Cairn Energy drills 41-million-pound loss - Yahoo! News

Cairn Energy drills 41-million-pound loss - Yahoo! News

LONDON (AFP) - British oil firm Cairn Energy said on Tuesday that it dived into the red in 2006 with a net loss of 41 million pounds (82 million dollars) after downgrading energy reserves estimates at its Sangu field in Bangladesh.
The loss, compared with profits of 40 million pounds (79 million dollars) in 2005, Cairn Energy said in its earnings statement.
Revenue climbed nine percent to 145 million pounds (286.3 million dollars), but total production sank 13.0 percent to 24,523 barrels of oil equivalent per day.
"The group made a loss after tax of 82.0 million dollars (41 million pounds), mainly due to the exceptional oil and gas write down of 71.5 million dollars (36 million pounds) as a result of the downward reserves revision on Sangu," Cairn said.
The Sangu field, offshore of southern Bangladesh, has been hit by falling output and drilling delays.
Cairn said on Tuesday that the total asset write-down relating to Sangu now stood at 213 billion standard cubic feet, compared with an earlier estimate of 187 billion that was given in January.
Estimated reserves at Sangu stood at 116 billion standard cubic feet. That was about 5.0 percent of Cairn's total booked reserves for 2006 compared with 6.0 percent previously.
Booked reserves refers to the amount of oil which a company believes it can recover from the ground.
In morning trade, Cairn's share price fell 1.41 percent to 1,611.00 pence, while London's second-tier FTSE 250 index, on which the group is listed, rose 0.02 percent to 11,657.40 points.
In response to the results, broker Merrill Lynch said that the Sangu downgrade lowered the group's net asset value by 7.0 pence per share, adding that it was the third reserve downgrade in 18 months.
The Edinburgh-based company raised over 1 billion pounds (1.98 billion dollars) earlier this year with the listing of its Indian unit, Cairn India, on the Mumbai stock exchange.
The parent company Cairn retained a majority 69.5-percent holding in its Indian offshoot.
Turning to its vast Rajasthan project in western India, Cairn said talks with the country's state-run Oil and Natural Gas Corp about pipeline construction were "progressing well."
The company also reaffirmed estimated oil reserves in Rajasthan of more than 3.6 billion barrels, and planned production from the field of 150,000 barrels of oil per day.
The first oil production from Mangala, the largest of the fields, is on schedule for 2009, the group added.
In July last year, Cairn signed a one billion dollar agreement with more than a dozen banks to develop the Mangala, Aishwariya, Saraswati and Raageshwari oilfields in the Rajasthan basin.