Cairn India Limited Third Quarter Financial Results for the period ended 31 December 2009

28  January  2010

The attached release was issued today by Cairn India Limited (“Cairn India”) to the Bombay Stock Exchange and the National Stock Exchange of India.

The following commentary is provided in respect of the unaudited financial results and operational achievements of Cairn India Limited and its subsidiary companies (referred to as “Cairn India”) during the third quarter of 2009-10. Please note that the financial year 2009-10 (FY 09-10) refers to the period April 2009 – March 2010. 

FINANCIAL HIGHLIGHTS

  • Cash flow from operations for Q3 FY 2010 was INR 2,769 million (USD 59 million) on the strength of Rajasthan volumes; almost three times higher than the previous quarter
  • Repaid earlier borrowings of USD 850 million by drawing upon USD 660 million out of the USD 1.6 billion facility secured in October 2009 with the remainder drawn from  existing cash balances
  • Gross cumulative Rajasthan development capex spend to date USD  2,069 million, of which USD 223 million was spent during Q3 FY2009

OPERATIONAL HIGHLIGHTS

  • Q3 FY 2010 gross production was 66,843 barrels of oil equivalent per day (boepd) (63,005 boepd in the corresponding quarter of the previous year) and the working interest production was 24,599 boepd (16,591 boepd in the corresponding quarter of the previous year)
  • Mangala average gross production in Q3 FY 2010 was 15,430 barrels of oil per day (bopd); currently producing ~20,000 bopd and more than 1.5 million barrels (mmbbls) produced since field start-up in August 2009 through Train One
  • Construction of processing Trains Two and Three at the Mangala Processing Terminal (MPT) is targeted to attain capacity of 125,000 bopd by end of H1 CY 2010
  • The entire pipeline section from MPT to Salaya has been laid and commissioning is in progress
  • Work ongoing to align near term sales volumes with production capacity. Discussions continue with Government of India (GoI) and buyers to optimise offtake during the ramp up
  • Mangala development drilling progresses as planned; 43 development wells drilled to date of which 33 have been completed to support production ramp up; well results confirm the excellent quality and high deliverability potential of the Fatehgarh Formation reservoirs 
  • Eight Raageshwari Deep gas wells successfully drilled to ensure gas supply to fuel the MPT steam turbine generators and to heat the crude pipeline; one well successfully hydraulically fractured (hydro-fracced) which tested to a gas rate of 15.7 mmscfd (million standard cubic feet of gas per day), the highest ever recorded in the field
  • Crude oil sales to Reliance Industries Limited (RIL), Jamnagar commenced as the GoI allowed private refiners to qualify as additional offtakers of the Rajasthan crude
  • Delivered four parcels to MRPL and two parcels to RIL in Q3 FY 2010; trial parcels to IOC to commence soon
  • 4D seismic campaign has started in the Ravva block to identify bypassed oil zones and confirm targets for infill drilling
  • Exploration campaigns started in the Palar-Pennar Basin (offshore East Coast of India) and the Mannar Basin in Sri Lanka with the acquisition of 3D seismic data

Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said: 
 
“The ongoing development drilling confirms the excellent quality of the reservoir and reinforces our conviction of the long term potential of the Rajasthan fields.

The construction of the crude oil pipeline from MPT to Salaya is a significant achievement. This pipeline will provide the critical infrastructure needed to connect the oil fields in the Barmer basin to the markets.”

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