Building an Energy Business European Mediterranean Oil & Gas Exploration & Production Summit

Transcription

1 Building an Energy Business European Mediterranean Oil & Gas Exploration & Production Summit Cyprus, September 2012

2 Disclaimer These materials contain forward-looking statements regarding Cairn, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our 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 undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn's expectations with regard thereto or any change in circumstances or events after the date hereof. 2

3 Cairn Energy Experienced exploration and production (E&P) operator FTSE 250 London listed Company (CNE) post $4.5billion sale of majority stake in Indian business Business model Continue to create value and opportunities through exploration-led growth Exposure to transformational exploration potential in frontier basins Full cycle capabilities to deliver value from well balanced exploration, appraisal and development portfolio of assets enhanced by recent acquisitions Strong balance sheet from which to allocate capital to growth opportunities Delivery of safe and efficient operations 3

4 Create Value Create Value Create Value Realise Value Realise Value Return Value to Shareholders Business Model for Growth and Re-gearing $ 4

5 Vision La Clairvoyance Rene Magritte 5

6 Examples of Evolving Frontier Basins Chukchi Sea Barents Sea Rajasthan Greenland Basins West Trinidad Basin KG Basin Sri Lankan Basin West African play extending into South America East Med Basin Falklands Basin Brazil Santos Basin West Med and NW Africa Basins Ghana Tano Basin East African Rift Basin East Africa 6

7 Growth Strategy New Basin Initiatives Lower Risk Transformational Exploration Potential North West Europe Organic Growth through Exploration and Appraisal Development and Production Sustainable Cash Flow Re-balancing the portfolio for organic growth CIL stake 18.3% Appraisal and Development Operating Focus Lower risk exploration Non-Operating Focus Future Production + sustainable cash flow 7

8 Capital Growth Opportunity Material contingent resource base acquired North West Europe New frontiers opened up through licence applications, farm-ins and acquisitions 2012 Upstream E&P Assets Market Cap Cairn India 18.3% Interest Cash 8

9 North West Europe Growth Area The recent corporate acquisitions brought discoveries and pre-development projects that now underpin Cairn s value (aggregate cost ~US$7/boe) Objective to use this platform to create sustainable production growth and cash flow in order to fund the Group s exploration ambitions and activities Interest in 27 licences with active drilling programme in the next 16 months Cairn s balance sheet strength and expertise allows further value to be created in the North Sea: To take higher equities To increase future exploration opportunities through: Licence rounds Farm-ins 9

10 North West Europe Pre-Development Projects Cairn s net interest: Greater Catcher area 30% (~40 mmboe) Kraken 25% (40 mmboe) Mariner 6% (26 mmboe) Ketos Kraken KRAKEN Gross mmbbls 1 P Net mmbbls 1 P50 40 Varadero Catcher Total net 2C contingent resource 106 mmboe * Skarfjell (20%) discovery preliminary estimate of contingent resource mmbbls (gross 2C) Two appraisal wells planned in 2013 GREATER CATCHER Gross mmbbls 1 P Net mmbbls 1 P50 40 MARINER Gross mmbbls 1 P Carnaby Burgman Titan North Sea heavy oil supply for refineries has declined from a peak of 250,000 bopd to ~100,000 bopd creating an opportunity for new supplies in North West Europe Mariner Net mmbbls 1 P50 26 SKARFJELL Skarfjell Gross mmbbls 1 P Grosbeak * Excludes Carnaby and Skarfjell 1 Nautical estimates 2 Cairn estimates 3 Wintershall estimates 10

11 North West Europe New Opportunities Active lower risk exploration programme in next 16 months Active new business programme to expand and replenish portfolio UK 27 th Licence Round: 14 applications submitted (some as Operator) Central and Northern North Sea Separate AMIs (areas of mutual interest agreements) Award announcement anticipated end 2012 Norwegian Continental Shelf APA 2012 Licence Round UK 27th Licence Round NORWAY Norwegian Continental Shelf APA 2012 Licence Round Competitive AMIs formed with strong operators Cairn operates AMIs on several blocks Bids submitted September 2012, award expected Q / Q UK 11

12 New Basin Initiatives Transformational Potential Existing positions Pitu Southern Greenland Morocco Valencia Basin, Spain Targeting Targeting >4.0 >4.0 bn bn bbls* bbls* of of Yet to to find potential Applications submitted Spain Cyprus Trinidad and Tobago Pending Applications Lebanon Other new basins Other initiatives ongoing * Gross mean unrisked resource 12

13 Greenland First phase exploration completed: Extensive knowledge, database and operating capability: 2D seismic ~85,000 km; 2 x 3D seismic surveys; 8 exploration wells; geochemical, gravity and magnetic data Primary area of focus Pitu Melville Basin THULE North East Bid Rounds 3 and 4 Round 2 Licence Holders Greenland Selective and focused investment phase: Baffin Bay UPERNAVIK UPERNAVIK Round 1 Licence Holders Pitu block in Melville sub basin of Baffin Bay Farm out of % interest in Pitu block to Statoil ASA 3D seismic evaluation and geochemical work ongoing Southern Greenland Industry partner(s) required to fund any forward exploration programme post 3D and geochemical interpretation West Disko Blocks 5 wells in 2011/12 3 wells in 2011 West Greenland ILULISSAT AASIAAT AASIAAT NUUK ILULISSAT Kangerlussuaq Kangerlussuaq NUUK Open Round Secondary area of focus South Greenland Southern Greenland 13

14 Baffin Bay: Melville Sub Basin Pitu Block Yet to find Pitu Block resource estimate 3 bn bbls unrisked Current Pitu prospect and lead (P&L) inventory (subject to JV review) 2 prospects 11 defined leads >5 notional leads Pitu 3D seismic evaluation ongoing Industry Activity: Conoco 2D seismic survey 2012 Shell dual vessel 3D seismic survey underway Maersk 3D seismic survey nearing completion Melville Basin UPERNAVIK Pitu Block Cairn % (Op); Statoil %; Nunaoil 12.5% (carried) 8,170 km 2 (36 UK blocks or 1.2 quadrants) ~20% covered by 3D seismic Pitu second and block wide seabed geochemical sampling programme ongoing Melville High Melville Basin Regional shallow borehole programme ongoing (Shell Operator) Results are expected to mature a significant number of leads Schematic cross section 14

15 Baffin Bay: Melville Sub Basin Pitu Block Prospect 1 (3D defined interpretation ongoing) Melville High Structure Basin high with stacked reservoir potential Shallow prospect mean unrisked Resource potential >680 mn bbls Additional deeper potential - evaluation ongoing Prospect associated with strong microbial anomalies indicative of oil seeps Initial estimate of probability of success (POS) 22% 3D structure map with amplitudes Prospect 2 (2D defined) Basin Margin Fan Unrisked 267 mn bbls POS 17% A A 2D structure map A Frontier Basin with >3 bn bbls 10 km unrisked potential 5 km A 15

16 South Greenland SW High anomalies (Projected onto line) 10km NE 3D structure map with amplitudes 3D Seismic Section Interpretation of D seismic commenced 2011 seabed geochemical programme highlighted areas with strong microbial anomalies indicative of oil seeps Effective 3D seabed geochemical survey planned Q High anomalies 2012 Geochemical sampling Frontier Basin with >500 million bbls Yet to find potential 2012 Geochemical sampling programme 16

17 North Africa Morocco New Basin Entry Foum Draa Offshore 1-3 Cairn farm-in subject to all necessary approvals JV partners: Cairn 50% (Operator); San Leon (14.2%); Serica (8.3%) and Longreach Oil and Gas (2.5%); Office National des Hydrocarbures et des Mines ("ONHYM") 25% (carried) Two key prospects identified Water depths 500-2,000m covering an area of 5,090km 2 Foum Draa Offshore 1-3 Two key deepwater prospects Spain Morocco Morocco Juby Maritime I - III Three blocks Juby Maritime I, II and III acquired through Nautical acquisition Juby Maritime I-III Sidi Moussa JV Partners: Cairn 37.5% (Operator); Barrus Petroleum 37.5%*; ONHYM 25% (carried) Cap Juby field (MO-002 well tested 2,377 bopd 12 API oil from Upper Jurassic and MO-008 well recovered 38 API from Mid-Jurassic) Water depths 100-1,500m covering an area of 5,600km 2 Reprocess 500 km 2 3D seismic over Cap Juby field New 3D seismic proposed Q Exploration well(s) planned Q (subject to necessary approvals) * Subject to regulatory approval, Genel Energy 37.5% Forward Work Programme 17

18 Spain Valencia Basin Existing permits France 5 blocks awarded January 2011 Frontier contract terms 100% interest Barcelona 3D seismic planned Spain Drilling targeted for 2014/2015 subject to necessary consents Valencia Alta Mar-1 Alta Mar-2 Majorca Minorca New acreage applications Gandia Ibiza Blocks expected to be shortly gazetted by Government of Spain Benifayo Albufera Spain 18

19 Trinidad and Tobago Columbus Basin Trinidad bid round schedule Bid submitted 4 th September 2012 Grenada Cairn Bid Blocks Offered Open Licences Current Licences Cairn (Operator); Trinity - 1 block submission Competitive bid round (12 bids from 10 companies on 5 out of 6 blocks on offer) Trinidad Tobago Awards announcement scheduled November 2012 Venzuela 19

20 Cyprus and Lebanon East Mediterranean Levant Basin Cyprus bid round schedule Bids submitted May 2012 Cairn (Operator); Marathon Oil, CCEnergy S.A.L and Oranje-Naussau Energy B.V. - 2 block submission Syria Competitive bid round (33 bids from 20 companies on 9 out of 12 blocks on offer) Cyprus Bid Round 2012 Cyprus Awards expected H Lebanon NOBLE Lebanon bid round schedule (expected) Formal announcement ~Q Cyprus: Aphrodite Discovery December 2011 Lebanon Bid Round 2012 Bid submissions ~H Contract awards 2013 Cyprus Lebanon NOBLE Leviathan Discovery 16 Tcf (325km 2 ) NOBLE Tamar Field 8 Tcf Dalit Field 0.5 Tcf Syria 20

21 Cairn in 2012 Vision of balanced business Operated frontier exploration Non-operated lower risk exploration Sustainable production to fund future exploration Clear focus on exploration and appraisal North West Europe Frontier Greenland and Mediterranean Near term developing assets Catcher and Kraken to provide sustainable cash flow 2016 onwards Capital discipline with strong balance sheet >$500 mn plus stake in CIL Building blocks in place with future focus firmly on exploration 21

22 Investor Relations Contacts David Nisbet Group Corporate Affairs Carly Blackbourn Investor Relations Coordinator Tel: +44 (0) Tel: +44 (0) Follow us on Twitter Download our IR ipad App View our YouTube Channel 22