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Cairn India Ltd's board, which met here on Thursday, categorically stated it will not accept any condition — regarding the approval of the Cairn Energy-Vedanta transaction — which can negatively impact the company's value.
The parent company Cairn Energy Plc proposes to sell majority stake in Cairn India to Vedanta Resources. The Government has set certain pre-conditions, including the issue of royalty raised by ONGC to be resolved first before a go-ahead is given to the deal.
The board of Cairn India had met to consider the third quarter results. For the quarter, Cairn has registered a seven-fold increase in its net profit at Rs 2,010.1 crore against Rs 291 crore in the corresponding quarter last fiscal.
This was mainly due to higher crude oil production from the prolific Rajasthan fields and better price realisation from crude oil sales. The company's revenue during the quarter under review rose six-fold at Rs 3,096.4 crore, compared to Rs 495.5 crore.
The average oil price realisation in the third quarter of 2010-11 was $ 75.9 a barrel, compared to $70.7 a barrel in the same quarter last fiscal. The gas price realisation in the third quarter was $4.5 per thousand standard cubic feet (mscf) at the same levels as corresponding quarter last fiscal.
Mr Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India, said, “Mangala production (Rajasthan fields) has consistently delivered at the currently approved plateau rate of 125,000 barrels of oil per day (bopd). A further production increase to 150,000 bopd remains subject to joint venture, ONGC, and Government approvals.”
Further ramp up in Rajasthan production has been impacted due to delays in getting mandatory approvals. The company's board felt that due to these delays the momentum have been lost. Mangala reservoir performance and surface facilities ready to support immediate production increase of 25,000 bopd to 150,000 bopd.
After 15 months of successful Mangala production the gross field revenues has been excess of $ 2 billion. The company has sold more than 27.5 million barrels (mmbbls) of Mangala crude as on December, 31.
The company's shares ened at Rs 314 (Rs 312.65) on the BSE on Thursday.
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