Cairn abandons Morocco well

Oil and gas production independent Cairn Energy has announced that one of its exploration wells offshore Morocco has been plugged and abandoned without testing.

Drilling of the JM-1 well, located in the Juby Maritime blocks, started in January to evaluate Upper Jurassic and Middle Jurassic objectives.

In the Upper Jurassic section, drilling confirmed the presence of heavy oil over a gross interval of 110 metres as originally tested in the 1968 MO-2 well, about two kilometres away, but the firm has plugged and abandoned the well without testing.

"Reservoir quality and the oil gravity in the Upper Jurassic across the Cap Juby structure require further evaluation by Cairn and its joint venture partners," the statement said.

Work is taking place to correlate the core and log data from JM-1 with other wells on Cap Juby to evaluate the extent of moveable hydrocarbons and how any further assessment should be conducted.

Cairn said the Middle Jurassic objective was encountered in the well but with limited primary porosity and it is continuing to evaluate well logs and side wall cores.

JM-1 was the first of nine wells Cairn is planning this year, with its attention now turning to the Fan-1 well on the Sangomar, Sangomar Deep and Rufisque blocks off Senegal.

Cairn operates the Juby Maritime 3 licence with a 37.5% interest and is partnered by London-listed Genel Energy with a 37.5% interest and Moroccan state-run National Office of Hydrocarbons & Mines with a 25% stake.

The shares fell 3% on Monday morning on the news to around 190.90p.

Also today, the company today had its 'buy' rating reinstated by equities researchers at Jefferies Group in a research report. They currently have a 385p price objective on the stock. Jefferies' price target suggests a potential upside of over 100% from today's price.

The company hit the news earlier this month when founder Sir Bill Gammell stepped down and the firm released further detail about its long-running tax dispute with the Indian authorities.