News

Preliminary Results Announcement

8 March, 2017

Simon Thomson, Chief Executive, Cairn Energy PLC said:

“Cairn continues to deliver positive progress across its balanced portfolio.

2017 will see first oil from our North Sea developments and progression of an exciting ongoing exploration and appraisal drilling programme in Senegal, all against a backdrop of increased financial flexibility.

The company remains well-positioned to deliver further value for shareholders from multiple catalysts within the portfolio.”

HIGHLIGHTS

Senegal Exploration & Appraisal

  • Seven successful wells drilled to date in Senegal: two discoveries, four wells in 2016 and a further appraisal well just completed
  • SNE-5 appraisal well operations safely and successfully completed ahead of schedule and under budget
  • Stena DrillMAX drill ship is moving location to shortly commence operations on the Vega-Regulus (VR-1) well, ~5 km to the west of the SNE-1 discovery with the exploration target underlying the SNE field
  • VR-1 will also provide further appraisal data on the SNE field and results will help narrow field volumes and allow the Joint Venture (JV) time to integrate the results of SNE-5 prior to moving to SNE-6 to complete the planned interference test
  • Current 2C in place resources more than 2.7 billion barrels and the ongoing programme will further define the recovery potential of the field
  • Multiple exploration prospects have been identified: Cairn estimates further block wide exploration potential of ~500 mmbbls gross mean risked resource
  • Prospect inventory includes numerous material targets across four play types identified within a 30 kilometres (km) tie back radius to SNE field

Senegal Development

  • Decision on development concept selection expected in 2017, current plans include a phased development to capture the potentially extensive resource base
  • From 2018 onwards, Cairn and JV partners plan to submit the Exploitation Plan and proceed to a Final Investment Decision with first oil expected in the period 2021-2023
  • Woodside Petroleum Ltd (Woodside) entered the JV in 2016 bringing extensive experience in developing and operating floating production, storage and offloading (FPSO) facilities

UK & Norway

  • Catcher (Cairn 20% WI) and Kraken (Cairn 29.5% WI) developments in the UK North Sea on track for first oil from 2017; peak net production to Cairn of ~25,000 boepd
  • Skarfjell (Cairn 20% WI) development in Norway, subsea tie-back to nearby GjØa platform selected by JV as development concept
  • Five new licences awarded in Norway in Q1 2016, including Cairn’s first licence as Operator
  • Entry to the Barents Sea, Norway with three new licences awarded in Q2 2016, including one as Operator; region believed to have high potential for commercial oil discoveries
  • Seven new licences awarded in Norway in Q1 2017, including two as Operator and two existing licence extensions
  • Participated in two unsuccessful non-operated exploration wells: Aurelia in the Barents Sea (Cairn 10% WI) and Laverda in the UK (Cairn 36% WI)
  • Operated Licence application in the UK 29th Licensing Round, awards expected shortly

International

  • Western Sahara: Boujdour Maritime new Petroleum Agreement (Cairn 20% WI) with Operator Kosmos Energy, 3D seismic acquisition commences in 2017
  • Ireland - Cairn awarded Licence Option (LO) 16/18 in the Atlantic Ireland Licencing Round in H1 2016. Additional farm-in to a 70% WI and Operatorship in the adjacent LO 16/19 with Europa Oil & Gas with plans for 3D seismic in 2017. Cairn farm-in to a 30% WI in Frontier Exploration Licence (FEL) 2/14 in Southern Porcupine Basin with Providence Resources and Sosina; with one firm well in 2017

Financial

  • US$335 million (m) Group net cash at 31 December 2016
  • Norwegian tax receivable of US$26m at 31 December 2016
  • Reserve Based Lending bank facility remains undrawn with peak availability expected to reach US$350m to US$400m
  • Forecast development expenditure on Catcher and Kraken for 2017 is US$150m and committed drilling E&A expenditure for 2017 is estimated at US$170m, predominantly in Senegal. At 31 December 2016, remaining cash outflows in respect of activities undertaken in 2016 were expected to be US$37m

Subsequent to year end:

  • US$75m funding from FlowStream Commodities Ltd (FlowStream) in exchange for the proceeds from 4.5% of Kraken production, stepping down to 1.35% after 10% return achieved
  • NOK 500m (~US$60m) three year Norwegian Exploration Finance Facility, allowing the company to borrow against future Norwegian exploration tax refunds

Resources & Reserves

  • A total of 51.5 mmboe booked as 2P reserves and 239 mmboe booked as 2C Contingent Resources on a net working interest basis at 31 December 2016

India Tax Dispute

  • Confirmation received via the international arbitration that dividends of US$51m due from Cairn India Limited (CIL) are no longer restricted, Cairn has requested the immediate release of the sum from CIL
  • International arbitration proceedings are progressing in respect of Cairn’s claim under the UK-India Bilateral Treaty with the main Statement of Claim and the Statement of Defence now submitted

Enquiries:

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

Brunswick Group LLP

Webcast
There will be a live audio webcast of the results presentation available to view on the website (www.cairnenergy.com) at 9am GMT. 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 7:00am GMT.

Conference call
You can listen to the results presentation by dialling in to a listen only conference call at 9am GMT 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 11am on Wednesday 8 March 2017 until Wednesday 15 March 2017.

Recording dial-in details:

UK 0121 260 4861
All other locations +44 121 260 4861
Passcode 5220762#

Transcript

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

 

Related information
Preliminary Results Announcement Download PDF 0.79MB
Preliminary Results Transcript Download PDF 0.30MB
Preliminary Results Presentation Download PDF 4.62MB
Preliminary Results Webcast View