For Immediate Release 21st Oct, 2015

Cairn India Limited

Results for the Second Quarter ended 30th Sep, 2015

Healthy EBITDA margin at 43% driven by enhanced operational and cost efficiencies

Financial Highlights

• Revenue of ₹ 2,242 crore (US$ 345 mn); 44% lower YoY, mainly due to decline in crude prices

  • EBITDA of ₹ 966 crore (US$ 149 mn); robust EBITDA margin at 43%

  • Profit after Tax of ₹ 673 crore (US$ 104 mn); PAT margin at 30%

  • Strong Cash Flow from Operations of ₹ 986 crore (US$ 152 mn)

  • Gross Capital Expenditure of ₹ 523 crore (US$ 81 mn), primarily development capex in Rajasthan

  • Gross contribution to exchequer of ₹ 3,098 crore (US$ 477 mn)

  • Solid Cash and Cash Equivalents position of ₹ 17,943 crore (US$ 2.7 bn)

  Operational Highlights Production

• Overall gross production volume of 205,361 boepd across Rajasthan, Ravva and Cambay assets

• Rajasthan production up by 3% YoY to 168,126 boepd

  • In-line reservoir performance in Mangala, production from 12 new infill wells in Aishwariya

  • Increase in gas production to an average rate of 30 mmscfd, 93% growth YoY

• Offshore assets perform well; production up by 19% YoY to 37,235 boepd

  • Prudent reservoir management methods including higher sustained water injection rates and deeper gas lift injection

    Development

• Significant progress made in the core MBA field

  • Bhagyam EOR - FEED in advance stage; tendering for rigs and long lead items started

  • Mangala EOR - Injection ramped up from 80,000 blpd to 200,000 blpd QoQ; 75% wells drilled

  • Aishwariya Infill- 6 more wells brought online; currently 12 out of 20 drilled wells online

• Growth projects also advancing as per schedule:

  • RDG Gas- Completed a 5 well hydro-frac campaign; tendering process underway for terminal

  • Aishwariya Barmer Hill - Continued focus on cost optimization led to finalization of FDP; will be submitted to the JV partner shortly

    Exploration

• Appraisal well RDG Main was fracced in two zones; flowed oil at an average rate of 220 bopd

• 123 sq km of 3D seismic data acquired in Rajasthan in Q2FY16, totalling 322 sq km in H1FY16

• First phase of appraisal testing of Barmer Hill at DP, NL and V&V fields started

  Operational Excellence

• Achieved ~13% procurement savings through constant cost focus approach; resulted from negotiations and tapering of service providers costs

• Rajasthan water flood operating costs remain low at $5.5/boe

Mr. Mayank Ashar, Managing Director and CEO of Cairn India commented:

'Our strategic objective is to maintain healthy cash flows post dividend. The last quarter has seen this strategy tested and we have responded by recommitting our efforts to drive down costs and focus on adopting advanced technologies to improve our efficiencies and productivity. Improving our health, safety and environmental standards remain at the core of all our activities.

Enhanced Oil Recovery from core fields, recovery of tight oil reserves and Raageshwari Deep Gas are all examples of projects where technology and cost efficiency factors are at the heart of our growth strategy. With good visibility in near term on multiple projects in the pipeline, we are optimistic of meeting our production projections for 2015-16.

The company is also focusing on dialogue with the Government on improving the investment climate for oil and gas industry in the country. We believe that these discussions will be enablers of our mid-term growth ensuring consistent value creation to our stakeholders.'

Corporate and Regulatory Developments

Corporate

Following the Annual General Meeting held in July 2015, the Company paid a final dividend of ₹ 4 per equity share to shareholders, taking the FY 2014-15 total dividend to ₹ 9 per share culminating in the payout ratio of 45% including dividend distribution tax.

With regard to proposed merger of Cairn India Ltd with Vedanta Ltd, both NSE and BSE have provided their 'No Objection' to the proposed merger vide their Observation letters dated 10 September, 2015. The validity of the 'Observation Letter' is six months, within which the Scheme of Amalgamation is required to be submitted to the Hon'ble High Court.

Regulatory

Cairn India contributes actively in Oil & Gas policy formulation through structured & strategic engagement with government and its stakeholders. At present, amid the sustained low price environment, Cairn along with other industry players is actively engaging with the government on various strategic issues, which include a revision of the cess charged on oil production to be in-line with crude prices, PSC Extension policy and fair price realization of domestically produced hydrocarbons amongst others. We believe that these policy revisions will enhance the investment climate for the oil & gas sector in India

In addition, Cairn India continues to actively engage with government constituted committees on Good International Petroleum Industry Practices (GIPIP) and Site Restoration Guidelines for Petroleum Operations.

Financial Review

Note: EBITDA includes forex gain/(loss) on operating activities

Net revenue for Q2FY16 was reported at ₹ 2,242 crore which declined 15% QoQ mainly due to fall in crude prices and increase in discount to Brent for Rajasthan crude. Average Brent prices fell 18% QoQ to

$50.5 per barrel driving our average oil realization down by 22% QoQ to $43.7/bbl. Discount to Brent for Rajasthan crude widened to 14.3% from 9.9% on sequential basis due to lower demand for heavy crude. Decline in Benchmark Brent prices was followed by greater incentive for processing light grades, driving the demand for light crude. Oversupply of heavy crude also suppressed the prices. Depreciation of 2.3% in the average exchange rate for Rupee against US Dollar partially offset the impact of crude prices.

During the quarter, total profit petroleum was ₹ 674 crore (US$ 104 million) including ₹ 536 crore (US$

83 million) for Rajasthan block.

EBITDA for the quarter came in at ₹ 966 crore with a strong EBITDA margin of 43%. EBITDA was down 26% QoQ on account of lower realization and increase in overall operating cost due to increase in polymer injection volumes. We continued to maintain low water-flood operating cost at Rajasthan at

$5.5/boe aided by reduction in crude processing and facility maintenance costs. The water-flood opex was slightly up by 4% QoQ from $5.2/boe in Q1FY16 due to lower production volumes resulting into increase in cost per unit. Ramp-up in the polymer injection volumes also lifted the blended operating cost by 11% QoQ to US$ 6.4/boe.

DD&A charges remained almost stable at ₹ 864 crore as compared to the first quarter, which is expected to continue at the current normalised level.

A favourable movement in the currency resulted into forex gain of ₹ 381 crore, a 109% QoQ increase, on our investments and operating activities. The 3.3% depreciation in the Rupee against US Dollar emanated from quarter end exchange rate rising to 65.9 from 63.8 over second quarter.

Other income declined by 68% QoQ to ₹ 120 crore due to timing difference in the maturity of our investments and mark-to-market losses on bond investments.

There was reversal of tax expense by ₹ 130 crore in the second quarter against charge of ₹ 141 crore in the first quarter. We posted profit after tax of ₹ 673 crore with a healthy profit margin of 30%. The profit was down by 19% QoQ mainly on account of lower EBITDA and other income, which was partially offset by higher forex gain and lower tax, as highlighted above. Earnings per share came down proportionately to ₹ 3.6 in the second quarter from ₹ 4.4 in the first quarter. Cash EPS was also down 34% QoQ to ₹ 5.5 due to lower EBITDA and other income.

Cash flow from operations for the quarter was ₹ 986 crore. Net capital expenditure for the second quarter stood at ₹ 402 crore (US$ 62 million) with 80% of the investment made on development projects and 20% on exploration activities. Our closing cash and cash equivalent position was solid at ₹ 17,943 crore (US$ 2.7 billion), of which 68% is invested in rupee funds and 32% in dollar funds.

Operational Review

During Q2FY16, Cairn had a gross production of 18.9 mmboe from its three producing blocks where it enjoys 100% operatorship, of which net working interest production was 11.8 mmboe. Gross production per day for Q2FY16 was 205,361 boepd and working interest production per day was 128,021 boepd.

Gross Sales averaged 205,673 boepd.

• Includes internal gas consumption

  
  

  Producing Assets	Region	Operator	Participating Interest
  1	RJ-ON-90/1	North Western India	Cairn India	70%
  2	PKGM-1 (Ravva)	Eastern India	Cairn India	22.5%
  3	CB/OS-2	Western India	Cairn India	40%

  
  

  We continue to work on improving our economics to weather the prevailing weak oil price environment better by optimizing our overall capital and operating expenditure. As a result of our focused efforts, we realized better efficiencies in our operations:

  • Procurement savings of ~13% realized through constant focus on the cost reduction, mainly led by tapering of costs and negotiations with the vendors for new contracts across assets

  • Well cost cut by approx.15%: Realized better cost efficiency for drilling and completion of well at Barmer Hill tight reservoir formation over one year. This is a result of various measures taken including optimizing the well completion designs, comparable rate of penetration with the global players, improvement in cycle time and leveraging lower service providers cost.

  • Sustaining low Opex/boe at Rajasthan: The water-flood operating costs remain low at $5.5/boe driven by decrease in the crude processing and facility maintenance costs.

Rajasthan (Block RJ-ON-90/1)

* Includes internal gas consumption

Operations and Development1

Rajasthan block crossed the cumulative production of 300 million barrels of oil equivalent (mmboe) in the second quarter with the total production of 312 mmboe by the end of the quarter. Gross production was at 15.5 mmboe in Q2FY16 at an average of 168,126 boepd driven by in-line reservoir performance at Mangala and additional volumes from new infill wells at Aishwariya. Barmer Hill and Satellite Field production contributed ~5.5 kboepd on average in Q2FY16. During the quarter, a total of 15.2 mn barrels of oil was sold, at an average of 165,008 bopd, to PSU and private refiners across India.

The average crude price realization for the quarter declined to US$ 43.3/bbl from US$ 55.8/bbl, 22% lower QoQ largely on account of 18% QoQ drop in the Brent price from US$ 61.9/bbl to US$ 50.5/bbl. An

1 EUR numbers stated for development projects are as until 2030

expansion of the discount to Brent from 9.9% in Q1FY16 to 14.3% in Q2FY16 also implied a 4% lower realization per barrel for Rajasthan crude. The water-flood operating expense in Rajasthan remained low at US$ 5.5/boe, slightly up by 4% QoQ due to lower volumes. Increase in the polymer injection volumes lifted the blended operating cost to US$ 6.4/boe.

RDG field in DA-1 witnessed a ramp-up in the gas production with the volumes rising by 58% to an average rate of 30 mmscfd in Q2FY16 from 19 mmscfd in Q1FY16. We achieved a record peak production of 34 mmscfd from RDG in August 2015, and expect to produce more than our guidance of an average production of 25 mmscfd of gas from existing RDG infrastructure in FY16. Total gas production in the quarter was 2.8bscf. We successfully completed a 5 well hydro-frac campaign in the quarter, which helped us ramp-up production of the gas from the field. We are planning to commence a 15 well hydro- frac campaign in the next quarter to sustain the production growth.

Gas sales from RDG field increased 65% QoQ to an average rate of 15 mmscfd in Q2FY16 and touched a peak of 18 mmscfd in August, on account of optimization of existing infrastructure. Total Gas sales were

Successful testing of the key wells would increase the present resource base. The total drilled and tested hydrocarbons in-place remained stable at ~1.6 bn boe and total drilled but yet be tested hydrocarbons at

~0.8 bn boe as reported in Q1FY16.

The seismic crew acquired a further 123 sq km of high quality 3D data in the Airfield area in DA3, completing the program over that area. Till end of Q2FY16, 64% of the seismic program in Rajasthan block has been completed. The seismic data is expected to improve the understanding of the block and increase the resource base. A new technique on seismic inversion 'Sparse Layer Inversion' is being selectively applied to improve the vertical resolution and mappability of reservoirs in key areas.

During the current financial year, activity will continue to be focused upon appraisal of the Raag Deep Gas Field extension and the key oil discoveries at DP, NL, V&V together with Saraswati Basement with the objective of progressing these discoveries to development.

Ravva (Block PKGM-1)

* Includes internal gas consumption

Operations and Development

The Ravva block continues to be an example of good reservoir management and operational excellence, having produced more than 273 mmbbls of crude and over 341 billion cubic feet of gas since inception in 1993, far greater than the initial resource estimates at the time of the PSC award.

During the quarter, the block produced a total of 2.4 million boe at an average rate of 26,064 boepd, 27% higher YoY. Though the field is on natural decline, the decline rate is arrested by employing prudent reservoir management practices including sustained higher water injection rates and deeper gas lift injection. Ravva asset upholds strong focus on asset integrity through continuous surveillance and proactive measures. The facilities continued to record a high uptime rate at 99.8% in Q2FY16.

During the quarter, 2.2 mmbbls of crude and 2.0 bcf of gas were sold, averaging 24,109 bopd of crude oil and 21.4 mmscfd of gas, respectively.

Maintaining the high standards of safety, Ravva asset recorded 3.6 million LTI free man-hours since last LTI as of Q2FY16.

Cambay (Block CB/OS-2)

• Includes internal gas consumption

  
  

  Operations and Development

  
  

  Since inception in 2002, the Cambay block has produced more than 23 mmbbls of crude and over 224 bn cubic feet of gas.

  For the quarter, total production was 1.0 mmboe at an average rate of 11,172 boepd, 4.9% higher YoY. Effective reservoir management practices have helped in achieving higher production as the well intervention program was executed in Q1FY16.

  Facilities maintained at excellent uptime rate of 99.9% during the quarter. Additional crude oil tank construction, effluent treatment plant augmentation and offshore gas lift compressor installation are in progress as part of facility up-gradation.

  During the quarter, 0.8 mmbbls of crude and 0.9 billion scf of gas were sold averaging 8,870 bopd of crude oil and 9.4 mmscfd of gas, respectively.

  Safety of operations continued to be of paramount importance and the asset recorded ~2.6 million LTI free man-hours since last LTI as of Q2FY16.

  
  

  Exploration Review - Other India & International Assets

  
  

  Asset	Basin	Cairn India's Interest (%)	JV partners	Area (in km2)
  1	KG-ONN-2003/1	KG Onshore	49%	ONGC	315
  2	KG-OSN-2009/3	KG Offshore	100%	-	1,988
  3	MB-DWN-2009/1	Mumbai Offshore	100%	-	2,961
  4	PR-OSN-2004/1	Palar-Pennar	35%	ONGC, Tata Petrodyne	9,417
  5	SL 2007-01-001	Mannar, Sri Lanka	100%	-	2,912
  6	Block 1	Orange, South Africa	60%	Petro SA	19,898

  
  

  During the quarter, significant advancements were made in exploration activities across other Indian and International blocks paving the way for long term growth opportunities from these blocks.

  
  

  KG Offshore (Block KG-OSN-2009/3)

  Preliminary depth migrated preliminary seismic data have been interpreted for the maturation of prospects in the block and preparations are ongoing for exploratory drilling. Drilling is anticipated to commence in Q3FY17, subject to all statutory clearances.

  
  

  KG Onshore (Block KG-ON-2003/1)

  Our, Joint Venture partner and operator, ONGC, has submitted a Field Development Plan to the Management Committee. The project is in pre-development phase.

  
  

  Mumbai Offshore (Block MB-DWN-2009/1)

  Regional prospectivity analysis has been completed, together with interpretation of the newly acquired PSTM processed broadband 2D seismic data. We are currently assessing the implication on block specific prospectivity and future exploration program.

  
  

  Palar-Pennar (Block PR-OSN-2004/1)

  We continue evaluation of the prospect inventory and optimization of drilling locations in Q2FY16 to prioritize and execute the outstanding drilling work program.

  
  

  Sri Lanka (SL 2007-01-001)

  We have submitted the requisite closure documents to Petroleum Resources Development Secretariat (PRDS), the regulatory authority for petroleum resources in Sri Lanka. The review is under process and is expected to be closed in October 2015.

  
  

  South Africa (Block 1)

  Evaluation of in board prospectivity for oil and gas commenced in last quarter and is currently ongoing.

  Human Resources

  
  

  Last quarter, we focused on effectively cascading the key corporate objectives and goals with all employees, and laid emphasis on driving the new way of working in a low oil price regime.

  
  

  We re-aligned our field manpower to our business plan and planned projects. We focused on building talent from within by aiding our employee to continuously develop their skills through various L&D opportunities and also encouraging them to take on higher responsibilities and job rotations. This enables us to stay lean and keep our hiring from outside focused only on critical skills/roles.

  
  

  For our employees in our technical functions, we launched a project to create a comprehensive technical skills database which will help in identifying in-house expertise and development areas.

  We also continued to promote employee wellness and piloted a daily 5 minute chair yoga program for 200 employees aimed at creating engagement and boosting productivity.

  
  

  Health, Safety, Environment and Sustainability

  
  

  Cairn India is committed to meet the highest international standards of Health, Safety, and Environmental performance and continues to accord highest priority to conducting safe operations while being responsible towards the environment and sustainability.

  We are continuing with our flagship health programs on Fitness and Yoga, and introduced new programs on Diet and Nutrition. Towards a healthy and fit organization, a major campaign was started for Periodic Medical Examination of employees. Early results revealed significant improvement (81% compliance) in Q2FY16.

  During Q2 FY16, Cairn India's road transport safety guidelines were revised to align with recent changes in Indian Motor Vehicle Rules and to bring in more clarity.

  During Q2 FY16, Cairn India improved reporting of Process Safety Events & revised Emergency Management Plans across our sites. We have incorporated new HSE training modules to strengthen the HSE management system.

  Our Ravva and Midstream Asset have received OISD (Oil Industry Safety Directorate) Safety Awards. MBA operational activities and projects across Rajasthan have clocked 29.8 million Lost Time Incident (LTI) free man-hours, until end of Q2FY16. Project Construction also continues to maintain an excellent HSE track record and clocked 25 million LTI free man-hours at the end of Q2 FY16.

  Cairn India released its third annual sustainability report, 'The Process Story', in conjunction with its Annual General Meeting.

  
  

  Corporate Social Responsibility

  
  

  Cairn is shortlisted amongst the 12 finalists for the Platts global energy awards in the CSR category. The winner will be announced on December 9th. During the quarter we focused on alignment with Government to ensure smooth execution of all the projects and increase the number of beneficiaries.

  • Water: We are in the advanced stage for our safe drinking water project. We plan to commence on-ground installation by Nov 2015. This is one of the largest safe drinking water projects in the country and will provide access to 1.1 million population spread across 800 villages.

  • Cairn Centre of Excellence (CCoE): In partnership with Rajasthan Skill Development Corporation, we have increased the enrolment and presently batch of 200 youth is undergoing training. We are working on partnering with various corporate and government agencies for the recruitment.

  • Cairn Enterprise Centre (CEC): 460 youths were trained across 6 Barmer centres, of which 400 were placed in various quality jobs

  • Health: Continued support to District Hospital by providing specialist doctor and sanitation services. Added a General Surgeon to the already supported ENT, Orthopaedics and Gynaecology leading to a substantive increase in number of surgeries.

  • Sanitation: Completed our commitment to construct 188 school toilets under Swachh Bharat Swachh Vidyalaya Yojana.

  • Solar: Installed 300 home solar systems in various villages without access to the electricity. We plan to expand the program significantly given the positive feedback so far.

  • Water Harvesting: Installing roof top rain water harvesting system; 7000 children to benefit

As part of our social commitment, Cairn took proactive measures in flood relief effort in Rajasthan and Gujarat. We touched the lives of 25,000 people through food distribution, rescue and relief operation.

FY16 Outlook

Cairn India continues to remain committed to creating long term shareholder value. Despite prevailing low oil prices and substantial cut in capex, the company will at a minimum maintain Rajasthan production in current year at FY15 levels. Planned capital investment is for a net capex of US$ 500 million; 45% in Core MBA fields, 40% in Growth projects of Barmer Hill, Satellite Fields & Gas and 15% in Exploration. The company retains the flexibility to invest balance US$ 1.4 bn as oil prices improve and costs bottom out. The company aims to have healthy cash flows post capex so as to retain the ability to pay dividends subject to Board.

Contact

Media Relations

Arun Arora, Chief Communication Officer

+91 124 4593039; +91 8826999270; [email protected]; [email protected]

Investor Relations

Dheeraj Agarwal

+91 124 4593409; +91 9769732150; [email protected]