Final Results
Cairn Energy PLC
17 March 2003
EMBARGOED UNTIL 0700
17 March 2003
CAIRN ENERGY PLC
PRELIMINARY RESULTS ANNOUNCEMENT
HIGHLIGHTS
Financial
• Average production 22,057 boepd (2001: 20,115 boepd) - currently
30,000 boepd
• Average price received per boe $21.05 (2001: $21.05)
• Turnover before exceptional items £114.2m (2001: £107.4m)
• Profit after tax before exceptional items £27.9m (2001: £29.8m)
• Operating cash flow £72.1m (2001: £64.9m)
Operational
• Lakshmi gas development successfully completed and on production
• Oil discovery at Lakshmi tested 10,500 bopd - appraisal programme
currently underway
• Equity interest in Rajasthan block increased to 100% and subsequent
Raageshwari oil discovery
• Successful step-out well completed on Raageshwari discovery
• Extensive exploration and appraisal drilling campaign commenced in
Western India
Bill Gammell, Chief Executive, commented:
'Completion of the Lakshmi gas development was a key milestone for Cairn during
2002 and has significantly increased the Group's production base. An extensive
exploration and appraisal drilling campaign is now underway in Western India and
has been rewarded with early success in both Gujarat and Rajasthan. Cairn's
unique strategic position and competitive edge in South Asia means that we
continue to be ideally placed to maximise the value of our exploration success.'
Enquiries to:
Cairn Energy PLC:
Bill Gammell, Chief Executive Tel: 07785 557 310
Mike Watts, Exploration Director Tel: 07768 631 328
Kevin Hart, Finance Director Tel: 07771 934 974
Brunswick Group Limited:
Patrick Handley, Mark Antelme, Catherine Bertwistle Tel: 0207 404 5959
CHAIRMAN'S STATEMENT
In 2002 the Group witnessed another strong financial performance as well as the
successful development of the Lakshmi gas field offshore Gujarat. As a result of
this development, Cairn's production has risen to current levels of
approximately 30,000 boepd against a 2002 average of 22,057 boepd.
The primary source of value creation for Cairn remains successful exploration in
its key focus area of South Asia. Whilst each of the Cairn's four core areas in
South Asia has significant growth potential, the current focus of our
operational activity is offshore Gujarat and onshore Rajasthan, where an
extensive phase of exploration and appraisal drilling is underway. Continued
success in this drilling campaign has the potential to substantially increase
the Group's oil and gas reserves.
Cairn's strategy of focusing on high equity positions in large licence areas
with significant exploration potential has been rewarded by a series of
discoveries in recent years. As a result of its exploration success, the Group
has now identified a large number of additional prospects around its initial
discoveries. This has lowered the risk previously associated with drilling
while still providing the same potential for value enhancement.
Results
Average daily production increased 10% year on year to 22,057 boepd (2001:
20,115 boepd). The average price achieved per boe was $21.05 (2001: $21.05 per
boe). Group turnover before exceptional items increased 6% year on year to
£114.2m (2001: £107.4m). Operating profit before exceptional items and operating
cash flow were £48.9m and £72.1m respectively (2001: £51.4m and £64.9m). Profit
after tax before exceptional items was down 6% year on year to £27.9m (2001:
£29.8m).
The exceptional items in the results relate to the commencement of arbitration
in respect of the Ravva PSC and an adjustment pursuant to FRS 11, further
details of which are contained in the Financial Review. Profit after tax and
exceptional items was £26.5m (2001: £29.8m).
India
The majority of the Group's operational activity during 2002 has focused on
various projects in Western India. We have also significantly progressed our
technical understanding of our deep water acreage offshore Eastern India.
Gujarat
The Lakshmi gas field commenced production on 1 November 2002. Gas sales for the
four month period from commencement of production to the end of February 2003
averaged 94 mmscfd.
A Lakshmi oil appraisal programme commenced earlier this year to determine the
commerciality of the oil bearing reservoirs beneath the gas field. The initial
oil discovery well drilled in April 2002 flowed at a combined rate of 10,500
bopd and was followed by a successful step-out well in May 2002. The first two
appraisal wells drilled this year (CB-A-5 and CB-A-4) have further delineated
the field.
The Group is also proceeding toward development of the neighbouring Gauri gas
field as a satellite to Lakshmi. It is intended that some of the gas development
wells planned on the Gauri gas field will be deepened in order to appraise
underlying oil zones.
An onshore seismic programme to identify future exploration drilling locations
is currently underway and the offshore 'K' prospect is planned to be drilled in
the first half of 2003.
Rajasthan
A key milestone for Cairn during 2002 was the acquisition of Shell India's 50%
interest in onshore Block RJ-ON-90/1. The resultant increase to a 100% equity
interest, coupled with a three year extension of the final exploration phase of
the block, has allowed Cairn to accelerate its drilling activity on an area
which is almost an entire basin where only six wells have been drilled to date.
Whilst we are at the early stage of exploration and appraisal, we are delighted
to be fast-tracking our operations in a proven hydrocarbon generative basin with
significant exploration prospectivity.
A multi-well exploration drilling campaign on the block commenced in Q4 2002 and
has already resulted in a shallow oil discovery (subsequently named Raageshwari)
with the RJ-E-1 exploration well. Cairn announces today that it has subsequently
completed a successful step-out well (RJ-E-1ST) on the Raageshwari discovery.
As a result of these two Raageshwari wells we are also very encouraged by the
potential of the shallow horizons on the rest of the block, which provide the
opportunity for low cost development schemes. Cairn is currently sourcing an
additional drilling rig in anticipation of a multi-well programme on these
horizons.
In addition, appraisal drilling on the existing Saraswati oil discovery is
scheduled to commence very shortly.
KG Basin
During 2002, Cairn completed the detailed subsurface technical review required
pursuant to its successful 2001 exploration programme in the KG Basin. Work is
now underway on cost analysis, engineering and conceptual development studies
with a view to seeking a value adding partner to optimise forward appraisal and
potential development programmes.
Bangladesh
Whilst the ability to sell substantial additional volumes of gas depends
principally on a decision by the Government of Bangladesh to allow the export of
gas to India, the demand for gas in the domestic market continues to rise. This
is reflected by increased year on year Sangu gas sales from an average daily
offtake of 138 mmscfd in 2001 to 142 mmscfd in 2002, with Q4 2002 having
averaged 160 mmscfd.
Scheme of Arrangement
The scheme of arrangement to introduce a new holding company to the Group became
effective on 19 February 2003. The new holding company was originally called
New Cairn Energy PLC and was renamed Cairn Energy PLC when the scheme became
effective. The former Cairn Energy PLC was renamed Cairn Energy Bangladesh PLC
at the same time.
Employees
Cairn's achievements have only been made possible by the expertise and hard work
of all of its employees. I would therefore like to record the Board's
appreciation of each individual's contribution and continued commitment during
2002 and to date.
The entire Board visited India during 2002 which allowed the opportunity for
non-executive directors to familiarise themselves further with the Group's
overseas operations and management team. In addition, Cairn hosted a site visit
to Blocks CB/OS-2 and RJ-ON-90/1 for analysts and investors in February 2003.
These visits have clearly demonstrated not only the enthusiasm and abilities of
Cairn's employees, but also the breadth of opportunities available in a
relatively under-explored country with significant indigenous reserve potential
and an extremely large and growing energy market.
Outlook
Cairn's focus in 2003 will continue to be the commercialisation of its
exploration success in Western India. In addition to the progression of the
Gauri gas development project, key objectives during the year will be the
appraisal of the oil potential on Block CB-OS/2 and of the existing discoveries
on Block RJ-ON-90/1, together with further exploration wells on both blocks.
In Eastern India, Cairn's primary objective during 2003 will be to bring in a
value adding partner to optimise forward appraisal and development plans for the
Group's deep water acreage.
Financially, Cairn continues to perform well against a backdrop of strong
product prices and current production levels of approximately 30,000 boepd.
These factors, together with low levels of gearing combine to provide the Group
with the financial strength and flexibility to aggressively pursue the
exploration and development opportunities within its portfolio.
Although we are reporting results at a time of considerable geo-political
uncertainty, the fundamental strengths of our business and Cairn's forward
exploration and appraisal programme continue to present shareholders with a
robust investment case.
Norman Murray
Chairman, 17 March 2003
OPERATIONAL REVIEW
WESTERN INDIA
Production
Lakshmi Development Area, Block CB/OS-2 (Cairn 50% and operator)
The Lakshmi gas field was discovered in May 2000 and successfully appraised by
the CB-A-2 well in December 2000. Two GSCs were signed by the CB/OS-2 joint
venture in May 2001 with GPEC and GTCL respectively, for the sale of gas from
Lakshmi into the industrialised Gujarat market. Gas from the field is contracted
to be sold under a combination of oil-indexed (with a contractual floor and
ceiling) and fixed pricing.
First gas sales commenced from Lakshmi on 1 November 2002. Average sales from
commencement of production to the end of February 2003 were 94 mmscfd.
Gauri Development Area, Block CB/OS-2 (Cairn 50% and operator)
The Gauri gas field was discovered in January 2001 and declared commercial in
June 2002, pursuant to which ONGC exercised its 30% back-in right in August
2002. The Gauri jacket is scheduled to be installed on location in Q2 2003 and
full development of the field is subject to final approval by the Indian
Government. Development drilling is planned to commence later this year.
Oil has also been discovered beneath the gas reservoirs at Gauri, for which
further appraisal will be required to evaluate the oil potential. It is
currently intended that this will be achieved as part of the planned development
drilling programme.
Exploration
Block CB/OS-2 (Cairn 75% and operator)
Exploration drilling by the joint venture on the block has resulted in several
hydrocarbon discoveries since 2000 - Lakshmi (gas and oil), Gauri (gas and oil),
Ambe (gas and oil) and Parvati (oil). The Lakshmi oil discovery was made in
April 2002 and flowed at a cumulative rate of 10,500 bopd on test. This was
followed by a successful step-out well (CB-A-3) in May 2002.
A number of appraisal wells are required on Lakshmi to determine the extent of
the oil bearing reservoirs, prior to establishing commerciality. The two
appraisal wells drilled so far this year (CB-A-5 and CB-A-4) have delineated the
north-east and western margins of the field. Further appraisal drilling will be
undertaken throughout 2003.
A seismic survey in the shallow water and onshore eastern part of the block
commenced in February 2003 and Cairn anticipates further exploration drilling in
both the east and west of the block during 2003 and 2004 in order to evaluate
its overall oil and gas potential.
Block RJ-ON-90/1 (Cairn 100% and operator)
During the first half of 2002, the Group acquired Shell India's 50% equity
interest in the block and simultaneously secured a three year extension to the
final exploration phase from the Indian Government.
In addition to the Guda-2 and Saraswati oil discoveries previously made by Cairn
and Shell India, the recent RJ-E-1 exploration well successfully tested
hydrocarbons from three separate intervals in February 2003, resulting in the
Raageshwari oil and gas discovery.
Cairn has subsequently completed a successful step-out well (RJ-E-1ST) on the
new discovery. This step-out well was drilled from the same surface location as
RJ-E-1 to penetrate a separate fault block. Additional technical data which
could not be obtained from the initial well was acquired and RJ-E-1ST
encountered oil and gas bearing reservoirs in the same shallow stratigraphic
interval. No oil water contact was encountered and the ODT in RJ-E-1 was
extended by 34 metres.
Preliminary OIIP estimates for this shallow interval are now 37-386 mmbbls with
a small gas cap, and mean OIIP of 176 mmbbls.
Encouraged by the oil potential of the shallow horizons, which provide the
opportunity for low cost development schemes on the block, Cairn is currently
sourcing an additional rig(s) for a multi-well drilling programme with a view to
conducting a series of stratigraphic bore hole tests. Conceptual cost
engineering work envisaging potential developments is also underway.
In addition, appraisal drilling is about to commence on the Saraswati oil
discovery, for which current OIIP estimates are 250 mmbbls with estimated mean
recoverable reserves of 34 mmbbls.
EASTERN INDIA
Production
Ravva (Cairn 22.5% and operator)
Ravva remains on plateau production and averaged 51,514 bopd and 68.8 mmscfd
during 2002 (2001: 47,725 bopd and 34.4 mmscfd). Ravva cumulative oil production
at 31 December 2002 was in excess of 100 mmbbls.
The Ravva joint venture drilled one exploration well on the block during 2002,
which was plugged and abandoned following an unsuccessful drill stem test.
Cairn's 3D seismic interpretation over the block has since identified a large
number of leads and prospects.
Exploration
Block KG-OS/6 (Cairn 50% and operator) & Block KG-DWN-98/2 (Cairn 100% and
operator)
The 2001 exploration drilling campaign on these deep water blocks resulted in
several discoveries, all of which are located on Block KG-DWN-98/2. During 2002,
the Group completed a detailed subsurface technical review of both blocks
pursuant to the successful 2001 exploration programme. Work is now underway on
cost analysis, engineering and conceptual development studies with a view to
seeking a value adding partner to optimise forward appraisal and potential
development programmes.
BANGLADESH
Production
Sangu Development Area (Shell Bangladesh operator, Cairn 37.5%)
Cairn has experienced an improvement in domestic market conditions and a related
improvement in Sangu production volumes during the year. During 2002, gross
daily offtake from the Sangu gas field averaged 142 mmscfd (2001: 138 mmscfd).
Sangu cumulative production at 31 December 2002 was 197 bcf. The average
realised gas price for Sangu during 2002 was $2.917/mcf (2001: $2.909/mcf).
Exploration
Block 16 (Shell Bangladesh operator, Cairn 50.0%)
Block 15 (Shell Bangladesh operator, Cairn 50.0%)
Blocks 5 and 10 (Shell Bangladesh operator, Cairn 45.0%)
Future investment in exploration in Bangladesh depends on a market for gas
which, with limited domestic demand, requires an export market. Gas export
continues to be discussed at a political level and a decision is awaited from
the Government of Bangladesh. Cairn's forward exploration and appraisal plans
will be conducted in a measured manner in line with market development.
NORTH SEA
Cairn continues to hold small non-operated interests in the Gryphon field in the
UK North Sea and several producing fields in the Dutch North Sea. Average net
daily production for these two areas during 2002 was 2,819 boepd (2001: 3,064
boepd).
During the first half of 2002, the Gryphon co-venturers reached agreement with
the operators of the Maclure and Tullich fields to route production from both
fields via a tieback to the Gryphon A floating production, storage and
offloading facility. Third party production through Gryphon from Maclure and
Tullich commenced in Q3 2002. The routing of this third party production has
resulted in additional tariff income for the Gryphon co-venturers.
RESERVES
The table below shows reserves information on an entitlement basis for the
Group.
Reserves as at Reserves as at
31 December 2002 31 December 2001
mmboe mmboe
North Sea 3.8 5.2
South Asia 83.2 96.7
Total 87.0 101.9
On a direct working interest basis, reserves as at 31 December 2002 totalled
126.3 mmboe (2001: 136.7 mmboe).
FINANCIAL REVIEW
The Group's solid financial position provides an ideal foundation for future
value creation.
% Increase/
Key Statistics 2002 2001 (Decrease)
Production (boepd) 22,057 20,115 10
Average price per boe ($) 21.05 21.05 0
Turnover before exceptionals (£m) 114.2 107.4 6
Average production costs per boe ($) 5.27 4.93 7
Operating profit before exceptionals (£m) 48.9 51.4 (5)
Profit after tax before exceptionals (£m) 27.9 29.8 (6)
Operating cashflow (£m) 72.1 64.9 11
Strong product prices and increasing production coupled with low levels of
gearing continue to ensure that the Group has the financial strength and
flexibility to aggressively pursue exploration and development opportunities in
its key focus area of South Asia.
PROFIT AND LOSS
Turnover
Total production for the year increased to 8.1 mmboe (2001: 7.3 mmboe),
predominantly as a result of commencement of production from the Lakshmi gas
field. The average price realised by the Group remained unchanged year on year
at $21.05 per boe (2001: $21.05 per boe). Turnover before exceptionals increased
by 6% year on year to £114.2m (2001: £107.4m).
Operating Profit
The Group generated an operating profit before exceptional items of £48.9m
(2001: £51.4m).
Total cost of sales for the year was £53.4m (2001: £45.6m). Cost of sales per
barrel were £6.63 ($9.98) (2001: £6.22 ($9.24)). The majority of the increase is
in respect of depletion and decommissioning following the transfer of certain
historic exploration costs to the depletable cost pool and the revision of North
Sea reserves and costs.
Profit for the Year
Administrative expenses for the year were £11.9m (2001: £10.4m). This includes a
charge of £1.6m (2001: £1.9m) in respect of the amortisation of Cairn's LTIP.
Net interest payable was £1.9m (2001: net receivable £0.6m), including a foreign
currency exchange gain of £0.4m (2001: loss £0.1m).
The majority of the £19.1m tax charge before exceptionals (2001: £22.3m) arises
on profits in India and includes a credit of £4.9m resulting from a reduction in
the effective rate of tax in India from 48% to 42%. Both the current and prior
year tax charge now reflect full provisioning for deferred tax pursuant to the
implementation of FRS 19. Profit after tax and before exceptional items was
£27.9m (2001: £29.8m). Profit after tax and exceptional items was £26.5m (2001:
£29.8m).
Exceptional Items
The results include two exceptional items. The first is a net provision of £2.5m
comprising a £4.3m exceptional provision against turnover and an associated
£1.8m exceptional deferred tax credit. This relates to the commencement of
arbitration with the Indian Government in respect of the calculation of its
share of profit petroleum under the Ravva PSC. Prior to commencement of
arbitration this issue had been disclosed as a contingent liability.
The second item is a £1.1m exceptional write-back of oil and gas assets. This
comprises two elements, the first of which is a £1.9m write-back of the Group's
North Sea cost pool under FRS 11 arising from a revision in the Group's
underlying long term real oil price assumption from $12/bbl to $15/bbl. This is
offset by a write-down of £0.8m relating to the reversal of a prior conditional
transfer of Cairn's interest in Papua New Guinea.
BALANCE SHEET
Capital Expenditure
Capital expenditure during 2002 was £58.4m (2001: £125.6m), comprising £36.7m on
development activities, £20.6m on exploration activities and £1.1m on other
fixed assets. The majority of the development expenditure was in respect of the
Lakshmi gas field.
Net Debt and Net Assets
Group net debt at 31 December 2002 was £34.8m (2001: net debt £33.8m). Net
assets at 31 December 2002 were £326.8m (2001: £326.4m).
Payments for Sangu Gas
I am pleased to report that payments for Sangu gas improved considerably during
the year with a total of 14 payments received by the Sangu joint venture. As at
31 December 2002, payments were four months in arrears (2001: six months in
arrears), equating to a net amount overdue to Cairn of £22.0m (2001: £22.7m).
Accounting Policies
During 2002 the Group implemented FRS 19, which requires full provisioning to be
made for deferred taxation. This change in accounting policy has resulted in a
prior year adjustment to reserves of £9.5m and the restatement of 2001
comparative figures. In addition, the Group is fully compliant with the
requirements of the Statement of Recommended Practice 'Accounting for Oil and
Gas Exploration, Development, Production and Decommissioning Activities'.
CASH FLOW
Net Cash Inflow, Tax and Interest
Group net cash inflow from operations was £72.1m (2001: £64.9m). Tax payments
during 2002 were £4.5m (2001: net receipt of £1.7m). Net interest paid was £1.4m
(2001: net received £1.1m).
Capital Expenditure/Financial Investment
Cash outflow from capital expenditure and financial investment during 2002 was
£73.4m comprising £28.8m exploration expenditure, £40.0m development expenditure
and £4.6m other expenditure (2001: £116.1m - £77.3m exploration, £37.7m
development and £1.1m other). The Group had a net cash outflow before financing
of £7.2m during 2002 (2001: net outflow £48.3m).
Financing
The Group had a net cash inflow after financing of £6.4m (2001: £2.6m). The
Group has negotiated new $150m facilities to replace the previous $100m facility
which expired in 2002. The new facilities comprise $96.7m three year and $53.3m
364 day multicurrency revolving credit facilities. As at 31 December 2002, the
Group had drawn $77.5m of its available $150m.
Kevin Hart
Finance Director, 17 March 2003
GLOSSARY OF TERMS
The following are the main terms and abbreviations used in this announcement:-
Corporate
Cairn the Company and/or its subsidiaries as appropriate
GPEC Gujarat Powergen Energy Corporation Limited
GTCL Gujarat Gas Trading Company Limited
ONGC Oil & Natural Gas Company Ltd.
Shell Bangladesh Shell Bangladesh Exploration and Development B.V.
Shell India Shell India Production and Development B.V.
The Board the Board of Directors of Cairn Energy PLC
The Company Cairn Energy PLC
The Group the Company and/or its subsidiaries as appropriate
Technical
3D three dimensional
bcf billion cubic feet of gas
/boe per barrel of oil equivalent
boepd barrels of oil equivalent per day
bopd barrels of oil per day
FRS 11 Financial Reporting Standard 'Impairment of Fixed Assets and Goodwill'
FRS 19 Financial Reporting Standard 'Deferred Tax'
GSC(s) Gas Sales Contract(s)
km kilometres
km2 square kilometres
LTIP long term incentive plan
mmbbls million barrels of oil
mmboe million barrels of oil equivalent
/mcf per thousand cubic feet of gas
mmscf million standard cubic feet of gas
mmscfd million standard cubic feet of gas per day
ODT oil down to
OIIP oil initially in place
PSC Production Sharing Contract
Note:
This press release contains forward looking statements that reflect Cairn's
expectations regarding future events. Forward looking statements involve risks
and uncertainties. Actual events could differ materially from those projected
herein and depend on a number of factors including the uncertainties relating to
oil and gas exploration and production and sale of oil and gas.
Group Profit and Loss Account (Unaudited)
For the year ended 31 December 2002
Continuing
operations Total
Continuing exceptional Total 2001
operations items 2002 (Restated)
£'000 £'000 £'000 £'000
Turnover 114,226 (4,348) 109,878 107,427
Cost of sales
Production costs (28,285) - (28,285) (24,708)
Depletion (24,215) - (24,215) (20,704)
Decommissioning charge (917) - (917) (225)
Gross profit 60,809 (4,348) 56,461 61,790
Exceptional write-back of oil and gas assets - 1,146 1,146 -
Administrative expenses (11,930) - (11,930) (10,406)
Operating profit 48,879 (3,202) 45,677 51,384
Interest receivable and similar income 1,110 - 1,110 1,835
Interest payable and similar charges (2,983) - (2,983) (1,193)
Profit/(loss) on ordinary activities before 47,006 (3,202) 43,804 52,026
taxation
Taxation on profit on ordinary activities
- current (4,459) - (4,459) (3,601)
- deferred (14,688) 1,827 (12,861) (18,675)
(19,147) 1,827 (17,320) (22,276)
Profit for the year 27,859 (1,375) 26,484 29,750
Earnings per ordinary share - basic 18.25p 20.62p
Earnings per ordinary share - diluted 18.16p 20.44p
Group Statement of Total Recognised Gains and Losses
For the year ended 31 December 2002
2001
2002 (Restated)
£'000 £'000
Profit for the year 26,484 29,750
Unrealised foreign exchange differences (26,994) 3,924
Total recognised gains and losses for the year (510) 33,674
Prior year adjustment (9,465)
Total recognised gains and losses recognised since last annual report (9,975)
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2002
2001
2002 (Restated)
£'000 £'000
Total recognised gains and losses for the year (510) 33,674
New shares issued in respect of employee share options 902 1,044
Net additions to shareholders' funds 392 34,718
Opening shareholders' funds (after prior year adjustment) 326,390 291,672
Closing shareholders' funds 326,782 326,390
The prior year adjustment reflects the change in accounting policy arising from
the implementation of FRS 19. The opening shareholders' funds at 1 January
2002, before deducting the prior year adjustment of £9,465,000 (2001:
£5,605,000) were £335,855,000 (2001: £297,277,000).
Balance Sheets
As at 31 December 2002
Group Company
Group 2001 Company 2001
2002 (Restated) 2002 (Restated)
£'000 £'000 £'000 £'000
Fixed assets
Exploration assets 207,106 212,262 25,187 29,451
Development/producing assets 193,554 186,365 43,464 44,411
Other fixed assets 1,915 2,167 783 737
Investments 5,229 3,473 197,375 181,704
407,804 404,267 266,809 256,303
Current assets
Debtors 60,503 73,646 26,582 44,861
Cash at bank 13,494 5,927 4,999 14
73,997 79,573 31,581 44,875
Creditors: amounts falling due within one year 43,199 96,403 22,652 42,588
Net current assets/(liabilities) 30,798 (16,830) 8,929 2,287
Total assets less current liabilities 438,602 387,437 275,738 258,590
Creditors: amounts falling due after more than one year 35,848 - 11,222 -
Provisions for liabilities and charges 17,481 12,159 - -
Deferred taxation 58,491 48,888 13,965 9,465
Net assets 326,782 326,390 250,551 249,125
Capital and reserves - equity interests
Called-up share capital 14,891 14,817 14,891 14,817
Share premium 74,381 73,553 74,381 73,553
Capital reserves - non distributable 50,487 50,487 27,025 27,025
Capital reserves - distributable 35,254 35,254 35,254 35,254
Profit and loss account 151,769 152,279 99,000 98,476
Shareholders' funds 326,782 326,390 250,551 249,125
N L Murray, Chairman
W B B Gammell, Chief Executive
17 March 2003
Group Statement of Cash Flows
For the year ended 31 December 2002
2002 2001
£'000 £'000
Net cash inflow from operating activities 72,097 64,883
Returns on investments and servicing of finance
Interest received 745 1,844
Interest paid (2,163) (700)
(1,418) 1,144
Taxation (4,488) 1,711
Capital expenditure and financial investment
Expenditure on exploration assets (28,814) (77,310)
Expenditure on development/producing assets (40,016) (37,722)
Purchase of other fixed assets (1,127) (1,139)
Purchase of fixed asset investments (3,439) -
Sale of fixed asset investments - 102
Sale of other fixed assets 36 29
(73,360) (116,040)
Equity dividends paid - -
Net cash (outflow) before use of liquid resources and financing (7,169) (48,302)
Management of liquid resources*
Cash on short term deposit (1,806) 9,932
Financing
Issue of shares 902 1,044
Debt drawdowns 67,172 39,962
Repayment of debt (52,724) -
15,350 41,006
Increase in cash in the year 6,375 2,636
* Short term deposits of less than one year are disclosed as liquid
resources.
Reconciliation of Operating Profit to Operating Cash Flows
For the year ended 31 December 2002
2002 2001
£'000 £'000
Operating profit 45,677 51,384
Depletion and depreciation 25,368 21,985
Decommissioning charge 917 225
Amortisation / provision against investments (including LTIP) 1,678 1,948
Exceptional write-back of oil and gas assets (1,146) -
Debtors movement (4,527) (10,029)
Creditors movement 1,939 910
Other provisions 4,693 (1,128)
Gain on sale of other fixed assets (12) (5)
Foreign exchange differences (2,490) (407)
Net cash inflow from operating activities 72,097 64,883
NOTES:
1. No dividend has been declared (2001: nil).
2. The earnings per ordinary share is calculated on a profit of
£26,484,000 (2001: £29,750,000 restated) and on a weighted average of
145,105,444 ordinary shares (2001: 144,310,214). The weighted average of
ordinary shares excludes shares held under the LTIP - the shares are held by the
Cairn Energy PLC Employees' Share Trust as the Company cannot hold its own
shares.
The diluted earnings per ordinary share is calculated on a profit of £26,484,000
(2001: £29,750,000 restated) and on 145,869,939 ordinary shares (2001:
145,520,492) being the basic weighted average of 145,105,444 ordinary shares
(2001: 144,310,214) and the dilutive potential ordinary shares of 764,495
ordinary shares (2001: 1,210,278) relating to share options.
3. Cairn follows the full cost method of accounting for oil and gas
assets. Under this method, all expenditure incurred in connection with and
directly attributable to the acquisition, exploration, appraisal and development
of oil and gas assets is capitalised in two geographical cost pools: North Sea
and South Asia. This includes interest payable and exchange differences incurred
on borrowings directly attributable to development projects.
4. The financial information contained in this announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The comparative financial information is based on the statutory accounts
for the year ended 31 December 2001, restated for FRS19. Those accounts, upon
which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies. The statutory accounts for the financial year ended 31
December 2002 will be delivered to the Registrar.
5. The scheme of arrangement to introduce a new holding company to the
Group became effective on 19 February 2003. The new holding company was
originally called New Cairn Energy PLC and was renamed Cairn Energy PLC when the
scheme became effective. The former Cairn Energy PLC was renamed Cairn Energy
Bangladesh PLC at the same time. As shareholders are now members of this new
holding company rather than the former Cairn Energy PLC it is necessary for
legal reasons to provide shareholders with the annual accounts of the new
holding company for the period to 31 December 2002. Full accounts are due to be
posted to shareholders on 4 April 2003 and will be available at the Company's
registered office, 50 Lothian Road, Edinburgh, EH3 9BY, from that date.
6. The Annual General Meeting is due to be held in the Glamis Room at
the Caledonian Hilton Hotel, Princes Street, Edinburgh, EH1 2AB on 7 May 2003 at
1200.
This information is provided by RNS
The company news service from the London Stock Exchange
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