Cairn India reports quarterly loss; reaffirms potential in Rajasthan block

Cairn India reported a quarterly loss of Rs.10,948 crore for the March quarter, primarily led by impairment loss on goodwill and non-producing oil and gas assets due to a drop in oil prices. The company had reported a net loss of Rs.240.82 crore in the corresponding period last year. Cairn said the decline in crude oil rpices globally led the firm book an impairment on the carrying value of goodwill and some of its non-producing oil and gas assets aggregating to Rs.11,389.63 crore and Rs.284.17 crore respectively.

´The Cairn team has delivered a resilient performance in a challenging year. Drive for cost efficiency and rationalization of capital investment have aided free cash generation despite crude prices plummeting to a 12-year low,´ said Mayank Ashar, MD & CEO of Cairn India. He added, ´We are delighted to recommend a dividend of `3 per equity share for the year. Our commitment towards technology and innovation has enabled us to successfully execute one of the world´s largest EOR project at Mangala. Adopting cutting edge fraccing technology in RDG field has demonstrated excellent results in tapping the gas potential for future growth. The company continues with its pre-development activities to be future ready to tap the resource base.´

The company said it would maintain its focus on its Rajasthan asset. ´We aim to maintain production from Rajasthan asset broadly at FY16 level. With an estimated net capex of $100 million, we plan to invest 80 per cent in development (primarily RDG Gas and Mangala EOR completion activities) and 20 per cent in exploration. We will continue investing in pre-development activities of our key projects in core MBA fields, Barmer Hills and satellite fields, to ensure project readiness for development with rebound in oil prices and grant of extension of PSC. We maintain the flexibility to raise our capital investment as oil prices improve and aim to generate a healthy cash flow post capex so as to retain the ability to pay dividends,´ the company said in a statement.