Tuesday, October 4, 2011

Cairn India’s share up 1.5% on gas discovery in Sri Lanka

India (PTI): Ignoring the bearish trend in the broader market, stocks of Cairn India jumped by over 1.5% on the bourses today after the company said it has struck natural gas reserves in the very first well it drilled in the offshore Mannar Basin of Sri Lanka.

Cairn had spud the CLPL-Dorado-91H/1z well in early August and natural gas was discovered a few days back.                          

CLPL-Dorado-91H/1z is the first well to be drilled in Sri Lanka in 30 years and the first well to have encountered hydrocarbons in the country.

Reacting to the development, shares of Cairn India jumped by over 1.53% on the BSE and more than 1.59% on the National Stock Exchange (NSE), to a high of Rs. 277 and Rs. 276.85, respectively.

However, the stock saw some of the initial gains pared during the course of morning trade and was being quoted at Rs. 273.50 on the BSE, up 0.26%, and at Rs. 72.60 on the NSE, up 0.04%, at 1148 hours.

The uptrend in the counter assumes significance as the broader market was in the red, with the 30-share Sensex down 322.87 points at 16,130.89 and the wide-based Nifty trading lower by 102.90 points at 4,840.35.

Cairn had in 2004 made India’s biggest oil discovery in more than two decades in Rajasthan. It is currently producing 125,000 barrels of oil per day from the Mangala oilfield in Rajasthan.

The Sri Lanka block is the only overseas property Cairn India that currently has. It has 10 oil and gas blocks in India.

Cairn India is the target of a $ 9 billion takeover by London-listed mining group Vedanta Resources. Vedanta is buying 40% of UK-based Cairn Energy Plc’s stake in Cairn India.

source - www.ft.lk

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