Hydrocarbon Exploration Activities in South Africa

APPEX MARCH 2014 Petroleum Agency SA - oil and gas exploration and production regulator

1. Update on latest exploration activity 2. Some highlights and upcoming events 3. Comments on shale gas Exploration map 3 years ago Exploration map 1 year ago Exploration map today Offshore exploration

SunguSungu 7 Production Rights 12 Exploration Rights 14 Technical Cooperation Permits Cairn India (60%) PetroSA (40%) West Coast Sungu Sungu Sunbird (76%) PetroSA (24%) Anadarko (65%) PetroSA (35%)

Thombo (75%) Shallow-water Afren (25%) • Cairn India, PetroSA, Thombo, Afren, Sasol PetroSA (50%) • Sunbird - Production Sasol (50%) BHP Billiton (90%) right around Ibhubesi Global (10%) Mid-Basin • Sungu Sungu Deep water • Shell • BHP Billiton Shell International Southern basin • Anadarko and PetroSA • Silwerwave Energy • New Age PetroSA (20%) • Rhino Oil Anadarko (80%)

Silver Wave Energy West Coast

Open Acreage in southern Orange Basin Greater Outeniqia Basin - comprising the Bredasdorp, Pletmos, Gamtoos, Algoa and Southern Outeniqua sub-basins South Coast PetroSA, ExonMobil with Impact, Bayfield, NewAge and Rift Petroleum in shallower waters. Total, CNR and Silverwave in deep water

Bayfield PetroSA Energy

New Age(50%) Rift(50%0 Total

CNR (50%) Impact Africa Total (50%) South Coast

Partnership Opportunities ExxonMobil (75%) East Impact Africa (25%) Coast Silver Wave

Sasol Rights and major ExxonMobil (75%) operators Impact Africa (25%) ExxonMobil • Shallow water – ExxonMobil and Impact 2 ERs Silver Wave • Silver Wave and ExxonMobil in deeper waters • Sasol exploration right East Coast

ExxonMobil (75%) Impact Africa (25%)

Possible Relinquishment of 20% shallow water block Some recent highlights and activity New exploration/development activity

8000 km2 3D 2000 km2 3D 2 ~25 000 km 687 km2 3D 10 000 km2 3D 3500 km2 3D

1800 km 2D 6200 km 2D >22 000 km 10 000 km 2D 5000 km 2D NewAge 3D – 635km2 southern summer completed 3 January

Polarcus Nadia PGS large 2D multi client survey underway ~ 10 000 km

Sanco Spirit

About 60% complete Block 9 – PetroSA F-O gas field Project Ikhwezi South Coast 110km offshore, 40 km SE of F-A F-O gas field 8 wells drilled during exploration and appraisal phase Onshore exploration

SunguSungu

1 Production Right 55 Exploration Rights 7 Technical Cooperation Permits SA Onshore

Three types of unconventional resources

• Coal bed methane

• Biogenic gas

• Shale gas Local and international companies Coal Bed Methane Approaching 20Tcf GIP Coal Bed Methane ctd

Amersfoort area – Ermelo Coalfield

Soutpansberg area– Mopane Coalfield

Lephalale/Ellisras Basin – Waterberg Coalfield

Tshipise – Soutpansberg basin Biogenic Gas

Molopo Energy

Production Right since Sept 2012

Assets assets in Virginia in the Free State and Evander, SE of JHB.

Agreement with SA based company, pending approval to take on all future development obligations Shale Gas

Potential – South Central Karoo Basin

EIA’s estimate of 485(370) Tcf of shale gas resource for the Karoo

South Africa rank of 5th in the world

Our own technical team’s conservative minimum estimate of the resource is 40Tcf

However, until exploration wells are drilled , the resource remains unknown and unproven New exploration/development activity

• 8 core hole drilling program • 2 core holes completed

• 8 pilot wells have been drilled

• Tshipise Energy (Pty) Ltd – 6 wells

• 5 point test Shale Gas

• No new applications accepted, but existing applications processed

• Formulation of regulations and guidelines for unconventional exploration and hydraulic fracturing

• Draft regulations published for public comment and comment is now being considered and addressed

• On finalisation DMR will guide processing of existing applications, accepting new applications and exploration activity (i.e. if hydraulic fracturing is allowed, under what conditions). Timing of this is currently uncertain