JKX Oil & Gas Investor presentation London March 2017 - PowerPoint PPT Presentation

JKX Oil & Gas Investor presentation London March 2017

Disclaimer The information contained in these presentation materials (the “Presentation”) has been prepared by JKX Oil & Gas plc ( the “Company”). This Presentation is being made for information purposes only and does not constitute an offer or invitation for the sale or purchase of securities in the Company or any of the assets described in it nor shall they nor any part of them form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever or otherwise engage in any investment activity (including within the meaning specified in section 21 of the Financial Services and Markets Act 2000 as amended). The information in this Presentation does not purport to be comprehensive and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the Company or any of its officers, employees, agents or advisers as to, or in relation to, the accuracy or completeness of this Presentation, and any such liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any management estimates or prospects contained in this Presentation. Such statements, estimates and forecasts reflect various assumptions made by the management of the Company and their current beliefs, which may or may not prove to be correct. A number of factors could cause actual results to differ materially from the potential results discussed in such forward-looking statements, estimates and forecasts including: changes in general economic and market conditions, changes in the regulatory environment, business and operational risks and other risk factors. Past performance is not a guide to future performance. Statements contained in this document regarding past trends or activities should not be taken as a representation or warranty, express or implied, that such trends or activities will continue in the future. No statement in this document is intended to be a profit forecast. You should not place reliance on forward-looking statements, which speak only as of the date of this document. The Presentation is not a prospectus nor has it been approved by the London Stock Exchange plc or by any authority which could be a competent authority for the purposes of the Prospectus Directive (Directive 2003/71/EC). This Presentation has not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. The information contained in this Presentation is subject to change, completion or amendment without notice and is subject to verification. Recipients of this Presentation in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This Presentation does not constitute an offer to sell or an invitation to purchase securities in any jurisdiction. You will be taken to have represented, warranted and undertaken to the Company that: (i) you have read and agree to comply with the contents and restrictions of this disclaimer; and (ii) you will conduct your own analysis or other verification of the data and information set out in this Presentation and will bear the responsibility for all or any costs incurred in doing so. 2

JKX Oil & Gas (JKX LN) E&P growth portfolio across Central/Eastern Europe and Russia Contingent 2016 Production Reserves Resources Country Licenses Prod Expl Infrastructure mmboe Gas Oil Total mmboe mmcf/d mbbl/d mboe/d 1P 2P 3C ✓ Ukraine Ignativske ✓ Elyzavetivske ✓ Rudenkivske 2 Processing Facilities 18.6 0.9 4.0 15 29 457 ✓ Novomykolaivske 1 LPG Plant ✓ Movchanivske ✓ Zaplavska Russia ✓ Koshekhablskoye 1 Gas Processing 36.1 0.1 6.1 43 80 108 ✓ Hungary 6 Licenses 1 Gas Processing - - - - - 1 ✓ Slovakia 3 Licenses (25% WI) - - - - - - Total 54.7 1.0 10.1 58 109 565 • Ukraine: large-scale field development opportunity • Russia: Stable cash-generating operations • Hungary/Slovakia: Significant exploration potential • Team: New board and executive management focused on modern development approach *Source: Company data, Reserves and Contingent Resources are DeGolyer and MacNaughton estimates as of 31 December 2016 3

Progress & Priorities Progress provides launch pad for growth 2016 Progress • Completed detailed field development plans (FDPs) for all core assets, identified growth opportunities, 1 and started their implementation • 2 Increased production with minimum capital expenditure • 3 Reduced operating costs and overheads, resulting in an increase in cash flow and profitability • 4 Eliminated short-term financial liabilities (bond repurchase and restructuring) • Completed international arbitration procedure, while actively engaging in dialogue with the Government of 5 Ukraine. 6 • Built a technical team 2017 Priorities Russia: Maintain base Hungary/Slovakia: Resolve legal issues Ukraine: Execute and consider strategic Appraisal and with Ukraine development plan monetization Exploration 4

Strategic Growth Priorities Leading Central/Eastern European focused E&P Production growth underpinned by transparency and western technology • Leverage existing resource base and local • Increase production expertise • Explore and appraise Hungary & Slovakia • Introduce modern technology and practices upside potential targeting world-class performance • Improve market profile for retail and • Strengthen corporate culture with focus on institutional investors transparency, inclusivity and individual responsibility Production, boepd Capital Expenditures, $ million 20.0 50 40 15.0 30 $ million k boepd 10.0 20 5.0 10 0 0.0 2014 2015 2016 2014 2015 2016 5

Capital Investment Projects Ukraine re-investment drives future growth Indicative Year 1 Project Country Scope CAPEX* Production EUR $mn mboepd mmboe Enhancement projects on existing wells and Well enhancements Ukraine rig-less interventions (ESPs, velocity strings & 2.4 1.7 1.4 perforations) Project priority / phasing Fracking of existing wells Ukraine Fracking of up to 11 existing wells 17.7 4.4 4.1 Rudenkivske field Ignativske waterflood Ukraine Oil-focused enhanced recovery project 7.5 1.5 0.6 Well 5 workover Russia Workover of existing non-producing wells 3.0 6.4 1.8 Sidetrack Hungary Sidetrack of existing wells 1.8 0.1 0.3 Rudenkivske full field Ukraine 2 pads with 12 wells each 153.7 16.4 9.2 development (Phase 1) New well to de-risk predicted porous Callovian Russia 15.0 7.2 4.0 Callovian well reservoirs Other projects and base / maintenance CAPEX Other Various 13.1 for 2017-2018 TOTAL 214.1 37.7 21.5 * Indicative full-cycle project capital expenditures (CAPEX) subject to Final Investment Decision (FID) and/or Board authorization. 6

Capital Allocation Prioritized for Returns Across the project portfolio of the Group and potential targets Prioritizing capital projects – scale vs. returns Indicative product sales prices, $/boe 18 Ukraine - Rud 60 drilling (24 55.0 16 53.0 wells) Oil $50/boe 50 Initial stages of 14 Rudenkivske 14.0 22.5 development in Ukraine 12 40 have the highest impact EUR, mmboe 34.2 10 for JKX Gas $4.6/mcf $/boe 30 ($27.5/boe) Russia - 9.9 8 Callovian well Russia well 5 19.8 20 6 39.0 4.9 32.5 Ukraine - Rud 4 fracs 24.3 Ukraine - 8.6 10 enhancements 0.9 14.9 2 Ukraine - 7.7 Ignativske 0 0 Gas Condensate Oil Gas Condensate 0 5 10 15 20 25 Ukraine Russia Project net revenue/CAPEX, $/$ European oil and gas benchmark prices • JKX has a variety of projects in Ukraine and Russia • Rudenkivske project provides good balance of scale and returns with additional upside with decreased royalty rates 7

Financial results: Reversing the Trend Key Financials Change ($m) 2015 2016 % $2.95 $5.38 (22.4)% Group revenue 88.5 73.8 (16.6) 8.70 Loss from operations 7.45 before exceptional (10.7) (3.9) 63.6 5.74 30% 5.38 28% items 4.20 2.95 Exceptional items (64.9) (30.8) 52.5 2014 2015 2016 Loss from operations (75.6) (34.8) 54.0 2014 2015 2016 2014 2015 2016 after exceptional items Cash from operations 12.8 17.0 32.8 (22,4) (23,0) Capital expenditure 8.7 5.6 (35.6) (35,8) JKX Oil & Gas plc share information Realised gas price 4.20 2.95 (29.8) ($ per Mcf) 100 25 Volume Price Ticker JKX LN Realised oil price 80 20 Share price (01/25/2017), GBp 25.5 49.75 45.94 (7.7) ($ per bbl) Price, GBp Shares outstanding 171,723,145 Volume 60 15 Market cap, GBPmn 43.8 40 10 GBPUSD (03/17/2017) 1.24 Market cap, USDmn 54.3 20 5 0 0 Net debt, USDmn 2.5 EV, USDmn 56.8 JKX Oil & Gas plc trades with a premium Listing on London Stock Exchange 8