PA Resources – finding our niche

Q2 Presentation

18 July 2014

International business

2

Take out Greenland

Production

Exploration and development

• Our Core Areas of operations are West Africa,

North Africa and North Sea.

• Our current Oil Production is around 3,200 bopd

and comes from Equatorial Guinea and Tunisia.

• We have near term developments in all three

Core Areas.

• We have a number high impact exploration

opportunities, the first of which will be drilled in

Congo in 2015.

PA is an international oil & gas company

with assets across the full spectrum of

exploration, appraisal, development and

production

Geographically balanced portfolio

3

West Africa North Africa North Sea

Production

• Aseng

• Alen

Appraisal &

Development

• Diega

Exploration

• MPS

• Block I

Production

• Didon

• DST

Appraisal &

Development

• Zarat

• Elyssa

Exploration

• Makthar

• Jelma

• Jenein Centre

Appraisal &

Development

• Broder Tuck

• Lille John

• Birgitta

Exploration:

• Denmark

• Germany

• UK

How we deliver value

4

Good

Assets

Right

Operators

Strong

Owners

Top

Team

Development Planning

Maximise Asset Value

Develop Current

Portfolio

Organic

Growth

M&A

Laying the

Foundations

• Short term finance

• New leadership

• Portfolio

rationalisation

A period of change – for long term success

Building the platform

• Exploration and Appraisal drilling

• Development Plans completed

• Project execution underway

• Focus on Europe, North & West Africa

• Licence Round applications

• Review value enhancing M&A opportunities

• Medium term finance plan

Sustainable Future

• Increased and stable

production

• Projects funded from

cash flow

• Growth opportunities

2013 2014 - 2016 2017>

Block I current value and future potential

Overview

• Steady production from Aseng and Alen

• Diega well test at upper end of expectations

• Diega planned tie back to Aseng

• First oil estimated in 2017

6

2005Alen

Discovery

2014Diega Development Plan

Q2 Update

• Gas compressor issues restricted Q2 production

• Continuing preparation of Diega POD

• 3D seismic survey underway

2007Aseng

Discovery

2008Diega

Discovery

2012Aseng first oil

2013Diega appraisal

2013Alen first gas

Mer Profonde Sud exploration

Overview

• MPS is a prospective exploration

block on trend with several large fields

• Reprocessed 3D seismic was basis

for PA re-evaluation and farm-out

• SOCO will carry PA in a well to test

the Boabab Marin prospect

2014DL-23

2010-20113D Seismic

2002-2004WO & Infill Drilling

7

2008PA acquisition

2013SOCO Farm-out

2015Exploration Well

Q2 Update

• SOCO has assumed operatorship

• Third period of the licence entered

• Planning commenced for exploration well

Baobab Marin 1 in 2015

20123D Seismic survey

Didon rehabilitation2017

First production 2013-2017

Development1976

Discovery

1998First Oil

1997 Concession

2006Platform + 2 Wells

2008-20094 New Wells

2005PA Acquisition

2011Enhancement Study

Overview

• Produced 32 million barrels since 1998

• Platform and tanker in place

• 70 km offshore in 70m water depth

• Tanker was overhauled in 2013

• EnQuest has been successful in mature

field rehabilitation at Thistle & Heather

• First step is ESP in well D6

• Further ESP installation and new wells in

following years

8

2014ESP

Q2 Update

• Announced completion of Didon transaction with

Enquest

• Begins ESP installation in July

• Preparatory work for second ESP commenced

Zarat Field development

1992 Discovery

2012Draft POD

1995 Appraisal Well

2013EnQuest Farm-Out

2005PA Acquisition

1990 Permit Award

Overview

• Largest undeveloped discovery in Tunisia

• Active participation of ETAP to secure

early production and offset decline in

Tunisian gas production

• Development may need CO2

sequestration and gas recycling

• Local infrastructure can handle Zarat gas

• Commercially complex since unitisation

required with Joint Oil block

9

2014UUOA, UPOD

Q2 Update

• Agreed timetable for UUOA in Q4

• POD with ETAP on target for September

• Avenant 5 still awaiting approval

• EnQuest completion will follow Avenant 5

Overview

• A significant gas accumulation

• Four well penetrations drilled to date

• Further appraisal well required

• Straightforward development if

appraisal is successful

• Commercially simple with whole field

in PA licence

• Local infrastructure with ullage to

handle the gas

1974 Discovery

2006/2007Appraisal Well + ST

1992 Appraisal

Well

2010New 3D Seismic

2013Enquest Farm-Out

2005PA Acquisition

10

Elyssa Field appraisal

2015Appraisal Well

Q2 Update

• Planning of appraisal well continues

• Commitment to drilling rig awaiting approval

of Avenant 5

2006 6th license round

Awarded to Scotsdale

2011Exploration well

2008 PA acquired

Scotsdale

2012Discovery Evaluation

Report

2013Dana Farm-out

Overview

• Gas field discovered by PA in 2011

• In shallow water and adjacent to

existing infrastructure

• Good progress in discussions with

nearby host platform and an alternative

host is under active review

• Decision in 2014 on preferred

development or further appraisal

11

Commercialisation of Broder Tuck

2014Pre-Development Evaluation

Q2 Update

• Concept screening continues

• Operatorship handed over to Dana

• Preparing for a decision regarding further

appraisal drilling or FEED

2006 6th license round

Awarded to Scotsdale

2011Exploration well

+ ST

2008 PA acquired

Scotsdale

2012Discovery Evaluation

Report

Appraisal drilling of Lille John

Overview

• Oil field discovered by PA in 2011

• Appraisal well required to confirm size of

structure and reservoir model

• Straightforward tieback to existing

infrastructure for oil export to Danish

mainland

• Will pursue this trend together with Dana in

Denmark

12

2013Dana Farm-out

2014Appraisal Well

Q2 Update

• Planning for the appraisal well continues

• Drilling rig secured

• Drilling planned in Q4 2014

2014 Progress

Exploration

West Africa

• Close farm-out to SOCO

• Confirm MPS drilling target

• Secure rig for MPS well

• Acquire Block I 3D seismic

Tunisia Onshore

• Plan seismic programme

• Execute seismic programme

North Sea

• Evaluate Danish 7th round

• Apply in UK 28th round

13

Appraisal & Development

Block I

• Submit Diega POD

Zarat

• Close EnQuest farm-out

• Complete UUOA

• Submit Zarat POD

Elyssa

• Plan appraisal well

• Secure rig for appraisal well

Lille John

• Close Dana farm-out

• Develop drilling plan

• Drill appraisal well

Broder Tuck

• Pre-Development evaluation

Birgitta

• Investigate export options

• Initiate development planning if justified

Production

Didon

• Close EnQuest farm-out

• Install ESP

• Install additional ESP or drill well

Tunisian Onshore

• Review DST fields

• Identify enhancement opportunities

West Africa

• Drill Alen production well

Financial highlights

Q1

15

Production and prices in Q2

• ASENG: Q2 production impacted by gas compressor

issues

• TUNISIA: Relatively stable during 2014. ESP

installation anticipated July

• AZURITE: Production ceased November 2013

• PRICE: 1H 2014 in line with 2013

• CURRENCY: Stronger USD

Average production (boepd)

Average sales price (USD/bbl)

113

103

108106

109 108

113

102

110 109108 110

80

90

100

110

120

130

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

PA Resources Brent

Closing day rates

6.52 6.716.43 6.51 6.51 6.74

4.08 4.04 3.90 3.94 4.10 4.02

1.11 1.11 1.07 1.06 1.08 1.10

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

31/3-13 30/6-13 30/9-13 31/12-13 31/3-14 30/6-14

USD/SEK TND/SEK NOK/SEK

5,6

00

4,8

00

4,2

00

3,6

00

3,4

00

3,2

00

1,2

00

60

0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

70% Didon

PAR Production

Income statement

16

SEK million Q2 2014 Q1 2014 Jan-June

2014

Jan-June

2013

Revenue 181 178 359 625

Production costs -48 -37 -85 -242

Depletion O&G -39 -43 -81 -134

Gross profit 94 98 192 249

Other income and G&A -27 -27 -53 -57

WD & Capital loss - - - -668

Operating profit 67 71 139 -475

Financial items -87 -90 -177 -118

Profit before tax -19 -19 -38 -593

Income tax -7 -30 -37 277

Profit for the period -26 -48 -74 -316

Q2 vs Q1

• Revenue decline due to lower production

counteracted by price / timing effects

• OPEX impacted by non-routine work on

Didon

• Financial items impacted by c. SEK -20

million in exchange losses both quarters

• Revised tax calculation in EG

2014 vs 2013

• Didon farm-out distorts comparison with

2013

• SEK -323m Capital loss net after tax and

Impairment included 2013

• Financial items excluding exchange gains

/ losses amounted to SEK -136m (-160)

Cash flow statement

17

SEK million Q2 2014 Q1 2014 Jan-June

2014

Jan-June

2013

CF from operations 45 -52 -7 -98

Proceeds from farm out 65 - 65 -

CAPEX -43 -41 -84 -96

Rights issue - - - 604

Loans raised 129 - 129 38

Amortisation of debt -143 -94 -237 -365

CF from financing -14 -94 -108 276

Net cash flow 53 -187 -134 82

Q2 - 2014

• CF from operations SEK 45m:

Interest payments c. SEK -65m

Didon lifting c. SEK 150m

• Proceeds from farm out 12/06

Divestment (net) c. SEK 65m

1H - 2014

• Capex SEK -84m:

19m Makthar seismic acquisition

41m Block I (Diega)

• Loans raised Gunvor WCF $ 20m

• Amortized net NOK -131m and CB SEK

-94m

Balance sheet and covenants

18

SEK million 30 June

2014

31 Dec

2013

Non-current assets 4,778 4,599

Current assets 684 861

Whereof cash 273 403

Total assets 5,462 5,460

Equity 1,863 1,795

Total Interest bearing debt 2,148 2,194

Other Non-current liabilities 601 593

Other Current liabilities 850 877

Total Equity and Liabilities 5,462 5,460

Covenants

Book Equity > 1,000 MSEK OK OK

Book to Capital > 40% 46,4% 45,0%

KEY COMMENTS

• Stronger USD positive impact on assets

and equity

• Net equity increase in spite of net loss in

period

Thank you