Third Quarter 2013

Mark McAllister, CEO

Tomas Hedström, CFO

Stockholm, 23 October 2013

Today’s topics

2

Q3

>> NEW CEO

Short introduction to Mark McAllister

>> OPERATIONAL UPDATE

Recent developments

>> FINANCIAL HIGHLIGHTS

Earnings, key ratios and one-offs

>> PA RESOURCES’ WAY FORWARD

Follow up on strategic review and outlook

3

Mark McAllister New CEO since 1 October

• Petroleum Engineer with Engineering MA from

Cambridge University

• Joined the oil industry in 1979 with Conoco

• Worked for Operators in the North Sea, FSU and

North Africa

• Held senior management positions at Monument

Exploration and LASMO plc, two of the most

successful UK Independents

• Founded and ran two new UK Independents,

Acorn Oil & Gas and Fairfield Energy

• These companies have played a significant role in

the rationalisation of the mature North Sea

• Was Chairman of OSPRAG, the joint industry-

government body formed as a North Sea response

to the Macondo blow-out

• Awarded Honorary Doctorate from Robert Gordons

University in Aberdeen for services to the North

Sea oil industry

4

Q3 summary Strengthened balance sheet

Q3 HIGHLIGHTS

• Strengthened balance sheet through

completed rights issue and bond issue

• Main owner Gunvor Group now holds ~50%

• Advanced 12/06 farm-out negotiations and

MPS farm-out discussions in progress

• Maintenance and upgrade shut-in of Didon

field extended until early November

• Alen production start, gas volumes slowly

increased

• Diega appraisal programme underway

Operational update

Q1

6

West Africa: MPS farm-out and Azurite abandonment

• Early abandonment to commence in Q4 2013

• Final lifting expected in Q4 2013 to mainly cover

PA Resources’ share of regular abandonment cash

costs

• One-off decommissioning costs of SEK 469 million

reported in Q3, costs relating to the FDPSO vessel

and Murphy’s Congo office

Azurite field (35% interest)

Mer Profonde Sud (85% interest)

• Farm-out data room process attracted considerable

interest

• PA Resources in the process of finalising agreement

to divest majority stake and operatorship

• Farm-out subject to government approval, prior to

enter third and final renewal period in November

2013 incurring one firm well commitment

• If third period not entered, licence to be relinquished

giving rise to impairment of current book value

(approx. SEK 800 million)

EG Block I – Diega appraisal programme underway PA Resources 5.7%

1. Carla North and South exploration/appraisal

• 2011 discovery in adjacent Block O (’Carla

North’) appraised in 2013 with additional oil

reservoir found

• Carla South exploration well in Block I and

its sidetrack encountered oil in two different

good quality sandstone reservoirs

• Implication of results being evaluated

2. Diega appraisal

• Pilot how drilled and logged in Q3 followed

by a horizontal sidetrack

• Diega oil production test being performed

• Possible further drilling in 2014 and near-

term submission of plan of development

• Advanced discussion on initial allocation of

Diega field (between Block O and Block I)

7

Licence Group: Operator Noble Energy (38%), Atlas Petroleum

(27.55%), Glencore Xstrata (23.75%), PA Resources (5.7%),

GEPetrol (5%)

Block I Drilling program - targeting next developments

Carla South

1 2

Diega

8

North Africa – Didon shut-in and farm-out process

• Production shut in since 1 July

• FSO-vessel undergoing a comprehensive recertifica-

tion and upgrade work programme conducted in

Palumbo Dry Dock in Malta

• Extensive shut down maintenance programme on

production platform and production riser change out

• Production restart is now re-scheduled to early

November

• Production shortfall expected to be partly compen-

sated by higher production when field is back on

stream

• Vessel prepared for field life extension programme

Didon field (30% interest)

Farm-out process

• Agreement to farm-out 70% and operatorship of

Tunisian offshore assets to EnQuest signed in May

2013

• Notification and approval process has commenced,

delayed due to political situation in Tunisia

• Transaction completion not expected before Q1 2014

9

North Sea – Advanced 12/06 negotiations

• Rig discussions continue for 2014/2015 drilling, with

Lille John appraisal as priority

• Studies continue of development options for Broder

Tuck field, towards decision in H1 2014

• PA Resources currently finalising negotiations

regarding a farm-out of 40% interest in the licence,

reducing the interest from 64% to 24%

12/06 (64% interest)

Gita evaluation (26.8% interest)

• Operator received regulatory approval for continued

evaluation of remaining prospectivity until Q2 2014,

Northern portion of licence to be relinquished

UKCS Block 22/19a (100% interest)

• PA Resources operator of the Bergman (formerly

Fiddich) gas/condensate discovery from 1984

• Initial discussion with potential candidate host

facilities to assess scope for tie-back to nearby

infrastructure

• Gunvor Group is a leading global energy

commodities trader with a turnover of more than

USD 93 billion, book equity in excess of USD

2.2 billion and USD 5.6 billion in available

liquidity at year end 2012

• Mainly owned by Mr Guennadi Timtchenko and

Mr Torbjörn Törnqvist

• Year end 2012, Gunvor Group had USD 461

million in investments in associates and joint

ventures

• Gunvor Group also has USD 84 million

outstanding to PA Resources through an RBL

(reserve based loan)

Gunvor Group and Lorito – New main owners

10

• Following the equity issue, Gunvor

owns 49.96% of PA Resources after

invested c. SEK 550 million in new

equity

• Lorito Holdings Ltd (Lundin family-

owned trust) owns 9.69% after

investing c. SEK 120 million in the

rights issue

• Both Gunvor Group and Lorito

Holdings are financially strong owners

with significant experience from the oil

and gas industry and related

businesses

Largest shareholders and Nomination Committee

11

Largest shareholders per 30 Sep. 2013 Capital/

votes

GUNVOR GROUP LTD 49.96%

LORITO HOLDINGS LTD 9.69%

CREDIT AGRICOLE (SUISSE) SA 3.84%

AVANZA PENSION 2.59%

ÅGERUP FASTIGHETER AB 2.06%

ORIGINAT AB 1.70%

NORDNET PENSIONSFÖRSÄKRING AB 1.02%

HAJSKÄRET INVEST AB 0.91%

STIFTELSEN OLLE ENGKVIST 0.80%

AB TRACTION 0.76%

Total, 10 largest shareholders 73.33%

Other shareholders 26.67%

Total 100.00%

NOMINATION COMMITTEE 2014

• Dirk Jonker (Gunvor Group)

• Garrett Soden (Lorito Holdings)

• Göran Ågerup (Ågerup Fastigheter)

• Sven A Olsson, Chairman of the Board

The Nomination Committee’s proposal

regarding the Board of Directors, election of

auditors, remuneration and more will be

published ahead of the AGM on 16 April 2014

Financial highlights

Q1

8 7

00

8 0

00

7 7

00

7 1

00

6 8

00

5 7

00

4 2

00

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

PAR production Before Tunisian farm-out

13

Production and sales in Q3

bopd Ytd

2013

Q3

2013

Sept.

2013

West Africa 4,200 3,800 3,800

North Africa 700 400 300

Group Total 4,900 4,200 4,100

• ASENG: Oil production declined slightly, consistent

with expectations and facility’s gas handling capacity

• AZURITE: Early field abandonment to commence

in Q4 2013, final lifting in Q4 2013

• TUNISIA: Shut-in of Didon since 1 July due to

maintenance work programme which has been

extended with expected completion early November

• PRICE: PA Resources realised price of USD 108 per

barrel compared to Brent average of USD 110

Average production (bopd)

Average sales price (USD/bbl)

120

109 109 106 113

103 108

119 108 109 110 113

102

110

20

40

60

80

100

120

140

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

PA Resources Brent

Earnings and key ratios

14

Q3 2013 Q2 2013

Production (bopd)* 4,200 4,800

Oil price (USD/barrel) 108 103

Revenue (SEK million) 293 332

EBITDA (SEK million)** 64 140

Profit before tax

(SEK million)*** 10 -2

Profit for the period

(SEK million) -501 -350

Earnings per share (SEK)**** -8.53 -12.89

* Subject to the necessary approvals, PA Resources´ working interest in the Didon field in Tunisia

has been reduced from 100% to 30% through the farm-out transaction with EnQuest.

** Figures for Q3 and Q2 exclude non-cash, one-off costs of SEK 469 million and SEK 462 million

respectively.

*** Figures for Q3 and Q2 exclude non-cash, one-off costs of SEK 469 million and SEK 647 million

respectively.

**** The rights issue in September 2013 gave rise to retrospective adjustments

KEY COMMENTS Q3 vs Q2

• Revenue negatively impacted by lower

production counteracted by higher oil

price

• Cost for Didon recertification and

upgrade programme of SEK 48 million

• Decommissioning costs from early

Azurite abandonment of SEK 469

million, presented as one-off costs

Q3 & Q2 comparison after one-offs

15

SEK million Q3 2013 Q2 2013

Profit for the period -501 -350

One-off costs

Decommissioning costs 469 0

9/06 (Gita) 0 88

2008/17 (Block 8) 0 97

Tunisian farm-out 0 117

Net exchange gains/losses -46 3

Didon 70% net result impact 0 8

Profit for the period

(Adjusted) -78 -38

KEY COMMENTS

• Adjusted profit for Q3 and Q2 amounted

to SEK -78 million and SEK -38 million

respectively

• Difference of SEK -40 million is mainly

explained by cost for Didon recertification

and upgrade programme.

Q3 2013 Q2 2013

Production (bopd) 4,200 4,800

Oil price USD(barrel) 108 103

Currency (USDSEK) 6.52 6.50

Cash flow

16

SEK million Q3 2013 Q2 2013 Jan.-Sept.

2013

Cash flow from operations -13 -27 -110

Capex -74 -38 -171

Rights issues 810 0 1,413

Loans raised 0 38 38

Amortisation of debt -27 -121 -392

Cash flow from financing 783 -83 1,059

Net cash flow 696 -149 778

KEY COMMENTS

• Q3 capex of SEK 74 million, mainly

related to drilling activities in Block I in

Equatorial Guinea

• Full year capex forecast of SEK 250-

380 million, expected outcome in the

lower part of the range

• Rights issue of SEK 810 million, net

after transaction costs

• Cash and cash equivalents at the end

of the period, SEK 835 million

Current equity and debt situation

17

KEY COMMENTS

• Equity amounted to SEK 2,144 million

• New bond loan of SEK 750 million issued

and previous SEK 850 million repaid in

October

Q3 2013 Q2 2013 Q1 2013 Covenants

Book Equity (SEK

million) 2,144 1,973 2,201 >1,000

Book Equity to

Capital Employed 49% 46% 48% >40%

Net debt (SEK million) 1,422 2,197 2,111 N/A

Covenants and Net Debt development

Debt maturity per 23 Oct. 2013 (SEK million)

0

100

200

300

400

500

600

700

800

January 2014 April 2014 April 2015 March 2016 April 2016

Bond Loan 900m NOK

Bond Loan 750m SEK

Convertible Bond

Way forward and outlook

Q1

19

New strategic plan – basis for ongoing review

• Current producing assets in natural decline, but provide

important cash flow for several years to come

• Several appraisal and development assets expected to

come on stream within the next few years

• The scenario entails an average production of 15,000 –

20,000 boepd in 2018 net to PA Resources

• The new strategic plan focuses on the following assets

to be developed into production:

» Zarat (13.7 mmboe 2P and 6 mmboe in 2C),first oil 2017

» Elyssa (16 mmboe 2C), first gas 2016

» Block I (1.7 mmboe – Diega or Carla South), first oil 2017

» Denmark 12/06 (8 mmboe – Broder Tuck or Lille John),

first production 2018

• Relatively conservative scenario with only three

discovered fields brought to development

• Tangible upside in discovered hydrocarbons as well as

exploration potential

0

5 000

10 000

15 000

20 000

25 000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Currently producing Fields to be developed

Forecasted production profile (boepd)

Asset portfolio – Strategic plan assumptions

20

Take out Greenland

Production

Exploration and development

Producing assets

today

Development

assets included in

new strategic plan

Key Assets NOT

included in new

strategic plan

• Tunisia Offshore: Didon

• Tunisia Onshore: DST fields

• Equatorial Guinea: Aseng and Alen

• Tunisia: Didon and DST investment cases, onshore exploration

• North Sea: Bergman, German exploration

• Equatorial Guinea: Block I gas development

• Congo: MPS exploration

• Tunisia: Zarat and Elyssa

• Equatorial Guinea: Carla South or Diega

• Denmark: Broder Tuck or Lille John

21

• Capex required to reach production of 15,000 -20,000

boepd by 2018 estimated at $600 million

• Majority of capex is related to development costs

• Assets are located close to existing infrastructure

which reduces capex and enables cost efficient

development

• Impact of farm-out carries is to back-end loaded PA

capex requirement towards 2016-2017

• Majority of medium term capex is for Tunisian

offshore assets, Denmark and Equatorial Guinea

• Key requirement of farm-in Operators was a track

record of cost control and project delivery in similar

developments

0

50

100

150

200

250

300

2014 2015 2016 2017 2018

CAPEX plan 2014-2017 (USD million)

Medium term CAPEX plan 2014-2017

Strategic review Path to completion

22

• Strategic review initiated after AGM in May

• Financial situation stabilised in Q3 through

completed rights issue and bond issue

• Mid to long term asset development plan

presented with Q2 Report and Rights issue

• First step was to realise asset values and reduce

exposure through farm-out campaign to

experienced and efficient Operators

• Next phase is to provide a more rigorous

definition of the portfolio upside

• Then a refinancing plan will be put in place to

allow these field developments to be completed

• Final outcome of this strategic review process is

expected in Q1 2014

Thank you! Q1

Q4 Report on 6 February 2014