Download - Cairn India Corporate Presentation Feb 2012
© 2011 Cairn India Limited
Corporate PresentationCorporate PresentationCorporate PresentationCorporate Presentation
February 2012February 2012February 2012February 2012
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DisclaimerDisclaimerDisclaimerDisclaimer
This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financialcondition, future results of operations, future business plans and strategies. All such forward- looking statements are based onour management's assumptions and beliefs in the light of information available to them at this time. These forward-lookingstatements are by their nature subject to significant risks and uncertainties; and actual results, performance and achievementsmay be materially different from those expressed in such statements. Factors that may cause actual results, performance orachievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry productsupply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use oftechnology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise anysuch forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change incircumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within thiscircumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within thisdocument represent the views of Cairn India and do not represent the views of any other party, including the Government ofIndia, the Directorate General of Hydrocarbons or any of Cairn India’s joint venture partner.
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Holding StructureHolding StructureHolding StructureHolding Structure
IPO December 2006
Listed on BSE & NSE in January 2007
Part of NIFTY index & DJIT30
Over 200,000 retail shareholders
21.8%
10.1%
6.4%6%
FII5%
FI 3%
MF
2%
Other Institutions
2%
Retail
59%Over 200,000 retail shareholders
Market Cap >USD13 bn; amongst India’s top 20
Total Equity of 1,903 m shares; Free float ~19%**
Board comprises of 8 members; 4 independents, 3 nominees from Vedanta Group, 1 Cairn India Executive
59.0%
As on 18 Jan, 2011DJIT30: Dow Jones India Titans 30 Index,**Free float excludes Cairn PLC holding
*Twin Star Mauritius Holdings Ltd 38.8%, Sesa Goa Ltd 18.5% , Sesa Resources Ltd 1.7%,
Vedanta Group*
Cairn PLC
59%22%
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Overview Overview Overview Overview
Leading Leading Leading Leading
E&P Player E&P Player E&P Player E&P Player
� Top 20 independent E&P company with market cap of >USD13 bn
� Operates ~20% of India’s domestic crude oil production (~170,000 boepd)
� >1 billion barrels reserves / resources base; Net Cash of >USD1.2 bn
� Diverse international workforce of 1,300+ people
Proven Proven Proven Proven
� Opened up 3 new frontier basins with over 40 discoveries
� USD 4 bn Rajasthan Project – Discovery to Production in 5 yearsProven Proven Proven Proven
Capabilities Capabilities Capabilities Capabilities
VisionVisionVisionVision
� USD 4 bn Rajasthan Project – Discovery to Production in 5 years
� Built world’s longest (~600 kms) continuously heated and insulated pipeline
� Low cost operator; Innovation through application of technology
� Become a global, world class E&P company
� Establish a diversified & sustainable portfolio
� Deliver long term value to Government, Local Communities and all
stakeholders
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21.8%
10.1%
6.4%
World Class Asset Base World Class Asset Base World Class Asset Base World Class Asset Base
Rajasthan (RJRajasthan (RJRajasthan (RJRajasthan (RJ----ONONONON----90/1)90/1)90/1)90/1)
Cairn (Operator) 70%
ONGC 30%
Cambay (CB/OSCambay (CB/OSCambay (CB/OSCambay (CB/OS----2)2)2)2)
RajasthanRajasthanRajasthanRajasthan
RJ-ON-90/1 WI 70%
East CoastEast CoastEast CoastEast Coast
KG-DWN-98/2 WI 10%
KG-ONN-2003/1 WI 49%
Production Production Production Production BlocksBlocksBlocksBlocks Exploration Potential Exploration Potential Exploration Potential Exploration Potential 10 blocks in the Portfolio10 blocks in the Portfolio10 blocks in the Portfolio10 blocks in the Portfolio
59.0%
Cambay (CB/OSCambay (CB/OSCambay (CB/OSCambay (CB/OS----2)2)2)2)
Cairn (Operator) 40%
ONGC 50%
Tata Petrodyne 10%
Ravva (PKGMRavva (PKGMRavva (PKGMRavva (PKGM----1)1)1)1)
Cairn (Operator) 22.5%
ONGC 40%
Videocon 25%
Ravva Oil 12.5%
PKGM-1 (Ravva) WI 22.5%
KG-OSN-2009/3* WI 100%
PR-OSN-2004/1* WI 35%
West CoastWest CoastWest CoastWest Coast
CB/OS-2 WI 40%
KK-DWN-2004/1 WI 40%
MB-DWN-2009/1* WI 100%
Sri LankaSri LankaSri LankaSri Lanka
SL 2007-01-001 WI 100%
Q3 FY 2011-12: Average Daily Gross operated production at 169,580 boe; Cairn (Working Interest) at 98,969 boe
* Under Force Majure
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Strengths Strengths Strengths Strengths
NonNonNonNon----OECD OECD OECD OECD
Company with Company with Company with Company with
Low cost, project execution skills
Innovative application of technology
Proven technical expertise
Company with Company with Company with Company with
Global Capabilities Global Capabilities Global Capabilities Global Capabilities Strong balance sheet
Global, multi cultural workforce
Partnership and community development
“Mangala: Project of
the Year 2011” - Project Management
Institute (PMI)
“Fastest growing energy company in
Asia, 2011” – Platts 250
“Golden Peacock Award for Corporate
Social Responsibility, 2011”
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21.8%
10.1%
6.4%
Operational HighlightsOperational HighlightsOperational HighlightsOperational Highlights
� Mangala field consistently producing at 125,000 bopd since
August 2010; continue to pursue higher offtake of 150,000bopd
� Bhagyam field commenced production; safely proceeding to
reach its currently approved plateau rate of 40,000bopd
� Target to exit FY 2011-12 at 175,000bopd from Mangala and
Bhagyam fields
� Development of Aishwariya field underway with EPC contractors
59.0%
� Development of Aishwariya field underway with EPC contractors
engaged
� Significant part of currently envisaged basin potential of 240,000
bopd to be met from MBA fields in CY 2013
� Bagged 12 awards in the “Silver Jubilee Mines Safety Week”
function at Bikaner, Rajasthan under the aegis of the Directorate
General of Mines Safety
� Two successive discoveries in frontier Mannar Basin, Sri Lanka;
notified the Government of Sri Lanka of its intention to enter
Phase 2 of the exploration period
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Financial OverviewFinancial OverviewFinancial OverviewFinancial Overview
USDUSDUSDUSD mmmm Q3 FY 2011Q3 FY 2011Q3 FY 2011Q3 FY 2011----12121212 Q3Q3Q3Q3 FY 2010FY 2010FY 2010FY 2010----11111111 9 9 9 9 MthMthMthMth FY2011FY2011FY2011FY2011----12121212 9 9 9 9 MthMthMthMth FY 2010FY 2010FY 2010FY 2010----11111111
Revenue 610 691 2,019 1,452
Opex 92 102 290 241
EBITDA 467 567 1,622 1,160
DD&A 75 64 221 160
Other Income (inclforex)
82 8 223 6
PBT (before PBT (before exceptional item)
469 494 1,583 951
Tax 23 46 66 100
PAT 446 448 1,223* 851
EPS (INR per share) 11.9 10.6 30.2 20.4
CFFO 421 455 1,425 900
* Includes exceptional item of one time Rajasthan royalty adjustment
�Reduced nation’s crude oil import dependency by ~USD 1.5 bn on a gross basis in Q3 FY 2011-12
�Gross contribution to the national exchequer (excluding direct taxes) was ~USD 500 m in Q3 FY 2011-12
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Production Profile and Price RealizationProduction Profile and Price RealizationProduction Profile and Price RealizationProduction Profile and Price Realization
80
100
120
120
140
160
180 169109
101
170
113
103
172117
106
161
105
94
174
86
CambayRavvaRajasthanBrent (RHS)Oil Price Realization (RHS)
Kb
oe
pd
0
20
40
60
80
0
20
40
60
80
100
120
Q3
8
37
Q2
9
36
Q1
9
38
Q4
10
33
Q3
10
39
76
Kb
oe
pd
FY 2010-11 FY 2011-12
US
D/b
bl125
118125 125 125
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Low Cost and EBITDA MarginLow Cost and EBITDA MarginLow Cost and EBITDA MarginLow Cost and EBITDA Margin
9
11
3
9
10
2
8
2
9
11
8
1110
2 2
�Low Cost Operator with field direct operating
cost at ~USD 2.1 / boe
Other Costs(USD/boe)
Field DirectOpex (USD/boe)
Q4
3
Q3
2 2
Q1 Q2 Q3
2 2�Ravva field direct operating cost is amongst the
lowest in the world
�High EBITDA Margin of more than 75% primarily
due to lower costs
FY 2010-11 FY 2011-12
82
Q4 Q1
8584
Q3 Q3
78
Q2
77
EBITDA Margin (%)
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Rajasthan Rajasthan Rajasthan Rajasthan ---- Frontier to Producing Basin Frontier to Producing Basin Frontier to Producing Basin Frontier to Producing Basin
Development & ProductionExploration & Appraisal
AishwariyaBhagyam
Mangala
Oil
Gas
Mangala
Processing
Terminal
Frontier Exp.
1995 - 2002
ViramgamGujarat
Rajasthan
Koyali
Tankers to
Coastal Refineries
Jamnagar / Salaya
Kandla
�
Bhogat
Raageshwari
25 discoveries to date, >3,000 km2 approved development area
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21.8%
10.1%
6.4%
Rajasthan Rajasthan Rajasthan Rajasthan ---- Production and Crude Production and Crude Production and Crude Production and Crude OfftakeOfftakeOfftakeOfftake
� Produced and sold >70 mmbbls of crude to Indian refiners;
gross cumulative field revenue in excess of USD 6.5 bn to date
� Sales arrangements in place for 170,000 bopd
• With PSU & Private refineries
• Discussions ongoing with GoI and private players for FY
2012-13
59.0%
� Crude Pricing
• Reference to comparable low sulphur crude - Bonny Light
• Price represents an average of 10-15% discount to Brent on
basis of prices prevailing for 12 months to Dec 2011
� Construction work on ~80 km Salaya to Bhogat section of
pipeline including Bhogat terminal & marine facility is ongoing
• Access to 75% of India’s refining capacity
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Future Development & Prospective Resource
Rajasthan Rajasthan Rajasthan Rajasthan –––– Resource and Value PotentialResource and Value PotentialResource and Value PotentialResource and Value Potential
Gross Gross Gross Gross InplaceInplaceInplaceInplace
Gross Gross Gross Gross
RecoverableRecoverableRecoverableRecoverable
Resource Potential
Expected Gross Production
(~48%)
Under Development
0.140.140.140.14
1.901.901.901.90
~1.0* ~1.0* ~1.0* ~1.0*
2.102.102.102.10
0.250.250.250.25
~~~~2.502.502.502.50
(~7%) (~10%)
MBARSMBARSMBARSMBARS BH + 19 Disc.BH + 19 Disc.BH + 19 Disc.BH + 19 Disc. EXPLORATIONEXPLORATIONEXPLORATIONEXPLORATION
Significant part of
240 240 240 240
~6.5 bn boe
Total
~1.4 bn boe
CY CY CY CY 2013201320132013********Exit FY 2011Exit FY 2011Exit FY 2011Exit FY 2011----12121212
240 240 240 240
Note-****Gross Recoverable Includes EOR potential of 308 mmbblsMBARS –Mangala, Bhagyam, Aishwariya, Raageshwari, Saraswati******** Sometime in CY 2013
Resource Data as on 31 March 2011
Production in kbopd
175175175175
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Rajasthan Capex & FundingRajasthan Capex & FundingRajasthan Capex & FundingRajasthan Capex & Funding
Capex
Gross Net
Exploration (till FY 2010-11)
0.63 0.56
Development
Till FY 2010–11 2.99 2.09
1,249889
1,449
1,7341,447
Debt (USD m)Gross Cash (USD m)
Till FY 2010–11 2.99 2.09
FY 2011-12 E ~0.50 ~0.35
FY 2012-13 E* 1.00 -1.25 0.70 - 0.87
Cash Position (as on 31-Dec-11)
Gross Cash 1.45
Debt (0.24)
Net Cash 1.21
598
Q3
695
Q2
235
Q3
276
Q1
422
Q4
Net Cash Company with debt equity ratio of 0.03 as on 30th Sept 2011
* ~70% of the capex is expected to be spent on the MBA, facilities including pipeline
FY 2010-11 FY 2011-12
Numbers in USD bn
15
21.8%
10.1%
6.4%
Exploration ProgrammeExploration ProgrammeExploration ProgrammeExploration Programme
� Major long term player� Large proprietary database � Experienced team� Successful exploration >10
years: Success ratio ~50%
RJ-ON-90/1
Assessing new plays, generate new prospects
� Play based approach to building portfolio� Diversity of basin, plays and environments� Ongoing regional petroleum system studies
KG-ONN-2003/1
Nagayalanka-1Z discovered;
59.0%
MB-DWN-2009/1
Under Force Majeure
Nagayalanka-1Z discovered; Exploration & Appraisal well
drilling in progress
RAVVAInfill drilling completed
KG-OSN-2009/3
Under Force Majeure
KG-DWN-98/2
Decided to sell off the stake
PR-OSN-2004/1
Under Force Majeure
KK-DWN-2004/1
Acquired 300 km2 3D;data processing and
interpretation completed
NON-OPERATED
OPERATED SL-2007-01-001
Two successive discoveries; notified the Govt. of SL of its intention to enter 2nd Phase of exploration SRI LANKA
16
21.8%
10.1%
6.4%
Exploration Exploration Exploration Exploration ---- Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007----01010101----001) 001) 001) 001)
� Cairn Lanka 100%; Working Interest (NOC
back-in 15%)
• Cairn India’s first overseas venture
• Block Area: ~3,000 km2
• Water depth: 400 - 1,900m
� Under explored, frontier basin with multiple
plays
59.0%
plays
� Exploration Program
• First phase of exploration completed
• Successive discoveries in two of three
exploration wells drilled
• Establishment of working hydrocarbon
system in the basin
• Notified to the Govt. of SL of its intention to
enter phase 2 of exploration
SLSLSLSL----2007200720072007----01010101----001001001001
SRI LANKA
50km
17
21.8%
10.1%
6.4%
Engaging with the CommunityEngaging with the CommunityEngaging with the CommunityEngaging with the Community
Strategic Intent
� Proactive engagement with stakeholders
� Demonstrate leadership in corporate citizenship
� Partnering with communities through our principles of
respect, relationship and responsibility
� Enterprise Centre to create pool of skilled manpower
� Micro Vendor Development – local employment and
59.0%
SRI LANKA
� Micro Vendor Development – local employment and
training
Areas of Focus
� Education
� Infrastructure
� Health
� Economic
Development
18
21.8%
10.1%
6.4%
SummarySummarySummarySummary
� Rajasthan
• Mangala producing at 125,000 bopd since August 2010; pursue higher offtake of 150,000bopd
• Bhagyam field, 2nd largest discovery in Rajasthan block commenced production
• Delivery to domestic refiners through worlds longest continuously heated and insulated pipeline
• Gross field revenue in excess of USD 6.5 bn
• Enhanced oil recovery pilot continues to progress well
• World class resource base – focussed on delivery & growth
• Significant part of currently envisaged basin potential of 240,000 bopd to be met from MBA
59.0%
SRI LANKA
• Significant part of currently envisaged basin potential of 240,000 bopd to be met from MBA
fields in CY 2013
� Initiatives to slow down the rate of production decline in Ravva and CB
� Proven record of fast track, low cost development and production; Field Direct Opex – USD 2.1/bbl*
� Gross contribution to the national exchequer (excluding direct taxes) ~USD 9 bn till date
� Success through innovative application of technology
� Two successive discoveries in frontier Mannar basin in Sri Lanka; notified the Govt. of SL of its
intention to enter Phase 2 of exploration
* For the period Q3 FY 2011-12
For More Information log on to: www.cairnindia.com