CORPORATE PRESENTATION - Cluff Natural Resources · This Corporate Presentation may contain “forward-looking statements” that involve substantial risks and uncertainties, and

CORPORATE

PRESENTATION

Cluff Natural Resources Plc | Corporate Presentation

Important Notice

The information contained in this document (the “Corporate Presentation”) has been prepared by Cluff Natural Resources Plc (“CLNR”). CLNR is a UK company quoted on AIM, a market operated by London Stock Exchange plc. This corporate presentation has not been fully verified and is subject to material updating, revision and further verification and amendment without notice. This Corporate Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (as amended) (“FSMA”) and therefore it is being provided for information purposes only.

While the information contained herein has been prepared in good faith, neither CLNR nor any of its directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Corporate Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither CLNR nor any of its directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Corporate Presentation.

The views of CLNR’s management/directors and/or its partners/operators set out in this document could ultimately prove to be incorrect. No warranty, express or implied, is given by the presentation of these figures here and investors should place no reliance on CLNR’s or any operators’ estimates cited in this document.

No assurance can be given that hydrocarbon resources and reserves reported by CLNR, will be recovered at the rates estimated or that they can be brought into profitable production. Hydrocarbon resource and reserve estimates may require revisions and/or changes (either up or down) based on actual production experience and in light of the prevailing market price of oil and gas. A decline in the market price for oil and gas could render reserves uneconomic to recover and may ultimately result in a reclassification of reserves as resources. There are uncertainties inherent in estimating the quantity of resources and reserves and in projecting future rates of production, including factors beyond CLNR’s control. Estimating the amount of hydrocarbon resources and reserves is an interpretive process and, in addition, results of drilling, testing and production subsequent to the date of an estimate may result in material revisions to original estimates. Any hydrocarbon resources data contained in this document are unaudited management estimates only and should not be construed as representing exact quantities. The nature of reserve quantification studies means that there can be no guarantee that estimates of quantities and quality of the resources disclosed will be available for extraction. Therefore, actual production, revenues, cash flows, royalties and development and operating expenditures may vary from these estimates. Such variances may be material. Any reserves estimates contained in this document are based on production data, prices, costs, ownership, geophysical, geological and engineering data, and other information assembled by CLNR (which it may not necessarily have produced). The estimates may prove to be incorrect and potential investors should not place reliance on the forward looking statements contained in this document concerning CLNR’s resources and reserves or production levels. Hydrocarbon resources and reserves estimates are expressions of judgement based on knowledge, experience and industry practice. They are therefore imprecise and depend to some extent on interpretations, which may ultimately prove to be inaccurate. Accordingly, two different independent parties may not necessarily arrive at the same conclusions. The views of management/directors as set out in this document could ultimately prove to be incorrect. Estimates that were reasonable when made may change significantly when new information from additional analysis and drilling becomes available.

This Corporate Presentation may contain “forward-looking statements” that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are statements regarding CLNR’s intentions, beliefs or current expectations concerning, among other things, CLNR’s results of operations, performance, financial condition, prospects, growth, strategies and the industry in which CLNR operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Corporate Presentation and CLNR does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Corporate Presentation. This Corporate Presentation should not be considered as the giving of investment advice by CLNR or any of its directors, officers, agents, employees or advisers. In particular, this Corporate Presentation does not constitute or form part of any offer or invitation to subscribe for or purchase any securities and neither this Corporate Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in these slides or the Corporate Presentation or on the completeness, accuracy or fairness thereof. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters.

Neither this Corporate Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

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Cluff Natural Resources – Introduction

▪ UKCS focussed oil and gas investing company with a portfolio of low cost, high impact exploration and appraisal projects

▪ April 2019 farm-out of Licence P2437 (Selene) to Shell

▪ Shell acquired a 50% interest1 in return for a total cash consideration of USD$600k

▪ Shell will pay 75% of the first well drilled up to a gross cap of USD$25M

▪ Selene prospect – 291 BCF P50 Unrisked Gross Resource

▪ Feb 2019 farm-out of Licence P2252 (Pensacola) to Shell

▪ Cluff retains a 30% working interest and is fully carried through the work programme2

▪ Extensive fully carried work programme agreed including acquisition of new 3D seismic during 2019

▪ Pensacola prospect – 309 BCF P50 Unrisked Gross Resource

▪ Shareholders have access to Shell’s technical competency via a vehicle where exploration success would result in very significant value uplift

3

>2.4TCF (equivalent) of P50 Prospective Resources (gross)

7Highly prospective exploration licences within the UKCS

km2 (gross) under licence1,734

Super major validation of technical work and licensing strategy

Line of sight over 2 future drilling opportunities with Shell as Operator

Multi-asset portfolio and high retained equity positions allows for further farm-in or farm-down activity

1 Subject to OGA Approval and agreement on JOA2 Carry lasts until the sooner of a well investment decision or the end of 2020


Management Team

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Graham Swindells – Chief ExecutiveJoined CLNR as Chief Financial Officer in May 2013. He previously worked in corporate finance and M&A, during which time hespecialised in advising mid and small-cap public companies. Before joining CLNR, he was a Director in Corporate Finance at Ernst &Young. Previously, he was a Director in Corporate Finance at Arbuthnot Securities where he gained significant natural resourcesexperience acting as nominated adviser and broker to a variety of companies in the sector. He qualified as a Chartered Accountant inScotland with BDO and subsequently spent two years at PricewaterhouseCoopers in corporate recovery and restructuring.

Andrew Nunn – Chief Operating OfficerAndrew Nunn is a Chartered Geologist with over 20 years of experience working on exploration, mining and geo-environmentalprojects in Europe, Australasia and Africa. For the last 10 years he has worked on a wide variety of UK and European conventionaland unconventional gas projects with a primary focus on Carboniferous aged reservoirs. Andrew’s previous role was as ExplorationManager for Dart Energy. He holds a B.Sc. (Hons) in Economic Geology and an M.Sc. in Environmental Management.

Peter Cowley – Non-Executive DirectorPeter is a geologist with 46 years of international experience in the minerals industry and has been involved in the discovery anddevelopment of a number of gold mines in Africa. Peter Cowley was previously Managing Director of Ashanti Exploration Limited andGroup Technical Director of Cluff Resources Plc. He holds M.Sc and MBA degrees and is a Fellow of I.M.M.M. Until recently he wasalso a Non-executive Director of Banro Corporation and Amara Mining Plc.

Mark Lappin – Non-Executive Chairman (from May 2019)Mark Lappin has over 35 years of experience in the oil and gas industry. Mark’s recent roles include Technical Director at Caudrillaand prior to that Sub-Surface Director for UK and Netherlands at Centrica. Mark began his career as a Geophysicist at PhillipsPetroleum and has held senior technical and commercial roles with Phillips, Exxon Mobil and Dart Energy. Mark’s North Seafocussed operational, commercial and super-major E&P experience will be hugely valuable as the company moves into the nextstage of its development.


A Strategic UK Asset

▪ Proven gas basin within established operating environment

▪ Recent exploration has targeted mature and new plays and resulted in large discoveries e.g. Pegasus, Tolmount, Cygnus & Breagh

▪ Flexible and reactive regulators with attractive fiscal regime (top quartile globally)

A Growth Market with Premium Pricing

▪ UK gas production meets less than 50% of demand

▪ Demand to increase as gas replaces coal for electricity generation

▪ UK gas price trades at significant premium compared to Henry Hub (US)

SNS - A Low Cost Operating Environment

▪ Assets are located in shallow water environment

▪ Jack-up rig rates are low - $70k/day (v $165/k in 2015)

▪ Existing export infrastructure and supply chain supports future developments

▪ Ideal time to drill

Domestic Production

IN THE PAST

Supply surplus

AT PRESENT

UK imports ~50% of gas

IN THE FUTURE

Major supply deficit

0.0

20.0

40.0

60.0

80.0

100.0

120.0

19

98

20

01

20

04

20

07

20

10

20

13

20

16

20

19

20

22

20

25

20

28

20

31

20

34

An

nu

al p

rod

uct

ion

an

d

dem

and

(b

cm)

Gas Production

Gas Demand

Source: OGA

Why focus on UK Gas?

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Where We Operate & Key Prospects

Southern North Sea – Rotliegend Area ▪ Mature gas producing region▪ Commercial drivers around infrastructure protection▪ Focus is on overlooked opportunities – technology driven

Southern North Sea – Core Area▪ Over 6 years of accumulated knowledge▪ Additional multi-level prospectivity – Bunter & Zechstein▪ New and proposed infrastructure locally▪ Significant planned drilling activity on adjacent acreage

Central North Sea ▪ 30th Round Awards - 100% CLNR ▪ Located close to BP operated ETAP infrastructure▪ Oil and condensate – diversifies the portfolio▪ Contains the Tesla discovery and Dewar prospect

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Southern North Sea Gas Basin

Assets 5 Licences

Area Approx 1,600 km2 (Gross)

ResourcesP50 Prospective 2.4 TCF (gross)

Range (P90-P10) 0.8 to 6.7 TCF

Equity 25% to 100% Cluff Natural Resources

30th Round Work

Commitments

Phase A – acquire and reprocess existing

seismic, sub-surface studies

▪ World class gas basin with established and emerging plays

▪ Stacked plays with reservoirs at multiple levels – lower risk exploration wells

▪ Proven production potential in the Carboniferous, Rotliegend, Zechstein & Bunter Sandstone Reservoirs

▪ Several TCF of new discoveries and drillable prospects (e.g. Breagh, Tolmount, Cygnus, Crosgan, Pegasus & Aurora)

▪ Shallow water – jack up rigs (low cost)

▪ Multiple hubs operated by majors with existing and new infrastructure resulting in low commercial thresholds for surrounding existing and new discoveries

▪ Significant corporate interest and planned drilling activity during 2019

7


Shell UK Farm-in to P2437

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Overview

▪ P2437 contains the Selene Prospect with gross P50 prospective resources of 291 BCF with 145 BCF net to Cluff

▪ Located adjacent to Shell operated infrastructure at Barque which is in long term production decline

▪ Shell exercised their option to farm-in to P2437 at end April 2019:

▪ Shell will receive 50% working interest in return for total cash consideration of USD$600k

▪ Shell to pay 75% of the costs associated with the first well to be drilled on the licence up to $25M

▪ Completion subject to OGA approval and entering JOA

▪ Shell have indicated a commitment to drill an exploration well at the soonest possible opportunity – possibly during 2020

➢ Shell and ExxonMobil recently completed a £300M rejuvenation of the Bacton Gas terminal which is fed from the Shell operated Clipper hub

➢ Up to 25% ullage available in the Clipper-Bacton system from 2021

➢ Shell operates the Barque field, located approx. 20kms to the south of the Selene prospect, which in turn feeds gas to the Clipper hub

➢ Access to Clipper-Bacton system provides long term offtake option for the Selene prospect

Location of P2437 and the Selene Prospect


P2437 – Selene Prospect

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SELENE PROSPECT

Leman Sandstone Structural Prospect - Covers an area of approx. 26km2

- 100% 3D seismic coverage - Down dip well (48/8b-2) in transition zone or on GWC- Analogous to Shell operated Barque field located

20kms to south

- Gross P50 Resource of 291 BCF (Range 105-688 BCF)- GCoS = 39%


Shell UK Farm-in to P2252

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Overview

▪ Pensacola Prospect is a Zechstein Reef with gross P50 prospective resources of 309 BCF with 93 BCF net to CLNR

▪ Shell to acquire a 70% working interest and operatorship in Licence P2252

▪ Shell to carry 100% of all costs associated with the agreed work programme through to a well investment decision

▪ Agreed work programme includes:

▪ The acquisition of >400km2 of new broadband 3D seismic across Pensacola

▪ Seismic reprocessing and other sub-surface studies to support a well investment decision in Q4 2020

▪ Cluff estimate of exploration well costs on Pensacola at between USD$13M and USD$18M

▪ Cluff retains the option to farm down its 30% interest to offset exposure to drilling costs

➢ Shell have announced that Shearwater Geoservices have been contracted to shoot 3D seismic on Pensacola with acquisition planned to commencing in mid-August 2019

➢ Exploration well to be drilled as soon as practicable after well investment decision

➢ Pensacola could be developed via tieback to Breagh(45km) or via a new pipeline directly to the onshore Teesside Gas Processing Plant (78 km)

TGPP


Lower Triassic

Permian

Carboniferous

Hauptdolomite FmWerraanhydrit Fm

P2252 – Pensacola Prospect

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Z2 Zechstein Reef Build-up- Approx 200-250m reefal build-up covering >75km2

- Gas proven in Z2 Formation on block- Crosgan (42/15a-2) analogue flowed >7mmscf/day on test - New high resolution 3D seismic to be acquired by Shell in 2019

- P50 Resource of 309 BCF (Range 118-566 BCF)- GCoS = 20%

PENSACOLA REEF


Recent & Proposed Activity in Adjacent Licence Areas

CORPORATE ACTIVITY

Dec 2015 INEOS completes acquisition of DEA UK North Sea gas fields for £490M

Mar 2017 ONE acquires STERLING RESOURCES interest in Breagh for USD$163M

May 2017 INEOS acquires DONG ENERGY for USD$1.3B

Dec 2017 SPIRIT ENERGY formed by merger CENTRICA and BAYERNGAS

Feb 2018 NEPTUNE completes acquisition of ENGIE E&P for USD$3.9B

Dec 2018 ONE and SHV Holdings merge E&P business to form ONE-Dyas

Cygnus Gas Field▪ First Gas flowed Q4 2016

▪ 630 BCF reserves

▪ Produces from Carboniferous

and Leman

▪ One of largest gas fields in the UK

Pegasus West Discovery▪ Namurian sandstone target

▪ Flowed >90mmscfd on test in 2014

▪ FDP submission expected 2019

Andromeda Prospect▪ Carboniferous Prospect

▪ Exploration well expected 2019

Ossian-Darach Prospect▪ Zechstein & Carboniferous Prospect

▪ Exploration well expected Q2 2019

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Breagh Gas Field▪ Carboniferous – Scremerston Reservoir

▪ First gas – October 2013

▪ Approx 600 BCF reserves

▪ Focus of recent M&A activity by INEOS and ONE

Aurora Prospect▪ Multi-TCF structure in Fell Sst

▪ Key analogue for Cupertino Prospect

▪ Drilling proposed 2019

West Newton Prospect▪ Zechstein reef analogue for Pensacola

▪ Located onshore East Yorkshire

▪ Exploration well spudded May 2019


P2352 – ETAP Area in Central North Sea

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Overview

▪ Cluff have a 100% Working Interest in P2352 (Blocks 22/24f & 22/25g)

▪ 30th Round Licence - effective 1st October 2018

▪ Dewar prospect is key focus – previous drilling has focussed on deeper Triassic HPHT targets

▪ 4 year Phase A – firm work commitments have been completed

▪ Located close (<5kms) to key ETAP infrastructure operated by BP and with >25% available oil export capacity

▪ $1bn investment completed in 2015 will see ETAP produce well into the 2030’s

▪ Rock physics and economic feasibility work ongoing

▪ Virtual dataroom to support farm-out marketing expected to be ready by mid-2019

➢ Dewar is a 39.5 million barrel (P50 recoverable) light oil prospect within a channelised Forties Sandstone Reservoir

➢ Channel is key feeder for sediment transport from Marnock-Skua high to Forties Sandstone turbiditic fans around Merganser-Scoter area

➢ Non HPHT field reduces exploration & development cost and risk profile


P2352 – Dewar Prospect, CNS

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Tesla – 22/24b-11

22/25b-4Z

Forties Mbr

Ekofisk Fm

Maureen Fm

Dewar Channel

Dewar Channel

Maureen Debris Flow

Forties Sandstone – Channel Sand Prospect - Strongly analogous to the Huntingdon Field - Oil proven on block by well 22/24b-11- 100% modern reprocessed 3D seismic coverage - Drillable with large jack-up rig – approx. 90m water - AVO anomaly which supports the geological model

- P50 Prospective Resource of 39.5 mmbo- P10-P90 Range of 10.5-80.5 mmbo- GCoS = 41%

100% interest provides maximum flexibility for farm-down

22/25b-4Z

22/24b-11

NE SW S N


30th Round Awards - SNS Core Area

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P2428 – Cupertino (100% CLNR)

▪ Blocks 43/7 & 43/8▪ Targeting early Carboniferous reservoirs▪ Cupertino is TCF scale structural lead▪ Additional on-block potential in shallower

Bunter Sst and Rotliegend formations ▪ 2019 work programme is to reprocess approx.

500km of legacy 2D seismic data

P2424 – Cortez & Burbank (100% CLNR)

▪ Blocks 42/14 & 42/15b▪ Multi-level prospectivity adjacent to the Breagh field ▪ TCF scale potential including the Cortez structure ▪ Initial work programme is to reprocess 2D seismic and

sub-surface studies

Planned 2019 wells by Spirit and

ONE-Dyas on Andromeda, Darach &

Aurora will generate significant

focus on the early Carboniferous

play over the next 18 months.

If successful these offset wells will

add significant value to the Cluff

Core Area portfolio


Proposed Activity Timeline – Key Licences

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Q1 2019

Q2 2019

Q42019

Q3 2019

Q1 2020

Q2 2020

1H2021

Q32020

Q4 2020

P2252 Pensacola Processing and Evaluation

Dewar Farm-out processP2352 Sub-surface Evaluation

32nd Licensing Round Technical Evaluation

Expected Well Investment Decision

Cortez 2D Seismic ReprocessingP2424 *2

P2428 Cupertino 2D Seismic Reprocessing *2

*2 Subject to funding or farm-out

Farm-out process

Farm-out process

*2

*1 Timing is subject to no further seismic reprocessing

Selene Sub-surface EvaluationP2437 *1*1


Summary

Shell farm-outs give line of sight over two near term exploration wells

targeting 238.2 BCF of net P50 resources on two independent prospects

Shell farm-in represents clear endorsement of the portfolio’s potential and the Company’s

strategy

Intend to repeat farm out success with remaining portfolio of exciting prospects currently held with high

working interest

Shell investment and remaining Cluff working interest provides catalyst for

potential further farm downs to offset future drilling costs

Agile, debt free and low cost explorer operating in an attractive

regulatory and fiscal regime

17

Improved working capital position from consideration paid for P2437

and 100% carry on P2252


Contact

18

APPENDIXFollow CLNR at

Cluff Natural Resources Plc |

Investor Base and Capital Structure

Key Shareholders (at 30 April 2019)

▪ IPGL (Michael Spencer) 11.8%

▪ Hargreaves Lansdown (Nom) 11.1%

▪ Fiske 7.8%

▪ Interactive Investor Trading 6.5%

▪ Janus Henderson 6.2%

▪ Barclays Wealth 5.1%

▪ Guinness Asset Management 5.0%

▪ Halifax Share Dealing 3.9%

▪ Lloyd Dorfman 3.2%

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Capital Structure

Shares In Issue 549m

Options 48m

Free Float 85.6%

Cash at 31 December 2018Post Y/E farm out consideration

£1.4m$600k

Debt NIL

Cluff Natural Resources Plc |

Prospect Inventory – May 2019

20


Contact

21

Cluff Natural Resources Plc

Third Floor5-8 The SanctuaryLondonSW1P 3JS United Kingdom

Tel: +44 (0)20 7887 [email protected] Follow CLNR at

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CORPORATE PRESENTATION - Cluff Natural Resources · This Corporate Presentation may contain “forward-looking statements” that involve substantial risks and uncertainties, and