Cairn India Ltd., operator of the nation’s biggest oilfield on land, reported its first decline in quarterly profit in a year after crude prices fell.
Group net income fell 18 percent to 31.3 billion rupees ($530 million), or 16.36 rupees a share, in the three months ended June 30 from 38.3 billion rupees, or 20.02 rupees, a year earlier, according to an e-mailed statement today. That beat the 28.5 billion rupee median of 34 analyst estimates compiled by Bloomberg. Sales fell 8.6 percent to 40.6 billion rupees.
Cairn India, acquired by Vedanta Resources Plc for $8.67 billion in 2011, plans to spend 130 billion rupees in the next three years to discover new oil pools and boost production at its biggest fields in Rajasthan state, Chairman Navin Agarwal told shareholders today in Mumbai. It plans to drill more than 450 wells to raise production in the area by 67 percent to 300,000 barrels a day.
The shares fell 0.5 percent to 308.60 rupees in Mumbai. They’ve declined 3.3 percent this year, compared with a 3.4 percent gain in the benchmark S&P BSE Sensex index. The earnings were announced after trading closed.
The company sold oil and natural gas at an average $93.3 a barrel of oil equivalent in the quarter, compared with $99.3 a year earlier, according to the statement. The average price of Brent traded in London was $103.35 a barrel in the quarter.
Cairn India sells crude at rates linked to Brent oil prices, unlike state-owned Oil & Natural Gas Corp., which is required to bear part of the country’s fuel subsidy. Cairn India discovered new oil in the Dharvi Dungar sands in Rajasthan’s Barmer district and is evaluating the size of the reserves, according to an April 9 stock exchange filing.
Total output from Cairn India’s fields rose 3 percent to 212,442 barrels of oil equivalent a day. Production from the Rajasthan block is at 180,000 barrels of oil equivalent a day and the company expects it to increase to as many as 215,000 barrels this financial year, according to the statement.