Preliminary Results

Presentation
Cairn Energy PLC
13th March 2018
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.
Cairn Energy PLC

Value Creation Strategy

Cairn’s business model is to create, add and realise value for shareholders through exploration,
development and production of oil and gas within a self-funding business model

Create Value Add Value Realise Value

Identify Explore Appraise Develop Produce Return & Reinvest

3 Preliminary Results Presentation, March 2018

Finance
James Smith

4 Preliminary Results Presentation, March 2018

Finance

Group Funding
Significant  Cash at 31 December 2017: $86m
Financial
 Reserve Base Lending Facility: undrawn, ~$200m available at year end
Headroom
at Year End  2017 Norway tax receivable in 2018: $38m

 Kraken and Catcher development spend: ~$140m

 Currently committed exploration and appraisal spend: ~$95m
 Reserve Base Lending Facility: peak availability of $350m to $400m
2018
Guidance  Production guidance:
17,000 to 20,000 bbl/day, blended operating cost of $18/bbl
 Hedging strategy:
~5,800 bopd at a floor price of $58.4/bbl, ceiling price of $70/bbl

 Business plan not dependent on Indian dispute resolution, final

India international arbitration hearing scheduled for August 2018
(damages claim not less than ~$1.3bn)

5 Preliminary Results Presentation, March 2018

Finance

2017 Cashflow
USD $m Pre-award costs and E&A capex
500.0

450.0

29
400.0 60
75
350.0
103
300.0 335
Kraken: $98m
Catcher: $48m
250.0
67
200.0
Kraken Revenue: $20m
Royalties: $10m
150.0 Opex: ($22m)
146
100.0
15 8 30
50.0
86

0.0
Opening
Opening Cash FlowStream
FlowStream Norway
Norwegian UK UK
and and
Norway Senegal
Senegal International
International Admin,
Developments Admin,Financial, Operating
Operating Norway
Norway Tax Closing
Closing Cash
Cash Exploration
Exploration Norway / Other
/ Other Developments Financial,
FX, Other Cashflow
Cashflow Tax
Refund Cash
Finance Facility
Finance FX, Other Refund
Facility

6 Preliminary Results Presentation, March 2018

Finance

2018 Capex Guidance

US$m
250

35
200

35

150 25

235
70
100

50
70

0
Catcher Kraken Senegal Mexico, Ireland and UK / Norway Total 2018
Development Development International (post-tax) expected capex
Note: Capex guidance includes $35m cash outflows relating to 2017 activity

7 Preliminary Results Presentation, March 2018

Finance - Developments

Senegal – SNE
 SNE Development Phase 1
 Full field phased – FPSO Full Project
45%
 Exploitation plan approval targeted 2018 SNE Project Unlevered IRRs at FID
 Expenditure 40%

 Capex to first oil ~$800m (net to Cairn)

35%
 Development costs ~$12/boe
(60% development drilling) life of field 30%
 Operating Expenditure
 Production costs: ~$7/boe (life of field) 25%

 FPSO lease costs: ~$3-7/boe (life of field)

20%
 Economics
 Highly attractive even in lower oil price environment 15%

 10% return break even oil price ~$35/boe

10%
 Full project unlevered IRR at $60/boe, ~34%
 Funding 5%
 Work on project financing structures and pre-launch
preparation underway 0%
$50 Brent $60 Brent $70 Brent

8 Preliminary Results Presentation, March 2018

Finance - Developments

Norway – Nova (formerly Skarfjell)

 Nova Development
 Subsea tie-back to Gjøa platform 25%

 Nova Final Investment Decision (FID) H1 2018 Nova Unleveraged IRRs

 Expenditure
20%
 Capex to first oil ~$200m (net to Cairn)
 Development costs ~$15/boe life of field
15%
 Operating Expenditure

IRR (%)
 ~$7/boe at peak production
 Economics 10%

 10% return break even oil price ~$45/boe

 Unlevered IRR at $60/boe, ~17%
5%

 Funding
 Work underway to include in existing Reserve
Based Lending Facility 0%
$50 Brent
$50/bbl $60 Brent
$60/bbl $70 Brent
$70/bbl

9 Preliminary Results Presentation, March 2018

Finance

Delivering Long Term Sustainability

2018 2019 2020 2021
 Kraken and Catcher  Nova  Nova first oil
production ramp up, development
completion of  SNE project  SNE development
development drilling financing drilling drilling
 Nova Final Investment complete  SNE
 SNE first oil
Decision and amended development 2021 - 2023
RBL drilling

SNE Future Production

Nova
Catcher and Kraken

2018 2019 2020 2021 2022 2023

10 Preliminary Results Presentation, March 2018

Development and Production
Paul Mayland

11 Preliminary Results Presentation, March 2018

Development and Production

2018 Outlook – Further Progress Across All Assets

Senegal – SNE Norway – Nova UK – Kraken UK – Catcher
 Final FPSO
 Exploitation plan  PDO submission and  Optimise production
commissioning
submission and contract finalisation up to 50,000 bopd
entry to FEED with to ensure project  Ramp-up to plateau
 Completion of firm production (60,000
preferred captures current development drilling
contractor(s) cycle pricing bopd) H1 2018
(25 wells)
 Completion of firm
 Transfer of  PDO approval
development drilling
Operatorship and FID
(18 wells)

Future Current
Production

Senegal Nova Kraken / Catcher

(Net to Cairn (Net to Cairn (Net to Cairn 17,000
~40,000 bopd ~10,000 bopd
on plateau) on plateau) to 20,000 bopd in 2018)
12 Preliminary Results Presentation, March 2018
Development and Production

Senegal – SNE Development Milestones

2017
 Key deliverables
completed
 Geophysical,
Environmental Baseline
Survey and Geotechnical
surveys
 Passed concept select
 Appraisal completed
three years from
discovery
2018
 Tenders for FPSO and  Exploitation Plan submission  Work progressing on
Subsea Infrastructure to Government of Senegal H2 detailed concept, with
issued Q1 2018 2018 front end engineering
 Phase 1 ~240 million barrels and design (FEED)
 Redeployed FPSO beginning H2 2018
preferred development  Subsequent phases
>250 million barrels
option  First Oil 2021-2023
 Plus >1 Tcf Gas
 Environmental and  PSC provides for 25 year
 Plateau production term with 10 year
Social Impact 100,000 bopd gross extension(s)
Assessment (ESIA)
targeting H1 2018  Exploitation Plan targeted for  Subsequent phases
approval H2 2018 anticipated to follow
submission Phase 1 after 2-4 years

Timeline
Discovery Appraisal Concept FEED Detailed Design First Oil Production
Drilling Select & Fabrication

2014 2-4 years 3-5 years 2021-2023

13 Preliminary Results Presentation, March 2018

Development and Production

Senegal – SNE Phase 1 Development Moving Forward

 Subsurface drainage pattern
 Subsea architecture and layout SNE Development Schematic

Key decisions  Flow assurance

taken or studies  FPSO location
completed
 FPSO capacity
FPSO
 FPSO mooring selection
 Artificial lift technique

 ITT’s issued for:

Concept select  FPSO, SPS, SURF
finalised, ITTs
 Drilling packages to follow
issued
 Responses evaluated Q2/Q3 2018

 Supplier led solutions and field

Solutions proven technology being pursued
by JV

14 Preliminary Results Presentation, March 2018

Development and Production

Senegal – SNE Recovery

 Reservoir depth and productivity of recent and probable deepwater oil developments
 SNE fits well within West African analogues, with EURs/well ranging from 6-18 mmbbls, driven by shallow
normally pressurised reservoirs and low viscosity oil

Development well EUR (mmboe) Global Crude Characteristics

0 10 20 30 40 50 60 3.50
0 Mexico - Maya
SNE range, Senegal
West Africa 3.00 SNE sits in light
Brazil & Guyana
2 sweet category
Reservoir depth (km)

2.50

4 Kuwait Blend Arab Light

Sulphur (%wt)
2.00
OPEC Blend
6 USA- Mars
1.50
USA - North Slope Nigeria - Bonny Light
8 Forties
1.00
Chad - Doba
Senegal SNE Angola - Cabinda
10 Brent
0.50
US GoM Threshold of Girassol Jubilee
commerciality at US$50 oil WTI
12 0.00
20.0 22.0 24.0 26.0 28.0 30.0 32.0 34.0 36.0 38.0 40.0
FID 2012-2017 Probables Gravity
Source: Wood Mackenzie (°API)

15 Preliminary Results Presentation, March 2018

Development and Production

Norway – Nova Development

 Oil field ~16 km south west of  Two subsea templates  Q1 2018 JV awarded two major
Gjøa field tied back to Gjøa subsea contracts
platform for processing  Subsea Production System
 High quality Upper Jurassic
and export Pipeline and Subsea Construction
reservoir: light oil with gas cap 
 Gjøa will provide lift gas  Plan for Development and Operation
 Reserves 80 mmboe*
and also water injection (PDO - FDP) submission Q2 2018 and
 Peak production (net to Cairn) for pressure support approval Q3 2018
~10,000 bopd with associated gas
 First oil target 2021

PL884 PL885
Agat Stjerneskudd
PL748
PL748B
Oftenåsen PL747
PL747B PL828
Dione Havhest
PL790 PL928
Saturn Ex PL682
Norway Raudåsen
Tethys
Saturn
PL788 PL928
Morkel Saturn Ex
UK PL880
Terako Gjøa Platform
PL927 PL927
Caramel Caramel
Cairn Licence PL880
Terako
PL248J
Terako PL418
Cairn Operated Licence PL248J Updip
Terako
Updip PL248C
PL248I
Grosbeak
Nova
Bergand

Norway

PL877
Seil
Subsea
* Operator estimates

16 Preliminary Results Presentation, March 2018

Development and Production

UK – Kraken Production
 First oil H1 2017  Both process trains online  DC4 subsea installation planned
 Reserves updated but broadly  11 producers and 10 injectors for Q3 2018, and drilling /
consistent with FID values completion of remaining four
(2P 121 mmboe Gross) successfully complete and
online producing at capacity wells in Q3/Q4 2018
 Optimise Production up to
50,000 bopd in 2018  Operational efficiency  Regular liftings with strong
significantly improved in 2018 interest in crude from European,
 $2.3 bn full cycle capex
(down 25% from FID) US and Asian buyers

FPSO

Armada Kraken Subsea

17 Preliminary Results Presentation, March 2018

Development and Production

UK – Catcher Production
 First oil H2 2017  Production established  Ensco 100 jackup-rig
from Catcher and completing planned
 Reserves now upgraded from FID values
Varadero fields remaining 4 wells in initial
(2P 90 mmboe Gross) and satellite potential
phase
being evaluated  10 producers and 4
injectors successfully  Regular cargo liftings
 Ramp-up to 60,000 bopd in H1 2018
completed and underway at small premium
 $1.6 bn full cycle capex available for to Brent
(down 30% from FID) production / injection

BW Catcher FPSO Ensco 100

18 Preliminary Results Presentation, March 2018

Exploration
Eric Hathon

19 Preliminary Results Presentation, March 2018

Exploration

Full Cycle Exploration

Strategy
To generate value with an evolving portfolio of prospects
which mature into a choice of material drilling targets and
deliver consistent results on a three year rolling average NORWAY

UK
 Moving from Exploration  Drill ready  Future/Maturing IRELAND
and Appraisal to portfolio Opportunities
Development  UK  Ireland
 Senegal – SNE  Norway
 Mexico
 Norway – Nova
 Suriname MEXICO

Critical Success Factors

 An outstanding team
SENEGAL
SURINAME
 Compelling commercial, subsurface and above ground
risk
 Clear path to commerciality
 Operatorship and strategic partners

20 Preliminary Results Presentation, March 2018

Exploration

Atlantic Margin – Senegal

Analysis of significant well results
ongoing for future activities UK

Capitaine
 FAN SOUTH-1
 Well results integrated with FAN-1 basin
discovery to assess Greater Fan Complex Senegal
potential
 SNE NORTH-1
 Encountered deeper and separate reservoir
to SNE field – S400 and S500 Series Spica
reservoirs
 Has positive implications for further Cairn Licence
Carbonate
hydrocarbon potential Platform Edge
Merou SNE Gas
 Evaluation plan for Spica prospect approved SNE Oil
Discovery Gas
by Government providing potential future Discovery Oil
target Upper Cretaceous
Lower Albian

21 Preliminary Results Presentation, March 2018

Exploration

UK and Norway – Material Drilling Campaign Commenced

 Extensive portfolio across a variety PL854
Flipper

of plays in UK and Norway Norway PL722

Inca

 Barents Sea UK
PL856
Prinsesse

 Norwegian Sea
 Norwegian North Sea PL758
Lynghaug

 Drilling programme up to 10 wells

Nova
in 2018 / 2019 PL885
Stjerneskudd

 Targeting ~725 mmboe net to Cairn Norway PL748

Oftenåsen

unrisked resource (>1.5 billion boe gross PL828

unrisked resource) PL790 Raudåsen

Nova
Havhest

PL682
 Post-tax cost ~$60 MM net PL880
Terako
Tethys
Kraken PL682
Saturn

 Tethys currently operating Stavanger

Catcher P2184
 Raudåsen well spud Q1 2018 UK Cairn Operated Licence
Ekland

 45 day well Cairn Licence

Exploration 2018
Catcher
Exploration 2019
Edinburgh

22 Preliminary Results Presentation, March 2018

Exploration

Atlantic Margin – Ireland

 Extensive acreage position in Porcupine basin
FEL 2/04
FEL 2/04 & 4/08
 Multiple Play Types FEL 4/08
Cairn 38% (Op)
PVR 58% and Sosina 4%
Ireland
LO 16/18
 Tertiary Deepwater Fan and Channel prospects Cairn 100% (Op)
LO 16/18

 Cretaceous Fan and Channel Prospects LO 16/19

LO 16/19 TGS Crean

 Jurassic Tilted Fault Block and Truncation Trap Cairn 70% (Op)
Europa 30%
3D Survey

Prospects FEL 2/14

 Interest in >4,000 km2 in 5 licences FEL 2/14 (Druid/Drombeg)

Cairn 30%, PVR 56% (Op), Sosina 14%

 LO 16/18 and LO 16/19 licences covered by new TGS

multi-Client 3D
 Encouraging initial results
 Maturing prospectivity
 Drilled 53/6A well (Druid/Drombeg prospect)
southernmost well in Porcupine Basin
 Good reservoir development in both intervals but water
wet Albian channels and fans in LO16/18
5km

23 Preliminary Results Presentation, March 2018

Exploration

Atlantic Margin – Mexico

 Planning underway for 2019 / 2020 USA
drilling campaign
Mexico
 Block 7: ENI (45% operator), Cairn
(30%), Citla (25%)
 Block 9: Cairn (65% operator), Citla (35%)
 Four well programme; two wells per block
 >1 billion boe gross unrisked resource
across two blocks Premier Block 7
Zama-1 discovery

 Multiple 3D seismic-supported July 2017

400-800 mmbboe recoverable1

prospects
Block 9
 Offsetting world class oil discoveries Mexico
Block 7
 Exploration Plan submitted to
government Cairn Operated
ENI
Cairn Non-operated Amoca Discovery
 Approval starts 4 year licence period Licenced Blocks March 2017
>1 bn bboe in place2

 Looking at future bid rounds Future Bid Round Upgraded to 1.4 bn bboe
following Mizton-2

1 Premier estimates 2 Eni estimates

24 Preliminary Results Presentation, March 2018

Exploration New Ventures

Atlantic Margin – Suriname

Growing acreage position in Latin America Middle Cretaceous Plate
Tectonic Reconstruction

 Awarded Block 61 (finalising production

Suriname
sharing contract) Q1 2018 Senegal

 Cairn 100% WI, and Operatorship Cairn Senegal

Licences and
SNE Oil Discovery
 Demerara Plateau offsetting recent Araku Reconstructing the
well in Block 54 demonstrates presence of continents allows transfer
of Senegal play elements
hydrocarbons to conjugate South
America margin
 Potential future drilling opportunity Guyana Oil Guinea
Plateau
Discoveries

 13,000 km2 licence area VENEZUELA Demerara

Plateau
 Adds ability to farm down or swap into new
areas GUYANA

Onshore Suriname
Oil Fields FRENCH
Suriname GUIANA

BRAZIL

25 Preliminary Results Presentation, March 2018

Conclusion
Simon Thomson

26 Preliminary Results Presentation, March 2018

Conclusion

Active Programme Across Balanced Business

Current Future
Production

Kraken / Catcher Nova Senegal

(Net to Cairn 17,000 to 20,000 (Net to Cairn ~10,000 bopd (Net to Cairn ~40,000 bopd
bopd in 2018) on plateau) on plateau)

Exploration Drilling

Norway UK Mexico Senegal Ireland Suriname

27 Preliminary Results Presentation, March 2018

Conclusion

Sustainable Value Creation

Full Cycle E&P Business

Consistent Strategic Delivery
 Preliminary Results March 2013 Production
 Capital base re-geared to
exploration success
 Access to future cash flow to Development
fund exploration programme
 Appropriate equity interests in
operated, frontier exploration Exploration Exposure

Funding Flexibility
28 Preliminary Results Presentation, March 2018
Contacts
David Nisbet Paula Pratt
Group Corporate Affairs Investor Relations Co-ordinator
E-mail: E-mail:
david.nisbet@cairnenergy.com paula.pratt@cairnenergy.com
Telephone: Telephone:
+44 (0)7711 146 068 +44 (0)131 475 3094

www.cairnenergy.com

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29 Preliminary Results Presentation, March 2018