22 Aug 2017
Half-Year Report Announcement
Simon Thomson, Chief Executive, Cairn Energy PLC said:
Cairn continues to deliver strong progress across the business.
In the North Sea, Kraken has commenced production and Catcher is scheduled for first oil later this year. In Senegal, planning work has commenced on the phased development of the world class SNE field.
Cairn has also added to its exploration portfolio with exciting new opportunities in Norway, Ireland and Mexico creating additional drilling prospects in the near term.
With a strong balance sheet and imminent cashflows, Cairn remains well funded to create and capture value for our shareholders.
Senegal
- Joint Venture (JV) planning underway for phased development of SNE field, Cairn targeting production rates of 75,000-125,000 barrels of oil per day (bopd) with first oil planned 2021-2023
- Updated overall SNE 2C oil resource base of ~563 million barrels of oil (mmbbls)*, with additional recoverable gas resources of more than 1 trillion cubic feet (TcF)
- Cairn estimates up to 25 wells planned in initial development phase, targeting ~240 mmbbls principally in S500 lower reservoir
- Subsequent development phases to target resource base in S400 upper reservoir
- Engagement with major FPSO and subsea contractors commenced prior to formal tendering process later this year
- Targeting Evaluation Report and Exploitation Plan submission to Government of Senegal in 2018 for Final Investment Decision (FID) before end of 2018
- Evaluation of potential further exploration opportunities underway, including in the shallower water Rufisque block
*ERC Equipoise Limited (ERCE) estimate
Exploration new ventures
- New licences acquired in three countries: Norway, Ireland and Mexico in 2017, with drilling expected in 2018-2020
Finance
- US$254 million (m) Group cash at 30 June 2017
- Norwegian tax receivable of US$29m in H2 2017
- Reserves Based Lending (RBL) bank facility remains undrawn with expected peak availability of US$350-400m and ~US$210m at year end 2017
- FlowStream US$75m cash proceeds received in H1 2017
- Remaining 2017 capex for Catcher and Kraken development projects of US$35m and US$75m
- Exploration and appraisal (E&A) expenditure across the portfolio of US$150m in H2 2017
- Following merger of Cairn India Limited (CIL) and Vedanta Limited (VL), Cairn holds ~5% of VL, valued at US$824m at 30 June 2017
- Cairn remains unable to access its ~5% shareholding of VL pending resolution of the Indian tax dispute and dividends receivable of US$105m are fully impaired following an order directing payment from VL to the Indian Income Tax Department (IITD)
Developments
- Kraken (Cairn 29.5% working interest (WI)) production commenced as anticipated in Q2 2017 with facilities commissioning and production ramp up underway. Plateau production 50,000 bopd in 2018 with ~15,000 bopd net to Cairn
- Catcher (Cairn 20% WI) targeting first oil by year end 2017** with FPSO well advanced in Singapore. Plateau production 50,000 bopd with ~10,000 bopd net to Cairn
- Skarfjell (Cairn 20% WI) concept selection for field development, targeting FID in H1 2018. Expected plateau production 50,000 bopd with ~10,000 bopd net to Cairn
** Operator estimate
Enquiries to:
| Analysts/Investors | ||
|---|---|---|
| David Nisbet | Corporate Affairs | 0131 475 3000 |
| Media | ||
|---|---|---|
| Linda Bain | Cairn Energy PLC | 0131 475 3000 |
| Patrick Handley | Brunswick Group LLP | 0207 404 5959 |
| David Litterick | Brunswick Group LLP | 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 is available here. This can be viewed on PC, Mac, iPad, iPhone and Android mobile devices.
Presentation
Half-year report presentation (3.89MB)
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: | |
|---|---|
| United Kingdom (Local): | 020 3059 8125 |
| All other locations: | +44 20 3059 8125 |
A recording of the conference call will be available from 22 August 2017 until 29 August 2017.
| Recording Dial-in Details: | |
|---|---|
| United Kingdom: | 0121 260 4861 |
| United States: | 1 844 2308 058 |
| All other locations: | +44 121 260 4861 |
| Passcode: | 6576858# |
Transcript
Download Transcript (PDF 239KB)