MIRA
INFORM REPORT
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Report Date : |
04.08.2007 |
IDENTIFICATION DETAILS
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Name : |
CAIRN INDIA LIMITED |
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Formerly Known As : |
CAIRN ENERGY INDIA PTY LIMITED |
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Registered Office : |
401, |
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Country : |
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Date of Incorporation : |
21.08.2006 |
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Com. Reg. No.: |
163934 |
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CIN No.: [Company
Identification No.] |
U11101MH2006PLC163934 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEC01025D |
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PAN No.: [Permanent
Account No.] |
AAACC3097L |
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Legal Form : |
A public limited liability company. The company’s shares are now
listed on the Stock Exchanges. |
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Line of Business : |
Manufacturer and Importer of Crude Oil and Gas. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
-- |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company, now listed on the
Mumbai Stock Exchange. It is quoting below offer price. However, the company
is doing well. It’s payments are correct and as per commitments. Financial position
is good. Trade relations are fair. The company can be considered good for any normal business dealings at
usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
401, |
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Tel. No.: |
91-22-22872001 |
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Fax No.: |
91-22-22872002 |
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E-Mail : |
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Website : |
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Principal Business office : |
3rd and 4th
Floor, |
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Tel. No.: |
91-124-4141360 / 2703456 |
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Fax No.: |
91-124-2889320 / 2889320 |
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Head Office : |
Cairn Energy Plc., 50, |
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Tel. No.: |
91-131- 2475 3000 |
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Fax No.: |
91-131- 2475 3030 |
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E-Mail : |
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Website : |
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Branches : |
3, Rajdoot Marg, Chanakyapuri, |
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Tel. No.: |
91-11-24670207 |
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Fax No.: |
91-11-24673595 |
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Branches : |
12, Bhanwani House,Old Residency Road, |
DIRECTORS
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Name : |
Mr. William Grammell |
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Designation : |
Non –Executive Chairman |
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Address : |
Earlscross, The Shore, Earlsferry, |
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Date of Birth/Age : |
33 Years |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
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Name : |
Mr. Norman Murray |
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Designation : |
Non-Executive Deputy Chairman |
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Address : |
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Date of Birth/Age : |
58 Years |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
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Name : |
Rahul Dhir, Chief |
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Designation : |
Executive Officer |
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Address : |
A1 West End, Ground Floor, |
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Date of Birth/Age : |
40 Years |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
Cairn India Holdings Limited |
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Name : |
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Designation : |
Chief Operating Officer |
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Address : |
E-14/3, 2nd Floor, Vasant Vihar, |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
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Name : |
Jann Brown |
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Designation : |
Acting Chief Financial Officer |
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Address : |
Slatehall, |
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Date of Birth/Age : |
51 Years |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
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Name : |
Hamish M. Grossart |
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Designation : |
Non-Executive Director |
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Address : |
Pitlour, Strathmiglo Cupar, |
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Date of Birth/Age : |
49 Years |
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Date of Appointment : |
22 August, 2006 |
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Other Directorship : |
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Name : |
Aman Mehta |
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Designation : |
Independent Non-Executive Director |
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Address : |
4/7 Shanti Niketan, |
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Date of Birth/Age : |
60 Years |
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Date of Appointment : |
21 September, 2006 |
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Other Directorship : |
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Name : |
Naresh Chandra |
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Designation : |
Independent Non-Executive Director |
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Address : |
Sector C4, Flat 4053, Vasant Kunj, |
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Date of Birth/Age : |
21 September,2006 |
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Date of Appointment : |
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Name : |
Dr. Omkar Goswami |
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Designation : |
Independent Non-Executive Director |
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Address : |
A-130, Neeti Bagh, |
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Date of Birth/Age : |
50 Years |
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Date of Appointment : |
21 September, 2006 |
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Other Directorship : |
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KEY EXECUTIVES
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Name : |
Mr. Richard Heaton |
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Designation : |
Director of Exploration |
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Name : |
Mr. Rob Theriault |
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Designation : |
Director of Producing Assets and
Midstream |
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Name : |
Mr. Rolf Stork |
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Designation : |
Director of Rajasthan Operations |
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Name : |
Mr. P. Elango |
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Designation : |
Director of Strategy |
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Name : |
Mr. Jon Hafsmo |
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Designation : |
Director of Projects |
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Name : |
Mr. John McNeill |
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Designation : |
Director of Reservoir
Development |
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Name : |
Mr. David Nisbet |
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Designation : |
Director of Communications |
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Name : |
Mr. H. P. Bhalla |
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Designation : |
Director of Business Services |
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Name : |
Mr. John Caldwell |
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Designation : |
Chief Corporate Counsel |
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Name : |
Mr. T. Vijayagopal |
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Designation : |
Head of Finance (Joint Venture) |
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Name : |
Mr. S. Suriyanarayanan |
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Designation : |
Head of Finance (Corporate and
Investor Relations) |
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Name : |
Mr. Robert Newcomb |
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Designation : |
Head of Finance (Accounting
Services) |
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Name : |
Mr. P. Senthil Kumar |
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Designation : |
Head of Human Resources and
Administration |
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Name : |
Mr. Prabhakar Sastry |
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Designation : |
Head of Legal |
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Name : |
Mr. Tor McCaul |
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Designation : |
Head of Commercial & New
Business |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Pre-Issue [as of
the date of filing of this Draft Red Herring Prospectus with the SEBI] |
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Category / Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Cairn UK Holdings Limited |
365,078,898 |
100.00 |
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Public |
-- |
-- |
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Total |
365,078,898 |
100.00 |
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Union issue of Equity shares to be issued
pursuant to the Share Purchase Deed |
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Category / Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Cairn UK Holdings Limited |
1,226,843,791 |
100.00 |
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Public |
-- |
-- |
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Total |
1,226,843,791 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Importer of Crude Oil and Gas. |
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Imports : |
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Countries : |
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Terms : |
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Purchasing : |
L/C |
GENERAL INFORMATION
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Customers : |
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No. of Employees : |
202 |
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Bankers : |
The Hongkong & Shanghai Banking Corporation Limited,
30, Rajaji Salai, Chennai – 600 001, |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Ø Ernst & Young Chartered Accountants Ø Arthur Andersen Associates Chartered Accountants Ø Price Waterhouse Chartered Accountants Chennai, |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2,250,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 22500.000 Milliohms |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
365,078,898 |
Equity Shares |
Rs. 10/- each |
Rs. 3650.789
Millions |
Present issue under this Draft Red Herring :
|
No. of Shares |
Type |
Value |
Amount |
|
538,470,588 |
Equity Shares |
Rs. 10/- each |
Rs. 5384.706
Millions |
Net issue to the Public :
|
No. of Shares |
Type |
Value |
Amount |
|
538,470,588 |
Equity Shares |
Rs. 10/- each |
Rs. 5384.706
Millions |
Equity Capital Post-Issue :
|
No. of Shares |
Type |
Value |
Amount |
|
1,765,314,379 |
Equity Shares |
Rs. 10/- each |
Rs.
17653.144 Millions |
Share Premium Account :
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Before the Issue |
Rs. 51834.104 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
|
Group 2006 $’000 |
Group 2005 $’000 |
Company 2006 $’000 |
Company 2005 $’000 |
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Non-current assets |
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Intangible exploration / appraisal assets |
419,239 |
321,855 |
-- |
-- |
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Property, plant and equipment – development / producing assets |
394,010 |
456,929 |
-- |
-- |
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Property, plant and equipment – other |
5,891 |
4,158 |
1,291 |
1,127 |
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Intangible assets – other |
6,724 |
2,601 |
1,730 |
1,253 |
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Investments |
96 |
96 |
508,056 |
24,829 |
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Deferred tax assets |
18,911 |
2,606 |
-- |
-- |
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|
844,871 |
788,245 |
511,077 |
27,209 |
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Current Assets |
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Inventory |
4,615 |
5,533 |
-- |
-- |
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Trade and other receivables |
218,159 |
124,725 |
80,936 |
229,195 |
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Bank deposit |
-- |
20,000 |
-- |
-- |
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Cash and Cash equivalents |
856,266 |
75,509 |
19,513 |
33,764 |
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|
1079,040 |
225,767 |
100,449 |
262,959 |
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Total assets |
1923,911 |
1014,012 |
611,526 |
290,168 |
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Current Liabilities
|
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Trade and other payables |
897,232 |
94,736 |
113,810 |
38,021 |
|
Obligation under finance leases |
1,380 |
-- |
-- |
-- |
|
Provisions |
6,845 |
-- |
-- |
-- |
|
Derivatives financial instruments |
9,694 |
-- |
--- |
-- |
|
Income Tax Liabilities |
6,064 |
7,550 |
-- |
-- |
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|
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|
921,215 |
102,286 |
113,810 |
38,021 |
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Non-current
liabilities |
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Loans and borrowings |
155,000 |
-- |
47,000 |
-- |
|
Obligations under leases |
3,092 |
-- |
-- |
-- |
|
Provisions |
24,740 |
17,456 |
-- |
-- |
|
Deferred tax liabilities |
138,694 |
136,672 |
-- |
-- |
|
|
|
|
|
|
|
|
321,526 |
154,128 |
47,000 |
-- |
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Total Liabilities |
1242,741 |
256,414 |
160,810 |
38,021 |
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Net assets |
681,170 |
757,598 |
450,716 |
252,147 |
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|
Called up share capital – Equity |
25,870 |
25,775 |
25,870 |
25,775 |
|
Share premium |
201,019 |
197,895 |
201,019 |
197,895 |
|
Share held by ESOP Trust |
[55,756] |
[37,311] |
[55,756] |
[37,311] |
|
Foreign Currency translation |
2,798 |
[7,927] |
37,181 |
[8,219] |
|
Other reserves |
37,284 |
37,284 |
-- |
-- |
|
Capital reserves - non distributable |
45,331 |
45,331 |
79 |
79 |
|
Capital reserves - distributable |
178,429 |
178,429 |
-- |
-- |
|
Retained earnings |
246,195 |
318,122 |
242,323 |
73,928 |
|
|
|
|
|
|
|
Total equity
attributable to the equity holders |
68,170 |
757,598 |
450,716 |
252,147 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
Group 2006 $’000 |
Group 2005 $’000 |
|
|
|
|
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Turnover |
|
286,304 |
262,562 |
|
|
|
|
|
|
Cost of sales |
|
[56.931] |
[50.235] |
|
Production costs |
|
[62.018] |
[26.867] |
|
Depletion |
|
[103.487] |
[91.740] |
|
Decommissioning charges |
|
|
|
|
|
|
|
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|
Gross Profit |
|
63,868 |
93.720 |
|
|
|
|
|
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Other operating income |
|
3,340 |
3,116 |
|
Administrative expenses |
|
[60,323] |
[41,204] |
|
Exceptional impairment of oil and gas assets |
|
[71,455] |
-- |
|
Exceptional Gain on sale of oil and gas assets |
|
-- |
15,272 |
|
|
|
|
|
|
Operating profit /
loss |
|
[64.570] |
70,904 |
|
|
|
|
|
|
Finance Income |
|
4,603 |
32,543 |
|
Finance Costs |
|
[30,609] |
[2,236] |
|
|
|
|
|
|
[Loss] / Profit before tension |
|
[90,576] |
101211 |
|
|
|
|
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Taxation Credit / [Expenses] on [loss]/profit |
|
8,559 |
[22,139] |
|
|
|
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[Loss]/profit for the year attributable to the equity holders of the parent |
|
[82,017] |
79,072 |
|
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|
Earnings per
ordinary share - basic [Cents] |
|
[52.02] |
50.37 |
|
Earnings per
ordinary share - diluted [Cents] |
|
[52.02] |
50.10 |
QUARTERLY RESULTS
|
PARTICULARS |
31.03.2007 |
30.06.2007 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
Full
Year |
|
Sales Turnover |
05.000 |
03.600 |
00..000 |
|
Other Income |
121.000 |
84.900 |
59.100 |
|
Total Income |
126.000 |
88.500 |
59.100 |
|
Total Expenditure |
211.200 |
164.200 |
349.600 |
|
Operating Profit |
[85.200] |
[75.700] |
[290.500] |
|
Interest |
00.200 |
00.000 |
01.700 |
|
Gross Profit |
[85.400] |
[75.700] |
[292.200] |
|
Depreciation |
00.000 |
00.000 |
00.000 |
|
Tax |
00.000 |
00.000 |
00.000 |
|
Reported PAT |
[85.400] |
[75.700] |
[292.200] |
Notes:
200703
Quarter 1 –
1. The above unaudited financial results were reviewed and recommended
by the Audit committee and approved by the Board of Directors at their meeting
held on 27 April 2007 The limited review under clause 41 of the Listing
Agreement has been carried out by auditors of the company. 2. The Company was
incorporated on 21 August 2006 and hence the comparison with the corresponding
quarter of the previous year is not applicable. 3.The Company operates in only
one segment i.e Oil and Gas Operations. 4.During the current quarter the
Company issued stock options amounting to 1,708,195 options under the Cairn
India Performance Option Plan(2006) and 3,467,702 options under the Cairn India
Employee Stock Option Plan(2006) 5.The Company was listed on 9 January 2007 on
the National Stock Exchange and Bombay Stock Exchange. The number of investors
Complaints received disposed of during the quarter ended 31 Mar 2007 were as
follows. 1.Pending at the beginning of the Period - 2.Received during the
period 9,316 3.Disposed of during the period 8,903 4.Pending at the end of the
quarter(31 mar 2007) 413 6.As on 31 March 2007 the company has utillsed Rs
63,253,600 thousands for the Purposes listed in the Prospectus as against the
projected utillsation of Rs 88,248,800 thousands. The funds utillsed till 31
March 2007 are as follows Amount in Thousand a. Accuisition of shares of Cairn
India Holding Limited form Cairn UK Holding Limited 59,580,800 b.
Exploration/Development Expenses 3,392,300 C. Issue Expenses 280,500 The
Company and its subsidiary Cairn Holding Limited has an untillsed amount of Rs
24,995,200 thousands as at 31 March 2007 held as a. Cash and Cash Equivalents
21,090,771 b. Current investments 3,904,429
200706
Quarter 2 –
Expenditure Includes Staff Cost Rs 132.471 million Others Rs
29.704 million Exploration Costs Rs 1.979 million EPS is Basic & Diluted
Status of Investor Complaints for the quarter ended June 30, 2007 Complaints
Pending at the beginning of the quarter 413 Complaints Received during the
quarter 2733 Complaints disposed off during the quarter 2941 Complaints
unresolved at the end of the quarter 205 1. The above unaudited financial
results were reviewed and recommended by the Audit Committee and approved by
the Board of Directors at their meeting held on July 30, 2007. The limited
review, under clause 41 of the Listing Agreement, has been carried out by
auditors of the Company. 2. The Company was incorporated on August 21, 2006 and
hence the comparison with the corresponding quarter and half year of the
previous year is not applicable. 3. The Company operates in only one segment
i.e 'Oil & Gas Operations' 4. During the quarter ended June 30, 2007, staff
cost includes Rs 131.303 million representing amortisation of employee
compensation expenses pertaining to Employees Share Options. 5. The Finance Act
2007 requires payment of Fringe Benefit Tax (FBT) on Employee Share Options
benefit provided to employees. FBT is payable on the date when an option is
exercised by employees based on fair market value on the date of vesting of the
options. During the quarter no stock options have been exercised. 6. During the
quarter ended June 30, 2007 the company commenced surveys and other exploration
activities in one of the Oil & Gas blocks awarded under NELP - VI. 7. As on
June 30, 2007, the Company and its subsidiaries together have utilised Rs
65933.560 million for the purposes listed in the Prospectus, as against the
projected utilisation of Rs 88248.900 million. The funds utilised till June 30,
2007, are as follows: (Rs in million) Acquisition of shares of Cairn India
Holdings Limited from Cairn UK Holdings Limited: 59580.837 Exploration &
Development expenses: 4731.427 General Corporate Purposes : 28.048 Issue
expenses: 1593.248
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.144.50/- |
|
Low |
Rs.140.35/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY AND CORPORATE STRUCTURE
The Company was
incorporated under the Companies Act on 21 August, 2006 and obtained its certificate
of commencement of business on 14 September, 2006.
The registered
office of the Company was changed from Lentin Chambers, 3rd Floor, Dalal
Street, Fort, Mumbai 400 023, India to 401, Dalamal Towers, Nariman Point,
Mumbai 400 021, India on 12 October, 2006.
Cairn India Limited, a newly incorporated Indian company,
incorporated under the Companies Act on 21 August, 2006 and been promoted by
Cairn Energy PLC, a crude oil and natural gas exploration and production
company, obtained its certificate of commencement of business on 14th
September, 2006. At the completion of the Reorganisation, the Company will
acquire the Subsidiaries which hold all of the ownership and operated interests
in Cairn Energy PLC's Indian crude oil and natural gas development and
production assets and the majority of its Indian crude oil and natural gas
exploration assets. Upon the Company's acquisition of the Subsidiaries, the
company aims to be a leading participant in the Indian crude oil and natural
gas industry. The company estimates the total gross proved plus probable
(''2P'') reserves attributable to the fields in production or under development
in which Cairn India has interests to be 754 mmboe and its net working interest
in these 2P reserves to be 472 mmboe. Most of the 2P reserves are estimated to
be contained in the Rajasthan Block which is currently subject to significant
appraisal and development activity. In addition to proved plus probable
reserves, the company estimates the gross contingent resources attributable to
these fields to be 413 mmboe. Outside of the Rajasthan Block the company
estimates the total gross 2P reserves attributable to the fields in production
or under development in which Cairn India has interests to be 122 mmboe and on
a net working interest basis the company estimates these same reserves to be 30
mmboe. In addition, a further 157 mmboe of gross contingent resource has been
identified in fields outside of Rajasthan, with most of this gross contingent
resource (143 mmboe) estimated to be contained in the deep water Block
KG-DWN-98/2.
Cairn India Limited has secured an interest in two exploration blocks in India
PR-OSN-2004/1 and KK-DWN-2004/1. The blocks are awarded to the company under
the Sixth New Exploration Licensing Policy Round. Recently, Government of India
has awarded the company a six month extension to the Exploration Phase of the
Northern Appraisal Area of the Rajasthan License RJ-ON-90/1 in North West India
from May 2007.
Trade terms with
- Hyundai Heavy Industries Company Limited,
- Vetco Gray Pte Limited,
- Hunting Oil Field Services,
- Mustang
Engineering Inclusive,
Consolidated Results of Operations Information for Cairn Energy
Australia Pty Limited
Rs in millions
Indian
GAAP
|
|
Six Months ended
30 June |
Year Ended 31
December |
||
|
|
2006 |
2005 |
2004 |
|
|
Income : |
|
|
|
|
|
Sales |
3532.098 |
5460.934 |
4627.071 |
|
|
Other Income |
47.283 |
101.874 |
34.495 |
|
|
Increase [Decrease] in Inventories |
[60.238] |
119.155 |
[85.819] |
|
|
Total |
3519.143 |
5681.963 |
4575.747 |
|
|
Expenditure : |
|
|
|
|
|
Production Cost |
670.179 |
1290.028 |
1437.380 |
|
|
Depletion, Depreciation and amortization |
354.450 |
654.053 |
671.745 |
|
|
Unsuccessful exploration costs written off |
1358.687 |
1506.163 |
1662.952 |
|
|
Staff costs and administration expenses |
251.075 |
532.739 |
424.503 |
|
|
Profit on sale of interest |
-- |
[1601.390] |
-- |
|
|
Foreign exchange [gain]/loss [realized] |
70.736 |
[96.478] |
[101.041] |
|
|
Financing expenses |
9.315 |
137.356 |
99.658 |
|
|
Total |
2714.442 |
2422.471 |
4195.197 |
|
|
Net profit / [loss] before tax and extraordinary items |
|
|
|
|
|
Taxation |
804.701 |
3259.492 |
380.550 |
|
|
Current |
140.188 |
351.360 |
206.811 |
|
|
Deferred |
383.749 |
1425.214 |
[155.920] |
|
|
Fringe benefit tax |
7.200 |
14.800 |
-- |
|
|
Net profit after tax |
273.564 |
1468.118 |
329.659 |
|
The profit on sale of interest in 2005 relates
to ONGC Assets Transaction [The asset sale and purchase agreement with ONGC,
dated 31.12.2004, through which Cairn India acquired a 30 % interest in Block
CB-ONN-2001/1, and which also included the acquisition by Cairn India of its
interest in Blocks CB-ONN-2002/1, and which also included the acquisition by
Cairn India of its interest in Blocks CB-ONN-2002/1 and GV-ONN-97/1 and the
farm out of part of Cairn India’s interest in Block KG-DWN-98/2]
Unconsolidated Results of Operations Information for Cairn Energy
Hydrocarbons Limited
Rs in millions
Indian
GAAP
|
|
Six Months ended
30 June |
Year Ended 31
December |
||
|
|
2006 |
2005 |
2004 |
|
|
Income : |
|
|
|
|
|
Sales |
-- |
-- |
157.228 |
|
|
Other Income |
2.029 |
2.659 |
0.696 |
|
|
Increase [Decrease] in Inventories |
-- |
-- |
-- |
|
|
Total |
2.029 |
2.659 |
157.924 |
|
|
Expenditure : |
|
|
|
|
|
Production Cost |
|
0.002 |
42.151 |
|
|
Depletion, Depreciation and amortization |
4.181 |
6.281 |
60.030 |
|
|
Unsuccessful exploration costs written off |
1008.562 |
1388.429 |
1738.158 |
|
|
Staff costs and administration expenses |
16.012 |
29.281 |
30.138 |
|
|
Profit on sale of interest |
-- |
-- |
[204.610] |
|
|
Foreign exchange [gain]/loss [realized] |
541.036 |
75.492 |
[63.329] |
|
|
Financing expenses |
69.145 |
71.429 |
51.051 |
|
|
Total |
1638.936 |
1570.914 |
1653.589 |
|
|
Net profit / [loss] before tax and extraordinary items |
[1636.907] |
[1568.255] |
[1495.665] |
|
|
Taxation |
|
|
|
|
|
Current |
0.002 |
0.013 |
88.070 |
|
|
Deferred |
|
|
[38.758] |
|
|
Net profit after tax |
[1636.909] |
[1568.268] |
[1544.977] |
|
Consolidated Results of Operations Information for Cairn Energy
Rs in millions
Indian
GAAP
|
|
Six Months ended
30 June |
Year Ended 31
December |
||
|
|
2006 |
2005 |
2004 |
|
|
Income : |
|
|
|
|
|
Sales |
1909.534 |
2180.163 |
2135.153 |
|
|
Other Income |
20.593 |
14.859 |
2.121 |
|
|
Increase [Decrease] in Inventories |
[26.503] |
35.234 |
7.296 |
|
|
Total |
1903.624 |
2230.256 |
2144.570 |
|
|
Expenditure : |
|
|
|
|
|
Production Cost |
161.410 |
220.137 |
260.875 |
|
|
Depletion, Depreciation and amortization |
810.979 |
1482.226 |
1485.026 |
|
|
Unsuccessful exploration costs written off |
-- |
19.222 |
124.468 |
|
|
Staff costs and administration expenses |
40.986 |
74.189 |
75.118 |
|
|
Profit on sale of interest |
[0.119] |
[699.570] |
-- |
|
|
Foreign exchange [gain]/loss [realized] |
[12.719] |
66.967 |
[219.589] |
|
|
Financing expenses |
0.086 |
0.230 |
16.554 |
|
|
Total |
1000.623 |
1163.401 |
1752.452 |
|
|
Net profit / [loss] before tax and extraordinary items |
903.001 |
1066.855 |
392.118 |
|
|
Taxation |
|
|
|
|
|
Current |
66.051 |
42.159 |
23.972 |
|
|
Deferred |
-- |
-- |
-- |
|
|
Net profit after tax |
836.950 |
1024.696 |
368.146 |
|
Consolidated balance Sheet Information for Cairn UK Holdings Limited
|
|
Indian GAAP As on 30 June
2006 Rs in Millions |
|
Fixed Assets |
|
|
Gross Block |
1291.726 |
|
Less : Accumulated depreciation |
901.142 |
|
Net Block |
390.584 |
|
Producing properties [net of depletion] |
4349.838 |
|
Exploratory and Development wells in
progress |
11916.634 |
|
Total |
16657.056 |
|
|
|
|
Goodwill |
9579.564 |
|
|
|
|
Investments |
4.166 |
|
|
|
|
Current assets, loans and advances |
|
|
Inventories |
1317.560 |
|
Sundry debtors |
2434.265 |
|
Cash and Bank balances |
1368.365 |
|
Loans and advances |
2305.494 |
|
Other current assets |
171.627 |
|
Intercompany loans and receivables |
23.726 |
|
Total |
7621.037 |
|
|
|
|
Liabilities and provisions |
|
|
Secured loans |
|
|
Unsecured loans |
|
|
-
Intercompany |
2739.663 |
|
-
Others |
1157.500 |
|
Intercompany payables |
1894.325 |
|
Current liabilities and provisions |
5435.830 |
|
Finance lease liabilities |
213.981 |
|
Deferred tax liabilities |
3563.900 |
|
Total |
15005.199 |
|
|
|
|
Net Worth |
18856.624 |
|
Represented by : |
|
|
Share capital |
18856.624 |
|
Reserves and surplus |
-- |
|
Net Worth |
18856.624 |
INDUSTRY OVERVIEW
The Indian Oil and
Gas Industry
The origins of the
Indian oil industry can be traced back to the nineteenth century when the first
crude oil discoveries were made in
Throughout the 1960s,
as the industry increased in size, it became increasingly dominated by
state-owned entities. In 1974, ONGC discovered the large Mumbai High offshore
oil field prompting large-scale expansion in the Indian oil and gas sector. In
the 1970s, the Indian government implemented policies of nationalisation which
led to the Government taking over the operations of, for example, Esso, Caltex
and Burmah-Shell. The period also witnessed increased regulation in all aspects
of the industry from production to pricing.
However, in the
early 1990s, and as
In 1997, the NELP
was implemented. According to the DGH, the NELP was designed as a means of
allowing participants in the Indian oil and gas industry to compete on equal
terms for exploration acreage. Successful bidders are required to enter into
production sharing contracts with the Government. Historically, and in an
effort to promote licensing rounds and encourage potential bidders, production
sharing contracts have contained comparatively favourable terms, including, for
example, 100% costs recovery, and a seven-year income tax holiday beginning
from the tax year during which commercial production first begins.
While deregulation
and other Government initiatives have increased the level of private sector
participation in the domestic production sector, the oil and gas industry in
Indian Domestic
Energy Demand
The International
Energy Agency has predicted that between 2003 and 2030
BUSINESS
Background
Cairn India
Limited is a newly incorporated Indian company and has been promoted by Cairn
Energy PLC, a crude oil and natural gas exploration and production company
trading on the main market of the London Stock Exchange. At the completion of
the Reorganisation, the Company will acquire the Subsidiaries which hold all of
the ownership and operated interests in Cairn Energy PLC's Indian crude oil and
natural gas development and production assets and the majority of its Indian
crude oil and natural gas exploration assets. Upon the Company's acquisition of
the Subsidiaries, they aim to be a leading participant in the Indian crude oil
and natural gas industry. They estimate the total gross proved plus probable
("2P") reserves attributable to the fields in production or under
development in which Cairn India has interests to be 754 mmboe and its net working
interest in these 2P reserves to be 472 mmboe. Most of the 2P reserves are
estimated to be contained in the Rajasthan Block which is currently subject to
significant appraisal and development activity. In addition to proved plus
probable reserves, they estimate the gross contingent resources attributable to
these fields to be 413 mmboe. Outside of the Rajasthan Block they estimate the
total gross 2P reserves attributable to the fields in production or under
development in which Cairn India has interests to be 122 mmboe and on a net
working interest basis they estimate these same reserves to be 30 mmboe. In
addition, a further 157 mmboe of gross contingent resource has been identified
in fields outside of Rajasthan, with most of this gross contingent resource
(143 mmboe) estimated to be contained in the deep water Block KG-DWN-98/2.
Competitive
Strengths
World class
resource base. They estimate the Cairn India net working interest in 2P crude oil and
natural gas reserves to be 472 mmboe. A significant portion of this 2P reserves
base is in the Rajasthan Block and provides the opportunity for
transformational growth in the near term. In addition, they have identified
significant contingent resources, particularly in the Rajasthan Block, which
provide them the opportunity to sustain and grow their production in the medium
term. In addition to the exploration and appraisal potential remaining in Cairn
Experienced
management.
They have an
executive management team with substantial experience in the Indian oil and gas
industry, backed by a highly skilled and experienced Board. As a result, they believe
they are ideally positioned to pursue value-adding opportunities, whether in
respect of new or existing assets. In the Rajasthan Block, the development team
is fully constituted and staffed with industry experts possessing a wealth of
international experience in large-scale international development projects. The
team is expected to be led through project implementation by their Chief
Operating Officer Lawrence Smyth, formerly President of British Petroleum's
business in
Proven development
and operational expertise.
Cairn
In addition, the
Ravva Field ranked in the leader category, in terms of operational costs, among
25 similar shallow water oil developments according to Ziff Energy's July 2005
"Operating Cost Benchmarking and Field Operating Efficiency
Analysis".
Exploration
expertise in
Cairn
Cairn
Sustain production
from and maintain low operating costs in existing producing fields. They aim to
sustain Cairn
Execute Rajasthan
Block Northern Fields development.
They intend to
execute their Rajasthan Block development to reach first commercial production
at Mangala during 2009. While the Mangala field is intended to be the first of
the Northern Fields to be developed, their development planning also includes
the commencement of production from the Bhagyam and Shakti fields within six
months and the Aishwariya field within 12 months of commencement of production
from the Mangala field. All of the major regulatory clearances have been
obtained, the land for the process facilities and the majority of the drilling
sites acquired and the detailed engineering progressed to a point where
ordering of long lead equipment can begin. In addition to their development and
production experience, their execution of the Rajasthan Block development will
also benefit from their extensive subsurface knowledge of the development
areas. This knowledge base which includes extensive 2D and 3D seismic surveys,
a comprehensive series of well tests and core and fluid analyses, will help
them` optimise reservoir development to maximise reserves and production.
Maximise potential
in Rajasthan.
They believe that there is a significant
resource base in the Rajasthan Block. They are in the process of assessing the
application of advanced technologies to help increase recovery from this
resource base. For example, Cairn
In addition, above
the main Fategargh reservoir in both the Mangala and Aishwariya fields is a
thick section of oil
bearing reservoir rock
of the Barmer Hill Formation. The Barmer Hill Formation has very low
permeability resulting in low expected recovery rates. However, recent
hydraulic fracture stimulation tests on the Barmer Hill Formation in the
Mangala—6 and Aishwariya—4 wells have resulted in initial flow rates of 156
bopd and 400 bopd, respectively, and, indicate a potential further contingent
resource for the future. Cairn
They will also
continue to appraise their two development areas in the Rajasthan Block which
cover approximately 2,288 km2 as well as, subject to PSC extension
applications, the Northern Appraisal Area which covers approximately 879 km2.
Appraisal of
potential in the Rajasthan Block lies in numerous prospects and leads in a
number of reservoirs in the vicinity of existing discoveries in the Rajasthan
Block. A comprehensive and growing inventory has been collated, based upon
analysis of the 2D and 3D seismic data and the various wells in the licence
area, which they currently estimate includes approximately 30 prospects. The
prospects and leads include new structures in existing plays, as yet untested
plays, and extensions of, and new pools associated with, existing discoveries.
Identify new
opportunities for growth in reserves and production.
Cairn
Their lead and
play portfolio is also being fostered in both mature and frontier areas, as
well as in regions and basins where the current data set can be optimised or
reinterpreted. For example, Cairn
In addition, they
believe that
Key Assets
The following map
shows the location of the assets included in Cairn
Ravva, Lakshmi and
Gauri
Cairn
Production of
natural gas commenced from the Lakshmi field in 2002 (19.4 bcf (gross) in 2005)
and from the Gauri field in 2004 (16.0 bcf (gross) in 2005). Gauri oil
production commenced in 2005 (gross production of commingled crude oil from the
Gauri and Lakshmi fields was 0.2 mmbbl in 2005). For the six months ended 30
June, 2006, the total gross production rate from fields they operate was
approximately 87,500 boepd of which Cairn India had a working interest in
24,000 boepd. Cairn
The Rajasthan
Block
The majority of
the estimated hydrocarbons in place, 2P reserves and contingent resources
attributable to fields in
which Cairn India
has an interest are contained in the Rajasthan Block where the upstream picture
continues to evolve. Cairn
The Rajasthan
Block accumulations fall into three groups:
•
• Small
Southern Fields Saraswati, Raageshwari oil and Raageshwari Deep gas; and
• Other
accumulations GS-V, Guda, N-E, Kameshwari, Shakti, Shakti NE, N-I, N-P,
Bhagyam South, NI-North, NC West, Vijaya & Vandana, NR, Mangala Barmer Hill
and Aishwariya Barmer Hill.
Reorganisation of
Cairn
Cairn
The Company has
entered into the Share Purchase Deed with Cairn Energy PLC, Cairn UK Holdings
Limited and
Cairn India
Holdings Limited to effect the acquisition of Cairn India Holdings Limited so
that, subject to the terms and conditions of that agreement, the Company will
own 100% of Cairn India Holdings Limited on the Final Transfer Date, which will
occur on or prior to Allotment. Following the completion of the Issue and
assuming no exercise of the Green Shoe Option, the Cairn Energy Group will
beneficially own approximately 69.5% of the issued Equity Shares and the
Company will therefore continue to be an indirect majority-owned subsidiary of
Cairn Energy PLC. For further details, see the section entitled "History
and Corporate Structure" at page 95 of this Prospectus.
The Reorganisation
will be completed, subject to the terms and conditions of the Share Purchase
Deed, on or prior to Allotment and, accordingly, they refer in this Prospectus
to Cairn
Block PKGM-1—KG
Basin—Ravva Field
Overview
Cairn
The PSC for the
exploration, development and production of the Ravva field (the "Ravva
PSC") was signed on 28 October, 1994 between the GoI and a consortium
consisting of ONGC, Videocon Petroleum Limited, Ravva Oil and Command Petroleum
(
In 1996, Cairn
Energy PLC acquired Command Petroleum, including its interest in the Ravva
field, and Cairn
Ravva oil
production levels, which were approximately 3,700 bopd before execution of the
Ravva PSC, were increased by Cairn
Production from
the Ravva Field
As at 30 June, 2006,
the Ravva field had produced more than 200 mmboe since the commencement of
production, including 168 mmbbls of 36° API crude oil. For the six months ended
30 June, 2006, the Ravva field's gross production rate was 62,700 boepd, of
which Cairn India's entitlement interest was 6,431 boepd.
As part of its
development programme for the Ravva field, the Ravva JV has built six unmanned
offshore platforms (it also inherited 2 platforms previously built by ONGC) and
additional sub-sea pipelines to transfer crude oil and natural gas from
offshore and to inject water to the Ravva field to maintain reservoir pressure
and to sweep for oil. They believe that the reservoir management strategy of
water flooding utilised for the Ravva field has resulted in the high recovery
factor experienced for the field of approximately 55%. A 225 acre onshore
processing facility at Surasaniyanam (the "Ravva Onshore Terminal"),
which is owned by the Ravva JV, processes natural gas and crude oil from the
Ravva field. The Ravva Onshore Terminal achieved ISO 14001 certification, an
international standard for environmental management systems, in 2005 and has a
capacity to process 90,000 bbls of gross fluids per day (70,000 bopd), 95
mmscfd of natural gas and 110,000 bbls per day of injection water. The
processing facilities include three stage separator trains, storage tanks, gas
and effluent treatment plants as well as 10 megawatt captive power generation.
The Ravva Onshore Terminal is being upgraded to handle increased water cuts (that
is, the ratio of water produced compared to the volume of total liquids
produced) through produced water handling and re-injection. This upgrade is
scheduled for completion in the second quarter of 2007.
Crude Oil
Production
The Ravva main oil
reservoir is of Mid-Miocene age at depths of between 1,500m and 1,800m. After
the Ravva PSC was signed in 1994, 11 exploration wells and 26 development wells
were drilled. The Ravva field was expected to come off its plateau rate of
50,000 bopd in 2005, but various surface and sub-surface initiatives have
allowed for an extension of this rate. An infill drilling programme designed to
extend the plateau rate for approximately nine to 12 months was planned for
2004-05. However, due to a delay in obtaining the required approvals and the
limited availability of offshore drilling rigs, the programme commenced on 7
October, 2006 and will include the drilling of five firm infill wells, one firm
appraisal/development well, one firm workover and one firm exploration well ("LM
403"). It is anticipated that these infill wells, once producing, will
maintain the Ravva field's plateau rate of 50,000 bopd until late 2007 at which
point they expect that production will begin to decline.
Natural Gas
Production
As at 30 June,
2006 the main field at Ravva was producing 44.5 mmscfd of natural gas, of which
78% is associated natural gas (that is, natural gas produced with crude oil
from the same reservoir). Non-associated natural gas in the Ravva field is
produced mainly from a satellite field of Late-Miocene age natural gas reserves
found at depths of between approximately 800 m and 1100 m. The satellite field
was discovered during exploration drilling undertaken in 1997-98 and production
from the field commenced in September 2001. As part of development work carried
out in 2001-02 which gradually increased natural gas sales by March 2002 to a
plateau rate of 31.78 mmscfd, one new natural gas well was drilled, one natural
gas well was re-entered and two additional wells on existing platforms were
connected.
They currently
expect the plateau rate to continue until the end of 2007, and decline
thereafter. Also, as part of the developmental work, one platform and a sub-sea
pipeline were installed to transfer natural gas to the Ravva Onshore Terminal.
Block CB/OS-2—
Overview
Cairn
Exploration,
development and production of Block CB/OS-2 is governed by a PSC between the
GoI and a consortium consisting of ONGC, Tata Petrodyne Limited and Cairn India
(the "Cambay JV") which was signed on 30 June, 1998 (the "Block
CB/OS-2 PSC"). Cairn
Production from
the Lakshmi and Gauri Fields
The Lakshmi and
Gauri fields cover areas of 121.1 km2 and 50.7 km2, respectively, in the
An 82 acre onshore
processing facility at Suvali (the "Suvali Processing Plant"), which
is owned by the Cambay JV, processes natural gas and crude oil from the Lakshmi
and Gauri fields. The Suvali Processing Plant achieved ISO 14001 certification
in 2005 and has a capacity to process 150 mmscfd of natural gas and 5,000 bopd
of crude oil. Cairn
Natural Gas
Production
The natural gas
reservoirs of the Lakshmi and Gauri fields are of Mid-Miocene age and are found
at depths of between approximately 735 m and 1,150 m. Cairn India discovered
the Lakshmi natural gas reservoir in May 2000 and production from this
reservoir commenced in October 2002 utilising two offshore platforms, six wells
and a 36 km, 24 inch offshore pipeline which connects the field to the Suvali
Processing Plant. The Gauri natural gas reservoir was discovered in January
2001 and production from this reservoir commenced in April 2004 utilising one
offshore platform, four wells and a 5 km, 12 inch offshore pipeline connecting
the field to the Lakshmi pipeline.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.45 |
|
|
1 |
Rs.82.70 |
|
Euro |
1 |
Rs.55.94 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|