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PetroNor E&P ASA

Investor Presentation Sep 14, 2016

3710_iss_2016-09-14_c1b8d924-7dfe-4a3b-8b8a-21a10ce1342b.pdf

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Company Presentation

Pareto Securities – Oil & Offshore Conference, Oslo 14 September 2016

www.africanpetroleum.com.au

Disclaimer

This Presentation has been prepared by African Petroleum Corporation Limited (Company).

Summary information

This Presentation contains summary information about the Company and its subsidiaries (Company Group) and their activities. The information in this Presentation does not purport to be complete or comprehensive, and does not purport to summarise all information that an investor should consider when making an investment decision. It should be read in conjunction with the Company's other periodic and continuous disclosure announcements lodged with Oslo Axess, which are available at www.oslobors.no

Not financial product advice

This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other offer document under Australian law or the law of any other jurisdiction. This Presentation is not financial advice, a recommendation to acquire Company shares or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs and seek such legal, financial and/or taxation advice as they deem necessary or appropriate to their jurisdiction. The Company is not licensed to provide financial product advice in respect of Company shares.

Future performance

This Presentation contains certain forward looking statements. The words anticipated, expected, projections, forecast, estimates, could, may, target, consider and will and other similar expressions are intended to identify forward looking statements. Forward looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied on as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements. This difference may be due to various factors, including, among others: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; the outcome of negotiations, conclusions of economic evaluations and studies; changes in project parameters and returns as plans continue to be refined; future price of oil and gas; drilling risks; political instability; insurrection or war; arbitrary changes in law; delays in obtaining governmental approvals or financing or in the completion of development activities. The forward looking statements in this Presentation speak only as of the date of this Presentation. To the full extent permitted by law, the Company and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions. Nothing in this Presentation will

under any circumstances create an implication that there has been no change in the affairs of Company Group since the date of this Presentation.

Investment risk

An investment in the Company shares is subject to investment and other known and unknown risks, some of which are beyond the control of the Company Group. The Company does not guarantee the performance of the Company or any particular rate of return on the performance on the Company Group, nor does it guarantee the repayment of capital from the Company or any particular tax treatment.

Not an offer

This Presentation is not and should not be considered an offer or an invitation to acquire Company shares or any other financial products and does not and will not form any part of any contract for the acquisition of the Company shares. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Company shares have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

Competent person statements

The information in this Presentation relating to hydrocarbon resource estimates includes information compiled by Dr Adam Law, Geoscience Director of ERC Equipoise Ltd. Dr Law, is a post-graduate in Geology, a Fellow of the Geological Society and a member of the Society of Petroleum Evaluation Engineers. He has 18 years relevant experience in the evaluation of oil and gas fields and exploration acreage, preparation of development plans and assessment of reserves and resources. Dr Law has consented to the inclusion in this Presentation of the matters based on the information in the form and context in which it appears.

Disclaimer

Company's advisers have not authorised, permitted or caused the issue, lodgement, submission, despatch or provision of this Presentation and do not make or purport to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by the advisers. To the maximum extent permitted by law, the Company, its representatives, advisers and their respective officers, directors, employees, agents or controlling persons (collectively, the Representatives) expressly disclaim all liabilities in respect of, and make no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Presentation or in any other documents furnished by the foregoing persons.

Statements made in this Presentation are made only at the date of this Presentation. The information in this Presentation remains subject to change without notice.

Company Highlights

World Class Exploration Acreage Position

  • Large acreage position in West Africa Margin: 5 countries, 10 licences

  • 11.6bn+ barrels net unrisked prospective oil resources1

Significant Discoveries in Adjacent Acreage

  • Several material hydrocarbon discoveries made in adjacent acreage by Total in Côte d'Ivoire, and Cairn Energy and Kosmos in Senegal

  • Discoveries are on trend with prospects in African Petroleum acreage

Securing Partnerships in a Challenging Market

  • Successfully bringing in partners to share risk/reward on licences

  • Ophir Energy transaction (45% operated interest CI-513) Mar 2016

  • LOI with undisclosed international E&P company (Gambia) Aug 2016

High Impact Drilling to Commence in 2017

  • Exploration well with Ophir Energy in Côte d'Ivoire (CI-513) in H2 2017

  • Possible further two wells in The Gambia and Senegal in 2017/20182

  • Proven deep-water operator and expertise on West Africa margin

Listed on Oslo Axess

  • Strong support from Norwegian retail investors since May 2014 listing

  • Blue chip institutional shareholder base

Market Statistics (9-Sep-2016)

Listing OAX (APCL)
Shares
on Issue
106,685,114
Market Cap NOK 261.4m
Share Price NOK 2.45
Debt Nil

Geographic Analysis of Investors

1Prospective resource volumes taken from ERC Equipoise 2014 & 2015 (adjusted for Ophir Energy deal); 2Subject to financing through farm-out transactions, and licence extensions

Securing Licence Partners

Despite the challenging business and investment environment in the energy sector, African Petroleum is continuing to deliver partnership transactions on its licenses – a testament to the quality of our acreage…

Côte d'Ivoire: Transaction Completed With Ophir Energy (Mar 2016)

  • New PSC negotiated for CI-513 licence in Côte d'Ivoire: better fiscal terms, lower holding costs and an extension to work commitments

  • Ophir Energy holds a 45% Operated interest

  • African Petroleum received US\$16.9m in cash at completion

  • Exploration well planned for H2 2017

Gambia: LOI With International E&P Company (Aug 2016)

  • Non-binding commercial proposal regarding the possible acquisition of interests in Licences A1 and A4

  • Conditional upon extension of the exploration periods of both licences by at least 12 months

  • Subject to ongoing due diligence and commercial negotiations

Experienced Board & Management Team

Jens Pace: CEO & Executive Director

  • 30 years at BP, and heritage company Amoco, gaining E&P leadership experience in Africa, Europe and Russia

  • Managed an active exploration portfolio for BP in North Africa

  • Additional experience in the areas of field development and as commercial manager

Stephen West: CFO & Executive Director

  • 20+ years of financial and corporate experience from public practice, oil & gas, mining and investment banking

  • Chartered Accountant with Bachelor of Commerce (Accounting and Business Law)

  • Non-Executive Director of Apollo Consolidated (ASX:AOP) and Zeta Petroleum (ASX:ZTA)

Michael Barrett: Exploration Director

  • 20+ years global exploration experience at Chevron, Addax International

  • Specialised in Play and Prospect risk assessment, volumetric analysis, commercial evaluation and portfolio management

  • Background in quantitative geophysics, stratigraphic interpretation workflows and 3D visualisation

David King: Non-Executive Chairman

  • 30+ years experience in natural resources

  • Co-founded and held executive and non-executive board positions in a number of successful ASX listed companies

  • Fellow at the Australian Institute of Company Directors, the Australian Institute of Geoscientists, and Australasian Institute of Mining & Metallurgy

  • Chairman of two ASX listed companies: Galilee Energy Limited and Cellmid Limited

Bjarne Moe, Timothy Turner & Anthony Wilson: Non-Executive Directors

World Class Exploration Acreage in Proven Basins

#Estimated net unrisked mean prospective oil resources, ERC Equipoise CPR (adjusted for Ophir Energy deal)

Recent Third Party Catalyst Activity

1Kosmos Energy news releases; 2Cairn Energy news releases; 3AfrOil Week Oil and Gas Monitor, Issue 597, 7 July 2015; 4Total news release 17 April 2014; 5Impact Oil & Gas press release 18 February 2016; 6FAR Limited press release 1 September 2016

Company Presentation – September 2016 Page 7

Share Price Performance – 12 Months

programme for next 18 – 24 months

Strengthen financial position through successful farm-outs: contribution towards significant historic cost pool

Complete further farm-out transactions during 2016 to fund forward drilling

  • Maintain capital and cost discipline with focused team

  • Undertake focused technical work to support prospect maturation

2017:

2016:

Commence high impact exploration drilling campaigns in Côte d'Ivoire (H2 2017) and The Gambia+ (Q3 2017)

Objectives for 2016 & 2017

Great Time to Invest in Exploration

  • The industry is benefitting from a significant decrease in prices for drilling rigs and seismic vessels

  • Estimated well cost of <\$40m, compared to +\$80m two years ago

  • Significant activity in the West African Margin during last two years with positive results by Total in Côte d'Ivoire, Cairn Energy in Senegal and Kosmos in Mauritania and Senegal

  • Attractive PSC/licence terms: our projects are economic, even at current low oil prices

  • Ophir Energy deal for Côte d'Ivoire (completed in Mar 2016) and recently announced LOI for The Gambia (Aug 2016) indicates industry interest remains for world class exploration assets despite the weak oil price environment

  • Oil exploration is for the long term: our long term strategy is to realise potential value of our 11.6bnbbls+ assets

Net Mean Prospective Oil Resources

Prospects and Plays

  • Côte d'Ivoire to Sierra Leone: > Pure play deep-water exploration
  • 2014-16: transformational exploration/appraisal in Senegal, Mauritania and Côte d'Ivoire

  • CPR inventory is diverse and material

  • Our large equity position provides room for partners to participate in the transformation

Côte d'Ivoire – CI-509 and CI-513

  • CI-513: 45% Ophir (Operator), 45% African Petroleum

  • CI-509: 90% African Petroleum (Operator)

  • High quality proprietary 3D seismic. New PSDM delivered in March 2014

  • April 2014 Total oil discovery at Saphir-1XB (Block CI-514) 40m net oil pay 34º API

  • Well defined fan systems with numerous material prospects identified

  • Plan to drill exploration well with Ophir Energy on CI-513 in H2 2017

Prospects: Cretaceous (post rift) Composite Amplitude

Prospects on trend with Saphir-1XB Discovery

Gambia and Senegal Overview

  • High potential frontier exploration area

  • 90% working interest in Senegal, 100% Gambia

  • Multiple prospects analogous to Cairn Energy operated oil discoveries each approx. 1 Billion barrels in place (with 3.5 bnbbls follow up potential1)

  • Basin opening Kosmos multi-TCF gas discoveries in Mauritania and Senegal in 2015/20162

  • High level of industry interest in Senegal/Gambia

1FAR, Investor Presentation November 2014; 2Kosmos Energy news releases

The Gambia – A1 & A4

  • 100% working interest in both licences1

  • 2,500km2 3D seismic acquired over licences

  • Material discoveries by Cairn Energy in Senegal on trend

  • Unrisked resource potential 3,079 MMbbls2 Looking at the Gambian 3D seismic volume from the North:

Mahogany Paprika Nema Lamia Alhamdulilah Rosewood Acacia FAN-1 Discovery Sami SNE Discovery

1Extension requested and being discussed with the Gambian government; 2ERC Equipoise March 2015

Liberia – LB-08 & LB-09

  • APCL 100% working interest#

  • Liberia-Sierra Leone basin has five discoveries announced to date

  • Under-explored potential in deep water

  • Multiple prospects in LB-08 & 09 at various intervals in the Cretaceous, within working petroleum system

  • Narina-1 Turonian oil discovery in block LB-09 by African Petroleum (Feb 2012)

  • Attractive early mover fiscal terms

Sierra Leone – SL-03 & SL-4A-10

  • Retained area fully covered by 3D seismic, SL-4A-10 3D acquired 2014, completed processing 1Q 2015

  • Prospective at multiple levels within the Cretaceous, in basin floor setting relative to announced oil discoveries by Anadarko/Tullow/Repsol partnership

  • Amplitude support for stacked hydrocarbon plays at multiple Upper Cretaceous levels

Conclusion: Value Creation (Near & Long Term)

Assets

  • Diverse portfolio in 5 countries with multiple prospects
  • 11.6 bnbbls+ net unrisked prospective oil resources
  • Assets significantly de-risked through historic investment and third party activity and discoveries

Capabilities

  • Highly experienced management team
  • Excellent relationships with host Governments
  • Proven ability to attract credible industry partners

Discoveries

  • Narina-1 oil discovery by African Petroleum in Liberia
  • Recent significant discoveries in Côte d'Ivoire (Total), Senegal (Cairn & Kosmos) and Mauritania (Kosmos)
  • Further drilling underway in Senegal by Cairn in late 2016

Investment Proposition

  • Blue chip investor base
  • Positioned for low price environment
  • No debt
  • Recommence drilling with up to 3 wells in next 18 months
  • Ongoing discussions with potential partners

Q & A

Advisers & Contact Details

African Petroleum Corporation Ltd

48 Dover Street London W1S 4FF

www.africanpetroleum.com.au

BROKERS

Mirabaud Securities Limited (UK) EAS Advisors LLC (New York) Pareto Securities (Norway)

AUDITORS

Ernst & Young

COMPETENT PERSON

ERC Equipoise Limited

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