Cairn posts record profit of USD 4.56 bn

20 Mar, 2012, 07.56PM IST, PTI

Cairn posts record profit of USD 4.56 bn (CMP=360)

NEW DELHI: Edinburgh-based Cairn Energy plc today reported a record full year profit of USD 4.56 billion for 2011 on the back of proceeds from 40 per cent stake sale in its Indian unit to Vedanta Resources.

However, the company posted an operating loss of USD 1.1 billion against a USD 298.9 million loss in 2010 as a result of an unsuccessful drilling campaign in Greenland.

Cairn, which had in 2010 reported a profit of USD 1.08 billion, drilled five exploration wells offshore Greenland in 2010 and five in 2011 without any success.

It said net proceeds of the sale of majority stake in Cairn India to Vedanta was about USD 5.4 billion, allowing a cash return of USD 3.5 billion to shareholders in February.

Simon Thomson, Chief Executive, Cairn Energy said: "Cairn has delivered on its key objectives for 2011: completion of the sale of 40 per cent of Cairn India, the return of USD 3.5 billion to shareholders and the farm-down of the Pitu block in Greenland to Statoil."

"With full cycle capabilities and balance sheet strength, Cairn is well positioned to create significant value from transformational exploration, within a well balanced portfolio of exploration and production assets," Thomson said.

After Eqqua block, the firm said its exploration focus in 2012 will switch to the Pitu Licence in the Baffin Bay area west of Greenland over which 3D seismic and geochemical seabed sampling surveys were acquired in the summer of 2011.

Cairn had in January this year farmed out 30.625 per cent stake in the Pitu block to Statoil.

"Commercial quantities of hydrocarbons have yet to be discovered, but the first phase of our exploration programme in Greenland has demonstrated that all of the geological ingredients necessary for success are present," Thomson said.

Cairn has retained a 22 per cent share in Cairn India, following the stake sale to Vedanta.