Cairn India Profit Rises 48% on Higher Crude Oil ProductionRakteem Katakey
Cairn India Ltd., operator of the nation’s biggest oilfield on land, reported 48 percent higher profit in the third quarter after it increased production.
Net income at Cairn India and its units rose to 33.4 billion rupees ($623 million), or 16.5 rupees a share, in the three months ended Dec. 31, the Gurgaon-based company said in a regulatory filing today. That beat the 30.7-billion rupee median estimate of 31 analysts surveyed by Bloomberg. Total revenue rose 38 percent to 42.8 billion rupees.
Cairn India, acquired by Vedanta Resources Plc for $8.67 billion in 2011, this month won approval to raise production from its biggest field in the western Indian state of Rajasthan by 71 percent, helping boost earnings. The explorer 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 shares rose 1 percent to 340.30 rupees at the close in Mumbai before the earnings announcement, valuing the company at $12 billion. The stock has gained 6.6 percent this year, outperforming a 3.5 percent increase in the benchmark Sensitive Index.
The explorer’s share of production from fields in India was 128,058 barrels of oil equivalent a day in the quarter ended Dec. 31, 29 percent higher than a year earlier and 1 percent lower than in the preceding quarter, the company said in the statement. Net production from the Rajasthan field averaged 118,984 barrels of oil equivalent per day in the three months, compared with 87,585 barrels a day a year earlier and 120,261 barrels a day a quarter earlier.
The company sold its oil and gas at an average $94.90 a barrel of oil equivalent in the quarter, 4 percent lower than a year earlier, according to today’s statement. The average price of Brent traded in London rose 1 percent to $110.13 a barrel in the quarter from a year earlier.
The oil ministry approved an increase in Cairn India’s Rajasthan output to 300,000 barrels a day from the current 175,000, Oil Minister Veerappa Moily said Jan. 4. Cairn India owns 70 percent stake in the Rajasthan oil block and state-run Oil & Natural Gas owns the rest.
Vedanta Resources, a London-based miner controlled by billionaire Anil Agarwal, and unit Sesa Goa Ltd. completed buying a 59 percent stake in Cairn India from Cairn Energy Plc and other shareholders in December 2011.