Cairn Energy reports net profits rocket in 2011
British oil and gas explorer Cairn Energy revealed on Tuesday that net profits rocketed in 2011, boosted by the sale of most of its Indian division to Vedanta Resources.
Profits after taxation hit $4.1 billion (3.1 billion euros) last year, compared with 794.3 million in 2010, the London-listed company said in a results statement.
The company sold its 40-percent stake in Cairn India last year to Vedanta Resources for $9.6 billion, but has retained a 22-percent holding.
Following the divestment, Cairn added that it has returned $3.5 billion to shareholders since the start of the year and planned to spend $1.2 billion on future growth opportunities.
Cairn also said it hoped to start another drilling campaign offshore Greenland in 2014, with its efforts focused on the Pitu prospect in the Baffin Bay Basin.
"The sale of the majority of our holding in Cairn India Limited to Vedanta in December 2011 marked the culmination of an effective twenty-year association with the economic growth of the sub-continent," the group said in the earnings release.
"We can now look forward with confidence, excitement and ambition to building the future of the company in new strategic directions from a position of significant strength."
Edinburgh-based Cairn, whose fortunes were transformed in recent years by successful exploration projects in India, has since turned its focus to offshore Greenland.
However, two drilling campaigns failed to locate commercial quantities of oil and gas in 2010 and 2011.
Cairn added on Tuesday that it made a pre-tax loss of $1.19 billion from continuing operations, and blamed soaring costs in Greenland.
Hargreaves Lansdown equities analyst Keith Bowman said that the figures were in line with market expectations.
"The (Cairn India) disposal did drive profitability. In all, the figures look to be broadly in line with expectations," Bowman told AFP.
"A geographical refocusing has been undertaken, with a strong balance sheet and the group's successful track record still providing significant support to investor sentiment."
© 2012 AFP