However, the explorer did not give details on further capital expenditure to explore the gas.
"In line with our vision to contribute to the nation's energy security, we are confident of not only achieving the stated exploration target of 3 billion barrels of hydrocarbons in-place, ahead of the schedule, but also of adding another 3 billion barrel to our un-risked prospect inventory," Sudhir Mathur, interim CEO, Cairn India, said in an earnings release.
Out of the current 3 billion barrel reserves, 1.2 billion is tested and established, another 1.2 billion would established by this fiscal-end and testing for remaining 0.6 billion is underway.
In the company's annual report for 2013-14, the company had said as on March 31, 2014, Rajasthan block had estimated in-place resources of about 4.6 billion barrels of oil equivalent.
The exploration major also stressed that natural gas production would be the next big growth drive for the company. "With multi-tcf (trillion cubic feet) potential, we expect gas to be a significant contributor in our product mix. Before end of financial year 2015, we anticipate doubling of gas production from Rajasthan," Mathur said.
The company aims to increase it gas production from Rajasthan block to 100 million cubic feet per day by 2017 from current 8 mmcftd.
"We have now identified that the Raageshwari deep gas field has significantly higher gas resources. We believe that through additional infrastructure, we can quickly ramp-up production. In addition, our ongoing exploration programme around the field is yielding positive results. Initial assessment indicate a significantly large resource base," Navin Agarwal, executive chairman, told shareholders at the annual general meeting on Wednesday.
Later in an earnings call, the company said reserves in Raageshwari deep gas field could be around 1-3 tcf, of which 50% could be recovered.
In its annual report, the company had said that it would invest $200 million from financial years 2014-15 to 2016-17, for development of gas assets. The company is also in discussion with ONGC which holds 30% stake in the Rajasthan block for developing roughly 1 tcf and how to put it in production before end of fiscal 2016, Mathur told reporters post AGM.
On Wednesday, the company posted a massive 65% drop in its consolidated net profit in April-June quarter to Rs 1,092.9 crore due to a one-time depreciation charge on new accounting rules. Revenue post profit sharing with the government and the royalty expense in the Rajasthan block was Rs 4,483 crore, up 10% year on year on account of higher volumes and realisations.
During the quarter Cairn India committed a loan of $1.25 billion to Vedanta group, of which $800 million is already given while remaining $450 million would be given (at Libor+300 bps) in future.
Overall, Cairn India will invest $3 billion towards its capex programme in the next three years. "We are confident that this will lead to a reserve replacement ratio of 150% and help us deliver a growth of 7% to 10% in production over the next three years from the Rajasthan block," Agarwal said.
The company had in April last year requested the petroleum ministry to extend PSC in the first instance till 2030, since the block had commercial production potential till 2040.
"We should hear on PSC very soon. We are entitled to the extension. We are actively engaged and we expect something will happen soon. Even if we get a five-year extension to begin with, does not mean we will not get further extension. In this case its unlikely that our plans with regard to the block will change," Agarwal told reporters.
At present, the company holds a 70% stake in the Rajasthan block, the original PSC with the government was signed by ONGC and Shell in 1995.
Cairn India also closed its buy-back programme on Tuesday and managed to buy 36.7 million shares (21.4% of the mandate) by spending Rs 1,225 crore, where in the maximum share price was fixed at Rs 335 a shared. The company hoped that Sebi would consider that the stock was trading way above the buyback price for prolonged time.