INVESTOR PRESENTATION Q2 2017 Revised June 2017
A MID-CAP AFRICAN & EUROPEAN GAS COMPANY REGIONAL GAS STRATEGY TWO REMAINING KEY SHAREHOLDERS I T UNDERPINNED BY STRATEGIC PLAYS A L Y Strong European gas demand and local pricing Badile (Italy) and Sidi Moktar (Morocco) Pan European / African Strategic Partnership 28.8% with Schlumberger BOLD GROWTH AGENDA Supportive Cornerstone Investors 54.6% Signifjcant opportunities in distressed oil sector STRONG THEMATIC 7.1% Limited competition from POSITIONING cash constrained peers 9.5% Carbon consciousness and global warming driving transition to gas METRICS LOW COST MULTI Italian Cornerstone Investor Key Shareholders: CIP , OGIF TCF DEVELOPMENT IN (Continental Investment Partners) Stock Ticker: O SOU.LN EASTERN MOROCCO Moroccan Cornerstone Investor (OGIF) C C Market Cap: £507 million O Retail R Volumes: O 6m shares/day Other M JOURNEY SO FAR... Slide Acquisition of Securing cost Introduction of Acquisition of Introduction Successful drilling 1 Italian onshore gas covering Cornerstone Moroccan onshore of Strategic of 3 wells and portfolio production Investors gas portfolio Partner extended well test in Eastern Morocco Investor Presentation Rapagnano Continental Investment Tendrara, Sidi Schlumberger TE6, TE7 & TE8 Q2 2017 Partners, Oil and Gas Moktar, Meridja (Tendrara, Badile) Investment Fund (OGIF)
THE TEAM Brian Mitchener Leonardo Spicci Exploration Director 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 Country Chairman, 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 Mohammed Seghiri Joined Sound Energy in 2011 Managing Director, Morocco Slide Over 18 years’ experience in leading complex 2 European and African projects across difgerent sectors, including Gas Storage, Oil&Gas Exploration and Power Production. Joined Sound Energy from OGIF where he was a Investor Managing Partner. Presentation Q2 2017
COMPELLING REGIONAL CASE FOR GAS Badile Zibido Morocco Italy Casa Tiberi • Low risk emerging market • Stable demand with high gas Growing gas Rapagnano dependency penetration • Gas increasingly SMG replacing other fuels • Strong domestic gas network 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 Posta Del Giudice discussion hydrocarbons • 10 year tax holiday • 37.9% government net take Top quartile Solfara Mare (24% corporation tax ((FY2017 fiscal terms • Thereafter 35% net government onwards)), 3.9% regional take (30% Corporation tax and income tax plus 10% royalty Costa Del Sole 5% royalty after 10.6 Bcf) above 0.9 Bcf annually) Tendrara I Meridja Tendrara II Slide Tendrara 3 Sidi Moktar Investor O C Presentation Exploration C Q2 2017 O R O M
FLAGSHIP EASTERN MOROCCO DEVELOPMENT: EXTENSION OF PROVEN NORTH AFRICAN BASINS TENDRARA* (47.5% interest; Operated) MERIDJA* (47.5% interest; Operated) Atlas Mountains Strategic Partnership where T U N I S I A Schlumberger own 27.5% and High Plateau co-fund and technically de-risk Atlas the asset (Geophysical Survey Mountains (including seismic) with gross Benoud cost $27.2m fully carried by Ghadames Schlumberger) Oued Continuity of the Algerian Triassic M O R O C C O Mya Province and Saharan Hercynian A L G E R I A Timimoun platform Play type: gas discovery with condensate- light oil shows in the Illizi Lower Triassic sequence; Ahnet TAGI and Paleozoic sand objectives Slide Tendrara, eight exploration permits 4 14,500 km2 acreage, seven wells drilled; Meridja: reconnaissance 0 km 300 N licence 9,000km2 Investor Presentation Q2 2017 *Subject to completion of OGIF and Schlumberger transactions
TENDRARA: EARLY DRILLING RESULTS EXPLORING THE DEEPER PALEOZOIC POTENTIAL EXISTING WELLS JK-1 M E R I D J A TE-6 TE-6 N TE-2 TE-2 Triassic TAGI TE-7 discovery and TE TE TE-8 leads 21.2 Tcf RR-1 TE-5 potential TE-6 TE-8 2500-3500 mMD TE-3 Paleozoic Play SBK-1 K 1 28m net pay, Opener and 17 mmscf/d TE-1 TE-1 Extension of achieved TE-4 T E N D R A D R D R A D R A R A R TAGI Reservoir. post- stimulation Paleozoic concepts TE-7 additional ca. 10 Tcf potential 32 mmscf/d 3000-4000 mMD Slide after clean up: Option under Successful consideration 5 Extended Well Test 5 0 K M Investor Presentation Based on current seismic data Q2 2017 All volumetric estimates are 100% - Gross unrisked GIIP
EASTERN MOROCCO: PROSPECTS, LEADS AND RESOURCES Paleozoic 31 HIGH Meridja Identified TAGI leads 5.5 GAS VOLUME (TCF) 2 1 .2 TCF Tendrara 17 Identified TAGI leads 14.7 MID 9 Slide LOW Eastern Morocco 6 Development Volumes 1.0 Investor 0 Presentation Q2 2017 All volumetric estimates are 100% - Gross unrisked GIIP
EASTERN MOROCCO: N A Tahaddart Power E N COMMERCIALISATION A R R 2 x 400 MW E T I D E M Oued The Tendrara fjeld will connect to the GME Dhar Doum El Makhazine pipeline near Ain Beni Mathar village, a few 4 x 400 MW 2 x 400 MW km from the Morocco-Algeria border via a Oujda new Pipeline C I Ofgtake expected to be either domestic power T N Al Wahda A plants for gas-to-power generation (transit via L Rabat 120km Meridja 4 x 400 MW T GME line) or export to Southern Europe A The GME can accommodate c.200 mmscfd of Casablanca Moroccan-source gas immediately, additional capacity opening in the short-term with contracted exports from Algeria declining Tendrara Marrakech O C C O Slide R O A I M 7 R E G L A Investor Presentation Q2 2017 Gas Maghreb-Europe Pipeline Gas Pipeline Project
NORTHERN ITALY 3D M I L A N O Badile Seismic Zibido STRATEGIC PLAY: BADILE Coverage Casa Tiberi Net efgective ownership Rapagnano 80%; operated, Schlumberger 20% SMG SNAM Dalla Po Valley (Northern Italy); 45 km SW of Gas I I T T T Pipeline analogous ‘Malossa’ gas fjeld A A A L L L L Permit located close to Milan, with a tie-in available Y Y Y c. 2 km from the Badile permit Laura Play type: Inverted fault block; gas-condensate Posta Del Giudice in Mesozoic (TD c. 4,600 m) Lacchiarella Well cost of EUR 25 m (100%; tested and completed); chance of success 34% Badile Solfara Mare 142 Bscfe: 85 Bscf gas and 10 mmboe condensate Costa Del Sole (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 Results in June 2017 Badile Pavia Permit Resource potential Badile 3D Pipeline O C Seismic 500 538 cum. C O R Slide 400 O M HIGH 8 300 Bcfe 200 Investor 142 cum. 100 Presentation MEAN Q2 2017 LOW 37 cum. 0 Net to Sound
SOUTHERN Jorf Lasfar Power Plant MOROCCO STRATEGIC PLAY: SIDI MOKTAR Tahaddart Power 2 x 400 MW State owned Safi Chemicals Net Efgective interest: 75% operated Plant Phosphate Oued Plant (OCP) Dhar Doum El Makhazine 4 x 400 MW 2 x 400 MW Play type: gas discovery (Kechoula) in the Lower Liassic sequence, (219 Bscf net to Sound, initial estimate, single accumulation most likely) Al Wahda Rabat Chichaoua 4 x 400 MW Two wells drilled with positive gas Meskala indications from log and gas shows Plant Casablanca in the Liassic; Rig on site for two Planned workovers and possible extended well New Phosphate tests during June 2017 Plant Triassic across multiple blocks considered analogous to the adjacent Meskala fjeld Marrakech Unrisked up to 9 Tcf exploration potential targeting the Triassic (TAGI) Slide Asset is located 10km from the Meskala O C gas processing plant C 9 O R O M Investor Presentation Triassic (TAGI) leads Q2 2017 Gas Maghreb-Europe Pipeline Gas Pipeline Project
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