Cairn India Investor Presentation February 2015

© 2015 Cairn India Limited

February 2015

Cairn India Limited Edelweiss India Conference

© 2015 Cairn India Limited 2

This material contains forward-looking statements regarding Cairn India and its affiliates, its corporate and business strategies and plans, future financial condition and results of operations. All such forward- looking statements are based on the 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 India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated, the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India’s joint venture partner.

Disclaimer


Overview

Strategy

Growth options

Agenda


0

2

4

6

8

2010 2020 2025 2030 2035 2040

Production of Petroleum & Other Liquids

Consumption of Petroleum & Other Liquids

Mill

ion

bar

rels

per

day

Net Import Bill US$ 400 Billion

Source: U.S. Energy Information Administration, International Energy Outlook 2014 & International Energy Agency, World Energy Outlook 2013 and 2014, World Bank 1 As per latest available 2012 data 2 MoPNG data

Net Import Bill ~US$100 Bn

Positive policy measures

• Domestic natural gas price reforms

• Reforms to simplify PSC execution

Untapped opportunity

• ~130 billion barrels - Resources in ‘yet-to-find’ category2

• 65% On-land, 49% Deep Offshore

- Basins with ‘very negligible’ exploration

• 7 of 26 basins in production - Additional potential from 19 (73%) basins

Growing Oil Demand with High Import Dependence

India offers significant growth opportunities

Low Per Capita Energy Consumption

Tonnes of Oil equivalent per year

1.10.6

3.02.1 2.11.9

Current1 2040

China India World

Cairn contributed ~28% of domestic crude oil production in fiscal 2014

FY40e Daily Oil Demand ~7 million barrels


World Class Resource Base

• Hydrocarbon Initially in Place of 6.1 bn boe • 2P* Reserves and 2C Resources of 1.4 bn boe

* Gross Reserve and Resource estimates based on SPE guidelines as at 31st March, 2014

Assets: Diverse geological basins and environments

Robust production – 96% Oil mix by volume

Gross Average Volume (kboepd)

Rajasthan

RJ-ON-90/1

70%, 3,111 km2

Cambay

CB/OS-2

40%, 207 km2

Ravva

PKGM-1

22.5%, 331 km2

KG Onshore

KG-ONN-2003/1

49%, 315 km2

Mumbai Offshore

MB-DWN-2009/1

100%, 2,961 km2

Palar-Pennar

PR-OSN-2004/1

35%, 9,417 km2

KG Offshore

KG-OSN-2009/3

100%, 1,988 km2

Sri Lanka

SL-2007-01-001

100%, 3,000 km2

South Africa Block 1

60%, 19,898 km2

INDIA

Cairn India - well positioned for the opportunity

• Balanced portfolio, 9 blocks, acreage ~41,000 sq. kms

551217667

1262249

Total

1,408

6,055

Others Cambay Ravva Rajasthan

1,210

4,620

HIIP 2P + 2C

(mmboe)

FY 11

173 149

+14%

FY 14

219

FY 13

205

FY 12

Cambay Ravva Rajasthan

• 90% volumes resilient in current crude environment • Low cost of production at ~US$ 6/bbl

11% 6%

83%

9m FY15 volume 210 kboepd


Our value creation journey


Delivering consistent revenue growth and profitability Revenue (INR Billion)

EBITDA (INR Billion)

Cash and Cash equivalents (INR Billion)

178229

167

9156

+60%

9m FY 15 FY14 FY 13 FY 12 FY 11

Profit after Tax (INR Billion)

+25%

9m FY 15

63*

FY 14

124

FY 13

121

FY 12

79

FY 11

63

~US$ 4 billion contribution to exchequer

Cash EPS of INR 40.37 for 9m FY15 Ability to retain absolute level of dividend

EBITDA margins of over 65%

* Normalized PAT excluding net of exceptional items

120

188175

119103

6877103 9598

9m FY 15

+22%

FY 12 FY 11 FY 13 FY 14

Gross realization (US$/boe) Revenue

79139130

10284

74748681 66

9m FY 15

+18%

FY 12 FY 11 FY 14 FY 13

EBITDA margin EBITDA


Technology adoption and operational excellence reducing total cost of ownership

3,000

2,500

1,000

500

0

50 10 15 0 35 25 40 20 45 5

2P

Res

erve

s (M

mb

bls

)

F&D cost per barrel (USD)

Cairn

0

50

100

150

200

250

300

15 10 5 0 20 25 40 30

Opex per barrel (USD)

An

nu

al P

rod

uct

ion

(M

mb

bls

)

Size of the bubble indicates Market Cap as of Jan’15 (USD Bn)

Cairn

Competitive F&D costs

Best in class Opex/bbl

* Development drilling, Source for peer company data: Bloomberg, as of latest financial year

• Pioneering technology adoption

• Hydro-fracturing technology – In partnership with world class service providers

• Mangala Polymer flood EOR – One of the largest in the world

• Skin effect heating system – world’s longest continuously heated pipeline

• Modular well pad concept – Rapid moving rigs

• Excellence in execution

• Top quartile drilling* efficiencies - 17.6 days per 10,000 feet

• RJ Onshore oil production - With-in 5 years of discovery

• Offshore natural gas production - In 28 months in Cambay


Overview

Strategy

Growth options

Agenda


Brent drops 60%, long term view positive

Prices have fallen by close to 60% in the last 6 months due to demand supply dynamics

10

20

30

40

50

60

70

80

90

100

110

120

2014 2010 2005 2000 1995 1990 1985 1980 1976

Average Brent 1976-2014, USD/bbl

Source: BP Statistical Review, June 2014, EIA, * Total consumption and production of petroleum and other liquids, 2014 demand and supply from IEA monthly report

55

60

65

70

75

80

85

90

95

2014 2000 2010 2005 1995 1990 1985 1980

Global oil demand vs supply* Million bopd

Demand Supply


• Post capex, Ability to retain absolute dividends

Positive Free Cash Flows

• MBA, Ravva, Cambay - Low cost, high margin, resilient to price volatility

Core fields continue to generate cash

• Barmer Hill, Gas

Optionality for Growth

• Robust balance sheet, low cost onshore operations, world class resource base

Resilience

• Geology, technology, people, strong partnerships and financial discipline

Unique Leverage

Five Key Strategic Themes

Rich set of growth options at all crude price scenarios


Rajasthan – Prolific block with significant upside

Significant Potential: ~10 bn boe In-Place

Multiple formations and play types

Fractured Mesozoic & basement

Fategarh

Barmer Hill

Dharvi Dungar

Thumbli

Akli

Volcanics

Gross Hydrocarbons In-Place potential in RJ (billion boe) Discovered To be tested/drilled

5.7

4.24.5

Total Potential

~10

Future campaign

3.02

Current campaign

~3

1.5 1.51

Till FY13

1 ~0.6 bn boe under evaluation, 2 Unrisked prospect inventory

~3,111 km2 block with rich set of options

Mangala (M)

~130 km

DA-1

DA-2

DA-3

Oil Discoveries (31)

Gas Discoveries (5)

Legend Onshore Low cost 36 discoveries Multiple growth

options • Barmer Hill • Gas

Aishwariya (A)

Bhagyam (B) Core fields

Prospective BH fields

Raag Deep Gas

~40 km

M B A


Core MBA onshore fields resilient with low cost, high margin

• Facilities • Upgraded fluid handling capacities to ~800,000 barrels per

day • Grid and captive power available to increase reliability and

facility uptime

• Mangala Polymer flood EOR • First polymer injection achieved on 31st October, 2014 • Commissioning of critical packages nears completion; Drilling

ongoing

• Mangala ASP Pilot • Pilot successful, initial results better than expectations • Expect pilot to be concluded by this fiscal

• Bhagyam • Infrastructure debottlenecking initiated to create more ullage • Discussions ongoing with JV partner for alignment on EOR

• Aishwariya • Production volume ramped up to 30,000 bopd • Execution plans underway for further ramp up

HIIP: ~2.2 bn boe, Target recovery rate: 50% Invested development capex of US$ 4.8 bn in 10 years Enhanced brownfield development

MPT modifications

Well pad modifications for Polymer EOR project


Maximizing value at core offshore fields

..Performing better than expectations Offshore assets continue to see success.. HIIP: 884 mmboe as on 31st March, 2014

Maintaining production at low costs

Ravva in production for >20 years

Cambay for >10 years

Production mix: 85% Oil by volume

Cumulative production till Q3 FY15

Ravva: 322 mmboe, Achieved 48% recovery

Cambay: 58 mmboe

Successful RE-6 Discovery at Ravva in FY15

HIIP of 10-15 mmbbls

Production potential of 4,000 bopd

Ravva: Example of world-class recovery

322

101

9m FY15

3x

FY12 FY06 FY02 FY04 FY00 FY98 FY96 FY10 FY08

As per Initial plan (mmboe)

Oil (kboepd) Cum Production (mmboe)

Gas (kboepd)

Cambay: Gas producing to oil producing

58

FY14 FY12 FY10 FY08 FY06 FY04 9m FY15

Oil (kboepd)

Gas (kboped)

Cum Production (mmboe)


Overview

Strategy

Growth options

Agenda


Experiential learnings in Barmer Hill provide options to scale up

Leveraging technology and existing infrastructure

• Strategic partnerships to provide commercially

feasible solution

• Pioneering North American technology

adoption

• Efficient use of frac technologies - ~20 frac

jobs/month

• Drilled and fracced vertical and horizontal wells

• Cumulative horizontal – 8, vertical – 4

• Lateral lengths of 800 – 1200m

• Initial production rates encouraging

• Optimizing costs through re-engineering and re-

negotiation

• Focus on leveraging infrastructure by prioritizing

fields near Mangala and Aishwariya

DP-1

Mangala BH NL

V&V

Aishwariya BH

Prospective Barmer Hill Fields in initial phase

Barmer Hill better than Shale plays

Field Porosity (%) Permeability (md)

Viscosity (cP)

M&A BH 15-30 0.1-5 5

Bakken 4-10 0.001-0.1 0.3

Eagle Ford 4-15 <0.002 0.1-0.3

Permian Midland

6-16 0.01-0.3 0.3


Commissioning of Compressors and Equipment

• Holds significant potential of 1-3 Tcf of GIIP

• Estimated recovery of 50%

• Commissioning of compressors underway to double production from 12 mmscfd by end of March 2015

• FDP for 100 mmscfd in advanced stages of regulatory approval

• Expect to commence production by 2017, execution planning and contracting ongoing for terminal, pipeline and related services

Raag Deep Gas field – Project status

RDG - Raageshwari Deep Gas field; FDP - field development plan

Focus on building Gas business to boost growth Production potential (Incl NGLs): 10-20,000 boepd


Focused exploration and appraisal campaign to enhance future growth potential

Rajasthan Block – 3 development areas, 11

discoveries since resumption, 36 in total

Significant exploration and appraisal activities since resumption of exploration Total HIIP*: Cairn – 7.6 bn boe, RJ – 5.7 bn boe

Established 1.5 bn boe of HIIP since resuming

exploration in 2013

Additional ~0.6 bn boe drilled and yet to be tested

~43 E&A wells drilled since resumption

Focus on prioritization of new discoveries for appraisal basis volume and proximity to infrastructure

3D seismic acquisition program continues at pace, with ~725 km2 data acquired as of Q3 FY15

Aishwariya-46

Raag S-1

V2Y Channel NR3-2100

Guda South 7

DP-1

Saraswati SW-1

Aishwariya BH

Kaam-W-8

SL-1

NL-2

* Including 1.5 bn boe of HIIP discovered in the current exploration campaign


Exploration activity across the rest of the portfolio

o KG Onshore: DOC for Nagayalanka discoveries approved by

management committee; Operatorship transferred to ONGC

Offshore o KG Offshore: 934 km2 of 3D seismic data was acquired

and processed during the year. Interpretation underway.

o Palar Pennar: Reprocessing of the vintage 503 km2 Palar 3D seismic is underway

o Mumbai Offshore: Processing of the recently acquired 2,128 line km of 2D broadband seismic is on track

Onshore

KG onshore 49%

Sri Lanka 100%

Mumbai 100%

India

Sri Lanka

South Africa 60%

Palar-Pennar 35%

KG Offshore 100%

South Africa

o Sri Lanka: Commercialization of the gas discoveries made on the block continues to present challenges

o South Africa: Inventory of exploration prospects has been identified based on the 2013 3D seismic survey; Formulating monetizing strategies

International assets


Robust and resilient with multiple growth options

Core fields refer to MBA fields in Rajasthan, Ravva and Cambay

Positive Free Cash Flows

Production from Core

fields

Optionality of Growth

Resilience

Unique Leverage


Value Proposition

As India’s largest private sector E&P company accounting for ~28% of the country’s domestic oil production, Cairn India is well positioned to grow revenues and profits. Its strong track record, low cost of operations, high cash flow generation, combined with the world's growing demand for energy, provides confidence for future growth in reserves and production while meeting its return on capital targets.

Top

Management

Chairman: Navin Agarwal

CEO: Mayank Ashar

CFO: Sudhir Mathur

FY14 average Production

Gross Production: 218,651 bopd, 6% YoY increase Oil: 209,378 bopd Gas: 56 mmscfd

Countries present

India Sri Lanka South Africa

Reserve and Resource Base

Gross Hydrocarbons Initially in Place (mmboe): 6,055 Gross 2P Reserves & 2C Resources (mmboe): 1,408 Net Working Interest 2P Reserves & 2C Resources (mmboe): 956

Producing Assets - Cumulative Production (till FY14)

Rajasthan (RJ-ON-90/1) - ~216mmboe Andhra Pradesh - Ravva (PKGM-1) - ~317 mmboe Gujarat - Cambay (CB/OS-2) - ~55 mmboe

Capital Budget $3 billion over three years (FY2015, 2016, 2017) 84% for Development; 16% in Exploration

Cumulative Capex (till FY14)

Gross Exploration and Development - ~US$ 7 bn RJ Exploration : ~US$ 0.8 bn; RJ Development : ~US$ 4.3 bn

Operational Achievements

Together with its JV partners accounted for ~28 per cent of India’s crude oil production in FY14

Built world’s longest (~600 kms) continuously heated and insulated pipeline

Awards Fastest growing energy company in the world at Platts Top 250 Energy Company

Awards 2013

Financial Strength

FY 2014 P&L

Revenues: US$3.1 billion

PAT: US$2.1 billion

Cash Flow from Operations: US$1.8 billion

Balance Sheet

Cash: US$3.8 billion

Assets: US$10 billion

Zero Debt Company

Other Ratios

Diluted EPS: INR 64.95

Dividend Yield: 4%

DPS: INR 12.5

BVPS: INR 309

Stock Market

Market Cap: ~$10 billion

Listed on: NSE, BSE

Index Representation - Nifty 50 and MSCI

Symbols: CAIRN (NSE); 532792 (BSE); INE910H01017 (ISIN); CAIR (Bloomberg)

Shares outstanding: 1874 million

Shareholding Pattern:

Vedanta Group: 60%

Cairn PLC: 10%

Institutional Holding: 27%

Retail: 3%

Contact Information

Nidhi Aggarwal, Head - Investor Relations M: +91 98101 97755; +91 124 459 3490 [email protected] [email protected]

Cairn India Ltd.

4th Floor, Vipul Plaza, Sun City, Sector-54, Gurgaon 122002

India

Fact Sheet

mailto:[email protected]

mailto:[email protected]


Board members (1/2) Mr. Navin Agarwal Chairman & Non-Executive Director

Mr. Navin Agarwal, 53, is also the Chairman of Sesa Sterlite Ltd. and Deputy Executive Chairman of Vedanta Resources Plc. Mr. Agarwal plays a key role in developing the strategic thinking and governance framework of the Vedanta Group. He has been part of the Group for the last 32 years since its inception, and has been instrumental in shaping and executing the growth strategy of the Group, through a combination of inorganic and organic initiatives leading to multifold expansion in shareholder returns.

Mr. Tarun Jain Non-Executive Director

Mr. Tarun Jain, 54, is a graduate from the Institute of Cost and Works Accountants of India and a fellow member of both the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He is a Whole-time Director of Sesa Sterlite Limited. Mr. Jain has over 35 years’ experience in corporate finance, accounts, audit, taxation, secretarial and legal matters. He is responsible for Sterlite’s strategic financial matters, including corporate finance and strategy, business development and M&A.

Ms. Priya Agarwal Non-Executive Director

Ms. Priya Agarwal, 24, has done B.Sc. Psychology with Business Management from the University of Warwick in the UK. She has wide experience in Public Relations, Human Resources and Strategic Planning having worked with reputed names like Ogilvy & Mather, Korn Ferry International, Vedanta Resources , HDFC Bank and Rediffusion Y&R.

Mr. Mayank Ashar Managing Director and CEO

Mr. Mayank Ashar, 60, holds a Bachelors of Art & Science in Chemical Engineering, a B.A. in Philosophy and Economics, a Masters of Engineering and an M.B.A. from the University of Toronto. He brings with him rich and diverse experience spanning across more than 36 years in the international Oil & Gas industry. This includes top leadership roles in global organizations like British Petroleum, Petro-Canada and Suncor Energy. He has also served as the Chief Executive Officer and President at Irving Oil Limited.


Board members (2/2)

Mr. Edward T Story Non-Executive & Independent Director

Mr. Edward T Story, 70, holds a Bachelor of Science degree from Trinity University, Texas, a Masters degree in Business Administration from the University of Texas and an honorary Doctorate degree by the Institute of Finance and Economics of Mongolia. He is a member of the North America Mongolia Business Council. Mr. Story has 48 years’ experience in the international oil and gas industry and is the founder, President and Chief Executive Officer of the London Stock Exchange listed SOCO International Plc.

Mr. Naresh Chandra Non-Executive & Independent Director

Mr. Naresh Chandra, 79, graduated with Masters’ degree in Mathematics from Allahabad University. A 1956 Indian Administrative Services officer, honored with the Padma Vibhushan in 2007, a high civilian award, he brings vast administrative experience having held leading positions in various Committees for the Government of India. In December 1990, he became Cabinet Secretary, the highest post in the Indian Civil Services followed by his appointment as the Senior Advisor to the Prime Minister of India in 1992. He has served as the Governor of Gujarat and as an Ambassador of India to the United States of America during 1996-2001.

Dr. Omkar Goswami Non-Executive & Independent Director Dr. Omkar Goswami, 57, holds a Masters Degree in Economics from the Delhi School of Economics and is a D. Phil in Economics from Oxford University. He has taught in several academic institutions in India and abroad; edited one of India’s best known business magazines; was the Chief Economist of the Confederation of Indian Industry; and is the Executive Chairman of CERG Advisory Private Limited, a consulting and advisory firm. Dr. Goswami serves as an independent director on many Company boards and has authored books and research papers on economic history, industrial economics, public sector, bankruptcy laws and procedures, economic policy, corporate finance, corporate governance, public finance, tax enforcement and legal reforms.

Mr. Aman Mehta Non-Executive & Independent Director

Mr. Aman Mehta, 67, is an economics graduate from Delhi University. He has over 37 years’ experience in various positions with the HSBC Group from where he retired in January 2004 as CEO Asia Pacific. Mr. Mehta is actively engaged in corporate governance issues, with Board and advisory roles in a range of Companies and Institutions across the globe. He is also a member of the governing board of the Indian School of Business, Hyderabad and a member of the International Advisory Board of Prudential of America..


Key Management team (1/2) Mr. Sudhir Mathur CFO

Sudhir has 27 years’ experience across core functions like Corporate Strategy, Finance and M&A, Restructuring and Regulatory Affairs, in reputed organizations like Aircel, GMR and Idea Cellular amongst others. A seasoned CFO with commercial orientation, Sudhir has been exposed to high-growth sectors like Oil & Gas, Telecom and Infrastructure. He stepped into the role of Interim CEO in Cairn India at a critical time when the company had just embarked on executing its biggest ever 3 Year strategic plan of development and exploration.

Sudhir is a Bachelor of Economics from Shriram College of Commerce, Delhi University and MBA from Cornell University, New York.

Mr. Sunil Bohra Dy CFO Sunil became member of Vedanta family in the year 2000 and has demonstrated success across various group companies in diverse assignments across various functions. He has in depth experience in setting up systems and processes, formulate new strategies and develop organization structures to facilitate growth of the company.

Since joining Cairn in 2012 as Deputy Chief Financial Officer, he has been instrumental in strategic decision-making and continued success of the company. He has completed General Management Program from Harvard Business School and is a qualified Chartered Accountant.

Mr. Mike Yeager Chairman, Operations Review Board Mike brings in more than 38 years of rich experience in reputed organizations like Exxon Mobil, BHP Billiton and the US Marine Corps. In his last assignment, he was the CEO of the Petroleum business at BHP Billiton. Mike works closely with the Cairn management team to deploy the best global technology and practices to unlock the full potential of existing assets and steer their efficient development.

Mike graduated from the US Naval Academy and went on to complete his Masters of Science from University of Southern California.

Mr. Darran Lucas Director, Exploration Darran comes with over 30 years of Global Exploration, New ventures and Asset Management experience in both conventional and unconventional areas. His experience includes assignments with Kosmos Energy, Nexen Petroleum International, OMV Aktiengesellschaft, Enterprise Oil and British Petroleum. He has proven track record of building and managing high potential, high value exploration portfolios across the globe including Africa, the Middle East, UK and Europe, Latin America and South-east Asia.

He is a Geology graduate from university of London and MBA from Henley Management College, U.K.


Key Management team (2/2) Mr. Suniti Bhat Director, Rajasthan Oil Suniti Bhat has been working with Cairn for more than 5 years and has more than 20 years' experience in global oil and gas industry. Suniti was instrumental in delivering a production CAGR of ~20% over 2011-14 from the Rajasthan block and is responsible for shaping the overall growth strategy of Cairn India. He has completed a General Management Program from Harvard Business School, holds a Masters in Petroleum Engineering from Stanford University and has a degree in BE (Hons.) in Chemical Engineering from Punjab University Chandigarh.

Mr. Ananthakrishnan B. Director, Rajasthan Gas B. Ananthakrishnan has more than 25 years of experience in the industry. He has worked in both Exploration and Development projects in Cairn in technical and management roles. He has been closely associated with the Rajasthan project since 2003 and led the subsurface teams involved in the development of all the fields in Rajasthan including the Mangala Field which holds over a billion barrels of oil in place.

He is a post graduate in Petroleum Geology.

Mr. Rich Paces Director, Offshore Rich has over 32 years of substantial experience and expertise in petroleum and reservoir engineering as well as operations and management. He has worked onshore and offshore with both large and small multinational companies and has a variety of international experience of working in the USA, Trinidad, China, Egypt, Russia, Kazakhstan, India and Equatorial Guinea.

Prior to Cairn, Rich served as Vice President and Country Manager-Equatorial Guinea (EG) at Noble Energy and as Chief Operating Officer of the Oil & Gas Division at Reliance Industries. Rich holds a Bachelor of Science degree in Chemical Engineering from the Ohio State University.


Application of hydraulic fracturing technology at BH

Hydrocarbons piped to market

Hydrocarbons flow out of the well

A truck injects a mix of sand, water and chemicals into the well Truck delivers

water for the fracturing process Recovered water is

stored in open pits, then taken to treatment plant

Hydro-frac fissures

Mixture of water, sand & chemical agents

Hydrocarbons flow from

fissures into the well

Sand keeps fissures open

Horizontal well with multi stage fraccing

Documents

Cairn India Investor Presentation February 2015