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The Oil Council “Engaging Upstream Oil & Gas Communities World-wide” Foreword

‘Drillers and Dealers’ is our pioneering free monthly e-magazine for the upstream industry. It is entirely focused on sharing insight, analysis, intelligence and thought leadership across the E&P sector. We hope you enjoy reading the articles our guest authors have so kindly contributed. Yours, Ross Stewart Campbell Chief Executive Officer, The Oil Council T: +44 (0) 20 8673 3327 [email protected]

Iain Pitt Chief Operating Officer, The Oil Council T: +27 (0) 21 700 3551 [email protected]

Contact The Oil Council For general enquiries and information on how to work with The Oil Council contact: Ross Stewart Campbell, Chief Executive Officer T: +44 (0) 20 8673 3327, [email protected] For enquiries about Corporate Partnerships, attending one of our Assemblies and advertising in a future edition of ‘Drillers and Dealers’ contact: Laurent Lafont, VP, Business Development, [email protected] Michael Knowles, VP, Business Development, [email protected] To receive free monthly editions of ‘Drillers and Dealers’ , as well as, discounts to all our upcoming Assemblies please visit our website now (www.oilcouncil.com) to sign up as a Member of The Oil Council. Membership is FREE to oil and gas executives. Copyright and IP Disclaimer ***Any content within this publication cannot be reproduced without the express permission of The Oil Council and the respective contributing authors. Permission can be sought by contacting the authors directly or by contacting Iain Pitt at the above details***

„Drillers and Dealers‟ – April 2010 Edition 

About The Oil Council and „Drillers and Dealers‟ o Contact Details

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Executive Q&A o An interview with Attila Holoda, Managing Director, Eurasian E&P, MOL Plc. Exploration and Production

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Giving Birth to Shareholder Value o By Alistair Stobie, Chief Financial Officer, Pan-Petroleum

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Our Partners

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2010 Global Oil & Gas Survey Results

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„On the Spot‟ with our Question of the Month o “What defining qualities and characteristics do oil and gas executives (CEOs, CFOs and COOs) need to possess to lead their company to new growth in today's marketplace?"

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The Oil Council‟s Assemblies in New York City and London

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Crude Enterprise in Iraq o By Elaine Reynolds, Oil Analyst, Edison Investment Research

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“Diary of a Commodity Trader” (Column) – Ahead of the Curve: Getting in Front of the Coming Energy Crisis! o By Kevin Kerr, President and CEO, Kerr Trading International

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“The Oil Outlook” (Column) – Crude's Irrational Exuberance o By Gianna Bern, President, Brookshire Advisory and Research

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“Golden Barrels” (Column) – Lifestyle Companies o By Simon Hawkins, Managing Director, Omni Investment Research

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Executive Q&A With Attila Holoda, Managing Director, Eurasian E&P, MOL Plc. Exploration and Production Talking with Ross Stewart Campbell, CEO, The Oil Council

Date: 11th April 2010

Ross Stewart Campbell (RSC) from The Oil Council: Attila thanks for joining us. There are a number of topics that I wanted to discuss with you today but if I may I’d like to start with exploration. As we move into a world where all the ‘easy oil’ has been found, E&P companies are facing a raft of new challenges when looking to find and extract oil and gas in increasingly far flung locations and complex environments. In your opinion what are the biggest exploration challenges facing oil and gas companies and how are MOL planning on overcoming these? Attila Holoda (AH) from MOL: Ross, the oil industry in the first decade of the 21st century faces a range of new challenges in the replacement of hydrocarbon reserves. In competing for exploration areas, companies have witnessed that the sizes of conventional field discoveries tend to be smaller and smaller, while they are forced to execute work programs and to perform operations in harder and tougher environments.

“For the MOL Group, our main task in the coming few years is to maximise the value of our existing upstream portfolio.”

which have a production history of more than 30 years and are now in a ‟mature age‟. As these fields still hide significant potential reserves that can to be produced, the industry gives plenty of room for the implementation of new techniques and technologies, in order to intensify the fields and to improve the efficiency of production from them (Brownfield developments). MOL‟s upstream portfolio (including INA‟s US portfolio which has been fully controlled by MOL since mid-2009) has a solid basis for future growth, with sizeable production in seven countries, and further exploration potential in 15 countries. All these operations leverage off our 70+ year-old E&P experiences gained in the Central-European region. As one of the largest operators in the region we have introduced and successfully implemented a wide range of enhanced and improved techniques for maturing oil fields in the last 40 years. For the MOL Group, our main task in the coming few years is to maximise the value of our existing upstream portfolio. Our key focuses are;    

Two good examples of this phenomenon are the activities carried out in deep or ultra-deep off-shore and arctic conditions. But apart from the climatic and geographical hardships, safety risks are also now increasingly high on the agenda to a certain degree. Despite intense conventional and unconventional exploratory activities these days, currently 65% of the global crude oil production still comes from fields

To progress high-return, early-cash generation development projects in CEE, Syria, Pakistan, Kurdistan and Russia; To increase our production levels; To contribute significantly to Group-level EBITDA; and All while extending MOL‟s outstanding efficiency to our whole upstream portfolio.

To help do this we‟ll carry out extensive conventional and unconventional exploration to further increase our reserve base. RSC: We’ve recently witnessed a record amount of M&A and A&D activity in the oil and gas sector as companies ‘fight’ to acquire new assets needed to fulfil their growth potential. With this activity burns the age old question of whether companies should focus on organic or inorganic growth to build their reserves base.

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Is exploration still the ultimate key to growth, or, has M&A overtaken it as the leading factor in building one’s reserves? AH: In my opinion Ross exploration provides a hugely important organic method of value generation for all industry players. But today‟s best and quickest opportunities for growth may come from the M&A marketplace. Companies who aligned themselves to ride out the cyclicality of the oil and gas industry are much better positioned to significantly benefit from arising M&A opportunities. For those who can apply rigorous strategies in “contango” years and preserve significant financial resources, there are currently multiple inorganic growth opportunities available at very attractive and hugely discounted prices.

the past 75 years in E&P activities, or, by applying creative financing and structuring alternatives. Let me draw you (and your readers) a few examples Ross on our most recent exploration activities: 1.

In Hungary, we implemented a new concept in our exploration activities in 2006, which resulted in an above 70% exploration success ratio [since the initiation of this concept], proving that a mature area can also be important part of an exploration strategy

2.

In Russia we had 100% success rate in our exploration activities in 2008, where we utilized the experiences we gained in Hungary

3.

We had one of the world‟s top 10 discoveries in 2009 (according to Wood Mackenzie) in the Kurdistan region of Iraq, which is one of the most promising regions for growth

“...we are continuously analyzing further opportunities within our other core regions to replace reserves at an appropriate risk level.”

RSC: What are your main exploration objectives in the Eurasia region in the short, medium and longterm, and what news flow should the industry look out for later this year and moving into 2011/2012?

If we analyze the last “oil price crisis” at the end of the 1990‟s, a significant consolidation process took place based on accumulated and preserved resources, which have been mainly spent right after the bottom of the cycle, providing significant inorganic value generation for those who could survive the crisis.

Beside our Hungarian exploration activity we would like to enter other Central-European areas, like the Romanian, Polish and Croatian exploration arenas. 

In the short-term we want to use our [similar] geographic, geological and infrastructural experiences in Central-Europe here.

RSC: Looking at your global exploration strategy Attila where geographically is MOL focusing on to find new reserves? What particular country (countries) do you view as most opportunistic for future growth? And how large ‘a play’ and part of this strategy is the Eurasia region?

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In the medium-term we would like to strengthen our presence in these countries by building up a new asset portfolio.

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Considering long-term objectives we would like to enter in to exploration of the offshore Black Sea, either on the Romanian part, or, on other offshore sections of the sea. We believe that this region of Eurasia is one of the most promising areas to discover considerable hydrocarbon reserves.

AH: We would like to continue our domestic conventional exploration in our most successful areas but we are becoming more and more focused on several existing unconventional targets (i.e. the Pannonian Basin).

AH: MOL pursues exploration opportunities in the CEE region, in the Middle East, in Central Asia and in the Northern and Western parts of Africa – altogether in 15 countries. As our domicile region, Eastern Europe, is relatively explored compared to [e.g.] Western Africa and as such it therefore provides little room to further increase our reserve base.

“Forming partnerships and strategic alliances have had a clearly visible effect on the performance of the oil and gas industry.”

We are continuously analyzing further opportunities within our other core regions (e.g. Western Africa, Middle East, and Central Asia) to replace reserves at an appropriate risk level. We enter certain projects on a case-by-case basis, where we see real potential for significant value creation, either by utilizing our knowledge gained in

RSC: On a similar note what production milestones within the region have you set yourself this year? Are you on track to reach these milestones?

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AH: This year we would like to stabilize our domestic production (in essence stop falling production rates).

focuses on shareholder return – of course typical to IOCs

However our medium-term objective is to slightly increase domestic production by developing current, and near-future, discoveries and start work on some very promising IOR/EOR projects in our more “mature” fields.

We utilize this dual role in our partnerships and alliances as well. For example as an NOC, MOL has taken an active role to unlock the potential in unconventional hydrocarbon resources in Hungary with the active participation of ExxonMobil.

As is widely known [and recognized] about MOL we have a strong background in field rejuvenation methodologies; horizontal wells, infill drilling, 3D seismic programs, state of the art geological modeling, methane and CO2 injection, and improved water flooding.

While as an IOC, MOL is utilizing our ability to develop certain [technically difficult] assets in Pakistan, where the NOC here didn‟t have the necessary expertise to develop their assets – our partnership provided both parties significant results.

Considering the region I do hope that we can reach the pre-mentioned exploration objectives and in addition that we can start production from each of the new discoveries we have made. I believe that we are on track to reach these milestones. RSC: I’d like to ask your opinion on four key issues that are currently influencing the mindsets of E&P executives: (i) partnerships, (ii) costs, (iii) technology and (iv) people. Starting with partnerships, how is MOL positioning itself to work with other oil and gas companies? Are you looking to work as JV Partners with other IOCs, NOCs and perhaps even independents? What are the opportunities of partnering MOL on new ventures? And are you always looking to retain operatorship and ownership of any new venture?

“If the NOC – IOC – Service Sector is working well together, the caseby-case supply-demand gaps in oil and gas output can be filled in.”

It is important to note that in terms of NOC–IOC relationships and partnerships, in MOL‟s operations a dual role can be recognized:

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RSC: What qualities do MOL look for in a potential partner? And for those companies perhaps looking for new industry partners, what can MOL bring to the table that the industry should be more aware of? AH: MOL has been creating partnerships in the past few years along two different models. In unconventional plays, we seek experienced and financially robust partners, while in our conventional plays, where exploration was extended to smaller prospects close to known accumulations, we teamed up with other industry players contributing a different approach with special regional know-how. This approach has helped us decrease industryspecific risks in our unconventional plays. Our exceptional success rate in the CCE region in the past couple of years is a clear sign that this was the right approach to take.

AH: Forming partnerships and strategic alliances have had a clearly visible effect on the performance of the oil and gas industry. If the NOC–IOC–Service Sector is working well together, the case-by-case oil and gas supply-demand output gaps can be filled in.

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In order to exploit the opportunities arising in the currently challenging market environment, we have built up several strategic alliances recently – with OOC, INA, CEZ and other MENA partners.

On one hand, MOL is the custodian of the Hungarian E&P sector; owning more than 50% of acreages in Hungary, and contributing approx. 99% of the country‟s production – which is typical to NOCs

As a Group we have a legacy of over 70 years in oil and gas E&P and in developing partnerships since the end of the 1990s. Our experts have proven their skills in many projects around the globe. The key to their success was the combination of high quality performance with the understanding for our partners‟ culture and needs. RSC: For many companies last year was about streamlining their businesses and reducing costs wherever possible. How can E&P companies look to reduce their costs without losing their competitive

On the other hand MOL is building an international asset portfolio, has a diversified shareholder structure, and as a listed company

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“...money and energy need to be (re)invested to renew our most important human resources”

edge and effectiveness? Are their some examples from within MOL you could share with us? AH: At times of crisis major oil companies used to regard the closure of weaker fields almost as the only solution. In reality, writing off and liquidating human resources are such steps whose reinstatement costs cannot, or can fully, be assessed accurately (fundamentally for the time required for reinstatement). In our endeavour not only to sustain but to develop the machines and devices that we use, we fight against their depreciation and their replacement through accurately planned accounting rules, planned refurbishment and renewal. Likewise, money and energy need to be (re)invested to renew our most important human resources, since such technical and technological challenges, such as developing and adopting EOR/IOR techniques, or, exploring and exploiting the reserves in operation, are impossible to resolve without them! Technically responsible and financially accountable managers; experts who often possess specialised knowledge; background workers; and technicians; all play a similarly important role in (i) the efficient operation of technological systems and (ii) helping to breed the talents of a new generation who themselves bring new, fresh ideas, as well as, new paradigms.

Together with the maintenance personnel dedicated to the given technological area, operators have a joint responsibility to run the process systems, the existing technical devices, machines and equipment at a constant optimum. One staff member complements the other. They must not only intend to fulfil the responsibility they have taken, or the joint necessity they have to operate the field, but strive to sustain [and even develop] their personal existential status. Personnel, unified in this sense, who breathe together with the technological systems they run, are profoundly knowledgeable about each element of the process. Practice from daily operations, gaining experiences and developing skills will allow them to filter out the inevitably inherent but superfluous elements in our systems, and to discover the optimisation potentials, to the smallest details, of all technological processes. Thus, a manager‟s responsibility is not only to track the realisation of a business plan – prepared with the help of a well-established planning method called Zero Based Budgeting (or ZBB), i.e. an operation case-map designed to the minute detail at asset and service level, with a constant and continuous engineering and cost-centre control – but also to

Registration is now open for our New York City and London Assemblies. Special discounts for oil & gas companies. Book now at www.oilcouncil.com involve to the highest possible degree the operators‟ staff into the continuous process optimisation. RSC: Moving the discussion onto technology Attila, in the past few years a wave of innovative technology has emerged that is now allowing E&P companies to operate successfully in previously uneconomical and/or inaccessible oil and gas plays. How large a factor will technology be for tomorrow’s E&P companies? AH: Generally technology can create a massive competitive advantage over those companies that are behind the cutting edge of technology. Nevertheless this competitive advantage can be perceived from at least two perspectives.

“Competition makes it compulsory for every economic performer to enhance efficiency. Change and innovation are essential in improving competitiveness.” Firstly that companies who use less sophisticated technology in areas that are accessible to most of their competition are in a less favourable position than companies who can apply state of the art of technologies. Here the competitive advantage seems to be very straightforward, like the Olympic motto „Citius, Altius, Fortius‟, which in this case means that a certain exploration project can be accomplished faster, cheaper and more efficiently than those that are run on has-been kind of technologies. Secondly that companies who work in areas that are only accessible to high-level technology. In this case new technology is instrumental in achieving any success. If a company does not have such technologies their efforts will be in vain, and it can be concluded that technology is an essential part of the game and its lack forms a barrier to success. Suffice to think about the success ratio of exploration ops focusing on unconventional plays. State of the art technologies, especially a series of technologies logically built along the line of

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information acquisition and interpretation can provide a considerable amount of competitive advantage in decision making and profit realization with companies that are in a position to apply them. Professionals who have the privilege to be responsible for developing or implementing state of the art technologies also bear the responsibility for making their company‟s decision makers aware of the advantages and the risks of the technology. This includes the risks that might come from the inappropriate application of the technology and losing control over its budget. Well-trained experts and state of the art technology go hand in hand. If any of these two prerequisites for success are missing then failure becomes inherent in the system.

Join Matt Simmons, Ken Hersh, Ed Morse, Tom Petrie and John Schiller in NYC and join Andy Bartlett, Francisco Blanch and Jeffrey Currie in London. Book now at www.oilcouncil.com All companies should be aware at all times of the corporate capabilities and expert skills they need to meet their own strategic goals.

Competition makes it compulsory for every economic performer to enhance efficiency. Change and innovation are essential in improving competitiveness.

For this aim we worked out and implemented a transparent and controllable performance evaluation system based around a continuous capability matrix which incorporated a career management system for each member of our staff.

“Nowadays the war for talent has become really very aggressive.”

It is highly important to harmonize the personal futures of your staff (including benefits, packages, trainings, professionals or managerial careers) with your company‟s own fortune making them aligned to common success as much as possible.

RSC: Moving finally onto people – many large oil and gas companies are struggling to secure skilled talent and we’re already seeing a [growing] shortfall of skilled personal within the industry (particularly engineers and geologists). Are we, as an industry, heading towards a ‘skills/talent crunch’? How is MOL looking to capture and retain skilled E&P staff (both in management and in operations)? AH: As I touched on earlier trained managers, skilled experts and technicians all play an important role in the efficient operation of technological systems and continuous improvement. To retain them is crucial and a critical factor of the future success of any E&P company. Nowadays the war for talent has become really very aggressive. In this situation our managerial responsibility is to offer our staff a long-term professional career opportunity with personal and professional development.

RSC: If I may Attila I’ll wrap up by asking your oneword opinion (bullish, bearish or uncertain) on the future of the following. Bullish, Bearish or Uncertain? RSC: China? AH: Bullish RSC: Russia? AH: Uncertain RSC: Oil at $100 before the end of 2010? AH: Bearish RSC: Attila, thank you very much for your time and your thoughts. We wish you and the team all the very best in reaching your goals.

About Attila Holoda: Attila graduated (M.Sc.) from Gubkin University of Moscow, Russia in petroleum engineering in 1989. He has MBA (finance) graduation from Budapest University of Economic Sciences as well. He joined MOL as a production engineer in 1989. He worked in different leading positions in production, operational maintenance and investment until 1999. He headed a Hungarian-Kazakh joint venture, and represented at the same time MOL in Atyrau, Kazakhstan between 1994 and 1995. Since 1999 he held different mid and top level managerial positions in the domestic production and exploration. He is responsible for Hungarian and Russian E&P activities of MOL, as managing director of Eurasian E&P. About MOL: MOL Group is an integrated oil and gas group in Hungary. In addition to Hungary, the company is present in the Europe, the Middle East and Africa region, as also in the CIS countries, with interests in exploration, production, refining, marketing and petrochemicals. MOL Group’s upstream operations expands in Central Europe, the CIS countries, Middle East and North Africa. www.molgroup.hu

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The BDO network is a living network and our oil and gas team work together and meet regularly at BDO’s international Oil and Gas conferences where there are real relationships and real personalities – the network is not a loose umbrella of firms where every firm is different. The BDO network is one where the partners know each other personally and work with each other on a regular basis to service their client’s needs. These strong relationships ensure the quality of our work internationally is also consistent – you can be sure that the advice you receive from our African team will be the same standard as that you receive from our Australian team.

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TAXATION Companies operating in the oil and gas sector often have complex cross-border structures and employees who spend long periods of time overseas. It is also becoming increasingly important for companies to ensure they minimise their exposure to costly tax regimes through effective tax planning and for them to also look to incentivise key employees in a tax efficient way. Our tax teams provide a wide range of specialist services covering international tax planning, compliance services through to advising on the structure of share schemes, remuneration and reward planning.

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Giving Birth to Shareholder Value

Written by Alistair Stobie, Chief Financial Officer, Pan-Petroleum As I subjected my wife to the vicissitudes of the latest transaction in the Stobie household she remarked that transactions seem not entirely dissimilar to the latter stages of pregnancy; you feel bloated, immobile, exhausted and can’t wait for the whole thing to be over. Which is exactly the point at which the problems really start. I wasn’t quite sure though how ice cream fitted into the analogy.

provides the capital that allows the wells to be drilled and the fields developed.

Pan-Petroleum’s recent announced merger with the Brazilian arm of Norse Energy Corp and subsequent listing to create a cross-Atlantic independent with assets in Brazil, Nigeria, Gabon and the Republic of Congo will, if I may continue to borrow from the analogy above, mark the end of the pains of childbirth and the beginning of a new corporate life.

“I can think of a number of companies who have fed frequently at the capital trough before creating much by the way of shareholder value.”

Whilst some would suggest that the time to think about how others created value was perhaps prior to the transaction, it is of course the nature of life that the process has caused a rethink on what made others successful in the past. And success in this case is breaking out of the crowded small-cap space into the headier realms of the mid-cap space. In search of the minnow’s nirvana, shareholder returns (read personal enrichment), the small and mid-cap E&P sector is somewhat wedded to deals; farm-in’s, farm-out’s, farm-down’s, portfolio rationalisation, the desire for scale and above all the need for capital to feed the exploration and development beast. Deals in this case would seem to be a proxy for value creation. And yet if you were to read the management bios of a random selection of AIMlisted companies it wouldn’t be entirely clear where the art of creating shareholder returns was learnt. Whilst, subsurface skill (and luck) and execution excellence inevitably play a substantial role, there is a theme that runs through successful companies that would suggest that these are necessary but not sufficient conditions.

Nor are they a great place to understand the investor mind-set, or put another way, the mind-set that

The ex-private equity man inside me thinks that a lifetime of investment banking is hardly ideal either. And this is long before we get into the discussion of who has the right to apply the portfolio approach to managing risk; the investor or the oil and gas company.

Access to capital, at more or less the right price which is also aligned in its timing and expectations, is the lifeblood of our sector. It was fashionable for a brief moment in the dark days of early 2009 to talk about the length of the funding runway. The shorter the runway, the higher the cost of capital. Those companies able to source capital relatively easily, and it’s never easy, are able to focus on adding value, growing their portfolio and taking out their less successful brethren. Those who struggle are reduced to farming down earlier than they would like in order to keep going. I can think of a number of companies who have fed frequently at the capital trough before creating much by the way of shareholder value. And I am not sure that is a criticism. A day or so of mine was recently spent trying to merge decision making processes across two companies. Sitting on the table was a weighty capital values tome from an estimable multi-billion marketcap independent with an enviable record of executing complex North Sea developments on time and on budget. There was a lot of very good material on what has to be included in the decision gates and how to ensure that you are on track between them, but very little on how to apply risk to the value and whether, as a

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small company, the returns would still commensurate with our own cost of capital.

be

But does it really matter? My personal list of small companies that became bigger, and in some case really quite big, over the past few years include Burren Energy, Tullow, Addax and Imperial Energy. I’ve selected these naturally through past personal involvement or because they operate in geographies in which I am interested. You will note there are no North Sea, Asia, or North America focussed companies – I’m sure plenty of wealth has been created in these places; I just haven’t followed it.

“Strangely, these companies also share one other common strand – their CEO did not come from a big oil background”

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There is no correlation between their success and value created through exploration, with one notable and honourable exception

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Similarly there is little evidence of a combined focus on low-cost operations – probably because growth was deemed to be more important than counting the pennies.

One common strand was having a core shareholder base who believed in the vision management was promoting. It maybe a little farfetched to refer to them as an ‘investor fan base’, but given the hurdles that can impede progress in our sector having a core group of shareholders who continue to believe in the big picture is as important, if not more so than technical skill. The investor base won’t stick around if faced with too many disappointments and it’s clear that they became fans because targets were set and met.

I don’t have personal knowledge of all these companies; one I do and two others I have followed directly or indirectly quite closely. Those I am most familiar with shared a common theme of being process light, and rapid executive-decision heavy. These qualities maybe necessary for success but definitely not sufficient. There are plenty of small E&P companies which also had rapid executivedecision making as a key quality, which are no longer with us or reside in AIM’s living dead category. I have tried to identify a common theme between companies that have either broken out into the sunlit uplands of the FTSE250, or been acquired by a NOC or IOC. 

than G&A, which keeps the institutional shareholder-base happy, even when other events are following a more normal oil and gas emerging market path.

Beyond that each of these companies is relatively easy to understand. There was a relative geographic focus – extreme in Imperial’s case – and an ability to control one’s own destiny [that is, if you believe that you can control your destiny in Nigeria and Russia]. Value could be easily identified in relatively few assets and a story could be easily constructed which spoke to value catalysts. Cause and effect; but were they rewarded by the market for geographic and asset focus, or, was their geographic and asset focus the key to their wealth creation? Strangely, these companies also share one other common strand – their CEO did not come from a big oil background and serendipity has worked in their favour.

There is some, but imperfect, correlation between sufficient early production to fund more

Written by Alistair Stobie, Chief Financial Officer, Pan-Petroleum

About Alistair Stobie: Alistair is the EVP, New Ventures and Commercial-designate at the merged Pan-Petroleum - Norse do Brasil company and is CFO at Pan-Petroleum. Prior to Pan-Petroleum Alistair was CFO at Volga Gas, an AIM listed oil and gas producer with assets in the European part of Russia. At Volga Gas, Alistair was responsible for all aspects of the company’ IPO which raised $135 million in April 2007. Before Volga he worked for Baring Vostok Capital Partners, the manager of the First NIS Regional Fund, a leading FSU-focused private equity firm. Whilst at Baring Vostok, he was responsible for the fund’s investment in Burren Energy and represented the fund on the board of directors from 1994 – 1998. After Baring Vostok, Alistair worked for Urals Trading and a Burren Energy subsidiary establishing new business ventures in Russia.

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*** Oil Council Partners ***

2010 Global Oil & Gas Survey Results 1. What type of company/organisation do you represent?

Independent Oil & Gas Company Oil & Gas Consultancy Financial Service Provider (Bank/Advisor/Stockbroker/Investment Dealer) Major Oil & Gas Company Investor (SWF/Institutional/Asset Management/Private Equity/HNWI) Law/Accountancy Firm Oil &/or Gas Service Company National Oil & Gas Company Equipment or Technology Provider Government Official / Regulator Other Insurance Broker or Risk Management Firm

80

2. Are you bullish, bearish or uncertain, about the future of:

70

60 50 40 30

Iraq as a major international oil province

10 National Oil & Gas Companies

0

20 Oil Sands

10

30

US Natural Gas Markets

20

Uncertain

The US Dollar

30

Bearish

40

Banks

40

Bullish

Oil & Gas Service Companies

50

50

Small-cap Oil & Gas Companies

60

60

Mid-cap Oil & Gas Companies

70

Major Oil & Gas Companies

80

35 30 25 20 15

20 10

www.oilcouncil.com

0

10 [email protected]

5 0

Oil Council

20 10

3. What do you expect to see happen to the oil and gas markets in 2010?

60

35

50

30 25

40

20 30 15 20

10

Other

0 A progressive weakening/ deterioration

0 Increased volatility and uncertainty

5

A slow, steady and continued recovery

10

4. Which of the following holds the greatest investment potential in 2010?

35

60

30

50

25

40

20 30 15 20

10

www.oilcouncil.com

[email protected]

Oil & Gas Service Companies

0 Small-cap Oil & Gas Companies

0 Mid-cap Oil & Gas Companies

10

Major (blue-chip) Oil & Gas Companies

5

Oil Council

5. Are we likely to see another oil price spike in 2010?

60 50 40 30 20 10 0 Yes

No

Uncertain

6. What in your opinion will be the peak oil price in 2010?

$80 $95 $110 $125 $140+

7. What in your opinion will be the average oil price in 2010?