Annual General Meeting Swala Oil and Gas (Tanzania) Ltd May 2 nd - PowerPoint PPT Presentation

Annual General Meeting Swala Oil and Gas (Tanzania) Ltd May 2 nd 2013, 9am, Southern Sun DSM

Swala AGM • Chairman’s Welcome • Competitive Review 2012-2013 CEO • Asset update OM • Financial statement CFO • Listing on the DSX CEO • Voting • Any other business

Swala AGM • Chairman’s Welcome • Competitive Review 2012-2013 CEO • Asset update OM • Financial statement CFO • Listing on the DSX CEO • Voting • Any other business

Our current position

2011-2012 discoveries

2013 opportunities

Swala AGM • Chairman’s Welcome • Competitive Review 2012-2013 CEO • Asset update OM • Financial statement CFO • Listing on the DSX CEO • Voting • Any other business

Pangani – 2012 results

Pangani – distressed vegetation?

Kilosa-Kilombero – 2012 results

KK – distressed vegetation?

Eyasi Licence – what do we know?

Seismic - background • Polaris will carry out the onshore seismic • Scheduled to be acquired during the dry season, between May and October 2013 • Use existing roads and tracks within these areas for seismic data acquisition, where possible • Low impact technologies will be utilised for the seismic source and for line clearing, to minimise potential impacts on local communities, farming and other activities • Helicopters will be used to move equipment and personnel.

Seismic Acquisition Seismic data is collected by recording sound waves that are reflected off different geological horizons found below the surface. The sound waves generated by the seismic source are received by geophones inserted along the seismic line and transmitted to a recording truck

Seismic Sources • Due to a variety of access conditions, land usage, and environmental / social sensitivities in the survey areas, a variety of seismic sources are being considered: – standard vibroseis trucks – explosives (dynamite) – AWD (Accelerated Weight Drop) • It is likely that a combination of these seismic sources will be used • A dual source (dynamite and AWD) may be used in some areas

Use of Dynamite • Dynamite charges are placed in holes that are drilled with dedicated drilling equipment (shot hole drilling). • With a deeper holes, charges produce dull thumps. Holes are “preloaded” - dynamite is loaded right when the hole is drilled, which prevents the hole caving in. Blasting cap leads are buried and located when the hole is shot. • Dynamite is imported and stored in magazines or ‘ mags ’. Commonly CCans are used – these must be wood-lined, fenced, and guarded, with one mag for dynamite, and one for blasting caps etc. • Has been usede very successfully on many previous onshore seismic surveys in Tanzania

Less Intrusive Techniques Vibroseis truck AWD • Vibroseis method involves a vibrating source mounted on a heavy vehicle • AWD units can be mounted on smaller vehicles such as tractors • AWD regarded as most environmentally friendly surface source available

Line Preparation (1) • Line preparation will be done using low impact, crooked line techniques: – hand cutting / clearing – GPS guided mulchers for avoidance cutting and narrow width line construction – bulldozers or graders may be required in some areas – no removal of trees should be required – any road repairs will be beneficial to local communities • Lines will be deviated to avoid particular sensitivities - e.g. crops

Line Preparation (2) • Mulchers do not cause root damage and vegetation recovers very quickly • Mulcher lines are less than 2 m wide

Line Preparation (3) • In dense jungle bulldozers are sometimes needed • For dynamite source one pass is OK • For AWD and vibroseis multiple passes are required • Vibroseis is least “environmentally friendly” surface source in areas of dense vegetation given amount of clearing required • Mulching or hand clearing preferable

Vegetation Regrowth • Regrowth is rapid if mulchers are used, as there is no root damage • Rate of regrowth will depend on clearing method, soil and vegetation type, rainfall etc.

Acquisition Crew • The 2D seismic survey will use a seismic crew consisting of both foreign and local personnel • The survey will be operated using a main camp and satellite camp facilities • A maximum crew size of ~200 personnel is expected to be used • A proportion of the crew will be local or national Tanzanian workers

ESIA Process (1) • The ESIA process for the proposed 2D seismic survey will conform to all relevant requirements of the Tanzanian Environmental Impact Assessment and Audit Regulations 2005 • It will be comprised of the following steps: – project registration and screening – preparation / submission of a project brief to the National Environment Management Council (NEMC) – scoping – baseline study – impact assessment – impact mitigation and enhancement measures – preparation / submission of an Environmental Impact Statement (EIS) to the NEMC

ESIA Process (2) • SOGTL has contracted ERC (Environmental Resources Consultancy) to conduct the ESIA for the 2D seismic surveys • ERC has extensive ESIA experience in Tanzania, including onshore oil & gas projects • ERC conducted the EIA for SOGTL’s airborne gravity-magnetic survey in 2012

Stakeholder Consultation (1) • A key aspect of the ESIA will be the identification of the main stakeholders that will be negatively or positively impacted by the proposed project • SOGTL and ERC will facilitate the engagement / participation of these stakeholders in the ESIA process to ensure that all of their concerns and issues are addressed in the Environmental and Social Management Plan component of the EIS

Stakeholder Consultation (2) • ERC will prepare a Stakeholders Involvement Plan (SIP) • Objectives: – disclosure of planned seismic survey activities – identification of concerns and grievances from stakeholders – response to grievances and enquiries of stakeholders – harnessing of local expertise, needs and knowledge from stakeholders – promoting collaborative efforts • Entry to stakeholder consultations at local level will be the District Commissioner offices in the appropriate districts • A Background Information Document (BID) will be made available to stakeholders at these meetings

Swala AGM • Chairman’s Welcome • Competitive Review 2012-2013 CEO • Asset update OM • Financial statement CFO • Listing on the DSX CEO • Voting • Any other business

2012 SOGTL Activities • Feb 2012 – Award of assets to Swala and Otto, Swala being the Operator • Mar – Jun 12 – Set up of office and recruitment of staff • July to Dec12 – Fulfilment of work program obligations and reporting.

SOGTL P&L 2012 USD Revenue USD Other income 62,853 Prospecting and exploration expenses -1,071,670 Operating and administration expenses -252,735 Loss before taxation -1,261,552 Taxation - Loss for the period -1,261,552 Total comprehensive loss for the period -1,261,552

SOGTL Balance Sheet 2012 USD ASSETS Non-Current assets Property and Equipment 11,611 Current assets Tax claimable 16,040 Other receivables and prepayments 9,198 Bank balances 38,655 TOTAL ASSETS 75,504 EQUITY Equity attributable to equity holders Share Capital 22,309 Share Premium 595,229 Accumulated deficit -1,261,552 Total equity -644,014 LIABILITIES Non-Current liabilities Share capital advance 179,448 Current liabilities Intercompany payable 164,314 Current accounts 12,681 Other payables and accruals 363,075 TOTAL EQUITY AND LIABILITIES 75,504

2012 Cost Analysis 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 50,000 0 Surface fees and Training Work Commitments external costs SOGTL 2012 costs against budget Work Commitments Personnel costs Non JV general & corporate costs Actual - Total Budget - Total Office Cost Travel Accommodation Personnel Cost G&A Overhead charges - 3%

2013 Budget Estimates Table2: (12 months) (net SOGTL) Jan to Mar13 Apr to Jun13 Julto Dec13 Total $82,158 $144,055 $273,310 $499,524 Salaries $78,102 $89,311 $86,862 $254,275 Office etc -$75,530 $365,717 $161,000 $451,187 Support services $84,730 $599,083 $521,172 $1,204,986 Actual Total - General $27,834 $563,124 $3,488,000 $4,078,958 Work on Pangani $25,145 $565,204 $5,250,000 $5,840,349 Work on KK $0 $461,436 $4,544,000 $5,005,436 Eyasi $0 $0 $0 $0 12B $52,978 $1,589,764 $13,282,000 $14,924,742 Actual Total - Work commitment $41,194 $373,040 -$924,174 $41,194 Cash at start of month $469,555 $891,633 $9,248,448 $10,609,636 Investments/ JV reimbursement $510,749 $1,264,673 $8,324,274 $10,650,830 Total Cash in plus bank balance Total Net Debt SOGTL $373,040 -$924,174 -$5,478,898 -$5,478,898 $100,000 $3,200,000 $0 $3,300,000 Parent loan plus interest Total Net Debt SOGTL (after parent $473,040 $2,375,826 -$2,178,898 -$2,178,898 loan)

Budget snapshot 2013

Swala AGM • Chairman’s Welcome • Competitive Review 2012-2013 CEO • Asset update OM • Financial statement CFO • Listing on the DSX CEO • Voting • Any other business