Vedanta Res PLC (VED) - Cairn India announces Q2 FY2013 results RNS Number : 2249P Vedanta Resources PLC 22 October 2012 22 October 2012 Vedanta Resources plc Cairn India Announces Results for the Second Quarter ended 30 September 2012 The following release was issued today by Vedanta Resources Plc's subsidiary Cairn India Limited. For Immediate Release 22 October, 2012 Cairn India Limited Second Quarter Financial Results for the period ended 30 September, 2012 The following commentary is provided in respect of the unaudited financial results and operational highlights of Cairn India Limited and its subsidiary companies (referred to as "Cairn India" or the "Company", NSE: CAIRN, BSE: 532792, Bloomberg: CAIR) for the second quarter (from July - September 2012) for FY 2012-13, in accordance with Indian GAAP. Please note: `denotes Indian Rupee and US$ denotes US Dollar. Elango P, Interim Chief Executive Officer, Cairn India said: "The quarter saw consistent production from our flagship Rajasthan asset. The block continues to produce ~175,000 bopd, which is more than 20% of India's domestic oil production. Work to enhance production from the block continues to remain our focus. Production from all assets resulted in reducing India's import bill by ~US$ 1.8 billion and contributing ~US$ 0.8 billion to the national exchequer during the quarter. Following support from the GoI, we have received all approvals for our corporate re-organisation. Implementation of this will help simplify and consolidate the multi-layered structure of CIL comprising foreign subsidiaries. We have made good progress with GoI in respect of further exploration in the Barmer Basin. With our internal preparation to implement exploration programmes at an advanced stage, I am confident that the Joint Venture can move quickly to harness the Block's full potential post approvals. Our farm-in agreement in the Orange Basin, South Africa and partnership with PetroSA, is a step in the right direction towards our strategic goal of growing our resource base by building a balanced portfolio with a long term vision." Q2 FY2012-13 Financial Highlights · Revenue at ` 44,431 million (US$ 806 million), up 68% yoy · EBITDA at ` 34,253 million (US$ 621 million), up 66% yoy · PAT (excluding forex loss) at ` 31,080 million (US$ 564 million) · Cash flow from operations at ` 28,111 million (US$ 510 million), up 43% yoy · Net cash of ` 124,427 million (US$ 2,360 million) as on 30 September, 2012 · Average daily gross operated production at 207,245 barrels of oil equivalent (boe) (working Interest production at 129,431 boe) o Helped reduce nation's crude oil import dependence by ~US$ 1.8 billion gross o Contribution to the national exchequer (excluding direct taxes) was ~US$ 800 million gross · Gross Rajasthan development capex till date US$ 3,570 million India Highlights Onshore · 'Drill Ready' preparation for exploration in the Barmer Basin at an advanced stage; Cairn-ONGC JV continues to work with Government of India (GoI) to obtain necessary approvals · Mangala field continues to produce at ~150,000 bopd; sustained production at its peak rates over the last two years · Cumulative production from the Bhagyam field crossed five million barrels; currently producing ~25,000 bopd; focus on drilling residual wells and de-bottlenecking of pipeline · Aishwariya field development in progress; expect tocommence production by end FY 2012-13 · Mangala EOR polymer pilot success led to the booking of 70 mmboe as 2P reserves; FDP submitted to JV; full field implementation expected to commence in FY 2014-15 · Technical/pilot trials completed for the application of Drag Reducing Agents (DRA) to de-bottleneck MPT to Salaya section of the pipeline; report submitted to JV · In KG-ONN-2003/1 block, preparatory work is in progress for appraisal drilling in Q1 FY 2013-14; this will help evaluate the size and commerciality of the second discovery i.e. Nagayalanka-SE-1 Offshore · In Ravva, a 'high value high risk' deeper prospect has been identified; exploratory well drilling planned in H1 FY 2013-14 · In CB/OS-2 an infill drilling campaign is expected to commence in H2 FY 2012-13; potential of deeper horizons is also being evaluated International Highlights Sri Lanka · Completed acquisition of 600 sq km of 3D seismic data under Phase 2 exploration programme; preparatory work on-going to drill an exploration well in mid CY 2013 South Africa · Farm-in agreement in 'Block 1' signed in August 2012, with PetroSA for 60% stake along with operatorship; subject to regulatory approvals; tendering for acquisition of 3D seismic data initiated Recognitions · Ravva asset won the Platinum Award under the FICCI Safety Excellence Awards for Manufacturing 2012 · Cairn India won the Golden Peacock Award for Excellence in Corporate Governance for 2012 · Ravva asset won the OISD award for offshore Platform Category for 2011 Financial Review ` million Q2 y-o-y H1 H1 y-o-y FY 2012-13 FY 2011-12 (%) FY 2012-13 FY 2011-12 (%) Revenue 44,431 26,522 67.5 88,832 51,126 73.8 EBITDA 34,253 20,651 65.9 68,822 39,689 73.4 Margin (%) 77.1 77.9 77.5 77.6 PAT (excluding forex 31,080 2,320* 60,674 29,555* gain/loss) PAT 23,222 7,630* 204.4 61,479 34,896* 76.2 Margin (%) 52.3 28.8 69.2 68.3 Basic EPS (`) 16.3 1.2 31.8 15.5 (excluding forex) Basic EPS (`) 12.17 4.01 203.5 32.22 18.34 75.7 CFFO 28,111 19,687 42.8 56,285 32,918 71.0 US$ million Q2 y-o-y H1 H1 y-o-y FY 2012-13 FY 2011-12 (%) FY 2012-13 FY 2011-12 (%) Revenue 806 578 39.4 1,626 1,131 43.8 EBITDA 621 450 38.0 1,260 878 43.5 Margin (%) 77.1 77.8 77.5 77.6 PAT (excluding forex 564 51 1,111 654* gain/loss) PAT 421 167* 152.1 1,125 772* 45.7 Margin (%) 52.3 28.9 69.2 68.3 Basic EPS (`) 0.30 0.03 0.58 0.34 (excluding forex) Basic EPS (US$) 0.22 0.09 144.4 0.59 0.41 43.9 CFFO 510 428 19.2 1,030 728 41.5 Note: Cash flow from Operations (CFFO) - refers to PAT (excluding other income and exceptional item) prior to non-cash expenses and exploration costs *One time retrospective impact of Rajasthan royalty estimate was considered Gross cash available to the company as on 30 September, 2012 was ` 130,677 million (US$ 2,479 million). The non-convertible debentures (NCD) outstanding as on 30 September, 2012 were ` 6,250 million (US$ 119 million). The net cash available as on 30 September, 2012 was ` 124,427 million (US$ 2,360 million). The outstanding NCD were redeemed in October 2012. Revenue reported for the quarter post profit sharing with the GoI and the Rajasthan block royalty expense was `44,431 million (US$ 806 million). The cumulative costs associated with the Development Area 2 (DA 2) have been recovered during the quarter resulting in commencement of profit sharing with the GoI. The profit petroleum of the Rajasthan block (net to the company) was ` 6,981 million (US$ 127 million). Earnings before Interest Tax Depreciation and Amortisation (EBITDA) for the quarter was `34,253 million (US$ 621 million), resulting to an EBITDA margin of 77%. The company generated quarterly profit after tax (PAT) excluding forex loss at `31,080 million (US$ 564 million) and quarterly earnings per share (EPS) excluding forex loss at ` 16 per share. The gross cumulative Rajasthan development capital expenditure as on 30 September, 2012 was US$ 3,570 million, of which US$ 78 million was spent during the quarter including US$ 16 million in DA 2. The average US$-`exchange rate for the quarter was `55.15 vs. ` 54.1 for corresponding quarter of previous year. The closing exchange rate as on 30 September, 2012 was `52.72. Corporate Developments The shareholders of the Company had approved a Scheme of Arrangement (Scheme) between the Company and some of its wholly owned foreign subsidiaries (Cairn Energy India Pty Ltd, Cairn Energy India West B.V., Cairn Energy Cambay B.V., and Cairn Energy Gujarat B.V.), to be effective from 1 January, 2010. This was approved by the Honorable High Courts of Bombay and Madras in 2010, subject to the receipt of other regulatory approvals which have been received in October, 2012. Considering the fact that the necessary approvals were not in place as at 30 September, 2012, no adjustments are made to the unaudited financial results. Implementation of the Scheme will ultimately help in the consolidation of Indian businesses held by these foreign subsidiaries, directly under Cairn India. The Board has decided to meet on 31 October, 2012 to consider the payment of interim dividend. A notice is being sent to the Indian Stock Exchanges today. Cairn India Group and PetroSA signed a farm-in agreement for exploration in the offshore Block 1 in the Orange Basin on the west coast of South Africa. The closure of the transaction is subject to South African regulatory approvals. The search for the Cairn India CEO is ongoing and progressing well. In the meantime, the Board has appointed Mr. P. Elango, Director - Strategy and Business Services and a member of Cairn India's Executive Committee, as the Interim CEO. Further, Mr. Sudhir Mathur has joined the company as the Chief Financial Officer and member of the Cairn India Executive Committee. Operational Review No. Block Name Region Operator Participating Interest 1 RJ-ON-90/1 North Western India Cairn India 70% 2 PKGM-1 (Ravva) Eastern India Cairn India 22.5% 3 CB/OS-2 Western India Cairn India 40% Q2 y-o-y Q1 q-o-q H1 FY 2012-13 FY 2011-12 (%) FY 2012-13 (%) FY 2012-13 Average daily gross operated production 207,245 169,944 21.9% 206,963 0.1% 207,105 (boepd) Average daily working interest production 129,431 99,220 30.4% 127,226 2% 128,335 (boepd) Average oil price 98.1 102.8 -4.6% 101.0 -2.9% 99.6 realisation (US$ per bbl) Average gas price realisation (US$ per 4.6 4.5 2.2% 4.5 2.2% 4.5 mscf) Average price realisation 96.7 100.3 -3.6% 99.3 -2.6% 98.0 (US$ per boe) 1. Rajasthan (Block RJ-ON-90/1) Q2 y-o-y Q1 q-o-q H1 (%) (%) FY 2012-13 FY 2011-12 FY 2012-13 FY 2012-13 Average daily gross operated production 171,801 125,251 37 167,146 3 169,486 (bopd) Average daily working interest production 120,261 87,676 37 117,002 3 118,641 (bopd) Operations & Projects The Rajasthan Operation and Projects including drilling and pipeline had 7.5 million Lost time Injury (LTI) free hours during the quarter. As a commitment towards maintaining the highest Health, Safety, Environment and Assurance standards, the company would be reporting quarterly LTI performance. Rajasthan block continues to produce from four fields, i.e. Mangala, Bhagyam, Saraswati and Raageshwari with current production at ~ 175,000 bopd. The facility and well uptime stood at 98.1% during Q2 FY 2012-13 and figured in the top decile amongst global peers. In line with standard industry practice, we envisage staggered shutdowns to tie-in new fields, routine maintenance periods for safe operations, etc. Accordingly, we expect routine downtime of 3%-5% for the facilities and processing infrastructure. However, our endeavour remains to minimise downtime. Mangala field continues to sustain production at ~150,000 bopd following GoI approval in April 2012. The field produced at a rate of ~125,000 bopd for more than one and a half years and has now ramped up to its current level since April 2012. A total of 152 development wells are drilled and completed in the Mangala field. The remaining well count as per the FDP will be drilled in due course. Bhagyam field is producing at ~25,000 bopd; cumulative production from Bhagyam crossed 5 million barrels. A total of 64 wells have been drilled to date with the drilling activity for the residual wells (~20% of the FDP approved count) and the pipeline de-bottlenecking in progress. The technical/pilot trials for first stage of the de-bottlenecking process to enhance capacity have been completed by the application of DRA technology. The report has been submitted to the JV. Once these activities are completed, field production is expected to ramp up to the FDP approved rate of 40,000 bopd. Crude oil is transported via the Bhagyam trunk line to MPT for processing andthen exported through the heated pipeline. The Raageshwari and Saraswati fields continue to cumulatively produce at ~500 bopd. The availability of the integrated processing and evacuation facility has reduced operating costs and accordingly has made these marginal fields economically viable. The MPT is currently handling ~175,000 bopd. Work continues on the associated facilities expansion project which will ensure the availability of the facilities for life of the field. Development drilling and well completion activities in line with the approved FDP continue to progress in Bhagyam and Mangala. Development work on the Aishwariya field is currently underway with EPC contracts awarded. All long lead equipment items are purchased and are now being delivered. The crude oil production is expected to commence by end FY 2012-13. The MPT to Salaya (~590 km) section of the pipeline continues to safely deliver crude oil to Indian refiners. We continue to witness higher crude demand from this section of the pipeline. The section provides us with access to over 1.6 million barrels per day of refining capacity. The pipeline is currently operating at ~175,000 bopd. As mentioned previously, technical/pilot trials for the de-bottlenecking of the pipeline to enhance capacity is in progress. The application of the DRA technology has resulted in satisfactory results and a report has been submitted to the JV. The enhanced capacity of the pipeline is expected to come alongside increased field production. Overall, the pipeline can handle much higher volumes in line with the basin potential through incremental investments and augmentation of facilities, subject to regulatory approvals. Work on the remaining ~80 km Salaya to Bhogat section has been initiated following the resolution of execution challenges. This section, including the Bhogat Terminal, is expected to be completed in H1 CY 2013. The Marine facilities off the coast of Bhogat are installed. The Rajasthan upstream project has achieved a significant milestone of 10 million LTI free hours. Raageshwari Oil field received a runner up award from DGMS for "Low Injury Frequency Rate - Cat 7". Sales Crude oil sales arrangements are in place with PSU and private refiners for volumes in excess of 175,000 bopd. The crude is currently being supplied to four refineries. The Rajasthan crude is well established in the market, generating higher demand and thereby increased value for its stakeholders.We have enough demand for the crude in the current pipeline route. In accordance with the RJ-ON-90/1 PSC, the crude is benchmarked to Bonny Light, West African low sulphur crude that is frequently traded in the region, with appropriate adjustments for crude quality. The implied crude price realisation for this quarter (average of three months up to September 2012) lies within the stated guidance of 10%-15% discount to Brent. Resource Base A comprehensive review of the resource potential in the block was carried out by Cairn India through detailed studies involving the usage of innovative technologies and advanced geoscience. Based on Cairn India's assessment, Rajasthan potential resource for the block is now estimated to be 7.3 billion boe in place. This is primarily due to an increase in the exploration upside with the prospective resource base now estimated at 3.1 billion boe in place from an earlier estimate of 2.5 billion boe in place. Rajasthan recoverable prospective resource increased from 250 mmboe to 530 mmboe on a risked basis, primarily due to generation of additional leads and prospects. Cairn India and ONGC are working with GoI to obtain the necessary approvals required to conduct exploration and appraisal activity in the block. In anticipation of this, focused 'Drill Ready' preparation is on-going and is at an advanced stage. The JV continues to work towards the technical approval of some of the prospects which could include both oil and gas. The rationale behind the exploration of gas prospects is to augment the already rich gas finds in the southern part of the block and explore possibilities of commercialisation beyond captive usage. This is a step towards the equitable usage of resources in the Rajasthan block in an environmentally friendly way to add value for all stakeholders. The Mangala, Bhagyam and Aishwariya (MBA) fields (including EOR potential) have gross ultimate recoverable oil reserves and resources of approximately one billion barrels. The 20 other fields in the RJ block hold around 2 billion barrels of oil in place of which around 165 mm boe is estimated to be recoverable. A draft FDP for the Barmer Hill discovery has been prepared and is currently under discussions with the JV. The FDPs for the other discoveries are under preparation. EOR pilot continues to progress well with positive results being observed from the polymer injection phase. Based on these results, an FDP for a full field application of polymer flood in the Mangala field has been submitted to the JV. The full field implementation of the polymer flood is expected to start in FY 2014-15 subject to GoI approvals. Pursuant to the submission of the FDP, Cairn has booked 70 mmboe as 2P reserves. Preparation for the commencement of the Alkali Surfactant Polymer (ASP) phase is currently underway. The currently envisaged basin potential stands at 300,000 bopd (equivalent to a contribution of approximately 35% of India's total domestic current crude production). 2. Eastern India (Block PKGM-I - Ravva Field) - Krishna Godavari Basin Q2 Q1 q-o-q H1 FY 2012-13 FY 2011-12 y-o-y (%) FY 2012-13 (%) FY 2012-13 Average daily gross operated production 28,614 36,185 -20.9% 32,589 -12% 30,591 (boepd) Average daily oil 21,597 26,965 -19.9% 23,536 -8% 22,561 production (bopd) Average daily gas 42 55 -23.9% 54 -22% 48 production (mmscfd) Average daily working interest production 6,438 8,142 -20.9% 7,333 -12% 6,883 (boepd) The Ravva field celebrated its 17th year of successful operations, has produced more than 249 mm bbls of crude and sold 310 billion cubic feet of gas, more than double its initial estimates. During the quarter, the plant uptime was 99%. A 'high value high risk' deeper prospect has been identified in the block and the drilling of an exploration well is planned for H1 FY 2013-14. Asset integrity measures in line with statutory compliances are in progress. A total plant shutdown was carried out to complete all hydrotests as per statutory requirements. The asset had an LTI incident during the quarter. Ravva asset won the Platinum Award (FICCI Safety Excellence Awards) for Manufacturing 2012 and also the prestigious OISD Award for offshore Platform Category for 2011. 3. Western India (Block CB/OS-2) - Cambay Basin Q2 Q1 q-o-q H1 FY 2012-13 FY 2011-12 y-o-y (%) FY 2012-13 (%) FY 2012-13 Average daily gross operated production 6,830 8,508 -19.7% 7,228 -6% 7,028 (boepd) Average daily oil 4,297 5,390 -20.3% 4,737 -9% 4,516 production (bopd) Average daily gas 15 19 -18.8% 15 2% 15 production (mmscfd) Average daily working interest production 2,732 3,403 -19.7% 2,891 -6% 2,811 (boepd) The asset recorded 0.28 million LTI free hours during the quarter. The CB/OS-2 facilities had an uptime of over 99.9% in Q2 FY 2012-13. This block provides an example of optimal asset utilisation. The infrastructure utilisation in the block was optimised by making a tolling and processing arrangement with ONGC to process the gas from its North Tapti field (adjacent to the Lakshmi field). The tolling of gas commenced in June, 2012. The block shall undertake an infill drilling campaign which includes two new wells and one work over, which is expected to commence in H2 FY 2012-13. This is expected to help arrest the rate of production decline in the block. The potential of deeper horizons is also being evaluated and is under discussions with the JV. The block recorded more than 10 million safe work hours over the last eight years, which demonstrates Cairn's continued commitment to operate safely. Exploration Review Area Sr. Block Name Area Cairn India's JV partners No. Interest (%) (in km^2) 1 RJ-ON-90/1 Barmer Basin 70% ONGC 3,111 2 CB/OS-2 Cambay Basin 40% ONGC, Tata 1,657 Petrodyne 3 PKGM-1 (Ravva) Krishna-Godavari 22.5% ONGC, Ravva 331 Basin Oil, Videocon 4 KG-ONN-2003/1 Krishna-Godavari 49% ONGC 3,288 Basin 5 KG-OSN-2009/3 Krishna-Godavari 100% - 1,988 Basin 6 KG-DWN-98/2* Krishna-Godavari 10% ONGC 7,295 Basin 7 MB-DWN-2009/1 Mumbai Offshore 100% - 2,961 Basin 8 PR-OSN-2004/1 Palar-Pennar Basin 35% ONGC, Tata 9,417 Petrodyne 9 SL 2007-01-001 Mannar Basin 100% - 3,000 10 Block 1** Orange Basin, SA 60% Petro SA 19,922 *Divestment approved by GoI, **Subject to South African regulatory approvals Note-all the blocks except KG-DWN-98/2 are operated by Cairn India Cairn India has a portfolio of ten blocks, located in four strategically focused areas: one in Rajasthan; two on the west coast of India; six on the east coast of India (including one in Sri Lanka) and one in South Africa. Out of these, nine blocks, including the three that are in production, are operated by Cairn India. The blocks are located in the Barmer Basin, Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin in India, the frontier Mannar Basin in Sri Lanka and the Orange Basin in South Africa. India Block Updates In the KG-DWN-98/2 block, Cairn India has decided to farm-out its stake to its JV partner, ONGC. GoI approvals have now been obtained. This divestment of insignificant equity is part of Cairn India's process of continuous portfolio optimisation. In KG-ONN-2003/1, following the discovery ofoil and gas in the well Nagayalanka-SE-1, an appraisal plan has been prepared. The two well appraisal programme has been approved by the JV partner. It is planned to spud the first well in Q1 FY 2013-14. The estimate of the gross in place resource for both the discoveries is ~550 mm boe. In the KG-OSN-2009/3 block, force majeure has been declared due to the denial of permission to carry out exploration activity in the restricted area by the Ministry of Defence. GoI has granted conditional approval for carrying out exploration activity; however discussions are in progress for unrestricted access. In the MB-DWN-2009/1 block, awarded in the NELP VIII licensing round, force majeure was declared by Cairn India due to denial of defence clearances for further exploration activity. This has been accepted by the Directorate General of Hydrocarbons (DGH). Cairn India is in discussions with the GoI to resolve the matter. In the PR-OSN-2004/1 block, force majeure has been declared due to the denial of permission to drill in the restricted area by the Department of Space. GoI has granted conditional approval for carrying out exploration drilling; however discussions are in progress with the GoI for unrestricted access. Sri Lanka Block Update 600 sq km 3D seismic acquisition program under Phase 2 exploration period was completed in Block SL 2007-01-001 in order to evaluate certain leads and to finalise future drilling locations. The 3D seismic acquisition programme has been carried out on time, within budget and without any HSE incidents. Data processing of the acquired survey is in progress. The Phase 2 exploration well is planned to be drilled in mid CY 2013. South Africa block Update A farm-in agreement has been signed with PetroSA on 16 August, 2012for a 60% stake along with operatorship in the 'Block-I' located in Orange basin, South Africa. The area of the block is 19,922 sq km. The approval process from Govt of South Africa is in progress. The tendering for acquisition of 3D seismic data has been initiated. Cairn India Limited Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai - 400025 Corporate Office: 3^rd & 4^th Floors, Vipul Plaza, Sun City, Sector-54, Gurgaon - 122002 (All amounts are in ` lakhs, unless otherwise stated) Part - I : Statement of Consolidated Unaudited Results for the Quarter and Six months ended 30 September 2012 Preceding Corresponding Corresponding Quarter quarter Half year half year Previous ended quarter ended year ended Sr. Particulars ended ended 30 Sep ended 30 Sep No. 30 Sep 2011 in the 30 Sep 2011 in the 31 Mar 2012 30 Jun previous year 2012 previous year 2012 2012 Unaudited Unaudited Unaudited Unaudited Unaudited Audited 1 Income from operations a) Income from 444,314 444,003 265,220 888,317 511,255 1,186,065 operations b) Other operating - - - - - - income Total income from 444,314 444,003 265,220 888,317 511,255 1,186,065 operations (net) 2 Expenses - a) Share of expenses in 18,066 17,718 15,774 35,784 27,647 63,004 producing oil and gas blocks b) (Increase)/Decrease (757) (1,800) (371) (2,557) 193 (2,626) in inventories of finished goods c) Employee benefit 3,601 3,215 2,347 6,816 4,431 8,894 expenses d) Depletion, depreciation and 45,152 43,734 31,422 88,886 66,024 144,030 amortization expenses e) Cess 71,697 69,466 29,663 141,163 59,051 128,497 f) Unsuccessful and general exploration 2,624 3,521 3,888 6,145 5,762 29,883 costs g) Other expenses 6,548 6,194 7,408 12,742 17,285 32,972 Total expenses 146,931 142,048 90,131 288,979 180,393 404,654 3 Profit from operations before other income, exchange 297,383 301,955 175,089 599,338 330,862 781,411 fluctuation, finance costs and exceptional items (1-2) 4 a) Other income 22,262 9,644 6,198 31,906 11,477 31,940 b) Foreign exchange fluctuation (78,581) 86,628 53,104 8,047 53,409 61,861 gain/(loss)-net 5 Profit before finance costs and 241,064 398,227 234,391 639,291 395,748 875,212 exceptional items (3+4) 6 Finance costs 1,881 2,947 12,282 4,828 17,125 22,580 7 Profit after finance costs but 239,183 395,280 222,109 634,463 378,623 852,632 before exceptional items (5-6) 8 Exceptional items - - (135,518) - (10,285) (10,285) (Refer note 6) 9 Profit before tax 239,183 395,280 86,591 634,463 368,338 842,347 (7+8) 10 Tax expense a) Current tax 62,867 65,243 9,685 128,110 65,523 155,445 b) MAT credit (49,278) (49,499) 2,425 (98,777) (46,903) (118,128) entitlement c) Deferred tax (6,624) (3,038) (1,822) (9,662) 759 11,256 charge / (credit) Total 6,965 12,706 10,288 19,671 19,379 48,573 11 Net Profit for the 232,218 382,574 76,303 614,792 348,959 793,774 period (9-10) 12 Paid-up equity share capital 190,873 190,787 190,258 190,873 190,258 190,740 (Face value of ` 10 each) 13 Reserves excluding Revaluation 4,638,468 Reserves 14 Earnings per share (in ` ) (not annualized): a) Basic 12.17 20.05 4.01 32.22 18.34 41.71 b) Diluted 12.15 20.02 4.00 32.17 18.28 41.61 Part - II : Select Information for the Quarter and Six months ended 30 September 2012 Corresponding Corresponding Quarter ended Preceding quarter Half year half year Previous year Sr. Particulars quarter ended ended ended No. 30 Sep 2012 ended 30 Sep ended 30 Sep 30 Jun 2012 2011 in the 30 Sep 2012 2011 in the 31 Mar 2012 previous year previous year A Particulars of shareholding 1 Public shareholding - Number of 786,015,345 785,155,823 911,258,793 786,015,345 911,258,793 784,682,109 shares - Percentage of 41.18% 41.15% 47.90% 41.18% 47.90% 41.14% shareholding 2 Promoters and promoter group shareholding a) Pledged / encumbered -Number of - - - - - - shares -Percentage of shares (as a % of the total share - - - - - - shareholding of promoter and promoter group) -Percentage of shares (as a % of the total - - - - - - share capital of the Company) b) Non-encumbered -Number of 1,122,713,999 1,122,713,999 991,323,584 1,122,713,999 991,323,584 1,122,713,999 shares -Percentage of shares (as a % of the total share 100% 100% 100% 100% 100% 100% shareholding of promoter and promoter group) -Percentage of shares (as a % of the total 58.82% 58.85% 52.10% 58.82% 52.10% 58.86% share capital of the Company) Consolidated Statement of Assets and Liabilities As at As at Sr. Particulars 30 Sep 2012 31 Mar 2012 No. (Unaudited) (Audited) A EQUITY AND LIABILITIES 1 Shareholders' funds (a) Share capital 190,873 190,740 (b) Reserves and surplus 5,256,236 4,638,468 5,447,109 4,829,208 2 Share application money 588 - pending allotment 3 Non-current liabilities (a) Deferred tax 58,929 68,413 liabilities (net) (b) Long-term provisions 221,233 187,399 280,162 255,812 4 Current liabilities (a) Trade payables 65,088 60,716 (b) Other current 127,232 187,561 liabilities (c) Short-term provisions 27,170 12,061 219,490 260,338 TOTAL 5,947,349 5,345,358 B ASSETS 1 Non-current assets (a) Fixed assets 1,356,410 1,345,017 (b) Goodwill on 2,531,927 2,531,927 consolidation (c) Deferred tax assets 1,215 1,039 (net) (d) Long-term loans and 352,492 253,799 advances (e) Other non-current 38,630 69,076 assets 4,280,674 4,200,858 2 Current assets (a) Current investments 155,225 183,557 (b) Inventories 18,044 13,607 (c) Trade receivables 265,577 149,684 (d) Cash and bank 1,151,544 701,351 balances* (e) Short-term loans and 52,106 83,847 advances (f) Other current assets 24,179 12,454 1,666,675 1,144,500 TOTAL 5,947,349 5,345,358 * includes cash and cash equivalents of ` 602,190 lakhs (31 March 2012 : ` 444,639 lakhs) Notes:- 1. The above unaudited financial results for the current quarter ended 30 September 2012 were subjected to a limited review by the auditors of the Company and reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meeting held on 22 October 2012. 2. The individual items in the above financial results are net of amounts cross charged to oil and gas blocks where the Group is the operator. The Group's share of such net expenses in oil and gas blocks is treated as exploration, development or production costs, as the case may be. 3. Employee costs for the current quarter and six months include stock option charge of ` 697 lakhs and ` 1,417 lakhs respectively, computed under the Intrinsic Value Method. The said charge for the current quarter and six months would have been ` 2,051 lakhs and ` 3,920 lakhs respectively, if computed under the Fair Value (Black Scholes) Method. 4. 859,522 additional equity shares were issued during the current quarter on exercise of stock options by the employees of the Cairn India Group. 5. The shareholders of the Company had approved a Scheme of Arrangement between the Company and some of its wholly owned subsidiaries, to be effective from 1 January 2010 ("the Scheme") which was approved by the Honorable High Courts of Bombay and Madras in 2010, subject to the receipt of other regulatory approvals which have been received in October 2012. Considering the fact that the necessary approvals were not in place as at 30 September 2012, no adjustments are required to be made to the above unaudited financial results. 6. Vedanta Resources Plc. along with its subsidiaries (Vedanta group) became the promoter of the Company w.e.f. 8 December 2011. Consequently, royalty paid by Oil and Natural Gas Corporation Limited with respect to the RJ-ON-90/1 block was treated as cost recoverable, as it was one of the pre-conditions imposed by the Government of India for approving the transaction of sale of shares by Cairn Plc. group to Vedanta group resulting in reduction in revenues and profit after tax of the Cairn India Group. The reduction on this account for the period upto 31 March 2011 and 30 June 2011 was disclosed as an exceptional item in the previous year ended 31 March 2012 and half year ended 30 September 2011 respectively. 7. The Group operates in only one segment i.e. "Oil and Gas". 8. Previous quarter / six month / year's figures have been regrouped / rearranged wherever necessary to confirm to the current quarter's presentation. For and on behalf of the Board of Directors Place: Gurgaon Navin Agarwal Date:22October Chairman 2012 Cairn India Limited Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai - 400025 Corporate Office: 3^rd & 4^th Floors, Vipul Plaza, Sun City, Sector-54, Gurgaon - 122002 (All amounts are in `lakhs, unless otherwise stated) Part - I : Statement of Standalone Unaudited Results for the Quarter and Six months ended 30 September 2012 Preceding Corresponding Corresponding Previous Quarter quarter Half year half year year ended quarter ended ended Sr. Particulars ended ended 30 Sep ended 30 Sep No. 30 Sep 2011 in the 30 Sep 2011 in the 31 Mar 2012 30 Jun previous year 2012 previous year 2012 2012 Unaudited Unaudited Unaudited Unaudited Unaudited Audited 1 Income from operations a) Income from - 80 321 - 376 880 operations b) Other operating - - - - - - income Total income from operations - 80 321 - 376 880 (net) 2 Expenses a) Data acquisition and - 520 - 520 - 468 analysis b) Employee benefit 304 446 373 750 765 1,538 expenses c) Depreciation and 1 1 1 2 2 4 amortization expenses d) Legal & professional 341 926 329 1,267 696 2,371 fees e) Unsuccessful and general 437 443 443 880 1,072 1,788 exploration costs f) Other 1,725 493 440 2,138 580 1,282 expenses Total expenses 2,808 2,829 1,586 5,557 3,115 7,451 3 (Loss) from operations before other income, exchange (2,808) (2,749) (1,265) (5,557) (2,739) (6,571) fluctuation, finance costs and exceptional items (1-2) 4 a) Other income 1,652 2,223 2,371 3,875 5,101 24,014 b) Foreign exchange 206 (227) (564) (21) (573) (1,548) fluctuation gain/(loss)-net 5 Profit/(Loss) before finance costs and (950) (753) 542 (1,703) 1,789 15,895 exceptional items (3+4) 6 Finance costs 1,551 2,635 2,898 4,186 5,770 11,145 7 Profit/(Loss) after finance costs but (2,501) (3,388) (2,356) (5,889) (3,981) 4,750 before exceptional items (5-6) 8 Exceptional - - - - - - items 9 Profit/(Loss) before tax (2,501) (3,388) (2,356) (5,889) (3,981) 4,750 (7+8) 10 Current tax - - 474 - 480 354 expense 11 Net Profit/(Loss) (2,501) (3,388) (2,830) (5,889) (4,461) 4,396 for the period (9-10) 12 Paid-up equity share capital 190,873 190,787 190,258 190,873 190,258 190,740 (Face value of ` 10 each) 13 Paid up debt 62,500 135,000 125,000 capital 14 Reserves excluding Revaluation 3,001,222 Reserves 15 Debenture redemption 4,396 - 4,396 reserve 16 Earnings/(Loss) per share (in `) (not annualized) : a) Basic (0.13) (0.18) (0.15) (0.31) (0.23) 0.23 b) Diluted (0.13) (0.18) (0.15) (0.31) (0.23) 0.23 17 Debt equity 0.02 0.04 0.04 ratio 18 Debt service 0.30 0.75 coverage ratio 19 Interest service 0.30 1.43 coverage ratio Part-II: Select Information for the Quarter and Six months ended 30 September 2012 Preceding Corresponding Corresponding Quarter ended quarter Half year half year Previous year Sr. Particulars quarter ended ended ended No. 30 Sep 2012 ended 30 Sep ended 30 Sep 30 Jun 2012 2011 in the 30 Sep 2012 2011 in the 31 Mar 2012 previous year previous year A Particulars of shareholding 1 Public Shareholding - Number of 786,015,345 785,155,823 911,258,793 786,015,345 911,258,793 784,682,109 shares - Percentage of 41.18% 41.15% 47.90% 41.18% 47.90% 41.14% shareholding 2 Promoters and Promoter Group Shareholding a) Pledged / Encumbered -Number of - - - - - - shares -Percentage of shares (as a % of the total share - - - - - - shareholding of promoter and promoter group) -Percentage of shares (as a % of the total - - - - - - share capital of the Company) b) Non-encumbered -Number of 1,122,713,999 1,122,713,999 991,323,584 1,122,713,999 991,323,584 1,122,713,999 shares -Percentage of shares (as a % of the total share 100% 100% 100% 100% 100% 100% shareholding of promoter and promoter group) -Percentage of shares (as a % of the total 58.82% 58.85% 52.10% 58.82% 52.10% 58.86% share capital of the Company) Particulars Quarter ended 30 Sep 2012 B Investor Complaints Pending at the beginning of the quarter - Received during the quarter 11 Disposed of during the quarter 11 Remaining unresolved at the end of the quarter - Standalone Statement of Assets and Liabilities As at As at Sr. Particulars 30 Sep 2012 31 Mar 2012 No. (Unaudited) (Audited) A EQUITY AND LIABILITIES 1 Shareholders' funds (a) Share capital 190,873 190,740 (b) Reserves and 2,998,309 3,001,222 surplus 3,189,182 3,191,962 2 Share application money 588 - pending allotment 3 Non-current liabilities (a) Long term 116 124 provisions 116 124 4 Current liabilities (a) Trade payables 1,786 1,321 (b) Other current 69,715 133,099 liabilities (c) Short-term 42 60 provisions 71,543 134,480 TOTAL 3,261,429 3,326,566 B ASSETS 1 Non-current assets (a) Fixed assets 6,009 5,660 (b) Non-current 3,088,404 3,085,346 investments (c) Long-term loans and 15 15 advances (d) Other non-current 354 354 assets 3,094,782 3,091,375 2 Current assets (a) Current investments 154,281 182,134 (b) Trade receivables - 47 (c) Cash and bank 5,794 46,000 balances* (d) Short-term loans 5,770 5,886 and advances (e) Other current 802 1,124 assets 166,647 235,191 TOTAL 3,261,429 3,326,566 * includes cash and cash equivalents of ` 622 lakhs (31 Mar 2012: ` 8,355 lakhs) Notes:- 1. The above unaudited financial results for the current quarter ended 30 September 2012 were subjected to a limited review by the auditors of the Company and reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meeting held on 22 October 2012. 2. Employee costs for the current quarter and six months include stock option charge of ` Nil and ` 65 lakhs respectively, computed under the Intrinsic Value Method. The said charge for the current quarter and six months would have been ` 1,374 lakhs and ` 2,579 lakhs respectively, if computed under the Fair Value (Black Scholes) Method. 3. 859,522 additional equity shares were issued during the current quarter on exercise of stock options by the employees of the Cairn India Group. 4. The shareholders of the Company had approved a Scheme of Arrangement between the Company and some of its wholly owned subsidiaries, to be effective from 1 January 2010 ("the Scheme") which was approved by the Honorable High Courts of Bombay and Madras in 2010, subject to the receipt of other regulatory approvals which have been received in October 2012. Considering the fact that the necessary approvals were not in place as at 30 September 2012, no adjustments are required to be made to the above unaudited financial results. 5. Paid up debt capital comprises of non-convertible debentures. 6. Ratios have been computed as follows: Debt equity ratio = Debt / Shareholders' fund Debt service coverage ratio = EBIDTA / Finance cost + Principal repayment (DSCR) of debt during the period Interest service coverage = EBIDTA / Finance cost ratio (ISCR) Debt = Long term borrowings (including their current maturities) Shareholders' fund = Share capital + Reserves and surplus EBIDTA = Earnings before finance costs, depreciation, depletion & amortization and tax DSCR and ISCR for the half year ended 30 September 2012 have not been furnished as EBITDA is negative. 7. The Company operates in only one segment i.e. "Oil and Gas". 8. Previous quarter / six month / year's figures have been regrouped / rearranged wherever necessary to confirm to the current quarter's presentation. For and on behalf of the Board of Directors Place: Gurgaon Navin Agarwal Date:22October2012 Chairman Contact Details Analysts/Investors Anurag Pattnaik, DGM-Geology & Investor Relations +919910487716 Media Dr Sunil Bharati, Head, Corporate Affairs & Communications +919910486055 In conjunction with these results Cairn India is hosting an Analyst Conference Call today. The live audio webcast for the call will be available at the Cairn India website (www.cairnindia.com) from 17:30 hrs IST. 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 part of the Vedanta Group, a globally diversified natural resources group with wide ranging interests in aluminium, copper, zinc, lead, silver, iron ore, etc. Cairn India is headquartered in Gurgaon in the National Capital Region, with operational offices in Tamil Nadu, Gujarat, Andhra Pradesh, Rajasthan and Sri Lanka. Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. Average daily gross operated production was 207,245 boe in Q2 FY2012-13. The Company sells its oil to major refineries in India and its gas to both PSU and private buyers. The Company has a world-class resource base, with interest in eight 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, six 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, Mannar Basin and Orange Basin. Cairn India's focus on India has resulted in a significant number of oil and gas discoveries. Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. To date, twenty five 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. The main Development Area (1,859 km^2), which includes Mangala, Aishwariya, Raageshwari and Saraswati is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC. Further Development Areas (430 km^2), including the Bhagyam and Shakti fields and (822 km^2) comprising of the Kaameshwari West Development Area, is also shared between Cairn India and ONGC in the same proportion. The Mangala, Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of approximately 1 billion barrels, which includes proved plus probable (2P) gross reserves and resources of 636 mmboe with a further 300 mmboe or more of EOR resource potential. The Rajasthan block is contributing more than one fifth of current domestic crude production. The total resource base supports a vision to produce 300,000 bopd, (equivalent to a contribution of more than 35% of India's current domestic crude production), subject to further investments and regulatory approvals. In Andhra Pradesh and Gujarat, Cairn India on behalf of its JV partners operates two processing plants, 11 platforms and more than 200 km of sub-sea pipelines with a production of approximately 30,000 boepd. 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. Cairn Lanka (Private) Limited is a wholly owned subsidiary of Cairn India and holds a 100% participating interest in the block. The signing of the Petroleum Resources Agreement (PRA) to explore oil and natural gas in the Mannar Basin was held in July 2008 in Colombo. The farm-in agreement has been signed with Petro SA on 16 August 2012,for 60% stake along with operatorship in the Block-I located in Orange basin, South Africa. The area of the Block is 19,922 sq km. The approval process of this agreement from Govt of South Africa is in progress. India currently imports 3.4* million bopd of crude oil. The current domestic crude oil production is approximately 0.76** million bopd of which Cairn India operated assets (Ravva, CB/OS-2 and the RJ-ON-90/1) contribute around one-fourth. For further information on Cairn India Limited & Cairn Lanka (Pvt) Limited see www.cairnindia.com& www.cairnlanka.com *BP Statistical Review for CY 2011 **MoPNG August 2012 data Corporate Glossary Cairn India/ Cairn India Limited and/or its subsidiaries as appropriate CIL Company Cairn India Limited Cairn Lanka Refers to Cairn Lanka (Pvt) Ltd, a wholly owned subsidiary of Cairn India CY Calendar Year DoC Declaration of Commerciality E&P Exploration and Production EBITDA Earnings before Interest Tax Depreciation and Amortisation EPS Earnings Per Share FY Financial Year GBA Gas Balancing Agreement GoI Government of India GoSL Government of Sri Lanka Group The Company and its subsidiaries JV Joint Venture MPT Mangala Processing Terminal MC Management Committee 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 Group Vedanta Resources plc and/or its subsidiaries from time to time, but shall not include CIL 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 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 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 PSC Production Sharing Contract Field Glossary Barmer Hill Formation Lower permeability reservoir which overlies the Fatehgarh Secondary reservoirs in the Guda field and is the Dharvi Dungar 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 Basin Located in the Gulf of Mannar, situated on the NE shallow continental shelf of Sri Lanka MBA Mangala, Bhagyam and Aishwariya Youngest reservoirs encountered in the basin. The Thumbli Thumbli is the primary reservoir for the Raageshwari field Disclaimer This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are by their nature subject to significant risks and uncertainties; and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India's joint venture partner. For further information, please contact: Investors: Ashwin Bajaj firstname.lastname@example.org Senior Vice President - Investor Tel: +44 20 7659 4732 / +91 22 6646 1531 Relations Vedanta Resources plc Media: Gordon Simpson Faeth Birch Tel: +44 20 7251 3801 RLM Finsbury About Vedanta Resources plc Vedanta Resources plc ("Vedanta") is a London listed FTSE-100 diversified global resources major. The group produces Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Power, and Oil and Gas. Vedanta has world-class assets in India, Zambia, South Africa, Namibia, Ireland Liberia, Australia and Sri Lanka and a strong organic growth pipeline of projects. 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 MSCLLFIVISLFFIF -0- Oct/22/2012 13:17 GMT
Vedanta Res PLC VED Cairn India announces Q2 FY2013 results
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