Preliminary Results
Cairn Energy PLC
27 March 2007
EMBARGOED FOR RELEASE AT 0700 27 March 2007
CAIRN ENERGY PLC
PRELIMINARY RESULTS ANNOUNCEMENT
HIGHLIGHTS
CORPORATE
• IPO of Cairn India completed in January 2007 raising $1.98bn
• Return of £3 per share to Cairn Energy PLC shareholders to be completed
in April 2007
• IPO proceeds of $600m retained by Cairn India - $300m available to Capricorn
OPERATIONAL
• Gross operated production 105,028 boepd (entitlement 24,523 boepd)
India
• Rajasthan midstream solution progressing well - alignment with ONGC on
pipeline evacuation, subject to Government of India (GoI) approval
• Rajasthan oil in place in excess of 3.6 billion barrels
• Rajasthan planned production of 150,000 bopd, including increased
Bhagyam production plateau target of 40,000 bopd
• EOR potential for recovery increase and plateau extension
• First oil production from Mangala on schedule for 2009
Bangladesh
• Drilling operations ongoing in Bangladesh - separate potentially high
impact exploration campaign planned for late 2007/early 2008
• Final Sangu gross booked reserves reduction of 213 bscf (increased from
the 187 bscf reduction announced in January 2007)
Nepal
• Agreement to acquire 100% interest in Blocks 3 and 5, subject to
required consents
• Seismic field operations planned to commence early 2008
FINANCIAL
• Average entitlement production 24,523 boepd (2005: 28,240 boepd)
• Cash generated from operations $207.2m (2005: $139.6m)
• Exceptional oil and gas write off $71.5m, relating to impairment on
Sangu
• Loss for the year of $82.0m (2005 profit: $79.1m)
• Net cash at year end of $701.3m (2005: $95.5m), including $751.8m
raised in pre IPO placing
• Expected gain of $1.1bn on IPO to be reported in 2007
Sir Bill Gammell, Chief Executive said:
'Cairn has undergone an extensive restructuring of its business with the IPO of
Cairn India and the formation of Capricorn.
We continue to be focused on delivering the Rajasthan development and ensuring
the upstream project remains on track to produce first oil in 2009.
Cairn India is aligned with its joint venture partner ONGC and intends to become
an active participant in midstream activities with a view to optimising value
from its exposure to the entire production and oil sales chain.
We are actively evaluating growth opportunities for Capricorn.'
Enquiries to:
Analysts/Investors
Bill Gammell, Chief Executive
Jann Brown, Finance Director Tel: 0131 475 3000
Mike Watts, Exploration & New Business Director
Media Tel: 0207 404 5959
Brunswick Group LLP:
Patrick Handley, Mark Antelme, Phoebe Buckland
Cairn India Media Enquiries
David Nisbet Tel: 00 91 99 1048 7715
Interviews with Sir Bill Gammell, Chief Executive of Cairn Energy PLC, and Rahul
Dhir, Chief Executive Cairn India Limited, in video/audio and text are now
available at http://www.cairn-energy.plc.uk/ www.cairnindia.com and at
www.cantos.com
Cairn Energy Live Audio Webcast
The webcast of the 2006 preliminary results presentation will be available at
0900 (UK time) on Tuesday 27 March 2007.
This will be available at the Cairn Energy PLC and Cairn India websites:
www.cairn-energy.plc.uk and www.cairnindia.com
An archived version of the webcast will be available later.
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.
CHAIRMAN'S STATEMENT
Corporate Overview
The last year has been momentous for Cairn as it set about creating an
autonomous business in India (Cairn India) and a separate company (Capricorn)
based in Edinburgh and more focused on exploration. Cairn Energy PLC continues
to be the parent company of each of these businesses.
The flotation and listing of Cairn India on the Bombay Stock Exchange and the
National Stock Exchange of India was successfully completed on 9 January 2007
raising a total of $1.98bn and leaving Cairn with a holding of 69% in Cairn
India. From the funds raised, approximately $940m is being returned to existing
Cairn shareholders, representing £3 per share. A further $600m has been retained
to fund ongoing working capital requirements in Cairn India. The balance of
around $300m, after fees of the transaction and debt repayment, is being
retained by Cairn and is therefore available for potential investment in new
business opportunities.
The IPO of Cairn India was the largest IPO to date in the Indian primary equity
markets and Cairn India currently has a market capitalisation in excess of $5
billion, ranking it the fourth largest oil and gas company in India. The IPO
attracted a number of high quality investors (including PETRONAS, which holds
10%) thereby signifying investor confidence in the Indian equity story, the
regulatory environment and the capital markets. Cairn India is committed to
continuing investment in India and is very much focused on creating shareholder
value by developing its world class resource base in Rajasthan and seeking to
continue Cairn's track record of exploration success.
As previously announced, all of the assets not transferred to Cairn India in the
IPO - those in Bangladesh, Nepal and certain exploration interests in northern
India - have been brought under Capricorn, which is currently a wholly owned
subsidiary of Cairn. The balance of proceeds raised in the IPO which are not
being returned to shareholders have been retained to support the growth of
Capricorn, with the aim of creating further value for shareholders in the
future.
The Group continues to be well placed financially with a strong balance sheet,
positive operating cash flows, a $850m syndicated revolving credit facility, and
cash generated from the flotation of the Indian business to drive forward the
Rajasthan development and pursue opportunities in other business areas.
Staff
The IPO was completed in less than 10 months from inception to execution and the
manner in which Cairn's staff dealt with not only the restructuring of the
business but also the additional workload of this complex transaction is a
testament to their dedication and efficiency.
In recognition of the fact that a significant part of Cairn India's future
operations will be focused on Rajasthan, a new Indian headquarters has been
established at Gurgaon on the outskirts of Delhi. Cairn's original Indian
headquarters, in Chennai, Tamil Nadu has now closed. This has necessitated the
relocation of a number of Cairn staff and their families and I would like to
thank them for their ongoing support.
Cairn Energy PLC (and Capricorn) will continue to be run from Edinburgh with
operational offices in Dhaka and Chittagong. In addition, Cairn has recently
opened an office in Kathmandu to support its proposed operational activities in
Nepal.
The Cairn Board held two meetings in India during 2006 and heard at first hand
about the support work carried out in Rajasthan during the floods that affected
the region in 2006.
We also continued our numerous community programmes in all of our operational
areas across South Asia.
Outlook
The restructuring of Cairn's activities into two separate businesses means that
each of these businesses is now positioned more effectively to pursue their
respective strategies.
Cairn India will focus on delivering the very significant future cash flows
associated with production from the Rajasthan discoveries, while also maximising
new investment opportunities in the rapidly growing Indian market.
In parallel with this and by using its established exploration and transaction
expertise, Capricorn will continue to follow a strategy of seeking to add
shareholder value through material growth.
Norman Murray
Chairman, 27 March 2007
CHIEF EXECUTIVE'S REVIEW
Overview
Just over three years ago Cairn made the transformational discovery of Mangala
in Rajasthan. Following successful completion of the IPO in January 2007 and its
establishment as an autonomous business, Cairn India is well placed to move that
discovery and others in Rajasthan forward in preparation for first oil
production in 2009.
In parallel with this, Capricorn is examining a number of opportunities for
growth.
India
The IPO of Cairn India is a natural evolution of our business, building on the
decade of remarkable achievement that Cairn has had in South Asia. The
successful completion of the IPO has created an autonomous business with an
experienced management team capable of developing and building on our world
class assets in India.
Cairn India's oil and gas fields at Ravva and CB/OS-2 continue to be the
cornerstone of its existing production. During 2006 both of these assets
benefited from revised gas prices and improved oil production. An ongoing
drilling programme at Ravva and new developments planned on CB/OS-2 will ensure
that these assets continue to underpin Cairn India's activites elsewhere in
India.
A step change in production is expected from 2009, when the first of the
Rajasthan developments is scheduled to come onstream. The Mangala field will be
brought on production first followed by the Bhagyam and Aishwariya fields and
the targeted gross production from these three fields is 150,000 bopd. Once
onstream, these fields will create enormous value for the GoI, the Rajasthan
State Government and for investors and other stakeholders in both Cairn and
Cairn India.
Laboratory studies have indicated that the early application of enhanced oil
recovery (EOR) techniques on the Mangala and Bhagyam fields is expected to
extend significantly the production plateau and ultimate reserves for these
fields. Further work is also planned to determine the best method of extracting
the oil from the potentially productive Barmer Hill formation.
India's exploration potential is huge, with the majority of the 26 hydrocarbon
basins in the country being under-explored. Cairn India has recently secured two
new exploration blocks in the NELP VI licensing round and now has an interest in
a total of 15 blocks in India. Cairn India is well placed to build on this asset
base and to bid for further exploration acreage that may be offered in future
licensing rounds.
Rajasthan Upstream
The upstream picture in Rajasthan is progressing well. Current estimates for the
proven and probable (2P) hydrocarbons in place for the six fields Mangala,
Bhagyam, Aishwariya, Saraswati, Raageshwari Oil and Raageshwari Deep Gas total
2.2 billion boe and the associated 2P reserves plus contingent resources are 864
million boe.
The additional smaller and/or low permeability fields and reservoirs have an
estimated 2P hydrocarbons in place volume of more than 1.4 billion boe. Over the
coming years, Cairn India's focus will be on converting as much of this
contingent resource base into 2P reserves as is economically possible.
In this regard, work is also ongoing to establish optimal EOR techniques in the
Rajasthan block to extend plateau production and maximise recovery factors.
Laboratory work is currently underway to establish the potential of these
technologies, particularly in relation to how they can be used in Mangala and
Bhagyam, the largest of the Rajasthan fields.
The first phase of development drilling on Saraswati has been completed and
development drilling is now underway on Raageshwari. Development drilling on
Mangala is scheduled to commence in 2008.
The GoI has approved the Declaration of Commerciality for Bhagyam, the second
largest field in Block RJ-ON-90/1, along with the Shakti field. FDPs for Bhagyam
and Shakti are expected to be submitted to the GoI in Q2 2007.
Rajasthan Midstream
Cairn India is aligned with its joint venture partner ONGC on a midstream
solution and intends to become an active participant in midstream activities
with a view to optimising value from its exposure to the entire production and
oil sales chain.
Through third party discussions and studies relating to the evacuation of the
crude, Cairn India now has a comprehensive understanding of the construction
schedule for a pipeline from the fields in Rajasthan. Specialist consulting
engineers have been retained to help develop this knowledge base further and to
assist Cairn India in addressing the associated technical and commercial issues
involved.
A proposal is currently being prepared for submission to the GoI seeking
approval to include within the FDP a pipeline to transport Rajasthan crude from
Mangala to a coastal terminal facility. The proposed routing of the pipeline
will allow access to the existing pipeline infrastructure and refinery network,
with a final coastal delivery point that also affords access to the majority of
India's refining capacity. It is proposed that the pipeline will fall within the
definition of the field development activities and will accordingly be funded
70% by Cairn India and 30% by ONGC. If the pipeline is included in the FDP, the
costs would be recoverable under the PSC. The conceptual engineering and route
identification for the pipeline are at an advanced stage.
Cairn India and ONGC are continuing discussions on the approach to pricing of
the Rajasthan crude.
Rajasthan Project Funding
Cairn India's funding for the initial upstream development will be provided from
ongoing cash generation, its retained proceeds of the IPO ($600m) and specific
banking facility ($850m). Funding for the midstream pipeline can also largely be
met from these sources. Once the Mangala oil field is onstream subsequent
development phases will be funded out of the resultant cash flows and borrowings
under the facility.
Bangladesh
A planned three well offshore drilling campaign in Bangladesh commenced in
January 2007 and is ongoing. However, due to operational delays the third well
in the sequence - an exploration well on the Hatia prospect - will now not be
drilled in the current weather window. A separate high impact exploration
campaign targeting both the Hatia and Magnama prospects is being planned for
late 2007/early 2008.
The first well drilled in the current programme was a down-dip appraisal well on
the South Sangu field, which unfortunately encountered a gas water contact in
the main reservoir. The gas volumes associated with South Sangu are now
considered to be non-commercial and it has been decided not to proceed with its
development.
Present drilling operations are focused on a Sangu infill development well
(Sangu-10). The principal objective of the Sangu-10 well is to test a
potentially undrained compartment in the main Sangu field. At the time of the
January 2007 operational update, it was expected that the results of Sangu-10
would be known by the time of the preliminary results announcement. However,
operational delays have meant that the results of this well are not yet
available. It has therefore been decided to reclassify 88 bscf of the 100 bscf
attributable to the success case from the 2P to the 3P category to reflect fully
the risk that this compartment may be partially drained. This has had the effect
of increasing the gross Sangu reserves reduction to 213 bscf compared to the 187
bscf announced in the January 2007 operational update.
The Sangu gas field, although now in decline, has produced in excess of 400 bscf
since commencement of production in 1998. To date, the Sangu joint venture has
generated gross revenue in excess of $830m.
Results and Financial Performance
Production for the year, on an entitlement interest basis, has decreased by 13%
to 24,523 boepd (2005: 28,240 boepd). This is primarily due to reduced gross
field production at Sangu with entitlement further impacted by reduced
development expenditure incurred in 2006. A breakdown of production is shown in
the table in the Operational Review on page 16.
The Group's production mix continues to be gas biased (approximately 73% on an
entitlement basis). This, combined with contractual gas price caps, resulted in
an average price realised by the Group for the year of $31.84 per boe (2005:
$25.44 per boe). The increase was mainly due to higher oil prices achieved.
Cairn's exposure to world oil prices will increase significantly when production
commences from Rajasthan.
Revenue for the year was $286.3m (2005: $262.6m).
Operating profit (pre exceptional items) and operating cash flows were $6.9m and
$207.2m respectively (2005: $55.6m and $139.6m). The Group made a loss after tax
of $82.0m (2005 profit: $79.1m), mainly due to the exceptional oil and gas write
down of $71.5m as a result of the downward reserves revision on Sangu.
On 9 January 2007, Cairn's Indian business was floated on the Bombay Stock
Exchange and the National Stock Exchange of India, pursuant to Cairn's strategy
of increasing the autonomy of that business and of realising value for
shareholders.
The total proceeds raised in the flotation were $1.98bn and on 27 February 2007,
the Company announced the proposed return of £481m (approximately $940m) of this
cash to shareholders of Cairn Energy PLC (equivalent to £3 per share). Cairn
India has retained $600m, with the remainder of the proceeds currently being
held to fund Cairn's ongoing business held by its wholly owned subsidiary
Capricorn. This provides financial flexibility to support the growth of
Capricorn, with the aim of creating and realising further value for shareholders
in the future.
The expected $1.1bn gain on disposal of the 31% interest in Cairn India in the
IPO will be included in the results for 2007.
The Group signed a $1bn syndicated revolving credit facility on 27 June 2006
($845m unutilised at 31 December 2006). Following the IPO, the $150m corporate
facility was cancelled and the remaining $850m transferred to Cairn India to
finance the Rajasthan development.
At the year end the Group had net cash of $701.3m, including funds raised in the
pre IPO placing of $751.8m (2005: net cash $95.5m).
Sir Bill Gammell
Chief Executive, 27 March 2007
OPERATIONAL REVIEW
Cairn's gross operated production across South Asia during 2006 was 105,028
boepd (net entitlement 24,523 boepd).
Operational activity has been largely focused on the continued appraisal of
Block RJ-ON-90/1 in Rajasthan. There are now a total of 20 discoveries in this
block including the world class Mangala and Bhagyam oil fields in the northern
part of the acreage. FDPs have been approved or are pending on 6 of these 20
discoveries.
An independent report prepared by DeGolyer and McNaughton in August 2006
estimates 3.4 billion boe in place in the combined discoveries in the Rajasthan
block. Cairn currently estimates there to be at least 3.6 billion boe
hydrocarbons in place, of which 2.2 billion are under active development
planning, with the remaining 1.4 billion identified in other fields under
review.
The Mangala, Aishwariya, Saraswati, Raageshwari Oil and Raageshwari Deep Gas
fields all have GoI development approval, while work on approvals for the
development of other discoveries, in particular Bhagyam and Shakti, is ongoing.
It is planned to submit FDPs for Bhagyam and Shakti in Q2 2007. The remaining
discoveries require further appraisal or evaluation.
Ongoing drilling campaigns are taking place in Eastern India and Bangladesh
while the other operated and non-operated exploration blocks in India and
elsewhere in South Asia are at various stages of evaluation.
RAJASTHAN BASIN - North West India
Development Area (Cairn India 70% (Operator); ONGC 30%)
Civil construction work is now underway to meet the planned first oil production
from Mangala in 2009. FDPs for the Mangala, Aishwariya, Saraswati and
Raageshwari fields have been agreed by the GoI and, in addition to the retained
IPO proceeds, bank funding has been secured for the development. The first phase
of development drilling on Saraswati has been completed and development drilling
is now underway on the Raageshwari Oil field.
All the permits and permissions required to begin major construction work have
been granted and Cairn India is in the process of procuring the major items of
long lead equipment required to establish the production facilities. It is
planned to contract three purpose built rigs which will be used to drill the
development wells. These state of the art rigs will allow the drilling of the
Mangala wells (some horizontal) and running completions which Cairn India
intends to use to deliver the first phase of the target production rate of
150,000 bopd for the Rajasthan fields.
The detailed engineering design for the Mangala development is progressing in
Houston; the design team comprises Cairn India personnel working alongside
consultants from Mustang Engineering. The assessment of the impact of the severe
flooding in Rajasthan last year on field development design and activities is
ongoing. Work carried out to date confirms the future viability of the current
design and facilities locations provided that reasonable flood protection
measures are implemented as a contingency (these are currently being designed).
The GoI has approved the Declaration of Commerciality for Bhagyam, the second
largest field in Block RJ-ON-90/1, along with the Shakti field. These fields are
contained within a second development area of 430 km2. It is currently
anticipated that the final FDPs for Bhagyam and Shakti will be submitted to the
GoI in Q2 2007. The current 2P base case for Bhagyam envisages a plateau
production rate of 40,000 bopd.
Two more recent small scale discoveries (Shakti North East and N-1-North) have
been retained within the Bhagyam/Shakti development area, together with the N-I,
N-E, N-P and Bhagyam South discoveries.
Enhanced Oil Recovery
Work is also ongoing to establish optimal EOR techniques in the Rajasthan block
with a view to extending plateau production and increasing ultimate recovery of
oil. Laboratory work is currently underway to establish the potential of these
technologies to facilitate early implementation of a field scale pilot project
at Mangala, the largest of the Rajasthan fields.
Northern Appraisal Area (Cairn India 100%)
In June 2005, Cairn was granted an 18 month extension (until 14 November 2006)
to complete its activities in the northern appraisal area to the north and west
of the Development Area. However, the work programme in this area was
interrupted by the severe flooding in Rajasthan in 2006. Cairn India has ceased
operations in this area and is in discussions with the GoI for a further
extension of part of this acreage to complete its planned work programme. As at
31 December 2006, expenditure incurred in this area was approximately $24m.
Reservoir Stimulation Programme
A programme of hydraulic fracture stimulation on various lower permeability
reservoirs was completed in 2006. The hydraulic fracture programme highlighted
the potential for new reserves in the lower permeability reservoirs. The
currently estimated hydrocarbons in place associated with these reservoirs is in
excess of 1 billion boe.
Test results from two Barmer Hill wells highlighted the potential to unlock
material oil resources in this reservoir at two of the three main fields.
Additional work is required to quantify the potential of the Barmer Hill
formation and will be addressed during the development drilling programme at
Mangala and Aishwariya.
Results on the Raageshwari deep gas field from a single tested zone in
Raageshwari-5 indicated a two-fold increase in productivity. Gas from the
Raageshwari wells will be utilised as fuel for the Mangala development and
subsequent northern area developments.
The Vijaya, Vandana, N-R and southern fields are also potential candidates for
future fracture stimulation to access new reserves and/or accelerate production.
Southern Fields
In the south of the Rajasthan block, first commercial production by trucking
from the Saraswati field is ready to start and will begin as soon as an
arrangement for oil sales has been finalised with the GoI. First commercial
production from the Raageshwari oil field is expected to commence within 12
months of Saraswati. The first phase of development drilling has recently been
successfully completed at Saraswati and development drilling is currently
underway in Raageshwari.
Block RJ-0NN-2003/1 (Cairn India 30%, ENI Operator)
In early Janauary 2007, the operator commenced acquisition of a 3D seismic
survey on this Rajasthan block, which was awarded in NELP V.
CAMBAY BASIN - Western India
Block CB/OS-2: Lakshmi and Gauri Gas Fields (Cairn India 40% (Operator))
Average gross production from the Lakshmi and Gauri fields for the year 2006 was
21,176 boepd, including 3,452 bopd.
The gas sales contracts (GSCs) with the buyers (GTCL and GPEC) have been
successfully re-negotiated whereby the contractual terms for volume commitment
and price have been reset and the Gauri gas field volume committed to the
current buyers under the new pricing scheme.
The CB/OS-2 joint venture is focused on further development of the field with a
planned offshore four well infill development drilling programme and also the
conversion of three wells into oil producing wells following the continuing
success of the Gauri-3 oil producer. The infill development drilling programme
is scheduled to commence in H2 2007.
Engineering studies to upgrade the oil handling facilities at Gauri to 9,000
bopd have been completed and this upgrade is scheduled for completion in Q3
2007. During 2006 oil sales to private buyers from Gauri averaged 3,452 bopd.
The onshore CB-X well has been completed and the pipeline installation is in
progress to deliver planned first gas in Q2 2007.
CB-ONN-2001/1 (Cairn India 30%, ONGC Operator)
Following the acquisition of an 89 km2 3D seismic programme two wells were
drilled on this block in 2006 - one encountered sub-commercial quantities of oil
and the other was dry. One further well is currently operating prior to making a
decision on whether to proceed to the next phase.
CB-ONN-2002/1 (Cairn India 30%, ONGC Operator)
Following the acquisition of a 100 km2 3D seismic programme on this block, three
wells are scheduled to be drilled during 2007.
GS-OSN-2003/1 (Cairn India 49%, ONGC Operator)
The operator is currently acquiring a 3D marine seismic programme on this block.
KRISHNA-GODAVARI BASIN - Eastern India
Ravva (Cairn India 22.5% (Operator))
Average gross production from the Ravva field for the year 2006 was 61,595 boepd
(comprising average oil production of 49,695 bopd and average gas production of
71.4 mmscfd).
The ceiling prices under each of the Ravva GSCs have been increased following
re-negotiation with the buyer (GAIL). The ceiling price for associated gas has
increased by 18% and the ceiling price for non-associated gas has increased by
30%.
An onshore exploration well (RX-9), spudded in June 2006, was plugged and
abandoned after encountering non-commercial quantities of hydrocarbons.
An extensive offshore infill, appraisal and exploration drilling programme on
Ravva commenced in October 2006. The first appraisal well (RD-7) encountered oil
and gas in the main producing intervals at Ravva with 38 metres of net oil pay.
The second well (RD-8), an appraisal well on one of the main Ravva fault blocks,
encountered 16 m net oil pay. In addition a 3.5 metres thick unprognosed sand
was encountered in an oil leg in RD-8. Production from RD-7 commenced in
December 2006 and from RD-8 in January 2007.
The RC-5 well has been completed and commenced production in March 2007. A
subsequent workover well on RC-3 was also successfully carried out in March
2007. The rig is currently operating on a further infill well (RE-4).
Two exploration prospects (MM 301 & LM 403) are scheduled to be drilled in Q2
2007.
KG-DWN-98/2 (Cairn India 10%, ONGC (Operator))
Three exploration wells were drilled in water depths of 600 metres to 1200
metres during 2006. Two discovered gas, one of which flowed at a rate of
approximately 9 mmscfd and the third was dry. In addition, 1,208 km2 of 3D
Q-marine seismic data was acquired on this block.
The UD-1 ultra-deep water exploration well, located 140 km south of Ravva, was
spudded in late September 2006 in 2,841 metres water depth after the acquisition
and interpretation of an additional 255 km of 2D seismic data. The well
encountered gas in a secondary objective and options for further appraisal are
currently under consideration.
KG-ONN-2003/1 (Cairn India 49% ONGC (Operator))
Plans are underway to commence a seismic acquisition programme of 2D and 3D data
on this block in late 2007.
NELP VI
Cairn India has secured an interest in two new exploration blocks in India -
PR-OSN-2004/1 and KK-DWN-2004/1 - in NELP VI.
There was an unprecedented level of interest in this latest licensing round,
with 165 bids submitted for 52 blocks and a total of 68 companies bidding, 20 of
which were foreign firms participating in NELP for the first time.
To date, 80% of the 26 basins identified in India are under-explored and Cairn
India intends to apply for further acreage that may be offered in forthcoming
licensing rounds.
HIMALAYAN FORELAND BASIN - Northern India
Ganga Valley
GV-ONN-2002/1 (Cairn India 50% (Operator), Capricorn 50%)
An aeromagnetic survey commenced in January 2007 and is expected to be completed
in April 2007. This will be followed by a 2D seismic acquisition programme.
GV-ONN-97/1 (Cairn India 15%, Capricorn 15%; ONGC Operator)
The first exploration well in the Himalayan Foreland Basin in which Cairn India
and Capricorn participated (Tisua-1) was plugged and abandoned after
encountering residual oil shows.
GV-ONN-2003/1 (Cairn India 24% (Operator), Capricorn 25%)
Subject to receipt of the requisite approvals, a 2D seismic acquisition
programme is scheduled to commence in Q4 2007 or early 2008.
VN-ONN-2003/1 (Cairn India 24% (Operator), Capricorn 25%)
Seismic reprocessing is underway and a 2D seismic acquisition programme is
expected to commence in 2008.
HIMALAYAN FORELAND BASIN - Nepal
Blocks 1,2,4,6 & 7 (Capricorn 100% (Operator))
Assuming continued improvement in the political climate in Nepal, it is
anticipated that Capricorn will be in a position to commence seismic field
operations in early 2008, subject to agreement with the Government to cease the
contractual force majeure currently in place in respect of these blocks.
In addition, Capricorn has reached agreement with Texana for the acquisition of
a 100% interest in Blocks 3 and 5 in Nepal, subject to contract and required
Government approvals.
During 2006, a new office was established in Kathmandu in readiness for proposed
operational activity in country.
BENGAL BASIN - Bangladesh
Sangu (Capricorn 75% (Operator))
The Sangu gas field, although now in decline, has produced in excess of 400 bscf
since commencement of production in 1998. To date, the Sangu joint venture has
generated gross revenue in excess of $830m.
A planned three well offshore drilling programme in Bangladesh commenced in
January 2007, comprising one appraisal well (South Sangu-3), one development
well (Sangu-10, which is targeted at a potentially undrained compartment in the
main Sangu field) and one exploration well (Hatia-1).
South Sangu-3 encountered non-commercial quantities of gas and was plugged and
abandoned. The South Sangu discovery will now not be developed.
The Sangu-10 well is currently operating behind schedule and as a result, the
Hatia-1 exploration well cannot be drilled in the current weather window. A
separate potentially high impact exploration drilling campaign targeting both
the Hatia and Magnama prospects is therefore being planned for late 2007/early
2008.
In addition to the above, well intervention work has been undertaken on some of
the existing producing wells at Sangu, increasing production by approximately
10%.
Blocks 5 & 10 (Capricorn 90% (Operator)).
A 392 km 2D seismic survey has recently been completed on Block 10 and a further
296 km 2D survey has been completed on Block 5. Processing of this data is close
to completion.
Block 7 (Capricorn 45%)
A 2D seismic survey of 1,054 km was acquired during 2006 and evaluation of the
potential of this block is ongoing.
GROUP PRODUCTION
The Group's average entitlement production for 2006 was 24,523 boepd net to
Cairn compared to 28,240 boepd in 2005.
Gross field 61,595 21,176 22,257 105,028
Working interest 13,859 8,470 16,693 39,022
Entitlement interest 6,504 8,088 9,931 24,523
Cairn's current production is 73% gas: 27% oil. This high gas weighting,
combined with contractual caps on the gas price received means that the average
price per boe in 2006 was $31.84. On commencement of oil production from
Rajasthan, the majority of Group production will be oil (currently estimated to
be approximately 90%). As a direct consequence of this, the Group will become
much more highly geared to prevailing world oil prices.
GROUP RESERVES
The table below shows reserves information at the end of 2006 on an entitlement
basis for the Group. For accounting and reserves purposes, the Group has used an
oil price assumption of $30 per bbl (real) (2005: $20 per bbl).
Reserves Produced in Additions in Revisions in Reserves
2006 2006 2006
31.12.05 mmboe mmboe mmboe 31.12.06
mmboe mmboe
India 208.4 (5.3) 0.1 (17.5) 185.7
Bangladesh 29.5 (3.6) 0.0 (15.6) 10.3
Total 237.9 (8.9) 0.1 (33.1) 196.0
On a direct working interest basis, reserves as at 31 December 2006 totalled
230.5 mmboe (2005: 275.7 mmboe), comprising 216.0 mmboe in India and 14.5 mmboe
in Bangladesh.
India Reserves
FDPs for the Mangala, Aishwariya, Saraswati and Raageshwari fields have been
approved by the GoI and the associated net entitlement 2P reserves until 2020
for Mangala, Saraswati and Raageshwari were booked in 2005. The current proposed
development sequence for the Rajasthan northern fields is Mangala, Bhagyam and
Aishwariya. The timing of the Aishwariya investment is dependent on the timing
of the Bhagyam development, so a decision on the booking of the Aishwariya
reserves will be deferred until the Bhagyam FDP and associated expenditure have
been approved. It is planned to submit FDPs for Bhagyam and Shakti to the GoI in
Q2 2007.
The downward revision to India reserves of 17.5 mmboe in 2006 is mainly as a
result of the change in the Group's oil price assumption.
Bangladesh Reserves
Sangu gross proven and probable (2P) reserves have been reduced by a total of
213 bscf. Of this, 69 bscf is attributable to poorer than predicted production
performance from the field post the infill drilling programme in 2005, with
another 56 bscf being attributable to a decision to reclassify the reserves
associated with Sangu gas compression to the contingent resources category. The
remaining reduction of 88 bscf is associated with the reclassification from the
probable (2P) to the possible (3P) reserves category for the reasons set out in
the Chief Executive's Review on page 8.
The impact of these adjustments is to reduce current estimated Sangu gross 2P
booked reserves to 116 bscf (10.3 mmboe on a net entitlement basis), which
represents approximately 5% of the total estimated currently booked Group
reserves for 2006.
FINANCIAL REVIEW
Cairn continues to be well placed financially with a strong balance sheet,
positive operating cash flows, a $850m syndicated revolving credit facility, and
cash generated from the flotation of the Indian business to drive forward the
Rajasthan development and pursue opportunities in other business areas.
Key financial performance indicators
2006 2005 % Increase/
(Decrease)
Production (boepd)* 24,523 28,240 (13.2)
Average price per boe ($) 31.84 25.44 25.2
Revenue ($m) 286.3 262.6 9.0
Average production costs per boe ($) 6.36 4.87 30.6
Operating profit pre exceptional items 6.9 55.6 (87.6)
Exceptional items **(71.5) 15.3 (567.3)
(Loss)/profit before tax ($m) (90.6) 101.2 (189.5)
(Loss)/profit after tax ($m) (82.0) 79.1 (203.7)
Cash generated from operations ($m) 207.2 139.6 48.4
Net assets ($m) 681.2 757.6 (10.1)
Net cash ($m) ***701.3 95.5 634.3
* on an entitlement interest basis
** relates to impairment on Sangu
*** includes $751.8m raised in pre IPO placing
PROFIT AND LOSS
Turnover
Production for the year on an entitlement interest basis has decreased by 13% to
24,523 boepd (2005: 28,240 boepd). This is primarily due to reduced gross field
production at Sangu, with entitlement also impacted by reduced development
expenditure incurred in 2006.
The Group's production mix continues to be gas biased (approximately 73% on an
entitlement basis) with contractual caps on the prices realised. This results in
an average price realised by the Group for the year of $31.84 per boe (2005:
$25.44 per boe). The increase is due to a higher oil price environment and a
revision of the pricing for gas sold from Ravva and CB/OS-2.
Revenue for the year was $286.3m (2005: $262.6m).
Gross Profit
Cost of sales for the year was $222.4m (2005: $168.8m). This includes a write
off of unsuccessful exploration costs and general exploration expenditures of
$62.0m (2005: $26.9m) in accordance with the Group's successful efforts based
accounting policies. The increase is partly due to the write off of expenditure
on relinquished areas in Rajasthan.
Production costs for the year were $56.9m (2005: $50.2m) with the increase due
mainly to stock movements. Production costs for 2006 were $6.36 per boe compared
to $4.87 per boe in 2005. Production costs also include pre-exploration costs
that are expensed.
The average Group rate for depletion and decommissioning has increased by 29.9%
to $11.56 per boe (2005: $8.90 per boe), mainly as a result of the downward
reserves revision at the year end for Sangu as outlined in the Chief Executive's
Review on page 8.
The Group generated a gross profit of $63.9m (2005: $93.7m).
Profit for the Year
Administrative expenses for the year were $60.3m (2005: $41.2m). This includes a
charge of $18.5m (2005: $10.0m) for share based payments in accordance with IFRS
2 (including IPO related awards to certain senior executives of Cairn India) and
associated national insurance contributions. Administrative expenses were also
increased by one-off reorganisation costs in connection with the IPO.
Net finance costs for the year were $26.0m (2005: net finance income $30.3m),
including a foreign currency exchange loss of $13.0m (2005: gain $27.1m) and a
$9.7m (2005: nil) fair value charge in respect of foreign exchange options
entered into to manage the currency exposure on funds raised in the IPO, which
have since been unwound. Realised exchange rate losses arose primarily due to
the treatment under IFRS of exchange movements on intra-group funding arising
from the weakening of the US dollar against Sterling in the year.
The $8.6m tax credit (2005: $22.1m charge) arises principally due to the
exceptional oil and gas write down, increased depletion and decommissioning
charges and the write off of unsuccessful exploration costs, all of which reduce
the deferred tax provision.
Exceptional Items
The exceptional oil and gas write down of $71.5m relates to impairment on Sangu
arising under IAS 36 due to the downward reserves revision at the year end (as
outlined in the Chief Executive's Review on page 8). The prior year exceptional
gain of $15.3m relates to the gain arising on the sale of assets to ONGC.
After the exceptional charge, the Group made a loss for the year of $82.0m
(2005: profit $79.1m).
BALANCE SHEET
Capital expenditure
Capital expenditure during the year was $284.0m, comprising $161.0m on
exploration/appraisal activities, $110.5m on development activities and $12.5m
on other fixed assets (2005: $241.8m - $193.1m exploration/appraisal, $41.0m
development and $7.7m other). The exploration/appraisal expenditure during the
year relates principally to the continued drilling programme in Rajasthan. The
majority of the development expenditure was pre-development expenditure on
Rajasthan. Further development expenditure was incurred on Ravva and Sangu
pursuant to the drilling activites detailed in the Operational Review.
CASH FLOW
Cash flows from operating activities
Cash generated from Group operations increased to $207.2m (2005: $139.6m).
Interest paid was $5.6m (2005: $1.2m). Tax payments during 2006 were $12.2m
(2005: $6.6m).
Cash flows from investing activities
Cash outflow from capital expenditure during the year was $281.6m, made up of
$157.5m exploration/appraisal expenditure, $115.0m development expenditure and
$9.1m other expenditure. (2005: $290.9m - $218.3m exploration/appraisal, $64.9m
development and $7.7m other). Pre IPO placing proceeds of $751.8m were received
prior to the year end and are also included in deferred income. The balance of
the proceeds were received in 2007.
Cash flows from financing activities
Purchases of own shares by the ESOP Trust during the year were $21.7m (2005:
$17.2m). Arrangement and facility fees were $17.1m (2005: nil).
Net assets/net funds
Net assets at 31 December 2006 were $681.2m (2005: $757.6m). At the year end,
the Group had net cash of $701.3m, including $751.8m raised in the pre IPO
placing (2005: net cash $95.5m).
The Group signed a $1bn syndicated revolving credit facility on 27 June 2006
($845m unutilised at 31 December 2006). On 22 November 2006, an amendment
agreement was signed, which became effective on 31 January 2007, to cancel the
$150m corporate facility and transfer the remaining $850m to Cairn India to
finance the Rajasthan development. Drawings under the facility are based on
LIBOR.
IPO Transaction
On 9 January 2007, the Group's Indian business was floated on the Bombay Stock
Exchange and the National Stock Exchange of India, pursuant to Cairn's strategy
of increasing the autonomy of that business and of realising value for
shareholders.
The total proceeds raised in the flotation were $1.98bn with $751.8m pre-IPO
placing funds included in net cash at the year end. On 27 February 2007, the
Company announced the proposed return of £481m (approximately $940m) of this
cash to shareholders of Cairn Energy PLC (equivalent to £3 per share). Cairn
India has retained $600m, with the remainder of the proceeds currently being
held to fund Cairn's ongoing business held by its wholly owned subsidiary
Capricorn. This provides financial flexibility to support the growth of
Capricorn, with the aim of creating and realising further value for shareholders
in the future.
The expected $1.1bn gain on disposal of the 31% interest in Cairn India in the
IPO will be included in the results for 2007.
I would like to take this opportunity to thank all of the staff and advisers
involved in this unique and complex transaction for their hard work and
commitment, without which the IPO could not have been achieved in such a short
timescale; a remarkable achievement.
Jann Brown
Finance Director, 27 March 2007
Cairn Energy PLC
Group Income Statement
For the year ended 31 December 2006
Group Group
2006 2005
$'000 $'000
______________________________________________________________________________
Revenue 286,304 262,562
Cost of sales
Production costs (56,931) (50,235)
Unsuccessful exploration costs (62,018) (26,867)
Depletion and decommissioning charge (103,487) (91,740)
______________________________________________________________________________
Gross profit 63,868 93,720
Other operating income 3,340 3,116
Administrative expenses (60,323) (41,204)
Exceptional impairment of oil and gas (71,455) -
assets
Exceptional gain on sale of oil and gas assets - 15,272
______________________________________________________________________________
Operating (loss)/profit (64,570) 70,904
Finance income 4,603 32,543
Finance costs (30,609) (2,236)
______________________________________________________________________________
(Loss)/profit before taxation (90,576) 101,211
Taxation credit/(expense) on (loss)/profit 8,559 (22,139)
______________________________________________________________________________
(Loss)/profit for the year attributable to the equity
holders of the parent (82,017) 79,072
______________________________________________________________________________
Earnings per ordinary share - basic (cents) (52.02) 50.37
Earnings per ordinary share - diluted (cents) (52.02) 50.10
______________________________________________________________________________
Cairn Energy PLC
Group Statement of Changes in Equity
For the year ended 31 December 2006
Group Group
2006 2005
$'000 $'000
______________________________________________________________________________
Opening equity 757,598 711,197
Currency translation differences 10,725 (23,893)
Capital reduction in subsidiary - -
______________________________________________________________________________
Total income/(expense) recognised directly in equity 10,725 (23,893)
(Loss)/profit for the year (82,017) 79,072
______________________________________________________________________________
Total recognised income and expense for the year (71,292) 55,179
______________________________________________________________________________
New shares issued in respect of employee share options 3,219 3,782
Share-based payments 13,304 4,592
Cost of shares purchased (21,659) (17,152)
______________________________________________________________________________
Closing equity attributable to the equity holders 681,170 757,598
______________________________________________________________________________
Cairn Energy PLC
Group Balance Sheet
As at 31 December 2006
Group Group
2006 2005
$'000 $'000
______________________________________________________________________________
Non-current assets
Intangible exploration/appraisal assets 419,239 321,855
Property, plant & equipment - development/
producing 394,010 456,929
assets
Property, plant & equipment - other 5,891 4,158
Intangible assets - other 6,724 2,601
Investments 96 96
Deferred tax assets 18,911 2,606
______________________________________________________________________________
844,871 788,245
______________________________________________________________________________
Current assets
Inventory 4,615 5,533
Trade and other receivables 218,159 124,725
Bank deposits - 20,000
Cash and cash equivalents 856,266 75,509
______________________________________________________________________________
1,079,040 225,767
______________________________________________________________________________
Total assets 1,923,911 1,014,012
______________________________________________________________________________
Current liabilities
Trade and other payables 897,232 94,736
Obligations under finance leases 1,380 -
Provisions 6,845 -
Derivative financial instruments 9,694 -
Income tax liabilities 6,064 7,550
______________________________________________________________________________
921,215 102,286
______________________________________________________________________________
Non-current liabilities
Loans and borrowings 155,000 -
Obligations under finance leases 3,092 -
Provisions 24,740 17,456
Deferred tax liabilities 138,694 136,672
______________________________________________________________________________
321,526 154,128
______________________________________________________________________________
Total liabilities 1,242,741 256,414
_______________________________________________________________________________
Net assets 681,170 757,598
______________________________________________________________________________
Equity
Called-up share capital 25,870 25,775
Share premium 201,019 197,895
Shares held by ESOP Trust (55,756) (37,311)
Foreign currency translation 2,798 (7,927)
Other reserves 37,284 37,284
Capital reserves - non distributable 45,331 45,331
Capital reserves - distributable 178,429 178,429
Retained earnings 246,195 318,122
______________________________________________________________________________
Total equity attributable to the equity holders 681,170 757,598
______________________________________________________________________________
Cairn Energy PLC
Group Statement of Cash Flows
For the year ended 31 December 2006
Group Group
2006 2005
$'000 $'000
______________________________________________________________________________
Cash flows from operating activities
Cash generated from/(used in) operations 207,199 139,621
Interest paid (5,599) (1,201)
Income tax paid (12,184) (6,563)
______________________________________________________________________________
Net cash generated from/(used in) operating activities 189,416 131,857
______________________________________________________________________________
Cash flows from investing activities
Expenditure on exploration/appraisal assets (157,535) (218,324)
Expenditure on development/producing assets (114,995) (64,921)
Purchase of property, plant & equipment - other (1,346) (4,079)
Purchase of intangible assets - other (7,779) (3,623)
Purchase of investments - -
Proceeds on disposal of exploration/appraisal assets - 91,930
Proceeds on disposal of development/producing assets - 35,574
Proceeds on disposal of property, plant & equipment 20 95
Movement in funds on bank deposit 20,000 (5,656)
Interest received 5,568 4,378
______________________________________________________________________________
Net cash from/(used in) investing activities (256,067) (164,626)
______________________________________________________________________________
Cash flows from financing activities
Payments for IPO costs (23,276) -
Proceeds from IPO pre-placement 751,849 -
Arrangement and facility fees (17,074) -
Proceeds from issue of shares 3,219 3,782
Purchase of own shares (21,659) (17,152)
Payment of finance lease liabilities (285) -
Proceeds from borrowings 155,000 -
______________________________________________________________________________
Net cash flows from/(used in) financing activities 847,774 (13,370)
______________________________________________________________________________
Net increase/(decrease) in cash and cash equivalents 781,123 (46,139)
Opening cash and cash equivalents at beginning of year 75,509 122,961
Exchange (losses) on cash and cash equivalents (366) (1,313)
______________________________________________________________________________
Closing cash and cash equivalents 856,266 75,509
______________________________________________________________________________
Reconciliation of operating (loss)/profit to net cash inflow from operating
activities
Group Group
2006 2005
$'000 $'000
Operating (loss)/profit (64,570) 70,904
Depletion, depreciation, decommissioning and amortisation 110,494 96,680
Share based payments charge 13,304 4,592
Inventory movement 918 (3,373)
Trade receivables movement (7,037) (16,590)
Trade payables movement 15,139 14,551
Exceptional gain on sale of oil and gas assets - (15,272)
Movement in other provisions 5,762 (39,048)
Gain on sale of other non current assets (2) (41)
Impairment write off 71,455 -
Unsuccessful exploration costs 62,018 26,867
Foreign exchange differences (282) 351
______________________________________________________________________________
Net cash inflow from operating activities 207,199 139,621
______________________________________________________________________________
Net Funds
Group At 1 January Cash flow New Finance Exchange At 31
2006 Leases movements December 2006
$'000 $'000 $'000 $'000 $'000
Bank deposits 20,000 (20,000) - - -
______________________________________________________________________________
Bank deposits 20,000 (20,000) - - -
______________________________________________________________________________
Cash at bank 15,831 12,779 - (1,037) 27,573
Short term
deposits 59,678 768,344 - 671 828,693
______________________________________________________________________________
Cash and cash
equivalents 75,509 781,123 - (366) 856,266
______________________________________________________________________________
Bank loans - (155,000) - - (155,000)
______________________________________________________________________________
Net cash 95,509 606,123 - (366) 701,266
______________________________________________________________________________
Finance leases - 953 (5,432) 7 (4,472)
______________________________________________________________________________
Net funds 95,509 607,076 (5,432) (359) 696,794
______________________________________________________________________________
The segment results for the year ended 31 December 2006 are as follows:
Cairn India Capricorn Energy Other Group
Limited Group Limited Group 2006
$'000 $'000 $'000 $'000
Revenue from sale of oil,
gas and condensate 221,956 63,753 - 285,709
Tariff income 595 - - 595
Total revenue 222,551 63,753 - 286,304
Cost of sales (143,751) (78,685) - (222,436)
Gross profit 78,800 (14,932) - 63,868
Segmental operating
profit/(loss) 119,725 (143,675) (40,620) (64,570)
Cost of sales in the
segment results above
includes:
Production costs 38,585 18,346 - 56,931
Unsuccessful exploration
costs 56,650 5,368 - 62,018
Depletion and
decommissioning charge 48,516 54,971 - 103,487
Other segment items
included in the Income
Statement are:
Impairment of oil and gas
assets - 71,455 - 71,455
Depreciation 2,393 3 749 3,145
Amortisation 2,242 - 1,620 3,862
The segment assets and liabilities as at 31 December 2006 and capital
expenditure for the year then ended are as follows:
Cairn India Limited Capricorn Energy Other Group
Group Limited Group 2006
$'000 $'000 $'000 $'000
Assets 1,092,022 151,250 680,639 1,923,911
Liabilities 1,132,689 35,620 74,432 1,242,741
Capital expenditure 249,622 31,624 2,715 283,961
NOTES:
1. A proposed dividend of £481,000,000 (300p per share) (2005: nil) was
announced on 27 February 2007 and was approved at an Extraordinary General
Meeting of Cairn Energy PLC on 22 March 2007. This dividend will be paid by
means of a B Share structure with the new B shares being created on 26 March
2007. The B Shares will not be listed on the Official List or admitted to
trading on the London Stock Exchange. The proposed dividend is not included as a
liability in these Accounts. There are no income tax consequences arising from
this proposal for the Cairn group of companies.
2. The earnings per ordinary share is calculated on a loss of $82,017,000
(2005: profit $79,072,000) and on a weighted average of 157,654,751 ordinary
shares (2005: 156,995,878). The weighted average of ordinary shares excludes
shares held by the Cairn Energy PLC Employees' Share Trust. In respect of 2006,
587,128 potential ordinary shares were anti-dilutive.
The 2005 diluted earnings per ordinary share were calculated on a profit of
$79,072,000 and on 157,841,207 ordinary shares being the basic weighted average
of 156,995,878 ordinary shares and the dilutive potential ordinary shares of
845,329 ordinary shares relating to share options.
3. Accounting policies - Basis of preparation
Cairn prepares its accounts in accordance with applicable International
Financial Reporting Standards (IFRS) as adopted by the EU.
4. The financial information contained in this announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. However, the financial statements contained in this announcement are
extracted from the audited statutory accounts for the financial year ended 31
December 2006, which will be delivered to the Registrar of Companies.
5. The directors have considered the factors relevant to support a statement
on going concern. They have a reasonable expectation that the Group will
continue in operational existence for the foreseeable future and have therefore
used the going concern basis in preparing the financial statements.
6. Full accounts are due to be posted to shareholders on Tuesday 17 April
2007 and will be available at the Company's registered office, 50 Lothian Road,
Edinburgh, EH3 9BY, from that date.
7. The Annual General Meeting is due to be held on Thursday 17 May 2007 at
12.00 pm.
GLOSSARY OF TERMS
The following are the main terms and abbreviations used in this announcement:
Corporate
Board the Board of Directors of Cairn Energy PLC
BSE Bombay Stock Exchange
Cairn Cairn Energy PLC and/or its subsidiaries as appropriate
Cairn India Cairn India Limited
Capricorn Capricorn Energy Limited
Company Cairn Energy PLC
GAIL Gas Authority of India Limited
GoI Government of India
GPEC Gujarat Powergen Energy Company Limited
Group the Company and its subsidiaries
GSCs gas sales contracts
GTCL Gujarat Gas Trading Company Limited
IPO initial public offering (of shares in Cairn India Limited)
NELP New Exploration Licensing Policy
NELP V Fifth New Exploration Licensing Policy round
NELP VI Sixth New Exploration Licensing Policy round
NSE National Stock Exchange of India Limited
ONGC Oil and Natural Gas Corporation Ltd
PETRONAS Petroliam Nasional Berhad
Technical
2P proven plus probable
3P proven plus probable and possible
2D/3D two dimensional/three dimensional
boe barrel(s) of oil equivalent
boepd barrels of oil equivalent per day
bopd barrels of oil per day
bscf billion standard cubic feet of gas
EOR enhanced oil recovery
FDP field development plan
mmboe million barrels of oil equivalent
mmscfd million standard cubic feet of gas per day
PSC production sharing contract
Accounting
bn billion
ESOP Employee Share Ownership Plan
IFRS International Financial Reporting Standards
IFRS 2 International Financial Reporting Standard 2 'Share-based Payment'
IAS 36 International Accounting Standard 36 'Impairment of Assets'
LIBOR London Inter-Bank Offered Rate
m million
$ United States Dollars
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