Hi all, see link below for full transcript of Cairn's results...

Hi all, see link below for full transcript of Cairn's results release and associated Q&A:

https://www.cairnenergy.com/media/2163/transcript-cairn-13-03-18-v3.pdf
https://www.cairnenergy.com/investors/results-reports-and-presentations/#Tab2018=1

Points of interest I found on a quick scan:

It’s still relatively early days in defining exactly what the funding solution for SNE is, it’s likely to be a standalone. The base plan is that there’ll be a standalone project financing solution for the SNE project in which all of the joint venture participants will be able to participate. So the sources of capital for that financing will be commercial banks, but could also include export credit agencies for example, multilateral agencies, the World Bank has been very active in Senegal. So there are various pools of capital that we are warming up to participate in what is likely to be a project financing facility specifically for SNE for all partners. So that's the base plan, clearly there are alternatives around that, on our own balance sheet and the other part that we’ll look at. But that's very much the base plan.


As you've heard most interestingly, the SNE NORTH well found hydrocarbons in the S500 Series below the field oil water contact at SNE, which demonstrates that it is a separate accumulation. This has very positive implications both there and farther north here in the Spica prospect, where data suggests that in the S400 Series an oil accumulation could extend well north into it. Our work programme for both Spica and some of these other areas have been submitted and approved by the government, and we are now looking forward to developing potential additional opportunities.


Question: Secondly, can you remind me on the SNE exploration side of it, I think that you have to ring fence the development areas, is it your aim that you’re going to be able to ring fence all of the area or have I got it completely wrong and you don't need to ring fence it? Also do you think you're going to be able to hold on to the Fan area?
Answer: Yes our intent clearly is to capture, as you said ring fence, all the area that we see as potential going forward, particularly as it relates to a potential tie back to SNE, but that's work in progress.


That translates into capex prior to first oil net to Cairn of about $800m, with first oil expected in the period 2021 to 2023, and we’ve already begun work on the project financing of that capital spend.
Far:CNE = 15:40   Far's share = $300m, converted to A$ @ $0.77 = A$389m to first oil


Question: Nathan Piper, RBC You talk about a lot of expenditure across the whole portfolio, and historically you talked about shareholder returns. Isn’t that the risk that even on that arbitration success and the potential selling down in Senegal that the Cairn business will require quite a lot of those proceeds?
Answer: Simon Thomson From our perspective, because we are confident in the successful outcome of that, obviously we’ll look at the business in front of us on that day, but there’s an opportunity to effect a relatively significant cash return to shareholders. And similarly in Senegal, there may be some redeployment but we perceive that there may be the opportunity for further returns as well.


Question: Just on Senegal and the exploration side, I think previously you indicated that there might be some exploration drilling in 2018, obviously that’s not in the programme at the moment, so I’m just wondering when you’re thinking that you might come back and test any additional prospect there? Is it now likely to be alongside any development drilling?
Answer: Relative to Senegal that's correct it is highly likely that further activity exploration/appraisal in association with predevelopment and development activities.


And in respect of Woodside we’ve worked very collaboratively with them. I made three trips to Australia last year. We’ve had people seconded both ways into the organisations and we have 15 a pre-development delegation agreement. We’re trying to build to a position where the transition is very smooth. Obviously it goes through the normal operating committee resolutions but the natural plan is to transition through the summer such that the evaluation report is really an end of Cairn’s journey as operator and the exploitation plan is the start of Woodside’s journey as operator and hopefully in 2021 to 2023 they’ll be looking back favourably on a project that they’ve executed well as set out in the original exploitation plan.