Developing Nigerias Gas Reserves to Empower Domestic Growth

Why Nigeria? The macroeconomic investment opportunity

Nigeria: Attractive and Growing Economy
Nigeria is the 8th largest country in the world with a population of over 155 million and an economy underpinned by hydrocarbon resources Predicted to be one of the fastest growing emerging economies with an expanding middle class and expected growth in the energy and power sectors Existing energy supply and demand imbalance widening as a lack of past investment in infrastructure has hindered development of Nigerias natural gas resources Government objective to increase power generation capacity to 10,000MW by 2011 Current installed capacity of 6,000MW less than 50% utilised due to gas supply constraints
2007 2008 2009 2010F 2011F 2012F 2013F 2014F 351 368 376

Oil consumption in Nigeria

Oil demand (Mbopd)
Lack of domestic infrastructure has led to diesel/fuel oil being the main source of fuel supply for electricity generation in Nigeria

387

406

426

458

493

Source: UN, IHS Global Insight, African Development bank Group: Nigeria Economic and Power Sector Reform Program report

Source: BMI Nigeria Oil and Gas Report Q2 2010 (publication March 2010)

Forecast average annual real GDP growth for 2010-2020 (%)

Energy demand of top 5 African countries Energy consumption per capita (kg of oil eq.) Gas consumption CAGR 0914
Nigeria South Africa Algeria Egypt Libya 5.2% 4.7% 3.3% 24.1% 19.1%

6.1 4.9 4.6 4.5 4.4 4.4 3.4 3.1

Libya South Africa Algeria Egypt Nigeria 136 1,072 926

2,596 2,538

Nigeria

Brazil

Libya

Turkey

Egypt

South Africa

Russia

Algeria
Source: United Nations, BMI Top 5 countries chosen by total consumption of oil and gas in Africa for 2009. United Nations estimates (2007). BMI Nigeria Oil & Gas report Q2 2010 (publication March 2010).

Source: IHS Global Insight; May 2010 forecast for Nigeria, Brazil, Libya, South Africa and Algeria; August 2010 forecast for Turkey, Egypt and Russia

Why Nigeria? Large reserves and underdeveloped domestic market

Nigeria 4th largest exporter of crude to US, but 2nd largest importer of refined products Domestic gas supply / demand imbalance presents an enormous challenge for Nigeria Limited distribution infrastructure in place Federal Government Gas Master Plan to unlock Nigerias natural gas potential and meet growing energy demand
R us s ia Ira n

Proven natural gas reserves (2009)

(Tcf)

1,567 1,046

896 286
Q a ta r T urkmen.

280
S a udi A ra bia

245
US

227
A ra b E mira tes

200
V enez uela

185
Nig eria

159
A lg eria

Over 180 Tcf of Nigerian gas resources available for exploration and production

35% in Non-Associated Gas fields with resource potential believed to exceed 500 Bcf / field Numerous undeveloped gas discoveries

Source: BP Statistical Review (2010)

Growing Nigerian natural gas demand/constrained supply

35,000

Gas netbacks comparable with oil given field sizes and fiscal term incentives
MMcfpd

30,000 25,000 20,000 15,000 10,000 5,000 0 2006 2007

Demand Supply at $2.50/mcf Supply at $4.80/mcf

$2/Mcf is equivalent to $60/bbl

Seven to initially build a local presence by bridging the gap in the market for a domestic gas producer and supplier

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: EIA, BP Statistical Review, Wood Mackenzie, Company information Natural gas produced from a reservoir that does not contain significant quantities of crude oil.

Internal management model estimates and forecasts. Management projections based on numerous assumptions. It is subjective and therefore susceptible to periodic revaluation based on actual experience and business, market and industry conditions. The eventual plan may differ from the information set forth above and any such differences may be material.

2020

Seven has a unique insight into Nigerian gas market

Sevens proprietary model provides a unique insight into gas supply and demand dynamics in Nigeria
industrial usage and power demand supply potential from undeveloped gas fields

Domestic gas demand is forecast to increase fivefold in c. 10 years driven by industrial demand meeting projected domestic demand will require a significantly higher gas price

35,000 30,000

MMcfpd

25,000 20,000 15,000 10,000 5,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Demand Supply at $2.50/mcf Supply at $4.80/mcf

Filling a gap in the market for a domestic gas player

Niger Delta is a mature basin dominated by the Super Majors
Migrating to Offshore and Deepwater prizes Gas strategy almost exclusively LNG focused

Seven Energy

ConOil

Amni ConocoPhillips Eni Total

Shell SAPETRO Petrobras CNOOC Ltd Addax Chevron

Gas %

One of the few regions in the world where junior E&P companies can access world class onshore fields and prospects

Afren

Nexen StatoilHydro

ExxonMobil

Reserves

High barriers to entry provide opportunities to purchase assets at a discount to historical metrics
Soco Melrose Roc Oil Premier

Addax

Seven is bridging the gap in the market for a domestic gas producer and supplier

Tullow Niko Heritage

Production

Seven
Afren Salamander JKX Oil Coastal

Scale: Comparative valuation

Seven Energy Corporate History: 2007 - 2011

2007 - 2009
Company achievements
Acquisition of assets from Weatherford and merger of Seven and Exoro Seven s Nigerian gas supply and demand model developed and presented to Nigerian Government $120mn acquisition of GOGE MOU with Ministry of Petroleum Resources on Accelerated Gas Plan

2010
Acquisition of 62% interest in Universal Energy (Stubb Creek) Commenced US$350mn development of Uquo field Strategic Alliance with NNPC for development of OMLs 4, 38 & 41 Strategic Alliance with Petrofac for engineering and project management services and co-investment

2011
First gas and oil from Uquo field scheduled for Q4 2011 First oil from Stubb Creek field scheduled for Q4 2011 Expansion of NNPC Strategic Alliance Monetisation of OMLs 4, 38 & 41 gas reserves

2P Reserves (MMboe - net)
1

Reserves

Nigerian founders investment

Financing

US$119mn raised from private equity in 2008 US$68mn raised in December 2009

US$104mn raised from institutional investors US$110mn raised from strategic partners including Petrofac US$60mn project finance facility completed

$150mn senior debt facility arranged in Q2 2011 $100mn raised from strategic partners in Q2 2011 IPO ready by Q4 2011

1 Source: Competent Person s Report, Company s estimates

Seven Energys Nigerian footprint

Note: Map not drawn to scale this summary of Seven Energy's assets does not include any additional interests to be obtained in the Company's Alliance Agreement with NPDC.

Empowering the power plant and industrial market in SE Nigeria

Current 2P + 2C production profile (Gross - Mboepd)

Gross Production (Mboepd)

Seven Energy Phase 1a Pipeline Seven Energy Phase 1b Pipeline Phase 2 Pipeline Phase 3 Pipeline 3rd Party Pipeline

Seven Energy gas field Seven Energy oil and gas field 3rd party gas field

100 75 50 25 0 2011 2012 2013

T otal O il

T otal G as

Demand Centres

2014

2015

2016

2017

2018

2019

2020

Source: Competent Person s Report Note: Liquids to Bcfe conversion ratio of 6Bcfe:1MMboe

OKIIP Mill

Port Harcourt

Aba

Geometrix IPP 12 km

Uyo
Unicem Cement

NIPP Alaoji 30 km

15 km

Ukana South
NIPP Calabar

OML 13 (SPDC)
55 km 60 km

Uquo

37km

Eleme Petrochemical

Stubb Creek Ikot Abassi

Ibom Power Alscon 23 km Qua Ibo Oil Terminal

Cross River (Monipulo) Oron (Addax)

Bonny Island 8

Note: Based on Seven Energy s management projections. The expansion plan is a management projection based on numerous assumptions. It is subjective, and therefore susceptible to periodic revaluation based on actual experience and business, market and industry conditions. The eventual plan may differ from the above and such difference may be material.

Established operating and execution

QHSSE & Community: International standard systems and management in place IFC Performance Standard by end of 2010

Drilling/Workover: A full operations team to support year-round drilling Two onshore drilling rigs on contract with best contractor in Nigeria

Pipeline: in-house pipeline team: Recruited from Shell Capability to lay >100km 18 gas pipelines per annum

Facilities: EPC expertise in-house: To develop 200 MMcf/d processing capacity every 12-18 months 5,000 bo/d Early Production Facility in logistics base

Subsurface: In-house team with additional team seconded to the Uquo JV Capacity for 2 field developments per annum

Gas Marketing M&A: Corporate finance team to execute 1 $250+ million or two $100+ million per annum Deal screening & evaluation: capability to screen 10-15 deals and evaluate 5 deals per annum

EmPowering Nigerias Communities

Working in partnership with Federal and State governments Contributing to structural economic growth of Nigerias gas industry Contributing to sustainable development of local communities Pro-active Community Relations programmes
In-house Community Relations Team Long term job creation Investing in local infrastructure and educational projects

$1mn + per annum pre-production investment.

10

Developing Nigerias Gas Reserves to Empower Domestic Growth

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