Cairn India- Corporate Presentation July 2011
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Transcript of Cairn India- Corporate Presentation July 2011
CAIRN INDIA
Corporate Presentation
July 2011
2
Disclaimer
These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financialcondition, future results of operations, future business plans and strategies. All such forward-lookingstatements are based on our management's assumptions and beliefs in the light of information available tothem at this time. These forward-looking statements are, by their nature, subject to significant risks anduncertainties and actual results, performance and achievements may be materially different from thoseexpressed in such statements. Factors that may cause actual results, performance or achievements to differfrom 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 useof technology, acts of competitors and other changes to business conditions. Cairn India undertakes noobligation to revise any such forward-looking statements to reflect any changes in Cairn India’s expectationswith regard thereto or any change in circumstances or events after the date hereof.
2.6%
3
Holding Structure
IPO December 2006
7.1%
Listed on BSE & NSE in January 20079.4%
Part of NIFTY index & DJIT30
52.1%
Over 200,000 Indian retail shareholders
Market Cap >USD13 billion; amongst India’s top 20
28.8%
FII
Vedanta Group
Institutions
Cairn PLC
Total Equity of 1,902 million shares; Free float ~19%*
DJIT30: Dow Jones India Titans 30 Index, *Free float excludes Vedanta Groups holding
Retail
As on 27July, 2011
4
World Class Asset Base
10 blocks in the PortfolioProduction Blocks
Rajasthan (RJ-ON-90/1)
Cairn (Operator)
ONGC
70%
30%
Exploration Potential
Rajasthan
RJ-ON-90/1 WI 70%
East Coast
KG-DWN-98/2 WI 10%
Cambay (CB/OS-2)
Cairn (Operator) 40%
ONGC
Tata Petrodyne
50%
10%
KG-ONN-2003/1
PKGM-1 (Ravva)
KG-OSN-2009/3
WI 49%
WI 22.5%
WI 100%
PR-OSN-2004/1 WI 35%
West Coast
CB/OS-2 WI 40%
WI 40%Ravva (PKGM-1) KK-DWN-2004/1
Cairn (Operator)
ONGC
Videocon
Ravva Oil
22.5%
40%
25%
12.5%
MB-DWN-2009/1
Sri Lanka
SL 2007-01-001
WI 100%
WI 100%
Q1 FY 2011-12: Average Daily Gross operated production at 171,801 boe; Cairn (Working Interest) at 99,640 boe
5
Growth Strategy
MaximisePotential inRajasthan
>3,000 km2 in BarmerBasin under contract
Resource base at 6.5bn boe
Monetise Barmer Hill(BH) & Other Fields;BH DoC filed, FDPunder preparation
Vision to produce 240kbopd**
Maximiserecovery fromproduction base
Increased Ravvareserves by 20% in2010
>16 years of low costoperations in Ravva
Initiatives to slowdown productiondecline – 4Dseismic, Infill drilling
GBA agreement forsharing gas from theshared reservoir inCB/OS-2
ExecuteRajasthan
development
Mangala currentproduction-125kbopd;potential to reach 150kbopd*
Crude transportsthrough Pipeline
MBA approved peakproduction at 175kbopd
Increased recoverythrough EOR; pilotongoing
Identifynew growthopportunities
Frontier explorationdrilling to commencein Sri Lanka
Exploration andAppraisal drilling inKG-ONN-2003/1
New plays inRajasthan
Existing portfolioenhancement
GBA: Gas Balancing Agreement, * subject to Joint Venture (JV) and GoI approval, ** subject to JV and GoI approval & additional investments
6
Financial Highlights Q1 FY 2011 - 12
Net Revenue
EBIDTA
Profit After Tax (PAT)
Cash Flow from Operations (CFFO)*
Quarterly EPS
Net Cash**
Gross Cumulative RJ Development Capex**
~USD 830 million
~USD 706 million
~USD 610 million
~USD 576 million
INR 14.3 per share
~USD 1,025 million
~USD 3,115 million
*CFFO is calculated as profit after tax (excluding other income) prior to non-cash expenses (non-cash employeecost, depreciation, depletion, amortisation, and deferred tax) and exploration costThe company started sharing Profit Petroleum with the GoI in the Rajasthan block at the rate of 20% under theProduction Sharing Contract (PSC) framework** as on 30 June, 2011
7
Financial Highlights
Price Realization (USD/boe) Gross Production (Kbopd) Revenue
92
104
691
830
808
95
172
161
174
165
67
74
68
Q1 FY11
Q1 FY12
Q4 FY11
Q3 FY11
Q2 FY11
184
577
0 50 100 150 200 0 200 400 600 800
USD Million
543
610
PAT
576
577
Cash Flow from Operations
62
341
448
Q1 FY12
Q4 FY11
Q3 FY11
Q2 FY11
Q1 FY11 108
337
455
0 200 600 800400USD Million
0 200 600 800400USD Million
8
Rajasthan - Frontier to Producing Basin
Exploration & AppraisalFrontier Exp.1995 - 2002
Development & Production
Mangala
Mangala
ProcessingTerminal
Bhagyam
Aishwariya
OilGas
Rajasthan
Raageshwari
Viramgam
Koyali
Gujarat
Kandla
Jamnagar/ Salaya
Bhogat
Tankers toCoastal Refineries
25 discoveries to date>3,000 km² approved development area
9
Rajasthan Update
Total Pipe Diameter790 mm (32”)
Heat Tube
MPT
Pipeline
High DensityPolyethylene Wrap
Poly UrethaneFoam Insulation
Mangala production ~125,000 bopd; reservoir performance as perexpectations
148 Mangala wells drilled; 96 completed, 64 producing
Saraswati commenced production in May 2011; currentlyproducing at the rate of 250 bopd
Produced and sold >50 mmbbls of crude to Indian refiners; grosscumulative field revenue in excess of USD 4 billion to date
Construction activity on Train 4 at MPT commenced; expected tocommission in Q4 CY 2011 to take the capacity to 205,000 bopd
Reservoir performance & surface facilities ready to supportMangala production of 150,000 bopd; subject to JV and GoIapproval
Bhagyam development on track; 33 wells drilled, expected tocommence production in Q4 CY 2011; subject to GoI approval
Development of Aishwariya underway; plan to commenceproduction in H2 CY 2012, subject to JV and GoI approval
Data as per 26 July, 2011 press release
10
Rajasthan - Crude Marketing
Mangala World’s longest continuously heated & insulated
pipeline operational
Delivery through ~590 kmheated pipeline
from Barmer to Salaya
Sales arrangements in place for 155,000 bopd• With PSU & Private refineries• Discussions continue with GoI for further nominations
Radhanpur
Crude Pricing
• Reference to comparable low sulphur crude - BonnyLight
ViramgamKandla
• Price represents a 10-15% discount to Brent on basisof prices prevailing for 12 months to June 2011
KoyaliJamnagar/ Salaya
Bhogat
Completion of Salaya to Bhogat section of pipelineincluding Bhogat terminal & marine facility scheduledfor H2 CY 2012
• Access to 75% of India’s refining capacity
Tankers to Coastal Refineries
Pipeline Route
Existing Pipelines
Refinery
11
Rajasthan - Future Resource And Value Potential
Gross InitialIn PlaceVolumes
~4 Billion boeIn Place
Most Likely
Prospective
Gas
140
250
Risked
ProspectiveResource
~6.5 Billion boe
~2.5 Billion boe in35+ prospects
GrossReserves, Resources 1
and Potential 2
ContingentIn Place
GIIP
OilSTOIIP
308BH
+ Others
20 additionaldiscovered
fields includingBarmer Hill
78
R & S 12
707MBAEOR
1 The independent estimates of Reservesand Contingent Resources recentlycarried out by D&M arein line with the CIL estimates
2 Top 35 prospects audited by D&Mrisked resource 178 mmbbls
468
293
A 66
B151
M477
2.1 Billion boe
MBA Fields,Raageshwariand Saraswati
R & S STOIIP
MBASTOIIP1,293
M B A R&SContingentResource
2P+2C MBA EORBarmer Hill+Other Fields
FDP approvedRisked
Prospects,Leads &Concepts
mmbblsmmbbls
Data as per 23 March, 2010 press release
Target
12
Rajasthan - Vision For Growth
MangalaProcessing Terminal
FDPApprovedProduction
MBA••••
Reservoir PerformanceEOR Pilot ImplementationBH Pilots and DevelopmentExploration and Appraisal
Technical andOperational
Capacity205,000 bopd
PotentialProduction
240,000 bopd
• JV Approvals• Additional SalesRegulatory
FDPApprovedProduction175,000bopd
Investment••••
Facilities and pipelineEOR full field implementationBH staged developmentExploration
13
Exploration Programme
I N D I A
Play based approach to building portfolio Diversity of basin, plays and environments Ongoing regional petroleum system studies “Drill Bit exploration”: >190 exploratory
/appraisal wells
KG-ONN-2003/1
Nagayalanka-1Z discovered;Further Exploration &
Appraisal drilling FY 2011-12
RAVVAInfill drilling inprogress
Major long term player Large proprietary database Experienced team Successful exploration over 10
years: Success ratio ~50%
RJ-ON-90/1Assessing new plays,generate new prospects
MB-DWN-2009/1Exploration activity
commenced; 2D seismicin Q1 CY 2012
KK-DWN-2004/1
Acquired 300 km2 3D;data processing in
progress
OPERATED
KG-DWN-98/2
3 appraisal wells drilled
KG-OSN-2009/33D seismic planned
by end 2011
PR-OSN-2004/1
Under Force Majeure
SL-2007-01-001
Drilling to commence in August2011 – 3 wells SRI LANKA
NON-OPERATED
India
14
Exploration - Sri Lanka Block (SL 2007-01-001)
Cairn Lanka 100% Working Interest (NOC back-i in 15%)
•
•
Block Area: ~3,000 km2
Water depth: 400 -1,900m
Extension of proven hydrocarbon play (Cauvery/ Mannar)
Under explored, frontier basin with multipleplays
SL-2007-01-001 Exploration Program
•5th generation drillship contracted fromJapan Drilling Company
SRI LANKA•Drilling to commence in August 2011; 3wells planned
50km
Capex Gross Net Financed By
15
Rajasthan – Capex & Funding
USD billion
Exploration (up to 2006)* 0.61 0.57
Development
Net Cash** 1.03
CY 2007 0.31 0.22 Existing debt facility** 0.68
1.70CY 2008 & 2009
CY2010
Total Capex up to CY 2010
Estimated CY 2011
Total Actual & Estimated
1.76
0.75
3.43
1.25
4.68
1.23
0.50
2.52
0.88
3.40
Total
Additional Sources
Cash flow from producing blocks i.e.Rajasthan, Ravva and CB
*Exploration Cost: During the initial years the entire exploration costs was borne by Cairn India and hence the net number is > 70%.** data as on 30 June, 2011
16
Engaging with the Community
Strategic Intent Proactive engagement with stakeholders Demonstrate leadership in corporate citizenship Partnering with communities through our
principles of respect, relationship andresponsibility
Areas of Focus Education Infrastructure Health Economic
Development
17
Summary
Rajasthan
•
•
•
•
•
•
•
Mangala production at its currently approved plateau of 125,000 bopdDelivery to domestic refiners through pipelineGross field revenue in excess of USD 4 billionEnhanced oil recovery potential; pilot ongoingWorld class resource base – focussed on delivery & growthVision to produce 240,000 bopdStrong economic contribution to the State of Rajasthan and Government of India
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 2.3/bbl*
Success through innovative application of technology
Increasing exploration potential; enhanced resource base through NELP VIII
Sri Lanka frontier exploration drilling campaign to commence in August 2011
* For the period FY 2010-11
18
Contact Details
Investor RelationsAnurag Mantri, Group Financial ControllerEmail: [email protected]: +91 – 98103 01321
MediaManu Kapoor, Director – Corporate Affairs & CommunicationsEmail: [email protected]: +91- 97178 90260
AddressCairn India Ltd4th Floor, Vipul PlazaSun City, Sector-54Gurgaon 122 002, Indiawww.cairnindia.com