CAIRN INDIA LIMITED
UPDATE AS ON 30,AUGUST,2010
First Quarter Results
for the period ended 30 June 2010
OPERATIONAL HIGHLIGHTS
Gross operated production in Q1 FY 2010-11 was 94,950 barrels of oil equivalent per day (boepd); 73% higher than the corresponding quarter of the previous year (59,461 boepd). The working interest production was 44,812 boepd; 182% higher than the corresponding quarter of the previous year (15,917 boepd)
Rajasthan
Pipeline sales started through the ~ 590 km Barmer - Salaya section to private refiners and IOC
Train Three commissioned in June 2010 to attain Mangala Processing Terminal (MPT) processing capacity of 130,000 barrels of oil per day (bopd)
Trains Two and Three at the MPT now operational and in ramp up phase; currently processing >100,000 bopd
Sales arrangements in place for 143,000 bopd
Mangala production to ramp up to currently approved plateau of 125,000 bopd during H2 CY 2010; development drilling indicates production potential of 150,000 bopd, subject to Government of India (GoI) approval
Mangala development drilling progresses as planned; 81 development wells drilled to date of which 65 are complete
Fatehgarh Formation reservoir continues to perform well; nine horizontal wells drilled, which tested at an average production rate of more than 11,500 bopd
Mangala Enhanced Oil Recovery (EOR) pilot progressing well; first phase consisting of four injectors and one producer drilled
Other Assets
Production Sharing Contract (PSC) signed for the two blocks, KG-OSN-2009/3 and MB-DWN- 2009/1, awarded under New Exploration Licensing Policy (NELP) – VIII bidding round
Processing of 4D seismic data in Ravva underway; to help identify bypassed oil zones and potentially new targets for infill drilling
Cambay basin (CB/OS-2) operations achieved more than eight million safe work hours over last six years
Exploration campaigns progressing well; five well exploration drilling campaign in KG-ONN- 2003/1 progresses on schedule; data interpretation ongoing for 3D seismic data acquired for the Palar-Pennar Basin (offshore East Coast of India) and Mannar Basin in Sri Lanka
FINANCIAL REVIEW
In Q1 FY 2010-11, the gross production of the operating units was 94,950 boepd (59,461 boepd in Q1 Last year) and working interest production was 44,812 boepd (15,917 boepd in Q1 FY2009-10). Current quarter production numbers include gross production of 44,381 boepd and working interest production of 31,067 boepd from the Rajasthan block.
The average oil price realisation in Q1 FY 2010-11 was USD 72 per bbl and for Q1 FY2009-10 was USD 60.2 per bbl.
The gas price realisation in Q1 FY 2010-11 was USD 4.6 per mscf versus USD 4.0 per mscf for the Q1 FY2009-10.
Average price realisation per boe was USD 67.1 in Q1 FY 2010-11 and for Q1 FY2009-10 was USD 51.2.
The consolidated revenue of Cairn India for Q1 FY 2010-11 was INR 8,406 million (USD 184 million); higher by 310% as compared to INR 2,049 million (USD 42 million) in Q1 FY2009-10.
Cash flow from Operations INR 4,928 million (USD 108 million); increased by 358% ( Q1 FY2009-10 :INR 1,076 million (USD 22 million))
The consolidated profit after tax (PAT) for Q1 FY 2010-11 was INR 2,814 million (USD 62 million); higher by 520% as compared to INR 454 million (USD 9 million) for Q1 FY2009-10.
“Cash flow from operations”, worked out as profit after tax (excluding other income and Forex revaluation gain/loss) prior to non-cash expenses (non-cash employee cost, depreciation, depletion, amortization, MAT and deferred tax) and exploration cost was INR 4,928 million (USD 108 million) for Q1 FY 2010-11; higher by 358% as compared to INR 1,076 (USD 22 million) for Q1 FY2009-10.
Cash available as at 30 June 2010 was INR 25,439 million (USD 545 million) and the loan drawn down to 30 June 2010 against the loan facility of USD 1.6 billion was INR 39,906 million (USD 856 million).
OPERATIONAL REVIEW
Gross operated production in Q1 FY 2010-11 was 94,950 boepd (working interest 44,812 boepd). The average crude oil price realisation in Q1 FY 2010-11 was USD 72 per bbl and the average gas price was USD 4.6 per mscf resulting in an average price realisation of USD 67.1 per boe.
Rajasthan (Block RJ-ON-90/1) (Cairn India 70% (Operator); ONGC 30%)
Average gross production from the Mangala field for Q1 FY 2010-11 was 44,381 bopd.
Cairn India and its joint venture (JV) partner ONGC have an area of 3,111 km2, under long term contract on the Rajasthan licence spread across the districts of Barmer and Jalore. Current gross production is >100,000 bopd.
The Mangala Field, is the largest onshore oil discovery in India in more than 20 years. The Mangala Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of over 1 billion barrels, which includes proven plus probable (2P) gross reserves and resources of 694 million barrels of oil equivalent (mmboe) with a further 300 mmboe or more of EOR resource potential. An EOR pilot project in the Mangala field has started in 2010.
The twenty other fields (including the Barmer Hill Formation) are estimated to hold approximately 1.9 billion boe in place of which the gross 2P recoverable resource is estimated to be 140 mmboe. Evaluation work is underway for these fields. A pilot hydraulic fracturing programme in the Barmer Hill is planned in FY 2010-11, subject to GoI approval.
Development – Upstream
The MPT is designed to process crude from the Rajasthan fields and has a capacity to handle 205,000 bopd of crude with scope for further expansion. Four processing trains are being built to ensure that the JV is able to produce and process the approved peak plateau production of 175,000 bopd in 2011.
While Train One, with a capacity to process 30,000 bopd, was commissioned in August 2009, Trains Two and Three with a capacity of 50,000 bopd each commenced production in May 2010 and June 2010 respectively. Mangala production will continue to build during the ramp up phase.
The Raageshwari Gas Terminal, the Thumbli water field (saline aquifer) and the captive power plant at MPT have been commissioned and are operational.
Development drilling and the well completion activities are progressing with three drilling rigs and one completion rig operating in the Mangala development area. 81 Mangala development wells have been drilled of which 65 wells have been completed and made ready for initial production.
In addition to the success of the first horizontal well at Mangala, which tested more than 11,500 bopd, Cairn has successfully drilled and completed eight more horizontal wells in Mangala. Six horizontal wells have been put on production. Water injection has started and will be further ramped up in the coming months. A total of 30 Mangala wells are currently producing and the other wells will be brought on stream in a staged manner during the ramp-up period.
Mangala production is expected to ramp up to 125,000 bopd during H2 CY 2010. The ongoing development drilling results indicate a production potential of 150,000 bopd from Mangala, subject to GoI approval.
Development - Midstream (Pipeline)
Of the total length of the MPT to Bhogat pipeline of ~670 km which passes through the states of Rajasthan and Gujarat, the MPT to Salaya section of ~590 km is now operational along with the final delivery infrastructure to each buyer.
Pipeline sales started to private refiners in June 2010 and to IOC in July 2010.
Crude – Sales
The initial crude oil sales arrangements to Public Sector Undertakings have now been supplemented by sales to private refiners following the decision of the GoI to allow private refiners to qualify as additional offtakers of the Rajasthan crude.
To date, more than seven million barrels (mmbbls) of crude from Mangala has been delivered to the refiners.
The commercial terms and pricing negotiations have been concluded with all the buyers. In accordance with the Production Sharing Contract, this pricing is based on comparable low sulphur crude frequently traded in the region – Bonny Light - with appropriate adjustments for crude quality.
The implied price realisation represents an average 10-15% discount to Brent on the basis of prices prevailing for the twelve months to June 2010.
Sales arrangements are now in place for 143,000 bopd. With the pipeline and related facilities becoming operational, sales to both public and private refiners are expected to ramp up to the currently approved plateau of 125,000 bopd in H2 CY 2010.
Exploration - RJ-ON-90/1 (Cairn India is the Operator - 70% holding in the Mangala, Bhagyam and Kaameshwari West Development Areas)
The updated exploration portfolio now consists of a most-likely risked mean estimate of 2.5 billion boe in place. The results of the successful Tukaram 2 and Tukaram SE-1 wells drilled in Q1 CY 2010, both of which encountered oil and gas, are under review.
Technical evaluation work continues to assess existing and new plays in the basin to generate further prospects in Rajasthan.
Cairn India – Producing Assets
Krishna-Godavari Basin - Eastern India
Ravva (Cairn India 22.5% (Operator))
Average gross production from the Ravva field for Q1 FY 2010-11 was 37,043 boepd (comprising an average oil production of 28,871 bopd and average gas production of 49 mmscfd).
Originally estimated to produce 101 million barrels of crude oil, the field has to date produced more than 225 million barrels; and following a comprehensive assessment of remaining potential the Gross Proved plus Probable (2P) reserves have increased by 20%, from 60 mmboe last year, to 72 mmboe. Cairn is confident of the field’s considerable remaining reserve potential and of producing more oil from this block.
The Ravva block’s direct operating cost per barrel is amongst the lowest in the world. This has been possible only through life-cycle planning, continuous monitoring and the innovative application of operating technologies.
Cambay Basin - Western India
Block CB/OS-2: (Cairn India 40% (Operator))
Average gross production from the CB/OS-2 block for Q1 FY 2010-11 was 13,527 boepd (comprising an average oil / condensate production of 8,229 bopd and average gas production of 32 mmscfd).
The application of advanced geophysical tools has helped map thin oil sands which are beyond seismic resolution. These techniques have transformed CB/OS-2 block from a predominantly gas field to an oil field following the discovery of an oil leg. An infill drilling campaign is planned later this year to increase production. The asset recorded more than eight million safe work hours over the last six years, which reinstates our commitment to operate safely.
ANNOUNCEMENTS
TO THE NSE (EXCHANGE)
25-08-2010 Cairn India Limited has submitted to the Exchange a copy of the Notice of the Annual General Meeting of the Members of the company to be held on September 15, 2010.
23-08-2010 Cairn India Limited has informed the Exchange that "Cairn Energy India Pty Limited (CEIPL), a wholly owned subsidiary of Cairn India Limited, has notified the Directorate General of Hydrocarbons (DGH) of a Discovery of oil and gas in the Nagayalanka-1z well, located in the onshore block KG-ONN-2003/1. The block is situated in the Krishna-Godavari basin and was awarded under NELP V bidding round. CEIPL, the operator of the block, has a 49% participating interest in the block and ONGC holds the balance 51% participating interest. The well encountered a 200 metre thick section of tight sandstones with low porosity, and permeability. Cased hole Drill Stem Tests (DST's) were attempted in two zones. No flow to surface was achieved in DST-I zone in the interval 4147.5m- 4216.6m. A flow of 75 barrels per day of oil and 0.27 million cubic feet per day of gas was achieved during DST-2 in the interval 4055m-4071 m. The well and test results are being evaluated to assess the commercial potential of the Discovery and to determine the future appraisal programme".
27-07-2010 Cairn India Limited has informed the Exchange regarding the consolidated Results for the quarter ended on 30-JUN-2010 as follows: Net Sales of Rs. 84060 lacs for quarter ending on 30-JUN-2010 against Rs. 20495 lacs for the quarter ending on 30-JUN-2009. Net Profit / (Loss) of Rs. 28141 lacs for the quarter ending on 30-JUN-2010 against Rs. 4544 lacs for the quarter ending on 30-JUN-2009.
27-07-2010 Cairn India Limited has informed the Exchange regarding the standalone Results for the quarter ended on 30-JUN-2010 as follows: Net Sales of Rs. 116 lacs for quarter ending on 30-JUN-2010 against Rs. 25 lacs for the quarter ending on 30-JUN-2009. Net Profit / (Loss) of Rs. (4277) lacs for the quarter ending on 30-JUN-2010 against Rs. 1859 lacs for the quarter ending on 30-JUN-2009.
15-06-2010 Cairn India Limited has informed the Exchange regarding a press release dated June 15, 2010, titled "Mangala Sales commence through pipeline".
27-05-2010 Cairn India Limited has informed the Exchange regarding a press release dated May 27, 2010 , titled "Consolidated Financial Results for the twelve month period ended 31 March 2010".
27-05-2010 Cairn India Limited has informed the Exchange regarding the standalone Results for the quarter ended on 31-MAR-2010 as follows: Net Sales of Rs. 128 lacs for quarter ending on 31-MAR-2010 against Rs. 34 lacs for the quarter ending on 31-MAR-2009. Net Profit / (Loss) of Rs. (8245) lacs for the quarter ending on 31-MAR-2010 against Rs. (1690) lacs for the quarter ending on 31-MAR-2009. -
27-05-2010 Cairn India Limited has informed the Exchange regarding the standalone Results for the year ended on 31-MAR-2010 as follows: Net Sales of Rs. 320 lacs for year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. (6895) lacs for the year ending on 31-MAR-2010. -
27-05-2010 Cairn India Limited has informed the Exchange regarding the consolidated Results for the year ended on 31-MAR-2010 as follows: Net Sales of Rs. 162303 lacs for year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. 105110 lacs for the year ending on 31-MAR-2010.
=The above data is taken from company’s releases at the time of Q1 Results. Following is the further News in AUGUST 2010=
Crude oil production from the Mangala oilfield in Rajasthan has crossed the 1.25 lakh barrels per day mark and is expected to further increase to 1.75 lakh barrels per day (bpd) by early 2011.It is now being transported to three buyer companies via the world's longest heated crude pipeline.
Production from Mangala adds about 25 per cent to domestic crude output.
Crude production from Mangala has raced to 1.25 lakh barrels per day within a short span of 12 months and by the end of next year, the state of Rajasthan will be one of the largest contributor's to the country's petroleum production.
The Mangala oilfield was discovered by Cairn in 2004. Since then, 25 discoveries have been made, including Bhagyam, Aishwariya, Saraswati and Raageshwari.
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