Corporate Presentation - Sterling Energy · Promotion) Order 2005, as amended (the ‘FPO’), ......

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www.sterlingenergyplc.com August 2015

Corporate Presentation

October 2016

www.sterlingenergyplc.com

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Disclaimer

This presentation has been prepared by, and is the sole responsibility of, the directors of Sterling Energy plc (the ‘Company’).

This presentation and the information contained in it does not constitute a prospectus or listing particulars relating to the Company and has not been approved by the UK Listing

Authority, nor does it constitute or form any part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any

securities in the Company, nor shall this presentation or any part of it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract therefore.

No reliance may be placed, for any purposes whatsoever, on the information contained in this presentation, or upon its completeness or accuracy and this presentation should not

be considered a recommendation by or on behalf of the Company or any of its directors, members, officers, employees, agents, advisers or any other person in relation to any

purchase of, or subscription for, ordinary shares.

No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, members, officers, employees, agents, advisers or any other

persons as to the accuracy, fairness, completeness or sufficiency of the information or opinions contained in this presentation and none of the information contained in this

presentation has been independently verified or approved. All financial information contained within this presentation has not been approved by the Company’s auditors and, as

such, may be liable to change. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in such information or opinions.

This presentation and its contents and any accompanying information communicated verbally as part of the presentation, including the speeches of the presenters, any question

and answers session and any materials distributed in connection with it, is being made only to and is directed only at (i) persons in the United Kingdom having professional

experience in matters relating to investments, being investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the ‘FPO’), (ii) high net worth companies, unincorporated associations and other bodies in the United Kingdom within the meaning of Article

49(2) of the FPO, (iii) in the United States to persons the Company reasonably believes to be qualified institutional buyers, as defined in Rule 144A(a)(1) of the United States

Securities Act of 1933, as amended (the ‘Qualified Institutional Buyers’) and (iv) persons to whom the presentation may otherwise lawfully be made (together ‘Relevant Persons’).

This presentation must not be acted on or relied upon by any persons who are not Relevant Persons. Any investment or investment activity to which this presentation relates is

available only to Relevant Persons and will be engaged in only with Relevant Persons.

Neither this presentation nor any copy of it may be distributed, forwarded to, or transmitted in or into the United States of America (except to persons the Company reasonably

believes to be Qualified Institutional Buyers), Canada, Australia, Republic of South Africa, Japan or their respective territories or possessions or to any national, citizen or resident

thereof or any corporation, partnership or other entity created or organised under the law thereof, nor into any other jurisdiction where the distribution thereof would breach any

applicable law. Any failure to comply with the foregoing restrictions may constitute a violation of United States, Canadian, Australian, South African or Japanese securities laws. The

distribution of this presentation in other jurisdictions may be restricted by law and any persons into whose possession this presentation comes should inform themselves about and

observe any such restrictions.

This presentation must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of the Company. By

accepting receipt of this presentation you agree to be bound by the limitations set out above.

Certain statements in this presentation are or may constitute ‘forward looking statements’. Such forward looking statements involve risks, uncertainties and other factors which may

cause the actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed by such

forward-looking statements. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.

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• Transformative growth platform

~US$92.5m million cash

Debt free & fully funded

Consistent capital discipline

Proven E&P capability set

• Continued portfolio transition

Pro-actively managing exposure to

Chinguetti decommissioning & abandonment

Maturing C-10 prospect portfolio

Odewayne 2D operations Q4 2016

Working to unlock potential on Ntem block

Disciplined data-driven exit of C-3

Disciplined data-driven exit of Ambilobe

• Near term M&A focus

Transformative M&A with near term

execution

Leverage cost deflated landscape

Onshore / shallow water

2P/2C bias with low break evens

Disciplined Material Growth

Value driven, uniquely positioned for growth

Mauritania

Somaliland

Odewayne

Sterling 40%

Genel 50% Op.

Petrosoma 10% C-10

Sterling 13.5%

Tullow 76.5% Op

SMHPM 10%

PSC-B Chinguetti

Sterling ~ 8% E.I.

Petronas 47.38%

Op. Cameroon

Ntem

Sterling 100% Op.

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Mauritania – Block C-10

Large footprint in a proven re-emerging basin

• Joint venture

− Sterling 13.5%

− Tullow (Operator) 76.5%

− SMHPM 10.0%

(SMHPM carried by Sterling & Tullow during exploration phase)

• Large block in a proven basin

− Area 8,025 km2, water depth 50-2,400m

− Drill ready Neocomian carbonate prospect in water

depths of ~100m

− Re-emerging play focus (Cenomanian)

• Licence terms and commitments

− Phase 2: November 2014 – November 2017

− Drill 1 exploration well

− Phase 3: November 2017 – November 2020

− Drill 2 exploration wells

• Outlook

− Focused Cenomanian interpretation of legacy and

reprocessed 3D

− Develop and refine programme for drilling in 2017

C10 - Sterling Energy 13.5%

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Mauritania – Block C-10

Independent value adding subsurface evaluation

Four plays (& prospects) under evaluation:

1. Neocomian shelf carbonates (Lamina) refreshed

interpretation & volumes/risks

2. Kimmeridgian fringing carbonates (SAK) Material new

play

3. Late Cretaceous canyon clastics (Kibaro) refreshed

interpretation & volumes/risks

4. Cenomanian DW clastics (Bertha)

Basin Studies

• Regional framework

• Database building

Play description

• Failure & success analysis

• Common risk segment analysis

• Regional seismic mapping

• Play fairway mapping

Prospect description

• Detailed prospect mapping

• Volumetrics & Risking

• Economics

Ongoing Completed

Marsouin

Tortue

Chinguetti

Leads

Prospects

Gas Fields

Oil Fields

Kibaro

Crocodile

SAK

Bertha

Lamina

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• Comparable seismic character

• Similar scale channel systems to outboard discoveries

• Multiple structural and combination traps

• In proven oil generating mature source rock kitchen

Mauritania - Block C-10

Cenomanian play – analogous to Kosmos discoveries in Mauritania & Senegal

Latest gas discovery in by Kosmos. 31m net gas pay in good

quality Cenomanian reservoir sand channel system.

Teranga-1 Discovery, Senegal May-16

Lower Cenomanian

5 km

C-10 3D random line

C-10 Zoomed Cenomanian 3D stratal

slice- Reservoir characterisation

Kosmos Teranga Discovery Pmean ~ 5Tcf

Albian

Equivalent (updip) Cenomanian-Albian sequence / fairway to Teranga

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Mauritania – PSC B Chinguetti

Oil production funding and royalty income

• Chinguetti Field

− First commercial oil field discovered in 2001, 80kms offshore in

800m WD

− Q1 2016 gross field production averaged 3,888 bopd

− Petronas 47.38% (Op.), Tullow 22.26%, Premier 8.12%, Kufpec

10.24%, Société Mauritanienne Des Hydrocarbures et du

Patrimoine Minier (SMHPM) 12%

• Sterling position

− Established since 2004

− Company entitlement to economic interest ~ 8% (from inception

of working interest) via:

1. Funding Agreement (‘FA’) with SMHPM. 2015 net economic

interest to Sterling averaged 310 bopd

2. Royalty Agreement (‘RA’) with Premier Oil over 5.28% of

Premier’s share of production

− Working with Chinguetti oil field stakeholders on a safe, cost

effective and technically robust decommissioning and

abandonment plan for the Chinguetti field.

PSC B (Chinguetti)

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Somaliland – Odewayne

Large footprint in frontier exploration province

• Joint Venture

− Genel (Operator) 50%

− Sterling 40%

− Petrosoma 10%

• Onshore frontier exploration

− Large block of 22,840km², equivalent to +/- 100 UKCS Blocks

− High resolution Gravity and Aeromag & Fieldwork completed in

2013.

• Licence Terms and Commitments

− Sterling carried by Genel for all costs in Periods 3 & 4

− Period 3: May 2012 – November 2016 (2yr extension)

− Airborne gravity and magnetics survey - completed

− Acquire 500km 2D seismic data

− Period 4: November 2016 – May 2018

− Acquire 1,000km 2D seismic data

− Drill one exploration well

• Outlook

− JV supporting Government in setting up a trained and equipped

Oil Protection Unit (OPU)

− Operator expecting to commence 2D seismic acquisition late

2016 / early 2017 of ca. 500 line kms.

Odewayne - Sterling

Energy 40%

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Somaliland - Odewayne

Unexplored Mesozoic rift basin

Pre-rift configuration

• Petroleum System

− Frontier block with no seismic control and no

drilling to date

− Rift basin interpreted to be deep enough for

Jurassic source rocks to be mature (3.5km+),

possibly of Permo-Triassic Karoo age

− Active petroleum system confirmed by oil seeps

within the block

− Sub-surface basin structure identified by 2013

aero-magnetic survey; multiple 3-way fault-

controlled traps likely with sedimentary fill as key

unknown

• Regional Activity

− SW Energy (Ethiopia) partly de-risking with

planned well on Getachew-1 prospect (529 Mmbo

un risked resource, with four stacked targets,

3,510m TD) in the adjacent untested Jijiga (NE

Ogaden) basin

Basement pseudo depth map

Odewayne Basin

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Cameroon – Ntem

Long term West African producer

• Joint venture

− Sterling (Operator) 100%

• Large deep water block

− Additional potential on block (Tonga & Boabab

prospects)

− High quality 1,500km² 3D

− Favourable fiscal terms

• Licence terms and commitments

− Current phase work commitments met

− JV declared force majeure in May 2014 due to

conflicting maritime border claims between Cameroon

and Equatorial Guinea

− April 2015, Sterling received notice from SNH that

current period had expired

− December 2015, SNH list Ntem as an “open block”

• Outlook

− Assess plans for further exploration of the Ntem block

given Sterling’s declaration of FM and SNH’s

declaration of expiry of the current period/classification

of Ntem as an “open block”

− “Reserve our rights” status under review

Ntem - Sterling Energy

100%

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2016 2017 2018

Country Asset H1 H2 H1 H2 H1 H2

Mauritania

(Emerging)

C10 (13.5%) 2015 entry

Ground floor terms, 1 well

commitment

Somaliland

(Frontier)

Odewayne (40%) 2013 entry.

2D Seismic and well costs

fully carried

Cameroon

(Emerging)

Ntem (100%) Force Majeure

Reserve our rights

Growth / M&A projects

Activity Timeline

Executing and refreshing the asset base

Note: Company estimates

Force Majeure

Regional studies

Due diligence & execution

Drilling Interpret 3D & Rank portfolio

500 km 2D

Seismic

1,000 km 2D

Seismic

Decision

to Enter

Phase 4

Decision

to Enter

Phase 3

Drilling

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Sterling Energy

Uniquely positioned for growth

• Robust platform

− Refreshed board & supportive shareholders

− Debt free, cash of ~US$92.5 million

− 2016 & 2017 commitments fully funded

• Actively working the assets

− Working with SMHPM on Chinguetti end of field life

abandonment and decommissioning plan

− Mauritania: C-10 drilling (1 well obligation) by end

2017

− Somaliland: Odewayne 2D seismic 2016. Seismic

and 1 well obligation fully carried by Genel

− Cameroon: Force Majeure, no obligations

− Mauritania, Cameroon & Madagascar: Disciplined

exits of C3 and Ambilobe blocks

• Transformative M&A growth mandate

− Opportunity leverage

1. Strong balance sheet

2. Entry consideration (cost deflated market)

3. Technology & capability uplift

4. Oil price upside & running room

Mauritania

Somaliland

Cameroon

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Ancillary information

May 2016


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31

Years

21 Years

Senior exploration, new ventures & management positions at Enterprise Oil, Shell, Marathon & Apache

(UK, US, Brazil and Australia)

Former Head of new ventures at Petrobras Oil & Gas BV (Africa focused Private Equity JV)

Eskil Jersing

CEO &

Interim Chairman

Michael Kroupeev

NED

Corporate information

1H 2016 Results, refreshed Board, strong drivers for growth

Sterling Energy plc - AIM listing 2002

Market capitalisation ~£36.3 million1

Shareholding

Shares in issue: 220.1 million1

LTIP (exercise 40p/43p) 4.3 million1

Fully diluted 224.4 million1

Significant Shareholders1

Waterford 29.90 %

Mistyvale Limited 15.66 %

YF Finance Limited 15.29 %

Denis O’Brien 7.16 %

Banque Heritage 6.78 %

Sub Total 74.79%

2.0% of issued share capital under option

Financial summary H1 2016

Cash $92.5 million net

Turnover $1.3 million

Economic Int. 214 bopd

Adj. EBITDAX $1.7 million loss

1) as at 19 July -16

Founding Director, Waterford Finance & Investments Ltd (Oil & Gas focussed investment vehicle with

shareholdings in companies with operations in Europe, Africa, North America and Australasia)

Previously Non-executive director of Sibir Energy Plc & Dana Petroleum Plc

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Sterling Management

Senior exploration, new ventures & management positions at Enterprise Oil, Shell, Marathon

& Apache (UK, US, Brazil and Australia)

Former Head of new ventures at Petrobras Oil & Gas BV (Africa focused PE JV)

Eskil Jersing

CEO &

Interim Chairman

Matthew Bowyer

Exploration Manager

Tony Hawkins

Comm./Legal Manager

& Company Secretary

Mary-Ann Page

HR/Office Manager

Broad legal and commercial experience at all stages of the E&P chain

Additional experience in LNG & Power

Previously at Centrica Plc

Broad management experience across various industries

Exploration management positions at Perenco and Melrose Resources (now Petroceltic)

focused on assets in Africa, Middle East and Australia

Also with wide ranging global new ventures and reserves audit experience

21 Years

31

Years

21 Years

33 Years

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Sterling Energy

E&P evolution

2002

2004

2005

2006

2009

2010

2013

2014

2015

Listing on AIM

Acquisition of Fusion Oil & Gas plc

Chinguetti field, Mauritania, Funding & Royalty agreement

Farm out of Ambilobe & Ampasindava blocks in Madagascar

First production from Chinguetti oil field , Mauritania

2003

Share placing and Board changes following sale of US business

Sangaw North well drilled in Kurdistan (fully carried)

Two-stage Odewayne block, Somaliland farm-in, (carried in phase III & IV)

Ambilobe block, Madagascar farm out to Pura Vida

Bamboo well drilled in Ntem block Cameroon (fully carried)

C-3 block Mauritania farm-in with Tullow (ground floor)

Ambilobe block Madagascar Operated 3D survey (fully carried)

Ampasindava block Madagascar relinquishment (disciplined data driven decision) C-10 block Mauritania farm-in / entry with Tullow (ground floor)

2007 Acquisition of Whittier Energy corporation (USA)

2008 Themis Admiral Marin & Iris Charlie Marin wells drilled Gabon

2016 C-3 block Mauritania exit (post new 2D evaluation – disciplined data driven decision)

Ambilobe block Madagascar exit (post new 3D evaluation – disciplined data driven decision)

Transformative

M&A

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Mauritania – Country Overview

Stable Democracy - growing Oil & Gas province

• Government

− Islamic Republic of Mauritania (1,030,000 km2)

− President Mohamed Ould Abdel Aziz:

− Held office since 2009

− Elected for further 5 year term in June 2014

• Economy (2014)*

− GDP: $12.9 billion

− 6.8% real growth rate

− Population ~4 million

− Industry 49%, Agriculture 17%, Services 34%

− Currency Ouguiya (MRO)

• Oil & Gas*

− Oil production ~ 4,900 bopd (Chinguetti Q2 2016)

− Oil imports ~12,810 bopd

− Gas production 0 m3 per annum

− Proved gas reserves ~1 Tcf

− Recent world class gas discoveries by Kosmos,

operator Pmean resources ~17Tcf for the Greater

Tortue Complex

* Source CIA fact book

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Somaliland – Country Overview

Frontier opportunity

• Government

– Somaliland (637,000 km2) was a UK protectorate

from 1884 until 1960

– Declared independence from Somalia in 1991;

allowed development of a stable, democratic

government

– Not recognised as an independent nation but

favourable political contacts with a number (ca.

35) of countries including UK

• Economy (2014)*

− GDP: $1.4 billion (ca.$347 per capita)

− Population 4 million

• Oil & Gas

– Immature Exploration sector

– No production

* Source World Bank

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Cameroon – Country Overview

Established oil producer

• Government

- Republic of Cameroon (475,440km2)

- Multi-party presidential system

- President Paul Biya

− Held office since Nov 1982

− Elected for further 7 year term in Oct 2011

• Economy (2014)*

− GDP: $67.23 billion

− 5.1% real growth rate

− Population 23.1 million (2014)

− Services 52.5%, Industry 27.6%, Agriculture 19.9%

• Oil & Gas*

- Oil production ~63,000 bopd

- Gas production ~165 million m3 / per annum

- Proved oil reserves ~200 Mmbo

- Proved gas reserves ~5 Tcf

* Source: CIA fact book

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website www.sterlingenergyplc.com

e-mail: [email protected]

85 Fleet Street, London, EC4Y 1AE

Tel: +44 (0) 20 7405 4133

Fax: +44(0) 20 7440 9059

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