Interim Results

8 December 2011

Jubilant Energy NV

("Jubilant" or "the Company")

Interim Results for the period ended 30 September 2011

Jubilant Energy N.V, an upstream oil and gas company with assets in the major proven and prolific hydrocarbon basins primarily in India, is pleased to announce its interim results for the six months to 30 September 2011.

 FINANCIAL OVERVIEW

·; Revenues increased by 43.7 per cent to USD 8.67 million against USD 6.03 million in the first half of last year.

·; The average oil price realised increased by 49 per cent. to USD 117.93 per barrel

·; Loss from operating activities of USD 49,000, significantly lower than the loss of USD 3.82 million in the corresponding period of previous year.

·; New dollar loan agreement signed with Export-Import Bank of India for a term loan facility of USD 50 million in August 2011 to fund the Company's continued exploration and development expenses.

·; Net debt of USD 233 million as of 30 September 2011. Cash balance and undrawn facilities available to the company total approximately USD 134 million, adequate to fund the operations to the end of Q3 2012 (converted at USD 1 = INR 49.62 as of 30 September 2011).

·; The Company exploring various options to raise additional funds for future operations.

OPERATIONAL OVERVIEW

 Kharsang

·; Average production of 1,757 bopd during HY 2011-12, down from 1,910 bopd in same period of 2010-11 due to greater than anticipated decline rates experienced at some wells and required work over activities.

·; Two wells of the seven well Phase III development drilling programme drilled and on production. The third well has been drilled and is ready to be tested.

·; Targeting increase in production from development wells of approximately 900 bopd by April 2012.

·; In addition to Phase III drilling, various Enhanced Oil Recovery ("EOR") and heavy oil development schemes are also planned, the pilot project for which will commence in early 2012. It is estimated that implementation of all of these activities could increase the recovery factor to industry standards from the current 11per cent.

·; An exploration well to target the hydrocarbon potential of the deeper reservoirs below the Kharsang thrust was spudded in August. The well is currently at a depth of 1,555 metres MD (targetting 2,800 metres TVD). The well has experienced some subsurface drilling issues and the operator is side-tracking the well to overcome these issues.

·; Work on 3D seismic of 87 sq kms commenced in late November 2011. Recording is expected to commence in January 2012

Deen Dayal Field of Krishna Godavari

·; Development of KG DDW is on track for first gas in 2013.

·; The Well Head Platform was set in May 2011 and is currently being used for batch drilling of four development wells. The Deep Sea Jack-up driller rig will be replaced by a lower cost modular rig in January 2012 to complete the development drilling.

·; Other facilities like PLQP, OGT and pipeline on schedule.

·; The Management Committee including the Government nominee for the block has recommended the grant of an extension to the existing development area by 20.5 sq km. This extended area of 20.5 sq km is expected to increase existing 2P reserves and 2C resources for the KG block after approval, the impact of which will be included in the next reserves and resources update.

Tripura

·; Completed acquisition of 188.5 lkms 2D seismic and currently acquiring an additional 64 lkms.

·; Spudded Srikantabari -1 ("SK-1") appraisal well on 18 July 2011. Currently at 2,973 metres TVDss as of 5 December (targeting 3,100 metres TVDss).

·; Two more appraisal wells are proposed to be drilled subsequent to testing of SK-1 well.

·; DOC for the north anticline is expected to be submitted by December 2012.

Manipur

·; Pilot acquisition of 16 lkms2D seismic in the Northern Block was completed in June.

·; Commenced seismic acquisition of over 500 lkms in the Manipur blocks. Expected to be complete by June 2012.

·; Airborne Gradiometric Survey of 5,273 lkms completed in November 2011, the first such survey in India.

·; Initial phase of Geological and sedimentological mapping completed.

·; First exploration well planned in Q4 2012. Tendering process for long lead items commenced.

Mr.Shyam Sunder Bhartia, Chairman of Jubilant Group commented:

"Jubilant has continued to deliver on its strategy and has made significant progress with its extensive exploration programme. The drilling programme in Kharsang continues and we are confident that our increased production target of 900 bopd will be achieved. The KG DDW field remains on course for first gas in 2013 and the Onshore Gas Terminal is ahead of schedule, as of September it was 42 per cent. complete. Our Manipur and Tripura blocks provide promising opportunities for exploration and we remain confident about the potential of this region. Jubilant is in a sound financial position and is fully funded for its activities until Q3 of next year. As we look ahead to 2012 the Company will continue to look to monetise the value of its reserves and convert resources to reserves through focused and economical appraisal and development programmes."

Enquiries:

Competent Person's - Consent for Release

Maxwell Birley, BSc in Geological Geophysics, the Company's Chief Operating Officer, has 30 years of international experience in the exploration and production industry. He has reviewed and approved the technical information contained in this announcement pursuant to the AIM guidance note for mining and oil and gas companies.

Glossary

Chief Executive's Statement

The six months ended 30 September 2011 has been a period in which the company has continued to deliver on its strategy as it further builds and exploits its diverse portfolio of exploration, development and producing oil and gas assets in most of the major proven and prolific hydrocarbon basins in the north-east Indian region.

The continued development of the Deen Dayal West field in the KG block remains on course to deliver the first gas by 2013, whilst the Onshore Gas Terminal was ahead of schedule and by September was over 40 per cent. complete. The Kharsang block, on average, produced approximately 1,757 bopd for the first six months of the year, a slight decrease for the same period of 2010 due to work over activities on wells to improve production and the recovery factor. We are particularly excited to start our exploration and appraisal programme in Manipur and Tripura, located in the prolific and proven hydrocarbon basins in the north east of India.

This is a very exciting time for the Company with considerable opportunities ahead. We have an extensive programme across our assets for 2012 as we look to maximise the potential of our portfolio.

 Kharsang

The Kharsang block, located in the Upper Assam basin in north-eastern region of India, is the Company's oldest block and is currently in production. Jubilant has a 25 per cent interest in the block which is operated by Geo Enpro Petroleum Ltd. The field has 58 wells, of which 33 wells produced oil in November 2011.

The gross production from the field during the first six months of the financial year totalled 321,483 bbl (1,757 bopd), down by 8 per cent. compared to the corresponding period of the preceding year, mainly on account of higher decline rates from some of the Phase II wells and due to required work over activities. The cumulative oil production from this field up to 30 September 2011 was 9.7 MMbbls. The average daily gross production for the month of November 2011 was 1,865 bopd.

The nominated buyer for the oil is Indian Oil Corporation Limited, India's largest commercial enterprise. The average realised price per barrel during the period, which is linked to Bonny Light and Qua Ibo, was USD 117.93 as compared to USD 79.3 per barrel for the first six months of fiscal 2010.

As a part of the Company's strategy to maximise the potential of its producing assets, the phase III drilling programme has commenced in the block. The programme consists of seven development wells, a multi-pronged Enhanced Oil Recovery plan, Heavy Oil development and a deeper exploration well. The programme aims to increase production, improve the recovery factor and enhance Jubilant's declared reserves and resources.

Two development wells have already been drilled and put on production. These wells initially started flowing at 170-180 bopd and 90-100 bopd, respectively. Drilling of the third development well is complete and testing will commence soon with the workover rig. Jubilant is targeting an increase in production of approximately 900 bopd from the seven well drilling programme and, based on progress so far, this target appears to be achievable by April 2012.

EOR and heavy oil development schemes are planned, which, along with Phase III drilling are aiming to increase the recovery factor to industry standards from the present levels of 11per cent. Gaffney Cline & Associates has been retained to review the workover plans and provide development expertise. The projects include development of AB sands, water and gas reinjection, wax inhibition using electric heating and heavy oil development.

The deeper exploration well, KPL-DX, was spud at the end of August. The well is targeting the hydrocarbon potential of the lower Girujan and deeper reservoirs. The lower Girujan formation underlies the producing upper Girujan reservoirs and is expected to contain oil and gas bearing reservoir sands. The deeper reservoirs have proven to be prolific producers in nearby acreages. Success at the KPL-DX exploration well could open up new prospective deeper horizons in the Kharsang field. The management estimate prospective resources for this exploration prospect on a gross and unrisked basis is 342 bcf of gas and 20 mmbbls of oil. The well will be drilled to a total depth of around 2,800 metres TVD and is currently at 1,555 metres MD. The well has experienced subsurface drilling issues and the operator is trying to sidetrack the well to overcome these issues.

Deen Dayal field in Krishna Godavari block

The directors believe that the KG basin is one of the most prospective basins in India and continues to be the most significant asset in the Jubilant portfolio. The operator is Gujarat State Petroleum Corporation ("GSPC"), promoted and predominantly funded by the State Government of Gujarat, India. The Company actively participates with the operator in technical evaluations.

The development of the Deen Dayal West Field ("DDW") is anticipated to produce first gas in 2013. Current activities include setting up shore-based handling facilities and development. The Well Head Platform was set up in May this year and the batch drilling of four development wells commenced in September. The jack up rig, Deep Sea Driller-1, spudded the first of the development wells on 12 September. The rig will batch drill the top hole sections of the four wells before it is replaced by a more economical modular rig early next year. As at the end November, the wells were drilled to the following depths; DDW-D1- 2616 metres MD, DDW-D2- 2806 metres MD, DDW-D3-2464 metres MD and DDW-D4- 83 metres MD. The post spudding fabrication of the platform is currently ongoing at the contractor, Larsen & Toubro's ("L&T") yard.

The Onshore Gas Terminal was over 40 per cent. complete in September, ahead of schedule. The terminal is expected to be commissioned in June 2013, in time for the first gas. The contracts for the Production and Living Quarter Platform ("PLQP") to L&T and Pipeline were awarded to L&T in April and to Punj Lloyd in June, respectively. The commissioning of both the PLQP and the Pipeline are expected in April 2013.

The Deen Dayal East appraisal well DDE-A-1, spudded on 1 January 2011, was drilled to 5,621 metres Measured Depth ("MD") and encountered basement at 5,530 metres MD. The operator is undertaking a full evaluation of the results.

The Field Development Plan ("FDP") for the DDW area, which includes wells KG-8, KG-15, KG-17 and KG-28, was approved by the Government in November 2009. The Management Committee ("MC") for the block, which consists of two nominees from the Ministry of Petroleum and Natural Gas and Directorate General of Hydrocarbons, has recommended the grant of an extension to the existing Development area by 20.5 sq km. The hydrocarbon plays encountered in discovery wells KG-8 and KG-15 extend towards the South/South West of the original block boundary. As per the Production Sharing Contract ("PSC"), the MC has recommended the enlargement of the DDW development area in this direction. The previously approved development area for DDW is 17 km2. As disclosed in the CPR at the time of the IPO, this extended area of 20.5 km2 will increase the existing 2P reserves and 2C resources for the KG block after approval. A further reserves and resources update will be announced to the market in due course following the necessary approvals.

North East Blocks

Tripura

Jubilant is the operator on this block with a 20 per cent. participating interest.

The Director General of Hydrocarbons approved the appraisal program of Kathalchari-1 (K-1) on 28 February 2011. The plan included the retesting of the K-1 well and the acquisition of 130 lkms of 2D seismic data. The JV subsequently increased the seismic acquisition to 180 lkms and agreed to drill the Srikantabari-1 ("SK-1") well which would be the first appraisal well on the K-1 discovery.

Jubilant acquired 160 lkms in the first season of seismic acquisition before the onset of rains and, post the rains, acquired a further 28.5 lkms increasing the total amount of seismic acquired to 188.5 lkms. Jubilant is acquiring another 64 lkms of 2D data, which is due to be completed in February next year.

The SK-1 well was spud on 18 July 2011. The well is located 4 km NE and up-dip of the K-1 well. The well was designed to be deviated by 650 metres to the SW and will be drilled to a total depth of 3,100 metres TVDss. The well has already been drilled to 2,973 metres TVDss. The extended production test of the K-1 well is currently being planned and is expected to occur during the current drilling program.

Jubilant has also proposed two more appraisal wells (KL-NE and KL-SE) for which there is an agreement in principle from the JV partner.

Manipur

The two Manipur Blocks, AA-ONN-2009/1 & 2, are located in the eastern extension of the Burma-Assam-Abakan fold thrust belt which covers almost 4,000 sq kms. Best estimate prospective resources have been assessed at 4.77 tcf on an unrisked basis. With Jubilant holding 100 per cent. PI, the blocks provide a significant long term upside potential.

The first season of surface geological and sedimentological mapping, which commenced in January 2011, was completed in February 2011. Traverses were made across the whole area in order to understand the surface and subsurface geology in more detail. Jubilant has contracted Asian Oilfields and Alpha Geo respectively for seismic acquisition of 300 lkms in the Block-1 and 240 lkms in Block-2 The work on the seismic acquisition has already commenced and is expected to be completed by June 2012 before the onset of the rainy season. 16 lkms of 2D seismic data was acquired as a consequence of the first season of surveying.

Jubilant contracted Bell Industries to undertake an airborne gradiometer survey, the first such survey in India. The survey was completed in November 2011 and 5,273 lkms of data was acquired. Processing and interpretation of the resultant data are expected to be completed by April 2012.

A number of drilling locations have been scouted within the two blocks. Environmental clearance was awarded in August for the Northern block and in September for the Southern block. Jubilant is aiming to drill the first well in Q4 2012 and planning for this is currently underway. The tendering process for procurement of the long lead items has commenced.

Other Assets

Sanand Miroli

The Company has a 20 per cent. interest in this block and GSPC is the operator. So far, 20 wells have been drilled on the block, including three appraisal wells, with seven hydrocarbon discoveries to date. A DOC for the M1-M6 discoveries submitted in 2009 was approved by the DGH. The Field Development Plan for the M1-M6 discoveries is under discussion with the MoPNG. An integrated DOC for SE-4, SE-8, and SE-10 clusters was submitted to DGH but not accepted by the Ministry due to marginal commerciality and discussions are ongoing with the Ministry. The net working interest 2C contingent resources are 0.16 MMbbls. A farm-out of the license is being considered.

Golaghat

Jubilant operates this block with a 10 per cent. participating interest. The block is located onshore in the Golaghat district of Assam state in the North East of India. Jubilant spudded the P-16-1 well in March 2011 and reached a total depth of 1,625 metres in April 2011, encountering a granitic basement from 1,555 metres onwards. The well tested a NE/SW fault prospect and was drilled through all the potential reservoirs that were previously identified at this location. Based upon drilling, electric logs and MDT data, no hydrocarbons were encountered in the well. The other 6 committed well locations lie within a forested area and the approval to drill is awaited.

Australia

Jubilant has settled the arbitration with Tap Oil in connection with Permit T-47/P located in Australian waters. Under the terms of settlement, Jubilant has paid AUD 1.67 million in full and final settlement against a claim of AUD 3.24 million towards cash calls raised up to the period of 31 July 2011, related claims, interest and costs.

As part of the settlement the joint venture partners have agreed that, going forward, the participating interests of Tap Oil and Jubilant will be 61.5per cent. and 38.5per cent., respectively. The joint venture partners have agreed to limit future expenses at AUD 297,000 which is to be funded from the equivalent cash balance already available in the joint venture. These expenses relate to permit maintenance and do not include any drilling costs, which are not expected to be incurred due to the low prospectivity of the Permit.

Indian Oil & Gas sector

The Directors believe that gas demand in India is set to grow substantially as India moves towards cleaner fuel to fulfil its enormous need for energy. While coal will continue to be the largest component of India's energy mix in the near future, gas is expected to grow from the current levels of around 10 per cent. to over 20 per cent. while oil will constitute between 25 and 30 per cent. The entry of BP through the acquisition of a 30 per cent. stake in 21 Reliance Industries' blocks and the acquisition of Cairn India by Vedanta are significant developments which illustrate the sector's attractiveness.

 On the pricing front, the Approach Paper of the Twelfth Plan refers to the initiatives which will allow gas prices to align with the global prices over the next three years. India currently imports a significant portion of its natural gas requirements. Some re-gassified LNG contracts signed in excess of USD 12/MMBtu at oil price parity. The difference between the prevailing prices of domestic gas and imported gas is large and the Directors believe that the imported gas will set the pricing benchmark.

Human Resources

During the financial period, the Company has upgraded its human resources. The technical team has been significantly strengthened by the recruitment of personnel with international experience and expertise at the middle management level in the disciplines of geology and geophysics. In view of the planned drilling operations in Tripura, the Company has also recruited drilling supervisors with wide experience in local and overseas operations with expertise in High Pressure High Temperature Drilling. In view of the seismic acquisition campaign in Manipur, we have recruited Seismic QC Geophysics and Seismic HSE Engineers. The Company is also strengthening its internal organisational capabilities in terms of skill enhancement of its technical team by taking them through specialised training workshops. Further strength and depth was also added to the finance and company secretarial teams.

Outlook

Jubilant has made significant progress in 2011 across its exploration programme, and particularly in the development of the KG field. Jubilant intends to continue to build its portfolio in its core areas of strength through exploiting on-going market opportunities.

I firmly believe that the Company is well positioned to achieve its vision to be an independent E&P group of choice with a focus on India's energy demand and to enhance value by leveraging opportunities for replacing high cost alternate fuels.

Consolidated Statement of Comprehensive Income for the six-month period ended 30 September 2011

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows for the six-month period ended 30 September 2011

Consolidated Statement of Changes in Equity for the six-month period ended 30 September 2011

Consolidated Statement of Changes in Equity for the six-month period ended 30 September 2011 (contd.)

Notes to the Accounts

1. General and principal activities

Jubilant Energy NV ('the Company' or 'JENV') was incorporated on 12 June 2007, in Amsterdam, the Netherlands, as a company with limited liability. The registered office of the Company is Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands. The Company is a subsidiary of Jubilant Energy (Holdings) B.V. (JEHBV), a Netherlands company, which in turn is a wholly-owned subsidiary of Jubilant Enpro Private Limited ('Jubilant Enpro'), a company incorporated under the laws of India. On 24 November 2010, the Company commenced trading on Alternative Investment Market (AIM), London.

The abbreviated consolidated financial information as at and for the six months ended 30 September 2011 comprises the Company and its subsidiaries (together referred to as the 'Group' and individually as 'Group entity') and the Group's proportionate interest in jointly controlled assets in unincorporated joint ventures. 

The Group is engaged in the exploration for and development and production of oil and natural gas. It conducts many of its activities jointly with others. The abbreviated consolidated financial information reflects only the Group's proportionate interest in such activities.

 2. Summary of significant accounting policies

The abbreviated consolidated financial information has been derived from the Company's Consolidated Interim Financial Statements for the six month period ended 30 September 2011 and the Company's Consolidated Financial Statements for the year ended 31 March 2011 which has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. These standards have been consistently applied throughout the Group and in previous year. The Company's Consolidated Interim Financial Statements for the six month period ended 30 September 2011 and the Company's Consolidated Financial Statements for the year ended 31 March 2011 were authorised for issue by the Board of Directors on 07 December 2011 and on 29 June 2011 respectively.

Basis of preparation

The abbreviated consolidated financial information, which comprise the abbreviated statement of financial position as at 30 September 2011, the abbreviated statement of comprehensive income, statement of changes in equity and cash flow statement for the six month period then ended, and related notes, have been derived from the Company's Consolidated Interim Financial Statements for the six month period ended 30 September 2011, and the Company's Consolidated Financial Statements for the year ended 31 March 2011, on which the Company's audit firm KPMG Accountants N.V. ("KPMG") provided an unqualified audit opinion dated on 07 December 2011 and on 29 June 2011 respectively.

For a better understanding of the Company's financial position and results, we emphasize that the abbreviated consolidated financial information should be read in conjunction with the Company's Consolidated Interim Financial Statements as of 30 September 2011 and for the six month period then ended and the Company's Consolidated Financial Statements as of and for the year ended 31 March 2011, from which the abbreviated consolidated financial information was derived.

3. Trade and other receivables - current

Footnotes:

a) Represents amounts due from co-venturers on account of non-payment of cash calls raised by the Group in respect of operated blocks and / or advance payments made by the Group in respect of non-operated blocks.

b) Restricted cash - margin money represents margin money against guarantees and letters of credit. Restrictions on margin money deposits are released on the expiry of the terms of guarantees and letters of credit.

4. Loans and borrowings (including accrued interest)

Details of interest rates of loans and borrowings are given below: -

5. Share Capital

6. Share Premium

Footnotes:

I. The authorised share capital of JENV as at 30 September 2011 is USD 12,145 thousand equivalent to EUR 8,742 thousand (31 March 2011: USD 12,145 thousand equivalent to EUR 8,742 thousand and 30 September 2010: USD 12,145 thousand equivalent to EUR 8,742 thousand).

II. Share capital

Year ended 31 March 2011

The issued share capital as at 31 March 2011 is the issued share capital of JENV amounting to USD 5,581 thousand (416,306,787 ordinary shares of EUR 0.01 each amounting to EUR 4,163 thousand).

(i) On 24 November 2010 the Company commenced trading on Alternative Investment Market (AIM), London, having raised GBP 53,422 thousand (USD 85,000 thousand) by way of placing 69,379,430 new ordinary shares in the capital of the Company at a placing price of GBP 0.77 (equivalent USD 1.23) per share.

(ii) As per the modification agreement dated 22 July 2010 with EXIM bank, as on 24 November 2010, USD 10,000 thousand of loan from EXIM bank to JENV, was converted to equity shares by issuance of 8,162,285 new ordinary shares at the placing price of GBP 0.77 (equivalent USD 1.23) per share.

(iii) As per the terms of deed of modification dated 21 June 2010 with the Dynamic Funds, the outstanding loan amount of USD 16,500 thousand as on 24 November 2010, given to JEL Canada by Dynamic Funds, was converted to equity shares by issuance of 13,467,772 number of new ordinary shares at a price of GBP 0.77 (equivalent USD 1.23) per share of JENV.

Six-Month period ended 30 September 2011

There is no change in the issued share capital of JENV during the six-month period ended 30 September 2011.

All issued shares are fully paid up. The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at the meetings of the Group.

III. Share premium

During the year ended 31 March 2011, the Group has issued a total of 91,009,487 ordinary shares (refer footnote II above) at a premium amounting to USD 110,217 thousand. Further during the year ended 31 March 2011, the Group has adjusted share issue expenses amounting to USD 5,170 thousand (including USD 2,482 thousand paid to underwriters and balance paid to various consultants) against the share premium.

7. Earnings per share

The following is the reconciliation of the loss attributable to ordinary shareholders and weighted average number of ordinary shares used in the computation of basic and diluted earnings per share:

The Group has issued options to its employees during the six-month period ended 30 September 2011 and 30 September 2010. Since the Group does not have profits during the current and in the previous period, the options issued are considered to have anti-dilutive effect. Therefore, the basic and diluted EPS are the same.

8. Related Parties

(a) Related parties and nature of relationships where control exists

(b) Related parties and nature of relationships where transactions have taken place during the year

(c) Related party transactions

(c) Related party transactions (continued)

d) Guarantees given by ultimate holding company

i. Secured foreign currency term loans taken by JENV from EXIM: Corporate guarantees in respect of these loans have been given by Jubilant Enpro.

ii. Secured term loans taken by JEKPL from banks: These loans are secured by primary charge on all present and future receivables of Jubilant Enpro relating to Kharsang field.

iii. Non-fund based limit taken by JOGPL, JODPL and JEKPL to furnish bank guarantee: Corporate guarantee in respect of this non-fund based facility has been given by Jubilant Enpro.

e) As at 30 September 2011, performance guarantee amounting to USD 947 thousand (31 March 2011: USD 1,035 thousand and 30 September 2010: USD 1,048 thousand) given on behalf of Jubilant Securities Private Limited against a lien on the term deposits of JENVPL in respect of Golaghat block.

f) As at 30 September 2011, performance guarantee amounting to USD 1,997 thousand (31 March 2011: USD 2,183 thousand and 30 September 2010: USD 2,229 thousand) given on behalf of Jubilant Capital Private Limited against a lien on the term deposits of JEKPL in respect of Ankleshwar block.

g) As at 30 September 2011, performance guarantee amounting to USD 937 thousand (31 March 2011: USD 1,024 thousand and 30 September 2010: USD 1,036 thousand) given on behalf of Jubilant Capital Private Limited against a lien on the term deposits of JENVPL in respect of Ankleshwar block.

h) Pledge of 51% of promoters' shareholding in JEKPL in respect of term loan facility from banks.

i) Non-disposal undertaking along with power of attorney in respect of 51% of the total issued and paid-up shares of JODPL held by JOGIL.

j) BG limit of USD 4,030 thousand is available for JCPL and JSPL within the overall limit of USD 15,316 thousand of JOGPL and negative lien on participating interest of JCPL and JSPL in the blocks.

9. Contingencies

Contingent liabilities in respect of matters currently in dispute comprise:

i. Jubilant Oil and Gas Private Limited (JOGPL):

- During the year ended 31 March 2008, JOGPL had received a demand of USD 66 thousand, together with penalty/interest of USD 121 thousand to the extent determined/quantified in the order, from the service tax authorities for alleged non-payment of service tax on advisory and assisting services provided to various foreign entities for their operations in India. During the year ended 31 March 2009, JOGPL has deposited under protest 50% of the demand amounting to USD 33 thousand with the authorities. Further, during the year ended 31 March 2009, JOGPL has filed an appeal against the said demand which is pending for hearing with Customs, Excise and Service Tax Appellate Tribunal. During the year ended 31 March 2011, JOGPL deposited an amount of USD 11 thousand for staying the demand. Considering the facts and current status of the case, management is confident that there shall not be any liability devolving on the Company in this matter.

- During the year ended 31 March 2009, JOGPL received a show cause notice from the Commissioner of Service Tax for USD 4,698 thousand (excluding interest/penalty) in respect of the financial years ended from 31 March 2005 to 31 March 2008. This show cause notice has been issued in respect of Mehsana, Cauvery and Tripura PSCs for alleged non-payment of service tax on services provided by the Operators to respective JV partners of each block. JOGPL has filed a reply against the said notice with the appropriate authorities and the order in respect of the matter is awaited. Considering the facts and current status of the case, management is confident that there shall not be any liability devolving on the Company in this matter.

- During the year ended 31 March 2010, JOGPL received a show cause notice from the Commissioner of Service Tax, Delhi amounting to USD 3,734 thousand (excluding interest/penalty, to the extent quantified / determined in the notice) in respect of the financial year ended 31 March 2009. This show cause notice has been issued in respect of Mehsana, Cauvery, Golaghat and Tripura PSCs for alleged non-payment of service tax on services provided by the Operator to respective JV partners of each block. JOGPL has already filed a reply against the said notice with the appropriate authorities and the order in respect of the matter is awaited. Considering the facts and current status of the case, management is confident that there shall not be any liability devolving on the Company in this matter.

- During the year ended 31 March 2010, JOGPL (as an Operator of Tripura block) has received a show cause notice from the Commissioner, Central Excise & Service Tax, Shillong for USD 1,089 thousand (JOGPL share USD 218 thousand) (excluding interest/penalty). This show cause notice has been issued in respect of Tripura PSCs for alleged non-payment of service tax for the financial years ended 31 March 2005, 31 March 2006, 31 March 2007 and 31 March 2008. JOGPL has already filed a reply against the said notice with the appropriate authorities and the order in respect of the matter is awaited. Considering the facts and current status of the case, management is confident that there shall not be any liability devolving on the Company in this matter.

- During the year ended 31 March 2010, JOGPL (as an Operator of Tripura block) has received a show cause notice from the Commissioner, Central Excise & Service Tax, Shillong for USD 1,798 thousand (JOGPL share is USD 360 thousand) (excluding interest/penalty). This show cause notice has been issued in respect of Tripura PSCs for alleged non-payment of service tax for the financial year ended 31 March 2009. JOGPL has already filed a reply against the said notice with the appropriate authorities and the order in respect of the matter is awaited. Considering the facts and current status of the case, management is confident that there shall not be any liability devolving on the Company in this matter.

- JOGPL (as Operator of Tripura Block) is involved in a dispute with Dewanchand Ramsaran Industries Private Limited ('DRIPL') for alleged delays in mobilizing a rig. JOGPL has claimed for liquidated damages from DRIPL of USD 450 thousand and cost of hire of various equipments by it on behalf of DRIPL amounting to USD 79 thousand. JOGPL has made a net claim of USD 305 thousand against DRIPL on the aforesaid account after adjusting its invoice for USD 224 thousand. JOGPL has further disputed DRIPL invoices to the extent of USD 29 thousand. JOGPL was also in possession of a performance bank guarantee amounting to INR 3,750 thousand (USD 76 thousand) from DRIPL towards due performance of the contract. Besides this, DRIPL has failed to remove its rig from the well site. JOGPL has issued several reminders to DRIPL for removal of the rig followed by a notice of criminal trespass. DRIPL has disputed that it has committed criminal trespass. JOGPL has invoked the performance bank guarantee. DRIPL has alleged that the demands raised by Jubilant Oil & Gas are not tenable and has claimed the amount of bank guarantee encashed by Jubilant Oil & Gas along with interest. Both parties have filed suit before High Court of Gauhati, Agartala Bench and case is currently under hearing, Considering, the current status of the case, the management believes that there shall not be any liability in this regard.

- JOGPL received a show cause notice from the Commissioner of Service Tax dated 22 October 2010 for USD 3,284 thousand (including education cess) in respect of the financial year ended 31 March 2010. This show cause notice has been issued in respect of unincorporated joint venture (operated by JOGPL) for alleged non-payment of service tax on services provided by the Operator. JOGPL has filed a response with the appropriate authorities and believes that there will not be any liability devolving on the Company in this regard.

ii. Jubilant Energy Kharsang Private Limited (JEKPL):

- The Ministry of Petroleum and Natural Gas (MOPNG) had prescribed the effective rate of oil cess being USD 18.14 (INR 900) per metric tonne (PMT). During the period up to 31 March 2005, the Operator paid oil cess at USD 17.00 (INR 853) PMT. The differential amount of USD 1.00 (INR 47) PMT was paid as additional royalty to the State Government. The excise department considered short payment of oil cess of USD 1.00 PMT (INR 47) and demanded the differential oil cess of USD 32 thousand (JEKPL's share)(including education cess amounting USD 3 (JEKPL's share)), along with interest and penalty of USD 14 thousand (JEKPL's share). Though the principal amount of demand i.e. USD 32 thousand (JEKPL's share) has been paid to the excise department, interest and penalty amounting to USD 14 thousand (JEKPL's share) have not been paid and an appeal has been filed before the Commissioner, Central Excise (Appeals) Guwahati against the levy of interest and penalty.

The department has waived the requirement of pre-deposit of the penalty/interest during the pendency of the appeal. The Operator is contesting the demands and believes that its position is likely to be upheld. Therefore, no provision for the same has been made in the books of account.

- The Operator of the Kharsang field, GeoEnpro had received a notice dated 8 November 2004, from the Conservator of Forests stating that under the Indian Forest Conservation Act, 1980, the Primary Mining Lease (PML) was required to be approved by the Government of India prior to the grant of PML. The notice also required the Operator to submit the necessary proposal for the diversion of 11 square kilometer of forest area in the Kharsang field, failing which action would be initiated against it under the relevant provisions of the Forest Act.

The Government of Arunachal Pradesh (GoAP) vide letters dated 15 January 2008 and 11 March 2008 to the Operator conveyed that the Department of Environment and Forests (DoEF), GoAP has requested to revoke the mining lease for the Kharsang field and requested the Operator to submit a proposal for grant of a fresh mining lease. The GoAP in its letter dated 11 March 2008, requested the Operator to submit a fresh proposal for grant of mining lease/forest clearances for the Kharsang field by 31 March 2008. The Operator by a letter dated 25 March 2009 requested the MOPNG to take up the matter with the Ministry of Environment and Forest (MoEF) to regularise/resolve the issue. The MOPNG vide letter dated 27 March 2009 and the Government of Arunachal Pradesh vide letters dated 21 April 2009 and 17 July 2009 have already written to MoEF to appropriately resolve the issue. No further communication has been received from the GoAP. The Group considers it as a procedural issue and believes that it would not result into any financial implication.

- The Operator had entered into a contract with Geophysical Institute of Israel (GII) for acquisition, processing and interpretation (API) of 3D seismic data of Kharsang Oil Field area. During the financial year 2009-10, GII has filed a claim of USD 3,302 thousand (JEKPL's share USD 826 thousand) with interest against the Operator before the Arbitration Tribunal for remaining portion of job completed, damages and theft of their equipments, loss due to non availability of TDS certificates, payment of performance bonds and reimbursement of various administrative costs etc. The claim is disputed by the Operator due to non performance of entire 3D seismic project by GII in accordance with Contract provisions and also most of the claims are out of contractual provisions and hence not payable.

The Operator has also filed a counter claim of around USD 2,232 thousand (JEKPL's share USD 558 thousand) for loss suffered due to non completion of entire 3D seismic project in accordance with Contract provisions. Pending resolution, the Operator has not acknowledged and accounted for the claim amounting to USD 3,302 thousand (net of performance guarantee amount of USD 385 thousand) plus interest as liability. The Operator is of the belief that its position is likely to be upheld. Therefore, no provision for the same has been made in the books of account.

iii. Jubilant Offshore Drilling Private Limited (JODPL):

- GSPC as an Operator has received a demand of USD 2,281 thousand (JODPL's share USD 228 thousand) towards service tax, a penalty of USD 2,217 thousand (JODPL's share USD 222 thousand) and interest, as applicable under the Finance Act, 1994, from the Commissioner of Central Excise, Ahmedabad pertaining to service tax on the off-shore services received by the Block during the period from 12 March 2003 to 31 March 2007. In response to this demand, the Operator has made an appeal in the Custom Excise and Appellate Tribunal (CESTAT) although the Operator has paid an amount of USD 1,248 thousand (JODPL's share USD 125 thousand) under protest to the authorities. The Operator has received an order from CESTAT waiving the requirement of deposit of the balance amount of service tax and penalties imposed upon the Operator and for stay of recovery of the same during the pendency of the appeal. Further, based on the legal opinion taken by the Operator in the matter, the Block is not liable to service tax on the services availed in the matter under appeal and hence under the facts and circumstances, the balance demand (net of deposit) has been classified and disclosed as contingent liability.

- GSPC as an Operator has entered in to contract with Tuff Drilling Private Limited for supply and installation of 3000 hp modular rig in the month of May 2010. Due to inability of Tuff Drilling to provide the rig in the stipulated timelines, the Operator has cancelled the contract and encashed the performance bank guarantee amounting to USD 3,132 thousand [JODPL's share USD 313 thousand]. Against the above actions of Operator, Tuff Drilling has raised a claim of USD 144,978 thousand [JODPL's share 14,498 thousand] against the GSPC for loss caused to it for illegal termination of contract, while GSPC has made counter claim for breach of contract for USD 103,929 [JODPL's share 10,393 thousand]. Since the matter is pending in arbitration till date, the claims have not been provided for in the books and the amount encashed has been included under the head "Trade and other payables".

- GSPC as an Operator has entered in to contract with Saipem (Portugal) Comercio Maritimo Su Lda ("Saipem") for hiring drilling rig Perro Negro III for exploration in the Block. Saipem has represented to have performed certain drilling and operational activities which were beyond the scope of work as stipulated in the Contract dated 1 April 2004 whereby the drilling activities got extended over additional time period. However, the Operator did not agree to accept the claim of Saipem including service tax thereon. Accordingly, Saipem has initiated arbitration proceeding against Operator, claiming higher day rate on the ground that the contract is for the number of days and for the days beyond contract period, it should be paid at higher rates than the contract rate. However, GSPC has maintained the stand that contract is for number of wells drilled and not for days/period and hence Saipem is contractually liable to work at contract rate. Further, GSPC has put counter claim against Saipem for poor performance of the drilling equipments. The claim made by Saipem which is subject to arbitration proceedings is for USD 143,452 thousand (JODPL's share USD 14,345 thousand) while counter claim made by GSPC is for USD 28,567 thousand (JODPL's share USD 2,857 thousand).

Apart from the stated claim, Saipem has also claimed an amount of USD 10,827 thousand (JODPL's share USD 1,083 thousand) from the Operator towards Service Tax (including interest thereon), which Saipem was liable to pay on the services provided to the Operator. As per the legal opinion obtained by the Operator, the Block is not liable to service tax on the services received from Saipem as rates in the contract are inclusive of all taxes. Since, the matter is pending in arbitrations till date the claims have not been provided for in the books.

- In September 2005, GSPC as an Operator has entered in to contract with Atwood Oceanics Pacific Ltd ("AOPL") for drilling, completing or abandoning the wells identified by GSPC drilling program. AOPL has demanded service tax on above services from July 2007 to July 2009, whose amount is USD 8,833 thousand (JODPL's share USD 883 thousand), which in the opinion of Operator is not in accordance with the said contract and in relation thereto, AOPL has preferred an application under section 11 of the Arbitration and Conciliation Act, 1996 before Gujarat High Court seeking for appointment of arbitrator in relation to above disputes.

iv. Jubilant Energy Limited (JEL):

The Operator of T-47/P permit in Australia had issued default notices to Jubilant for failing to pay its share of joint account expenses (excluding accrued interest). The total amount of claim is USD 3,919 thousand. Jubilant had replied to the letter inter alia stating that Operator intends to force its decision to drill a low-prospective well location upon the minority partners. Jubilant had also alleged gross negligence and mismanagement of the permit on the part of Operator. Jubilant had received a notice of arbitration from Operator. Further, an arbitral tribunal has been constituted. During the year ended 31 March 2011, the Group had made a provision of USD 2,063 thousand as best possible estimate of the liability to be paid to the Operator. During the six-month period ended 30 September 2011, the Group has settled the liability with the Operator at USD 1,739 thousand. The balance of USD 324 thousand has been considered as a reversal of impairment loss.

 10. Events occurring after the balance sheet date

JOGPL received a show cause notice from the Commissioner of Service Tax dated 24 October 2011 for USD 1,067 thousand (including education cess) in respect of the financial year ended 31 March 2011. This show cause notice has been issued in respect of unincorporated joint venture (operated by JOGPL) for alleged non-payment of service tax on services provided by the Operator. JOGPL is in the process of filing a response with the appropriate authorities.