INVESTOR PRESENTATION Q2 2018
A MID-CAP MOROCCAN GAS COMPANY REGIONAL GAS STRATEGY SIGNIFICANT EXPLORATION KEY SHAREHOLDERS I T UNDERPINNED BY POTENTIAL A L Y Strong European gas demand and local pricing Eastern Morocco up to 31 Tcf Supportive Cornerstone Investors Southern Morocco up to 11.2 Tcf 28.8% Private Investor centricity FURTHER CONSOLIDATION OPPORTUNITIES IN 54.6% STRONG THEMATIC MOROCCO POSITIONING 7.1% Carbon consciousness and global 9.5% warming driving transition to gas LOW COST 0.65 TCF METRICS DEVELOPMENT IN Retail EASTERN MOROCCO Key Shareholders: CIP , OGIF Moroccan Cornerstone Investor (OGIF) O Stock Ticker: SOU.LN C Swiss Cornerstone Investor C Market Cap: £477 million O (Continental Investment Partners) R O Volumes: 1.5m shares/day Other M JOURNEY SO FAR... Slide Introduction of Acquisition of Moroccan Introduction of Successful drilling and 1 Cornerstone Investors onshore gas portfolio Strategic Partner extended well test in Eastern Morocco Continental Investment Tendrara, Anoual, Schlumberger Investor Partners, Oil and Gas Matarka, Sidi Moktar Presentation Investment Fund (OGIF) Q2 2018 All volumetric estimates are Gross unrisked GOIP
THE TEAM James Parsons Brian Mitchener JJ Traynor Mohammed Seghiri Chief Executive Offjcer Exploration Director Chief Financial Offjcer Managing Director, Morocco Over 20 years in Oil & Gas Over 36 years experience Over 28 years experience Over 18 years’ experience in leading complex European and African projects strategy, general management, in Oil & Gas exploration in oil & gas and fjnancial across difgerent sectors, including Gas M&A and fjnance across including as Regional markets, including as Storage, Oil&Gas Exploration and Power Europe, South America and General Manager Exploration Executive Vice President of Production. Joined Sound Energy from Central America at BG, Vice President Investor Relations at Shell, OGIF where he was Managing Partner. International Exploration Managing Director of oil & 12 years with Royal Dutch Shell for Africa at Statoil and 22 gas research at Deutsche years with BP Exploration. Bank, and as an Exploration Specialist in restructuring, Chartered Geologist, Geologist with BP funding and growing small and a past President of listed upstream companies; the Geological Society’s qualifjed accountant Petroleum Group Joined Sound Energy in 2011 Slide 2 Investor Presentation Q2 2018
COMPELLING MOROCCAN CASE FOR GAS N A E Tahaddart Power N A R R Morocco 2 x 400 MW E T I D E M • Low risk emerging market Growing gas Oued penetration • Gas increasingly Dhar Doum El Makhazine replacing other fuels 4 x 400 MW 2 x 400 MW Oujda • Circa 90% hydrocarbons C Disadvantaged I T imported from Algeria supply position N Al Wahda A L • GME pipeline ownership Rabat 120km Anoual 4 x 400 MW T transitions to Morocco in 2021 A • New Gas Agency under Casablanca discussion • 10 year tax holiday Top quartile fiscal terms • Thereafter 36% net government Sidi Moktar Onshore take (31% Corporation tax and Tendrara 5% royalty after 10.6 Bcf) Matarka Marrakech O C C Slide O R O 3 A I M R E G L A Investor Presentation Q2 2018 Gas Maghreb-Europe Pipeline Proposed routing of pipeline to GME
EASTERN MOROCCO: EXTENSION OF PROVEN NORTH AFRICAN BASIN TENDRARA 47.5% interest 8 exploration 9,336 km 2 permits acreage, Operated 7 wells drilled ANOUAL Atlas Mountains 47.5% interest Exploration 8,873 km 2 T U N I S I A permit Operated High Plateau Atlas MATARKA Mountains Benoud 47.5% interest Reconnaissance 5,223 km 2 licence Operated Ghadames Oued M O R O C C O Mya A L G E R I A Continuity of the Algerian Triassic Province Timimoun and Saharan Hercynian platform Play type: gas discovery with condensate- light oil shows in the Lower Triassic sequence; Illizi TAGI and Paleozoic sand objectives Ahnet Slide Geophysical Survey (including seismic) underway ($27.2m) fully carried by 4 Schlumberger 0 km 300 N Investor Presentation Q2 2018
EASTERN MOROCCO: EXISTING WELLS 28m net pay, 17 mmscf/d 32 mmscf/d after clean up: Paleozoic Play Opener & TE-6 TE-7 TE-8 achieved post-stimulation Successful Extended Well Test Extension of TAGI Reservoir. JK-1 Triassic TAGI discoveries and leads with c.21 Tcf potential. A N O U A L NE LAKBIR TE-6 TE-6 2500 to 3500m depth A STRUCTURE TE-7 T T TE-8 TE-2 TE-5 TE-3 RR-1 T E N D R A R A & M A T A R K A SBK-1 TE-4 TE-1 Palaeozoic concepts, additional 10 Tcf potential, 2500 to 4000m depth. Slide 5 Investor Presentation 5 0 K M Q2 2018
EASTERN MOROCCO: 1 ST TWO WELLS GROSS UNRISKED GOIP (TCF) 7 6 HIGH 5 4 3 MID 2 1 LOW 0 TOTAL Slide EXISTING TE-9 TE-10 6 DISCOVERY 25km North-West of 20km North-East existing discovery of existing discovery Investor (TAGI & Paleozoic) (TAGI) Presentation Q2 2018
N A Tahaddart Power E N EASTERN MOROCCO: A R R 2 x 400 MW E T I D E M COMMERCIALISATION Oued Dhar Doum El Makhazine 4 x 400 MW 2 x 400 MW The Tendrara fjeld will connect to the GME Oujda pipeline near Ain Beni Mathar village, a few km from the Morocco-Algeria border via a C I T new Pipeline N Al Wahda A L Rabat Anoual Anoual Ofgtake expected to be either domestic power 4 x 400 MW T A plants for gas-to-power generation (transit via Casablanca GME line) or export to Southern Europe The GME can accommodate c.200 mmscfd of Moroccan-source gas immediately, additional capacity opening in the short-term with G M E P I P E L I N E Tie-in point contracted exports 80 bar Tendrara Pipeline funding BOT ofgers under discussion Matarka PROSPECTS, LEADS AND RESOURCES TENDRARA O GAS EXPORT C Paleozoic 120 km PIPELINE 31 C O Diameter range: 12 to 20 inch R O A HIGH Anoual I M R Identified TAGI leads E 5.5 G GAS VOLUME (TCF) 21.2 TCF Inlet point L Slide A 110 bar Tendrara & Matarka 17 Identified TAGI leads 14.7 3 7 MID ..n Central Gas Maghreb-Europe Pipeline Processing 9 Facility Proposed routing of pipeline to GME (CPF) Investor LOW Eastern Morocco 60MMSCFD Presentation Development Volumes 1.0 1 Q2 2018 4 0 2 All volumetric estimates are Gross unrisked GOIP
SOUTHERN MOROCCO: EXTENSION OF THE MESKALA PETROLEUM SYSTEM Jorf Lasfar Power Plant SIDI MOKTAR ONSHORE 75% interest Exploration 4,499 km 2 permits Operated Tahaddart Power 2 x 400 MW Safi Chemicals State owned Plant Phosphate Asset located 10km from the Meskala Oued Plant (OCP) Dhar Doum El Makhazine gas processing plant and close to state 4 x 400 MW 2 x 400 MW owned phosphate plant Al Wahda PROSPECTS, LEADS & RESOURCES Rabat Chichaoua 4 x 400 MW Meskala High Case (11.2 Tcf) 11 Gas Field Casablanca Planned 10 New 9 Best Case (8.9 Tcf) Phosphate Plant GAS VOLUME (Tcf) 8 O 7 C Low Case (6.7 Tcf) C 6 O Marrakech R 7.6 5 Slide O M 4 8 3 Triassic (TAGI) leads 2 0.6 Gas Maghreb- 0.6 Investor 1 Europe Pipeline Presentation 0 Q2 2018 Liassic Triassic Lower Triassic Best Case & Paleozoic All volumetric estimates are 100% - Gross unrisked GOIP
SOUTHERN MOROCCO: PLAY SUMMARY Sidi Shallow (1000m to 3000m) 0 1 0 2 0 3 0 4 0 k m N T Gas discovery (Kechoula) in the Argovian and Lower Liassic with 2 wells on structure ( Koba-1 and Kamar-1) Jurassic gas Koba-1 and oil Recent success perforating discoveries Meskala Kamar-1 1000-3000mMD and clean up test of Argovian in 2 JRP-1 Kechoula discovery (Koba -1 well) 1 Sidi Deep (3000m to 4500m) Deeper pre-salt potential up to 11.2 Tcf unrisked Latest subsurface work suggests one potentially drill-ready high Triassic TAGI quality prospect leads 9Tcf potential Other wells likely require further 3000-4500mMD 2D seismic before pre-salt drilling Slide KEY Exploration wells 9 MESKALA targeting the Jurassic GAS FIELD GAS DISCOVERY TAGI LEADS Investor Line of Section Presentation Future possible Q2 2018 exploration wells
UPCOMING NEWSFLOW Ongoing (to August 18) New 2D Seismic (2,900 live km) Ongoing Morocco Consolidation April 2018 1 st seismic CPR released (403 km) Q2 2018 2 nd seismic CPR released (1.353 km) Q3 2018 3 rd seismic CPR released (1,144 km) H1 2018 GSA Secured for existing discovery H1 2018 Pipeline BOT secured July 2018 - Oct 2018 TE-9 Drilling TE-10 Drilling Q4 2018 Slide 3 rd well Drilling Q1 2019 10 Final Investment Decision on Discovery 2018 Investor Presentation Q2 2018
SUMMARY ACCESS TO LOW COST ONSHORE UNDERPINNED BY INDUSTRY m GAS PLAY IN TOP TIER EMERGING PARTNERSHIPS MARKET (MOROCCO) Cornerstone Investors with Board representation Recent 0.65 Tcf onshore Strong Moroccan relationships gas discovery in Morocco Strong domestic demand and infrastructure connecting Morocco to strong European gas markets Priority remains securing fjrst gas SCALE, LIQUIDITY AND NEWSFLOW TEAM TRACK RECORD Demonstrated deal making pre-discovery (with potential to apply same skills to gas commercialisation and exit) Demonstrated capability to discover major fjeld and deliver wells Strong retail shareholder base Slide 11 Investor Presentation Q2 2018
APPENDIX Slide 12 Investor Presentation Q2 2018
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