Final Results - Year Ended 31 December 1999 - Pt 2

Cairn Energy PLC 8 March 2000 PART 2 CAIRN ENERGY PLC PRELIMINARY RESULTS ANNOUNCEMENT Consolidated Profit and Loss Account For the year ended 31 December 1999 Continuing operations Total Continuing exceptional Total 1998 operations items 1999 (Restated) £'000 £'000 £'000 £'000 Turnover Producing 74,611 - 74,611 41,040 Rig 2,210 - 2,210 - ------------------------------------- 76,821 - 76,821 41,040 Cost of sales Production costs (24,435) - (24,435) (17,138) Rig operating costs (2,861 - (2,861) - Depletion (14,317) - (14,317) (12,212) Decommissioning charge (304) - (304) (207) Depreciation of rig (3,139) - (3,139) - -------------------------------------- Gross profit 31,765 - 31,765 11,483 Write-down of oil and gas assets - (1,246) (1,246) (47,529) Write-down of rig - (2,291) (2,291) (11,729) Administrative expenses (7,081) (1,594) (8,675) (10,633) ------------------------------------- Operating profit/(loss) 24,684 (5,131) 19,553 (58,408) Gain on disposal of listed investment - 2,128 2,128 - Provision against listed investment - - - (11,651) -------------------------------------- Profit/(loss) on ordinary activities 24,684 (3,003) 21,681 (70,059) before interest Interest receivable and similar income 1,932 - 1,932 823 Interest payable and similar charges (669) - (669) (1,987) ------------------------------------- Profit/(loss) on ordinary activities before taxation 25,947 (3,003) 22,944 (71,223) Taxation on profit on ordinary activities - current (2,532) - (2,532) (1,388) - deferred (4,160) - (4,160) (2,215) --------------------------------------- (6,692) - (6,692) (3,603) Profit/(loss) for the year 19,255 (3,003) 16,252 (74,826) -------------------------------------- Earnings/(loss) per 9.66p (44.00p) ordinary share - basic Earnings/(loss) per ordinary share - diluted 9.63p (44.00p) ------------------------------------ The prior year comparatives have been restated to reflect the changes in accounting policy arising out of the implementation of FRS12: 'Provisions, Contingent Liabilities and Contingent Assets', which changes the accounting treatment of decommissioning costs. Group Statement of Total Recognised Gains and Losses For the year ended 31 December 1999 1998 1999 (Restated) £'000 £'000 Profit/(loss) for the year 16,252 (74,826) Unrealised foreign exchange differences 1,779 (2,682) -------------------- Total recognised gains and losses for the year 18,031 (77,508) ------------------- Prior year adjustment 1,254 ------------------- Total gains and losses recognised since last annual report 19,285 ------------------- Reconciliation of Movements in Shareholders' Funds For the year ended 31 December 1999 1998 1999 (Restated) £'000 £'000 Total recognised gains and losses 18,031 (77,508) for the year New shares issued in respect of employee share options 84 253 New shares issued in respect of the conversion of HSSH Warrants and Debentures - 510 Repurchase of shares (26,656) - ------------------- Net deductions to shareholders' funds (8,541) (76,745) Opening shareholders' funds (after prior year adjustment) 257,559 334,304 ------------------- Closing shareholders' funds 249,018 257,559 ------------------- The prior year adjustment reflects the change in accounting policy arising from the implementation of FRS12. The opening shareholders' funds at 1 January 1999, prior to the adjustment, were £256,305,000 (1998: £333,544,000). Balance Sheets As at 31 December 1999 Company Group 1998 Company 1998 1999 (Restated) 1999 (Restated) £'000 £'000 £'000 £'000 Fixed assets Exploration assets 130,041 112,922 59,028 26,642 Development/producing assets 110,706 118,773 19,608 27,539 Other fixed assets 17,813 20,795 1,343 1,756 Investments 685 - 126,857 145,059 ------------------------------------ 259,245 252,490 206,836 200,996 Current assets Debtors 38,342 95,617 64,468 101,885 Investments - 1,729 - - Cash at bank 8,517 5,073 7,337 627 ------------------------------------ 46,859 102,419 71,805 102,512 Creditors: amounts falling due within 42,247 80,705 41,672 72,031 one year ------------------------------------ Net current assets 4,612 21,714 30,133 30,481 ------------------------------------ Total assets less current liabilities 263,857 274,204 236,969 231,477 Provisions for liabilities and charges 6,212 6,460 577 540 Deferred taxation 8,627 10,185 - - ----------------------------------- Net assets 249,018 257,559 236,392 230,937 ----------------------------------- Capital and reserves-equity interests Called-up share capital 15,060 17,054 15,060 17,054 Share premium 182,439 182,366 182,439 182,366 Capital reserves - non distributable 50,120 48,115 26,658 24,653 Capital reserves - distributable 41,537 68,193 41,537 68,193 Profit and loss account (40,138)(58,169) (29,302) (61,329) ------------------------------------ Shareholders' funds 249,018 257,559 236,392 230,937 ------------------------------------ N Lessels, Chairman W B B Gammell, Chief Executive 7 March 2000 Group Statement of Cash Flows For the year ended 31 December 1999 1999 1998 £'000 £'000 Net cash inflow from operating activities 36,624 9,349 ------------------ Returns on investments and servicing of finance Interest received 925 916 Interest paid (250) (1,303) ------------------- 675 (387) Taxation (14,053) (1,004) Capital expenditure and financial investment Purchase of exploration assets (25,282) (45,874) Purchase of development/producing assets (1,309) (33,167) Purchase of other fixed assets (3,758) (27,438) (including Energy Explorer IV) Purchase of own shares (802) - Sale of exploration assets - 5,449 Sale of development/producing assets - 12,046 Sale of other fixed assets 226 304 Sale of current asset investments 3,857 - Cash receipts from Shell (1) 52,763 - ------------------- 25,695 (88,680) Equity dividends paid - - ------------------- Net cash inflow/(outflow) before use of liquid resources and financing 48,941 (80,722) Management of liquid resources* Cash on short term deposit - 28,568 Financing Issue of shares 84 763 Repurchase of shares (26,656) - Debt drawdowns 18,070 36,915 Repayment of debt (36,995) (521) -------------------- (45,497) 37,157 Increase/(decrease) in cash in the year 3,444 (14,007) ------------------- * Short term deposits of less than one year are disclosed as liquid resources (1) During 1998, the Group sold part of its interests in Bangladesh to Shell for consideration of $65m, plus recovery of back costs. The proceeds were included within debtors at 31 December 1998. Reconciliation of Operating Profit/(Loss) to Operating Cash Flows For the year ended 31 December 1999 1999 1998 (Restated) £'000 £'000 Operating profit/(loss) 19,553 (58,408) Depletion and depreciation 18,558 13,470 Decommissioning charge 304 207 Amortisation of long term incentive plan 178 - Exceptional write-down of oil and gas 1,246 47,529 assets Exceptional write-down of rig 2,291 11,729 Loss on sale of other fixed assets - 196 Exceptional administrative expenses 1,594 1,933 Debtors movement (3,180) (8,544) Creditors movement (1,407) 1,709 Other provisions (547) 790 Gain on sale of other fixed assets (137) - Foreign exchange differences 30 (136) --------------------- 38,483 10,475 Cash outflow on closure of Sydney office (870) (1,126) Cash outflow on transfer of operatorship (989) - and the Group restructuring ---------------------- Net cash inflow from operating activities 36,624 9,349 ---------------------- NOTES: 1. No dividend has been declared (1998: nil). 2. The earnings per ordinary share is calculated on a profit of £16,252,000 (1998: loss of £74,826,000) on a weighted average of 168,273,016 (1998: 170,066,371) ordinary shares. The diluted earnings per ordinary share is calculated on a profit of £16,252,000 on 168,714,913 ordinary shares, being the basic weighted average of 168,273,016 ordinary shares and the dilutive potential ordinary shares of 441,897 ordinary shares relating to share options. There is no dilutive effect in 1998. 3. The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory accounts for the year ended 31 December 1998 restated for FRS12. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. The statutory accounts for the financial year ended 31 December 1999 will be delivered to the Registrar. 4. The Group's external auditors, Ernst and Young, have confirmed that they have reviewed this Preliminary Announcement and that it is consistent with the audited accounts for the Group for the year ended 31 December 1999. The report of the auditors on those accounts was unqualified. 5. Full accounts are due to be posted to shareholders on 30 March 2000 and will be available at the Company's registered office, 50 Lothian Road, Edinburgh, EH3 9BY, from that date. 6. The Annual General Meeting is due to be held at the Company's registered office on Tuesday, 2 May 2000, at 12 noon.

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