For Immediate Release 29 October 2009 Cairn India Limited Second Quarter Financial Results for the period ended 30 September 2009 The following commentary is provided in respect of the unaudited financial results and operational achievements of Cairn India Limited and its subsidiary companies (referred to as Cairn India ) during the second quarter of 2009-10. Please note that the financial year 2009-10 (FY 09-10) refers to the period April 2009 March 2010. OPERATIONAL HIGHLIGHTS Gross production of the operating units was 60,480 barrels of oil equivalent per day (boepd) in Q2 (65,566 boepd in the corresponding quarter of the previous year) and the working interest production was 18,638 boepd in Q2 (17,111 boepd in the corresponding quarter of previous year) First oil production commenced from the Mangala field in Rajasthan on 29 August 2009 36 Mangala development wells drilled, of which 26 completed to support ramp up production profile; successfully drilled and completed the first horizontal well in Mangala, which tested at a production rate of more than 11,500 barrels of oil per day (bopd) Mangala production continues to build according to plan with average gross production of 5,991 bopd in Q2; currently producing ~10,000 bopd GoI has now agreed for private refiners to qualify as additional offtakers of the Rajasthan crude The processed crude is being safely trucked to storage tanks at the coastal port of Kandla in Gujarat and the first cargo was delivered to the Government of India (GoI) nominee, MRPL on 9 October, 2009 Train Two (50,000 bopd capacity) is expected to be ready by early 2010; with the contractors focused on optimizing completion Construction of Train Three (50,000 bopd capacity) is targeted to attain Mangala plateau production of 125,000 bopd in H1 2010 The Mangala Processing Terminal (MPT) to Salaya pipeline is ~590 km of which 560 km has been laid; hydro testing has started and the section to Radhanpur in Gujarat will be complete by the end of the year The Rajasthan upstream project has achieved 25 million safe work hours demonstrating a world class safety performance Ravva block has completed 15 years of continuous operations on 28 October 2009; the field has produced more than 220 mmbbl; the average gross production in Q2 was 42,008 boepd Provisional award of KG-OSN-2009/3 and MB-DWN-2009/1 blocks in NELP VIII bidding round; subject to GoI approval FINANCIAL HIGHLIGHTS Completed financing arrangements for a USD 1.6 billion facility for Rajasthan 1
Profit after tax of Indian rupees (INR) 4,695 million (~USD 97 million) The arbitration award in our favour on the ONGC carry issue was restored by the Court of Appeal in Malaysia; provision of INR 1,637 million reversed Gross cumulative Rajasthan development capex spent to date USD 1,846 million, out of which USD 239 million was spent during the quarter Cairn has completed the financing arrangements for the USD 1.6 billion facility having tenure of more than six years. The proceeds from this facility will be used to repay the existing facility of USD 850 million and to fund ongoing development projects. In Q2 2009-10, the gross production of the operating units was 60,480 boepd (65,566 boepd in the corresponding quarter of the previous year) and working interest production was 18,638 boepd (17,111 boepd in the corresponding quarter of the previous year). The current quarter production numbers include gross production of 5,991 bopd and working interest production of 4,194 bopd from the Rajasthan block for a period of thirty three days from 29 August 2009. The consolidated revenue of Cairn India for Q2 2009-10 was INR 2,298 million (USD 47 million) as compared to INR 3,206 million (USD 73 million) in the corresponding quarter of the previous year. As a result of the hearing before the Court of Appeal in Malaysia the exceptional item in the current quarter of INR 1,637 million represents reversal of the provision created in respect of amounts deducted by the customers and paid to the GoI in relation to the ONGC carry case. The consolidated profit after provision for tax for Q2 2009-10 was INR 4,695 million (USD 97 million) as compared to INR 2,933 million (USD 67 million) for the corresponding quarter of the previous year. The average oil price realisation in Q2 2009-10 was USD 69.1/bbl and for corresponding quarter of previous year was USD 116.3/bbl. The gas price realisation in Q2 2009-10 was USD 3.9/mscf and for the corresponding quarter of the previous year was USD 4.1/mscf. The average price realisation per boe was USD 59.6 in Q2 2009-10 and for the corresponding quarter of the previous year was USD 87.3. Cash flow from operations, worked out as profit after tax (excluding other income) prior to non-cash expenses (non-cash employee cost, depreciation, depletion, amortization and deferred tax) and exploration cost was INR 765 million (USD 16 million) for Q2 2009-10 as compared to INR 2,199 (USD 50 million) for the corresponding quarter of the previous year. Cash (net of borrowings) available as at 30 September 2009 was INR 3,895 million (USD 81 million). Amounts shown in USD are converted based on average exchange rate for the Q2 2009-10 of INR 48.43 for revenue items and at the closing exchange rate as on 30 September 2009 of INR 48.02 in respect of cash balance (average rate of the corresponding quarter of the previous year was INR 43.65). Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said: We are delighted to have started production from the Mangala field in Rajasthan and delivered the first volumes of crude to the refiners. We now look forward to ramp up production to 125,000 bopd in H1 2010. This is the first step in the long term development of the world class Barmer Basin and heralds a new era in enhancing India s energy security. 2
The delivery of the first oil cargo to MRPL is the beginning of a long and mutually beneficial relationship which will soon be extended to all buyers. We continue to focus on the delivery of the Rajasthan project in the knowledge that key refineries in India want to access the crude. 3
OPERATIONAL REVIEW Gross operated production for the second quarter was 60,480 boepd (working interest 18,638 boepd). The average crude oil price realisation this quarter was USD 69.1/bbl and the average gas price was USD 3.9/mscf resulting in an average price realisation of USD 59.6/boe. Rajasthan (Block RJ-ON-90/1) (Cairn India 70% (Operator); ONGC 30%) The Mangala field was dedicated to the nation by the Honourable Prime Minister of India, Dr Manmohan Singh, at the MPT, Barmer, Rajasthan on 29 August, 2009. This marked the start of production from the Mangala field in Rajasthan. Cairn India and its JV partner ONGC have an area of 3,111 km 2, under long term contract on the Rajasthan licence spread across the districts of Barmer and Jalore. The Mangala field, which was discovered in January 2004, is the largest onshore oil discovery in India in more than 20 years. The Mangala, Bhagyam and Aishwariya fields have recoverable oil reserves and resources of nearly 1 billion barrels, which includes proven plus probable (2P) gross reserves and resources of 685 million barrels of oil equivalent (mmboe) with a further 300 mmboe or more of Enhanced Oil Recovery (EOR) potential. More than 12,000 people are currently involved in the construction of both the upstream and midstream projects. Development Upstream Cairn has designed the MPT to process crude before being evacuated for sale to GoI nominees. The MPT will process crude from the Mangala, Bhagyam and Aishwariya fields - collectively known as the MBA fields. The MPT is designed to process 205,000 bopd of crude with scope for further expansion. Train one has been commissioned and production has started. First oil was evacuated via trucking to the Gujarat coast for onward transport to MRPL, one of the GoI nominated buyers, using a heated crude oil tanker. Mangala production continues to build according to plan; currently producing ~10,000 bopd with average gross production of 5,991 bopd in Q2 Construction activities on all the key elements of Trains Two and Three are progressing and precommissioning activities have commenced. Work on the well pads, the Raageshwari gas terminal, the Thumbli saline aquifer development, in-field pipelines, processing facilities, buildings, power generation and associated utilities are at an advanced stage of completion. Train Two (50,000 bopd capacity) is expected to be ready by early 2010. Cairn is working with the contractors for optimizing completion of the facility. The construction of Train Three (50,000 bopd capacity) is targeted to attain Mangala plateau production of 125,000 bopd in H1 2010 Development drilling and well completion activities are currently underway with two drilling rigs and one completion rig operating in the Mangala development area. To date 36 wells have been drilled of which 26 wells have been completed and made ready for initial production. The first horizontal well at Mangala was successfully drilled and completed as per design and tested at a production rate of more than 11,500 4
bopd. Four wells are currently producing. The wells drilled to date will support the ramp up production profile for the Mangala field. The Rajasthan upstream project has achieved 25 million safe work hours, demonstrating a world class safety performance and Cairn s commitment to safe working practices. Development - Midstream (Pipeline) The export pipeline route from MPT to Bhogat via Salaya passes through the states of Rajasthan and Gujarat covering eight districts and more than 250 villages. Work is currently in progress across nine construction spreads. Of the total length of the MPT to Bhogat pipeline of ~670 km, the MPT to Salaya section is 590 km of which 560 km has been laid. The in-principle approvals for the Salaya to Bhogat section have been obtained and the necessary land purchase has been completed. Construction activity is in progress at the Viramgam and Radhanpur Terminal locations and on all the 33 Above Ground Installation stations, the Salaya distribution hub and river crossings. More than 85% of the construction activities have been completed on the route of the pipeline. Crude Sales The GoI has nominated MRPL, IOC and HPCL for the offtake of initial crude quantities from the Rajasthan Block for the period 2009-10 and 2010-11. Discussions are in progress with the GoI to allocate additional volumes. GoI has agreed for private refiners to qualify as additional offtakers of the Rajasthan crude. GoI has also granted approval to establish additional/multiple Delivery Points at Radhanpur and Viramgam for sales to IOC s Panipat and Koyali refineries respectively and to establish an additional Delivery Point at Kandla port for delivery of crude to MRPL and other coastal refineries, until the pipeline for transporting crude from Barmer to Bhogat is operational. The commercial terms and pricing negotiations for the initial offtake of the Rajasthan crude have been concluded with GoI nominees, IOC and MRPL. In accordance with the Production Sharing Contract, this pricing is based on comparable low sulphur crude frequently traded in the region Bonny Light - with appropriate adjustments for crude quality. The implied price realisation represents an average 10-15% discount to Brent on the basis of prices prevailing for the six months to September 2009. The oil from Rajasthan is categorised as medium gravity and is of a sweet grade with low sulphur content of about 0.1% by weight. While the crude has a high pour point and viscosity due to its waxy nature, it makes an excellent secondary processing feedstock for refiners. The Mangala crude is currently being trucked to the Gujarat coast and then being shipped to MRPL. The first oil cargo was delivered to MRPL on 9 October, 2009 and the first invoice has been raised. Resource base including enhanced oil recovery (EOR) Cairn India is at an advanced stage of preparation to conduct an EOR pilot trial in the Mangala field. The current assessment of the EOR resource base is more than 300 mmbbls of incremental recoverable oil from the MBA fields. 5
Cairn India is also in the final stages of planning to carry out pilot work to evaluate the Barmer Hill formation over the Mangala and Aishwariya fields currently estimated to hold around 400 mmbbls of oil in place in tighter reservoir rocks (lower permeabilities). Globally, analogous fields have been developed with expected ultimate recoveries of 7-20% under primary and secondary recovery schemes. Exploration - RJ-ON-90/1 (Cairn India is the Operator - 70% holding in the Mangala and Bhagyam Development Areas) There remains a significant and as yet untested prospective resource potential to pursue on the Rajasthan block and Cairn is targeting drilling of at least two wells in 2010. Ongoing technical evaluation work continues to result in the addition of further prospects in Rajasthan. Cairn India Producing Assets Krishna-Godavari Basin - Eastern India Ravva (Cairn India 22.5% (Operator)) Average gross production from the Ravva field for Q2 was 42,008 boepd (comprising an average oil production of 34,031 bopd and average gas production of 47.87 mmscfd). Ravva is now a mature field with 15 years of production. Originally estimated to produce 101 million barrels of crude oil, the field has already produced more than 220 million barrels. Cairn is confident of the field s considerable remaining reserve potential and of producing more oil from this block before the expiry of the PSC primary term in 2019. The Ravva block s operating cost per barrel at approximately USD 2 per bbl is amongst the lowest in the world. This has been possible only through life-cycle planning, continuous monitoring and the innovative application of operating technologies. Further studies are being conducted to identify additional in-place reserves and bypassed oil zones within the field. Cambay Basin - Western India Block CB/OS-2: (Cairn India 40% (Operator)) Average gross production from the CB/OS-2 block for Q2 was 12,480 boepd (comprising an average oil / condensate production of 8,991 bopd and average gas production of 20.93 mmscfd). The Suvali terminal, which processes the oil and gas from the CB/OS-2 block, has achieved more than 7 million safe work hours over the last 5 years, which demonstrates Cairn s commitment to safe operating practices. Cairn India Exploration Other Assets In addition to the ongoing exploration activities in the three producing blocks, Cairn India currently has exploration interests in seven blocks in India and one in Sri Lanka, four of which are operated by the Company. These blocks are located in the Krishna-Godavari Basin, the Palar Basin, Kerala Konkan Basin, Cambay Basin, Gujarat Saurashtra Basin, Barmer Basin, Indus Basin, Ganga Valley and the Mannar Basin offshore Sri Lanka. 6
The 2009 10 exploration programme includes the drilling of 5 other wells outside of Rajasthan. Three wells planned to be drilled in KG-ONN-2003/1 in Q4 2009, as part of a five well programme, will now spud in Q1 2010. Currently, an exploration well is being drilled in GS-OSN-2003/1 block. The KG-DWN-98/2 block will see 4 wells being drilled by Q2 2010. Additionally, the Company has begun preliminary work for 3D seismic surveys in the Mannar (Sri Lanka) and Palar basins. The new seismic acquisition positions Cairn India for an extensive drilling programme in 2010-11. The recent NELP VIII bid round saw Cairn India being provisionally awarded both blocks on which bids were submitted, KG-OSN-2009/3 and MB-DWN-2009/1. Cairn India has withdrawn from both the VN-ONN-2003/1 and GV-ONN-2002/1 blocks, following the completion of commitment work programmes. 7
Cairn India Limited Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi Mumbai 400025 Corporate Office: 3 rd & 4 th Floors, Vipul Plaza, Sun City, Sector-54 Gurgaon 122002 UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED 30 TH SEPTEMBER 2009 (All amounts are in lakhs of Indian rupees, unless otherwise stated) Sr. No. Particulars Quarter ended Six months ended 30-Sept-09 30-Sept-08 30-Sept-09 30-Sept-08 Previous Financial Period ended 31-Mar-09 (15 months) Unaudited Unaudited Unaudited Unaudited Audited 1 a) Income from operations 22,978 32,063 43,473 72,426 143,267 b) Other operating income - - - - - 2 Expenditure a) (Increase)/Decrease in stock-in-trade (2,591) (559) (4,141) 1,242 2,223 b) Operating expenses 6,235 4,477 10,636 9,491 21,297 c) Employees cost 2,112 1,596 4,264 4,516 11,452 d) Depreciation, depletion & amortization 3,905 6,499 8,038 12,968 26,980 e) Share issue expenses - 2,040-2,040 2,084 f) Administration cost 3,894 1,723 6,174 5,137 15,235 g) Exploration cost 1,171 793 4,259 5,068 16,839 h) Foreign exchange fluctuation - - - - - i) Total 14,726 16,569 29,230 40,462 96,110 3 Profit/(Loss) from Operations before Other Income, Interest & Exceptional Items (1-2) 8,252 15,494 14,243 31,964 47,157 4 Other Income 10,562 20,554 23,459 26,334 50,716 5 Profit/(Loss) before Interest & Exceptional Items (3+4) 18,814 36,048 37,702 58,298 97,873 6 Interest and finance cost 88 47 161 334 641 7 Profit/(Loss) after Interest but before Exceptional Items (5-6) 18,726 36,001 37,541 57,964 97,232 8 Exceptional Items 16,371 - - - 1,557 9 Profit/(Loss) from Ordinary Activities before tax (7+8) 35,097 36,001 37,541 57,964 98,789 10 Tax expense a) Current tax 8,045 1,912 10,375 3,374 11,108 b) MAT credit entitlement (5,219) - (6,162) - - c) Deferred tax (12,930) 5,703 (17,114) 10,386 6,234 d) Fringe benefit tax (1,750) (946) (1,052) 1,014 1,102 e) Total (11,854) 6,669 (13,953) 14,774 18,444 11 Net Profit/(Loss) from Ordinary Activities after tax (9-10) 46,951 29,332 51,494 43,190 80,345 8
Sr. No. Particulars Quarter ended Six months ended 30-Sept-09 30-Sept-08 30-Sept-09 30-Sept-08 Previous Financial Period ended 31-Mar-09 (15 months) Unaudited Unaudited Unaudited Unaudited Audited 12 Extraordinary items (net of tax expense) - - - - - 13 Net Profit/(Loss) for the period (11-12) 46,951 29,332 51,494 43,190 80,345 14 Paid-up Equity Share Capital (Face value of Rs.10 each) 189,667 189,443 189,667 189,443 189,667 15 Reserves excluding Revaluation Reserves 3,086,676 16 Earning/(Loss) per share in rupees (not annualized) a) Basic earnings/(loss) per share 2.48 1.55 2.72 2.30 4.31 b) Diluted earnings/(loss) per share 2.46 1.54 2.70 2.28 4.28 17 Public Shareholding - Number of shares 669,824,025 667,585,947 669,824,025 667,585,947 669,824,025 - Percentage of shareholding 35.32% 35.24% 35.32% 35.24% 35.32% 18 Promoters and Promoter Group Shareholding a) Pledged / Encumbered -Number of shares - - - - - -Percentage of shares (as a % of the total share shareholding of promoter and promoter group) - - - - - -Percentage of shares (as a % of the total share capital of the Company) - - - - - b) Non-encumbered -Number of shares 1,226,843,791 1,226,843,791 1,226,843,791 1,226,843,791 1,226,843,791 -Percentage of shares (as a % of the total share shareholding of promoter and promoter group) 100% 100% 100% 100% 100% -Percentage of shares (as a % of the total share capital of the Company) 64.68% 64.76% 64.68% 64.76% 64.68% Notes:- 1. The above unaudited financial results for the current quarter have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at its meeting held on 29 th October 2009 and have been subjected to a limited review by the auditors of the Company. 2. The previous accounting period of Cairn India Group ( The Group ) was for fifteen months from 1 st January 2008 to 31 st March 2009. Hence, the information pertaining to the six months period ended 30 th September 2008 has been provided by aggregating the reviewed figures for the quarters ended 30 th June 2008 and 30 th September 2008 to facilitate comparison. 3. The Group operates in only one segment i.e. "Oil and Gas Operations". 4. Employee costs for the current quarter and six months include stock option charge of INR 731 lakhs and INR 1,494 lakhs respectively, computed under the Intrinsic Value Method. The said charge for the current quarter and six months would have been INR 1,945 lakhs and INR 3,702 lakhs respectively, if computed under the Fair Value (Black Scholes) Method. 9
5. Exploration costs include costs pertaining to geological/geophysical studies, seismic studies, other surveys and unsuccessful wells and have been charged to the profit and loss account as per the provisions of the Successful Efforts Method of accounting. 6. Other income for the current quarter and six months includes (a) income from investments of INR 3,963 lakhs and INR 9,678 lakhs respectively and (b) foreign exchange fluctuation of INR 6,618 lakhs and INR 13,799 lakhs respectively. 7. For computing deferred tax liability in relation to the Rajasthan field, the Group has now considered field life as stipulated in the Production Sharing Contract instead of the economic useful life of the field considered earlier. This change has resulted in reversal of deferred tax liability by INR 26,479 lakhs. 8. The exceptional item in the current quarter represents reversal of the provision created in the previous quarter in respect of amounts deducted by the customers and paid to the Government of India in relation to ONGC carry case, as the Group has now succeeded in its appeal before the Court of Appeal of Malaysia. The Group hence believes that it has a legal title to the amounts which have been deducted. 9. Operating expenses include cess on crude oil produced from Rajasthan block. The Group has initiated arbitration proceedings against the Government of India and its joint venture partner for recovery of the same, but by being conservative has not accounted for the possible recovery. 10. The promoters of the Company have sold 43,600,000 shares subsequent to 30 th September 2009 and hence the same has not been given effect to in the above shareholding disclosure. 11. Previous quarter / period / year figures have been regrouped / rearranged wherever necessary to confirm to the current quarter s presentation. For and on behalf of the Board of Directors Place: Gurgaon Date: 29 th October 2009 Rahul Dhir Managing Director and Chief Executive Officer 10
Cairn India Limited Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi Mumbai 400025 Corporate Office: 3 rd & 4 th Floors, Vipul Plaza, Sun City, Sector-54 Gurgaon 122002 UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30 TH SEPTEMBER 2009 (All amounts are in lakhs of Indian rupees, unless otherwise stated) Sr. No. Particulars Quarter ended Six months ended 30-Sept-09 30-Sept-08 30-Sept-09 30-Sept-08 Previous Financial Period ended 31-Mar-09 (15 months Unaudited Unaudited Unaudited Unaudited Audited 1 a) Income from operations 21 55 46 152 373 b) Other operating income - - - - - 2 Expenditure a) (Increase)/Decrease in stock-in-trade - - - - - b) Operating expenses 23-280 2 362 c) Employees cost 402 (203) 949 460 2,125 d) Depreciation, depletion & amortization 1 1 2 1 4 e) Legal & professional charges 353 246 590 1,125 2,823 f) Share issue expenses - 2,040-2,040 2,084 g) Administration cost 237 675 432 917 1,222 h) Exploration cost 315 230 1,671 3,196 8,136 i) Foreign exchange fluctuation 1 502-908 1,806 j) Total 1,332 3,491 3,924 8,649 18,562 3 Profit/(Loss) from Operations before Other Income, Interest & Exceptional Items (1-2) (1,311) (3,436) (3,878) (8,497) (18,189) 4 Other Income 3,781 10,728 9,516 12,890 27,873 5 Profit/(Loss) before Interest & Exceptional Items (3+4) 2,470 7,292 5,638 4,393 9,684 6 Interest and finance cost 23-24 - 34 7 Profit/(Loss) after Interest but before Exceptional Items (5-6) 2,447 7,292 5,614 4,393 9,650 8 Exceptional Items - - - - 1,557 9 Profit/(Loss) from Ordinary Activities before tax (7+8) 2,447 7,292 5,614 4,393 11,207 10 Tax expense a) Current tax 506 377 1,526 377 5,438 b) MAT credit entitlement - - - - c) Deferred tax - - - - - d) Fringe benefit tax (1,168) (1,229) (881) 539 345 e) Total (662) (852) 645 916 5,783 11 Net Profit/(Loss) from Ordinary Activities after tax (9-10) 3,109 8,144 4,969 3,477 5,424 11
Sr. No. Particulars Quarter ended Six months ended Previous Financial Period ended 31-Mar-09 30-Sept-09 30-Sept-08 30-Sept-09 30-Sept-08 (15 months Unaudited Unaudited Unaudited Unaudited Audited 12 Extraordinary items (net of tax expense) - - - - - 13 Net Profit/(Loss) for the period (11-12) 3,109 8,144 4,969 3,477 5,424 14 Paid-up Equity Share Capital (Face value of Rs.10 each) 189,667 189,443 189,667 189,443 189,667 15 Reserves excluding Revaluation Reserves 3,005,523 16 Earning/(Loss) per share in rupees (not annualized) a) Basic earnings/(loss) per share 0.16 0.43 0.26 0.18 0.29 b) Diluted earnings/(loss) per share 0.16 0.43 0.26 0.18 0.29 17 Public Shareholding - Number of shares 669,824,025 667,585,947 669,824,025 667,585,947 669,824,025 - Percentage of shareholding 35.32% 35.24% 35.32% 35.24% 35.32% 18 Promoters and Promoter Group Shareholding a) Pledged / Encumbered -Number of shares - - - - - -Percentage of shares (as a % of the total share shareholding of promoter and promoter group) - - - - - -Percentage of shares (as a % of the total share capital of the Company) - - - - - b) Non-encumbered -Number of shares 1,226,843,791 1,226,843,791 1,226,843,791 1,226,843,791 1,226,843,791 -Percentage of shares (as a % of the total share shareholding of promoter and promoter group) 100% 100% 100% 100% 100% -Percentage of shares (as a % of the total share capital of the Company) 64.68% 64.76% 64.68% 64.76% 64.68% Notes:- 1. The above unaudited financial results for the current quarter have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at its meeting held on 29 th October 2009. 2. The previous accounting period of the Company was for fifteen months from 1 st January 2008 to 31 st March 2009. Hence, the information pertaining to the six months period ended 30 th September 2008 has been provided by aggregating the reviewed figures for the quarters ended 30 th June 2008 and 30 th September 2008 to facilitate comparison. 3. The Company operates in only one segment i.e. "Oil and Gas Operations" 4. Employee costs for the current quarter and six months include stock option charge of INR 94 lakhs and INR 274 lakhs respectively computed under the Intrinsic Value Method. The said charge would have been INR 1,413 lakhs and INR 2,514 lakhs respectively, if computed under the Fair Value (Black Scholes) Method. 12
5. Exploration costs include costs pertaining to geological/geophysical studies, seismic studies, other surveys and unsuccessful wells and have been charged to the profit and loss account as per the provisions of the Successful Efforts Method of accounting. 6. Operating expenses represent data acquisition and pre-exploration cost. 7. Other income for the quarter and six months includes income from investments of INR 3,781 lakhs and INR 9,148 lakhs respectively and foreign exchange fluctuation of INR nil and INR 368 lakhs respectively. 8. The number of investors' complaints received and disposed of during the quarter ended 30 th September 2009 were as follows- (a) Pending at the beginning of the quarter Nil (b) Received during the period 17 (c) Disposed of during the period 14 (d) Pending at the end of the quarter 3 9. As on 30 th September 2009, the Company and its subsidiaries together have utilized total IPO proceeds of INR 882,489 lakhs, as per the following details- Particulars INR in lakhs (a) Acquisition of shares of Cairn India Holdings Limited from Cairn 595,808 UK Holdings Limited (b) Exploration and Development expenses 268,385 (c) General corporate purposes 2,300 (d) Issue expenses 15,996 Total 882,489 10. The promoters of the Company have sold 43,600,000 shares subsequent to 30 th September 2009 and hence the same has not been given effect to in the above shareholding disclosure. 11. Previous quarter / period / year figures have been regrouped / rearranged wherever necessary to confirm to the current quarter s presentation. For and on behalf of the Board of Directors Place: Gurgaon Date: 29 th October 2009 Rahul Dhir Managing Director and Chief Executive Officer 13
Enquiries to: Analysts/Investors Anurag Mantri, Group Financial Controller +919810301321 Media Manu Kapoor, Director - Corporate Affairs & Comm. +919717890260 About Cairn India Limited Cairn India where referred to in the release means Cairn India Limited and/or its subsidiaries, as appropriate. Cairn Lanka (Private) Limited, is a wholly owned subsidiary of Cairn India that holds a 100% participating interest in the Mannar block. Cairn where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India), as appropriate. Cairn India is headquartered in Gurgaon in the National Capital Region, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan. On 9 January 2007, Cairn India Limited was listed on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn Energy PLC currently holds a 62.39% shareholding in Cairn India Limited. Cairn India holds material exploration and production positions in 10 blocks in India and one in Sri Lanka. The focus on India has resulted in a significant number of oil and gas discoveries. In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Twenty five discoveries have been made in Rajasthan block RJ- ON-90/1. In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a Production Sharing Contract (PSC) signed on 15 May 1995. The main Development Area (1,858 km 2 ), which includes Mangala, Aishwariya, Saraswati and Raageshwari is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. A further Development Area (430 km 2 ), including the Bhagyam and Shakti fields, is also shared between Cairn India and ONGC in the same proportion. The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC. India currently imports more than 2.4 million barrels of oil per day (bopd). The domestic production is approximately 0.7 million barrels of oil per day of which approximately 56,000 bopd comes from the Cairn India operated assets (Ravva, CB-OS/2 and the Rajasthan block) For further information on Cairn India Limited see 14
Glossary Corporate Cairn India/CIL Company CY DoC JV MBA MPT MRPL IOC HPCL E&P GoI Group MC ONGC OC Cairn India Limited and/or its subsidiaries as appropriate Cairn India Limited Calendar Year Declaration of Commerciality Joint Venture Mangala, Bhagyam and Aishwariya Mangala Processing Terminal Mangalore Refinery and Petrochemicals Limited, (subsidiary of ONGC) Indian Oil Corporation Hindustan Petroleum Corporation Limited exploration and production Government of India the Company and its subsidiaries Management Committee Oil and Natural Gas Corporation Limited Operating Committee Technical 2P 3P 2D/3D boe boepd bopd Bscf EOR FDP mmboe mmscfd mmt PSC proven plus probable proven plus probable and possible two dimensional/three dimensional barrel(s) of oil equivalent barrels of oil equivalent per day barrels of oil per day billion standard cubic feet of gas enhanced oil recovery field development plan million barrels of oil equivalent million standard cubic feet of gas per day Million metric tonne Production Sharing Contract The Fatehgarh is the name given to the primary reservoir rock of the Northern Rajasthan fields of Mangala, Aishwariya and Bhagyam. The Barmer Hill is a lower permeability reservoir which overlies the Fatehgarh. The Dharvi Dungar forms the secondary reservoirs in the Guda field and is the reservoir rock encountered in the recent Kameshwari West discoveries. The Thumbli forms the youngest reservoirs encountered in the basin. The Thumbli is the primary reservoir for the Raageshwari field. 15
These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forwardlooking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are, by their nature, subject to significant risks and uncertainties and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this presentation represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India s joint venture partners. 16