Cairn India on Friday reported its biggest quarterly loss of Rs 10,948 crore in the quarter ended March 31 mainly because of impairment loss on goodwill and non-producing oil and gas assets due to drop in oil prices
New Delhi: Cairn India on Friday reported its biggest quarterly loss of Rs 10,948 crore in the quarter ended March 31 mainly because of impairment loss on goodwill and non-producing oil and gas assets due to drop in oil prices.
Net loss of Rs 10,948.22 crore in January-March compared with a net loss of Rs 240.82 crore in the same period a year ago, the company said in a statement.
"Due to decline in crude oil prices in the international market, the Group has recorded an impairment on the carrying value of goodwill and some of its non-producing oiland gas assets aggregating to Rs 11,389.63 crore and Rs 284.17 crore respectively," it said.
Cairn said the impairment of Rs 11,674 crore largely reflects the lower crude price, prevailing discount on oil produced from Rajasthan block as well as adverse long term impact of revised cess.
"All the company's projects including Bhagyam and Aishwariya enhanced oil recovery (EOR), Aishwariya Barmer Hill as well as the Raageshwari deep gas project remain viable at the price assumptions taken for impairment," it said.
Production dipped 8 percent to 206,170 barrels of oil and oil equivalent gas in the fourth quarter of 2015-16. Its mainstay Rajasthan field produced 5 per cent less oil at 164,826 barrels per day.
Turnover fell 36 per cent to Rs 1717 crore on lower oil prices.
The company realised an average of USD 27.8 per barrel for oil it produced in January-March, down 43 percent from USD 48.6 per barrel a year ago. Gas price realisation was however up 19 per cent at USD 7.4 per million standard cubic feet.
For the full 2015-16 fiscal, the company posted a net loss of Rs 9,432 crore as compared to Rs 4,480 crore profit in the previous year.
The loss did not prevent the company board from declaring a Rs 3 per share dividend by dipping into cash reserves of Rs 19,521 crore.
Mayank Ashar, Managing Director and CEO of Cairn India said, "The Cairn team has delivered a resilient performance in a challenging year. Drive for cost efficiency and rationalisation of capital investment have aided free cash generation despite crude prices plummeting to a 12 year low."
The company has successfully executed one of the world's largest EOR project at Mangala oilfield in Rajasthan block.
"The company continues with its pre-development activities to be future ready to tap the resource base," he said.
Cairn India, he said, is engaged with the Government on extension of Rajasthan license beyond 2019 for further investment in the prolific Rajasthan block.