The role of Independent explorers in unlocking new plays and basins - PowerPoint PPT Presentation

The role of Independent explorers in unlocking new plays and basins offshore Southern Africa

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Introduction to Azinam, a PE backed E&P company Uniquely positioned in Namibia & South Africa – the new industry hot spot Focused niche explorer Large offshore acreage position across Namibia and South Africa Portfolio with Basin and Petroleum system diversity Azinam’s strategy is to participate in a drilling programme over the next three years, benefitting from cyclical lows in drilling cost Additional value creation for Azinam yielded from third party activity and success, and opening of new multi- billion barrel basins 2

Launched by Seacrest in 2012 with seismic data advantage 1. Anchor position – “seismic for equity” Playing the cycle to our advantage 1 3 • • Global Azinam takes screening advantage of programme downturn to identified consolidate potential and acreage opportunity position and offshore invest in Namibia seismic 2013 2019-2021 2012 2014-18 2. Successful proof of source drilling 4. South Africa entry and Azinam drilling 2 4 • The Future: Take HRT Drills • 2013 HRT wells Wingat and Murombewells advantage of low Cormorant recovered oil drilling costs to and proved Prospect S test portfolio working source • Exposed to third rock in the area party value creation Sample of light (41° API) oil from the Wingat-1 exploration well 3

Under explored Southern Africa… Southern Africa in comparison to other prolific basins Norwegian Continental Shelf as of 2018, 6,477 E&A wells drilled UK Continental Shelf as of 2018 over 7,800 E&A wells drilled Offshore Indonesia Since 2000, there have been 715 wells Offshore US and Gulf of Mexico Since 2000, there have been 2,219 wells 4 Source: Wood Mackenzie Upstream Data Tool, February 2019; Norwegian Petroleum Directorate; UK Oil & Gas Authority’s Well insight report 2018; Rystad Well Cube

Why is the Southern African Atlantic Margin underexplored? Historically a number of factors have impacted exploration appetite and activity CHOICE COST • More Mature Basins • Deepwater wells • Shallower waters • Expensive seismic surveys • Areas with easier access • Complex supply chain DATA RISK • Limited Seismic surveys – 2D • Financial Risk vs Reward (ROI) • Surface Area vs data coverage low • Unknown frontier areas • Technology INFRASTRUCTURE OIL PRICE • Limited refineries • Substantial fall in mid-80s • Poor transport links • Low price maintained through 90s • Distance & Geography Challenges 5

Example: Namibia Exploration History Largely unexplored region with only 16 exploration wells drilled over 48 years Phase 1: Phase 2: Oil price Phase 3: Oil price Phase 4: UN Sanctions 1968-1976 1990-1997 drop 2011-2014 drop 2018+ $160 2012-14 1974 $140 1998 6 wells drilled. First well drilled Wingat-1 $120 (Kudu 9A-1) 2 wells drilled recovered 41 encountered in the Luderitz API Oil $100 gas basin $80 10 year hiatus for 1994/95 international O&G $60 4 wells drilled in the Walvis basin $40 2008 2018 1 well drilled in the Namibe 2 wells drilled Basin as activity picks up $20 Prices dropped ~58% from start of 1997 to end of 1998 1980 1990 2010 1970 2000 6 1) Source: Macrotrends with data from EIA, NAMCOR; 2) Graph displayed using logarithmic scale and historical prices inflation adjusted

Sub-Saharan Africa – 2000 to 2014 Since 2000, exploration activity has confirmed the region’s oil and gas potential 2014 2000 Senegal Nigeria Ghana Equatorial Gabon Kenya Guinea DRC Angola Mozambique KEY Established petroleum provinces Emerging petroleum South Africa province 7 Source: Azinam estimates

Sub-Saharan Africa – 2000 to 2014 Who were the Pioneers and the Play openers? 2014 2000 KEY Established petroleum provinces Emerging petroleum province 8 Source: Azinam estimates

2019 Sub-Saharan Africa Who were the Pioneers and the Play openers? 2019 2014 KEY Established petroleum provinces Emerging petroleum province 9 Source: Azinam estimates

The changing of the Southern Africa Atlantic Margin? All of these factors are changing CHOICE COST • Exploration acreage is shrinking • Drilling costs at cyclical lows • Giant discoveries lie in Frontier basins like • Enhanced access to capital • Revived Farm-in market Africa RISK DATA • Political changes (SA – Apartheid ended, • Extensive broadband 3D seismic data Angola civil war ended) • Drilling Technology • Improved and defined fiscal terms OIL PRICE INFRASTRUCTURE • Oil price uptick • Investment in refineries & LNG • Growing consumer demand • World class ports • Growing investor confidence • Growing energy demand in Africa 10

Improved Fiscal Terms across Sub-Saharan Africa Low Government take & stable investment environments Government take 1 0% 20% 40% 60% 80% 100% South Africa SOUTH AFRICA 2 NAMIBIA 2 Guinea Bissau Morocco Namibia Mauritania Côte d'Ivoire Senegal Kenya Equatorial Guinea Cameroon Benin Congo Angola DRC Gabon Tanzania 1) Average tax across range of Namibian oil and gas assets 2) Africa Energy Corporate Presentation January 2018 Available on their website 11