Cairn India

Most of the analysts and brokerage houses were expecting the company to post a net profit of around Rs.2700 crore for Q4FY13 but it actually came in at Rs.2564 crore, also much lower than Rs.3345 crore reported in Q3FY13, which in Fy13 stands as the highest net profit ever notched in a quarter.  But if we look at the entire FY13 as such, the performance is excellent. Net profit came in at Rs.12056 crore and this was on its highest ever revenue, net of of profit sharing with the Govt of India and Rajasthan block royalty expense, grew by 48% at Rs.17,524 crore. Gross operated production was at 205,323 barrels of oil equivalent per day (boepd), a 19% increase over the previous year.  Most enticing aspect of Cairn – it generated cash flows of Rs. 11056 crore and thanks to this, balance sheet looks extremely strong with a cash balance of Rs.16713 crore and that too, when it is debt free.  Reserves as at 31st March 2013 stood at Rs.45,790 crore.

Cairn India has a portfolio of ten blocks, located in four strategically focused areas: one in Rajasthan; two on the west coast of India; six on the east coast of India (including one in Sri Lanka) and one in South Africa. Out of these, nine blocks, including the three that are in production, are operated by Cairn India. The blocks are located in the Barmer Basin, Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin in India, the frontier Mannar Basin in Sri Lanka and the Orange Basin in South Africa.

The company recommenced exploration drilling in Rajasthan in Feb 2013 and discovery was made in April 2013. Gas sales also commenced from the Rajasthan blocks.  The current production at Rajasthan block is at175,000 bopd and in current fiscal it is expected that exit production rate will be at 200,000-215,000 bopd. The Mangala field is producing at plateau rates and  infill wells are planned this year for sustaining and extending plateau. The Aishwariya field commenced production in March 201 and it is expected to ramp up to approved rate over the next few months. The Bhagyam field is expected to ramp up to approved rate in H2 FY2013-14 and additional wells are planned this fiscal.  Cairn India plans to drill in excess of 450 wells in the Rajasthan block over a three year period and this includes 100 Exploration and Appraisal (E&A) wells, which target a gross recoverable risked prospective resource of 530 mmboe. The company has planned for a net capital investment of US$ 3 billion through FY2015-16.