Monday, December 22, 2008

Cairn India finds new oil, gas ; shares gain 7%

Energy explorer Cairn India Ltd said on Monday it had made an oil and gas discovery near its existing field in the western Indian state of Rajasthan, sending its shares up 7 percent in a weak Mumbai market.

The company, a unit of Britain's Cairn Energy Plc said it was yet to determine the reserves but the well had a flow of 500 barrels of oil per day and 0.4 million standard cubic feet of gas a day during a testing phase.

"Future work on the Raageshwari East 1/1Z includes field studies to determine extent of the discovery as well as evaluate cost effective development options," Chief Executive Rahul Dhir said in a statement.

Cairn India, which aims to produce 175,000 barrels a day from existing fields in Rajasthan by 2010, said the new well was situated 1.5 kilometres east of its Mangala, Aishwarya, Raageshwari and Saraswati development area in the desert state.

Its largest field so far, Mangala, is set to start production by the second half of 2009.

Shares in Cairn India, which has a market value of $6.2 billion, were up 6.8 percent at 163.35 by 0817 GMT, while the main BSE index .BSESN was down nearly 1 percent.

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