INVESTOR PRESENTATION Q2 2017 - soundenergyplc.com · OR SBK-1 APPRAISAL Under consideration EASTERN MOROCCO TAGI AND PALEOZOIC: DRILLING RESULTS AND POTENTIAL Investor Presentation

INVESTORPRESENTATION

Q2 2017

I T ALY

MO R O C C O

1Slide

Investor PresentationQ2 2017

Acquisition of Italian onshore gas portfolio

Securing cost covering production

Introduction of Cornerstone Investors

Tendrara, Sidi Moktar, Meridja

Schlumberger (Tendrara, Badile)

TE6, TE7 & TE8Continental Investment Partners, Oil and Gas Investment Fund (OGIF)

Rapagnano

Acquisition of Moroccan onshore gas portfolio

Introduction of Strategic Partner

Successful drilling of 3 wells and extended well test in Eastern Morocco

JOURNEY SO FAR...

A MID-CAP AFRICAN & EUROPEAN GAS COMPANY

REGIONAL GAS STRATEGY UNDERPINNED BY � Strong European gas demand and local pricing � Pan European / African Strategic Partnership

with Schlumberger � Supportive Cornerstone Investors

STRONG THEMATIC POSITIONING � Carbon consciousness and global

warming driving transition to gas

LOW COST MULTI TCF DEVELOPMENT IN EASTERN MOROCCO

METRICS

TWO REMAINING STRATEGIC PLAYS � Badile (Italy) and Sidi Moktar

(Morocco) BOLD GROWTH AGENDA �

�

Key Shareholders:Stock Ticker:Market Cap:Volumes:

CIP, OGIFSOU.LN£0.6 bn6m shares/day

Italian Cornerstone Investor (Continental Investment Partners)Moroccan Cornerstone Investor (OGIF) Retail Other

54.6%

9.5%

7.1%

28.8%

KEY SHAREHOLDERS

James Parsons

Over 20 years in Oil & Gas strategy, general management,

Europe, South America and Central America 12 years with Royal Dutch Shell Specialist in restructuring, funding and growing small listed upstream companies;

Joined Sound Energy in 2011

Leonardo SpicciEVP, Production & Development Over 25 years experience in Oil & Gas management and operations across Kazakhstan, north Africa and Italy. Reservoir geologist background with 23 years with ENI E&P

Brian Mitchener EVP, Exploration Over 36 years experience in Oil & Gas exploration including as Regional General Manager Exploration at BG, Vice President International Exploration for Africa at Statoil and 22 years with BP Exploration. Chartered Geologist, and a past President of the Geological Society’s Petroleum Group

Leonardo SalvadoriManaging Director, Italy Over 30 years upstream experience with ENI and Dana Gas in exploration, business development and general management

Luca MadedduManaging Director, Morocco Over 25 years managerial experience across Europe, Asia and South America. Reservoir geologist background with 22 years with ENI E&P

Will HollandEVP, Business Development Over 20 years upstream experience across a

roles. 10 years as an engineer with Halliburton. Subsequently Director in Macquarie’s Oil & Gas team

2Slide


THE TEAM

I T ALY

MO R O C C O

Dalla

Rapagnano

Casa Tiberi

SMG

ZibidoBadile

Tendrara I

Tendrara

MeridjaTendrara II

ExplorationSidi Moktar

Laura

Costa Del Sole

Solfara Mare

Posta Del Giudice

COMPELLING REGIONALCASE FOR GAS

3Slide


Growing gas penetration

Low risk emerging market Gas increasingly replacing other fuels

Stable demand with high gas dependency Strong domestic gas network

Circa 90% hydrocarbons imported from Algeria GME pipeline ownership transitions to Morocco in 2021New Gas Agency under discussion

Circa 90% hydrocarbons imported from Algeria and Russia Recently introduced energy policy to encourage commercialisation of domestic hydrocarbons

10 year tax holidayThereafter 35% net government take (30% Corporation tax and 5% royalty after 10.6 Bcf)

37.9% government net take (24% corporation tax ((FY2017 onwards)), 3.9% regional income tax plus 10% royalty above 0.9 Bcf annually)

Disadvantaged supply position

Top quartile fiscal terms

Morocco Italy

4Slide

FLAGSHIP EASTERN MOROCCO DEVELOPMENT: EXTENSION OF PROVEN NORTH AFRICAN BASINS

M O R O C C O

T U N I S I A

A L G E R I A

Atlas Mountains

BenoudGhadames

Illizi

Oued Mya

Timimoun

Ahnet

Atlas Mountains

High Plateau

0 300 Nkm

� Strategic Partnership where Schlumberger own 27.5% and co-fund and technically de-risk the asset (Geophysical Survey (including seismic) with gross cost of $27.2m fully carried by Schlumberger)

� Continuity of the Algerian Triassic Province and Saharan Hercynian platform

� Play type: gas discovery with condensate- light oil shows in the Lower Triassic sequence;

� TAGI and Paleozoic sand objectives � Tendrara, eight exploration permits

14,500 km2 acreage, seven wells drilled; Meridja: reconnaissance licence 9,000km2

TENDRARA* (47.5% interest; Operated)MERIDJA* (47.5% interest; Operated)

*Subject to completion of OGIF and Schlumberger transactions


Slide

EXISTING AND FUTURE WELLS

TE-6 TE-8

5

28m net pay, 17 mmscf/d achieved post-stimulation

Paleozoic Play Opener and Extension of TAGI Reservoir.

TE-7 TE-1/2/432 mmscf/d after clean up: Successful Extended Well Test

Re-entryOR SBK-1 APPRAISALUnder consideration

EASTERN MOROCCO TAGI AND PALEOZOIC:DRILLING RESULTS AND POTENTIAL


MER I D J A N

DRARARTENDRADRDRA

RR-1

TE-3

TE-2TE-2TE-8

SBK-1

JK-1

TE-5

K 1

TE-1TE-1

TE-4

TE-6

TETTE

TE-6TE-7Triassic TAGI

discovery and leads 21.2 Tcf

potential2500-3500 mMD

Paleozoic concepts

addit ional ca. 10 Tcf potential

3000-4000 mMD

5 0 KM

All volumetric estimates are 100% - Gross unrisked GOIP

Based on current seismic data

Slide

6Investor PresentationQ2 2017 Discovered TAGI Extension TAGI leads

GAS

VO

LUM

E (T

CF) 21.2 TCF

Discovered0.3-0.5

(Under evaluation)

North Eastern TAGI Extension(TE8/1) (Under

evaluation)

Meridja Identified

TAGI leads5.5

Tendrara Identified

TAGI leads8.8

Paleozoic

LOW

MID

HIG

H

17

9

0

31

EASTERN MOROCCO: PROSPECTS, LEADS AND RESOURCES


Gas Maghreb-Europe PipelineGas Pipeline Project

OuedEl Makhazine2 x 400 MW

Al Wahda4 x 400 MW

Dhar Doum4 x 400 MW

Oujda

Casablanca

Marrakech

MO R O C C O

M E D I T E R R A N E A N

A L G E R I A

A TL A

N T I CRabat

Tahaddart Power2 x 400 MW

Tendrara

Meridja120km

Slide

�pipeline near Ain Beni Mathar village, a few km from the Morocco-Algeria border via a new Pipeline

�plants for gas-to-power generation (transit via GME line) or export to Southern Europe

� The GME can accommodate c.200 mmscfd of Moroccan-source gas immediately, additional capacity opening in the short-term with contracted exports from Algeria declining

7Investor PresentationQ2 2017

EASTERN MOROCCO: COMMERCIALISATION

TALY

MO R O C C O

III TTTAAALLLYYY

Dalla

Rapagnano

Casa Tiberi

SMG

ZibidoBadile

Laura

Costa Del Sole

Solfara Mare

Posta Del Giudice

Pavia

Lacchiarella

SNAM GasPipeline

BadilePermit

3DSeismicCoverage

Badile

Zibido

M I L A N O

Badile 3DSeismic

Pipeline

� Po Valley (Northern Italy); 45 km SW of

�

�

� �

�

�

of the licence

NORTHERN ITALYSTRATEGIC PLAY: BADILE

80%; operated, Schlumberger 20%

Slide

8

Net to Sound


Resource potential

0

100

200

300

400

500

HIGH

MEANLOW

Bcfe

37 cum.

142 cum.

538 cum.

Slide


SOUTHERN MOROCCOSTRATEGIC PLAY: SIDI MOKTAR

Jorf LasfarPower Plant

Safi Chemicals Plant

Chichaoua

State owned Phosphate Plant (OCP)

Planned New PhosphatePlant

MeskalaPlant

Kamar-1

Koba-1

Gas Maghreb-Europe PipelineTriassic (TAGI) leads

� Play type: gas discovery (Kechoula) in the Lower Liassic sequence, (219 Bscf net to Sound, initial estimate, single accumulation most likely)

� Two wells drilled with positive gas indications from log and gas shows in the Liassic; Rig mobilised to site April 2017 for two workovers and possible sidetrack / extended well test

� Triassic across multiple blocks considered analogous to the adjacent

� Unrisked up to 9 Tcf exploration potential targeting the Triassic (TAGI)

� Asset is located 10km from the Meskala gas processing plant


Slide


UPCOMINGNEWSFLOW

H12017

H12017

Q42017

Q22017

H2 2017–H1 2018

H2 2017–H1 2018

Exploration well in Italy

Workover of Koba-1 and Kamar-1(Sidi Moktar wells) with option to sidetrack

Re-entry and test; feasibility currently being determined

Concession application

2D seismic over the remainder of the block - to determine prospects and give better indication on volumes

Commencement of development works (facilities)

BADILE

SIDI MOKTAR

TENDRARA

TENDRARA

TENDRARA

TENDRARA

- Moirago-1

- Koba-1 & Kamar-1

- TE-1

- Concession

- 2D Seismic

- FDP

Slide


SUMMARY

ACCESS TO LOW COST ONSHORE GAS PLAY IN TOP TIER EMERGING MARKET (MOROCCO) � Recent potential multi Tcf onshore

gas discovery in Morocco � Strong domestic demand and infrastructure

connecting Morocco to strong European gas markets

�

SCALE, LIQUIDITY AND NEWSFLOW � Multiple near term catalysts (Badile, TE8) � High liquidity

TEAM TRACK RECORD � Demonstrated deal making pre-discovery

(with potential to apply same skills to gas commercialisation and exit)

�and deliver wells

� Strong retail shareholder base

STRONG CORPORATE GOVERNANCE � Industry experienced Board with balance of

UNDERPINNED BY INDUSTRY PARTNERSHIPS � Schlumberger as strategic partner:

enabling scale, technically de-risking assets and providing funding

� Cornerstone Investors with Board representation � Strong Moroccan relationships

Slide

12


APPENDIX

Slide


Current shares in issueShares to be issued

Total fully diluted shares 1.117 billion

10.4p warrants o/s

24.0p warrants o/s

30.0p warrants o/s

Options o/s

715.1 million

OGIF

8.3 million

31.5 million

53.0 million

37.2 million

272.0 million

CAPITAL STRUCTURE AS AT 13 APRIL 2017

CORNERSTONE INVESTOR POSITION

0 25 50 75 100 125

Cash and cash equivalents

€28.8 million corporate bonds5% couponDue 21 June 2021Secured on Sound Energy Italy Holdings share capital

150 175 200 225 250 275 300

OGIF

No. direct shares (millions)

Continental Investment Partners

£47.4 million

£24.6 million

14Slide

TENDRARA – CROSS SECTION

After Craig et al 2008


Slide

* Vakartchouk et al 1984, Structure Geologique et Interet Petrolier du Bassin Interatlasique

0

1

2

3

4

5

7

6

8

SENW

DEP

TH IN

KIL

OM

ETR

ES

0 50Kilometres

PetroleumGeneration

HercynianUnconformity

KEYJurassic

Triassic (Basalt)

Triassic (TAGI)

Upper Carboniferous

Devonian

Silurian

Lower Carboniferous

Paleozoic Petroleum Source Rocks

Early Paleozoic and Basement

Gas migration

Gas accumulations

Granite

Triassic (Salt)

15

� Multiple source rocks in Silurian, Devonian, Carboniferous well documented in surrounding

Algerian plays �

generated post the Hercynian Unconformity

� Basin modelling implies a range of 9-17-31 Tcf accumulated

� Thermogenic hydrocarbons present in all wells drilled to date

� Basin wide salt seal of over 1000m in thickness

�underlying petroleum system

� Pre-salt reservoirs in the Triassic and Paleozoic

� Triassic ‘TAGI’ reservoir present in all wells

� Commercial production rates now proven by TE-7

� Paleozoic yet to be unlocked but proven in Algeria


EASTERN MOROCCO BASIN & PETROLEUM SYSTEM

Slide


BROADER PORTFOLIO

COST COVERING PRODUCTION* (2 LICENCES)

APPRAISAL (6 LICENCES, EXCLUDING STRATEGIC PLAYS)

– LAURA

– DORA / DALLA

EXPLORATION (4 LICENCES EXCLUDING STRATEGIC PLAYS) – ZIBIDO

I T ALY

MO R O C C O

Dalla

Rapagnano

Casa Tiberi

SMG

ZibidoBadile

Tendrara I

Tendrara

MeridjaTendrara II

ExplorationSidi Moktar

Laura

Costa Del Sole

Solfara Mare

Posta Del Giudice

* Excludes two concessions awaiting abandonment

Slide


STRONG REGIONAL INFRASTRUCTURE

Ven iceMi lan

Rome

ZibidoBadile

Dalla

Rapagnano

Casa Triberi

SMG

Laura

High pressure gaspipeline network

Costa Del Sole

Solfara Mare

Posta Del Giudice

Gas Maghreb-Europe PipelineGas Pipeline Project

OuedEl Makhazine2 x 400 MW

Al Wahda4 x 400 MW

Dhar Doum4 x 400 MW

Oujda

Casablanca

Marrakech

MO R O C C O

M E D I T E R R A N E A N

A L G E R I A

A TL A

N T I CRabat

Tahaddart Power2 x 400 MW

Tendrara

Meridja120km

Sidi Moktar

ITALIAN HIGH PRESSURE GAS PIPELINE NETWORK

MOROCCAN GAS PIPELINE NETWORK

For more information please contact:

Detailed information on our investor website:

Slide

www.soundenergyplc.com

James Parsons

[email protected]

Brian MitchenerEVP Exploration [email protected]


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not recover the amount invested. Some securities carry a higher degree of risk than others. The levels and basis of taxation can change. The contents of this document have been prepared by, are the sole responsibility of, and have been issued by the Company.

Slide


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Slide


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INVESTOR PRESENTATION Q2 2017 - soundenergyplc.com · OR SBK-1 APPRAISAL Under consideration EASTERN MOROCCO TAGI AND PALEOZOIC: DRILLING RESULTS AND POTENTIAL Investor Presentation

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