Investor Presentation January 2013 Disclaimer This presentation has - PDF document

Investor Presentation January 2013

Disclaimer This presentation has been prepared by JKX Oil & Gas Plc ( JKX ) solely for use by you at the presentation held in connection with the proposed offering and sale of convertible bonds (the Offering ). The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. JKX is under no obligation to update or keep current the information contained in this presentation. None of JKX or any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this presentation or its contents. The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons. The recipients of this presentation should not base any behaviour in relation to qualifying investments or relevant products (as defined in the Financial Services and Markets Act 2000 ( FSMA ) and the Code of Market Conduct made pursuant to FSMA) which would amount to market abuse for the purposes of FSMA on the information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any way which would constitute "market abuse". Certain statements in this presentation constitute "forward-looking statements". These statements reflect beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, you are cautioned not to place undue reliance on such forward-looking statements. JKZ disclaims any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements, except where it would be required to do so under applicable law. This presentation is being communicated in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) and to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as relevant persons ). This presentation is only directed at relevant persons and any investment or investment activity to which the presentation relates is only available to relevant persons or will be engaged in only with relevant persons. Solicitations resulting from this presentation will only be responded to if the person concerned is a relevant person. Other persons should not rely or act upon this presentation or any of its contents. This presentation and the information contained herein are not an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States (within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the Securities Act )). The securities proposed to be offered have not been and will not be registered under the Securities Act and may not be offered or sold in the United States except to qualified institutional buyers as defined in Rule 144A in reliance on Rule 144A or another exemption from, or transaction not subject to, the registration requirements of the Securities Act.  2

Contents Introduction 4 Operations Review 8 Financial Review 15 Summary 20 Appendix 22 3

Introduction Who we are?  We are an upstream oil and gas company focused on central and eastern Europe  Our portfolio consists of 17 licence interests with activities spanning the full-cycle E&P value chain from exploration through to production  Established in Ukraine since 1994, we own and operate mature assets which generate solid cash flows  We entered the fast growing independent gas market in Russia in 2007. Our Koshekhablskoye field came on-stream in 1H12  2P reserves of 90.7MMboe as of 31/12/11*  Cash generated from operations in 2011 - $124m (1H 2012: $60m) *Reviewed by independent engineer Senergy (GB) Limited 4

Introduction Investment Opportunity Ukraine  Attractive price environment in the Ukrainian gas market due to domestic production deficit; solid cash flows from existing production  Recent entry of multinational E&P firms in the country illustrates geological potential; lack of local capital and expertise will create opportunities  Fracking program in Ukraine at the Rudenkovskoye field in 1H13 to extend Novo-Nikolaevkoye complex life; offers significant production upside if successful Russia  Workover programme at Koshekhablskoye on-going to increase gas production to plant capacity of 40MMcfd in 1H13  Sidetrack and testing of existing well to deeper Callovian formation in 2013; potential for rapid monetization if successful  Potential to increase plant throughput with debottlenecking and workover of additional well  Positioned to benefit from long term gas price appreciation in Russia Hungary  Existing licences and production in the very attractive Hungarian gas market; exploration potential exists in conjunction with local partner 5

Introduction Our oil and gas assets Asset life cycle Licence area Country Exploration Appraisal Development Production Reserves (Mmboe) UKRAINE Ignatovskoye Molchanovskoye North Molchanovskoye Main Novo ‐ Nikolaevskoye 28.5 Rudenkovskoye Molchanovskoye Wedge Zone Elizavetovskoye Zaplavskoye Koshekhablskoye Oxfordian RUSSIA Koshekhablskoye Callovian 61.2 Georgievskoye HUNGARY Hajdunanas* Gorbehaza* 1.0 Turkeve* Hernad l, ll* Veszto** Proved and Probable reserves as of 31 December 2011 JKX has 100% working interest in its licences except fot the following * JKX has 50% interest in this licence area ** JKX has 25% interest in this licence area 6

People Management Team Paul Davies Nigel Moore Chief Executive Officer Chairman Co-founder of JP Kenny Exploration & Formally a London-based partner of Ernst & Production Ltd, the forerunner of JKX Oil & Gas Young where he was responsible for the Ernst & plc. Extensive experience of business in the Young operations in Russia and Eastern Europe former Soviet Union Cynthia Dubin Alexander Bogdanov “Sasha” Finance Director General Director - Russia 27 years of experience in the oil, gas and energy Appointed as General Director of sector. Project finance expertise combined with Yuzhgazenergie in October 2011, Sasha was an international banking background previously General Director of a large Russian construction company Martin Miller Tim Kaunov Technical Director General Director - Ukraine Chartered Engineer with over 35 years of Joined PPC, our Ukrainian subsidiary, in 1996 as experience in the oil and gas industry, including Technical Director and in 1999 he was appointed senior positions with Mobil and BP PPC General Director Peter Dixon Gene Palenka Commercial Director Finance Director, CIS Region 27 years of experience in the upstream oil and Finance Director of our Ukrainian operations gas industry in particular in Ukraine and former since 1998; the role was extended in 2011 to Soviet Union countries become Finance Director of our CIS Region, which includes our Russian subsidiary 7

8 Operations Review

JKX Oil & Gas plc Operations map Ukraine Slovakia Hungary Southern Russia Bulgaria 9

10 Group Proved and Probable Reserves

Ukraine On-going development, appraisal and exploration History  In country since 1994, 100% interest in the Novo- Nikolaevskoye Complex and Elizavetovskoye exploration licence  Cumulative revenues in Ukraine in excess of $1.4bn  Production with more than 40 producing wells Highlights  A leading independent gas production company in the domestic market for 15 years  New LPG production installed in 2011 with strong margins  Initiation of production from existing well in Elizavetovskoye licence, data acquisition leading to sanction of new development project  Award of multi-frac contract for Rudenkovskoye field to Schlumberger  Exploration successes at Zaplavskoye with Z-4 well in 1Q12 Forward Programme  Fracking of well R-103 in 1H13  Acquisition of 3-D seismic over Zaplavskoye  Multi-well and facilities program at Elizavetovskoye 11

Ukraine Production and margin upside Multi-stage frac program at Rudenkovskoye  Contract signed with Schlumberger. Work scheduled for the spring of 2013  Largest on-shore multi-stage frac in Europe  Successful outcome would enable production and monetization of 21MMboe 2P reserves Elizavetovskoye exploration license  Stand-alone development, final design and work program to be completed in 4Q12  Drilling of first new well, E-301, and installation of additional facilities to start in 1Q13  Production ramp-up planned for 2Q13 Zaplavskoye  Initial Z-04 flow rates of 20.8 MMcfd of gas and 1,040 bpd of condensate  Z-05 appraisal well expected 2Q13  Increased opportunity for multi-well program on the back of newly acquired 3D seismic 12