August drill for oil

Cairn India said yesterday that exploratory drilling for oil in the frontier Mannar Basin is expected in August.

The development follows Cairn completing significant preparatory work. “A drillship has been contracted with the expected spud date in August 2011,” global giant Cairn Energy PLC-linked Cairn India, a leading player in the Indian oil and gas industry, said in an announcement accompanying its Financial Year 2011 results yesterday.

Cairn Lanka Ltd., a wholly owned subsidiary of Cairn India, acquired 1,750 km2 3D seismic data in the frontier Mannar Basin in the December 2009 to January 2010 period.

The programme fulfills the minimum work commitment of 1,450 km2 of 3D seismic data acquisition. The Mannar Basin is an under-explored frontier basin. Based on the 3D seismic interpretation, several prospects and leads have been identified and technical work to understand the petroleum system in this basin is ongoing.

Cairn India Managing Director and CEO Rahul Dhir said with its success in India especially in Rajasthan along with the application of innovative technologies the company is “well placed for the exploration drilling campaign in the frontier Mannar Basin in Sri Lanka later this year.”

Cairn India has 10 blocks in its portfolio in three strategically focused areas namely one block in Rajasthan, three on the west coast of India and six on the east coast of India, including one in Sri Lanka.

Out of these, eight including the three producing blocks are operated by Cairn India. Exploration activities are ongoing at different stages in the exploration blocks.

Cairn India reported fourth quarter revenues of $ 808 million and FY2011 full year figure of $ 2.25 billion. Profit after tax (PAT) in Q4 FY 2010-11 was $ 543 million whilst full FY 2010/11 amount was  $ 1.39 billion.

Cairn India’s Gross crude oil production was in excess of 13 million barrels (mmbbls) from operated assets in Q4 FY 2010-11; contributing 20% of India’s current domestic crude production.

It had maintained low cost operations with field direct opex at US$ 2.3 per barrel (bbl) for FY 2010-11.

Average daily gross operated production in FY 2010-11 was 149,103 boe (average daily working interest 83,474 boe).

The average crude oil price realisation in FY 2010-11 was US$ 79.1/bbl and the average gas price was US$ 4.55/mscf resulting in an average price realisation of US$ 76.8/boe.

In Q4 FY 2010-11, average daily gross production of the operating units was 161,194 boe (68,960 boe in Q4 FY 2009-10) and average daily working interest production was 94,129 boe (26,332 boe in Q4 FY 2009-10).

The average oil price realisation in Q4 FY 2010-11 was US$ 94.2 per bbl compared to US$ 71 per bbl in Q4 FY 2009-10. The gas price realisation in Q4 FY 2010-11 was US$ 4.5 per thousand standard cubic

feet (mscf) compared to US$ 4.6 per mscf in Q4 FY 2009-10. The average price realisation per boe was US$ 91.9 in Q4 FY 2010-11 compared to US$ 65.1 in Q4 FY 2009-10.

Cairn India’s achievements have been widely acknowledged. The Rajasthan Operations received nine safety awards in the 24th “Mine Safety Awards” organised under the aegis of the Directorate General of Mines Safety, Rajasthan. In recognition of our community engagement initiatives, Cairn India was awarded the “Golden Peacock Award for Corporate Social Responsibility” for 2011.

The Bombay Stock Exchange recognised Cairn India as the “Company offering the Best Investor Returns.”

The holding company of Cairn India Limited, Cairn UK Holdings Limited, along with its holding company, Cairn Energy PLC (the company’s ultimate holding company) has agreed to sell a substantial part of its shareholding in the company to Vedanta Resources Plc and Twin Star Holdings Limited (a wholly owned subsidiary of Vedanta Resources Plc). This transaction has been approved by the shareholders of Cairn Energy PLC and Vedanta Resources Plc.

Sesa Goa Limited (a subsidiary of Vedanta Resources Plc) has completed the Open Offer for Cairn India shares on 30 April 2011. Approximately 155 million Cairn India shares, representing 8.1 percent of the shareholding, have been tendered. Following the acquisition of both the 10.4 percent stake from PETRONAS International Corporation Limited announced on 19 April 2011 and the Open Offer shares, Sesa Goa Limited holds 18.5 percent of the shareholding of Cairn India.

Accordingly, on completion of the transaction, Cairn Energy PLC will sell 40 percent stake in Cairn India to Vedanta Resources Plc, following which Cairn Energy PLC will hold a residual interest of 21.7 percent of the shareholding.