TIDMVED
RNS Number : 5011N
Vedanta Resources PLC
29 January 2016
Q3 Production Release - Correction
Please note the correction on net debt in line 5 on page 13: the
correct figure is US$7.9bn, instead of the previous US$8.6bn.
29 January 2016
Vedanta Resources plc
Production Release for the Third Quarter Ended 31 December
2015
Q3 Highlights
-- EBITDA of US$494 million and 23% EBITDA margin(1) in a weak
commodity price environment
-- Zinc-India: Strong refined metal production; record quarterly
refined silver production of 3.7 million ounces
-- Oil & Gas: Stable production q-o-q with 19 kboepd
contribution from Mangala EOR; Rajasthan water flood operating
costs continue to improve
-- Copper :
o Zambia: Strong mined metal production at 32,000 tonnes with
improvement of hoisting capacity and equipment availability at
Konkola; continued improvement in cost of production despite higher
power costs
o India: 89% utilization, affected by floods and unplanned
shutdowns
-- Aluminium: Record metal production; 7% lower cost of
production q-o-q driven by the cost optimisation programme;
received approval for conversion of 3 units of 2,400 MW Jharsuguda
IPP to CPP
-- Power: Second 660 MW unit of 1,980 MW Talwandi Sabo plant
capitalised; 85% availability for unit - I and II
-- Iron ore: Stable operations in Karnataka; slower ramp up in
Goa due to transportation issues
-- Actively managing balance sheet, with a focus on optimizing
opex and capex to maximize free cash flow; refinancing and terming
out maturing debt; and simplifying the group structure
o Robust financial position with total cash and liquid
investments of US$8.9 billion and undrawn committed facilities of
US$0.8 billion
Tom Albanese, Chief Executive Officer, Vedanta Resources plc,
said: "In the weak commodity price environment, we remain committed
to optimising our operations, leveraging our high quality asset
base, and proactively managing our balance sheet. I am encouraged
to see the positive results of our cost reduction programme gaining
momentum, and believe that this relentless focus on efficiency will
not only make our business more resilient through the cycle but
position us favourably for any future improvement in market
conditions. Despite challenging market conditions, these efforts
have allowed us to generate a robust EBITDA margin of 23%."
Oil & Gas
Nine months
Q3 Q2 period
----------------------- ----------------------------- ------------------- -------------------------------
% change % change % change
Particulars FY2016 FY2015 YoY FY2016 QoQ FY2016 FY2015 YoY
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
OIL AND GAS (boepd)
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Average Daily
Total Gross Operated
Production(2) 211,843 228,622 (7)% 214,247 (1)% 214,663 219,757 (2)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Average Daily
Gross Operated
Production (boepd) 202,668 218,900 (7)% 205,361 (1)% 205,909 210,399 (2)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Rajasthan 170,444 180,010 (5)% 168,126 1% 170,258 175,451 (3)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Ravva 21,703 27,783 (22)% 26,064 (17)% 25,430 24,107 5%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Cambay 10,521 11,107 (5)% 11,172 (6)% 10,221 10,842 (6)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Average Daily
Working Interest
Production (boepd) 128,402 136,701 (6)% 128,021 0% 128,991 132,576 (3)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Rajasthan 119,311 126,007 (5)% 117,688 1% 119,180 122,815 (3)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Ravva 4,883 6,251 (22)% 5,864 (17)% 5,722 5,424 5%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Cambay 4,208 4,443 (5)% 4,469 (6)% 4,089 4,337 (6)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Total Oil and
Gas (million boe)
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Oil & Gas- Gross 18.65 20.14 (7)% 18.89 (1)% 56.62 57.86 (2)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Oil & Gas-Working
Interest 11.81 12.58 (6)% 11.78 0% 35.47 36.46 (3)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Brent ($/boe) 44 77 (43)% 50 (12)% 52 96 (46)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Average Price
Realisation ($/boe) 35.2 68.1 (48)% 43.7 (19)% 45.0 85.2 (47)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Oil - $/bbl 35.0 68.7 (49)% 43.7 (20)% 45.1 86.2 (48)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Gas - $/mscf 7.2 6.3 14% 7.0 3% 6.9 6.4 8%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Revenue (US $
million) 307.8 565.0 (46)% 342.3 (10)% 1,063.1 1,968.7 (46)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
EBITDA (US $ million) 95.5 346.0 (72)% 158.4 (40)% 469.2 1358.2 (65)%
----------------------- -------- -------- --------- -------- --------- --------- --------- ---------
Third quarter FY 2016 vs. second quarter FY 2016
Average gross production for Q3 FY2016 was 202,668 barrels of
oil equivalent per day (boepd), 1% lower, primarily due to lower
volumes from offshore assets. Rajasthan production increased 1.4%
to 170,444 boepd as volumes from Mangala Enhanced Oil Recovery
(EOR) continue to ramp up, as expected. Aishwariya recorded
strengthening of volumes on account of five more infill wells
coming online. Bhagyam production was largely steady as execution
of work-over activities in the last quarter helped us arrest the
natural decline.
The Mangala Polymer injection ramp-up is on track as it has been
increased from 200,000 barrels of polymer solution per day in Q2
FY2016 to 330,000 barrels of polymer solution per day in Q3 FY2016.
A further increase in injection volume to 400,000 barrels per day
is expected by March 2016. In-line with our plan, average
production from Mangala EOR increased to 19,000 boepd in the
quarter and is expected to ramp-up further to support Rajasthan
production in Q4.
During the quarter, the Salaya Bhogat Pipeline (SBPL), storage
terminal and the marine export facilities at Bhogat were
commissioned and consequently the first cargo of Rajasthan crude
oil was successfully loaded through the terminal for Mangalore
Refinery Petroleum Ltd, realizing superior pricing.
Rajasthan water flood operating cost reduced by 6% from US$5.5
per boe to US$ 5.1 per boe through improvement in operational
efficiency and re-negotiations with vendors. Ramp-up in the polymer
injection volumes has increased the blended operating cost
including the cost of polymer injection by 7.8% to US$ 6.9 per boe,
in line with guidance.
EBITDA for the quarter was lower by 40% at US$ 96 million,
primarily due to the lower oil price and a higher discount of
19%.
Third quarter FY 2016 vs. third quarter FY 2015
Gross production from Rajasthan declined 5%, primarily due to
underperformance of the Bhagyam reservoir and natural decline in
the Mangala and Aishwariya fields. This has been partly offset by
the ramp up of volumes from the Mangala EOR, infill wells at
Aishwariya and reservoir management initiatives at Bhagyam.
Production from Ravva and Cambay declined by 22% and 5%
respectively, due to natural decline in the respective fields.
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