TIDMVED
RNS Number : 6827T
Vedanta Resources PLC
21 July 2015
21 July 2015
Vedanta Resources plc
Cairn India announces Results for the First Quarter Ended 30
June 2015
The following release was issued today by Vedanta Resources
Plc's subsidiary Cairn India Limited.
Cairn India Limited
Results for the First Quarter ended 30(th) June, 2015
400% growth in quarterly Earnings led by improved cost
performance and oil prices
Financial Highlights
---------------------
-- 16% improvement in crude price realization QoQ; Revenue of INR 2,627 crore (US$ 414 mn)
-- 79% improvement in EBITDA QoQ; EBITDA of INR 1,302 crore (US$ 205 mn)
-- 447% improvement in Profit after Tax QoQ; PAT of INR 835 crore (US$ 131 mn)
-- Resilient Cash Flow from Operations of INR 1,268 crore (US$ 200 mn)
-- Sustained Investments- Gross Capital Expenditure of INR 880 crore (US$ 139 mn)
-- Gross contribution to exchequer of INR 4,037 crore (US$ 636 mn)
-- Strong Cash and Cash Equivalents position of INR 16,467 crore (US$ 2.6 bn)
Operational Highlights
-----------------------
Production
-- Overall gross production volume of 209,738 boepd across Rajasthan, Ravva and Cambay assets
-- Steady Rajasthan production at 172,224 boepd
o Dedicated production optimization & reservoir management
initiatives aid production
-- Offshore production grows by 8% YoY to 37, 514 boped
o Driven by 4D seismic technology, successful infill campaign
and RE-6 discovery
Development
-- In line with our stated growth strategy, significant progress
has been made on key projects; aimed to increase recovery by 60-80
mn barrels of oil
o Bhagyam Enhanced Oil Recovery- FDP submitted to JV
o Aishwariya Barmer Hill- Development concept finalized; FDP to
be submitted shortly
o Aishwariya Infill- 6 out of 20 planned infill wells already
brought online
-- Current growth projects are progressing well on track:
o Gas- Terminal EPC in final stages of tendering; progress on
regulatory approval for pipeline
o Mangala EOR- Injection ramped up from 25,000 blpd to 80,000
blpd QoQ
o M&A Barmer Hill Appraisal- 3 wells brought online in Q1;
all 12 wells are now online
Exploration
-- 38(th) discovery in Rajasthan, Raageshwari North, flowed oil at 100 bopd initial rate
-- Rajasthan appraisal program continues momentum; 3 Appraisal wells fracced and tested in Q1
-- 199 sq km of 3D seismic data acquired in Rajasthan
Operational Excellence
-- Improvement in Rajasthan water flood operating costs by 10%:
Reduced from US$5.8/boe in FY15 to US$5.2/boe in Q1 FY16
-- Procurement savings of 15%: Driven by renegotiations and softening of costs
-- Drilling efficiency increased by 15%: Average number of
Drilling days per 10,000 feet reduced from 16.5 days to 14 days
Mr. Mayank Ashar, Managing Director and CEO of Cairn India
commented:
"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. The first quarter of
this fiscal year has been notable for four key reasons:
i. We have made significant progress on key projects that will
maximize oil and gas recovery from our fields,
ii. Realized promising cost savings
iii. Brought about efficiency in drilling operations; and
iv. Optimized capital cost of projects to improve economic viability in a low oil price scenario
We will continue to maintain our focus on all elements of cost
and drive growth projects through the year."
Corporate and Regulatory Developments
--------------------------------------
At the Annual General Meeting held earlier in the day, members
have voted on all items of the AGM Notice. The results shall be
declared within the prescribed time limits and will also be placed
at the website of the Company and CDSL.
Financial Review
-----------------
INR Crore Q1 FY Q1 FY 15 y-o-y Q4 FY q-o-q
16 (%) 15 (%)
---------------- ------ -------- ------ ----- ------
Revenue 2,627 4,483 (41%) 2,677 (2%)
---------------- ------ -------- ------ ----- ------
EBITDA 1,302 3,120 (58%) 727 79%
---------------- ------ -------- ------ ----- ------
Margin (%) 50% 70% 27%
---------------- ------ -------- ------ ----- ------
PAT 835 1,093 (24%) -241 447%
---------------- ------ -------- ------ ----- ------
Margin (%) 32% 24% -9%
---------------- ------ -------- ------ ----- ------
EPS (INR) -
Diluted 4.44 5.76 (23%) -1.28 447%
---------------- ------ -------- ------ ----- ------
Cash EPS (INR) 8.36 18.17 (54%) 4.94 69%
---------------- ------ -------- ------ ----- ------
US$ million Q1 FY Q1 FY 15 y-o-y Q4 FY q-o-q
16 (%) 15 (%)
---------------- ------ -------- ------ ----- ------
Revenue 414 750 (45%) 430 (4%)
---------------- ------ -------- ------ ----- ------
EBITDA 205 522 (61%) 117 76%
---------------- ------ -------- ------ ----- ------
Margin (%) 50% 70% 27%
---------------- ------ -------- ------ ----- ------
PAT 131 183 (28%) -39 440%
---------------- ------ -------- ------ ----- ------
Margin (%) 32% 24% -9%
---------------- ------ -------- ------ ----- ------
EPS (US$) -
Diluted 0.07 0.10 (27%) -0.02 440%
---------------- ------ -------- ------ ----- ------
Cash EPS (US$) 0.13 0.30 (57%) 0.08 66%
---------------- ------ -------- ------ ----- ------
Average Units Q1 Q1 y-o-y Q4 q-o-q
Price
Realization
-------------- ---------- ----- ----- ------ ----- ------
FY16 FY15 (%) FY15 (%)
-------------- ---------- ----- ----- ------ ----- ------
Cairn
India US$/boe 56.0 97.0 -42% 48.4 16%
-------------- ---------- ----- ----- ------ ----- ------
Oil US$/bbl 56.3 98.2 -43% 48.6 16%
-------------- ---------- ----- ----- ------ ----- ------
Gas US$/mscf 6.6 5.6 17% 6.2 6%
-------------- ---------- ----- ----- ------ ----- ------
For FY15, net-revenue of ` 2,627 crore was reported which was
lower by 1.9% QoQ. This decline was primarily due to increase in
the share of Profit Petroleum payable to the government of India.
This quarter witnessed a jump from the 30% tranche to 40% in DA2 in
Rajasthan. This was partially negated by higher crude oil price
realisation. On a QoQ basis average Brent prices were up by 15%
which coupled with lower Rajasthan crude discount resulted in
improvement in oil price realisation by 16%.
EBITDA for the quarter was ` 1,302 crore with healthy EBITDA
margin of 50%. EBITDA for the quarter is higher by 79% compared to
Q4 FY 15 which saw an exploration cost write-off of ` 552 crore.
EBITDA margins were boosted by lower operating costs which for
Rajasthan waterflood case have reduced by 10% from the previous
fiscal year average of $5.8 to $5.2/boe in Q1 FY 16 as a result of
reduction in well and facility maintenance costs and MG&A.
Along with field opex, corporate MGA too has been brought down by
c. 14% as a result of manpower optimisation and decrease in
overheads on account of various cost optimisation initiatives
currently underway.
Exploration write off for the quarter was at ` 82 crore in line
with Successful Efforts accounting policy largely on G&G spend
from our ongoing seismic program in Rajasthan.
In the previous quarter, DD&A was lower due to one-time
reversal of depletion charge on abandonment assets due to change in
estimates. The same has been normalised in the current quarter
leading to increase in the current quarter charge by c. ` 621
crore.
Positive currency variance emanated from an appreciation of the
dollar against the rupee. Rupee averaged 63.5 to a dollar; 2%
higher than the fourth quarter average of 62.3; resulted in a forex
gain of ` 182 crore which was 208% higher compared to the fourth
quarter FX loss of ` 168 crore.
Other Income at ` 381 crore was higher by 7% quarter on quarter;
on account of reversal of MTM losses on bond investments
Total Tax expense was lower by 69% quarter on quarter, on
account of lower deferred tax charge. Deferred tax was higher in
the previous quarter due to higher deferred tax liability being
created for change in abandonment estimates and higher E&D
expenditure net of CWIP. Additionally lower tax depreciation
vis-à-vis book depreciation in Q1 FY16 also resulted in lower
deferred tax charge
As a result, our earnings in the first quarter have been very
strong; profit after tax has grown by 447% quarter on quarter.
Profit after tax at ` 835 Crore posted a healthy profit margin of
32%. The positive variance comes on account of higher EBITDA, Other
Income, Forex gains and lower tax, as highlighted above.
Healthy profits resulted in a proportionate increase in Earnings
per share to ` 4.5 and cash earnings per share of ` 8.4 in the
first quarter. Cash EPS has improved by almost 69% quarter on
quarter; largely driven by the positive EBITDA movement.
Total cashflow from operations for the quarter was ` 1,268
crore. This quarter saw a net capex spend of US$ 104 million. We
closed the quarter with a healthy cash and cash equivalent position
of ` 16,467 crore; of which 72% is invested in rupee funds and the
rest in dollar funds.
MAT credit currently stands at ` 8,033 crore.
Operational Review
-------------------
During Q1FY16, Cairn had a gross production of 19.1 mmboe from
its three producing blocks where it enjoys 100% operatorship, of
which net working interest production was 11.9 mmboe. Gross
production per day for Q1FY16 was 209,738 boepd and working
interest production per day was 130,565 boepd.
Gross Sales averaged 209,767 boepd
Average Daily Units Q1 Q1 y-o-y Q4 q-o-q
Production FY16 FY15 (%) FY15 (%)
------------------ ------- -------- -------- ------ ------- -----
Total Gross
operated* Boepd 217,935 226,597 (4%) 224,294 (3%)
------------------ ------- -------- -------- ------ ------- -----
Gross operated Boepd 209,738 217,869 (4%) 215,553 (3%)
------------------ ------- -------- -------- ------ ------- -----
Oil Bopd 203,731 209,846 (3%) 208,019 (2%)
------------------ ------- -------- -------- ------ ------- -----
Gas Mmscfd 36 48 (25%) 45 (20%)
------------------ ------- -------- -------- ------ ------- -----
Working Interest Boepd 130,565 137,907 (6%) 132,929 (2%)
------------------ ------- -------- -------- ------ ------- -----
* Includes internal gas consumption
Producing Region Operator Participating
Assets Interest
--------------- -------------- ------------ --------------
North Western
1 RJ-ON-90/1 India Cairn India 70%
--------------- -------------- ------------ --------------
2 PKGM-1 (Ravva) Eastern India Cairn India 22.5%
--------------- -------------- ------------ --------------
3 CB/OS-2 Western India Cairn India 40%
--------------- -------------- ------------ --------------
There is a strong focus on enhancing efficiencies and bringing
about greater cost discipline across capital investments and
operating expenses. During Q1FY16, we demonstrated three key areas
of improved efficiencies in our operations:
-- Improvement in Rajasthan Opex/boe by 10%: From $5.8/boe
average for FY15 to $5.2/boe in Q1FY16. The waterflood opex has
improved owing to reduction in well and facility maintenance costs
and MG&A expenses
-- Procurement savings of 15%: Driven by renegotiations and
softening of costs across key high value contracts across
assets
-- Improvement in drilling time by 15%: Drilling days per 10,000
feet reduced from 16.5 to 14 days, demonstrated in the drilling
performance of the latest Aishwariya 20 well Infill campaign
Rajasthan (Block RJ-ON-90/1)
Average Daily Units Q1 Q1 y-o-y Q4 q-o-q
Production FY16 FY15 (%) FY15 (%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
RJ - Total
Gross Boepd 179,683 190,879 (6%) 181,711 (1%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Rajasthan
- Gross Boepd 172,224 183,164 (6%) 174,206 (1%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Oil Bopd 170,686 181,894 (6%) 172,683 (1%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Gas Mmscfd 9 8 13% 9 1%
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Gross DA 1 Boepd 149,651 153,467 (2%) 150,489 (1%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Gross DA 2 Boepd 22,573 29,696 (24%) 23,717 (5%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Gross DA 3 Boepd - - - - -
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
Working Interest Boepd 120,557 128,215 (6%) 121,944 (1%)
------------------ -------- ---------------- --------------- -------------- ---------------- ----------
* Includes internal gas consumption
Operations and Development[1]
The Rajasthan Block produced 15.7 million barrels of oil
equivalent in Q1 FY16 at an average of 172,224 boepd, achieving a
cumulative total production of 297 mmboe till the end of Q1 FY16.
Dedicated production optimization and reservoir management
initiatives have aided aggregate production across Rajasthan block.
Barmer Hill and Satellite Field production contributed 5.8 kboepd
on average in Q1FY16.During the quarter, a total of 15.6 mn barrels
of oil was sold, at an average of 170,860 bopd, to PSU and private
refiners across India.
The average crude price realization for the quarter
significantly improved to US$ 55.8/bbl from US$ 48.4/bbl, 16%
higher QoQ. The quarter saw an improvement in the discount to Dated
Brent, which reduced from 10.5% in Q4FY15 to 9.9% in Q1FY16,
fetching 0.8% higher realization per barrel of Rajasthan crude. The
water-flood operating expense in Rajasthan was at US$ 5.2/boe, a
10% improvement in operating expense over the previous fiscal.
Including polymer costs, the operating expense is US$ 5.8/boe.
Gas production from RDG field has grown by 20% QoQ; averaging 19
mmscfd in Q1FY16. Towards the end of June we were producing close
to 25 mmscfd, and are very much on track to meet the guidance we
set out- of producing an average of 25 mmscfd of Gas from existing
RDG infrastructure in FY16. Total Gas production was 4.9bscf.
Gas sales from RDG field averaged 9 mmscfd in Q1FY16 and touched
a peak of 15 mmscfd towards end of June, on account of allocation
of gas sales to a new buyer, KRIBHCO. Total Gas sales were 0.84
Bscf.
The average facility uptime for the quarter was 99%
On the development front, three projects have garnered
significant traction
-- Bhagyam Enhanced Oil Recovery (EOR)
-- Aishwariya Barmer Hill
-- Aishwariya Infill
Bhagyam EOR: Enhanced oil recovery is one of the key pillars of
growth in Rajasthan, with the potential to unlock substantial
volumes of oil. Bhagyam EOR will allow for additional recovery of
40-50 mm barrels of unswept oil still in-ground at the Bhagyam
field. A revised FDP for Bhagyam EOR project was submitted to JV
partner in Q1FY16.
Commendable value engineering efforts have reduced capital cost
of the project and enabled improvement in economics. Expected
capital cost for Bhagyam EOR project would be US$ 250 mn, resulting
in a development cost of US$ 5-6/bbl.
Aishwariya Barmer Hill: Substantial progress was made in the
quarter on a Field Development Plan for Aishwariya Barmer Hill for
which the FDP will be submitted to JV shortly. The development of
Barmer Hill has been prioritized at the Aishwariya field due to
higher than expected well productivity in the region. Of Barmer
Hill's 2 bn barrels of in-place resources, recovery of 10-15% is
expected across the various fields, starting with Mangala and
Aishwariya. From the current development program, recovery is
expected to be 20-30 mm barrels of oil.
With infrastructure at MPT already in-place, the development
plan allows for extraction of oil from the tighter reservoirs at
attractive economics. The current Aishwariya Barmer Hill project is
expected to have a capital cost of approximately US$ 300 mn,
resulting in a development cost of US$ 10-15/bbl.
Aishwariya Infill: Aishwariya field crossed the 30,000 barrels
per day of production mark at the end of FY15. In this quarter, a
new 20 well infill campaign has been launched to further ramp up
production. Agile execution efforts have resulted in 6 wells being
drilled, completed and brought online in Q1FY16. Balance wells have
been drilled and will be brought online progressively.
Substantial progress has been made on the other ongoing
development projects in Rajasthan as well:
Gas Development at RDG Field: In addition to optimizing existing
infrastructure, preparations are ongoing for growth at the
Raageshwari Deep Gas field via a new terminal and pipeline. Both
have achieved good traction this quarter, with the terminal EPC in
its final stages of tendering and increased alignment with the
Petroleum & Natural Gas Regulatory Board on the new
pipeline.
Mangala EOR: Injection has been increased from 25,000 barrels of
polymer solution per day to 80,000 barrels in Q1FY16. The injection
ramp up plan is on track and progressive production impact will
begin in the second half of this fiscal, as guided. New wells are
being drilled, existing wells are being converted to EOR producers
and modifications at MPT are underway to process the incremental
crude post polymer breakthrough.
Mangala ASP: The Mangala ASP Pilot was completed in Q4FY15. In
Q1, work was carried out on performance matching and modelling of
the completed pilot.
M&A Barmer Hill Appraisal: As of Q4FY15, 9 of the 12 wells
were online. In Q1FY16 we have brought online the balance 3 wells,
hence all 12 wells of the Appraisal Phase are now producing for
long term testing. Phase II of Barmer Hill development involving DP
and NL fields and phase III on V&V fields is progressing with
desktop studies, applying lessons learnt from Mangala and
Aishwariya Barmer Hill execution and results.
Focus in Satellite Fields remains on profitable monetization by
leveraging existing Rajasthan infrastructure & applying cost
effective development concepts.
A routine operational and statutory maintenance shutdown at the
Mangala Processing Terminal is planned for Q3FY16. Though this
would have an impact on production, the opportunity will be used to
create tie-ins for ongoing new facility enhancements, development
projects and future growth projects.
[1] EUR numbers stated for development projects are as until
2030
Exploration
Our re-phased exploration program is focused on testing the
drilled prospect inventory and seismic activity. Exploration
activity in the current fiscal year aims to take advantage of
falling rates for rigs, seismic vessels and other services.
The 38(th) discovery in the Rajasthan block, Raageshwari North,
was made in Q1FY16. It flowed oil at an initial rate of 100 bopd
from the Volcanics/Felsics reservoir and opened up a large area for
undertaking further appraisal to assess its full potential.
During Q1 FY16, three appraisal wells were in various stages of
fraccing and testing:
-- The appraisal well Raageshwari North-1 was drilled in Q3FY15,
to test the potential of a separate fault block contiguous to the
Raageshwari Deep Main block. The well was fracced and tested during
this quarter and yielded the 38(th) discovery in Rajasthan block,
Raageshwari North, flowing at an average rate of 100 bopd.
-- The appraisal well Raageshwari Deep Main drilled in Q4FY15
was fracced and tested during this quarter. A zone in the Felsic
reservoir in this well produced oil at the average rate of 135 bopd
with gas rate of 90 mmscfd. This is a new zone, about 300m deeper
than the earlier established gas bearing reservoir in the
Raageshwari Deep Main field. Two more zones are to be tested in
this well in Q2FY16.
-- Appraisal well Vandana-10A drilled for Barmer Hill Turbidite
reservoirs in Q3FY15 was fracced and tested in the lower part of
the BHT-10 reservoir and produced oil at 20 bopd, during initial
flow back and activation, from a low permeability zone. Upper
BHT-10 zones with better reservoir characteristics will be taken up
for fraccing and testing in Q3FY16.
The total drilled and tested hydrocarbons in-place increased to
1.6 bn boe, an increase of 100 mn boe from the Q4FY15 reported
number of 1.5 bn boe.
Seismic activity in Rajasthan continues to provide a more
thorough understanding of the block and optimize our drilling and
completion techniques. The seismic crew acquired a further 199 sq
km of high quality 3D data in the Airfield area in DA3
During the current financial year, activity will continue to be
focused upon appraisal of the Raag Deep Gas Field and the key oil
discoveries at DP, NL, V&V and Saraswati Basement with the
objective of progressing these discoveries to development.
Ravva (Block PKGM-1)
Average Daily Units Q1 Q1 y-o-y Q4 q-o-q
Production FY16 FY15 (%) FY15 (%)
------------------ ------- ------- ------- ------ ------ -----
Total Gross
operated* Boepd 29,563 25,161 17% 33,218 (11%)
------------------ ------- ------- ------- ------ ------ -----
Gross operated Boepd 28,556 23,940 19% 31,738 (10%)
------------------ ------- ------- ------- ------ ------ -----
Oil Bopd 25,245 19,548 29% 26,872 (6%)
------------------ ------- ------- ------- ------ ------ -----
Gas Mmscfd 20 26 (23%) 29 (31%)
------------------ ------- ------- ------- ------ ------ -----
Working Interest Boepd 6,425 5,386 19% 7,141 (10%)
------------------ ------- ------- ------- ------ ------ -----
* Includes internal gas consumption
Operations and Development
Since inception in 1994, the Ravva block has produced more than
271 mmbbls of crude and over 339 billion cubic feet of gas, 2.7
times greater than the initial resource estimates at the time of
the PSC award.
During the quarter, the block produced total of 2.6 million boe
at an average rate of 28,556 boepd, 19% higher YoY. Key reasons
contributing to the annual production growth were due to several
successes in FY15- successful application of 4D seismic technology,
better than expected results from the infill drilling program and
contribution from RE-6 discovery.
Continuous field monitoring, optimization of gas lift and
prudent reservoir management method applications have helped in
arresting the natural field decline rate, which contributed to the
quarterly decline in production.
The Ravva asset continues to keep strong focus on the integrity
of onshore & offshore facilities to minimize down time and
carry on un-interrupted production operations. Facilities continue
to run at a high uptime rate, 99.4% in Q1FY16.
During the quarter, 2.2 million barrels of crude and 1.8 billion
cubic feet of gas were sold, averaging 24,307 bopd of crude oil and
20 mmscfd of gas, respectively.
Safety of operations is a top priority for Cairn India at all
its assets. Ravva asset recorded 3.1 Million LTI free man-hours
(404 LTI free days) since last LTI as of Q1FY16.
Cambay (Block CB/OS-2)
Average Daily Units Q1 Q1 y-o-y Q4 q-o-q
Production FY16 FY15 (%) FY15 (%)
------------------ ------- ------ ------- ------ ----- -----
Total Gross
operated* Boepd 8,689 10,557 (18%) 9,366 (7%)
------------------ ------- ------ ------- ------ ----- -----
Gross operated Boepd 8,958 10,765 (17%) 9,609 (7%)
------------------ ------- ------ ------- ------ ----- -----
Oil Bopd 7,800 8,404 (7%) 8,464 (8%)
------------------ ------- ------ ------- ------ ----- -----
Gas Mmscfd 7 14 (51%) 7 1%
------------------ ------- ------ ------- ------ ----- -----
Working Interest Boepd 3,583 4,306 (17%) 3,844 (7%)
------------------ ------- ------ ------- ------ ----- -----
* Includes internal gas consumption
Operations and Development
Since inception in 2002, the Cambay block has produced more than
23 mn barrels of crude and over 224 bn cubic feet of gas.
The block produced a total of 0.8 mm boe at an average of 8,958
boepd in Q1FY16 with a stellar facility uptime of 99.9%. A
successful well intervention campaign carried out during the
quarter helped improve the deliverability of producer wells and
thereby arresting the natural decline. Planned curtailment of
production in April was on account of cleaning and intelligent
pigging of the pipeline, essential to maintain the pipeline
integrity.
During the quarter, 0.9 mmbbls of crude and 0.6billion scf of
gas were sold averaging 8,593 bopd of crude oil and 7 mmscfd of
gas, respectively.
Safety of operations continued to be an area of focus and the
asset recorded 2.3 Million LTI free man-hours since last LTI as of
Q1FY16.
Asset Basin Cairn India's JV partners Area
Interest (in
(%) km(2)
)
---- --------------- ---------------- -------------- ------------ -------
1 KG-ONN-2003/1 KG Onshore 49% ONGC 315
---- --------------- ---------------- -------------- ------------ -------
2 KG-OSN-2009/3 KG Offshore 100% - 1,988
---- --------------- ---------------- -------------- ------------ -------
3 MB-DWN-2009/1 Mumbai Offshore 100% - 2,961
---- --------------- ---------------- -------------- ------------ -------
ONGC, Tata
4 PR-OSN-2004/1 Palar-Pennar 35% Petrodyne 9,417
---- --------------- ---------------- -------------- ------------ -------
Mannar, Sri
5 SL 2007-01-001 Lanka 100% - 2,912
---- --------------- ---------------- -------------- ------------ -------
Orange, South
6 Block 1 Africa 60% Petro SA 19,898
---- --------------- ---------------- -------------- ------------ -------
Exploration Review - Other India & International Assets
--------------------------------------------------------------------
During the quarter, significant advancements were made in
exploration activities across other Indian and International blocks
with a view to pave the way for long term growth opportunities from
these blocks.
KG Offshore (Block KG-OSN-2009/3)
Well site surveys commenced and completed in Q1FY16. Additional
2D seismic data was acquired and PSDM seismic data interpretation
was ongoing during the quarter. Detailed planning for the
exploration drilling campaign is continuing and drilling is
anticipated during the first half of FY16.
KG Onshore (Block KG-ON-2003/1)
Joint Venture partner and Operator, ONGC, has submitted FDP to
the Management Committee for approval in Q1FY16, initiating the JV
approval process for the Block.
Mumbai Offshore (Block MB-DWN-2009/1)
Regional work is continuing with options for acquisition of 3D
seismic data under consideration pending the outcomes of the 2D
interpretation
Palar-Pennar (Block PR-OSN-2004/1)
In Q1FY16, we continued evaluation of the prospect inventory and
optimization of drilling locations to be ready for the work program
to be carried out in this fiscal year.
South Africa Block 1
Robust portfolio of prospects generated and two drillable
prospects matured during Q1FY16. In board plays being evaluated for
oil and gas.
Human Resources
----------------
Cairn India started the new financial year with a renewed
commitment to our business plan and driving the people agenda.
Several critical positions at the leadership level were closed.
Better alignment between SBUs and functions was achieved, helping
us boost accountability and efficiency.
To ensure building a talent pipeline for our technical
functions, there was continued healthy intake of Graduate Trainees
from Premier Institutions. A formal process for job rotation in
technical functions was also launched.
This quarter we partnered with our HSE team and introduced an
employee wellness program called "CairnFit"- covering over 120
employees at our corporate office under Yoga, Functional Fitness
and Running Programs.
Health, Safety, Environment and Sustainability
-----------------------------------------------
Cairn India is committed to meet the highest international
standards of Health, Safety, and Environmental performance and
continues to accord highest priority to conducting safe operations
while being responsible towards the environment and ecology.
During Q1 FY16, Cairn India realigned its efforts to address the
key HSE enablers for business excellence- Wellness, Process Safety
& Asset Integrity, Risk Awareness and Controls. Flagship
programs on Fitness and Yoga have been launched at the Cairn Head
Office and similar programs are being rolled out across all Cairn
facilities.
A major awareness campaign was launched during Q1 FY16 on
Process Safety & Asset Integrity covering all assets and sites
to roll out the PSM standard and help the Business units implement
the same during this fiscal year. We have also launched a major
campaign to raise awareness on Cairn India's Drug & Alcohol
Policy and its effective implementation across all Cairn sites.
Early results suggest a significant improvement in the compliance
trends across the organization.
On the HSE performance, Cairn India continues to achieve
remarkable improvement with focus on increasing risk awareness and
strengthening risk controls. MPT and RGT have recorded 11 & 10
million Lost Time Incident (LTI) free man-hours respectively, until
end of Q1FY16. Project execution also continues to maintain an
excellent track record of LTI free construction activities,
crossing 20 million LTI free man-hours at the end of Q1 FY16.
Corporate Social Responsibility
--------------------------------
During the quarter CSR efforts focused on streamlining the
various initiatives for FY16. Significant success was achieved
under various initiatives in Q1FY16:
-- Water: Demand has gone up by 25% at the existing RO plants,
and most plants are running at high utilization rates. Value added
products like Chilled water are being added by the community
-- Cairn Centre of Excellence (CCoE): MoU has been signed with
the Rajasthan Skills and Livelihood Development Corporation
(RSLDC), Govt. of Rajasthan. 200 students already registered at
CCoE
-- Skill Development, Cairn Enterprise Centre (CEC): New CEC
opened at Sanchore in Jalore district. 380 youths were trained
across 6 CECs, of which 300 were placed in various quality jobs
-- Health: Continued support to District Hospital under PPP
mode. 2,500 patients treated via OPD and 100 operations carried
out- in areas of ENT, Orthopaedics and Gynaecology
-- Sanitation: Under the Swachh Bhagat Abhiyaan program, 600 new
household toilets were constructed in Baitu district and total 161
school toilets are targeted for completion in Q2FY16
-- Solar: Implemented community run 27 KW micro-grid solar PV
plant to provide household electricity to 600 community members in
Village Meghwalon Ki Dhani.
-- Water Harvesting: Additional 100 structures constructed in
Q1; 1000 families positively impacted
FY16 Outlook
-------------
Cairn India continues to remain committed to creating long term
shareholder value. Despite low oil prices and substantial cut in
capex, the Company will at a minimum maintain Rajasthan production
in current year at FY15 levels. Planned capital investment is for a
net capex of US$ 500 million; 45% in Core MBA fields, 40% in Growth
projects of Barmer Hill, Satellite Fields & Gas and 15% in
Exploration. The Company retains the flexibility to invest balance
US$ 1.4 bn as oil prices improve and costs bottom out and also aims
to have healthy cash flows post capex so as to retain the ability
to pay dividends subject to Board.
Contact
--------
Media Relations
Arun Arora, Chief Communication Officer
+91 124 4593039; +91 8826999270; cilmedia@cairnindia.com;
spokesperson@cairnindia.com
Investor Relations
Sneha Arora
+91 124 4593273; +91 8527592196; cilir@cairnindia.com
Cairn India Limited Fact Sheet
On 9 January, 2007, Cairn India Limited was listed on the Bombay
Stock Exchange and the National Stock Exchange of India. Cairn
India is now a subsidiary of Vedanta Limited; part of the Vedanta
Group, a globally diversified natural resources group.
Cairn India is headquartered in Gurgaon in the National Capital
Region. The Company has operational offices in India including
Andhra Pradesh, Gujarat, Rajasthan, Tamil Nadu and International
offices in Colombo and Houston.
Cairn India is one of the largest independent oil and gas
exploration and production companies in India. Together with its JV
partners, Cairn India accounted for 27% of India's domestic crude
oil production in FY14. Average gross operated production was
211,671 boepd for FY15. The Company sells its oil and gas to major
PSU and private buyers in India.
The Company has a world-class resource base, with interest in
seven blocks in India, one in Sri Lanka and one in South Africa.
Cairn India's resource base is located in four strategically
focused areas namely one block in Rajasthan, two on the west coast
of India, five on the east coast of India (including one in Sri
Lanka) and one in South Africa.
The blocks are located in the Barmer Basin, Krishna-Godavari
Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai
Offshore Basin, the Mannar Basin and Orange Basin.
Cairn India's focus on India has resulted in a significant
number of oil and gas discoveries. Cairn India made a major oil
discovery (Mangala) in Rajasthan in the north west of India at the
beginning of 2004. To date, thirty eight discoveries have been made
in the Rajasthan block RJ-ON-90/1
In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a PSC
signed on 15 May, 1995 comprising of three development areas. The
main Development Area (DA-1; 1,859 km2), which includes discoveries
namely Mangala, Aishwariya, Raageshwari and Saraswati is shared
between Cairn India and ONGC. Further Development Areas (DA-2; 430
km2), including the Bhagyam, NI and NE fields and (DA-3; 822 km2)
comprising of the Kaameshwari West Development Area, is shared
between Cairn India and ONGC, with Cairn India holding 70% and ONGC
having exercised their back in right for 30%.
In Andhra Pradesh and Gujarat, Cairn India on behalf of its JV
partners operates two processing plants, with a production of over
36,000 boepd for FY15.
Block SL-2007-01-001 was awarded to Cairn Lanka in the bid round
held in 2008. This offshore block is located in the Gulf of Mannar.
The water depths range from 400 to 1,900 meter. The signing of the
Petroleum Resources Agreement (PRA) to explore oil and natural gas
in the Mannar Basin was undertaken in July 2008 in Colombo.
The farm-in agreement was signed with PetroSA on 16 August, 2012
in the 'Block-I' located in Orange basin, South Africa. The block
covers an area of 19,898 sq km. The assignment of 60% interest and
operatorship has been granted by the South African regulatory
authorities.
For further information on Cairn India Limited, kindly visit
www.cairnindia.com
Corporate Glossary
Cairn Cairn India Limited
India and/or its subsidiaries
as appropriate
-------- -------------------------
Company Cairn India Limited
-------- -------------------------
Cairn Refers to Cairn
Lanka Lanka (Pvt) Ltd,
a wholly owned
subsidiary of
Cairn India
-------- -------------------------
Cash PAT adjusted
EPS for DD&A, impact
of forex fluctuation,
MAT credit and
deferred tax
-------- -------------------------
CFFO Cash Flow from
Operations includes
PAT (excluding
other income
and exceptional
item) prior to
non-cash expenses
and exploration
costs.
-------- -------------------------
CPT Central Processing
Terminal
-------- -------------------------
CY Calendar Year
-------- -------------------------
DoC Declaration of
Commerciality
-------- -------------------------
E&P Exploration and
Production
-------- -------------------------
EBITDA Earnings before
Interest, Taxes,
Depreciation
and Amortisation
includes forex
gain/loss earned
as part of operations
-------- -------------------------
EPS Earnings Per
Share
-------- -------------------------
FY Financial Year
-------- -------------------------
GBA Gas Balancing
Agreement
-------- -------------------------
GoI Government of
India
-------- -------------------------
GoR Government of
Rajasthan
-------- -------------------------
Group The Company and
its subsidiaries
-------- -------------------------
JV Joint Venture
-------- -------------------------
MC Management Committee
-------- -------------------------
MoPNG Ministry of Petroleum
and Natural Gas
-------- -------------------------
NELP New Exploration
Licensing Policy
-------- -------------------------
ONGC Oil and Natural
Gas Corporation
Limited
-------- -------------------------
OC Operating Committee
-------- -------------------------
PRA Petroleum Resources
Agreement
-------- -------------------------
PPAC Petroleum Planning
& Analysis Cell
-------- -------------------------
qoq Quarter on Quarter
-------- -------------------------
SL Sri Lanka
-------- -------------------------
Vedanta Vedanta Resources
Group plc and/or its
subsidiaries
from time to
time
-------- -------------------------
yoy Year on Year
-------- -------------------------
Technical Glossary
2P Proven plus probable
--------- ---------------------------
3P Proven plus probable
and possible
--------- ---------------------------
2D/3D/4D Two dimensional/three
dimensional/ time
lapse
--------- ---------------------------
Blpd Barrel(s) of (polymerized)
liquid per day
--------- ---------------------------
Boe Barrel(s) of oil
equivalent
--------- ---------------------------
Boepd Barrels of oil
equivalent per
day
--------- ---------------------------
Bopd Barrels of oil
per day
--------- ---------------------------
Bscf Billion standard
cubic feet of
gas
--------- ---------------------------
Tcf Trillion standard
cubic feet of
gas
--------- ---------------------------
EOR Enhanced Oil Recovery
--------- ---------------------------
FDP Field Development
Plan
--------- ---------------------------
MDT Modular Dynamic
Tester
--------- ---------------------------
Mmboe million barrels
of oil equivalent
--------- ---------------------------
Mmscfd million standard
cubic feet of
gas per day
--------- ---------------------------
Mmt million metric
tonne
--------- ---------------------------
PRDS Petroleum Resources
Development Secretariat
--------- ---------------------------
PSU Public Sector
Utilities
--------- ---------------------------
SPM Single Point Mooring
--------- ---------------------------
PSC Production Sharing
Contract
--------- ---------------------------
Field Glossary
Barmer Lower permeability
Hill reservoir which
Formation overlies the Fatehgarh
----------- --------------------------
Dharvi Secondary reservoirs
Dungar in the Guda field
and is the reservoir
rock encountered
in the recent
Kaameshwari West
discoveries
----------- --------------------------
Fatehgarh Name given to
the primary reservoir
rock of the Northern
Rajasthan fields
of Mangala, Aishwariya
and Bhagyam
----------- --------------------------
Mannar Located in the
Basin Gulf of Mannar,
situated on the
NE shallow continental
shelf of Sri Lanka
----------- --------------------------
MBARS Mangala, Bhagyam,
Aishwariya, Raageshwari,
Saraswati
----------- --------------------------
Thumbli Youngest reservoirs
encountered in
the basin. The
Thumbli is the
primary reservoir
for the Raageshwari
field
----------- --------------------------
For further information, please contact:
Communications Finsbury
Roma Balwani Daniela Fleischmann
President - Group Communications, Tel: +44 20 7251 3801
Sustainability
and CSR
Tel: +91 22 6646 1000
gc@vedanta.co.in
Investors
Ashwin Bajaj Tel: +44 20 7659 4732
Director - Investor Relations Tel: +91 22 6646 1531
ir@vedanta.co.in
Anshu Goel
Vice President - Investor
Relations
Radhika Arora
Associtae General Manager
- Investor Relations
About Vedanta Resources
Vedanta Resources Plc ("Vedanta") is a London-listed diversified
global resources company. The group produces aluminium, copper,
zinc, lead, silver, iron ore, oil & gas and commercial energy.
Vedanta has operations in India, Zambia, Namibia, South Africa,
Ireland, Liberia, Australia and Sri Lanka. With an empowered talent
pool globally, Vedanta places strong emphasis on partnering with
all its stakeholders based on the core values of entrepreneurship,
excellence, trust, inclusiveness and growth. For more information,
please visit www.vedantaresources.com.
Disclaimer
This press release contains "forward-looking statements" - that
is, statements related to future, not past, events. In this
context, forward-looking statements often address our expected
future business and financial performance, and often contain words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "should" or "will." Forward-looking statements by their
nature address matters that are, to different degrees, uncertain.
For us, uncertainties arise from the behaviour of financial and
metals markets including the London Metal Exchange, fluctuations in
interest and or exchange rates and metal prices; from future
integration of acquired businesses; and from numerous other matters
of national, regional and global scale, including those of a
political, economic, business, competitive or regulatory nature.
These uncertainties may cause our actual future results to be
materially different that those expressed in our forward-looking
statements. We do not undertake to update our forward-looking
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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