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Cairn India Q3 net soars, raises oil reserves

Posted by Yogesh on Wednesday, 29 October, 2008

* Reserves at largest oilfield in India raised 20 pct

* Profit jumps on higher prices, fx gains, investment income

MUMBAI, Oct 29 (Reuters) – Energy explorer Cairn India Ltd said on Wednesday its quarterly profit soared more than 12 times on higher oil prices and other income, and raised the reserves at its largest oilfield by a fifth.

The company, a unit of Britain’s Cairn Energy Plc, said it was on track to start production at Mangala in the north-western desert state of Rajasthan by the second half of 2009 and raised the field’s reserves to 1.29 billion barrels of oil from 1.08 billion barrels.

Cairn India aims to produce 175,000 barrels a day (bpd) from Rajasthan by 2010. It produced about 65,500 bpd of oil equivalent from its fields at Ravva off eastern India and Cambay off the west coast in the September quarter.

Consolidated net profit soared to 2.93 billion rupees ($59 million) in its third quarter ended Sept. 30 from 232.4 million rupees a year earlier, thanks to higher crude prices, foreign exchange and investment gains.

Sales rose to 3.21 billion rupees from 2.66 billion.

“Realisations were much higher, while costs and volumes remained the same,” Chief Executive Officer Rahul Dhir told Reuters on telephone. “We also had financial gains from investment income and mutual funds.”

Crude oil prices Clc1 hit a record peak of $147.27 a barrel in July, but has fallen more than 50 percent since. At 1330 GMT, U.S. light crude was trading at $66.42.

Cairn India said its average oil price realisation in the September quarter was $116.3 a barrel, compared with $77.2 a year ago.

It made a foreign exchange gain of 873.4 million rupees and had an income of 1.18 billion rupees from investments, the company said. The rupee depreciated 8.4 percent percent in the September quarter, and has lost about 21 percent in 2008.

Cairn India, which said in June it would spend $2 billion over 18 months for its exploration and pipeline projects, does not see any difficulty because of the global financial crisis.

“We have got adequate liquidity for our exploration plans in Rajasthan. Our near-term capex programme is secure,” Dhir said.

Ahead of the results, shares in Cairn India, which has a market value of $4.1 billion, ended 7.2 percent higher at 116.55 rupees in a slightly firmer Mumbai market.

The stock has lost 58 percent since the beginning of July, far more than the benchmark Mumbai index .BSESN that shed a third in the period. Source Reuters


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