Time Value of Money Money At Jan 1 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 US$ in wallet 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 US$ in bank 0 0 0 0 0 0 0 0 0 0 0 US$ (deflated) 0 0 0 0 0 0 0 0 0 0 0 Inflation 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Interest Rate 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Multiplier 1 Cost of chocolate 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 US$ flat 0 0 0 0 0 0 0 0 0 0 0 US$ inflation 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ Bars of chocolate 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 US$ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! US$ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! US$ Real versus Nominal Costs At Dec 31 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 US$ Nominal 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Inflation Rate 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Multiplier 1 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Money available 100 Chocolate Bars Money Invested 100.0 Chocolate Bars #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! US$ Real (2018) Money Available Cost of Choc Bar ##### Sheet/List 2 ##### Real and Nominal 2019 2020 Year 3 Year 4 Year 5 Real Nominal Inflation 0% 0% 0% 0% 0% Capex US$2019 0 0 Oil Price Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Real Nominal 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Inflation ##### Sheet/List 3 ##### Example Discounted Cashflow Example 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cashflow 0 0 0 0 0 0 0 0 0 0 Discount Factor Discounted Cashflow NPV Discount Rate 0% Excel Calculation Example 2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Capital Cost Revenue Operating Cost Net Cashflow Discount Factor Discounted Cashflow NPV Discount Rate IRR Excel Calculation ##### Sheet/List 4 ##### WACC Calculation Risk Free Rate 4.60% Corporate Interest Rate 8.00% Equity market return 10.50% Company Beta 4 Corporate Tax Rate 25% Debt Equity Debt:Equity Split 25% 75% Cost of Debt 6.00% Cost of Equity 28.20% WACC 22.65% ##### Sheet/List 5 ##### An Example Shale Gas Field Sensitivities 1 0% Base Results Oil or Gas Price 1 2 15% High NPV -13 US$mm Production 1 3 30% Upside IRR 13% % Operating Costs & Transport 1 4 -15% Low Capex 1 5 -30% Downside 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Revenues 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Operating Costs 0 -23 -12 -8 -6 -6 -5 -5 -4 -4 -4 -3 -3 -3 -3 -3 -2 -2 -2 -2 -2 -2 -2 -2 Transport Costs 0 -15 -7 -5 -4 -3 -3 -3 -2 -2 -2 -2 -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 0 Operating Taxes 0 -13 -6 -4 -3 -3 -2 -2 -2 -2 -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 0 0 EBITDA 0 50 25 16 12 10 9 8 7 6 6 5 4 4 3 3 3 2 2 2 1 1 1 1 Depreciation 0 -43 -21 -14 -10 -9 -8 -8 -7 -6 -6 -5 -4 -4 -4 -3 -3 -3 -2 -2 -2 -2 -2 -1 Straight Line (0) or Unit of Prod (1) 1 EBIT 0 7 3 2 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 -1 -1 -1 -1 -1 Tax on EBIT 0 -1 -1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Corporate Tax Rate 20% Post tax cashflow 0 49 24 15 11 10 9 8 7 6 6 5 4 4 3 3 3 2 2 2 1 1 1 1 CAPEX -70 -28 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 Free Cashflow (FCF) -70 21 23 14 10 9 8 7 6 5 4 4 3 2 2 2 1 1 1 0 0 0 0 -1 Cumulative FCF -70 -49 -27 -13 -3 6 13 20 25 30 35 38 41 43 45 47 48 49 49 50 50 49 49 48 Discount Rate 22.7% Discount Factor 1.23 1.50 1.85 2.26 2.78 3.40 4.18 5.12 6.28 7.70 9.45 11.59 14.21 17.43 21.38 26.22 32.16 39.45 48.38 59.34 72.78 89.27 109.48 134.28 Discounted Cashflow (DCF) -57 14 12 6 4 3 2 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NPV ($mm) -13 IRR (%) 13.3% Gas Price 4 Payback (years) 0 When does cumulative cashflow turn positive Excel Calculation -$13 Breakeven Gas Price $4.00 After Goal Seek Function in Data:What If Alternative NPV (terminal value) FCF for 10 years -57 21 23 14 10 9 8 7 6 5 4 Terminal Value 101 Implied FCF -57 21 23 14 10 9 8 7 6 5 4 101 Implied DCF -47 14 12 6 4 3 2 1 1 1 0 9 NPV 5 Plus Cash 0 Less Debt 0 Total NPV 5 IRR 26% EBITDA Multiple 20 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Revenues 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Lifting Costs 0 -23 -12 -8 -6 -6 -5 -5 -4 -4 -4 -3 -3 -3 -3 -3 -2 -2 -2 -2 -2 -2 -2 -2 Transport 0 -15 -7 -5 -4 -3 -3 -3 -2 -2 -2 -2 -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 0 Operating Taxes 0 -13 -6 -4 -3 -3 -2 -2 -2 -2 -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 0 0 Corporate Tax 0 -1 -1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Capex -70 -28 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 Free Cashflow -70 21 23 14 10 9 8 7 6 5 4 4 3 2 2 2 1 1 1 0 0 0 0 -1 ##### Sheet/List 6 ##### Production Oil Gas Total mmbbls kbpd Bcf mmcfd Resources 0 1000 Recovery Factor 0% 10% Reserves 0 100 17 Start date 5 years after first capex Peak as % Reserves 5 years after first capex Peak as % Reserves Peak Production (mmbbls) 0 0 0% 25 68 25% Time to Peak (yrs) 0 1 Length of Peak (yrs) 0 1 "Decline rate (%) Yrs 2,3,4,5+" 0% 50% 35% 25% 10% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil production 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total oil produced to 2040 0.0 Barrels per day 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Gas Production 0.00 25.00 12.50 8.13 6.09 5.48 4.94 4.44 4.00 3.60 3.24 2.91 2.62 2.36 2.12 1.91 1.72 1.55 1.39 1.25 1.13 1.02 0.91 0.82 Total gas produced to 2040 99.2 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil Production (mmbbls) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gas Production (mmboe) 0.0 4.2 2.1 1.4 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.5 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.1 Total (mmboe) 0.0 4.2 2.1 1.4 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.5 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.1 Production Scenarios Total Produced Oil Production Scenarios 1 0.00 2 0.00 3 0.00 4 0.00 5 0.00 Gas Production Scenarios 1 99.15 2 114.03 3 128.90 4 84.28 5 69.41 ##### Sheet/List 7 ##### Revenue Calculation Export % Oil 0% Gas 0% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil Production 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic Sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Export Sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic Oil Price 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Export Oil Price 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Domestic Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Export Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Oil Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Gas Production 0.0 25.0 12.5 8.1 6.1 5.5 4.9 4.4 4.0 3.6 3.2 2.9 2.6 2.4 2.1 1.9 1.7 1.5 1.4 1.3 1.1 1.0 0.9 0.8 Domestic Gas Price 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Export Gas Price 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic Sales 0 25 13 8 6 5 5 4 4 4 3 3 3 2 2 2 2 2 1 1 1 1 1 1 Export Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Domestic Revenue 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Export Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Gas Revenue 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Total Revenues 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Oil Production Scenarios 1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15% 3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 30% 4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -15% 5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -30% Gas Production Scenarios 1 0.0 25.0 12.5 8.1 6.1 5.5 4.9 4.4 4.0 3.6 3.2 2.9 2.6 2.4 2.1 1.9 1.7 1.5 1.4 1.3 1.1 1.0 0.9 0.8 2 0.0 28.8 14.4 9.3 7.0 6.3 5.7 5.1 4.6 4.1 3.7 3.4 3.0 2.7 2.4 2.2 2.0 1.8 1.6 1.4 1.3 1.2 1.1 0.9 15% 3 0.0 32.5 16.3 10.6 7.9 7.1 6.4 5.8 5.2 4.7 4.2 3.8 3.4 3.1 2.8 2.5 2.2 2.0 1.8 1.6 1.5 1.3 1.2 1.1 30% 4 0.0 21.3 10.6 6.9 5.2 4.7 4.2 3.8 3.4 3.1 2.8 2.5 2.2 2.0 1.8 1.6 1.5 1.3 1.2 1.1 1.0 0.9 0.8 0.7 -15% 5 0.0 17.5 8.8 5.7 4.3 3.8 3.5 3.1 2.8 2.5 2.3 2.0 1.8 1.7 1.5 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.6 -30% Export Oil Price -13 Base Case 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic Oil Price Base Case 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic Gas Price Base Case 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Scenario 2 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 Scenario 3 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Scenario 4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 Scenario 5 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 Export Gas Price Base Case 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Scenario 5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Slope 10% ##### Sheet/List 8 ##### Capital Expenditure Total Oil Gas mmboe mmbls bcf Reserves 17 0 100 Bcf per well Wells Wells 17 6 16.7 Capex per well 10.0 Capex per bbl 10.20 1.7 Total capex 170 % up to first prod 75% 128 % first oil to peak 0% 0 Maintenance capex 25% 43 First Capex First gas 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 US$mm 70 28 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Before first oil 98 Maintenance 33 Total 131 Sensitivities 2 81 32 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 91 36 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 4 60 24 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 5 49 20 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 15% 30% -15% -30% Field Comparisons Cost /bbl Capex Reserves Peak Prod Peak Prod Capex/ peak bbl US$/bbl US$mm mmbbls kbpd mmbbls US$/bbl Kashagan ( Kazakhstan) 10.46 136000 13000 1500 547.5 248 ACG (Azerbaijan) 4.00 20000 5000 620 226.3 88 Thunderhorse (Gulf of Mexico) 5.00 5000 1000 250 91.25 55 Novy Port (Russia onshore) 3.25 4500 1385 161 58.64 77 Ghawar (Saudi) 3.50 248500 71000 5000 1825 136 Lula (Brazil deep water) 9.04 75000 8300 500 182.5 411 US shale $10mm per well Ultimate recovery per well 8.0 bcf per well Global Comparisons Capex US$/bbl Saudi Arabia 3.50 Iran 4.48 Iraq 5.03 Russia 5.10 Venezuela 6.66 US shale 7.56 Indonesia 7.65 US conv 7.70 Canada 9.69 Nigeria 13.10 Norway 13.76 Brazil 16.09 UK 22.67 ##### Sheet/List 9 ##### Operating Costs Lifting Costs 6.50 US$/boe real Total for model 107 US$mm Variable 5.20 US$/bbl 80% Fixed 21 US$mm 20% Years production 23 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 US$mm 0.0 22.6 11.8 8.0 6.2 5.7 5.2 4.8 4.4 4.1 3.7 3.5 3.2 3.0 2.8 2.6 2.4 2.3 2.1 2.0 1.9 1.8 1.7 1.6 Total 107 Base Case and Sensitivities 1 6.50 2 15% 3 30% 4 -15% 5 -30% Global Comparisons Lifting Costs Transport Lifting Transport US$/bbl US$/bbl Iran 1.94 Saudi Arabia 2.49 Iraq 2.16 Iran 2.67 Russia 2.98 Iraq 2.47 Saudi Arabia 3.00 Russia 2.69 Norway 4.24 Indonesia 3.63 US conv 5.15 US conv 3.11 US shale 5.85 Norway 3.12 Indonesia 6.87 US shale 3.52 Venezuela 7.94 Canada 2.92 Nigeria 8.81 Venezuela 2.54 Brazil 9.45 Nigeria 2.97 Canada 11.56 Brazil 2.80 UK 17.36 UK 4.30 Company examples Rosneft 3.10 Lukoil 4.26 BP 6.90 Chesapeake 2.92 Transport Costs Oil 3.50 US$/bbl Gas 0.58 US$/mcf 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil (US$mm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gas (US$mm) 0.0 14.6 7.3 4.7 3.6 3.2 2.9 2.6 2.3 2.1 1.9 1.7 1.5 1.4 1.2 1.1 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.5 Total (US$mm) 0.0 14.6 7.3 4.7 3.6 3.2 2.9 2.6 2.3 2.1 1.9 1.7 1.5 1.4 1.2 1.1 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.5 Base Case and Sensitivities 1 3.00 2 15% 3 30% 4 -15% 5 -30% ##### Sheet/List 10 ##### Operating Taxes Oil Tax Export Tax Sliding of export barrels Royalty 0.0% of oil revenues Other taxes 0.0% of total revenues Export Oil Price 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Export Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Royalty 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Export Tax Cut-off point 0 US$/bbl Tax 0% above cut-off point Export Tax ($/bbl) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Gas Tax Export Tax 0% export revenues Royalty 0.5 US$/mcf 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Export Tax 0 0 0 0 0 0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Royalty 0 12.5 6.3 4.1 3.0 2.7 2.5 2.2 2.0 1.8 1.6 1.5 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.6 0.5 0.5 0.4 Total 0 12.5 6.3 4.1 3.0 2.7 2.5 2.2 2.0 1.8 1.6 1.5 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.6 0.5 0.5 0.4 Total Operating Taxes 0 12.5 6.3 4.1 3.0 2.7 2.5 2.2 2.0 1.8 1.6 1.5 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.6 0.5 0.5 0.4 Total US$/boe 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Gross Taxes US$/bbl Saudi Arabia 0 Iran 0 Iraq 0.91 Russia 8.44 Indonesia 1.55 US conv 5.03 Norway 0.19 US shale 6.42 Canada 2.48 Venezuela 10.48 Nigeria 4.11 Brazil 6.66 UK 0 ##### Sheet/List 11 ##### Depreciation Straight Line Total Capex 170 Years of Production 23 Annual Depreciation (US$mm) 7.4 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Depreciation 0 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 Production 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Total 170 Unit of Production Total Reserves 17 Total Produced 17 Total Capex 170 Depreciation per barrel 10.29 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Depreciation 0 42.9 21.4 13.9 10.4 9.4 8.5 7.6 6.9 6.2 5.6 5.0 4.5 4.0 3.6 3.3 3.0 2.7 2.4 2.2 1.9 1.7 1.6 1.4 Total 170 ##### Sheet/List 12 ##### Sensitivities Oil Price Oil Price Capex NPV 30% 3318 15% 2392 0% 1465 -15% 539 -30% -388 Production NPV 30% 4257 15% 3203 0% 2149 -15% 1094 -30% 40 Production Opex Capex NPV 30% 1012 15% 1580 0% 2149 -15% 2717 -30% 3285 Opex NPV 30% 1735 15% 1942 0% 2149 -15% 2356 -30% 2563 Corporate Tax Rate Tax Rate NPV Discount Rate 10% 2682 15% 2415 20% 2149 25% 1882 30% 1615 Discount Rate NPV 5.0% 5152 7.5% 2932 10.0% 2149 12.5% 496 15.0% -154 Summary Oil Price Production Capex Opex Corp Tax Disc. Rate Downside -388 40 1012 1735 1615 -154 Low 539 1094 1580 1942 1882 496 Base 1465 2149 2149 2149 2149 2149 High 2392 3203 2717 2356 2415 2932 Upside 3318 4257 3285 2563 2682 5152 ##### Sheet/List 13 ##### Exploration Well Analysis Chance of Success 0% Cost of Well 0 US$mm NPV of Success -13 Dry Hole 0.0 Successful Well 0 EMV 0 ##### Sheet/List 14 ##### PSA Regime 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Company Revenues 0 50 25 16 12 11 10 9 8 7 6 6 5 5 4 4 3 3 3 2 2 2 2 2 Operating Costs 0 -23 -12 -8 -6 -6 -5 -5 -4 -4 -4 -3 -3 -3 -3 -3 -2 -2 -2 -2 -2 -2 -2 -2 Transport Costs 0 -15 -7 -5 -4 -3 -3 -3 -2 -2 -2 -2 -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 0 Operating Taxes 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EBITDA 0 12 6 3 2 2 2 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 Depreciation 0 -42.8626512 -21.4313256 -13.93036164 -10.44777123 -9.402994107 -8 -8 -7 -6 -6 -5 -4 -4 -4 -3 -3 -3 -2 -2 -2 -2 -2 -1 EBIT 0 -31 -16 -11 -8 -7 -7 -6 -6 -5 -5 -4 -4 -4 -3 -3 -3 -3 -3 -2 -2 -2 -2 -2 Tax on EBIT 0 6.109341978 3.148076858 2.111634066 1.630428484 1.48606681 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 Corporate Tax Rate 20% Post tax cashflow 0 18 9 5 4 3 3 3 2 2 2 1 1 1 1 1 1 0 0 0 0 0 0 0 CAPEX -70 -28 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 Free Cashflow (FCF) -70 -10 7 4 2 2 2 1 1 1 0 0 0 0 -1 -1 -1 -1 -1 -1 -1 -1 -2 -2 Cumulative FCF -70 -80 -72 -68 -66 -64 -62 -61 -60 -60 -60 -60 -60 -60 -61 -62 -63 -64 -65 -66 -68 -69 -71 -72 Discount Rate 10% Discount Factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 7.40 8.14 8.95 9.85 Discounted Cashflow (DCF) -64 -8 6 3 2 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NPV ($mm) -61 IRR (%) #DIV/0! Revenue Calculation Company Govt Cost Oil 80% Profit Oil 50% 50% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Total Revenues 0 100 50 33 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 5 4 4 3 Govt Royalty 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1% Taxable Revenues 0 99 50 32 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 4 4 4 3 Cost Oil 80% of Revenues 0 79 40 26 19 17 16 14 13 11 10 9 8 7 7 6 5 5 4 4 4 3 3 3 Accumulated Cost Oil 79 119 145 164 181 197 211 224 235 245 254 263 270 277 283 289 293 298 302 305 309 312 314 Annual Costs -65 -21 -14 -11 -10 -10 -9 -8 -8 -7 -7 -6 -6 -6 -5 -5 -5 -4 -4 -4 -4 -4 -4 Accumulated Costs -65 -86 -100 -111 -122 -131 -140 -148 -156 -163 -170 -176 -182 -187 -193 -198 -202 -207 -211 -215 -219 -223 -226 14 33 45 53 60 66 71 75 79 82 85 87 88 90 90 91 91 91 91 90 90 89 88 Payback 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Cost Oil to Company 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit Oil 0 99 50 32 24 22 20 18 16 14 13 12 10 9 8 8 7 6 6 5 4 4 4 3 Profit Oil Company 0 50 25 16 12 11 10 9 8 7 6 6 5 5 4 4 3 3 3 2 2 2 2 2 Govt 0 50 25 16 12 11 10 9 8 7 6 6 5 5 4 4 3 3 3 2 2 2 2 2 Total Company Revenues 0 50 25 16 12 11 10 9 8 7 6 6 5 5 4 4 3 3 3 2 2 2 2 2 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Company Revenues 0 50 25 16 12 11 10 9 8 7 6 6 5 5 4 4 3 3 3 2 2 2 2 2 Govt. Revenues 0 51 25 16 12 11 10 9 8 7 7 6 5 5 4 4 3 3 3 3 2 2 2 2 ##### Sheet/List 15 ##### Questions Real and Nominal 2018 2019 2020 2021 2022 2023 Q1 100 102.5 105.1 107.7 110.4 113.1 Q2 2018 2019 2020 2021 2022 2023 Real 60 60 60 60 60 60 Nominal 60 61.20 62.42 63.67 64.95 66.24 Inflation 2% Real +1% 60 60.60 61.21 61.82 62.44 63.06 NPV and DCF Q1 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 US$mm 100 100 100 100 100 100 100 100 100 100 Discount factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 Discount Rate 10% DCF 91 83 75 68 62 56 51 47 42 39 NPV 614 NPV Excel 614 Q2 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Capex -187.5 -187.5 -187.5 -187.5 -187.5 Cashflow 100 150 200 250 300 300 300 300 300 300 270 243 219 197 177 Net Cashflow -188 -188 -188 -188 -188 100 150 200 250 300 300 300 300 300 300 270 243 219 197 177 Discount Factor 1.1 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 Discount Rate 10% DCF -170 -155 -141 -128 -116 56 77 93 106 116 105 96 87 79 72 59 48 39 32 26 NPV 381 NPV Excel 381 IRR 16% Cost Inflation 1.25