Faroe Petroleum Corporate Presentation March 2017 Faroe - PowerPoint PPT Presentation

Faroe Petroleum Corporate Presentation March 2017 Faroe Petroleum plc Company Presentation September 2016

Building the leading pan-North Sea independent Faroe Petroleum: strong recovery play in E&P sector Faroe in unique strategic position for material value growth  Excellent diversified portfolio, full-cycle, approved operator (Norway & UK)  Greatest exposure to Norway of any UK-quoted E&P company Existing assets capable of trebling production in the next five years  Strong investment plan underway with considerable upside Development and financing flexibility  Diversified asset base & strong balance sheet provide flexibility for the future Strong balance sheet  Currently approximately £100m cash (no debt under RBL)  Undrawn $250m (£200m) RBL facility  Increased operating cash-flow – ave. unit opex lowered post-DONG asset deal  Raised £66m in July/August in oversubscribed placing for DONG asset acquisition and to advance 2016 Brasse discovery Taking advantage of the downturn  DONG asset acquisition in 2016 was highly value accretive  Significant cost reduction - Brasse among cheapest recent wells in North Sea; development costs on Oda substantially reduced Exploration and business development remain key  Outstanding Brasse discovery continues Faroe’s strong exploration track record - Faroe historic finding costs <$1.5/boe  In prime position to exploit further M&A opportunities 2 Cash + Increasing Cashflow + Unused Debt = Opportunity to deliver accelerated growth

Continuing our track record of delivery 2P Reserves (mmboe) 1 W.I. Production (mboepd) 2 4x increase 2.5x increase between between 2012-2016 2012-2016 Company estimates for year end reserves 1. Economic production 2. 3

Taking Faroe to the next level – on track Supported by 2P reserves of 81mmboe plus Brasse Note: this chart relates to existing, defined projects; it is illustrative and not forward guidance 40 - 50 kboepd Pil and Bue Njord Future Project Brasse 5 year outlook Oda 17.4 kboepd Tambar / Tambar / Brage Brage Average 2016 Actual Sources: Management estimates 4

Brage (Faroe 14.3%) Incremental project to deliver 2018 production growth Overview  Large STOOIP (1,000 mmbbls)  Net 2P Reserves at 5.5 mmboe at 1 Jan 2016  Net 2016 production c. 2,400 boe/d  Wintershall 35.2% and operator  Opex reductions through improvement projects Brage infill wells underway  Drilling rig warm-stacked until Q2 2017  Portfolio of new infill targets A-18 C  4D seismic technology and modelling to improve A-7 B infills  Three new targets to be sanctioned in Q2 - to increase production from H2 2017 Outstanding performance of the last two infill wells in Brage, A-18C and A-7B 5

Brasse (Faroe 50% and operator) Robust, simple development project with excellent address  PL740 Brasse oil and gas discovery July 2016  Simple structure – similar quality to Brage  Good reservoir communication  Preliminary estimates of 43-80 mmboe recoverable volumes:  recoverable oil: 28-54 mmbbl  recoverable gas: 89-158 bcf  Close to 3 potential hosts - approximately 13 kilometres south of Brage and equidistant to Oseberg platforms  Brasse appraisal well confirmed for mid 2017  Planning for Concept Selection by year end 2017  First oil anticipated 2019/2020 6 Oseberg South Oseberg A

Brasse Extension (Faroe 50% and operator) Possible 2017/18 exploration well Tro roll ll Wes est Tro roll ll Eas ast 31/7-1 31/7-1 31/7-1 A 31/7-1 A Bra rage Brasse Extension - New acreage Jan 2017  The Brasse exploration wells 31/7-1 & 31/7-1 A were also an operational success Brasse  delivered in the Top Decile Performance for Dry Hole Cost/Meter  without HSE incident in 55 days  In January 2017, Faroe was awarded PL740B Brasse extension  the possible northward extension of the Brasse Discovery on the eastern side of the Brage Field is an attractive exploration target 3D map showing Top Sognefjord 7

Core Ula hub (Faroe 20%) Significant upside from further infill drilling and WAG reinjection scheme Field development  Net 2P Reserves at 8.3 mmboe at 1 Jan 2016  AkerBP 80% and operator  Three bridge-linked steel jacket platforms, seven producing wells, four Water Alternating Gas (“WAG”) wells  Host facility for the Blane, Oselvar and Tambar fields and the future host of the Oda (Butch) development  Oil exported via Ekofisk to Teesside  Gas used in WAG injection for increased oil recovery  Operatorship has been transferred to Aker BP following the merger of DetNorske with BP Norway  Renewed exploitation drive underway led by AkerBP Upside potential  Additional associated gas from Tambar and Oda will allow increased WAG injection scheme  Several infill targets to be matured to project execution  Triassic reservoir underexploited, only 1 well drilled to date  Satellite production, infill drilling and increased WAG scheme is expected to result in a significant reduction in Ula unit opex 8

Tambar (Faroe 45%) Gas lift and new infill wells Overview  AkerBP 55% and operator  Net 2P Reserves at 6.4 mmboe at 1 January 2016  Net 2016 production c. 2,200 boe/d Artificial lift  Retrofit gas lift system (straddle) in K-1, K-3 and K-6  Conversion of existing pipeline to gas lift service Potentially significant production increase  K-3 and K-6 wells ceased producing at approx. 4,000 bopd each  New gas lift installation to restore production from K-3 and K-6 wells  Will prolong field life and provide additional gas for WAG on Ula Ula P-D-Q Tambar 8” Production Umbilical 10” UGIP w/ power & control pipeline K5 K3 K6 16 km K1 9

Oda (formerly Butch) (Faroe 15%) Simple, high-return oil development via Ula hub infrastructure High value project  Centrica 40% and operator, AkerBP 15% and Suncor 30%  66m water depth - excellent quality reservoir, light oil  Subsea tie-back to the Ula platform via Oselvar infrastructure  Two production wells and one water injection well  FDP submission lodged November 2016  All major contracts awarded  Gross capex expected at c.$645m  Plateau production of c.35,000 boepd gross (c.5,250 boepd net to Faroe) 1  2P Reserves of 42 mmboe (6.3 mm boe net to Faroe) 2  First oil expected in 2019 Extracting synergies in the Ula hub  Faroe to capture  Oda compensation payment to Oselvar (Faroe 55%)  Oda tariff payment to Ula (Faroe 20% vs 15% of tariff) 1 Based on 100% uptime 10 2 CPR Jan 2016 (Senergy)

Njord Future Project (Faroe 7.5%) + Pil & Bue (Faroe 25%) Attractive projects with excellent upside Njord Future Project on track for project sanction H1 2017 Snilehorn  Njord A successfully towed to Aker Stord yard & Hyme  Dry dock period in H1 2017 to install new transverse pontoons Njord  Topside modifications and life extension thereafter  Bauge (formerly Snilehorn) to be developed as a subsea tie-back exploiting synergy with Hyme Pil & Bue  Planned to come back on stream in 2020 Pil & Bue - Njord chosen as host facility The Njord A facility  Subsea tie-back development to Njord at the Aker Stord yard  Three horizontal producers supported by water and gas injectors  Three competing concepts were considered leading to the selection of a subsea installation tied back to the Njord platform  The solution will be matured through the Front End Engineering Design (FEED) stage towards a formal field development plan 11

Njord, Hyme, Bauge, Pil, Bue and exploration Material 2P reserves and future production PL433 Fogelberg  Faroe has material position in the prolific Halten Faroe 25% PL888 Canela Faroe 40% Terrace area PL644 Aerosmith Faroe 20%  Material reserves estimated to be more than 300 PL836 Yoshi Faroe 30% mmboe (gross) 1 in Faroe’s portfolio in the area  Net 2P reserves at 34.9 mmboe PL753 Zircon  Net 2C resources at 13.7 mmboe Faroe 30%  Significant exploration position PL107C NF2 Faroe 7.5%  Highly prospective area with good success rate PL384C Bister / Dobby Faroe 7.5% Njord Faroe 7.50%  Faroe discoveries include Maria, Fogelberg, Bauge (Snilehorn), Pil and Bue  Additional new Njord NF2 and NF3 discoveries PL794 Rosapenna Hyme & Snilehorn Faroe 20% Faroe 7.50% announced in October 2016: potential tie-back developments (c 6km) to Njord field PL793 Portrush Faroe 20%  Added key new licence PL888 Canela in January 2017 from APA round PL749 Seychelles Faroe 20%  Faroe established and well regarded player PL586 Pil Faroe 25% 12 1 CPR Jun 16 (incl Fogelberg)