Cairn India Limited Corporate Presentation March 2013

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Cairn India Limited Corporate Presentation March 2013

Cairn India Limited Corporate Presentation March 2013

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  • 1. © 2013 Cairn India Limited Corporate Presentation March 2013
  • 2. Corporate Presentation 2 Disclaimer This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on our managements 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 Indias 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.
  • 3. Corporate Presentation 3 Overview • Amongst top 20 global independent E&P company; Market MF Retail Other Cap >US$10bn FI 3.1% 7.9% 2.8% • Q3 FY 2012-13 average daily gross operated production of 2.4% over 200,000 boepd; Currently operating ~25% of India’s domestic oil production FII 14.8% • Proven and Probable resource base over 1bn boe 58.8% • Part of NIFTY, DJIT30 & MSCI index*; Free float ~31%** 10.3% Cairn PLC • Interim dividend of INR 5 per share paid for FY 2012-13 in Nov12 Vedanta Group Shareholding as on 06 March, 2013 “Fastest growing energy “Runners up award to “16 awards in 26th Mines company in the world, Raageshwari Oil Mine by National Safety week 2012 under 2012” - Platts Top 250 Safety Awards (Mines) by GoI” aegis of DGMS, Ajmer” *DJIT30: Dow Jones India Titans 30 Index , MSCI: Morgan Stanley Composite Index **Float excludes Cairn Energy PLC holding Vedanta Group - Twin Star Mauritius Holdings Ltd 38.7%, Sesa Goa Ltd 18.4% , Sesa Resources Ltd 1.7%,
  • 4. Corporate Presentation 4 Consistent Value Creation across Upstream E&P Chain • Strong Balance sheet with net cash of over US$ 2.5 bn • Increasing production profile; Enhanced focus on exploration Well poised for • Strong pipeline of exploration, development and production assets further Growth • Unique manpower skill set across the E&P value chain International Foray Execution Success Exploration Success Sri Lanka deepwater World class discoveries S Africa entry Early Rajasthan Beginnings development Rajasthan & CB/OS-2 discoveries Ravva Re- Cairn India Vedanta development IPO (2007) Acquisition 1999 2007 2012 Market Cap (US$) 0.5bn* 6.0bn 12bn*Market Cap of Cairn Energy PLC end 1999
  • 5. Corporate Presentation 5 Vision and Strategy Leverage our ... through a focused ... to achieve Strengths ... strategy ... our Vision • Strong E& P Player • o Proven track record Realize full potential of • Best-in-class E&P world-class Rajasthan company of exploration and asset through aggressive development success exploration & fast track o Significant production development • Balanced Portfolio of and cash flow assets generation • Build material positions in • Global Talent 2-3 focused core areas • Partner of Choice for o Diverse talent of internationally Stakeholders >1,400 people • Low Cost Operator • Leverage strong presence • Superior business o Innovative application in India to build a larger performance of technology portfolio of Indian assets
  • 6. Corporate Presentation 6 World Class Asset Portfolio Onshore RJ-ON-90/1)# WI 70% KG-ONN-2003/1 WI 49% Offshore KG-DWN-98/2^ WI 10% RJ-ON-90/1 PKGM-1 (Ravva)# WI 22.5% KG-OSN-2009/3* WI 100% INDIA PR-OSN-2004/1* WI 35% CB/OS-2# WI 40% CB/OS-2 MB-DWN-2009/1* WI 100% KG-ONN-2003/1 RAVVA International MB-DWN-2009/1 KG-OSN-2009/3 KG-DWN-98/2 SL 2007-01-001 WI 100% SOUTH BLOCK 1 AFRICA South Africa - WI 60% PR-OSN-2004/1 Block 1** Operating Blocks SL-2007-01-001 Non-Operating Blocks SRI LANKA • Q3 FY 2012-13: Average Daily Gross operated production at 205,014 boe; Cairn (WI - Working Interest) production at 128,058 boe • FY 2011-12 Reserve and Resource Replacement Ratio of 175% # Producing Blocks ; *Under Force Majeure – GoI granted conditional approval, discussions in progress for unrestricted access ** Farm in agreement signed on 16 August, 2012; Assignment of 60% interest and ownership granted by SA regulatory authorities, other approval on schedule ^ Cairn India is in final stages of executing the farm-out to its JV partner, ONGC; GoI approvals have been obtained
  • 7. Corporate Presentation 7 Strong Financial Performance Significant growth in revenue and … leading to strong balance sheet … operating cash flow … +39% 9m FY 2011-12 9m FY 2012-13 Cash Position in US$ bn as on 31 Dec, 2012 +32% US$ m Gross Cash 2.76 2,417 1,745 Debt (0.09) 1,529 1,154 Net Cash 2.67 Revenue CFFO* … providing flexibility to invest in growth… … and capital distribution Company wide Net Capex (US$ bn) • Dividend payout policy of around 20% of annual consolidated net profits Till FY 2011-12 ~4.3 • Paid Interim Cash Dividend of INR 5 per FY 2012-13 & FY 2013-14 (E) ~2.0** equity share in Nov 2012 for FY 2012-13 *Cash Flow from Operations (CFFO): refers to PAT (excluding other income and exceptional item) prior to non-cash expenses and exploration costs, ** Capex Estimate Breakdown : Rajasthan - 60% (Development 30% ; Exploration 30%); Other Assets and New Ventures – 40%
  • 8. Corporate Presentation 8 Rajasthan Operational Highlights • RJ Exploration approval obtained; first exploration well drilling ongoing • Production from Rajasthan block at ~175,000 bopd • Mangala field sustained production at peak rates over last 10.1% two years; currently producing ~150,000 bopd post GoI 21.8% approval; measures underway for plateau sustenance 6.4% • Bhagyam field currently producing between 20-25,000 bopd; focus on drilling of additional wells • Aishwariya field development on track; expect commencement of production by end FY 2012-13 • Production ramp up to 200-215,000 bopd by end FY 2013-14 • Mangala EOR polymer pilot successful; full field implementation* 59.0% will result in plateau sustenance; EOR ASP pilot expected to begin by Q1 FY 2013-14 • Pipeline debottlenecking trials via DRA** application completed; JV alignment obtained Note: In line with standard industry practice, we expect routine downtime of 3-5% for the MPT facilities *Subject to GoI approval, **Drag Reducing Agent
  • 9. Corporate Presentation 9 Rajasthan Crude Offtake • Sold more than 130 mm bbls of crude to Indian refiners; generated gross revenues in excess of US$ 12 bn to date • Current sales arrangements in excess of 175,000 bopd with PSU 10.1% & Private refineries; negotiations ongoing for FY 13-14 renewal 21.8% 6.4% • Crude Pricing o Benchmarked to comparable low sulphur crude - Bonny Light o Discount guidance at an average of 10-15% to Brent • The MPT to Salaya section of the pipeline is currently operating at ~175,000 bopd; continues to safely deliver crude oil 59.0% o Recorded more than 6 million LTI-free man hours to date o Provides access to over 1.6 mm b/d refining capacity o Debottlenecking trials completed; JV alignment obtained • Work initiated on ~80 km Salaya to Bhogat section; expected to be mechanically completed in H1 CY 2013
  • 10. Corporate Presentation 10 Rajasthan Resource and Value PotentialResource Future Development & Prospective Under Development Total % inc from Resource previousPotential(mm boe) Gross 2,168 2,010 EXPLORATION 3,100 11% MBARS BH + 19 Disc. 7,278 In Place Gross EUR 1,044 (~48%) 165 (~8%) 530 (~17%) 1,739 24%Expected GrossProduction 300**(kbopd) 200 - 215 ~175 Note- Gross EUR Includes EOR potential of 238 mmbbls; balance 70mmbbls booked as reserves MBARS – Mangala, Bhagyam, Aishwariya, Raageshwari, Saraswati Company upgraded the numbers as on 31 March 2012 *By end FY 2013-14 * *Subject to approvals Apr-12 FY 2013-14* Block Map with 25 discoveries to date
  • 11. Corporate Presentation 11 Securing Long-Term Growth through Exploration Focused on growing our portfolio Rajasthan – Realize full basin potential Net Unrisked Prospective Portfolio Growth 2,100 • Exploration potential estimated at 530 Resource (mmboe) mmboe gross recoverable risked 1,400 prospective resource • E&A drilling expected by end FY 2012-13 350 2007 2009 2011 Growth in India … … and focused international areas • KG-ONN-2003/1: appraisal of largest • Sri Lanka: Opened up Mannar basin onshore discovery in KG basin through gas discoveries; Drilling of phase 2 exploration well completed • Ravva: “High Value High Risk” deeper prospect identified & MC approval • South Africa: 60% interest & received; drilling planned in FY 2013-14 operatorship granted by SA regulatory authorities; Tendering for acquisition of • CB/OS-2: Infill drilling campaign in 3D seismic data complete progress; first well completed successfully
  • 12. Corporate Presentation 12 Portfolio Exploration Work Program Block Exploration Work Program RJ-ON-90/1 Exploration well drilling ongoing Exploration well drilling in FY Ravva 2013-14 RJ-ON-90/1 CB/OS-2 Infill drilling ongoing Appraisal well drilling planned in INDIA Q1 FY 2013-14 to evaluate size KG-ONN-2003/1 & commerciality of 2nd discovery- CB/OS-2 Nagayalanka-SE-1 Under divestment (GoI approvals RAVVA KG-DWN-98/2* KG-ONN-2003/1 obtained) MB-DWN-2009/1 KG-OSN-2009/3 KG-DWN-98/2 KG-OSN-2009/3 PR-OSN-2004/1 GoI granted conditional access; PR-OSN-2004/1 discussions ongoing for unrestricted access MB-DWN-2009/1 SL-2007-01-001 BLOCK 1 Phase 2 Exploration drilling SRI LANKA SL-2007-01-001 completed SOUTH AFRICA Tendering for acquisition of 3D Block 1 (South Africa) seismic data completed Successful exploration with >10 years success ratio of ~50% Play based approach to build portfolio *Non Operated Block – Under divestment
  • 13. Corporate Presentation 13 High Value Exploration in Rajasthan  Received GoI approval on further exploration in the FY 2013-14 block Proposed E&A Wells  Aggressive exploration program slated -  Identified ~100 prospects in the block; targeting 530 mmboe gross recoverable risked prospective resource  Plan to drill ~30 E&A wells in a year (~100 wells in 3 years)  Plan to initially drill out high potential prospects and number of play types  Additional 3D seismic data acquisition and processing over 3 years covering >50% of block area  First exploration well drilling ongoing Appraisal wells Exploration Wells
  • 14. Corporate Presentation 14 High Impact Exploration in KG Onshore - East Coast of India N NAGAYALANKA-1Z NAGAYALANKA-SE-1 0 l 5 km A A’ Nagayalanka A Nagayalanka-1z ! Nagayalanka-SE-1 ! ( ! ( ! Raghavapuram Shale A’ LEGEND Oil Discovery Discovery Well River KG-ONN-2003-1 Block India Established New play GolapalliSand • Nagayalanka-SE discovery- largest oil discovery in KG onshore to date; Late Syn-Rift two successive oil discoveries in the Early Syn-Rift block • Deeper Cretaceous play established in less explored region Basement • Appraisal activity is being planned to evaluate size and commerciality • DoC for the first discovery filed • Two successful wells proved Gross • Tendering for rig & services ongoing for appraisal drilling in Q1 FY 2013-14 oil column of 300 meters to evaluate size and commerciality of Nagayalanka-SE-1 • Cumulative In-place volumes at • A total of 6 wells drilled in the block during Phase 1 & 2 ~550 mm boe
  • 15. Corporate Presentation 15 Frontier Deep Water Exploration – Sri Lanka A BARRACUDA DORADO A’ A A A’ Eocene Cretaceous Successful Frontier Deepwater Exploration • Dorado-91H/1z: First well in SL after three decades; first deep water well in SL • Basement First ever discovery of hydrocarbons in SL • Barrcuda-1G/1: 2nd successive Gas • Additional 600 km² high quality 3D seismic and exploration well discovery drilling under Phase 2 completed • Establishment of a working hydrocarbon • A total of 4 exploratory wells drilled with 50% success ratio system in the Mannar Basin • Potential commercial interest notification submitted for the two discoveries
  • 16. Corporate Presentation 16 Diverse and Experienced Talent Pool Global Expertise • Leadership from 9 nationalities across 4 1,449 continents • Prior experience across more than 50 countries Technical Experience & Depth Support 1,173 • Strong base in India with over 1,400 people • Young and dynamic workforce with average age 562 of ~37 years • Senior leadership experience with an average of over 24 years 466 • Geo – technical experience with an average of 276 over 11 years 96 • Project & Operations experience with an average of over 14 years Dec-06 Dec-12 Current • Support experience with an average of over 13 IPO years
  • 17. Corporate Presentation 17 Partnership with the Community• Local content development o Through Enterprise Center o Create pool of skilled manpower• Proactive engagement with stakeholders• Demonstrate leadership in corporate citizenship• Partnering with communities through our principles of respect, relationship and responsibility Areas of Focus Education Infrastructure Development Economic Development Health
  • 18. Corporate Presentation 18 Summary • Amongst top 20 Global independent E&P players with world-class assets • Proven track record of Exploration and Development success • Strong Balance Sheet providing flexibility to invest in growth and support dividend policy • Focused strategy to deliver stated Vision o Rajasthan - Realize full potential of world-class asset through aggressive exploration and fast- track development o International – Build material position in 2-3 core areas o India – Build larger portfolio of assets
  • 19. Corporate Presentation 19 Contact Details Investor Relations Anurag Pattnaik, DGM - Geology & Investor Relations Email: cilir@cairnindia.com M: +91 – 99104 87716 10.1% 21.8% Media 6.4% Dr. Sunil Bharati, Head - Corporate Affairs & Communications Email: cilmediainfo@cairnindia.com M: +91 - 99104 86055 Address Cairn India Ltd 4th Floor, Vipul Plaza 59.0% Sun City, Sector-54 Gurgaon 122 002, India SRI LANKA www.cairnindia.com