Annual General Meeting 31 st January 2018 Swalaoilandgas.com - PowerPoint PPT Presentation

Annual General Meeting 31 st January 2018 Swalaoilandgas.com

Disclaimer This presentation contains forward -looking statements that are subject to risk factors associated with oil, gas and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delays or advancements, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to United States currency, unless otherwise stated. References to “Swala” are references to Swala Oil & Gas (Tanzania) plc or its applicable subsidiaries. Unless otherwise noted, all references to reserves and resources figures are as at 30 January 2018 and represent Swala’s share. Any geological, reserves and resources information in this presentation is based on, and fairly represents, information and supporting documentation prepared by, or under the supervision of, Mr. Neil Taylor. Mr. Taylor is an employee of Swala Oil & Gas (Tanzania) plc and has over 30 years of experience in the oil and gas business with internationally renowned E&P companies including British Petroleum (1981-1992) and Woodside Energy (1992-2007). Any geological, reserves and resources information in this presentation has been issued with the prior written consent of Mr. Taylor in the form and context in which it appears. Page 2 Swalaoilandgas.com

The Kilosa-Kilombero Licence Acquisition of an interest in PAE PanAfrican Energy Corporation Indirect exposure to the Songo Songo Field About the field Field Production and Reserves Share Matters – Resolutions 12 and 13 Conclusions Page 3 Swalaoilandgas.com

Kilosa-Kilombero Licence (Swala 75%) • Swala is licence operator with 75% equity. Kilosa-Kilombero Location Map • Late 2013 identified the Kito Prospect. • Late 2014 further work on Kito plus identified a number of other leads and prospects. • Late 2015, farmed down to Tata Petrodyne Limited (“TPL”) for $5.7 million in past costs and a carry through the first exploration well (capped at $2.5 million). • If the first well is successful, TPL will pay a further $1 million towards Swala’s costs for a second exploration well. • 2016-2017: Prepared to drill but permits not received in time. Kilombero basin • Extension to 2019 currently under application. Page 4 Swalaoilandgas.com

Sizeable Prospect with Six Additional Leads Page 5 Swalaoilandgas.com

Kito – a significant potential resource KILOMBERO BASIN LOW BEST MEDIUM Kito Basal Sandstone 31 mmstb 97 mmstb 293 mmstb Kito Sequence 1 Sandstone 24.2 mmstb 87 mmstb 254 mmstb Kito Shallow 11.2 mmstb 48.8 mmstb 169 mmstb Lead A 3 mmstb 7 mmstb 10 mmstb Lead B 6 mmstb 14 mmstb 20 mmstb Lead D 19.5 mmstb 45.5 mmstb 65 mmstb Lead F 14.4 mmstb 33.6 mmstb 48 mmstb NET TO SWALA LOW BEST MEDIUM Kito Basal Sandstone 18.6 mmstb 58.2 mmstb 175.8 mmstb Kito Sequence 1 Sandstone 14.52 mmstb 52.2 mmstb 152.4 mmstb Kito Shallow 6.72 mmstb 29.28 mmstb 101.4 mmstb Lead A 1.8 mmstb 4.2 mmstb 6 mmstb Lead B 3.6 mmstb 8.4 mmstb 12 mmstb Lead D 11.7 mmstb 27.3 mmstb 39 mmstb Lead F 8.64 mmstb 20.16 mmstb 28.8 mmstb Page 6 Swalaoilandgas.com

The Kilosa-Kilombero Licence Acquisition of an interest in PAE PanAfrican Energy Corporation Indirect exposure to the Songo Songo Field About the field Field Production and Reserves Share Matters – Resolutions 12 and 13 2018 Kilombero Activity Timeline Page 7 Swalaoilandgas.com

The Transaction • Swala has right to buy up to 40% of PAE PanAfrican Energy Corporation (“PAEM”) for up to $130 million. • PAEM owns 100% of PanAfrican Energy Tanzania Limited, the operator of the Songo Songo Field. • First transaction • Acquired 7.93% interest in PAEM; • Consideration of $17MM in cash and $3.97MM in Preferred Shares (subject to shareholder approval). • Second transaction • Acquisition in tranches to maximise local investment • Possibility of acquiring up to 32.07% more of PAEM; • Local mezzanine bonds to be listed on the DSE, $50MM (greenshoe issue) plus Preferred Shares for difference. Page 8 Swalaoilandgas.com

A farm-in to Songo Songo? SWALA OIL & GAS Orca Exploration Group (TANZANIA) PLC Inc. (TANZANIA) (BRITISH VIRGIN ISLANDS) 100% 100% PAE PANAFRICAN ENERGY SWALA (PAEM) LIMITED CORPORATION Other Projects (UNITED KINGDOM) (MAURITIUS) 100% PANAFRICAN ENERGY LOAN WITH TANZANIA LIMITED Other Projects THE IFC (JERSEY) 100% ? SONGO SONGO A transaction limited to Songo Songo meant that Swala would miss out on potential opportunities being explored within PAET. Page 9 Swalaoilandgas.com

A transaction with PanAfrican Energy Tanzania Ltd? SWALA OIL & GAS Orca Exploration Group (TANZANIA) PLC Inc. (TANZANIA) (BRITISH VIRGIN ISLANDS) 100% 100% PAE PANAFRICAN ENERGY SWALA (PAEM) LIMITED CORPORATION Other Projects (UNITED KINGDOM) (MAURITIUS) 100% PANAFRICAN ENERGY LOAN WITH TANZANIA LIMITED ? Other Projects THE IFC (JERSEY) 100% A transaction with PAET allowed Swala to indirectly benefit from potential opportunities SONGO SONGO being explored within PAET but raised issues of seniority of debt with the pre-exisiting IFC facility. Page 10 Swalaoilandgas.com

Optimal: a transaction with PAEM SWALA OIL & GAS Orca Exploration Group (TANZANIA) PLC Inc. (TANZANIA) (BRITISH VIRGIN ISLANDS) 100% 100% PAE PANAFRICAN ENERGY ? SWALA (PAEM) LIMITED CORPORATION Other Projects (UNITED KINGDOM) (MAURITIUS) 100% PANAFRICAN ENERGY LOAN WITH TANZANIA LIMITED Other Projects THE IFC (JERSEY) 100% A transaction with PAEM allowed Swala to indirectly benefit from potential opportunities SONGO SONGO being explored within PAET and PAEM without any issues of seniority of debt with the pre- exisiting IFC facility in PAET. Page 11 Swalaoilandgas.com

How the Cash Consideration is Structured SWALA OIL & GAS Orca Exploration Group (TANZANIA) PLC Inc. (TANZANIA) (BRITISH VIRGIN ISLANDS) 92.07% 100% PAE PANAFRICAN ENERGY 7.93% SWALA (PAEM) LIMITED CORPORATION Other Projects (UNITED KINGDOM) (MAURITIUS) 100% PANAFRICAN ENERGY Tranche 1 – has TANZANIA LIMITED acquired a 7.93% Other Projects interest in PAEM: (JERSEY) Tranche 2-3: International Funds EAC Mezzanine Bonds 100% (144A) Resolution 10 Resolution 8 Resolution 11 SONGO SONGO Resolution 15 A proportion payable in Preferred Shares subject to Shareholder approval. Page 12 Swalaoilandgas.com

Local participation as a complement to DSE listings Swala Oil & Orca Exploration Group Inc. Gas (BRITISH VIRGIN ISLANDS) (Tanzania) plc 92.07% 100% PAE Swala 7.93% PANAFRICAN (PAEM) Other Projects ENERGY Limited CORPORATION 100% 100% PANAFRICAN ENERGY Other Projects TANZANIA Positive and commercial alternative to LIMITED DSE listings. 100% 100% On completion, Swala (50% locally owned) will own 40% of PAEM, SONGO SONGO equivalent to PAEM being 20% locally owned. Page 13 Swalaoilandgas.com

Returning cashflow to Tanzania through local bonds SWALA OIL & GAS Orca Exploration Group (TANZANIA) PLC Inc. (TANZANIA) (BRITISH VIRGIN ISLANDS) 100% PAE PANAFRICAN ENERGY SWALA (PAEM) LIMITED CORPORATION Other Projects (UNITED KINGDOM) (MAURITIUS) Interest Payments PANAFRICAN ENERGY (14.5%, USD-linked) TANZANIA LIMITED Other Projects (JERSEY) Positive impact in funds retained in country and on the country’s call on its foreign currency account. SONGO SONGO Ownership of the bonds results in coupon payments bringing USD back into Tanzania; Page 14 Swalaoilandgas.com

Additional positive impact of local ownership • First Joint Venture of this magnitude between a foreign company and a Tanzanian-listed company in the Oil & Gas Sector; • Subject to CMSA and DSE appprovals, bonds to be listed on the DSE, underlying the parties’ commitment to the development of local capital markets; • First USD-linked bonds denominated in TZS shillings. The USD-linkage provides holders with an inbuilt currency hedge; • First time that the Tanzanian pension and investment funds are invited to participate alongside international investors in these opportunities, allowing them to diversify their investments; • Potentially increased tax receipts for Tanzania as a result of repatriation of funds. Swala will pay more taxes as a result of the already-taxed cashflow being repatriated to Tanzania. Tanzanian investors on Songo Song Island on a pre-investment due diligence visit. Page 15 Swalaoilandgas.com

The Kilosa-Kilombero Licence Acquisition of an interest in PAE PanAfrican Energy Corporation Indirect exposure to the Songo Songo Field About the field Field Production and Reserves Share Matters – Resolutions 12 and 13 2018 Kilombero Activity Timeline Page 16 Swalaoilandgas.com

Location of the Songo-Songo Field • Songo Songo connected to Songas terminal via 25-km gas line. • Connected to Dar es Salaam through 207km 36” gas line. Page 17 Swalaoilandgas.com