Q4 2013 presentation

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Information about Q4 2013 presentation
Investor Relations

Published on February 5, 2014

Author: PA_Resources

Source: slideshare.net

Description

The results for Q4

Fourth Quarter 2013 Mark McAllister, CEO Tomas Hedström, CFO Stockholm, 5 February 2014

Today’s topics >> BUILDING A PLATFORM FOR THE FUTURE >> FINANCIAL HIGHLIGHTS >> OPERATIONAL UPDATE >> CONCLUSION 2

Q4 and full year Summary • Strengthened balance sheet and refinancing • Portfolio rationalisation » Strategic farm-outs bring in strong partners and reduce risk and investment » Azurite field closed and field abandonment commenced SEK 891m Equity May Jun Congo Farm-Out Jul Aug Sep Denmark Farm-Out Oct Nov Dec Q4 Tunisian Farm-Out 3 SEK 750m Bond Azurite Field Closure

Three strategic Farm-outs Each operator is a technical and strategic fit for the respective licence. Exploration Appraisal Production MPS Congo 12/06 Denmark Zarat Tunisia  Farmed out 60% to SOCO  Farmed out 40% to Dana  Farmed out 70% to EnQuest  PAR retains 25% - a significant upside  PAR retains 24 % - a significant upside  PAR retains 30% - in production & development  SOCO will carry PAR share of exploration costs  $44m (gross) consideration including appraisal and development carry  $249m (gross) consideration including carry and contingent payments  Financial strength of KNOC behind Dana  EnQuest expert in mature field extension and new developments  An exploration well in the remaining license period  SOCO is an established operator in Congo  SOCO and PA AMI for further activity 4  Dana operates nearby licenses  Also includes German exploration acreage  Dana joining PAR Danish 7th Round bidding group  EnQuest and PA AMI for further acquisitions

Latest news – Diega towards development • Block I, Equatorial Guinea » PAR 5.7% » Noble Energy, operator • Encouraging results » Good reservoir quality, no water » Consistent with upside case expectations • Tie Back to the Aseng FPSO • Development plan in 2014 • First oil in 2016 The Atwood Hunter drill rig and the tanker that collected the oil. 5

An experienced Management Team Mark McAllister CEO London Tomas Hedström CFO Kevin McGrory General Counsel Stockholm London 6 Graham Goffey SVP Exploration MD West Africa and North Sea London Paul Elstone MD Tunisia Slimane Bouabbane VP Business Development Tunis Stockholm

Shaping the asset portfolio • • • Core areas: North Sea, North Africa and West Africa Project execution – moving our assets further Plan of development in the coming months Take out Greenland Production Appraisal & Development Priority Upside Potential 7 • Tunisia Offshore: Didon • Tunisia Onshore: DST • Equatorial Guinea: Aseng & Alen • • • • Tunisia: Zarat & Elyssa Equatorial Guinea: Diega Denmark: Broder Tuck & Lille John UK: Birgitta (22/19-1) • • • • Tunisia: Onshore exploration North Sea: Danish/German exploration Equatorial Guinea: Gas, exploration Congo: MPS exploration Production Exploration and development

Financial highlights Q1

Production and sales in Q4 bopd Full year 2013 Q4 2013 Dec. 2013 West Africa 3,900 3,000 2,600 North Africa Average production (bopd) 700 600 1,000 4,600 3,600 3,600 9 000 8 000 7 000 6 000 2 000 3 600 Q1 2013 Group Total 5 700 Q4 2012 3 000 4 200 Q3 2012 6 800 Q2 2012 7 100 7 700 4 000 8 000 8 700 5 000 1 000 0 Q1 2012 PAR production Q2 2013 Q3 2013 Q4 2013 Before Tunisian farm-out • ASENG: Production as forecast • AZURITE: Production ceased and field abandonment commenced Average sales price (USD/bbl) 140 130 119 120 120 108 109 110 113 110 113 109 100 109 110 102 108 106 109 103 106 90 80 Q1 2012 Q2 2012 Q3 2012 Q4 2012 PA Resources 9 Q1 2013 Q2 2013 Q3 2013 Brent Q4 2013 • TUNISIA: Production from Didon resumed in November following the upgrade and maintenance programme since 1 July • PRICE: PA Resources realised price of USD 106 per barrel compared to Brent average of USD 109

Earnings and key ratios Q4 2013 Q3 2013 2013 KEY COMMENTS Q4 vs Q3 3,600 4,200 4,600 • Revenue lower due to production and oil price Oil price (USD/barrel) 106 108 108 Revenue (SEK million) 241 293 1,312 EBITDA (SEK million)** 89 64 536 Profit before tax (SEK million)*** -9 10 132 Profit for the period (SEK million) -402 -501 -1,219 Earnings per share (SEK)**** -3.55 -8.53 -21.54 Production (bopd)* * Subject to the necessary approvals, PA Resources´ working interest in the Didon field in Tunisia has been reduced from 100% to 30% through the farm-out transaction with EnQuest. ** Figures for Q3 and full year 2013 exclude non-cash, one-off costs of SEK 469 million and SEK 931 million respectively. *** Figures for Q4, Q3 and full year 2013 exclude non-cash, one-off costs of SEK 335 million, SEK 469 million and SEK 1,473 million respectively. **** The rights issue in September 2013 gave rise to retrospective adjustments 10 • Fourth quarter impairment of MPS and Block H, SEK 335 million presented as one-off costs

Q4 & Q3 comparison after one-offs SEK million Q4 2013 Q3 2013 -402 -501 Decommissioning costs 0 469 Block H 8 0 MPS 326 0 Net exchange gains/losses -12 -46 Profit for the period (Adjusted) -80 -78 KEY COMMENTS Profit for the period • Didon vessel upgrade costs SEK 42 million in Q4 and SEK 48 million in Q3 One-off costs Q3 2013 3,600 4,200 Oil price USD(barrel) 106 108 Currency (USDSEK) 11 Q4 2013 6.51 6.52 Production (bopd)

Income Statement full year 2013 SEK million Profit for the period 2013 -1,219 One-off costs Decommissioning costs 469 Impairments 542 Tunisian farm-out, net KEY COMMENTS • Impairments of: Block 8, Greenland 9/06 (Gita), Denmark MPS, Congo Azurite, Congo Block H, EG 117 totalling SEK 542 million Net exchange gains/losses Profit for the period (Adjusted) 12 -100 -191 97 90 326 21 8

Cash flow SEK million Q4 2013 Q3 2013 2013 KEY COMMENTS Cash flow from operations -269 -13 -379 Capex -100 -74 -271 Rights issues 0 810 1,413 Loans raised 726 0 764 -791 -27 -1,182 -65 783 995 -434 696 345 Amortisation of debt Cash flow from financing Net cash flow 13 • Q4 capex of SEK 100 million, mainly related to drilling activities in Block I in Equatorial Guinea • Full year capex forecast of SEK 250380 million, outcome in the lower part of the range • Capex for full year 2014 are expected to be some SEK 300 million • Cash and cash equivalents at the end of the period, SEK 403 million

Current equity and debt situation Covenants and Net Debt development KEY COMMENTS Q4 2013 Q3 2013 Q2 2013 Q1 2013 Covenants 1,795 2,144 1,973 2,201 >1,000 Book Equity to Capital Employed 45% 49% 46% 48% >40% Net debt (SEK million) 1,792 1,422 2,197 2,111 N/A Book Equity (SEK million) Debt maturity per 5 February 2014 (SEK million) 800 700 600 500 400 Bond Loan 900m NOK 300 Bond Loan 750m SEK 200 100 0 April 2014 April 2015 14 March 2016 April 2016 • Equity amounted to SEK 1,795 million • In compliance with both covenants as per 31 December 2013 • Convertible bond SEK 94 million amortized in January 2014

Operational update Q1

Production re-start on the Didon Field 1976 1997 1998 2005 2006 2008-2009 2011 Discovery Concession First Oil PA Acquisition Platform + 2 Wells 4 New Wells Enhancement Study • Produced 32 million barrels since 1998 • Platform and tanker in place • 70 km offshore in 70m water depth • Tanker was repaired and recertified in 2013 • EnQuest has been highly successful in mature field rehabilitation at Thistle & Heather • Plan to install an Electric Submersible Pump on one of three wells in 2014 • Will follow up with new production well • Further ESP installation and new wells likely in following years 16 2017 2013-2017 2014 First production ESP, Development Infill Well

Plan of development for the Zarat Field 1990 1992 1995 2005 2012 2013 2014 Permit Award Discovery Appraisal Well PA Acquisition Draft POD EnQuest Farm-Out UUOA, UPOD • • Active participation of ETAP to secure early production and offset decline in Tunisian gas production • Development may need CO2 sequestration and gas recycling • • 17 Largest undeveloped discovery in Tunisia with 120mmboe of oil and gas Local infrastructure can handle Zarat gas Commercially complex since unitisation required with Joint Oil block

Plan appraisal well on the Elyssa field 1974 Discovery 1992 Appraisal Well 2005 2006/2007 2010 PA Acquisition Appraisal Well + ST New 3D Seismic • • • Straightforward development if appraisal is successful • Commercially simple with whole field in PAR licence • • 18 Another significant gas accumulation Local infrastructure with spare capacity Four well penetrations drilled to date with one further appraisal well planned Tunisian need for gas will ensure active ETAP support once appraisal complete 2013 2015 Enquest Farm-Out Appraisal Well

Commercialisation of Broder Tuck 2006 2008 2011 2011 2013 2014 6th license round Awarded to Scotsdale PA acquired Scotsdale Exploration well Discovery Evaluation Report Dana Farm-out Pre-development evaluation • • • Gas field discovered by PA in 2011 • • Concept screening underway • Decision in 2014 on preferred development concept or further appraisal drilling 19 Estimated recovery 15-45mmboe In shallow water and adjacent to existing infrastructure Good progress in discussions with nearby host platform and an alternative host is under active review

Appraisal drilling at Lille John 2006 2008 2011 2012 2013 2014 6th license round Awarded to Scotsdale PA acquired Scotsdale Exploration well + ST Discovery Evaluation Report Dana Farm-out Appraisal well • • Oil field discovered by PA in 2011 • Appraisal well required to confirm size of structure and reservoir model • • Slot available in Dana rig programme • Will pursue this trend together with Dana in Denmark and Germany 20 Estimated recovery ranges from uneconomic up to 60mmstb Straightforward tieback to existing infrastructure for oil export to Danish mainland

Identify drilling target at Mer Profonde Sud 2002-2004 • • • • • 21 Azurite Field now abandoned and vessel shortly to depart Murphy exited from remaining MPS exploration licence MPS is a prospective exploration block adjacent to and along trend from several large fields Encouraging reprocessed 3D seismic was basis for PA re-evaluation and farm-out to SOCO Once transaction complete, plan to drill RR prospect in 2014/2015 2010-2011 2014 WO & Infill Drilling 3D Seismic DL-23

2014 Key activities Exploration Appraisal/Development Production Closing of MPS farm-out to SOCO Closing of 12/06 farm-out to Dana Closing of Tunisian farm-out to EnQuest MPS - Confirm drilling target - Secure rig for exploration well Block I - Submit Diega POD - Commence development Didon - Install ESP - Drill infill well Zarat field - Complete unitization agreement - Submit Zarat POD Tunisian Onshore - Review DST fields - Identify enhancement opportunities Elyssa field - Plan appraisal well - Develop and submit drilling plan - Secure rig for appraisal well Lille John - Develop and submit drilling plan - Drill appraisal well Broder Tuck - Pre-Development evaluation Birgitta - Investigate export options - Initiate development planning if justified 22

Conclusion Q1

A period of change – for long term success Developed platform for future growth • Project execution • Based on 2013 achievements Start building the platform • • • Strengthened balance sheet and refinancing New Group Management and Board Farm-outs according to plan • Closing of farm-out contracts • Cooperation for the future: competent local mid-sized partners with local connections and knowledge • Reduced level of risk and investments Development of growth plans • • Continued business focus on North Sea, North Africa and West Africa • Increased pace of exploration, appraisal and development • Exploration of licenses with high potential and with nearby infrastructure, enabling cost-effective development • Start reviewing value enhancing M&A opportunities to create economies of scale and a wider asset portfolio • Acquiring new reserves and resources where opportunities to enhance value Securing financing of long-term development plans

Thank you Q1 Report on 16 April 2014

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