FID Targeted before the end of 2018, page-4

Tones

That is indeed old news. Was covered clearly in their Aug2017  conf call. Recap that FID will see them move 2C to 2P category for the phased development. After which the JV will lodge a Exploitation plan & submit that to the Govt followed by a FEED study.

Right now they have done a scoping study ie use a leased FPSO, target the 400 sands for their 2C resource & produce first oil in a few years time.

In parallel, they'll b pursuing funding options. James gave a clear breakdown. It's on pg-4 of their transcript worth revisiting.

Gross basis USD2.3bil for phase 1 with water injectors, oil producers etc.
Cairns net share will b funded half by debt & the other half by Equity (around GBP450mil). Convert this figure to USD on a gross basis & apply FAR's equity.

How does debt funding work? Simple. U borrow funds from banks at x% interest.
Its done by Extensive Roadshows & sales pitch justifying the development case & fiscal returns from the project to Insto's globally & locally. (Do chk out BPT-Lattice deal preso, Cooper Energy's Sole D:Eq fund preso in recent times).  

How does Equity funding work ? Raise capital from the mkt.
Together the two (ie D:E) have different weightage which as per the sector risk (ie Beta) are used to work out the WACC. This is the minimum the project has to earn to clear the internal hurdle.

As an example, if y'r project WACC is say ballpark 10-13% (comprised of Debt & Equity finds) & the IRR of the project is 18-30% for Phase 1, then that's what Insto's want to hear b4 they sign the cheque alongwith terms such as 'is the project derisked by the FID, FEED, geopolitical risk' etc. The project will breakeven in a few years depending on the Fiscal terms of the Country its located in & the price of the relevant commodity. So one has to address all these questions.

Hope the conf call by Cairn & the Q&A tonite r good.

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As for the ICC tribunal, hope the panel etc is decided. A recent deal that went sour was decided by the tribunal, ie Cobalt's sale with Sonangol of USD1.75b, settled for USD500mil as per the ICC decision (just google it).