AGM / Interim Management Stat

RNS Number : 4983S

Cairn Energy PLC

19 May 2009

 

 FOR IMMEDIATE RELEASE                                                                                             19 May 2009 

CAIRN ENERGY PLC ('Cairn')

AGM / Interim Management Statement

Cairn Energy PLC is today issuing its Interim Management Statement in conjunction with its Annual General Meeting.

India

Phased Mangala, Bhagyam and Aishwariya (MBA) development project continues to make good progress

• Mangala Processing Terminal (MPT) Train one (30,000 bopd capacity) mechanically complete, ready to commission and start production with initial evacuation by truck mid-year 2009

• Train two (50,000 bopd capacity) targeted completion Q4 2009 

• The 600 kilometre main oil export pipeline from Barmer (Rajasthan) to Salaya (Gujarat) targeted completion Q4 2009

• Train three (50,000 bopd capacity) targeted completion H1 2010
• Development drilling on schedule to meet production targets
• Crude oil sales negotiations ongoing 

Greenland

• Processing of 10,000 km of 2008 2D seismic data nearing completion

• Seismic interpretation underway and initial prospects and leads inventory for the Disko West area expected in Q3 2009

• Infill 2D seismic in south Greenland and well site surveys in Disko blocks planned for summer 2009
• Prospecting licence awarded by the Government for East Greenland with reconnaissance 2D seismic planned for Q3 2009

Iraq

• Government of Iraq announcement that Cairn has pre-qualified to participate in the second bid round (greenfield) and hence subsequent bid rounds in Iraq

Group Production

The figures in the table below show group production for Q1 2009 (including 100% of Cairn India's production).

Production (boepd)	Ravva	CB-OS/2	Sangu	Total
Gross field	47,374	12,913	9,639	69,926
Working interest	10,659	5,165	3,614	19,438
Entitlement interest	4,820	4,113	2,891	11,824

The average realised price per barrel of oil equivalent for Q1 2009 is $34.93. 

Commentary

Cairn is ready to start production with initial evacuation by trucking in mid-year 2009 from the Rajasthan fields. The facilities to handle a capacity of 30,000 bopd of crude through the first train have been completed at both the MPT in Rajasthan and at the port of Kandla in Gujarat. 

Construction on the second and third trains with a combined capacity of 100,000 bopd is ongoing as is the construction of the insulated pipeline from the MPT to the Gujarat coast.

Two drilling and one completion rig are carrying out drilling and completion of the Mangala development wells. The drilling is on schedule to meet production targets.

Processing of 2008 2D seismic from Greenland is nearing completion, interpretation is underway and an initial inventory of leads and prospects from the Disko west acreage is being prepared. Planning for a potential multi-well drilling campaign commencing in 2011 is underway.

In Iraq, Cairn is one of 43 companies to have pre-qualified for the second bid round which includes 11 greenfield projects. The expertise and knowledge the company has acquired in developing oil fields in the Rajasthan desert is potentially transferable and applicable to developing fields in Iraq. 

The Group's existing cash resources, debt facilities and cash flow from operations provide adequate funding to complete the core Mangala development project plus the pipeline.  However, Cairn continues to monitor the credit markets to assess current pricing and may consider expanding its facilities in due course.

Cairn has always maintained a capital structure appropriate for its operations in exploration, appraisal and development.  Cairn strengthened its equity capital base in March 2009 when it raised a further $161m through a 5% placing of shares. At 31 March 2009 Cairn had net cash of $897m.

Enquiries to:

Cairn Energy PLC Sir Bill Gammell, Chief Executive Dr Mike Watts, Deputy Chief Executive Jann Brown, Finance Director David Nisbet, Corporate Affairs	Tel: [phone]
Brunswick Group LLP Patrick Handley David Litterick	Tel: [phone]

Notes to Editors: 

• Cairn Energy PLC ('Cairn') is an Edinburgh-based oil and gas exploration and production company listed on the London Stock Exchange. Following the IPO of Cairn India in January 2007, there are two separate parts of the business:

• Cairn India limited ('Cairn India') is listed on the Bombay Stock Exchange and the National Stock Exchange of India and has interests in a total of 14 acreage blocks in India and Sri Lanka. Cairn currently retains a 65% interest in Cairn India.

• Capricorn Oil Limited ('Capricorn'), a 90% subsidiary of Cairn is focused on exploration. Capricorn now has assets in Bangladesh, Nepal, Northern India, Greenland, Tunisia, Albania, and pending licence awards in Spain.

• 'Cairn' where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India and Capricorn), as appropriate. 

• 'Cairn India' where referred to in the release means Cairn India Limited and/or its subsidiaries, as appropriate. 

• 'Capricorn' where referred to in this release means Capricorn Oil Limited and/or its subsidiaries as appropriate.

• Cairn has focused its activities on the geographic region of South Asia, which has already 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. Cairn has now made more than 20 discoveries in Rajasthan block RJ-ON-90/1. 

• Cairn India is headquartered in Gurgaon on the outskirts of Delhi, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan. 

• Cairn Energy PLC (including Capricorn) is run from Edinburgh with operational offices in Dhaka, Kathmandu and Tunisia.

For further information on Cairn see www.cairnenergy.com  

 

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