News

Half-Yearly Report Announcement

16 August, 2016

Simon Thomson, Chief Executive, Cairn Energy PLC said:

"Successful appraisal of the world-class SNE discovery in Senegal has significantly increased 2C oil resources to 473 million barrels with associated 2C oil in place in excess of 2.7 billion barrels.

Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector. The programme contains options for multiple wells and in addition to ongoing appraisal of the SNE field, the Joint Venture continues to assess optimal locations for further exploration drilling on the acreage.

Cairn's exploration and appraisal focus in Senegal is balanced with development assets in the UK, with first oil targeted from both Kraken and Catcher during 2017 and in the meantime Cairn remains fully-funded in respect of all of its capital commitments."

Senegal Exploration & Appraisal

  • Drilled six wells in two years; two basin-opening discoveries and four successful appraisal wells
  • SNE contingent resource upgrade: independently verified current best estimates for gross oil in place on the SNE field of more than 2.7 billion bbls*
  • Estimated gross recoverable oil resource of 1C 274 mmbbls, 2C 473 mmbbls, 3C 906 mmbbls*
  • Cairn estimates further Senegal exploration potential of ~500 mmbbls gross mean risked resource
  • Joint Venture (JV) planning third phase drilling programme commencing in Q4 2016/Q1 2017 with further evaluation of SNE discovery
  • Rig tender for next phase of appraisal and exploration benefiting from lower cost environment
  • Conceptual development planning underway to include range of potential options including phased development to capture a potentially large resource base

*ERC Equipoise Limited (ERCE) estimate

Finance

  • US$414 million (m) Group net cash at 30 June 2016
  • Norwegian tax receivable of US$45m at 30 June 2016
  • Reserves Based Lending bank facility remains undrawn; debt availability to fund UK development assets increasing with project progress, with availability expected to reach US$260m by 2017; additional US$175m available in the form of Letters of Credit
  • Forecast net capex for the Catcher and Kraken development projects of US$315m from H2 2016 to expected free cash flow by year end 2017
  • Envisaged future exploration and appraisal expenditure across the portfolio is US$135m, of which US$55m is current committed activity, with the balance principally relating to expected additional drilling activity in Senegal
  • Cairn is currently unable to access the value of its ~10% residual shareholding in Cairn India Limited (CIL) valued at US$383m at 30 June 2016, or accrued dividend payments of US$50m
  • International arbitration proceedings have commenced in respect of Cairn's claim under the UK-India Bilateral Investment Treaty. Cairn is seeking restitution for losses resulting from the attachment of its shares in CIL and failure to treat Cairn and its investments fairly and equitably

Developments

  • Kraken remains on schedule with first oil anticipated in H1 2017. Latest gross capex estimate is >US$300m (gross) or over 10% lower than sanction estimate. In H1, acquired an additional 4.5% in the development bringing Cairn's total Working Interest (WI) to 29.5%
  • Catcher (Cairn 20% WI) is targeting first oil H2 2017 with the FPSO hull now in Singapore; further cost reductions secured. Latest gross capex estimate now 20% lower than at sanction
  • Skarfjell (Cairn 20% WI) JV working towards concept selection for field development; decision expected Q4 2016

Further Exploration and New Ventures

  • New licences acquired in Norway and Ireland
  • Continue to actively assess and pursue new ventures within context of balanced portfolio and less competitive environment

Enquiries:

Analysts/Investors    
David Nisbet Corporate Affairs 0131 475 3000
Media    
Patrick Handley Brunswick Group LL 0207 404 5959
David Litterick Brunswick Group LL 0207 404 5959

Webcast

There will be a live audio webcast of the results presentation available to view on the website (www.cairnenergy.com) at 9am BST. This can be viewed on PC, Mac, iPad, iPhone and Android mobile devices.

An 'on demand' version of the webcast will be available on the website as soon as possible after the event. This can be viewed on PC, Mac, iPad, iPhone and Android mobile devices.

Presentation

The results presentation slides will be available on the website from 7am BST.

Conference call

You can listen to the results presentation by dialling in to a listen only conference call at 9am BST using the below dial-in details.

Dial-in details:

UK: 020 3059 8125
All other locations: +44 20 3059 8125

A recording of the conference call will be available from 16 August 2016 until 23 August 2016.

Recording dial-in details:

UK: 0121 260 4861
All other locations: +44 121 260 4861
Passcode: 3626365#

Transcript

A transcript of the results presentation will be available on the website as soon as possible after the event.

Related information
Half-Yearly Report Announcement Download PDF 0.80MB
Half-Yearly Report Presentation Download PDF 8.28MB
Half-Yearly Report Transcript Download PDF 0.24MB
Half-Yearly Report Webcast View