S0und0il Investor Presentation Q1 2016 Updated 08-Feb-2016
Building a Mid-cap Mediterranean Gas Company... Regional gas strategy underpinned by Multiple near-term game changing drills → Strong European gas fundamentals → Tendrara and Badile → Pan European / African Strategic Partnership Balanced and evolving portfolio with Schlumberger → Supportive Cornerstone investor → Includes production → Well funded Strong thematic positioning Bold growth agenda → Sheltered from recent oil price decline → Carbon consciousness and global warming driving → Significant opportunities in distressed oil sector transition to gas → Limited competition from cash constrained peers Acquisition of Securing cost Introduction of Introduction Acquisition Italian onshore covering Cornerstone of Strategic of Moroccan gas portfolio production Investor Partner onshore gas portfolio Rapagnano Continental Tendrara, Sidi Moktar, Schlumberger Nervesa Investment Partners Meridja Slide 1 Investor Presentation Q1 2016
Balanced Portfolio PORTFOLIO TOTAL: Badile Sidi Nervesa Tendrara & Meridja >EUR 2.5 BILLION Moktar Zibido Exploration Exploration Rapagnano Zibido SMG Tendrara Appraisal Dora / Dalla RISK Badile I T A Sidi Moktar L Appraisal Y SMG Laura Nervesa Laura Dora/Dalla Rapagnano REWARD Tendrara I Meridja Tendrara II Tendrara Assets Cost covering production O Sidi Moktar C Low risk discoveries C Exploration O High upside exploration R O M = Other Assets Slide 2 Investor Presentation Q1 2016
The Team James Parsons Luca Madeddu Leonardo Spicci Chief Executive Officer Managing Director, Morocco Managing Director, Italy Over 20 years in Oil & Gas strategy, Over 25 years managerial experience Over 25 years experience in O&G general management, M&A and across Europe, Asia and South management and operations across finance across Europe, South America. Reservoir geologist Kazakhstan, north Africa and Italy. America and Central America background with 22 years with ENI Reservoir geologist background with E&P 23 years with ENI E&P 12 years with Royal Dutch Shell Specialist in restructuring, funding and growing small listed upstream companies; qualified accountant Joined Sound Energy in 2011 Mary Hood Leonardo Salvadori Chief Financial Officer Business Development / Deputy MD, Italy 10 years upstream experience with Over 30 years upstream experience Gulf Keystone and Deloitte with ENI and Dana Gas in exploration, Qualified Chartered Accountant and business development and general Chartered Company Secretary management Slide 3 Investor Presentation Q1 2016
Key Development Assets: Building Material Cash Flows Nervesa NERVESA SITE UP TO €24M NPV 10 (BEST ESTIMATE €8M) Owned 100% → Veneto region → Play type: anticline structure, multiple gas bearing Miocene sand intervals; 3P 3P Recoverable 2P 2P (TD 1,500-1,800m) +€16M +5.5 resource 3.0 €8M 8.5 Bscf → Drilled 2013, first gas February 2016 → GSA signed with Royal Dutch Shell NPV10 (Eurocent 31/cbm) Recoverable resource (Bscf) Rapagnano UP TO €4M NPV 10 RAPAGNANO SITE (BEST ESTIMATE €3M) 3P +€0.4M Owned 100% → Marche region (Central Italy) 3P 2P +0.2 +€0.5M → First gas achieved 15 May 2013 from the Sabbie reservoir Recoverable 2P 1P 1P → 10 years production remaining resource +0.3 0.8 €2.9M 1.3 Bscf NPV10 (Eurocent 31/cbm) Recoverable resource (Bscf) Slide 4 Investor Presentation Q1 2016
Drilling Existing Discoveries: Morocco N Tahaddart Power A E N Tendrara I & II A R 2 x 400 MW R E T D I E M Net Effective 27.5% interest (Paying 20%) Oued Dhar Doum El Makhazine → Key play type: Gas discovery with condensate 4 x 400 MW 2 x 400 MW - light oil shows in the Lower Triassic sequence Oujda (TD 2,600m); TAGI sand objective → Previous wells sub-optimally perforated C I Al Wahda → First two wells approaching T N Rabat A 4 x 400 MW L → 85.4 Bcf resource with NPV 10 EUR 249M (31 Eurocent T A per scm, based on 2013 development plan); Best Casablanca Tendrara II Estimate net to Sound → First Project in agreed Schlumberger Strategic Partnership where Schlumberger co-fund (80%) and technically de-risk the asset Tendrara I Sidi Moktar Marrakech Sidi Moktar A I R E G L Owned 75% O A C → Key play: gas discovery (Kechoula) in the Lower C Liassic sequence, (220 Bscf net to Sound, initial O estimate, single accumulation most likely) R O Assets Permit → Two wells drilled with positive gas shows; M Cost covering production Power station project Extended Well Test planned for 2016 Online power station Low risk discoveries → Asset is located 10km from the Meskala gas Gas Maghreb-Europe Pipeline High upside exploration processing plant Gas pipeline project Slide 5 Investor Presentation Q1 2016
Drilling Existing Discoveries: Italy (select assets only) Laura UP TO €65M NPV 10 LAURA RESERVOIR MAP (BEST ESTIMATE €40M) Prospective €6M Owned 100% → Gulf of Taranto (4km offshore, 200m Prospective +4.2 water depth) → Play type: inverted fault block, Recoverable 3C 3C 1C 1C gas in Pleistocene (MVD 1,300m) resource +€24M +7.2 12.3 €27M 25.6 Bscf → Long reach deviated well from onshore → €16.2M well cost; under review NPV10 2C (Eurocent 31/cbm) +1.9 Recoverable resource (Bscf) 2C +€7M Dora / Dalla POTENTIAL >€81M NPV 10 DORA / DALLA RESERVOIR MAP (BEST ESTIMATE €66M) 2C Owned 100% €19M High → Adriatic Sea; majority of license >12 miles TBC 2C offshore 17.6 High 3C → Play type: faulted anticline, gas-condensate +25.9 +€15M Recoverable in Scaglia Formation (TD 1,400m) resource 3C 74.5 Bscf → Dora gas discovery previously drilled +6.4 Low 1972, tested 20MMScf/d Low TBC 8.9 Best → €13M well cost NPV10 (Eurocent 31/cbm) +15.7 → Exploration potential from Dalla prospect Recoverable resource (Bscf) Best €47M Slide 6 Investor Presentation Q1 2016
Exploration Assets: Italy Badile BADILE RESERVOIR MAP UP TO €1,745M NPV 10 Low (BEST ESTIMATE €486M) €101M Owned 100% Low BADILE → Po Valley (Northern Italy) 46 DRILL TARGET → Play type: Inverted fault block; Best Best +132 +€385M gas-condensate in Mesozoic (TD 4,200m) Recoverable resource → 45km SW of analogous ‘Malossa’ gas field 673 Bscf → EIA recently approved → €25M, tested and completed NPV10 High (Eurocent 31/cbm) LACCHIARELLA +495 → Chance of success 34% 2 PREVIOUSLY Recoverable DRILLED resource (Bscf) High +€1,259M Zibido ZIBIDO RESERVOIR MAP Owned 100% → Po Valley; Zibido is adjacent to Badile prospect → Play type: Downthrown fault terrace gas/oil in Mesozoic (TD 5,600m) → Zibido P50 NPV10 €225M (Eurocent 31/cbm) ZIBIDO 1 PROPOSED LOCATION Slide 7 Investor Presentation Q1 2016
Exploration Assets: Morocco Tendrara Tahaddart Power N A E N A 2 x 400 MW R R E T D I E M Net Effective 27.5% Interest Oued → Continuity of the Algerian Triassic Province Dhar Doum El Makhazine 4 x 400 MW and Saharan Hercynian platform 2 x 400 MW → Eight blocks, 14,500km 2 acreage, seven Oujda wells drilled, five of which were gas bearing, two Al Wahda tested gas 4 x 400 MW C I T N → Multiple Tcf potential across multiple prospects / A Rabat L T leads; 0.4 Tcf Best Estimate Meridja A and 1.2Tcf High Estimate; net to Sound Casablanca Tendrara Meridja Sidi Moktar Option to purchase 55% Marrakech → 9,000 Km2 Licence adjacent to Tendrara with A further continuity of the Algerian Triassic Province I R and hence additional upside exposure E G L O A C C Sidi Moktar O R O Permit Assets Owned 75% M Cost covering production Power station project → 0.5 Tcf exploration potential targeting the Triasic Low risk discoveries Online power station (TAGI) objective; net to Sound Gas Maghreb-Europe Pipeline High upside exploration Gas pipeline project → Triassic across multiple blocks considered Meridja analogous to the adjacent Meskala field Slide 8 Investor Presentation Q1 2016
Building a Mid Cap Mediterranean Gas Company: Summary Regional gas strategy underpinned by Multiple near-term game changing drills Strong European gas fundamentals → → Tendrara and Badile → Pan European / African Strategic Partnership Balanced and evolving portfolio with Schlumberger Supportive Cornerstone investor Includes production → → → Well funded Strong thematic positioning Bold growth agenda → Sheltered from recent oil price decline Significant opportunities in distressed oil sector → Carbon consciousness and global warming driving → transition to gas → Limited competition from cash constrained peers Upcoming news flow Sidi Moktar Badile farm-in Badile Badile extended well exploration well permitting test Broadening of Tendrara second Tendrara first Strategic well well Partnership Slide 9 Investor Presentation Q1 2016
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