Cairn does Greenland deal but stays quiet on Rockhopper

Edinburgh-based explorer Cairn Energy is to partner with Statoil ASA to help exploit the Pitu block in the Baffin Bay Basin, west of Greenland.

However, the firm offered no clue as to whether a tie-up with Rockhopper was on the cards in its trading update.

Recent reports claim Cairn has held talks with AIM-listed Rockhopper over the possibility of taking a stake in its Falkland Islands operations.

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The only possible clue came from chief executive Simon Thomson who said Cairn was "well positioned to access new opportunities and further growth in 2012".

Under Cairn's agreement with Statoil, the latter will acquire a working interest of 30.625% in the Pitu licence, subject to the approval of the Greenland Government.

Cairn will retain operatorship of the exploration (with a 56.875% interest in the block) and Statoil will operate any future development. Nunaoil has an ongoing 12.5% interest in the block.

The exact financial terms of the agreement are remain secret but Cairn said that Statoil would pay a signature bonus, back costs on the block and promoted terms of future exploration expenditure.

The 1,500km2 3D seismic data collected by Cairn over part of the Pitu block in Baffin Bay is currently being processed with fully migrated results expected in Q2 2012.