A New Story for PA Resources

Mark McAllister, CEO

Pareto Bond Conference Stockholm, 23 January 2014

The Renewal is underway.....  We have made very significant progress in 2013 in our regeneration plan  A highly experienced management team is now in place

 A series of strategic farm-outs has shaped the portfolio for development  Equity raised has lowered leverage  Two new large owners with outstanding industry experience SEK 891m Equity

May

Jun

Tunisian Farm-Out

2

Congo Farm-Out

Jul

Aug

Sep

Denmark Farm-Out

Oct

SEK 750m Bond

Nov

Dec

Azurite Field Closure

…and further drilling success in Equatorial Guinea!

Mark McAllister Chief Executive Officer 

Monument Exploration » Director of Operations



LASMO plc » Managing Director (Europe and N Africa)



Acorn Oil & Gas » Founder and Managing Director



Fairfield Energy » Founder and CEO



Board Member of Oil & Gas UK



Founding Chairman of OSPRAG » North Sea response to Macondo blow-out



Decommissioning Security and Relief Steering Committee » Oil industry engagement with HMG on tax relief status

 3

Honorary Doctorate from Robert Gordons University » Services to the Oil Industry

Tomas Hedstrom Chief Financial Officer 

PWC » Auditor



SCA » Senior Vice President, Stockholm, Large cap » CFO, (North America) Philadelphia » Vice President Business Control, Stockholm » Managing Director SCA Recycling, London » Head of M&A, Packaging division, Brussels » Managing Director, Packaging sub, Stockholm



Rottneros » CFO, Stockholm, small cap

4

Kevin McGrory General Counsel 

Unocal » Regional Counsel, MEA



Chevron » Senior Legal Adviser, Upstream Operations



Anadarko » Vice President, Legal & Negotiations EMEA



Delta Group » Group General Counsel



Fairfield Energy » General Manager, Legal & Commercial



Shepherd and Wedderburn LLP » Partner, Head of Oil & Gas Law

 5

Seven Energy International Ltd » General Counsel

Graham Goffey SVP Exploration, MD N Sea and W Africa 

Conoco » Geologist



LASMO plc » VP Exploration, Indonesia



Sterling Energy plc » Exploration Manager



Paladin Resources plc » Business Unit Manager, International

6



Director of Oil and Gas Independent Association



Member of Advisory Board, Petroleum Geoscience MSc, Royal Holloway University



Previous Chairman, Petroleum Group of Geological Society of London



BSc (Birmingham), MSc (Imperial College), MBA (Warwick)

Paul Elstone Managing Director PA Tunisia 

Aramco – Saudi Arabia » Field Engineer



NIOC - Iran » Engineering Superintendent



Mesa Petroleum - UKCS » Commissioning Manager



BP – UKCS & International » Offshore Installation Manager (OIM) » Mature Assets Business Manager, UKCS » Field Manager, New Project Start-up, Venezuela

» Business Transformation and Start-up Manager, Azerbaijan » Area General Manager , GUPCO Egypt » HSE Business Transformation Advisor, Trinidad & Tobago and US Refining post Texas City

7

Slimane Bouabbane VP Business Development 

Technip/Coflexip Stena (Aberdeen) » Engineering » Support to worldwide offshore project



IntecSea (Houston) » Project and Engineering

» Support to E&P companies and contractors



Subsea 7 (London/Stavanger/Paris) » Management roles, commercial and strategy » Turn-around team of Acergy/Stolt Offshore



PA Resources (Stockholm) » VP Projects & Investments » Farm-out, Financing, Investment management

8



Board Member of The MacArtney Underwater Group (Denmark)



MBA (INSEAD) and Engineering Deg. (Ecole Centrale Marseille)

The Portfolio Production

Appraisal & Development Priority

Upside Potential

9

• Tunisia Offshore: Didon • Tunisia Onshore: DST • Equatorial Guinea: Aseng & Alen • • • • • • • •

Take out Greenland

Tunisia: Zarat & Elyssa Equatorial Guinea: Diega Denmark: Broder Tuck & Lille John UK: Birgitta (22/19-1) Production

Tunisia: Onshore exploration North Sea: Danish/German exploration Equatorial Guinea: Gas, exploration Congo: MPS exploration

Exploration and development

A hat trick of successful farm-outs PA has undertaken a highly focused farm-out campaign. Each operator is a technical and strategic fit for the respective licence. Exploration

Appraisal

Production

MPS Congo

12/06 Denmark

Zarat Tunisia

 Farmed out 40% to SOCO

 Farmed out 40% to Dana

 Farmed out 70% to EnQuest

 PA retains significant upside with a 25% interest

 PA retains significant upside with a 24% interest

 PAR retains 30% interest in production & development

 SOCO will carry PA share of exploration costs

 $44m consideration including appraisal and development carry

 $249m consideration including carry and contingent payments

 Financial strength of KNOC behind Dana

 EnQuest expert in mature field extension and new developments

 An exploration well in the remaining license period  SOCO is an established operator in Congo  SOCO and PA AMI for further activity

10

 Dana operates nearby licenses  Also includes German exploration acreage  Dana joining PA Danish 7th Round bidding group

 EnQuest and PA AMI for further acquisitions

Didon Field 1976

1997

1998

2005

2006

2008-2009

2011

Discovery

Concession

First Oil

PA Acquisition

Platform + 2 Wells

4 New Wells

Enhancement Study

» Produced 32 million barrels since 1998 » Platform and tanker in place » 70 km offshore in 70m water depth » Tanker was repaired and recertified in 2013 » EnQuest has been highly successful in mature field rehabilitation at Thistle & Heather

» Plan to install an Electrical Submersible Pump on one of three wells in 2014

» Will follow up with new production well » Further ESP installation and new wells likely in following years

11

2017 2013-2017 2013+ First production Development LEX program: ESP, Infill,

Zarat Field 1990

1992

1995

2005

2010-2011

2011-2012

2014

2015-2017

2017

Permit Award

Discovery

Appraisal Well

PA Acquisition

ZRT-N1 Appraisal

POD Update, Unitisation

UPOD, UUOA

Development

First production

» Largest undeveloped discovery in Tunisia with 120mmboe of oil and gas

» Active participation of ETAP to secure early production and offset decline in Tunisian gas production

» Development may need CO2 sequestration and gas recycling

» Local infrastructure can handle sour gas

» Commercially complex since unitisation required with Joint Oil block

12

Elyssa Field 1974 Discovery

1992 Appraisal Well

2005

2006/2007

PA Acquisition

Appraisal Well + ST

2010

» Another significant gas accumulation » Four well penetrations drilled to date with one further appraisal well planned

» Straightforward development if appraisal is successful

» Commercially simple with whole field in PA licence

» Local infrastructure with ullage for gas

» Tunisian need for gas will ensure active ETAP support once appraisal complete

13

2013

New 3D Seismic ELY-4 Appraisal Well

2014 POD

2014-2016 Development

2016 First Production

Broder Tuck 2006

2008

2011

2012

2014

2015

2017

6th license round Awarded to Scotsdale

PA acquired Scotsdale

Exploration well + ST

Declaration of commerciality

BT POD

Development start

First production

» Gas field discovered by PA in 2011 » Estimated recovery 15-45mmboe » Development Plan will be completed in 2014 » In shallow water and adjacent to existing infrastructure

» Preferred development concept to be determined in 2014

» Good progress in discussions with nearby host platform and an alternative host is under active review

14

Lille John 2006

2008

2011

2012

2014

2015

2017

6th license round Awarded to Scotsdale

PA acquired Scotsdale

Exploration well + ST

Declaration of commerciality

LJ appraisal well

Development start

First production

» Oil field discovered by PA in 2011 » Estimated recovery ranges from uneconomic up to 60mmstb if appraisal well confirms reservoir model

» Appraisal well required to confirm size of structure

» Currently looking at 2014 slot in Dana rig programme

» Straightforward tieback to existing infrastructure for oil export to Danish mainland

» Appraisal well required to establish better reservoir development

» Will pursue this trend together with Dana 15

Mer Profonde Sud » Azurite Field now abandoned and vessel shortly to depart

» Murphy exited after Azurite failure but remain in the Azurite Exploration Permit

» MPS: prospective exploration block adjacent to and along trend from several large fields

» Encouraging reprocessed 3D seismic was basis for PA re-evaluation and farm-out to SOCO

» Once transaction complete, plan to drill RR prospect in 2014/2015

17

2002-2004

2010-2011

2014

WO & Infill Drilling

3D Seismic

DL-23

Strong Supportive Shareholders 

Since 2000 Gunvor has grown into one of the world’s leading energy commodity traders



In 2012 Gunvor traded 130 million tonnes of oil and ended the year with:

» a turnover > $93 billion, » book equity > $2.2 billion » available liquidity of $5.6 billion 

As part of its growth strategy, Gunvor has invested in a number of business related to its trading activities, including PA Resources



Apart from being our largest equity holder, Gunvor is a key stakeholder in PA through its reserve base lending facility



The second largest PA shareholder is Lorito, a trust owned by the Lundin family, founders of Sweden’s most successful oil company

17

Current debt in the market Following repayment of convertible bond on 15th January 2014, PA Resources currently have 2 outstanding bonds:

NOK Bond

SEK Bond

ISIN

ISIN

NO0010605728

Amount outstanding Maturity date

Amount outstanding

NOK 810,000,000 2016-04-05 2014-04-05: NOK 135m 2015-04-05: NOK 135m

Amortisations Coupon

2016-03-03

Amortisations

-13,50%

Interest payments

Semi-annually April/October

Annually

Covenants and Net Debt development Q3 2013

Q2 2013

Q1 2013

Covenants

Book Equity (SEK million)

2,144

1,973

2,201

>1,000

Book Equity to Capital Employed

49%

46%

48%

>40%

1,422

2,197

2,111

N/A

Net debt (SEK million)

18

SEK 750,000,000

Maturity date

Coupon

12,25%

Interest payments

SE0005392834

Earnings – Q1 to Q3 SEK million Profit for the period

Jan – Sept 2013 -817

One-off costs Decommissioning costs

469

9/06 (Gita)

89

2008/17 (Block 8)

97

Tunisian farm-out

117

Remaining costs Azurite field

21

Net exchange gains/losses Didon 70% net result impact

-88 3

Profit for the period (Adjusted)

19

-109

Cash flow – Q1 to Q3 SEK million

Cash flow from operations

-110

Capex

-171

Rights issues

1,413

Loans raised

38

Amortisation of debt Cash flow from financing

Net cash flow

20

Jan - Sept 2013

-392 1,059

778

KEY COMMENTS • Rights issues of SEK 810 million and SEK 604 million respectively, net after transaction costs

• Full year capex forecast of SEK 250380 million, expected outcome in the lower part of the range • Cash and cash equivalents at the end of the period, SEK 835 million

.....progress will continue in 2014.......  Field rehabilitation in Didon  ESP on a current producer  A new production well

 Development Plans approved:  Zarat  Diega

 Development concepts worked:  Broder Tuck

 Birgitta

 Rigs secured and drilling plans in place:  Lille John  Elyssa 21

 MPS