Report for Neptune Energy Group Midco Limited About Neptune Energy - PDF document

Report for Neptune Energy Group Midco Limited

About Neptune Energy Group Neptune is an independent global E&P company. Having completed the acquisition of the exploration and production business of the ENGIE group (‘EPI’) in February 2018, Neptune is now active across the North Sea, North Africa and Asia Pacific. The Company’s parent company, Neptune Energy Group Limited, is backed by CIC and funds advised by The Carlyle Group and CVC Capital Partners. Further background information is available on the corporate website www.neptuneenergy.com General Except as the context otherwise indicates, “Neptune” or “Neptune Energy”, “Group”, “we,” “us,” and “our,” refers to the group of companies comprising Neptune Energy Group Midco Limited (the Company) and its consolidated subsidiaries and equity accounted investments . “EPI” refers to the business of ENGIE E&P International S .A. (now renamed Neptune Energy International S.A.) and its direct or indirect subsidiaries. This report includes the results of the acquired EPI business consolidated since 15 February 2018, which is the acquisition date as that is when Neptune acquired control over EPI. Equivalent data for Neptune for the corresponding reporting period ended 30 June 2017, starting when the Company was incorporated on 22 March 2017, are generally not informative, as the Company had minimal activity at the time, principally comprising only minor administration expenses. Therefore, in respect of certain measures, including production, EBITDAX and capital expenditure, we have provided additional approximate pro forma information relating to the acquired EPI business, to enable a comparison of the results for the full six months ended 30 June 2018 (including the period prior to our acquisition on 15 February) with those for the six months ended 30 June 2017. In this report, unless otherwise indicated, our production, reserves and resources figures are presented on a basis including our ownership share of volumes of companies that we account for under the equity accounting method, in particular, for the interest held in the Touat project in Algeria through a joint venture company. Production for interests held under production sharing contracts is reported on an entitlements basis. The discussion in this report includes forward looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to materially differ from those expressed or implied by the forward looking statements. While these forward-looking statements are based on our internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, future capital expenditures and cash flow, we caution you that the assumptions used in the preparation of such information may prove to be incorrect and no assurance can be given that our expectations, or the assumptions underlying these expectations, will prove to be correct. Any forward-looking statements that we make in this report speak only as of the date of such statement or the date of this report. This report contains non-GAAP and non-IFRS measures and ratios that are not required by, or presented in accordance with, any generally accepted accounting principles (“GAAP”) or IFRS. These non -IFRS and non-GAAP measures and ratios may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS or GAAP. Non-IFRS and non-GAAP measures and ratios are not measurements of our performance or liquidity under IFRS or GAAP and should not be considered as alternatives to operating profit or profit from continuing operations or any other performance measures derived in accordance with IFRS or GAAP or as alternatives to cash flow from operating, investing or financing activities. 2 Neptune Energy Group Midco Limited Report for the period ended 30 June 2018

Highlights Production Neptune Energy (note a) Information in relation to EPI June 2018 6 Months (period 15 February to June 2018 6 Months to 30 June) (note c) to June 2017 Total production (mmboe) 22.5 30.1 27.7 Daily average production (note b) Dry gas production (kboepd) 87.4 86.8 91.6 Gas production for sale as LNG (kboepd) 33.5 33.5 12.2 Liquid production (kbpd) 44.7 45.8 49.3 Total production (kboepd) 165.6 166.1 153.1 a) Neptune owned no producing assets in 2017 and hence production for 2017 was nil. b) Production for this period for Neptune relates to the post acquisition period only, from 15 February 2018 to 30 June 2018. Average daily production is therefore calculated over 136 days, in order to provide data comparable with other periods. c) Production for the six months to 30 June 2018 for EPI, as above, is analysed by quarter in the following table: Q2 2018 Q1 2018 Total Gas production (kboepd) 89.6 84.0 Total Gas production for sale as LNG (kboepd) 33.7 33.4 Total Liquid production (kbpd) 44.4 47 .0 Total production (kboepd) 167.6 164.4 3 Neptune Energy Group Midco Limited Report for the period ended 30 June 2018

Summary of financial results Period to 30 June 2018 (note a) $ millions Revenues 1,033.3 EBITDAX (note b) 766.9 Operating profit (note c) 464.4 Profit before tax 340.0 Net Income 70.4 Net income before acquisition-related expenses (note d) 133.8 Cash flow from operations, after tax before acquisition related expenses (note d) 506.6 Net debt (book value) 973.6 a) Results for this period consolidate the acquired EPI business for the post acquisition period, from 15 February 2018 to 30 June 2018 b) EBITDAX comprises net income for the period before income tax expense, financial expenses, financial income, non-recurring acquisition-related expenses, mark-to-market adjustments on commodity contracts exploration expense and depreciation and amortisation, c) Operating profit comprises current operating income after share in net income of entities accounted for using the equity method, and is stated before tax, finance costs, mark to-market on commodity contracts and non-recurring items. d) Adjustment for acquisition-related expenses and taxes of $63.4 million incurred in connection with the EPI acquisition. The Group’s result for the period ended 30 June 2017 was a loss before and after tax of $0.4 million due to administrative ex penses. e) Pro forma information relating to EPI business 6 Months ended 6 Months ended June 2018 June 2017 $ millions $millions EBITDAX 939 709 Cash capital expenditure (note f) 162 410 f) Includes expenditure of $33 million for period to 30 June 2018 and $48 million for period to 30 June 2017 in respect of the Touat project, held by a joint venture company which Neptune accounts for under the equity method. 4 Neptune Energy Group Midco Limited Report for the period ended 30 June 2018