INVESTOR PRESENTATION Q1 2017 Updated 19/1/17
BUILDING A MID-CAP AFRICAN & EUROPEAN GAS COMPANY REGIONAL GAS STRATEGY TWO REMAINING STRATEGIC I T A UNDERPINNED BY PLAYS L Y Strong European gas demand and local pricing Badile (Italy) and Sidi Moktar (Morocco) Pan European / African Strategic Partnership BOLD GROWTH AGENDA with Schlumberger Signifjcant opportunities in distressed oil sector Supportive Cornerstone Investors Limited competition from cash constrained peers STRONG THEMATIC POSITIONING Sheltered from recent oil price decline Carbon consciousness and global warming driving transition to gas BALANCED AND EVOLVING PORTFOLIO, INCLUDING LOW COST POTENTIAL O C C MULTI TCF DEVELOPMENT O R (TENDRARA: EASTERN MOROCCO) O M JOURNEY SO FAR... Slide Acquisition of Securing cost Introduction of Acquisition of Introduction Successful drilling 01 Italian onshore gas covering Cornerstone Moroccan onshore of Strategic and extended well portfolio production Investor gas portfolio Partner test in Eastern Morocco Investor Presentation Rapagnano Continental Investment Tendrara, Sidi Schlumberger TE6 & TE7 2017 Partners, Oil and Gas Moktar, Meridja (Tendrara, Badile) Investment Fund (OGIF)
THE TEAM Brian Mitchener Leonardo Spicci EVP , Exploration EVP , Production & Development Over 36 years experience in Oil & Gas exploration Over 25 years experience in Oil & Gas including as Regional General Manager Exploration management and operations across James Parsons at BG, Vice President International Exploration for Kazakhstan, north Africa and Italy. Reservoir Chief Executive Offjcer Africa at Statoil and 22 years with BP Exploration. geologist background with 23 years with Chartered Geologist, and a past President of the ENI E&P Over 20 years in Oil & Gas Geological Society’s Petroleum Group strategy, general management, M&A and fjnance across Europe, South America and Luca Madeddu Leonardo Salvadori Central America Managing Director, Morocco Managing Director, Italy 12 years with Royal Dutch Shell Over 30 years upstream experience with Over 25 years managerial experience across ENI and Dana Gas in exploration, business Europe, Asia and South America. Reservoir Specialist in restructuring, development and general management geologist background with 22 years with funding and growing small ENI E&P listed upstream companies; qualifjed accountant Mary Hood Will Holland Joined Sound Energy in 2011 EVP , Finance/CFO EVP , Business Development Slide Mary has over 10 years upstream experience Over 20 years upstream experience across a 02 in fjnance and management working across range of operational, commercial and fjnancial Europe, Africa and the Middle East for Gulf roles. 10 years as an engineer with Halliburton. Keystone Petroleum (most recently as Deputy Subsequently Director in Macquarie’s Oil & CFO) and for Deloitte, in its Energy and Gas team Investor Resource practice. A Chartered Accountant Presentation and Company Secretary. 2017
COMPELLING REGIONAL CASE FOR GAS Badile Zibido Morocco Italy • Low risk emerging market • Stable demand with high gas Growing gas Rapagnano (7% annual growth) dependency penetration SMG • Gas increasingly • Strong domestic gas network replacing other fuels Dora / Dalla I T • Circa 90% hydrocarbons • Circa 90% hydrocarbons Disadvantaged A imported from Algeria imported from Algeria L supply position Y and Russia • GME pipeline ownership transitions to Morocco in 2021 • Recently introduced energy policy to encourage Laura • New Gas Agency under commercialisation of domestic discussion hydrocarbons • 10 year tax holiday • 37.9% government net take Top quartile (24% corporation tax ((FY2017 fiscal terms • Thereafter 35% net government onwards)), 3.9% regional take (30% Corporation tax and income tax plus 10% royalty 5% royalty after 10.6 Bcf) above 0.9 Bcf annually) Tendrara I Meridja Tendrara II Slide Tendrara 03 Sidi Moktar Investor O C Presentation Exploration C 2017 O R O M
EASTERN MOROCCO N A Tahaddart Power E N FLAGSHIP DEVELOPMENT WITH A R R 2 x 400 MW E T I D E M MULTI TCF POTENTIAL Oued Dhar Doum TENDRARA* El Makhazine (47.5% interest; Operated) 4 x 400 MW 2 x 400 MW Oujda MERIDJA* (75% interest; Operated) C I T N Al Wahda A L Rabat Strategic Partnership where Schlumberger 120km Meridja 4 x 400 MW T A co-fund and technically de-risk the asset (Schlumberger 27.5% interest in Tendrara Casablanca and paying 80% on 1st well; 75% on 2nd and 3rd wells.) Continuity of the Algerian Triassic Province and Saharan Hercynian platform Tendrara Play type: gas discovery with condensate- light oil shows in the Lower Triassic sequence; TAGI and Paleozoic sand objectives Marrakech Tendrara, eight exploration permits 14,500 km 2 acreage, seven wells drilled; Meridja one O reconnaissance licence 9,000km2 C C First well (TE-6): 28m net pay, fmow achieved O pre stimulation, 17 mmscf/d on test Slide R O A Potential for super-giant (multi Tcf) connected I M 04 R gas fjeld E G L TE-7: 32 mmscf/d after clean up: Successful A Extended Well Test Investor Presentation TE-8 (step out appraisal well) early 2017 2017 Gas Maghreb-Europe Pipeline * Subject to completion of OGIF transaction Gas Pipeline Project
SHOWCASE TENDRARA: ILLUSTRATIVE AERIAL VIEW (TAGI ONLY) NEAR TERM POTENTIAL LONG TERM UPSIDE POTENTIAL MERIDJA 1,800 KM 2 TE-8 (Sound Energy: 2017) TE-2 (AGIP:1967) TE-9 (2018) 1-1.5 Tcf Provisional 75km 2 3-4 Tcf, location 250km 2 TENDRARA TE-6 300–500 (Sound Energy: 2016) PRESSURE Bcf 17km 2 TE-5 DEPTH TE-7 (Sound Energy: 2016) (MPE: 2006) PLOT TE-4 (MPE: 2006) TE-1 Slide (AGIP: 1966) 05 TE-3 (ONHYM: 1984) Investor Presentation 2017 All volumetric estimates are 100% - Gross TE4 data unreliable; requires re-entry.
PATHWAY TO COMMERCIALISATION CURRENT PHASE 2017 & 2018 2019 EPC Facilities Step-Out Finalise FIRST TE-8 Appraisal Development EPC Pipeline GAS plan & Development wells Concession Further step out wells application & re-entry Seismic acquisition Slide Self funding Return to MATERIAL 06 exploration & Shareholders CASH FLOWS development Investor Presentation 2017
NORTHERN ITALY STRATEGIC PLAY: BADILE 3D Net efgective ownership M I L A N O Badile Seismic 80%; operated Zibido Coverage Po Valley (Northern Italy); 45 km SW of Rapagnano analogous ‘Malossa’ gas fjeld SMG SNAM Permit located close to Milan, with a tie-in available Dora / Dalla Gas c. 2 km from the Badile permit T Pipeline A Play type: Inverted fault block; gas-condensate L Y in Mesozoic (TD c. 4,600 m) All permissions to drill secured Laura Well cost of EUR 25 m (100%; tested and Lacchiarella completed); chance of success 34% Badile 142 Bscfe: 85 Bscf gas and 10 mmboe condensate (net best-case prospective resources) Zibido Farm-out secured with Schlumberger funding EUR 7.5 m of fjrst well in exchange for an option on 20% of the licence Low EUR 88m Badile Up to EUR 1,404 m Low Pavia Permit NPV10 (Best Estimate 37 Slide Best Best EUR 396 m) Badile 3D Pipeline +EUR O +105 308m Recoverable C Seismic 07 resource C 538 Bscf O R O M NPV10 High ocent 31/cbm) Investor +396 (Eurocent 31/cbm) Presentation Recoverable High 2017 resource (Bscf) +EUR 1,008m
SOUTHERN Jorf Lasfar Power Plant MOROCCO STRATEGIC PLAY: SIDI MOKTAR Tahaddart Power 2 x 400 MW State owned Safi Chemicals Net Efgective 25% interest, carried Plant Phosphate Oued Plant (OCP) for fjrst USD 18 m gross; operated* Dhar Doum El Makhazine 4 x 400 MW 2 x 400 MW Play type: gas discovery (Kechoula) in the Lower Liassic sequence, (73 Bscf net to Sound, initial estimate, single Al Wahda Sidi Moktar II Rabat accumulation most likely) Chichaoua 4 x 400 MW Meskala Two wells drilled with positive gas Plant Casablanca indications from log and gas shows in Planned the Liassic; extended well test planned New Phosphate in 2017 Plant Sidi Moktar I Triassic across multiple blocks considered analogous to the adjacent Meskala fjeld Marrakech 211 Bscf exploration potential targeting the Triassic (TAGI) objective; net to Sound O C C Slide Asset is located 10km from the Meskala O gas processing plant R 08 O M Investor Presentation * Heads of Terms for Partnership arrangements announced 10 March 2016 2017 Gas Maghreb-Europe Pipeline Gas Pipeline Project
UPCOMING NEWSFLOW Jan OGIF Signature of binding agreements with OGIF 2017 Feb Target: prove 1.5 Tcf fjeld in the TAGI TENDRARA - TE-8 and explore the Paleozoic 2017 Q1 - Sidi-Moktar Introduction of partners to Sidi Moktar SIDI MOKTAR 2017 H1 Re-entry and test; feasibility currently being - TE-2 & TE-4 TENDRARA 2017 determined H1 - Badile BADILE Exploration well in Italy 2017 H1 Workover of Koba-1 and Kamar-1(Sidi Moktar wells) SIDI MOKTAR - Koba-1 & Kamar-1 2017 followed by extended well test Q3–4 TENDRARA - Concession Concession application 2017 Slide 09 H2 2017– 2D seismic over the remainder of the block - to determine - 2D Seismic TENDRARA prospects and give better indication on volumes H1 2018 Investor H2 2017– - FDP TENDRARA Commencement of development works (facilities) Presentation H1 2018 2017
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