INVESTOR PRESENTATION December 2013 1
Investment Highlights • One of the largest African acreage positions of any junior oil company globally (Kenya, Namibia) • Working oil and gas systems proven offshore Kenya in 2012 , offshore Namibia in 2013 • Introduced major global players such as BG, Origin, Apache, Premier, PTTEP and Tullow Oil • Expect $300 - $400 million to be spent on exploration across our projects over the next 18-24 months: – Kenya L10A (18.75%): Sunbird-1 well offshore Kenya spudding mid January 2014, operated by BG Group – Kenya L10B (15%): a well offshore Kenya potentially mid-late 2014, operated by BG Group – Kenya L6 (40%): targeting a free carried well in 2014 from current farm out process (plus portion of $10m back costs) – Kenya L8 (30%*): targeting a free carried well from current farm out process – Namibia EL 0037 (30%): Pancontinental free carried through first well by Tullow Oil • Cash position $30 million and Enterprise Value of only $48 million 2
Pancontinental Oil & Gas (ASX: PCL) • Hydrocarbon discoveries in Africa will change the global energy dynamic • PCL is positioning to significantly benefit from this rare event Large Offshore African Acreage Position – one of the largest of any junior company 4 Blocks Offshore Kenya Market Cap. A$78m Block PCL% Partner Operator Cash. A$30m Kenya 40% FAR 60% FAR L6 EV. A$48m Kenya 15%* Apache 50% Apache L8 Origin 20% Tullow 15% Kenya 18.75% BG Group 50% BG Group L10A PTTEP 31.25% 1 Block Offshore Namibia PCL Block Partner Operator Kenya 15% BG Group 45% BG Group % L10B PTTEP 15% Premier 25% Namibia 30% Tullow 65% Tullow EL0037 Paragon 5% *Increasing to 30% after Apache withdrawal New African Acreage – Pancontinental will continue to grow its asset portfolio through a stringent selection process 3
Corporate Snapshot Capital Structure Shareholder Overview Capital Structure Shares on Issue 1,151 m Board & Mgmt Others 15% Options on Issue 1 5 m Market Cap. (at $0.068) $78m 58% 27% Cash (December 2013) – see Example Use of Funds slide $30 m Debt Nil Institutional Enterprise Value $48 m 1. 2.25m options (exercise price $0.1225, expiry Nov 2014), 2.75m options (exercise price $0.1230, expiry Nov 2016) Share Price History 30,000,000 $0.14 $0.12 25,000,000 Daily Trading Volume (shares) $0.10 PCL Share Price (A$) 20,000,000 $0.08 15,000,000 $0.06 10,000,000 $0.04 5,000,000 $0.02 0 $0.00 4
Early Mover, Track Record, Turning Point Woodside farms Gippsland into Licenses L6 Petroleum (now …for over 10 years Pancontinental has: and L8 FAR) farms into License L6 Secured African acreage before it becomes highly prized • Introduced major players as partners through farm-in • Prudently managed exposure to exploration for stakeholders • PCL awarded offshore Kenya Licenses L6, L8, L9 PCL, BG Group, Cove Tullow farms into Energy, Premier awarded License EL 0037 Offshore Kenya Licenses PCL African Expansion – Origin Energy Farms offshore Namibia L10A & L10B Acquires Afrex into License L8 Apache Corp farms into BG Group to drill License License L8 L10A offshore Kenya PCL awarded Offshore Namibia License EL 0037 Tullow farms into License L8 PCL’s first African well – 52 net metres gas pay …recent turning points for Kenya and Namibia ...such turning points have foreshadowed many successful producing basins around the world* *See Appendices for “Understanding How Prolific Basins Develop” 5
In Perspective – Alongside Heavyweights Pancontinental Joint Venture Partners Partner Market Capitalisation Project with Pancontinental Notes (Approx) US$ • BG Group $80 Billion Kenya L10A & L10B Seventh largest company on the London Stock Exchange • Biggest supplier of LNG to the USA • Tullow Oil $17 Billion Namibia EL 0037 Leading African oil explorer • Kenya L8 Farmed-in to Pancontinental projects in Kenya and Namibia • In the Top 40 on the London Stock Exchange • PTTEP $20 Billion Kenya L10A & L10B Thai State-Owned Oil Company • 128 th in the global Fortune 500 list • Highly diversified energy company • Australia's leading integrated energy company Origin Energy $16 Billion Kenya L8 • In the ASX Top 20 • Expanding into Southern Africa • FTSE 250 member Premier Oil $2.9 Billion Kenya L10B • Notable British oil producer and explorer • Pancontinental also has some notable neighbours - Shell, Anadarko, Total, Ophir, HRT, ENI ……… .. 6
OFFSHORE KENYA..... 7
Offshore Kenya – Factors for Success THE THEORY – Favourable Depositional Environment • The Tana River delta developed inboard from the Davie – Walu Ridge into the Tembo and Maridadi Troughs Schematic of • Jurassic to Tertiary restricted depositional Cretaceous and Kenya environments Tertiary Deposition • Pancontinental recognised the opportunity early and acquired exploration licences THE ACTIVITY – After Success, Drilling Now Moving North 1 Offshore Kenya – gas discovery + non commercial oil shows in reservoir 3 quality sands (2012 / 2013) Last 5 wells Years 2 ~30 + Tcf Gas discovered offshore Tanzania > 15 wells ~ 150+ Tcf Gas discovered offshore > 35 Mozambique wells
Offshore Kenya – Factors for Success THE SETTING – Recent Discoveries and Building on Success Onshore Northern Kenya • Only 3 wells in the last five years offshore Kenya - PCL’s Major Oil Discoveries by Tullow Oil and Africa Oil Four Blocks - One gas discovery; and - One well with significant oil shows and good reservoir Oil Shows • 3 Operators believe that the inboard area is “oily” Gas Discovered • Pancontinental has access to much of the inboard • Future drilling will be on a variety of play types THE PROSPECTIVITY – A Multitude of Play Types and Prospects New hydrocarbon Drilled 2013....... province opening offshore Kenya Major Carbonate / Reef Prospects Major Clastic / Sandstone Prospects 4
Kenya Block L10A Prime Acreage, World-Class Joint Venture • Offshore Kenya - Pancontinental 18.75% • BG (Operator) 50%, PTTEP 31.25% • 4,962 sq km (1,226,136 acres) • Water depth 200m to 1,800m & close to Mombasa Port Significant Oil Opportunity • Extensive 3D seismic - multiple Play types, Prospects and Leads • Approx. $31 million spent to date • Two interpreted oil “kitchen” troughs Ready to Drill • Targeting Sunbird Miocene Reef Prospect • Strong operator – BG Group • Drilling expected to commence mid January 2014 10
Kenya L10A Exploration Multiple Play Types • Miocene Reefs • Oil interpreted from two Source Kitchen “Troughs” • Tertiary & Cretaceous • Drilling Sunbird Miocene Reef mid January 2014 Channels • Cretaceous anticlines • Channel and turbidite fan sands Sunbird Starling West Prospect Prospect Longclaw- Prospects and Leads Starling Mombasa Prospect • >20 Main closures L10A Miocene Miocene Miocene • Miocene reefs -Sunbird, Reef Reef Reef Chatterer, Turaco, Prospects Prospects Prospects Outboard Babbler etc • Crombec 550 sq km Weaver- • Inboard Numerous other Francolin- Outboard clastic Flycatcher L10B Prospects prospects Multiple Plays + Crombec Hornbill Extensive 3D Coverage Akalat Lead Lead Prospect Stacked Potential • 3D surveys totalling ~ 4,800 sq km (L10A & L10B) • Plus extensive 2D data 11
Kenya L10A/L10B Sunbird Prospect Sunbird Prospect Reef • Large Miocene Reef build-up Fore-reef Core • Talus Prospect covers 73 sq km, with vertical relief of approximately 700m. The well will be drilled to at least 3,000m subsea. Water depth is 725m. Sunbird • Mature Eocene source rocks interpreted Prospect • Excellent analogues – S East Asia etc • Multiple follow-ups • OIL play Babbler • DRILLING mid January 2014 Prospect Carbonate reefs developed over extensive platform 12
Kenya Block L10B Prime Acreage & Joint Venture • Offshore Kenya • Pancontinental 15% • BG (Operator) 45%, PTTEP 15%, Premier Oil 25% • 5,585 sq km (1,380,082 acres) • Water depth 200m to 1,800m and close to Mombasa Port Significant Oil Opportunity • Extensive 3D & 2D seismic - multiple Play Types, Prospects and Leads • Approx. $32 million spent in L10B • Two interpreted oil “kitchen” troughs Ready to Drill • Strong operator – BG Group • Clastic prospect- Drilling expected mid 2014 • Targeting outboard clastic play and / or Crombec Lead 13
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