>CAIRN INDIA: Takeaways from India Investor Conference, May 26-28

■ Takeaways from Mumbai — Cairn India presented at our India Investor Conference on May 26-28. Below are key takeaways.

■ Operational updates — The company has completed the Barmer-Salaya pipeline section, which should enable Train-III to be ready for production by Jun’10. Production from Mangala would be ramped upto 125kbpd in 2H2010 depending on offtake. The field is currently producing ~60kbpd of crude, being sold to both MRPL and RIL. While the company has already tied-up with MRPL, IOC, RIL and Essar for 143kbpd of output, sales discussions are ongoing with others as well. Besides, three wells have been drilled in the Mangala field to gauge the EOR potential.

■ 2011 will be key year for exploration — Cairn plans to commence drilling in its offshore Palar bock and in Sri Lanka in CY11.Of the five exploration wells to be drilled in the onshore block KG-ONN-2003/1 this year, the company has drilled its second exploration well, which has also turned out to be dry.

■ 4Q results takeaways — Cairn produced 17.5 kbpd of crude from Mangala in 4Q, with average realization of US$67/bbl (implying a 12% discount to Brent) vs. a realization of US$66/bbl in 3Q (13% discount to Brent). Even though production has been ramped up to 60 kbpd, sales ramp-up would likely happen with a lag.

To read the full report: CAIRN INDIA