Cairn India Q1 net drops 65 percent on depreciation method change

Oil and gas major Cairn India Wednesday reported a fall of 65 percent in consolidated net profit at Rs.1,092.9 crore in the first quarter ended June compared to Rs.3,127.23 crore in the same quarter of the fiscal, attributed to a change in the depreciation method from a straight-line to unit of production method, as well as weak operational performance.

Exceptional cost on account of a change in depreciation method was Rs.1,627.4 crore during the quarter.

EBITDA (Earnings before Interests Taxes Depreciation and Amortisation) dropped 17 percent sequentially to Rs.3,052 crore and its margin dropped 490 basis points to 68.1 percent in the quarter ended June 2014.

Total income from operations grew 10.3 percent to Rs.4,482.8 crore from Rs 4,062.93 crore in the same quarter a year ago, on account of higher volumes and realisations.

Cairn India recorded forex gains of Rs.98.9 crore during the quarter as against Rs.682 crore in the year-ago period.

Its Rajasthan block produced around 16.7 million barrels of oil equivalent (mmboe) in the quarter, taking a total production of around 233 mmboe until the end of the first quarter of 2015.

The company has established 1.2 billion barrels of oil equivalent (boe) of hydrocarbons in-place since resumption of exploration in Rajasthan. An additional 0.6 billion boe has been discovered and is either currently undergoing testing or is awaiting testing, it said in a filing to the BSE.

In the fiscal 2015-16, the company anticipates establishing an additional 1.2 billion boe hydrocarbons in-place achieving target volumes significantly ahead of plan.

It said 34 new wells were brought on production during the quarter contributing to the block's gross average production of 183,164 boepd, in line with FY15 guidance, adding the overall operating expenses in Rajasthan continued at a low of $4.2 a barrel for the first quarter of the current fiscal.

"An average of 182,715 bopd, amounting to around 16.6 mmbbls for the Q1 FY14-15 was sold to PSU and private refiners, across India.

The average crude price realisation for the quarter was $97.5 a barrel, an implied around 11.1 percent discount to dated Brent," Cairn said.

Cairn India stock closed Wednesday at Rs.345.70 a share, 0.76 percent higher than its previous close on the BSE.

--Indo-ASian News Service

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