CORPORATE PRESENTATION - Panoro Energy€¦ · Corporate Presentation | DISCLAIMER This presentation does not constitute an offer to buy or sell shares or other financial instruments

Corporate Presentation |www.panoroenergy.com

CORPORATE PRESENTATION

OSE Ticker PEN

March 2017

Corporate Presentation |

DISCLAIMER

This presentation does not constitute an offer to buy or sell shares or other financial instruments of Panoro Energy ASA (“Company”).

This presentation contains certain statements that are, or may be deemed to be, “forward-looking statements”, which include all

statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the

Company’s experience and perception of historical trends, current conditions, expected future developments and other factors that

we believe are appropriate under the circumstances. Although we believe that the expectations reflected in these forward-looking

statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking

statements due to known or unknown risks, uncertainties and other factors. These risks and uncertainties include, among others,

uncertainties in the exploration for and development and production of oil and gas, uncertainties inherent in estimating oil and gas

reserves and projecting future rates of production, uncertainties as to the amount and timing of future capital expenditures,

unpredictable changes in general economic conditions, volatility of oil and gas prices, competitive risks, counterparty risks including

partner funding, regulatory changes and other risks and uncertainties discussed in the Company’s periodic reports. Forward-looking

statements are often identified by the words “believe”, “budget”, “potential”, “expect”, “anticipate”, “intend”, “plan” and other

similar terms and phrases. We caution you not to place undue reliance on these forward-looking statements, which speak only as of

the date of this presentation, and we undertake no obligation to update or revise any of this information.

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PANORO ASSETS IN WEST AFRICA

TWO CORE ASSETS IN WEST AFRICA WITH PRODUCTION, DISCOVERED RESOURCES & SIGNIFICANT EXPLORATION UPSIDE

Aje (Nigeria) Dussafu (Gabon)

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COMPANY SNAPSHOT

4

US$29mmMarket Cap (March 13, 2017)

ticker: PEN

US$4.8mmCash

(as at December 31, 2016)

US$0mmDebt

3.2mmbbl2P Reserves

35.4mmbbl2C Resources

Focused E&P Company High-quality Asset Portfolio Solid Foundation

▪ Entire team

located in

London

▪ Full cycle portfolio

▪ Additional proven resources in

OML 113 Nigeria

▪ Substantial pre-salt discoveries

in Gabon

▪ Progress of Gabon development

▪ Material Exploration upside

▪ Oil Production

▪ Proven reserves and production

provide foundation to valuation

▪ Debt free

▪ Pending transaction on Dussafu-

$12 million in cash

▪ Strong shareholder register


PANORO TEAM

EXECUTIVE MANAGEMENT TEAM

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BOARD OF DIRECTORS

Mr. Julien Balkany

ChairmanMrs. Hilde ÅdlandMs. Alexandra Herger Mr. Torstein Sanness Mr. Garrett Soden

John HamiltonChief Executive Officer

Experience

Qazi QadeerChief Financial Officer

Richard Morton Technical Director

Experience Experience

Experience ExperienceExperience Experience Experience


WEST AFRICA STRATEGY

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NIGERIA

GABON

▪ Unlock value at Aje

▪ Close transaction with BWO

▪ Build business through M&A

▪ Use existing regional knowledge

base and strong local network

▪ Prioritise pre-salt, transform margin plays

▪ Target mature established basins

▪ Evaluate both oil and gas opportunities

▪ Focus primarily on production and development

assets, operated or non operated

▪ Maintain strong financial discipline


CORPORATE SUMMARYPANORO IS FULLY COMMITTED TO CREATING SHAREHOLDER VALUE

Project execution

Efficient and low cost

operations

Growth opportunities

assessment

FOCUSED TEAM AJE

Provides Foundation for

Company

Ability to leverage cash

flow from Aje once

stabilised

Further value in

OML 113

DUSSAFU UPSIDE

BWO Transaction

Existing discovered

resource base

Material exploration

upside

PANORO IS A FULL CYCLE E&P COMPANY

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Corporate Presentation

AJENigeria


OML 113 AJE LICENSE OVERVIEW

9

Operator YFP

Revenue Interest Initially 12.19%

Paying Interest 16.255%

Working Interest 6.502%

Other Partners NewAge, EER, MX Oil

HISTORY AND STATUS

MAY 2016 AJE FIELD COMMENCED COMMERCIAL PRODUCTION

PROJECT INFORMATION

Within the OML 113 License area, a Secure Anchorage Area is in operation, off the coast

of Lagos, for vessels that require dedicated maritime security. The area is protected by

multiple armed Patrol Boats, which enforce a Maritime Exclusion Zone around the

anchored vessels.

1991: Awarded to Yinka Folawiyo Petroleum (“YFP”)

1996: Aje field discovered in 1996

- Located offshore Lagos, near Benin border

- Approximately 800km from Niger Delta

- Water depths ranging from 100-1,500m

- Discoveries lies 24km from the coast

- Close to West Africa Gas pipeline (12km) and Lagos (64km)

2014: Aje Field Development Plan (FDP) approved

2014: Final Investment Decision (FID) made (October)

2015: Aje 5 and Aje 4 wells completed (Q3/4)

2015: YFP purchases Afren/FHN stake (22.5% paying

interest) in October 2015 for US$ 35 million (October)

2016: First Oil production (May)

First lifting (September)


AJE UPDATE

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Operational

• Gas lift compressor issue fully resolved in January. Net 4Q16 production at 355 bopd.

• Intervention operations at Aje 5 underway, with a view to re-establishing targeted production levels

Arbitration

• Panoro has commenced arbitration proceedings against its joint venture partners in OML 113 claiming that they have

not abided by the terms of the Joint Operating Agreement (JOA) in purporting to pass certain resolutions in respect of

a new well and issuing related cash call notices

• Panoro’s position that the resolutions are invalid, and as such the cash call notices are invalid

• In addition to commencing arbitration proceedings, in order to protect its rights prior to commencement of the

proceedings, the Company applied to the High Court in London, UK for interim relief in order to protect its rights

under the JOA. The application was successful and a Court order was received granting Panoro an interim injunction,

and awarded its legal costs in seeking the injunction. The other joint venture partners are now temporarily restricted

from taking any action related to new well cash calls that would prevent Panoro’s continued participation in the JOA

and OML 113

• Arbitration hearing is likely to take place in late 2nd quarter 2017, and a decision in late 3rd quarter

• Panoro has been required by the High Court to post a security in the sum of US$1.5 million

• Panoro is still proactively trying to resolve the issue out-of-court in order to preserve shareholder value

• Panoro is in discussion with a number of potential buyers for the sale of all or a portion of its interest in OML 113.

However there can be no assurances that any transaction contemplated under these discussions will be consummated.

In the meantime, Panoro is resolved to bring the case to arbitration should no commercial solution be forthcoming

OPERATIONAL

ARBITRATION


OML 113 AJE FIELD

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Aje-3 Aje-1 Aje-2 Aje 4

CENOMANIAN OIL JUST THE START

TURONIANMATERIAL DISCOVERED GAS AND

LIQUIDS RESOURCE - PHASE 3

CENOMANIAN

TWO WELLS (PHASE 1), AJE 4 & 5

TWO FURTHER WELLS POSSIBLE

(PHASE 2)

ALBIANFURTHER GAS AND CONDENSATE

UPSIDE

Aje 5


AJE RESERVES AND CONTINGENT RESOURCES1

GROSS RESERVES AND RESOURCES (MMBOE)PANORO ECONOMIC ENTITLEMENT

NET RESERVES AND RESOURCES (MMBOE)

ORIGINAL PRODUCTION PROFILE (KBOEPD)

▪ Net entitlement barrels vary between

12.1913% and 16.255% due to carry

arrangement embedded within Joint

Venture Agreement

0

5

10

15

20

25

30

35

40

45

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

(Gross, kboepd)

Aje Cenomanian 1P Aje Cenomanian 2PTuronian 2C Oil RimAje Cenomanian 2CTuronian 2C Con Turonian 2C LPGTuronian 2C Gas

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Phase 1Aje 4 & 5 wells

23.4mmbo

15.7mmbo


11.7 11.7

163.2mmboe

Phase 3Assumes 4 Turonian gas

cond. wells with onshore gas plant

4.0

22.0

40.0

97.2


3.2mmbo

2.0mmbo


1.8 1.4

26.6mmboe

Phase 3Assumes 4 Turonian gas

cond. wells with onshore gas plant

0.7

3.6

6.5

15.8

1C: 18.2 mmboe

2C: 26.6 mmboe

1) TRACS CPR Report, 25th July 2014 (at 80 US$/bbl)


TURONIAN & CENOMANIAN DEVELOPMENT

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OML 113 3D SEISMIC & PROSPECTIVITY

▪ In late 2013, 1,000km2 of 3D acquired in conjunction with OPL

310 license holders

▪ Prospect inventory being updated

▪ New seismic being used to plan phase 2 and phase 3 drilling

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NEW 3D SEISMIC DATA STATUS

▪ Ogo-1 and Ogo-1ST were drilled on OPL 310 in 2013, discovery

reported to have P50 resources of 774 mmboe in Turonian –

Cenomanian and syn-rift

▪ With Aje, discoveries confirms potential of Dahomey Basin

DAHOMAY BASIN EMERGING

▪ 7 leads in post-rift middle cretaceous section identified from

existing seismic data; at least further 2 leads have been

identified in syn-rift

▪ Improved seismic increased confidence in distribution of

Cenomanian oil reserves; supports reported reserves and

resources

▪ Prospective Resource Study commissioned

OML 113 PROSPECTIVITY


NIGERIAN GAS IN CONTEXT

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▪ 7th largest population in world (180 million

people)

▪ Largest economy in Africa

▪ 9th largest gas reserves in world

▪ Domestic gas prices rising (>$3.50/mscf)

▪ Nigerian gas production for domestic

power: 600 mmscf per day, while demand

is estimated at 2700 mmscf per day

▪ Large infrastructure investment required in

order to meet local demand

▪ Due to irregular supply of electricity,

Nigerian businesses and families estimated

to spend $22 billion per annum to buy

diesel for power generation


OML 113 GAS RESOURCES IN CONTEXT

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▪ Nigerian installed gas fired power

generation capacity estimated at

10,000 MW

▪ Only 3600 MW actually generated

largely due to gas constraints

▪ Generation generally in the

West (70%) while consumption is

weighted to the West

▪ Infrastructure constrained

▪ OML 113 strategically located near

large gas markets near Lagos and

the West Africa pipeline

~60% total load

~70% total generation

OML 113


WEST AFRICAN GAS PIPELINE

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WAGP is owned by

Chevron, Nigerian

National Petroleum

Corporation (NNPC),

Shell, Ghana, Togo,

Benin

NNPC Contractual

obligation to send via

WAGP

120 MMscf per day

Capacity of

800 MMscfpd

Net backs $4/mcf


Corporate Presentation

DUSSAFUGabon


BW OFFSHORE DEAL WITH PANORO: ULTIMATE GROUP

Panoro

Subsidiary

8.33% 81.66%

Assuming Gabon Oil

Company (National Oil

Company) carried interest 10%

BW Energy

Gabon

Dussafu

PSC

SALE OF A 25% STAKE IN DUSSAFU

• $12 million in cash

• Non-recourse loan for up to $12.5

million for all costs until first oil

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• SPA signed

• Pending Gabonese approvals


DUSSAFU MARIN (GABON)LARGE DEVELOPMENT BLOCK WITH MULTIPLE DISCOVERIES AND EXPLORATION PROSPECTS

Operator BW Energy Gabon 81.66%

Panoro Working

Interest8.33%

Other PartnersBack-in right for 10% working interest

held by Affiliate of Tullow Oil

Gabon Oil Company 10.00% assumed

PROJECT OWNERSHIP POST BWE TRANSACTIONS

▪ Four pre-salt oil discoveries with upside/appraisal potential

▪ Panoro’s oil discoveries in Ruche (2011) and Tortue (2013) have demonstrated

a step change in the success rate of identifying oil-bearing structures

▪ Gaffney Cline reports demonstrate commerciality of the discoveries with

Gross 2C Resources of 36.3 mmbbl, 3C 70.6 mmbbl

▪ PSC area outside Ruche EEA expired May 2016

▪ Important milestones achieved in 2014 with Declaration of Commerciality and

award of Exclusive Exploitation Authorisation

▪ Field Development Plan has been approved by the Government of Gabon, first

oil required by mid 2018

▪ Following the 2013 outboard 3D seismic the block is now fully covered by 3D

seismic data

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LICENSE

ACTIVITY

RUCHE

EEA AREA

Etame

M’Bya

GMC-1X

Walt Whitman

Moubenga

Tortue

Ruche

DUSSAFU BLOCK

Oil Fields Gas Discovery Gamba Prospects Gamba Leads Dentale Prospects

N. Tchibala

S. Tchibala

Avouma

M’Wengui

Yombo

Etame located a few

kilometres away is Dussafu

analogue with ca 100

mmbo recovered to date,

initial estimate 30 mmbo


DUSSAFU DEVELOPMENT PROJECT

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• Full new upstream technical team has been assembled

by BWO with many years of experience in Gabon

• New team fully focussed on achieving first oil by second

half 2018

• Potential has been identified beyond Contingent

Resources estimate from historical Gaffney Cline

Associates (“GCA”) 2014 report

• Initial likely development plan ca.15,000 bopd

• Team have experience on Etame PSC analogue which

has produced ca. 100 mmbo since 2002, with original

estimates of only 30 mmbo

• Full field development can yield up to 150 mmbo

recoverable not including all exploration prospects

• Further exploration potential inside EEA area includes

the large A and B prospects with the potential for an

estimated mid-case additional ~500 million barrels

Potential Ruche Area development


▪ 13 robust prospects have been identified and over 14 leads

within Ruche EEA

▪ The most attractive prospects are within Ruche EEA area and

have potential for inclusion in FDP once drilled

▪ Within EEA area, Prospects A and B have combined P50 of 482

million barrels of gross un-risked prospective resources

EXPLORATION INVENTORY

Base of salt map from 3D seismic with prospect outlines

RUCHE AREA EEA

Gamba

Dentale

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Tortue


PANORO ENERGY78 Brook Street

London W1K 5EF

United Kingdom

Tel: +44 (0) 203 405 1060

Fax: +44 (0) 203 004 1130

[email protected]

Contact Details:

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CORPORATE PRESENTATION - Panoro Energy€¦ · Corporate Presentation | DISCLAIMER This presentation does not constitute an offer to buy or sell shares or other financial instruments