Corporate Presentation JUNE 2015 Disclaimer These presentation - - PowerPoint PPT Presentation

Corporate Presentation

JUNE 2015

Disclaimer

These presentation materials (the “Presentation Materials”) do not constitute or form any part of any offer or invitation or inducement to sell

• r issue or purchase or subscribe for any shares in Savannah Petroleum plc (“Savannah”) nor shall they or any part of them, or the fact of their

distribution, form the basis of, or be relied on in connection with, any contract with Savannah, or any other person, relating to any Savannah

• securities. The Presentation Materials do not constitute or form part of a prospectus prepared in accordance with the Prospectus Rules (being

the rules produced and implemented by the Financial Conduct Authority (“FCA”) by virtue of the Prospectus Rules Instrument 2005) and have not been approved as a prospectus by the FCA (as the competent authority in the UK). The Presentation Materials do not contain any offer of transferable securities to the public as such expression is defined in section 102(b) FSMA or otherwise. Any decision regarding any proposed purchase of shares in Savannah must be made solely on the basis of the information issued by Savannah at the relevant time. Past performance cannot be relied upon as a guide to future performance. The Presentation Materials are not intended to be distributed or passed on, directly or indirectly, to any other class of persons. They are being supplied to you solely for your information and may not be reproduced, forwarded to any other person or published, in whole or in part, for any other purpose. In particular they, directly or indirectly, must not be distributed to persons in the United States of America, its territories or possessions or Australia or Canada or New Zealand or Japan or the Republic of Ireland or South Africa or any jurisdiction, in each case, where to do so might constitute a violation of local securities laws or regulations. The Presentation Materials contain certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. While Savannah believes the expectations reflected in the Presentation Materials to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond Savannah’s control or within Savannah’s control where, for example, Savannah decides on a change of plan or strategy. No reliance may be placed for any purpose whatsoever on the information contained in the Presentation Materials or on the completeness, accuracy or fairness of such information and/or opinions expressed herein. Savannah undertakes no obligation to revise any information contained in the Presentation Materials, including, without limitation, any forward-looking statements. No representation or warranty, express

• r implied, is made or given by or on behalf of Savannah or any of its directors, officers, partners, employees or advisers as to the accuracy or

the completeness of the information or opinions contained in the Presentation Materials and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors or omissions.

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Introduction and Overview

• Savannah Petroleum (“Savannah”)
• UK oil & gas company focused around the exploration, appraisal

and development of the R1/R2 PSC in Niger

• Listed on the AIM market of the London Stock Exchange with a

strong institutional investor base

• Experienced board and management team
• Have successful track records in establishing, growing and

monetising E&P companies

• Have developed a clear and structured phased business plan for

Savannah, aimed at delivering material benefits for all stakeholders

• R1/R2 a potential world class exploration asset
• Overall prospectivity assessed at IPO at 573mmbls of risked

prospective oil resources (using probabilistic methodology)

• Post-IPO, 3D seismic data based structural prospect mapping

has indicated a materially higher prospect volume density in a portion of the license

• 2D seismic mapping has further indicated significant potential in

“new” deeper structural and stratigraphic plays

MARKET STATISTICS AS AT 18 JUNE 2015

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Market Statistics Listing AIM (SAVP) Shares Outstanding 131,337,172 Share Price 40p Market Cap. £52.5m Geographic Analysis of Investors Blue Chip Shareholder Base UK Overseas

Agadem and the Central African Rift System

• The R1/R2 permit is located in the Agadem Area of South East Niger
• The Agadem Rift Basin (“ARB”) sits on the most westerly rift of the Central African Rift System (“CARS”)
• CARS consists of a series of highly oil prolific Cretaceous and Tertiary rifts, with over 6bn bbls of oil discovered to date

SOURCE: PETROQUEST, WOOD MACKENZIE, IHS, GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Melut Basin 1,782mb Muglad Basin 2,053mb Bongor Trough 417mb Doba Trough 1,059mb Agadem Rift Basin 975mb 2P reserves

ARB Exploration and Activity History

• Pre-CNPC Era (1975 – 2004)
• 5 discoveries made from 25 exploration wells (i.e. 20% success

rate)

• CNPC Era (2008 – 2014)
• US$300m signature bonus paid
• 93 exploration discoveries from 124 exploration wells (i.e. 75%

success rate)

• Over 225 wells drilled in total (i.e. including appraisal and

development)

• 975mb 2P reserve base established
• Over 18,000km 2D seismic and 11,000km2 3D seismic acquired
• 463km oil pipeline and the 20kbd Zinder refinery built and

commissioned

• First oil delivered from the Sokor and Goumeri fields (2011) and

Agadi (2014)

• 20% of Agadem license sold to CPC (2013)
• Portion of license mandatorily relinquished (2013)
• CNPC/Savannah Era (2014+)
• June 2014, R1/R2 license awarded to Savannah

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

5 Savannah leads Savannah prospects Proven field R1/R2 block boundary Dinga 3D survey Agadem block

R1 R2

FIELD CHARACTERISTICS

• Average discovery size is c.10mb, with no discoveries to date having been greater than 60mb
• Typical discoveries in the primary Eocene play have an API of c31 degrees, a wax content of

c.12 – 18%, a mid-20s pour point and a low sulphur content

• Reservoirs are normally pressured and are thought to typically have porosity levels in the low-

20s percent, and permeability levels of c.250 milidarcies

• Primary recovery factors of c.25% are typically assumed
• Wells typically deliver oil production rates of between 1 – 3kbd, across up to 5 horizons on test

CNPC EXPLORATION WELL

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Agadem Area Field Characteristics

CNPC CAMP SITE EXPLORATION DRILLING CHARACTERISTICS

• Eocene well costs are c. US$4.25m per well (including completion)
• Eocene wells average less than 25 days to TD
• Exploration wells are vertical and are completed using industry standard methods

TOPOGRAPHICAL LOCATION

• The Agadem area is over 200km from the nearest major city and is in a largely population

remote area

• Located in a relatively benign desert environment

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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ARB Exploration Discovery History (1)

2009 2010 2011 2012 2013 2014 Pre-CNPC

2014 2013 2012 2011 2010 2009 Pre-CNPC

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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ARB Exploration Discovery History (2)

2009 2010 2011 2012 2013 2014 Pre-CNPC Pre-2013 exploration in the classic tilted fault block Eocene play was the principal focus

Eocene Upper Cretaceous Stacked Target

Agadem Creaming Curve

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Analysis of historic wells drilled in the Agadem basin to date shows no sign of exploration success slowing

Cumulative OOIP (mmstb)

Sokor Discovery October 1982 CNPC Entry (June 2008) Goumeri Discovery February 1990 Agadi Discovery January 1994

Geo-Seismic Cross Section of ARB

SOURCE: BANG ET AL (2015), GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Potential Target Horizons

R1 R2

Sokor 1, Madama and Yogou are the proven target horizons

ARB Stratigraphy

SOURCE: WAN ET AL (2014), GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Tests & Shows Targets Existing ARB Discoveries R1/R2 Prospects

96

R1/R2 Leads

14 31 14 9 26 2

• To end-2014, there have been

98 ARB discoveries in the CNPC-operated Agadem PSC area

• Multiple play types remain un-

explored that are active in analogous basins (both within the CARS and elsewhere)

Shows Tests/Discoveries

Stylised ARB Fault Re-Activation Cartoons

SOURCE: SAVANNAH PETROLEUM

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Fault reactivation has seen larger Eocene/Upper Cretaceous tilted fault block structures break up into a series of smaller accumulations - 3D seismic is therefore the critical exploration tool

EARLY STRUCTURATION AND OIL EMPLACEMENT LATE RE-STRUCTURATION AND OIL EMPLACEMENT EARLY FAULT TERRACE LATE RE-ACTIVATED FAULT TERRACE

Margin Basin Margin Basin

R1/R2 Prospectivity

• At IPO, estimated prospectivity of 573mb (un-risked 819mb)
• CPR assessed Eocene potential only, using probabilistic methodology
• Primary exploration risk related to seal, 3D seismic critical to de-risk this
• Post-IPO, 14 drill-ready exploration prospects identified
• 215mb of mean un-risked resource potential in 3D seismic area (8% of

R1/R2)

• Prospect volume density materially higher than implied in CPR
• Risk profile similar to other 3D seismic exploration prospects in basin
• Post-IPO, 37 exploration leads identified along NW/NE flanks
• Range of mapped closure size similar to existing discoveries in the basin
• 3D seismic required to turn leads into prospects, also likely to identify

additional prospects within the current “2D only” area

• Post-IPO, understanding of exploration risk materially enhanced
• Geochemical studies show prevalence of good quality source rocks
• Petrophysical studies have found target reservoir rocks to be of good

quality at principal target depths

• Post-IPO, encouraging “new” play types identified
• Series of potentially large deeper exploration leads identified along a

regional high, with largest potential closure of up to 40 km2

• Potential for existence of stratigraphic play types at several horizons

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

13 Savannah leads Savannah prospects Proven field R1/R2 block boundary Dinga 3D survey Agadem block

R1 R2

ARB: 2D to 3D Data Improvement

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Example 3D Prospects

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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E1 E5 LV Shale Madama E2 & E3 E4 Sokor Shales Base Miocene Yogou PSTM Amplitudes Prospect 2 Prospect 1

E4 Horizon

10m Contours

Prospect 2 Prospect 1

Depth TVDmsl (m) Yogou Madama

Example Deep Play Lead

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Base Miocene Sokor Shales Sokor Alternances Madama Yogou Deep Lead

SW NE

Contour interval 10 m

Depth TVDmsl (m)

Deep Lead Yogou Horizon

NUMBER OF WELLS DRILLED, 2008 – 20141

SOURCE: GOVERNMENT OF NIGER, BGP, GREAT WALL DRILLING COMPANY, SAVANNAH ESTIMATES

• 1. DATA AVAILABLE FOR AGADEM BLOCK ONLY

17

Niger Oil & Gas Activity History

10 20 30 40 50 2008 2009 2010 2011 2012 2013 2014 Exploration Appraisal Development Production

Niger has a developed oil service industry since 2008 with > 225 wells drilled, >18,000km 2D and >11,000km2 3D seismic acquired

2D AND 3D SEISMIC ACQUIRED, 2008 – 2014

1,000 2,000 3,000 4,000 2008 2009 2010 2011 2012 2013 2014 2D, km 3D, km2

Agadem in a Global Context

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES, IHS GLOBAL UPSTREAM PERFORMANCE REVIEW SEPTEMBER 2014. AGADEM NUMBER BASED ON DATA PROVIDED BY THE GOVERNMENT OF NIGER.

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The Agadem basin is highly cost competitive relative to other global regions

• 10

20 30 40 Russia & Caspian Agadem Canada South & Central America USA Asia Pacific Europe Africa & Middle East

Estimated Global F&D Costs, 2011 – 2013

$/ $/bbl bbl

OIL EXPORTS TARGETED FOR 2016/17

• CNPC currently sells domestically to the c20kbd Zinder refinery, via the

463km Agadem-Zinder domestic pipeline

• The Ministry of Energy and Petroleum (“MEP”) has indicated to

Savannah that it anticipates construction to start on the Agadem Oil Export Pipeline (the “Export Pipeline”) in 2H 2015, enabling exports to commence in 2016/17

• The chosen Export Pipeline route is expected to see 717km of new

pipe being laid connecting Agadem to the existing 1,070 km Exxon Mobil-operated Chad-Cameroon pipeline (the “CC Pipeline”) via the recently commissioned 193km CNPC-operated Bongor Field Area pipeline (the “BFA Pipeline”)

• Under the Nigerien Petroleum Code and PSC framework, access to this

capacity is expected to be granted on a first-come/first served basis with tariff pricing based upon a pre-determined return on invested capital for the pipeline owning company

• CNPC is highly experienced in such projects, having constructed 40

long-distance pipelines (totalling a distance of > 50,000km) since 2000 (including the Agadem-Zinder pipeline)

PLANNED PIPELINE EXPORT ROUTE

SOURCE: GOVERNMENT OF NIGER, CHINA PETROLEUM PIPELINE BUREAU, SAVANNAH ESTIMATES

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Oil Export Pipeline Targeted for 2016/17

20

Board and Management

Steve Jenkins, Chairman Andrew Knott, CEO Phil Magor, Chief Geologist David Jamison, NED Mark Iannotti, NED

• Recognised as one of the most capable oil and gas executives in the UK
• From 2005 to 2012, Steve held a variety of senior roles at Nimir Petroleum, a private Saudi Arabian company with extensive

global exploration and production interests

• Currently holds a variety of directorships at various oil and gas companies
• Andrew is the CEO and principal founder of Savannah Petroleum
• Held leading roles in the European oil & gas sector for the last decade, with extensive energy and investment experience

across emerging markets

• Previously Head of Global Energy Investments for Man Group/GLG Partners
• One of the founders of Vitol, having executed a management buyout of the company alongside 3 partners in 1976
• He left Vitol in 1986 to operate as an independent venture capitalist in the upstream oil & gas trading business
• Previous companies David has held integral roles at include Sibir Energy (founding Director), Mintley and independent trading

company Blue Ocean (founding Director)

• Over 20 years experience in EMEA equities, largely focused around the oil & gas sector, but most recently as a member of

BofA’s EMEA Executive Committee and Head of its EMEA Equity Research division

• Prior to BofA, Mark held senior equity research positions at Cazenove & Co, Credit Suisse and Citigroup
• Mark started his career at Wood Mackenzie consultants as an upstream analyst focused on emerging markets
• Geologist with over 34 years experience in the oil & gas industry, who has successfully managed onshore desert environment

exploration programmes

• Joined Savannah from Maersk Oil, where he was a senior member of the exploration and development team for the multi-

billion barrel Dunga project in Kazakhstan

Indicative Work Programme

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Activity 1H 2015 2H 2015 Legacy seismic data re-processing and interpretation Updated leads and prospects inventory FTG survey acquisition and interpretation Potential seismic acquisition Potential exploration well drilling Potential partner introduction Potential new venture activity

Appendix – Further Background

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23

Production Sharing Contract (“PSC”) Overview

Phase 1

• 4 year term
• Minimum work programme: at

least 2,000km 2D seismic, 1,000km2 3D seismic and 5 wells

• 50% relinquishment of land at

end of phase

• Excludes land already declared

commercial Phase 2

• 2 year term
• Minimum work programme: at

least 1,000km 2D seismic, 500km2 3D seismic and 2 wells

• 50% relinquishment of land at end
• f phase
• Excludes land already declared

commercial Phase 3

• 2 year term
• Minimum work programme: at

least 500km 2D seismic, 500km2 3D seismic and 2 wells Exclusive Exploitation Area (“EEA”) Phase

• Accomplished by declaring a commercial discovery in a defined area
• Government can elect to back in for 20% of profit oil at time of

execution of EEA

• 25 year term plus 10 year extension

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Overview of Main PSC Terms

• Signature bonus and related expenditure of US$38m
• Work commitment of c.US$100m over 8 years
• Royalties:
• Oil – 12.5%
• Gas – 2.5%
• Cost Oil:
• Recovery of 100% of capital and operating costs

(capped at 70% of net after royalty revenue) per annum

• Excess costs carried forward to future years in a Cost

Oil pool

• Profit Oil:
• 60 – 45% depending on R-factor (cost oil plus profit
• il, less cumulative exploitation costs) / (cumulative

exploration costs plus cumulative development costs)

• No corporation tax
• State back-in right for 20% of profit oil

R-Factor Contractor State < 1 60% 40% 1 – 1.49 55% 45% 1.5 – 1.99 50% 50% > 2 45% 55%

Contractor State Contractor Cost Oil Profit Oil Net After Royalty

SOURCE: GOVERNMENT OF NIGER, SAVANNAH ESTIMATES

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Niger – Current Licensing Position

License Information Name Principal Owner Nationality R1/R2 Savannah Petroleum British Aborak International Petroleum Australian Achegour Akata Resources Australian Agadem CNPC Chinese Bilma CNPC Chinese Dallol Labana Nigerian Dibella 1 Labana Nigerian Djado 3 Shenshui Oil & Gas Nigerian Djado 4 Shenshui Oil & Gas Nigerian Grein Sirius Group Nigeria Nigerian Kafra Sonatrach Algerian Manderam 1 Advantica Nigerian Manga 1 International Petroleum Australian Manga 2 International Petroleum Australian Tamesna Shenshui Oil & Gas Nigerian Tenere CNPC Chinese Tenere Ouest International Petroleum Australian Tounfalis Suntrust Oil Nigerian

SOURCE: WORLD BANK, EIU, SAVANNAH, REPORTERS WITHOUT BORDERS

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Niger – Key Facts

• 2013 population of 17.8m people (59th largest

population in the world)

• Landlocked country in West Africa covering

1,267,000km2 (22nd largest country in the world)

• Terrain mainly desert, with arable land in the South

West and South East

• Former French colony, now boasts a “real” multi-party

democratic system of government

• Centre Left government, pro-Foreign Direct Investment
• Significant French (cultural/economic/military),

Chinese, Candian (both economic) and US (military) influences

• Strong and free press, ranked 47 out of 180 in

Reporters Without Borders 2015 Press Freedom Index)

• 2013 GDP of US$7.4bn, economy focused around

subsistence agriculture and raw commodity export

• Current oil production capacity of 20kbd, all sold

domestically from Agadem to the Zinder refinery

SOURCE: WORLD BANK

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Niger – Key Economic Statistics (1)

2000 2005 2010 2011 2012 2013 Population, total (millions) 10.99 13.18 15.89 16.51 17.16 17.83 Population growth, annual (%) 3.6 3.7 3.8 3.8 3.8 3.9 GNI, Atlas Method (current US$, billions) 1.91 3.35 5.82 6.11 6.76 7.12 GNI per capita, Atlas method (current US$m) 170 250 370 370 390 400 Life expectancy at birth, total (years) 51 54 57 57 58

• GDP (current US$, billions)

1.80 3.41 5.72 6.41 6.61 7.41 GDP growth, annual (%) (1.4) 4.5 (8.0) 12.1 3.1 12.1 Inflation, GDP deflator (annual %) 4.5 6.6 2.6 4.4 0.5 4.1 Export of Goods & Services (% of GDP) 18 17 22 21 25 23 Imports of Goods & Services (% of GDP) 26 31 49 48 43 41 Gross capital formation (% of GDP) 11 23 40 38 35 34 External debt stocks, total (DOD, current US$m) 1,721 2,006 1,549 2,237 2,319 2,655 Foreign Direct Investment, net inflows (BoP, current US$m) 8 50 796 1,061 835 631 Net official development assistance and official aid received (current US$m) 209 522 745 650 902

SOURCE: WORLD BANK, INDEX MUNDI, EIU

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Niger – Key Economic Statistics (2)

20,000 40,000 60,000 80,000 Niger Africa World 2,000 4,000 6,000 8,000 10,000 12,000 Niger Africa World 3 6 9 12 15 World Africa Niger 10 20 30 40 50 Industry Agriculture Services 1 2 3 4 5 World Africa Niger 20 40 60 80 Niger Africa World

2013 GDP (US$BN) 2013 GDP PER CAPITA (US$) 2013 GDP GROWTH RATE (%) STRUCTURE OF THE ECONOMY (%) 2013 POPULATION GROWTH RATE (%) LIFE EXPECTANCY (YRS)

Corporate Presentation

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