We recently held our "Your Business in Africa" seminar at our London office. The presenters spoke of their experiences of the trend for increasing investment in the energy sector in Africa, the challenges faced by the sector currently, and challenges for the future, and also about where they saw Africa placed in 10 years time, against other oil & gas provinces.

1. Africa: the Investment Case for Oil & Gas
Presenter: James Spinney, Director of Corporate Finance

2. Introduction to Strand Hanson
Independent, entirely management owned corporate finance advisory firm
Traditional merchant banking model allows investment to be made from our own balance
sheet
Award winning M&A adviser, having been involved in transactions with an aggregate value of
£6.0 billion in recent years
Leading nominated adviser on the AIM Market in the fields of oil & gas and metals & mining
and also the market leader in advising African businesses
Regulated to act as:
Sponsor to the Official List;
Nominated adviser to the AIM Market;
Takeover panel approved adviser; and
Corporate adviser to the ISDX Growth Market
Cross-border specialists with an office in South Africa and a global network of advisers and
consultants

3. Overview of Strand Hanson Africa
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Regional office established, in November 2008, in Cape Town, South Africa
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Under the leadership of a senior Strand Hanson Director
Team now comprises both South African and UK nationals
Enables Strand Hanson to:
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Expedite due diligence processes on African assets
ƒ
Source both transaction opportunities for listed clients (particularly in the Oil & Gas, Mining and Natural
Resource sectors) and alternate pools of capital for both listed and private clients
ƒ
Develop key relationships with local market participants
ƒ
Advise on cross-border transactions both intra-Africa and between Africa and other regions, particularly Asia
ƒ
Identify early stage investing opportunities for direct investment by Strand Hanson’s merchant banking
operations
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Service clients with assets across Africa through direct communication with, and ready access to, key
executives
Gain exposure to fast-growing African economies
South Africa office is now a key hub for Strand Hanson’s full range of services

4. Advantages of doing business in Africa
Common languages
Similar timezones
Shared legal principles
Vast natural resources
Changing governmental attitudes to external investment
The need for sophisticated financial and technical expertise
Making indigenisation work

5. Challenges to doing business in Africa
Disputes over title
Lack of formalised agreements
Retrospective application of new laws
Lack of political accountability
Less developed regulatory frameworks
Indigenisation
Poor infrastructure

6. Oil and Gas in Africa – AIM Listed Companies
AIM oil and gas companies by market capitalisation, total: c. £1bn
OTHER
£97m
SIRIUS PETROLEUM
£28m
TOWER RESOURCES
£34m
BOWLEVEN
£167m
WENTWORTH RESOURCES
£37m
CHARIOT OIL & GAS
£39m
ELAND OIL & GAS
£150m
MADAGASCAR OIL
£54m
STERLING ENERGY
£75m
FALCON OIL & GAS
£102m
LEKOIL
£92m
Source: London Stock Exchange
TRINITY
EXPLORATION &
PRODUCTION
£96m

7. Oil and Gas in Africa - Production & Reserves
Production
Reserves
14,000
6,000
4%
4,000
2%
2,000
0
0%
1980 1985 1990 1995 2000 2005 2010 2015
Production - mboe/d
Source: BP World Energy Review 2013
% of global production
Reserves
6%
8,000
% of global production
8%
10,000
10%
200
10%
12,000
Production
250
8%
150
6%
100
4%
50
2%
0
0%
1980 1985 1990 1995 2000 2005 2010 2015
Reserves - bnboe
% of global reserves
% of global reserves
12%
16,000

8. studies:
Case studies Lekoil Limited
Deal type: AIM IPO of Lekoil Limited (“Lekoil” or the “Company”), co-terminous with the completion of a
significant acquisition
Deal size: Total fundraise of US$50 million resulting in a market capitalisation of approximately US$110 million
on admission to AIM
In early 2013, Strand Hanson was engaged by Lekoil, the oil & gas company established to acquire assets in subSaharan Africa and in particular Nigeria, to advise on the acquisition of an ultimate 30 per cent. economic interest
in OPL310, offshore Nigeria from Afren PLC and simultaneous admission to trading on AIM. OPL310 is an early
stage Nigerian oil & gas asset, located in the Dahomey-Benin Basin, with significant potential. Admission to trading
on AIM occurred in mid-May 2013.
Strand Hanson acted as nominated and financial adviser to Lekoil and worked alongside Mirabaud Securities LLP and
Revere Securities Corp., the company’s Broker and US placing Agent, to co-ordinate the largest H1 2013 AIM IPO,
overcoming the challenges faced by a multi-jurisdictional transaction and significantly raising the profile of AIM in
one of Africa’s rapidly growing and resource rich economies.
Following the announcement of positive drilling results on OPL310, and the intention to acquire a 6.502 per cent.
participating interest in the adjacent block OML113, Lekoil successfully raised a further US$20 million in July
2013 to progress its drilling programme.
Despite the complex jurisdictional issues, the listing was completed on an accelerated basis in order to secure the
acquisition prior to the commencement of drilling on OPL310.

9. studies
Case studies: Sirius Petroleum PLC
Deal type: Introduction to Sirius Petroleum PLC (“Sirius” or the “Company”) of a prepayment facility and
exclusivity off-take agreement with Glencore Energy (UK) Limited (“Glencore”)
Deal size: $65 million
Sirius has an interest in a previously producing OPL, shallow off-shore Nigeria, in addition to options to acquire
interests in two further OMLs.
The Company planned to undertake work to recommence production of its existing asset and exercise the options
that it has. In May 2013, Sirius entered into an agreement to funding from Glencore, such that it could achieve its
short term objectives and further, to guarantee a market for the oil it produces in the future.

10. Strand Hanson: African experience
Strand Hanson has extensive experience in Africa, with clients and Investments across the continent, as set out below:
Investments
Experience
Tunisia
Algeria
Egypt
Mali
Chad
Mauritania
Mauritania
Ethiopia
Ethiopia
Liberia
Ghana
Ghana
Nigeria
Tanzania
Cameroon
Benin
Nigeria
Tanzania
Cameroon
Zambia
Zambia
Gabon
Madagascar
Namibia
Madagascar
Namibia
Mozambique
Botswana
Mozambique
Botswana
South Africa
Zimbabwe
South Africa

11. Strand Hanson Limited is authorised and
regulated by the Financial Conduct Authority.
Strand Hanson Limited
Registered in England. Company no. 2780169
Registered office 26 Mount Row, London, W1K 3SQ
Strand Hanson Limited
26 Mount Row London W1K 3SQ
Tel: 020 7409 3494 Fax: 020 7409 1761
Mail: mail@strandhanson.co.uk

12. dŚĞ ŶĞƌŐLJ Θ EĂƚƵƌĂů ZĞƐŽƵƌĐĞƐ ^ĞĐƚŽƌ ŝŶ ĨƌŝĐĂ
džĂŵŝŶŝŶŐ Kŝů Θ 'ĂƐ ĂŶĚ ŶĞƌŐLJ /ŶǀĞƐƚŵĞŶƚƐ
ŵLJŶ DƵƐƐĂ͕ ^ĞŶŝŽƌ WĂƌƚŶĞƌ
ŶũĂƌǁĂůůĂ Θ ŚĂŶŶĂ
ϯ KĐƚŽďĞƌ ϮϬϭϯ

13. Kŝů Θ 'ĂƐ /ŶƚƌŽĚƵĐƚŝŽŶ
ͻ ^ŝŐŶŝĨŝĐĂŶƚ KƉƉŽƌƚƵŶŝƚŝĞƐ ŝŶ ĞŶLJĂ ĨŽƌ W ĐŽŵƉĂŶŝĞƐ͗
Ž ϰϲ ŽĨ ϰϴ ĞdžŝƐƚŝŶŐ ďůŽĐŬƐ ĂůƌĞĂĚLJ ůŝĐĞŶƐĞĚ
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ͻ hƐĞ ŝƚ Žƌ ůŽƐĞ ŝƚ
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ŽƉĞƌĂƚŽƌƐ
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15. ŽŶĐĞƌŶƐ ZĞůĂƚŝŶŐ ƚŽ ƚŚĞ EĞǁ ĞŐŝƐůĂƚŝŽŶ

16. Kŝů Θ 'ĂƐ ZĞĐĞŶƚ ĞǀĞůŽƉŵĞŶƚƐ ŽŶƚ͙
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22. Angola Mozambique | Energy Market
October 2013

23. Angola
• Country Area: 1,246 thousand km2
• Estimated Population (2012) : 20 M
• Country Risk: B

24. Angola
8,4% of ECONOMIC GROWTH IN 2012
ENERGY
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25. Angola at a glance
Main Clients and Suppliers
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26. Angola at a glance
Main Products
Export
%
Import
%
Fuels and mineral oils
97,4
Machines and
mechanical equipment
13,6
Ships and Boats
1,4
Ships and Boats
8,3
Precious stones and
precious metals
0,8
Machines and electric
equipment
7,8
Machines and
mechanical instruments
0,1
Cars and Parts
6,3
Iron and Steel
0,1
Iron and Steel Products
6,3

27. Highlights on Angola
ƒ Ambitious reforms - improving governance and modern legal system
ƒ Difficult business environment - lack and poor functioning of institutions,
including the judiciary
ƒ Still an important investment option for companies looking for new
challenges and open to participating in the country development plan
Key Sectors
Agriculture
Building
Mining
Industrial
Activity
Infrastructure
Tourism

28. Angola – Energy Market - Background
− Onshore drilling for oil began in 1915;
− First commercial discovery in the Cuanza Basin in 1955;
− Angola is now the second biggest oil producer in Sub-Saharan Africa;
− The Angolan government, through the public concessionaire (Sonangol),
has granted rights to conduct petroleum operations in relation to 33/34
blocks to companies including BP, Chevron, Eni, Exxon, Statoil and Total;
− The country’s first LNG plant is already being developed near Soyo;
− The downstream sector – refinery and distribution of the products derived
from crude oil – remains underdeveloped;
− Recent deals entered into in relation to the pre-salt blocks in the Kwanza
Basin - hopes that the Angola pre-salt will bring exploration success to
match that in Brazil;

29. Angola – The latest in the Energy Market
OIL GAS
− Sonangol recently announced that is expected later this year and during the
year of 2014, the completion of an onshore licensing round for oil
exploration blocks in Kwanza and Lower Congo Basins;
− 10 new blocks will be tendered;
− Specific legislation for such types of operations has been enacted;
− Preferable treatment and great incentives for Angolan companies may be
adopted – good opportunity for partnerships with local companies;
− 2 million barrels of oil a day by 2015 are expected;

30. Angola – The latest in the Energy Market
RENEWABLE ENERGY
−
190 MW of small hydro capacity addition announced by the Angolan
Government;
−
The hydrographic potential of Angola, together with the two Congos,
represents more than half of the water resources of the African continent;
−
30 million litres of ethanol per year capacity addition announced;
−
Eaglestone NV (financial services platform and an international private
equity business) intends to invest as much as 40% of a planned 100-million
Euro renewable energy fund in projects in Angola and Mozambique;
−
Angola may also develop wind and solar power within the next 5 years;

31. Mozambique
• Country Area: 744,9 thoushand km2
• Estimated Population (2013) : 22,9 M
• Country Risk: BB

32. Mozambique
7,3% of ECONOMIC GROWTH IN 2012
EXTRACTIVE
INDUSTRY
35,2%
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33. Mozambique at a glance
Main Clients and Suppliers
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34. Mozambique in a glance
Main Products
Export
%
Import
%
Aluminium
45,1
Fuels and mineral oils
23,6
Fuels and mineral oils
16,3
Machinery and
mechanical appliances
14,0
Fruit
7,1
Aluminium and
aluminium products
11,0
Tobacco
5,0
Cars and Parts
10,2
Other ore
4,9
Cereals
4,9

35. Highlights on Mozambique
ƒ Ambitious reforms – tax, tourism, foreign trades seeking modernisation
ƒ Difficult business environment - lack of qualified work force
ƒ Still an important investment option for companies looking for new
challenges and open to participate in the country development plan
Key Sectors
Energy and
Mining
Transports
Industry
Comunications
Financial
Tourism

36. Mozambique – Energy Market - Background
− The first gas discoveries were made in the 1960s
− Production began in 2004
− In last 10 years there has been an enormous growth of gas production
− Often described as the next epicentre for global natural gas
− Anadarko’s major gas development with a LNG liquefaction plant

37. Mozambique – Energy Market Update
OIL GAS
− Recent discoveries natural gas show that Mozambique could become one
of the largest global exporters
− Specific LNG legislation is being prepared
− First natural gas production contracts executed in 2014. Production in 2018
− One of world’s largest unexploited inland coal fields – projected to be within
the world’s top 10 producers by 2015
− Government recently announced the construction of two petroleum
terminals in Palma and Tete to guarantee supply to coal and gas projects

38. Mozambique – The latest in the Energy Market
RENEWABLE ENERGY
− The first solar panel factory in the country (Beluluane Industrial Park Maputo) will start operating next month, annual production target of 5MW
− Mozambique launched first wind power tender in 2012
− Government has been introducing incentives for investments in this sector
− Potential for biofuels is still being explored

39. Angola Mozambique – Energy Market - Top Tips
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40. Contacts
CMS RPA
Rua Sousa Martins, 10
Patrick Dewerbe
1050-218 Lisbon, Portugal
Telephone: + 351 21 095 81 00
patrick.dewerbe@cms-rpa.com
Fax: + 351 21 095 81 55
www.cms-rpa.com