05-07-05

10:17

Side 1

www.signatur.no

251099_pa_resources_omslag

PROSPECTUS

PA Resources AB (publ) Enterprise no. 556488-2180 PA Resources AB Kungsgatan 447TR SE- 111 35 Stockholm, Sweden Telephone: +46 8 218382 Fax: +46 8 20 98 99 E-mail: [email protected]

Carnegie ASA Stranden 1, Aker Brygge P.O. Box 684 Sentrum 0106 Oslo, Norway Telephone: +47 22 00 93 00 Fax: +47 22 00 99 60

Prospectus in connection with Private placement and listing of 7,000,000 new shares each with a nominal value of SEK 1.50 issued at a subscription price of NOK 87.50 per share Acquisition of 77.78 per cent interest in the Didon Field and a 35 per cent interest in the Zarat Permit, both offshore Tunisia, and the acquisition of a 10 per cent interest in the Volve field offshore Norway

LEAD MANAGER

Handelsbanken Capital Markets Rådhusgaten 27 P.O. Box 332 Sentrum 0101 Oslo, Norway Telephone: +47 22 94 09 00 Fax: +47 22 94 08 46

Pareto Securities ASA Dronning Maudsgt. 3 P.O. Box 1411 Vika 0115 Oslo, Norway Telephone: +47 22 87 87 00 Fax: +47 22 87 87 10

CO-LEAD MANAGERS

5 July 2005

Prospectus

NOTICE This Prospectus has been prepared in order to provide information of PA Resources and its business in connection with (i) the completed private placement and listing of 7,000,000 new shares, (ii) the acquisition of a 35 per cent interest in the Zarat Permit offshore Tunisia in the Gulf of Gabes, (iii) the acquisition of a 77.78 per cent interest in the Didon Field located in the Zarat Permit and (iv) the acquisition of a 10 per cent ownership share in the Volve oil field offshore Norway. The Prospectus has been reviewed by Oslo Børs in accordance with chapters 15, 18 and 19a of the Stock Exchange Regulations. The New Shares have already been subscribed to and fully paid, hence, this Prospectus does not contain any offer to subscribe to and/or purchase the New Shares. Except for the approval by Oslo Børs as described above, no action has been taken to permit the distribution of this Prospectus in any jurisdiction where action would be required for distribution. Accordingly, this Prospectus may not be used for the purpose of an offer of, or solicitation for, any securities in any jurisdiction or in any circumstances in which such offer or solicitation would be unlawful or unauthorized. The distribution of the Prospectus is subject to legal restrictions in certain jurisdictions. The Prospectus and any related offer documentation are not being distributed and must not be mailed or otherwise distributed or sent in or into any country in which such distribution would require any such additional measures to be taken or would be in conflict with any law or regulation in such country. The information contained herein is only updated as of the date hereof and subject to change, completion or amendment without notice. In accordance with section 14-6 of the Norwegian Stock Exchange Regulations any significant new factor or inaccuracy that might have an effect on the assessment of the New Shares and/or the Company and emerges between the time of publication of the Prospectus and the listing of the New Shares, will be included in a supplement to the Prospectus. Neither the publication nor distribution of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that the information herein is correct as of any date subsequent to the date of the Prospectus. Financial information reproduced in the Prospectus has been prepared in accordance with IFRS accounting principles and good accounting practice unless otherwise stated. The information contained in this Prospectus was obtained from the Company and other sources, but no assurance can be given as to the accuracy or completeness of such information. No person has been authorized to give information or to make any representation concerning the Company or the New Shares other than as contained herein. If given or made, such other representation should not be relied upon as having been authorized by the Company. Any dispute arising concerning the Prospectus is subject to Norwegian law and the exclusive jurisdiction of Norwegian courts. The Prospectus has been prepared in English only, but contain a summary in Norwegian for information purposes only. In the event of any discrepancy between the English and the Norwegian text, the English text shall prevail. Non-confidential documents referred to in the Prospectus are available for review at the business address of PA Resources AB, Kungsgatan 447TR SE – 111 35 Stockholm, Sweden .

1

Prospectus

TABLE OF CONTENTS 1. RESPONSIBILITY STATEMENTS 1.1. 1.2. 1.3. 1.4. 1.5.

5

The Company’s Board ............................................................................................. 5 The Managers........................................................................................................... 5 DLA Nordic ............................................................................................................. 6 Wikborg Rein & Co ................................................................................................. 6 The Company’s auditors .......................................................................................... 6

2. DEFINITIONS AND GLOSSARY 2.1. 2.2.

8

Definitions................................................................................................................ 8 Glossary ................................................................................................................... 9

3. SUMMARY 3.1. 3.2. 3.3. 3.4. 3.5.

11

Overview of The Company.................................................................................... 11 The Acquisition of the Didon, Zarat and Volve interests ...................................... 11 The Private Placement ........................................................................................... 13 Main Financial Figures – Pro forma (unaudited) ................................................... 14 Miscellaneous......................................................................................................... 14

4. THE PRIVATE PLACEMENT 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. 4.10. 4.11. 4.12. 4.13. 4.14.

15

Background for the Private Placement................................................................... 15 Resolution .............................................................................................................. 15 Share capital prior to the Private Placement .......................................................... 16 Overview of the Private Placement........................................................................ 16 Subscription price .................................................................................................. 16 Allocation of Shares............................................................................................... 16 Payment for allocated shares.................................................................................. 17 The rights of the New Shares ................................................................................. 17 Share capital subsequent the Private Placement .................................................... 17 Listing of the New Shares ...................................................................................... 17 Miscellaneous......................................................................................................... 17 Costs....................................................................................................................... 17 Lead Manager ........................................................................................................ 18 Co-Lead Managers ................................................................................................. 18

5. THE DIDON AND ZARAT ACQUISITIONS 5.1. 5.2.

Background and rationales for the Acquisitions .................................................... 19 Terms of the Didon and Zarat Acquisitions ........................................................... 19

6. THE VOLVE ACQUISITION 6.1. 6.2.

20

Background and rationale for the Volve Acquisition............................................. 20 Terms of the Volve Acquisition............................................................................. 20

7. INDUSTRY AND MARKET OVERVIEW 7.1. 7.2. 7.3. 7.4. 7.5.

21

Overview................................................................................................................ 21 The oil price ........................................................................................................... 21 The demand for oil................................................................................................. 23 Oil market balance ................................................................................................. 24 Geographic production regions .............................................................................. 24

8. DESCRIPTION OF PA PRIOR TO THE ACQUISITIONS 8.1. 8.2. 8.3.

19

29

General ................................................................................................................... 29 History.................................................................................................................... 29 Business concept and strategy................................................................................ 30

2

Prospectus 8.4. 8.5. 8.6. 8.7. 8.8. 8.9. 8.10.

Operations overview .............................................................................................. 30 Financial information ............................................................................................. 38 Investments ............................................................................................................ 43 Loan agreements .................................................................................................... 44 Pension scheme ...................................................................................................... 45 Auditors.................................................................................................................. 45 Insurance details..................................................................................................... 45

9. ORGANISATION, BOARD AND MANAGEMENT 9.1. 9.2. 9.3. 9.4. 9.5. 9.6.

46

Organisation ........................................................................................................... 46 Legal structure........................................................................................................ 46 The Board............................................................................................................... 47 Management........................................................................................................... 48 Related party transactions ...................................................................................... 49 Loans from shareholders ........................................................................................ 49

10. DESCRIPTION OF THE DIDON CONCESSION AND THE ZARAT PERMIT 50 10.1. 10.2.

Overview................................................................................................................ 50 Production fields and exploration permits ............................................................. 51

11. DESCRIPTION OF VOLVE

52

12. PA AFTER THE ACQUISITIONS

54

12.1. 12.2. 12.3. 12.4. 12.5.

Overview................................................................................................................ 54 Business concept and strategy................................................................................ 54 Current operations overview .................................................................................. 54 Guarantee facility ................................................................................................... 56 Pro forma financial information............................................................................. 56

13. SHARE CAPITAL AND SHAREHOLDER MATTERS 13.1. 13.2. 13.3. 13.4. 13.5. 13.6. 13.7.

Current share capital .............................................................................................. 60 Listing, share price development and traded volume............................................. 62 The Board’s Authorisation to increase the share capital........................................ 62 Employee option programme................................................................................. 63 Treasury shares ...................................................................................................... 63 Shareholders’ rights ............................................................................................... 63 Shareholder policy and corporate governance ....................................................... 64

14. LEGAL MATTERS 14.1. 14.2. 14.3. 14.4. 14.5.

65

Company legislation .............................................................................................. 65 Regulatory issues – Tunisia ................................................................................... 65 Regulatory issues – Norway .................................................................................. 67 Legal Matters related to the Acquisitions .............................................................. 71 Legal disputes ........................................................................................................ 73

15. TAXATION ISSUES 15.1. 15.2.

74

Swedish Taxation issues ........................................................................................ 74 Norwegian Taxation issues .................................................................................... 76

16. RISK FACTORS 16.1. 16.2. 16.3. 16.4. 16.5.

60

78

Operational risk...................................................................................................... 78 Market prices.......................................................................................................... 78 Currency exchange rate exposure .......................................................................... 79 Reserve estimates................................................................................................... 79 Environmental surroundings .................................................................................. 79

3

Prospectus 16.6. 16.7. 16.8.

Political conditions................................................................................................. 80 The Acquisitions .................................................................................................... 80 Development Phase II of the Didon Field.............................................................. 80

17. NORSK SAMMENDRAG (”NORWEGIAN TRANSLATION”) 17.1. 17.2. 17.3. 17.4. 17.5.

81

Presentasjon av selskapet ....................................................................................... 81 Kjøpet av interessene i Didon, Zarat og Volve ...................................................... 81 Den private plasseringen ........................................................................................ 83 Finansiell informasjon............................................................................................ 84 Annet...................................................................................................................... 84

APPENDICES 1 - Articles of Association of PA Resources AB 2 - PA Resources AB Annual Report 2004 3 - PA Resources AB Q1 2005 Report 4 - Auditor’s report on the pro forma financial adjustments 5 - Subscribers in the Private Placement 6 - Detailed information on the pro forma financial adjustments

85 89 111 114 115 116

This Prospectus has been prepared in the English language only. An unofficial Norwegian translation of section 3 “Summary” has also been prepared, and is incorporated in this Prospectus as section 17 “Norsk Sammendrag (Norwegian translation)”. In the event of any discrepancy between the contents of the English and Norwegian text, the English text shall prevail.

4

Prospectus

1.

RESPONSIBILITY STATEMENTS

1.1. THE COMPANY’S BOARD The members of the Board of Directors of PA Resources AB hereby confirm that, to the best of their knowledge, the information contained in this Prospectus is in accordance with the facts and contains no omissions likely to affect the import of the Prospectus. Market conditions and future prospects have been assessed on the basis of best judgement of the Board of Directors of PA Resources AB. Stockholm, 5 July, 2005 The Board of Directors of PA Resources AB (publ)

Rabbe E. Lund

Niklas Adler

Chairman

Ulrik Jansson

Jan Haudemann-Andersen

Harald Arnet 1.2. THE MANAGERS Carnegie ASA, acting as Lead Manager together with Pareto Securities ASA and Handelsbanken Capital Markets (acting as Co-Lead Managers), have at the request of, and in co-operation with, the Board and the management of PA Resources, prepared the Prospectus. Our assistance with regard to the preparation of the Prospectus has been based on (i) publicly available information, and (ii) discussions with the Board and the management of PA Resources. Based upon such information, the Managers have endeavoured to assist the Company to provide as accurate and complete presentation of PA Resources as possible, but no financial or legal due diligence has been performed in connection with the Private Placement or the Acquisitions. On the basis of the above, the Managers expressly disclaim any legal or financial liability for the completeness or accuracy of this Prospectus. As of 30 June 2005, Carnegie and/or its employees hold 169,100 shares in PA resources, Pareto Securities ASA and/or its employees hold 10,200 shares and Handelsbanken Capital Markets and/or its employees hold 2,644 shares in PA Resources.

Oslo, 5 July, 2005 Carnegie ASA Handelsbanken Capital Markets Pareto Securities ASA

5

Prospectus 1.3. DLA NORDIC We have, on behalf of and upon request from the Manager and PA Resources AB, reviewed sections 14.1.1 “Company Legislation” (Sweden), 14.4 “Legal matters related to the Acquisition”, 14 “Legal Matters” and 15.1 “Swedish taxation issues” of this Prospectus, however, strictly limited to matters governed by Swedish company and tax law. In our view the descriptions in sections 14.1.1, 14.4 and 15.1 of the Prospectus are correct as far as governed by Swedish company and tax law. We confirm that the New Share Issue has been duly adopted by the competent legal bodies of PA Resources AB in accordance with Swedish company law. This statement is restricted to matters governed by Swedish law and we have not reviewed any of the commercial, financial, technological and market matters described in the Prospectus. Stockholm, 5 July, 2005 Advokatfirma Lindhs DLA Nordic KB

1.4. WIKBORG REIN & CO We have, on behalf of and upon request from the Lead Manager, Carnegie ASA, reviewed the information in sections 14.1.2 “Company legislation” (Norway), ”14.3 “Regulatory Issues – Norway”, and 15.2 “Norwegian taxation issues”, however, strictly limited to matters governed by Norwegian law. On the basis of the information presented to us, it is our view that these sections in all material aspects give a fair and balanced description of the Norwegian legal matters described therein. This statement is restricted to matters governed by Norwegian law and we have not reviewed any of the commercial, financial, technological and market matters described in the Prospectus. Oslo, 5 July, 2005 Wikborg Rein & Co

1.5. THE COMPANY’S AUDITORS Ernst & Young AB has reviewed and approved the financial information for the last three fiscal years included in section 8.5.1, 8.5.2 and 8.5.3 in the Prospectus. Ernst & Young AB has been the Company’s auditors for the last three financial years and their reports have contained no qualifications or clarifications. •

Ernst & Young has provided the Auditor’s report for the 2004 financial year in Appendix 2 in the Prospectus.

Ernst & Young AB has also reviewed the report for the first quarter ended 31 March 2005, for PA Resources AB (publ). Ernst & Young AB has conducted the review in accordance with recommendation issued by FAR (Föreningen Auktoriserade Revisorer). A review is limited primarily to enquiries of company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. Ernst & Young AB has not performed an audit and, accordingly, does not express an audit opinion.

6

Prospectus Based on Ernst & Young AB’s review, nothing has come to its attention that causes it to believe that the interim report does not comply with the requirements for interim reports in the Annual Accountants Act. Ernst & Young AB has also reviewed the pro forma figures in section 12.5.1, 12.5.2 and 12.5.3. Also make reference to Appendix 6 in the Prospectus. Stockholm, 5 July, 2005 Ernst & Young AB

7

Prospectus

2.

DEFINITIONS AND GLOSSARY

These abbreviations and definitions are also used in the pages previous to this section. 2.1.

DEFINITIONS

Acquisitions Board Bolagsverket Carnegie Co-lead managers Company Didon Acquisition

Didon Concession Didon Field Didon FPSO Didon Interest DST EBIT ECB EMU ETAP FAR

FSU GAAP GOR HTC IFRS Investors Lead Manager Management Medex MEF MI MP Zarat MPE NCS New Shares NGM NOK NPD OECD OPEC Oslo Børs PA

The Didon, Zarat and Volve Acquisitions The Board of Directors of PA Resources AB (publ) Swedish Companies Registration Office Carnegie ASA, PO Box 684 Sentrum, 0106 Oslo, Norway Pareto Securities ASA & Handelsbanken Capital Markets, a business unit of Svenska Handelsbanken AB (publ) PA Resources AB (publ) The purchase by the Company of the Didon Interest, including the FPSO ‘Didon’ and certain other assets and obligations relating thereto, from MP Zarat The exploitation concession granted by MI dated 2 December 1997, relating to the Didon Field currently held by PAO and MP Zarat The petroleum deposit known as the Didon field, located within the Didon Concession Didon FPSO Limited, a company incorporated in the Cayman Islands The 77.78% interest in the Didon Concession, previously owned by MP Zarat Douleb, Semmama and Tamesmida fields Earnings before interest and taxes European Central Bank European Monetary Union L'Enterprise Tunisienne d'Activités Petrolières - The Tunisian state owned petroleum company FAR is the professional institute for authorised public accountants (auktoriserade revisorer), approved public accountants (godkända revisorer) and other highly qualified professionals in the accountancy sector in Sweden Floating Storage Unit Generally Accepted Accounting Principles Gas/Oil Ratio Hydrocarbure Tunisie Corporation International Financial Reporting Standards The investors that have subscribed the New Shares Carnegie ASA The executive management of PA Resources AB (publ) Medex Petroleum Limited, a company incorporated in Cyprus The Tunisian Ministry of Economy and Finance The Tunisian Ministry of Industry MP Zarat Limited, a company incorporated in the Cayman Islands, holding the Didon Interest and the Zarat Interest The Norwegian Ministry of Petroleum and Energy (“Olje- og Energidepartementet”) Norwegian continental shelf The ordinary shares in the Company issued in connection with the Private Placement. Nordic growth market Norwegian kroner Norwegian petroleum directorate (“Oljedirektoratet”) Organisation for Economic Co-operation and Development Organisation of the Petroleum Exporting Countries Oslo Børs ASA (translated The Oslo Stock Exchange) PA Resources AB (publ)

8

Prospectus PA Group PAN PAO PBT PDO PL046 PL046B Private Placement

Prospectus SDFI SEK SNDP SOCO

Stock Exchange Regulations TND Total USD Volve Acquisition Volve Field Volve Interest Volve Platform Volve Satellites VPC VPS Zarat Acquisition Zarat Fields Zarat Interest

Zarat Permit

2.2. bbcmoe bbl bcf bo

PA Resources AB (publ) including subsidiaries PA Resources Norway AS, a 100% subsidiary of PA incorporated in Norway PA Resources Overseas Ltd, a 100% subsidiary of PA owner of a 22.22% interest in the Didon Concession, incorporated in the United Kingdom Profit before taxes Plan for development and operation Production Licence 046 on the NCS, covering block 15/9 and parts of block 15/8, including the Sleipner Øst, Sleipner Vest and Volve fields The new Production Licence, to be carved out from PL046, covering the Volve Field The share offering of 7,000,000 New Shares with a subscription price of NOK 87.50 per share towards selected investors, as further described in section 4 herein. This prospectus dated 5 July 2005 prepared in connection with listing of the New Shares issued in the Private Placement and the Acquisitions. State’s Direct Financial Interest Swedish Kroner Société Nationale de Distribution du Pètrole – The Tunisian National distribution and marketing company SOCO Overseas, a company, incorporated in England, acquired by the Company in December 2004 (Later renamed to PA Resources Overseas Ltd.) The Norwegian Stock Exchange Regulations of 17 January 1994 no. 30 (as amended) Tunisian dinar Total E&P Norge AS United States dollar The purchase by the Company of the Volve Interest, including certain other assets and obligations relating thereto, from Total The petroleum deposit located in PL046 on the NCS, approx. 8 kilometres north of the Sleipner A platform The 10% interest in the Volve Field purchased by the Company from Total, to be carved-out of PL046 The jack-up drilling rig to be installed at the Volve Field for the purpose of drilling wells and producing and processing petroleum Shall have the meaning assigned to it in section 6.2 hereof The Swedish Central Securities Depository (Värdepapperscentralen) The Norwegian Central Securities Depository (Verdipapirsentralen) The purchase by the Company of the Zarat Interest, including certain other assets and obligations relating thereto, from from MP Zarat The petroleum deposits known as the Zarat field, the Elyssa field and the El Nisr field, all located within the Zarat Permit The 35% interest in the Zarat Permit held by MP Zarat, including the interest held by MP Zarat in the agreements relating to the the Zarat Permit, including the joint venture agreement between the holders of the Zarat Permit and the convention between the holders and the Republic of Tunis The permit granted by the MEF dated 13 September 1990, prior to the acquisition, held by ETAP, PAO and MP Zarat

GLOSSARY Billion standard Cubic Metres of Oil Equivalent Barrel Billion Cubic Feet – 1,000 mmcf Barrels of Oil - Volume measurement. One Barrel=159 litres

9

Prospectus boe

bopd cmoe EIA FPSO mmbo mmboe mmboepd mmcf proven and probable reserves

tcf

Barrels of Oil Equivalents Natural gas converted to barrels of oil equivalents, 6 MCF=1BOE. The conversion rate is approximate since the relation may vary Barrels of Oil Per Day Standard Cubic Metres of Oil Equivalent U.S. Government Energy information administration Floating Production Storage and Offloading vessel Million of Barrels of Oil Million of Barrels of Oil Equivalents Million of Barrels of Oil Equivalents per day Million Cubic Feet Proven reserves is the estimated amount of raw oil, nature gas and liquid "natural gas" which, according to geological and technical engineering data received from the respective operators has a strong (greater than 90 per cent) probability of being extracted in the future from known reserves, given present economic and operative conditions - that is, at prices and costs as per the day of the calculations. Probable reserves are reserves which are not yet proven, but which are estimated to have a greater than 50 per cent probability of being technically and economically viable. Trillion Cubic Feet =1,000 bcf

10

Prospectus

3.

SUMMARY

The following summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information and the appendices appearing elsewhere in this Prospectus. 3.1. OVERVIEW OF THE COMPANY PA was established in 1994, and is a Swedish public limited company. PA is an upstream oil and gas company which operates in the first stage of the value chain within exploration and production. The Company focuses on developing mature and late-life oil and gas fields. The operational activities are located in Tunisia, North Africa, where the Company is a well regarded oil producer. PA has operated in Tunisia for four years and has invested substantially in exploring and developing the respective fields. The Company is in the process of entering the NCS and is exploring business opportunities through possible acquisitions and license applications, primarily within mature fields. PA has started a pre-qualification process with the MPE to become an active participant and licensee on the NCS. As of 31 December 2004 the PA Group had 12 employees in 3 countries (2 in Sweden, 2 in Norway and 8 in Tunisia). The Acquisitions will increase the PA Group’s oil production and substantially increase the PA Group’s reserve base. Further possibilities arise in the development of the, Zarat, Elyssa and El Nisr discoveries made under the Zarat permit, the Theta Sør prospect and other exploration possibilities in PL046B. As a result of the Acquisitions, PA’s proven and probable reserves will increase by 80 million boe from 38 million boe to 118 million boe. Daily production will increase by 17,700 bopd from 3,300 bopd to 21,000 bopd. For pro forma financial information regarding PA after the Acquisition, see section 11.5. 3.2. THE ACQUISITION OF THE DIDON, ZARAT AND VOLVE INTERESTS On 14 June 2005, PA announced that it has acquired 10 per cent of the Volve Field on the NCS for a purchase price of NOK 205 million. The Volve Field is an oil field under development whereof the first oil is expected March 2007. In respect of PA’s interest, a plateau production of 5,000 bopd is expected in 2007 – 2010, with abandonment occurring in 2011 or 2012. On 20 June 2005 PA announced that it has acquired 77.78 per cent in the Didon Field, a producing field offshore of Tunisia, and 35 per cent in the Zarat Permit, covering an area offshore Tunisia, for a total purchase price of USD 230 million. Its ownership interest in the Didon Field will through this acquisition increase from 22.22 per cent to 100 per cent, and its ownership interests in the other parts of the Zarat Permit from 10 per cent to 45 per cent. PA’s production from the Didon Field is expected to increase with 18,500 bopd from a current level of 1,500 bopd to 20,000 bopd in 2006. All three purchases will be effective as of 1 January 2005. Completion is subject to a number of approvals and consents, from government authorities and private parties. The Acquisitions will be financed with (i) payments from the Company’s cash reserves, (ii) the Private Placement of 7,000,000 shares with gross proceeds of NOK 612.5 million, and (iii) approx. USD 100 million of new debt, to be arranged by the Company. The Company

11

Prospectus already has got commitment for a stand by facility providing a one year bridge loan of USD 100 million which may be drawn in August and September 2005. 3.2.1. The Didon Concession and the Zarat permit MP Zarat is an upstream oil and gas exploration and production company which operates in the first stage of the value chain. The company focuses on developing mature and late-life oil and gas fields. Its current operational activities are located in Tunisia and Algeria, North Africa. MP Zarat has operated in Tunisia for a number of years and has invested substantially in exploration and development of fields discovered. MP Zarat holds a 35 per cent interest in the Zarat Permit, located 75 kilometres offshore eastern Tunisia in the Gulf of Gabès. The Zarat Permit has one commercial declaration, the Didon Field where MP Zarat holds 77.78 per cent. The remaining 22.22 per cent are held by PAO, a subsidiary of the Company. The Didon crude oil is produced into the ‘Didon’ FPSO. Production from the field is sold into the spot market (please refer to additional details regarding the fields in the tables below). Working interest production to MP Zarat from its Didon interests averaged 92 bopd during the first quarter of 2005. According to RPS Energy Ltd, June 2005, the proven and probable reserves for the Didon field on an entitlement basis (77.78%) totalled 32.9 million bo at the time of the acquisition.

Production field Working interest Didon (offshore) 77.78% Table 1: Production fields

Production field Didon (offshore)

Operator MP Zarat

Partner PAO (22.22%)

Expiry date Until field is depleted and abandoned.

Summary of terms Mining concession issued 5 April 1990 Royalty and income tax payable to government on sliding scale based on “R” factor. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 10% discount to the export price.

Working interest 35%

Gross area Operator 724 sq. km MP Zarat

Table 2: License terms

Exploration permit Zarat (offshore)

Partner PAO (10%) ETAP (55%)

Table 3: Exploration permits

Exploration permit Zarat (offshore)

Expiry date 24 July 20051

Summary of terms Permit assigned the 25 January 2001 Preferential right of renewal to permit holder. Validity date: 2,5 + 2 years extension Obligation: 1 exploration well

1

An application for a one year extension has been filed– the Company has received confirmation from Ministry of Oil and Energy but s waiting for final approval from the national assembly in Tunisia

12

Prospectus Table 4: License terms

3.2.2. The Volve Field The Volve Field is situated about 8 kilometres north of the Sleipner A platform on the NCS, in relatively shallow water depth (90 meters). In the PDO, the proven and probable reserves of the Volve Field are estimated at 70 million BO. The production profile in the PDO has a daily production of 50,000 bo in 2007-2010, with an anticipated shut-down in 2011 or 2012. A PDO was filed in February 2005 and approved by the MPE in April 2005. First oil is currently expected in March 2007. The planned development calls for a new jack-up rig (owned by Mærsk) with drilling and processing facilities. The oil produced will be stored in a FSO, chartered from Teekay, which will be moored close to the jack-up. Oil will then be offloaded into shuttle tankers. The small quantities of wet gas will be transported by a dedicated pipeline to Sleipner A for processing and export. The development is based on three production wells, three water injection wells and two water-producing wells. The total investment for the development has been estimated by the field operator to be NOK 1,920 million. Abandonment costs are believed to be relatively small, due to the development concept, and are currently estimated by the field operator at NOK 143 million. The Volve Field is located on PL046, but a new production licence – PL046B – will be carved-out of PL046 as the owner of the Volve Field. Prior to the Volve acquisition the licence partners were: Company Interest Norsk Hydro Produksjon AS 9.40% Total E&P Norge AS 10.00% ExxonMobil Exploration and 28.00% Production Norway AS Statoil ASA 52.60% Table 5: Licence partners – Volve field prior to the acquisition

Statoil is operator for PL046, and will also have this function for PL046B. 3.3. THE PRIVATE PLACEMENT Prior to the Private Placement, the Company had a share capital of SEK 52,207,002.00 divided into 34,804,668 shares, each with a nominal value of SEK 1.50. All of the shares were fully paid up. The Subscription Price in the Private Placement was set at NOK 87.50. The New Shares was fully paid on 30 June 2005 and the Private Placement is expected to be registered with the Swedish Bolagsverket on or about 5 July 2005. The Board resolved the Private Placement in accordance with the authorisation from the shareholders received at the Company’s annual general meeting held on 11 May 2005. After completion of the Private Placement, the Company has a share capital of SEK 62,707,002.00 divided into 41,804,668 shares, each with a nominal value of SEK 1.50. All of the shares have been fully paid up. The New Shares will be admitted to trading on Oslo Børs as soon as possible following the

13

Prospectus publication of this Prospectus. The listing of the New Shares is expected to take place on or about 6 July 2005. 3.4.

MAIN FINANCIAL FIGURES – PRO FORMA (UNAUDITED)

Please refer to section 12.5 for pro forma assumptions and Appendix 6 for detailed information regarding the pro forma figures. Income statement summary (SEK’000) Total operating income EBIT PBT

2004

(Q1)2005

(Swedish GAAP/IFRS)

(IFRS)

532,956 312,940 233,825

49,417 22,287 1,753

Dividend per share 4.94 Table 6: Overview of the Pro forma Consolidated Profit and Loss Account Balance Sheet summary (SEK’000) Total fixed assets Total current assets Total Assets

0.12

2004

(Q1)2005

(Swedish GAAP/IFRS)

(IFRS)

2,100,805 240,328 2,341,134

2,121,748 233,622 2,355,370

Total shareholders equity 995,501 Total liabilities 1,345,632 Total shareholders equity and liabilities 2,341,134 Table 7: Overview of the Pro forma Consolidated Balance Sheet

1,041,024 1,320,346 2,355,370

3.5.

MISCELLANEOUS

Investing in the shares of the Company involves risk, relating inter alia to general risks relating to upstream oil companies and the specific risks to which the Company is subject, including reserve and production risks. For a fuller discussion of risk factors, see section 16.

14

Prospectus

4.

THE PRIVATE PLACEMENT

4.1. BACKGROUND FOR THE PRIVATE PLACEMENT On 14 June 2005, the Company announced that it had purchased a 10 per cent interest in the Volve Field, an oil field offshore Norway, for NOK 205 million. On 20 June 2005, the Company announced the signing of an agreement to acquire all outstanding ownership interests in the oilfield Didon Field and in the Zarat permit situated offshore Tunisia in the Gulf of Gabes, including production and other related assets from the company MP Zarat. The agreed purchase price was USD 230 million whereof USD 45 million was due on signing, USD 60 million is due by 18 August and the remaining part of the purchase price falls due at final closing of the transaction. Both transactions are conditional upon approval from the relevant authorities in Norway and Tunisia, respectively, which is expected to be given in September 2005. The Acquisitions will be financed with (i) payments from the Company’s cash reserves, (ii) the Private Placement of 7,000,000 shares with gross proceeds of NOK 612.5 million, and (iii) approx. USD 100 million of new debt, to be arranged by the Company. The Company already has got commitment for a stand by facility providing a one year bridge loan of USD 100 million which may be drawn in August and September 2005. In order to achieve these objectives, the Company decided to carry out the Private Placement as a directed offering to selected investors, in order to complete the Acquisitions within the available time frame. 4.2.

RESOLUTION

The resolution to issue the New Shares directed towards selected institutional and other professional investors were made by the Board in a board meeting held on 22 June 2005 based on an authorisation from the shareholders at the Company’s annual general meeting held on 11 May 2005. At the mentioned annual general shareholders’ meeting, the Board was granted an authorisation to issue shares, convertible debentures, and/or debentures with attached option rights encompassing a share capital increase of up to SEK 15,000,000 divided into a maximum of 10,000,000 new shares each with a nominal value of SEK 1.50. The authorisation encompasses the right for the Board to resolve upon an issue in deviation from the shareholders’ preferential rights. However, prior to the resolution to issue the New Shares as described in this section, the remaining part of the authorisation encompasses an increase of the share capital of up to SEK 10,500,000 that equals to 7,000,000 shares each with a nominal value of SEK 1.50 The Board made the following resolution on 22 June 2005 to increase the share capital (English translation): “The board of directors has, based on the authorisation from the shareholders at the annual general meeting held on 11 May 2005, resolved to increase the company’s share capital by SEK 10,500,000 by issuing 7,000,000 new shares each with a nominal value of SEK 1.50 per share subject to the terms and conditions as stated below - The new shares shall be issued without preferential rights for the present shareholders and shall only be subscribed for by certain selected institutional and other professional investors. -The new shares shall be issued at a subscription price of NOK 87.50 per share. -The new shares shall be subscribed and fully paid for in cash at July 1, 2005 at the latest

15

Prospectus -The board shall however have a right to prolong the subscription and payment period. -The new shares shall be entitled to dividends resolved as from the financial year 2005.” Following the Private Placement and the registration of the Board’s resolution at Bolagsverket, the Company’s share capital is SEK 62,707,002.00, divided into 41,804,668 shares, each with a par value of SEK 1.50. Furthermore, the above mentioned authorisation of the Board from the annual general shareholders’ meeting in PA has been fully utilised by the issue of New Shares as described in this section. The share premium on the New Shares is allocated to the Company’s share premium fund after deduction of the costs related to the Private Placement. The structure of the Private Placement was chosen to ensure that the Acquisitions were fully financed within available time frame. 4.3. SHARE CAPITAL PRIOR TO THE PRIVATE PLACEMENT The Company’s share capital prior to the Private Placement was SEK 52,207,002.00, divided into 34,804,668 shares, each with a par value of SEK 1.50. 4.4.

OVERVIEW OF THE PRIVATE PLACEMENT

During the selling period, the Company received orders to subscribe for New Shares corresponding to approximately NOK 2,984 from 195 investors of which 21 were existing shareholders and 174 were new shareholders. The investors were divided geographically between Norway, with 24 per cent of the value in the Private Placement and the rest of the world, with 76 per cent of the value in the Private Placement. The structure of the Private Placement was chosen to ensure necessary financing within available time frame. As the Subscription Price in the Private Placement was based on the market price of the Company’s shares at the time of subscription, the Company considers the Private Placement to be in compliance with the requirements for equal treatment of the shareholders under section 23-8 of the Stock Exchange Regulations. Based on the above, the Company does not intend to carry out a subsequent share offering directed to the shareholders not participating in the Private Placement. An overview of the allotment to the subscribers in the Private Placement is set out in appendix 5 of this Prospectus. On 23 June 2005, the subscribers in the Private Placement were notified of their allotment. Payments for the New Shares were made on 29 June 2005. 4.5. SUBSCRIPTION PRICE The Subscription Price in the Private Placement was set at NOK 87.50. The subscription price of shares was based on the market close 22 June 2005. The subscription price was determined by the Board in collaboration with the Managers, and was made public through a stock exchange notice. 4.6. ALLOCATION OF SHARES The allocation of the New Shares was determined by the Board in collaboration with the Manager. Decisions on allotment in the Private Placement took, in accordance with applicable law and practice for institutional placements, into account matters such as early application, price sensitivity, the relative size of the application, perceived investor quality, sector knowledge, investment horizon, investment history. The overriding objective of the Board

16

Prospectus and the Manager was to create an appropriate long-term shareholder structure for the Company. The allocations of the New Shares were resolved by the Board on 22 June 2005 and published by the Manager on 23 June 2005. 4.7. PAYMENT FOR ALLOCATED SHARES The New Shares was fully paid on 30 June 2005 and the Private Placement is expected to be registered with the Swedish Bolagsverket on or about 5 July 2005. 4.8. THE RIGHTS OF THE NEW SHARES The New Shares have the same rights as existing shares, including the right to participate in dividends, if any, resolved from the 2005 accounting year and thereafter. 4.9. SHARE CAPITAL SUBSEQUENT THE PRIVATE PLACEMENT Following the Private Placement, the Company has a share capital of SEK 62,707,002.00, divided into 41,804,668 shares, each with a par value of SEK 1.50. All of the shares have been fully paid. 4.10. LISTING OF THE NEW SHARES The New Shares will be admitted to trading on Oslo Børs as soon as possible following the publication of this Prospectus. The listing of the New Shares is expected to take place on or about 6 July 2005. The shares of PA Resources AB are registered in the VPS under the security number ISIN SE-000-0818569. 4.11. MISCELLANEOUS In order to facilitate the settlement towards institutional investors relating to the Private Placement, Ulrik Jansson and Datum AS have entered into a Share Loan Agreement with the Lead Manager, of up to 1.5 and 3.5 million shares in PA, respectively. The Lead Manager will based on the Share Loan Agreement distribute shares to institutional investors at the same time as the distribution of this Prospectus in order to comply with customary DVP-settlement (delivery versus payment) procedures. Following the Registration of the New Shares in the Private Placement, the actual number of shares that have been distributed under the Share Loan Agreement will be allocated to the Lead Manager for redelivery to Ulrik Jansson and Datum AS. 4.12. COSTS Transaction costs, together with all other costs directly attributable to the Private Placement and the Acquisitions, will be paid by the Company. The costs are set forth in the table below. Name

Nature of work involved

Carnegie ASA P.O. Box 684 Sentrum NO-0106 Oslo Pareto Securities ASA P.O. Box 1411 Vika N-0115 Oslo Handelsbanken Capital Markets PO Box 332 Sentrum NO-0101 Oslo Wikborg Rein & Co Da P.O. Box 1513 Vika

Lead Manager

Amount NOK 13,100,000

Co-Lead Manager

NOK 6,400,000

Co-Lead Manager

NOK 3,400,000

Legal Advisor

17

NOK 150,000

Prospectus 0117 Oslo DLA Nordic Legal Advisor PO Box 7315 SE-103 90 Stockholm Ernst & Young AB Financial Accountant PO Box 7850 SE-103 99 Stockholm Aulie Bjerke Mäland DA Volve Legal PertroAdvisor Volve M&A Sagex Petroleum Volve G&G advisor Clifford Chance Selafa Didon/Zarat Legal advisor KPMG Tunisia Didon/Zarat Due diligence Adly Bellagha Didon/Zarat Local legal advisor Tunisia Ernst & Young Tunisia Local company auditor Tunisia Other expenses (Printing, miscellaneous, etc.) Table 8: Costs related to the Acquisitions and the Private Placement

SEK 75,000

SEK 150,000

NOK 175,000 NOK 350,000 NOK 77,000 EUR 550,000 USD 5,700 USD 3,000 USD 4,300 NOK 150,000

The fees charged by the Manager are calculated on the basis of a separate agreement, while other costs are estimates based on estimated time consumed. All expenses are quoted exclusive of VAT. The share premium was allocated to the Company’s share premium fund after deduction of the costs related to the Private Placement. 4.13. LEAD MANAGER Carnegie has acted as Lead Manager in connection with the Private Placement. 4.14. CO-LEAD MANAGERS Handelsbanken Capital Markets and Pareto Securities ASA acted as Co-Lead Managers in connection with the Private Placement.

18

Prospectus

5.

THE DIDON AND ZARAT ACQUISITIONS

5.1. BACKGROUND AND RATIONALES FOR THE ACQUISITIONS The Didon and Zarat Acquisitions are consistent with the Company’s strategy to acquire assets with producing field and with an exploration upside in the core area. In particular, the Didon Acquisition gives the Company full ownership to the entire Didon Field and Didon Concession, allowing effective management by the Company over these assets. The Zarat Acquisition increases the ownership interest of the Company in the Zarat Permit to 45 per cent, increasing the equity position of the Company in any development of the fields that have been discovered there (Zarat, Elyssa and El Nisr). The Didon and Zarat Acquisitions will be financed partly with equity from the Private Placement, partly from the Company’s cash reserves, and partly with new debt, to be arranged by the Company. 5.2.

TERMS OF THE DIDON AND ZARAT ACQUISITIONS

5.2.1. Main terms On 20 June 2005, PA entered into a confidential asset purchase agreement with MP Zarat and Didon FPSO to acquire the Didon Interest and the Zarat Interest. The purchase price is USD 230 million, subject to adjustments, in particular to reflect that the purchase is effective as of 1 January 2005. For further details of the asset purchase agreement, see section 14.4.2 “Legal Matters related to the Acquisitions - Tunisia”. 5.2.2. Main terms Simultaneous as the agreement on the Didon and Zarat Acquisitions were entered into, PA undertook to lend to MP Zarat USD 104.4 million, repayable upon completion of the Didon and Zarat Acquisitions, or 6 months after termination of the purchase agreement. The loan shall be disbursed in two tranches: USD 44.4 million following signing of the asset purchase agreement and USD 60 million by 18 August 2005. The first tranche has been disbursed. This loan is governed by a separate loan agreement. For further details of the loan agreement, see section 14.4.2 “Legal Matters related to the Acquisitions – Tunisia”. 5.2.3. Other conditions No leading employees or board members in PA have been granted favourable agreements in connection with the Acquisition. There are not any personal or commercial relations between MP Zarat and the PA Group.

19

Prospectus

6.

THE VOLVE ACQUISITION

6.1.

BACKGROUND AND RATIONALE FOR THE VOLVE ACQUISITION

The Volve Acquisition is consistent with the Company`s strategy to target mature area oil opportunities. It represents the Company’s first investment on the NCS and is thus an important step for the Company. The proven and probable reserves for the Volve Field are estimated in the PDO to be 70 million bo, equivalent to 7 million bo for the Company’s interest. Oil production is expected to start in 2007, with an initial daily production for the Company of 5,000 bopd. The Volve Acquisition will be financed partly with equity from the Private Placement, partly from the Company’s cash reserves, and partly with new debt, to be arranged by the Company. 6.2.

TERMS OF THE VOLVE ACQUISITION

6.2.1. Main terms On 13 June 2005, PAN and PA entered into a purchase agreement with Total for the acquisition by PAN of the Volve Interest, for a purchase price of NOK 205 million. The purchase is conditional upon PAN being approved as a licensee on the NCS by MPE, as well as consents from the MPE and the Ministry of Finance. It is also condition upon agreement with licence partners in PL046 on carving-out a new Production Licence, to be named PL046B, from PL046, covering the Volve Field, and upon the pre-emptive right of the Kingdom of Norway not being exercised. The Company expects the Volve acquisition to be completed in the fourth quarter of 2005.The Volve Interest will be owned by PAN. For further details, see section 14.4.3 “Legal Matters related to the Acquisitions - Norway”. 6.2.2. Other conditions No leading employees or board members in PA have been granted favourable agreements in connection with the Volve Acquisition. There are not any personal or commercial relations between Total, the licence partners and the PA Group.

20

Prospectus

7.

INDUSTRY AND MARKET OVERVIEW

7.1. OVERVIEW The world’s energy consumption has increased constantly during the recent years. The trend shows that there still is a growth in demand for oil, together with nuclear energy, gas energy and hydroelectric energy, while the use of coal has stagnated. The oil market is an integrated part of the world economy, where demand moves in line with the general economy. OPEC is an international organisation of eleven countries which are heavily reliant on oil revenues as their main source of income. Membership is open to any country which is a substantial net exporter of oil and shares the ideals of the organisation. The current members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Twice a year, or more frequently if required, the Oil and Energy Ministers of the OPEC countries meet to decide on the Organisation's output level, and consider whether any action to adjust output is necessary in the light of recent and anticipated oil market developments. OPEC has currently suspended their price band target oil price of USD22–28 for the OPEC oil basket. The price for Brent blend equalled around USD2-3 above the OPEC basket price before the suspension.

World's energy consumption in MMBOEPD 250 200 150 100 50 0 65

67

69 Oil

71

73

75

77

79

Nuclear

81

83

Coal

85

87 Gas

89

91

93

95

97

99

01

03

Hydroelectricity

Figure 1: World’s energy consumption

Source: BP, Carnegie Research 7.2. THE OIL PRICE The oil price as of today is not high in relation to historic levels in real terms. As can be seen from the graph below, it is still under both the first and the second oil shock in the seventies and eighties.

21

Prospectus Brent Crude - Current Month USD/BBL 70 60 50 40 30 20 10 0 06/2000

12/2000

06/2001

12/2001

06/2002

12/2002

06/2003

12/2003

06/2004

12/2004

06/2005

B re nt Crude -Curre nt M onth,FOB U$/B B L

Figure 2: The Brent Crude-Current Month

Source: Datastream Oil price and oil spending in relation to OECD economy 7.0%

90.0 80.0

6.0%

70.0 5.0%

60.0

4.0%

50.0

3.0%

40.0 30.0

2.0%

20.0 1.0%

10.0 0.0

0.0% 1965

1970

1975

1980

1985

Oil spending to GDP

1990

1995

2000

Real oil price

Figure 3: Oil price in relation to OECD economy

Source: Carnegie Research, BP

22

Prospectus

45

USD / barrel

40 35 30 25 20 15 1

3

5

7

31 Dec 2001

9

11

13

7 Mar 2003

15

17

19

21

23

No. of months forward 13 Aug 2004

25

27

29

31

33

15 Sep 2004

35 19-Jan-05

Figure 4: Future price of Crude Oil

Source: EMC and Carnegie Research 7.3. THE DEMAND FOR OIL The world demand for oil normally moves along the lines of the world’s GDP growth. The table below shows an estimate. Change from last quarter (year) Global demand1 units1 % 1Q03 80.2 2.3 3.0 2Q03 77.2 1.0 1.3 3Q03 79.2 1.6 2.0 4Q03 82.0 1.9 2.4 1Q04 82.3 2.1 2.6 2Q04 81.0 3.8 5.0 3Q04 81.5 2.3 2.9 4Q04 83.8 1.8 2.2 1Q05(e) 84.2 1.9 2.4 2Q05(e) 82.6 1.5 1.9 3Q05(e) 83.3 1.8 2.2 4Q05(e) 85.6 1.8 2.2 2003 79.6 1.7 2.2 2004 82.2 2.5 3.2 2005(e) 83.9 1.8 2.1 1) Million barrels of oil equivalents per day

Table 9: Global Oil Demand

Source: IEA The use of oil with respect to the total energy consumption has also increased, but it must be noted that the market is dynamic and that means that the demand for oil is inversely linked to the price. Sustainable levels of high oil prices can therefore lead to increased use of alternative energy sources at the cost of oil demand. 7.3.1. • • • • •

Drivers affecting the oil price Changes in supply and demand for oil and gas OPEC regulations Weather conditions Regulations from domestic / foreign authorities The price of substitutes

23

Prospectus • • 7.4.

Political conditions Economic conditions OIL MARKET BALANCE OECD demand Non-OECD demand Total demand

1999 47.6 27.9 75.4

2000 47.8 28.4 76.2

2001 47.7 29.1 76.8

2002 47.7 29.2 77.0

2003 48.6 30.9 79.6

NON-OPEC supply Iraq supply OPEC NGL supply Total supply

44.7 2.5 2.8 50.1

46.1 2.6 2.9 51.5

46.6 2.4 3.1 52.0

48.0 2.0 3.5 53.5

48.9 1.3 3.9 54.1

Table 10: Oil market balance

Source: IEA 7.5.

GEOGRAPHIC PRODUCTION REGIONS

7.5.1. Tunisia North Africa is a well known oil region with several larger oil fields, which were explored in the 1950s. Today, there exists a developed infrastructure with oil and gas pipelines and export terminals. Tunisia is not part of OPEC and is mainly an oil-producing country, although it also holds gas reserves. The authority’s policy has been to encourage and facilitate the conditions for investment through beneficial tax rules and a non-bureaucratic system. Tunisia also offers a business environment which makes operations efficient. Intensive exploration has been carried out in Tunisia since the discovery of oil in neighbouring Algeria and in May 1964, Tunisia's first oil field, El Borma, was discovered in the southern region near its frontier with Algeria. Oil2 Tunisia has proven oil reserves of 367 mmboe and gas reserves of 330 mmboe. Currently, Tunisia produces around 77,000 bopd, nearly all of which was crude. The country had its peak output of 120,000 bopd between 1982 and 1984. Meanwhile, domestic petroleum demand has increased, and the country's modest domestic production capacity is proving unable to meet it. Tunisia became a net oil importer in 2000 for the first time in over 20 years. New discoveries in recent years have been limited. The Tunisian government and ETAP try to attract foreign firms to fund exploration of offshore areas in the Gulf of Hammamet and off the north coast, as well as onshore in the northwest and other parts of the country. The Tunisian government would also like to attract foreign firms interested in developing the country's smaller fields, which ETAP traditionally has viewed as uneconomic. To achieve this, Tunisia reformed its hydrocarbons laws in August 2000, hoping to attract just such upstream investments. One of the most important provisions is a reduction in the tax rate from 75 per cent to 50 per cent for foreign firms if ETAP takes a 40 per cent share of the concession. Royalties are fixed at 10 per cent for oil and 8 per cent for gas (for new licenses). Tunisia's main oil producing fields are El Borma, Ashtart and Sidi el Kilani while the principal gas fields are the El Borma field where associated gas is produced, and the offshore 2

Source: http://www.etap.com.tn/etap/o_g_res.html#

24

Prospectus Miskar field. Tunisia produces heavy crude types, with El Borma and Ashtart as the best known. Natural Gas Tunisia is increasingly turning to natural gas as a way of coping with steadily increasing domestic demand for energy. Tunisia has 2.8 TCF of proven natural gas reserves, with around two-thirds located offshore. In 2000, Tunisia produced 66 bcf of natural gas. Output rose significantly to 79 bcf in 2001. Demand growth was even faster. Between 2000 and 2001, Tunisia's consumption of natural gas grew from 109 bcf to 135 bcf. Between 1990 and 2001, demand for natural gas grew almost 9 per cent per year. Much of the demand growth comes from the electricity sector, but industrial and domestic use of natural gas has also increased.

Figure 5: Tunisia Petroleum infrastructure May 2002

Source: ETAP 7.5.2. Norway Norway is today the third largest exporter of crude oil after Saudi Arabia and Russia3 Norway offers a highly stable investment environment for oil and gas industry and the country is an OECD province with unwavering infrastructure. Since petroleum production began on the NCS in 1971, it has been produced a total of 3.8 bbcmoe from 60 fields. That corresponds to 29 per cent of Norway’s original recoverable reserves.

3

Source: Petroleum economics Ltd, for 2003

25

Prospectus As a conclusion from the above, substantial oil and gas reserves remains. Also mature parts of NCS continue to offer substantial potential for proving new resources, and realisation of those assets are crucial in order to maintain Norway’s position as a major oil and gas exporter. Norwegian oil history Year

Event

1950 1959

Few people believed that NCS might conceal large oil and gas deposits Discovery of gas at Groningen in the Netherlands caused geologists to revise their thinking Phillips Petroleum oil company applied for permission to conduct geological surveys off Norway New statute determined that the state had sovereign rights over any natural resources on the continental shelf, and that the Norwegian government alone is authorised to award licences for exploration and production. In the same year, companies were granted permission to carry out preparatory surveys and reconnaissance. The median line principle was agreed with UK and Denmark as the basis for delineating the NCS. Norway’s first offshore licensing round was announced on 13 April 1965, and 22 production licences covering a total of 78 blocks were awarded. The first well was drilled on the NCS in the summer. It proved to be dry First production on the NCS, from the Ekofisk field. State participation, through the state oil company Statoil State participation in petroleum operations was reorganised. The state itself funds the exploration expenses, investment and operating costs relating to the SDFI interests, and receives the share of production and revenues which corresponds to its interest in each production licence The North-East Frigg gas field became the first NCS development to cease production Petoro AS was established in May 2001 as a state-owned limited company to manage the SDFI on behalf of the government. Statoil carried out its initial public offering The Norwegian Parliament (“Stortinget”) resolved in the spring that 21.5% of the SDFI’s assets could be sold. 15% was sold to Statoil that same spring, with the remaining 6.5% sold to other companies in March 2002.

1962 1963

1965

1966 1971 1973 1985

1993 2001

2001/2002

Table 11: Norwegian Oil history in brief

Source: MPE

26

Prospectus

Figure 6: UK / Norway well density

Source: Norsk Hydro Norwegian upstream oil industry There have been many changes in the political framework and way of thinking over the last six years. The authorities have realised that in order to attract more independents, they need to change the policy regarding the preservation of resources because it could be seen as prejudice to the overall recovery and value. Norway realised that due to the liberalisation of gas market supply to the EU, they could not rely on old alliances and needed to include other players in order to reach a high market share at an early stage. Reserves The total recoverable petroleum resources are calculated to be 12.8 bbcmoe approximately yielding half and half liquid and gas. The estimates range from 10.5 to 14.5 bbcmoe. Undiscovered resources amount to 40 per cent of the estimated recoverable resources that remain.

27

Prospectus Dis tribution of the total Norwe gian re cove rable re s ource s

Undiscovered resources

Sold and delivered

Possible measures for improved recovery Contingent resources in discoveries

Reserves

Figure 7: Distribution of the total Norwegian recoverable resources

Source: NPD May 2003

Figure 8: The Norwegian infrastructure and exploration fields

Source: MPE

28

Prospectus

8.

DESCRIPTION OF PA PRIOR TO THE ACQUISITIONS

8.1. GENERAL PA Resources AB is a Swedish public limited company with registered address Kungsgatan 447TR, 111 35 Stockholm. The Company is registered in the Swedish Companies Registration Office with enterprise number 556488-2180. PA’s shares are registered with the VPS and the VPC AB under the security number ISIN SE-000-818569. 8.2. HISTORY The Company was founded in 1994 through the acquisition of Petro Artic Svalbard AS, a Norsk Hydro company which focused on oil production on Svalbard, Norway. Since establishment the Company has mainly operated within the oil and gas industry. During the first years, however, the Company also focused on mineral prospecting through the subsidiary International Gold Exploration (IGE), in which PA became the principal shareholder in 1994. IGE was separately listed on Oslo Børs in 1997, and today the Company does not have any ownership interest in IGE. Petro Artic Svalbard AS was sold in 1999 and PA did not extend its concessions on Svalbard. Since 1997 the Company has mainly focused on oil and gas production and exploration in Tunisia. PA has also operated within oil production in Texas in the US, but sold all of its interest in 2004. Most of the oil fields were acquired in 1997 and 1998. In 2001 and 2002 the Company acquired two exploration fields in Tunisia. PA was listed on the NGM in 1998 and on Oslo Børs in 2001. The table below gives an overview of PA’s development and significant historical events.

Year 1994

Event PA Resources AB was established through the acquisition of Petro Artic Svalbard AS, the Company also became the principal shareholder of IGE. 1997 Purchase of oil and gas exploration fields in Tunisia and Texas, USA. IGE was seperately listed on Oslo Børs. 1998 New share issue and listing of PA on NGM. Purchase of additional exploration fields in Tunisia and Texas, USA. 1999 Petro Artic Svalbard AS sold. 2000 New share issue. Purchase of offshore oil field in Tunisia (El Biban). 2001 PA Resources was listed on Oslo Børs in September 2001. In 2001 PA also received the Jelma prospecting license. Most of the Company’s remaining shares in IGE was distributed to PA’s shareholders. 2002 Acquisition of the Makthar exploration license. 2003 New prospects were identified in the Jelma and Makthar exploration fields. Three new wells were drilled in the Douleb field. 2004 Assets in Texas, USA was sold (Good Omen field and Prairie Mud field). PA Resources Norway AS was established. 2004 PA Resources AB announced that it had entered into a Sale and Purchase Agreement for the acquisition of SOCO International plc 22.22% interest in the Zarat Permit offshore Tunisia in the Gulf of Gabes. 2005 The company acquired two smaller interests in exploration blocks offshore Equatorial Guinea. Table 12: Historical overview

29

Prospectus 8.3.

BUSINESS CONCEPT AND STRATEGY

8.3.1. Business concept PA is an upstream oil and gas company which operates in the first stage of the value chain within exploration and production. The Company focuses on developing mature and late-life oil and gas fields. The operational activities are located in Tunisia, North Africa where the Company is a well regarded oil producer. PA has operated in Tunisia for four years and has invested substantially in exploring and developing the respective fields. The Company has recently acquired share in two exploration permits in Equatorial Guinea, West Africa. This was the first step for PA towards becoming more active in West Africa, where there a numerous of excellent opportunities to acquire shares in producing assets and to participate in field developments. The Company is in the process of entering the NCS and is exploring business opportunities through possible acquisitions and license applications, primarily within mature fields. PA has started a pre-qualification process with the MPE to become an active participant and licensee on the NCS. 8.3.2. Strategy The Company’s strategy is to primarily seek opportunities within fields were major and larger oil and gas producing companies have withdrawn, i.e. tail-end production. PA focuses on cost efficiency to achieve profitable long term growth within the small field segment. PA’s strategy for further profitable growth is: • • •

Increase production from existing fields in Tunisia and utilise company interest in infrastructure Build on existing business in Tunisia and continue acquisition of fields and exploration projects in Africa Establish the NCS as a new core area

8.4. OPERATIONS OVERVIEW PA’s portfolio of oil fields in Tunisia has been acquired through company takeover, the purchase of licence shares and by licence applications and awarded permits. In 2004, PA had assets in five producing oil and gas fields in Tunisia. The Company is an operator in three of these fields. The total production in Tunisia in 2004 was approximately 685,000 BOE. Gas produced from the Ezzaouia and the El Bibane fields was flared until May 2003 as it did not exist any market for gas in Tunisia. However, from May 2003 a power plant has started to use gas from the El Bibane field. Currently, PA’s prospecting licenses in Tunisia cover 5 per cent of Tunisian territory and the Company is the largest foreign holder of exploration and prospecting acreage in Tunisia as of today.

Production fields Tamesmida (onshore) Douleb and Semmama (onshore)

Working interest 95%

Gross area 11 sq.km

70%

34 sq.km

30

Operator HTC, Seconded to Serept HTC, Seconded to Serept

Partners Serept (5%) Serept (30%)

Prospectus El Bibane (offshore)

Ezzaouia (onshore)

Didon (offshore)

25%

228 sq.km

13.5%

40 sq.km

22.22%

Ecumed Petroleum Tunisa (Centurion Energy) Maretap

MP Zarat

Centurion Energy (75%) ETAP (55%) Centurion Energy (31.5%) MP Zarat (77.78%)

Table 13: Production fields

Production fields Tamesmida (onshore)

Expiry date 17.11.2018

Douleb (onshore)

17.11.2018

Semmama (onshore)

31.12.2025

El Bibane (offshore)

31.12.2013

Ezzaouia (onshore)

31.12.2019

Didon (offshore)

Until field is depleted and abandoned.

Summary of terms Mining concession issued 01.03.1970. Preferential right of renewal to permit holder. Royalty payable to government on sliding scale based on “R” factor and fix income tax on net earnings after expenses. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 90% of the export price. Mining concession issued 01.04.1968. Other terms equal to Tamesmida. Mining concession issued 22.09.1977. Other terms equal to Tamesmida. Mining concession issued 14.04.1983. Preferential right of renewal to permit holder. Royalty and income tax payable to government on sliding scale based on “R” factor. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 90% of the export price. In additional an export tax of 1.5% of the exported production. Mining concession issued 11.04.1989. Other terms equal to El Bibane Mining concession issued 5 April 1990 Royalty and income tax payable to government on sliding scale based on “R” factor. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 10% discount to the export price.

Table 14: License terms

Exploration permits Jelma (onshore)

Working interest 35%

Gross area Operator 7,200 sq.km HTC

Makthar (onshore) Zarat (offshore)

45% 10%

3,800 sq.km 724 sq. km

Block I (offshore)

6%

860 sq. km

31

HTC MP Zarat

Noble Energy and Atlas Petroleum

Partners ETAP (50%) TOPIC (15%) ETAP (55%) MP Zarat (35%) ETAP (55%)

Prospectus Block H (offshore)

3.125%

1,400 sq. km

Roc Oil, Pioneer Natural Resources and Atlas Petroleum

Table 15: Exploration permits

Exploration permits Jelma (onshore)

Expiry date 26.11.2008

Makthar (onshore)

Zarat (offshore)

10.07.2006 24.07.20054

Block I (offshore)

02.02.2008

Block H (offshore)

02.02.2007

Summary of terms Initial exploration permit period with minimum work commitment of 200 km of 2D seismic, reprocessing of 400km of seismic and 2 wells. Permit holder can file for additional 6 years extension. Exploration permit with minimum work commitment of 200 km of 2D seismic and 1 well. Permit holder can file for additional extension. Permit assigned the 25 January 2001 Preferential right of renewal to permit holder. Validity date: 2,5 + 2 years extension Obligation: 1 exploration well One well is expected to be drilled during 2006, which would satisfy the Block I work commitments until Feb 2007 One well was drilled on H Block in July 2004 and one further well is scheduled for Q3 2005. This is expected to target the same formations productive in Block G and will satisfy the current work commitments.

Table 16: License terms

Infrastructure Export pipeline (75% share)

Description A 171 km long pipeline stretching from the Douleb, Semmama and Tamesmida fields to a port in La Skhira on the Tunisian coast. PA has a 75% interest in the pipeline.

Drilling rig Offloading and storage facilities

A slim hole drilling rig (Microdrill). Onshore facilities in the port of Zarzis were oil from the Ezzaouia and El Bibane fields are exported. Similar onshore facilities in the port of La Skhira were oil from the Douleb, Semmama and Tamesmida fields are exported.

Table 17: Infrastructure assets

8.4.1. Production fields Ezzaouia field The Ezzaouia field is located onshore in the south east of Tunisia. The field was discovered by Marathon Oil in 1986 and production commenced in 1990 from two producing horizons with a total of nine wells. The field is operated by Maretap SA, an operating company owned and controlled by the license owners of the field in proportion to their respective interests. In 2004, oil was produced from six wells within the two oil bearing zones. An extensive program has been carried out to increase production in the field. A 3D seismic acquisition and a processing and interpretation programme were implemented in 2002. Based on the results from the development program, the licence holders decided to drill three new wells. Results 4

An application for a one year extension has been filed– the Company has received confirmation from Ministry of Oil and Energy but is waiting for final approval from the national assembly in Tunisia.

32

Prospectus of the drilling activities have so far been promising and two new wells are currently producing oil. In addition, the Company is exploring the opportunities to drill a well at approximately 5,000 metres. A successful well in this area could increase the Company’s oil reserves substantially. However, the time frame for such a well has not yet been set. Oil from the field is transported through pipelines to a city 15 km south of the field (Zarsis) where a production and export terminal is located. In 2004, PA’s share of production was 71,000 bo from the field. There is also gas in the field, but the gas production has been flared so far. There is potential for delivery to the power plant that currently uses gas from the El Bibane field. The time-frame for such a well has not yet been set. Douleb, Semmama and Tamesmida fields The fields are located onshore in the north west of Tunisia close to the Algerien border. The Douleb field was discovered by Serept in 1966 and production started in 1968. Activities by the various field operators have now almost come to a standstill, but despite large reservoir depletion the field is profitable for PA. The Semmama field is located to the south of the Douleb field. It was discovered in 1967 and put into production in 1968. In 2004, PA’s share of production was 148,000 bo from the Douleb and Semmama fields together. The Tamesmida field was discovered in 1967 and production started from three wells in 1970. After the Company acquired interests in the field in 1998, PA has developed several concepts and ideas based on the review and synthesis of available data, not only on the production side, but also on the exploration and appraisal aspects of the field. In 2001 the Company started the first steps in a development programme to extract an additional 2 mmbo which will run over several years. In 2004, PA’s share of production was 51,000 bo from the Tamesmida field. The production from the Douleb, Semmama and Tamesmida fields is transported through the export pipeline described in table 10 above. PA has filed an application to improve the economic terms for the fields which have not changed since 1968. The Tunisian Ministry of Industry and Energy agreed to improve some of the terms in 2003. Over a five year period PA has planned to develop a total of 8 new wells in the Douleb, Semmama and Tamesmida fields, with a total budget of USD 10 million. The Company successfully drilled three new development/exploration wells in 2003 and two wells in 2004 in the Douleb field. Five wells have now been put into production. In addition to discoveries in already existing production formations, a new oil bearing formation has been discovered in the Douleb field. Tamesmida well number 5, Tam 5, is the fifth well in a series of wells to be drilled over a period of 5 years in the Douleb, Semmama and Tamesmida fields, the DST development/exploration Project (please refer to section 8.3. A total of 8 wells have been planned with a total budget of USD 10 million. Tam 5 was spudded 2 December 2004. This is the first well in the Tamesmida field under the DST project. Target depth is 1,612 m in the Serj Formation, the dolomite reservoir of Aptien age. The secondary target is the limestone reservoir (Vraconian age) expected at 1,050 meter. PA with its Tunisian subsidiary HTC has completed 1 onshore development well in North West Tunisia in the Tamesmida field. The development well has been drilled to 1,610 meter and discoveries have been made in two formations. The well is currently being tested and will

33

Prospectus thereafter be set in production. PA is operator and has a 95 per cent participation interest in the field. Due to difficulty in clearly defining and estimating market size, it is not meaningful to assess market shares for PA within their business portfolios. The tables below give an overview of the current operations in Tunisia and the Company’s license terms. There is a 171 km long pipeline stretching from the Douleb/Semmama/Tamesmida fields to the port in La Skhira on the Tunisian coast. PA Resources has a 75 per cent interest in the pipeline. The Company is not aware of any unusual circumstances affecting the business/production. Further, PA has no knowledge of any recent interruptions in the business/production that may have a substantial impact on the Company’s financial situation. El Bibane field The El Bibane field is located on the south west coast of Tunisia 16 km offshore from the town of Zarzis. The field was discovered by Marathon Petroleum by drilling of one well in 1982, and delineated by the drilling of 3 additional wells. In 1996 one of the wells was reentered under the operatorship of Ecumed Petroleum, and a horizontal well of some 1,800 metres was completed with 1,100 metres of open hole. The field produces from a small wellhead platform at 30 metres water depth. The well stream is piped through an 8 inch pipeline to separate facilities onshore. In addition to oil there are also gas reserves in the field, and since 2003 a power plant has used gas from the field to produce electricity. The Company has still not agreed on the price for gas delivery. In 2002, the well began producing water, with the water cut gradually rising to about 64 per cent by the end of 2002. A separate water filter has been installed to treat the water to bring it within environmental requirements so that it can be disposed of in the sea. In 2003, production came from 6 wells in 2 oil-bearing zones and in 2004 PA’s share of production was 127,000 boe from the El Bibane field. The Didon Field The Didon Field is located within the Zarat exploration concession, which is part of the 724 square kilometres Zarat exploration area described below. The field is located offshore 75 kilometres to the east of the Tunisian Libya border at water depth of approximately 75 meters. Four wells have been drilled to date. The 40 m thick reservoir has been producing since 1998 from a single sub sea well tied back to the Didon FPSO. In September 2004 an additional sub sea well was set in production. The Didon Field produced 2,100,000 boe in 2004, equal to 289,000 boe for the original working interest of the Company (from 1 July 2004). In November 2004, the owners of the field at that time (MP Zarat and SOCO) adopted a plan – often referred to as “Didon Project Development Phase II - for the installation of a new jacket platform on the field and to drill an additional well from that platform, to increase production. The new platform is scheduled to be installed in August 2005. Currently the project is in line with schedule. Engineering has achieved more than 70 per cent progress (as of end May). Refurbishment of jacket was completed and unit ready for load out and transportation. The deck fabrication and equipment installation is ongoing. Production is expected to be on stream through new solution in during the first quarter of 2006. Current budget of USD 43 million (100 per cent share) includes one additional well. Post transaction Capital expenditure is estimated at USD 16 million (100 per cent share).

34

Prospectus Two additional wells will be included in the development with an estimated total cost USD 14 million. Preliminary production forecast is that the new platform and well will increase production to about 15,000 bopd, equal to 3,300 bopd for the Company’s original working interest. 8.4.2. Discoveries Zarat Permit area The Zarat Permit area includes several oil and gas discoveries. Each of the concessions are regulated by a license convention and the Tunisian state can enter fields declared as commercial and with an approved field development plan, with up to a 55 per cent interest, within 6 months after start of production. In the Zarat and Elyssa fields, and in other exploration fields under the Zarat Permit, the state can exercise this right after reimbursement of all accrued cost. The acquired interest in these exploration fields can, on a field to field basis, be diluted to a minimum of approx. 10 per cent. 8.4.3. Exploration fields Jelma field The Tunisian Ministry of Industry and Energy granted the Company an exploration permit in 2001 for a period of five years in the Jelma field. The field is located onshore in the north west of Tunisia in a proven geological area located near the Douleb, Semamma and Tamesmida fields. The permit covers an area of 7,216 square kilometres. The Company is the operator together with ETAP (50 per cent participation interest) and the service contractor TOPIC (15 per cent participation interest). A number of promising prospects have been identified within the Jelma permit. The work commitment includes two wells and acquisition and reprocessing of seismic data for a total budget of USD 4 million. Based on the completed interpretation of reprocessed old and new seismic data, several attractive prospects and leads have so far been identified in the field. Existing production and transport facilities in connection with the Douleb, Semamma and Tamesmida fields can potentially be used for production in the Jelma field, and further improve the field’s financial potential. Makthar field The Makthar exploration field is located onshore in the north west of Tunisia in a proven geological area alongside with the Jelma exploration field and the Douleb, Semmama and Tamesmida fields. The Company purchased Springfield Resources’ share in the exploration permit in 2002 and became the operator of the field together with ETAP, which has a participation interest of 55 per cent. The Tunisian Ministry of Industry & Energy also awarded an extension of the permit in north. The Makthar permit now covers a total 3828 square kilometres. Work at the Makthar exploration permit is included and follows the Jelma exploration program. A preliminary Geodetic and Geophysical evaluation indicates several surface and sub-surface structures which could constitute potential prospects. A seismic acquisition campaign is scheduled to define these prospects more clearly. As with the Jelma exploration field, existing production facilities in connection with the Douleb, Semmama and Tamesmida fields can be utilised for production. Block I Block I lies immediately adjacent to ConocoPhillips 2002 discovery of Coco Marine-1, which tested oil at a rate of 3,000 BOPD. An 860 square kilometres 3D seismic survey, acquired in

35

Prospectus 2004, is currently being processed and a well is expected to be drilled during 2006, which would satisfy the Block I work commitments until February 2007. Block H Block H lies on-trend and to the north of the prolific Amerada/Triton discoveries on Block G (Ceiba and Northern Block G Fields, Rio Muni Basin), where more than 500 million bo are currently either producing or under development. Following acquisition of a 1,400 square kilometres 3D seismic survey in 2002, a well was drilled on H Block in July 2004 and a further well is scheduled for third quarter 2005. This is expected to target the same formations productive in Block G and will satisfy the current work commitments. Figure 9 sets forth PA’s oil production in the period from 1998 to the first nine months of 2004. Figure 10 sets forth the Company’s turnover and operating profit in the period from 1998 to the first three months of 2005. Oil production, BOE yearly 800,000 685,000

700,000 600,000 500,000 376,000

400,000 300,000

327,000 329,000 260,000 255,000 277,000

200,000

116,000 136,000

100,000 1998

1999

2000

2001

2002

2003

2004

Figure 9: Historical oil production

Source: PA Resources AB Annual Report 2004 and press release on 3M2005

36

Q1 2004 Q1 2005

Prospectus Turnover and operating profit 120,000 100,000

SEK'000

80,000 60,000 40,000 20,000 1998

1999

2000

2001 Turnover

2002

2003

2004

Q1 2004 Q1 2005

Operating profit

Figure 10: Turnover and operating profit

Source: PA Resources AB Annual Report 2004 and press release on 3M2005 8.4.4. Estimate of remaining reserves The table below sets forth estimates of PA’s proven and probable reserves in boe as of 31.12.04 in the respective production fields the Company has an interest. The reserves are based on the respective operators’ estimates. Please refer to section 2 for a definition of proven and probable reserves. It is expected that with the current production ratio the remaining proven and probable reserves will be depleted within the permits expire. Oil Gas Total reserves Field (million BO) (billion CF) (million BOE) Ezzaouia 4.0 5.0 4.9 Douleb/Semmama 5.6 5.6 Tamesmida 0.7 0.7 El-Bibane 4.6 37.3 11.2 Didon 26.1 26.1 Total oil 40.9 Total gas 7.5 42.3 48.5 Oil equivalent 48.5 48.5 (1 mmcf = 178.11 BOE.) Table 18: Proven and probable reserves as of 31.12.2004

37

PA share 13.50% 70.00% 95.00% 25.00% 22.22% 28.00%

PA reserves (million BOE) 0.7 3.9 0.6 3.0 5.8 12.0 1.8 13.8

Prospectus 8.5. FINANCIAL INFORMATION The financial accounts for 31 March 2005 are not audited. Accounting principles As of 1 January 2005, PA Resources AB (publ) has adopted the International Financial Reporting Standards (IFRS). As from 2005, PA Resources will issue its financial reports in accordance with these standards including one (restated) comparative year. The three month period report of PA Resources AB (publ) has been prepared in accordance with IAS 34 and interpretations of the IFRS as issued by the International Financial Reporting Standards Committee (IFRIC) and the Standards Interpretation Committee (SIC). The accounting principles for the parent company are unchanged from the previous year All financial figures included in this Prospectus containing information regarding the full years 2002, 2003 and 2004 are reported after Swedish GAAP accounting principles. The financial figures included containing information regarding the first quarter 2004 and the first quarter of 2005 are reported after IFRS accounting principles. 8.5.1.

Profit and Loss Statement Consolidated Profit and Loss Account

(figures in SEK'000)

2002

2003

60,059 1,310 1,559 62,927

51,915 2,968 1,039 55,922

99,400 199 14,225 113,824 1,2

23,805 -4,163 307 19,949

47,947 -4,309 315 43,952

-14,987 -3,150 -4,966 -8,010 -31,114

-12,722 -5,922 -5,787 -6,419 -30,850

-20,597 -14,439 10 -7,621 2,3 -2,807 5 -45,464

-4,967 -1,452 -1,125 -837 -8,381

-10,886 -5,231 -1,798 -1,371 -19,287

Operating profit (loss)

31,813

25,072

68,360

11,568

24,666

Financial items Interest from income Interest expenses Other financial items Profit participation's in associated company Profit before tax

741 -429 -4,381 27,743

50 -869 -572 23,681

176 -3,217 -308

-188 -76

850 -3,014

65,011

11,305

22,502

Royalty Tax, oil and gas Deferred tax Income tax Profit after taxes

-4,264 -7,768 -275 -106 15,330

-4,776 -776 1,658 -168 19,620

-6,634 -15,079 682 -203 43,778

-1,375 -55 -1,063 -3,862 4,949

-2,267 -63 -5,824 14,348

1.54 -

1.98 -

4.59 -

1.17 -

1.62 -

OPERATING INCOME Net sales of oil and gas Changes in stock Other income Total operating income OPERATING EXPENSES Cost of sales Other external expenses Personnel expenses Depreciation Total expenses

Earnings per share Dividend per share

Table 19: Profit and loss statement

38

2004 Note (Q1)2004

(Q1)2005

Prospectus 8.5.2.

Balance Sheet Consolidated Balance Sheet

(figures in SEK'000)

2002

2003

2004 Note (Q1)2004

(Q1)2005

80,620

95,678

209,330 26,550

5

94,863 -

230,952 26,550

36 6,026

1,647 5,443

3,129 4,658

5 5

1,709 5,598

1,892 4,756

97 7,025 93,804

6,310 1,118 2,032 112,228

5,877 1,118 29 250,690

6,490 1,118 2,032 111,809

8,868 1,118 29 274,165

8,526

10,926

9,344

8,521

13,653

8,025 24,203 1,217 4,561 46,531

6,694 3,473 1,555 23,565 46,214

57,462 13,096 3,065 43,868 126,835

7,238 2,735 1,746 25,506 45,745

12,437 323,709 10,594 83,781 444,175

140,335

158,442

377,525

157,555

718,340

1,984 43,421

1,984 39,437

2,980 141,470 20,475

1,984 39,437 -

3,080 158,949 36,874

27,474 15,330 88,210

49,642 19,620 110,684

62,140 43,778 270,844

68,942 4,950 115,313

109,564 14,348 322,816

ASSETS Fixed assets Tangible long-term assets Oil and gas assets Exploration Machinery and equipment Plant and machinery Construction in progress Long/term financial assets Advance payments Shares Other long-term receivables Total fixed assets Current assets Stock Short term receivables Accounts receivable Other receivables Prepaid expenses and accrued income Cash Total current assets Total assets

5

4

SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity Share capital Restricted reserves Unregistered share capital Unrestricted equity Retained earnings Net results Total shareholders equity Liabilities Long-term liabilities Bank overdraft facilities Other long-term liabilities Deferred tax liabilities Total long-term liabilities Current liabilities Accounts payable Tax liabilities Other liabilities Accrued expenses and prepaid income Total short-term liabilities Total liabilities Total shareholders equity and liabilities

8

23,264 1,658 24,923

29,180 29,180

35,212 35,212

30,585 1,063 31,648

519 365,445 365,964

9,526 7,641 8,328 1,708 27,203 52,126

13,919 654 2,887 1,119 18,579 47,758

19,835 18,375 30,601 2,659 71,470 106,681

1,838 3,901 3,753 1,102 10,594 42,242

11,674 727 14,391 2,769 29,561 395,524

140,335

158,442

377,525

157,555

718,340

Table 20: Consolidated balance sheet

39

Prospectus 8.5.3.

Cash Flow Statement Consolidated Cash Flow Statement

(figures in SEK'000) Cash flow from operations Profit from participations in associated comp. Deprecation Deferred tax liabilities Adjustment for items not included in cash flow Received interest Paid interest and similar income statement items Paid royalty Paid tax Total cash flow from operations before change in working capital Change in working capital Increase/decrease in inventories Increase/decrease in long-term receivables Increase/decrease in short-term receivables Increase/decrease in long-term payables Increase/decrease in short-term payables Total cash flow from operations Cash flow used for investments Investments in intangible long-term assets Acquisition/disposal of tangible long-term assets Acquisition/disposal of financial long-term assets Total cash flow used for investments New share issue Total cash flow from financial activities Change in cash and bank Cash and bank at the beginning of the year Currency exchange difference Cash and bank at the end of year

2002

2003

2004

(Q1)2004

(Q1)2005

31,813 8,010 -275

25,072 6,419 1,658

68,360

11,569

24,666

836 -1,063

1,371 -

849 -4,920 -4,263 -7,874

-1,391 -4,776 -942

2,807 682 176 -3,524 -6,633 -15,282

-264 -1,375 -3,917

1,370 -3,534 -2,267 -5,887

23,340

26,040

46,586

5,786

15,719

-1,309 -6,701 -5,517 -10,074 3,126 2,865

-2,400 -1,317 21,721 4,257 -8,624 39,677

1,582 2,436 -61,901 -6,032 52,891 35,562

2,404 -180 4 1,405 -7,984 1,435

-4,309 -273,118 330,752 -41,909 27,135

-1,723 -6,701 -8,424

-22,505 - 1,021 -23,526

-143,705 -143,705

-237 -237

-19,748 -2,990 -22,738

-

-

126,202 126,202

-

33,977 33,977

-5,559 7,468 2,652 4,561

16,151 4,561 2,853 23,565

18,059 23,565 2,244 43,868

1,198 23,565 742 25,505

38,374 43,868 1,539 83,781

Table 21: Consolidated cash flow statement

40

Prospectus 8.5.4. Segment information The table below sets forth the geographical split of the operating income and the operating profit. The Company has only one business area, oil production, in which all operating income is generated. Breakdown of operating income and operating profit (figures in SEK'000) Tunisia Sweden Internally Total

Operating income 2002 2003 57,473 7,302 -1,849 62,927

55,325 6,063 -5,465 55,922

2004 113,579 15,369 -15,325 113,622

Operating profit 2002 2003 35,563 -3,750 31,813

27,804 -2,732 25,072

2004 61,469 6,891 68,360

Table 22: Geographical split of operating income and operating profit (Swedish GAAP)

8.5.5. Financial Development as of (Q1)2005 The group profit before tax was SEK 22.5 million. Operating income was SEK 43.9 million. Operating income before deprecations was SEK 26.0 million. The increase in group profit from 2004 was due to the inclusion of the Didon Field and increased oil price. Net financial costs in the period was SEK 2.1 million of which SEK 1.7 million represents unrealised foreign exchange loss without cash flow effect related to the company’s bond debt. The company’s bond debt was raised in March 2005 and the costs reflected in the Q1 accounts represent the cost of funding for one month. Available liquidity as of the 31 March 2005 was SEK 358.2 million which is invested in short term low risk bonds. The company’s NOK 300 million 5 year fixed interest bond loan has been fully swapped to USD with floating interest rate. The parent company operating revenue was SEK 0.9 million with loss before tax at SEK 3.5 million. Available cash as of the 31 March 2005 came up to SEK 56.3 million. Oil inventory The company had 104,000 bo at the end of the period. Number of employees The numbers of employees at the end of the period were 12 persons. Accounting and valuation principles AS of 1 January 2005 the Company has implemented IFRS accounting. Valuation of the IFRS effect is immaterial and thus no adjustments are made to equity. Group activity (Q1)2005 Tunisia The Company produced in the first quarter of 2005 approximately 136,000 boe, which correspond to an average production of 1,500 boepd. In Tunisia, the fields Douleb, Semmama and Tamesmida produced approximately 710 BPD in the period. An additional new well in the Tamesmida field was drilled in the last quarter in 2004 with oil discovery in two oil-bearing zones at 1,600 meters and 1,000 meters depth. Due to technical problems with the completion the well has not yet reached full capacity. The El Bibane field produced approximately 1,984 boepd in the period. Studies are set to evaluate a new well are ongoing.

41

Prospectus The Ezzaouia field produced approximately 1,925 bopd in the period. The production from the Didon field has been adversely affected by technical problems with the FPSO operating on this field. This has caused a reduction in the overall production level for the first quarter of 2005. The Didon complementary development project progresses according to set schedule. Engineering has achieved more than 50 per cent progress and fabrication work on the jacket and the deck has started. Acquisitions – Tunisia No new acquisition has been completed in the first quarter 2005 Tunisia - Exploration Based on completed G&G work in the Makthar permit preparation for a drilling campaign on several prospects has been launched. The first well is forecasted to be drilled in October 2005. In the Zarat exploration permit work has started to process the newly acquired 3D seismic. A total of 780 km with 3D seismic data shall be processed. Equatorial Guinea On 1 March the company announce the signing of a sale and purchase agreement which will lead to the addition of two new license interests in promising exploration areas offshore Equatorial Guinea, West Africa. These comprise a 6 per cent interest in Block I, offshore Douala Basin, operated by Noble Energy (Houston) and a 3.125 per cent interest in Block H, offshore Rio Muni Basin, operated jointly by Roc Oil (Sydney) and Pioneer Natural Resources (Houston). Atlas Petroleum International Ltd. is the administrative operator of both blocks. Preparation for a new well that will be drilled in block H is ongoing, currently forecasted to be drilled in during third quarter of 2005. Accounting The stock of oil included in the balance sheet at the end of the reporting period, has as of 1 January 2005 been valued on a cost basis at USD 13.00 per barrel. The reduction from the previously used USD 15.00 per barrel is due to the new IFRS rules. The difference between actual selling price and book value of the stocks is realised and accounted for at time of the sale of the oil. Acquisition of Block I&H Equatorial Guinea The transaction was completed 1 March 2005 and the acquired company has been consolidated from and with this day in the group. The Group’s exploration licenses including Zarat, Jelma, Maktar and Equatorial Guinea have been listed separately and evaluated according to the “full cost method”. Development after Q(1) Production has resumed on the Didon-field since 15 April to a total rate off 9,000 bpd. The construction of the platform develops as planned and the platform is estimated to arrive to the Didon-field by the end of August. Production on other fields in Tunisia has developed according to budget in a rate of 1,000 – 1,200 bpd.

42

Prospectus 8.5.6. IFRS Implementation From 1 January 2005 the Company has reported the financial accounts in accordance with International Financial Reporting Standards (IFRS). To prepare for the transition to IFRS, the Company has gathered necessary information from its subsidiaries in order to evaluate differences between the current Swedish accounting principles and IFRS as well as the effects with respect to the Company’s financial reporting. The Company has revised the figures for 2004 in accordance with IFRS in order to be comparable in the 2005 reports. Based on the current information and propositions, significant differences between IFRS and the Company’s precedent accounting principles are: •

IAS 10: Proposed dividend is according to Swedish GAAP recognized as a part of the equity, thus there will be no changes in the future according to IFRS.

•

IAS 16: The accounting treatment of property plant and equipment, which will affect the assessment of potential impairment of such assets. The Board of Directors has implemented an evaluation model for identification of potential impairment for oil and gas licenses based on geological data. As of today’s estimation there will be no need for an impairment adjustment of the accounts.

•

IAS 18: The Board of directors is aware of possible effects related to certain contracts regarding revenue recognition. However we do not consider as of today this effect to be material.

•

IAS 19: The Company is aware of potential effects for the employee’s pension plans, but today’s existing pension plan is a defined contribution plan, thus it will have no effect on the financial statement

•

IAS 39 The accounting treatment of financial instruments, which will be reported in market value. With respect to financial treatment of financial instruments, the Company does not currently use such instruments but may do so in the future. The Company has not identified effects with respect to other financial instruments such as debt and receivables.

Hence, the transition to IFRS will not bring significant quantitative changes in PA’s financial result and position, except for effects from IAS 16 which with a potential decrease of oil prices as well as changes in exchange rate between SEK and USD. This could generate an impairment adjustment. The company continuously reviews changes in relevant regulations and make necessary adjustments. 8.6. INVESTMENTS The table below sets forth the investments made by the Company over the last three years.

Amounts in SEK’000 Oil and gas assets Machinery and equipment Table 23: Investments

As of 31 December 2002 2003 2004 6,024 31,570 116,350 1,640 59

43

As of 31 March 2004 2005 19,748 -

Prospectus 8.7. LOAN AGREEMENTS Prior to the Acquisition PA had two loan agreements regarding the financing of the Douleb, Semmama and Tamesmida fields. The loans are held by L’Union Bancaire pour Le Commerce. There are no covenants connected with either of the loans. 5 – Year senior unsecured bond Loan 16 February 2005, PA decided to issue a NOK 300 million unsecured bond loan over a 5 year period. The loan is a bullet loan, with 8.75 per cent fixed rate. The loan is due 10 March 2010. The borrower has a call option on 10 March 2008 at price 104 per cent, and at 10 March 2009 at 102 per cent. There are some important covenants in the loan agreement: • Minimum book equity of SEK 250 million • Minimum book equity of 40 per cent of capital employed • A maximum possible dividend payment of 50 per cent of net profit after tax The loan has been fully swapped into a floating rate USD loan. 8.7.1. Terms Loan 1 Loan

Amount Interest

Time to maturity

(USD’000)

Douleb, Semmama and Tamesmida project loan

2,250 LIBOR+ 1.25%

30.11.2007

Table 24: Loan agreement terms

Loan 2 Loan

Amount Interest

Time to maturity

(USD’000)

Douleb, Semmama and Tamesmida project loan Table 25: Loan agreement terms

3,000 LIBOR+ 1.50%

01.05.2009

8.7.2. Instalments Loan 1

Loan (USD’000) 2005 Douleb, Semmama and Tamesmida project loan 750 Table 26: Loan agreements repayment schedule

2006

2007

750

750

2006

2007

2008

2009

750

750

750

375

Loan 2

Loan (USD’000) 2005 Douleb, Semmama and Tamesmida project loan 375 Table 27: Loan agreements repayment schedule

The second loan agreement was entered December 2004.

44

Prospectus 8.8. PENSION SCHEME The Swedish personnel have a defined pension scheme covered by a life assurance company. The scheme gives entitlement to defined future pension payments, which primarily depend on the outcome of the life assurance company’s administration of the funds. The managing director in Tunisia have similar pension scheme. 8.9. AUDITORS The Company’s auditors are Ernst & Young AB (public authorised accountants), enterprise number 5560535873, with business address Jakobsbergsgatan 24, Box 7850, SE-103 99 Stockholm, Sweden. Ernst & Young has audited the Company’s annual accounts for the last three financial years. 8.10. INSURANCE DETAILS The Company’s working interest in each concession is covered by insurance on behalf of the concession executed by the operator of each concession. The Company has also a separate insurance with Assurances Maghrebia, agent MARCH Tunisie, for transport and storage of produced oil for all concessions. In addition the Company has insurances to cover Company liability in respect of other damages, accidents, environmental issues etc. with Assurances Maghrebia, Europeiska and Länsförsäkringar AB.

45

Prospectus

9.

ORGANISATION, BOARD AND MANAGEMENT

9.1. ORGANISATION The graph below gives an overview of the current organisation structure. As of 31 December 2004 the PA Group had 12 employees in 3 countries. PA has focused on keeping a lean corporate organisation. The Company will further expand the organisation in Norway as a result of the plans to enter the NCS. Initially, PA will build a small team of professionals with relevant industry experience. The Company will achieve this by building a new organisation, or through acquisitions. PA Resources AB Ulrik Jansson Managing Director & President

Gunilla Olson Chief Accountant & Administration Officer

Ali Gaaya Exploration Manager

PA Resources Norway AS Trond Bjerkan / Ole Wiborg Vice President & CFO Vice President

HTC Jean Louis Remondin Managing Director

Naceur Souisse Operation & Reservoir Manager

Hedi Ayadi CFO

Figure 11: Organisational structure

9.2. LEGAL STRUCTURE The chart below gives an overview of PA’s legal structure. The Company has four wholly owned subsidiaries. As can be seen from the legal structure below, the Company has branches in Norway and Tunisia. The headquarters is located in Sweden. PA Resources AB Sweden

Hydrocarbures Tunisie Corporation HTC Tunisa

Hydrocarbures Tunisie El Biban Ltd. El Hydrocarbures Tunisie Biban Ltd. Tunisa

Microdrill AB Tunisa

PA Resources Norway AS (To be registered) PA Norway PAResources Resources NorwayAS AS Norway

PA Resources Norway AS (To be registered) PAResources Resources Norway AS PA Overseas Ltd. Norway UK

Figure 12: Legal structure of PA Group prior to the Acquisitions

The Volve Interest will be owned by PA Resource Norway AS, while the Didon Interest and the Zarat Interest will be held through PA Resource Overseas Ltd.

46

Prospectus 9.3. THE BOARD The following table sets forth the name, date of birth and board position of each board member in PA. The Chairman was elected in 2003 and the board members are elected annually. Name

Born

Position in PA

For re-election

Rabbe E. Lund

1946

Chairman of the Board

Annually

Ulrik Jansson

1954

Member of the Board

Annually

Managing Director and President of PA Niklas Adler

1970

Member of the Board

Annually

Jan HaudemannAndersen

1958

Member of the Board

Annually

Harald Arnet

1961

Member of the Board

Annually

Table 28: The Board of Directors of PA

The Board members were elected at the general annual shareholders’ meeting held on 11 May 2005. Rabbe E. Lund. Mr Lund has been Chairman of the Board since 2003. Mr. Lund is currently President in Intellectual Capital Group AS and holds several board positions in oil related companies. Prior to joining Intellectual Capital Group AS, Mr. Lund served as Executive Vice President in Saga Petroleum ASA where he worked in 24 years. Mr. Lund has also worked in the International Monetary Fund and the Norwegian Ministry of Petroleum and Energy. Mr. Lund holds a MBA and studied political science. Mr. Lund is a Norwegian national with residence in Asker, Norway. Ulrik Jansson. Mr. Jansson has been Managing Director and President of PA since 1996. Prior to joining PA, Mr. Jansson worked as a corporate lawyer at AGA AB and Uddeholms AB. He received his law degree from Uppsala University. Mr. Jansson is a Swedish national with residence in Stockholm, Sweden. Niklas Adler. Mr. Adler is currently working as a lawyer in Grönberg Cederlöv law firm in Stockholm. He received his degree in law from Stockholm University in 1997. Mr. Adler is a Swedish national with residence in Stockholm, Sweden. Jan Haudemann-Andersen. Mr Haudemann-Andersen was elected member of the Board in 2005. Mr Haudemann-Andersen is currently Chairman in Datum AS. Mr. HaudemannAndersen is a Norwegian national with residence in Oslo, Norway. Harald Arnet. Mr. Arnet was elected member of the Board in 2005. Mr Arnet is currently Chief Executive Officer in Datum AS and in Wega ASA. Mr. Arnet is a Norwegian national with residence in Oslo, Norway. Allowance to the Board The members of the Board of PA received SEK 119,000 in aggregate remuneration for the financial year 2004.

47

Prospectus 9.3.1.

Shares and share options of the Board

Name No. of shares in PA Rabbe E. Lund 30,000 Ulrik Jansson 2,835,504 Niklas Adler Jan Haudemann5,798,7105 Andersen Harald Arnet Table 29: Shares of the Board

None of the members of the Board hold options in PA. 9.4. MANAGEMENT The table sets forth the name, date of birth and position for each member of Management. Name

Born

Position in PA

Ulrik Jansson

1954

Managing Director and President, member of the board

Trond Bjerkan

1958

Vice President

Ole Wiborg

1957

Chief Financial Officer

Jean Louis Remondin

1953

Managing Director HTC

Table 30: Management structure

Ulrik Jansson. Please refer to section 9.3 for additional information. Trond Bjerkan. Mr. Bjerkan has served as Vice President for PA since 2000. Mr. Bjerkan has over 15 years of experience from the oil and gas industry. Prior to joining PA, he worked in Saga Petroleum ASA where he held several management positions in projects such as, Snorre, Vigdis, Varg and Haltenbanken South. Mr. Bjerkan received his Master of Science from the Norwegian Institute of Technology, NTH in Trondheim. Mr. Bjerkan is a Norwegian citizen with residence in Oslo, Norway. Ole C. Wiborg. Mr. Wiborg has served as Chief Financial Officer for PA since 2005. Mr. Wiborg has a broad financial background including 5 years on the credit side in Chase Manhattan Bank, London covering Scandinavian clients in the shipping and offshore sector, then 11 years as CFO in the publicly listed Fred. Olsen related shipping company Loki AS, Oslo. Wiborg has in addition been actively involved in venture capital and holds several board positions. Wiborg holds a BS. degree in business administration from Boston University. Mr. Wiborg is a Norwegian citizen with residence in Oslo, Norway. Jean Louis Remondin. Mr. Remondin has been the Managing Director of HTC since 1997. Mr.Remondin has over 20 years of experience as petroleum engineer. In the period from 1976 and 1990 he was responsible petroleum engineer in Schlumberger and Elf Aquitaine foremost for the companies’ operations in North Africa and South East Asia. From 1990 to 1997 he served as head of the French oil company Geopetrol SA.Mr Remondin is a French citizen living in Tunis, Tunisia.

5

Of which 5,398,710 shares are owned by Datum AS (owned 100 per cent by Mr. HaudemannAndersen) and 400,000 shares are owned by Wega ASA (owned 61 per cent by Datum AS).

48

Prospectus 9.4.1. Allowance to Managing Director and President The remuneration to PA’s Managing Director and President in 2004 is described below. Name

Salary Pension costs (SEK) Other remuneration (SEK) (SEK) Ulrik Jansson 739,951 584,602 74,100 Table 31: Allowance to Managing Director and President

9.4.2.

Shares and share options of the Management

Name

No. of shares in PA No. of options in PA

Ulrik Jansson Trond Bjerkan Ole Wiborg Jean Louis Remondin

2,835,584 22,962

36,000 36,000

Table 32: Shares and share options of the management

9.5. RELATED PARTY TRANSACTIONS During the three years ended 31 December 2004 the Group entered into the following transactions set out in the table below.

Related party International Gold Exploration IGE AB Managing Director and President - Ulrik Jansson Administration services and rental offices premises

Purchases from related party SEK

Amounts owed to related party SEK

Amounts owed from related party SEK

Year

Sales to related party SEK

2004 2003 2002

1,480,160 595,000 245,000

-

-

43,750 1,434,559

2004 2003 2002

-

370,527 323,749 313,582

94,780 92,219 421,132

-

2002

-

313,200

139,200

-

Intellectual Capital Group AS President - Rabbe Lund Rental office premises Imeon AB Former member of the Board - Bertil Zaudy Rental office premises

Table 33: Transactions with parties related to PA during the last three years ended 31 December 2004

9.6. LOANS FROM SHAREHOLDERS Bertil Lindqvist, a shareholder in PA, granted an interest free loan to PA in 1999 of SEK 6,800,000. SEK 3,500,000 was repaid on 28 February 2005 and SEK 3,300,000 on 14 April 2005. No interest has been paid on the loan.

49

Prospectus

10.

DESCRIPTION OF THE DIDON CONCESSION AND THE ZARAT PERMIT

10.1. OVERVIEW MP Zarat holds a 35 per cent interest in the Zarat Permit, located 75 kilometres offshore eastern Tunisia in the Gulf of Gabès. The Zarat Permit has one commercial declaration, the Didon Field where MP Zarat holds 77.78 per cent. The remaining 22.22 per cent are held by PAO, a subsidiary of the Company. The Didon crude oil is produced into via the ‘Didon’ FPSO. Production from the field is sold into the spot market (please refer to additional details regarding the fields in the tables below). Working interest production to MP Zarat from its Didon interests averaged 92 bopd during the first quarter of 2005. According to RPS Energy Ltd, June 2005, the Proven and probable reserves for Didon on an entitlement basis (77.78%) totalled 32.9 million bo at the time of the acquisition. Due to difficulty in clearly defining and estimating market size, it is not meaningful to assess market shares for MP Zarat within their business portfolios. The tables below give an overview of the current operations in Tunisia and their license terms.

Production field Working interest Didon (offshore) 77.78% Table 34: Production fields

Production field Didon (offshore)

Operator MP Zarat

Partner PAO (22.22%)

Expire date Until field is depleted and abandoned.

Summary of terms Mining concession issued 5 April 1990 Royalty and income tax payable to government on sliding scale based on “R” factor. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 10% discount to the export price.

Working interest 35%

Gross area Operator 724 sq. km MP Zarat

Table 35: License terms

Exploration permit Zarat (offshore)

Table 36: Exploration permits

50

Partner PAO (10%) ETAP (55%)

Prospectus

Exploration permit Zarat (offshore)

Expire date 24 July 20056

Summary of terms Permit assigned the 25 January 2001 Preferential right of renewal to permit holder. Validity date: 2.5 + 2 years extension Obligation: 1 exploration well

Table 37: License terms

10.2.

PRODUCTION FIELDS AND EXPLORATION PERMITS

Figure 13: Gulf of Gabès, east central Tunisia

See sections 8.4.1 and 8.4.2 for details regarding the Didon Field and the Zarat Permit. 10.2.1. Exploration fields Elyssa, Zarat and El Nisr fields The Zarat Permit area of a total of 724 square kilometres comprises a number of oil and gas discoveries and prospects, including the Elyssa, Zarat and the El Nisr field discoveries. Each of these discoveries holds recoverable oil and gas reserves. The permit area is operated by the French company Medex Petroleum Zarat. In 2004 a 3D seismic acquisition of 700 square kilometres was made in order to determine further development of these discoveries. The recorded data will be processed and interpreted under the remainder of 2004 and in 2005. Based on these results of the seismic interpretation a new exploration well will be drilled late in 2005. 10.2.2. Estimate of remaining reserves According to RPS Energy Ltd, June 2005, the proven and probable reserves in the Didon Field on an entitlement basis were expected at 32.9 million bo (updated on 2 June 2005), equal to 25.6 million boe for the acquired working interest and 32.9 boe for the total equity interest of the Company following completion of the acquisition of MP Zarat’s part of the Didon Field.

6

An application for a one year extension has been filed– the Company has received confirmation from Ministry of Oil and Energy but s waiting for final approval from the national assembly in Tunisia

51

Prospectus

11.

DESCRIPTION OF VOLVE

The Volve Field is situated about 8 kilometres north of the Sleipner A platform, in relatively shallow water depth (90 meters).

Figure 14: Map of the Volve field

The Volve Field was discovered in 1993. The reservoir is middle Jurassic, consisting of sandstone, in a salt-related faulted dome. It is primarily an oil field, but some gas will be produced. In the PDO, the proven and probable reserves of the Volve Field are estimated at 70 million BO. The production profile in the PDO has a daily production of 50,000 bo in 2007-2010, with an anticipated shut-down in 2011 or 2012. A PDO was filed in February 2005 and approved by the MPE in April 2005. First oil is currently expected in March 2007. The planned development calls for a new jack-up rig (“Maersk Inspirer”, leased from its owner Mærsk) with drilling and processing facilities. The oil produced will be stored in a FSU (“Navion Saga”, chartered from Teekay), which will be moored close to the jack-up. Oil will then be offloaded into shuttle tankers. The small quantities of wet gas will be transported by a dedicated pipeline to Sleipner A for processing and export. The development is based on three production wells, three water injection wells and two water-producing wells. The total investment for the development has been estimated by the field operator to be NOK 1,920 million. Abandonment costs are believed to be relatively small, due to the development concept, and are currently estimated by the field operator at NOK 143 million. The Volve Field is located on PL046. Prior to the Volve acquisition the licence partners were: Company Interest Norsk Hydro Produksjon AS 9.40% Total E&P Norge AS 10.00% ExxonMobil Exploration and 28.00% Production Norway AS Statoil ASA 52.60% Table 38: Licence partners – Volve field prior to the acquisition

52

Prospectus Statoil is operator for PL046. Total became a licence partner in 1998, following a licence swap agreement with Statoil. As part of that agreement, Total undertook to pay to Statoil 10 per cent of all income from the sale of petroleum, from the interest acquired by Total, for the entire production life of the Volve Field. This obligation will be assumed by the Company. As part of the completion of the Volve Acquisition, a new Production Licence (PL046B) will be carved-out of PL046, with the same licence partners, and it is Total’s 10 per cent interest in this PL046B that will be transferred to the Company. Statoil will be operator for PL046B. PL046B will also cover the Theta Sør prospect, which if a commercial discovery is made, could potentially be drilled and produced from the jack-up following completion of production from Volve.

53

Prospectus

12.

PA AFTER THE ACQUISITIONS

12.1.

OVERVIEW

The Acquisitions will increase the PA Group’s oil production and substantially increase the PA Group’s reserve base. Further possibilities arise in the development of the Zarat, Elyssa and El Nisr discoveries made under the Zarat permit, the Theta Sør prospect and other exploration possibilities in PL046B. 12.2. BUSINESS CONCEPT AND STRATEGY For a detailed description of Company business concept and strategy please refer to the description of PA, MP Zarat and Volve in sections 8-11. 12.3.

CURRENT OPERATIONS OVERVIEW

12.3.1. Current operations overview Production field Working interest Didon (offshore) 100.00% Table 39: Production fields

Production field Didon (offshore)

Operator PA

Partner -

Expire date Until field is depleted and abandoned.

Summary of terms Mining concession issued 5 April 1990 Royalty and income tax payable to government on sliding scale based on “R” factor. “R” factor is the ratio of field accrued net earnings to accrued expenditures. Domestic market obligation requires that 20% of the gross production is sold domestically to ETAP (or the state) at 10% discount to the export price.

Working interest 45%7 10%

Gross area Operator 724 sq. km MP Zarat 21 sq. km8 Statoil ASA

Table 40: License terms

Exploration permit Zarat (offshore) Volve (offshore)

Partner ETAP (55%) Norsk Hydro Produksjon AS 9.40% ExxonMobil Exploration and production Norway AS 28.00% Statoil ASA 52.60%

Table 41: Exploration permits

7 8

Assuming Tunisian state oil company ETAP fully exercise their right to increase ownership to 55% Production right

54

Prospectus

Exploration permit Zarat (offshore)

Expire date 24 July 20059

Volve (offshore)

December 2014 (subject to PL046B obtaining same expiry date as PL046)

Summary of terms Permit assigned the 25 January 2001 Preferential right of renewal to permit holder. Validity date: 2.5 + 2 years extension Obligation: 1 exploration well Subject to approval by the Norwegian authorities, PL046B will have the same licence terms as PL046. All work obligations have been completed.

Table 42: License terms

12.3.2. Estimate of remaining reserves PA disclosed on 2 June 2005 an update of the PA`s proven and probable reserves that implied an increase of the reserves of 124% referring to the Company`s ownership interests in the Didon Field and in the exploration license Zarat. The verification work of the reserves has been conducted by the English company RPS Energy (previously Troy Ikoda, a subsidiary of the London Stock Exchange listed company RPS Group) based on the situation per 1 January 2005. The operator of the Didon Field and the exploration license Zarat, MP Zarat Ltd., informed of substantially higher reserves in relation to the acquisition of the licenses. However, until further information becomes available, PA will base their reserve estimates on this recent evaluation from Troy Ikoda (RPS Energy) that includes total reserves of 103 mmboe (Didon Field and the Zarat exploration permit). During the third quarter 2005 the result of the processing of the 700 km 3D-seismic acquired in 2004 will be available and likely imply an additional reserve update then. In the exploration license Zarat, PA has assumed an ownership interest of 45 per cent as it is assumed that the Tunisian government owned oil company ETAP will exercise their future step-in right to assume an ownership of 55 per cent in the license. Oil Gas Total reserves Field (million BO) (billion CF) (million BOE) PA share Ezzaouia 4.0 5.0 4.9 13.50% Douleb/Semmama 5.6 5.6 70.00% Tamesmida 0.7 0.7 95.00% El-Bibane 4.6 37.3 11.2 25.00% Didon 32.9 32.9 100.00% Volve 70.0 70.0 10.00% Zarat Permit 75.5 452.5 156.1 45.00% Total oil 193.2 Total gas 7.5 42.3 281.3 Oil equivalent 200.7 281.3 42.00% (1 mmcf = 178.11 BOE.) Table 43: Proven and probable reserves as of 1.1.2005 after the Acquisitions

PA reserves (million BOE) 0.7 3.9 0.6 2.8 32.9 7.0 70.2 80.1 38.0 118.1

As a result of the Acquisitions, PA’s proven and probable reserves per 1 January 2005 will amount to 118 million barrels oil equivalents, geographically distributed with 111 mmboe in Tunisia and 7 mmboe in Norway. 9

An application for a one year extension has been filed– the Company has received confirmation from Ministry of Oil and Energy but s waiting for final approval from the national assembly in Tunisia

55

Prospectus 12.4. GUARANTEE FACILITY PA has on 1 July entered into a three month USD 100 million guarantee facility with a consortium of bond investors. The guarantee facility can be drawn and converted into a 12 month, 7.75 per cent fixed rate, unsecured, USD denominated bond loan if drawn between 1 August 2005 and 1 October 2005. The facility represents an alternative source of debt financing for the recent acquisition of the outstanding shares in the Didon field and the Zarat permit that is expected to be completed around 15 September 2005. There is a payable commitment fee of 1.25 per cent per annum. 12.5. PRO FORMA FINANCIAL INFORMATION The pro forma figures are prepared to illustrate how the consolidated profit & loss and balance sheet statements would have been affected if the Transactions had been acquired on 1 January 2004. The pro forma financial statements for 2004 are prepared according to Swedish GAAP/IFRS, and the first quarter of 2005 are prepared according to IFRS, however based on the evaluation from the board of directors there are no effects on the equity with changing the principles to IFRS. For accounting principles, see section 12.5.4 Pro Forma Principles. 12.5.1. Pro forma consolidated Profit & loss account Pro forma Consolidated Profit and Loss Account (figures in SEK'000)

2004

(Q1)2005

507,224 1,724 24,008 532,956

53,411 -4,309 315 49,417

-113,369 -22,652 -83,994 -220,016

-13,760 -9,467 -3,903 -27,130

Operating profit (loss)

312,940

22,287

Financial items Interest from income Interest expenses Other financial items Profit participation's in associated company Profit before tax

2,589 -75,797 -5,906 233,825

1,370 -520 -21,384 1,753

-40,115 -203 682 -118,105 76,084

-2,267 -63 8,300 -5,824 1,899

4.94 -

0.12 -

OPERATING INCOME Net sales of oil and gas Changes in stock Other income Total operating income OPERATING EXPENSES Cost of sales Other external expenses Personnel expenses Depreciation Total expenses

Royalty Tax, oil and gas Deferred tax Income tax Profit after taxes Earnings per share Dividend per share

Table 44: Pro forma consolidated Profit and loss statement

56

Prospectus 12.5.2. Pro forma consolidated balance sheet Pro forma Consolidated Balance Sheet (figures in SEK'000)

2004

(Q1)2005

1,290,361 755,118

1,311,984 755,118

43,645 4,658

39,876 4,756

5,877 1,118 29 2,100,805

8,868 1,118 29 2,121,748

10,869

13,653

57,462 125,064 3,065 43,868 240,328

12,437 8,300 104,856 10,594 83,781 233,622

2,341,134

2,355,370

2,980 141,470 712,827 0 62,140 76,084 995,501

3,080 158,949 729,226 141,870 1,899 1,035,024

1,274,163

1,271,896

ASSETS Fixed assets Tangible long-term assets Oil and gas assets Exploration Machinery and equipment Plant and machinery Construction in progress Long/term financial assets Advance payments Shares Other long-term receivables Total fixed assets Current assets Stock Short term receivables Accounts receivable Deferred tax Other receivables Prepaid expenses and accrued income Cash Total current assets Total assets SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity Share capital Restricted reserves Unregistered share capital Unrestricted equity Retained earnings Net results Total shareholders equity Liabilities Long-term liabilities Bank overdraft facilities Other long-term liabilities Deferred tax liabilities Total long-term liabilities Current liabilities Accounts payable Tax liabilities Other liabilities Accrued expenses and prepaid income Total short-term liabilities Total liabilities

1,274,163

1,272,415

19,835 18,375 30,601 2,659 71,470 1,345,632

11,674 727 32,761 2,769 47,931 1,320,346

Total shareholders equity and liabilities

2,341,134

2,355,370

Table 45: Pro forma consolidated balance sheet

57

Prospectus 12.5.3. Pro forma consolidated cash flow statement Pro forma Consolidated Cash Flow Statement (figures in SEK'000) Cash flow from operations Profit from participations in associated comp. Deprecation Deferred tax liabilities Adjustment for items not included in cash flow Received interest Paid interest and similar income statement ite Paid royalty Paid tax Total cash flow from operations before change in working capital Change in working capital Increase/decrease in inventories Increase/decrease in long-term receivables Increase/decrease in short-term receivables Increase/decrease in long-term payables Increase/decrease in short-term payables Total cash flow from operations Cash flow used for investments Investments in intangible long-term assets Acquisition/disposal of tangible long-term ass Acquisition/disposal of financial long-term as Total cash flow used for investments New share issue Total cash flow from financial activities Change in cash and bank Cash and bank at the beginning of the year Currency exchange difference Cash and bank at the end of year

Table 46: Pro forma consolidated cash flow statement

58

2004

(Q1)2005

312,940

22,287

83,994 682 2,589 -81,704 -40,115 -118,308

3,903 8,300 1,370 -21,904 -2,267 -5,887

160,078

5,802

57 -229,459 1,244,983 52,891 1,228,550

-2,784 49,403 -25,286 27,135

-1,991,798 -2,437 -1,994,235

-17,952 -2,991 -20,943

126,202 126,202

33,977 33,977

18,059 23,565 2,244 43,868

40,169 43,868 -256 83,781

Prospectus 12.5.4. Principles for preparation of pro forma financial information General The pro forma financial statements for 2004 are prepared with taking the audit financial statements for MP Zarat as of 2004 and the year then ended as base. These statements are excluded from items not effecting the normal operations such as charges from its parent company, financial expenses, depreciation and items effecting comparability. In addition some reclassifications are prepared for increasing the comparability with the old PA Resources group. Additionally the statements are included with actual depreciation expenses based on the investment in the Didon field/Zarat permit of USD 230 million and Volve of NOK 205 million and estimated financial expenses for the borrowing (see below). MP Zarat has not prepared any financial statements for the first quarter of 2005, why pro forma statements only include assumptions based on the existing figures for PA’s investment in SOCO/Didon field published as of 31 March 2005. The main assumption is that the production was close to zero. The expenses are assumed to be pro rate to SOCO’s expenses based on its owning part. Financing The investment of USD 230 million and NOK 205 million are estimated to be financed through the Share Issue and a long term loan. The pro forma statements are prepared based on that the increased share capital as of today will be used for this investment and the remaining amount will be financed through a long term credit facility. The long term credit facility is estimated to be USD 110 million and already existing loans of USD 16.6 million (obtained in connection with acquisition of MP Zarat) and the earlier obtained bond loan of NOK 300 million. See section 8.7 for further details. Purchase price allocations The acquisition of Volve (NOK 205 million) is fully allocated to “Exploration”. The MP Zarat acquisitions (USD 2 million) are allocated to investment in “Machinery and equipment”. Ships (USD 5 million), exploration rights (USD 70 million and USD 155 million), are allocated to “Oil and gas assets”. These allocations are based on existing geological resources of existing reserves. “Oil and gas assets” are depreciated on a straight line basis derived from usages of oil. The investments in “Machinery and equipment” and ships are depreciated with 20 per cent per annum. Taxes Taxes are calculated on the profit according to existing tax rates for the fields in accordance with regulations in Tunisia, with the estimated rate of 40 per cent. Due to the limited production during the first quarter of 2005, the Tunisian field showed a loss and thus the pro forma statements are provided with a deferred tax asset. Earnings per share Pro forma earnings per share are calculated by dividing the profit after tax by total shares in PA after the acquisition of MP Zarat and Volve.

59

Prospectus

13.

SHARE CAPITAL AND SHAREHOLDER MATTERS

The following summary does not aim to be exhaustive and is subject to the Company’s articles of association and Swedish law. The articles of association of PA are attached as Appendix 1. The articles of association of PA do not contain conditions governing changes in share capital that are stricter than Swedish law. 13.1.

CURRENT SHARE CAPITAL

As per the date of this Prospectus, PA has a registered share capital of SEK 62,707,002.00 divided into 41,804,668 shares, each with a nominal value of SEK 1.50. The Company’s share capital is fully paid up and registered with the Swedish Companies Registration Office. The Company’s shares are registered with VPS and VPC under the security number ISIN SE000-00818569. Please refer to section 13.3 for the Board’s authorisation to issue additional shares. No offer has been made during the financial years 2003 or 2004 to PA’s shareholders to purchase all shares issued by the Company. The Company has not made any offer to purchase all shares in other undertakings. There are no outstanding convertible loans that entitle the lenders to require that PA issue new shares. The Board does not hold other authorisations to issue convertible loans except for as described in section 13.4 below. There are no outstanding independent subscription rights that entitle the holders to require that PA issue new shares. The Company has issued option rights, see section 13.4. 13.1.1. Development of share capital The table below shows the share capital developments since 1994. Year

Type of change

1994 1994 1995 1996 1997 1998 2000 2000 2004 2004 2004 2005 2005 2005

Company Split 500:1 New issue Directed share issue New issue New issue New issue New issue Directed share issue Directed share issue Directed share issue Directed share issue Split 1:2 Directed share issue

Change in Share capital after No. of shares Nominal share capital change (SEK) after change value (SEK) (SEK) 50,000 50,000.00 500 100.00 0.00 50,000.00 250,000 0.20 572,913.00 622,913.00 3,114,565 0.20 46,000.00 668,913.00 3,344,565 0.20 240,000.00 908,913.00 4,544,565 0.20 425,133.00 1,334,046.20 6,670,231 0.20 500,000.00 1,834,046.20 9,170,231 0.20 150,000.00 1,984,046.20 9,920,231 0.20 196,421.00 2,180,466.80 10,902,334 0.20 800,000.00 2,980,466.80 14,902,334 0.20 100,000.00 3,080,466.80 15,402,334 0.20 100,000.00 3,180,466.80 15,902,334 0.20 44,526,535.20 47,707,002.00 31,804,668 1.50 4,500,000.00 52,207,002.00 34,804,668 1.50

Table 47: Development of share capital

60

Prospectus 13.1.2. Ownership structure The Company had 2,030 shareholders as per 27 June 2005. 47.76 per cent of the share capital was held by Norwegian shareholders as of this date. The Company has 2,007 shareholders registered in VPC holding one trading lot or more and 1,983 shareholders registered in VPS holding one trading lot or more. (A Swedish trading lot equals 100 shares and a Norwegian trading lot equals 200 shares). As of 27 June 2005, 65.17 per cent of the share capital is registered with VPS, and 34.83 per cent is registered with VPC. An overview of the Company’s 20 largest shareholders as of the same date is set out below.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Shareholder Datum AS Lindqvist, Bertil Jansson, Ulrik incl. Controlled companies SIS Segaintersettle Voldberg Tore Aksel Credit Suisse First Credit Agricole Indo Calyon Handelsbanken Market Adrian AS Norus AS Grimmes, Jan Pihl Wega AS Schröder, Håkan First Securities ASA Limpac AB Scan Chemicals As BNP Parisbas MP Pensjon Galten AS Citibank Intern Plc Others Total

# of shares % - ownership 5,398,710 15.51% 4,416,000 12.69% 2,835,504 8.15% 1,505,500 4.33% 1,135,500 3.26% 782,400 2.25% 772,100 2.22% 760,300 2.18% 528,800 1.52% 502,000 1.44% 480,000 1.38% 400,000 1.15% 380,000 1.09% 340,000 0.98% 298,000 0.86% 291,800 0.84% 223,857 0.64% 187,600 0.54% 178,500 0.51% 170,850 0.49% 13,217,247 37.98% 34,804,668 100.00%

Table 48: Ownership structure per 27 June 2005

The Company is not aware of any single shareholder or group of shareholders that exercise or could exercise control over the Company, either independently or through shareholder agreements.

61

Prospectus 13.2.

LISTING, SHARE PRICE DEVELOPMENT AND TRADED VOLUME

The Company’s shares are listed on the OB Match of Oslo Børs with ticker code PAR. One trading lot consists of 200 shares. The graph below shows the share price development and traded number of shares over the last three years.

3000

2000

1500

1000

500

05

05

/2 0 07

05

/2 0 05

03

/2 0

05

04

/2 0 01

04

/2 0 11

04

/2 0 09

/2 0

04

05

N:PAR(VO)

07

04

/2 0

04

/2 0 03

03

/2 0 01

/2 0 11

/2 0

03

03 09

03

/2 0 07

03

/2 0 05

03

/2 0 03

/2 0 01

11

/2 0

/2 0

02

02

0

09

/2 0 07

Volume (no. Shares)

2500

02

Share price (NOK)

Share price de ve lopme nt and trade d volume s 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

N:PAR(P)

Figure 15: Share price development and traded volume

PA is also listed on Nordic Growth Market (NGM Equity) with the ticker code PARE. Nordic Growth Market is an exchange under the supervision of the Swedish Financial Supervisory Authority. 13.3.

THE BOARD’S AUTHORISATION TO INCREASE THE SHARE CAPITAL

At an extra ordinary shareholders’ meeting in PA held on 23 June 2005 the shareholders gave the Board authority during the time up to the next annual general shareholder meeting, to increase the share capital through issue of new shares, convertible bonds and/or debentures with option rights which can increase the share capital with a total amount of fifteen million (15,000,000) SEK equal to 10,000,000 shares in PA at a nominal value of SEK 1.50 each. Issue of shares and debentures can be made without the existing shareholders right to participate or through set off against liabilities, issue in kind or otherwise with specific conditions. Extract from the text of the resolution at the extra ordinary shareholders’ meeting on 23 June 2005 (in English translation): The shareholders resolved to authorize the Board of Directors, until the next annual general meeting, at one or several occasions, to decide upon an increase of the Company’s share capital through the issue of shares, convertible debentures, and/or debentures with attached option rights for the subscription of new shares. The authorization encompasses an increase of the Company’s share capital with at most SEK 15,000,000 divided into a maximum of 10,000,000 new shares each with a nominal value of SEK 1.50. The authorization encompasses the right for the board of directors to resolve upon an issue in deviation from the shareholders’ preferential rights. Payment for new shares and debentures may be made by capital contributed in kind, through set-off or otherwise with specific conditions. The authorization intends to grant the Board of Directors opportunities to secure the Company’s capital need in the future expansion of the Company and also the possibility to use issued

62

Prospectus shares, convertible debentures, and/or debentures with attached option rights as payment in connection with acquisitions of companies or assets.

The authorisation of the Board from the extra ordinary shareholders’ meeting on 23 January 2005 has at the date of this Prospectus not been utilised. Accordingly, as per the date of this Prospecuts the Board is authorised to resolve on the issue of shares, convertible debentures and/or debentures with attached option rights that encompasses a share capital increase of up to totally SEK 15,000,000 divided into a maximum of 10,000,000 new shares each with a nominal value of SEK 1.50. The authorisation is valid until the upcoming annual general shareholders meeting to be held in May - June 2006 at the latest. 13.4.

EMPLOYEE OPTION PROGRAMME

Options rights have been issued to management and other staff according to the decision of the annual general meeting 15 May 2002. The strike price is SEK 9.00 and the options rights can be utilised between 1 July 2002 and 30 June 2005. In total, 450,000 options rights have been issued. However, after recalculations with respect to the split resolved at the annual general meeting in PA on May 11 2005 according to the terms for the option rights, each option right entitles the holder to subscribe for two shares in PA, each share with a nominal value of SEK 1.50, at the subscription price of SEK 4.50 per share. PA has received notification regarding the subscription of 900 000 shares in accordance with the terms of the option rights which will increase the share capital of PA with SEK 1,350,000. 13.5.

TREASURY SHARES

The companies within the PA Group own no shares in PA as of the date of this Prospectus. 13.6.

SHAREHOLDERS’ RIGHTS

The Company has only one class of shares. All the shares rank equal in all respects. 13.6.1. Voting rights All of the Company’s shares carry equal voting rights at the Company’s general meetings. To be able to exercise the voting rights, the shares must be registered in the shareholder’s name in the VPC 10 days prior to the general meeting. For shares held through VPS, this implies that the shareholder must give instructions for a temporary registration arrangement in VPS at least 13 days before the general meeting. This arrangement is temporary and cost-free for the shareholder. After the general meeting the arrangement lapses without the need for any action by the shareholder. Further, each shareholder who wants to participate at general meetings must also notify the Company of its participation at the meeting in accordance with what is stipulated in the official notice to the meeting. 13.6.2. Dividend rights All of the Company’s shares carry equal rights to dividends. 13.6.3. Transferability - ownership The Company's Articles of Association do not restrict the transferability of the Company’s shares. There are no licence provisions which will apply in connection with acquisitions of shares in the Company. Neither the Articles of Association of the Company nor current Swedish legislation limit the right to own shares in the Company.

63

Prospectus 13.7.

SHAREHOLDER POLICY AND CORPORATE GOVERNANCE

13.7.1. Information and equal treatment PA emphasises equal rights for all shareholders. PA has only one class of shares. The shares are freely transferable, and there are no transfer restrictions. All shareholders in PA have equal rights to dividends. PA puts emphasis on keeping the stock market informed about developments in the Company's results and future prospects. At any given time the stock market shall have correct and equal information about PA to provide the basis for a correct valuation of the Company. PA will distribute all information relevant to the share price to Oslo Børs and NGM. Such information is distributed without delay and simultaneously to the capital market and the media in accordance with the provisions of the Stock Exchange Regulations and the applicable regulations for the listing at NGM. 13.7.2. Dividend In evaluating the dividend amount, the Board emphasises a sound capital structure, the Company’s dividend capacity, and requirements for equity capital as well as for adequate financial resources to enable future growth. 13.7.3. Corporate governance PA puts great emphasis on exercising good corporate governance. This requires clear management principles and business targets as well as good follow-up and control. The Company’s governing bodies comprise the Board and the general meeting of the shareholders. The governing principles established will ensure good management and control of the business. 13.7.4. The General Meeting and the Board The general meeting of the shareholders is the Company's supreme governing body. The annual general meeting is held once a year. The Company’s general meeting is open to all shareholders and all shares carry equal voting rights. All shareholders can participate in person or through a proxy. The annual general meeting elects board members for a period of one year. According to the Company’s Articles of Association the board has 3 to 8 ordinary members elected by the shareholders. The Board makes decisions on PA’s plans and budgets and handles cases of major strategic or economic significance for the business. The Board is responsible for the accounts and presents a proposal for allocation of net income to the annual general meeting. The Board appoints the chief executive officer.

64

Prospectus

14.

LEGAL MATTERS

14.1.

COMPANY LEGISLATION

14.1.1. Sweden The Company is a Swedish limited company, which shares are, besides Oslo Børs, listed at the Swedish Exchange Nordic Growth Market (NGM). The Company has entered into a listing contract with the NGM and is therefore subject to the terms of the listing contract, which includes the rules issued by the Swedish Industry and Commerce Stock Exchange Committé (Näringslivets Börskommitté). The relevant Swedish legislation that the Company is subject to is above all the Swedish Companies Act, the Swedish Accounting Act and the Swedish Annual Account. Other relevant Swedish laws and regulations are the Financial Instruments Trading Act, Act concerning Reporting Obligations for Certain Holdings of Financial Instruments, the Insider Penalties Act, the Act regarding certain directed issues in stock market companies etc, as well as certain rules issued by the Swedish Financial Supervisory Authority (Sw Finansinspektion) such as prospectus rules. 14.1.2. Norway With regard to Norwegian legislation the Company is, due to its listing on the Oslo Børs and its shares being registered in VPS as an issuer of securities, subject to the Norwegian Securities Trading Act (Verdipapirhandelloven), the Norwegian Stock Market Act (Børsloven) and this Act’s derived regulation the Stock Exchange Regulation (Børsforskriften) and the Norwegian Act on Registry of Securities (Verdipapirregisterloven). 14.2.

REGULATORY ISSUES – TUNISIA

14.2.1. Introduction In Tunisia, each concession is regulated by a license convention between the authorities and the licensees. In the Zarat Permit, the Tunisian state can, according to the license convention, enter fields declared as commercial and with an approved field development plan, with up to a 55 per cent interest, within 6 months after start of production. This interest, if exercised, will be made through the Tunisian State Oil Company, ETAP. In the Didon Field, the state did not exercise this right. In the Zarat and Elyssa fields, and in other exploration fields under the Zarat Permit, the state can exercise this right after reimbursement of all accrued cost. The acquired interest in these exploration fields can, on a field to field basis, be diluted to a minimum of approx. 10 per cent. 14.2.2. General framework Proprietary rights to subsea petroleum deposits are vested in the Tunisian State. This constitutes the fundamental legal basis for government regulation of the petroleum sector. The 1985 Decree-Law develops from this and provides the overall legal basis for the licensing system, which governs petroleum operations in Tunisia, in addition to providing the general principles for exploration, development, production and transportation of petroleum. In 1999, a new Petroleum Code (the ‘1999 Hydrocarbons Code’) has been promulgated but concessions granted before 1999 remain governed by the 1985 Decree-Law.

65

Prospectus Tunisia's current petroleum tax regime is based on the ‘R Factor’ which is the ratio between the total expenditures incurred on the permit and the total revenues generated by the production. The tax rate starts at 50% and the royalty at 2%. The Tunisian State is entitled to raise 20% of the production at a 10% discount. The local market share is offtaken by ETAP who pays the licensor. ETAP also acts as offtaker of the royalty when the Tunisian State decides to exercise its option to raise such royalty in kind rather than in cash. The legal basis for taxation of offshore petroleum business is the 1985 Decree-Law. 14.2.3. The licensing system The Tunisian licensing system comprises a number of types of licenses. All companies can apply for an appraisal authorisation, an appraisal permit or an exploration permit (together referred to as ‘Licenses’ or individually as ‘License’). The appraisal authorisation grants a non-exclusive right to make geological, petrophysical, geophysical, geochemical and geotechnical surveys for a period of 1 year. The appraisal permit grants an exclusive right to make geological, petrophysical, geophysical, geochemical and geotechnical surveys for a period of 3 year. The exploration permit grants the right to conduct all type of exploration works. It is granted for a maximum period of 5 years renewable twice for 2.5 years. A permit can be awarded to more than one company (the ‘Licensees’), one of them being appointed as operator. All these authorisations are granted through a convention ratified by a decree under the 1999 Hydrocarbons Code. An area fee is charged per kilometre square and is payable at the time of award of the permit. In case of a concession, such area fee is payable every year. The award of a License is conditional on all the Licensees concluding a joint operating agreement with ETAP in a standard format. The joint operating agreement regulates relations between the partners in the License. It forms the basis for day-to-day organisation and operation of the License, including allocation of costs and decision-making. The Licensees establish a management committee as the ultimate decision-making body. All Licensees are represented on this committee, with the DGE as an observer. The joint operating agreement also governs the operator’s duties and obligations vis-á-vis the partnership and specifies the group’s voting rules. Any hydrocarbon produced will be allocated to the partners according to their share in the License, to be used or sold by them on an individual basis. If a petroleum field extends across more than one production license, the Licensees are obliged to conclude an unitisation agreement which ensures joint and appropriate utilisation of these resources and governs the various licensees’ rights in the discoveries. Participating interests in an unitised field are normally allocated in line with the way resources in the field divide between the production licenses concerned, and may vary over time due to redetermination of the ownership allocation, based on particular mechanisms in the unitisation agreement. In the absence of unitisation agreement, the DGE will arbitrate. Subject to approval from the DGE, a Licensee may sell its participating interests in a License to third parties. Such transfer will not give rise to any tax. 14.2.4. Developing a discovery When a discovery is made under a License, the Licensees can decide whether or not to apply for an exploitation licence (a ‘Concession License’).

66

Prospectus A Licensee cannot be forced by its partners in the License to participate in the exploitation of a discovery (‘Development Project’). The Development Project may, however, still proceed if at least one of the partners is willing to fund the project itself (sole risk operations). Any partner who decides not to participate in the Development Project nonetheless remains a participant in the remainder of the acreage covered by the License, but not in the Development Project. ETAP has the option to participate in the field and the development up to a rate fixed in the Convention which in not less than 50%. ETAP has the right to notify its participation rate either at the time of filing a Concession License or 6 months after commencement of production, provided that ETAP pays all expenditures (plus interest) already spent by the participating partners. In order to develop a discovery, the license partners must prepare an extensive development plan (the ‘Development Plan’) and submit it to (i) ETAP for the purposes of enabling it to make its decision as to whether to participate or not in the discovery and (ii) to the DGE for its approval prior to commencement of any development works. 14.2.5. Production Based on the Development Plan, the Licensees must exploit the hydrocarbons in the “best economical manner”. 14.2.6. Abandonment Licensees are, as a general rule, required to submit an abandonment plan two-three years before a Concession License expires or the use of a facility is terminated. The general principle is that all permanent physical facilities must be removed. The DGE will decide on the disposal of these facilities. The costs of the decommissioning are borne by the Licensees. Removal costs are tax deductible, and if the removal costs create a tax loss due to lack of offsetting net income, the tax value of the remaining tax loss will be paid by the tax authorities when the activity on the oil field(s) ceases. Under the 1999 Hydrocarbons Code, the Licensee can constitute an abandonment provision, which is tax deductible, 3 years before the end of production under an oil field and 5 years for a gas field. 14.2.7. Taxation Taxes are based of the R Factor described above. 14.3.

REGULATORY ISSUES – NORWAY

14.3.1. Introduction The Norwegian Parliament (‘Stortinget’) exercises ultimate authority with respect to political policy for the petroleum activities on the NCS, and with respect to the legal framework for these activities. The overall responsibility for the petroleum activities on the NCS rests with the Ministry of Petroleum and Energy (MPE – ‘Olje- og Energidepartementet’). MPE is responsible for ensuring that the operations on the NCS are carried out in accordance with the regulatory framework laid down by Stortinget. MPE’s main functions relate to policymaking, particularly with respect to license awards (selecting areas, determining sequence and tempo, selecting participants), approving development projects, infrastructure issues, and regulating production. The Norwegian Petroleum Directorate (NPD – ‘Oljedirektoratet’) is located in Stavanger and is administratively subordinate to MPE. Its main functions relate to resource management and day-to-day operational issues. The Petroleum Safety Authority (PSA – ‘Petroleumstilsynet’),

67

Prospectus which is also located in Stavanger, carries the responsibility for issues relating to safety, health and environment, including working conditions and emergency response. The operation of the main gas export pipelines, where the ownership has been integrated into GasLed (owned by the oil companies), is handled by the State-owned joint-stock company Gassco. The Ministry of Finance is responsible for policy and legislation concerning taxation of the petroleum industry. The annual tax assessments are carried out by the Petroleum Tax Office in Oslo. 14.3.2. General framework Proprietary rights to subsea petroleum deposits on the NCS are vested in the State. This constitutes the fundamental legal basis for government regulation of the petroleum sector. The 1996 Petroleum Act develops from this and provides the overall legal basis for the licensing system, which governs offshore petroleum operations in Norway, in addition to providing the general principles for exploration, development, production and transportation of petroleum. Various regulations have been issued by the Norwegian Government in the form of royal decrees pursuant to the Petroleum Act. The Petroleum Act and these regulations authorise the granting of permits and licenses to explore for, produce and transport petroleum. Norway's current fiscal regime can be described as a high tax, high total government involvement regime. The Norwegian State is by far the largest player on the NCS, having a total of almost 90 per cent of the risk and 90 per cent of the benefit. The main instruments for this high total government take are taxation, the State shareholdings in Statoil and Norsk Hydro, and the State’s Direct Financial Interest (SDFI – ‘Statens direkte økonomiske engasjement’), which is a mechanism for state participation in certain petroleum fields and licenses. SDFI is currently managed by the State-owned joint-stock company Petoro. The legal basis for taxation of offshore petroleum business is the 1975 Act Relating to Taxation of Subsea Petroleum Deposits. 14.3.3. The licensing system The Norwegian offshore licensing system comprises a number of types of licenses, approvals and other control mechanisms. All companies can apply for an exploration license (‘undersøkelsestillatelse’) to make geological, petrophysical, geophysical, geochemical and geotechnical surveys, including shallow drilling. This kind of license grants no exclusive rights in the areas covered and does not entitle its holder to conduct regular exploration drilling. The core document in the licensing system is the Production License (‘utvinningstillatelse’), which gives the licensee an exclusive right to drill and search for petroleum in the area covered by the license, and to develop and produce any petroleum deposits that may be discovered there. Production Licenses have normally been awarded through licensing rounds, where MPE invites submitting of applications for a certain number of blocks. In the mature North Sea area, there is an annual award procedure, where all unlicensed acreage is open for application from the oil companies (APA). Companies can apply individually or in groups. There is no cash payment for Production Licenses, but an important factor in the competition for Production Licenses is the extent of work obligations which the applicant is willing to assume. Production Licenses are awarded by the MPE.

68

Prospectus A Production License can be awarded to one or several oil companies. One of them is appointed by MPE as operator for the Production License; the operator is responsible for the daily conduct of operations in accordance with the terms of the Production License. Each Production License is awarded for an initial exploration period, which can last up to 10 years. A specified work obligation must be met during this period, including seismic surveying and/or drilling exploration well(s). Provided the work obligation has been completed by the end of this period, the licensees are generally entitled to retain up to half the acreage covered by the Production License for a period of up to 30 years. There are now examples of fields producing beyond the 30 year license period (Ekofisk, Valhall) with licence extensions having been granted. An area fee is charged per square kilometre after the ten year initial period. Providing all the licensees agree, a Production License can be relinquished, but only after the completion of the work obligations. In recent years, MPE has adopted a slightly different structure for Production Licenses granted on acreage in the North Sea that has already been explored. The precise terms vary from licence to license, but generally a “drill or drop” scheme is applied. The licensee will then have a short time (typically 2 years) to decide whether to drill an exploration well. After drilling the well he will have to announce his intentions to develop any finds, and actually develop it, in order to retain the Production License. In respect of existing discoveries which have been left undeveloped by the original licensees, there is a similar “PDO or drop” concept. The awarding of a Production License is conditional on all the licensees concluding a joint operating agreement (‘Samarbeidsavtale’) in a standard format determined by MPE. Similar in many respects to partnership agreements, the joint operating agreement regulates relations between the partners in the Production License. It forms the basis for day-to-day organization and operation of the Production License, including allocation of costs and decision-making. The licensees establish a management committee as the ultimate decision-making body. All licensees are represented on this committee, with NPD as an observer. The agreement also governs the operator’s duties and obligations vis-á-vis the partnership, and it specifies the group’s voting rules. Any petroleum produced will be allocated to the partners according to their share in the license, to be used or sold by them on an individual basis. If a petroleum field extends across more than one production license, the licensees are obliged to conclude a unitization agreement which ensures joint and appropriate utilization of these resources and governs the various licensees’ rights to the finds. Interests in a unitized field are normally allocated in line with the way resources in the filed divide between the production licences concerned, and may vary over time due to re-determination of the ownership allocation, based on particular mechanisms in the unitization agreement. Subject to approval from MPE, and in certain cases a pre-emption right for the State, a licensee may sell his license interest. There is also a need for a tax clearance from the Ministry of Finance, which applies a “tax neutrality principle”, implying that taxation is neither accelerated nor deferred as a consequence of the transaction. In practice this usually means that the purchaser assumes the tax position of the seller, and that any gain from the sale is effectively tax-free. Transfers of controlling interests in companies holding production licenses are also subject to approval. In practice, MPE has distinguished between various levels of control: Negative control (generally, over 33.3 per cent), positive control (generally, over 50 per cent), full control (generally, over 66.7 per cent) and full ownership (generally, the trigger will apply at 90 per cent and not 100 per cent, as a 90 per cent shareholder can effect a squeeze-out for the remaining shares). The requirement for approval arises when an investor moves from one level to a higher level.

69

Prospectus 14.3.4. Developing a discovery A licensee cannot be forced by his license partners to participate in a development project. The project can, however, still proceed if the positive partners are willing to fund the project themselves (sole risk operations). The negative partner remains a participant in the remainder of the acreage covered by the production license, but not in the development project. In order to develop a find, the license partners must prepare an extensive PDO and submit it to MPE for approval before any development work starts. Major projects (with an anticipated investment over NOK 5 billion must be presented to and approved by Stortinget before MPE can approve the PDO. The PDO will i.a. define the development concept and the production profile for the field. 14.3.5. Infrastructure In order to construct and operate pipelines and facilities for processing of petroleum, a plan for installation and operation (PIO) must be submitted to MPE for approval. Most new development projects in the North Sea are too small to bear the cost of dedicated transportation and/or processing facilities. Consequently the ability to access and use third party facilities is crucial. The owners of such facilities are under a general obligation to make excess capacity available to new users (third party access), and if the parties fail to reach an agreement, MPE has the power to impose a solution on them. All contracts for use of installations owned by others need approval from MPE. GasLed, which owns the Norwegian gas export pipeline network, has standard conditions for third party access. Such access can, however, be restricted due to capacity restraints, and existing users and the owners of GasLed have priority over new users. 14.3.6. Production Based on the PDO, NPD issues annual production permits allowing the licensees to produce defined volumes of petroleum, considering i.a. proper resource management. The main principle for NPD is to ensure maximum depletion of petroleum from the reservoirs. Norway has occasionally imposed general production restrictions in periods where oil prices have been low. 14.3.7. Abandonment Licensees are, as a general rule, required to submit a cessation plan two-three years before a production license expires or the use of a facility is terminated. The general principle is that all permanent physical facilities must be removed. MPE will decide on the disposal of these facilities. The costs of the decommissioning are carried by the licensees. Removal costs are tax deductible, and if the removal costs create a tax loss due to lack of offsetting net income, the tax value of the remaining tax loss will be paid out from the tax authorities when the activity on the NCS ceases,. 14.3.8. Taxation In addition to the general income tax at 28 per cent, offshore petroleum production is also subject to a surtax of 50 per cent called petroleum tax. This tax is calculated on the total net income from the production of offshore petroleum on the NCS, but the tax base is not identical with the one for the 28 per cent tax. In particular, the surtax allows for an additional deduction (uplift), equivalent to 5 per cent of the development costs of a field, for six years.

70

Prospectus 14.4.

LEGAL MATTERS RELATED TO THE ACQUISITIONS

14.4.1. Sweden In accordance with Swedish legislation, the Didon, Zarat and Volve Acquisitions will not require any permits, concessions or approvals by authorities or other public institutions. As set forth in sections 5 and 6, these acquisitions are conditional upon a number of public consents and approvals in Tunisia and Norway respectively. 14.4.2. Tunisia The Sale and Purchase Agreement On 20 June 2005 PA entered into a Sale and Purchase Agreement with MP Zarat, and, with respect to the Didon FPSO, Didon FPSO Limited, a 100 per cent subsidiary of MP Zarat. The assets to be transferred include MP Zarat’s 35 per cent interest in the Zarat Permit, their 77.78 per cent interest in the concession covering the Didon Field, including the seller’s interest in the joint venture agreement and coordination agreement related thereto, various service agreements (subject to approval from the contractor, where necessary), certain insurance polices, the Didon FPSO, employees, fixed assets (including machinery, equipment, tools), crude oil inventory, agreements relating to the development of the Didon Field. The purchase price is USD 230 million, payable on completion of the transaction. Completion of the purchase is conditional upon (i) publication of an order by the Tunisian authorities approving the transfer, (ii) publication of a legislative amendment to the convention between Tunisia, Etap, MP Zarat and PAO relating to the renewal of the Zarat Permit, (iii) no material adverse change to the operations, the transferred assets, the position (financial, trading or otherwise) of the transferred business and (iv) no material breach by the seller of his covenants, his representations and warranties, his obligations in the interim period prior to closing, or his obligations under the loan agreement (see below). If all conditions are not met by 1 November 2005 (PA may at their discretion waive conditions (ii) – (iv)), either party may terminate the Sale and Purchase Agreement. Both the Didon and the Zarat Acquisitions are effective from 1 January 2005. Consequently, all activities subsequent to that date is for the account of PA, and all costs, proceeds from crude sales, capital expenditures etc. made, accrued or incurred by the seller, including cash calls from joint ventures, will be debited or credited, as the case may be, against the purchase price. The purchase agreement contains customary representations and warranties from MP Zarat. In the interim period between signing of the Sale and Purchase Agreement and completion, MP Zarat may, with respect to transactions outside the usual course of business, only make arrangements with the approval of PA. In the event of breach of any covenant, undertaking, representation or warranty, or other obligation by the seller, PA may claim to be indemnified, up to a maximum gross amount of USD 20 million. Claims with an aggregate value under USD 100,000 are disregarded. The Sale and Purchase Agreement is governed by French law, and all disputes shall be resolved by arbitration. The Loan Agreement On 20 June 2005, the Company, as lender, entered into a Term Facility Agreement with MP Zarat, as borrower, and Medex, as guarantor.

71

Prospectus The loan amount is USD 104,400,000, divided into two tranches: A first tranche of USD 44,400,000 and a second tranche of USD 60,000.000. Should PA fail to make either tranche of the loan available to MP Zarat, or fail to arrange equity financing of at least USD 60 million by 18 August 2005, the Sale and Purchase Agreement provides that MP Zarat shall be entitled to the payment of USD 25 million from PA. The USD 25 million amount constitutes liquidated damages, and is the sole remedy for MP Zarat for such failure by PA. The first tranche has been made available to MP Zarat. The second tranche shall be made available five business days after the Company has available to it at least USD 60 million from a new equity financing. The Private Placement will qualify as such financing. The first tranche shall be applied by MP Zarat for repayment of existing loan (approx. USD 14 million), payments to suppliers (USD 8 million) having fallen due, and capital investments relating to further development of the Didon Field (USD 7 million). MP Zarat shall apply the second tranche for capital investments relating to further development of the Didon Field (USD 16 million, payments due to suppliers and general corporate purposes. The interest rate is LIBOR + 2 per cent p.a. The loan shall be secured by an unconditional guarantee by Medex (the parent of MP Zarat), as well as second priority pledge and assignments over (i) of all shares in MP Zarat, (ii) offtake agreement between Medex and Shell relating to oil production from the Didon Field, and (iii) certain hedging arrangement. The first priority security are held by certain banks and financial institutions and relate to existing financing arrangements of MP Zarat. The loan shall be repaid in full on the earlier of: (i) the date of completion of the Sale and Purchase Agreement and (ii) six months after termination of the Sale and Purchase Agreement. The Loan Agreement is governed by English law, and all disputes shall be resolved by arbitration. 14.4.3. Norway On 13 June 2005 Total, PA and PAN entered into a Sale and Purchase Agreement with respect to the Volve Field. As the purchase does not extend to all of PL046, a new Production Licence – PL046B – will need to be carved-out of PL046. The licence partners in PL046 other than Total will also be licence partners in PL046B. The purchase price is NOK 205 million. The transaction is conditional upon agreement with licence partners in PL046 on carving-out PL046B, and upon the pre-emptive right of the Kingdom of Norway not being exercised. The purchase is conditional upon PAN being approved as a licensee on the NCS by MPE, as well as consents from the MPE under the Petroleum Act and the Ministry of Finance under the Petroleum Taxation Act, in both cases on terms reasonably acceptable to the parties. Upon signing of the purchase agreement, PA paid, on behalf of PAN, a 10 per cent deposit on the purchase price. PA is also obliged, within two weeks of execution, to arrange for, on behalf of PAN, the remainder of the purchase price to be secured by a bank guarantee or an escrow arrangement.

72

Prospectus In the Sale and Purchase Agreement, Total and PA have agreed upon a set of coordinates for PL046B. In the event that the final coordinates agreed with the licence partners covers a smaller area (but still includes the Volve Field), PAN shall have the right to produce all oil and gas from petroleum deposits in the area lying between the two sets of coordinates (“Volve Satellites”), provided that the they are produced from the Volve Platform, and that there is no communication between such deposits and the Sleipner Øst field. All gas produced from the Volve Field as well as any Volve Satellite with an initial GOR over 500 Sm3/Sm3 shall be delivered to Total at Sleipner, with no compensation due to PAN. All gas produced from any Volve Satellite with an initial GOR under 500 Sm3/Sm3 shall also be delivered to Total at Sleipner, against payment of a purchase price related i.a. to the price of Oseberg Blend. With respect to the 10 per cent compensation payment Total undertook in 1998 to pay to Statoil on all income from the sale of petroleum from PL046, Total and PAN have agreed that this obligation with respect to production from PL046B (and Volve Satellites, if applicable) will be assigned to PAN, but all payments relating to gas being delivered free of charge to Total, will be made by Total. The Volve Acquisition is effective from 1 January 2005, implying that the purchase price will be adjusted to reflect all joint venture cash calls relating to the subsequent period that have been actually paid by Total. The Sale and Purchase Agreement contains customary representations and warranties from Total, as well as customary covenants, relating i.a. to the interim period before completion. Apart from the features identified above, the Sale and Purchase Agreement generally reflects current practice for such agreements on the NCS. The Sale and Purchase Agreement is governed by Norwegian law, all disputes arising out of it shall be settled by arbitration. 14.5. LEGAL DISPUTES PA is not involved in any material disputes or legal proceedings.

73

Prospectus

15.

TAXATION ISSUES

The following is a summary of certain Swedish and Norwegian tax considerations relevant to the acquisition, ownership and disposition of PA shares by holders that are resident of Sweden for purposes of Swedish taxation ("Swedish tax resident shareholders") or resident of Norway for purposes of Norwegian taxation ("Norwegian tax resident shareholders") unless otherwise stated. The summary is based on applicable Swedish and Norwegian laws, rules and regulations as they exist as of the date of this Prospectus. Such laws, rules and regulations are subject to change, possibly on a retroactive basis. The summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to the shareholders and does not address other foreign tax laws. It does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities and commodities) may be subject to special rules. The tax treatment of each individual shareholder depends on the specific situation of the individual concerned. Each shareholder should therefore consult his or her own tax advisor to determine the particular tax consequences for him or her and the applicability and effect of any Norwegian or foreign tax laws and possible changes in such laws. This summary is only intended as general information for Swedish tax resident shareholders and Norwegian tax resident shareholders Please note that new Norwegian tax provisions regarding taxation of dividends and capital gains were adopted by Parliament in 2004. As for corporations the new provisions have become effective, while for personal shareholders the adopted tax provisions will not become effective until the income year 2006. 15.1.

SWEDISH TAXATION ISSUES

15.1.1. Swedish Resident shareholders Taxation of dividends Dividends paid to a Swedish tax resident individual or to a Swedish estate are taxed in Sweden as capital income at a flat rate of 30 percent. The VPC or – if the shares are nominee registered – the Nominee withholds the tax as a preliminary tax. Dividends paid to a Swedish legal entity (except for estates) are normally taxed as ordinary business income at a flat rate of 28 per cent. Dividends attributable to so-called business related shares are tax-exempt10. Note that the holding period requirement can be fulfilled a posteriori. Taxation upon Realisation of Shares The capital gain or, where applicable, the capital loss, is calculated as the difference between the sales proceeds less sales expenditure and the acquisition cost (costs related to acquisition and potential improvements) for the shares sold. The acquisition cost is calculated according to the so-called average method, implying that the tax acquisition cost is calculated as the average acquisition cost for all the shares of the same type and class.

10

Publicly traded shares are considered as being business related if the transferor holds at least 10% of the voting rights in the sold company or if the holding otherwise is necessary for the business conducted by the holder or any of its affiliates; and that the transferor has held the transferred shares for an uninterrupted period of at least 12 months prior to the transfer date and that the transferor during this 12-month period has held a participation of at least 10% in the voting rights of the transferred company

74

Prospectus Since the shares in PA are publicly traded, the acquisition cost related to these shares may be determined as 20 per cent of the sales price after deduction of expenses related to the sale; the so-called standard rule A) Individuals A capital gain realized by Swedish tax resident individuals (and Swedish estates) is taxed as capital income at a flat rate of 30 per cent. A capital loss is normally fully deductible against capital gains on other securities, except for participations in securities funds that exclusively consist of Swedish receivable (Swedish interest fund). For capital loss not deducted from such capital gains, a deduction of 70 per cent of the loss is allowable against other capital incomes. If a net capital income loss should arise, 30 per cent of this loss may be credited against earned income tax and against real estate tax. However, if the loss exceeds SEK 100,000 only 21 per cent of the excess portion allows for a tax credit B) Legal entities A capital gain realized by a legal entity (except for estates) is normally taxed as ordinary business income at a flat rate of 28 per cent; please see below as regards corporate shareholders holding so-called business related shares. Capital losses may only be deducted against capital gains on other securities realized by the company the same year as the loss was realized. In certain cases capital losses may be offset against capital gains realized by group companies if group contributions can be exchanged between the companies. Capital losses that are not offset against capital gains may be carried forward to the following income year. Capital gains and capital losses attributable to so-called business related shares held by corporate shareholders are not taxable/tax deductible. Special rules apply when a share cease to be business related. Wealth Tax The PA shares are not subject to wealth tax. 15.1.2. Non-resident shareholders Taxation of dividends In the case where a non-resident shareholder receives dividends from a Swedish company such as PA, Swedish withholding tax is withheld. The withholding tax rate is 30 per cent but is generally reduced by tax treaties with other countries. Based on the present tax treaty between the Nordic countries, a withholding tax rate of 15 per cent applies when dividend is paid from a Swedish company to Norwegian tax resident shareholders. If the shareholder is a company, the dividend may be exempted from withholding tax in accordance with Swedish internal law provided the shareholding is deemed to be so-called business related (see footnote 3 above) and the shares have been held for no less than a year at the time of the dividend payment. However, according to the Nordic tax treaty exemption from withholding tax may exist if a company holds at least 10 per cent of the share capital in PA and without any requirement of holding period. In Sweden, VPC or – in case of nominee-registered shares – the nominee normally handles the deduction of withholding tax. Taxation upon Realisation of Shares For shareholders that are not tax resident in Sweden are normally not taxed in Sweden for any capital gain on the sale of shares or other securities. An individual not resident in Sweden for tax purposes may be subject to tax in Sweden for the sale of certain Swedish securities if this person at any time during the calendar year of the disposal or the previous ten calendar years has been domiciled or permanently resident here. However, this right may be limited by applicable tax treaties for the avoidance of double taxation.

75

Prospectus 15.2.

NORWEGIAN TAXATION ISSUES

15.2.1. Norwegian Resident shareholders Taxation of dividends For the fiscal year 2005 resident personal shareholders must include dividends distributed from Swedish companies, in their general income, and they are taxed at a rate of 28 per cent. The imputation system, which has been established to avoid double taxation of companies and their shareholders, only applies to dividends from Norwegian companies and is not applicable to dividends from Swedish companies. With effect from 1 January 2006 a new shareholders model is introduced whereby dividends distributed to resident personal shareholders exceeding a calculated allowance, will be taxed as general income for the resident personal shareholder. This also includes dividends from foreign companies. The general income is taxed at a rate of 28 per cent. The allowance is calculated as the acquisition cost of the share multiplied by a determined risk-free interest rate. The tax-free allowance will be calculated on each individual share, not on a portfolio basis. Un-used allowance may be carried forward and set off against future dividends or gains upon realisation of the same share. Personal resident shareholders will be allowed, within certain limitations, to claim credit in Norwegian taxes for taxes paid in Sweden on the distributed dividend. Dividends distributed to resident corporate shareholders are exempt from taxation as from the 2004 fiscal year, i.e. for dividends distributed from Swedish companies in 2004 and onwards. Taxation upon Realisation of Shares For resident personal shareholders gains from sale or other disposition of shares in a Swedish company are taxable as general income at a rate of 28 per cent and losses are deductible against other general income. The provisions on computation of capital gain or loss have been amended with effect from the fiscal year 2006 For the fiscal year 2005 a gain or loss is calculated as the difference between the consideration received and the acquisition cost of the share. The adjustments for annual changes in the taxed equity of the company (the so-called RISK method) are not applicable to shares in Swedish companies. From the fiscal year 2006 the taxable gain or loss will be calculated in the same way, but according to the new shareholders method, a taxable gain may be reduced by un-used calculated allowance, as described above, but may not lead to or increase a deductible loss. If a shareholder disposes of shares acquired at different times, the shares that were first acquired will be deemed as first sold (the FIFO-principle) upon calculating taxable gain or loss. Costs incurred in connection with the purchase and sale of shares may be deducted in the year of sale. For resident corporate shareholders, gains from sale or other disposition of shares in the Company are exempt from taxation, and losses suffered from such realisation are not tax deductible. Costs incurred in connection with the purchase and sale of shares are not deductible.

76

Prospectus 15.2.2. Net Wealth Tax Resident shareholder that is a joint stock company or a similar entity is exempted from net wealth tax. For other resident shareholders, the shares will form part of the capital and be subject to net wealth tax. The maximum net wealth tax rate is 1.1 per cent. Listed shares are valued at 65 per cent of their quoted valued on 1 January in the assessment year. 15.2.3. Inheritance tax When shares are transferred either through inheritance or as a gift, such transfer may give rise to inheritance or gift tax in Norway if the deceased, at the time of death, or the donor, at the time of the gift, is a resident or citizen of Norway. However, in the case of inheritance tax, if the deceased was a citizen but not a resident of Norway, Norwegian inheritance tax will not be levied if inheritance tax, or a similar tax, is levied by the deceased's country of residence. Irrespective of residence or citizenship, Norwegian inheritance tax may be levied if the shares are effectively connected with a business carried out by the shareholder in Norway.

77

Prospectus

16.

RISK FACTORS

All equity investments involve elements of risk. In the following a selection of the various risk elements that are considered particularly relevant for PA are presented. The description is not necessarily exhaustive, and factors not discussed may have an impact on the evaluation of the risks associated with an investment in the Company’s shares. Prospective investors should carefully consider each of the following risk factors and other information contained in this Prospectus, and perform an independent evaluation before making an investment decision. 16.1.

OPERATIONAL RISK

16.1.1. Loss of key personnel PA’s future success depends to a significant degree on the skills, experience and efforts of the Company's management and other key personnel. If any of these key employees would decide to leave PA, this could imply negative consequences for the long term development of the Company. 16.1.2. Risk associated with operating in different countries As the Company expands its operations within the countries in which it currently operates and commences operations in new markets, the Company may experience significant strains on its managerial, operational and financial resources associated with the hiring and training of new employees and the development and management of additional offices, business functions and relationships with clients. 16.1.3. Exploration Previous exploration experience shows that there is substantial risk involved with the effort of exploring oil and gas from the ground. Many of the prospects explored are never developed into producing oil and gas fields. Even though to an extent operators try to reduce the risk by using seismic surveys, this may be costly and require considerable expenditure and not lead to a successful drilling. 16.1.4. Drilling and operating wells There are many external factors that might influence the drilling and operation of oil and gas wells. The factors may be a result of weather conditions, oceanographic conditions or unexpected geological formation pressures. Some of the wells drilled may result in unprofitable efforts, either because they may be considered dry, or the amount of oil and gas you manage to exploit is not sufficient to cover the large expenses involved with the project. 16.2. MARKET PRICES The Company’s revenue stream is correlated to the price of oil. Historically, the oil price has fluctuated widely, due to factors PA neither can control nor predict: • • • • • • •

Changes in supply and demand for oil and gas OPEC regulations Weather conditions Regulations from domestic / foreign authorities The price on substitutes Political conditions Economic conditions

The Company is currently not using financial derivatives for stabilising the price of the oil produced and thus the Company’s revenue will be negatively affected by a drop in the oil price. The Board has determined that derivative instruments may be evaluated in the future.

78

Prospectus 16.3. CURRENCY EXCHANGE RATE EXPOSURE The Company has both revenues and costs in a foreign currency. Currently, the Company has a net currency exposure mainly in USD, due to their international oil and gas operations. In this business, revenues, and to a large extent all costs based on investments, are denominated in USD. The Company also has personnel costs in Tunisia, and relatively small administration costs in Norwegian and Swedish currencies, but these constitute a relatively small part of total costs. The Tunisian currency is for the time being pegged to the USD. The exchange rates between USD and the accounting currency SEK in recent years have fluctuated notably and may in the future fluctuate as well. Such fluctuations may cause impacts in the Company's financial results which are not necessarily related to its operations. Consequently, the Company’s results are exposed to translation changes in the currency rates. The Company is currently not using financial derivatives for hedging currency risk. 16.4. RESERVE ESTIMATES Estimates of oil and gas reserves always involve risk. The estimates, made by professional petroleum engineers, are based on several assumptions: • • •

The size of exploitable crude oil and natural gas in a reservoir The costs connected with the production of the crude oil and the natural gas The rate of production

The estimates are also based on evaluations of geological, engineer, production and economic data. These data may change over time due inter alia to the following: • • •

Increased development activity Production history Change in production costs, market prices and economic conditions

The rate of production of oil and gas decreases as the reserves go towards depletion. If PA does not identify and acquire additional oil fields with proven reserves, engages in successful exploration, appraisal and development actions, or identifies several production areas in existing wells and fields, the reserves will decrease as they are being produced. Future production of crude oil and natural gas is therefore dependent on PA’s ability to substitute reserves. 16.5. ENVIRONMENTAL SURROUNDINGS Impositions from authorities can change planned explorations. Being a player in the petroleum industry implies certain risks, and PA’s activities can be influenced by a number of risk conditions. • • • •

Conflicts in the workforce Operational accidents as fire, explosions, blow outs, defects in pipelines and general problems in the production facilities Natural phenomenona Environmental damages due to oil spill, gas leakages and effluent of poisonous gas

The conditions mentioned above can result in damages, losses and claims towards PA. Regarding insurance see section 8.10.

79

Prospectus 16.6. POLITICAL CONDITIONS Tunisia The political conditions in Tunisia are regarded as stable in relation to many other African states. The Tunisian authorities have throughout the 1990s encouraged foreign investors to invest in Tunisia. However, it can not be excluded that changes in future policies or legal framework could be harmful to the Company. Norway The political conditions in Norway are regarded as stable as the other Nordic countries. An eventual change in the political environment in Norway might result in impact on the acquired Volve Interest, and the exploration and production of this asset. The government may also decide to alter fiscal policies related to petroleum production, negatively affecting the financial condition of the Company. 16.7. THE ACQUISITIONS The completion of the Acquisitions may fail to be completed, either due to factors outside the control of the Company, such as failure to obtain approval from the relevant authorities. Should the Company fail to qualify as a licensee on the NCS, the Volve Acquisition will terminate, and the 10 per cent deposit will be forfeited. The Company needs to arrange additional financing in order to complete the Didon and Zarat Acquisitions. There can be no guarantee that the Company will succeed. Should it fail to complete the purchase due to lack of funding, it could be held liable for any and all loss suffered by the seller. 16.8. DEVELOPMENT PHASE II OF THE DIDON FIELD There can be no assurance that this project will be completed in time or on budget, or that it will result in the increase in production anticipated by the Company.

80

Prospectus

17.

NORSK SAMMENDRAG (”NORWEGIAN TRANSLATION”)

Dette kapittelet er en oversettelse av kapittel 3 “Summary” foran i dette prospektet. Ved motstrid mellom de to kapitlene, går den engelske versjonen foran. 17.1. PRESENTASJON AV SELSKAPET PA ble stiftet i 1994, og er et svensk allmennaksjeselskap. PA er et oppstrøms olje- og gasselskap som er virksomt i den første trinnet i verdikjeden innen utforskning og produksjon. Selskapet fokuserer på modne og senfase olje- og gassfelt. Driftsvirksomheten er lokalisert i Tunis, Nord-Afrika, hvor Selskapet er en velansett oljeprodusent. PA har operert i Tunis i fire år og har foretatt betydelige investeringer i leting og utvikling av sine felt. Selskapet er på vei inn på norsk kontinentalsokkel og evaluerer ulike forretningsmuligheter gjennom mulige oppkjøp av lisensandeler samt nytildeling, fortrinnsvis i modne felt. PA har startet en prekvalifiseringsprosess med Olje- og Energidepartementet for å bli en aktiv deltager og rettighetshaver på norsk kontinentalsokkel. Pr. 31. desember 2004 hadde PA konsernet 12 ansatte i tre land (to i Sverige, to i Norge og åtte i Tunis). Kjøpene av interesser i Didon-feltet, Zarat-tillatelsen og Volve-feltet vil medføre en vesentlig økning i PA konsernets produksjon og reserver. Videre muligheter knytter seg til utvikling av Zarat, Elyssa og El Nisr-funnene som er gjort under Zarat-tillatelsen, Theta Sør prospektet and andre letemuligheter på PL046B. Som en konsekvens av disse oppkjøpene vil PA’s påviste og sannsynlige reserver øke med 80 millioner boe til 118 million boe. Daglig produksjon vil stige med 17.700 bopd fra 3.300 bopd til 21.000 bopd, For finansiell informasjon om PA etter oppkjøpene, se pkt. 17.4 nedenfor samt pkt. 12.5.

17.2. KJØPET AV INTERESSENE I DIDON, ZARAT OG VOLVE PA kunngjorde 14. juni 2005 at de hadde kjøpt 10% av Volve-feltet på den norske kontinentalsokkel for NOK 205 millioner. Volve-feltet er et oljefelt under utbygging hvor man forventer at oljeproduksjonen vil starte i mars 2007. For PA’s andel forventes en platåproduksjon på 5.000 bopd i 2007 – 2010, med nedstenging i 2011 eller 2012. PA kunngjorde 20. juni 2005 at de hadde kjøpt 77,78% av Didon-feltet, et produserende oljefelt på tunisisk kontinentalsokkel, og 35% av Zarat-tillatelsen, som dekker et område på tunisisk kontinentalsokkel, for en samlet kjøpesum på USD 230 millioner. PA’s eierinteresse i Didon-feltet vil gjennom dette kjøpet øke fra 22,22% til 100%, og eierinteressen i de andre delene av Zarat-tillatelsen vil øke fra 10% til 45%. PA’s produksjon fra Didon-feltet vil stige med 18.500 bopd fra dagens nivå på 1.500 bopd til 20.000 bopd. Alle tre kjøp vil være effektive pr. 1. januar 2005. Gjennomføring er betinget av godkjennelser og samtykker, fra offentlige myndigheter og private parter.

81

Prospectus Kjøpene vil bli finansiert med (i) betalinger fra Selskapets kontantreserver, (ii) den private plasseringen på 7 millioner aksjer med brutto emisjonsproveny på NOK 612,5 millioner og (iii) ca. USD 100 millioner i ny gjeld. Selskapet har allerede etablert en garantifasilitet som gir Selskapet mulighet til å trekke opp et ettårig lån på USD 100 millioner i løpet av august og september 2005.

17.2.1. Didon-konsesjonen og Zarat-tillatelsen MP Zarat er et oppstrøms olje- og gass lete- og produksjonsselskap som opererer i det første trinnet av verdikjeden. Selskapet fokuserer på modne og senfase olje- og gassfelt. For tiden er dets driftsvirksomhet lokalisert i Tunis og Algerie i Nord-Afrika. MP Zarat har operert i Tunis i flere år og har foretatt betydelige investeringer i leting og utvikling av de felt de har påvist. MP Zarat har en 35% andel i Zarat-tillatelsen, som er lokalisert i Gabes-bukten, 75 kilometer utenfor kysten av østre Tunis. Zarat-tillatelsen har et funn som er erklært kommersielt, Didon-feltet, hvor MP Zarat har 77,78%. De gjenværende 22,22% eies av PAO., et heleid datterselskap av PA. Råoljen fra Didon-feltet produseres via et særskilt flytende produksjons- og lagringsfartøy (FPSO). Produksjonen fra feltet selges i spot-markedet (for ytterligere informasjon om feltene, se tabellene nedenfor). MP Zarats produksjon fra dets interesse i Didon-feltet var gjennomsnittlig 92 bopd i første kvartal 2005. Påviste og sannsynlige reserver for MP Zarats interesse i Didon-feltet (77,78%) var 32,9 millioner bo på oppkjøpstidspunktet.

Produserende felt Andel Didon (offshore) Tabell 1: Produserende felt

Produserende felt Didon (offshore)

Operator

77,78% MP Zarat

Partner PAO (22,22%)

Utløpsdato Inntil feltet er uttømt og forlatt.

Sammendrag av vilkår Konsesjon utstedt 5. april 1990 Royalty og inntektsskatt til staten fastsatt på glideskala basert på “R” faktor. “R” faktor er forholdet mellom feltets samlede netto inntekter og samlede utgifter. Forpliktelse til lokal levering innebærer at 20% av brutto produksjon selges til ETAP (eller staten) med 10% rabatt ift. eksportprisen.

Andel

Brutto Operatør område 724 km2 MP Zarat

Tabell 2: Lisensvilkår

Utforskningstillatelse Zarat (offshore)

35%

Tabell 3: Utforskningstillatelser

82

Partner PAO (10%) ETAP (55%)

Prospectus Exploration permit Zarat (offshore)

Utløpsdato 24. juli 200511

Sammendrag av vilkår Tillatelsen overdratt 25. januar 2001. Fortrinnsrett til fornyelse for innehaver. Varighet: 2,5 + 2 års forlengelse Forpliktelse: 1 letebrønn

Tabell 4: Lisensvilkår 17.2.2. Volve-feltet Volve-feltet befinner seg ca. 8 kilometer nord for Sleipner A-plattformen på norsk kontinentalsokkel, i relativt moderat vanndybde (90 meter). I den innleverte planen for utbygging og drift (PUD) er de påviste og sannsynlige reservene i Volve-feltet anslått til 70 millioner bo. Produksjonsprofilen i PUD’en har en daglig produksjon på 50.000 bopd i 2007 – 2010, med antatt nedstenging i 2011 eller 2012. PUD ble innlevert i februar 2005 og godkjent av Olje- og energidepartementet i april 2005. Produksjonsstart forventes i mars 2007. Utbyggingsløsningen har en ny oppjekkbar plattform (eid av Mærsk) med bore- og prosesseringfasiliteter. Oljen som produseres vil bli lagret i et flytende lagringsfartøy (FSO), som leies inn fra Teekay, og som forankres nær den oppjekkbare plattformen. Oljen lastes så på shuttle-tankskip. De mindre kvantaene med våtgass vil bli transportert gjennom en egen rørledning til Sleipner A for prosessering og eksport. Utbyggingen har tre produksjonsbrønner, tre vanninjeksjonsbrønner og to brønner for produksjon av vann. De samlede investeringene for utbyggingen er anslått av feltoperatøren til NOK 1.920 millioner. Fjerningskostnadene antas å være nokså begrensede på grunn av utbyggingskonseptet, og anslås nå av feltoperatøren til NOK 143 millioner. Volve-feltet befinner seg på utvinningstillatelse (PL) L046, men en ny utvinningstillatelse – PL046B – vil bli skilt ut fra PL046 som eier av Volve-feltet. Før kjøpet var lisenspartnerne: Selskap Norsk Hydro Produksjon AS Total E&P Norge AS ExxonMobil Exploration and Production Norway AS Statoil ASA Tabell 5: Lisenspartnerne I Volve feltet før kjøpet

Andel 9,40% 10,00% 28,00% 52,60%

Statoil er operatør for PL046, vil også ha denne funksjonen for PL046B. 17.3. DEN PRIVATE PLASSERINGEN Før den private plasseringen, hadde selskapet en aksjekapital på SEK 52.207.002 fordelt på 34.804.668 aksjer, pålydende SEK 1.50 per aksje. Aksjekapitalen er fullt innbetalt. Tegningskursen i den private plasseringen var satt til NOK 87,50. De nye aksjene var fullt innbetalt 30. juni 2005, og den private plasseringen forventes registrert hos det svenske ”Bolagsvärket” 5 juli 2005.

11

Søknad om forlengelse på ett år er inngitt, Selskapet har mottatt bekreftelse fra Olje- og energiministeriet men venter på endelig godkjennelse fra nasjonalforsamlingen.

83

Prospectus Den private plasseringen ble besluttet av Selskapets styre, på basis av styrefullmakt vedtatt på Selskapets ordinære generalforsamling 11. mai 2005. Etter gjennomføring av den private plasseringen har Selskapet en aksjekapital på SEK 62.607.002 fordelt på 41.804.668 aksjer, alle fullt innbetalt. De nye aksjene vil kunne omsettes på Oslo Børs så snart som mulig etter offentliggjøring av dette prospektet. Notering av de nye aksjene forventes å finne sted på eller rundt 6. juli 2005. 17.4. FINANSIELL INFORMASJON Vennligst refererer til seksjon 12.5 for pro forma forutseninger og Appendiks 6 for detaljert informasjon om pro forma tallene. Resultatregnskap (SEK’000) Totale driftsinntekter EBIT PBT

2004

(Q1)2005

(Swedish GAAP/IFRS)

(IFRS)

532.956 312.940 233.825

49.417 22.287 1.753

Dividende per aksje 4,94 Tabell 6: Oversikt over Pro forma Konsolidert Resultatregnskap

0,12

Balansesammendrag (SEK’000) Sum anleggsmidler Sum omløpsmidler Sum eiendeler

2004

(Q1)2005

(Swedish GAAP/IFRS)

(IFRS)

2.100.805 240.328 2.341.134

2.121.748 233.622 2.355.370

Sum egenkapital 995.501 Sum gjeld 1.345.632 Sum gjeld og egenkapital 2.341.134 Tabell 7: Oversikt over Pro forma Konsolidert Balanse

1.041.024 1.320.346 2.355.370

17.5. ANNET Investering i Selskapets aksjer innebærer risiko, bl.a. slike risiki som oppstrømsselskaper i sin alminnelighet er utsatt for, og selskapsspesifikke risiki, knyttet bl.a. til reserver og produksjon. For en fyldigere omtale av risiko, se kapittel 16.

84

Prospectus

1 - Articles of Association of PA Resources AB

85

Prospectus

86

Prospectus

87

Prospectus

88

Prospectus

2 - PA Resources AB Annual Report 2004

89

Prospectus

90

Prospectus

91

Prospectus

92

Prospectus

93

Prospectus

94

Prospectus

95

Prospectus

96

Prospectus

97

Prospectus

98

Prospectus

99

Prospectus

100

Prospectus

101

Prospectus

102

Prospectus

103

Prospectus

104

Prospectus

105

Prospectus

106

Prospectus

107

Prospectus

108

Prospectus

109

Prospectus

110

Prospectus

3 - PA Resources AB Q1 2005 Report

111

Prospectus

112

Prospectus

113

Prospectus

4 - Auditor’s report on the pro forma financial adjustments

114

Prospectus

5 - Subscribers in the Private Placement

115

Prospectus

6 - Detailed information on the pro forma financial adjustments Detailed information about the pro forma Consolidated Profit and Loss Account - 2004 (figures in SEK'000)

Group

MP Zarat

Volve

OPERATING INCOME Net sales of oil and gas Changes in stock Other income Total operating income

99,400 199 14,224 113,823

414,368 1,525 3,239 419,132

-

OPERATING EXPENSES Cost of sales Other external expenses Personnel expenses Depreciation Total expenses

-25,720 -16,937 -2,807 -45,464

-136,152 -17,593 -47,646 -201,391

-

Operating profit (loss)

68,359

217,741

-

26,839 -

312,940

Financial items Interest from income Interest expenses Other financial items Profit before tax

176 -3,217 -308 65,011

2,413 -7,276 -5,598 207,280

-

-65,305 4) -38,465

2,589 -75,797 -5,906 233,825

-6,634 -203 682 -15,079 43,777

-103,026 104,254

-

-33,482 2) -

-

-71,947

-40,115 -203 682 -118,105 76,084

4.59 -

-

-

-

4.94 -

Royalty Tax, oil and gas Deferred tax Income tax Profit after taxes Earnings per share Dividend per share

Eliminations

Total

-6,544 1) 6,544 1) -

48,502 11,878 -33,541 26,839

2),5) 3),7) 8) 6)

1) 2) Reclassification of Royalty 3) Adjustment for impairment with SEK 10,596 made by previous owner, not relevant for new owner since oil & gas assets are entered at a new price 4) Interest expenses are adjusted to new loans 5) Reversal of intercompany charges with SEK 15,020 due to non-recurring items from MP Zarats parent company 6) Depreciations (47,646-81,187) based on new booked values of oil & gas assets 7) Reversal of depreciations which are recorded on other line 8) Personell costs are booked on Cost of sales and Other external expenses

116

507,224 1,724 24,008 532,956

-113,369 -22,652 -83,994 -220,016

Prospectus

Detailed information about the pro forma Consolidated Balance sheet - 2004 (figures in SEK'000)

Group

MP Zarat

Volve

Eliminations

Total

209,330 26,550

1,152,090 527,100

201,468

-71,058 1) -

1,290,361 755,118

3,129 4,658 5,877 1,118 29 250,690

50,645 1,729,835

201,468

-10,129 1) -81,187

43,645 4,658 5,877 1,118 29 2,100,805

9,344

-

-

1,525 2)

10,869

57,462

-

111,968 3) 113,493

57,462 125,064 3,065 43,868 240,328

ASSETS Fixed assets Tangible long-term assets Oil and gas assets Exploration Machinery and equipment Plant and machinery Construction in progress Long/term financial assets Advance payments Shares Other long-term receivables Total fixed assets Current assets Stock Short term receivables Accounts receivable Deferred tax Other receivables Prepaid expenses and accrued income Cash Total current assets

13,096 3,065 43,868 126,835

-

Total assets

377,525

1,729,835

201,468

32,306

2,341,134

2,980 141,470 20,475

692,352

-

-

2,980 141,470 712,827

62,140 43,778 270,844

692,352

-

32,306 32,306

62,140 76,084 995,501

SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity Share capital Restricted reserves Unregistered share capital Unrestricted equity Retained earnings Net results Total shareholders equity Liabilities Long-term liabilities Bank overdraft facilities Other long-term liabilities Deferred tax liabilities Total long-term liabilities Current liabilities Accounts payable Tax liabilities Other liabilities Accrued expenses and prepaid income Total short-term liabilities Total liabilities

35,212 35,212

1,238,951 1,238,951

-

-

1,274,163 1,274,163

19,835 18,375 30,601 2,659 71,470 106,682

1,238,951

-

-

19,835 18,375 30,601 2,659 71,470 1,345,632

Total shareholders equity and liabilities

377,525

1,931,303

-

32,306

2,341,134

1) 2) 3)

Depreciation through the year, balance sheet is adjusted as if new assets are put in 1.1.2004, and thus need to be depreciated to end on 31.12.2004 value Increase in stock Proforma changes of working capital based on 2004 income statement due to it is estimated to be an asset deal

117

Prospectus

Detailed information about the pro forma Consolidated Profit and Loss Account - (Q1)2005 (figures in SEK'000)

Group

MP Zarat

OPERATING INCOME Net sales of oil and gas Changes in stock Other income Total operating income

47,947 -4,309 315 43,952

5,465 5,465

-

- 3) -

53,411 -4,309 315 49,417

-12,235 -5,681 -1,371 -19,287

-1,525 -3,786 -2,532 -7,843

-

- 3) - 4) -

-13,760 -9,467 -3,903 -27,129

Operating profit (loss)

24,666

-2,378

-

-

Financial items Interest from income Interest expenses Other financial items Profit before tax

850 -3,014 22,502

-2,378

-

1,370 5) -1,370 5) -18,370 1) -18,370

1,370 -520 -21,384 1,753

Royalty Tax, oil and gas Deferred tax Income tax Profit after taxes

-2,267 -63 -5,824 14,348

-2,378

-

8,300 2) -10,070

-2,267 -63 8,300 -5,824 1,899

1.62 -

-

-

OPERATING EXPENSES Cost of sales Other external expenses Personnel expenses Depreciation Total expenses

Earnings per share Dividend per share 1) 2) 3) 4) 5)

Estimated interest expense on assumed credit facility Deferred tax on losses The Didon Field had no production Personell costs are booked to Cost of sales and Other external expenses Reclass of financial items

118

Volve Eliminations

-

Total

22,287

0.12 -

Prospectus

Detailed information about the pro forma Consolidated Balance sheet - (Q1)2005 (figures in SEK'000)

Group

MP Zarat

Volve Eliminations

Total

230,952 26,550

1,081,032 527,100

201,468

-

1,311,984 755,118

1,892 4,756 8,868 1,118 29 274,165

37,984 1,646,116

201,468

-

39,876 4,756 8,868 1,118 29 2,121,748

-

13,653

ASSETS Fixed assets Tangible long-term assets Oil and gas assets Exploration Machinery and equipment Plant and machinery Construction in progress Long/term financial assets Advance payments Shares Other long-term receivables Total fixed assets Current assets Stock Short term receivables Accounts receivable Deferred tax Other receivables Prepaid expenses and accrued income Cash Total current assets

13,653

-

-

12,437 323,709 10,594 83,781 444,175

113,647 113,647

-

Total assets

718,340

1,759,763

201,468

-324,200

2,355,370

3,080 158,949 36,874

692,352

-

-

3,080 158,949 729,226

109,564 14,348 322,816

32,306 -2,378 722,280

-

-10,070 -10,070

141,870 1,899 1,035,024

519 365,445

1,238,951

-

-332,500 3)

519 1,271,896

8,300 1) -332,500 3) -324,200

12,437 8,300 104,856 10,594 83,781 233,622

SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity Share capital Restricted reserves Unregistered share capital Unrestricted equity Retained earnings Net results Total shareholders equity Liabilities Long-term liabilities Bank overdraft facilities Other long-term liabilities Deferred tax liabilities Total long-term liabilities Current liabilities Accounts payable Tax liabilities Other liabilities Accrued expenses and prepaid income Total short-term liabilities Total liabilities

365,964

1,238,951

-

-332,500

1,272,415

11,674 727 14,391 2,769 29,561 395,524

1,238,951

-

18,370 2) 18,370 -314,130

11,674 727 32,761 2,769 47,931 1,320,346

Total shareholders equity and liabilities

718,340

1,961,231

-

-324,200

2,355,370

1) 2) 3)

Deferred tax assets on losses Accrued interest expense Reclass of bond loan allready included in the group figures

119

05-07-05

10:17

Side 1

www.signatur.no

251099_pa_resources_omslag

PROSPECTUS

PA Resources AB (publ) Enterprise no. 556488-2180 PA Resources AB Kungsgatan 447TR SE- 111 35 Stockholm, Sweden Telephone: +46 8 218382 Fax: +46 8 20 98 99 E-mail: [email protected]

Carnegie ASA Stranden 1, Aker Brygge P.O. Box 684 Sentrum 0106 Oslo, Norway Telephone: +47 22 00 93 00 Fax: +47 22 00 99 60

Prospectus in connection with Private placement and listing of 7,000,000 new shares each with a nominal value of SEK 1.50 issued at a subscription price of NOK 87.50 per share Acquisition of 77.78 per cent interest in the Didon Field and a 35 per cent interest in the Zarat Permit, both offshore Tunisia, and the acquisition of a 10 per cent interest in the Volve field offshore Norway

LEAD MANAGER

Handelsbanken Capital Markets Rådhusgaten 27 P.O. Box 332 Sentrum 0101 Oslo, Norway Telephone: +47 22 94 09 00 Fax: +47 22 94 08 46

Pareto Securities ASA Dronning Maudsgt. 3 P.O. Box 1411 Vika 0115 Oslo, Norway Telephone: +47 22 87 87 00 Fax: +47 22 87 87 10

CO-LEAD MANAGERS

5 July 2005