Cairn India posts highest profit in six quarters

Highest net profit in six quarters; revenue up 8% at Rs 2,039 cr

Cairn India today reported Rs 779 crore in net profit for the quarter ending September, its highest in the last six quarters. It was Rs 359 crore in the quarter-ago period. 

Its revenue stood at Rs 2,039 crore, up 8 per cent over the previous quarter. 

During the second quarter ending September 30, 2016, the company reported a gross production of 18.1 million barrels of oil equivalent (mmboe) across all the assets, of which working interest production was 11.6 mmboe. Gross sales was 17.6 mmboe averaging at 191,579 boepd.

"The Cairn India team has delivered a net profit of Rs 779 crore for the quarter ended September 2016 in a challenging oil price environment. This is the highest quarterly profit for the company over the past six quarters and is reflective of our industry leading technological and operational capabilities," Sudhir Mathur, acting CEO, Cairn India, said in a statement. "Our efforts to monetize our world class resource base through improved economics have resulted in the key projects - RDG Gas, Bhagyam and Aishwariya EOR becoming viable by achieving the desired IRR even at Brent at $40 per barrel."

The company said it would continue to remain focused on monetizing its Rajasthan resource base. A net capital investment of $100 million is estimated for FY17, including 20 per cent for exploration activities and 80 per cent for development of RDG Gas project and completion activities of Mangala EOR. The gross production from Rajasthan for FY17 is expected to be maintained at FY16 level.

"Efforts are ongoing to further improve the economics of key projects - Bhagyam and Aishwariya EOR, Barmer Hill and Satellite Fields, at low oil prices and the pre-development investment is underway to ensure project readiness for the development with grant of extension of PSC. The company retains the flexibility to raise its capital investment as oil prices improve and aims to generate a healthy cash flow post capex so as to retain the ability to pay dividends," the company said in a press release.