Annual Report 2007 in PDF - Cairn Energy PLC

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NOTES TO THE ACCOUNTS CONTINUED 36. Related Party Transactions (continued) Increase in investments in subsidiaries and debt conversion On 1 September 2006, Cairn Uk Holdings Limited issued 29,780,710 £1 ordinary shares at par to Cairn Energy PLC pursuant to a debt conversion agreement between Cairn Energy PLC, Cairn Uk Holdings Limited, Cairn India Holdings Limited and Cairn Energy Hydrocarbons Limited (a subsidiary of Cairn India Holdings at this time). In summary, this agreement provided that $56.8m due to Cairn Energy PLC from Cairn Energy Hydrocarbons Limited was assigned to Cairn Uk Holdings in exchange for an issue of shares. Cairn Uk Holdings then assigned the debt to Cairn India Holdings in exchange for 29,780,710 £1 ordinary shares in Cairn India Holdings. Further loan capitalisations and capital contributions Following the restructuring of the group, Cairn Energy PLC made the following additional investments in subsidiaries: • • • $10.0m in Capricorn following the capitalisation of a loan balance; $0.5m in Cairn Uk Holdings Limited following the capitalisation of a loan balance; and $0.6m in Cairn Energy Holdings Limited following a capital contribution. (b) 2007 Group transactions During 2007, Capricorn issued new share capital to Cairn Energy PLC for a total consideration of $275.2m. On 31 December 2007, Cairn Uk Holdings Limited repurchased share capital from Cairn Energy PLC, reducing the company’s investment. Capital of $128.9m was returned to Cairn Energy PLC. (c) Remuneration of key management personnel The remuneration of directors, who are the key management personnel of the Group, is set out below in aggregate. Further information about the remuneration of individual directors is provided in the audited part of the Directors’ Remuneration Report on pages 57 to 68. 2007 2006 Group and Company $’000 $’000 Short-term employee benefits 7,013 7,664 Pension contributions 592 413 Share-based payments 3,243 1,555 ––––––––––– ––––––––––– 128 CAIRN ENERGY PLC ANNUAL REPORT 2007 10,848 9,632 ––––––––––– ––––––––––– (d) Other transactions During the year the Group did not make any purchases in the ordinary course of business from an entity under common control (2006: $356,000). There were no amounts owed to the party at the year end (2006: $nil). 37. Events after the Balance Sheet Date In March 2008, Cairn India arranged a private placement of approximately $625m with Petronas and Orient Global Tamarind Fund Pte Limited, who have agreed to subscribe for a total of 113 million shares. As a result of this private placement, Cairn Energy’s holding in Cairn India will reduce from 69% to 65%. The cash is due to be received in April, following formal approval of the transaction.
RESERVES Direct Direct working entitlement interest basis basis Group proven plus probable oil reserves ’000 bbls ’000 bbls At 1 January 2007 207,178 179,618 Additions of reserves in place 1,511 1,392 Revisions of previous estimates 42,943 (14,018) Production (4,599) (2,687) ––––––––––– ––––––––––– At 31 December 2007 247,033 164,305 ––––––––––– ––––––––––– Group proven plus probable gas reserves mmscf mmscf At 1 January 2007 140,124 98,251 Addition of reserves in place 974 896 Revisions of previous estimates (56,514) (36,732) Production (34,741) (27,259) ––––––––––– ––––––––––– At 31 December 2007 49,843 35,156 ––––––––––– ––––––––––– Group proven plus probable oil and gas reserves ’000 boe ’000 boe At 31 December 2007 255,340 170,164 ––––––––––– ––––––––––– At 31 December 2006 230,532 195,993 ––––––––––– ––––––––––– Reserves by geographical segment at 31 December 2007 are as follows: ’000 boe ’000 boe India 254,365 169,386 Bangladesh & Nepal 975 778 ––––––––––– ––––––––––– At 31 December 2007 255,340 170,164 ––––––––––– ––––––––––– Reserves by geographical segment at 31 December 2006 are as follows: ’000 boe ’000 boe India 216,017 185,704 Bangladesh & Nepal 14,515 10,289 ––––––––––– ––––––––––– At 31 December 2006 230,532 195,993 ––––––––––– ––––––––––– Production by geographical segment in the year was as follows: ’000 boe ’000 boe India 6,825 4,381 Bangladesh & Nepal 3,564 2,849 ––––––––––– ––––––––––– For the purposes of this table, 6 mscf of gas has been converted to 1 boe. 10,389 7,230 ––––––––––– ––––––––––– CAIRN ENERGY PLC ANNUAL REPORT 2007 129
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ANNUAL REPORT & ACCOUNTS 2007 CAIRN
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CAIRN is an edinburgh based oil and
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CAIRN INDIA performance First comme
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2000 lakshmi disCovery 2001 sarasWa
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THE RESTRUCTURING OF THE GROUP INTO
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ajasthan midstream the government o
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Cambay Basin, India CAIRN ENERGY PL
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Cairn india assets 30% 30% 49% 40%
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Rajasthan, India the increased reso
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Detail heading here relore min ullu
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uk (West Of shetland) Block 214/19
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nePal the security situation in nep
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angladesh reserves sangu gross 2p r
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activities in all operated blocks.
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2007 marked the beginning of a new
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key financial performance indicator
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CAIRN INDIA CAPITAL EXPENDITURE FOR
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3 9 12 4 8 1 Sir Bill Gammell, Chie
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2007 ACCOUNTS Risk Factors 36 Corpo
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RISk FACTORS CONTINUED The developm
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RISk FACTORS CONTINUED Corporate Re
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CORPORATE GOVERNANCE STATEMENT CONT
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DIRECTORS’ REPORT CONTINUED At 31
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DIRECTORS’ REPORT CONTINUED Elect
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DIRECTORS’ REPORT CONTINUED Age o
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DIRECTORS’ REMUNERATION REPORT Re
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DIRECTORS’ REMUNERATION REPORT CO
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INDEPENDENT AUDITOR’S REPORT TO T
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PRINCIPAL LICENCE INTERESTS ASIA In
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GROUP INCOME STATEMENT For the year
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BALANCE SHEETS As at 31 December 20
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