Half-yearly Results 24th August 2010 Discovering hidden value Discovering hidden value
AGENDA Introduction and Overview Sir Bill Gammell Group Chief Executive Group Financial Overview Jann Brown Group Finance Director Rajasthan Project Phil Tracy Engineering and Operations Director Future Resource and Value…
Introduction Sir Bill Gammell, Group Chief Executive Discovering hidden value through entrepreneurial exploration Discovering hidden value
GROUP OVERVIEW Focus on long held strategy of adding and realising value Rajasthan development now producing 125,000 bopd Strategic exploration positions in frontier basins of Greenland Strong balance sheet Interim Results…
Rationale of Transaction With Vedanta Cairn is an entrepreneurial company with a vision to discover hidden value by developing strategic positions in frontier areas with significant potential The disposal means PLC can fully focus…
Financial Overview Jann Brown, Group Finance Director Discovering hidden value through entrepreneurial exploration Discovering hidden value
FINANCE Introduction H1 revenue 2010 333m: on track for record full year Rajasthan currently producing 125,000bopd Profit before tax 58m (H1:2009 loss 118m) Fully funded for Greenland and India Significant transaction announced…
FINANCE Proposed Transaction With Vedanta Cairn to sell 51% of CIL to Vedanta Group; minimum of 40% sold at this stage, plus options for any balance At 405 INR (8.66) / CIL share - represents a 153% premium to the 160 INR IPO…
FINANCE Production And Realised Prices Production Gross Rajasthan production (entitlement basis) 40,000 Gross (boepd) production: 32,866 87,523 boepd From January to June 2010 31,031 31,428 Current production levels 125,000…
FINANCE Cashflow Net Cash Movement Funding 800 2000 172 -47 600 1500 524 Other 182 'm 'm CIL -181 Available 400 1000 Funding 1,358 Rajasthan 69 267 838 200 500 -270 PLC / Capricorn Cash Greenland 548 421 0…
FINANCE Funded For Growth Pivotal moment for Cairn Group Vedanta transaction locks in value Allows re-gearing to exploration success Interim Results Analyst August 2010 Discovering hidden value 12
Rajasthan Project Phil Tracy, Engineering and Operations Director Discovering hidden value through entrepreneurial exploration Discovering hidden value
INDIA Rajasthan Overview Mangala Processing Terminal (MPT) Trains 1, 2 and 3 operational Oil sales commenced via 590km pipeline to private refiners and IOC Mangala production currently around 125,000 bopd Four rigs operating…
RAJASTHAN Resource Base 6.5 Billion boe 250 Gross Gross Reserves, Initial 2.5 Billion boe in 35+ prospects Most Likely Resources 1 and 50 - 400 Potential 2 Prospective Risked Prospective In Place In Place Resource 4…
RAJASTHAN Mangala Production 150,000 bopd 143,000 bopd Current Sales 125,000 bopd Arrangement FDP Approved Target Interim Results Analyst August 2010 Discovering hidden value 16
RAJASTHAN Vision For Growth 210,000 bopd FDP Approved Production 175,000 bopd Target Potential Mangala 150,000 bopd Mangala 125,000 bopd Production 240,000 bopd Bhagyam Bhagyam 40,000 bopd 40,000 bopd Aishwariya…
Future Resource and Value Potential Dr Mike Watts, Group Deputy Chief Executive Discovering hidden value through entrepreneurial exploration Discovering hidden value
GREENLAND In Context Cairn Blocks Cairn Prospecting Licence Several offshore Wells Baffin Bay North East basins only one of Bid Round Bid Round which was drilled 2010 2012 prior to Cairns activities USGS highlights the large…
GREENLAND Current Operations Baffin Bay Cairn Blocks Sigguk Bid Round 2010 Cairn Prospecting Licence Wells Applied for 6 blocks Four exploration wells 2010 Alpha-1ST and T8-1 currently operating T4 next prospect to be drilled Post…
GREENLAND Operations Video Stena Forth drillship on T8-1 well location Interim Results Analyst August 2010 Discovering hidden value 21
GREENLAND Prime Minister Visit to the T8-1 Well Location July 2010 Greenland Prime Minister, Industry Minister and Head of BMP with Cairn staff visit Stena Forth Greenland Prime Minister and Industry Minister on bridge of Stena…
GREENLAND West Disko Operations Stena Forth Understand and manage risks 6th Generation DP Drillship Highly experienced operational team Best contractors and best equipment Two state of the art drilling rigs Extensive support fleet…
GREENLAND West Disko - A Sense Of Perspective SIGGUK T3 and T4 11,033 km2 prospects West Disko acreage equivalent to 3 UK North Possible Sea Quadrants drilling locations Drilling campaign designed to test different play…
WEST DISKO Tertiary Play Fairway Tertiary prospects and leads Schematic Palaeo Tertiary Deltas Sediment entry Baffin Bay points bid round blocks under negotiation SIGGUK Qaarsut SIGGUK 11,033 km2 Qaarsut Currently drilling…
SOUTHERN GREENLAND 2010 Work Programme 7,500km 2D infill seismic 3 Well site surveys KINGITTOQ Seabed geochemical Qaqortoq survey SAQQAMIUT 6,600 Km SALLIIT 2D Seismic acquired by Cairn 2008 and 2009 UMMANNARSUAQ…
Concluding Remarks Sir Bill Gammell, Group Chief Executive - Cairn Energy PLC Discovering hidden value through entrepreneurial exploration Discovering hidden value
CONCLUDING REMARKS Focus on long held strategy of adding and realising value Reduce our equity base Re-gear the Group to exploration success Interim Results Analyst August 2010 Discovering hidden value 28
Appendix 29 Discovering hidden value through entrepreneurial exploration Discovering hidden value
APPENDIX Group Structure NOW PROPOSED Cairn Energy PLC Cairn Energy PLC Listed on London Listed on London Stock Exchange Stock Exchange (1988) (1988) 62.37% 100% 11-22% 100% Cairn India (CIL) Cairn India (CIL) Listed on…
APPENDIX Production boepd H1 2010 H1 2009 40,000 Gross Gross field production 87,523 68,941 production: Entitlement production 32,866 11,573 32,866 87,523 boepd 31,428 30,000 Prices realised H1 2010 H1 2009 Oil per bbl ()…
APPENDIX Revenue and Gross Profit Production costs 14.72 (2009: 5.59) per boe 333m (exc stock movements and pre-award costs) (revenue) 350 Increase due to Rajasthan production Ravva, Sangu and CB-OS/2 remain in line with prior year…
APPENDIX Cash And Cash Equivalents Cairn India PLC / Capricorn Group m m m Cash 550 548 1,098 Debt (831) - (831) Net (debt)/cash (281) 548 267 PLC/Capricorn - 64m received from Petronas in February 2010 Cairn India -…
APPENDIX 2010 Full Year Capital Budget 2010 Group capital budget Production and 62% development 1,441m 38% Exploration 2010 CIL capital budget 2010 Capricorn capital budget Greenland Rajasthan Drilling and Development 987m…
APPENDIX Income Statement Before Exceptional Items H1 2010 H1 2009 m m Revenue Includes 19m stock 332.6 81.1 Production costs movement credit (72.1) (18.3) Unsuccessful exploration costs Net of 69m Louza costs (40.8) (24.0)…
APPENDIX Balance Sheet H1 2010 H1 2009 m m Oil and gas exploration / appraisal assets and Exploration - 488m 2,569.8 2,062.2 development/producing assets Development - 2,082m Other non-current assets 80.7 18.3 Includes 63m of…
APPENDIX Cashflow Statement H1 2010 H1 2009 m m Net cash generated from operating activities 125.1 (24.8) Exploration 180.7m Oil and gas capital expenditure Development 270.5m (451.2) (459.4) Other capital expenditure (5.2) (1.9)…
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