3rd Jun 2005 12:15
Cairn Energy PLC03 June 2005 EMBARGOED FOR RELEASE AT 1215 3rd June 2005 CAIRN ENERGY PLC Annual General Meeting The following statement was made by Cairn's chairman, Norman Murray at theCompany's Annual General Meeting held in Edinburgh today:- "2004 was the busiest year in Cairn's history and the Board is delighted withthe continued progress and growth of the company in the early part of 2005. Rajasthan, India The value of Cairn was transformed in 2004 by the Mangala oil discovery inRajasthan. A further 11 discoveries on the block have highlighted theprospectivity of the acreage and the importance of this new petroleum provinceto Cairn and to India. The Mangala field is the biggest discovery in India for 22 years and the draftField Development Plan (FDP) has already been submitted to our joint venturepartner ONGC and the Government of India. Development plans have also beensubmitted for the Aishwariya, Saraswati and Raageshwari discoveries. Theanticipated approval for these plans is the end of 2005. We are consolidatingand building on the exploration successes of 2004 and moving at pace to ensurethat production begins from Mangala at the end of 2007. Cairn anticipates formal approval shortly from the Government of India for anextension of the Exploration licence for further appraisal over the northernpart of the Rajasthan block, termed the Appraisal Area. In addition, anapplication for an extension of the southern area of the block has beensubmitted. The northern extension is for 2,884 km2 of acreage in the north and west of theRajasthan block. This Appraisal Area incorporates the Bhagyam and Shakti oilfields as well as several structures requiring appraisal and intervening tractsof untested acreage. One such structure, the N-I structure, has beensuccessfully tested by the N-I-2 well which has encountered oil in the Fatehgarhformation. The N-I discovery lies five km east of the Bhagyam field and 13 km north west ofMangala. The N-I-2 well encountered 21 metres (m) of net oil pay in high qualityFatehgarh reservoirs. The estimated oil column for the structure is 150 m.Preliminary volume estimates suggest the N-I field is larger than Shakti butsmaller than Aishwariya with estimates for field in-place volumes between 35 and70 million barrels . The evaluation of N-I is at an initial stage but the discovery itself highlightsthe potential of the acreage between Bhagyam and Mangala where a 320 km2 3Dseismic survey is planned. It is expected that the Declaration of Commerciality, which is the first stepbefore the preparation and submission of the FDP, for the Bhagyam and Shaktidiscoveries will be ready for submission by the end of June 2005. A 3D seismicsurvey around Bhagyam covering 125 km2 is also underway. Elsewhere in Rajasthan, Cairn continues to drill a range of exploration andappraisal wells. Recent wells N-C-8, N-V-6 and N-V-7 have not encounteredcommercial hydrocarbons but provide useful low cost information to delineate theextent of the play in the Northern Area. Indian Exploration Bid Round (NELP V) For more than ten years India has been a focus for Cairn. NELP (New ExplorationLicensing Policy) V has attracted an unprecedented level of internationalinterest in India with very competitive bidding. Along with its joint venturepartner in India, ONGC, Cairn has submitted nine bids for both onshore andoffshore blocks including three in Rajasthan. For two of these blocks Cairn andONGC have been joined as a bid partner by ENI. Bidding for the blocks closed on 31st May 2005 and it is anticipated that thewinning bids for NELP V will be announced by the Government of India on 31stJuly 2005 and contracts signed by the beginning of October 2005. Elsewhere in India, Bangladesh and Nepal Following successful in-fill drilling campaigns on the Lakshmi (offshorenorth-west India) and Sangu (offshore Bangladesh) gas fields, the group'sentitlement production for the first five months of 2005 was 27,633 barrels ofoil equivalent per day (boepd) net to Cairn. Production is in line with thecompany's expectations. Full year entitlement production for 2004 was 22,789boepd. In the deepwater block, in the K-G basin off the east coast of India, which wepartially farmed out to ONGC, a three well drilling programme will start in thenext few weeks. Cairn has retained a ten percent interest in this block. In Nepal, Cairn is carrying out studies on five exploration blocks and iscontinuing to monitor the political situation. The strength of our balance sheet enables us to move forward on the keydevelopment projects in Rajasthan while maintaining an active exploration anddrilling programme providing potential for further growth." Enquiries to: Cairn Energy PLC: Bill Gammell, Chief Executive Tel: 0131 475 3000 Mike Watts, Exploration Director Tel: 0131 475 3000 Kevin Hart, Finance Director Tel: 0131 475 3000 David Nisbet, Head of Group Communications Tel: 0131 475 3000 Brunswick Group LLP:Patrick Handley, Mark Antelme Tel: 0207 404 5959 A presentation by the Executive Directors at today's AGM is available on theCompany's website at www.cairn-energy.plc.uk . Notes to Editors: •Cairn focuses its activities on the geographic region of South Asia. The Group holds material exploration and production positions in west India, east India and Bangladesh along with new exploration rights in northern India and Nepal. •This focus on South Asia for more than ten years has already resulted in a significant number of oil and gas discoveries. In particular, the company made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. •In 2002, Cairn was granted a three year extension of the exploration term of the entire Rajasthan block comprising 6,688 km2 until 15th May 2005. In October 2004 part of the block was converted from an exploration term to a production term forming a 1,858 km2 Development Area. •ONGC took up its option to acquire a 30% participating interest in the Mangala and Aishwariya discoveries in January 2005. •The Bhagyam 125 km2 3D survey is expected to be completed early July. •The total of Cairn discovered fields in Rajasthan is 12. •Current life of field reserve estimate of 500 million barrels based on secondary recovery only for Mangala, Bhagyam and Aishwariya - the three northern fields. •Independent assessment of the three northern fields, assigns 1.64 billion barrels of oil in place. •India currently imports approximately two million barrels of oil a day (bopd). It produces 650,000 barrels a day itself of which 50,000 bopd comes from the Cairn operated Ravva field. For further information on Cairn see www.cairn-energy.plc.uk There are matters discussed in this media information that are forward lookingstatements. Such statements are only predictions and actual events or resultsmay differ materially. For a discussion of important factors which could causeactual results to differ from the forward looking statements, refer to theCompany's annual report and accounts for the year ended 2004. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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