Cairn falls 3% on more than 50% cut in FY16 capex plan

The company will be undertaking projects that are economically viable at current oil prices. Additionally, the management focus is on re-engineering projects and re-negotiating contracts to improve project economics.

"The company will remain agile to make investments to enhance volumes. However, despite the partial deferment of capex, the volumes will yet see growth in the coming fiscal," said the oil exploration company. Cairn had sacked some employees last month to keep costs in check as falling crude oil prices hurts its bottomline.

Cairn's statement said it has received management committee approval for the Raag Deep Gas Project in oil-rich Rajasthan block. "As always, the focus will be on free cash flow after capex and dividend payout," it adds.

Mayank Ashar, Managing Director & CEO of Cairn India said, "We would like to give confidence to our shareholders that we are more focused than ever to drive operational efficiencies in the current crude price environment. Our cash rich balance sheet and best-in-class cost profile provide a solid foundation to operate our high margin core fields."

At 13:11 hours IST, the scrip of Cairn India was quoting at Rs 237.35, down Rs 6.75, or 2.77 percent on the BSE.

Posted by Sunil Shankar Matkar