Annual Report 2007 in PDF - Cairn Energy PLC

FINANCIAL REVIEw
Jann Brown, Finance Director
$827m
net Cash
$910m
tOtal CredIt faCIlItIes avaIlable
$625m
due In aprIl, fOllOWInG fOrmal
apprOval Of the prIvate plaCement
Of shares tO petrOnas and
OrIent GlObal
28 CAIRN ENERGY PLC ANNUAL REPORT 2007
CAIRN ENTERS 2008 wITH THE FINANCIAL
FLEXIBILITY TO DRIVE FORwARD THE RAjASTHAN
DEVELOPmENT AND TO PURSUE OPPORTUNITIES
FOR GROwTH.
cairn has net cash of $827m, positive
operating cash flows and total facilities
of $910m. in addition, cairn will receive
approximately $625m in april, following
formal approval of the private placement
of shares to petronas and orient global.
accounting Overview
on 9 january 2007, cairn india was
floated on the bombay stock exchange
and the national stock exchange of
india. the total proceeds (before
expenses) raised in the flotation were
$1,984.1m, with $935.7m (including
expenses) returned to shareholders
in 2007, a return of £3 per share.
cairn india retained $600m, with the
remainder of the proceeds held to
fund cairn’s exploration-led subsidiary,
capricorn.
on 7 september 2007, dyas bv acquired
a 10% holding in capricorn for a total
consideration, before expenses,
of $91.0m.
cairn energy plc’s consolidated
accounts include 100% of the results of
both of these subsidiary undertakings,
cairn india and capricorn. the interests
held by external shareholders (31% in
cairn india and 10% in capricorn) are
then reflected as minority interest
adjustments.
on 7 september 2007, the group
announced two recommended cash
offers totalling $76.2m (before expenses)
– one for plectrum petroleum plc and
the other for medoil plc. both of these
offers were declared unconditional on
10 october 2007 and their results are
included in the group’s consolidated
financial statements from that date.
on 25 october 2007, santos international
holdings pty limited acquired 100% of
cairn energy bangladesh limited from
the group (50% of cairn’s bangladesh
position) for a total cash consideration
of $55.8m. this has been reflected as
a disposal of oil and gas assets.
the prior year financial statements
have been adjusted for changes in
the accounting for deferred tax and
financial assets. the net impact of these
adjustments in 2006 was an increase
in the loss for the year attributable to
equity holders from $82.0m to $97.1m
and a decrease in net assets from
$681.2m to $678.8m.
prOfIt and lOss
turnover
revenue for the year was $287.7m
(2006: $286.3m).
production for the year, on an
entitlement interest basis, has decreased
by 19% to 19,809 boepd (2006: 24,523
boepd). this is primarily due to reduced
field production at both sangu and
cb/os-2.
the group’s production continues to
be predominantly gas (circa 63% on an
entitlement basis). this production mix,
together with price caps in the gas
contracts, results in an average price
realised by the group for the year of
$39.70 per boe (2006: $31.84 per boe).
the increase is due primarily to the
higher oil price environment in 2007.