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EGM 2012           Bo Askvik, President & CEO                   Stockholm                7 December 2012
Presentation outline    1      Financial highlights           2     Recapitalisation proposal                   3    Way f...
Recent development    HIGHLIGHTS    •   Alen field development progressing according to plan,        targeting first produ...
Production and sales Ytd 2012                  Average production per country (bopd)12000                                 ...
Q3 financial highlights                          Q1
Q3 impairments and tax adjustments                       Impairments                                          Tax adjustme...
Earnings and key ratios                                                  Q3             Q2       Jan-Sep        Jan -Sep  ...
Cash flow                             Q3      Q2     Jan-Sep   Jan-Sep                                                    ...
Capex forecast 2012/2013                   Capex 2011 - 2013                   KEY COMMENTS           1 800               ...
Current debt situation                         Covenants and net debt                        KEY COMMENTS                 ...
RecapitalisationTransaction in brief                       Q1
Development 2010–2012: Azurite set-back                                          Production                               ...
Indebtedness too high given current asset base                         Background                                         ...
Solution: Recapitalisation for future growth         Board of Directors propose a two-step transaction strengthening equit...
Terms of set-off and rights issue     1      Set-off issue                               • Set-off of one (1) convertible ...
PA Resources way forward – business plan    Operating cash flow       » Cash flow from producing assets to finance mainten...
Zarat Field – Largest undeveloped discovery in Tunisia     1990       1992              1995             2005           20...
Zarat Field – Tentative Unitization agreement     RECENT DEVELOPMENT                                                      ...
Elyssa – Appraisal well in 2013 1974          1992               2005            2006/2007               2010             ...
Denmark 12/06 – 2011 discoveries and way forward PA Resources Operator with 64%                        Broder Tuck •   Hig...
Reserves and Resources for development                                             2P                        Contingent   ...
Prioritised investments/projects 2013-2018                                                                                ...
Expected outcome of Business Plan                  Estimated development of reserves (MMBOE)                              ...
Expected outcome of Business Plan                                 Production and cash flow* development                   ...
CAPEX forecast – Total and per barrel                              CAPEX incl carry proceeds                1 800         ...
Prioritised assets – Value through farm-outs                             Asset valuation before and after farm-outs       ...
Asset valuation – Summary                   10                                                      8,5                   ...
Summary and outlook     INVESTMENT HIGHLIGHTS:     •   Cash flow from current production     •   Financial capacity to fin...
Thank you!             Q1
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PA Resources EGM 7 December 2012

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Transcript of "PA Resources EGM 7 December 2012"

  1. 1. EGM 2012 Bo Askvik, President & CEO Stockholm 7 December 2012
  2. 2. Presentation outline 1 Financial highlights 2 Recapitalisation proposal 3 Way forward - business plan » Operational recent » Equity increase of SEK 1,700 » Financial strength combined developments million with farm-out transactions » Q3 operational result in line » Net debt reduced to SEK 1,900 » Development of 30 Mmboe at with market expectations million 1) USD 9/boe in operated assets » Congo asset impairment of » Equity post recapitalisation » Asset revaluation – upside SEK 1,495 million transaction approx. SEK 2,500 potential million 1) After cost and assuming 100% acceptance2
  3. 3. Recent development HIGHLIGHTS • Alen field development progressing according to plan, targeting first production in 2H 2013 • Block I targets for exploration and appraisal drilling in 2013 in progress • Zarat permit extended until July 2015, with Elyssa appraisal well scheduled in 2013, farm-out activities on-going • Appraisal requirements and development options are evaluated on Danish 12/06 – parallel with efforts to locate available rig continues. Initiated discussions with Maersk for infrastructure tie back • Awarded provisional UKCS licence - Block 22/19a - containing undeveloped Fiddich gas/condensate field (1984) and adjacent to PAR-operated Block 22/18c • German licence farm-out to Danoil (10%) – partner in adjacent 12/06 licence. • Tentative Unitization agreement of the Zarat field3
  4. 4. Production and sales Ytd 2012 Average production per country (bopd)12000 bopd Ytd 2012 Q3 2012 Nov. 2012 Congo: Azurite EG: Aseng Tunisia: Didon & Onshore West Africa 5,700 5,600 4,800100008000 North Africa 2,300 2,100 2,4006000 Group Total 8,000 7,700 7,20040002000 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 • ASENG: New production level of 60,000-63,000 bopd to maximise reservoir recovery Average sales price (USD/bbl) • AZURITE: Sidetrack operations begun in Q4 and 140 PA Resources Brent expected to last several months. Plug & abandon 117 113 119 completed, drilling to commence. 120 106 109 108 109 120 • TUNISIA: Onshore fields are back in production 100 85 109 109 109 79 78 106 104 after the temporary shut down in Aug/Sep 77 97 80 78 82 • PRICE: PA Resources realised price equal to 60 71 72 Brent average for the third quarter 40 20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 20124
  5. 5. Q3 financial highlights Q1
  6. 6. Q3 impairments and tax adjustments Impairments Tax adjustments • One-off and non-cash impairment charges and • Previously unreported deferred tax liabilities write downs in Q3 of in total SEK 1,495 million pertaining to periods before 2011 have been adjusted by SEK 445 million and reported directly • The Marine XIV license in the Republic of Congo against share-holders equity for the opening was relinquished in early October, resulting in a balance of 2011 write down of approximately SEK 174 million • New opening balance of equity 2012 • The annual impairment test performed and SEK 2,816 million assets in the Republic of Congo impaired, mainly as a result of a revision of Azurite field’s • Previously unreported deferred tax assets in the recoverable reserves parent company reduced income taxes in Q3 by SEK 125 million • Azurite/Mer Profonde Sud impairment of SEK 1,321 million. Azurite future book value only new sidetrack/well6
  7. 7. Earnings and key ratios Q3 Q2 Jan-Sep Jan -Sep 2012 2012 2012 2011 KEY COMMENTS Q3 vs Q2 Production (bopd) 7,700 8,000 8,100 8,700 • Lower production lowered revenue Oil price (USD/barrel) 109 109 113 103 • Stable OPEX, to a large extent fixed costs Revenue (SEK million) 525 542 1,717 1,619 • EBITDA margin of 55.7% • Depreciation somewhat lower EBITDA (SEK million) 292 302 990 989 due to lower production EBITDA margin 55.7% 55.7% 57.6% 61.1% • Financial net strengthened due to fx effects and both lower interest Profit before tax 64 -23 107 147 and amortized cost (SEK million) * • Tax/EBITDA 27% in Q3 Profit for the period -15 -118 -166 -229 (SEK million)* Earnings per share (SEK) -2.17 -0.33 -2.55 -0.36 * Figures 2012 exclude non-cash, one-off write downs and impairment charges of SEK 1.495million(SEK 1.370 million after tax) in Q3, SEK 92 million in Q2 and SEK 1.585 million (SEK 1.460 millionafter tax) in the nine-month period. 7
  8. 8. Cash flow Q3 Q2 Jan-Sep Jan-Sep KEY COMMENTS SEK million 2012 2012 2012 2011 Operating cash flow 64 425 664 917 • Operating cash flow of SEK 664 million Jan-Sep of which income 0 -2 -5 -38 • Continued low capex spending, taxes paid mainly on Aseng and Alen CAPEX -16 -21 -69 -1,478 development in EG Financing activities -51 -570 -634 -445 Net cash flow -2 -167 -39 -1,0058
  9. 9. Capex forecast 2012/2013 Capex 2011 - 2013 KEY COMMENTS 1 800 1,613 Actual Forecasted • 2012 forecast of SEK 240-375 million unchanged 1 600 • Capex of SEK 16 million in Q3 and SEK 69 million 1 400 for nine-month period 2012 1 200 • Azurite sidetrack drilling imminent MSEK 1 000 800 • 2013 forecast SEK 250-380 million 600 400 240 - 375 250-380 Drilling program/planned wells 2012-2014 200 Tunisia: Zarat Elyssa 2013 Appraisal/1 0 69 2011 2012 2013 Tunisia: Makthar 2014 Exploration/1 Congo: MPS Azurite Q4 2012 Sidetrack/1 Appraisal/ EG: Block I Block I 2013 exploration/1 EG: Block H Aleta Q4 2012/2013 Exploration/1 DK: 12/06 Lille John 2013/2014 Appraisal/19
  10. 10. Current debt situation Covenants and net debt KEY COMMENTS Q3 2012 Q2 2012 Q1 2012 Covenant • Recapitalisation to restore Equity and BookBook Equity (SEK million) 956 3,064 2,994 >2,000 equity/Capital employed above requirementBook Equity to in covenants 22% 47% 43% >40%Capital Employed • Waiver obtained for both NOK & SEK bondsNet debt (SEK million) 3,410 3,503 3,803 N/A covenants • Waiver conditional on EGM approval of proposed recapitalisation • Bond loans will be due for immediate repayment if waiver is withdrawn • New equity post recapitalisation of approx. SEK 2,500 million10
  11. 11. RecapitalisationTransaction in brief Q1
  12. 12. Development 2010–2012: Azurite set-back Production CAPEX 20 000 6 000 5 000 15 000Average bopd 4 000 MSEK 10 000 3 000 2 000 5 000 1 000 0 0 2010 2011 2012 YTD 2010-2012 2010-2012E 2010 Strategic Plan Actual Production 2010 Strategic Plan Actual CAPEX Operating cash flow* • Production 2012 YTD turned out almost 10,000 boepd 4 000 below the plan set fourth in 2010 – mainly due to Azurite 3 500 – Negative operating cash flow effect of more than 3 000 SEK 2.9 billion 2010-2012 YTD* 2 500 • Other assets – especially Aseng – have performed in MSEK 2 000 line or above plan 1 500 • Planned capex delayed due to cash flow constraints 1 000 500 • Operating cash flow** from producing assets remains 0 strong – SEK 664 million 2012 YTD 2010-2012 2010-2012E *) Net entitlement. Based on an oil price of USD 80/bbl 2010 Strategic Plan Actual Operating Cash Flow **) Operating cash flow pre capex, post tax 12
  13. 13. Indebtedness too high given current asset base Background Net debt development 5 200% Poor Azurite performance 4,0 4 3,7 3,7 3,8 Net debt/equity (%) 3,5 3,5 3,4 150% Net debt (SEKm) 3,1 3,2 3 2,8 2,5 127% 100% Accelerated amortizations 122% 114% 140% 2 85% 77% 72% 60% 68% 50% 1 52% 41% Weak balance sheet 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 Perceived inability to develop assets Net debt of which convertible bonds Net debt*/equity *) Includes convertible bonds, before impairment Unfavourable • Underlying cash flow from production stable but conditions for net indebtedness following Azurite set-back too credit facilities high and liquidity has become a constraint Difficulty to Low perceived • Recapitalisation to strengthen balance sheet make asset critical to avoid financial distress value of assets transactions Price pressure on all traded instruments13
  14. 14. Solution: Recapitalisation for future growth Board of Directors propose a two-step transaction strengthening equity with SEK 1.7 billion 1 Set-off issue Ownership Outcome 8% » Offer to convertible bondholders » The company believes that after the to set-off their convertible bonds transactions its balance sheet will be against newly issued shares at 92% sufficiently strong to: SEK 0.15 Current Convertible shareholders bondholders • Increase ability to complete asset divestments 2 Ownership • In combination with new debt Rights issue financing, enable ability to develop 24% 4% prioritised assets to secure future growth » Fully underwritten rights issue of approx. SEK 700 million at 48% • In combination with new debt 24% financing, enable planned SEK 0.10 (~50% directed to old equityholders and ~50% to Current Convertible amortisation of bond loans and shareholders bondholders convertible bondholders) credit facilities during 2013 Convertible Shareholders’ share bondholders’ of new issue share of new issue » Post transaction – continue to benefit from operating cash flow and development potential inherent in assets primarily in North Africa and the North Sea The set-off issue and fully underwritten rights issue are subject to the underwriting agreement entered into between the company and Carnegie not being terminated. Carnegie has the right to terminate the agreement, inter alia, if the set-off issue is not subscribed for to such extent that more than 90% of the claim under the convertible bonds (including accrued interest as at 6 November 2012) is used as payment for the new class B share by way of set-off.14
  15. 15. Terms of set-off and rights issue 1 Set-off issue • Set-off of one (1) convertible bond of nominal value including accrued interest of in total SEK 17.40 for 116 new B shares at SEK 0.15 per share Set-off issue • Maximum of 7.1 billion new B shares (increase in equity of SEK 1.1 billion) 2 Rights issue approx. SEK 700 million (assuming 100% acceptance in set-off issue) Rights issue to • Rights issue directed to the current shareholders (holders of A current shares) of approximately SEK 350 million at SEK 0.10 per share shareholders Rights issue to • Rights issue directed to holders of new B shares from set-off issue of holders of new B approximately SEK 350 million at 0.10 per share share15
  16. 16. PA Resources way forward – business plan Operating cash flow » Cash flow from producing assets to finance maintenance investments in the Aseng and rights issue proceeds and Didon fields enables maintenance » Strengthened balance sheet, in combination with new debt financing, enables investments planned amortizations of bond loans and credit facilities during 2013 » Work ongoing to reduce interest in certain prioritized assets Farm-outs to reduce risk exposure and • Zarat license in Tunisia (Elyssa, Zarat and Didon) future investments • 12/06 in Denmark (Broder Tuck and Lille John) » Cash flow from producing fields combined with new debt financing enables Development of development of prioritized assets – target to develop ~32 mmboe to production prioritized assets for • Zarat and Elyssa in Tunisia long-term • Broder Tuck and Lille John in Denmark production growth » Net debt to remain in line with the level following the transactions Selective exploration to increase the » Selective exploration and appraisal of Block I in EG and Makthar in Tunisia resource base » Only a few planned commitments Improved position for » Strengthened balance sheet secures the value of the asset portfolio and improves farm-outs and asset the position in future farm-outs and asset related transactions related transactions16
  17. 17. Zarat Field – Largest undeveloped discovery in Tunisia 1990 1992 1995 2005 2010-2011 2011-2012 2013 2013-2017 2017/2018Permit Award Discovery Appraisal Well PA Acquisition ZRT-N1 Appraisal POD Update, Unitisation UPOD, UUOA Development First production • c. 80 mmbbl liquids Outlook - Forward Plan Gross Recoverable • c. 600 Bscf gas incl. inerts » Tunisian gas deficit growing – more gas projects required Volumes • Largest undeveloped discovery in Tunisia with Elyssa & Zarat as clear candidates » Submit Unit Plan of Development by Q1 2013 • c. 60% of field lies in Zarat Permit » Agree unitisation principles with Joint Oil Block Unitisation » Actively participate in Government infrastructure initiative • c. 40% in Joint Oil Block Ownership & • Zarat Permit: PA Resources 100% Development Concept Operatorship • Joint Oil Block: Sonde 100% • El Gueria fm reservoir Subsurface • 30m oil rim with > 70m rich gas cap Aspects • 40° API oil, 53° API condensate • Significant inert component in gas • 40,000 bopd initial oil/cond rate first year • 200 mmscf/d initial raw gas rateFacilities and • 9 producer wells, 4 gas injectorsDevelopment • Objective to maximise liquid recovery Aspects • Plan assumes a 7yr gas recycling phase • Followed by gas cap blowdown • 25yr + production life17
  18. 18. Zarat Field – Tentative Unitization agreement RECENT DEVELOPMENT Joint Oil Block Zarat field • Tentative agreement reached on Unitization of Zarat field reached with Sonde Resources (licence holder ZRTN-1 to North Zarat licence) ZRT-1 Zarat Field ZRT-2 • Agreement includes principles relating to Unit Area, El Nisr Unit Plan of Development Area and Tract Participation Aliyan • Unit Plan of Development on track for submission to Updip Tunisian Authorities by end Q2 2013 Massinissa • Detailed reservoir technical evaluation undertaken Didon North Field jointly by PA Resources and Sonde is on-going • Preliminary results indicate gas recycling option as Zarat West Didon South Didon Field a viable production option – allows production of oil and condensate in advance of gas blow down Zarat Permit Elyssa Field Zarat Field (PART) • Further announcement once all approvals have Didon Concession been obtained Fields Lead / Prospects TUNISIA LIBYA Licence Group: Operator PA Resouces 100% ETAP has a back-in right of up to 55%18
  19. 19. Elyssa – Appraisal well in 2013 1974 1992 2005 2006/2007 2010 2013 2014 2014-2016 2016Discovery Appraisal Well PA Acquisition Appraisal Well + ST New 3D Seismic ELY-4 Appraisal Well POD Development First Production Outlook - Forward Plan Gross • c. 50 mmboe Recoverable • Mainly gas resources » Tunisian gas deficit growing – more gas projects Volumes • Small quantity of oil/condensate required with Elyssa & Zarat as clear candidates » Seismic re-interpretation & modeling by end 2012 Ownership & » Drill appraisal well in 2013 • PA Resources 100% Operatorship Development Concept • Asymmetric anticline structure • Gas & oil accumulation in Vascus Cherahil Subsurface and Bireno reservoirs Aspects • 36-37° API oil • Low inert, c. 16% assumed • 50 m water depthFacilities and • 6 production wellsDevelopment • Development via tie-back Aspects • c. 3,000 bopd initial oil/cond rate • c. 120 mmscf/d initial raw gas rate19
  20. 20. Denmark 12/06 – 2011 discoveries and way forward PA Resources Operator with 64% Broder Tuck • High quality Middle Jurassic reservoir proved by wells • Mid to high case assessment of c. 25-50 mmboe gross of contingent resources including liquids • Commercialisation studies continues through 2012 • Initiated discussions with Maersk for infrastructure tie back 12/06 Broder Tuck-2 • Assumed production start in 2017 Lille John Lille John-1 • Wells established 35 API oil in Miocene sandstone at c. 900m – exceptionally light oil for shallow depth • Work focused on Miocene prospect inventory B20008-73 • Remaining deeper potential likely – Chalk remains and well result upgrades Middle Jurassic prospect • 2012 work programme to reprocess 3D to determine prospect inventory and appraisal well location Licence Group: Operator PA Resources (64%), Danish • Drilling project management tendered and efforts to locate North Sea Fund (20%), Spyker Energy (8%), Danoil (8%) available rig continues • Initiated discussions with Maersk for infrastructure tie back • Assumed production start in 201620
  21. 21. Reserves and Resources for development 2P Contingent Risked Prospective MMboe Reserves Resources Resources Block I, Block H, MPS, Didon, Azurite, Aseng Block I, MPS, 12/06, Marine XIV, Zarat permit, Assets liquids, Alen, Zarat field Marine XIV, Zarat permit, Jelma, Makthar, Jenein included liquids, DST Netherlands Center, Gita, 12/06, Block 8, Netherlands, UK 2011.12.31 60.2 145 409 Present PAR working interest Tunisia: Zarat 43.9 29.3 Tunisia: Elyssa 42.2 Denmark: Lille John 9.1 9.1 Denmark: Broder Tuck 21.4 Total 43.9 102.2 9.1 Developed Net after farm-out 8.8 21.5 2.221
  22. 22. Prioritised investments/projects 2013-2018 Farm-out 2013E 2014E 2015E 2016E 2017E 2018E Total target • CAPEX forecast assumes farm-out ofDevelopment Projects prioritised assetsProducing Fields 240 160 140 30 0 0 570 • Maintenance CAPEX ofDenmark: 12/06 Field 130 220 310 180 0 0 840 64% to 15% producing fields includedTunisia: Zarat Field 210 500 1 060 680 230 0 2 680 100% to 20%Exploration 110 70 0 0 0 0 180CAPEX Forecast (MSEK) 690 950 1 510 890 230 0 4 270PAR Carry Estimate 520 680 970 300 0 0 2 470Net CAPEX (MSEK) 170 270 540 590 230 0 1 800 Total assets Production and reserves under development 2013 2014 2015 2016 2017 2018Reserves*Reserves in producing fields(MMBOE) 12.8 10.9 8.9 7.6 6.2 5.0Reserves in assets to bedeveloped (MMBOE) 32.5 32.5 32.5 30.3 27.5 23.2Total 45.3 43.4 41.4 37.9 33.7 28.2Production (boepd)*Working interest 6,300 5,300 5,400 9,500 11,500 15,000*) Assuming farm-outsNote: Assumes an oil price of 110 USD/bbl, USD/SEK of 6.53 and a discount factor of 10%22
  23. 23. Expected outcome of Business Plan Estimated development of reserves (MMBOE) HIGHLIGHTS: 40 35 • Continued production from currently producing 30 assets 25 30 MMBOE • Investments in 2013-2015 adds new production 20 and long-term cash flow – 30 mmboe developed 15 to production 10 5 • Farm-outs critical to reduce risk and capex 0 2013 2014 2015 2016 2017 2018 • Further investments in 2016-2017 Producing Fields Fields to be developed to maintain and add new production • Planned production start for Lille John and Production development (boepd) Elyssa in 2016 followed by Broder Tuck and Block I in 2017 and Zarat field in 2018 17 500 15 000 12 500 10 000 7 500 5 000 2 500 0 2013 2014 2015 2016 2017 2018 Producing Fields Fields to be developed23
  24. 24. Expected outcome of Business Plan Production and cash flow* development Net debt development 8 160% 2 000 1,820 20 000 Net debt and equity (SEKbn) 6 120% 1 500 15 000 5,0 Net debt/equity (%) Production (boepd) 86% Cash flow (SEKm) 76% 72% 4 68% 3,6 80% 1 000 840 10 000 2,8 2,5 2,4 2,4 2,1 2,0 33% 1,7 1,8 2 1,2 40% 500 5 000 180 60 0 -13% 0% 0 0 -100 -0,6 -500 -270 -5 000 -2 -40% 2013e 2014e 2015e 2016e 2017e 2018e 2013e 2014e 2015e 2016e 2017e 2018e Equity Net debt Net debt/equity Net cash flow Production *) Cash flow post capex, G&A and interest payments24
  25. 25. CAPEX forecast – Total and per barrel CAPEX incl carry proceeds 1 800 CAPEX HIGHLIGHTS: 1 600 1 400 • Development of prioritised key assets and 1 200 continued selective exploration activities MSEK 1 000 • 30 MMBOE to be developed to producing 800 reserves 600 400 • Total capex forecast of SEK 1.8 billion 200 0 • Development capex of approx. USD 9/boe 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E including carry proceeds CAPEX/Produced barrel 80 70 60 50 USD/bbl 40 30 20 10 Cost per developed boe incl carry proceeds 0 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E25
  26. 26. Prioritised assets – Value through farm-outs Asset valuation before and after farm-outs After Farm -outs KEY COMMENTS: Reserves & Current Current Contingent Working PAR Working PAR • Farm-out of prioritised assets to reach Resources Book Value Interest Valuation Interest Valuation preferred working interest level and North Africa (mmboe) (MSEK) (%) (MSEK) (%) (MSEK) reduce risk on individual assets Didon* 100,0% 50,0% DST* 75,0% 75,0% • Value per barrel potential increase from Zarat 120 2 807 100,0% 8 300 20,0% 3 000 $4/boe in current book value to $19/boe Elyssa 100,0% 20,0% on prioritised assets after development Total 120 2 807 8 300 3 000 and farm-outs • Upside potential compared to current West Africa book values in West Africa and North Azurite* 35,0% 35,0% 13 707 2 100 2 100 Sea development assets Block I* 5,7% 5,7% Total 13 707 2 100 2 100 • Large portion of value in North African assets North Sea ASSUMPTIONS FOR VALUATION: 12/06, Broder Tuck 40 384 64,0% 3 100 15,0% 1 100 12/06, Lille John • Reserve data from third party reports Total 40 384 3 100 1 100 • Business plan as previously presented Exploration assets Oil price of 110 USD/bbl Other Assets, incl. • USD/SEK of 6.53 441** 1 693 - 2 300 - 2 300 Exploration** Total 441** 1 693 2 300 2 300 • Cash flow discounted at 10% Total 5 591 15 800 8 500*) Producing assets**) Includes prospective resources 26
  27. 27. Asset valuation – Summary 10 8,5 8.5 8 2,3 6.2 SEK billion 6 5,6 Total equity of SEK ~1.9 billion 1,7 3,9 4 0.1*** 0.7** 1,6 1.1** 2.3 2 2,3 2,3 1.9** 0 Book values PAR valuation Net debt New equity from New equity from Old equity** Upside to NAV assuming farm- convertible rights issue outs* bondholders Asset valuation Upside potential to business plan Producing assets Assets to New equity from Net debt post New equity from Old equity Upside potential be developed rights issue transactions convertible bondholders Exploration assets *) Based on reserve data from third party reports, the business plan as presented on the previous pages, an oil price of 110 USD/bbl, USD/SEK of 6.53 and a discount factor of 10% **) Assumes 100% acceptance in the exchange offer ***) Based on a share price of SEK 0.14, i.e. the theoretical share price post transactions27
  28. 28. Summary and outlook INVESTMENT HIGHLIGHTS: • Cash flow from current production • Financial capacity to finance development capex according to plan and repay/refinance the SEK bond due in 2013 • Development of existing reserves adding after farm-out 30 MMBOE for long-term production growth - expected to result in net cash position in 2018 • Value in asset portfolio secured and strengthened position for future farm-outs and transactions28
  29. 29. Thank you! Q1
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