Cairn India - Corporate Presentation - September 2013
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Cairn India - Corporate Presentation - September 2013

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Cairn India - Corporate Presentation - September 2013

Cairn India - Corporate Presentation - September 2013

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Cairn India - Corporate Presentation - September 2013 Cairn India - Corporate Presentation - September 2013 Presentation Transcript

  • © 2013 Cairn India Limited Corporate Presentation September 2013
  • Corporate Presentation 2 Disclaimer This material contains forward-looking statements regarding Cairn India and its affiliates, its corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on the 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 India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India’s joint venture partner. All data points in the presentation refer to status as on 31 March, 2013, unless otherwise specified.
  • 3 Corporate Presentation Where are we today World class resource Base Operational excellence and Strong skill set A top 20 global independent E&P company; Robust financial position Active Exploration Program for Growth Market Cap - US$10bn View slide
  • 4 Corporate Presentation World Class Resource Base • Balanced Asset Portfolio, Net acreage in excess of 42000 sqkms, ~ size of Switzerland • Successful track record across Exploration, Development and Production cycle Asset Locations & Share of Production Assets across the life-cycle of a field Asset Basin Exploration Development Production Domestic Assets RJ-ON-90/1 Barmer CB/OS-2  KG-ONN-2003/1 KG Onshore KG Offshore KG Offshore  RJ-ON-90/1 70%  Ravva   KG-OSN-2009/3   Cambay  INDIA   CB/OS-2 MB-DWN-2009/1 Mumbai Offshore PR-OSN-2004/1 Palar – Pennar KG-ONN-2003/1 40%  49% RAVVA 22.5%  MB-DWN-2009/1 International Assets KG-OSN-2009/3 100% SL-2007-01-001 Mannar  Block 1 Orange 100%  PR-OSN-2004/1 35% BLOCK 1 60% SOUTH AFRICA SL-2007-01-001 100% Name of Asset Participating Interest (%) Note: Percentages represent Working Interest View slide
  • 5 Corporate Presentation Sustained Year on Year Growth • Rich Resource base supports production growth • Currently account for over 25% of India’s oil production* • Strong Partnerships with state and private companies Volume Growth Product Mix CAGR: 31% >225 5% 205 173 149 Oil 69 Gas 95% FY10 FY11 FY12 FY13 Cairn India’s Production Growth (kboepd) * Source: Ministry of Petroleum and Natural Gas, Government of India FY14 Exit* Total Production of 212,442 boepd in Q1’FY14
  • 6 Corporate Presentation Robust Financial Performance • Strong revenues and profits driven by lowest quartile F&D and operation costs • Flexibility to develop asset base and support accelerated growth CAGR 66% 2.3 0.3 0.3 FY09 FY10 2.5 FY11 FY12 PAT (US$ bn) 2.2 0.2 0.2 FY09 FY10 1.7 FY11 FY09 values are for 15 month ended Mar’09 FY12 FY13 2.4 1.8 0.2 FY10 1.9 FY11 FY12 0.2 FY09 FY13 CAGR 61% 1.4 EBITDA (US$ bn) 3.2 Cash Flow from Operations (US$ bn) Revenue (US$ bn) CAGR 55% FY13 CAGR 58% 2.0 1.4 0.2 FY10 FY11 FY12 0.2 FY09 1.5 FY13
  • Corporate Presentation Operational Excellence across the value chain • Safety First - LTI free man hours of 65 million across assets as on 30 June13 • Opened 4 frontier basins with >40 discoveries • Excellence in Execution - Discovery to Production • • • Onshore Oil production - in 5 years in Rajasthan Offshore natural gas production - In 28 months in Cambay Leveraging technology to reduce total cost of ownership • Skin effect heating system – world’s longest continuously heated pipeline • Modular well pad concept – rapid moving rigs • Uptime greater than 98% with field direct opex at $3/bbl 7
  • 8 Corporate Presentation Efficiently manage onshore and offshore projects Strong Infrastructure in place Rajasthan: Production Trends 200000 150000 100000 50000 0 2009-10 2010-11 2011-12 Cambay (CB/OS-2): Gas Producing to Oil Producing Ravva: Production Trends 70,000 60,000 50,000 40,000 30,000 20,000 10,000 1995-961999-002003-042007-082011-12 2012-13 25000 20000 15000 10000 5000 0 2002-03 2005-06 Gas BOE (boepd) 2008-09 2011-12 Oil Production (bopd)
  • 9 Corporate Presentation Active Capex Program for Growth To invest $3 billion net over 3 years To prove up reserves through exploration To increase production primarily in Rajasthan Block (RJ) Currently Under Development/ Production Gross In Place MBARS 2,272 (Mmboe) ~15% RJ Additional Production (BH + Satellite fields) ~20% Significant Potential In Barmer Basin Gross EUR ~25% 1,069 (~47%) RJ Exploration Future Development & Prospective Resources Other Assets ~40% Gross In Place 1,925 BH + 19 Disc. 3,100 Exploration Gross EUR RJ Production Sustenance (MBA + EOR + Infill drilling) 165 (~9%) 530 (~17%) Exploration (45%) Development (55%) ≈80% of the capex planned for RJ Note: *Capex excludes spend on new ventures & development of new exploration discoveries in RJ TOTAL Gross in Place Gross EUR 7,297 1,764 Note: Percentages represent recovery factors
  • 10 Corporate Presentation Improving Ultimate Recovery (EOR + Infill drilling): ≈$1,200Mn • To sustain the MBA plateau via EOR technology and infill drilling Polymer Flood - Improved Sweep Efficiency Areal Sweep improvement Enhanced Oil Recovery Pilot Performance Vertical Sweep improvement Alkaline Surfactant Polymer Flood- Improved Displacement Efficiency Original Oil Sand Grain Remaining oil Water Oil Saturation Display at Pore Level Reduction in Trapped Oil Initial After Waterflood After ASP flood
  • Corporate Presentation Additional Producing Fields (BH + Satellite): ≈$450Mn capex Monetizing ≈ 2bn boe contingent resource base • Barmer Hill formation spread over a large area in the basin • Oil and Gas found in majority of the wells penetrating BH formation • Low permeability tight reservoirs • Infrastructure is already in place for quick monetization • Require fracture stimulation and horizontal wells to optimize recovery • Data Analogs indicate recovery factors of 7 to 20% • Development plan for BH submitted • Production expected to commence in FY14, subject to approvals 11
  • Corporate Presentation Exploration in Rajasthan (RJ) - ~US$ 750m To pursue high-value exploration opportunities A Target-Rich Environment ~100 Prospects; 20 Play Types Prospective Resources: 530 mm boe Gross Risked Recoverable (3.1 bn boe in place) Two-pronged Strategy    Proven Play Extensions • Drill prospects with largest risked volumes first • Revise / re-prioritise remaining prospects based on results  Unproven Plays • De-risk the play – Drill lowest risk prospect first • Revise / re-prioritise tested play based on results Exploration Program  Plan to drill ~100 E&A wells; rig count to increase multifold  Acquire ~1,900 sq km of additional 3D seismic to assist in extending proven plays & de-risking prospects 12
  • Corporate Presentation Major Undrilled Play Types in RJ 13
  • 14 Corporate Presentation Ensuring growth in other assets - $ 600Mn Portfolio Diversity Across India BASINS (Established & Emerging)  Raava: ‘High Value/ High Risk’ prospect to be drilled in H2 FY13-14  KG-ONN-2003/1: Drilling underway to appraise the second discovery with 2nd well planned in FY14 RAJASTHAN  KG-OSN-2009/3: Conditional approval to carry out petroleum operations in 65% of block  MB-DWN-2009/1: Conditional approval to carry out exploration activity received INDIA MUMBAI RAAVA  PR-OSN-2004/1: Significant progress towards resumption of exploration activity KG – ON/OFFSHORE PALAR/ PENNAR Growing International Exposure  Successful exploration in Sri Lanka – two gas discoveries; commercial options under review  3D seismic gathered in S. Africa Block 1; processing underway; plan to drill exploration well in 2015  A growth-focused New Ventures strategy aimed at capturing best-fit international opportunities MANNAR SOUTH AFRICA ORANGE KG: Krishna Godavari MB: Mumbai Basin PR: Palar Basin
  • 15 Corporate Presentation Summary • Delivered on the investments made in the past with high returns • High level approval for exploration in Rajasthan to help future delivery Restart RJ Exploration Exploration Success Ravva Redevelopment Rajasthan & CB/OS-2 discoveries FY2000 - 2006 FY1999 Market Cap End of Period Reserves & Resources End of Period US$ 0.5bn Policy clarification on exploration FY2007-2013 US$ 6.0bn 1.29 bn boe FY2014 - 16 US$ 10bn 1.17 bn boe $3Bn Capex plans for future growth Target Additional 530 mmboe from RJ exploration
  • 16 Corporate Presentation Fact Sheet Value Proposition Top Mgmt Financial Strength As India’s largest private sector E&P company accounting for 25% of the country’s energy production, Cairn India is well positioned to grow revenues and profits. Its strong track record, low cost of operations, high cash flow generation, combined with the world's growing demand for energy, provides confidence for future growth in reserves and production while meeting its return on capital targets.  Chairman: Navin Agarwal  CEO: P. Elango  CFO: Sudhir Mathur FY 2013 P&L  Revenues: US$3.2 billion  PAT: US$2.1 billion  EPS: INR 63.2  Cash Flow from Operations: US$2 billion Balance Sheet  Cash: US$3.1 billion  Assets: US$9.9 billion  Zero Debt Company Other Ratios  Dividend Yield: 4%  DPS: INR 11.5  BVPS: INR 250 Market Cap: ~$10 billion Listed on: NSE, BSE Index Representation - Nifty 50 and MSCI Symbols: CAIRN (NSE); 532792 (BSE); INE910H01017 (ISIN); CAIR (Bloomberg)  Shares outstanding: 1910 million  Shareholding Pattern: Vedanta Group: 59% Cairn PLC: 10% Institutional Holding: 28% Retail: 3%     Stock Market FY13 Production  Gross Production: 205,323 bopd  Oil: 195,780 bopd  Gas: 57 mmscfd Countries  India  Sri Lanka  South Africa Producing Assets  Rajasthan (RJ-ON-90/1)  Andhra Pradesh - Ravva (PKGM-1)  Gujarat - Cambay (CB/OS-2) Reserve Base  Gross 2P Hydrocarbons Initially in Place (mmboe): 5,641  Gross 2P Reserves & Resources (mmboe): 1,386  Net Working Interest 2P Reserves & Resources (mmboe): 871 Capital Budget  $3 billion over three years (FY2014, 2015, 2016)  55% for Production; 45% in Exploration Capital Allocation     Achievements  Together with its JV partners accounts for ~25 per cent of India’s crude oil production  Among the top 20 global independent E&P companies  Built world’s longest (~600 kms) continuously heated and insulated pipeline Awards  Fastest growing energy company in the world at Platts Top 250 Energy Company Awards 2012  16 awards in 26th Mines Safety week 2012 under aegis of Directorate General of Mines Safety (DGMS), Ajmer  Golden Peacock Award for Excellence in Corporate Governance, 2012 ~15% additional production (BH and satellite fields) ~40% RJ production and sustenance (MBA+EOR+Infill Drilling) ~25% RJ exploration ~20% other assets (e.g. KG, Ravva, Sri Lanka, South Africa) Contact Information Nidhi Aggarwal M: 91 – 98101 97755 nidhi.aggarwal@cairnindia.com cilir@cairnindia.com Cairn India Ltd. 4th Floor, Vipul Plaza, Sun City, Sector-54, Gurgaon 122002 India
  • 17 Corporate Presentation Q&A
  • 18 Corporate Presentation Summary - Q1’14 Financials Unit Q1 FY 2013-14 Q4 FY 2012-13 q-on-q% Gross Production Boepd 212,442 202,014 5 Q1 FY 2013-14 Factsheet Revenue INR bn 40.6 43.6 -7 • Average Price Realization: EBITDA INR bn 29.1 28.9 1 EBITDA Margin % 71.6% 66.3% 530bps • RJ Oil - US$ 94.3 / bbl DD&A INR bn 5.2 4.7 9 • RJ Oil Price Discount: EBIT INR bn 32 26.4 21 PBT INR bn 31.9 26.2 22 • RJ Opex: US$ 3 / boe PAT INR bn 31.3 25.6 22 • Net Cash: US$ 3.16 Bn EPS INR/sh 16.4 13.4 22 Cash EPS INR/sh 12.9 13.2 -2 CFFO INR bn 24.4 26.7 -8 • CIL - US$ 93.3 / boe 8% Profit petroleum pay-out to the government rose from 20% to 30% in the Development Area 1 (DA1) in the RJ block
  • 19 Corporate Presentation Strong Stable Balance Sheet Asset US$ bn Current Assets Liability US$ bn Current Liabilities Cash and Investments 2.9 Other Current Asset Current Liabilities 0.7 0.6 Non Current Liabilities Non Current Assets Non Current Liabilities Fixed Asset 2.5 Goodwill 2.8 MAT Credit 0.9 Other LT asset 0.5 0.1 Total Shareholders Funds Networth 9.9 8.8 Total 9.9 US$ INR: 54.39 ROCE (%) 25.3 ROE (%) 16.7 22.1 15.3 16.4 2.5 3.1 FY09 FY10 1.3 1.4 FY11 FY12 FY13 1.7 FY09 FY10 FY11 FY12 FY13