Cairn posts 24% drop in Q1 at Rs 835 cr

Following crude oil's slump, Cairn India sold oil at an average price of $56.30 a barrel during the first quarter, compared with $98.20 a year earlier

Cairn India reported a 24 per cent drop in first-quarter profit following a slump in crude oil. Net profit fell to Rs 835 crore during the April-June quarter from Rs 1,093 crore a year ago.  “Our strategic focus is to maintain healthy cash flows post capex, fuel future growth through investments and use technology to our advantage to drive value in what we do,” said Mayank Ashar, managing director and chief executive officer.

Cairn India sold oil at an average price of $56.30 a barrel during the first quarter, compared with $98.20 a year earlier. Cairn has cut its capital expenditure plans for the year ending March by more than half to $500 million and said it may invest another $1.4 billion should oil prices improve and costs decline. It had Rs 164.7 billion of cash and cash equivalent as of June 30.

The company produced 209,738 barrels of oil equivalent a day during the quarter. Production from its flagship Rajasthan block was 172,224 barrels a day, according to the statement.

The company also took an exploration write off for the quarter at Rs 82 crore. It had in the quarter ending March 2015 written off Rs 552 crore on account of fall in oil prices.

Other Income at Rs 381 crore was higher by 7% quarter on quarter on account of reversal of mark-to-market losses on bond investments.

Cairn closed the quarter with cash and cash equivalent of Rs 16,467 crore, of which 72% is invested in rupee funds and the rest in dollar funds.

It said that operating expenditure in Rajasthan improved from an annual average of $5.8 a barrel of oil equivalent to $5.2 in the first quarter of 2015-16. The waterflood operational expenditure improved owing to reduction in well and facility maintenance costs.