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SECURITIES AND EXCHANGE COMMISSION

e@ Lr* vrlu. or Pr 00shde

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sephbd I0, 201r. upon .dmplerion of rhe rcLjabitir) and eeddmece c$int fie Mcpp *d mcomdcid opsdions on Febn4 3, 2014

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wiri rhe sEbre pedofrse of rhe F :pansion or ft M3ibl@ p6jd(Ml) Therc is d Lea! J M\{ exes srm suppty fiom rhe 20 Mw *.tk, and *irh rhe .-6 Mw .a@ci!y ofMB-

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ad M.ibmm 2 rohk ro 7.1 kc/. and rhe.onbin€d Gpecny of*trV8.|4RDsdM3|.FD'-3tg

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on rune 17, 2015, PcEc 'nd

a$ride ompdy EEr Polr corp (EErrc), jrco'!.ai€i a joinr kdme pmjd.onpmy, Pftsd& conoBrioi (Psc), ro unddik.

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'he Etrvircimenbl codptihe c€nrficaE (Ecc).

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Ti! En{sI Regurdory commissioi (ERc)appmvedoi rury r2, r0t6 rhecr -rslr.lisibr. pors prh( (coc FrT) fof rhe Tspp, lhich qurifis rhe ptdr b rccive l]ld FiT paym46 of

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illalllljI.s0

oftq sbrehord€n re ate heins crefu y ob$r.d

eed{eisreeftrrrober@-'\r 0.70".o,repdir(onp,,]b)drDr\R

o.k d$eoo. fl,. honrcdd,-kb ,

cmmerene o.Flund qorLr ' re{rea\ kadprci.,detdopno,

Tre plmring adivnjes *s. condud iid fes l.ljse *de.onduc@d ii

Deveropmenr cons for fte oil p'ojeds d nli.Ly non $e developme or Ebn. Erpaison rroiet(a.bon). specincaly dnniry of n.v p

ds m.ounr .nounring rose.l6 hilion ae bu]k of

133 Fsuln .n!loy&s ol rre aroup.$. nexr Ndv. ( 2) nomhs due b jncH.d votun. ofbGinai sp.cifically for ns ftielabt. .io:y busins:.

Bero* is de bE,rdo*n of qutaem

Pdlnal'Elwnb.nlL*alRhI:h|hePhili.D]M

l:jll!rt,."": ,,;,"...d ".,"aItr'0'FJ|'*J{.'p.

rn,. . r ,,,., _dm; ,e,

L.r nrrl 6ei.;n ,dme d ie?$F ft* h'. 3 .o b.* g,sms ;'h.

'iol I n,.o, rF.a_h. n r prcn , orfi. eorqn.n,

e.. d" L.!.;d |h( 00m..

,," s',.1 i*€ d o|^p;1o

a. ?Ted B; "TT.ber,, ed""1"e

.qudr), ud , rc' t, f oI ie pm

A m* HlnD.flbon La* ha ben pd uctic ne{ fisl rms ror sllmd,o)a k. dafts;d,q ,M\er do.\.

d ,he req v.brt " p;odrcn sh,trgdo or,t 1gof ,h\t{, n te FLm;

lienk b.foc Juty 202r, *ift tunhd d

"r E en.drnA @,he re;m, ff d;

mn_ru,tr.,. .rh, b;{r pi.r

iiiii' ir::rd:':,i{iH.ii:il#ilx*:.::i;T'"ri'n:: " il"t:,jr:

n*r*;;;^,:n_t.,;i l:i ;"";;;-;:,;r : ;:-"f)"T"."j.;,,"fti l;; ;iTt1l

Thc genear pdrfticat shulrio. in nproribbirit or de conphy. Any tur-. p"tLrkr - **.,i. insubiri,y i aabm mry h!rc s rtqiNe.ftd

dsnNnbeli.tsl]r{trhisalndy

Tne Ebne crudr oil prodrdiotr ii ofishore cabon s or D&?mbq 3t.20

unexpeded rev.rs o r ourpui or .m. id mD tv * irh tudhe. diEdr;ns or ih.Elevar govmfrsr aurhoiiq Morcov.r, tike mon oit dis.o{ry aE

cnd. oilsaks and Purh3* sd st1i.6 As*m€nr (cospA)*irhviiol s.a. (viro ), *heE dre rand k obrisql ro anqs p.reniat pri.* fbm rhnd p t btrrr nd ro$ltdjecrud. dil ro 6e bd biddd. rmbiriry ofvilot io cavas, $id pdy buys oflerins an oprinun buyiig pricror rhe.nd. oil may cEaie d sdv. bjtiry Thrs ftk k mirigard by rhe

ofrh.biddingpcss.ondudedbyvirol. u0derrh.cospA,virolkobligd to $bnir ro rh. consoniun d€

onhnuetodlop'Tonana€etheris

BdledPjbiLighrduing pdi.ul[ d:b or period. Dded Bed rend ft p .e or .nd. oit produ&d in $. Nonh ss inNoih.n Eep. {hire Rabi Lidr rc

+L+t!!4e4!nee!, ta p,u4B

.oma}.rhk!olmekdrnrs]

. co|*rioi rnLs fron omlkq and

bg*ddorheloladida|

. tra*r in rhe desi9 or.qutpneft o

mnetrht p.m rcqnn.menr!,

. !€domne below.rpeccd teve

d dhef ridrstriar rcrjoN by emtoyes afr-6g me prcjeds dnery;

. pbnn€n and unptmild po*d our,s* due ro n,idei!.ej expansion snd Efurbishnedi

. c0ns@(ion ad opmriond detars

. force mFm Md dh4 ahfoeror.d o@ss, peNmL injue ro$ o

dMd'on or 0 planh and suspeisioi of openhos

The crcup .sd 6su. $ar ruerc 6curcnes orsy of rh€ evenh tisred ab.similo or disim ild nduft would noi exp.cred (qu* fi.om any of j6po{s or nsm gendr.ng ss4j or si

}e (qws ot P.roEi.4] ar pFdonmandy deiomiiMd h u s. Do[$s Ho*.vei rh. oblicdioi aid.ip.nss ofrhe losLfts whictr do ny arc d.ioniided in ptritippine

conFny d0$ mr mma y he4e i3u.s. Dollr od/d Phirippin. Peso, a rh. cd! may be, h snswd for .oftspondiDs oblisariotrs.

I':.eimtr, :li' ra,t- (rci

Fitrrn.id nnk M!D3en.n. objetiv6 ,nd potict6I'. Crup\ pinciFt finmcial inshhenh indde qd(fin'ncbl 6ds a' rypl) sd Eceivabt6 rh. nain

isls ehing fiommecroup\ finen. iit i.nrumenb

eid 6h eqrvaledsj tuding atrd inyedmed wunr6

I,se.!T t9 , h,nc-

pa,s ci,y Tt. 'ilh

or,he conpliy ovs ,h. pDpeny is d.d !.d ri€e nom ,t Lih _d .*,,b,*:e

Aho, Mdb8e ha a usto ?60 n ion wonh ofpurchd.d torrob.u€d6

ddirioiel p6p€ny in r[e n.{ rwerv€ ( t2) nonrhs

Ihe prin iparprepenies ofrhe croup h. phitippind!.d f crbon,ad

Pdror.um s+n,c. cDorn(B (scJ

wiid rmrgy s.flic. coornd (wlsc,

(Nab.sM'hy-Burulisa, Akl,r)

(|:g!m dd BahtreA)

s.r'r Etr.rs s.ri.e coirrud (srsc)

sfr dscu$'ond s6rarro/r'r.f

.gtufs cdmmon Equty (rar 2 ys^)

As offt€nber I t, 20 r6. rhe compb

r. PoNofine. colponrion (Fitipino)

I HoB<ofrn\erruft rn..

6rcDNofuec.rp{lon.F''p'nor

!! tlu.rohn tokrc &d Y!, mnc?. Phir \,E Euu $! hc L455

liiil"Hij:,tE}il*'**-

ff.:Ii:il.i{'",1i.:r,ffi:*,".ff "x';Ti1iii3:fi:,:ff :?#i",rsj;,[ s:,]ilti r;t;:15a'* *,t',I.$il, ";,,y"1 ::: ",i:.lf . " h" 8".d " b -. - o'

;li:tlri Tlia;}t;ii;;,r11. ""1;";,:;::;

"i;'; Li t,i;"::;;t,;!:,:: i,,,.;.,i:nt1-'", --

Knnmn ri rro(r) mer 'Km Err

Ird. *6 no $1. oaumeisrrcd scufiries for rh.

Debr sEriri.s . Nor apJrtiqbte

srck oprids - Nor Appltcabk

s€cuiries subjd ro Rld.nprion c,u Nor Applic,br.

orher seunres Nor Applicable

^3orD4.rber3r (^udned)

Finai.ia|s*d6nYdEeoucrj

Pmp.ftygndequ$m.ilnd

lNdre in a joiir vensre

LI^BIITTIESAND EOUITY

roTAL Lr{Brr rrb {\D Lor r Y r!r..:cc,.? r2r-![0540

rdbrr*.6mounrdro$214.l00nillio.aid rlr7.l3t mittionaorD{

y m,*d pL,en i6 {ilh orisinaths fte6nit% nd d{rci* flom Us$12.53? nittioi d of Decembd 3 L.66q ]L 20t6 is mrinly du. ro pryn.d of prcsEs bilin$ for rhe

.d3ddion or solar Po*d Psjed hd 6c MCPP Ph.s€ 2 and payn.d orcuftrl @nioi of td.s.

h preIit'Dd ros (rvPL) lnoui&d ro us$0.t62 ni ion ad us$0.t56

Propeny,ord.nd.quipn.i.(PPo) d4lhed bj I r?% non ustr40?24 nbUs$1r3.3?l hillionmainlydu.rorh.inpaimdof rlreclboioiles6

si$ orrceivables fi,on linjntsal* o$16']]'isaccomling.aedby||3ea

dins re€i{ble fiom d{ric,ty sales, mainly hon sorar Polr hjed,

r, defm.d fiid.ing.o* P,ipaid

Thn accomt mounred to Us$6.?66 n2015,EspdivdyThe55%ndinceuiomal lor rhe MCPP Phe l

.d io r.rs$r0 84 niLrioi md us$r5.9dd2015.r.s!.riy.ly rhe 36 14% id d.dse is !i& ro th

rbvdrhorr itr , lorbi vemrre nf.us$2? 311 mirrion hd !s$27 r6?ni .enbs r r, 20r J, 6p€divdy. 'Ihe

e hsrdion sdju{md' from pFvioNP49.72 Us$ 1 a ofiid by rhe income Bemard by PwEl mou i.Ero Us$l lr0million

Der.rEd rrx N.t (lirbili.y) (m^,4-) @B du. io 'iming

differcrcs in re{s

Ii'bi|ity,povjsiotrfolprcbable|6$i

'Ihe crclp h6 a DTA or Ust0 r0l milliotr and Us$0.i07nillion 6 o

srdion adjudmd of mis emml froP4? 06r r.rss ro P49.72:US$l

e additionrl input txes {ilhin $.

cDErr Do{ron 0r roi p.yibt. 6 o

rprion * of D-.nb6 I r. 20 16 momr.d.o $r 7!? frilrioi dd $6 55?p.tuiis rd roral coilidrdidi c.jy.d iion non.@nrolling hr6c (ff

PdoCEen. MCr dd Pehsold) in .r..$ of r|1l idhoriud captbt ot lnliries uirtrin rhe crcup, * h rh.pupc. of,pdyiic rhe $ne $yn.

::"ff1'll1"i,Yfi3,-"" 3ro']&!{n' noroto''e;"bngo'

rd ro usfi 16Tni ion$d us$t.095 frilion as

labihr was tuly &Bed (Pte,* $

fquiJ rfrribd'bhbeqrq hddf6 L\ror:--h.Lono.u\lvr.w

. 44% sh@ ofEEr pc (dir*r.nd 10r.df56%shiie( Mimt in p€fosotai

Noo .orhnior iftB' 0icD d of D. r@.srrare of EEt_Pc tn Perocfti:

lnn [ndd Den&r r (a!did)

!ENEN AND IDMIN'NMTNO

mHER rNoM[ (CsRc[s) dsre i Dd iioDc (hs) or{oii E0NE

Nd roEisr *d0F siis (os)

..".,'.'..""''

Eq!i'h|&n.llhLft!|(0nts!'

!!lDl|!drmr$Po $E(rPffi

Nd? DAee{ th unold, t, dR t, rcu4dq at}

vture, qh4" i.ah{ ret tueqn *.h@se Eciq tu soin on lan vt e cho8$ ar Ffpr. nhanoneas

T1,! Cmup s.@rd mnetidred nd itron. .lribur,bL ro .quiry hmddiry b us$1.773 minion d $0.0043 ffiiss per shd. ed us$2.630 m

"on d s0.003 fthd e.;shm ,s of De.mbs 31, 20r 6 and 20 ts, rcsp4riyely.

ig pdw getrenGd by Mcpp ad pehsohr. ln. 66.71% im6c f

oi|'ew!6oaT&.db)'3-s!dl

cNb or dehi.iiy $r€ p.tuii ro th. dd .osb or gendariig eledftiryorhd .6ts didly

'tri6urd ro prod

d Po*d Pmi.d *bkh naft€i its on

oir produdion .xp.n:s (oPf,x) dedemrd by 12.6r% from $4.219 nirl6 mainly b(a$ ot lo*er ro}?l!. (Gabo.) erpenss bbusht abour by rhe

dslin. in .Y$ase crude oir prie ad d

ri. 66.23% in-*e in d.pkrion is d€ h inflasd PPE $bFd b depldi

. (c&A) decded by r ? 74%1 rion ull,20l5 ro Us$3217 millioi !s orDsiekRighhol'ering,mdDdunsl,l'

mh.i incon.lch'rg6) anofrd ro (us$i 6r?) hirrion$d (us$542r)nirion a of Dlcenb( I t, 20r 6 ddin.od. Ghfe4) e.ouit

. crin (los) 0n derrv,tv*:

ri.bility (PreN rcfer ro Nor r9 orrhe Aidired Fins.i,L siordeio: wh.Blos ii 20 ri nsuhd aon $. addilroilr *!up of dsivdiy.

kbiliry duri4 rhe F od (Plese ftfd ro Nor re ofrheAidir.d Fiib.i,L sbrn.d);

nane ofa joiD' Edu. bease,h.op.di@r in iune 10,2015, dlus rhe

€mb€r 31, 20r5 ro US$0.234

I,20r5 roUS$0.040nilion Nndi4d gain in 20t6 du. ro itudu.lions otpee ys. us Do ui

hang6 in markd vaLu6 ot mvedmenrmn !S$r,392 a of D.enbq 31.2015 b US$16,404 a or Decembd l

! 3r.94% indee in ii@es exp6* nom us$4.935 mi ion as of Deemb$ l

! us$3.3l mrrrion inplim. r6s @rnpdcs (pleas rcfer ro Nor r0 orft coNoLjd&d

^ldired Financiat sbEmens)i aid

. ridmus$.t4l mi ionaof Dsembnirrionaof D.cmbdr,20r6 n.ii

n. so'p ar-o tuded, u\10 r.3 n't or dna s!' 4, . n"o- prclino

m. hx s ofD*mb$ l,l0t6 neiity petuins ro

t\e Us$r1rr nilLion beneft n h iofognnioiofrh!of re rnHtizd cr

Nob{odnrritrg in&ru, (NcD tr or

. 44% $&. of EEr Pc (dircd) dd tcp/. of 56% shrc (indiEd) in io pdmsoL,;

Toer8.rmobcdros237.1} nilionandst42043nil]on60f D*

ymdkelpL&.ms6{ilhdicimlrhs. The nd incF* ftom us$1.313 miLlion 4 ol D@mbq r t, 20 r{ io

sb04lrr iny.in.bb (srD conlnr

h.rofirrnd los (rypl) amou.rd ro Lrs$o r56mi ionad usto 16lmirrion as ofDeembs31.20r5 sd 2014, rcsp*riv.ty Ttu4 tsyo0dde

ofrhecompmy\ invedmenh in rc

o s3.592 ni idi and t3.572 niltioi s of Dsdbd 3r. 2or5 andD.mbq rr, m14, mp&t'.ty. Th o adv,n.s csMd 10 a! af6ljaE,

(cabon) .ndiis iildroo rhns$0.4r9 nilioi d ihe e|d of ernb.

d 1bft|. o' D...nb1 ' ' 0|1;

Fep4rffr n a.ror. dnolirtr ro r)toI7ni io' od Ust:.qs3 nir o, L or D

. s.Gup o] Mcr hd pdosolai.s D.br sdyice paymed Accoum (DspAJl

he $hr Povs Prqifrr

Prepery. prr and.qurpn.nr (ppE) is up by 7613% riom Lr$?e.731mt,20|l maiiL] du€ ro rhe devdoen.d of rtre sota povs pnidr and

fusfelofconlkcdEbn.wdkllo

D.[.md oir dpronrioo .ct moud.! h uss 15 920 mi]tion and us$ t9 I B nifiion as of D€cembd ] r. ?015dd 2014, rcsp&rlyely. Th. 16 70% nd d€e* is du. ro hansfer of .osG of comDtded *dk tfr.m Eum.Expasion Proj*r in Gabo\ w$r Afijca) fiom dr ftdc66roppE.

Invd.m.n t in r iori t v.trrn ( dlB I wE l rh. mmpmy rhd dektop.dthe Nab€s wind Pow Ptujlc! (NWPD. In Febru.ry la, 20ra, P.focfti sold 50% or ir 30% shre hordings

,2015 ed $2?61 niLridi as ormnddion adjdned fmm P*o ro usD

hi.rred bx mst (irbihy) (DrtL) c.n drt ro rlning dir.rercs rn

riabirhy, pmvision for probabte to$s,

Th. cf up hs' m of us$0.r0?nilrion ad us$0 202 s orD-enbr 3

The soup ar$ n.ord.d a $r.614 nithon atrd $J 123 m tion Dt.L I of D&.nbs 3t, l0t5 and 1014,f ii!d(m.d a5 0l rJ*mb€r I.

iutEg|eo'sha.6nolradedinlh

ustr023r mirlron and t5.{10 nirrion a of knbdr.20r5 rd

ot$ Pow Ptojd.

lion dnd USts r42 nillion s orsetrpmenGprog4*bi|ljnesliom

suppliert .ontu'on for r\e soLr Po*s Proj4r.

Majody or $. orFd podion or rmlods payabh ornatunty nor nore rhm one ( | ) yer;

'nd rhe reda$ificdron

Tn. croup n.ord.d ailrad Us$?r income 6i p,y,b e6ofDeenbqJt, z0t5 ad ?0t4, Bpedivdy.

Tne rminimr 6x* pry.bre aEERc and PcEc, rhey ft subjed

'o !h

d (MCIT) due !o low rdabte inconei and. Fd Mcr, i. c sbjd 6 $e spsiat ru Rs6 uidq Bor, rh inqtive

roaN p.y'br. notr.rretrl p.driis b rhe lom facitity iviiled byto fimtrce rh. con{mdjoi oirre 50 Mn sotn Pow Prcjd.

rd ro us$t.ogJ mrlionatrd ust0.609 ni ioi s of D.canher L 20lJ

abrndoinln! d enimd. for rh. Ebn. hFBion.

iis ro rh. plrlrl sdd!re and pur atrdirroid *tup ofd4ivdjye tiabiliiy du ncrhe pmd

^ftnsd diftmenr rirbiri.y amouried ro us$0.066 mi ion and us$0 069 niLlioi as or D{.nb.. L r0r5

Equity .rriburrbr. ro ?q yhord.dofrh.PaEntcomprnysmou.drous$66]]5ni iotrorbookvatuep$ she ot Us$o 162 s of Ds€mber I l, ?01I ed Lrst5o 09r million or Ust0.lsrbook vatu. pd she s or

Notr{rtolhs inrrcn (xcD a of Ik

e orPNoc.Rc, aid roe. ofrhe 6i%shlftorEElPc (indired) in

. 44% she or EE1 Pc (dn{t and loto or 56% share (indiFc!) ii P.'tusoLr;

whihasorD*embdr1,20la,ftisp€n

003 €minss ps shaE and Us$ a3e niLLion r lsso0l1 .mings pd

ypowftgemntdbyM,ibaiMao'h

ftr,0bAonp3r.db,0'4

o pndkrm dp.ns (oPEx) d-Fed by r?40e. fmm 15.112 mit4.2re millioi a of D-embd lr,201t b$8. or b*d myalty (aabon) *penss bmughi abod by m€

ss io PPE-{erh $bjs' b deprdion and hichq baftk prod!.d df6 17

n,iihm.. csc (o&M) of pdw.r phd nd aujd ortudbn md aidje'ioi sys.h (FcRs). depn.ia,ioi. mdmiig.].dri.ilyrx.l?23%inseae

20rssompr.dro2014,vhichsd.donrylifebruiry20r4 AGo, $ft ,( high6 dpe.$ llke iisurumes,ds and pqsoiiel .ost in puEuane ol rlre opsdrons

s (c&A) indded by le.r5%from u201,1 ro Us$3.91 I nillion s of D€.e

'he amhdion of sord Po{s Pbjd

o.h( iuconeGl'rrss) amounEd to (usla.637) nillion ind (us$4.571) aome Gharset rccounr.

t s4.6?% d{line ii i.r un*ali4d gain in charsF in markd varu* of iivesmenb in nsb tud€d d rh.PSE non US$0.026 niUim as oftrembq 11,2014 b us$r,rg2 aofDe

eftomUS$051 milliondorDEem

t 90.93%.hsge ii nd 4ri4d ro* on forex chan36 ftom us$0.094 mjl20r 1 r0 us$o r79 iirion tos lor rtr. s

. shd. ii ftr gain r to$) of d *$jd., pwEt amouncd ro $0.241 mithoidd vs$ozr nllioi ro$ !s of Dr

ncome nom us$0.24r mirrioi ro ust

idirryaolrremb€r3r,:014 rcsurr

(uss10.755) nilion rss on dsiverivA rrdling nom $€ pur md e0 oprions (pteas. refd ro Nos le or 'heconsol'&td Financial Sbr.neit) r

ddlida|$!upofdqivdjv.hbi|il}

Thegsry3ho@ordedaUS3o'$r)mi||ionand'l96cni|l]oipm!nioi20r5 dd20r4, rEpsrivery. Bulk ofr

rhe PsE. fi. chdge ii lax rare ased

Nob{obtdnhsin@r.nOcDaorDsembsrr.20r5petuiisrorherorLo ng.

hd orPNoc.Rc, sd r0% ofuhe 6570 share ofEEt pc (indircd) in

. 44% s\a. of EEr-Pc (dn&, and t07o of 56% shde (idiFd) in io pdbsot4

Irl'ile d of Ds.mbn I l. 20 r4. rhis p.eiff b rhe 2570 shiie of TmyAsia rnd rhe rllld sh!rc orPNoc-Rc ii

K.yPerldnme|odicdon:

Th. rorrowitrg riquidity .nd profib

. lnbrci.xp.ns mouftd ro us$4 9r5 nilLloi !s ofD{cnb6 rr,2015 aid us$4.5r4 hirlld as ofDecenb.r ]l, z0r4 Thr e 07% inf.se !3 de b:

LbbiiicsToE|5]o!}ho|deE'E4ui|'

ftear nq DrcrtoDenrinr Rfl.nue

r.io a of D..embd 3r,2016.onp

dnetohiehdequi'ybrcughlaboutbyad

gDup\ tevenge. Thisd(tined drro high4 equit.

Thert k s sligh! deline in op.nring piofii nrrgh s of De.hber 3lmughr ahour by d€ctin. in crude pric.s. Thh indhdB in. yd&ri.! ofrlr

For iddnionar KPh, phae *e atuch.

tu iliri6prognm ror Dcu rpprcla

op.s6Phi|od||*i1]@mmmeyilhlhe&quisilionofrbe|.g!cy3Dd.oidd auanri'div. Ii@prehion ov

Th. cddium is a*lnins DoE.s fdnat opprovat ofih. nvGed work pmgrpdr prcsure rudy hd sayiqr $oer

Prodjdioi wlll mdink. cm.hdnn for rhe .xpdsion (Maibdrs 2) dtliries *ill br cmied on $is y.& (i.e.i\ ls0l', ole'.o,.'a.rcr .oln!

T1,. prar *ill b. ii conrinuous opedrion non me t3 wras omprisjns ,he p4jers ph6e I

Th. plmr wirl codinu. ro supply et{dcity ro rhe srid. prcpamiions ror Tdl,. ph6$2 iie ongoiis inctudingoprniarion ofemj4r coss, orneke btd pcpararionsi sd .o iiurion of scuing p.frns. ptusdd ains rod.crde rsPP.2 onmscbl by 2d ar 201?

vrbm Grchmd. tn. ,vtr F\ffio, parelr iptrbe ) d,tr v,u?,a1,.,, nroeo -0.o1 tr,ghd.br!0d rl} . h ougr .,r

ForoiIfv.nE,|heopgddof9idprojed,VAALcoaabon(Ehmo.|ic.shav. d.fin.d some *drs ro b€ dr rj rh. ftcsry skitk ro naBge rhe

For rre d.cficiry sar.s, cxpa6io. o pow projed w iic&e rtre powd

'@iv.d .yeq :r0rl dlys htro*ins .&h sle

For me foud.en 04) yers lince oil erup is $Iinsi; bok

Tr'e ctuup onsidss rhe abow facroB fd'd4rifia

arr lts Gh rcqujremenb for a

fims ii hinas.m.nr oithen find.ill Ltquidiry.

Thrd|)Ne|'oq,fe.rud.o|r

dive exp.i* i. eq!ivat.nr ro 6 e9% ofrhe rorat roleN.

lntona" h tndqde"t ,htttu'

seJnrins fi a \a ben e' dor .d b

Aldir sic* or scv for rhe.atedtr yeo qd€d Decembtr 3r. :016 ft r!@m.nb ofrh. company, rcvi.w of lacd ro fitins of rmns made lirh'n.

Ycitrh\md |{hrse ' o nr' i

s7 r,r,r r nd sr6,ll9, for ln€ yan

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PcrfinslgyPETROEIERGY RESOURCES CORPOiiATION

7/F JlUl Blttdhg, ADB Avenu., O.ljgas Ce.lerP6ig City 1600. M.tro M.ntt , Phitipplegrd:P34a37-2e17 Fa!: (632) 631J066E-m.ll p.to_.n€Ey@D€lr!€rEl€v.@d,ph

STATf, MENT OF MANAGf, MENT'S RESPONSIBILITYFOR FINANCIAL STATf, MENTS

February 23, 20 I 7

S€curiti€s and Exchange Commission

PICC, Roxas Boulevard, Pasay City

The mamgement of PetroEneryy R€sources Corpomtion is responsible for the prepa.ation and fair presenlation oftheconsolidaled financial statements includins the schedules attached th€rein, for th€ yea|s end€d D€&mber 31, 2016 and2015, in accordanc€ with the prcscribed financial reporring fi€mework indicated therein, and for such intemal conhol as

managem€rit det€mines is nec€ssary to enable the prepamtion of finarcial slatements rhar are fiee from malerialmisstat€ment, whelher due to filud or enor.

In preparing the frnancial sratemenrs, management is r€sponsible for assBsing the Company's ability 10 continue as agoing conc€m, disclosing, d applicable matters relat€d to going concem and using the going ooncem basis ofac.ounlingunless nanagement either intends to Iiquidale lhe Company or 10 c€as€ op€rations, or has not realistic altemarive but to

The Bodd ofDirectors is responsible for overs€eing th€ Cornpany's financial reponing process.

The Board of Dir€.io6 reviews and approves the financial statem€nts including the schedul€s atbched therein, andsubmits the same to th€ stockholders or nemb€rs.

Sycip, Gones, Velayo & Co., the independent auditor appoinl€d by th€ stockhold€rs, has audit€d rhc fina'cialstatements ofthe company jn accordance wirh Philippine Slnndards on Auditin& and in jts repod ro rhe stockholders ormembe.s, has express€d iis opinion on the faimess ofpresentation upon completion ofsuch audn.

SUBSCRIBED AND SWORN to me before this April 10, 2017 in Pasig City. Affianrs exhibited to me their Ta\Identification Number (TIN) indicated below €ach nam€.

NAMES

Milag.os V. Reyes

Carlora R.. Vi|ay

Doc. No. ?-t9 :

rug"No. T6 ,sookNo. / ;

TIN

\00"732-775100-732-809

l'

COVER SHEETAUD|rED FIXANCIAI STATCMEN'S

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E T R N E R c R E s v E R o R T

I N N B s D R E s

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INDI Pf NDENI AUDTTOR'S REPORT

Die B6d of Dn€toa sd SloclholdeBPetoEnsgr' Resoues cdlont@7lh Floor, JMI Buildin8, ADB Alenuc,

wcisve dibd rhe consolid&d firuci,l sbrment of PtuEndgt RcsouE6 ColpoEtion sd i6subcidiarics (rhe cronp) ich conFise th. cosolid.lod sbbent offintucial posilid 6 alDecmber 3 I, 2015 fld 2015, dd lho a@lidftd shhenb of contrchesive iname, comoli&redsbtenena of ohdges in equit dd €nsoli&Ld slo&mentr of c'sh flo*s for each oflhe the yemin lhe Dcriod ended De€nber 31, 2016, dd not6 ro the aMlidiled fiMdal sbremenb. including Isummry of siSnificdt &munting policis.

In ou opi.ioq the r€hpmying coMlidaLd fimcial tuhenL pr.Ml fanlt in dl tuisirlffirb, rhe con$lidaled finmcial posirion ofr& GrcuD 6 al D*nber I l. 2015 md 2015, $d its

coMlidted fiwirl psfm* dd its oonsoli{tded c6h flo$ for eoh olthe LllEe t€m in rhe

period sded Deembd 31, 20 | 6 in aadm€ with lhiliptin. Fine.hl Reponins Sb&tds

we mnducted our aldits in loord@e *ith PhiliDDinc St ndrtds on Andniq (PS{s) OlrBldsibirirtes uder rhe sbnd.ids N lunhd dFcribed in the -.l,ard t s R.spNibnftie: lN tl|.,{ulit af the Co$otidded Fiwncial,tde'.,rs $ction ol ou toport, We m indep.ndst ottcGnup in accodoca Nilh the Cdde ofErhics ld PDlesioal Accounba in tb. Philjppines (Code ofElhict toserher *ilh th. clhical EquiEmmb rh'r fle Fldmt 10 our udil ofrhe coaolidaredfinocid siahentr i the Philippines, md ur bNe turlled ou orhs ethi€l sponsibilili$ in

ecudscewithrhse ie{uiEmdls udtlECoi.ofEL\ics. We beli.v.lhal lte ludit widene *ehaw oblained is su6cienl od app@piat rd pbvide r bsis for ou opinton.

w. d6r aneniio' b Nd l0 ofrhe coMlidanii Jinmill sftnenb, *hich discuses th€ snsp.nsionofthc Drdudim adilitie in lh. West Linlpam Oil6eld. Among lh. other op€mrioc ofrh. Ctoup,the susDosiod oithe prdudion adivilies in ihe wesl Limpoo Oilneld aises dRdainlies 6 io tlep(lit bilig of lhe ptulem opddions in rhe eid oilfield. Itie profltabjli9 of p.ttoleum opsatoNrelaEi to the sid oilfi€ld is dc!.tulert upon di$overy ofoil in comdoiol qwlftfu thrl woDld

Esult fsh the srcce$irl Ed{eloDmmr &ti!iti* thdon. Ou opinion is nor qudilied in resp€t of

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-7-

Key audn natten m lhs. mn N thof, in our pof$sioal judgnent tuft ofbosl signin.mce inour audit olilc consolidrbd fimdal shbnenb of the c!ftnt priod. Ibero naft6 seE addressdin dE conbxr of ou audit ofrhe cdnolidakn fid&cid slalemdls 6 a wholq rd in foming ouopinion tl€Mn, dd w. do no1 proride . seprate opinion on drese tuns. Fd e&h matht b.lo\our desoiotion othow our andn addK!.d l)le nite. is @vid.d in lhat conlql

We hive fiiJnlled the Esponsibililies dsribed in the,r&tir,.'s Xsrp"tuibnniet lor the ,ardn o/&.Cohsalidat?d Finaeial Stden?nb srion of olr retoG inoluding i relation ro th*e ntd*.Aedingly, ou audit includ.d the pcrfom$e ofpDcedEs d6i8led ro espond b olt 6se$nertof rhe risks of mdial DistuDenr of rhe comolidrred frdcid slocmdls. The 6uh5 ofou ndilprcedu6, including the prccedfts pdfomed to oddrcs tie m,teB below, p@vide rhe bais foi ouaudit opinion on the Nconpmyirg @nsolid.led finmcial shrden6.

vat"dio" oJptu ud caa oli.rc

Tho laludion of Pdocrem Ener8/ Cotpontont (a subsidhry of peboEmlgy) ddivatv. liobiltryFlrted b lh. pur sd call options on tne shm pmhde 4sm.n1 micEd ilto virh C,pAsh ASEANwind Holdinss Coopenriefu.A. oler lh. inv€te Compmy, PtuWind Endg/, lnc. (rekwtnd) is

hded on ctuin dsumplioN sd enimares. nies imlude thc probabilily ofo liquidiry evd thrt wiulminore the Dur Dd call options, rh. omplbliar ofstike price ar exeris. dtrc, th. tuiurcDerfo'fuce of lerowird, md rhe rjst ldjured dkaDt ne. we focu.d o tiis @ bmuse ofthensagmmfs judgDent invohed in rhe laluidd. T1| .fied on rhe 2016 m'sdlidakn ns incomc ofrhe Fnaument of thc dedvotive liabilig moud ro $10.76 niuion. See Note l9 of rhe

€nsolidaled nmoirl sardenls.

W. sse$ed L\e valurtior nodel u*d by referedcing 10 conmon valution rodeb We Ficwci lhe*ey inpnb used in the lab.lian seh 6 lhc pobabiliry ot m *en! tha! aiu trige.r tne pnt or 6u,con@tual c6h llors, ris* fr* nre, nakd bda tud uquoi.d mskel pri6 by Efemdng ro ntuk ldabonMluatiddate In addilion, {c involvci ou in&nul sp€cialisl in the sid of thenerhodolqy dd lhc ssuptions nsed.

'Ihc estimles ot oil d e6 aepes rcquiE siglificdrjudend dd ue of Nmptions bt .hemmlgeDenr includins inpu6 froa int mal .4ins. We focus€d on this ftt be6!s. lhecs.iml.s havc a mlaid imp,cl on ihe consolidared fndcial slot mdls, 6 theso @ urilized inh$ing impaimenr, mlcularins d€pleialio4 derletion dd moniadoq md estnnatingd€nni$ioing prcvisions.

'nrere is m innae'r Dnfrinty iNolved in e$ina1i4 ENe qwtiries b€m$ of lle cdplexanbacrdl sd3lmcnll d.ldli4 the Group's sh@ offfieres in Gabd dd othd l@al seryicesntacL oler *hici tl'e Compmy ha peticiparing in@ss. Illis DnMin!, ako depends on lhemount of Eliable sEologic dd dginerhg dab avdhble al lh€ rime ofthe edintle dd llcinrrprebtid ofthesc drll by lhc nilageDent Se Nob l0 oflhc consolid.l€d fimdal tunda.

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W. Eviewed rhe mmslnenlt *linotion pFGs, including the asumplios used i' refedce !o lhedsumpriotu oflhid parq esdnlis md rstd rhe relddt conrols We pflfom.d m dalysn otfiechbges in lhc .uol yee Esnes cdDed to lh. prior ys sd inquiftd of uy ch$e6 i' tbe

uderlyin8 ssunprio.s u*d. We dalu!&d dE amp€enc., spobiljlies sd objsiiviry ofrheengineN en98ed by rh. Goup to perfom d iideD€nd.nt Gsesmqt of ib oil ftsfle Wcreviered lh€ spoidi*t rad dd oblain d m ud.Ebdiry ofrhe natw, s.ote sd objedives ofhis wo.k od bajl of die Blimo&s includins d' chdg$ in lhe Eserye

Etitulo, of M ..ti'w^t oblizdtuB

The GbDp h6 prcvisions for cl6e dom, restoraton ud envimmental obligarions on ii5 sol& po*erpldt in T6lac, geothemal po*s plant it Bolog6 sd iimi in oil fields in G$or The calcul.tionof rhese plovisions FqDt* rhe 6c of nmagmenrjudgndl in esrinating lururt @sts dven the

nature of@h si&, rhe opsarins actililies donc, md dE facifties coatucl.4 oong other

considemtioB. Ihs €lculatim ftquire rhe 'rmagenmt

!o ssme q rc@nable 6te 10 dis@unlrh* fuore ssb to pEsenr ulue al Ep.ni4 d.1e

The OouD ftviess dr closeim, restorim md envircnmmral obligations on o unu'l b6is neCoun s6 m eftmal tshni€l sFcialisl to 6ss ib shd in abmdonFenr @s in Gnbon oil noUs,md m intul bchni@l Broup lo estimre rhe furure rcsldalio' c6b of ib sole od Beothmdporer plsls sibr Berue dfrhejldgnenl ud snbjecrivi9 involv.d it dF Btinatio. pie.$, wccorsjdered rhis ro be a kel audit nonr. As ofDeMbct 31, 2016, provisions Elald 10 Netdnenenloblieltimstobl€d $1.3? million. seNob l3todie snsolidaled finocial $rd.nll

W. rcvie*ed the tlllmsEmenf s pllEs in alcularins rhe piovisions for ser EtiEnenl obliealion,andtned$eEldtutconltols imludinschmses inrhe saidprorisios in2016 W.Evieueddddiscws.d wilh the ndasme Flevdl dcumenrs od rstd rhe doutts ofthe 6sDed Hloiarionand Ehabilibtio. by comparlnB these b rhe repon offie dhnicol specialisr. W. reviNed the lnftondihalesused inalcnldingrhe pbvision. Wc 6r*qi the conpelen€, apabilitis ddobj*rivig of the lfuasemcnl's irteDal md *emal r*hnicol speolist rtilized ro prcduce lh6e

Val@ion ol invnw"t in Goboi, Pd Alrica $d tv?n Linap@

fie GrcuD hs irvelrrent in Gaboa We$ Afticodd wesl Li'rpacm inchdcd in wells, phdmand oder frcililiff' accour 0nds Ppp tty, plat ad equipn tu snian e bsd fd iepaimdlvhm therc .ie indicoljons tirt tne crryin8 values oftle inv6hent nay eica.d rovemble

On aeomt ofthe d.clinc ir oil pries in 2016. which lMogomsr ansidsed d inprimenliddi€ld, lhc mmag€menr perfomed m inFaimdl 16l D4 rc..rdingly, @ogni4d o inpiidmrlo$ mounring to $3.33 niuim. nE de&mimtion ofrhe recovdble moub oflhe 43.* b.ingtsd for inpaiment r.quies e*imrim involing lh. w of intdal asuiptions such 5 tutuepldduclion 14eh ud msb, md eftbd sumplions sch a oil pflB dd disout 6b Bsus. of$e signincmtjudsndr iNolv.d in lh. esliDdion ps*, we consideEd rhis ro be a koy udnroftr. s€ Not l0 0f dle @nsolide! ntucirl stllrnents

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w.obtainedtnemsagmencsdse$m-tof itsiNeslr!'ens HMbbilityrhroughthetdisonnredc6h now psledim. In ftldiion, we tesbd dE Asmprim lsed lo complte vdue iluse of eichinvesbent such d funire 6i io* poj€tion, cmodiy trices, disur nrs, dd exchdge mbour poo.du6 ako include snladng lhe osupiions usen b those povd.d by rhid Frtestimdes. We also iBpecd lhc serice onhcb rd @lddl joinl opedions 4redds of @hexplohrion pojels lo deGdi.e lnd the psiod ovd viioh de Ghup hN lh. riShl 10 exploE in the

speofc ma has nd expi.ed dd $a(he Grcup na rishts dd obligdions Dds rhe ontr&b thDughpdiciparing interesL We obainei the lat6r nMgm.nr discl6Es rest.ding lhc slotus oftnensenicc contrb md asesed the rd.qu.cy lo suppon lhe ffi6snen1 olnsogpmor restding .h.sovombility of these inv6b.nts. we dso involved ou incmd sp€cialhr bm to revis lh.calcularidn oflhe Ecoverable mounb ofthe invdlll.nls for pu.pGff of impaiment testing-

Mdaldent is rsDonsible fd rh. otnt inf@arion Die olhd infonation mnpiis.s tleinfmrion includan in $. SEC Fom 2OlS (Delinitivc lifomalion Sbhctt) SEC Fod l7_A mdADual R.pd for tl'e ys etuled D.Mbs I I, 2016, but dos no1 include the @6olid.Ld fi'mci'lslstnenb Dd or audilor's Fpofr thedn. ]t SEC IoD 2GIS (Defmilive rnforurion Sbemdt,SEC Fom 17-A md An'ual Repon for rb. yee odtd Decemb€t 31, 2016 ee exte.ie! b bc rodewaihble lo N afte rhe dale ofihis audibr's repd

Ou opinion or lh. consoli{t r€d flldid slolemenb does nor avd lhe oths infomalion md we *iUnol cxpres my fod of sMr@ anclGidn .h4on.

Ir onnolion rh ou tDdib ofthe eBolid{ed flMci.l sbrenena. olr rcsposibilit is ro rcad the

other infolmtion iddlificd above vhen it b*ones ovdlable dd, in doing so, consider vh.lher the

olhd hfmriio is meiauy inconsislenr vith rhe @nsolidlted finmcial sEtsdls or ouknowl€dse ohained in rh. .udils, or orhegie app.s 10 b€ marerially missLl€d

R.sDo.sibililig or Mr.ag.n.nl rhd Thk Ch"rg.d rirL Governone for th. Consolid.ted

Muagemenr is Hp6iblr foi lne pEp€Etion rd faii prcsentation ofrhe consolid.led fmcialshrflients in aeodmce wirh PIRss. md fd suoi iDtedal contol d mmlenert ddmind is

nece*sary to dable rh€ prermlion ofconsoli&red fDmcitl sMentr dlar de fiee fton material

mislabmsr. *herhd dDc 1o t ud or *or.

In E.paiine lh. coNlidared fitucial slalem.nt, mm'gdent is rdpocible for as6sing tlFcronp\ ability ro contin!. d a goiry 6n(a di$lsing, $ applicable, nand relaled b songcon;n dd 6inc the going @'cen bads olMnnring unle$ mma8ensrt eider intcn& io liquidate

the GrcuD or to e6e oD.'atios, d h6 no Ealiiic albidi!. bul lo do s

TlGe chrged lh Bovdsoe e ftsponsibl.lot ovffiinA the Gblph lbocial Fponhg pme$

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,{udilor'rRspouibitit'e!rorrh.Auditof rheCotrblt.redrim.ci Srrro.trb

our obislivd ee lo obbin Eenable a$dde aboul Nhelier the mnsolidared 6nddd slaldeds6 a whole ft 6e fron aacrial nisloLnen! vherher due io liaud d e]ff, dd lo isue m rudtoasEDd.halinclud.souopinion. Re6onable dsurace is a hie! lael of dsumcq bur is not Igudotc thol u audir conducred in Mddde lh PsAs will alM,s debct a mlsid miss&lemertwien it exisb. MissEhdt 6 4isc frcm liaud or etur dd e mnsideFd nabrial ii individlallyor in the 4lrcgole, lhey could lffiombly be *peLd to itthene dE 4monic &4isids ofusmLk n or dE h6is ofrhse co@lid.ted nmoiol slo&menb.

Ar pd of m oudit in aaordmce with PSAS, se .xdisc pofssional JDdgDenl Md mainbin

Diofe$ioMl s*eprickn rhnughour lhe audii. We lho

Iden.iry ed ss.$ rie isks of mersial nisslaLsml oflhe coNolidatd nmn.iol si3bmenb.vh.lhs dne to lBud or ed, &si8n dd t€rlom Ndit pbc.dwe ietoNive b rhGe risk, ddobhin audit eliden* lhat is snfricient md rppbpirE lo pryide a basis for ou .pinion The rislofnot d.letire a mabrisl missbrdml Fsulring fron ts ud is hiShd lhr for orc rsulting ftonercr, 6 fraud nay involv. slluior forlery. inb.iontl omissioN. nisFpreMblio6, q the

overide of incml @rtuj.

Obbin d udstording ot inbrnsl dbol reldml10 rhe audirpre.nws thal @

'pprcpnit in lh. cifmstoces, tul nol for

opinion on rhe efredivrnds otlhe GEup\ intbll mtfol

Evilu.le lhe lppbpriaroe$ oa&couling policies tr*d md $eestinatB md rela!€d disolosw Dade by nmeFmol.

the purtose or expre$tng u

ffinrblde$ of s.ourins

Conolude on dre apFopri.t ne of llbagFmmf s e of tie gping cmo basis of lmutngmd. bsed on th. audil {idm€ ohbinc4 shelhs r nat.ial unetbinly exisb relaled lo evdrlor cuditioB rhar niy cdt si8nific$l dotrbt on rhe Grcur's ability ro cmtnu. a a go'ng anedIf se conclude .hal a n.terid uetuinB exists, wo e Equired b dra* atlention in du Ndibfsftodt 10 lhe rclatd disclosr* id tht coMlidarei fi.mcial sloLment or, if such disolsu€ miradequsre, to modiry our opinion. Ou conclDsiod e b6od on the audn *n dce obbin€d up

to the d.te olou luditoas repon. Howe!4, tunG evmb or conditions ncy caw the Group loce6e ro contnue d a goBa concen,

Eral0a@ th. ovs&ll pesenhrioq sdc.w dd @ntenr ofrhe cosolida&d ,ilmchl sbEmdts,inchding the dislosres, dd rh.lhr de coNolidrred fimnchl tusenb replg.tt the

lnderlying bm&rioN md evdb in a lllsmd rhar &hiw6 fair presmulion.

Obrain sufiioienr apprcpd& rudil .vid.nce rega'ding rhe fhscial inforuri@ oflhc enritid mbBinss aclivities villin tte C@uD ro expigs d otition on rhe cNlidal.d ,i'mciilshrdents. We @ FsFnsible fd rhe di@don, supmision ed Fntnoce ofthe ludit werdoir sol.ly HpoBible foi ou tudit opinior.

|M||lrfl[|mllfi[l

W. commuisare *idr rhce cheged lh goremde Egdding, mdg olhs mftq the plm.dscop.rd timingofth. Ndi$dsiSnificmraud nndings, includingmystnificdtdelioienciff iD

i dd cmrol tnat we iddt,i duing our audil.

we rlso povide lhos. choeFd with govtuc. rh o slo&mot rhat *e have @mrli.d 'nh

relevmtelhisl EquiEmenb regarding ind.p.nddo.! md 10 almunicale vith th.m all Eldidshipd edorher maftd rhit nay idombly be thoulhr rd bd on ou indep€ndence, ild whee atplioable.

Fioh th. natteE oomDunicrred rirh thos chdged *irh sovemmce, vc deremine th* ntttem tharsere ofnsr signifid€ ir $. au'lit ofrhe consolid.ied finoncial sbrsena of$e curcm period

ad e lhdfd. $e key audn ndets. W. deqibe ltese mne6 in oui tuditors rcpofr unl6s laa orftgulalion pEludd public disclosu. about tie Dsds or who, in cxttnely rm circmsbcB, we

debnine rhat . nrttr should nol te onnunicii.d it ou! Fpd b€c.us. th. ldv.Ne @sequdc6of doing e rould @'rbly b. .xp..t d lo oulweiSh rhe public intul b€nefis of s@h

Thc engsgflmr pder on &. audil Fsuhing in rhis indeFndot 4diror's FDoit is .r.hn T. ViUa.

sYcP cotRts vELAYo & co.

/rl, t ttaa

SEC AdFdibtion No. 0733-AR 2 (Gbup A)May l, 2015, valid util April 10, 2013

Tu ldenrificdion No. 901-61 7'005BIR AccEdibrion No. 03-001993-76-2015,

Febrary 27. 2015, volid util Febrxary 26, 2013PTR No. 5903775, Jsuary l. 2017, Mokti Cny

tmilruililil||I

PFTROTNERGV RTSOURCES CORPOR,ATIO\ AI\D SI. ESIOTARIESCONSOLIDATED STATEMENTS OF FTNANCIAL POSITTON

t0t5

ASSETS

cnsh dd ca$ equivalenb iNol6 6 ud 27)Fimcid 6setr ot fan vdE tnou8n profit or lo$

R*ivablcs (l.lore 5, 3 and 27)

!2,914,533 $l:,516,605

PEoaid exms md othft cutrnt arei,

Pdpdg, pldr sd .quipnent (Notes 5 ed 10)Deleren o exploation €st (N@s 5 dd I l)lnvehdr id .join. vent!€ (No&s 2 md l2)Irvstn€nl p@penies (Nor6 5 rd 13)Derfled d 66eb - het O]ob s sd 2l )

31,417

Orh.r nonlutrdr ets aNoE 14 r0JEr,8:l

$117.,t0,540

I,IABILITIES AI{D EQUTY

Accomb palabl€ ,rld a€rued exp€ns* O.lob l5 dd 27)curdt ponion of loss payrbL (Nol6 l6 sd 27)Inoone d psydle (Nd 2l )Depcia fd fritu sdk subsqiDrids (Nole l7)

$t3,795,72t

6,557,2244r,392 021

lrss payable - ner of crmt pofrion o,lob I6 dd 2,Ase. e.nmr dblig.lion (Nols 5 dd l3)Derivotive liabiliy (Note 19)Defeftd b liabilftiB (Nd 21)

r0,355,936

Tohl Noncuftnt Lilbilidg

|lt[lfltxlrumlI

2016 tol5

Andbul$le b equity hol&6 of lh. Pabt CompMycapiill slox (Noro 20)Addirio.il paid-in ciDibl (Noc 20)

Approprided (Nore 20)

Rensucrents of nel eorucn Edment liabililyCmularive tuda.ion idjBhdrEquiq Gfle 0,rore 20)

o7,136)

1,359,1?3

1,t49,555

(16.227J(2,543,323)

Non6'tolling i.is$a (Nole 30) 24Jn2,014ToL tqur) 3e;?3,9-5 32,t77.570

TOTAI LIAIIIITITS AND EQUITY $237,130,540

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PETROENERGYRESOURCESCORPORATIONAND SUBSIDIARIESCONSOLIDATf,D STATEMENTS OF COMPRtrHINSIVT INCOMD

cc. ot.rrdhiiy d6 0{or 2t

cIliRL !M ^pMNrtrsTrvE

ExPf,NSE (Nor a) rJ17Js r,qr,032 3Jt6eB

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tuugh Pft.d d bs (xor 7)crtr oD disd o.brctur (Ndc tr)

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rRov6roN roR (BBEnr rRoM) Ncom rdNor2p trxd! (3,132,qn 5.q3.72

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rrrr,0q, (r.rt)4ro

^NruBUAB!E M EOUITY IIOLDM OT B'

10 @t

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PETROENERGY RESOURCES CORPORATIONAND SUDSIDIARIDSCONSOLIDATED 5TATEMEYTS OF CASH FLOWS

CAStr fl,OWS 'TOM

OPEUTING ^CTIITTIf,S

Itudn .xFEr (Not 16)Inrridd! ls! d cabdi Ed (Not 10)

Depletid, d.re.i'iio,nd mdizatioD

a6did .rla$ 0{de rt)wncott of'Lr.n.d .xplmrion cosb

cain on dbp{.,r of invaft.ni Orot 12)

Los (srin) od d.nvative (Not le)she in n. ro$ (in.oi.) or, joint v.nM Orote 12)

Nd @.iri'.d fwisi dcb'ngc los Gaii')Nd siir d rin hh. chdg* on rmial s* ar

hir slu. deu€n pnfir r los (Not 7)cain on ele of.qlipn.d ilot 2l)

dr34,63:

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opmriry incom. 6efor N*iis opibt chrs6

r,4661!LaeomE @FbL sd rcqu.d d@rs 0 )n9?,t5.)

Ndc.shomudedbyoFnbsdivitjB !J0!,061 2r.49r,129 16,451.592

C^SH 8I-oWS TROM INVESTINC ACTIVITIESProc..js6'onsaleofFop.nyedlqDpm.hl

AcquisirioB orprcpsry, pld .nd .quipr.d (Not 10)

addirimd deLred oil elrldion .6 CNo@ 1 l)D.c& (incl%t io orb{ nucenr !sAddjriod,l invBftmt in ajoid mtu (Nd. 12)N.r c,sh iniw trom deomlid:riu ofi lublidioy

,."]

ca,8ee.?2t 00,041,65rJ(5,6t6.616) (?,715,161)

(630,33t (5.303,110)

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C^SH FI-OWS TROM FIN^NCINC ACTIVITIESPm.€.ds fion availnent or hos-tu debr (NoF 16)

contullins inrsess (NoF 20)Pm.€.is r,on nsuuc. ordoc*s (xoe 20)

addirimr €pid aon nomnEollins illd o.rde r0)

$55t1r,ry7 t76.?I,632

- 4,669,61313,44s,629

(s5zrtr) (20,000,t9(ej377,6,r.) O,06r.tr)

D,no.o3r pro OoE:0, Cs)

r3r,0r0

(: r0or59

EQrrrvaLENrs 3r?{d3 0,04e,?e, (?r3,0r2)

NET INCREASE (DECRE^SE) IN CASII INDC^SHEQUIV^LENTS

C^SII AND CASH EAUIVALENTS AT 8ECINNING

CASII AND C^SH f,OTTW^LENTS ^T

II\D OTYEAR(N"E 6) $1r,rt4$

ilLill|iltillimill

PETROENERGY RESOURCDS COR?ORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCTAL STATIMENTS

L corponl. I.rom,rio.

PetroEne.S/ Resources Co4ddid ('P!RC". "PtuEne.s/ ' or tbe "Gdup '). fomdlyPetoreh Consulunr5, Inc ! s6 orgoiad o Set'tenb€r 29, 1994 io pEvidc sp@idia!tehni€l wices ro ib pdnr ampany. PetuIields Colponrion, fld ro mnpdi* exploinsfor oil in the Philippind

'ft. icgislc€d offc. dd principrl place of bNine$ oflh. Ptrdi CmpMy is 7/F IMTBuilding, ADB Alenue, Ont6 Cflrs, P6is Cit.

h 1997, the Group s nmc 16 fmally chmgod irto "elroEnere/

Rsllre CoDomtion",sinultusN Nitn dE chsge in ib prinary purpose litrn Endsing rechnisl sedi6 to oilexpldaljon and d.velopm-r dd 6inin3 stivities.

6 lme 25, 1999, rhe Dep.tuenr oflnery (DOl) aurho.izd the sumption by lb. GrcuDofPhilippine oil *plorltion @nt&ls. $e Minislry ofEn€By ofGrbon, wsr A6i* hrdalso ben duly norified ofde bosfer b PERC ofPtufields Prcdudid Shaing Cmhclcovsins the Etme discovcry block in lhe Addtic shcll

Or N{ay 23, 2001, rhe Secuttics lnd Exchsee CommGsjon (SEC) lpporcd rhe Goup\applicdion fd a d€rctre in aurho.izd Capibl 6on One Billion ( 1,0n0,000,000) smmonshN at a ttr $lu. of Ono Ps (?l.00) ter she to Thr* HDdEd Tniny MillionLI10.000,000) "hrs d rpa ',lueofonePe\o(? 00)po "hrOn July 23, 2004, rhe Philippine Stck E\chmse, rnc. (PSE) apprc!.d lh. Lisri$ by way ofInlrodudion oflhe entire issucd FDiid ofdc GrcnD

on Algusl 4, 2004, ihe sEc hs@d !o lh. coup thc erlilicste oIIEmil lo olls sediries forsde. Tlis cdtines $ar rhe sh,H olrhe C@D hrve b€en Ednftd dd licen*d for Liningby Way oflnlroderion dd by thd be $ld oi ofiered for s.le ir the thilippins.

On aususr I l. 2004. dre Gbup's rhfts ** listd 11 lh. PSE.

On Jnly 22, 2009, the Bdrd ofDir*ron (BOD) appoved the mmdn.nt oftho adiclG otinoQoralion of?ERC !o includ. lhc bNine$ oi !.nsating pows iioD @nEnrion'l solllqsuch 6 c@1, fosil fiel, mtud Es, nud* rd otls hdirional $urc6 ofpoqa, ud nlmHewabl€ su6 snch 6. but not limicd rq bioms, hydro, solar, wind, e*lhetml, ocmddsloholhdrenemble surc6 ofpo*ei Tne mfldm.nr ws qprored by the PhilippineSecuiries md Exchmge Commision (SIC) on Sepbbs 21, 2009

on Februry 23, 2010, rhe BOD Apprcved r l: I Sbl Righb Of.ring (SRO). Under rheSRO, rhe sh'e {se ofiftd at P5.00 pr sbe, giving a net pl@is of P631.436 million,ehich Na Ned ior th. 20Mw Phe I ofihe Mdh'ffi p.wer hoj*l OrcPP). Th. sRoffi udetulen duins rh€ period Jue 23. 2010 rd luly 5, 2010.

OnDeceDb€r5,2014rheBODapprcveda2,ISRO. Ihe SRO vs rdort l.n duing rhepsiod Mry I I b 15. 2015. The psceeds oflh. sRo mounled lo F599.6?5 niuid and uiub. us.d b pdidly finuG the dprsion, conshdion md d*elopmar oftdeuble endg/

u[llfiflmflmil

prcjecis, such 6 th. MCPP iPhs. 2) ed solai P.wer Proje! s w.ll 6 lh. *pssion offieEhe Prcjcr in c$otr, west Alric4

On June 01, 2015, SEC app@!e'i lhc Goup\ ,gplicdion for r incEse in AurhodzedCapihl fton Three HddFn Thirty Million 030.000,000) shde at pa value ofOne Peso (ll.00) 10 S.!en Hutulrcd Million (700,000.000) sh@s ol pr vdue ofone Peso.

h oder b insul& PehEnergr''r core oil busines frcn iL renN$L .ndgj/ vdtures,P€toEncleJ/, rilh lhe appDul otthe Boord on February 21, 20r 0, cEabd a wholly oMedsubsidbry c'lled PeboGEn EneB/ CorpoBrion (PtuGred). PtuGen shall cdry{ulthe rd.wabl. cnr8y poj@ll ofPeaoEnsgy. flE SEC appovcd tbe inelpordion ofPeto6ro on Mmh 3l , 2010.

on May 19, 2010, P.toclw signed ! Joirl vniF AgRDenr (JvA) *iih TmlAsia oilrd Energ)/ Dewlopnent Colponrion (.TmlAJii), no* PHINMA End8y Corponlion odPNoc Rde*lbls corpoFrion ("tNoc-Rc") (.oll@livoly ihe Jv Peln6 ), wh.Eby meW Pdcn aere! lo pool dEir resoues logelher ed enb inb rjoii vtu rd d*elopmd opede the Mribffi G{t}emil Field L\hugh rh. fm.lion of a joinl venl'ft nmedl4aib6@ G.o.hdmal, Inc. (MCl. On Augu$ I l, 2010, dE SEC apprcved tne incorponlionofMGI, whN p'incipal bBirss is ro d$elop ud opsar. georhsnal ied nclb and

D.rd plrnb Pu66t b the wA, P.tocen holds a 65% inteE$ in MGI, shile Ta asiimd PNOC-RC hoid 25qlo sd l0%, Bp{iively. OD Jau&} 5, 201 1. rh€ DOE appbved lh.tuld of rhe Miibatua GREsc fton PeroEndg/ 10 MGL

lr Jmuarr 2013, duough a SpEial Meding of.h. Board ofDiEclon, Petocen cErred a

slbsidir/, P.dowind EnereJ, lnc. (Pelrawind) rhat will uderbl<e rhe Nibd wind PovsPoj@r CNWPP). Ptulvind *6 incolponed or Meh 6, 201I *hdin Petsocen innia[yheld l00o/o inrered Oi tuly 15,2011, EEI Po*er Coaorrrion (EEIPC) subsnibed toa20%equit she in Pctowind. EEI}C fonally b€.me a sbcknoBer oftettowiDd upon rheSlC s approlal of PtuWhd s increGo ir ulhorizd mpibl dek on AugBi 23, 2013.En-rively a ofDem6er 3 I, 2013, Peboclen held 30% equiy shN in Petowind.

o]r Nowmbd 21, 201l, P.ffi'tr md CapAsh Asm Wind Holdi4s Coop.iaii.f U,A.(CapAsia) enbEn inb a Shre PEchae Agendl (SPA) {hioh sets oul the p,ni6 nutulagesdr $ 10 llle saL of2,l75,00! shes in Perowind held by PtuGen, which isequilolent to 4Csli ollne rohl issEd md ouMding shes of terowind The pmh6ed€ for rhe sale of slfts, & set our in S*rion I of tie sPA, shdl b€ $5,13?,0?9 upfiontpayndl md o prmim oI S2,600,000 wnich *ill h€ paid on a stagBcrcd bais.

Simulhausly on Novehbd 21. 201l, P.tocrcen, CapAsia md E€IPC enrer€d inb aSheholdea Agsmdl (SHA) lhat *ill govo tneir relationship a shehold.n md slaledren rcsF.tive rieht ed obligdioro in rclalion ro Pelrowind. Funhs, th. Slr-a 6nra'6Eovisio.s ftgddi4 vo.i4 nquiftnens for Elevut dilnies rftir Equire a higher d.8r.o ofrptoval lhd thot wder disling corpo* laws. P€ftGerL CapAsi! md EEI?C ag* rhatrheir eguiry {Mmhip di6 in Petowind e ai 40%, 40p, sd 2trl., Hp€tilely.

Althouch lhc sPA md dE SttA were ex*ftd on Novmber 21, 201I, thde did Dor Esun ioPtuGreent los of contul ova Paowind in 2013. Tne lN of contul did not h!@n utilFeb0ary 14,2014, tn.Cldin8 Dote.

oli Fehrary 14. 2014, rhe Closirg Dai., uE Daynelt h6 hen Eived 6om el. oflheshds d .x@uted in tie M ofAsismat coveing lh. lrNfd ofsh@s nom Pebdclg

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,3 -

b capAsia md all rhe bnditions pEedenr have bm sdisficrorily compleled. As suoh,PeLocrg losl ill mnlrol ov.r PtuWind shile CipAsh *a givd tull vorins tud €nonic;shb a r 4P. shmholde. Th. r-srolio made retowi.d ajoint vdtlE betsehP.hcrs, CapAsii sd IEIPC by tue ofd\. SHA signed bfieen the rhEe pani6Sovcning the nm.r olmagiiS l.hwind.

AsolDecenber31,2014. MGI isefi6t ely a subsidiay ofPetuEnerB/ thbug!Pdocren, Nhioh is eholt oqd by PcloEners/. PeLrccreen olned najonq ofth. lotine

On Jme 09,2015. EEIPC rcquned l0o/o ofPdoEne$rt shm in PetocEeq leavingPelrcl3dlC/ wi.h 90% 3he in lehcls.

On Men 19, 2015, PtuGEen *6 3w,rded by rhe DOE with de Solr Ener$/ Se*iceContet (SESC) No. 2015-031 l5 giling n de right dd obligarid b .rplore, d*el@ dduriliz rhe sold eHS/ rsnrce within rhe smice ertlci @c l@rci in Tsl@ Cjly, Byvinue of rhe Telac SESC. lebocMn c(rlmencd tne p.en*ebpmst &1iviti6 fd rh. 50Mw Islac sols Power Plljed (TSPP) 10 be consruoled widin a 55 t*@ rroperry inCeral Technoparlq Ss Miguel, Te|r Ciq.

On Jue I7, 2015j P.tosole Colpordion ( P.tosol'") w6 in@Adden. PetoCE€n h656% shehdldings in Petosola, vhile EEDC olm rhe Emainins 44%.

On Ime I9, 2015, by vitue of rhe Deed of Asisrmsr md Asmption, PftGI€ntoNlenld its inleEsl in lh. S€SC 10 Pelrosolr. ne ssi8Ment ss opprored by L\e DOEon Seprember 15,2015.

Tne DOE confimei tlc commsciality ofrhe TSPP on Sepbmbfl 24, 2015. Codhcrion ofthe TSIP olmencen by lhe third qu&r of20l 5 wi.h 6gd snpletion of Jmuory 2016

As ofD@nber 31, 2016, MGI md Peliosolr e elT*liv.ly indiiet subsidieid ofPetoEnsgl lh@ugn PetlocRn, whicn is 90% omd by PtuEner$/. PtuGrem dnedmjdity dfrhe voting po*d ofMGI md lefosolar. P.hoEnsgr, P.L{G'6, McI odPerosold r. ell*tiv.ly rcfeftd lo 6 lhc crcur.

IlE Groupt lou (4) slir d.rs/ buindses e pololM, rind, seodmcl .!d sol,r.

P€lrolem pDdu.lion is on-goi.s in de Eioe (Cdon) @ncsion, shile rhe orher Fftoleuncon€sioG in the Philippines (No-rh*en hh*d, O{fshoE Mindob, Eatd Vhayd) m$ill in the advuc.d explohlion dagd d prcrr.v.lopnent st ges.

The geothmal rrcjeob @ lhc 20-Mw Moibm omlhmal Pow6 Pojd (MCPP) i. sto.Tom6, Brhg6 ud ils ,2Mw *pssion dar is dpsr€d to be complered by L\e lodh

Th. qind dss] projecl is .he 36-me3rsl1r (Mw) NWPP i, Nab6, Aklm, wh* Petowind

1miltilntx||]ilt

The solar poN& piojecl is the 50Mw Tslao sol[ Po*e lldt (TSPP) in Telac CE, Tel&.

c. Ap!Ia!4!!!esEelid!e4!u!!qdq44q!!Ih. .Mmpanying consolidrr.d fi'mcial tumsb *eF appioved dd aurhodad for issue

by dr BOD on February 23, 2017.

lhe acconpdying ensolidaleii finsoi'l sbtmenb b,ve been prepded uddd lhc histoncoi eslcoNention meihod, *ept for ftucial asets si.d 0t fon vahe rhmugh prfir o. los (IWL)fld de. ative liatility lhat have b6 msura d net E lizable vil@. Figld e pr€ented inUniL! s&tes (Us) Dollo ($) the lmnr conpdy s ninclionrl cllHct. All mounb reounden b lhe n*ei dollar ml* o.hwh. indi.oled.

sbtemenl ofcomplimceThe accoDpoying mnsolidded fmcid saem.nls have been pEp'ren in mnplidce withPhilippin Financial Reporting sbdr& (PFRS).

Basis of CoMli&lion'ne oonsolid?bd tnmcial shtmena snpiise rb. linmcial sbremenb ofrhe Crcup 6 atDecemb€r31,2016dd20l5. nE inocial stabmenb ofthe subsidiais @ p€pmd fot lhesme r.!.ding yed 6 de Groupj Ning ddisrdi aMuline policis,

Belo* e i\e Goupt sub3idieiB wirh ib Espst e perenbg. orne6hip 6 orDecemter31, 2015. 2015 &d2014:

2016 2015 2014

Percenbge she of PtuGjg ir its subsidtes:MCI

90yo) 90%) t0t]l/o

63'% 65% 65%*vo 56%

NNa Road Developtn nl Colpmlron (NRDC) r00% )0Ol lot]//o

'As a rsuft ofrbe sale of l0% sbke ir PGEC, oo'solidared PERch ultitnah sh@ in MGI mdlehsol&h Etoined @ing! md income is redrced by 10v! 6 ol od for rhe )€m ddedDeFmber 31, 2016 ad 2015.

Penocrm h6 oonlrol oler Pebosolr, sinca Peltocen is lsgely iNolved in rhe key decisiotsconoeming dre lindcill ad opdling polioies, aotirilis md p.o sion of tcbtologtoai suppondd bchnic.l know-hoq to Petosold.

flililuill|liltmI

,5,

Subsidisies o€ coNolidrtd whm contll is tufe'ed b l]l. Gionp dd c.N. b b. cmolida&dwhm mnbd is bmfsrn out of tbe Gioup. Sp*insuy,lhc Grcup conlrols ssubsidiory if ud

i) Po*er oler.he inBE (i... .xisring deha filt givc il the ourelt !bi1i9 ro difot the Fl*etadivitie ofrhe iNesbe)

b) E:pdure, o. ight, b leiable rellm fm ill iNolvenot wth rhe invd€, mdc) Ihe abiliq b 6e jl5 power ove rhe invesbe ro afie.. its rdms

When rhe GoDp hs l* thm a n.jodq ol the lotjrg or sinile right ofm invsr*, the G@upconsideB all rclcvor f&ls ud dtmsbd in assi4 wherher il ha povd over m invslee,

a) The mntrctul mmsment *irh the .thd !@ holdm oflh. invel*b) Rthrs disina ftm olhs contlotul mgemdtc) Tbe Group s voting righb sd pdmrial voling dglts

The Gioup rc-6scs.s vhether tr no1 it ootrr.ols m invEre iffad dd dEMsbces indic&thar lhef e ohoees to @e or Dore oftne dree elenent of 6ntol.

'ne consolidaled linochl sftDenb ffi pEpeed Bing mif6m &counting polici.s for likctssadiom ad othe. evenb in simile circunshG. All inlocDup balo6 md tustions,in&rcroup pofits dd cxpdses od gains md lGses ft elinidre! dding sMli&tion. Allirt'Croup balmces, tustions, in6ne md qp€nsd dd pofil dd lNos m eliDinabd in

Nonantduing inreresb e pasmLd sotm&ly frcn lne 'mnr

Conp&yk equiq. The pdionof proft or los md nd Neb in subsididi* nor $holly oMcd e prsenl.d sp@rdy in rhe

coNolida&d sbrendr of ohprehdsivo incone, oonsolidabd shhent ofampEhedileircome od m'solidatn sdmsr of chdges in equiry, &d within .quny in tl'e @nsoli{taredn&ne offindcial pdiljm.

lo$es wirhin r subsidiary m sbibued b .he nonconlrolli4 in&Bls den ifdar Esulb i' a

A chmge in rhe .r*D6hip idffil of a subsidi!ry, vithoul 1o$ of emtol, is lcod.n for d meqlity tra&tion, 6 tatMtios wid tie omm in then capeiq a oh6. Fot puch66 ftomnon-mtulling intssb, the ditrmce ba.d dy cdsjderaiion pdd md rhe Elevot shreacquired ofrhe carrying value ofn r ssols ofthe subsididT is rsorden in equiry. Gains oi lsseson dispssls 10 non-oonlrolling idffib m als. reoded in equiq.

If rhe Ghup lose contol ovd a subsidiary, it:

D€Boerias the 6er5 (includins sed{ill) dd lhbiliii.s ofthe tubsidiory, tne canfingmout of my nonantulling inldl md ih. omulaiive tushrion difftn6 esrded in

Rsenizs the fair value of the €adedion '@ived,

Oe fiir value of ny invetuentr*ioed dd dy suplN o donoit ir the consolidared shhenl df €hpiehNile itmne,Roldsifie lh€ p€Fnfs slsE ofmmponda prdiously @ogniz.d in OCI lo rhecoGolidahn sbtnflr ofconpi.hdtue hmne or Ebined ffings, as appropdaE.

tllmiltmilmil

Thn polcy n in @od{kne wirh PFRS 10, CaEoliAd?d Fiwid Sdem,l'

L Cnrrsd ir Accoutrriq PolicigThe &counring policie adoFen dc consiscnl uitn lhce of d. previoN c.lddr yee, .xceplthd rhe Grcup h6 ldoden the followins ne* aqmrin! ponoucemmb shingIsurryl,20l6. AdoDtion oflhese lromuncondts did nol hrv. dy si8nilicmi inpict d rheGFUp\ finsoial position or perfomsce nnl6s oln@ise i ialci.

r Am.db.nr! rd PIIts 10, PFITS 12.ad P AS 24,Inedt E"tina: ,lppbb,t theCoNlrldlion Ewptkn

. An..dD.rt ro PFRS 1r, r4donth's lor A.q'isttiN of rtuzttt i" roi!'t OrtuiN

. PFRS 11, R4tldor! D.lordl ActuM

. An.dnerr3 ro ?as l,riEld@Inrrirts

. Ab.ndm€ ero PAS 16 r.d PAS33,aui;li.di.'otA.tettablM.lhod'ofD?pt .idion ud Inodrzdi.,

. An.hdn.Ilr 1o PAs 16 .d PAs 41,,kticulttrc: Bwu Plartx

. Ane.dDenr! b PAS 27, tgity Mdhod in Seputu Fiw.*'l SMa

. Amurf Imp.ov.netrr b PFRS!20I? - 7014 C!.lc. Ab..dn.bl1o PFRS 5, Crea4 in Mdrodt oI Ditpotdl. mendn.nt to PFRS 7,,td'i.i'" Cr,tutt. Am.nlae b PrRs 7,,,1?/.rrlit! ofth.An nba2"atu PFRS 7to con Ldt d

I4tuin Firon rnstuMt' An.ndD.trlroPASl9,rtr.od Ie:

^4|ordl M@*a Isu, Anqdneli ro PAS 3{, rn r,ru. of l{tuion'Ek whn n$.Ituin

Fi,Mcial Rqd'

Na Acoutrtitrg Sltdlrft, Ini.rpretdlor .nd Ao.dn€hll ElIe.t|l. Sub.{Cuent toD...nb.r31.2016

fie G6up vill adop. .he iland.ds ed intapr.larim cnmcraicd b.lar qhd l]ls b@Decf@tive Exo.pl s ofieviso indrcated il'e Grcup d6

'ot *psr rhe adoption ofthese new,

r*ised md mended shdards dd tuw thilippine In@rFrcbtion 10 hav. a sierifioi impool ot

Arqdnent ioPFp..s t\ au|i.arw oftt s.ope of th. st'nlad (P'n ot,4rtt4!I''prorM b PFRss 2014 - 2015 (yd.)

'I1E mendnda old0 that tne dislosm Equimenb in PFRS 12, oths ihd rhose rehling !osummdizd fmcial infodrtion, apply lo m .nntyt interest in o subsididf, ljoinl lene or sssociaL (or ! poI1ion of ils inteE t in ajoinl ve!tuE or m sseie) dar is clBsified (o includedin a disposal gbup that is cldsifien) a held for sale.

'Ille mddnents do nol hflc sy impd on th€ Crup's nmdal pGition md resula 6fop€htion TheGbup U include the nquiFd disclGurcs in ils 2017 ensolid.tcd firoci.l

rmmtmm!ilr

Anordd.rt! ro PAs 7. s&r.n..r of c..h Flo*. Db.lduts Iniri.dv.'ne mendinenb to PAs 7 r€qDiE m enr y to provide disclsuEs thd e,abl. 6e6 offine.ialsen.nts lo .valuL chugs in liobili.ies disinA from linmcing aclivilies, idclDdine bolhohmg6 sisirg Fom c6h nows ud non{ssh chflgE Guch s foreign excl'm8e gains or l6set.On inilial rppliotion of Llie dmdndb, enrities de no. Equned b O.vide cdpdativeinrmalid forpraciins periods E topplicolion oithe modmots is pemiftn.

ADDIi€lion ofdendnenb qiu 6uh in additiond disolosuB in the 2017 consolidoted fDmcial

Am.ndd.trb b PAS 12, 1r&fr. TM, R.cqntioh oJ D.lMd Tu Asald VrEaIh..l

The dddmenb clfiry ftat d mrit n..ds ro cdsi&r whethr la{ laa rcsticts lhc so!rc.s ofb\obl. pDt s agFiNl Nhici it may nake deduclions on rh. sssl oftkr deducrible rmpor'rydifieEne FunnmoE, rhe mddnda sovide gliddce d hoa d en.ily shoDld ddminetutuE Lxoblc pofils rd *ploir lh. cjrcumslllG jn vhich l,rable prclil Dry i.clnde il'eFoolery of sore asd for moE thm then errying mour.

Entities ff. required 10 apply the mendrnents rcrsp@lilely. uosevs, on initial applicdion ofrhe mendnmt. rhe chDle in rhe openinE equ,ty ofrhe edlie$ cdpft.iw period nay berseni&d in opdins .etored emincs ior iD anoths @Dponenr ofequ,9, 6 rppopride).withour sllsariry 1be cnmse besen openins Ebinen mings ad oth{ amponst ofequiry.Enliris applying ots relici mB1 dGolse ilat iact. lsly lppliation otlte mendmdrl n

Th* mendme'b ue nd *peded ro have ay inplcr on tne Goup

Aneldn.nll to PFRS 2, ,t aE rrt d PryMaa cl6t{Eolion ond M6w^.nt ofsnu&66EIIPWI TMdN

Tne mddnenls to PFRS 2 add6 tl'Fe nain e6: the ellesb ofvesting condirioN on then*rendt of r c.sh{edled 3h&-b6red Di}ddr l@ridi the cldsilicalid of . sh@bdedpaymdl lrtusolion rh n l $ldcndt fc.t]E ior anhholding d obligrtionsi od th.,cmuring {heE a nodification ro rhe rems rd conditim of a shft-ba$d piynen. Ltu&.ionchdgls its cldsincaftn Aon cah setLd lo equily s.nhd.

On adoprion, entilie m requiFd b dpply n\€ mmd'rdts wirhoul relaling prior p.riods, bulrehospetive applislion ir prmin d if el.ct d fd aU thr.. Mendnenls rnd iiotner cnteria uemer Erly +pliatior of dr mm.indt is pemiftd.

Th. Croup is ss.$iru lI totenli.l offol ollhc mcndsenrs o i6 a@liddd fimcid

PFPS L, Rt arclron cont@ ,ith cwlMtPFRS l5 esblishes a ner live*tp nodel thar *ill apply b Benue &isine toh Mhdl sithcuslomd. Und.r PFRS I5, r.venu h tecd4d ar d mounl thd Fl eels lhe oonsidflrrion towhich m enrit exped b be enritl€d in exchas! for tufring geds or s.nie 10 . clslomd.The principle in PIRS I5 pbvide a more slructored rypooh !o meu.irg dd Eogniz'ng

nill[tililftrl

fie nes Evenle silr&rd h oppli€bl. lo all enlirics ed will suD.ncd. all cuftnl fl.nucrMsnirion requir€mob uder PFRss. Eirher r tull or modified rtuspr.rile applicdion G

'.qun d fo' murl phods b.gimng on d afte tdu!) l. 201 3.

The Gbup is cun€nrly 6sesing rhe impacl ofPFPS I J dd plss ro adopr rhe ns sb{tard on

Pfps9. Finmi,t ItuMtPFRS 9 Eflecrl all pi6$ of ihe nn@ial instruenE p@j*r sd Eplmes PAS 39, ]C,imtd,l8tudk: Reasnhianann Me6rE .,r.mdallpreviousverionsof PFRS9 Thestudadintodu€s nN rcqui€md* far .l6sifi*1io dd n.srden! imraimd! lnd h.4.rccounriry. PFRS 9 is efaediw for snnal p€rio<ls b€ginning on or aner Jmuary 1, 2013, {nne&ly ipplicdid pedired Retosp€tive rpplication is equired, bLt providing contmlivciniomalid is nol mnpulsory. For hodg. Munlin& tne requiremenls e geneBlly appliedpr6p€dively, wirh sone linnen *€prions.

'ne adoption of PFRS 9 vill havc s ctret o t e olNificdion sd neslllment of rheGmupt fimcial dseb ad inprimst nerhodolos/ fd 66cial 6sets, but qill h.vc no itnpaclon the clssifidion dd ne$llMenl of th. Croup's linmcial liabilitie. Tle adopiion will alsohNe o efad on rhe Group\ ,?plicarion ofhedge acomrins md on the doEr of its crcdit

Amendne.t! to PAS 2q ntz8uta a AMitu t Jobt Vtu d Fah lal@ etnolAnnuol In'yMb b PFRss 201,1 - 2016 cycl.)

The meodmeft cldit rhar m mrit that is a venrue capir.l o.gdiation, or olhd qdiryingotily, n.y .le! al inili.l l@enilion on s invesirenl'by'invEhot b6is. ro neasse ibinlesbenb in ssociabs mdjoinr lentu ar fan vdue thrcugh profit or lo$ ]h.y also cls$rhat ir d dtity thal is not self m inv.sddl 6tE hs o irteFst i! o aseiare or joiDt vmtuftlhar is d invohent enri9, rhe entiq may, when lpplyins the equity ndhod, ele! to relain rhcaan lahe nesurdd applied by lhd invsb.n. entit Ndaie or jinve$rert edity 6smiare\ or joint vset inhsb in 3ubsididi.s. This .letior js nadesepdrly fd @h iiv*tndt mtity Ncialc oi joinl ventuc, ct the l,&. of de drre an *hich (a)oe iDvdbenl .',tity oseide orjoinr ventu is innialy Eosnizedi (b) d'. ssoci0tc orjoinlvoft 6e.on6 d invsbent enri$ dd (c) rhe investndl .nlily 6s@iale orjoint venft 6rsrbesnes a p3Mt. It mddmd& should h. aplied retospEtiyel, *irh ealie. rpplicdion

'Ihe crcup b dsesing th. potertiol ed@l ofth. merdrenb on ib m6oli&Ed fiochl

An.dr.nr ro PAS 40, Iny61i. Pm!.rty, Tnuf.a of ltrrgtu..t Pmp..ty'IXe mend,amb clai& shm d endq should tufd prcp€dy, including propsly udssnsruc.id d ddelopmdt i ., d ou1 of invetndi pop.rty. Ir'e menchdgc in Ne (cN wien de popefry meetr, d @s ro nee! rhe definnion of inv€ltnenlpopefry md there is evidde ofrbe chds! in use. A nerc .hdgc in mo4emefs iftnritu fdrhe use df a pbpdty does no! prclide elidedce ofa chd3. in se. Tie mmtnnenb shdDld b€

rptlicd posp..tivoly lo ohog6 in w inat Nur on oruns lhe besinning of t]l. muol EDortingp€iod in rhich rhe dtiry fc. appliB th. m.ndtnents. Rot osp€dive applisrior is onlyp€mitted ii this is posiblc wilhoul lhe e olnindsignt

The Gbup is sssing the poldlill .fer oflh. dendrenb o' tu aMlidaed nnscid

flflils[|milmil

Philippin. I .rpEbtion IFRIC-22, Fo4lt, C@ac! TMddioN ard Atuaw

Tle inrstEdion cleifis tlar in ddmiding rh. spol.xchme. iaL io use on irilial E@gnilionof th. rcla1ed ds.! .xteNe or incomc (or pd of ii) on rhe dffignirion of a nm-Doneby aselor non,monebry li$ility rclatiry io advo€ mnsidetuio4 .hc dat of rhe ralwrion h rh. daleon rhich d entily inni.lly rsgnias lh. nonmdet ty 6sel o! non-Donclrry li$ilig uisingfron lhc .ti!.ne @rsidenlton lftnd. m

'ulriple parmenb or reeipb in advfle, l\d .he

enrity mui ddemine a dat of t!. tdserions fd @h t.ymenl or F6ipl of adloeconsidemlid. Ille intrprcLlim @y be eplien on r tuUy tupedive bail. Eiiries tay applythe inlorpetanoD p@spetiEly b rll 6eb, *pemes dd incone in i. scoo.lh3l4. initiallyrecolnidd dn or rftd the b.gimi4 oi th. E oning perioi in wl'ich rh€ e'tit) 6nr 4plies rheinteer.lrlion d lhe bogimine of a pnor Fponing period pHenred as conptudive infom.lim inthe nmcial shreneft ofrhe Epon,q peiod in which Ur. cnlily fis1 applie tle inlerpFtstion.

'Ille Croup k osesing tie potertial efl*r ofthe inrs!ftbtion on its €Mlida@d nnsoirl

Under rhe rew sbdfl4 lesees *ill no lo$d .lasi& thcir lees s eilhs opeding or finmcelcM in &cddan€ wilh PAS 17, ,.aer tuiner, lssffi will apply rhe singled nodelUnder this nodel, l6ss will rssniu rhe ase16 dd iel.Ld liabililid for most lses on rhetbalanca sh*, .nd subs.qundy, will d.p@ia& lne lese ,s* md Ecogniz int€€t on th.lee liabiliriB in then pmfit or loss. kdes rirh a cm of I2 nonlhs or l6s or lor which rhe

undrlyidg aset is of loN value r. *dplod lrcn rhse Equirmeft.

The acoutinA by le$o6 G subsbliolly uohsgFd 6 rhe nN sbded c ies fo dd $eprinciples oi le$or ,@uiing uder PAS 17. lasm, howeve., liU b. sluird to di$lose moreinfdmalion in then fDMcial slalm.nte, p€lticulely o tie dsk exposE to Esidul valu..Enritid roy st adopr PFRS I 6 bur only if rhey hav€ also idopLd PFRS I 5. !v.en adoptingPFRS t 6. b mrity is pedft&n b Ds. eiih.r r tull rcrGpeotive or a mldined tusp*.ileapprNh, rith options to e oedi t"nsnion Eliefs.

The u'oup .cunendJ s*3ingk inp&r of adoptngPrRS 16.

An.ndn..r. 10 PIRS l0 .hd PAs23- s.lc u Catuitdin oJ,4stu tun an lrwtor Mditt Affi.te t Jobt Vatu

'ne meddnmts lddEs trc cdllid b€twFn PFRS l0 md PAS 23 in daling with th. lo$ ofoonbol ofu subsidiary tnat is sold o. cdntibuled to m ssooiolo orjoim v€ne. The mendnentscldify rhat a tull gain or los is jgg'ad when a t!rofs ro e ssode d jdinr v-ture iNolvs. businN s deined in PFRS 3, ,6jnes Canbindio8. A'y grin ot lo$ resling ton lie sale

or mntiburion of ssd ihd ds ndt cmrilul. a buires, howd, is 'senized

only b lnestst of uN€litd inv*d' intdBls in lh. dsootote or joint vme.

On Jduary I3, 2016. the linmcial Reponhg Slondo.d! Coucil pc9.ned the o.igin.l .fietiledaeofJeu.ry l,2016 ofll said mendrnenrs util rhe Intditioml A@untirg St

'd.rdsBdd h6 coDplered ib broader Evid of rh. resoroh pDjd o' .qDily acmuring thd nayrsulr in the sinplilication of&courlirg fo suh tusdions md dfotber 6p€cts of&@unltngfor 6s@ial6 sd jo'Dt v€nnlH.

1tililil:ilnil!ilt

4. Sunnory ol Signilicanl Aaounrilg Policis

Revenu RecodiliotRsenue is reosliad to rhe exrdt thal it is probable rhai lh. enmic b.refits uill flow to theGrolp bd rh. rev.n@ cm bc roliably m4uEd rcglrdlss of shen the pa)md is being dideRolenu is msued ai $e fiir value ofthe ansidsarions reeiled or ie.ivlbL, o*tng irtoaccount 6.r&rually delin.d tms ofplyment md excludiry des or duty. The G@up Nesesi6 dene .lmgcndts o€Finst sp*ific cirsis in older rd dtuine if ir is etirg a trimipal oragenl. The Gnup hs cmcluded rhd n is eting d pdncipll in all ofils rwenue sroAmenbsine n i! lhe piimary oblbor ir all lhe Evsue mgeDent , has picina lalilude md h alsoexpscd lo invdlory rd cftdit ns*s. 'Ihe sF.inc ltesririd cdtrria desoib.d b.lov nBl alebe mer b€fore BOUo is reopized.

Revenue fton oil tuIs is recqriz.d s in@mo al lhc time ofprodrction. Rewdue il nsuEd.tih. 6ir value olthe eonsidemrion Eeived.

S.le ofeleolnciry uing renemble eners/ ir osumd d whctwe! the electicity gensared byrhe Gmup is tusniftd rhrug! lh. tdsmission linc deigrftd by rh€ bu,€r. for a

Inbed inmne is Eosnizd s rhe inte€sl &crue lrling inro rmur rh€ effediv. yield on lhc

Miscelldcous inoome inclnds time wiri.s chdAes, dividend it.me, renb1 inmme dd gait msale oftuspotutim .4uipnml. Revdue is Hognized *hen rhe Ghup s nglt to re€ive me

Cah md Csh EouivalotC6i inclndes cash on hmd dd in banks. Csh cquivaldtr m shofr tem, hiSbly liquidbvstndb thdd.sdily mrvshbterohommoubof c4sh lh originllmtuities ofrhE (l) nolhs o le$ lim the d,bs of&qui3itid ad ibar e subje.t ro m i'significd'is* of

Frocid lmtument

'Ih. Cout rMgnias o li@ci'l as tr a frmcial liabiliq in llle @solidared s@mdt offinscial position vhen il b*om€ a parly 1o l1l0 contactul po sidns ofth. inston ntPNhs6 or sales of frmcial 6sea thal rcquiE deliw.y of a$ets wilhin rhe lime li me.sbblishod by Ecll,lion or mnvention in rhe tu*eQle e F6!!ird on rhe ddemdt dtl..

I|utMmrfl[n[mI

hniat Pkognio, drll MeMenetFindciil aseb {irhin i\e scoF of PAS 39 * cldsified a enh.r nmdol ss.t .t FVPL, loansmd t*ivablei hold lo malurit {HTM) iNest nenl5 o! avdlabl+foHale (AFs) fmciil ds6.d appopritu. Finmcial lhbiliriB de cl'ssifi€d a eirher fmncill liabilities ar lVPl or olhsfindcial liabilities. The clssificalion d.phds on lhc purtoso for which the iDvdlnenrl reacauiEd ed the G@up ddmines rhe cldsification of the finmcial iBhnedb a! inilialreblnirion dd, {hs. allo*ed dd appspf,ac, Hvdule lhis desjgmlion .1 eah limcial

All finmcial dseb e inniiuy l@gniad al llt value plus, i! lhe o6e offmflcial 6sds not at!vPL, dtedy aftibuLble tcdion co*. All fDrcial liabilitie e iniriauy leogniad at fairlalue, l$s, i the cae of finmcial liabilitis nor ar F\'PL, diedy lttibulablc tselioD @st.

Th. crcuD s fimdal ssets irolude ljnmial 6sd ar lvPL ad Iotu dd ftc.ivabld md iannmcial liabilitiB e oflhe nltr. of olha lindcial lirbilitis.

The $bsequen. ndlment bM ior lsmcial 6sels depend or rhe cl*ifi€rid. IinMcialds.ts th.i dc clssificd 6 loes od reivlbls re nedred al doniDd cci uing lhee6*ti!e ideren de GIR) ndhod. AndiDd ost is $loulaLi bybli'g irto aHut dydircob! pidim and LrN&lim Fsis on eqnisitioq der the Deriod b mtorily. Amofriaiionof discolnb. DEnillm md bflsaction cosb e bld dirc.dy lo llE consolid'tn sdenmt of

Detuhdion ol Fair Yal@Frir valE is tte pri€ rhar would b. @ived ro sell d aset oi paid to ttosfer a lbbil,ty in mordsly bsadion bdM ndk ! pilticipmls 0l tE msDEmst da€. The fan valueh.sllmdl is b6ed on de pBDprion rhd the tuetion 10 $ll lh.

. In the pdrcipal m*01 fu lhc ssd or lAbifiq, or

. In lhc absenc ofa prircipal mrke! in ih. nost or'v{lageou markd for the 6sel ot liabiliq

Tll. princitd orthe nsr dvrbseous mflkd nusr be rssiblc io by ihe Coup lhe fail !.lueof m dser d a lAbilt is D€ured Bing the dsmplims tnd twket pdicipmrs vould uerhen pdcjng ih. s.l oi liabil,ty, ssumiq drat twket pdidpmts &i in thet aononic best

The Grcup us6 volu.tion IrchDiqu6 tnat ft apprpriate in lh. circunsloles md for *hichsuffcierl drt. e arailable ro nesc fan vdue, muirnizins d€ use ofrel*dl obs!F!61.inpub aild nininizing lhe Be of unabs. €bl. inpub.

All 6seir md liabiliries for which frn vafue is msui.d oi dislGed in rhe fDdcial sbcmdlsm Bresorizen within the fan lahr hi.mhy, decrjb€d s follo*s, baed on lhc lowest lmlinpu! lhat is s4rificm110 tte fdr valE m$uEment d a vhole:

L€vel I Quoed (unadj6t!d) m*d priG in aclive nekeb foi iddtical 6sl5L€vel 2 - Valuilion L.hniques lor whioh rhe lo*en level inpul thot is signitmivalu m6u€mmr is dituly or indnedy obd.nobLkvel 3 - valulion rehniqus lq which rhe lolen level inpul thd is significmrvalue maucmml is uobseruble

tut[l$ililmmil

For 6sel5 md liabilnies dEt @ lfug,iad in de nnocial tuDenb on a recmins btris, rheGoup ddemins *herher tufm have occmd hdem lrek in the hisehy by p{r€sing€legodanon (b6ed on th. lov.sl I{.1 intul lhat tu siSnificnl to lho fan loluc msDFncnr 6a whole) ar L\e end of ern Epofring penod.

Wnft lhe nosadion Drice in a non-acrive neket is ditrert b the fii. value ton orh.robsedable c|llmt n&k i IrmoctioB in lhe se insrument or b6ed on a vllurion bchniqnewnose v&i,bl6 include oly dah nom obsedable lwkd. L\e Gdup rcdgnids rhe dfierenebeNH rhe bmacrio price dd fin vahe (a Day I ditrcren€) in li. cdsolidarcd slalem.nl ofcompr.hensivc incomc unl€s ir qulifiE for F@gnition 6 sone other tW€ ofdsd or liibility

I' css rheft vdiables u$d is mad. ofdala Nhich is not o69cnable- llF difiercnce b€seen rhelm&tion prie md model valu. is only rsogli@d in tne m@lidared sbemdt ofcomEehensive incone whs ihe inDub be.me ob€edabL or shd the irslrunenl isdercs8nizd. For @h lrosactior, de Grcup dcGnines dE

'pproFhre nedod of @Snizing

dE Dd I difieftnce mour.

L.ds md Rr*ivabl.s[@s md r#iubls m finmcial asd th fix.d d dekminoblo r4mcnb ud nxeinatr i.s lhat e not ouohd in d acrive Mlet, Tnw m not enbren ido th rhe incnlion ofimDediat or shod-bn resle sd m nor desisftd a AFS frdcial ss.ls or llMciat EFb ar

Affs inilial meaurenent, lom md ftc.ivlbld e subsequmdy Dedued d mftiu d codusirg rhe EIR Detftod, les allovmce for impdmdi Andtiad msl is @lculalel by raldn! inbamur my dimdr o. pldiun on acquisilim md l€ dd @ m inre8El pan of lhe EIR.clcified undd llln ea&gory e rhe coupt 6h dd 6h equivdtnb, eeivables !d Htichn

El!3!!id3$ls@dli!!asEl!E!il!!!€r!I{!!Fimcial 6se13 md flmoirl liabilities ct FvPL irclude fnmcial dset and finmciol liabililtesheld for hding purposs. dsivarive i8tumll, or thN desiglllei by Dmagenenr upon inilialrecoslition a at FvtL, subjsi 10 sy oftbo follosi'g crirsial

the desislrrion eliDin&s d si8rifiody Fd!6 lhe indsisrot t€bedr lhat ,ouldolhwis dis. &om ndurirg lho ssels or lubilities or @gnizing gaids r lsses oD $em

tbe 6seb rd liab nies ft pad of a gout of fmooicl @q fimd'l liabiliri* otbolhwhicb e nmagld md lh.ir F fomsce se evaluted dn a fNn valu. bsis, in ecordmewirh r docmaled ;st twsemdt or irwsbenr shcgr'; orfie fimcial iEtu.t cdbin d db.dd.d ddivalive. unls rhe emb€dded drivaiivcdoes not significully nodiry $o c6h Ilos or it is clee, vilh lirde d no dtl}5is, tial itNould nol be seFrdety rNrded.

Findcial s$6 dd lindcial liabililis al FVPL e mrden in the cotuolid.l.d slalement offnsci.l psilion at foir valuc Cnuees in fair value ft Fneded in the .msoli&bd shben. ofcompEhe6ive insne. Inbest €m.d ar incmd is Hord€d in ifte$ idcon. ot expene!

Dilidend incom. is Ecognized eo.dinB b lh. tcms oflhe conhcr, or *hd the riglt of lhe

tililill|lflllllll

Mhent h6 be.n 61ablish.d.Cl6sified 6 finmdd asb ar FVPL m $e Ooup\ D&ktuble €quity secuitis neld for tudingpDrposes dd inveshdt in gllf clDb shdes 0{ote 7).

PllradlsElllliallsassDerivaliv. IiMcial iNtsdll (inoluding bifusLd .mb.ddcd d.rivoljvet, if sy, @ iniljallyr$Erized d fair mlu d rhe dab ar which rhe dsivarive conhcr is mr*d into md isrubsequaily renedued al fairlalue Any gdns or lo$rs risin8 fron chmges in f.irr€lue ollhc deriv ile (eeF doso &oounted for 6 rcoundns he4e, is blen didly ro rheconsolidatn sdflmr of onprehensive incde Ddd 'Orhd inade". Tl)e ddivalive is oniedas dse. Rhd the fan value is pNilive md s liabilig/ rhen lh. fair volue is neeBtive.

q!sdi!4!B!!4!i!r&!All findcial liabili.i€ e irilially rcoenizd .1lhc fair voluc ol d'e s'sidsriior reeived lssdielly ltibuLbl€ t!6dion ast. After initial Emsnition, orher fiMcid lhbnitid msubseqDendy nedued d eonizd mt using th. EIR nelhod. GaiN ed los6 m

'€mgniziin the cdsolidaled shtemdt of@npEhersive ineDe who L\e liabilnies e deftco8riz.d diDpairn, s well as lnmugh the donizarion psN.

Clssifien udd lnn cdeaory ft the Cnupt Moub payable dd &ded expdscs md l@s

lsp3i@!!&iB!@!E!4rs!,'Ine GrcuF ases .l @h reptrling dote vhetiq a fi'mcirl or lmup of fimcial eseb is

A tDscid 6sd or a group of finmcirl nsd is dened ro be impaired ii .nd otly if, lh* is

obj*iive evidence of inpaim.nt s . r€uit ol one or moE ev.nb rhar h6 ccuftd ind fteinitial r@snilion of lhc 6$l (' immed los evmr') sd rhar lB evml (ord.nll) h6 mimpacr on rhe estinaed tutore ah noas ofth. finmcial ssd u rhe goup of finflcial dseb thdcd be rcliably estimated Evidsce ofimpaimenr my inclu& indistoN $ rhe bo'o*er or agrcup ofbono*ds is expsimcing si$ifimt fbdcial dift"roulq, defuh or delinquency ininLi.sl d ptncitd !6,merls, lh€ p@b$iliq ind they *ill mb ba{mptcy d orhe! fitmcialmrg4iarion ed *hse obseoible d& indic& lhal lh.rc is meduable d*rcG in theesind.d tutorc csh flo{s, suoh s otag6 iD d6 or sronic condilim lhal @ftlote tridt

'Ihocroupf6t6s6ses{hetherobjst e cviden€ of inp.iment *ists individully forftrUcial ss* rhal ft itrdividuuy signiliol r colledively for nnmial 6* rhd e no1

individully iigrincdr rlhere is u objeolive 'ide'e rh,t fl impaim.nt los on l(6 rdftceivablE cffiied ar soniEd con ha bea incDftd, lhc mount ollhe los is ndd.d a rhedifieFnc. bdreen tbe asett c{rying mounl md lhe pEsmr value of ennnatd fDtorc @hAows (.rcludinS inure exp@&d credit 10$6 rnd hrve nd bs incured) disomLd sl lhennmcial 6er! oriEi'sl EIR (i.e., the EIR osputd a1 initirl l@gninonl

If it is dffiined tha! no objolivc evidflce of iDpiment exisb for d individ!.lly 6s$edli'mcial 3sr l@ or Eetuable, *herher sig'nnmt d no! tho Ner is included in a gsDp offinflciil Nr *itb 6inil{ crcdii risk chaFcterislic ud rhat gtuup of linMchl sels is

mue.ljle1y 6se$ed for impdmst as6 rhd e individu.lly 6ss$d for inpaimenr dd fdNhich D inpaiment los h or mlinug b b. €.o8niei @ nd included i. t collecliv.

fftis[||||ilill|ffi

fte .,rrying amourt oflhc sset h rcduc.d dhugh th. e of on aUosd€ for inpaimenl losaHunr. The mour of rhe lN siall b. l@eniad in lhe con$ltu l.d slalcnenl of

Ii in a subsgumr psiod, rhe mout ollhe imtaiment lo$ d@@es, dd lh. &cre6. cm be€ld.d objecliv.ly b m elent @udng aher .he inpainen! *a ftcosnizd, rhe previouslyHognizei imp,imert lo$ is BeNed. Any subsequenl @eEal ofs impaimdl lss isrecogni*d in the onsdlidared sbEnmr of onpFheBiv€ in@ne, ro rhe *nr rhar rhe car.yinsvalue ofthe 6sl d6 not exoocn uhal would hale b.€n rh. Monian cost ol lhc revNl d.&had rheE b€n no impainenr Ecosriz€d.

lf m AFS nnmcid sst is inpaiE!, b mout camprising the di,teFnce be$€en il5 cost (ret oldy principrr pdybed bd dodizrion) rd it cuMt fan vahe, les ay nnpaimdt l6slrclioury r@cn'ad in .dsolidlied sblemenl of cmpEheGive income, n rosfdEn non $consolidard sbrmmr of chdg* in equit b sbrmenr of obprehsive incone. Inpaimenlrev.rels in resp*t of .quiry iNl.undts clNified s AFS finucirl sets @ ,ol rMg,iad inrhe mnsolidarei srement ofaDpreheaire in@ne. Revesrk ofimpaimenr lss on debriBtudts d reve6ed thouah the €dolidared shEndr of €apr.bedive inen , if rheincr@ in fot value of th. iNlrumdt m b. objcctilely Elated to d denl ooouing lner thcimpaiment lcs ws Ho8niEd in consolidared stment ofcompFhem e income. Itte dounrof revem.l is linicd lo lhc mounl1h.1 brider thc .srying vahe oflh. dobt inrlrumcrt to shal tcould have heen had dr* b*n no inpaimmt in the fid placa.

Derecodilim of Firmciol Aset sdLiabililiesA flfucirl ad (o. *heF applicrblq r pd of a sonp of flmcial s*) is drsgniad vh.n:

. the rishb to receive cah flos 6on th. as* have expired; or

. the Grcu! ha kafdtd subshridly all rhe dsks dd rrysds of$. 6sor, or h6 asmenu obligdio' b pay dem in tull *irhod mrsial delay ro ! rhirdrany under a b6s{ircu3h"almgemmr rd neiths tufdnd nor ein.d subsi.rtiauy all the rislc md wdds ollhe6set, but h6 lldsfftd conLol oflhe 6set,

whft de GbDp ha rsfeftd th. rtbll to sciv. c6h flovs fm { set o' h6 €nteEd inloa pssthDugh mgddl od h6 Deiths lrarsfeftd rcr di'ed sDhdtully all rhe risk3 ddEv'rds of the 6sd nor tusfmd mntul of tne ase! rhe aset is eogliDd to th. .xlenl of theGroupt contiNing involvemdi in lhe ,$l. Conlinui'g iNolv€ment rhdbkes tne fom ofiswmr* over rhe tufeftd 'g is n6ui€d ar rhe lower of rh. oriSind c.1rying mount of ocdsd dd rhe ldidm dodl of cmidenrid th.1 $. cDup @!ld be FquiEd ro Epay.

Finmcial liabilities ft deftcogliDd rhd the obligdion urd6 lhe liabiliq is disondge4cmeued oh6 expired. wl@ d *istin8 fiMcirl liabiliq is repbed by eorher iom rhesme lender on subdslially difa* bmq orde tems ofm existi4 liabilily m subsht.llymodified, snch d e$huge d nodifistion is bcNled 6 r &re.qlirion ollhe original lilbili9dd the @gni.ion of a n* liability, ad lb. difidd6 in ihe Espr.tile c,rrying modb irEcogriad in the coMlid*cn srdeDenl ofconprehensive inmme.

Ofis.nine Fimcial InslrlmeotsFinucial a* md flucirl lisbililies re ofise. md lh. ne1 mout Fponed in rhe @Bolidared$Lhml of frdcial position ii md oly if, t]u. n a cmdy enfor€ble lelrl rigl b offse.rhe

'tmgnizd moDb md thft is m ine ion ro sede m a nelbasis, orto ftoli4 tle 6sd md

|nilililn|[ilmil

-15-

sedle .hc liibility sibulhslsly.

E!p!d!4!!$!-ad-E!E4!4e44$4!Prpdd dD.lM dd orh.r cudt ss.ls p€rllin lo esou€ contolled by rhe c'onp 6 a Esultol p6r *enll and ,iom wiich tuft ecoDonic bmefib e exp..kn b flor !o rhe Gbup.

Pro6!tv- Pldt 0d EouionenrPrcPery, plmt rd eluipnen. e slal.d ot cosl lcs oeumulated deplet on, d.p@iction odmoniaton dd any.elmulared impaiment loses. The inirial cdr ofthe popedr. plmr dd.quipmenr 6nsis ofib purchEe prie. including .ny inpod duli.s, lrrd ud ey di'diyrbibubble ess of bdngiq th. NB lo j$ vo ing andition md lmrion for ib inrsded use

lxpendilurcs incuftd aii.r tn. fixod osls hale been put iDto opedio', such 6 Epain rdnainbm€, m nomlly ch'rged b rhe srde of €hprhdsive in€n in lhe paiod invhich rhe 6.t e incuftd. h situ ids where jt cm be cledly demo'sden $d tne.xpendinG hale Gulted in e incr6e in ttle fie €Dmic benefib expebd lo b€ obbir.diion rhe us of m itm of propeit,, plur dd eqlipmdl beyond ia ongiMlt ,5ss! studard ofpefomdc€, lho erpenditns N opihlized 6 u lddnioml a( of pmps9, pl'nt sd

DoFoiatior ots irem of propefry, plet md equipnenl beAins *hd n be6n6 avrilable foiuse. i.e , whm n is in the l@dion md mndirid nde$ory 6' ir to be epabL ofopemring in thensner inrdded by mdagflent Dep€iarion css rr the dlid of rhe d& lhal ft. nd isclNifed a held fd s.le (or inclu&d in o distacal goup that is olEsifien 6 held for sal€) inecordmca wirh PFRS 5, ivo,{metu,4:seb EeldJt lnle o DirdktudOp4diN,adrl\.dab the dset is deEcogliz.d.

Wells, platfolm and orher facilities ft depl&d using rhe unib-of-produdion molhod @opul.db6.d on .stiinare oftovcd tgsdes. The depldion h& includes rhe explohlion ddd*lopmert coi ofthe pmducing oilfi.Lrr.

towd D,u! tuel colldio' 'rd

Einjedim sldd (FcRs) lnd prodlolion welh i, tne eeorhemalplflr de depEciateJ using th. stFiell-line nethod owr$e ueful liv6 ofrhe 'sb. nte hefullil: ofrhoso 6sets sholl be decmined one in rhe mndition n@$a loi ih.e 6sets to bedpable of opeBring in rhe lllse inladed by mmogdert.

Lsd imp@veDenb co6if of b€tuenr!, sn prepediu md siL imprcvmdis rhd sdy ludfor ib intnded use. I1ese includ. .xc*€tio[ nor-itrfrsdctu urility iGrdhiion, drive*ays,sideNdls, pr*ing lob, od fen6. lfld imprcvmenb ft deprciaLd ovd 5

'€s.

mmmmilln|il

t6-

Orher pbpst}. pldt ad .{uipndr e deF*iar€d dd anoniz.d Dsing rhe shighrline neihodoler rhe srimred Netul liv.s oflhe sseb d follows:

Po*er plu! fCRS md production *elk

Odice flnie 0d orher equipnent

51

2-1

W.lls in proeE$ p€n{in lo those developmenr 6sb Elding to lne Seoice C.nbd (SC) *hereoil in olmercial qudlitie e di@vsed dd e subs.quddy re.lssifi.d 10 W.lls, platlomsdd olh.r feilitie" shown unds'Propr!,, plut od equipmenf'r@ur in tne ansolid,tedsbbmmt of nmcial psition uDd comdci.l plod@lim. D.lLlim of$.Us in prcgdsaaadc4 upon ksLr b prop€rty, plul ud e'ruipDenl od Elabd nain 6sb m in rhecon'lition ree$'ry for it to be capable of opsarins in the lrrmd idedded by 6mgment.

Cnnstu.tion in ptogr* represenb pmpetyi pldr md €quipment uder cmshdion dd ft sbedar mn. Tnis includes de cd1 ofcoshctim io inclu& natedals, labd, profFsioml f6,bomwin8 mts dd olher dirody abibnbble es. coGtuction in prosEs is nd deprei.rednnlil such tine the cdtuhc.ion is empl.Ld.

All cosb incuftd in lhc g@logicll ud geoph,sisl activilies such a cosb of rotogFphis\glologi€l ed grcphysial studie, .ishb of i@$ b proteti.s to mnd@t tiN stodies, saldiesmd orher *pmes of gologists, g@physi€l cEw, or orhen conducring thG. sodies echdged !o prclil or lN in dle

'€e smh 6sb m incuftd.

Ifrhe Hul6 dfinitial 8lologiol dd gsphysical adivniB Fv*l rhe presd@ ofgeolhemalrslre rhal sill EquiE tu rhft aDlo6tion rd drilUng subs.ludt expldalio dtd dillingcosir m scmulared ed dcfd.d under lhe 'Defen€d sdhedal c61s" ecoul ir thc

The usetul lives md deplerior! d.trciario md morlialion nethods N rdiercd periodically to.nsuro lid lhc penod md nerhod of dgldion, depHi{ion md moniadon e 6nsis&nl *inihe *pecred panm ofecdonic b.n.n6 fton ilm of potedy, plst sd equipm€nr.wlq th. 6*ls d€ rolird or orhwise disposed of, the con md de Ehred aeutulalddepldion. depr-iation dd dodizsrion otd dy d.mulaed impaimefion tlr. asunlr ud sy rsulti'g gain or I6s is Ended in lne €nslid:red sbemdl of

P!&srd q!!!4!o!!Es!!!!s'nie Grcup follows lh. full cost Derhod of rmurins for *plontion €sG dMin.d m lhc66is ofeach SC aH. Unde. thi3 ndho4 all exoloralid cosls rclati'g ro easi SC e bndiv.lydelded p.ndi4 dotemin ron of sheiherrhe ma mnbins oil Hwes in @mscial quantit'es.

'ne erploFtion ssb rcl.ting lo lie SC whft oil in @nDerci'l qmtities dc discoleEd Nsubs.qenlly 6l6ified 10 w€lls, platro'm Dd orhq facilites" shoqn under "Propqq! plmrod equipment' in the msoUdaLd st t!mm1 of linrncial positio! npon subdbtial onplelion ofde developnent saAe. 1)'r the orher hrd, sll csb rehli's ro d abmdon d SC e wihen ofi inlhe yetu lhe rca is pemufltly absndoned. SCs ft 6nsidd.d pmdenlt abmdonen ifdeSCs nave *pired andor .hft r. no d.linit! plds lor 6dher *plomtion md/or developmdt.

Defeftd Dryelomenr Cosb - G.o&m.l included in O0ls Noncm't Assb

|I|ilnCII|I[ilililr

-t7-

onsolntrled sbbndt of finmchl p6irion.Ths eose irclud. th. fouoving:

t Cosb aseiatd wirh the eBtudion of teDponry frcilitiesl. CosE oldrilling cxplmlory add .xpldarory rype 3hrignDhic cs uells, poiding

dtuination of Nhether the wells cm pod!@ prcv.! Fsflesj sd. Cosb ol lMl adninishtion, fime, sEnsal md sEuiq sfli6, snrface faciliri$ md

othd loc.l .osB in prpadng lor dd supponing rhe &ill &.ivnies, erc. incured dx.ing rhedrilling of explordory relk.

If esls condrct d on the diillcd .xpl@tory welh Eveal thd the. vells snot pl.due provedresees. rhe epiblized 6s ft charged ro exp€ns qcepr when nmageDent decids to ce themproduclive wells foi leycling or uaL disp6al.

One the pojed's rechnical feaibilit d ammscial viibility b prcest blish.d, rhe explodion md elalurid Ns.ts sball b. mlssinrd io top.ity, plarl md.quipm€nt 4d dep@iaied ecodingly.

Defd.n D.v.lom.nl CosL - Sola Poad Pbicct included in Orher Nonowl A$csTh6e re ccb incmd in the developnmt ofthe SolI lmjd. This include 6sb incr.n fdrrhe constlcrim oflb. ase. md othe dirccdy airriburabL exp.nse duing rhc oNlruclion ofde

Inloneible AsselsInhsible ffeb icquired sepdrely ft beauFd on inithl lugnilion ai @sl. Ille 6t ofinhgibl. Lls.ts rcquiFd is lhcn ian voluc s al tE d.L of rcquisiion. Follosing inirialEcogritioq itusible sseb m tried d 6n le$ rernul !d moniation ed &omuloted

lnran8ible aseb *ilh fniL liv4 e modi2ld ov.r thcir ueirl e@omis 1i!6 md ssssd forinpaimcnt uh.nds lh* is u indimtion th't tne inbgible asr my be inpair.d. Th.uodianion p.iod md .he dodizstion nethod lor d inlrngible ael wid' r 6ric uefDl liG msic{cd al lei rl lhe {d of@h Eportng p.riod, Chogs in rhe *pad @ftIlife orlllcexpecred padm ofcosuptid of futuft eonobic bh.fts dbodicd ir th. Ner is @coubdfor by ohmgin8 ihe moniadon period or netho( 6 rpp@piare, sd e Mbd 6 chdg.s in

The donianon *poBe on irtongible 0s€ts wilh finir€ livs is Eognirn in the llllen.nl ofcospt iensire iDmne h dE exp.nse cftgory ansisenl *irh the fuction ol tne inlangibl€

Amortidion is compured usins rhe tuishlline Dethod ovs lh. eslinatcd uetul livs (EttL) of

lntugible d* with indefrir 6etul Iives e not moniad, but @ lesbd for inpaimdrdnualu, eirher individu.lly or d rI. cGU Lv.l. l1E 6se$moi of i'dennib life is di.lrdddudly 10 detemibe vheo'ertne indefirib liG coftinus ro be suFponanb. f.oq de chdse inusetul life tron ind€finiE b fDie is nad. on r pospc.tive b6is. Gains o. l6ses disiry ftomd@gnilion of M irt ngibL 6set @ me6md 6 rhe dilTerene ben?.d ih. net dnposrlpr@ds {d the csrying mour of rhe Net and arc @gnizcd ir lie sLbment of pbli. d lNshm rhe 6set is dmgnized.

rt!t!ffimllmI

-t3-

lnvesir'.enr Pbbedies,nvefimr prcpedies 6nsis1 of lmd h.ld for capi&l lppEcialion or Fnt,l b olhe6. Lod issbt d ar con h$ w imDat$enr

'n value.

'Itle ini.ial cdl ol the invesnr.nr prp.nies mmpris of pNhs tri€ ond my dir@rlyottsibnbble msb ofbingiq rlc ds.t b ils wo*ing @ldition. ExpendirG incur.d.nt $eiNabent psp€rtid hs b6r put irto op€mtion, such 6 E aiN dd n.inemce, G nomallycheeed io dp€nse in the yqr when @sll m incmci. lD sitoations *hm ir 6n h. cldlydenorotitd rhat thc .xp.ndi$E irve Esulbd in m incred. in lhc futu. emmic benefibdDecled io b. obt ine! ioD tle 6e ofd ici of inv*lmdi tolslies beyo.d irs oiginally6s6sen shdard of prfommc., lh. dpcnditud @ spiblizi a m addilional csr of

Inlesbmr pDpeq is del@gnizd {hd oithd il is be.' disposed of q {hen lh. iNeslrnmlprop.dy is D€mmdtly wnndnw 6om ce md no futur. edomic bdefil i! exp€ctn from iadGp6al. Any gains or ldses on $e fttiFmert or dispNl of invghst prcpedis frecqni*d in th. coNolidored slaroent ofcompEhdive inom. in lh. yd of EtiEmert or

Trdsfe6 m Dade to iNesmr pspstes vhen, dd only when. lheE is a ch le in ae,*idenced by .hc .nd ai oue.ooupalron, coDDen€mmr ofd op€radng l*. to dolhe. Frryor by tlo end of oortucrion o. developnedt Trssfd r. nrdc fton inv6bent plopd'esvhen. md only when, lherc is a charUe in use, evidencen by colmencddt ofotn4{eouprtiondi osm.n€ndt of dev.loDmmr w navi$rosell

In&resl in Joinr obemtioGA joint op€dion is i joidr o]msemdt wheEby the pdiff thar have joint enlrol of rhe

orugenent hav€ rigtu b rhe ds6, dd obliSltioN for the liobililies, Elarin8 b rhe

The Grcup rsgnizd in Elalion to ib irtftn in rjoint opdalion its:. 6sels, includincibshreof my a*held joinily. lidiliries,includingibiheof dylirbnidesinc!ftdjoindl. ftven@ fion rhe s.lc ol ils shm oflhe oltpur dsing ton $r joinl opemlion. sh@ oflh€ soue 6on dre sle of rhe oulput by $e joinr opedion. *pees. inclDdinS ill shm oldy exFD$s incu.edjointb

'nE Goup aoounrl for dE 6sd it cdntuk 4d rh. liabilnies it ingm, the spdtes it incun tndihe shm ofirdde iha! ir ems ion the sale of cnde oil by thejoiii opttliots,

lnvdtndi in a Joii Ve'tueA joinr vmrG (rv) b a ty!. orjoinl dosoenr wheEby rhe pati.s thol havejoint cotul 6rlhc llmgemd n,ve righb b rhe nd N* of d\. joirt v.nnft. Joinr @tul is rhe cdhlctuallylgEed shdins of 6nhl ofd mtu8mdl shioh qist only {hd d*kids aboul dE re1*dlacririlies F,tniE unsimous oonsenl oftne p€ni* shding control. Inv€t dr in I w i!&cobted for ud€r the equiq nethod of eourin3.

As dis.nsed in Nole 2, th. GrcuD l6t it ontul ovr P.ttowind, Prior rq beonin8 ! joinrlentu in 2014, PtuWind wa &oolnled for 6 r subsididt in previos ye6. h

'.mrdd@virh PFRS, rh. CrouD me6uEs md rsslizes my r€lain d invdtnor d ib fair hlu. rhmlh6 is los of cdtul ovs a snbsididy. Any difieren€ bese.he c.rryitg uod ofrhesnbsidi'ry upon loss ofcdlrol dd lhe tuir vdue ofrhe rebined invest Denl od pac.e& nom

|l!il|Iflilttr0muil

disp.sal is rcognizen in pmtu or los a u*lizd gain on remeaEDenr ofinvshent

hnaiment of Nonfpdcial A$ebThe Gronp 6s6s6 at erch Eponing dale rhclhd theE is d indicdion rhd an sscl(e.9., p6pei9, planr dd equipnenr, iNeshmr pmpenis, defs.en ms. md inbsible 6sd)noy be inpaircd. Ifmy such indi€nM dists, orvha mru.l impaimdr t6.ing foi d 6s.t isrquired, the Gnup dirorE rhe 6sd\ €ryerabte mout. An lMt 'wBble mour isrhe hkla of m dst or dh-gdeding unit\ fan vdu. l6s costs !o scu md its !alu. h lstmd b de&mined for an irdividu.l N! uls lhe Nel d6 not gde6te 6h inflows tnat NloEely independent of th6e lilm orher aseb or grcup of 's*.\{lleF t!. csrying mounl of o 6sl exceds irs l@qable moug the 6sd is ansideF!inpliEd md is wift. dM to ib lt.ryenble mount. ln a$e$ing value in e. the *rin redtutur. cah flovs e dissunLd h lncir prgenl vdu. using a discout raE $!1r.fl@15 cwnltw*d ase$Dent ofrh€ tire valu€ of Doney md the rkks specific to the 6sd. ln debminin8f.n vatue l6s co* ro sell. tu appbFi& ulua.ion nodel is Dsed. Ilrese .dcllations emmb@lod by lalulid muliples, qDted she pi6 for publicly t ded compmis or orheralril le fair lalm indiarox.

An ssesmenr is 6ade rt ach Eponing drr€ as b *helnd rheft i! dy indicdion lnd prvioulyrsgnized ihpiimen.lo$es my no longs exbt or my hav6 &cresed. Ilsuoh indicrrioncxisbj the Group nBles b sliDrb of rilemble moui A pEviously reqliz.d inp3imrllos is Evmed ont ifthm h^ b*n i chdge in .h. gtimts uscd lo d.temine tho sset'sraovdable moul sine llE 161 impdmat los w6 remBnized. Ifthar is the cae, the c.rryingmod of the as* is bM.i b ib Mlrable doui nd incrcsed mounl6noi qceedrhc $rryina amoml lhal vould hav. been dolmined, Dd ofdepldion, deprsidion mdmoniztion h:d Do inpaiment los b*n @gnidd for th. dsd in pdor )rs.such seel G @ogrizd in the dsolidrred shen. of 6hpr.hdsiv. income unl6s ihe6s.t is cdied at ddu.d moun! in Nhioh 6e dE qexal is ftared s a Evalurion incs..

dlircup recoas comon srax ar ptr value od additioml paid iD capibl in ex*3 orlh. bblcontiburions ffiived over rh€ a8sre8ne pd ul@ ofrh..qlily shms. men 0'e Goup issusdd. rha de cla of sdk r so61c o@ut n Minlained for @h cl6s of sre* dd lhelDbq of shffi issue!. IDoFmenral @b incurd die y eibulabL ro thc islue of Drysh:E ft shom in equity a a ddudid nom pooc.is, net oft&{. whe. oy Demb.r oftheGrcup pucb66 th. CrcuD\ c.piLl stook (Fe6ury sh.H) the onsidsrlid pai4 including aryotriblhble ilcEmenr,l msb, is denuftd fron eqDity itdibutabl. 10 lh. Coup\ equiry holdmutil the shfts re cm€lled, Eissued d dbDos.d ol WheF suh si@s se subsequendy $ld otreissu.d. my coNidmlim rcceiv.d, n l of oy diedy afribuhble incm66l tusolim 0615md the rehred rd efaeb is iDclud€d in equity.

ReLined emirgs repreDt lFDuled emin$ of rhe dritiB rhin rh. Goup le$ dividmdsdeclftd sd wirh mnsidmrion of my chdgls in &counlirg tolicie fld etu appliedfr@tivelr. Ilt *Lined emin3s oflhc Ctroup od ib subsidieis ft ilailabl. fr divid.ndsorly trpon approval md d€ldion of@h of dFn r*potv. BOD.

Eouilv R6deEquiry 6ee€ i made np ofeguig tuscrions orber lhd .quiq conlribulions such as gnin orlds ftsulthr ftoh inc@. or dectle of oDe6hiD sirhour los ofc@tol.

til[ruiltmilil|lt

PEpe!!s&r&!4qsta!!l!!sq!p!&!,Deposits for futur sbck subscrittions is @odei b$ed on tne Eieemrble mount Mei*n ddis lrsbd under 1i$iliti6 unles rhe follNing itens *eft nd fd dNincdion 6 part of

a. fie unissued authdiad c.bilal sloc* oi tne dlit is insnfficienr ro cowr rhe mounl of shdesi.dt€r.d ir rhe 6rr.rlj

b. There is BOD alploval on lhe prcpos.d hcMe in audoriad spjtal $ock (for rhich a

detosi. w6 Fc.ivcd by tho Gro!p);c. fieE is slmkhold6 approval ofsaid pmpded increasq mdd. The application for rhe appnval of rhc popos.d incE6e hs bd 6le! virh rhe S€uitis

dd Ex.hd$ Comissior (SEC),

Deposib Epregr subscndon loynenls wiled frcm pGpedive in*sbd for th. Gouphcommm shd6 wtich re yd b be issued npon apFoval by !h. SEC ollhe orplication forincme in lle aurhdiz.d opilal s1@*. Ilis will b. eolssifiei 10 'Capibl sd*' upon iss@ce

crmt h 'ss ud liabiliri.s for rhc omnl od prior psiods e neaurtd a1 tr. doulexpe.ied 10 b€ @ovcei iFn or plid b the drrim adho i.s. Th. la: 016 md d hvs used

to compre tne mouna de rhose rhar e docled d substurively enaded d (he rcp.nlng da&.

Deid.d tq is prclided sing tne &bnce sh*r liability merhod d all rmponry difftr€s dtie Eponing dare btuen rhe h bes of6s.ll od liobililres od tnen c'rrying adouns forfi tucial €podhA purtoses.

DeferEn bx [ibilili.s r. recogriad for a]l tuahle tmpoary difid.€ *epr ro rhe extot.h.1 ihe dcfcftd d lhhiliris {ise 6on .h.: a) inilitl @grition ofSood*ill; or b) th. inilt.lEcognirion ofil aet d liabilily in a lrs.olion wnich is not i) i bDsin.s conbitalioni Ddii) 11th. lim. of dE trsacrioq rfred neirbd .eoutit8 pDfit nor bxble pmfit oi l6s.

Defered d ds.ts e reooFizen for all deducrible bponry difatdoes virh (trinqeprions, md car.yfNdd bdcfils of uuscd tq cEdib 6om *€$ mininum cotpomreincon k 0vlCIT) ov.r RCIT od Dus.d 'd opeding Io$ .itrydt (NOLCO), b rhe d!.n!.hot i is probable th,r sufficiot tuble incon uil be r€ilable agaiGr which lhe d.drclibletempoBry difrftmes md cdryfodad b€ncfils of unused d mdib ftom .xe$ MCIT mduusei NOLO cd b. ulilizcd, Defsren h dsds, how.vs, e nol raog'ized *hd it disfrcm dF !) inilial

'wglition of m dset d liability in a Fansaotion rhd is ndt , blsinc$

oombimtionr md b) d rhe tihe ofllmadion, afierls reirher rhe acounling in@me nor tuble

nie cr.yin8 dount of&f.ftd t&\ 6setl m Fviwed at eeh ietorting drle 3nd Enuced ro lheexienl lhat i1 h no loneer pDbable that sutrcimi hble in@mc will b€ alailable lo alov all orpd ofde defered b ssd b be utilizd Ur@gnizn deferol deach reFonile dote, sd @

'@3rizd ro rhe *knt I'id it h6 beoome p@babl€ rbd futuic

t&\oble in@me will aUN rhe defftd d asets b b€ recowred T[e Qdup do.s not 'wgni4defmd d Nets dd d.f.dti ts liobilnis thd will Fe6. dltit8 the incoDe d holid.y

tf,tlr]|iltmil!fl

Defeftd d isls od liabihies ft m*ured at the b Ere rhrt e applicable to the p€.iodsh.n lhe dset is raliad oi lh. liabilily is $tded. based on d r es (dd d lavs) thal hav. bemseten e suhbrively emr.d 6 ofthe Eponing dare.

Deleftd d relaling b nds Hogriad oulsidc p@ft or Ios G eognizn oubide profi d los.Defftd d nem ft Mognidd in eftldi@ b rhe 0nddlying ddsaclid ei.lis in }tfit orlo$ or olhd compreheNirc in@mc.

Defftd t x dsets dd defftd l.{ liabiliie @ olTs.l if a legauy enldsbL riCl* exnts io s1oficuenr lax sseb orainst c!renl ld liabililies -d lhe defeftd hes relde to the rme tubleentiq md the sme lMion aurhority

PeNton Cosl'lte nd defned benelit liahility d asd is rhe a$Eg& oflh. pl.st vrluc oftE d.tncd boeliiobliedon d th. .nd oflhc E orti,g Deriod Fducad by lhe fair lalw of plm ?sls (ir my).adjunen for my etrd of limiiins r mt ddDed bendn 6sc1b lh.6sd eilin8. Th. set ceili'gis rhe p@nl value of my Mnmic bd.fB availoble in lhe fom of etunds toD rhe plu orrcduclions ir tunle ontibnlioG io tne plu.

The con of proliding b.n.fiB und& lh. derined b€Deft plss is acbeially dftmined $ing lh.pmjeftd un cEnit merhod.

Defined benefil rcsls empise tne following:

. Ner incre$ o. l]le n.1 &fm.d b.n fit liabiliry or 'sr. RmsuMeft of nd defred b*fit lhbilitv or ds.l

Sfli* 6ts whioh irolude .@rt seeice ccb, pd sdic. @sL md 8.ins ot lo$es d no'mutine $dlmetu ffi recoglibd a e!pm? in ib. cdsolidftd shrnert of cmpEbtuiv.income. Pd sdic. osts e remgnizcd when pl$ mendnei or cunaihst @w. Th*moub re t alt Jden p€riodicdlly bJ deFndmr qulificd & iDnes

Not inieresl on tie nd defred beneft liabiliB or 6set k rh. chdec du tg do p€riod in rhe neidetned b€.efi. lirbiliry d as.r lh!! &ises frcD tie Fssage af tine lhich is ddmin d by

ryplying th. dismut 6te b6ei o gdenmot bmds b the n.t d.lo.! tnefit lilbilig or 6sdNd incE on the nd defDed benent liability d set is 'wg zd 6 *p€ae d inen. in lheonsolidried s6hd. of ompr.hersiv. in6ne.

Rem€trmmenb conprising &tueid gdns ud lo$es, rtu on plfl 614 dd dy ch{ge inrhe efTe.! oflhe 6s ceilins (dcluding n€l inieHt on defned b.n ft liabiliq) @ Eo3lizedimmedialcly ir ocl in rhe period i' which they dise. Rdesremenrl m nor eLsili.d io@Dsolidared tunent of{dpi.bensiv. insne in subsequdt peiods.

Plo 6seb @ 6sd thar ft held by r lons:I€m esployee bdeil fu.d or qurUrying iNu@cepolicies. Plan ssd re nd avaihble b the creditG ofde G@up nor cd rhey b. paid direorly rolh. Crolp. Fair Elu ofplo 6Els is haen on narkd prie infom.lion. When m lMkd pi€is available, dE fiir valm ofplan 'l* b esriD&d by disoutDg exp-red fitu c8h florsusina ! discoukal. lhat rcllers bodr dE risk as@iatd *i!\ lhe plm 6sets md llt. n8tui9 orcxpeolod disporol d,e& ofrhose Ns* (o.. iflhe! h8ve no manfty, rhe exp€dd pdiod unlil the

serdenmt ofthe Elaed obltrtioB). rlhc frn vatu ofrhe pld asel! iJ highet thd Oie pEsenrvalue ofrhe defined bd.tu obligotjon, lhe mescmmr of th. Buling defirei b€ne6r as.t is

ntfitiltfl[I|iln

limiien b lhe pltsmr ulue ofecdnomic b.defiB .vailable in rhe fom ofrfunds f.om rh. plon otrducrions in ftre sntibulions 10 the plu

The Grcupk .ight ro be Finbm.d of sft. or oll ofrhe expmditu requned to s.tlle a d.finedbenen. obl*Etion is eoeriad 6 a s.pmre dsd ar f.n val@ uhd md only *h.nEinbudemert is viturlly 4din.

Cosls ud ExmnsesOil s.ducrion opdaline .xpdses e c6t incutrn to pI dle and sell crudc oil ilvotory,incl0di4 trmsportatio, slorage md loadin!, mda o.h.6

Ccb of electiciry sil* pen in 10 dire.t oost in geneclinE el*ticity poaer whioh inolu{tesopmlirg nd einldme c6b (o&\0 fd poNr plart sd fluid collection md ftinjeclionsysten OCRS) depEcialim dd oths cosls diredy aits'bured to ploducin8 elelriciq.

CdeBl md d,ainitutue *pen* constiot. .ss ofadminisbriry rhe busin.$. Costs odexposes ft remgnian a incwd

Assl R.liEmdt Obljsalim rARO\Pwisim fd sd retnd.nl obliealion G ruogniEd rhen lhe rccoCnjtion cirsia fo. a sovidone nd. Tic Goup rMsnia the pfts.nl vtluc olths m$ s ARO seb (itclud.d undd.Pop.fr), plant r.d eluipnent ) sd aRO liabilit.

For dE Ensable eners/, lhe Group deprdhbs ARO 6s6 .n t 3bigillinc basis over dieesimaLd stul life (EUL) ofthe Flaed ase. oi rh. sewiee @ntad rem, whichdet h shorter,or wiftn oIT B a Esula of inpoimenl of$e Elden asd.

For dE oil op€tuion, rhe GbuD d.trccjoles ARO asd ba*d on unil olpodwlron nerhod

Tho Group monia ARO liabiliry uin8 $e effeorive inleBr nethod dd aognires rccdionexpse ov4lh. sr& contur h.

The Gbnp Egulirly 6s*s the prcvGion for ARO dd adjNts ih. re1.&d liabiliq

The dtuimlid of Nhether o 'lmsmed is. oi @nloint a le6e, is b€sed on th. substcnce oI

lh. .ltrgemdi ar i'ceprio {tab, dd rcquires m sssnent of wh.rha the tulillnenr of the

Mmgmenr is depdddl on $e ue of s specific 'g or ds.ll, md tl. ruaeddl onvets aighr lo w ihe Net. A MssDenr is mdc afcr ineplion of tne lse onry if de (l) orthe

a. rhse h r chsge in contlotrd rels. drher rhm. rendd or *6ion of th. mgems!a EEwal option is exsised o m .ilension grmted. ules thd tem ofdre rm4al oiexteNidn rd initally includei in lhe l6e tedl

b. lha is o chsge in rhe ddmimtion oi whelhd tulfilLnenr is dep.nddt on o spr.ified as.q

c. rhw is a subsdri.l chdgc lo tbe ssd.

Wl* a rsse$ment is nade, ld. reobti.g sl'all colmd€ or c.6e frcn rhe dab Bhen thcchmge in cftumdces grc rise ro the resse$ddt for ey ofrhe s€ndid abov., ed a1lhe

d e of r.nqal or dmion pei.d fd lh. 3@nd smeio

tilril|lilliltfil

l-#es where the le$q r.hiN slbslonthlt ,ll rhe risr, dd b.n.lit of oundhip ofde 6sd recldsifiod 6 opsding le,s. Op.hting lese palmdls !. Fogrizd 6 d Expose in th.coGolidztd sbhml of onpretosive incone on a tui8lt-line bais oler lhe lese renMininm le6e patbenls se

'@g'iz€d on r shighlline b6is wiiL rhe vrirble re is

sogDizd 6 r expse baed on $. ems oflhe le6ed contact.

Re3ach &d Dcvelopmflr cosbR.s@n msb ee dp€ns.d 6 incurd. Ddelopmert exp€ndirr* on m individull pljed mrmsnizd s d inhsibL ssel wnen fie Group d ddoNtate oll oftle followinSl

r rhe technical f*ibility of cmtleting dE i'tergible 6sd so ihat il vill b€ aloilable for w or

. ib inldtion to complere sd ib abilit ro Be q eu th. sseqr i@ rhe 6d will genebte tutui. rmronic benefibiI rhe availabil,rt of re$!rces 10 complete the 6sdi ddr rhe ability 10 ne6uc reliably rhe exp€ndi@ dunng ddelopment,

Ltft$ dd orhd Fl.&d finocing chdses on bo@w.d fi[ds used ro finme the acqubni@ ond

conshcrion ofa quali8ing ssei (ircludcd uder pop€ny, plur dd equipmdt) e apitali@d rorhe apEopriaE as.l @outs. Capilaliztion ofb.tu*ing osts commdcas when me.xpddituts sd borc*bs @sb e b€ine incur.! duing the @nstudion sd rebi.d &tiviliesrccesry rd prepire th. 4srt for its inlended use E in pbgt$. Ii is sutended duing *endenperio& in whioh &live d*elopment is int pred dd cN when sDbshriauy au rh. tcrivitig

'eces'y ro prep@ rh. 4s.t for its inlendod se F @nple€. fie €Fiialiario is b6ed on rhe

retlted awrae. bmwins e6l.

The bono*i'8 6srs €pi6liz.d 6 psrt olpoFeny, plmr dd equipn tt e @ofrized usins the

shigbllin mdnod ovq llle enined uetul Uve of th. scls.

Inte$ expede on los tud borowin8s is ltagnirn Dsi4 lh. EIR mdnod ovs rhe bm of the

FoEio ctrdcv-dmoniroted Ttmdioc md Tldlatid'tlc consolidd€d 6mcial sbbedts d. ,r6.rted in US OoUm, which tu th. Ctoup s rnncrion'idd pEsdr.1ion c!renoy. leh entiq in lhe G@up ddmin€ ils ou l ctionil cudcy sdnm inclu&d in the FDsoli&red finucial s@nenll ofceh erti!, m 6*uftd using thtlfunolio@l cuscy. Tdsicli@ in fGie! cuftn is e iniriiuy @tded in th. fuclionalcrency Ere d the d.@ oflh. rssoclion. Monebry asers ad liabilities deDninftd in foEigncmnciB e rcl@slabd ar rhe firdionil crency olosiry rde d rhe reponid8 dae.

All dilTdn6 e ulen 10 lllc @nsolidared senml of compEhe6ive itu@e sirh th.dc.Dtion of difresces on foEkn cufficy borowinSs th.r pbvide, ifdy, a hcdge agpn$ a ndi,v6hent in ! foEisn entiq. m* N llten djEtt b eqliq undl dispNl ofrhe ndinvetn4! ar vhich line ln.y @ |Qsli-d in the onsolidcled sbrment of€mprchdsileircme, Non-mon€bry itm rhar e mduEd in tems of hiJbncd si it foreig' c'mnc) fttmslded using rh. exchsg. ral6 6 ar rhe dars of initial tMlions, Non mdnebry ilmsmdDred ar ion Ehc in a foEis, cftncy d. tslalei 6ing the *hm8t ales ot thc dare

whd the fair valE *s dtuin d.

ilmilurmru|[l

Tho funciiorul cmncy oftbc Coup's immediaie subsididy, P.lrcCrced sd ils subsidioi6,nmely MGI 4d ?.lrosois, G lhe Philippine leso. As at repoding dde, rhe dset dd liabilititsofrhese subsidi'ies G tmslikd i o the prese alion c@cy of rhe Gioup (the Us Dolltrt ar

lne exchmse db al t]l. rctoning d,rc md the ansolid.t d ststemonr ofamprehmsiv. incmca4ouns ft tdsloled ot rcishred Ne6g. exchuSe mles for the )€d. ne ex.hmge ditr Mcasdsing on rhe tuldion e 6kd di@dy to "Cumularive teslatiot adjutnenf'ecomr in rhe

equig s€rion of rh. @Mlidlied lhroenr of lidchl posiio Upo' disposrl ofa subsillidy,th. defer€d cunuhrive b$sldion adjuslsdr mout Ecosniz.d in equiq rchting lo o'dpdicule subsidiary is rccoelizd in the acolidted sbLmcnt of mDpEhssive incde

EeirA n-Nl Pe SbdeBsic eminSs (lst p€r shs m mmptcd on th. b6is ofrhe weighred arsage nunbd ofshes outslodins dwins rhe ,€a lnd givirg rddct e efiecl lot dy s1o* dividends declftd

Dilu&! @inss ps sb* e onputed on the b6is ofrhe r.iShLd .vdaCe nmbtr ofshftsotrtuding duing !h. )cd plus lhe weishred ivehge dmber ofordimry shffi tha. qould bcissued on de convssion ofau the dilulile potntial odin&y shes inb ddindT si'G

Obmlha S.menl'nE cmupt opsatins businsd N orgmizd md m.g!d s.taL&ly !@diry ro rhe mtureoft\e pbducb 4d swi6 prolide4 wirh eich s.gn.nl FpEsenring a shbgic busitss unil$ot off6 difleE.l Drcdud md swices od smes diffmt ndkell. Iitochl i'fomtion onbGines sgDenc h prMted in Nob 23 ro rhe consolidded fitucid sbbmenb

Provisios d€ r@edzd when rhe Goup hs c pEsenr ohligrtion (leeal ot cotsbdivO 6 rEsult of a pan ernr, it is lobable lh{ d oudlor ofjsu6 embodying eononic bdeliB wiube requied lo solde rhe obligation dd a ieliabL esdoe cm be nrd. of rb. mout ofrheoblisarim. If the eIfer of tn.1in. lalu€ of money is n&iiol, povisio6 F deEmin.d bydiscoutirs lh. dpe.d tuft cah flows 11 r tre-t&r rde rh.t refl4b cllMt nekcl6se$ne.a ofrhe dme valDe ofnoney o4 where 4propi.te $. riskr speciic to rhe liabili9Whd di$ounting is ued, de ircse in rhe provisiot due b rhe p6saS! oftin. is rooe!@d6 m irtrest qpense. Provisions d. revised d each repodi4 dai. dd adjsred to renet $e

Elenb Alter ihe Rmnin! leriodPcr yetu{d ev.nb $ot provide ddilion.l inlomation abour rhe Grcupt silu.iion d lherponirg date (adjNrins wenb) e r.lleolod ir th€ fDaciil 3bLndis, iruy Pon vw_endevob rhat ft nol adjudirg {otl m dirlded in rhe notes io finmcial sbrddL vhen

5. Sig.ificr Accoudi4 Judane!!, f,stimrld dd A$umptro'3

The prcp@tion ofrhe coBolid.ted linscial sbhenb in mnpljsc with PFRS rcquires lheCmup ro nik judeDents, estDfts md asumplions tnd 8ffecr rhe ftton d moub ofas6,liabilitid, ircom€ ud exrses dd disclosw of onlingen. as.ts dd oortingsi litbilili.s.Futu eveft my occu shiob will cse rhe asMplioN ued in mi 4 ar rhe .stmr6 ro

chmg. nr etrecrs ofsy chdg! in judenent, srinares dd dsuaptions n reflded in lheconelidded firdcial 3brd.nts, 6 dey t€cone resntbly d.ffiinable

|miltr[ilmm$il

-25

Judgnents, elind.s dd ssuptions @ cortinually evalur€d dd d beed on historicsldt€liooeDdorlErfacrc,includingexpedionsof futuE.v.nblh r.b.lidedlobeEasonable under .he circmsianB.

In lhe pocs ofaptlying tie Goupt r*outins policies, ndagenent ha nNde .h. lollowingjudgDenrs, apd ftoD lnce involving edibdioni Bhich ha rh. nasr sigrificsl cf{t an themouna rec4riud in lhc cdsolidlted nmcial sbrment:

Deftminotion ol Fwtional ctu r'ne mritid rilhin the Group ddmine rhe firdiodl cDftncy b.sed on .comic subslance ofmdedyirg circllmtuG Elevdt b @h htily virhin tne Croup. Tho P&€rt Compry\tunctioml cftrcy is lhe US Dollr. nre tu Ftional cmmcy of PtuGrm dd MGI is rhe

A3of Deccnb.r31,2016dd2015,rheG p\cunulati*tusldiondjustndtmountedlot5.,10 eillionrd $2.55 nillion, esp*rively.

In?ainmt ud vnk-ofofDefenz.r at E plotuimc64Tte Cmup ss*s inpaimcnl d dofd.d oil dploErion c6b whs fads dd circlNlanc.ssugget thrl lh. atrying oounr of the :st 6ay er@ed ill rMvdabL doul, u'til rhe GmuPh6 su,Iicieftdabtoddenine Gchnicalf.aibi ry md @mmcrcial viabiliry, defered oil*plomtion Gts ne.d not b. asessed for impaimenr.

Fad md dddsdccs lhal Nould ftquie u inpainenr ?sssnert as sd ford inPFRS 6, F]+brution lor ann Etaldion aIMiMol R.lowd t.6 tuttoss

t fie period for wnich rhe Grcup ha $e +!t b txploE in $e sp{ilio rs hs *pired or villdpire in the nea fubre, md is not exp€ded io b€ Enewedl

. Subshliv. erpodinrc on turlher explontion for md evallaiion ofnin ial Esowes in d'esp€ifio da is neirhs hudgered nor tlmedi. ExploErion for md .lalu.tion of mineBl HoUffi in rhe specific aM ha!. noi Ld 10 lhcdiscov.ry ofconnerially viabL qMtiris of ninsal isu@s dd tlrc enlity h6 decided todis@ntinue such adiviri6 in the speiic ar€4 sd

' Sulficient d& ens b indiel. dqq cllnoDsli a develoDhdr in lhe sp€cif1c e. is lik.ly roproced, the .&ryirg mod ofrh€ explobtion dd .voludion 6set is ulikely to be

l€oveEn in tuU ftod sucNin d{elopnent or hy s.le.

rn 20 r 6, rhe DoE approvd rh. qirhdmwol ofth. sc 47 (of6hoE Mindod ed Pdry) .ii.r th.cNnim agE.d to rlinquish the sc 47 bl@L This decision v6 b€sed on lhe dkring hidSelogical rist of rhe cllllqr psspe.t dd lcrd irvdbry, hol oI inteF* nw f'min*, ddgivo the DOE rquiMen. of drilling ore well for SuhPhse 3. Conseqtrmlly,lh.6toup wDte-offtne defeftd dpl@nd cos6 p€rtainins b tnis sfli4 cond&l douliry 10 $12,980 (se

As of DeeDbd 3l, 2016 dd 2015, lhe ouryi'g value of defmd oil exploialion @ss moun&db $10.13 Billion ed$15.92 Dillion, Bpe.ilelyO.lor.ll)

IilEflilttililill

c tas s dic d io, oI ra k I an ds enen tJudsnenr is requied b decmine rhrn th. Grcup hs joirt @nlrol oler o mgemeng *hichrequhs m sssndt ollhe El.!ilt acliviries $d *to the deisioN in relation to rho$rdiviries F{uiE lllmiDous c{rent. Judgndr is iequired lo classiry a joinl megenenl.ClaJsifying .he

'lm8.mdt equires lh. Coup 10 6se$ dEn righri md ohltarions &isins fton

the altrsendt. Sp*ifically. rhe Gmup mnsid*:. The shctde ofrhe joinr dd8lndr - sh.rher il is sfuoturcd thowh a spmb lehicle. \llhd the @sement is stuctftd thmusi a sepdare *hicle, rhe G6up also onsideN

rhe riEi s dd obligarim &isirg fmnl. lte legd fom of the sepamle vehicle. Thc tems of ine mnhdal mmEEimr. Orher facb dd cftmst n€- snsid.rcd or a c6e bv @ b6is

'nis6se$mc onen EquiH sisnifiorjndgndt. A difi.rcnlsnclusion oboul botb joinlmnbol dd wherhd $c Mdgddt i, a joinl opsalio or ! joinr lentu, nay mrdially inpacl

'Irie crcu!\ inv*tlb.nl in ! joint vtu (Ne 12) is tuctud in a s.pan& incoaoFhd ent,ry.'ne Ooup ud lle pdis ro the rgenml only have fi. neh b lhe n l 6sell ofrhe joinr w.1e6mud, de etu of rhe mlr..turl Mogoenl. Accordiqly, rhe joii almgdent is clssifred

Copitalidrh ot Derekprent cotuDwelopmenr ms ft BpibUrd in esid6c. wilh lhe !@unriry policy discN.n in Noc 4.

rilial €pialiation oi csls G baen o' Msemenas judgnen. that dhnoloBicol ud MmnicfeGibilir_v is con6med, usurlly sho r prcducl d*elopmdt prcjed ha Hched a defo.dmileddne edding ro s eslablisieli p@jecr nmagment Dodel If rh. requiremdls forepiloljation ofdevelopmmi 6ts e not me! slch csls rc expi'sed.

Xsinde dd Asumorio'sTle key Esmprions con.dinA .h. tutm and olher key $mes of srimrid uc.it inq ar lhereponing d& rhai h.vo a signifi@t rk* of caGins a turerial adjusnrenl 10 dre carrying mdi6ofNell sd liabilnies vidin rhe ne{ nmcial yeu @ discuseJ beld.

Btindihe lhpoimdt oJ PRi,ottz'The Goup Elids ib rc*iv.bles to alss impaimenl ar led. d d snu.l b6is. In detemininsvherhs d inllimenl lo$ should be lffiden in the eMlid.l.d salmells of incone, rhe

c@np m,les judsnqa a b whetha dE. is uy obsedable dab indiBring rhat therc is tnedmble dec6. in rhc .stin.tei tul'E s,sh nNs fmn ia r€ivabl.s Tnk widoGnomally jDolud6 dik inforailion ihoul thc fsm.iol .mdihon md ninnicrl pdtnenls oflhc

As oi De@mber I l, 2016 md 2015, the c(rying vdu. of reoeivablA mour.d b $7.36 millionsd ir.59 million, Bpaiively. Accmulated impeiDenl los$ dour.d 1o $0.05 nillion Dd$0.05 dillim 6 ol DeMbor I I, 2016 sd 2015 (Note 3). No inp.im.nl 10$6 seF t@sniad

Tic Goup cmis etuin deivativ. flmcirl iNlrMenll d fdr vduq *hich reqlns e ofrccodtinS dlimlte ddjudgDelrl. Fan vdue ddemindim for d\tivaltues @ &s€d genmllyon curdt fword excimse rabs fd @ntu13 silh sinnr rolutig Profils. If P es e notEadjly dd€miuble or if liqlid.tin! lho pdilios is E6onably eip€ld b rtret m{rkd pn€s,

lEil[|llnil$il

f.ir value is b,s€d or eirher inren l vllution nodels or mmsemst s 6rimb ofmout dur6uld be realiDd under cDftnt adket cmdi.ions, 6smin3 d oderly liqunbdon over !

As of D.Mb6 31, 2016 dd 2015, lhe Coup hd a d.rilotile liability mouling lo nil lnd$10.46 nillion, HF.iively Gee Nore 19) Gin or derivdive moutin3 to $10.76 nillion mdlos on ddivative dounting ro $0.?3 million were ecogri-d in rhc s@n6. ofcmprehetuivein6ne in 2016 $d 2015, B!€.tively.

Estituiry G.ot^elrnn FieLl Revtu*MGI p€rfomed volmdic Esede estimtion dd rmencd modeling ro ddmine dF r.sesofde Miibd&a aeorhenal n.ld. As ! i.quiid.nl fd projet fiMciu, MGI .nC!g.d ot il5oM @si thc New zerlmd tm Sincldr Knishr Mez (Sr,M) in 201 I ro unded:te .@mprehcnsive rhid parry r*h'icil Biew of the Mdbae geothml licld. nis ftvi{includ.d dalysis of ihc

'aurc. 6se$md1 F fomed in-hoe by MGI 6 wll s a sepanc

SKM 6ede estinalion ud nmsicd nodelin! ofrhe Mribflm ftsde.

As lh. eonmic ssmtnms us.i nry chmge dd 6 addirioml sEolosiol infomdion isobtained duinA the opentioD of r 6eld, srituie of lgvmble rcs.de n.y ohdg.. Suhchdgls my iapact the Cbupt €porkd iin{cial positio' ud Esulb, Nnich include:

r lne carrying r:lue of*pldarion md dilurid ds.ti dd p6p.dy, plel ud equipmenrr. P.ovisim fu decombsioning n.y chdg. - rhere oh$ges to lt'c Esfle enimares

d|.r .xpeclalioN aboul when suolr aciivnies will ccu Dd rhe assiatd es of tl*

t Tho recoCnition dd elryirg !!lue ofdefeftd h ds* my chdgp dle b chm8.s inthejDdgDenb Egarding the exisbn€ dfsuch as.b dd in 61imo1es oftle lik€ly

Eeitui'1s Pwd O ResmaPmkd oil r*edes e slimd.s oft. mou$ ol oi1 rhar m b. economiciuy rd legruytud 6on the Gmupt oil pdFnie. Ill. Gtuup cstiml€ ilr @mmrcid Bers bas€d ontbe bchnical amplioN dd is calculoled in aeordoF wid, ,€epred volundic mcrhods,sp{iiically lhe pohabilidc nethod ofsrituiidn. Prcblbilislic nethod ls IoM BEolosical.main@ring dd eonmic dot to gen@10 a

'5gp of estiDaB md then as*i&d prcbabililies.

The Goup ase$6 ils erimite ofpro!.n m.de on d unul b6is. All porcd Bd.*tn&s de subj.ci io Evision, .iiher upwd or domward, baed on ne* inromdion, slch 6fiom developm€nr drilling md pmdudion adivitis d frcm chdgls in Mnoni. fooloE,including prcdut pri€, colraol &ms or devclopm€nr pl,ns. E(inat6 ofceds forunddelop.n or panidly d.lelo?en fields re subjd ro gE br mtuinty ovt oEn tutuF lifefiu eninales ofEseees for fields thd e subshlially dweloped ud depled.

For the penod end€d o$€mb€r 31, 2016 dEE h6 be.n no stnifical chdge in Blirored

'tavelble l6wes for the Grbon s.6. It sm. drimled mdnine Ecovdble Fsere as

us.d 10 cmnule thc dmLlion .a& uscd.

tuNtrililililnil

E 6tumq Usfn Lia of P..p.nr, Pltut h.l EquipMl'Iho 6rcup @ies on m urul b6n d6 est Dded ueful ltues ofprcpsry, pl'nt Md equipnenlbaed on exp€cred 6sd dilizarid a dchd.d d bBid* pla dd sr

'8i.s thol .lso considc!

expatcd futoR h hrologMl derclopmdts ,nd mdle beh,vior

Ir is posible lhar fltie resulb ofopmrions could b. ml.rially offeclcd by ohog6 in theso.slimo&s brcu3h about by ohdg€ in lhc fa.r6 nentioftd. a rcdudion in rne Bdnared usetulliv€s of plopflt plart md equipndt rould in.@ the rccoided depl.lioA &Frccidion dddortiz3tion dp.re md der@e

As of D€€iber 3l. 2016 dd 2015, rhe Coup\ d.p@icble pop€fry, plmt ed equipnenrdomlod 10 $130.77 million sd t80.71 nillion, rcsp€.tiwt (Nore l0).

Eslituihg lk?aitu nt af N.nJirMidl}RBTie C@up ssesss impliment on ib nonfmcial 'sb (..9., prcp.ny, plm! dd equipn.n!inv*tndt pr.pdties dd inbgibl. ss.ll) wh.n.ver {ols or ohmges i' drcDtuG indicaretnal the ca.ryine mourt of o asd may

'or b. Ecowmble.

For pbp€dy, pldl dd equipnenl md investndl toFrlies, r impaimot los h ftco8ni*dvhenevs rhe carryins mour of d 6sd meeds ib Fcovsabl. mout n. twvcBblemonnt is lhe highs of d dsett n l selling pric sd valuc in E. Tie nd sellins pi€ is thelmolnt olnrinrble fiom tl'e el€ of m 6sd in r 'nk lolth tu&tion vhiL vrlu. ir @ is rheplest value ofeninitd futu 6h nos! dpec&d L diso ircm lhc conrinni'g use ofe sseted from ils dirD6ol ot l& end of ils uEfUl life.

In d.tcmining th. pr6dt val@ otdrirotn tuft cah flovs exD.@d lo b. gddaiod IDm rhemntinued e ot prcpedy, dd fld e{uipbed dd iN.shdt prcp€nis, rie Grcnp is r{uiEd ronak .s1im0Ls dd sMolioN dFl oo narshlh aff*r rhe coBolidaGd fmmcbl slalments,

A3 di$n*.n id Nole 10, poductian &tivilie in tle wesl Limprm Oilfield (WLO) remined onsNp€sior mode for rhe ld sevoh (l?) yem. Ihe invdnn nt in \rrLO incildcd in welh,Platfdm and Oln€r F&ilitiet' .MUt undd prcprq, plart and equipmmt in the €n$lid&dsllremdis of lnocial Dositio' moutei ro $6.66 nillion a of Dembe 31, 2016 sd 2015.Msagenot ssssed rhd rhe siid invehent is fully ecolenbl. 6 SC l4{ hd nor }d expiPd,wi.h &. l5-y* .xLnsior oi tE SC s rppored by rhe D€ptumt of Eneq/ (DOE), frcmD*rDb{ I3, 2010 to D*nbs 13, 2025 od in lhc vi.{ oflhe qisriry Edselopnenr eriviticsled by Pi&in Ptuldn Ltd. (tilkin) of$. Urirci SLB ofAnsica. B6ed on oil pnd disljtgal Da€Dber I I, 2016, the pri€s have nor sme b€16* rhe bre*evd lcvcl lo! tne Conpoy in $fs 6 ib WLO invehd is mn@ded. Th!s, no ihpaimenl {6 @og'ired for 2016 dd 2015.

On D@b€r I l, 2016, tne CoDpmy H.ded d inpaimdt lo$ mouliry to 13.33 millionpedining ro de 6s in Gabon, Africo Eed for oil podndion. Irie Gbup belid.s lhal the lowoil pric in lhe globd m&k l is u indi€ro. d\at the asets nthl b. inpoired ud tha ptmpkdthe Comprybp€ on inpaimenl reding Gee Nore I0).

E|[r!ruIililt!

The Elabd balrces ofrhe Goup's nonfimoirl 6els follow (Noks t 0, I3 dd I5):

2015Pbp€ty dd equipnent $133,&70,569 i140,724,197IntuEible 6se$ 3,017,0.19 1,233,236Inv6bmr pmpdies 31117 !1,1t1

2016

Eiindks ,lsst Retimnt OblisdiN'ne Goup hs ldios l*ol obligrion 10 dMmmission or dhmmll. it3 ssets ielal.d b lh. oilprodudion, seothenal ers$l Fojed ud eld power prcjeot d th. e'd of e@n respdilesflice cont&t. In ddmining .h. anount ofprovisim for reslomlim cos6, 4umplioN Md*lisates e rcquired in iclalim io lhc *p@Ld ccls 10 t6lm sjl6 sd infBstncbE when suchobligarid exjs&. The Crcup Eoeria rhe prenl value of rhe oblisarion ro ditutl. dd€pihlizs i\. pemt v.lue of this co$ 6 pad of ur. bold* ofthc FLl.d prcperty, plst udcquitmhl whioh arc being depNilred Dd mdd4d on r staidlline hais over rhe us.tul lifeofrhe rehred 6sd (for the me$able end$/) dd baed on uil of prodldiod (for lhe oil

The FlaGd brlmces oflhe GrcuD's s.r r.tndenl obligdion follw:

Perolnsa/ - oil produclimMGI ' Geotbemal ene€/ pmjecrPdosold - Sold Do{er pioi@.

s931r33

l4t,l93

t35t,304

Tle Gmup reviews de ca..ying moub ofdefftd d 'ss at coh Eponing drre sd Edu€sthem ro rhe *nt lhal n h no long.r prob.bL lhat sudjcient tuft eble prc6t rill b. availtbl.io !.11o* !U or p{n ofde deferr€d d 6sd ro be urilidd. Ihe Crcup beli4.s thol it rillgeneac sufa,cior fitu Mble piofit b alloq dl oflh. d.fdod ta\ 6sls ro b. utilizd

As of D$ember I l, 2016 ud 2015, rhe Gbut did nol Fogniz defmd ta 6seb on cedinNOLCO dd MCrT 6 .h. GbDp b.li.ve lh.t ii noy not b. pobable thd sutrcidr bnu.inoone will be alailable i0 rhe lEd forcssbb ftbE asritui vhich lhe b bcr.rits cm be

6 Cabr.dCab EquiELrb

1016Cahmhnd Sa,?45C6h in banl6 4,521/5rClsh equivd.nts 3;35;192

l4,l?6t4,7t0l2lr 7,82Lq03

sl2,9t{533 $t:.516,605

Cah in bdks .m int.rcst o he prevailing banl deposit *s. C.sh equi!.l.nb to nrde rdvrrying p.riods of up ro thEe months depdding od lhe inm.dia& sh requiEmmb of theGbnp, dd em inLrcst alth. pEvailing snon'bm dep6i1 dt'

ruMr$ilttililr[|

-l0-

The Grcup h6 no shdt-lem inveinmb virh periolis of md. thd dre noorhs bur lss thoone ys 6 ofDecember 3l, 2016 &d DeMber I t, 20t 5.

Inl*{ inmDe e@ed on cash in bdk dd shon,teo invesrnenb mounr.d b $0.15 mittion_$0.11 nilliondd $0.0?nillion in 2016, 2015 dd20t4, respedirely.

7 Flutrcirl Ald c. F ir vrt0.Thmugh Pmiir orhs)016 .:015

12,ll315.4&7$162,14s fl56,211

N.l Srin on fai value chsgEs on finmcid 6sets 01 FVPL included in rh. dsolidared tudenljorconpFhmiv. inone do0ncd rd $16,404, $1,192 r,l $26,123 in2016,2015 md 2014.idpcclively. D idmd inmme reiv.d ion cquity suriti.s dobred b $2,131, $1,704 md$2,059 ir 2016, 2015 ud 2014, Bprdively (Nore 25)

reed in,Trifi (FiT) revds fron T6scoEle.l.iciq sales ro PHINMA

El*ticit sales ro WESM

1515,113$

1,726,10t

lesallowm(e for inprimdt l6s

The Group\ ftceivables ft n.idy du€ t@ FiT srl6 lo Ndioral TrosDission CorpoEriot(Ttmco), sale of e,ectricily io PHINMA EMgr' Cdpoiarion dd cl)l1Miun opelfu lhese d.due rirhin one yed. Ille ca.fi'g valu6 6 ofDecemb€r 31,2016 ud 2015 apprcxiroL ihei

'n. Eeivable fro6 iltli{e FFesb 'dla6 rode by the Gmup to Petollind. This isuseousd dd noninlasl he&ing &d collerible within one ya. For the relm dd cdditioaon reldd pafry t rErctioD, rcfs lo Nole 26.

Thc abl. b.lor shos3 the dbcldw offtonciliarim of illowd@ fd impaimenr h$* d€eivables fro6 q coMrtiM opeBtor:

2015Balre d beginnin8of)*Eflet of f@iFr cudcy tulation (3,0s0) 12.931)B"i{e ot erd ofyetu $5395

|Lil|ntmm[|r

.lt

9. Pnprid Elpenr6 rld Olh.r Cum.r A$ec

s2,472;21

653,513

ResricLd csh minly pftins ro rhe mour oftund r!!t lh. crolp is requiEd ro conply withthe Debr Sfli€ Patndt Accou! (DSPA) dd Debr Seeice Rserve Accoul (DSM) oIMCItud Perdsola, Esp4rirely. The 6bio&d c6h is $d to pay loi rhe fonhconins debt swicesoheduled ir Apdl md Oclober ofde.y ye$ uril rhe lom is tully paid oft lhis ale includ.suused ponion ofthe St@t Righls prcc..&, {hich qs h.ld undd *mw a@urt.

Advmces b snraenrr Den ir to advdces nade to ldious conbacroB for tn€ conshdion ofpow pldb such d rhe MGPP ud sold Pwer Poj@l (No1o l0). The dowdpilmdb vill beapplied agaiNl fu@ billin$ h rhe come ofmstuction. Tne cuftnt ponions e esli@&d lohe applied lBrirst progrN billirgs wilhin d.

'@ fr@ rcFoniig dar€ dd m clEsified unds

''Pielaid expejs dd otber clllrmt 6sd '. Ihere Nft rc doNnpaymot lo otulrn)s that Nrlated p!ti6 a ofDedb€r 3 t, 2016 dd 2015, aD€dively.

PF .id .xpM includc prep d itulfue sd pEpiid ftd.

lrcp.id 1ax.s pei$ d.dibble rirhholdins h6 ad prior yedk bmm€ h crnit.

Olhs pdr.in !o suppli6, crude oil invsto.y sd udram defed€n fi'rcing c6b.

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-34-

Pows Plart includes MGh gsrhend powr pldl which were completed in 2013 rdPtuSolar\ phtuvdlbic plant Bhich vd @Dplebd in Feb'nary 2016.

Tne CoGtuction h posEs pslaiN ro th. coNhoiion ofMdbzfra Phae 2.

chdg! in Alo .stimate md bsfes tum dd'Fn .xplodior ssts sd d{elop'ent ccr NoonsideEd 6 non6h investing &rivilies.

Depletion oi *ells, pldloBs md odfl fncilnies is pd ol otl produolion under @s of sales in rhecoMlidaed $Endr of contreh.nsiw tncome.

Depldion dd depftciadon exps. chdeed to pDti or los follows:

C6l or elsticiq sar6 (Noc 2r)

Cdral dd adminishlive spmses (Nore 24)

95,231,3,92.795353

223,773

$2.?35,992

$r,25op?s

Iqc&!-A!9I!is!!

Toial crude ptoduction in 2015 reached 5.15 frillion baftls oi oil (MMBO), wirh dait oilprodrdion mgine 6on I l.?40 - 22.910 bmk oloil per dry (BOPD) 6om lou dil nelds(Ehe, Avoun4 lbouri $d Norrh Tcnibrla). T*o (2) AvoMa sells wd vor*ed over in 2016,

stabilizins overiu pmdudion

'nc Ooup r@gnizd inpaiment los on rh. liseis loc.&d i0 Olbon, Anim {hich m used inoil pmdErion. nE Ghup beli.ve lhat the low crude oil prices in rhe ddke! is u indicolor lhllth. Esct mighl b. impsir.d ud tnus p.onpcd lhe coup ro p.rfom impaine't rsring ofrh.

ln ssBsing whethq iDpdmdl is requircd, lhe srryrng value ofrhe asel or CCU is compaFd{irh ils eovdabL dout. Tr'e 'wvsdle

moun. i! th. hiSlet ollllc ssol tCGUt feir ulueles o6t !o sell ud rBlue in use Givd .hr n!tur. olthc GBup's riivities, infomition ot th.fdr value of m aset is usully diilicult 10 oblain unls

'egotialim wilh poLntial pwh6e6 or

sinild tdsactions e laking plac. CoGequenrly, Nls indicoted olheeise, lhe 'wwmblemounl used in Bsssing n\€ inpaimd. lo$ is raho in nse. TIE Crcup [meGlly etinrLs

'alne in use 6ins ! dh6!nLd 6h llow nodel.

The tutF 6h l ows *eE discoDncd L $.ir pFsent mlues sing a pFh disunl 6L of

IlE Group re@e.izd m nnpiidenl lo$ mourtirg lo $3.33 nillion. fie cdrying dounl ofGdbd ssel beforc lh. inprimenl G $15.35 niuion. AsofD.6btSl,20l6,liecarryingdount ofc$.n ssol ator t!. impaitu t dodts io $6.52 nillion.

fl|[rurumru[|

-15-

updde on DevclmentEtu Erp6io, Prukd |EEP)The EEP, ahich @nDenc€! ir 20t0, lim b inc6e codc oil pr.ductid r. -25,000 - 30,000BOPD od mdiniz the life ofrhe Ehc Mrin neld by l) opriDizing lhc ovailable i€owmbleoil rsr$ in iie existirg D6d@ion nekb by installing No (2) otEhore pndErio pladmssd lh. subsequent &illing non dBe platfoms, bd 2) splorin3 for n.w p.toleuh plcpedshich @ add lo crud. Dbductidn

Alid lhc Cabd Bbvelmenr appowd lhe plaifom cmhcrion for rhe EbDe md 50!tn*rEba4{ori[ Tchibala (SE€NT) exp.Nim prcgM or Decmbd 27. 2012. de pldfom iopsiddficihies design md hbric€iim rft undcibf,en in 201l, *hile the rusDon md instala.ion ofpo.ls w@ done in 201.1. After m l3,nonlh conshcrion peidd, rhe Erme ed SEENI tladomsdived in C$on o'1 *6 insr.lled in Sepbmb€r 2014, jl liDe Id lhc dritting ofrhe (3) thepmduction wells rd uother de (3) SEENT relh.

Atd dlilling oD.rdioN d th. SEENT Plitfom. rhe Co6relldion Il rig noved 10 lh. AvounrPlrtfom in erly lmuary 2016 ro oordud wor*o!.r opmrim on so (2) Avoma wells *ithdcfetive submsible pmps. As a shGsic Dde to cop. *irh falling oit priB, th. snsdiumdecided ro @rolude lhc drilling togm at thft poinr The Coniellation II rig w6 demobilizcd

Despne n\e natural deplerion oflfie nek, i.ord.d gs and aata snknb in sone ofrhe welk.h.chdicd faihres dd tdsiei poduction doMliDes, de drlly produolid Mg.d ftonI 1,740 22,910 BOPD 6npm'l b 2015'r m& of 13,730 - 22.140 BOPD. Nonerhel6s, thecon$nim mMspd Mlve (12) linings for rhe y@ 2016, eulling in o net @d. dton of602 MMBO. Crudeail mketpdcefordey6z0l6 dgen 6dn $27.30 t56.30psbzftl.

,lrow E!.lreli. Wo*n'eTo roinbin sble rydall prcdu.lior of ibo Etom. field, woi*ov.r opadi.ns sse c@deted onNo (2) Avounr velb (T IBSM-2H fld EAVOM 2H) to repb€ n\en defedive subrGiblopumF. ft6e workovm ained to brirg b.c* --4,200 BOPD lo rhe ovehll pbdn.tion of.he neld.

The wo*ovd op.ntions d tn. ! IBSM-2H well. *hich shed o Novenbs 19, 2016, wmconcluded on Decenbs 06, 2016 sio' @Dple&d DomiroloFty!. ESPS. Ilr. w.lt a6 hddedover lo Prcdrclid, dd inili.lly prod@d -1.500 bbls on Denbs 0?, 2016. Tne HydraulicWorkMr Unit o:IWID skidded b EAVOM-2H m Deoenber 07, 2016, dd its wor*ov.r v6onpleed .n Dffib€r 2q 2016. The well v6 put on,line on D{.'r'bd 2l, 2016 !t a sbble ote

Field Llle Ea^ioD and kftstued Field DNloptu PLmGabon reddy tss.d a !s Hydodbm br rhich intuduB neq fircal hs fd aIupsftm openro$ *hich irclud. incMed golehm.nr she ud oyaldei doruen costrecovcry, dd lhc inp.snid of 35% income d on proft oil. ln the lttr1 ofrhese .hdgEs, rheElame consortiM h6 h.er @rductirg a cmprdhdsiv. @nonic modeling dd lahation of rheEhe Mdin Esenes, *hich will be subjd to tne Dryi5io6 otde nfl Glbon* Prcductionsheins cont&. (Psc) srth.

The ne* 6scrl EgiDe will bke efred one L\e td ofthe sploihior IioeM (Ebe) *pirs inJuly 2021 (Aloma vill .xpire ir 2025, NbjL Eboui will .xpire in 2026). Afta llly 2021, lheconsoniM *ill appt td a new PSC Dersins lne dre (l) 6elds, whion rill alrady be b6ed on

liltruflll[!ill

- 16,

The clmnr 6onomi. nod.ls d. beed on drilling oflnEe (3) wclls in lhe Etdne liense bdoEJuly202t, *idr tunier drilling toges ftdn 2021-2024. The cmsortiM h clllMdy ehiningtno nost optinal drilliq prqlm to ensure ndinum rmvnble oil rhile eGurirg positivertu for dr coFonim ncnb.^.

Sh'Io|| Wdt E plordio, Prcjtt 6WEP)In m etron to ndimi& lhe remaining i€verable oil resffs {ithb rle €tanc Mtuincon@sion, tie Ehe constrim *icked ofi.a Shauow Wd.r lxpldarion Progm in 201 I loidenrii ptuleun prcteots for fu.!E ddllins in the shallowd p,rri oflic bl(*.

UsiDg lhe a!.ilabl. 3D seismic dab eguiEd iD 1997 od 201 I, the Consodiw *s able ro Bapour drillahle prGpets ir tn.* shallow es, dd by 2013, dre @@nium cmitt d lo drillh4o shalloq yib prcsFcb, mely o!ok! md Dinb{ Ite ovoli pMpd v6 drillcd inAugsl 2013, Nhile Dinba wa d.iuen in FebnEry 2014. Boih s.lh h&l oil 3ho*s. bur *eE

One challenae th.t ha ane np in rhe Grbon con€$ion is lh. .nsglnce ofIDS s6 iD 6!re

prcducod oil offoli (4) welL. In July 2012, so (2) {ells h lhe Eboui net msifcs.a }l2S inrheir prDduction, whil€ No (2) velh in Etan field yield.d Ii2S in 2014. Sine $e Eboun fieldstiu onLtiN subsLn.irl rftsvred oil, rhe tudy ofd€ sw*te qg po6s rhich ains !oad.4t$ lhe s66 nm tbese $u veus, wa tued in 2012. Ho*ever, due to lhe rodt delinein oil pices, rhe prcjd re put on hold.

Bree,fu|d Prcjds UryndeIn 2013, r Water Knock-Oui Slsh 16 itrrrlled in de Avoumr Pl.fom io oDtinia th.etud cdde going lo the Flooling PiodDcrid Sldagr dd Omoadins (FPSO) wsel.

FPSO ln@g/ity AsMlh ode. td inther ndiniz de lorg-lm @biliry offt. disting FPSO,.he Petmlea Nae\N, dTopside Inle8rity Ase$mdr w6 joindy cnied oui in 2013 by Allied Maine Sflices sdBASS to identi6, atuile aclions to roinhir th. ves.l\ shcMl intgrity dd ensemrtiruoE otmlion thrcughout the life ofdE field. The DNv clN ReDeml 2012 for lheNanripr v6se1@ approved in tull &ms innid-Ocbbd20t3, rh the dificalion ulid dil

Iulp!!lsalrl3d!!!oI' Jouary l, 2013, O!.ntor RMA (HK) Ld. applied ailh rh. DOE for a tufs of op€ftshipof SC l4C2 ftom RMA 0IK) Ltd. ro il5 nryly Imed Singop.re-bascd suhidiory RMA W€lLinapom fte. L!d. (RMA Wst, whjch EqBr the DOE appmd oD Mry 24, 2013. By the 6xrhdf of20l3, RMA @Dtinued il5 Erjes ro* for €s.nes c.itifiulim md reswon sirnulotion,rldgside furnd drppinA 6frhe Wst Limplo field for additiomi leads sd pr6ped. Inparallol, well td.ciory md dnni4 objdive pltuing *ft ilso cdducred to*d& alypoducrid md tull field developmol ir Wcst LiMpsm.

RMA w6r sm1th. final h&pdddr lxp€n Repon oflhe w6r Linip(Ga6ey Cline & Asmid6) on Seprobq 5, 2013. Tle WLA liel,l hs PBvcd (lP) oil reserdof 9.6 MMBO dd a Proved + ProbabL l2D Hwes crimare of 16.5 MMBO. This is b6ed on !NGmu ul,rdaltrellderclopmmr prcerm !.b.dulrd D 2014-15

rnL[|ilmiln

In M&ch 2014, RMA shded wirh pd6 the nd E ort olcafaney, Cline od Aseoi!&s(GCA) od the cadifrotion of the Mes of the Wen Linapam A stutue. A@rding ro rhercp.4 the Wen Linapace A srutN hs Prov.d (1P) resedcs ol I L6 Million bmls, wilhPrcven + Prcbable (2P) regnes of I3.2 Miuion b€ftk, md Pmven + Prohable + PGsible (3P)ffides of 22.3 Million bmh. lunns, GcA indicar.d rhat all !hr. cas am. esflrd froma thEe Nell dwelopnert whieh w6 agFed upon by ine Consonium duling de Tshnisl odOpm.iig CoDnid.e Medings OCI''OCM) held ar RMA offces in Melbome, Aushlia m

On lebrury 5, 2015, lhc DOE gmEd incunbdr opdroi Ri,'-A W*r d addnidnrl on.nodh*reGion util Mmn 5! 2015 ro show p@f ol6@cial oap$iliry, whicn RMA W$r fiilei toprdide This pbnpred 6e DOE ro l€mimre the lam-in AsEmenr (FlA) bdeen Pi&in ddtheFilipinopdtreBonM{ch12,2015. nis olso.fielively lemirotes tte Pitldn'RMA FIA,also stippin! RMA wesl of il5 inlolvdenl in thc bl@k.

Fron April to M.y 2015, th. rmairing Consonium n.6b6 sougl DOEt fmal app'oval oftne EveBion of pdiciparing iftEG in SC I4C2 follolin! rhe exit of Pilkin dd RMA Wei.\r'triL su.h appioval va soud! n aly lppoinLd Openlor Philodrill pres.nLd its propd.d 2015work Pogrm sd Budgd for the block - corsisring ofr*hnial sd mlmercial audir of RMAWen\ conplebd *dlc thbu8iolt ib ODdbhip, binling US$59,950 ova liv! (5) nortns.Following Philo'lrill s r+ssmptioD ofopeEto6hip orlhe w6r LiDaplcd bloc! the) tude ifom'l Eqnedro fomeropsarorXMA W6ronJue 1,2015 b c pedt with Philodiiu in lh.h{d-ova of ill lechni$I, leed md f'Mcial delmd* in RMA Wcslt posssio! during ib

witi oil p'i6 mnlinuing to dmp rhFughoui the end of20l5, rhe Cdsofrim *d in g6ddaglMer 10 postpde dy fidrd dewlotmdt in the block. Hov.v.r, th. eMniu aeFed roconlinu !o keep thc SC elile by suboilting a Wort PDgrm for 2016.

On De.nb.i 13, 2015, Philo&ill slbnlr.d b lhe W Pme6 lhei p'opo*! 2016 Wod(Pros@ & Budsd (WP&B) for SC 1.1C2, which consisb of.he @ndDc. of m ROV (remotelyoD.FFn vehicle) doanlole swe! ofrhe old Wel linlpsu rells in prepdriior tbrrbrrdonmflrpc€duEs Tle @hnicrl md conDmial audn of $e blek will cmliN. in 2016,ildglide €nlinuing etrda b sw the G&G dib gd.6t d by pr.viols opralor I(MA wenLinapom I1E iobl budg.l for rhe rbov.Denrion€d acrivitiB is US$23,390. ltuEndg/ she

In eely 201 6, Philodtill soughl lppoml 6om rhe Jv Pder fo. the mduc. ofa dow$olesNey of tne old W6r Linapacm wlls usins d ROV (molely opmLd v.hiclc), iD p,!pr{iofoi ddlu.l field abddomai ltc W patheF irsterd oped to Eslasit rhis wo.k acontirgdt ofllF o!-goirg ldl'niorl md smmsci'] audn of RMA dd olhd cdt&o.l

TnroDgionl 2016, Philodrill lB hm condrcrina ib G&G nudi6 on $. bl@k to tunhsrMgihed die Wd Linapao bl@* 10 b€ div.d fo! pFdudion. To{rdr the end of20l6, lh.cmoriiM discu$.d Philodillt propGei wP&B for 201? b be subnitld 1o .he LIOE. Note llulin 20,4, pdiou op€rdor RMA dsiged enhadd Dounudder c€solulions (DuC) toreplMs r lD s.isnic d!l!3.1over lho w$l l,inap3g bloct a pd of then fm-in adks, bura$ nol able to setne the

'€Min'ry brlm6. Afta xMA s sDbs.qD.nl . tom the bloot itr

2015 DUG *eDr bold of rhe ffised 3D d.tM.

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,33,

As pd ofthe 2017 sc l4c2 wP&B wirh I tolrl budget of $472,924, lhc remaining consortiumnenb6 auocaLd i lim budget of $l?4,659 to pay RMAt oMding balm@ of

'cquning rhis

dabd from DUG. A Conrirgdt pogm of$293r65 ior pNibl. Qbtildive Inrdpi*rid(Ql) works 6ing

'. DUG 3D dal'la is aimed ro udat€/nodiry lhe ryt well dsisn /

dwelopmenr plus or lo fomrlate enlirely nea plds ld lh. blo.k.

PIRC ard lh. othd le6 apprcved die said W?&B od DeMbs 20. 2016. Philod.ill hassubniftd rhG wP&A lo de DOE on Deoembd 2l, 2016 .nd trs aptov.d on teu.ry 25, 2017.

Aftr th. &mindion of the FIA with Pi*jn. PERct pdiciparing idssr in sc l4c2 is back to

Gdkml Eftra

Gtuth.tul Ru.*atle Ene.g Senn. Contrct (GRESC) No. 20lA-02-012PeboEDerS/ signed tfie Seri€ CoDtlot for lhe N{aibm Geolhem.l Powd Projc.t ontebruar l, 2010. Afts vhicb, IERC mnduded pEiev€lopnent adivnis in 2010 uril 201 LAlso, PERC fmed a Joinl ventore Cou!, MGI, with TrdsAsia sd PNOC'RC.

Lrurit th. laller pan of 201 l, th. DoI conlimed rhe com.rciality oflhc 20-Mw MaibffiGdnmal power Prcjecr, *hich allowed MCI ro p@ed ro rhe prcjert dewlopment shge,iNolvi4 l) rhe &illins ofso (2) *els ro 6npl& rh. sE prbdDdion od reinj.clion w.llcopejdes, dd 2) the @nslruolid oflhc si.mteld dd poser plol teiftiE,

'Ih. mnpletion of lhc sLm rcqui€mdt lor lhe 20 MW Mdbrra C@themal Powd Plor(MGPP) wd su*stuUy rchiewn vhen MGI (billei ia fBt pbd@rid Bell, MB-l2D, inJulyloAugusl2012!o!tobldeplhofover2,000m.Simildly,thediillingofnwcondeGftiqedion well MB l4RD to a deprh of 1,900 n in Ocrobs,2012 rh Fsulting gdd p.m.$ilirysidsfied tli€ *€ll requiFnenr for cddeMc flDid Einj€rim. Along qilh the 201 I vok-oler orwelk M0i-6D, Mai9D dd Mai- I I D, MGI had dE ,*$ary w€lk for the 20 MW facilit.

MGPP\ I l5*V Trdsnhsion Liro sys&n wd suc$tully oarneoled io tn€ di$ing MEMtaOlineon sepbmbs 10,2013. upd conpldion df rhe Eliability dd perfolme Brin& lh.MCPP wenl d comcrcial op@lids d Fcbnuty 3, 2014

MGI drillcd so n N w.lls in 2014 10 conlim lhc *psion ofthe Maibm EsoNe. WellMB- l5RD v6 succe$tully complcled on Oetobtr 6, 2014, rhile wll MB-l6D ra drilled ddcomplded on Novmbs 16, 2014. Due rd lrt good now Gd Esuls, MB'l5RD w6 lai.rdecided b b€ the pbduction well forin exQansio4 md MBI6D 6 the roinj.otion *eU.

Witn the sble perfolrrne of the Heroi, MGI d€ided ro psue & expansid of thcMdbarda Projrcl (M2). IlEe is ot le61 5 MW qe$ ste@ snpply lion the 20 MW *elb, ddsirh the J MW capacity ofMBlsRD. d expssion ro t 2 MW wa d.cid.d dd Aprovcd tn2015. The separations for rhe dpmion bl( ofi in 2015 {irh inirill disusions wiih potatialsuptlid sd contBolor. Discsiors sid pototal oitules rm llb conduccd during ih.

Tbe MGPP hod iE fisl sohelule! Paentiv€ Mainreme ShurdoM iPMS) tm Mmh 07 23.2016 the fiEr rojd PM! sin€ the pldfs onddiil op.rdions in l.tnrary 201a, Majoremponedrs on the Sl€dlicld md Po{er Platrt qeF Eirbisned. TlE MGI rem onpld.d allshltdoM o.tivit* 6 prog@me!, Tl'e p.ws plst *a slrchr@iad 1o rh. Srid d Matoh 29,

ILililrnnmilill

t9,

2016 ar 5:16 AM ud resDn.d nmrl tu11lod 20Mw grss oulpul by ?r15 AM. ab.Ll 12 hou6rlead ofrhe orisird soheduL.

MGI drilled rhe .ew Maib.m-2 GO) reinj*rion sell, MB I 7RD, lo a io6l dc,t]l of1,900 nec* d tuly 08, 2016 nsirg DESCO Rig 30. Dnuing md c@pldion rsr 6!h5 indjcot drhlt rhe well EquiB a plnp in ods ro be $ilized for brinc injetim. coftndr. MBI?RD isbeing injded wid, posq tlant condeMrs i. atmpt ta enheG itr ..pacity, sinilor to whatvd dme d MB- l4RD duin! ils edly otmlioN.

On rhe Stufidd sd Resedoir sil|e, aell MB.l5D - inrended 6 proiucrion v.ll for lhc l2-MWMaibatua-2 cxpdsion p@j*r is o' @tinuous dishorg.lelin8 sin€ o.lober20,2015. Itiewell will be shli in nid-Jm!!ry 2017 rhm it is exp€ftd dBr Maiba@-2 costrutio &tivitjein lh. se Pad ll go into tull drivc. FIow m.a!rcmdts indiete rhat rhe well h6 r oulpui of14 0 MW. 6 of Decdbs 29. 2016.

The cobbineJ Eirj*tion load for lr!ib@a- l md Maibffi-2 robls ta 74 kS/s rd rlecombin d capac y of *elk MBl.lRD Dd MB- l7RD (73 ke/t is dough b &..!. all ofrh.rinjerion load. well MB.l6RD sill be ued a . sbdby rcinjedia well yhen reeded.

FroD Juu.ry 0l 10 D.cmber 31, 2016, rhe roral megy *pofre! to tle er.id v6153,06?.70 MWn. This ws sold to MCI'9 Oma*a, PHINMA Ene.S/ Coryomtion.

Telac solr Power Proi.ct

S,LT E".tg, S.tui.e Contrct ISESC) No 2015 A3 I 15)The Seoice C.nMcr for PC€C Dry6l FnoabL .nsgy prcj.cr, rh. 50 MW Tale Sold PowerPoj.ct (TsPr), re sisnei vith the DoE on M4h 19, 201 5. Tn€ elli pDj4l is sinden in dDcental plains ofl-umr mrsistina of nd tdnin wilh hiSh imdi.ton lalues makiq ir highlyfavouable for phorovolbic (Pv) ele pow.r d.v.lopn.nl.

PGIC a*arded rhe Dajor elr equipncrt supply contacl fd lh. TSPP ro GeIlfu fm Consgyd June 19, 2015. Cons&/, rhroush then bcd OnshoE Conhctor, Pliesoo Inc,, o@nite! io6nDen€ rhe sold fan srstuctim rolivili.s by Au3B1 2015, siln *Fecled ohpl.lion of.he50-MW $lar fm br Jdury I l, 2016. PGEC adden tne Civil ed Struot@l Workr for rheTeh sne b Medio Cmstlction $d Ddclopnenl Co4odion on Jhe I9. 2015. lhilcanlehEnlearises (d elerical nm b6ed in Taho City) u{lerlook lho supply, d.livery md iNlallatisof ihe 5.9-kiloft.ter 6qlv tunilsion line linkinS dE Talac sold f@ to rhe NccP 8rid,

on Jue 17, 201 t, PGEC sd odiliole Coup EEI Pouft coa. GEIPC), incdp@Ld a joinlvdlure piojed G.oup. Petosola Colpodion (PSC) ro underble the dev€lopmdt ofde TSPP.

On June 22. 2015, PGEC md Dlu fm lot ovnm, Lrisil! IrdBlrial Port CoDoralion (LIPCO).x.culed a Iae Agrdent fo. rhe 55 hek sole f'n d*elopmmt This w6 Nigned to PSCo, sctldber 15, 2015. As th. LI?co proDeny is eirhin rhe Cenral T*hnopdl(. which iJ Dndqrhejurisdidion ofdE Pnilippine E onoDic Zonc PrZA), PSC w6 oble to r.gisler 6 oEsnonic Zde Ulilili6 Enb.prise on Jut 28, 2015, ertirling it to tne ingtivs av,ilable roPEZA loalm, od ohblinB th. r.ivs of l-GU endGddts (rhe Tdl.c Cityt fav@bl.endoMent *as n*enheles sonshr Dd w6 semd on SeDbmbs 3. 2015) ud for the TSPP rob.n fit iron s dp.dil.d tusude oflhe Envibmedlil Conplim@ Cdificall (ECC).

On Ausun 4, 2015, rhe DENR EMB Resion III issued PSC wirh rhe ECC. fl e$mri.l p€mnne.ded fd 8rcund uorb ro cmdc. on tle sold pdk sitc. Aho, on Au8lst 27,2015, Lle

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Nsioml C.neisrion on IndigeDou P6pld Rcgion trI (NCIP) isued rhe CefrifieL ofNon-ovslap (CNO) lo PSC, sbting thd no r€ral domriN or irdigdous p.oples aisr yithin the

The DOE suhseguendy apgoved rhe bsisment ofthe T'jrc Sole Sflice C.nll&t !o lSC onScptenbt22,20l5. It aka Gsued the Allmdion ofD.claiatid of Cmerciality for the TSPPon scpldbd 24, 2015, cdcludins $e prqecfs PE,DevelopDent s14! od comnencing virhthe p.oJedk Dwelopnml Stagc. B.tvs Sepbbd dd Novemb.r 2016, PEZA issred *ve6tpe@ils for TSPP annodid4 alloling d*elopDenl iNide LIrcO b go nil-blasr.

M.dia Conrdction Dohilizi for tie sil€ cteein3 in 6ly tuly dd by Novenbtr, 6 lbte bcmplete m!.h ofrh. inteml tuds md foundrtjon wo.ks for lho sole fm dd the snrdbuildins. Cons$/ s piling F s&ior Cdeon ini.iakn de pilins *orks for tne slu pmelsub.trd& in late sepbmber od @mpLled it by mid-No!.nbs. Phs lft, rhe on$orecorslruclion sntrlor, onhenc€d with dE inslldioD of sold modutes on Ocbbs 13. 2015dd cdpleied it on lmury I l. 2016.

Phildech commenced lh. ercdion of.he 69-*V T/L pole on Ocrober 3, 201J ud w6 able loconplek tlr *hole 5.9 kn tunision lim by de i]ltrd w@r ol DMbd 2015. Philcanbh*6 able to complelc th. swilchydd by tll. .hid s*t ofD*.mbs. 'Itis follo*ed 6on NGCPTipprolal ofrhe sysm tinpad study Dd Faciliy snldy by Psc.

ln rh€ memliDe, Perosolo .xeuLd m Onnibls lno md Seurity ABEden. (OLSA) rirhjoii lddds Developnst Brnk oftlE Philippin6 (DBP) md Philippinc Notidal B6k (PNB) onNovmber 12, 2015, esidg. Iod moDd of?2 6 billion. The OLSA la EsisGred with rheRegistry ofD*ds on Novenher 13, 20 r 5.

By nid-De.eDber 20r J. the soltr t'n md rlGmi$im faeniie ,eF 30yo dd 100%coftpl.red, Bpedively, prcmplins rhe DOE b nomimre rhe TSPI b be FnsUsible. nr solarfan va complered by DidJsuaJy 2016 od s6 able to dpon powd b th. gri'i on

On Mmh 07, 2016. u\. DOE issued th€ Ce,ailicare of E dorsent fq Fed in Teifi Eligihility(COE-FIr) oftho TSPP, codfmins lhar $. prcj.cl is qlalili.d !nd.i $. FrI systcm slbj.ct !oonplide wirh the ftquiEnents ofrhe EnsS/ Regul,rory Colmission (ERC), Dd v'liddinglhrl F€ta{ry I q 2016 tu rh. st d of t]l. pbjelr comercial op.6.io..

olr April 06. 2016, ltuSold ex*uied ib Rmeeable Eners/ Parment AEEmenl (REPA) *irhlhc Natoml Trmnisstd Corpmtd (TrNCo) dsudng lhe prcjet's revenues fom tbe FiTpalndrofP3.69 wliiom2016ro2036. IneP\EPArmkefledonMayrO.2016.

The Entr&/ R4uhlory CommGsion GRC) lppoled or tuly 12, 2016 lhe Ceirficaie olCohplidce d a ftsn-in-Tditr elilible p.ws plet (COC-FIT) fd rhe TSPI. *hich qDafin* lheplsl ta @iv. $e FiT paynmli of P3.69AWI for 20 ysu.

petuSde aDpletn tne l@l Vdiable Rene*€ble Entrg/ (VRE) bst wirh NGCP for lne TSPPlst D{€mber 0l - 02, 2016 ro e6u. rhe @mplifce oflhe on4ite eleclrical etin$ roPhililDine Crid Code n nd,rds. Rnob VR.E bsb reE conducred wirh NGCP onDedber 27 - 23. 2015 b sr elTativda of rle planCa BD@e b Ncc}-cdrolledpffield. To rddree drL poleily isus .nouni.rod duing the FmoE VRE 1615, NCCP willHne fDal drb inbgrarion duing ine 2d *ek of lmusry, 2017. Ans passing dese Es,NGCP {ill issu. Prlrosol& qilh lh. Final Amrcral io Com€t c.dilielion.

til!mtMIru[l

t.lrosoLr .xeuGd ib Co Lqrion AgEment sith NCCP on D.c.mb€r 27. 2016. Thisl3rDeot allos Perrosolar b s NGCP\ 4Gn Ridtif way (Row) ovq rre 230-kvConcepcion-Sd Mouel Iire lor dE omslruclid md utlialim of Pedsolart 69-kV SwitchirgSblton, Fm.cting the TSPP io rhe NGCP grid.

ln 201 6 md 2015, lhc Grcup copit lizd speinc bom*inA c6b Elarins ro finmce chuEesincMdl in the mNtucrion of tne pqs plMr. CQitoliad sp.ciic b(mying €sr doDnred ro$0.71 nillion dd $0.02 nillidn in 2016 rd 2015, resp..rively, Tbo ra& Eed to ddmin. dr.nour ofspr.ific borowing @sts .lieibl. for clp aliation we 6 39%, which is dle efadile

c.llderal b s4fre BowkasIn 201 l, MGI &qfied prEek of lad ntrn Scioce P&k ofrfie Philippines, ltro. o,1 PhillomPmp.ni*. lnc. mouling io $0.6 nillion ed $0.2 millio4 rcspetively, to b. used a pNd pl&rsne in rhe Maibrc Pmjed AH in sto. ToD6, Ba&n96. h @rnelid wilj] th. lMs, MGIh6 pledged a ponion olib lmd add pioFeny, plbr dd .4uipnent modins ro$4.5 nillion 6 collarsal. Pledged sserl e s follows:

Fom Fcbn.ry 10 b Decsbs I l, 2016, de iotd endg dpon d to .he gid h 67.393 MWh,*j$ rsoN. of P553.7 MM br.ed on rhe FiT pne ofF3.69 / *wn,

Reai sllL (land to bo used 6 pow.r plant sie, uda ?rop.rry. pldl Dd equipnedf)

Ch.nel(undd Aopsly, pldr md eqdpnflf) $l.5iiuion.

PSC also pl.dged aU df ib plopeq md e4uipmmr mouring to $56.14 millior (F2.30 billion)dd t5?.5.4 million (*2,71 bnlon) s mllal.ral in @melid lhillloDin2016md2015,

l l Det ntd Oil EtploEdor CorB

Brlm€ .l b€ginDirg ofyd

Tlmfes b Nells 5d plaifms (l.rote l0)

r,89,64r$t9,tl2,5?t

(32,930)(6992266' (3,309,403)

BJmrr end ot'€r 5 | 0,ll,l,ll,l

Unds rhe scs enreEd inlo wit! lhc DOE overirg cerr.in p€roleun conlrel e6 in !sio6localioN in rhe Philippines, rtE pdicipding oil compmies (collecrively knoln E ConftctoB)@ oblieod to provi&, .1lll.ir sole nd! .he sedic*, bhnolo8/ dd fddcing n@sary ir thep€rrommce ofden oblisalions under dre rcft!.8, Thc CoDtBctou @ ako obliged ro spendsDeified doub indidred in the anhcr in diEcr prcponion ro then wdk obligdrioc.

Howevtr, ifthe Con?cion f.jl lo cmply vilh lhet wrk oblE rions, th.y shdl pny lo thegov.md. .he dount rhey should have sFnr but did nor in dired proDdtion b rhet wdkobli8atiom. Ti. p.nicip.ting comp$ies hav. Opadng Ag@mdi! Mong 0lloselves whicngoled rheir dshb ad oblisdions uds dEse conhcb.

nilmrurufll

Addnions petuin to &v.lopn.nl €sb incuftd for Erane exFnsion.

Tlle illl remv.ry of1h6e defdied c6b is dependent upon lte dis.ov.ry of oil in onimialqudtnies ion ay ofrhe p.lrolem conssions dd the su@s of tubE d*elopDenl the@t

SC 6-A - O.1or-Mald]tu RlnckIn tlly 201 l. Pi*in Ptu1@ Plo entered ! fm-in agrdd. io acquiE ?oto ,€nicipalinginterest in SC 6,{ block. IDihemoE. Pirkin s6 6sig!.d 6 n!. nea Opsalor of SC 6A in

on Au8us 27, 2014, Pirkin se't a lerler to irlom lhc Filitino Jv D6c6 of ir iddi ro *iihdlNfiw m. oosonim anr @mplding Phee I (i.e inrs?frrion of 1D seioic dala) al lhe cnd ofD*mbs 2014 widour paynent oatcnrty. li&in will on .ver nU dah, rep.ft ad mb^isgen.nled duidg Phe 1 od will subnir b DoE ,ll t€mrds relabd ro Pise I work prcgrM fdmdHorery The paftE6 opprcv.d Pi&in\ withd6wrl upon fulfilmsr of all L\e lbm

Dri4 de SC 6A Technic.l sd Otenling Cmitte. M.€tings (TCM/OCM dNovdbr 24, 2014, the !tu6 lppbved the pmposed 2015 Wo* Progm ed Bndget(WP&B), mDposen mainly ofcmlqical md G.ophysicil dDdie, will a bbl budser mount of$173,170. Fomer SC 6A 6pedr The Philodrill CorpodioD ws de unsinoudy el@Ld to casme the opeEbxnip fM Pittin.

The Philodrill Corpo6lior prst d lh. dllt of 6.it o4oin8 Geologic.l & Cophysical(G&G) srluario. orrle.qrhm ponion ofsC6A 6l@k. Touds dE Diddlo ofthe 2015,Phibdnll pnposed th. @nduct ofBrsdbdd P@$ing for rhe 2013 lD seGmic dat . ro befollo*ed by a QlKridiw lnrerprcbrion (QI) vortoo\ in ods to enhm€ th. prcspetiviir orlhe idenlili.d prcsp€cb. Tl€ Pdss usimously rppwed th* dirnis 6 pan of tne 2016Wo* hoglu & Budgd. Il'e DOE rppEEd lhc 2016 SC6A Work Prcgm md BD4.t(wP&B) mounting ro $759,990.50

'nrcu8lout 2016, Philodrill cdductd Geolosicrl ud Gdphysical (G&G) *o*s for ihe Ocronbl@*,6panofdeDo!-approvrdWoikPrcgimfor2016. n.seinchdc l)biedbDdFplocesinE of rh€ 2013 3D seisDic da@! whiofi Philo&ill wived fDn DownunderCosolutim (DUG) ltui Sepremb€r 05, 2016. 2) on eoing seismic inberturion *o*s on rher*ly proc6s.d dai4 sd r) on-goins Qulibriv. hcrpd.lion (QI) vo*r on th. oclon

On D*nb.r 02, 2016, llE SC 6A coMniM di$Esed Philodtill's popsed W?&B for 2017 tobe slbni@d ro rh€ DoE. The 2017 sc 6,{ wP&B h6

' bral bndgd of$454,76?, wftn a Fim

ptocM of $416,014 fd th. ond@l of &h pr@$hg oflh. 2013 3D s.imic dala mdQdibtive InterpFtction worts over tnot pD.scd dlt se! md 0 cmiineFnl poerm olt33,753.70 fo. preliainary weu dssi8! studies for prcsp€c(t rhrt cr b€ mtled ro drilhble

As ib lim-in obligalid, Piikin, &quiFd, presed ud inbled 503 s{. km. of 3D s.ismicdab fo Ph6e l. Tne sisic equisition 16 onpletld id Novehbs 2011. After shich, Pirtinbee@ proNinB dd int ipdins the sisic drb in 2014.

PIRC dd lhe o6er Pirtd* approved rhe siid W?&B on Dccdbe. 20, 2016. Philodriu h6subnitlci lhis WP&B lo the DOE on D.cemb.r 21, 2016 sd w6 appovcd on Jmucry 25. 2017.

rLililililtilnl

!eboEie.s/\ Pdiciparing Inl61 in SC 6A block inc@sed b 16 65?% 6oD 5.001%, wid dreexil of PiUtu Petuleun on MN 14. 2015.

sc .7 - oIlth@ Mi,.bo ontt Pu.rIn 20t 2, th. sffonim ft4uestd fton tne DOE m enensior of SubPhae 2. Duri4 thc ye.r,fan{ur efaorrs h,ve bm miod out by rh. o!€6hr. Ihe fmo!. hs include seisnicplG3ing dd drilling of one *ell.

In Jdudy 2014, the DO! appoEd a thre+yes *dsion 10 lhe 7-yd Explo6tion Phe of SC47, b which INOC-EC subhided a Wdt Prq@ for SubPh6e 2, imluding ti. E o€singmd inblprbrion of2D lines and prcsp€ct matmlion ahich nay l€d b dillins ofrhe

Ho*evs, on Fehruary 25, 20,5, lhc SC a7 consonim oSr..d io rclinqlish th. SC 47 bleL *ilnd oprion lo r€pply fo. rhe sme cdhd on€ n is ofreEd 4ain by rhe DoE. IhisdaGiow6h6ed on tne qisling hieh geologisl rist ollhe clllml pospcct md l.ad invdlory, ldk ofbbBi ftom f'nines, fld sivfl the DOE requiEnenr ofdrilling on€ w€ll for SubPhoe 3

A L.h of Wirhdra*al ofrhe Joinr votu w6 senr ro DoE onJuly23,20l5. In a letlqfomtne DOE drlcd J&urry I6, 2016, ih. DOE do lo4s rcco8nized SC 4? a dons rhe sfliceconbacb in Nhich PeroEieqy is 3 meDb€r. Tle DoE fomally appoved $.Jv\dinquidndr of SC 4? on }6rh 10, 2016, *ith rhe ofiicial bination dare reckoned ar rhe endofrhe ? ys Explonrio Period on Jmuary 10, 2012. As a r€ul! the Perl Contuy hawifid offrhe defeftd dil *pl@rion c6r Ehred to rhis mourina to $12,930 in 20 r 6.

o'r AugNl 5, 2005, SC 5l mdbe6 (Alcom Gold R.surces, TmsAsia Oil, ed PERC) sigrcd afm-in asEenent *ith NdAsim Elss/ Lrd. (lars chflEEd lrme ro Otu Erers/ lnvsbenrLld, OEL). 30% pdicipaling inlercs in SC 51 lill b. eded by Norkim lpd slcGsfulacquisilion of lD seisDic drb md dri inE of2 *DtoBbry wells.

For Suhphae 2 coDnihdg tne rD *Gmio dab oler Atgm s6 rquired in Jue 2007.'Irtrcueh ils oM C&C .volulioa Opdator OEIL d.cidrd lo focls d the noihm block (NWtete) md ro ElinquGh all ib inreer in the sontnm hbck (oflshore cebu).

otu E sg/ &ifled so welts but boti vd€ u6uBfut. Fitipi,o f,mo6 (cos6 capit l, Tru'Asia dd PIRC) did noi cFnit 6\e {ells 6 eming vells. Sinildy. DOE did not cEditrhe wlls6 cmtliel io tn. sc comih.n! but grv. otb 6 nonlhs lo .dduct ,ost-soll mrlrsis.

The pGctull 'nalysis

ofDnBr2 cdDen@d on Febddy 20, 2014, dd th. resulb wdepEsdlcd dldng the OCM on April 23, 2014. OEIL conoluded lhal il is not ssl€ b dnll $)avheeon the Dunat prsped. OEIL also *presd ib inGnrion ro wirhlrae ftom rhe SC 51 sd b Esignfrcm Op.mrdsbip. ne folloving &y, a famd l.tei ofvilhdnyll dd Esig tion v6subriftd 6y OEIL to lhc SC 5 t Jv lFnres (TBlAsia Cos od PetoEne$,) {d io rheDOE.

On Junc 10, 2014, OEL subeitted a leed d@umenl lo ite DOE io app€al dle $bs ofDuhdl.The lqnl docmflr aimeJ b poii our ro DOE rhd rhe opeie h6 drilled th. w.I 10 s@d&djdd rhat rh. htl pssw eltl.&r blow-oul a.stiiurcd ! forluilou wdt whi.h rendeFdimposibl€ rhe ful6lnot ofrh€ objarive ofrhe well.

mil|[tmilmil

In 2015, mo$ ofthe acrivities fd SC 5l focued on lh. adridishiw dmsition bbulhr abour bvOFll !.rr.DOE Esgnized drat DulDr-2 {cll Na nonromptimr duo lo ire faitc b r@h tho obj.c.ivedriuing deplh. It. jmbbS pde6 (TAo, cos bd pERc) md rilh DoE md infomcdrhen ofrhe consoniuD's plm ro continue wilh lie sc, lh rbe proposed wo {prcgidl( I ) Cdducr DoE pHsu. sludy using ihe dnllinE rsnlrs of Duha! I dd 2 md existing simicdab ro eshblish thai ddllina in the ma is not fe6iblc; sd (2) condud dobil.d giavit swey{ithin Feviously idenrifiei sltlonri.s s! dfrhe Norrh Blek. Th. Ptum atso requsLd for dexte$ion of$e Swie Codd

ol) F.bdq 15, 2016, a m&ling rs h.ld mons the SC 5l Jv P{rtnm r,o disccs the cu@nlsiturion oflho Sdicc Cdber alier fomq CrpeElor Ono Ends/ of6cidly dpre$od ibinbrtion ro ldve the bl@k. T6Gasia infomed the p€nneN rtrd .he DoE is menabt. io Sirccl.mce ro ob on€ tne rcnaini.e tortld Aune arl lhe righE md obtigalions undr sc 5l.h lio of drillida a wll rhe p.tu6 rould poposod a rdisd Work lmslm shioh will hctDdetmine ifthee @ stil olhd drillabte plospecb 6ide non dc Duhd srrctuft

on April I I, 201 6, lhc DOE re4u6kn tne Filipino a@nium Denbds (Tm-Asii, Alam odPIRC) !o fubfth docmenhrf, requiEm€nr io fomlir rh. tusfd ofoutSoiDg OpeBtor OrioEnergy sloa/oPalticitolin8In!.rcsb md tben* fron dle blck. Assmin8 Opc6lorTm-Asirfodiuy submiftd lne @nenium s d@undrs td rhe DOE on Mry 18, 20t 6. wilh de DOEopprcving thc subnhsiod m ,De 09, 2016.

Iroa July b Octob€r 2016, rhe DOE h6 moirain.d cmuielion witn Ob ova wnledTniriDg Fud pryndb duing then Opebcnip ovs dr bl@*, totoling ll24,763.00. ft *erslved thd the Filipino @nsofriu mdbds bay .xecule a lrnd ofundsbling ro sdleOtlol Fmaining Tbining Flnd balde of !124,?63.00, only who the DOE h6 .xlrru@d itslqal m6rs against Ollot Ef6d 10 p.y such blldce. Upon execurion ofsDeh undetulins,rhe @nsonim m uddLle de Subphde 5 Wor* Pmglm for the remrining two (2) ys ofthe SeoieContuuntil2019 shich ircludd I P@ Pre$uE rtody Dd I Cmvit swey ovq

letroEnergk Pdicip.ting InbHr in SC 5l inmded to 20.05% fion 4.012% uDon OEILTrsignation rd qil fBn sc t I, *irl nea opdaror TmsAsia Perolff coDonrion at 31.35%dd Alcod Pebdlem & Mimmk Colpo'ltion at 46.60%.

SC 7t - OlIshD. Notrttu Palo*e

'Ihe joinl sludy md bid goup @nsistina ofPhil* Perolm coaoalio! PNoc.lc MdPetoEnersy ws notified by rh. DOE lhd lh. grolp son rh. bidding for AEr 4 ofrhe Pnilippinelnrgr Conhcling Roud t (?ECR .4) l,sl Februlry I4, 2013. Th. block is le&d in d*p*ar.'s olishore Nonhwei Pd.]m. Af€i fbali2rtion of cdtu relm. rhe @.sonim fomlllvsiged Sdie Contd 75 on Decenber 19, 2013. Seretary tetilla thcn skrcd d behalf ofDOEonDedber2?.2013.Undertheresly *su1e{tSdiceConflo!lhcfi61Sul}Dhe llconsisl ofc.ologic.l & Geophysicd (G&G) iudies ofrhe Northlest Pdrwu B6in ud tiecondud of a 2,200 line-ktn 2D seisDic sw.y ovd SC 75 for die dmtion of24 nonrtu ar mestinacd €s of ust3.50 nillion.

lollowilg rhe execrtion of Sdi& Contlol 75 M Dembs 27, 2013, the SC 75 conrdiM(Phil.x PcroLurl PNOC-EC, P.toEner8/) held a kick'off meriry on JmDry 16, 2014 to

|l]nmiltmiln|fit

Th. M^r' voteg.r Explor vssel af Subird L.pblatiu co'meiced rhe SC ?5 2D seisicsNey o. Mmh 3l, 2014 and 16 ddys df line ic4uisition, t]le !e$el cdplelcd th. 2,237 line*n sw.y d Alril I7,2014.

ResulE of the twine gnvity swey rcquiren in 1014 vse p.Tsenbd ro rhe Pd6 onJmuarr 12, 2015; while the inldFdrid ofrhe 2D .ebnic d.6 wft pi6.ded d May 22, 2015.

Throughout rhe s.cmd balfof 2014, CCG Mbbai *s commission.d fe th. pree$ing ofth.n$ly'equired 2D $isic {tab. ARKeX Lrd. onplebd the prHsina of ihe supplmenreysEvity dd iagnelics dab dn Jme 20, 2014, wirh copies oflhe neuly-conpled gNig ddnognclios dala sl lo tie ensonium by end Junc 2014. Th€ d4isior ofrhe Joint Venft for theray fo$ard, e ner to rcquire noE seinic dib o' sd ner pdd b driu, riu depdd on thertsnlkofrheirtrpretioroflhelinestob.conducl€dir2015.IDAugust2014,deSC75coMdm aptoved the applicltion aftne boadbod pncesing ro rhe enriE 2014 2D seismicdara sd b snme fie qurlity of dib. Addnidal cdr lor brcdbmd prcssing mountcd to

A..ivilies for SC 75 in 2015 focu3ci o tio on-going Geologiel & G@phlsioal (G&G) wor*s for

_45 -

dsus lhe my fotrord. operalor Philex PerolcDm pEsented lhe foeard pbtr ro oonducl r 2DsGmic sBey oEr SC 7t a pan of Subphe 1.

on sepbmt r9.2015,rheDOEplrcedSc75,slorg rh adjacflr bl@ks sc 53 od Sc 72,ud* Force Maj.ue du. b t{. geotolilial ldsioN in the west Philippin. Se& By tnis tiDe, thea'sdiD hs alr€'dy ftlfiUed ib Wdt Pnglm fo. Subphde l, cmisting oflhe icauisition,Foce$ing dd inte'prehliod oi 2,200 linckn of 2D s.isnic daa ovd SC 75

On D4embs 4. 2015. .he DOE apprd.d lhe Rovis.d SC ?5 Woft Prcgu & Budgcl (wP&B)for 2016, shich @rsisrs ofa -1,000 sq.kn 3D seismic surey *ith a budset of53.50 MM. Due brhe enfdmen. of Fd€ Maj.ure by the DoE shich slqted ai lhe end of subph6e I onD€cembn 27, 20 t 5, no qDlodion work will 6€ done in rhe block within lne Wen PhilippineS€ s displkn wrd lnlil .h. I@. M.j.e h Inrd.

Tod"E, fie blel i!.rill mde Itu MajeuE. punidseiplmiod idivnid d-hold.

Piilq Petoleu is rhe OFraior of SC ?5 wnh selo pdicipaling idfts! PNOC-EC Bilh 35%,md PtuEners/ with l5%.

As of DcDber I t, 2016, 2015 dd 2014, the omponding percmllges oflh. CrolptdiciDation in ln€ vdioDs t.tol.!m SC .M e d follow:

2015

Wel Linopacan - SC l4C2ooton Malajon BlEk Sc 6A

2,52591 2.525%

ilFil|[!ruIl!t!il

12. Inv6h.ntinr JoinlVe urc

Tle invetumr in r joirt v.nluE ep'Mts PeLocrent 40vo inl#l in P.rowind (Noh 1).

Petrowind {6 rnooDonled in the Philippres d March 6, 2013 s r wholly own d subsidiiry ofPdoCEq prindily ro czr.J on the gseml Susins of gaerarin8; tuiting md/ddisiributing po{d dcrir.d fron ren wabl. .nrey so!rces.

O. July 15, 2013. EEI}C subsc.ibed b i 20% equi9 she in PtuWind.

As disNsd in Nob l. on Novenbs 1l, 20r 3, Petucreen ed clpasia enreEd inro a sn@Puchde ACrenent (SPA) 6 10 lhe sol. oflctrocrmt 40% .{uity she in P.lrowind.

as of D*abs 31, 2013, P.lroGM still holdq 30olo eqDily she in lehwind dd &6DnGd a! sukidbry in lhe 2013 Fnsolid!&d finscial sratemenls.

On lebnury 14, 2014, ?.trocreen rceiv.d lhe paymml fm sal. of $e shorcs, od th. D..d olAstrme.r, mve.ina the bmfer of shfts 6on PdoGEn to CapAsi4 *a exsuted uDons.lisfadory compl.tion of all lh. cddilions prec.dcnl uda th. SPA. P.1ro6rcen lst ils mntolin ldowind afte. rhe cmsmnatioD ofrhe SPA. A@rdin8ly, Petowind csed 6 a suhsidi'ryofPdoclM (NoL 2).

ft*iftd, PtuWind beme a joift vdft htueen PtuGrem, CapAsia md EEPC by vitueof de SA sienod betwcn lhe thEe p.di6 epvding lhc nsnd ofnmagiq leblwind

Th€ Grcup reco8liad umlized srir on EDesEnenl of iNetuenr mostins ro$17.22 million, s.in on s.le oI iNesfiFnl mourlirg lo $2.67 millim od sh@ in deco'solidaledrebined emings momring to $l.I ? Diuion. Toral gain on disposal of invsbenr momred b$2l.05niuion. IIr. Group\ nel pre.eds a a€sult ofll dhpNalofinv.shdiMountedto

'ne molemerE i, thc cMyinc valrc oldE Oourt invstndt in joirt vdtuo ir Perowi.d in

2015Balse .1 b.gimirg of y.rAdditonal irvestnenl duirs ln. ysShe in n* iD6me of rjdinr *nru€

$,7,t66,952 $27,6J0,546630,333241,431

(r,t85,95r)ItrJaLion adiumenr (,{53,470)Balme ar end ofyw $26.343J96 $27,166,952

Selected findci.l infomlid of PtuWind 6 of D.cdber 31. 2016 ud 2015 fouw'

2015

(20,344,934)

LcuiJ 521)5'.'72 $22,010,100

n]tmuililffi

_17_

SDDary of sbrenor of (@pEhdsile incone ofPetowind for d. yer sde! Decemher I l,

,)015

codud.xrnse. t,3d31,166, (6,20<,3?r)

3,362t!t24,303

Grcup\ shft of lhe nd iname t2r1,431

ll.Invdtn !lPmD.dd

As ofD.Mbd I l, 2016 dd 2015, rhb eout cdsists of lmd dd pa!*jrg lot spaF (loco&d inT.KitO silh totol erryirg volue of 13l,417.

The fan vdue ofth. inBtn.rt prop.did ofrhe ODup mountd lo $40.273 r ofDeemb.r 31, 2016 md 2015. The GDup did .or obbin $e sdices ofd aDpiais mddemined the fiir vilus of tbe Gbupt inv*nnen. prop.nie or lh. bsh of recenl sll€ ofsinild propenies jn the me c6 6 de inreshot popdies md ralinA inro ecod iheecononic m irioN peailing d the lime the ulnarioB v* Dad..

As of D*nb.r 3 l. 2016 Dd 2015, tne fln value ofrhe invesbdr Fopdties is clNin.d lndcr

Etuep1 fo. iBi8nifidr ndunt ofre.l pbpdty llx.s on th. i[.sb.nt pDpcnjes, no orher.xpens weE inoun€d! ed .o iname @ eme! i' relation b de iDv6h{1 ploDedid in

11. OrhrrNo..trmtA!!4

2015

trepaid Ht - noncu@t pontonD€fsred developnmr db l,553Jtl

$3,233,2361, 0,6332,017,331

0,403,066 $t0,232,321

itmm:mil||r

-43 -

As of D@mb€! 3 t, 20 t 6, bulk ofrftis ecomr p€tuiB b the &quir.d esment of ngh ofvayby PtuSol& mountins 10 t3.0.6 nillion n.1 olmotiatio, This also i'cludff soft*e used

fo. rhe geological nod.ling of MGI ficld. Dei,ils follN;

Brhm6 .1 b.einnlq ofye.r $3y'73,562

Brl.trc6rr.trdolls. 3ll4t37 :64,314 l/1o9.721AduduLt d rnod2lllotrB.lmc6 .l b.gimiq ofy6r

l23lt5?J76

Ctrpnhriv. rlushliotr rdj!!rb. (167,6,()l O.,r7r) (r69J1r)

l0l5

BdmH d b€simins ofld7.144

$-

1,212,671 1,40,51L

BalmG ot begifring olys

Balses il.nd olyd 195,224 195224Cunuh e @ndion rdiundr

$,212,6rJ2,01

$50.6r1 $1,233,236

lfld ighb refss to smr of e'3denl of rbhl of way dlsed by Pebosold ro cmtu! op.ia1e,minbi4 epair, Epli€ dd move pol6, wir, cables, rypratoi dd e$ipmdl od sNh omerappmtN dd shotus

'e€ded for the tusnission lin. (* Note l5).

Amonidid expd€ chdAed 10 pol,t or 16s follols:2016 2015

General ald adbinishtve .xFns6 (Xote 2a)cost of elecrriciry soles (Nole 23)

t9,551

The inpur VAT Efss ro th. Goup\ oumul,rive inpur VAT c{ryov.rs vhich will b€ ulilizd infu@ priods. M,jo,ty ofrhe input vAT pet ins lo MGI. MGI is ude4oina a vAT EliDdprcces oedns the yes 201 l, 2012 od 2011 wirh a brrl mounl of 12.25 million orPl 12.01 nillid. Th€so olaiDs hNe ft* been el*r&d 10 lhe coun ofh A@ah oflb.

tiltil$||[il[ilI

Prcpdidd - tmwt poniaolr April 23, 2012, MGI .rhred inio r Lmd ree &rmdl (LLA or the AgEment) *ilh theNarional PoNer corpoBrion (ilPc) Md rbe PoNq seoror Asd ud Liabiliris MmSmenrCorDdlion ("SAIM) ovd rhe MGrPt sbfi€ld lot in Slo. Ton6, Bahgas

U.der rhe LLA, MGI will le6e rhe smneu lor for a p€riod of15 ye6. enen&ble for dorher25 yff upon muluil igftendt of dhe pdies. PEDiid idlnonc!ftnt poni@ perhiN !o th.sd!&c Enol patbenl paid for thc le6e ag@mert. Tle clmnr podion due in oDe r€d isshoM a pdl of PEpaid xp6es dd orher cuM. asets id tbe ansolida@d ibrdmts of

DeJet?d de]elapmnt .o!sDeleftd d.v.lopn.nl w* t.itoin 10 the 6str incurr.d for tho IoMw Phse 2 p$jei oIMGImountins $ Laa million sd $0 7l million in 2016 md 2015, Espstively. D$dopmot c6r llsoincludes cons incftd for rhe 50 MW Telac Sold Poqd PBjec. molnrin8 lo $0.46 million sofDeembq 31, 2015. o]r Fetru!ry 2016, dev.lopnenl esil mountina to $4.44 nillion wsespiblizd ro pDpefry, plani md equipnent upon Pebosold\ sh of@hnddil ot.nlion.Remiding brldce ofdefeftd d.velopndl cosl ofPrlrosolr 6 of D€cember I l, 2016 pedins10 costs incured for the !h6c 2 expmsion poj@l Dounrins to $0.1 I nillion.

Rdlricted c6h p.rlains lo rhe Penl cmpoyk shre i' tne scry nrd fq rhe abddomd! ofrhe Gabon ases. Iltis ilsd incl es e$oa !o seDre paymdi dd dischtr3. oflhc Grouptobltalios and lilbililies udd lh. Fldiry Prcdrctior Slong. od Ofl@ding (FPSO) conb&t.The moDr for rhe shft in scmw ofthe Pmnr C@pmy's obUgdion foi th. FPSO '6dedlcted fro6 the she on lifring prcc€ds dlring lh. fid lining made by Ebe in Nolember2002 md will be Daid bel io the GrouD d tne sd ofdE anhd *hich is in 2020.

As ofDeenbd 31, 20 L6 dd Dccember 3l, 2015, rhe Pelt Compey mntibured ib addnidalshee in tne a6rdornmr of ihe Ehe Main€ lemit b the 6c@v fud doulinA to$0.21 billid dd $0.23 niuion, rcspetiv.ly.

Tllis cdsisb of prcpdd expds.s md ecuity &tait

l5 AcootrhPr]rblc.'d Accru.d ErD.u6

.:015

Wilhholdine taes md vAT paFble72],,t51

55.t23 53.6.:7

$t3,795,72t

A6unt payrble ctui* of p.yable to slpplis dd cont!.to6 rhd e cmtly involved in lhedaclormen! coNro.tion sd opqalio"s ofoetay proj*b.

Acmed intffir Dieble slaiB ro mal of inlsi on lMi

ililtiltntilIilMltl

Ac.rued *p€nses m 6 follo6:

t223,117

33,140

&2,527

r{!!,12! E4!!l

Dividmds pa'€ble Ftuin b Ncl.imen cheb a ofDsnbd 3 l, 20 t 6 sd 20l5.

Olher pay$16 mirly pcdain to raded secuily serices, utilitie dd @tu oniniu dnes.

Ille Gmup's rccodb pryabl. ud accned exp€ns m dne wilhin de ya. Cfrying lalues.ttoxiMlo dFir f,n uhs 6 ofDsmber 3I, 2016 dd 2015.

16. Sioniem .d Intrg-t.rb h!trs P.y.ble

The Gioupt lom pryablc pcrtais 10 l@s avaihn by lhe Gtuut. Belor e the deoils ofthe

Clrcnr podioD of lorgrm lMs pay&le$1,137,420

Unmodiz.d dcftrEd nMcine con (12J54) (105.952)

sl5j32.@0 t16.539.074

$r0r,165,6t3 $r01,:05,990Unmortizn defeftd ntuins cod (1,660,a3$ (2,03a,622)

$9tJ05.133 $99.171,163

PettuE qp\ shartaemea ldrkm lM! pafabkPetoEnergy entered inb bsecur.d lom oltMenr5 with wios lendd speifi@lly ro 6nmceequiry infNid ro Pctowind.

o' July 19,20r3, ?tuEners/ enlcrcd inlo o sl,50 million lomagEmst tn vrioB led6rith mul inllrsl ralo for tle td itun Fidd (i... six ndlhs frm isue dd) of 3.393%,

subjeot to epricins we.y six nondis b€t.d on a b.toh'ek rrre Pl6 a Fc{g..d spBd. Tteknorofde lod r 2)@ fttslos\6soledonJulJ la.20L5

Or NoveDbs 21. 201l, PetoEnssl .ntcftd inlo lddirion l lod uounting b $4.50 million(P200 nillion) Nirh laioB londeG witn r inrered nL ai 5.45% pd onD. lnerest 61e ot lh€noe shall b. .alcularcd o a 30/360 diy count bsis Md will be paid *ery I nontns j! @6 inlhe last &y of eacb thr*nonth p.tion. Tne bnor ofrhe lM is tto i2) ye6 ftis bd rdsetled on Novedb.r 21. 2015.

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OrApril27,2015,P.lroEnerg/enteEdinromOmibusCrnitLin AgrIHtwirhtheD.v.lopnent buk ofthe Philippine rhich prolides ! cEdit aeiliry in lhe principal moud notexc€edins t9.10 nillion (F420 million). o'r May 12, 2015, PetoEner8/ avdled lhe IiFlddrdoM mouling io $1.10 millim (?60 million) si$ u inlddl rate of5.l5% p{

'munsubjert to repricing evsr qu,fu payabL. nE lou is pq€ble within one y* which nttu d sd

On July 20, 2015, PehEnr8y oteE l into m addirioml lod dounling io $2.50 nillion lomwi$ v4ious len&B wirh m inr*r hE of 1.9647% ter annu subjed to reFici'g ev.iy q!ds.The l(fr is payable in $o (2) y.m qilh natuiry on July 19. 201?.

()'r Ociobs 15. 2015. ddirional $l.91 nillion (t90 nillion) ws &am ftom the DBlt ftditfacilig wirh d inlercsl mL of 5.00% per mnm payable {irhin onc ya rhioh motuE! md pdd

oi Nov.nb& 23, 201 5, PtuEnss/ edd.n inb addilioMl lM moDnling ro PI 54 nillim(S1.30 Dillion) vith v{ious lenden qilh tu interest F& of5.25% ps Mun ln@$6te mthend shill b. c.lcul&d on a 30/160 day @ut bais hd sill bc paid .vcry 3 honlis in mff inrhelsld.yofeehlhr'monrhpsiod. ne bd of 6t lM is 2

'€s ud the naturity is on

on Octobs r 4, 20 r 6, addirional $3.42 million (iI70 rillion) *a drrw ion ihe DBPt ordilf&ility wiih s interst de of 4.50% p€r mu subjer lo Epricitg dery qds parable withinone ye& with oatuit d orbbd 9, 2017.

P.tocrun s lhd-kn nd long-M laM WtblePtuGrd aviiled of ! on -y@ unsrd cEdir line facilit moutrg 10 $2.64 nillion("124 5 million)o' D*nbs 19,2014 lith vdiols lmde6 5% unurl inreHr ptyable eleryquder. l)Ii Decembd 19, 2015, I LI niuion (?49 million) ofthe robl ficiliry {a emtci, rdihc remoining b!lo@ *6 Eale6ed in Jdu&y 2015. All of thse l@s wse strled a of

In Novenbfl 2015, ledocncd .nld.d irto a 5-yee cEdir line frcilit wilh Chimb$k in rhe

soln or $10.62 nillion (1500 Dillion) wirh d Mu.l iiest tdc of 5 2a% subj&t b rcpicingDay le wery May sd Novdhd As olD€omb.r 3l, 2015, $3.50 nillion (F400 millid) oul ofrhe br.l feility were grMted o' Nownb€r 2016, PtuGIM .vailod addilional$0.60 millio (Blo DiUion) lM rith the sm. inllr.sl md Fincipal matuiq dae 6 ft. fiFrdardoM. nie principrl is Doyable semiunully shing Novdba 2017 aiiq a 2 yes s@epe.iod fton the digirol drawdoM. Pri'cip€l due *irhin d. )qt mouting ro $ m milion(F4.3 nillion) w€re duly clNified d cmnt ponion of the long l€m lM.

MGl s lDnglen la6 pcrgbleo]r SeDte6bd26,201t,MGIbgether $ PNOC R6erabl6 Corp.btion od Tm$Asiaenbred into a 12.4 billion (d 154 nillion) o'nDibu l,lD tud Secuity Agrmol wirh RcBcdd BPI rpdificdly to psnially fDme the d6igl! d.v.lopDenr, proclllme4 onstruolid,op.ralion 6nd oainrenae 6f ia geth.dtl povor plot pojEt

h 2016, the MGI prereminrbd its l@ md paid lh. endE Emrinina outshnding pri'ciP€iresultins 10 rmsnition of fitue cost d eninglnhmst of lom douting lo F58.40 millidOuttudinA dra*dom pqtoring to this lob f&iliry s ofDe.enber 31, 2016 dd 2015

amounb io $2,01 I (o' Fl00 dbusfld) dd $43.7 million (or F2 06 hiui@), respatively.

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on tune 2, 2016 md Ocrohs 10. 2016, MC! together r h PNOC Rc md PHINMA Energ/co@o6tion, dbed inb a Pl.40 billion dd P2.l0 biltion P@jed t4m facil,ty AsEehdt sithRCBC steoifi€lly lo partully fime ine desis4 ddelopndt, pocwndl ud oonsbudior oIils r 2Mw ssrhemrl poqd pld. expdsion proj.ct md to a'solide fte oftbdiq tdlotu undd 201 I omibus AEFem.nr od inoid$bl osa in omelid anh &. coNolidltion,.nd lo fooc lie Norking *pibl Equimenb dd orls 3lneEl cdpo€& purPoses orthe

'fte rcr Ml lM dounring !o P2,10 billid h6 a lm of ren (10) yem fim rhe DE*dornDa@ of ocloba 10, 2016. hteesl is paFble semi muall, md pnncip.l is Fyabl. in t'enty(20) semi uNal palmenb tuin8 April 12, 2017

Inr.€s 6& is fixed for tne fid tve (5) ves 6on DnvdoM D.1e, bos.d m the sw or theprwailing 5 Ytr Fixed Bmchndk RnL .n lhe Pdcirg d.te sd rhe ru3b of L7t% (the "Initialhrft$ Raie ). on tE Roprioing Do&, lhe inrst for rh€ €naining five (5!yu im of thtLil rill b. rhe ftigher of(i) rhe im oflhen pEvailirg 5-Ycd lixed Benohmdk Rrre plus themdgin of I 75%. o. (n) lhe Initial hdsl Ratc.

'ne M2 Expflsion l-ls modring b Pl,40 bilion h6 c ten ot eelve ( 12) ytr includin8L'rify{ix (36) mdths g@ teriod im Inirial DBwdom Dat ofJune 2, 2016. In&rc$ ispayoble semi mully, md p ncipal is D6)6ble in.ighleon (I3) senion@l payDent withinMhe ( 12) yea fron bd lfrer th. lnili.l Dm{dow Dare.

lnr*n 6b is nx.n fd de f6t s.!.n {7) w ftm de Initial DasdoM Dare hffed on de $hollhc psailirg 7-Ys Fixed Dschne* Rde on rhe Picing Daa dd th. ltplieble @gin of(l) l2s% per mun prjd lo connmid OFdiors ture, or (ii) L?5% Ds md fiom ddrnd the cm.rci.l or@rims Dote (tne "Inithl InbEn Rne'). For subo.qudi DrawdowN,inteEst e sill be rhe tne 0) -diy sinple avm8. inl.rpolate! ote b6ei on rhe l€miningrenor dd €mputed u6ing rhe sdatll-line nedod on the Rep.icins Dars..he incest fd lhcmdning file (5) y* l€m of rhe hm will be l]le high.r ol (i) lhc sun oftie iien psailins 5-Yd Fixcd Bdchntrk Ralc ptu ine applioable n[gi., or (ii) rhe *ethtd ave6*! itteEsl mleduinE dE n6t seven (7) yffi oftne LM.

As of De.mb.r 3 l, 20,6 sd 2015, the MCI hs ouabding dbsdovns ol t5l .69 nillion(t2.57 billion) Dd $43.71 eilUon (?2.06 biuion), respelively.

Th. lM evenarns @vsing the onbbding debt ofMGI irclud., mong olhe6, minrerf@ ofdebtfo e{nity ud debkefli@ cov.Eg. ntios. As of Dmber 31, 2016 dd 2015, MQI is i.codpUdce rith $e sdd lou @v€mls.

PdoSoLt\ lang-tun loN pdtdbleOn Novenbd 12, 2015, tho Petosobr, together with ICEC md EEITC, $ tnid prfry ndlagon$d pleigors, enreEi i o a P2.5 billion (or $55.25 nillion) Omibus lid dd S4uityAgreemst (OISA) wi!'r PNB md DBP spccifially to psnially fDde th. &si9, dcvolopDenr,procllMed! corslruolio4 operario' ad minisdce of ill T&lac sole poer p@jed.

As of Decmber 3l. 2016 dd 201t. lh. P.rosolr dEvdom r MI of i2.49 biuion

PSC snal fully pay lhe L@ fd lh. tcBla e6!nr of each Lndt vithin ts.be O 2) y€m 6ondd afs th. dat ollhc irilid dBwd(lw imeditely follouing lhe Lam SiSning d&, rh.paymenb to h€ made i' every t*enty-No (22) Mi-enu,l p.incipal insr.lbnmLs comencin8 on

|I|[llNl[I[ilN[l

lh€ dar€ the n6t sniveEary ofrhe inithl dra{dom ( rhe'Pdncipal Amoniation Dae),inclusive. for rhe arcidmce of doub( dfa grc. pdiod of s.lv. (12) nonlhs ftom lh. inilialdrasdosn Dai.. TlNs l]l. coftsponding mout on lhe ,jEl semi'o'ul pa)Denl n dulyclGsifien 6 cuft.t pqtion ofrhe longrm I@.

PSC pl.dCed all of ill propcrty md equipr,enr 6 @ll.teml in co"ecrion *nn lhe l@.

Defftd fDmdns c6b m incidmbl cost incrre! in obbininA .he lM which includesdocme ry shp d! hdfs ia! .hatd mo4rg., r.l 61ar. nodga8e, p.lfNional f€s,uu8ers lc ed oder @str diEctly afribuhhle h obbininE de l@. As ofDecmber3l,2016rd 2015. the poftion petuininE b rhe rtrM .mosr of rhe loan mobtin8 10 $l.67 niuion md$2.la nnlion is presenLd 6 dedulio, liom the 1@s paFble ecout md is mofrizd over tnelile ollG lou usins lllc efrediv€ inrffir ft merhod. Anodiarion ofdefdred co* *ill b€crpiblted until all divni* n.ssry 10 pEpar. lh. Dover plml for ils inlcndcd lse msubslodlidly mnplcle Delails oldE Cnupa umoniz€d defeftd fimcing asb follows:

Baloce ai beginniq ofy€&Defeftd fmcing ost on lM draan

2,733J39Ls moniutid duins rhe yd 1,06sr00Balanededdorrd 11,67J,130 t2,l4l )_4

Ider€* expmse Elded ro rh6e loffi momred b t9.03 millid, $4.93 niuion dd $4.52 nillionin 2016, 2015 dd 2014, rcspativ.ly.

Tdbl pdeeds fron availndl &m lon3i.m d.bt mourted 10 155.71 nillion, $76.73 nillionsd S2.20 millio, in20l6,20ls md 2014, Esp€dively.

Tolal paymerir for l$s oourei b f55.77 Diuion sd $20.00 nillion h 2016 dd 2015,

|l|il|||ililmill

I 7. Depolie ror Fut!re Sto.k SubscriDliom

D.rosits fo fururc stx* subsdip.ioa pfrin b lobl oBidedion eived iiom tne non-contulling inlGls i! .xos ofdre althonad c.rit l oflhe dtili.s qirhin u\e Gioup, lilh rhepu.pw olapplyina the se a Da)menr for fihE issum€ ofshms. Debik folloN:

EEIPC

EEI?C

On July 12, 2016, SEC ippbved Pehsola\ ipplidion fd incHse in anthodrd capihl i$t.Antr @mplelim of oll $e rcquimenls, tho ercu! reclssifi.d d.Dosits for tuorc slocksub!&ipion fton liabiliiy &colrn b equity acour unds nonqntullina ideBt

As df Decdher 31, 2016, dE incme in authorized capibl of Ptucften ud MGI w6 'or

yet,ppDvcd by lhc Philippir. SEC, lhus, lhc b.ltu* of &tosits qs not cl4sificd d .qui9, inrc...dme wirh Philippine SEC Finmcial Reponing Bull€ti No 006 issued in tou&y 2013.

l3 A*r RedEDenr Obu.lion

rxe GFup h6 ecogniad iE she in t e abadormdl costs Nmialod wi$ dE Etom.! Avouo.ad Eboui oilfields locared in Gabon, Wd Aftica, G€timal field loqr.d in Sb. ToImtube6, md pho'ovol@r tPv ' ,le potrn Ia.l|l) D lel&

Movmsb in this &counl follow:

.:015Bild@ 11 b.ginning ofys

Additio.s or chage in dnntus (Nd I0)Tmration.diusnid O394t 02,2?5)Balu@ d crd olyee $196

tuiluilt||ntuill

Discount hre of4.63% dd 15.50% uerc Nd in slinatin! dE povision for rh€ oilfiets inEb6. for 2016 md 2015, Gpedively.

$931233 $351,304

$1966,511

ln 20 L6 ed 2015, ihe .hsee i' estimre Esulred 6on the adjusbent ofc.rryirg mounl oldEobligliion md dimur nre u$d. ne etiin.c q6 piovid.d by.third p,iyqperti a engaged

hy rhe cmoniln op@ld of the o ne& in Gabo'\ Wei Aftica. This also resuhed lo r ders.in rhe b@k v,luc in 2016 md imMe in ilr bool value in 2015, of "W.lls, Diotfoos bd otl'er6ciliti$" a€oui undd "Prcpeily, plm! Md .quipmcnl" in the Gnupt mnsolidared stmdbofffdcial ncitio Note l0).

The addirion in 2016 pctuins ro provision for rhe presenr ulue ofthe fuuE .slinatcd @sis oflcA.l ud @'tudive obUsrriods b rend. Ure silr uron disDodiDg Dd rmovinA tbe opsaringfrikis ofrhe Tdlac $ld roNr nlel

O. Novemb€r 21, 2011, PtuGM dd ClpAsia ASIAN wind Holdings CoopeBtief UA.(CipAsir) drded inlo a Shm Pwhse AgEemert (SPA) which * oD. i1). !odi6 nulurl.gFomenl 6 lo lhe sale of2.375.000 shes in Ptuwind hcld by Petocre', which is equivalentro 4crl ofrhe total issued dd outsbnding shes ofPtuWind.

Sinul6{6ly on Novenber 21, 2013, PtuOtU, EEIPC dd ClpAsir enidld inio aShseholded' A3tesml (SA). T1'e SA sill golem rftei. ElalioNhip 6 lh. sheholdex ofP.tuwind s vell ff mnbining thcir Esp.div. nehs ud obligdio.s in relarion b Paowind.Fuihs, dre SA cmbiN DrcvisioN regdditrg voling EquiEmenb fo. relevdt o.livitid tlalre'tuiE umiDo6 mnsenr ofall rh. pdies.CapAsia {tr sivd tull vorinB md emnmjc rjghls 6 a 40% shGholdfl. On F.biu.ry 14, 2014,the olosing date, PtuCrcen lcr it ontul on Ptuwind 6 a result ot ia sale of the half of itrinbE$ of 3(I/o on Ptuwind.

'Ille SA 6nths prcvides fd oll di put optioN:

cd :idlnwtur\ P$@dIn de absen€ ofa Liquidit Evdt by .hr sixth MniveNary ofthe Closing Da!e, CapAsia Inwfrormay d my p.inr rhdend, by winlr notice (tte Pur Norie') ftquiEs retloc@n or ibdeignee !o pwhse {ll oI its sh&s in Pehwind .r r vdu. dral sroll e'sG CapAsia Invdld dIRR of fificn !€!@t ( l5vo) for ib invest nent.

In th. abscnc of 6 Liquidily EEnr by tbe s*enih Mivdary ofthe Closing Dab, lehc'6nay d my p.int rhs€frs, hy sftld natic. (lh. C,ll Norise'), crll upon CryAsia lNesbr roRll all of ib 6mor shde in PftWind b ttuGreen or it designe ar r ulue rhd shalldsure CapAsh lrvstor u IRR of isdry pe'6t (20%) for ib iNetuent.

rmll0tilm[ml

-56

Upon ex orclPAsj8 Invslor lhrcW! r Liqlidity Ev.n! ClpAsia Invdrd shall .hft the Fof[oflhe lnvesbent vith PetocEen follo*ing rhe soheiule b€jry:

(a) Affs capAsia Invsld n6 r*iv.d u IRR of Ndty p.rc.nl (20%) d ils Invdlncn!Pelrocrccn shall re*ive Nenty nve p*enr (25%) ofrhe profb liom rhe Inveshenr oler mIRR of taenty p.lgt (20%) ud up !o d nR .o CapAsia InBror of sory five Drenrt75%).

(b) After capAsia Investor h6 Eceive'l u IRR oftwenq-tv. per6t (25v,) on ils Inlestn n!IGEC shall i*eive fihy ps6t (50%) ofrhe pbits ftom the lNesbent Ner d IRI oftrenly-file percenl (25%) dd ut 10 d IRR 10 CapAsia Inv.sor of thiny ps@nt (30%).

(c) Afra CapAia h!es. ha received eluiq IrX ofrhi4 pmmt (30%) on ib Invesbenr,pGEC shal, t*ive smnty-ivc pr6t (75%) of lh. prcnb ircm dE Invetndt ov.r m IRRof thidy perdr (30%).

Liquidit) lvot shall nm oy ofrhe fouowing:

(a) A $le of dr oI Petrowind's epilal sle* b a tlinl panyl

(b) Tmsfd ofshde by lhc Cmpmy !o a prcposed trmsf.ft. {hich giv6 ns. io $. ag alongrishb of capAsia iNestoq

(c) An inirial pnblic ofl'rin8 ofrte sh.H of Petowind on tne Philippine St@k Erche3€ (PSE);

(d) Any orber proce$ or tserid of i innik Dbre a $. lbovc lisling lht enrbld CopAsiainvestor to div€sl ot ir5 sh@ in Petowird

Ir 2016, CapAsir\ mother 6Dpmy, CAIFIII PTE Ltd. (CAIF III) n%orided for r pmposed saleb a thnd paty of ib 99 99% nenbdship inhn in C5t&i! rhich oqns 40% intd$ itPelrowind. In Flarion ro thir, it r$ aCFed thct tie SA enrd€d pEvioBly by PtuCe4 IEPCdd Cip^sia shau @a. ro h*e efiei M@vs on a lAtli A8r.malridrd ifio by th.padi€, thcy rc*rowL4.d md odimed lhat c.pAsi. Inwstols ht Option od petocrstCaU Oprion shau c6e ro haw my elTecr on rh€ dare of rhe clGing ofrhe sale which happ€n.d in

As .h. pdnies acknowledged dd cofm.d lhll th. call ed pul olion shall ce6e Dpd sig'irsolthc nq SA, PcttoOM droogliad lhe ddivdive lidilny 6 d December 31. 2016.Cai on derivat e witeolTdouiing b $l0.76 million in 2016 ond lss on dciBtivemounling b $0.?3 nillid ud $10.76 millio weF 'w8rizd for rhe yem endenD*nbq 3I, 2015 0d 2014, esperively.

Unda lh. dislirg laws ollho Rcpublio ofde Philippins, d 16. 60010 of PERC\ issucd @pthln€k should be o*ned by citihs oflh. Philippines td dE Compmy ro om dd hold &ynining, peirolem or rcn mlle dergy @ntlct @a. As of D*nber 31, 2016, lh. loLl issued

ed subs'ibed apibl sioct ofrh€ PMr C.dOdy k 99.64% Filipino sd 0.16% non-Filipino acompmd ro D.cenher 31, 2015 whereir lhe total ksued sd subd.riben opilal siock otth.

tllil[iltmilm

57,

c'oup is 99 76% Iilipino od 0.24vo non-lilipino.

As oi Decnber 3 l, 2014 . capibl stock @rsisrl af330.000.000 3ulhori7.4 sd n1,824,220Gsuei a oubdding connon shues vith p6r vilue ofPl d0.0224) per shm Tohl capidlstock md addilronal plid in crpibl douled to 95.12 million md $25.24 niuion, Espedirelv.

On tue 3, 20 15, S€cuitie dd Exchdeo Commission appoved rhe incrcso it ,urhoriEd ctpiLlriom330.000,000 shGto 700,000,000shG dPl rrvalu!€rsn@ 9ut oflhe enlirein@s in th€ audorizd epihl .rek, 136,912,I I Q @nmon shes havc b.d sbscribedlhoughrfie SROonMay ll to l5,20l5. fte subscriprid of 116,9l2,l l0 @mmon shmsmounrd ro $l1.4,r nillior\ otrr of

'hich addirioml paid-in clpibl Doured b $10.33 million.

As of D*mbs 31, 2016 od 2015, tle P@nl Conpmy\ ciDibl slock coNiss af 70Q,000,000autboi*d dd 410,?36,310 issued md outhding c@on shfts rilh ts ralue of Pl ($0 0201)

ter sie. Tobl mpibl sdk dd addilionol t.id-in spibl mounted to t9 39 nillior md$15.62 nillio', ft sperively.

r,oallL

.?015

Bah@s ar b€Aitrirg afyd

$35,620,533

The G.oupt t ck sdd of capibl eloo* follovsi

o)Dffib]'',0'6 1'0.?]6

EilLlllllll||lllx

- 53-

Thft r@ no d@l@1ion of6h dilidenlls for rhe y€m 2016 Md 201 5

A p p tq tu.d Re @ k ed [br1 t "zsOn lmu. I 5, )003, fie BOD apprclod ie lpproFieion ol t0 ae aillion td th. oselopnenr

ofthe Eboui oil fiell ir Gabm, i' addinon b lhe $0.56 millian o4jnally appoptia&dmour. Pdicipation ir rhe d*elopnd! oflho Eboui neld by lhe Cmup is ba appeved bv

On luly 24, 2003, the BOD approved additional appIopnalion of Eoinei ffiings amounling loi L0 niilion fd rie &v.lo9mei of the lbosi oil field in Glb@, west Afric!.

On February 19, 2013, th. BOD sppnved addiridal .ptroptided r*ined emi4t mount'g ro

$ r .09 niuion 10 ever for rhe Gdup's shm in th. cdr ofthe omiited N.lb in tie Eheoilicld in Gaboq w61Anica.

Tor.l aFproprialions for the developnml ol t te oilfields in Gabo4 wel Atns a ofDecmbe. 31, 2016 sd 2Ol5 mouten b

'3.l5 million. Furths spasid of the soid oilfield is

As discu$€d i' Note l, on Ilne 9, 2015, P.tsoEnereJ sold ib l0% inl.ct in PtuGEd bEEIPC, bringit is oM.6l'ip in ltuGFd lion 1009'6 io 90% The tudon w6 .eounr€d6 m equit Ersaction sime rhere v6 no ohuge in mntul

'Ihc efiect olchmge in rhe osnmhip inldesl iD PtuGEdof Petolnels/ dDnry tb. t€r G sDo&iEd d fouo*s:

Considedion Edrtn ftd non-conlrouirg iniw$

on rh..quit) ,Ei6mble bolns

.6mcmounr orlon intull'ns inGFu sol4 nd ortbred.drExc$ orcoEidsation @iv.! Bogtized in equiry

Al PecoEnerg/ s sepraG findcial $lm.nll, lhc g.in 6on sile @o8niz.d in rhe sbhdt ofcompEhensive incone mornLd lo $2.l2 niuion in 2015.

The prinary objativ. ofth. Groupt mpibl nrnagd.tt is io eGUE rha! il ndnllins a tunscrcdit raling sd healrhy apibl raris it oder to snppod ib busite$ od ttwimire sheholdeN'

Th. croup msss€s it 6pibl sdcM sd nuJ:es djDshenb to i! in light of chmg€ insononic cmdniohs. To minlo' q adjsr rhe cipilal slruonE, the Grcup my incrde

'E debr

Aon crcdiioN, ldjust the dividdd !€ynd! lo shd.lDldss or i.su n.w shsH

As of D€cmb€r 3l, 2016 ed 2Oi 5, rhe Glup noniloF copibl using d d.br-lo_equitv tuiq whichis bbl liabiliri.s divided by robl eluity.

t1.359,171

lilil[|ilL0lm]l

As of Dembe. 3 t, 2016 4d 2015, the Croupt soui€s ofcopilal ue 6 follows:

$115y'A717f, $115,710,4429;9r;1r 9;9l,3rl

tqu ryGfle lIso'l7J2!822X69

35,620,53322,449,424

r,859,!2L$136.130.61,1 $134,610,942

'Ihe idle belo* denonss$ rh. &bt-ro-equily dio ofrhe Gbup a of Dsmb€t 3l, 2016 od

Acmutu payabl. dd ecrued .xpci$s

Dep.sn for frnuft tuc* subsdptionAsd dilment oblblrion

orhs .dncllffit liability

r'366'5rl

1gtetn!

I oa .auir $9,l4qjp"br i.q',tdi. 1.40'1 t.3

Basd on rte Gmupt sseMen! the @tiol mmag€md obj*dve wde m.l in 2016, 2Ol5 rd

rhe prcvisioD fo. (benelil ton) inc

2015

l2!3,rm5,219,303

(tr,432,03t $5.963.77:

m|fiilffiIlIlll![

_60-

'Ille comtondts oftie Grdpt ner defsr.d d liabililid @ 6 follrysl

Dermd h 8.b 06biliti*) n.osniz.d i.

Asd di]4flr obrigdioulFlird aor.ign .rchug. lo$Acmed dich.d |iabiliryPBviion foi r4babl. los*

(l'5J-'t3or {,'6:i1o6)

&"1

(r2t6J62)Def*d 6 ard rc.ogniz.d in .qutty:

7)u(sr,!2e,{r8r 61,317,536)

'Ihc above deferen d 6sd ddfmcial pGnid a follo$:

liibili.ies e pMted i! lhe co@lidlted shbed oa

!016 2015

Defded insnc d Ncl5 - ndD€fded itrene d liabiliries - net rfjr7j36) (t,6U,496)Nd defeftd inon. d liabililies ($r,3r7,536)

As of Dcnb{ 31. 2016 dd 2015, th. Orou! did nol rcagnize defenti ld as.ts on NOLCOmd MCIT s the Grcup bcliwd rhar n my nor b€ pbbtble lhal sufii.i.nl dable i'cone will b€

ovaihble in rhe ns fcssble futu .grial vhjch ltc Lx benefirs s be Edizd.

Details ofde NOLCO md MCIT follo*:

MCIT

201520t,1

20t9

2013351

Fo. MGI, s indic&d on lh. Inplenenli'g Rules md Rqllarions of $. Rmcwdle EHs/ GE)Acl ol2OO3, lie NOL,CO ofrhe RE Dev.lopd dhins rh. fi611h@ (3) yem f.om lh. st d of@nDercial optnrion shall be died over a a d.d@lion frcn 8rN inmde for lhe n*r scven(7) €nseutive t x$le yrrs imcnia&ly iollowins the )d or such lo$, subjel lo the rouo{i.s

a) The NOIrO had nd bcm pFiouly ofasd 6 a denudion ftd 8rc$ in@m.i odb) Ih.lo$ should b. r enh litrn rhe (J@ri6 dd tol fDn dE availDmt of instivs

p0ided for in the RE Acl.

Foi tSC, on .ruly 23, 2015, 6e tSC reststotrl vith PEZA 6 5 E@nonic Zde UtihisEnlearise lo biablish, opdae dd n.irtain il5 50Mw solar Facilily pojd !r tne cmbl

tLiltillllmIlfiNl

Tehnopdk dd iho sle ofeldicity in &6rdoc. wid, tne alEsent ipopoels s€t foib i' ib appli€rion.

PSC shall p.y lie sp€cial ra Ee of 5% on ill grss i'cone emed frcm suM wirhin rhe PEZA

.conomic zorc in lid 6fpayi4 all nalimal td lEsl incme la{es. GrGs ir@ne eded i.fdro E o$ ela diived lron uy bNim* &tivity, n r of retDos, dEmub dd dlouu€s, Ie$6s ofsoL! cost of producrion .nd .uowrble dpaes 6 defned by tEzA. Inoo'e 3seftdfiom sour6 oubid. ofthe PEZA snonic ane sh.ll bt subject io reglla @rp@L n@s.

AU o.ha incomc oursi& th€ Rx md PEZA i.gulolioN ft subj*r rd lhe RCIT 6t of l0%.

lhe ftconcilidim oi the slaturory d nte b rhe efi.ctivo in.me d rde sho*n in lh.coNolidlred siaLnenb of incdDe follovs

Add (d.dDd) trmiline ihs

In6no slbjrct dbfDard

capir'i sains $bjErd h 6ndr

rtrcoft non mbris subjcrd

(0.,4 (rs.r) q

l0l5Mucrion. hdponlton {d

Sro$Ee dd loidiq .xtenst3,t27,t93

r.,,70.,?0e t4,49-112 !!,ll?

n|liluilllllil

.62

21. Cor olEldFicit! 5116

!016 .2015

Depsidion dd Mortiaiion (Nore I0

Puich!*d snices od uilnis

lusine$ 0d alai.d dpenses

222,106

32,1t4

1,34t.531

55,21t

$tr,1rrt61 t?,113

B6€d on Eners/ Resulatidn l-94, all p@r pmducd shall *l 6ide one cmbvd p€r kilovan_hou (?0 ol^\Th) oflhc tobl eldicit $les oflhe energ/ gensiring f&ility whicn shdl be

applicd 10 Gensarion lacilities od/d dets, rcsoEe d.v.lopnenl pojeb locrtd in lllbdmsay., nuicipolilies, cilres, prcvin@s dd EdoN T1; GrcuP recqliz.d oyary r*smouiins $45,769, $32,114 md 29.605 in 2016, 2015 md 2014, Bpeivcly.

Under th. CRESC No. 2010 02 012, the R! D{eloDer shall pay rhe Sovcment shG equivalenr

10 o'e $d a hsrfps€n! (1.5%) ircm de ssle ofssrhemol sEfl pFducd md such otltincon. incidentol ro md eisin! ftd gd.Ftion, trsmission dd sd. of eleclrjc powergerembd nom geothedal enssl {ithjt rhe Conhcr Ars l6s 0615 5d expenses inc!ftdlneMn. MGI isedad gmnmst sharc dolrting ro t50,990. $69,750 sil 155,2t I in 2016,

2015 dd 2014, rcspedively lessolai also ls3 rn gpvmtnl she mourins ro t41,471

Elebic,ty sales of PtuSoltu st rteii only in 2016 (s NoL l0).

:1 C.mnlrDd AdDidirhriveErp.htg

20t4Sddis. *ases md bdefiis

Depleiarid dd motiarion

Enietuinnenq mcdenl ud

$1,192,112

D5J5r

.13,332

243,013

63.3t6

43.5313t,951

milil]||illlull

WiFofi of defered expldarion

Gadline. oil dd lubrimb

S*uriq mdj.dibnd sfli6

33,,101

31,123

21,n31

3t,3J9]]7,249

393,312

52.12t

$s2.291t1,729

21,33922,30535,24143,439

t 1,695

l6.t5l

t3;1?,r5J $3,9ll,032

.Othed 'Dedin to niqlloeo6 *pde seh s developmst ssiJh4, nolsiation, brnlchftge, lringe beDeft es dd r.roduction expses

)5. Mi*.llmeu Imome

Muisemflr incobe (No& 26)

2,131

$r30,5321722 19,307

t),\92

$2 |,6t3 t24lJr7

Mano€sdt in@ne Etec bPebowind Fdrhe ems od

adtninisrali'e fe€s biue! by P.lioEne€/ rd Pdoccn rosondition .f EI&d ls tusrcrioB. s.. Nole 26.

26. R.l.Ld P.rly Tnn!'ctiotrs

Pdies e onsiddd to b€ Elftd if.no pdty h6 tne ,hil'q, dielly ot indnedlv, to on!!l the

olhs torq or *€rcise signiliml inilunc over rhe olh.r pfq in D'kin8 frmcial od opsatinA

de.isions. Pdis e cmi&Ed 10 b€ Ehred if m. rrt l'6 rhe abilitv, ditcdlv or indirecdv to6ntul rb. other Do.ly jn m'}jng fnocial ud op€nting d4isions d lhe pdies N srbjcct toMnon conbol or comon sigilianrt i'oln€ (refftd ro 6 Af6liet) R.lcled pdies mvb. individuah or corpmio entiies.

ililNilillllmmrl

Stnificflt tmsdions wilh ElaLd panies m d

Iiin i,

I

'l'FJ8'1'04'(lL'3.a Ontuly19,2015,PERCNailedofa$0.70nillionlomtonHouseoiInvestenrs,Inc(Itr),

oayabloorDecember9,20l5ail.12%i sst These loms hale beo tully piid 6 olD*mbsll,2016 md20l5.

PeEoEnerg/ h6 engaged HI to p€rfon irtml atdil sewi6 on PeboEnds/ HI chlresdi6 f* ofF56,OOO ($l.l30) ps n@lh. Al$, on MNh ,. 2016, ?etoEndg/ eryaledHI for n Ge'enl contuls dd Swlen Inplemmhrid Revi.a.

On Mmh 2015, PWEI aviild of. +20 nillior (or $0.42 millid) lM iion PGEC { 5 6%

unual inbE$ payable in June 201 6, This wa slled-ovd ed pai'l on DMbd 29, 2016On May 4, 2015, PWEI availen of m ad,Citioml loM 6on IERC doutitg F20 Dillion (or

$0.42 niUion) payable in Moy 2016 !r m'ul inrst raL of 6.104% ftis wa slled olerad did on D.cember 29. 2016.

Mnasment in@mc Ef* to ti'ffitins chdgfs, lMagoent fees for &@unling l€al!msagddr ud orher tupton swic rendeFn ty PetuEnerg/ sd PdocHn ro

Advds e minirol Einbmmdt of .6ls ud exD€nscs.

TetB h.! cor.ltions .f b@tdio4 wnh ELtetl poti6oulshdinE bdm€ d yd{nd e uNecu.i, inrss!tue md $ltloTleE have been no e@d&c p@ided or ftceiled fd -y relah! pany @ivabl6 or payablsThe Gbtrp hs not recogniz€d my inp.illMl on moub due tron amlated coDpmis fo. the

vds ended Decflbd 31. 2016 dd 2015 This ?sssndl h udertaten e&h ftucid,q!ihrcuSh n €view of lhe fmooial p6 irion of 0tc r.lalod p,rry md fie d.rk l in vhioh lne relatd

squE$de4!Gv\!4!ls!tr ! !!!The Gbup ha a prcfil{l'ery pld for dnecio6, offi€r, nMAen md endoy* d indi€t d

in its byl,Nr The uou! th. lMr.rrd @caion ofdislribulion is ar rhe disci.lio ofrheBOD. poviden dd poff she sna0 nor ex*n 5% oflh. auditd ineh. bef@ income d sd

lr|milililtiltfiIil

'nie remDeBrion ofthe Gsupt dtebn ud olher mmbe6 of ke! mrtged.nl !rc 6 follos:

20t4Salai6 md {ages md orher

shon+m bm.fit (Nor. 24) $320,536

RdiEmenr errse ,7)61

27. Fina!.i.| hsrrtrn.nt

'ne Croup s principd fDmcirl iatuenb include sh od sh equinletu, shdn cmi.vehdrs, hding dd invctndt secuities (finmcial 6scb d FVPL), @ivabl6, Gtidencas\ lod payoble, leoud payable, &c@d exps.s tnd divid.nds pryable The niinpurpose ofrhEe finscial instiumdB is lo tund the c'oupt wo ina clpilal i.quiEmdts,

caEeodes od Frir vdues ofFidcial hslrmcnlsAs of DsDbe. 31. 2016 ud 2015, rhe c,rrying mounb of i\c Goup\ frnscial 6sd fdfDdciil Uabiliti6 DpoxiDab tnen fan vatues ercepl lot lMs payoble. Tle frt ulue ofrheloos Davable 6 ofDember3l.2016dd2015 Dour€d to $120.19 dillid md$120.71 milUon onlolr{i b then c,rryins lalue of $l 15.49 million 6d $ I I 5.71 miuion,

'n. n lhods ed smprioN used by rh. Group in estimariq the fai' vrl@ of flmci

C6h od cah equtr'ddt drt Rec?ivabkx D@ b ih. sbonrm natuc of $e iGtudb,carrying moub rDpDnmat frir vil*s 4 of dtr

Fan vaks s. bed on published quo&d plie.

Foil valGs ae bed d qM@n ms*d pnes B d

D@ b rhc ahon-t m n!ft of ille instuenb,carryiq mout rppFxitu fan volu€ 6 d

F i valws e bas.d on lhe di$oured value orexp€ctd fuM cash noss uing dle lpplietl. int*$hr for3imileltpc ofiNtsmenb. T1r fand@ for2016 dd 2015 for ihe 5 yd renq l@ is ddiveduing rh. pnjsr.i T-Bdd @upon Be or 1.863% md4.51996. respetiwl, plB 3.202% cEdit spErd for lnE

6d 6ve yd dd 4.303% lor ihe seond five t4.The faf vde ofrhe 22 yee bor lod b derivedsi4 rh. prcjd.d T-Boi 6utd re of 4.6,1c44

plu 2,250 cEdn sprcld. For rh. so lobs vih 2-ydte.or, 2016 ud 2015 fair valu is ddi!€d Bins rhe

Ersury nb of 5.964% Dd 3.39?% plDs a mdn

lIont payble ard eL't experLrd

|nililttiltmtl

3pled, of nil 0d 0,0?3%, 6pdtely.

Fai value is eiimared usilg a modilied bindnialoptjoB pricins nodel which asi$ oft*o p*: rhepricc c fld rhe bekrdds indElid trc..

The followins bbles shov fnddd inslDneqrl t@grircd at fair ulue a ofD€emb.r 31, 2016dd20l5. TIE fan mhe G b6ed on rhe source of vllutid 6 oullired belov:

quol.d pnce in active nskeb fq identical dsds or liabilnics (lxv.l l)ithose illolving inpft orhs rha qudr€d pnes included ir I-qol I fiai: ffi obePrble for ihe6set fl liabiliry, eirher di@dy d indislt (Lwel 2): sd!hos. wi& inpuls Id L\e 6set or liabili9 thrl d nor b6.d on obsoblc

'wkei dara

(uobsewable inpub) (kvel r).

Mekebble €quiB $.uirie.lrvestud in soll.lub 3hrs

i,,Jrdablee{uityscunies t

In 2016 md 2015, there *ert .o Msf.6 oi fin4cbl iNtuent dong all lev.ls.

D'ivdive Fipmcial Instuen6The onbined fat value of$e oplions is enimtd using . sodilied binonid options P.icingnod.l which @nsisb oftrc E1s: dl. Dri@ lr* dd tie baclaards indudion @. Undt a tisk-neltal csumprion, rhe Fie lr* is ued lo pftdjct t ie Fbtiil upuad md downwardnovededts ofrh. comp$y value 6 of valurim diL. ltc bookMds induction @ is B.d toonputelhov{lu€ ofrheoprim givd tnepFdioled vllu6 inthe pricel€. It.baora&dsindndion fte is nodili.d lo incoDoe wsal Nunplions t]l01 @ b€sed on mMgdentsju4Dent md *pe.brios.

These Bsmprim e. 6 follos:G) The projered ofid pri@ is rhe bmk value of Pehwitd al 5rh yer (2020)(b) Polrowird shm p.ice voldiliry h Nm.d d I c,/0.(c) Thert will b€ no dividend d*ldrrion for rhe 7-y.& projeolron(d) 9Elo Fobability of liqnidit evdt.

|l|l$ilfltulfl[[

De.riotion oa Sioifimt Unobserable Inpub b ValurionThe signifmr uobsflable inputs lsed in lhc l.t valw De6ument crts@z.d within hel 3

of rhe fan vabe hi.@hy togoltd wilh a qumtibrive esilivity maltsis s atDadbr 3 l, 2016 ud 2015 re a shorn below

@hnique inpub B6e srDptionse$itivit ofrhe input 1o fan

Modified hobabilir, 2016:99%binmid ofliqlid'ty 2015: a0%

Iftn€ prcbobiliiy is incrcddbC 5%, tne dervatile liability

Iftbe sp,rt prie is increddlby 5%, rhe dcrivotive liabil,ry

spor pie n decred.{i by 5%,the &iivotive liabiliry will be

l0Y!,thode vdive liabili9sill inclge by 1.4%;ifrhevolaliliq is d*ltred hy l0%,

Firdoi.l Risk Mmsqenfll Obiectv* ed PolioidTie Goup nmag6 dd nainains ils own portfolio offidcid itstlmdls iD order to fud i6oM op@liors Md capibl spendirG. Iihddt in sjng lhese finmcial ituhmmll @ tne

follo{ing risk on liquidity, ne*d od or.iit.

lte 'ain

finmcial nsk disin3 60r lhe Gmupt 6neid instlmois ft Iiquidit is& meket

Liquidity risk is lhe isk dd rhe Gsup L ufrbl. 10 ned ib lidcial obliSdions 'hen

due The

crcup Doril6 ib crsh flow position dd @enll liquidrty posttion it Msing its dpcrc to

liqnidit sk. Ih.Crcupmo'biN a lflelof@hddsh equivalenb d€n d suficie'tbfinmei$ opsalionsaldro nirigare rhe.ffels offluctuarion in c6h no{s Tomvda shon_

Lm ud lonsaem fiDding rcquimdts, de Gloup inldds to ue i.bdrllv gddalod tunds 6sell 6 b obbin lod 6on firsoial i6ridio6.

fiililruililmm|tlll

-63-

'IIrc 6bl6 belos sumne@ lhe matu,ty Dolile of lh. Crcup s nmojol 6srs od fidcialliobilitiE 6 ofDsenber 31, 2016 dd 2015 ba€d on .onr..tu8l palDenti

l[J,1''J'o,gl3j

l-'s&,]714/ld,!r3

]llr3t!L.!!q!r --_Mff-"iJ"*oldl|i,.

Mslerrist isrheiskofIo$ onfutu omings, o' fan vatues d on tuluft o6h flows rhrrDay Esult tron cbMA.s ir ndlet pi6. The Mbe ofa finncial

'nstumr nay chdgc $

a rcsuh ofcnmgE in equity prices, foeign cumncy *hmses nles, increst es md other

Eouitv Prik tus*The Grcup closely noriroB dE pric6 of ib s*ltilies d ! d.ily bais, e *ell dnad@monic dd dtityiFific f&d shioh oould diEdly or indioOy altar rhe piceoith* instue.t. h 4e ofd dpsten d€fine in its pordolio ofequity seuritics, $cGrolp Eadily dispde or tade lhe s*dtie for rcpl@ment sirh ndF vi.ble md ls riskv

such i'wsdenr surili.s de subjet la pncc tist dne ro chmges in nor*er ulu6 ofirorrunenls disin! eithe. ftd facto spi.ific ro individu.l instuenb s thet &su6, orl0do6 afi*ring nU instrDmenb tldei in rhe Mk t.

||lil[nlruili$ll

69

'fte mltsis b€lo* is psf@ed for Ee.ably po$ibL noMenb in th. PSa inlex (PSEi)vith all othe. veiables held @nsrant, 3howi4 l]le impet d ircm. befw Lx (due 10

changes in fair vab. ol.quity suriti.s md goll$@s whose for wlu6 m rqrded jl lhemn$lid,ten sbnmb ofincone). The Grcup used rbe d.ily avdS! ofnovdots ir PSEi

Die indies, pls .djDs@d b.L4 fd cquily s.curiti€

2015

Th@ is no orhd imD&t on rh. Cbup\ .guiry oths lhs lhose alFady afaering i'6ne

FdFih Exchdle RiskExD6!re 10 cuoey risk eises fom loeml rd adminisirtive .xpM, ascls edliibililies in clffides olhd rhM ih. CDur\ tuncio'ol ctrlHcy which is very ninimlsinc. ihe Grcup's oil Evdues ud @stl rd *pens e dendDimEd in US Dolls.Cmncy sk is nonnoEd dd iinlyz.d s,rldaii.llt od is mslged by de Group.

'Ihe msl]ris helov demonfab the ssitivriy ro a @mbly po$ible ohrg. in tnePhiUppine leso dchmg. El. which is lhc dly solff olrhe Gmup's fcisn excbd8E risk,rirh all orhs vdiahles held coNbt sho*ins lhe nnpDl on in@6. befoF ei (due tochdgps in fiir v.lu. of cllffioy seNitiv.lo finoshl llss md liabiliti6). ne Gioup usedthe yeu'aveBge ldsasl fmm rte Businss Mmird InMrtioMl in rhe sal'6is

'n. follo ng able er5 fdd ine foFign clmncyidoniml€d fiMci.l istumorl of rheGoUDE of D6emhe.3l. 2016 Dd2015:

Ps f,qoivrletrt Peso Equnaknt

t29s,l

(]u)

$11,635

o 1,53s)

0,20D

F642,113J15 5r29r4J33 Fl,531,172,611 t32,535,605

3{2,060,92t 6,379,74s

7,t52,211

r,trs,t3l]tls 22129299 1,333,511,609 39,.061191

Aoourl pa'€hle and aened5J42,O712r4 1r5/a12n 5,.{45,131,401 115,710,442

2!9.662,m0 4dr9,l0t 334,5)6,610 13,795,721

597r.689114 120,106t30 6,129,360,031 134,506,16L.P,tt50.504.,t 9r rt9r.6'7.03r, (F4.da1.143.42) (Xo<,/r3,763)

Ar ofD*.hb.r I l, 2016, 2015, rhe exchdAe nt s ed lot coNeBion ffi ?49 72 mdF47.06 per S I, Espsiively.

ltmrutmmill

-70-

fie fouowinE 6hle dmons@s rhe s.nsitivity to . 6o@bly po$ible chsge in US dollar*chmAe iaB. Wirh aI otird wiables held corstonl, rhe efed on the GbuD\ inonc b.fo€ is

2015(s.rr33I54) ($4,?7r,933)4Ia3,3!4 4,111,$A

Ir msr Rale tuskIne Grcup s exposu. ld ntukd nsk id chsges in inteEi rabs r€labs p.imily ro .hecrcup\ Ioms payrblo sd deivalive liability. Inrere$ d df l6s paylbL is fired fo! tltefixr tue (5) yem dd vill b. i.tric.d thft.frer.

Tie bble belor demonshbs the sensilivity b i mmbly posible oh{ge in i.bsr nrs,Nith iU olho vriable held conslait ofrhe G@up\ nd inome The Gioup usod u:.f(Hosled ore-yed TE6ury Biu mb in psfomina .he atlFis b.lo{.

(s1,700,722)

Th* h no othcr inpoot on rhe Coup\ eguit orher .hu thos. alreldy afaeiina iMft.

Th* !e signifimr mncdhtim ofcrcdit ri!* silhin rhe Gbup sincc nosl of iE limcial6sds de *ith coMdium op.rrls, a$onSn cEdit rLk is innat tial. Tfie 8rG ldiNm.xposuc of rh€ G@npt oedn isk ir eq!.j b the canyi'g moub of the nMdd !sls.

TheGbuphs!v.lld.t'€dcEditpolicytudcdablishci.rcdilpreduEs In.ddilio,seivablc bdoB E h€ins ndnild.d on . r?gule b6sis ro ensue rintly ex{ution of

'e6sary intdention.fforis.

|l|m]tmlI[Nll

,11-

The CrouD ddminE the crdir qulity by clN for lom-Elded oaolidtkn ${mcnts offindcial posnion lires baed on rhe follo 4lC6, in bmks a1d sh.nM inwthat b6en m $e druF ofthe sudrades md &eEpftrion ofthe fidciil insritution.

n..,iyzrler 66ed on the prlment behavior ofthe €dbD&l'. Htn 3n& p.nliN toi€eivoblrs ftom ansnim oleer nd irterest l*ilable ftom shoden inwsbenrs ddsbdrd grde p*i6 io orher lteivables. Borh re neither pal due nor jnpair.d.

Th. i.bl.s b.los sbow lh. credit qu.lily ty cb6s ot 6sei for lomjelftd coBolidare!sbr€meltr of fimcial position lines, baed on the Gmup's ftdil ding 3ystm a ofDecdb.i ll, 2016dd2015:

Hiehqrrd.sbnd[dgnd.|Dditrp'nld

'- ","!

HLsh srrd. sMd'd sad. md inpriftd

t-

Ftr n$lgeDent purpGes, rhe Gmup is o.8diad ido bBinds unils b,sd on lhen prcdlcb mdh6 nve Epotuble segnentl 6 fouows:

The oil poducrion segDent L e4rg.d in lh. oil dd nin@l exploEton, dev.lopndt dd

'Ihe g@th.mal dergy segFent derelop6 sd opsdr6 gsrh.lml sllmfrelds md pNa

The wind oer&/ *gndr 6i.s oul$c gae6l b6in6s of goeding, lrdsmining, odordifibutina pord derived im sird 6eEJ sollrs. Sdin8 2015, this w6 noi presEd aopdarinBsegmenls ois b€cmeajoinircntFin20l4. nE crcup l*e up ib shrt in n.teminss of Ptuwind sd ps.dts it tn. coMlidaLd sftmmb of inede ud.r "she iD

n l inon. 0N) of o joinl lentu".'n. $lr derg/ Fgmmr tries out solar endgy oteFtio's olmc croupOther acriviries Fniin b G.mh od investnent diviti6.

n|[$|lltruLil

-72-

No opeding segnent have been aggrga&d lo fom llle rbore repotuble oDdling s4m.nts.

Mafrg.ment nonior ii€ opdding Esulls of ib busine$ lnits sepmtely lo! tle purpase ofnBldn! daisim abour Bo!i@ .llo$lion sd prfonme ase$mmt SegEen! p.rfomatce nelalucd bascd on opraiing profi or lN ed is is!red consistcntly sid opemrins p@fit o.bs in lne consolidrtd fmcial $alm.ntr

o&loDd.!d.iao!0

ru!J) nr.l'oenJot s,z:.rr 6!rrsr)

'h,-h.

D6dh|'dt|'!6iil

o,qroD ct6,$D (6rJ4&M) or,o?,t{)

r"eo {?t{!4r

n[lruillmmilN

1l

cja.bo 00r1d1) 28,t60.t1 03dijt)

ffi

l cicroup investnenb, Evmues md .xFds.s e eliDi'ed duing consol .rion

29. Arlic.Diluled E.ming, P* Sh.re

Tne conpubrion of rhe Golp's emings pq shft follossl

Ndhconeatbbubbl!b.quii}

\redd d.i4 oumbs ot shr.! { | 0,7r6J10 21)]]!L

30. NorcoDrrclli.g I .r6b

As ofD@nb.r 3 l, 2016 md 2015, nonculrolling inrssb NCD p.rLin to lne lO%

shdcholding! of EEI-PC in P.doCEen, l5% shmholdi4! ofTrs*Asia dd INOC it MGI md44% sh*holdings oi EEI-PC in Petosol&

MGl Petsosol' and Ptuwind e dti1i6 incorpo*n ud op.tating in de Pbilippites.

t0 004J 100076

Embgs per she e olollarcd sin3 tne .d incone aittibut ble to e9ui9 hold6 oflh. P,MtCmpanydiridedbytneweigjjkni!mg!Nmb.rotshG OnJune3,2015,Seurii6sdExchmse Conni.sim apprcvcd de inclse in the aulhdizd copital frcn 310.000.000 shes b700,000,000 sh6 at Fl ptr !'18 ps shde. Our of tne otiE incl%e in ihe Nrhori4d capibislook 136.912J l0 cmon sh4s h.vo b@n subscrib€d rhrolgh rhe SlNt Righ On'e.ing onMay I I ro 15. 201t G.. Note 20).

lil[il]Lllllllll

As of D*mb.r 31, 2016 dd 2015, lhe a@@uhbd b€ldces ofdd ne1 lo$ ddbulable tononconholling int Es6 N s tbllos:

2t16Aannnhr€d brbnsof troro mlling

MGI

4,313510rJr2,05?2,868,633

94,002.0?3 116,042,125

N.r imon. nos) rrrtb .bl. rorobcotrtmlli4 i.reBt:MGI

1.501,,153

51,597,l]1

',923,363'Ihc summeizd firacial infomalion oftise subsidiaries is provid.d b.low ir Philippine Peso

which is rhe .uhidiriet turcrioDsl gllftncy. This inlomalion is bzs€d oo dount! b.foreinLr@mp,'y elimiDarim.

Th. 2016 dd 2015 fil$cial infmiion lor MCI lollo$:

sbbmetrr olri nclrl Posiiio!P596t05y'11 t310,497,1643,?59,030tr39 3,353,103,714(457112,133) (652160.361)

(2,13F4?!M!!9!.!!!.1 IFr/60676,?77 Fr,lr9,730,l4l

st t n.hll of conprche$iv.

F?39,3t6p37 Pr74,45l,lJl(6,13r30J03) (566,3:14,479)

sbbr.trIl 0f csh FlmNol sh provided by {ud in):

Operaring a.tililies

Finscing aciiviri.s

f33a;4r,115 ?272,161,1U(9?,910,65t 022.330,735)o490r]6a (15r,&7J13)

Ffted orrm'ed.hmFnE Oj3plo) (470q0o)

N.l incEe (d*Me) in sh

lutMilmlllfr![

The 2016 finmcial infooatior for PetuGrem follow:

2015Slltm. olFiuRid PNlllor

P71.71?,r98 F255,095,4131;1vt,493,0\5 |,192,7 15,994(265.631!092) (439,610,963)(123,n30,3!2) (90fl4l!!)

Equity ?1, | 75,541,169

Slrl.n..r of CorpFl.nrlv€ hon.cain (los) m ddiv iv*

P11,,r53,609 ?u.405,103t0,3a2,7r1 (33.393,5Q2)

Exp.rss (.17,436,004) (40,700,46!)Nd Dcome(lN) Pa-4,&U26 G!a6qrj'o)

Net cah provid.n by (used in)l

(36s,062) (6r5,443,r51)

Nd inM (defte) ir @h (P6,696,0r6, P13,404,374

Tl)e 2016 fbanoiai inlomtion for Petosole follo*:

Sr.&nent orFi.'mill Pciliotrlt!5,1!6,356 P1.261,266,5402,959,r09J?,1 2.339,095,003

Q21,1 q 29 r) | t,526.663,5 01)eJm'usl2n G,31r.334,933)

P9?3,!r00,5 | 2 F10q,303,0s7

St'&me ofcoDprch.Ntv.iron.

r:peb6 (Je6'360.r2t (lr,e'J6)0)

Opeding aclilili.s

Firuoing adiriries

(F739,r25p93) P76{,360,3?5(172122Ja0) (2.337.066,0s9)

ou,323I9t 3,252,930,639rfferorroRie*(husemk (2J0lPl2)Ne, incE*erd*@ej h6n (!l.025J7rJ.q !! ?!f?!:!!L

'Ihere wr€ ro diridends D6id b don@d.ollirs inrffit.

[[Nrr[unm![

-16-

The inc'ls in nm@nlolling ideEb non slo.k issuoces fbllows:. As oi Decmbd 31, 2015,ledosolar onvcned ils deposir for fito€ sbck subsoiiplim i!1o

oapild $ock vhich in*a6.d th. nonco.lrolling inrffir by t4 49 million. As of D.mbd 3l,201s, !tusdd isued 3,100,000 comon shaB wirh $2.04 pe value.

'ne i$w6 incBed rhe nonontrclling inleresl by $3 05 niuim, PeL'ocFo aiso issued

55.250,000 shd* rhich ircmed the non€nt@lling inlerl by ft l I Diuion. as oi De@mb.r I1,2014. MGI i$D.d 743,330 oomDon shfts with 100 pe valG. suoh

stook isum6 incrt8.d 6r nonconrolling intffib by $0.l3 million.

The incr.s. in ron€tullina inere$ ftoo stock i$w6 dG mr rsuh b tlE dilltion of $cPlrd Conpmy'3 efietiv. in'ffit i' rh. subsididies.

31. ReD{.ble E.ere/ ad of2003

On Jmu.ty 10, 2009, Republic Ad No.9511, )n ,4d PMorkC fie De'elapnd, Uilizdian andCohnetualtdion of Re@able Ewrs Reerc andfar other Pwpetsr, othe ne knrM as

the "Rdsrblc En.€, Ad of2003" (ih. ,\ct'), b.cme efidtue. The Acr ains !o(a) &cled rhe qplod.ion dd &vclopnent of rene*able derg/ rcsouM suoh 6, bur ndlidicd lo, bion6s, sole, *ind, hydb, aeorh.mal ud o@ oer8y som6, including hybtidsysteNj to achi*e ends/ slf-rlidoc, thFueb lhe sdoplion of sldait$I. endgy developmentsbabgi6 to ienua lh. coubyt dependen@ d fo$il fiieh sd tiereby minimi* rh. colnLytexposuE k, pri@ nudrrim in the inMalioMl m6td, the efab of *hicb spLl dou toalnon all s€br oflh. *orm, (b) irc'se th€ tilizlion of rcn.{ablc energy byiNlitliondiziD! the dflelopDent ofn.tional sd leol oaPa6ilities in rhe use of m.wable dergysysbnq rd pmndling irs efiicienl md @sl*lTedire mnnscial rypli€lion by providi'g 6sldd nd-fis.j jncentires: (c) mcouEg. lhe d.v.lopnent md ulilizaiion ofMeq$lo endg/Gouc 6 rok ro efftc.iv.ly pdd! or Ednce namtu dissioro dd ln*by balmce rhe goal3

of esndic gro\t r md d*elopnenr with lh. Do&.lion of h*hh md enviromml; ud(d) esbblish the n€€3.ry hnddolue 3nd menrin ro calry out nsdrles sptcified in rhe

as pnided fd in the Ac! Ren uble EnsSy GD ddelopds oi RE faoilitis, including hybridsystens, in proponion ro

'nd to ln€ qlenl oflh. RE .mpoenq fF both poad ud non-pwer

lpplicarions, 6 d y cenili.d t'y lhe DOq in m6ulbnm wilh ih. Boord oflnvesbenb {BOI),shall be entided b the follwi'3 in€nrives, mong otheN:

i. lncone Te Holi&y (lTH) - For the rd sevs (7) y.d ol iE @mneEi'l opsaliats,lreduly r.Cislf€d RE d*elop.r shaU b..xenpl nom inmm€ he ldicd by rh. N'tionil

ii. Duq-fEe ImportotioD ofRE Mmhine.y, EqDipn.nl md Mrrsials - wirhid the Insl6 (10)yes upon issMce of a c.nificatis of u RE develop€r, th. impat&ton of t@hinsv ud€quipnent Md nat rials od pft therf. includins mtttol ud mtmunicdion equip'enqshall nol b. subjeol to kitrduries;

iii. Sreial Ralq Tu Riles on lquipnenr od Machinery _ Any law ro die dnltuvnosiihtuding, isl1y ed oths hes oD civil tdk, equipnent, dfhin.ry, ud omsinrdven.rt3 ofa EsisEd RE dev.latd eluslly md exclusiv.ly used fq ll ftcim.sshall Dol dc€€d one fd ! holfpd@r (l 5%) of$en oriBital cost les &c@!lacd nomalden*iarid s n.t b@k uiue:

iv. NOLCO - 1he NOLaO ofrhe RE d.v.lopt dui's rhe fftltI!& (3) y€m 6on ln s6:t olmnmdial opsarid which iad nd ben previouly ofisd a ded@lid fom 8Es 'n6fre

truIlruuilfl[l

shrllbe c ied ovd d d.duotion 6on sFs incone rot lhc rcn swen (7) co$.curivedible ,€4 im.diotely following rhe ,@ of suh l6sj

v. corlomte Td Rd Ane. selen (7) yss ofrTq 'll RE dev.lopes sh.ll pay a mrpohtd of h De€nt (10%) m ils rel dlble in6ne s d.lin d iD tl'e Nrrioml IncmlRevenu. Code ot t997, s mmded by R.public Aol No 933?;

vi. Acleden Depdidid - If, sd orly if, o RE psjed fiih b receivc r ITH b€f@ flllopeclion, it n.y apply fo. !*lee! depreidid in its tlr b.oks sd be Lxed brscd o

vii zeo Pmml VAT Rac - nre ele of tuel or powr Sremled from Enewrble so!6 ofenss/. th. puchAe oflocsl goods. pDpdie md sedi6 nened fd rhe dd.lotmmi,cdsindio. md insbllatid ollhe plonl feilitiE. a well a ihe tholo ptw$ ofexploGrion dd d.v.lopndt of RE soNes up b i6 snvdio into powr shall be subie.tro do rsFnr (0"/o) vAT;

viii. C6h I'cenl e oflE Deleloprs for M;sion "

Elebificrtion - An RE develops,esbblished and lhe efrectiviq ofthe Ac! shall bc htitled ro a cah 3qe6.ion-basedincenri'e per kilosrt-hor iaE gdenled, equtualenr b 6fty ps6! (500/") ofde ui!e6.1chdge for p.*s need.d lo seriG Dksionay al6 Nh.rc i! opdabs dE smq

ix. Td lxmDlion of Car$on Crnib - All Drcc..ds lom rhe srle ofcabd tmission orcdibsholl 6. exempr fton dt dd all Lxesr od

x Tu Credit on Dmeslic C4ihl Equipndr dd Sewi6 - A d mdir equivaltt io otehundred Decnr (100/") ofth. labe ofilE vaT md cu$on dut.s tht would have bdpaid on rhe RE hNhin.ry, cquipmeng mrsials md pad, nod lll6e irens b..n impoded3hall b. BiveD to d R! opsaring 6nta.t hotl€r who pNhasd l@hin.ry, equipmtrqnobrhls. md Frt fion a dmdiio nsul@er for pDAM set fotii in rhe Ad

RE dcrel@eB md ldsl mdnf&hrs, fabricotoB Dd snpplid ofle.lly-ptoduoed REequipnenl shrll rgist r uith the DOE, duNsh the Rddable Entg/ MoasEnmr Bw$GIEMB). Upon r€gistuion, a cenifidion shall be issued to ach RD da.lot r sd lodlnmutrctur, f.bricabr ed sutplier ofleaUy produced rcnwab,e end$/ equipnenl L sd. 6rhe bsis ofthoir e'tirlemflt to the in@ntivd loviden lor in rhe Ad AI conificarios Equir.d10 quali& RE developd to ovail ollhe irc.rt es govid.d for under tne Acr shtll b. i$ued byrhe DoE lbrcu8l lhe REMB,

32. Ehcnic Porer Indorky R.fom ,{cr (EPIR-A)

After emerging non lhe cdppling powd crisis rhd ocored in lhc esly 199G. the lhiliFpincGovemenr dhdk d ar m i'd6ty privatiztid md rutactuing Prq@ envisio!.d tosuE lh. (lequb supply of eleclricily h delgiz it d*elopi4 Mnony This retulutingschemeisendi€d inRANo.9116,dFEPIM Appiovtdon,u. 8,2001..heEPIRAseeksrossft qnility, r.liable, sure od rffodabL .letrio power supPly; dcouaE fr& sd fanonpelitionr d$ooe rhe i'flo* ofpnlat. sriul; ud broadm rh. omdhip b6e ofDowseen€mlion, tusdission md disLibulron.

The cov.m.nl viwed Etuctuiig dd Efom 6 a long-llm $luiion lo tne poblds of dEpower s*ror. Ine hug! iw.stnelt Fquiment fdr nes Soemtion capacE sd dpssion ofrh.nsesd tunissim ud disdbrtion neNoik vd eslimr€d ar m mEl oreBg€ of$l.o billion, Civen tu oM n$d coNronls, rhe Govemdl

'@gIizd the n.ed for sEftr

privde sebr involvesonl in dE po*s seloi. Even liough sotu priv*e sator pdiciparid resucce$tuIly irrodmed alier beN.m lh. Nrc od p te inv.sioN, tiis time. the Covcnnenris envisioniq addre$iq th. p@r s4ror inefficid.i.s md rhe nonopoly in the gpnmiionbusines EPIRA ndd e! $e Mnll Mhcoritg of6e Phil ippine .l.olric Pows ind6lrv dd

r|IIillflililfim]l

-73-

call€d for lh€ priv,riztion ofN?C. Ihe reslruturing ofde eleoticiry indufy calb forlh.sepmrion of the ditr* snpon.nts of lhe lorer sdor. rmely: 8lnmtiod, ltmnhsim,dtutibuliol sdsuppt O! rhe otns hrd, rhe priv.tialion of lhe Nrc iwolv6 tne sb of desrare{Med powq fmt 8lndtion dd rdsmission 6sd (e.9. pove plob dtd lmNni$iofacilitiB) b privare inv.sh. flEse two Ffoms e aiDed ar encoDFgi4 Srals conpetiriondd atFa0lirg nore privrb setu iNetudts in th. p.v6 indusfy,

A n@ emp.tilive power idudy will in tu resuh in lowd po{s rdd 6d c moE €ficienrdelilery of eleticiry supply ro dd-usen.

Spoifi.ouy, lhe EPIRA h6 the foUowing obj€riv6:

Achiw. lrsspaMoy rilh ihe ubDdlins ofrh. iain snpon.nts of eleai.'ty srGs,whioh Nill tE refl-ten in lhe cmumd eletioity ralesrOpenins up ofrhe eleclricily n$td lo ompdirion d the vholeale Gdchljon) lcv.l toinpov. efiicieroy i. the openrim of po*e. pltua dd rcdound 10 lows el*ticiq pies;Enhmce 6ndEr inflow of pinre cipiial dd boodd oue6hip b6e i Senebnon,bmmissio distibution. dd suDply of eleolrtc powr:Eslablish a slrong md i'dependenr regularory body th.l will boldoo lhe inlqsr of both 65e

invsroB by psmorins cmpdirid dmuAn cMio. ofa lerel playing 6eld dd trctlcl$.electicity dd{se6 ftm ey n.rkcl power abuss Dd d.isnp.tiliv. b.hovioFj atdAcoolem& sd dsG rhe bbl eledifidion oflh. .owl.y.

u9!a. Certiircd Emi$io' RedudioDs Pmhe ASsmml

on teuary 3l, 201 I, MGI or*i inro a cdifi.d Enisid Reduclions P@hae agrem.nl{ ER?A") rh lndesi C.rbono S.r. CEndesa") ofM!d'id. SDain. Und.rlh. ERPA, MGIshall sell 100% oflhc Cenified Emission Reducrim ( CERS") goeBbd by rhe MdbMtcdrbemll Pwer Pmjed (ihe '"djor') in f.vot of E de 6on the slal ofits comnercialoDdrions in oclob.r 2013 uril 2020. This will Drcvid. MGI sith osrrM apart 6om ele.ri.it sle. It should b. norci lha! uds rhe RE Act of2003, !uprcens 6on rhe sale of @bo mGsion cFnit shall be erdpt Aon orry sd es

Tho Pojed h6 udsgone F8isbarjm pree$ rcquiEd uds rhe UN Clm DolelopDenrMechdisD (cDM) Tr s inoludes th€ prepadion ofrh. Ptojei Detr Dsudt (PDD),Mlidalion cmducted by a D6igared Opdrional Edily CDoE" or'vdida!oa'), applioolton*ith lhc Dcigmbn Nadonil Aurhorily (Depafinert of Envitment dd Nfitml R6olll€ror rhe lhnippin.t, dd r.sislEtion or r@pb@ oflh. Projol 6 a CDM Pbjdl Acliviqby lh. cDM Exeolive Bo'rd ("EB) nc PDD which wG pEpGd by End.e peDEinfomdion on the esenlial Ebnial md orypidionl ap€cb ollbe PDj4r divi9 md iJ akey inpur in the validaliorl, Egieffiion md ve.inc id ofth. Projeot MGI ontr&t.d lneSpdish A$@iahon for Shdddiz.lid md C.tifisdon ('AENOR') s ihe vslidrror roperfom m independent evah.tion ofde pDjd aclivity lgtist lhe EquiEnmG of tho CDMondreb6is ofthe PDD. Tre ssEtridt oflhe uritei Nltio6 fmdoik conventon on

climrL chse€ (LNFccc) h6 €nim.d thd tne MGPI hs ben Fsisr€rd etr*ri!.

|milm:mmlll

Upon connercisl opsarioN. MGI .hall collect md mhile all Ele!flr d.b nec.sary fotslolaring sEen hou$ g6 (GHG) dissior rcnudioG, *hich will rhd t€ subjeted loDeriddic indepddent vrificdion. T[e lB *ill thd hsu. ih. CERj equl to rhe veifiedGHG €mission Rnudioa.

The sloNdoM in sorld Darker enditim fo @bon credit s*sely afGcied Ends4nfesibriDg it closN dd evdo.l liquidolion. For lnis lson, eft*iile tue 23, 2013,MGI dd End.sa decided 10 Dunrlly himte the IRPA.

On JDly 3l, 2011. MGI eni.red irb o m.ndmdun af rgrnenr (MOA) Bilh En l TndeS.P.A Gnel), a Cout Egisr€Ei

'rd domiciled in Rone, Itdy, {ith rhe iniertion of

dloblishing m almgemot fo. i\e di$ssid, ncgoljotion, od @psarion of a mlo.llybeneficial CER purchde !3Femmr. To ddq MGI hd nor yet closed a CER PuchaeaC€monlvilhEnel.llleMOAisvtlidforoneysftonthed.l€of ibsisni4 Hov.vd,MGI has nor closed r cER puchGo agrmenl witn Enel bd .he MoA vhich is valid for oney.d fi.n the drte of irs signing thB dpired in 2014.

MGI hd nor mdergon. rh. validation pree$, besuse ofrhe poi n&kd condilron fordbon cndits, md MCI

'ould only do so mce rhe sme ftbounds.

b. Electicity Suttly Aerencnr

In 201 l, MGI entercd inlo o Eletisity SupDly AseDed (Ml ESA) wilh T'm Asi' Oiled E qS/ Delelopoent CoAonridn (TtusAsio) in {hicn the lans oflsed b ptrcha. ollofrhe 20 Mw facili9k nsl ou9ur

The conmerci,l opsdidn staid on F.bn ry 3, 2014 md pmudl b lh. Ml ESA, 8il orMGI 3 net c.leiry 01delilery poi't in rcudd€ sitr lhc elect!i.,9 delivsy Dt@d|B{@ sld to Tts Asi, rhmush th. eLctlicily f@s rhe pri€ aseei utoi ud subjeotto fladjutuent shidg on lhc se.ord conhd y€&, for chdges @ forcig' exohmge ud infldion

Rwerue nom sale of el*hiciry hder lhc Ml ESA moubd ro tl6.53 billion orP?34.61 milliondd$16 96niUiondPT?2.01 niuion in2016 &d2015,Esp*rively

ln May 2016. MGI dl@d irto oorhs Electicity SDpply Agtem.nr (M2 €SA) wirh TlnsAsio, lhG tine mvdn8 lne net oulplt ollhc I2 Mw *pmsim. The cm ud @nditions ofd.M2ESAftsihildrolh of rheMl EsA.

Operotiry he dmituab - lMOn Jue 22, 2015. rhe Gout (s siglee of PCEC) mrded itio a 25 ys opedins l€eagrmdt with Luisib lnd6tidl Pdk CorpoElid. Th. lse is EDew.ble by muntal 4renentof borh pdis smerally uds lhc sme r€ms dd conditions, wjrh es.lhtion claGe of 3% .lery

34. wid Emrs s€rvia Co.hcl (wf,Sc)

Witul Eke6t Seniee Contmt (WESC) No. 2A09-01002on Novoher 4, 2013, D.velopnenl Bu! ofihe Phnippin s (DBP) gtrred 10 P.howitd !F2.3 billid lM lor $e prcjed pr'€ble in 15 y.m. Following thii Pehowind signed kev

@nstldion od supply cdtu6 .ov.rite lhe sibhysrd dd bdsnission line *il[ C.ndalt

|LilI||tililrl

-80-

Ensinedng, civil wdIG d the vind fm inoludiDg intsn r Dads, lubin folndotions, sdconhol iom blildings widr EEI Colporarian,

'ld *ind .!rbin. supply, iNblldion, md

n.inrenscddoDadion lh Gdes. !.li€ of S.L Unipesonal Spain.

Constructid oftie th6e I ofthe {ind fd (36 MW) slaftd in De@bs 2013 vith EEIcoomencinS rh rhe pej€t &c.s iood 3! enlry poinr fton rhe Pbvincial higitoy. Tie a@$bads rere onplet d by 2nd quorter ol2Ql4, while rhe inlenal rco& for t\e fisl eight UTC(Wind Tlrbi.e Centu ) bvm w* emple@d ty 3rd quan€r ofrhe ys. On DeMb& 19,

2014, Pehwind .lso obbincd hvo (2) key approvals ton Eneigr Rcgllalory CoDsnsionGRC). rRC approled P€tawind\ rppli€tion lor a two-monfi lsling ud sals of sdedcdpo*er ofthe n6t eth (3) wTcs. P.towind also eeived rhe appavil 1o d.velop, o'n, odope@ a dedicihd poinl-to-poinr tusission facility @nn.cling lho Nab4 wind Fan b the

NCCPT Nobs4aricld 69 kV ove ead bsmission line,

The lini half of 2015 w6 dcvoled lo oompletior of rhe @nshclion ofdE *idd fan in Niba,Aklan. On Mmi 2.4, 2015 PWEI sftce$fully ensgiad !d disparched po*t non .ighr (3)wTCs (WTGk l -3) lo the Visryd grid. Or April I 7, 2015. the Deplnnfr oalndgy(DOE) issu.d is Nonirution for FIT Eligibilit'" ofNsba3-l . fte DOE also rel*ed on Apnl30, 2015, ib cefrificare of EndoMenl olNab6'I whioh is oe ofrhe ts4uiienmll fd oe ERcro pftes twErs c.nilico& otco'pli,ne (coc) ror lhe pova fooilily md fd FIT eltibilityByJue 2015, all eigbbn (13) WTC'S b..omc op.raiio'al. On ,De 16, 2015, lh. Depafrenr orEnerg (DOE) Ele6ed the Cdifidre of Edoddent (COr) for FIT EliSibility dd6inA the

ofiioial sMofcommercislopdlidb b.Jud.l0,2015 Tne ErErsy Reglltrory Commission

GRc) also €hplet d ltc siG visil for DOEt CO! IlI valnb on on tue 24-25, 2Q15.

On Au!6r l?. 2015. rhe ERC atpoved PwEl\ Cdifiqie of Conplidc. (COC) fq Phde IThh confim llle @mmeEid opmtion daE ofrhe vind fam to be JDe 10, 2015. o'rSepteDbfl 3, 2015, IWEI rsiled lh. Philippine Eldiciq M'ke. Corporaliant (PEMC)&*no{ledg.mm1 olP\rrEI s pdisipari@ in rhe wlol.srl. Elelioity spor Makd (wEslvt).Upo' Elia6ly ope.atin8 nU .ighr6 il3) WIOS od @onplishing cdolidalion of cpp@edpmchlisb dd o.her pm4uisitc deMcntrio'i PWEI eepi.d lh. wind F@ Tborc.c.rtificole fFn Gmesa on Decmber t2. 2015.

To ssis. duftg thc initial sLge ofrhe o&M, PWEI ha sSrged o @Nultur, Mddeh lnsgyMdog.me (MDM), to do siE audtasn.n! conducr windfm lm.gmhl t?t.ins to.PWEI tshnidl psxom.l, md evalu& Gm6at n@rhly Epqts for the fi61 )€a oflhe O&M.Thesit. luditedtEinincss conduci.d E MEMlastMay 10 l?,2016.

The Prvdtive MdrlMc Sedi6 (!MS) ofrhe Windfm EleoE al Flciliries (i e , Sut€iatiodd S{itching StdioD, including Swnchgs) !.rc sucestully conductd @nn^y 2l ' 22,2016

Fo. the Osblim sd Mrinl€n4e (O&nO ofrhe wind toibines, G@* had adpl.t.d ilslz-Mdlh ( l2M) Mortemce on July 05, 2016, its 3-Monrh (3M) Mainkndc. rclivitiq on

Aw6t 12, 2016, rd vill slin vith $? l3-nont! pEvmrive ndnb{c on Octobd 03, 2016.

Th€ prcgrm for the l3-nonlh minldm@ works is fd on. (1) \rIIC pE da] fd 3 hos o'er m

Mainrdm€ *o.kr foi lhe B.ld& of Ploi (BgP), including .l4ticsl feeder €bles, substrtion,erc., Ni. done by Gms's suboftebr - Aimtgy od Renwible hc. _ iromAug6t03 12, 2016, inirial E$ rsulE of shich plsqn Gdda s ovoluation

tI[ilruillnlHI[|

slop. poleiid works have been inplemenred thsugholr 2016, .von duiDg rhe tFhoon seaonin Auge 2016, to shich mnhclor GS! w6 abl. lo 6sss lho i'tegnty of rhe snplekn *db,rd delsine ds ior tunhd voda.

Tne NWPP {s sht-doM duing rhe otrldeft ofT}ThM M,M' on Noldbei 25, 2016 dub grid failurcs rldu lh. I l3-tv Nabr-Pmib line sd the 69-kv Nabalcdiclu li'e. OHit,the seid tTh@D 6ued ninor soil edid. nito d.nog. ot the @e$ od canal dd obtucledcms dnim (esp*ially rhos. hor'inB 10 wTcs 9, 1.4 md 16) bur rhe e$ oflb. sile remainciudd nmal operotirg conditiors. Sib cleding opdtions along th. dni.age cMls sd r.adreslrfacing works wse conducred non Novmb.r 26-29, 2016.

As ior rhe varioble R€nwable EHsy (vR!) T6b aill NGcr, PWEI ir slill owriting issmceofthe linrl Auihdity to C.md ftm NCCP'S Rerenm ed Resulab.y Af.in Crcup (RMC)olfi€ in Manilr, which is cxp*ted io b. issuen in Febflary 201?.

Fld Jdud! 0l lo D.cmb.r 3I, 2016, rhe lobl me€/ expotud ro thc grd is 101195.76 Mwhfor the Prciedt Pl6e l, wirh rdenue ofPbP 765.3 MM bs.d on lhe FiT prie of P7 40 ps

35. Conrnd r.dAgruD.trb

Rdol Moniionne svsten sd T*hniml a&iso* sdi4 A@m.nt

o') Auast 19, 201 I, McI ent*d inro m agEnmr vilh Fuji El4tir co. Ltd. ro conducr rhe

op€mlion md Ddtrnm€ ofdE M.ibdd povr plml. Tiis will include rhe Bdildin3 ofrhe poBer tlsl op.ntiars Emolely from Tobo, Jipd deu8n r mote nonitori'g sysbmb be esiablished by rhe Fuji El4tic. Fudha, Fuji Elecric slull povide lire r*hniulsewices to MGI d insbces wh*in the powr plrr momrd ldhni..l poblos Eqninng

Foi rh. mdc noniionrg sedi6, n\e fee modb 1o *3 nillid. Forthe @hni€l advis.rysenjees, lhe fee is b6ed on a (*in tu p€r hou md pd day. Ttis agenmr sh.ll b. for apdiod of one (l ) ,€& comd.ing on tie *piry ofrhe *ddty psiod of tne EPC conhdfor tie constlot'on of pows plst', tu*.ble .sy ye6 lh@ns npoD alEmd! of bothprnies. This *d rme*ed in 2015 md .rlended urrtil Otube 2016

on oclober 19, 2016, MGI Dd luii execur.d $. Twhnial seryics A!@ent dulyEplacins the IMS-TAS. Urdr lhc ncw ogrnenr, Fuj i rhall disprt h one Teoh' ical FieldAdviloi one .vry sii monds ro @'dd a resnld field insp€clion oftie plels opdtionud Egul,ry mss MGI'S qDe.ies thnugl phono colls or enail cortsp.ndenG. Should thesitodion ell fd i! IDji auld dispotcn ib pr5@el *ilhin 43 hou6 iD otds ro adde$ dglnl

!&E!!!s!!e!4sr!!r4MGI sig€d r Inremmeclion ASement (ICA) with MEMLCO for lhe phtsicalintrcmeljm of !h. Blrc.tior sd clDdion fa.ililid of MCI} 20 MW pNd pldt 1o

MlRAtaOt di$ibdion sFh. ft. Dovd liDiliq being coM.i.d in BrS/. So Rrlicl,

uil!ntilmil[

Sro. Tom, Bat$ga will be com..l!d 10 MERALCOT .xisling I l5 kv line in Calmbo,

On .ruly 7, 20 14, MGI, TrdsAdo lnd MERALQ s*r.d a Memomdun ofAgFm€nlvhioh efi*tively wailed tho palDenr for the *h€ling oh'ges momling to $96,1t4(?4.r0 nillim) ps mo,'ih.

c. Mc, sd FUn silled m D€camber 21, 2015 de cmt?ct for the DdufactuE ud supplv ofthe l2Mw $rbine, eEneabr md olh.r main equipnen. fot tho Mdbmr 2 {M2) *p$ionproj6i Ille plFst of rhe l0% doM pslDmr mounting to 11,055,600 00 v6 nade on

Undd the @nbacr. FUI {ill Deuftu rhe .quiPDenr withh l5 monrhs and deliver ioMcl dClRMdilaonFet'uary20,2017. Installarion of th..guiptnert shdl be sup.flisedby Fuji imluding the mhntusioting olrhe M2 pow* pbtf lo the 8id

Thc lolloNing mnhcb h.vo be.' enhed ifio lor tne codtldion md d*elopmdt of me

50MW Tdlac Sol& Power Prdjer (ISPP):

Iran*or* Amd.nr for ihe Ownd s Eneind seeEs

On tunc 25, 2015. IedoCGn €fud inb th. Ftm ort AgEmot for O*nth lngineaSenices ror rhc TSPP 'iih sjrt sB sol! Inbmttional AC ($ntsr) Unds rhiJ asi.sen!SlnFgt, smilpm\ide engrneen-s.enid colennC *e f.r proF I phtue\ frm con'eFd;\ el;DmmL Pv sskm Ensinedns P\ Posd Planr D6elopnsr &d Pv Po s lldrProier Execulion. Tobl mllaot pnce mornld lo $l,t00.000

Olfshde Suoplv conhcl

oli Jde 10. 2015. P€lmc€d .nltld in1o D Ofishc SuPply Conhcl widr Cders/ Asi! &ME PTE LTD (Consg/) for the supPly ofall inpoded sold poua plmt equipnenl which sr€qDiEd for the orelruotion of rhe TSPI. Total @tu1pti6 moutd b $46,735'500€rclaive of valDe Added Td (VAT),

The agls.rt requns lhe pdlin8 of a patmflr bond 6 secuitv for lh. obligation b pav nE90% bd{e of the ofishm Conbd P.ice On Julv 0,2015, t.tocEen sd8n.dthnofthoE strpply conracl lo Petosold. Followi'8 rhis ssigtmot, Ptusols obbined rhe

EquiFd bond froD M,liyd Inslmc Gmup, Inc

OnsboF CoNtucrion Cohtad

on tlne :lo. 2015. Petd6jg enreEj inb d Onsl'oE costutiot ConbDr vith PhGm'Ino. {h*in Ph.s shall insbll the inlode! sol[ pover plor equipn n! Penbm ft.eldicrl tud noisicsl ro*3, po@ locsl platt Dobrials, md t.rfom comissioni'gsedis. Tobl mnhct pri@ Douien b P247,950,000 Th. conhd wa 4r3nd bPtuSold on lulv 9. 2015.

d. CNrdiMlion A@emdl

On Jue 30, 2015, !tuGrcen s,Ered a Cdditoiion Ag€nenl wirh Phcscq Ins md

liltmtililillNI

INDf, Pf, NDENT AUDITOR'S REPORTON SUPPLf, MENTARY sCHf, DULIS

Thc Board of DirecroB dd StocknolknPetoEnerg/ R*ourc.s CorpoBnon7th fioor, JMT Building, ADB AEnue

We hale audired in aodrce wi.h Philiptile Sland?rds on AuditinS, the consolidated fin&ci.lsbtements of PetoEneq/ Resou4es Corrontion and is Subsidisis as ar Deenber I | , 2016 md2015edhaveissucdourEponfteftondar.dFebMry23.201? Outiudis{eEmadeforlhepurpos offoming an opinion on the basic fimciil sbrcmdts blen 6 a vhole The schedules lilredin rhe Index o Consolidared Fimcial Sbremeis and Supplenenrdt Scheduls &e rhe respoNibiliqofthe Conpanlt matu8cmst. These $hedules e pr.snted lor purtoses olcomplying * h

Ssurfties Rcgulalion Code Rule 63, As Amended (201I ) and e not pon ofrhe bdic finecialshteDenb These$hedul.s have been subj*ted rd lhe auditing prccedufts applicd in the audn oflh.basic finan.ial slalemenb m4 in out opinion, finly nat, in all naErial rcspeds. rhe infmationrcquned to be sd fonh $eEin in rclarion b rhe b6ic finscial sraremenb blen a a $hole.

SYCIP GORRES VELAYO& CO.

ola t rua

SEC Aocred ihtion No. 07 31-A R-2 (Goup A),Mi, l, 2015, volid until Apil 30, 2013

Tax Idertilioation No. 901-617-005BlRAccredib.ionNo. 03-001993 ?6-2015.

February27,2015, wlid until F.bruary ?6,2013PTRNo 5903?75, January3, 2017. Makari Ciry

ilililillllullllllllllilll

PETROENtrRCYRf,SOURCf,SCOR?OMTION ANDSUBSTDIARIESINDf,X TO CONSOLIDATtrD FIN

ANI} SUPPLf, Mf, NTARY SCIEDULES

CONSOLIDATED FINANCIALSTATf, MENTS

ibilny ror consoli&r.i F nmod Sbemmb

Reponollnd.p.ndenlAudlo6'Rep.n

con\olid!.d sracmenb of Finmclal Po:irioi 6 at De.mbd I l, 2016 and 2015

cmsoli&red Shtments or comprehensi!. Ii.oh. for rh. yea endedDecmber I I, 20 r 6, 2015 sd 2014

conelidared sb&h.is or Chsces in Etruiry ror rhe yaN endsd

Dedb.r 31, 2016, 2015 md l0l1

con$lidared sdenenb ol c^h Flows lor rtc yds odedDcnbq I l, 2016, ?0 r 5 hd 20r,1

Nors ro Cdnrolidated Finscisl sdmeft

SUPPLf, Mf, NTARY SCHEI'ULf, S

B. anou6 Rs.ivabl. from Didots, officm, Enploy.a. R.lftd Pdi6, sdPnrcipd sbckhorden (oo's rhm ReraEd Pdiet

C. Anoo* Re.ivlbl. nm R.ld.d Pdi6 which aE Elininatd dring rhrc.nsoliddion of Fimcial sbtmo$

PETROENERGYRESOT]RCES CORPORATTON ANDSI]BSIDIARIESSUPPLEMENTARY INFORMATION AND DISCLOSURES RXQUIRED ONSRC RULE 68 AS AMENDED

Philippire Sauitis od ExchdgE Comissim (SEC) isud lhe moded Sarities RegulationCode Rule SRC Rule 63 ahich consolid.lG ihe t'o srmt ruls dd labeled in rh. mddnelt 6'?d1 I" dd Pod r', Bp@rively. It also ple.ib.d rhe .ddilional i.fondion sd schedule

Rquienenb for issus ofsecuitie b lh. tublic

Belowetnod\cirionalinfom.lionod$hcdulerceuiFdbySRCRDle63,6Ane.d(201I)lhalm Elevmt io the Gsxp. Illis irfomrtion G pmenred for pures offiling lhtheSECodisnotr.quircd ps otthe b6ic fimcial scimb.

Schedde A. Fi.mcial A$etsTh. Cronp is not EquiEd b disclose lhe fod.ill 6*ts i, eqnity seffitis 6 the rod nmcid6$b d fair vrlue rtftq! profil dd lN secuitiE mourins ro $162,445 do nd coNtnft 5% ornore oflh. btal curent 6s6 ofrhe stuut a d Dember I I, 2016.

schedule B. Amounts R@iva6l€ 6on Dilss. otrrccn. Imolovees. Relaled Pdiffod Pri'cibal Sts*noldfls (olhd lhd Rdaled Psnis]As of DeMber 31, 2016 lheE de

'o moub Meivibl€ fion dii*16, ofiiooln emPloy*, relaed

pani6 ud pircipsl dc*ldde6 thil iSgFStt s .oh io moE lfim FI00.000 or l% 6fbbl ascts

C.nsolid ion of Firuotrl slllmenb

It. followirg is lhe s.h.dule of €eiwhls fim Fl.t d ,!rti.s, whioi @ elininabd in the

conslidded n.acial shmb a a! D.cemb€r 31. 20161

o 0) s2:o

Tmetions with olher Ehbd pdi6 ouaide lhe Grcup.Ple6e Eftr b Nd 26 of thc Cl)Mlid.t'd FiMcial Shtnenb.

Schedule p Inhsible AsdThe G6up hs d insierifi$t mout of inhsible sets 4 of Demb.r I l, 2016 moun.ing ro$1.01 nillion. Bulk of lne inbgible 'gr teis to llc lard righ eqnisition 6f Ptusolr.

Sdldd! E-l!4:!rr!o&!!Ptede pler to tJa CMahdde.t Aulrit d FiMcial stat.wnt, ot? l6Jor debitt olthe loN

|mil$t|ll|ilmil

Schedule F. bd.blednd b Reldd Pdies lhnq Tq!] lnN &m Rclated ConmiedTh. crcup h6 no ofttuding longrm indebtldn.s lo Elale! pdi6 a ofD€.dbd 3 I, 2016.

Schedule G. Cl.Mlees ofseuiries ofother lJsuenTh. 6rcup does nor haw gu,fure of surilie of o$et ismd 6 ofDe€db.r 31, 2016.

Schedde E. Cariial Sl@t

edd6cbyt]dedoft(sode10t9,r6 r,B,ae 3a.7r?9I

rmmrmililill

PETROENERGYRISOURCES COR}ORA'I'ION AND SUBSIDIAR]ES

siTueortr or rurelcteL souND\Ess r\DIcAToRsAS OF DECEMBER 31, 2016 rbd 20ls

iir* !'. 'r.

i*d.t *,t* t" * *rdd b ne GDup tor rhe r' 'nded

Ddnbs I r, 20 16 dd 20r 5:

colmr rrio (undtrpas.3r, (rD roral.uror s*

Ana d od profit + d.prcciation

hsh ++dim lBbllirie\

Tdl sbcknoke/s equrv

Earug! b.roE inffi,nd 66 (EBo) t.",

, th. .o$dd'atu'Ptoser ad ""'t' PPr

"t@,ry; baE d{-t tBA d.P

rNilutmml[tl

PETROENERGY R-ESOURCES CORPORATIONRECONCILIATION OF' RETAINED EARNINGS AVAILABLE FORDIVIDEND DECLARATIONDECEMBER 31, 2016

Unapproprialed Relaitred Eernings. Beginning $13,847,986Prior year adj ustmenls:

Unrealized foreign exchange gain - net (247,943\

Unrealized actuarialgains (5,779)Unreslized MTM gain on FVPL (75.498)

UDappropriated RetaiDed E.mitrgs,s3 adiusted Januarv 1.20t6 13,518,766

Net income bosed on the face ofaudited tiDrncial ststementsLess: Non-aotuavuDrgalized incom€ net oftax

Equity in net income of an associate/JvUnrealized foreign exchange gain - net (except those

attributable to cash and cash equivalents)Uffealized actuarial gainFair valu€ adjustrnent (marked-to-market gdins)

Fair value adjustment of investment propertiesresulting to gain

Adjustment due to deviation from PFRS/CAAP - gain

Other unrealized gains or adjustments to theretained earnings as a result of certain

transactions accounted for under PFRSAdd: Non-actuayunrealized losses net oftax

Depreciation on revaluation incrementAdjustrnent due to deviation from PFRS/CAAP - lossLoss on fair value adjushnent ofinvestment propertiesMovement in defened tax assets

(t 1 ,1 40,71s)

(235,600)

(16,404)

Net income actuel/r€alized (t1,992,719\

Less: Dividend declarations during the yearAppropriations during the year

Tot|l Parent Company Unappropriated Retrined EarniDgsAvaihbl€ For Dividend DlstributioL December 31.2016 $1,525,987

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PETROENERCY RXSOURCESCORIORATION AND SUBSIDIARMSSCHEDULE OF ALL THE EFNECII!'E STANDARDS ANDINTERPRETATIONS UNDER PFRS AS OF DECEMBf,R 3T, 2OT5

Below ir dE lii oflu etrdive Philippine Filmcial Reponing Sbd&& (?FrS) lhilippineAccouling Shdsrds (PAS) dd Philippin Incerdalim oilntcmitiond Finmial RepoainglnreDdrions Commifte (FRIC) 6 ofDecember I l, 2016:

conc.pMl Fmwork Phe A: objd

Fjn'.'rn.Addp'rmofPl'jlippb.rjhecjdRepdij'g

Ihvstunr in a subsidbry, Joi.dy contolled Enriry or

Arcndned ro PFRS I: Ad,titimil Erdtions for Fnr

RdodorFixedD"tfolrid.timAdoph

AnddlMtbPFRS,:vdn'scmdi'ioBmd

Anodm4r b PFRS 2: Goup Cah-sl.d Shft-bsd

anerdmcnb h PAs 3t ,rd PFRS 4, Fiio.i,l Cu,mre

Non-cllm! A$4 ll.ld fd S,l. bd Dituinu.d

riM.ll rnllw.dB DiqlsuBarendned ro PAs 19 !d PFRS 7: Rel6rifi.otidn of

An.ndm4b b PAs 39 sd Plts 7: R.chsmcrbotr ofFhmcial A$eb - Efidriv. Dd. hd TffirionAn!'dno! b PFRS 7: Inprcvi,s Di$losGs ibdr

anend'Hr b PFRS 7: Disdo.us . ofrdincFi.scial Assd ud Finh.iil Li,biliri.s

Anmdn* b PrRs ?: Ma&ldy Efldive Dat ofPFRS 9 md Trsiiior Disdosues

hddnEtr b PFRS 9: Lrddlrory ElT6riv. Dd. of

Neq H!ng! A(mdis R.{dirn*

Pl.6s@jdnofFiffi(iilsBanmh

An4dned h PAs 32 'nd

PAS l: hrbblc Fil'tri'lIntuent ad oblisiim Aftinc oi Liquidation

Ac.ouiins Polici.q cho36 itr A@utinc Esrimts

an idhdr ro PAs l2 - D€f.d.d rd: tu4vdy ol

anendomb b PAs 19: D.6ned Bs?h Plds -

Atrouting fd cov.mn dr Gmb hd Dislosu. or

AlMdnm'NdInvfuduir@ignop.d'on

a(dutncdd R.ponbsby Rdlmeor B.oeft Pl4

MendbmB b PAS 2?: rnEtud Ennns

FiimblRaoniqgjnHy?eliDnatui4E4imbs

r,Btuenr rd obliglrid3 atuins d uquid.rion

M.ndnrd b PAS r: Clasificdon of tushb r$Ganendnrd ro FAS 32: Ofi.ejns Finbcial Asd ad

Am.ndnetu ro PAs 36: Irpaimdr oras* .RsovdrbL Arod Di!.los'ffi for NoD Firocial

P'lMimr, comi4<d Li,bil ri.! rnd condrydtAs.E

Fi@ial hlDmdE Rocliim and MdKmatAn.ndn* b PAS 39 T,mitioD and hidalRapirim olFituci.l ad hd Fimcial Lirbilnies

AnmdnenbbP S l9: c,sh Flo* Heds! A@Dtins orFoF6t InhsFuP T''Ndic

^nmdm4bbPAsr9:Thera'vilu.oDtionhedd'mb b PAs 39 ,nd PFRS 4: Fimcial G'l,mb

Anendnmt b P S 3c 8nd PFRS 7: Rel6i6.arioo or

Anendtunr ro PAS 39 ud PFRS 7' klNindion ofFitu.ial Ass Eftcriw Dit od Tmsirim

AnendneDb ro Phlippitu ldr.rp*don IFPJC 9 ddPAs l9: Inb€dded Deri6tiv6

Ahddn n6 ro PAS 39: Fiio.hl I'tumb:Rsog''jiionandM.sd.ndl

chmss in Exi.tids De'llmissiooing, R.$@nd md

Mmbd sbft incGopdtjv.Enriti6a sinild

Detmhiry whethq M lnmsmd cad.i^t o t .de

tush6 ro Intu 'nbg

nd D.misionins;R*@rio fld ENnomMl R.b.bilidio FBd.

Liab ities ei'inE jnn Pdiituhs i, a s4lft ^t&4w6t Eh.hcd ad Ettu,b Eqripmd

,tpplti.z th. R.tuent,1warch sd- Pls 29Fiwcid Rqtuns h Hwlrltaio@ Eq@ia

R6esmd! ot rmbedd.d LlridiYes

Ancndnetr ro Pbilippi* ld.lptuiM IFFIC t ind

I\tnr Ftnn td R.pune dd Inpam.tu

PFRS 2 - Croup ,nd TlBury shd. rmdiGsefricec.rc*ioAnesenmscdob* r,Fry Pq@B'Irle Ljnn 0h 3 D.fi.d 8m.fi. A!3.!R.quii.md6 ud l}cn In6&!o

st ndlds bgled s'Not alplicable" n've been .dolted by de croDp but have no stnificul covs€drmdions foi thc yee e.ded Dsbd 3l, 2016

Stud,lds b$td s Nol odopbd" m tudaids issuc! bm not yd cf|erivc 6 ofDecemb€r 31, 2016.

The Gmup *iU rdotl tle Sbd'rds dd hterpFlalro6 rhen lhee bdoDe etr*ri!.

anendm* b PhilippiG ln6ad6dN IFUC - 14,

rrep.)mnb or! Minibm Fuod'ig tu'ruhment

He!s$ or 3 Ndbl/lfus' ina Fonlgr opsdim

Eni4unhing Fiffii,l Lirbilines wi$ F4ury

stippinc cd in dre P:odu..id Pbc or. surfde

c6oL,driotr . sFi'r Pxlpo( Endties

Am.ndfr.dbs|c.|2s@P.ofslcL2

Jodly codMu.i En nies - NoFMdebr) c.nEibdr@

In6tuTues R.6vsr of R.!rlu.d NoD-DepsDble

In6ne Tds - O6g.s in 6e Td sbtu ord hr'ry s

Eriluring d. Slbsde orTm*id3 livolvins rbe

sflid cobBdm Arnnsmmb oi*lolue!

R€du. 'Btu TllrlrdG Involvins Advdisirs

inbg,bk as.ts . w.j sik Co$

:

E]ti--r lqlLil lllLl1ZI------ri 5 |fl_ t.tr IFL

lFlt]-_TJt-l l; I

l€l Igl

l€lt1

I

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: 6d

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z

PETROENERGY RESOURCES CORPORATIONRXPORT ON SRO PROCEEDSDecember 3l' 2016

On December 05, 2014, the BOD approved a 2: l Stock Rights Offering (SRO) The StO ri/as

o"aert"t"o a*ing tft" period Iraay i i to t5, 2015. The proceeds ofthe SRO amounted to Php 599 68

million or US$12.36 million.

As disclosed in the Prospectus the Company expoots to raise gross proceeds of approximately

PhP599.68 million or U3$tz.ge .lttion *a nftur deducting listing, registration fees related to the

offer ofPhP592.46 million or US$ 12.26 million.

The proceeds from the SRO will be used to partially fund the exPansion, construction and

deveiopment ofPnRC's renewable energy projects: th€ to Mw Phase 2 ofthe MG-PP (Maibarara 2)

and Solar Power Projec! as well as the expansion of th€ Etame Projeot in Cabon, West Africa

The table below sho{s the Sross and nst proceeds; each exPenditure item where the proceeds were

used,

Precccds frcE the Stock Righr6 O ffc.ing

Les: Listing aad Registiation Fes

P1p599,075p435972,677

PhP594,602,366

Totel2015

lst, 2nd &3rd Qualtcr

Lcss; ExFndriresA. Et me Expanslon - Dri ing ofw€Is 742,202,469 15,740'937

B. Maib.!@ GeotlEm.l Ploiect Pbase 2

m16

well Cost

Fluid Colcction & Rcinj<don System 470,065 472'954

IGu.nc r'48O,774

5,165,AA2 1579913

96J16,946 164,890

29,567A63 9904,959

157,943,406

96,881,836

39172,422943919

7AAOJ146,A44,495

175,500

145,794,446

t74,673,326

41a,$5,n4

PbP116,187,188

t2J36,830

G&A and Odrer Costs

Fi''3trilA Costs

C. Tel,c Sola! Pow€r Pbiccr

I17,000

133.459.610 r233a,AI658,500

varios Plwiously RcPorted ExPser 114,67 3)26

Tot.l Exoe$cs Allocatcd to Procccdg 4EO,335,425 2a,O79,753

Remiaing proc.cds et of D.ccdbct 3L zrt6

R.mainina pece€& a! of D€ccDbe' 3t 2016 i! USD

""itil,i tl +,f Philtoo'n""i..r.

CERTIFICATIO

RESOURCES CORPORATION, with ofiice address at 7'n Floor JMT Building, ADBAvenue, Pasig City, after having been swom and in accordance with law hereby statesthat the information contained in the hard copy ofthe Gene.al Form for ConsolidatedFinancial Statements for the year ended December 31, 2016 and the one contained in thecompact disc ale one and the same."

fJ

IN WTTNESS WHEREOF, I hereto affixed my signarure this2017 at Pasis Citv.

auyo{Ll0?0f

tr||,'\CARLOTA R/ WRAY

AFFIA|${

SUBSCRIBED AND SWORN to before me this day of APR 1 0 20172u1 "1Pasig City, affiaht exhibited to me her Tax ldentification Number (TIN) 100-732-809.

Doc.No. ZZO ;PageNo. {'t ;BookNo. | ;Series of20l7 ,r.10!lE I\r|ARK R LllllC0t, ,

F'rm rio l{ll?016201!l, r4y'ubr. hr th! Ci6 or Prr g rid:

&d intlE trrip:liIol P,hoiUill 31 orietb?.I11

'l,rlil I d9.0ir9a! Cliler h:!i:Ro lrlo i3111

rr ?:l!5?? 0!/ii/11 ftt:i i:r r. .i$t6 !1r it7 [sil. . hvlii:ii105rlt, .

SPECIAL FORI! FOR FII{AIICIAL STATEIIEiIIS OF PUBLICLY.HELD AI{D IiIVESTIIENT COMPAI{IESIIATE OF PETROEIIERGY RESOURCES CORFORATIOI{ AI{D SUBSIDIARTES

CURRE TADDRESS: ?lh Fbof Jlff Buibhc, ADB Asu.,TEL ilo.: 53t.29it

PETROEIIERGY RESOURCES CORPORATIOI{ AI{O SUBSIDIARIES

coflPAt{Y otLE(PtoRATtollr h.se .ft btsed on consondelnd lt .rci., sbt ,ren6. ore$e so ird[c.E io tlE c.Dti@.

P$rc: 1193

Table l.Consolidatod Statomgntr of Financial P@ition

FITiANCIAL DATA 2016( rn !000 )

2015{InIo0)

20'l4(ln f00o )

c" ASEEIE {41 I A2 + 4.3 + 4,4 + 4,5 + 4.6 + 4,7 + 4.8 + A"9 + A"i0l 211 237.131 112.084.1 Cunenr r.ss€rs ta.1 1 +A 1.2 +A.13 +A.14 +A.1 5) 2t 701 12.697 9.781

A.1.1 C53h tnd Bh euiElents{A.1.1 1+A1.1.2}A.1 1.3) 12.915 32.536 2.818

5 3

A.1.1.2 ln dom€€lic b6nb/6nlil€s 12,910 32,532

4.1 1.3 In lorehn bankvenlitiesA.1.2 TEde and olher Recoivables lA 1.2.1 + A.1.2 2) 7.86t 3 592 3 572

2.1 0u€ irom domestc onriri€s {4.1 2.1 1 + A 1.21.2 + A 1.2.1.3 + 6.934 ?619 r 859

A 121 1 oue Ircm cuslomts (u?de) 6.926 1726 18154.1.2.1 2 0u6 lml. lelal€d oadi€s 2 880

a12.11Olhel3.sD€citu{A.12.I.t1+A.121 3.2) 60 70 144

A.1.2.1 3.1 Accounls |Bc€iv?bl€ - OPirC 54 €0 60

A.1.2.1,3.2 ote|s 6 10 44

A.1.2.1.4 Allorafte lor doubflui accounb {nedlive entdl ,54 (60

4.1.2.2 Due lmm lo€ign enliti6s, sp€.ilylA13) 1+ 413r, + 417r 3+ A1lr l\

927 973 1,713

A.1.2.2.1 A@unls r*iwble - Velco 921 973 1.i134.1.22.2

4.1.2.2.3

4.1.2.2.1

.3 lnv€nroi€s iA.1.31 +A.1.3.2 +A 1.3.3 +A.1.3 4 +A.13.5 +A 1.3.6

3.1 Rry roleriab End suDolies

.3.2 Goods in prc€ss (in ludinq unfnish€d ooods, qofinq crcp!,

.3.4 lGrchandise/Goods in llansil

.3.5 Unbil€d S€fticss lln cass ol s€lvce o,ovidas)

3 6 Olh€u. so€.rv (A.1 3 6.1+A I 3.6 2l

A.1.3.6.1 Crude oil incnldY4.1.4 Financirl lsseb othd $& CdtlR*iEbles/Eouiiv invBhenls 162 156 163

A 1.4.1 Fimndal AsssL al Fat Valu€ lhrcugh Pmfil of Lo6s - bsuod by

doneslic enlitio6 {A.l.4 1.1 + A.1.4.1.2 + A.1.4 1.3 + A 1.4.1 4 +156

4.14.11 NalionalGowmmntA.1.4.1 2 Public Finamial lnsftrtionsA.1.4.1 3 Public Non-Financial lnstiMions 162 156 103

A.l4.l4 Pnwb Financ6l lnslitulhsA.l 4.1 5 Piwte Noi Fhancbl lmb'hiliom

A.1.1.2 Held lo Mabrily lnwstMb - hsu€d by dmtic slili*(4,1.4.21 + L1 4,2,2 + 4.1.4 2.3 + 4.1.4.2 4 + A.1 4.2 5)4.1.4.2.1 NrlionalGov€mnenl41122 PftlhFinrn.irl l.dihnidnc4.1.4.2.3 Pr hli. N6n-Fin.miel lnsiii ni.ns4.1.4.2.4 Privto FiMn.irl lmlillti.lMA 1 4 2 5 Privrrd NM-Finamial lnqrir'tiys

ilOTE:

Tnb gmErtum b 4prcar,l6 lo.mpah3 dDas€d r Aoiculure, Frshery FoBlry. hnq, aid O@'ryins, aiur4[trf,s, Ek rdDt], Gs td Wabr

comtuton who€ssr 8d Rold TEdo, Tmpodalh., st€se ard cmmunbalm, HoGs d R6b'mb RealEsft, commiit sdJ and P6Mml

SeryiE,otslocolFldwljor, zds@6 bsi6op€.alim Ilris lm s d$ appfEbls b 0{s tunpaas uMr d0 mrhas tn6|4$p6cfrc spoc a Fmstdit lom sltdl bo c€d by plhrtrb! 6npt*s and 0r@ 6ig4€d n mn b rt sEr$ru aid ?clMla au 6ry brffid iibr.€didon rircrr ftqlirsM-y rb#rrm sEc

oomJlb @Dfddos d f!$ *tlch a€ l*vro6rd urd.r Plrlbr@ lr"s or tathetskldrais or rd8lsi coooElrore ItE Pnl0oB l,/4t tE ca€i ol a@nlc li€qn ot dxvriy h rllrrrn h. PNhdm 0n 0EoD€rhaid roEbi @'IqaloB a

sE6d rt]ldrio DmrB oi Pribdm oFlirrlrl NrilluoN e @ocalbu lilm9aly dtg4€d 0 nEf,ld inbln'edEljon, r4iilalriq frfl;d iibmsd]dim o, ukry nidralsad.* Nm

Finflil iB!turbre Els ro ccDo€lbN har @ ,m'ly sE46d n na p'ddlfr dr mrrd qoods ad eirnid s 6s

Fotf,rytr: -EFFSFI-Z@/-'

SPECIAL FORI' FOR FINANCIAL STATEI'ENTS OF PUBLICLY.HELD AND INVESTiTENT COITPANIESMIIE OF PETROEIIERGY RESOURCES CORPORATION AI{D SUBSIDIARIES

CURRE TADORESS:

coMPAt/Y--dfdEEna-iEE--

-

/tttr!6,rc b.!edo,i corroirrCetodlk cialttate'jontt, olaasa sokc a,/eln/,ecaqtlon.

Table 'l.Consolidttgd Shtenrgnts of Flnanclal Po€ltion

FINAN CIAL DATA 20't6(in l!00 )

2015{ in 9000 )

2014{ in t'000 )

A 1.4 3 Loans and Roceivables - issu€d by dom€slic enliles:tA 1411+ A1A lt + A 1A,\'\4,1.4.3.1 NaliondG.vemmentA.1.4.32 Pulti. Fin.nnirl ln{in ri.nrA1.4.33 PublicNon-Financia lnstitulionsA1434 PnvrF F in,nnirl lnrrir'

'riM.4.1,1.3.5 P veie N*Finan.i.l lnslildimsA 1.4 4 Availablefor.sale linancial assols - issu€d bv don€slic €nlilies

141441+ 4144, + A 1413 +A 1! l4 +A 1 d l5!4.1.4,4.1 NaiionalGowmmmlA.1.44.2 PublicFinanciallnstitulionsA.1.4.4.3 Public Non-Finln..ial lnrtitulonsA.1.4.44 PrivaleFinanciallnsliiulionsA 1.4.4 5 Pdvale Non-Financial lnslitulions

A I 4 5 Finen irl Assats i$u6d bv loEion Mtiti€s:A1451 Finrn.i2l A rat. 2l f2t v.l"alhnnh dnfii nrl^c.4.1t.5.2 Hold-tcm.turitvinv€ctm€nts4.14.5.3 Lorm and Rffiiveblds41454 lvril2hlafnr-e2l^nn,n.i2l,rc.lc

A 1 A A AlkMrn.. Lr dA,iinA ln mri.er vrlr F /ntrrllva .nrto,alq o|her crfl.nr Aqor.lqrr. snrr.relv mt*i4lr.m(\ rA 151+A 1F,+A l5 31

A l5l Adurn.r( h n-nh}{nrA I 52 Shonle,1ninv$lmenh 0 187

a 1 .5.3 Redricl€d cash 2473A154 Mered Finamim C6l 0

A.1 5.5 olhers - Advances lo Emoloye€s Suooes 'nvenlory,

Preoa d Eroenses ano 1.74t 993 313A 1 s5 Crude Oillnvsloru 19a 419

A 2 Pomrlv. olanl. and muiom4llA 21 + 422 + 423- 424 + 425 + 426 + A2T+42 8\ 138 87( 140 724 79 058

A 2.2 Bu dno and morcv€m€nts rndudno ls:€sholo m0rovem6nl t91 196 t14179! 1488 183

A 2 4 Transoorlaliorvmotor r€hiclss. aulomo|va eouioment. autos and lrucks. and delivorv 1.00i 146 687A ? 5 L.nd and lrnd imhhvm.nls 1412A 2 5 Othe6 sBifvlA251+4252 +4253 +A254-A2 551 180071 162 829 93./34

A 2.5 1 Welb. Dlefionns and olll€t ta€ilili€sA r 5, FCRS a.d obduction Wells Geolhemal 22 4Tl 20 888 194134253 Conslructon in Pmoess 11.31i 60.158 2.U7

4AOr7 48 248

A 2 6 AooEisalincFe sBito{A261+A26 2 -A263 +A2641A r 7 Adrmuh.n O.kiri.niD€bLrion lnd.tive.nrNlA , A lmnrim.nr l.cq n RehMllil lmc nmrivn enlrul

A:l lnvaqlmmlc ,m'nl.rl f.r rFn.lhe muiv melh.d lA 3 1 -A3 2 . A 331 ,7170 27 631A 1 1 Fnuirv in dmFrli. rxhriiidFi/,fi it* 27170 27 631

A 3 2 Fn'rirv in f.mirn hFn.h*/Hbri.lird*/:lfilirRrA 3 3 OlheR qHift lA 3 1 1 + A 3 2 1 + A 3 3 1 + A 3 3 4l

A332

31

A A lntrndihla ArGr.lA A I +A A r)a A 1 M,ir irm/e .mifv /A A I 1 + A A 1

' + A A 1 :l + A A 1 4l

A611 Soflvare Licenses

4613

A A, athAK .Fitu /A 6, 1 + A6, t + A61 7+ A61 4\

A6.2.1 Soflw?r€ Licames - lccumulal€d Amodizalion

A623A 7 Arsrr Ch.sifErl ,. H.H Lr Srl.

Contot No.:

ro rw", cEi,t,frmi

SPECIAL FORI{ FOR FIMNCIAL STATEI'E},ITS OF PUBLICLY-HELO AI{D INVESTIiIENT COIIPANIESt/AitE OF CORPORATIO T PEIROEIIEROY RESOURCES CoimRATor{ AND SUqtDnmESCURREilT ADDRESS: 7O Fl@r JMI Building, ADB Ayenue, Onisr Gnter, Pris cityTEL.l'lo.r 63?'At7 FAX NO,:

CO PATIYTYPE: O! EXPLOMTtox PStCt 1193

lfthaso obetadoncontolftt,/'adtut clsl ttf/fr'lt aht', pl3dse ao indtcat| k tha c'4tlon,

Table l.Con.olidaled Staten.nts ot Fin.nci.l Polition

FINAI{CIAL DATA 2016(li t'000 )

2015(in t 000 )

2011{inl000)

A.9 LonFlefl receivabl€s (n6l ol clrronl Dor|En) lA I I + A 9.2 - A 9.3)A.91. Fro,n domestic entilies soecilv tA 9.1 ' +A.91.2 . A.9.1.J ' A 9.14t

A.9.1

4.9.1.2A.9.1.3

A.9.1.4

A.9.3 Allownce lor doubfful accounls, ner of cune"| oodon lne{alrve €nrrv)

A.l0 Olher Assets {A 101 +A 10 2 *A.10 3 *A 10.4*A.10.5) 20.85C %510 25.547

A.10.1 Defened hcome Tax 308 307 2024.1024.10.3A 10.4 Olh66 sD€citv iA.10.4 1 *A.10.4 2 +A.10.4.3 *A.10.4.4) m542 26.203 25.U5

A.10.4.1 Dsl€red ol exDloralion msls 101v 15.920 19.113

A 10.4.2 Ad€nc$ aM O$er Non-CuflEnl Assels 10.40t 10.283 6.2324.10.4.3

A.10.5 Allo*€ncs lor wil€{odm of defened charoegbad accounts (neoadv€ ent )B. LTABILTflES t8.t + &2 + 8.3 + 8.t + 8.5) 125.021 t5{,753 83.275

B.l Cun€ntLiabililies(81.1 +8.1 2+B1 3-81.4-81 5+B.l 6+8.1 7j 22.42t 41.892 218n8.1.1 TrSe and O|ner Pavables lo Dome$rc Enltues 19355 33.873 20.571

8.1 1.1 Loans/Noles Pavable€ 1598i 16.539 16.679

8.1.1.2 Tnds PavablesB 1.14 Olh6rs. sDecifr {8.1.1.4.1+B 1.14.2 * 8.1.14.3) 3.373 173U 3.892

8.1.1.4.1 Accrued €xD€nses 611 461 521

B 1.1.4.2 Wihholdino laxes Davable 2U 352 95

8.1 .1 4.3 Accounb oavabls 2.423 16.462 3.215

8.1.1.4.5 Olhers 55 59 61

B.1.3 Povisions8.1.4 Financial Uabilili63 (6xcludinq Tlad6 and Olher Pavables and Prcvislons)

8.1.4.1

8.14.4B 1.5 Liabilllies for Cuned Tar 4l 1

9.1.6 D€fefl€d Iax Liab ili€sB 1.7 Olhers, sp€cifv (ll materEl, stale separatey indicab il lhe ioT i9 oayaole lo 3.02i 8.018 1.250

8.1 /.1 Dividonds dtrlarod and nol oaid al balanm she6ldalo 2ff 221 233

L I .7.2 Deoosils for fulure slocl subs{riotion s 1.781 6 557

8.1.t.38.1.7 4

81./5B 1.7.2 Accrued lnlere$ Davable 1.037 1244 1.017

B 1.7.6 Anv olM curfflhabhv n €xce$ ol5% ol lolalCursnt LEbrIlEs.

B.1.7.6.1

8.1.76.2

8.1.7.6.3

Pags 3

ronqpe: -@F5 '1W

SPEChL FORfl FOR FIM}ICIAL STATETIE}ITS OF PUBLICLY.HELD AI{D II{VESTI,|EI{T COI{PANIESXAI,IE OF CORPORAIIOIII PETRoEIIERGY RESOURGES coRPoRATIoI{ AiIO suB'o|AnEsCURREI,IT ADDRESSI

co PAI{Y TYFE:-----llfdRtrxa-ti0fl-Itthesearebesadoncr,nsotia@

Table 'l.Congolldated Statemenk of Financial PGition

FII{AI{CIAL OATA 2016(in f000 )

2015(lnt000)

2014{in t 000 )

8.2 Lonq lerm Debt' Non-cunenl Inleesl-b€rinq Uabililies 18.2.1 + 8.2.2 + 8.23 + 8.2.4 + B 2 5\ 99.50i 99.171 44 9708.2 1 Dom€stic Rrblic Financial hslilutionsB 2.2 Dome3 c Public Non-Financiallnsliutons 99 505 99171 44.9708.2.3 Domsdic Privato Financial lnslitulions

8.2.4 DomeslicPdvateNon-Financiallnstlulions8.2 5 For€iqn Financial lnslilutions

B.3 lrdebl€dr|ess lo Atfiliales and Related Partes rNoFclrennB 4 lbbilities Includ€d io he OisDosal Grouos Classilied as H6ld lor $168.5 Olher Uabil,lies 18.5.1 *8.5.2) 3.087 r3.690 16.483

85.1 Dst€ned lncom€ Tax 1 538 1.624 5.128

8.5.2 Oh€rs. soecifv lB 5.21 +8.5.2.2 *8.5.2.3 * 8.5 2.4) 1 550 12066 11.355

8.5.2.1 As$l r€ti'€m€nt oblnation 1 36? I 095 60s

8.5.2.2 Ac.rued reliremenl liabililv

8.5 2.3 Deivalive liabilily 10.856 r0.677

8.5.2.4 olhers 18: 115 69

C. EOUITY lC.3 + C.4 + C.5 + C.6 + C.7 + c.E I c.g+c.tot 89.27! 82.378 58.773

c.1 Aulhorized C apilal Slock (m ol sharcs, par value afd tolal value; show dela ls) 700,001 700,000 330 000

100,000,000 ri.rc., 10.0215 p|l vduo 700.00( 700.000 330.000

1.3 OdreE

C.2 Subsfibed Caoihl Slock {no ol shares. Dar valu€ and tolal ualNP-\ rc 2.1 - C 2.2 . C 2 3,

C.2.1 Conmon shares

C.3 Paid-uo Caoilal Slock (C.3.1 +C.3.2) 9.391 9.391 6.322

C,3.1 Common shar€s 9391 9391 6322

C.3.2 Pcfoned Shares

C 4 AddfionalPaid-in CaDital/ CaDilal,n exc.ss oi DarvalJ6 / Paidri Sumlus 35.621 35.621 25245C 5 MinodlY Inleresl 24.@2 16.042 8 679

C.6 Olhas. so€cdv {C.6.1 *C.62 +C.63 + C.6.4 + C.6.5) ,3 557 t726\ IU2C 6.1 Rem€su€m€nls of net accrued tel|lement liabiliiv (36) {38

C.6,2 Cumulalive lranslalron adiuslmenl 5 399 t2 549 t804

C.6.3 Equ(Y reserv6 1.859 1 859

c.64c65

C.7 ADDraisal SurDluJRevaluation rncremem in Proo€rlv/Revalualiof SUD us

C.6 Relain€d Earninos {C.8.1 + C.8.2) 23.821 22.050 19369

,8.1 AoDioorialed 3.15( 3.150 3.150.8.2 UnaoDroodated 20.67i 18.900 r6.2r9

C.9 Head / Home Offce kmunl lfor Forelon Branches onk)l0 Cosl ol Stocts H6ld rn T.€asurv rn6dltlv6 antrvl

). TOTAI. LIABILITIES AI{D EOUITY {B + CI 21{,30( 237.131 142,0,$

ContlolNo.:

ron rtpa: i4iifri66PECIAL FORII FOR FII{ANCIAL STATEiIETITS OF PUBLICLY-HELD AND II{VESTI'EMT COI,IPANIESAME OF CORPoRATIOil: pErRoENERoy REsouRcEs coRpoialtot| alip suBstptaRtEs

URREilT ADDRESST nh F|@r JIIT Euldlng, ,OB Av€nE, orlisa3 center, Pasig Ciry

:!. flO,r 6rr'A17 fCI.IPA YTYPE: OIL EXPLoRATIOI{ PS|C: 1193

dra3a ra Derod o, cor6orra,a!6d trenc,? stalsrDorls, p,easo so hdicab in th. c.ption,

Tabls 2: Consolidated Slatomonb of lncome

FINAI{CIAL DATA 2016{in t 000 )

2015

{ li t000 }

2014(lnt'000)

A. REIEI{UE / rricoflE tA.l + A,2 + A.3) 37,07( 23,tE4 25,874A.1 Nel Sales or Rew,rus / R€c€ipls lrom Op€rations (mnulactudng, m ning,utiliti€s, tad€

66rvices, elc,) lfron Primary Aclivilvl33,630 23,543 25,874

A 2 Shar6 in lhe Prcfil or Loss of Associal€s and Joinl Venlur$ ecounted lor usino lhe 1.130 241A.3 Ofier Rovenue 1A.3.1 *A.3.2 +A 3.3 + A.34 +A 3 5l

A J I R€nlal Income lrom Land and BulldlnosA.3.2 Receiols lrom Sals of Merchandis€ ltrdinol lfrcm SecondaN Activilv)

A 3.3 Sals of R€l Estale or oher Pmoedv and EduiomeDl

A.3.4 Rovallies, Franchise F€es, CoDyriqqls (boots. frhs. records. et )

A.3.5 Olt16rs, sp€cify (A 3.51 +A 3 5 2 +A 3 5 3 +A.3.5.4 +A 3 5 5 +

4.3.5.1 Renlal Incr'ns. Eouiomenl

A.3 5.2 Share in net income ol a ioint r€nlure4.3.5.3A.3.5.4

A.3.5.5

A3.5.6A.3.5.7

4.4 Othff In ome inon.oD€ralino) lA.4 1 + A.1.2 + A.4.3 + A.4 4l 2.31t t729' 10.492

2U 113 t1A 4.2 DMd€nd lncom€

A 4.3 Gain / (Lo$) fom sellin0 ol Ass€ts, sp€cify{A4 31 +A 4 3 2 +A 4 3 3 +A 4 3,1+A4 3 5 +A a 36 +A ! 3 7l

10,761 (134) 1029t

A4.3 1 Gainondisoosalolrnv6srn6nlandd6nvrtu6liaorllv 10.761 t7u 10.297

4.4.32A.4.3.4

A.4.4 Gain / {1o3.) on Forshn Exdanqe lA 4.4 1 + A.4.4.2 + A.4 4.3 + A 4.4 4l 97 tlm) 1244.4.4.1 Nsl unr€aliz€d oain on flnancial asseb al FVPL 1€

19i 211 243A.4.4.3 Nsl qain on tor€ion €xcnanoo 4( r179) {944.4.4.4 Accrelion exoense n41 151

-8.83i

L COST OF GOODS SOLDTB.I + 8.2+8.3r8.1 CoslorGoods Manulaclur€d {8.1.1 ,B 1.2+B 13+B l4 +B l5)

8.1 .1 Dir€d Mal€rial Us€d

8.1.2 Direct Labor

B I 3 Olhff Manulaclurino Cosl / Ov€rnoad

8.1 4 Goods in Process. Beonnino

8.1.5 Goods b Pmce$. End (nodrtlvr 6ntrv)

8.2 Finished Goods. Beoinnino

8.3 Finished Goods. End {nocdlv. entrv)cosT oF sALEs rc.l + c.2 + c.3r

C.2 Mercnandise Inventofi, Beoinnino

C.3 l\,brcnandiss Inv€ntory. End ln.crtlv. .nf!)). cosT oF SERvlcEs. sPEclFY iD.l + 0.2 + D.3 + 0.4 + D.5 + D.6)

0.1D2D.30.4D5

Page 5

Contot No,:

tutnffie:

SPECIAL FORiI FOR FINANC!{L STATEI'EITS OF PUBLICLY.HELD AND II{VESTMEI,II COMPANIES

I.IAME OF CORPORATIOil: PEIROEITERGY RESOURCES CORPORATION AIIO SUSSIOIARIES

CURREIIT ADDRESST 7ih Fl@rJm Buildlng, ADsAv.nuo. Odgar Cei|.r, Paris Cny

TEL, ilO.t 6!t-291f FAX lio.:COtlPrrl{Y TYPE: oll EXPLOMTION PSICI 1193

lfthaso arc bat6d on contol lad finmci2l st./,e,,enl6, please so indicae in the czptjon.

Table 2: Con3olidated Statemenb of lncome

F INANC IAL DATA 2016 2015 2014lh5so0) Iinr000) (in t 000 )

OTHER DIRECT COSTS, SPECIFY G.l + E.2 + E.3 + E.4+ E,5 + EOI 18.700 13.031 12.603

E.l Oil oroduclior o!€ratlno €xD€ns€s 3 705 4.239 5.132

E.2 oeoletEn. deDreoarron and amorlzalim 2.195 I 682 1.406

E 3 cosr ol 6lecticilv 12.244 T.113 6 065F. GROSS PROFIT IA. B. C. D. E} 18.37( 10.021 23.763G. OPERAIII'IG EXPENSES lG.1 + G.2 + G.3 + G.4) 3.211 3.911 3.520

G.l Sellino or M.d€lino Eroenses

G.2 Adminislralivg Exo€nsss 3.211 1.911 3.277

G.3 General ExDenses

G.4 Olher E oenses. so€dtv lG4 1 +G4 2 +G4 3 +G4 4 +G4 5-G4 6) 243

G.4.1 Shale in nel bss ol. oinl ventlre 243

G.4.2 Mis.ellrnoous exo6ns6

G.4.3 Research coslsG.4 4

G.4.5

G4.6H. F[{AilCE COSTS 9.077 {,933 4,524[ ilET I COIIE {LOSS} EEFORE TAX { F . G . H) 6.076 1.177 15,720

J. lNCOlllE TAX EXPEIISE {neoatlve entrv) .218 3.it33 15.9691

L. Amount of {i} Port T5I Potil or Lo8! of Dilcontinu€d OpoRtion!; and

{ll} Po3t-Trx Galn or Lo$ R€cogntzed on tieite.6urenent of Fak V.tuele.3 Cosl to S€ll or on th8 Di3po3!l of the &E€t! or Oilpo3al crcup(B)con.tltutlnd th. Dllcontlnued ODerrtlon lff .nvl

0 0

1.1 NCI sham in nel loss

1.2

lr. Profit or Lo!5 ftnbuhble lo Mnodlv lnt€r€8t d08a 1.252

N. PrcfIt or Lo3! Altributablo to Equilv Holdor ol tie P.rsnt 1,173 2,5E0 8,489

Page 6

. SPECIAL FORI IOR FIMIIC T STATEXCNIS OF PUBUCLY.flELO TXO h'VESTXENT COXPANIES

fufusekr4'Dglw{'ods|d,hd'c

SPECIAI FORII FOR FII|AI{CIAL STATEXEI{Ts OF PUSI.ICLY.HEID AND IIIVESTIIEIII CO PAI{IEsNAUEOFCORPORATIOX: PEIRoENERGY RESoI,RCES coRPoRATIoII AND SI,BSII]IARIES

FdnIyN, CFFS (nt 2006)

PSIC: 1193

CURREIT AODRESgI

TEL NO,: d37.2C17

7lh Fld J{r BuUliC, ADB Averu.,oniq$ Cer s, PBiq City

FAI IO,:COIIPAI'YTYPE: OILEXPIORATbII

tt olo il b.!.d d cmroi/ot|l€d lrfrcid th|€nqtt, pl.w .o ia.rinl€ in lr..t/ion,

T.bl. 3. Comolldrl€d Stltdn€ntt of Ca3h Florvg

FINAI{CIAL DATA

A. let C$h Pdided by (Uted In] 0!.6lins Acliviii6 l&m or dbo6

P@€ds fiw ele ol o@dv. lbnt and

OF FOREIGII EXCIIAIIGE RATE CHANGES III CASH ANO CASH EQUIVALEI{TS

IIICREASE III CASH AIID CASH EqUVALENI6 IA + B + C)