JV Poltava Petroleum Company Company presentation
About PPC JV JV Polt oltava Petr troleum Com Company is a pioneer in Ukraine’s energy sector operating since 1994. The company was established by JKX Oil & Gas plc and was the first successful foreign private investment project in the oil & gas industry in Ukraine. JV PPC is currently one of the leaders among private oil and gas producers. Ou Our prio priorities an and vi vision: • HSE is our top priority • dynamic progress and • maximize cash flow and returns for investors • implementation of advanced technologies • constant improvement of operations and processes Sc Scope of of JV JV PPC PPC Acti ctivities s an and Key Proj ojects • oil and gas production from core assets • prospecting and exploration within existing licenses • identification of growth opportunities and business development JV PPC – СП ПГНК 2
Our Licenses PPC holds 100% interest in five production licenses and one exploration license in the Poltava region of Ukraine: 2P # Licence Type Expiry Reserves, Area mmboe 1 Zaplavske prospect Exploration 2019 - 197.5sq.km. 2 Rudenkivske field Production 2024 22.2 3 Ignativike field Production 2024 3.9 127sq.km. 4 Novonick field 2024 0.7 Production 5 Movchanivske field 2024 0.6 Production 6 Elizavetivske field 2034 1.7 104.7sq.km. Production West Mashivska area - PPC plants JV PPC – СП ПГНК 3
Key Achievements During the company's activity: cubic meter of gas produced 7 000 000 000 paid in taxes from 1994 till 2016 $ 900 000 000 paid as dividends to JKX Oil & Gas $ 500 000 000 Invested in philanthropy, social and charitable projects $ 10 000 000 Production 414,11 395,49 141 old wells repaired and put into operation 287,40 287,40 234,15 79 new wells drilled 226,38 217,19 192,71 49 169,01 wells in operation 131,89 2 State-of-the-art processing facilities 98,28 77,23 59,66 1 42,75 40,78 LPG plant 36,71 31,40 31,73 2010 2011 2012 2013 2014 2015 2016 2017 2018 Natural Gas, mln cubic meters Crude oil & condensate, kilo tonns JV PPC – СП ПГНК 4
LPG Plant • Before 2011 sales gas contained significant amount of C2+ fractions which may be extracted and sold separately • PPC invested more than US$10 million in construction of the LPG plant in 2011 • This project turned into a major success for the company: • Project payback period was less than 1 1 year ear • More than 80,0 80,000 to tons s of PLG produces and sold to date • More than US$ US$60 mill illion in revenues to date • Currently we are evaluating options to fully utilize plant capacity and expand its operations JV PPC – СП ПГНК 17.11.2017 5
Innovations and Partners Innovations • First private oil & gas Joint Venture in Ukraine 1994 • First and longest horizontal well in Ukraine 2010 • First multistage frac in Ukraine 2013 • First major gas producer selling through UEEX 2016 Key partners JV PPC – СП ПГНК 6
HSE and Community Development En Environment Monitoring of Regular measurements Environmental Prevention of environmental groundwater, soil and damage, use of non-waste of environmental protection air quality indicators production technologies Peo eople Education and Strict HSE Collaboration with local Health and personal standards communities and the social insurance government development Com Community Improvement Construction and Development of sports Support of children's of the region reconstruction of organizations of the homes and boarding roads and Poltava region schools infrastructure JV PPC – СП ПГНК 7
Growth potential Ukraine Retains Significant Upstream Potential Ukraine retains significant hydrocarbon potential • Currently producing only 2% of proved reserves (vs. 10-15% in Europe and US) 10000+ • Large on-shore and off-shore exploration potential 10000 4000+ • Large unconventional potential (poorly understood) 970 Government focused on achieving energy independence (increase production by 604 1000 40%) by 2020 • Upstream regulatory reform underway 100 40 • Prospect of significant reduction of royalty on new wells (from 29 to 12%) in 2018 20 • New licensing round in 2018 likely 10 Existing PPC assets either mature (limited upside potential) or require significant additional study 1 Upstream business development opportunities for PPC: • M&A: Find attractive and accessible existing private licenses • Zaplavska license expansion • Licensing of new appraisal/exploration areas JV PPC – СП ПГНК 8
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