LONDON (SHARECAST) - Cairn Energy posted sharply lower underlying losses last year, adding good progress is being made towards first production of oil from its Mangala field in India in late 2009.
Underlying losses dropped from $97.1m to $49.4m, but including gains following the float of its Indian arm, Cairn posted a pre-tax profit of $1.55bn compared with a loss of $91.8m. Revenue was $288m, compared with $286m.
Production for the year, on an entitlement interest basis, decreased by 19% to 19,809 barrels daily (2006: 24,523 barrels), primarily due to reduced field production at both Sangu and CB/OS-2, Cairn said.
"All of the major contracts for the midstream and upstream developments in Rajasthan have been awarded and work is progressing well towards first Mangala oil in H2 2009," chief executive Bill Gammell added.
Costs of bringing Mangala, in Rajasthan, on stream are expected to be $1.8bn for 2008 and 2009. Cairn now estimates its Rajasthan acreage has reserves of 3.75bn barrels gross, a slight increase. Work will start of a pipeline in the second half of 2008, though it still negotiating with the Indian government over sharing the cost.
"We are increasingly confident about the scale of the resource base in Rajasthan. We firmly believe that a plateau production of 175,000 barrels is now achievable with the potential for higher rates," Gammell added.
The statement added that Capricorn, its exploration arm, is planning its first exploration drilling in Tunisia at the end of the year and is actively pursuing the longer-term growth potential of its position in Greenland.
Via [ShoreCast]
