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Private & Confidential
Sequa Petroleum
Company overview
March 2016
Management team
1
► A team of six executives with an Oil Major pedigree, deal execution track record and financial discipline
► Extensive leadership experience in Majors, IOCs and Service Industry
► Experienced local management teams in the UK, Norway and Kazakhstan
► Advanced technical and engineering capabilities enable the unlocking of maximum value
► Strong understanding of commodity cycles and M&A dynamics
Jim Luke
MD
33 years’ experience
• Senior management • Operations• Production• Engineering• Drilling
COO
35 years’ experience
• Senior management• Corporate governance • JV management• Operations• Exploration• Geoscience
Peter Haynes
MD
Technical
26 years’ experience
• Senior management• Project development• Petroleum engineering• Marketing
Jelte Bosma
MD
Business Dev.
20 years’ experience
• Senior management• Legal• Corporate governance• M&A• Financing
Robin Storey
GC & Company Sec
26 years’ experience
• Senior management• Business
development• Commercial
structures • Field development
CEO
22 years’ experience
• Senior management • Corporate
development• Corporate gov.• Financing, M&A• Investor relations
Benjamin Lee
CFO (interim)
Jacob Broekhuijsen MD
2
Unprecedented opportunity to acquire high quality assets at distressed valuations Temporary oversupply and major oil price collapse due to shale oil growth and Saudi change of strategy Liquidity distress causes outsized CAPEX cuts across industry, and availability of assets at distressed valuations Market fundamentals dictate medium term supply shortfall and equilibrium prices in excess of $70 per barrel
Create value in a cyclical industry through asset acquisition, optimisation and monetisation Identify material assets with proven resources, current or near term production, and value upsides Acquire, optimise and monetise assets throughout the cycle through technical and financial excellence Pursue balanced portfolio in select areas with low marginal cost and exploit growth potential and synergies
Highly skilled management with technical, operational, financial and M&A capability Strong global and local industry relationships through Sequa Petroleum and its local business units M&A pipeline with 8 targets with potential for deal execution within a year Pipeline includes public and private companies, distressed corporates and direct asset purchases
Execution capability proven by deal track record in a changing market Gina Krog – highly attractive development play at historic discount to comparable transactions Wintershall assets – disciplined approach terminated transaction before completion Kazakhstan licence – upside potential with no immediate capital commitment
Privileged access to capital Sapinda has top financial expertise and a track record of supporting companies’ growth through cycles Stable, committed and aligned shareholders work closely with management to fully exploit the industry opportunity Public market listing gives investors liquidity, and provides flexibility to deploy strategy
Sequa Petroleum – a unique oil and gas company positioned for success
Opportunity
Strategy
Edge
Depletion effect over 5 MMbbl / year
Exceptional asymmetric risk-reward profile for buyers to accelerate portfolio and value growth
Market environment creates an unparalleled investment opportunityA historic change in the oil market environment
3
Oil prices are at an unprecedented new low since 2001 as a result of OPEC’s collapsed pricing model
Major players have announced capital investment reductions of c. $400bn to date; additional capex at risk at sustained low oil price
OPEC spare production capacity is currently at an all-time low of c. 1%, which limits its capability to prolong oversupply
Mounting expectation of medium term supply shortage, starting in 2017 and increasing towards 2020
Distressed sellers are matching distressed market bids, forming a buyer’s market
Decline ~5 mbopd per annum
Implications
Marginal cost of new oil supply 2015-20 (kb/d new production, $)
Expected rebalancing towards the end of 2016 Global average of c. 6% annual production decline from
current fields requires over 5 MMbbl per day replacement capacity, every year
New capacity requirement is over 25bn bbl total for 5 years, growing to 100bn bbl for 10 years
Mid and long term average oil price has to exceed the marginal incentive cost of new supply (over $70 per bbl to exceed 15bn bbl of new capacity)
Geopolitical risk premiums are likely to return and add to the oil price once oversupply is diminished
Global production decline of producing fields
Source: Deutsche Bank Source: UBS Global Research, 12 January 2016
Mark
et va
luat
ion o
f ass
ets
Exploration Appraisal Develop Construct Production Market
Aksai Gina Krog
Strategy takes into account cyclical business nature to ensure shareholders’ value
Identification of attractive assets in the current oil price cycle…
4
Sequa’s principal investment criteria High quality assets with known
hydrocarbons Assets with current or near-term
production and cash flow Assets in the lower 50% of the
industry marginal cost curve Undervalued assets that can be
produced, developed, optimised and monetized
Avoid areas with high geopolitical risk
Conventional E&P approach Companies are built from
exploration over a long period with highly uncertain outcomes
Effect of Low oil price
Buy Assets
MonetiseAssets
Conventional approach of a Junior E&P Company
Sequa Petroleum leverages current market conditions by building company on Production & Cash-flow
Norway provides a secure platform for growth in a unique investor friendly environment
Norway: excellent tax environmentOil & Gas in Norway An attractive and stable investment environment for oil and
gas companieso Strong government support for new independent oil and
gas companieso A tax regime that provides strong investment incentives
and significant downside protection: up to 94% of development CAPEX can be refunded by the Government
o Transparent joint venture friendly regulation The NCS is an area with huge resource volume potential
o Prospectivity proven by ongoing large discoveries
5
Country overview
Strong sovereign government rated AAA and highly stable Europe’s largest oil and gas producer and having the highest
remaining commercial reserves of c. 25bn boe Low geopolitical risk and rare isolation from geopolitical crises Lowest risk environment for oil and gas globally
Tax relief for c. 94% of field investments
Norway is in a sweet spotin a low oil price environment2
0%
20%
40%
60%
80%
100%
Investment Tax position
Non refundable
Uplift 15%
Special Petroleum Tax50%
Corporate tax 28%
Uplift 16%
Special Petroleum Tax53%
Corporate Tax 25%
Norway offers a superior country risk environment1
Source: Rystad Energy, Norwegian Government1 Sovereign Risk Index, Euromoney2 Adapted from “Straws in the sand”, The Economist. Figures are 2015 break-even oil price (price at which profit is made, $ per bbl)
Rank Rank Change Country Overall
Score
1 0 Norway 90.12
2 0 CH 89.02
3 0 SG 88.73
4 +4 DK 85.07
5 -1 LU 84.77
6 -1 SE 84.53
7 -1 FI 83.62
8 -1 NL 83.23
9 0 CA 80.91
10 +1 DE 80.86
Back
stop
ped b
y Nor
wegi
an st
ate
Gina Krog – at a glance
Gina Krog overview Asset location
Reserves metrics (100%, PDO area only)1
Gina Krog is amongst the largest field developments on the NCS
6
An oil and gas field in the central part of the North Sea on the Norwegian Continental Shelf (NCS), located 250 km west of Stavanger and 30 km northwest of the Sleipner A installation
Field discovered in 1974 in the Middle Jurassic Hugin reservoir, with additional oil volumes discovered in 2007
After 15% acquisition from Total, partners are Statoil (operator, 58.7%), Total (15%), PGNiG (8.0%) and Det Norske (3.3%)
Gina Krog is among the largest field developments currently ongoing on the NCS Experienced operator Statoil has progressed development and expect Gina Krog
to become key area infrastructure on the NCS Project over halfway, planned completion remains within budget and on schedule
with first production Q2 2017 Contingent resources are 47 mmboe1 in addition to the 2P reserves of 260 mmboe
Gina Krog 2P estimated production profile (gross kboe/day) 1,2
1Source: Rystad Energy; WoodMackenzie; Gina Krog EIA; Statoil publications; Company estimates; Independent Evaluation of Gina Krog for Tellus Petroleum by AGR Petroleum Services AS2 Source: Statoil NPF conference presentation profile 2014 (scaled up to 260 million boe reserves)
0
10
20
30
40
50
60
70
80
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
'000 boepd gross
Oil and condensate NGL Sales gas
160-190
260
330-360
0
100
200
300
400
1P 2P 3P
Reserves (mmboe)
0
2
4
6
8
10
12
14
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
'000 boepd net
Oil and condensate NGL Sales gas AGR+segments, net
Estimated production profile with potential upsides (boe/day, 15%)
Gina Krog geographical resource allocation
Gina Krog – upside potential
1Source: Rystad Energy; WoodMackenzie; Gina Krog EIA; Statoil publications; Company estimates; Independent Evaluation of Gina Krog for Tellus Petroleum by AGR Petroleum Services AS2 Source: NPD Databases
Significant upsides are being pursued
7
Gina Krog has material upsides beyond its 2P reserves1: Additional recovery from the PDO area (solid red line on map) through
development optimisations Prolongation of the oil production plateau from additional development of
appraisal segments not included in the initial PDO (dotted line in prod. graph)o 3 significant appraisal segments: East 3, Central 3 and East 4o The East 3 segment was successfully drilled in 2015
Further resource potential from explorationo Currently two identified opportunities in the license areao Fanten and Rampen are being evaluated for drilling
Cost reductions through faster actual drilling performance and acceleration of hook-up and commissioning project execution
Cost reductions and tariff income from satellite developments to Gina Krog (e.g. Eirin) and to Sleipner (e.g. Alpha Central)
PDO
2PVolumes
Exploration
Appraisal #1
Appraisal #3Appraisal #2
Exploration
Historically, most large fields on the NCS have significantly outperformed their initial PDO submissions2
Upside from outside PDO area
Reserves & Resources (Tellus Petroleum, 15%, PDO area only)1
24-2839
50-54
0
20
40
60
1P 2P 3P
Reserves (mmboe)
Gina Krog acquisition is at a highly attractive discountAcquisition highlights
Tellus, Sequa Petroleum’s 100% subsidiary in Norway, signed deal to acquire 15% of the Gina Krog license unit from Total in October 2015
Effective deal date is 1 January 2015 Production is expected to commence in Q2 2017, reaching peak
production of c. 11,000 boepd net Capex estimated at $15 per boe and Opex also $15 per boe
(over field life from 1 Jan 2015) Tellus has been approved as a new NCS license holder, and the
deal has received all the necessary government approvals Tellus management is very experienced, with strong relationships
across the NCS
Attractive valuation metrics
5 Year Average Finding & Development Costs (USD/bbl) – Peers2
Gina Krog very well positioned on the cost curve and acquired at highly attractive entry point
Highly attractive entry cost, based on effective date being after 2 years of capex and several years of appraisal and development
All-in Tellus expenditure, prior to production start, of $360mn equating to $9.2 (pre-tax) per boe of 2P reserves
Total will retain Gina Krog remaining tax balances per the effective date
The price paid implied a more than 50% discount to similar transactions completed in Norway
High asset quality and Gina Krog breakeven costs place the asset in best half of the world’s oil and gas marginal cost developments
8
PDO area Project Cost (Tellus Petroleum, 15%)1
49.1
42.3
31.328.1 27.3
18.5 17.3 17.2 16.1
9.2
0
10
20
30
40
50
60
OMV BP Shell Statoil Eni MOL BG Repsol GALP
Gina Krog cost to first production USD$9/boe
pre-tax benefits
1 Source: Gina Krog EIA; NPD; Statoil publications; Rystad Energy; WoodMackenzie; Company estimates; Independent Evaluation of Gina Krog for Tellus Petroleum by AGR Petroleum Services AS2 Source: UBS Global Oil and Gas Analyser, 9 September 2015
0
50
100
150
200
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039
US
D m
n
Gina Krog PDO Area - Net Project Costs Tellus 15% WI - USD mn
CapexOpexAbex
Kazakhstan provides for strong potential with no immediate capital requirements
Kazakhstan license provides for growth potential
75% of Aksai license: 2,379 km2 surrounding the super-giant Karachaganak gas-condensate-oil field in the Pre-Caspian Basin
Karachaganak is one of the world’s largest oil discoveries, estimated to hold over 1 trillion cubic meters of gas and over 1 billion tons of oil o The field has already passed its payback point i.e. historic capex has
already been earned backo A new independent production system for a field extension would not
be required as Karachaganak is already in productiono Through unitization, extensions would have a faster timeline to
monetisation compared to new developments Initial 5,300 metre pre-salt deep well into one of the potential extension
areas in 2014o Asset book value maintained, well written off but left for re-entry
Recently acquired seismic data being interpreted to evaluate well results, further key opportunities and options for the Aksai contract areao Extension(s) of the Karachaganak field into Aksai acreageo Deeper reservoir layers with significant hydrocarbon volumeso Further exploration potential around Karachaganak
The licence is extended until July 2018 to continue appraisal and exploration activity
Aksai - Kazakhstan
9
Pursue balanced portfolio in select areas with low marginal cost, exploit growth potential and synergies
Sequa Petroleum’s strategic investment areasInternational focus
10
Focus on areas where political / fiscal / commercial stability and geological prospectivity allow for stable high returns and growth Selective NW Europe locations and in particular Norway (current focus area) Caspian Region and in particular Kazakhstan (current focus area) West / East Africa low cost conventional oil (future focus area)
NW EuropeLow risk environment
• Large producing and development area• Strong local team• Reviewing several opportunities
Sub Saharan Africa Low cost oil
• Local strategic partner• Target exceptional assets for rapid
production growth
KazakhstanMaterial opportunities
• Local team established• Strong relationships in place• Track record as operator
1
23
A B C D E F G H
Country
Asset type Oil/Gas Oil & Gas Oil & Gas Oil Oil Gas Oil & Gas Oil Oil & Gas
Status Production Production Production Development Development Production Development Appr/Devt
Timing for first oil Year 2016 2016 2016 2017 2022 2016 2018 2018
Target equity % 10 5 10 10 30 various 100 50
Net Production Boepd 3-5,000 5-10,000 8-12,000 6-7,000 5-10,000 10-20,000 5-10,000 5-10,000
Deal pipeline highlights multiple opportunities to create further value
High quality opportunities are increasingly available at very attractive acquisition parameters
Current opportunity pipeline
11
Appendix
13
FridtjofJebsenCEO
25 years experience from senior management, strategy, BD, finance, M&A
With Saga Petroleum (‘91-’99) within corporate planning and M&A&D
Partner Innovation Strategic Consulting (‘99-’02)
Man. Dir. NCS Strategy & BD advisory firm PetroAdvisor (‘03-’12)
Founder of Tellus Petroleum (2012).
Geir Chr. MelenCFO
25 years of experience within in oil & gas and health care sectors
Saga Petroleum within strategy, economics and finance (‘90-’97)
CFO PhotoCure and Algeta (’97-’08),
CEO of Clavis and Ostomycure (‘08-’12)
Einar F. SembBD & Commercial Director
32 years experience in oil & gas within commercial, BD, economics
With Saga and First Securities before co-founding PetroAdvisor in 2001
Experience as Chief Negotiator, Chief Commercial Advisor, BD Advisor
Co-founder of Tellus (2012)
Sjur TalstadSubsurface & GrowthDirector
28 years experience in oil & gas from NCS and international assignments
Statoil (‘87-’08) within subsurface & technology and as VP Sleipner assets
Seconded to BP (‘91-’94, Azerbaijan) and Chevron (‘97-’00, Venezuela)
CEO and EVP of AGR Petroleum Services (‘08-’15)
Ivar HaalandField Develop.& HSEQ Director
29 years experience from oil & gas and energy consulting
With Saga and First Securities before co-founding PetroAdvisor in 2001
Key expertise within field development, asset management, strategy/BD
Co-founder of Tellus (2012)
Claus Frimann-DahlOperations Director
29 years experience in oil & gas from NCS and international roles
Phillips P. (‘86-93), Norsk Hydro (‘93-98), Amerada Hess (‘98-’03)
CTO/COO of Ener Petroleum/Dana Petroleum NCS (‘07-’12).
Key expertise with reservoir management and operations
14
Tellus: highly experienced local management team in Norway with strong NCS track record
16
THIS PRESENTATION IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN. AN INVESTMENT IN ANY OF THE COMPANY’S SECURITIES INVOLVES SIGNIFICANT RISKS. THIS PRESENTATION DOES NOT COMPRISE A PROSPECTUS, ADMISSION DOCUMENT OR LISTING PARTICULARS AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION OR INDUCEMENT TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE, SUBSCRIBE FOR, UNDERWRITE OR OTHERWISE ACQUIRE, ANY SHARES OR ANY OTHER SECURITIES, NOR SHALL ANY PART OF IT NOR THE FACT OF ITS DISTRIBUTION FORM PART OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR INVESTMENT DECISION RELATING THERETO, NOR DOES IT CONSTITUTE A RECOMMENDATION REGARDING THE COMPANY’S SECURITIES OR ANY OF THE BUSINESS OR ASSETS DESCRIBED HEREIN. THE INFORMATION CONTAINED HEREIN IS FOR INFORMATION PURPOSES ONLY AND DOES NOT PURPORT TO CONTAIN ALL THE INFORMATION THAT MAY BE REQUIRED TO EVALUATE THE COMPANY OR ITS FINANCIAL POSITION.The information in this presentation (“Presentation”) has not been independently verified and is subject to change, and neither Sequa Petroleum N.V. (the “Company”) nor its financial adviser nor any other person, is under any duty to update or inform you of any changes to such information. In particular, some of the financial information contained herein has not been audited. No reliance may be placed for any purposes whatsoever on the information contained in this Presentation or its completeness. All statements in this Presentation are made as of the date hereof unless stated otherwise. No representation or warranty, express or implied, is given by or on behalf of the Company or its financial adviser or any of their members, directors, officers, advisers, agents or employees or any other person as to the completeness or accuracy of any information or opinions contained in this Presentation and, to the fullest extent permitted by law, no responsibility or liability whatsoever is or will be accepted by the Company or its financial adviser or any of their members, directors, officers, advisers, agents or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be relied on as a promise or representation as to the future. For the purposes of the United Kingdom’s Financial Services and Markets Act 2000 (“FSMA”), this Presentation is exempt from the general restriction in section 21 of FSMA on the communication of invitations or inducements to engage in investment activity on the grounds that the Presentation is directed at, and must not be acted or relied upon by persons in the United Kingdom other than, (i) persons having professional experience in matters relating to investment and who are investment professionals (as defined in article19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”); or (ii) high net worth companies unincorporated associations and other bodies (as defined in article 49 of the Financial Promotion Order) or (iii) other persons to whom it may be lawfully communicated (all such persons together being referred to as "Relevant Persons"), and the investments or investment activities to which the Presentation relates are available only to Relevant Persons and will be engaged in only with such Relevant Persons. The Presentation must not be acted on by persons who are not Relevant Persons. Any recipient of the Presentation who is not a Relevant Person (as described above) should not rely on the Presentation and take no other action. If and to the extent the Presentation is communicated in, or an offer of the securities is made in, any member state of the European Economic Area ("EEA") that has implemented the Prospectus Directive (each, a "Relevant Member State"), it is only addressed to and is directed exclusively at persons who are 'qualified investors' within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors") (or who are persons to whom it may otherwise be lawfully communicated). For these purposes, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in a Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU. No offer of securities in the Company is being or will be made in the United Kingdom in circumstances which would require such a prospectus to be prepared.Neither this Presentation nor any copy of it may be taken, transmitted, distributed or published in or into the United States of America, its territories or possessions (the “United States”) or distributed, directly or indirectly, in the United States. Any failure to comply with these restrictions may constitute a violation of United States securities laws. 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Outside the United States, any offering of securities will be made in accordance with Regulation S under the US Securities Act.The Presentation has not been approved by any competent supervisory authority. This Presentation does not constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction in which such offer or sale would be unlawful. Neither this Presentation nor any copy of it may be taken or transmitted into the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan or to any person in any of those jurisdictions. Any failure to comply with these restrictions may constitute a violation of the securities law of the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan. The distribution of this Presentation in other jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions.This Presentation includes forward-looking statements. The Company has based these forward-looking statements on its current expectations and projections about future events and typically contain words such as “anticipate”, “assume”, “believe”, “estimate”, “expect”, “forecast”, “plan”, “intend”, “will” and words of similar substance. These forward-looking statements are subject to risks, uncertainties, and assumptions about the Company and the business environment. The Company’s actual results of operations may differ materially from the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. 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