More what does it all mean type stuff, page-32

Morning Gilbert

For the purposes of my tables I have been waiting for revised guidance from Cairn on NPV values. In their Capital markets day report last May guidance for a base case 330mb field was, 10% IRR "breakeven"
I don't see any such Cairn commentary that current estimates are US$10/bl at US$50, that seems to come from FAR's more recent presentations where they have stated that number in conjunction with a 30% capex cost reduction - this surprised me a bit as Cairn's estimate of US$4.50 already included a 20% cost reduction, and that is why I have been waiting for a confirmation from Cairn. I might have missed it, but just don't see this in Cairn's commentary and I don't like to rely on the accuracy of newspaper reports.

I would also emphasise that Cairn's NPV estimates are discounted to the time of FID (2018) and are not strictly the "current" 2016 NPV though as time goes by we are getting closer.

So in the light of all this I do think your suggestion of current NPV of towards US$20/bl at US$50 oil is a tad optimistic, and even at an NPV (FID) of US$10/barrel I will have to revise all my table values upwards, possibly to the extent that they significantly exceed the "forecast current market prices", which is the game I was playing in constructing the tables.

So as I say, I was hoping and waiting, for an official operator update on the project economics. Please someone correct me if I am wrong, but I can't find any commentary references to the same, particularly the NPV $10/bl at US$50 as reported in the newspaper as being attributable to Cairn.

pj