Cairn India: Investors needn't worry too much about scrip's under-performance - Economic Times

Prices | Financials | Company Info | Reports MUMBAI: For the Cairn India investors who are worried because of the under-performance of the scrip in 2013 so far the management's plans to ramp up production hold hope. The company's valuations are extremely inexpensive and its ability to maintain the production coupled with improve the pricing mechanism should be good to stay with the company. The major challenge the company is fighting at present is the early onset of natural decline at its biggest field Mangala in Rajasthan. The production from this field is expected to trend downwards from current almost 150,000 bpd. However, the company is scaling up Bhagyam to 40,000 bpd in the second half of FY14 and Aishwarya, which only recently commenced production, should rise to 10,000 bpd within months. The company has began commercial sale of natural gas, which also holds potential for growth. Similarly, the company's is seeking approvals for the EOR programme that can potentially stagnate the fall in Mangala's output. In addition, the company has launched a 450-well drilling programme over next 3 years to improve output from Rajasthan field. In another major development, the company's interim CEO P Elango announced that the company is set to get a higher price for its crude in FY14, which always trades at a discount to the Brent benchmark due to its poorer quality. "As against the 10-15% discount to Brent crude oil prices till now, we are revising our guidance to 8-13% discount," he mentioned in a media conference call post results. Considering the government's improved decision making in the E&P space, the company's track record in project implementation and the company's potential for growth investors needn't feel excessively worried about the scrip's under-performance. Copyright © 2013 Times Internet Limited. All rights reserved. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEO0ccCjFJpKFAWBeOtBijMOLdTXw&url=http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/cairn-india-investors-neednt-worry-too-much-about-scrips-under-performance/articleshow/19680782.cms

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