Cairn India net profit falls 33% on low oil prices, output

Cairn India on Tuesday reported a 33 per cent fall in its September quarter net profit on the back of lower oil prices and production from its prime Rajasthan oilfield.

Net profit in July-September quarter fell to Rs 2,278 crore, or Rs 12.10 a share, from Rs 3,385 crore a year ago, or Rs 17.68 per share, the company said in a statement in New Delhi.

Revenue fell 14 per cent to Rs 3,982 crore "on account of lower volumes due to planned maintenance shutdown (at Rajasthan fields), realizations impacted by the softer global crude prices and higher profit petroleum tranche in Rajasthan."

It got $92.1 per barrel oil price in Q2 as compared to $96.7 in the same period last fiscal. However, gas price realisation was 30 per cent higher at $7.3.

Cairn produced 163,262 barrels of oil per day from the Rajasthan fields, down 6 per cent from 175,478 bpd in Q2 of last fiscal. This was 11 per cent lower than 181,164 bpd output in Q1 of current fiscal.

It completed the planned shutdown for routine operational and statutory maintenance activity at Mangala Oil Processing Terminal in Rajasthan.

"Though the shutdown resulted in lower production at 163,262 barrels per day of oil and oil equivalent gas, it has helped improve plant reliability and strengthen operational safety. We are back to normal production levels after the shutdown and excluding the shutdown period, Q2 production was comparable to Q1. We utilized the opportunity presented by the shutdown to create tie-ins for future development projects," Cairn said.

Cairn said it disbursed the balance $450 million as a part of $1.25 billion loan facility extended to its parent Vedanta Group firm in the previous quarter. It had cash of Rs 16,029 crore at the end of Q2.

The company board appointed Mayank Ashar as the Managing Director and Chief Executive Officer of the company with effect from 17th November, 2014. He will be the first full-time CEO to be appointed by Vedanta since face of the company, Rahul Dhir quit in August 2012.

Its CFO and Interim CEO Sudhir Mathur said: "In light of the renewed optimism under the new government, we view the recent regulatory announcements as a welcome step for the oil and gas industry."

In this time of lower crude prices, Cairn's strong balance sheet and top decile low cost profile distinctly positions its amongst global peers, Mathur said.

"Considering that each of our development projects is on track, we are confident of achieving our targeted volume growth of 7 to 10 per cent over the next 3 years. The continued success of our exploration and appraisal campaign will help achieve targeted 150 per cent reserve replacement ratio in the same period," he added.