re: evaluation of the petroleum and natural gas reserves ......the technically recoverable oil and...

Ref.: 3683.70965

March 21, 2019

Mr. John Horsburgh

Ithaca Energy Inc.

8 Rubislaw Terrace

Aberdeen, Scotland

AB10 1XE

Re: Evaluation of the Petroleum and Natural Gas Reserves of Ithaca Energy Inc.

As of December 31, 2018

Dear Mr. Horsburgh:

This letter report (the “Report”) was prepared by Sproule International Limited (“Sproule”) at your request

for Ithaca Energy Inc. Ithaca Energy Inc. is hereinafter referred to as "the Company". This letter report

was prepared on March 21, 2019 and is effective as of December 31, 2018. It consists of an evaluation of

the petroleum and natural gas reserves of the Company's interests located offshore United Kingdom.

The UK Brent crude oil and IPE Britain NBP natural gas price forecasts used in this report were provided

by the Company.

The Report, has been prepared for the Company’s use in filing with the Israel Securities Authority (ISA).

In our opinion the assumptions, data, methods and procedures used in the preparation of the Report are

appropriate for such a purpose.

Report Contents

For the purposes of summarizing the results, the Company’s 11 fields have been divided into two groups;

the Greater Stella Area (GSA) fields and the Non-GSA fields.

140 Fourth Avenue SW, Suite 900 Calgary, AB, Canada T2P 3N3 Sproule.com T +1 403 294 5500 F +1 403 294 5590 TF +1 877 777 6135

Ithaca Energy Inc. 2 March 21, 2019 Sproule International Limited

The following tables are included in this report:

Table 1 - presents the grouping of the fields and ranking of the properties based on reserves

within each field grouping, before income taxes, for the total proved plus probable reserves

category, as of December 31, 2018.

Table 2 - summarizes our evaluation, before and after income taxes, by group and by reserves

category, of the petroleum and natural gas reserves of Ithaca Energy Inc., as of December 31,

2018.

Table 3 - presents a summary of selected pricing, inflation and exchange rate assumptions.

Table 4 - presents detailed forecasts of production and net revenue for the various reserves

categories for the GSA and non-GSA fields.

Table 5 – presents a summary of the historical production, unit cost and revenue data, using data

provided by the Company.

The following Appendices were also included:

Appendix A – Abbreviations, Units and Conversion Factors

Appendix B – Petroleum Fiscal Terms

Report Standards

The Report was prepared by Sproule using current geological and engineering knowledge, techniques

and computer software. It was prepared within the Code of Ethics of the Association of Professional

Engineers and Geoscientists of Alberta (“APEGA”). This report adheres in all material aspects to the “best

practices” recommended in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) which

are in accordance with principles and definitions established by the Calgary Chapter of the Society of

Petroleum Evaluation Engineers.

The use of the Report, in part or in whole, outside the scope of which it has been prepared may not be

appropriate.

Sproule reserves the right to review all calculations made, referred to or included in this Report and to

revise the estimates as a result of erroneous data supplied by the Company or information that exists but

was not made available to us, which becomes known subsequent to the preparation of this Report.

The reserve estimates and net present values prepared in this evaluation have also been reviewed in

relation to the definitions and guidelines set forth in the 2018 Petroleum Resources Management System

(“PRMS”), approved by the Society of Petroleum Engineers (“SPE”), the World Petroleum Council

(“WPC”), the American Association of Petroleum Geologists (“AAPG”), and the Society of Petroleum

Evaluation Engineers (“SPEE”), Society of Exploration Geophysicists (“SEG”), Society of Petrophysicists


and Well Log Analysists (“SPWLA”), European Association of Geoscientists and Engineers (“EAGE”), and

in accordance with international recognized standards, as stipulated by the Israel Securities Authority

(ISA). The reserves as presented herein were found to comply in all material respects with the definitions

and guidelines set forth in the 2018 PRMS.

The oil reserves are presented in thousands of barrels, at stock tank conditions. The natural gas reserves

are presented in millions of cubic feet, at base conditions of 14.65 psia and 60 degrees Fahrenheit. The

natural gas liquids reserves are presented in thousands of barrels, at base conditions of 60 degrees

Fahrenheit and equilibrium pressure. For barrels of oil equivalent (BOE) a conversion ratio of 6 Mcf:1 bbl

was assumed, based on an energy equivalency conversion method primarily applicable at the burner tip

and does not represent a value equivalency at the wellhead. Additional units and conversion factors are

included in Appendix B.

The net present values of the reserves are presented in United States dollars and are based on annual

projections of net revenue, which were discounted at various rates. These rates are 5, 10, 15 and 20

percent and undiscounted. For your reference the closing exchange rate on Friday December 31, 2018

was 3.7480 Israeli Shekels per United States Dollar, sourced from the historical exchange rate data from

the Bank of Israel.

All historical production, revenue and expense data, product prices received, property descriptions,

details of interests held, well data and other data that were obtained from the Company were accepted as

represented, without any further investigation by Sproule. No investigation was made into either the legal

titles held or any operating agreements in place relating to the subject properties. The Company provided

their estimated operating, capital and abandonment and reclamation cost estimates, as well as historical

cost statements. Sproule checked these for reasonableness and made adjustments where considered

appropriate. The Company’s estimates were considered reasonable relative to other evaluations Sproule

has conducted in the United Kingdom North Sea.

In the preparation of this report, a field inspection of the properties was not performed. The relevant

geoscience and engineering data were made available by the Company or obtained from public sources

and the non-confidential files at Sproule. No material information regarding the reserves evaluation would

have been obtained by an on-site visit.

There was no investigation into environmental liability included in the scope of the report, and we are

unaware of any environmental liabilities that would have a material effect on the reserves estimated in

this report. No costs were included to account for any environmental liabilities.


Technically Recoverable Volumes and Production Forecasts

The technically recoverable oil and gas volumes were estimated using a combination of volumetrics,

decline curve analysis, analogues, material balance and numerical simulation methods, depending on

data available for each field and maturity of each field. In-place volumes were estimated using the net pay

encountered at the wellbore and an assigned drainage area or, where sufficient well data was available,

detailed geological models constructed using Schlumberger’s Petrel software. Reservoir rock and fluid

property data were obtained from available core analyses, well logs, PVT data, gas analyses, and

published information, either from the pool in question or from a similar reservoir producing from the same

zone. Recovery factors for technically recoverable oil volumes were selected from the results of detailed

analytical reservoir analyses, the results of detailed numerical reservoir analyses, or by comparing the

reservoir under study with similar reservoirs that have more firmly established recovery factors from

extended production histories.

The technically recoverable solution gas volumes were estimated based on historical and forecast

producing gas-oil ratios and oil production or volumetric calculations. Similarly, the technically recoverable

natural gas by-product volumes were based on historical and forecast recoveries and gas production.

Annual technically recoverable oil and gas production was forecast considering historical production

trends of the Company’s producing wells, applicable regulatory conditions, existing or anticipated contract

rates, and by comparison with other wells in the vicinity producing from similar reservoirs.

Economic Input Parameters

The economic parameters used in the Report were those obtained from the Company in field summary

documents and those obtained during communications with Company personnel.

The operating costs, which were applied at the field level, included annual fixed field costs, tariffs and

processing costs, and allocated platform costs, where applicable. Capital costs were scheduled based on

development plans supplied by the Company and included cost for drilling, completion and tie-in of wells,

workover operations, pipeline construction, and facility installation/modification. Costs were converted to

United States dollars using the exchange rate included in Table 3.

The Company has a 100 percent interest in the floating production unit, FPF-1, located at the Stella Field.

At the request of the Company, the processing income from the facility, which forms a material portion of

the economic calculations, was applied against the operating costs of the GSA fields. Further discussion

of the processing income is provided in Appendix B.


Abandonment and reclamation costs represent all costs associated with the process of restoring a

company’s properties, which have been disturbed by oil and gas activities, to a standard imposed by

applicable government or regulatory authorities. Pursuant to guidance provided by regulatory agencies

(such as the Alberta Securities Commission), the costs included in this report do not represent the total

decommissioning liabilities of the Company but only those costs related to abandonment and reclamation

of active wells and material dedicated facilities associated with the Company’s active oil and gas activities

in a property. Abandonment and reclamation costs for existing wells with economic developed reserves,

and future economic proposed development have been included in this report as prepared by the

Company. No allowances for salvage were incorporated into the abandonment and reclamation costs

contained in this report. As requested by the Company, the abandonment and reclamation costs were

applied starting two years after the cessation of production, over a three year period.

The price forecasts that formed the basis for the revenue projections in the evaluation were provided by

the Company, with adjustments for quality estimated from historical revenue data. Table 3 presents a

summary of selected forecasts.

Royalties and Fiscal Regime

The Stella and Harrier properties are subject to a third-party royalty for a portion of the revenue from the

two fields. There are no other properties subject to royalties.

Further discussion of the petroleum fiscal regime applicable to the Company is provided in Appendix B.

Forward-Looking Statements

For greater clarity, we point out that the Report may contain forward-looking statements including

expectations of future production revenues and capital expenditures. Information concerning reserves

may also be deemed to be forward-looking as estimates involve the implied assessment that the reserves

described can be profitably produced in the future. These statements are based on current expectations

that involve a number of risks and uncertainties, which could cause actual results to differ from those

anticipated. These risks include, but are not limited to: the underlying risks of the oil and gas industry (i.e.,

corporate commitment, regulatory approval, operational risks in development, exploration and

production); potential delays or changes in plans with respect to exploration or development projects or

capital expenditures; the uncertainty of reserves estimations; the uncertainty of estimates and projections

relating to production; costs and expenses; health, safety and environmental factors; commodity prices;

and exchange rate fluctuation.


Exclusivity

We confirm that the Report has been prepared for the exclusive use of Ithaca Energy Inc. It may not be

reproduced, distributed or made available to any other company or person, regulatory body, or

organization without the knowledge and written consent of Sproule, and without the complete contents of

the Report being made available to that party.

Sproule Independence

Sproule is one of the world’s premier petroleum consulting and advisory firms, anchored by over 60 years

of experience assisting companies with the evaluation of oil and gas reserves and resources, M&A

related due diligence and reservoir studies.

Sproule’s integrated approach covers all subsurface disciplines coupled with a strong commercial

understanding, which underpin our role as a trusted advisor to our clients.

In any given year Sproule completes approximately 600 projects for over 300 clients worldwide. Our staff

is experienced in providing consulting services to clients with operations or assets in any country of the

world. Sproule offers a full range of consulting services to the oil and gas industry and to clients ranging

from financial organizations to government agencies.

The company is widely recognized for its expertise and independence in providing clients with reserve

and resource assessments for conventional and/or unconventional oil and natural gas assets utilizing the

guidance in NI 51-101, SEC, PRMS or other regulatory regimes. These assessments are often

complemented by an economic evaluation of the future cash flows.

Sproule has been engaged to perform year end reserves evaluations for the Company since 2006, most

recently for December 31, 2018. Sproule has no relationship with the Company, the Company’s senior

management or Board of Directors or any of its subsidiaries that, to our knowledge, might be viewed as

affecting our independence. Sproule has no interest, direct or indirect, nor do we expect to receive any

interest, direct or indirect, in the properties described in this Report or in the securities of the Company.

In our opinion, we had access to all information we felt was relevant to perform the December 31, 2018

evaluation. The Company provided full and timely data. To the best of our knowledge, no potentially

negative data was withheld or misrepresented.


Staff Qualifications

Sproule International Limited is a member of the Association of Professional Engineers and Geoscientists

of Alberta and our permit number is P06151.

The report entitled “Evaluation of the Petroleum and Natural Gas Reserves of Ithaca Energy Inc. (As of

December 31, 2018)”, was prepared by the following Sproule personnel:

Individual Designation Sproule Position

Years of

Experience

(Years at

Sproule)

Core Project Team

Alec Kovaltchouk M.Sc., P.Geo. VP, Geoscience 35 (22)

Alexey G. Romanov Ph.D., P.Geo. Senior Geoscientist 17 (10)

Vladimir Torres Hernandez M.Sc., P.Geo. Senior Geoscientist 27 (13)

Suryanarayana Karri P.Geoph. Petrophysical Specialist 35 (12)

Vladimir Iglesias P.Eng. Manager, Latin America 22 (4)

Miles Hughes P.Eng. Manager, Strategic Advisory 19 (5)

Oluyemisi O. Jeje P.Eng. Senior Petroleum Engineer 18 (9)

Michael Owens P.Tech.(Eng.), P.L.(Eng.) Senior Technologist 31 (11)

Tamara Warren P.Eng. Petroleum Engineer 6 (5)

Jeffrey McKeeman P.Eng. Petroleum Engineer 6 (6)

Senior Advisory

Scott W. Pennell P.Eng. Senior VP, Engineering and Director 25 (19)

The staff listed in the previous table are all qualified reserves estimators, as defined in the Standards

Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the SPE.

Seven of the listed staff are also qualified reserves auditors, as defined in the Standards Pertaining to the

Estimating and Auditing of Oil and Gas Reserves Information promulgated by the SPE.

Oil Gas NGL and Cond. BOE% Mbbl MMcf Mbbl Mbbl

GSA FieldsHarrier 100.00 5,202 102,527 3,939 26,229 Austen 100.00 4,465 32,525 1,250 11,136 Stella 100.00 2,507 38,613 1,484 10,426 Vorlich 34.00 4,454 18,397 707 8,227 Courageous 55.00 3,685 11,925 458 6,131 Hurricane 100.00 1,958 17,488 672 5,545

Non-GSA FieldsCook 61.35 10,516 13,403 - 12,750 Pierce 7.48 2,725 18,813 1,976 7,837 Don Southwest 40.00 1,890 - - 1,890 West Don 21.40 272 - - 272 Broom 8.00 261 - - 261

Total, All Fields 37,934 253,691 10,485 90,702

Values may not or be consistent from one presentation to the next due to rounding. 1. Company Gross means the Company's working interest share of the remaining reserves.

Before Income Tax

Table 1Summary of Remaining Reserves

Total Proved Plus Probable ReservesRanked by Reserves and Field by Group

(As of December 31, 2018)

Field/GroupWorking Interest

Company Gross Reserves1

3/12/2019 10:05 AMP:\Ithaca YE2018 70965\Report\Table_Set D1 125_TASE 2018.v06.xlsx

Company Company Company CompanyGross Gross Gross Gross Gross Gross Gross Gross At 0% At 5% At 10% At 15% At 20%

GSA Fields - Before TaxTotal Proved 15,004 7,067 101,028 69,063 3,882 2,653 35,724 21,231 651,685 602,077 550,848 502,625 459,035 Total Probable 18,927 15,204 165,915 152,412 6,375 5,856 52,954 46,462 1,971,098 1,463,245 1,101,775 845,810 662,793 Total Proved + Probable 33,931 22,270 266,942 221,475 10,256 8,509 88,678 67,692 2,622,783 2,065,322 1,652,623 1,348,435 1,121,828 Total Possible 25,092 18,945 191,265 173,159 7,349 6,653 64,318 54,457 3,484,671 1,958,581 1,161,356 733,283 493,669 Total Proved + Probable + Possible 59,023 41,215 458,208 394,633 17,605 15,162 152,996 122,150 6,107,454 4,023,903 2,813,979 2,081,718 1,615,497

Non-GSA Fields Before TaxTotal Proved 25,302 5,415 113,368 13,351 12,610 943 56,807 8,583 130,023 135,072 133,313 128,728 123,143 Total Probable 37,706 10,249 159,988 18,865 13,808 1,033 78,178 14,426 707,114 531,708 408,481 321,937 259,778 Total Proved + Probable 63,008 15,664 273,356 32,216 26,418 1,976 134,985 23,009 837,137 666,780 541,794 450,665 382,921 Total Possible 27,493 6,615 88,012 11,851 7,140 534 49,301 9,124 535,534 361,380 264,236 205,900 167,815 Total Proved + Probable + Possible 90,500 22,279 361,368 44,067 33,558 2,510 184,286 32,133 1,372,671 1,028,160 806,030 656,565 550,736

Grand Total - Before TaxTotal Proved 40,306 12,482 214,396 82,414 16,492 3,597 92,531 29,814 781,709 737,150 684,160 631,352 582,177 Total Probable 56,633 25,453 325,902 171,277 20,182 6,889 131,131 60,887 2,678,210 1,994,954 1,510,257 1,167,747 922,571 Total Proved + Probable 96,939 37,934 540,298 253,691 36,674 10,485 223,662 90,701 3,459,919 2,732,103 2,194,417 1,799,100 1,504,749 Total Possible 52,584 25,559 279,277 185,010 14,489 7,187 113,619 63,581 4,020,206 2,319,959 1,425,592 939,182 661,483 Total Proved + Probable + Possible 149,523 63,494 819,576 438,701 51,163 17,672 337,282 154,282 7,480,125 5,052,062 3,620,009 2,738,282 2,166,232

Income TaxTotal Proved - - - - - - - - - - - - - Total Probable - - - - - - - - 226,903 160,388 108,777 73,246 49,632 Total Proved + Probable - - - - - - - - 226,903 160,388 108,777 73,246 49,632 Total Possible - - - - - - - - 1,640,288 909,834 524,670 315,591 197,512 Total Proved + Probable + Possible - - - - - - - - 1,867,191 1,070,222 633,446 388,837 247,143

Grand Total - After TaxTotal Proved 40,306 12,481 214,397 82,414 16,492 3,597 92,531 29,814 781,709 737,150 684,160 631,352 582,177 Total Probable 56,633 25,453 325,901 171,276 20,182 6,889 131,131 60,887 2,451,307 1,834,566 1,401,480 1,094,501 872,939 Total Proved + Probable 96,939 37,934 540,298 253,690 36,674 10,485 223,662 90,701 3,233,016 2,571,715 2,085,640 1,725,854 1,455,117 Total Possible 52,584 25,559 279,278 185,010 14,489 7,187 113,619 63,581 2,379,917 1,410,124 900,923 623,591 463,972 Total Proved + Probable + Possible 149,523 63,494 819,576 438,701 51,163 17,672 337,282 154,282 5,612,933 3,981,840 2,986,563 2,349,445 1,919,089

Values may not or be consistent from one presentation to the next due to rounding.Company Gross means the Company's working interest share of the remaining reserves, before deduction of royalties.Company Net volumes for oil, gas and condensate and natural gas liquids, which are not shown on this table, are equal to Company Gross volumes as there are no royalties to be applied to the volumes. Please refer to Appendix B for more detail. Income taxes are deducted from the Grand Total Before Tax values to arrive at the Grand Total After Tax values.


Table 2Summary of the Evaluation of the Petroleum and Natural Gas Reserves

by Group of Ithaca Energy Inc.Escalated Prices and Costs

Net Present ValuesBefore and After Income Taxes (M$ US)

At Various Discount Rates

Oil(Mbbl)

Solution, Associated and Non-Associated Gas

(MMcf)

Condensate and Natural Gas Liquids(Mbbl)

Total BOE (MBOE)


Table 3 Summary of Selected Pricing, Inflation and Exchange Rate Assumptions1

(Effective December 31, 2018)

Year

UK Brent

38oAPI(2,4)

($US/bbl)

IPE

Britain NBP(3,4)

($/MMBtu)

Operating

Cost

Inflation

Rate(5)

(%/Yr)

Capital Cost

Inflation

Rate(5)

(%/Yr)

Exchange

Rate(6)

($US/£UK)

Historical

2015 53.64 6.50 1.8% -18.7% 1.53

2016 45.04 4.73 1.2% -9.7% 1.36

2017 54.83 5.78 1.7% 2.4% 1.29

2018 71.95 7.92 2.5% 4.2% 1.34

Forecast

2019 67.40 7.60 0.0% 0.0% 1.25

2020 68.33 7.16 2.0% 2.0% 1.25

2021 74.51 7.38 2.0% 2.0% 1.25

2022 76.18 7.81 2.0% 2.0% 1.25

2023 78.85 8.36 2.0% 2.0% 1.25

2024 80.23 8.40 2.0% 2.0% 1.25

2025 81.80 8.47 2.0% 2.0% 1.25

2026 83.66 8.63 2.0% 2.0% 1.25

2027 86.66 9.00 2.0% 2.0% 1.25

2028 89.37 9.28 2.0% 2.0% 1.25

2029 91.60 9.61 2.0% 2.0% 1.25

2030 94.18 9.85 2.0% 2.0% 1.25

2031 97.64 10.13 2.0% 2.0% 1.25

2032 101.18 10.44 2.0% 2.0% 1.25

2033 105.14 10.79 2.0% 2.0% 1.25

2034 108.49 11.15 2.0% 2.0% 1.25

2035 111.56 11.40 2.0% 2.0% 1.25

2036 114.32 11.75 2.0% 2.0% 1.25

(1) UK Brent and IPE British NBP pricing forecasts above, were provided by the Company. The Company has advised that the price forecasts

are based on the average of a number price forecasts obtained from independent third party sources.

(2) 38 degrees API, 1.0 percent Sulphur.

(3) International Petroleum Exchange British National Balancing Point.

(4) Product sale prices will reflect these reference prices with further adjustments for quality and transportation to point of sale.

(5) Inflation rates for forecasting costs.

(6) Exchange rates applied to convert input data to output currency.

Table 3, continued Summary of Selected Pricing and Exchange Rate Assumptions1

(Effective December 31, 2018)

Year

UK Brent

38oAPI(2,4)

($US/bbl)

IPE

Britain NBP(3,4)

($/MMBtu)

Operating

Cost

Inflation

Rate(5)

(%/Yr)

Capital Cost

Inflation

Rate(5)

(%/Yr)

Exchange

Rate(6)

($US/£UK)

2037 117.11 12.01 2.0% 2.0% 1.25

2038 119.94 12.31 2.0% 2.0% 1.25

2039 122.80 12.68 2.0% 2.0% 1.25

2040 125.69 13.06 2.0% 2.0% 1.25

2041 128.63 13.32 2.0% 2.0% 1.25

2042 131.59 13.59 2.0% 2.0% 1.25

2043 134.60 13.86 2.0% 2.0% 1.25

2044 137.64 14.13 2.0% 2.0% 1.25

2045 140.72 14.42 2.0% 2.0% 1.25

2046 143.83 14.71 2.0% 2.0% 1.25

2047 146.98 15.00 2.0% 2.0% 1.25

2048 150.16 15.30 2.0% 2.0% 1.25

2049 153.39 15.61 2.0% 2.0% 1.25

2050 156.65 15.92 2.0% 2.0% 1.25

(1) UK Brent and IPE British NBP pricing forecasts above, were provided by the Company. The Company has advised that the price forecasts

are based on the average of a number price forecasts obtained from independent third party sources.

(2) 38 degrees API, 1.0 percent Sulphur.

(3) International Petroleum Exchange British National Balancing Point.

(4) Product sale prices will reflect these reference prices with further adjustments for quality and transportation to point of sale.

(5) Inflation rates for forecasting costs.

(6) Exchange rates applied to convert input data to output currency.

Ithaca Energy Inc.As of December 31, 2018

Total Proved + Probable + Possible Total, All Fields

Evaluation ParametersReserves Category Total Proved + Prob. + Poss.Plan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 45.7 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>

Remaining Reserves (MBOE) Net Revenue NPV (MM$US)Gross WI RI Net 0.00 % 5.00 % 10.00 % 15.00 % 20.00 %

Total 337,282 154,283 - 154,283 Total 11,455.6 7,322.8 5,148.9 3,884.7 3,088.6

Economic Indicators Cash Flow NPV (M$US)WI 0.00 % 5.00 % 10.00 % 15.00 % 20.00 %

Operating Cost ($US/BOE) 17.23 BT Cash Flow 7,480,125 5,052,062 3,620,009 2,738,282 2,166,232

Capital Cost ($US/BOE) 5.00 Tax Paid 1,867,191 1,070,222 633,446 388,837 247,143

AT Cash Flow 5,612,933 3,981,840 2,986,563 2,349,445 1,919,089

Cash Flow (MM$US)Co. Share

Revenue 11,455.6Royalties (Stella, Harrier) -

Operating Cost 2,658.1Abandonment/Salvage 388.7

Oth. Rev./Oth. Deduct. -Capital 771.3

(Credit)/Surcharge -

BT Cash Flow 7,480.1

Tax Paid 1,867.2

AT Cash Flow 5,612.9

Annual Co. Share Cash Flow

Year RateComp Sales

Revenue RoyaltyS-H

RoyaltyRevenue After

Royalty

AdditionalTaxable

RevenueOther

expenses Opex Capex AbandBTax

Cash Flow Total TaxesATax

Cash FlowBOE/d M$US M$US M$US M$US M$US M$US M$US M$US M$US M$US M$US M$US

2019 24,037 499,513 - 11,710 487,803 - - 114,035 143,341 - 230,427 - 230,4272020 27,980 609,762 - 9,432 600,329 - - 80,853 76,094 - 443,382 - 443,3822021 24,468 579,794 - 5,507 574,287 - - 59,887 50,490 - 463,910 - 463,9102022 25,759 616,259 - 8,960 607,299 - - 79,537 1,984 - 525,777 - 525,7772023 22,143 546,885 - 9,078 537,807 - - 87,576 8,789 - 441,442 - 441,4422024 23,830 579,631 - 11,943 567,689 - - 100,008 133,174 - 334,507 - 334,5072025 24,902 611,201 - 11,201 600,000 - - 107,965 2,106 - 489,930 71,984 417,9452026 24,705 611,313 - 9,580 601,733 - - 112,766 2,148 - 486,819 139,800 347,0192027 23,622 599,007 - 8,558 590,448 - - 107,507 199,908 - 283,033 132,278 150,7552028 26,611 720,035 - 7,676 712,359 - - 108,750 125,479 - 478,130 155,846 322,2842029 28,209 795,943 - 6,936 789,007 - - 105,136 2,280 14,604 666,988 242,429 424,5592030 26,354 765,037 - 6,073 758,963 - - 107,882 2,325 37,239 611,517 262,606 348,9112031 21,865 646,689 - 5,366 641,323 - - 99,983 2,372 22,790 516,178 229,028 287,1502032 16,538 500,120 - 4,903 495,218 - - 95,154 2,419 - 397,644 177,462 220,1832033 12,942 400,444 - 4,467 395,977 - - 96,004 2,467 - 297,505 132,201 165,3052034 10,859 343,023 - 4,272 338,751 - - 93,998 2,517 - 242,236 104,108 138,1292035 9,278 299,335 - 3,953 295,382 - - 95,599 2,567 - 197,215 84,730 112,4862036 8,143 269,841 - 3,729 266,112 - - 96,601 2,618 - 166,893 70,638 96,2552037 7,199 242,609 - 3,463 239,147 - - 97,532 2,671 - 138,943 59,138 79,8052038 6,334 217,792 - 3,240 214,552 - - 100,218 2,724 - 111,609 48,119 63,4902039 5,634 198,484 - 2,991 195,493 - - 102,085 2,779 - 90,629 38,877 51,7532040 4,136 149,516 - 2,747 146,768 - - 91,649 - - 55,120 26,725 28,3952041 3,796 139,783 - 2,595 137,188 - - 92,860 - 5,637 38,691 17,667 21,0242042 3,465 130,463 - 2,438 128,025 - - 94,112 - 14,375 19,538 10,369 9,1692043 3,174 122,180 - 2,295 119,885 - - 95,451 - 8,798 15,636 6,775 8,8612044 2,889 113,888 - 2,130 111,759 - - 96,833 - - 14,925 6,065 8,8602045 2,635 105,776 - 1,966 103,809 - - 98,264 - - 5,546 3,469 2,0772046 607 27,717 - 163 27,554 - - 26,451 - - 1,102 1,033 692047 (8) 415 13,586 - - 13,586 - - 13,432 - - 155 -154,152 154,3072048 - - - - - - - - - 47,770 -47,770 - -47,7702049 - - - - - - - - - 129,870 -129,870 - -129,8702050 - - - - - - - - - 95,093 -95,093 - -95,0932051 - - - - - - - - - 12,572 -12,572 - -12,57228.67 yr 11,455,627 - 157,372 11,298,254 - - 2,658,129 771,252 388,748 7,480,125 1,867,191 5,612,933

Table 4-Total

Opex presented above is after reduction by processing income.

Ithaca Energy Inc.As of December 31, 2018 Total Proved + Probable

Total, All Fields

Evaluation ParametersReserves Category Total Proved + ProbablePlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 40.6 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>


Total 223,663 90,701 - 90,701 Total 6,115.2 4,574.9 3,587.1 2,917.7 2,443.2



Capital Cost ($US/BOE) 8.14 Tax Paid 226,903 160,388 108,777 73,246 49,632

AT Cash Flow 3,233,016 2,571,715 2,085,640 1,725,854 1,455,117







Tax Paid 226.9

AT Cash Flow 3,233.0


Year RateComp Sales

Revenue RoyaltyS-H


Royalty

AdditionalTaxable

RevenueOther




2019 21,695 451,032 - 10,373 440,659 - - 111,040 143,266 - 186,352 - 186,3522020 23,568 510,405 - 8,293 502,111 - - 81,869 75,993 - 344,250 - 344,2502021 21,181 496,200 - 5,380 490,821 - - 61,839 174,218 - 254,764 - 254,7642022 24,356 571,730 - 6,048 565,683 - - 87,059 1,984 - 476,640 - 476,6402023 22,990 545,472 - 8,405 537,067 - - 97,382 2,024 - 437,661 - 437,6612024 24,474 591,435 - 7,289 584,146 - - 99,359 188,378 - 296,409 - 296,4092025 25,637 639,203 - 5,787 633,416 - - 90,270 118,241 - 424,904 - 424,9042026 20,590 520,087 - 4,453 515,634 - - 82,531 2,148 12,452 418,503 27,588 390,9142027 14,702 381,339 - 3,706 377,633 - - 84,663 2,191 33,088 257,691 71,683 186,0082028 11,151 295,669 - 3,249 292,419 - - 85,968 2,235 22,838 181,378 69,106 112,2722029 8,636 233,376 - 2,799 230,577 - - 86,964 2,280 2,084 139,249 47,931 91,3182030 6,923 190,882 - 2,485 188,397 - - 84,957 2,325 - 101,115 34,148 66,9672031 5,811 165,119 - 2,192 162,927 - - 85,918 2,372 - 74,638 25,442 49,1972032 4,845 142,205 - 1,987 140,218 - - 88,404 2,419 - 49,394 20,736 28,6582033 4,060 122,790 - 1,798 120,992 - - 89,546 2,467 - 28,978 14,160 14,8182034 3,215 100,842 - 1,372 99,470 - - 79,673 2,517 - 17,280 8,316 8,9652035 1,193 40,878 - - 40,878 - - 27,113 2,567 - 11,199 5,131 6,0682036 1,087 38,240 - - 38,240 - - 27,581 2,618 37,666 -29,626 3,475 -33,1012037 988 35,360 - - 35,360 - - 28,055 2,671 96,049 -91,415 2,142 -93,5572038 767 27,539 - - 27,539 - - 22,931 2,724 58,782 -56,898 951 -57,8492039 450 15,365 - - 15,365 - - 11,873 2,779 - 713 -103,905 104,6192040 - - - - - - - - - 6,741 -6,741 - -6,7412041 - - - - - - - - - 22,827 -22,827 - -22,8272042 - - - - - - - - - 24,895 -24,895 - -24,8952043 - - - - - - - - - 8,798 -8,798 - -8,79821.00 yr 6,115,168 - 75,616 6,039,553 - - 1,514,995 738,418 326,221 3,459,919 226,903 3,233,016

Table 4-Total


Ithaca Energy Inc.As of December 31, 2018

Total ProvedTotal, All Fields

Evaluation ParametersReserves Category Total ProvedPlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 32.2 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>


Total 92,531 29,814 - 29,814 Total 1,830.7 1,594.2 1,410.0 1,263.3 1,144.5


Operating Cost ($US/BOE) 18.30 BT Cash Flow 781,709 737,150 684,160 631,352 582,177

Capital Cost ($US/BOE) 8.47 Tax Paid - - - - -

AT Cash Flow 781,709 737,150 684,160 631,352 582,177



Operating Cost 545.4Abandonment/Salvage 229.4



BT Cash Flow 781.7

Tax Paid -

AT Cash Flow 781.7


Year RateComp Sales

Revenue RoyaltyS-H


Royalty

AdditionalTaxable

RevenueOther




2019 18,163 378,038 - 8,340 369,698 - - 106,495 77,113 - 186,089 - 186,0892020 14,518 307,577 - 4,397 303,180 - - 80,501 21,766 - 200,913 - 200,9132021 16,115 369,264 - 2,996 366,269 - - 58,098 136,465 - 171,706 - 171,7062022 12,415 285,640 - 2,089 283,551 - - 55,692 1,984 - 225,874 - 225,8742023 8,146 194,435 - 1,551 192,884 - - 63,589 2,024 11,557 115,714 - 115,7142024 5,382 128,774 - 1,216 127,558 - - 68,142 2,065 29,364 27,988 - 27,9882025 3,949 95,033 - 981 94,052 - - 64,027 2,106 19,190 8,729 - 8,7292026 1,213 28,910 - 208 28,702 - - 19,794 2,148 3,274 3,486 - 3,4862027 653 15,897 - - 15,897 - - 9,603 2,191 2,004 2,099 - 2,0992028 572 14,320 - - 14,320 - - 9,702 2,235 27,584 -25,200 - -25,2002029 500 12,806 - - 12,806 - - 9,801 2,280 70,338 -69,613 - -69,6132030 - - - - - - - - - 43,047 -43,047 - -43,0472031 - - - - - - - - - 4,506 -4,506 - -4,5062032 - - - - - - - - - 11,490 -11,490 - -11,4902033 - - - - - - - - - 7,032 -7,032 - -7,03211.00 yr 1,830,693 - 21,777 1,808,916 - - 545,445 252,376 229,386 781,709 - 781,709

Table 4-Total


Ithaca Energy Inc.

As of December 31, 2018 Total Proved + Probable + Possible

GSA Fields

Evaluation ParametersReserves Category Total Proved + Prob. + Poss.Plan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 79.8 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit Not AppliedScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>


Total 152,996 122,150 - 122,150 Total 8,976.7 5,633.3 3,880.5 2,870.6 2,242.9



Capital Cost ($US/BOE) 5.35








Year RateComp Sales

Revenue RoyaltyS-H


RoyaltyAdditional

Taxable Revenue Other expenses Opex Capex AbandBTax

Cash FlowBOE/d M$US M$US M$US M$US M$US M$US M$US M$US M$US M$US

2019 17,677 351,652 - 11,710 339,942 - - 65,938 104,950 - 169,0542020 19,583 416,529 - 9,432 407,096 - - 37,099 70,074 - 299,9232021 15,723 358,556 - 5,507 353,049 - - 20,316 19,507 - 313,2262022 16,998 395,549 - 8,960 386,589 - - 37,845 - - 348,7442023 15,049 361,916 - 9,078 352,838 - - 45,840 6,765 - 300,2332024 17,855 421,724 - 11,943 409,782 - - 58,066 131,110 - 220,6062025 19,739 473,273 - 11,201 462,072 - - 65,736 - - 396,3362026 20,160 487,719 - 9,580 478,139 - - 70,109 - - 408,0292027 19,875 494,987 - 8,558 486,429 - - 74,443 197,717 - 214,2692028 23,484 631,752 - 7,676 624,076 - - 83,966 123,244 - 416,8672029 25,358 713,812 - 6,936 706,877 - - 79,987 - - 626,8892030 23,736 687,794 - 6,073 681,721 - - 82,345 - - 599,3752031 19,446 573,052 - 5,366 567,686 - - 74,040 - - 493,6452032 14,294 429,453 - 4,903 424,550 - - 68,789 - - 355,7612033 10,863 332,842 - 4,467 328,375 - - 69,231 - - 259,1432034 8,924 278,136 - 4,272 273,864 - - 66,798 - - 207,0662035 7,457 236,799 - 3,953 232,846 - - 67,929 - - 164,9162036 6,432 209,493 - 3,729 205,764 - - 68,453 - - 137,3112037 5,585 184,586 - 3,463 181,123 - - 68,898 - - 112,2252038 4,803 161,526 - 3,240 158,286 - - 71,073 - - 87,2132039 4,179 143,782 - 2,991 140,792 - - 72,420 - - 68,3712040 3,553 124,907 - 2,747 122,160 - - 74,066 - - 48,0942041 3,245 116,039 - 2,595 113,443 - - 74,934 - - 38,5092042 2,943 107,439 - 2,438 105,001 - - 75,835 - - 29,1662043 2,678 99,808 - 2,295 97,514 - - 76,816 - - 20,6982044 2,417 92,055 - 2,130 89,925 - - 77,832 - - 12,0932045 2,184 84,548 - 1,966 82,582 - - 78,888 - - 3,6932046 (1) 2,083 6,990 - 163 6,827 - - 6,695 - - 1322048 - - - - - - - - - 47,770 -47,7702049 - - - - - - - - - 121,814 -121,8142050 - - - - - - - - - 74,550 -74,55027.08 yr 8,976,716 - 157,372 8,819,344 - - 1,814,389 653,367 244,134 6,107,454

Table 4-GSA Fields

As requested by the Company, the abandonment and reclamation costs were applied starting 2 years after the cessation of production, over a 3 year period. For the year immediately following the cessation of production, all cashflow values (revenue, costs, etc) are therefore zero. The software which generated the economic output automatically hides rows that contain no values.


Ithaca Energy Inc.

As of December 31, 2018 Total Proved + Probable

GSA Fields

Evaluation ParametersReserves Category Total Proved + ProbablePlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 76.3 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit Not AppliedScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>


Total 88,678 67,692 - 67,692 Total 4,418.5 3,340.6 2,627.4 2,134.9 1,782.0











Year RateComp Sales

Revenue RoyaltyS-H


RoyaltyAdditional



2019 15,689 311,509 - 10,373 301,136 - - 63,479 104,950 - 132,7072020 17,008 358,182 - 8,293 349,889 - - 39,468 70,074 - 240,3482021 14,941 336,024 - 5,380 330,644 - - 23,825 143,055 - 163,7642022 17,729 405,751 - 6,048 399,704 - - 46,853 - - 352,8512023 17,340 399,032 - 8,405 390,627 - - 56,856 - - 333,7712024 19,907 472,496 - 7,289 465,207 - - 67,829 186,314 - 211,0642025 21,889 541,418 - 5,787 535,631 - - 66,038 116,135 - 353,4582026 17,328 433,576 - 4,453 429,123 - - 58,808 - - 370,3162027 11,824 302,459 - 3,706 298,753 - - 60,637 - - 238,1152028 8,599 223,598 - 3,249 220,349 - - 61,613 - - 158,7362029 6,372 168,068 - 2,799 165,268 - - 62,280 - - 102,9892030 4,917 131,586 - 2,485 129,101 - - 59,934 - - 69,1672031 4,015 110,328 - 2,192 108,136 - - 60,512 - - 47,6242032 3,241 91,591 - 1,987 89,604 - - 62,605 - - 26,9982033 2,621 75,937 - 1,798 74,139 - - 63,341 - - 10,7982034 (10) 2,286 56,959 - 1,372 55,587 - - 53,014 - - 2,5742036 - - - - - - - - - 37,666 -37,6662037 - - - - - - - - - 96,049 -96,0492038 - - - - - - - - - 58,782 -58,78215.83 yr 4,418,514 - 75,616 4,342,898 - - 907,090 620,528 192,498 2,622,782

Table 4-GSA Fields


Ithaca Energy Inc.

As of December 31, 2018 Total ProvedGSA Fields

Evaluation ParametersReserves Category Total ProvedPlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 59.4 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type <multiple>


Total 35,724 21,231 - 21,231 Total 1,269.2 1,114.1 990.4 890.2 807.9









BT Cash Flow 651.7


Year RateComp Sales

Revenue RoyaltyS-H


RoyaltyAdditional



2019 12,680 250,460 - 8,340 242,120 - - 59,778 61,200 - 121,1422020 10,449 212,092 - 4,397 207,695 - - 38,524 19,074 - 150,0982021 13,300 298,370 - 2,996 295,374 - - 23,227 107,291 - 164,8562022 9,475 217,185 - 2,089 215,096 - - 32,004 - - 183,0922023 5,810 138,103 - 1,551 136,552 - - 39,934 - - 96,6182024 3,546 84,378 - 1,216 83,162 - - 45,701 - - 37,4612025 2,467 58,940 - 981 57,960 - - 41,388 - - 16,5722026 (3) 1,625 9,666 - 208 9,458 - - 9,124 - - 3342028 - - - - - - - - - 23,185 -23,1852029 - - - - - - - - - 59,121 -59,1212030 - - - - - - - - - 36,182 -36,1827.25 yr 1,269,194 - 21,777 1,247,417 - - 289,678 187,565 118,488 651,685

Table 4-GSA Fields


Ithaca Energy Inc.

As of December 31, 2018 Total Proved + Probable + Possible

Non GSA

Evaluation ParametersReserves Category Total Proved + Prob. + Poss.Plan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 17.4 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type Solution Gas


Total 184,286 32,133 - 32,133 Total 2,478.9 1,689.5 1,268.4 1,014.1 845.7


Operating Cost ($US/BOE) 26.26 BT Cash Flow 1,372,670 1,028,160 806,031 656,565 550,736









Year RateComp Sales

Revenue RoyaltyRevenue After

RoyaltyAdditional


Cash FlowBOE/d M$US M$US M$US M$US M$US M$US M$US M$US M$US

2019 6,360 147,861 - 147,861 - - 48,097 38,391 - 61,3722020 8,397 193,233 - 193,233 - - 43,754 6,020 - 143,4592021 8,745 221,238 - 221,238 - - 39,572 30,982 - 150,6852022 8,762 220,710 - 220,710 - - 41,693 1,984 - 177,0332023 7,095 184,969 - 184,969 - - 41,736 2,024 - 141,2102024 5,975 157,907 - 157,907 - - 41,941 2,065 - 113,9012025 5,163 137,928 - 137,928 - - 42,228 2,106 - 93,5942026 4,546 123,595 - 123,595 - - 42,657 2,148 - 78,7902027 3,747 104,019 - 104,019 - - 33,064 2,191 - 68,7642028 3,127 88,282 - 88,282 - - 24,785 2,235 - 61,2632029 2,851 82,131 - 82,131 - - 25,149 2,280 14,604 40,0992030 2,618 77,243 - 77,243 - - 25,537 2,325 37,239 12,1412031 2,419 73,637 - 73,637 - - 25,942 2,372 22,790 22,5332032 2,243 70,667 - 70,667 - - 26,365 2,419 - 41,8832033 2,078 67,602 - 67,602 - - 26,773 2,467 - 38,3622034 1,935 64,887 - 64,887 - - 27,200 2,517 - 35,1712035 1,821 62,536 - 62,536 - - 27,670 2,567 - 32,2992036 1,711 60,348 - 60,348 - - 28,148 2,618 - 29,5822037 1,614 58,023 - 58,023 - - 28,634 2,671 - 26,7192038 1,531 56,266 - 56,266 - - 29,145 2,724 - 24,3972039 1,454 54,702 - 54,702 - - 29,665 2,779 - 22,2582040 582 24,608 - 24,608 - - 17,583 - - 7,0262041 551 23,745 - 23,745 - - 17,926 - 5,637 1812042 522 23,025 - 23,025 - - 18,277 - 14,375 -9,6272043 496 22,371 - 22,371 - - 18,635 - 8,798 -5,0622044 472 21,834 - 21,834 - - 19,002 - - 2,8322045 450 21,228 - 21,228 - - 19,375 - - 1,8532046 430 20,727 - 20,727 - - 19,757 - - 9702047 (8) 415 13,586 - 13,586 - - 13,432 - - 1552049 - - - - - - - - 8,056 -8,0562050 - - - - - - - - 20,543 -20,5432051 - - - - - - - - 12,572 -12,57228.67 yr 2,478,910 - 2,478,910 - - 843,741 117,885 144,614 1,372,670

Table 4-Non-GSA Fields

Ithaca Energy Inc.

As of December 31, 2018 Total Proved + Probable

Non GSA

Evaluation ParametersReserves Category Total Proved + ProbablePlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 17.0 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type Solution Gas


Total 134,985 23,009 - 23,009 Total 1,696.7 1,234.4 959.7 782.8 661.2









BT Cash Flow 837.1


Year RateComp Sales


RoyaltyAdditional



2019 6,007 139,523 - 139,523 - - 47,562 38,316 - 53,6452020 6,560 152,222 - 152,222 - - 42,401 5,919 - 103,9022021 6,241 160,177 - 160,177 - - 38,014 31,163 - 91,0002022 6,627 165,979 - 165,979 - - 40,206 1,984 - 123,7892023 5,650 146,440 - 146,440 - - 40,526 2,024 - 103,8902024 4,567 118,939 - 118,939 - - 31,530 2,065 - 85,3452025 3,748 97,785 - 97,785 - - 24,232 2,106 - 71,4472026 3,261 86,510 - 86,510 - - 23,724 2,148 12,452 48,1872027 2,878 78,880 - 78,880 - - 24,026 2,191 33,088 19,5762028 2,552 72,071 - 72,071 - - 24,355 2,235 22,838 22,6422029 2,264 65,309 - 65,309 - - 24,685 2,280 2,084 36,2602030 2,006 59,296 - 59,296 - - 25,023 2,325 - 31,9482031 1,797 54,791 - 54,791 - - 25,406 2,372 - 27,0142032 1,604 50,614 - 50,614 - - 25,799 2,419 - 22,3962033 1,439 46,853 - 46,853 - - 26,205 2,467 - 18,1802034 1,311 43,883 - 43,883 - - 26,660 2,517 - 14,7072035 1,193 40,878 - 40,878 - - 27,113 2,567 - 11,1992036 1,087 38,240 - 38,240 - - 27,581 2,618 - 8,0402037 988 35,360 - 35,360 - - 28,055 2,671 - 4,6342038 767 27,539 - 27,539 - - 22,931 2,724 - 1,8852039 450 15,365 - 15,365 - - 11,873 2,779 - 7132040 - - - - - - - - 6,741 -6,7412041 - - - - - - - - 22,827 -22,8272042 - - - - - - - - 24,895 -24,8952043 - - - - - - - - 8,798 -8,79821.00 yr 1,696,655 - 1,696,655 - - 607,905 117,890 133,723 837,137


Ithaca Energy Inc.

As of December 31, 2018 Total Proved

Non GSA

Evaluation ParametersReserves Category Total ProvedPlan WorkingReference Date January-01-19Discount Date January-01-19Country United KingdomState N/ACompany Share 15.1 %Price Deck 2019-01-31 Ithaca YEPrice Set N/AEconomic Limit N/AScenario ReservesBOE Ratio 6:1 Mcf/bblChance of Success 100.0 %Chance of Occurrence 100.0 %Oil Reserves Type Light and Medium OilGas Reserves Type Solution Gas


Total 56,807 8,583 - 8,583 Total 561.5 480.1 419.5 373.1 336.6





Revenue 561.5Royalties (Stella, Harrier) -




BT Cash Flow 130.0


Year RateComp Sales


RoyaltyAdditional



2019 5,483 127,578 - 127,578 - - 46,718 15,913 - 64,9472020 4,069 95,485 - 95,485 - - 41,978 2,692 - 50,8162021 2,814 70,895 - 70,895 - - 34,871 29,174 - 6,8502022 2,940 68,455 - 68,455 - - 23,689 1,984 - 42,7822023 2,336 56,332 - 56,332 - - 23,655 2,024 11,557 19,0962024 1,837 44,396 - 44,396 - - 22,441 2,065 29,364 -9,4732025 1,482 36,092 - 36,092 - - 22,640 2,106 19,190 -7,8442026 812 19,244 - 19,244 - - 10,670 2,148 3,274 3,1522027 653 15,897 - 15,897 - - 9,603 2,191 2,004 2,0992028 572 14,320 - 14,320 - - 9,702 2,235 4,399 -2,0162029 500 12,806 - 12,806 - - 9,801 2,280 11,217 -10,4922030 - - - - - - - - 6,865 -6,8652031 - - - - - - - - 4,506 -4,5062032 - - - - - - - - 11,490 -11,4902033 - - - - - - - - 7,032 -7,03211.00 yr 561,499 - 561,499 - - 255,767 64,811 110,897 130,023


MBOE $US/BOE $US/BOE $US/BOE $US/BOE Percent

2018 5,866 57.47 1.30 23.15 33.02 8.22017 5,077 47.13 0.50 22.93 23.70 7.12016 3,407 41.09 0.00 22.96 18.13 6.42015 4,404 51.91 0.00 26.35 25.56 6.32014 3,996 93.82 0.00 55.26 38.56 6.9

1- The production, price and cost estimates shown above were provided by Ithaca Energy Inc. The estimates are based on historical data as of January 1, 2014 and include oil, gas, condensate data.

2- The GSA fields, excluding Stella and Harrier, were not yet on commercial production as of December 31, 2018. Therefore the above table only includes Stella, Harrier and the Non-GSA fields.

3- The 2015 value presented in the table excludes onerous contracts related to fields with no reserves assigned. The value including the effect of those contracts is 32.67 $US/BOE.

4- The reserves depletion rate is the quotient of the Company working interest production for a given year and the Sproule estimates of the proved plus probable reserves for the beginning of that year.

Average Net Revenue Per

Production UnitReserves

Depletion Rate4

Table 5Summary of Historical Production, Unit Cost and Revenue Data1

Stella and Other Non-GSA Fields2


Year

Company Working Interest

Production

Average Price Received Per

Production Unit

Average Royalties Paid Per

Production Unit

Average Production Costs Per Production

Unit3


Appendix A — Page 1

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Appendix A — Abbreviations, Units and Conversion Factors

This appendix contains a list of abbreviations found in Sproule reports, a table comparing Imperial and

Metric units, and conversion tables used to prepare this report.

Abbreviations

A&R abandonment and reclamation

AFE authority for expenditure

AOF absolute open flow

APO after pay out

Bg gas formation volume factor

Bo oil formation volume factor

BOE barrels of oil equivalent

bpd barrels per day

bopd barrels of oil per day

boepd barrels of oil equivalent per day

bfpd barrels of fluid per day

BPO before pay out

BS&W basic sediment and water

BTU British thermal unit

bwpd barrels of water per day

CF casing flange

CGR condensate-gas ratio

D&A dry and abandoned

DCQ daily contract quantity

DPIIP discovered petroleum initially-in-place

DSU drilling spacing unit

DST drill stem test

EOR enhanced oil recovery

EPSA exploration and production sharing agreement

FPSO floating production, storage and off-loading vessel

FVF formation volume factor

g/cc gram per cubic centimetre

GIIP gas initially-in-place

GOR gas-oil ratio

GORR gross overriding royalty

GRV gross rock volume

GWC gas-water contact

HCPV hydrocarbon pore volume

ID inside diameter

IOR improved oil recovery



IPR inflow performance relationship

IRR internal rate of return

k permeability

KB kelly bushing

LKH lowest known hydrocarbons

LKO lowest known oil

LNG liquefied natural gas

LPG liquefied petroleum gas

McfGE thousands of cubic feet of gas equivalent

Mcfpd thousands of cubic feet per day

md millidarcies

MDT modular formation dynamics tester

MPR maximum permissive rate

MRL maximum rate limitation

NCI net carried interest

NGL natural gas liquids

NORR net overriding royalty

NPI net profits interest

NRA no reserves assigned

NRI net revenue interest

NPV net present value

NRV net rock volume

NTG net-to-gross

OD outside diameter

OGIP original gas in place

OIIP oil initially-in-place

OOIP original oil in place

ORRI overriding royalty interest

OWC oil-water contact

P1 proved

P2 probable

P3 possible

P&NG petroleum and natural gas

PI productivity index

ppm parts per million

PSU production spacing unit

PSA production sharing agreement

PSC production sharing contract

PVT pressure-volume-temperature

RFT repeat formation tester

RT rotary table

SCAL special core analysis



SS subsea

TPIIP total petroleum initially-in-place

TVD true vertical depth

UPIIP undiscovered petroleum initially-in-place

WGR water-gas ratio

WI working interest

WOR water-oil ratio

2D two-dimensional

3D three-dimensional

4D four-dimensional

1P proved

2P proved plus probable 3P proved plus probable plus possible oAPI degrees API (American Petroleum Institute)



Imperial and Metric Units

Imperial Units Metric Units

M (103) thousand Prefixes k (103) kilo

MM (106) million M (106) mega

B (109) billion G (109) giga

T (1012) trillion T (1012) tera

Q (1015) quadrillion P (1015) peta

in. inches Length cm centimetres

ft feet m metres

mi miles km kilometres

ft2 square feet Area m2 square metres

ac acres ha hectares

cf or ft3 cubic feet Volume m3 cubic metres

scf standard cubic feet

gal gallons L litres

Mcf thousand cubic feet

MMcf million cubic feet

Bcf billion cubic feet e6m3 million cubic metres

bbl barrels m3 cubic metres

Mbbl thousand barrels e3m3 thousand cubic metres

stb stock tank barrels stm3 stock tank cubic metres

bbl/d barrels per day Rate m3/d cubic metre per day

Mbbl/d thousand barrels per day e3m3/d thousand cubic metres

Mcf/d thousand cubic feet per day e3m3/d thousand cubic metres

MMcf/d million cubic feet per day e6m3/d million cubic metres

Btu British thermal units Energy J joules

oz ounces Mass g grams

lb pounds kg kilograms

ton tons t tonnes

lt long tons

psi pounds per square inch Pressure Pa pascals

kPa kilopascals (103)

psia pounds per square inch absolute

psig pounds per square inch gauge

°F degrees Fahrenheit Temperature °C degrees Celsius

°R degrees Rankine K degrees Kelvin

M$ thousand dollars Dollars k$ 1 kilodollar



Imperial and Metric Units (Cont’d)

Imperial Units Metric Units

sec second Time s second

min minute min minute

hr hour h hour

d day d day

wk week week

mo month month

yr year a annum



Conversion Tables

Conversion Factors — Metric to Imperial

cubic metres (m3) (@ 15°C) x 6.29010 = barrels (bbl) (@ 60°F), water

m3 (@ 15°C) x 6.3300 = bbl (@ 60°F), Ethane

m3 (@ 15°C) x 6.30001 = bbl (@ 60°F), Propane

m3 (@ 15°C) x 6.29683 = bbl (@ 60°F), Butanes

m3 (@ 15°C) x 6.29287 = bbl (@ 60°F), oil, Pentanes Plus

m3 (@ 101.325 kPaa, 15°C) x 0.0354937 = thousands of cubic feet (Mcf) (@ 14.65 psia, 60°F)

1,000 cubic metres (103m3) (@ 101.325 kPaa, 15°C) x 35.49373 = Mcf (@ 14.65 psia, 60°F)

hectares (ha) x 2.4710541 = acres

1,000 square metres (103m2) x 0.2471054 = acres

10,000 cubic metres (ha.m) x 8.107133 = acre feet (ac-ft)

m3/103m3 (@ 101.325 kPaa, 15° C) x 0.0437809 = Mcf/Ac.ft. (@ 14.65 psia, 60°F)

joules (j) x 0.000948213 = Btu

megajoules per cubic metre (MJ/m3)

(@ 101.325 kPaa, 15°C)

x 26.714952 = British thermal units per standard cubic foot (Btu/scf)

(@ 14.65 psia, 60°F)

dollars per gigajoule ($/GJ) x 1.054615 = $/Mcf (1,000 Btu gas)

metres (m) x 3.28084 = feet (ft)

kilometres (km) x 0.6213712 = miles (mi)

dollars per 1,000 cubic metres ($/103m3) x 0.0288951 = dollars per thousand cubic feet ($/Mcf) (@ 15.025 psia) B.C.

($/103m3) x 0.02817399 = $/Mcf (@ 14.65 psia) Alta.

dollars per cubic metre ($/m3) x 0.158910 = dollars per barrel ($/bbl)

gas/oil ratio (GOR) (m3/m3) x 5.640309 = GOR (scf/bbl)

kilowatts (kW) x 1.341022 = horsepower

kilopascals (kPa) x 0.145038 = psi

tonnes (t) x 0.9842064 = long tons (LT)

kilograms (kg) x 2.204624 = pounds (lb)

litres (L) x 0.2199692 = gallons (Imperial)

litres (L) x 0.264172 = gallons (U.S.)

cubic metres per million cubic metres (m3/106m3) (C3) x 0.177496 = barrels per million cubic feet (bbl/MMcf) (@ 14.65 psia)

m3/106m3) (C4) x 0.1774069 = bbl/MMcf (@ 14.65 psia)

m3/106m3) (C5+) x 0.1772953 = bbl/MMcf (@ 14.65 psia)

tonnes per million cubic metres (t/106m3) (sulphur) x 0.0277290 = LT/MMcf (@ 14.65 psia)

millilitres per cubic meter (mL/m3) (C5+) x 0.0061974 = gallons (Imperial) per thousand cubic feet (gal (Imp)/Mcf)

(mL/m3) (C5+) x 0.0074428 = gallons (U.S.) per thousand cubic feet (gal (U.S.)/Mcf)

Kelvin (K) x 1.8 = degrees Rankine (°R)

millipascal seconds (mPa.s) x 1.0 = centipoise

density (kg/m3), ρ ρ÷1000x141.5-

131.5

= °API



Conversion Tables (Cont’d)

Conversion Factors — Imperial to Metric

barrels (bbl) (@ 60°F) x 0.15898 = cubic metres (m3) (@ 15°C), water

bbl (@ 60°F) x 0.15798 = m3 (@ 15°C), Ethane

bbl (@ 60°F) x 0.15873 = m3 (@ 15°C), Propane

bbl (@ 60°F) x 0.15881 = m3 (@ 15°C), Butanes

bbl (@ 60°F) x 0.15891 = m3 (@ 15°C), oil, Pentanes Plus

thousands of cubic feet (Mcf) (@ 14.65 psia, 60°F) x 28.17399 = m3 (@ 101.325 kPaa, 15°C)

Mcf (@ 14.65 psia, 60°F) x 0.02817399 = 1,000 cubic metres (103m3) (@ 101.325 kPaa, 15°C)

acres x 0.4046856 = hectares (ha)

acres x 4.046856 = 1,000 square metres (103m2)

acre feet (ac-ft) x 0.123348 = 10,000 cubic metres (104m3) (ha.m)

Mcf/ac-ft (@ 14.65 psia, 60°F) x 22.841028 = 103m3/m3 (@ 101.325 kPaa, 15°C)

Btu x 1054.615 = joules (J)

British thermal units per standard cubic foot (Btu/Scf)

(@ 14.65 psia, 60°F)

x 0.03743222 = megajoules per cubic metre (MJ/m3)

(@ 101.325 kPaa, 15°C)

$/Mcf (1,000 Btu gas) x 0.9482133 = dollars per gigajoule ($/GJ)

$/Mcf (@ 14.65 psia, 60°F) Alta. x 35.49373 = $/103m3 (@ 101.325 kPaa, 15°C)

$/Mcf (@ 15.025 psia, 60°F), B.C. x 34.607860 = $/103m3 (@ 101.325 kPaa, 15°C)

feet (ft) x 0.3048 = metres (m)

miles (mi) x 1.609344 = kilometres (km)

dollars per barrel ($/bbl) x 6.29287 = dollars per cubic metre ($/m3)

GOR (scf/bbl) x 0.177295 = gas/oil ratio (GOR) (m3/m3)

horsepower x 0.7456999 = kilowatts (kW)

psi x 6.894757 = kilopascals (kPa)

long tons (LT) x 1.016047 = tonnes (t)

pounds (lb) x 0.453592 = kilograms (kg)

gallons (Imperial) x 4.54609 = litres (L) (.001 m3)

gallons (U.S.) x 3.785412 = litres (L) (.001 m3)

barrels per million cubic feet (bbl/MMcf) (@ 14.65 psia) (C3) x 5.6339198 = cubic metres per million cubic metres (m3/106m3)

bbl/MMcf (C4) x 5.6367593 = (m3/106m3)

bbl/MMcf (C5+) x 5.6403087 = (m3/106m3)

LT/MMcf (sulphur) x 36.063298 = tonnes per million cubic metres (t/106m3)

gallons (Imperial) per thousand cubic feet (gal (Imp)/Mcf) (C5+) x 161.3577 = millilitres per cubic meter (mL/m3)

gallons (U.S.) per thousand cubic feet (gal (U.S.)/Mcf) (C5+) x 134.3584 = (mL/m3)

degrees Rankine (°R) x 0.555556 = Kelvin (K)

centipoises x 1.0 = millipascal seconds (mPa.s)

°API (°APIx131.5)x

1000/141.5

= density (kg/m3)

Appendix B — Page 1

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P:\Ithaca YE2018 70965\Report\Appendix B - Fiscal Terms.docx

Appendix B – Petroleum Fiscal Terms

The following is a summary of the petroleum fiscal terms applicable to the Company’s lands in the United

Kingdom (“UK”).

Royalties

Except for the Harrier and Stella properties, no royalties are applied to the fields. Thus, revenue less

costs are taxed, with allowances provided for as appropriate.

A third-party royalty of 5 percent (3.33 percent Company share) of the revenue from the Stella and Harrier

fields is paid by the Company. The royalty owner has no volume entitlement under the agreement.

The Stella-Harrier royalty is shown as “S-H Royalty” in Table 4 for the “GSA Fields” group.

Taxes

The ring fence fiscal regime applies to the exploration for, and production of, oil, gas and gas by-products

in the UK and UK Continental Shelf (UKCS) and is comprised of three taxes, namely Petroleum Revenue

Tax, Ring Fence Corporation Tax and Supplementary Charge Tax.

The Company is subject to United Kingdom Ring Fence Corporation Tax at 30 percent of profits and

Supplementary Charge at 10 percent of profits. The Supplementary Charge Tax is calculated on the

same basis as the Ring Fence Corporation Tax, with the exception that there is no relief for financing

costs. Payments are scheduled so that two thirds of the payments are made the year the liability is

incurred and one third is paid the following year.

The premise of the ring fence is that corporate tax on profits from oil and gas extraction activities should

be paid in full, undiluted by any losses or any other form of relief arising from any other business activities

whether in the United Kingdom or elsewhere. Oil and gas extraction activities are treated as a separate

trade (ring-fenced), distinct from all other activities carried out by the Company. An enhanced first year

capital allowance (i.e., 100 percent write-down) is available for ring fence operating and capital

expenditures. Acquisition costs and losses from other non-ring-fenced activities are not allowed. A Ring

Fence Expenditure Supplement (RFES) increases the value of unused qualifying expenditures carried

forward from one period to the next by a compound 10 percent per year for a maximum of ten years.

Petroleum Revenue Tax (PRT) is a field based tax on profits arising from individual oil and gas fields that

were given development authorization prior to March 16, 1993. Fields which were given development

authorization after that date are not liable for PRT. Any PRT paid by the Company is an allowable


3683.70965.OOJ.smr


deduction against ring fence profits for the purpose of calculating Ring Fence Corporation Tax and

Supplementary Charge Tax. The PRT rate was reduced to 0 percent from January 1, 2016.

Allowances

In December 2014, the UK government announced a new basin-wide investment allowance to simplify

and replace the previous system of offshore field allowances over time. The investment allowance

operates in a similar manner as the previous system and exempts 62.5 percent of qualifying capital

expenditures made by the Company from its adjusted ring fence profits which are subject to

Supplementary Charge Tax. The investment allowance applies to qualifying capital expenditures the

Company makes on or after April 1, 2015 in a field that is considered to be materially complete. First

commercial production is usually used to determine if a field is materially complete, except in phased

projects where much of the originally contemplated expenditure is scheduled after first production (such

as brownfield projects on producing fields).

For an existing field that was in receipt of a Small Field Allowance, any unactivated field allowance is

converted to an investment allowance pool. If a field is not materially complete, only the portion of capital

expenditures that exceeds 160 percent of the gross field allowance spent between April 1, 2015 and the

date it is deemed to be materially complete, can be applied as an investment allowance. The same

methodology applies for a field in receipt of a brownfield allowance.

For a field that is not producing by the effective date of this report and is not eligible for field value

allowances, all capital required to develop the field is eligible to be included in the calculation of an

investment allowance.

Previously, several fields were eligible for the former United Kingdom Small Field Tax Allowance, which

was applicable to fields with oil reserves under 6.25 million tonnes (roughly 20 to 45 MMBOE). The

maximum allowance for a field was £UK 150 million ($US 188 million), with a maximum £UK 30 million

($US 38 million) usable in a single year. The allowance was offset against the income subject to the

supplementary charge payable by the companies with interests in each of these fields.


3683.70965.OOJ.smr


The following table summarizes the investment allowance pools still outstanding as of December 31,

2018.

Summary of Outstanding Investment Allowance Pools

Field Gross Investment Allowance Pool (M£)

Stella 232,600

Harrier 134,300

Ythan 60,000

The Company also reported carry-forward losses of $US2.1 billion (£UK1.7 billion), as of December 31,

2018. Processing Income

Following an acquisition in 2018, the Company has 100 percent interest in the FPF-1 floating production,

storage and off-loading vessel (FPSO), located at the Stella field. The Company plans to produce all the

Greater Stella Area (GSA) fields through FPF-1. The processing income was estimated in the evaluation

for the FPF-1 facility. As requested by the Company, the processing income was applied against the

annual operating cost of FPF-1. In cases where the processing income was greater than the FPF-1

annual operating cost, the remaining amount was allocated to all the GSA fields on a unit of production

basis and used to reduce operating costs.

re: evaluation of the petroleum and natural gas reserves ......the technically recoverable oil and...

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