CAIRN INDIA LIMITED Rajasthan production up 1.4% QoQ to 170,444 boepd, aided by Mangala EOR and Aiswariya infill
Mangala EOR average production jumped to c. 19 kbopd as injection volumes ramp-up from 200 kbpld to 330 kbpld, as expected
First cargo of Rajasthan crude oil successfully loaded through Salaya-Bhogat pipeline for MRPL, generating superior realization
Signed an agreement with GSPL for construction of pipeline from RGT to Palanpur
Successful testing of three zones in Raageshwari Deep Main establishes a southern extension of the Raageshwari Deep gas field
Rajasthan water flood operating costs continues to improve, lowered by 6% QoQ to $5.1/boe
Financial HighlightsRevenue of ₹ 2,039 crore (US$ 309 mn); 42% lower YoY, primarily due to decline in crude prices
EBITDA of ₹ 665 crore (US$ 101 mn); higher polymer volume injection increases operating cost
Profit after Tax of ₹ 9 crore (US$ 1 mn); impacted by lower operating profit
Strong Cash and Cash Equivalents position of ₹ 18,470 crore (US$ 2.8 bn)
Corporate and Regulatory DevelopmentsWith regard to proposed merger with Vedanta Ltd, the company is seeking directions of the Bombay High Court for convening meeting of all our relevant stakeholders.
To ensure timely investment decision in Rajasthan block and realize fair price for our crude, we have approached the High Court to expedite the PSC extension process and allow us to export the crude. The matters are subjudice. The High Court has directed the parties to exchange the requisite information/documents and to communicate, in a time bound manner.
In an encouraging development, GoI has also supported the industry's view on rationalizing the Cess charges given prevailing low oil prices.
"We maintain our strategic objective of generating healthy free cash flow which has been successfully guiding us through the constantly deteriorating oil pricing scenario. Our unwavering commitment to improve cost efficiency continues to help us to navigate through the weak oil price situation and to generate free cash flow. Focus on adoption of advanced technologies remains the key to improve our efficiency and productivity. I'm pleased to inform you that the world's largest EOR project at Mangala is yielding results exactly as we envisaged. We continue to pursue pre-development activities for our growth projects to make them future ready for rapid development on oil prices rebound.
During Q3FY16, Cairn had a gross production of 18.6 mmboe across all the assets, of which net working interest production was 11.8 mmboe. Gross production per day for Q3FY16 was 202,668 boepd and working interest production per day was 128,402 boepd. Gross Sales averaged 200,449 boepd.
Average Daily Production | Units | Q3 | Q2 | 9M | |||||
FY16 | FY15 | y-o-y (%) | FY16 | q-o-q (%) | FY16 | FY15 | y-o-y (%) | ||
Total Gross operated* | Boepd | 211,843 | 228,622 | (7%) | 214,247 | (1%) | 214,663 | 219,757 | (2%) |
Gross operated | Boepd | 202,668 | 218,900 | (7%) | 205,361 | (1%) | 205,909 | 210,399 | (2%) |
Oil | Bopd | 196,135 | 210,748 | (7%) | 197,685 | (1%) | 199,167 | 203,694 | (2%) |
Gas | Mmscfd | 39 | 49 | (20%) | 46 | (15%) | 40 | 40 | 1% |
Working Interest | Boepd | 128,402 | 136,701 | (6%) | 128,021 | 0% | 128,991 | 132,576 | (3%) |
Rajasthan (Block RJ-ON-90/1) | |||||||||
Total Gross operated* | Boepd | 178,679 | 188,263 | (5%) | 176,281 | 1% | 178,209 | 183,189 | (3%) |
Gross operated | Boepd | 170,444 | 180,010 | (5%) | 168,126 | 1.4% | 170,258 | 175,451 | (3%) |
Oil | Bopd | 167,979 | 178,400 | (6%) | 165,585 | 1% | 168,074 | 173,966 | (3%) |
Gas | Mmscfd | 15 | 10 | 53% | 15 | (3%) | 13 | 9 | 47% |
Gross DA 1 | Boepd | 150,496 | 151,866 | (1%) | 147,443 | 2% | 149,195 | 146,599 | 2% |
Gross DA 2 | Boepd | 19,948 | 28,144 | (29%) | 20,683 | (4%) | 21,063 | 28,851 | (27%) |
Gross DA 3 | Boepd | - | - | - | - | - | - | - | - |
Working Interest | Boepd | 119,311 | 126,007 | (5%) | 117,688 | 1% | 119,180 | 122,815 | (3%) |
Ravva (Block PKGM-1) | |||||||||
Total Gross operated* | Boepd | 22,975 | 29,470 | (22%) | 27,162 | (15%) | 26,555 | 25,942 | 2% |
Gross operated | Boepd | 21,703 | 27,783 | (22%) | 26,064 | (17%) | 25,430 | 24,107 | 5% |
Oil | Bopd | 19,056 | 23,410 | (19%) | 22,491 | (15%) | 22,253 | 21,155 | 5% |
Gas | Mmscfd | 16 | 26 | (39%) | 21 | (26%) | 19 | 18 | 8% |
Working Interest | Boepd | 4,883 | 6,251 | (22%) | 5,864 | (17%) | 5,722 | 5,424 | 5% |
Cambay (Block CB/OS-2) | |||||||||
Total Gross operated* | Boepd | 10,189 | 10,890 | (6%) | 10,805 | (6%) | 9,899 | 10,626 | (7%) |
Gross operated | Boepd | 10,521 | 11,107 | (5%) | 11,172 | (6%) | 10,221 | 10,842 | (6%) |
Oil | Bopd | 9,099 | 8,938 | 2% | 9,609 | (5%) | 8,840 | 8,573 | 3% |
Gas | Mmscfd | 9 | 13 | (34%) | 9 | (9%) | 8 | 14 | (39%) |
Working Interest | Boepd | 4,208 | 4,443 | (5%) | 4,469 | (6%) | 4,089 | 4,337 | (6%) |
* Includes internal gas consumption
Operations1
Gross production from Rajasthan block was at 15.7 mmboe in Q3 FY16 at an average of 170,444 boepd driven by ramp-up in Mangala EOR production and additional volumes from new infill wells coming online at Aishwariya. In-line with our expectation, average production from Mangala EOR ramped-up to
1 EUR numbers stated for development projects are as until 2030
19 kbopd in 3Q FY16. During the quarter, a total of 15.1 mn barrels of oil was sold, at an average rate of 163,869 bopd. RDG field continued the gas production at an average of 28 mmscfd in Q3 FY16. Total gas production in the quarter was 2.6 bscf. We successfully commenced a 15 well hydro-frac campaign in December 2015 to sustain the growth level and campaign is expected to continue till Q1 FY17. Total gas sales were 1.4 bscf, continuing at an average rate of 14.8 mmscfd.
During Q3 FY16, Salaya Bhogat Pipeline (SBPL), storage terminal & marine export facilities at Bhogat were commissioned and consequently first cargo of Rajasthan crude oil was successfully loaded through the terminal for Mangalore Refinery Petroleum Ltd. We are generating superior realization through this sale.
The water-flood operating expense in Rajasthan declined 6% Q-o-Q to US$ 5.1/boe. Increase in the polymer injection volumes lifted the blended operating cost to US$ 6.9/boe.
The average facility uptime for the quarter was over ~99%
During the quarter, the block produced 2.0 mmboe at an average rate of 21,703 boepd, which was affected by its natural decline and shut down of a well for a week. A coil tubing campaign is planned in 4Q FY16 to arrest the natural decline. During the quarter, 1.92 mmbbls of crude and 1.46 bcf of gas were sold, averaging 20,918 bopd of crude oil and 15.9 mmscfd of gas, respectively.
The facilities recorded an uptime of 99.85 % and LTI free man-hours at 4.0 million in Q3 FY16 due to company's continuous emphasis on minimum down time and un-interrupted production operations.
For the quarter, total production was 0.97 mmboe at an average rate of 10,521 boepd impacted by its natural decline. As part of the asset's long term facility augmentation plan, an additional storage tank to expand the crude storage capacity at Suvali terminal and an offshore gas lift compressor package to provide artificial lift to the wells have been commissioned in this quarter. During the quarter, 0.84 mmbbls of crude and 0.78 billion scf of gas were sold, averaging 9,130 bopd of crude oil and 8.5 mmscfd of gas, respectively.
Facilities maintained an excellent uptime of 99.9% during the quarter. Operational safety continued to be key focus area as the asset recorded ~2.9 million LTI free man-hours since last LTI as of Q3 FY16.
Development
Our development projects continued to see traction in the third quarter:
Mangala EOR: The injection ramp up plan is on track as it has been increased from 200,000 barrels of polymer solution per day in Q2 FY16 to 330,000 polymer solution per day in Q3 FY16. Further increase in injection volume to 400,000 barrels per day is expected by March 2016, as per the plan. We have observed significant increase in the polymer driven volume to c. 19 kbopd in 3Q FY16, as per plan. Since there is a lag between injection and impact on production, we expect the volume to rise further.
All the EOR wells have been drilled and completed. Almost 66% of polymer injection wells have been
hooked up to the surface facilities and modifications activities for polymerized fluids handling are also reaching completion.
Aishwariya Infill: By end of 3Q FY16, 17 wells out of the 20 wells infill campaign were operating & balance wells will also be brought online before the end of FY16.
Bhagyam EOR: Front-End Engineering Design is in advanced stage. Tendering is ongoing for rigs, services and drilling & completion long lead items.
Gas Development at RDG Field: During the quarter, we achieved progress regarding the pipeline by signing an agreement with GSPL India Gasnet Limited (GIGL) which has agreed to construct the pipeline connecting Raageshwari Gas Terminal to Palanpur via their upcoming Mehsana Bhatinda Pipeline under Petroleum and Natural Gas Regulatory Board (PNGRB) approval. Tendering process for the new gas processing terminal is also progressing well.
Exploration
We continued testing key wells in the new discoveries and acquiring seismic data over high priority areas. Successful testing of key wells has enabled gathering of critical information for progressing these discoveries to development. During Q3FY16, three wells were in various stages of fraccing and testing:
In Raageshwari Deep Main well, two zones produced oil at 175-220 bopd and one zone produced gas at 1 mmscfd in the Volcanics section. Zones 4 and 5 in the Fatehgarh section have been fracced and the flow back is in progress. The successful testing of these zones has established a southern extension of the Raageshwari Deep gas field.
In Vandana-10A well, two zones in the Barmer Hill Turbidites produced oil at 300 bopd on co- mingled flow.
In Raageshwari South-3A well, a zone in the Dharvi Dungar formation produced oil at 252 bopd.
Our seismic crew shot 3D images of another 100 sq km in the DP-Shakti area in DA1. With this, we have covered most of the areas of interest in the block with 3D seismic data.
Other India and International AssetsKG Offshore (Block KG-OSN-2009/3): Drilling is anticipated to commence in Q3 FY17, subject to all statutory clearances. Cairn India is engaging with the DGH and the MoPNG for full life cycle clearances from the Ministry of Defence in order to commence drilling preparations.
KG Onshore (Block KG-ON-2003/1): ONGC, Cairn India's Joint Venture partner and the operator of the block, has submitted a Field Development Plan to the Management Committee. The project is in the pre- development phase.
Mumbai Offshore (Block MB-DWN-2009/1): Based on the results of various studies, Cairn India is evaluating options regarding further exploration in the block.
Cairn India Limited issued this content on 22 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 January 2016 11:53:08 UTC
Original Document: https://www.cairnindia.com/sites/default/files/press_releases/Cairn-India-Ltd-Press-Release-Q3FY16-Final.pdf
