Half-Yearly Results Presentation

Transcription

1 Half-Yearly Results Presentation August 2015 Delivering value from discovery and development

2 Disclaimer These materials contain forward-looking statements regarding Cairn, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are, by their nature, subject to significant risks and uncertainties and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn undertakes no obligation to revise any such forwardlooking statements to reflect any changes in Cairn's expectations with regard thereto or any change in circumstances or events after the date hereof. Cairn makes no representations or warranties, either express or implied, as to the accuracy, completeness or quality of the data contained in this presentation; and Cairn, its Directors, officers, employees, agents, consultants and advisers shall bear no liability whatsoever with respect to the use of or reliance on the data by any third party.

3 Simon Thomson Chief Executive

4 Strategy Half-Yearly Results Presentation, August Balanced Business Model Mature basin exploration and development Frontier and emerging basin exploration with primary focus on Senegal Fully Funded Core development assets through to free cash flow Senegal Value World class new basin play JV agreement on the sequence, location and evaluation targets for three firm appraisal and exploration wells Targets identified for drilling commencing Q Government of Senegal agreement for an extensive evaluation plan to access full block potential of gross mean risked resource of > 1 bn bbls* * Cairn estimates

5 James Smith Chief Financial Officer

6 Group Funding Half-Yearly Results Presentation, August Group cash at 30 June 2015 of US$725m Seven year Reserve Based Lending bank facility up to US$575m remains undrawn Forecast exploration and appraisal expenditure for the committed forward programme of US$170m (predominantly Senegal drilling activity during H and H1 2016) Forecast net development capex on Catcher and Kraken of US$615m from H to expected free cash flow by year end 2017 Resolution of the Indian tax dispute remains a key priority, but the business plan is funded and deliverable from existing financial resources * Net of Norwegian Tax Refunds

7 Capital Expenditure Committed Exploration and Appraisal Programme $170m Half-Yearly Results Presentation, August H YE 2017 Catcher and Kraken Development Capex $615m UK & Norway* $30m Other $10m $180m Catcher $130m $435m West Africa Kraken West Africa includes firm costs for 3D seismic and a 3 well programme in Senegal $55m received in January 2015 on completion of Catcher farm down to Dyas Kraken contingent carry to be determined during 2015, currently estimated at ~$50m * Net of Norwegian Tax Refunds

8 Finance Summary Half-Yearly Results Presentation, August Fully funded to deliver our exploration, appraisal and development programme Debt facility remains undrawn and available Low oil price break even economics across the portfolio North Sea development projects remain on track and on budget to deliver free cash flow from 2017 onwards Senegal programme targets material upside potential, deliverable in a lower oil price environment Continued focus on disciplined capital allocation to deliver strong economic returns through the cycle

9 Richard Heaton Exploration Director

10 Senegal 2015 Programme Half-Yearly Results Presentation, August Government of Senegal agreement for an extensive evaluation plan submitted by Joint Venture (JV) Q Appraisal and exploration drilling - 3 firm wells with potentially 3 further wells Coring and testing of appraisal wells 3D seismic acquisition programme to commence Q Will cover 2,600km 2 over the Sangomar block and south west of the Rufisque block Cairn has identified more than 5 prospects and 15 leads Objective to develop additional prospects to a drill ready status within 2016 Total Acreage ~7,490km 2 FAN-1 Discovery Well Ocean Rig Athena, 7 th Generation dual activity drillship, selected for drilling programme Seismic Firm Well SNE-1 Discovery Well Potential Well Proposed 3D Full Fold Seismic Survey 3D Seismic Cairn Owned Cairn Licences

11 Senegal Full Block Potential Full block potential of gross mean risked resource of > 1 bn bbls* SNE 2C resource, currently ~330 mmbbls SNE Initial projected production 50, ,000 bopd Sum of gross mean risked prospect resources ~380mmbbls Sum of gross mean risked lead resources ~350mmbbls Hub development will optimise value in blocks Shelf exploration prospectivity Significantly de-risked by SNE discovery 3D seismic cover required for shelf prospects extending into Sangomar and Rufisque Ongoing FAN-1 and SNE-1 well analysis and seismic reprocessing Confirming potential of SNE discovery Characterise SNE and FAN reservoirs (including thin beds) Updating exploration portfolio and ranking Half-Yearly Results Presentation, August km radius 11 * Cairn estimates

12 Half-Yearly Results Presentation, August 2015 Senegal SNE Field Forward Programme 2015 / SNE-1 Appraisal Objectives Coring and testing of the reservoir: Determine reservoir continuity and connectivity Establish productivity of the reservoirs Populate static and dynamic models Determine commerciality and underpin exploitation plan Reduce uncertainty range Increase 1C resource Confirm and potentially increase 2C resource Evaluate further oil potential 3D Seismic FAN-1 SNE-1 Continue shelf area exploration Martin et al 2010 ~25km

13 Senegal SNE-2 Appraisal Target at the SNE Field First appraisal well SNE-2, is in the Sangomar Deep Offshore block, 3km north of the SNE-1 discovery Half-Yearly Results Presentation, August SNE-2 is a Crestal well in a central location in the heart of the field where it can be expected to encounter maximum hydrocarbon density SNE-2 Central Appraisal indicative location SNE-1 Discovery Well SNE-2 will spud Q and will include coring and testing, taking six weeks to drill and core and further four weeks to test Appraisal Indicative Locations Km SNE Current Gross resource range recoverable (mmbbls) 1C 150 2C 330 3C 670

14 Half-Yearly Results Presentation, August 2015 Senegal SNE-3 Appraisal Target to South of the SNE Field 14 The second appraisal well SNE-3, on Southern Flank expected to begin late Q / early Q Well will test the southern extent of the field and will help to dictate the shape of the structure and define the aerial extension to the south This is a key well to establish deliverability and the full potential of the field SNE-3 Southern Appraisal indicative location SNE-1 Discovery Well SNE-3 will include both coring and testing, taking six weeks to drill and core and further four weeks to test Appraisal Indicative Locations Km SNE Current Gross resource range recoverable (mmbbls) 1C 150 2C 330 3C 670

15 Half-Yearly Results Presentation, August 2015 Senegal BEL-1 Appraisal Target to North of the SNE Field 15 The third appraisal well BEL-1, is on the Northern Flank and is expected to begin Q This well has a significant Exploration target (Cenomanian Buried Hill play ) This well will also test the northern extent of the field and will help to dictate the shape of the structure and define the aerial extension to the north This is also a key well to establish deliverability and the full potential of the field Gauges will likely be run in this well to allow future intra-field testing BEL-1 Northern Appraisal indicative location SNE-1 Discovery Well Appraisal Indicative Locations Km SNE Current Gross resource range recoverable (mmbbls) 1C 150 2C 330 3C 670

16 Senegal Future Exploration Programme Half-Yearly Results Presentation, August Confirmation of source rock and burial history from new data Remapping key reservoir and source intervals Redefining basin model Redefining plays, creating new prospect and lead inventory Acquisition of additional 3D seismic data BEL-1 is an Exploration well with a low risk exploration target on the Bellatrix Prospect which will also evaluate the Northern Flank of the SNE Field Confirming viability of additional plays More than 5 prospects and 15 leads identified FAN FIELD CENTRAL FAN PROSPECT SOUTH FAN PROSPECT FAN-1 Discovery SOLEIL PROSPECT SPICA LEAD RUFISQUE LEAD 1 SIRIUS PROSPECT ELECTRA LEAD RUFISQUE LEAD 2 RUFISQUE LEAD 3 ACHERNAR LEAD SNE-1 Discovery BEL-1 Prospect

17 Senegal Bellatrix Prospect Half-Yearly Results Presentation, August BEL-1 exploration and appraisal well Bellatrix Prospect Bellatrix Prospect lies above the northern flank of SNE discovery Will test the Bellatrix prospect and evaluate the Northern Flank of the field BEL-1 Loc. Will target both probable Cenomanian and Albian prospective reservoirs Will be cored and likely left such that testing is possible in the future N Bellatrix Prospect S Cairn Current Gross unrisked resource range recoverable (mmbbls) P90 35 mean 157 P SNE Field A A

18 Development From Discovery to Development Half-Yearly Results Presentation, August Evaluation programme aims to confirm volumes, connectivity and productivity Preliminary foundation development concept for SNE Standalone FPSO (Floating Production Storage and Offtake vessel) with expansion capability for satellite tie-backs Subsea production, gas injection and water injection wells Initial SNE plateau oil rate expected 50, ,000 bopd Threshold economic field size (gross) >=200 mmbbls for foundation development project First oil anticipated Evaluation Plan Exploitation Plan FID First Oil Discovery Appraisal Concept Select FEED Detailed Design and Fabrication Production yrs 3-5 yrs

19 UK and Norway Catcher Development Premier (Operator) 50%, Cairn 20%, MOL 20% and Dyas 10% Gas export PLEM Installation Half-Yearly Results Presentation, August The Catcher project remains within budget and on schedule for first oil 2017 Subsea installation work has commenced with two templates already installed and gas export pipeline successfully laid The Ensco rig is now on hire and batch drilling of the first four development wells has commenced Fabrication of the FPSO hull and topsides is ongoing Gas export pipeline spooling onto Seven Navica

20 UK and Norway Kraken Development EnQuest (Operator) 60%, Cairn 25% and First Oil 15% The Kraken project remains within budget and on schedule for first oil 2017 The fixed pipelines for the first two drill centres have been installed on the seabed. Installation of the mooring system of the FPSO also started H Kraken FPSO vessel is at the shipyard in Singapore and the conversion programme is continuing on plan. Equipment procurement and fabrication of the modules is in progress Batch drilling of the top-holes at the first drill centre has been completed, the drilling rig is progressing with the pre-drilling of individual wells Subsea: Aker and Technip Transocean Leader Half-Yearly Results Presentation, August

21 Half-Yearly Results Presentation, August UK and Norway Developments and Exploration in Mature and Emerging Basins Norway Skarfjell (20% Cairn) early stage development planning Norwegian 2014 Licensing Round: Awarded five licences Q Norwegian 2015 APA licence round applications being evaluated Process to pre-qualify as Operator in Norway well advanced Pursuing recent entry into Barents Sea with possible applications in 23 rd Licence Round Q Skarfjell Development Kraken Development Catcher Development

22 Simon Thomson Chief Executive

23 Strategic Delivery Half-Yearly Results Presentation, August Business well funded through to sustainable cash flow from 2017 Balanced portfolio - appropriate equity interests and size of company in current environment Focus on potentially world class asset in Senegal to increase shareholder value Senegal 2015 / 2016 drilling programme

24 Contacts Half-Yearly Results Presentation, August David Nisbet Group Corporate Affairs Tel: +44 (0) Kate Trevenen Investor Relations Co-ordinator Tel: +44 (0) Follow us on Twitter Download our IR ipad App View our YouTube Channel