Vedanta Group company Cairn India on Wednesday reported a better-than-expected 18% jump in fourth quarter net profit to R3,035 crore, thanks to higher production and better realisation from old assets such as Ravva and Cambay blocks. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 26% in the final quarter of last fiscal to R3,654 crore on revenues of R5,049 crore, up 16% y-o-y.
The company said it would spend $3 billion on increasing production from the Barmer block in Rajasthan by FY17 end. ?Considering the significant potential in the Rajasthan asset, we shall continue to focus on key development projects to enhance recovery with overall planned net capex of $3 billion by FY17,? according to its outlook statement.
The explorer targets to achieve a reserve replacement ratio of 150% in the next three years while production is expected to witness compounded annual growth of 7-10% from known discoveries with flat production in FY15.
Cairn India is implementing an enhanced oil recovery (EoR) programme to increase output from the Rajasthan fields. The company is confident that the production sharing contract (PSC) will be extended till 2030 and it will be able to sustain output.
In Q4FY14, Cairn India’s gross production averaged 224,429 boepd, 11% higher y-o-y. However, gross crude oil realisation decreased 5% y-o-y to $95.7/bbl, although it grew in rupee terms on the back of rupee depreciation against the dollar. During January-March 2014, the company’s most prolific Barmer block in Rajasthan achieved a landmark of 200 million barrels and 200,000 boepd production milestone while the Ravva asset produced 11% more y-o-y at 24,225 boepd. The Cambay block saw a 50% increase in output to 9,323 boepd.
In addition, Cairn declared a final dividend of R6.50 per share for FY14. In Q4FY14, the cash earnings per share were R17.75. Overall capex incurred was higher at $362 million (gross) and $ 237 million.
?We have significantly added to our resource base by delivering a rapid exploration and appraisal drilling programme with a success ratio of 50%, establishing 6 discoveries and adding over 1 billion barrels of oil and gas in-place. Going forward, we continue to remain focused on executing multiple projects, especially in the Barmer Basin, by deploying talent and technology to achieve world-class recovery and discovery rates,? said Elango P, interim CEO and wholetime director, Cairn India.
In the complete fiscal, net profit rose 3% y-o-y to R12,431.79 crore on revenue of R18,762 crore.
