Pura Vida Energy Nl Acn 150 624 169 Prospectus

PURA VIDA ENERGY NL ACN 150 624 169

PROSPECTUS

For an offer of up to 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000.

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Shares offered by this Prospectus should be considered highly speculative.

THE OFFER IS NOT UNDERWRITTEN

LEAD MANAGER TO THE OFFER

CO NT EN TS

1. CORPORATE DIRECTORY ...... 2 2. IMPORTANT NOTICE ...... 3 3. LETTER TO INVESTORS ...... 5 4. INVESTMENT OVERVIEW ...... 6 5. DETAILS OF THE OFFER ...... 20 6. COMPANY AND PROJECT OVERVIEW ...... 22 7. RISK FACTORS ...... 28 8. INDEPENDENT TECHNICAL SPECIALIST’S REPORT ...... 31 9. INVESTIGATING ACCOUNTANT’S REPORT ...... 104 10. SOLICITOR’S REPORT ON TITLE ...... 121 11. BOARD, MANAGEMENT AND CORPORATE GOVERNANCE ...... 127 12. MATERIAL CONTRACTS ...... 136 13. ADDITIONAL INFORMATION ...... 144 14. DIRECTORS’ AUTHORISATION ...... 160 15. GLOSSARY ...... 161

1. CORPORATE DIRECTORY

Directors Australian Solicitors

Damon Neaves Steinepreis Paganin Managing Director Level 4, The Read Buildings 16 Milligan Street David Ormerod Perth WA 6000 Technical Director Telephone: (08) 9321 4000 Bevan Tarratt Facsimile: (08) 9321 4333 Non-Executive Chairman Moroccan Lawyers – Solicitor’s Report Company Secretary on Title

Chen Chik Ong Naciri & Associés Allen & Overy Twin Center - Tour A, 7th floor Registered Office Corner of Bds Zerktouni and Massira Al Khadra Hemisphere Corporate Services Casablanca Level 8 20070 Casablanca – Maroc 225 St Georges Terrace Perth WA 6000 Telephone: +212 520 478 000 Facsimile: +212 520 478 100 Telephone: + 61 8 9486 4036 Facsimile: +61 8 9321 4333 Share Registry*

Email: [email protected] Security Transfer Registrars Pty Ltd Website: www.puravidaenergy.com.au 770 Canning Highway Applecross WA 6153 Corporate Advisor Telephone: +61 8 9315 2333 Hemisphere Corporate Services Pty Ltd Facsimile: +61 8 9315 2233 Level 8, 225 St Georges Terrace Perth WA 6000 Independent Geologist

Telephone: +61 8 9486 4036 RISC Operations Pty Ltd Facsimile: +61 8 9486 4799 1138 Hay Street West Perth WA 6005 Lead Manager to the Offer Telephone: +61 8 9420 6660 CPS Securities Facsimile: +61 8 9420 6690 Level 34, Exchange Plaza 2 The Esplanade Perth WA 6000 Proposed ASX Code

Investigating Accountant PVD

BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco WA 6008

* This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus.

2. IMPORTANT NOTICE

This Prospectus is dated 18 November 2011 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Shares may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Shares the subject of this Prospectus should be considered highly speculative.

2.1 Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. You should be aware that this examination may result in the identification of deficiencies in this Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not be processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on applications lodged prior to the expiry of the Exposure Period.

2.2 Web Site – Electronic Prospectus

A copy of this Prospectus can be downloaded from the website of the Company at www.puravidaenergy.com.au. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian resident and must only access this Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

2.3 Website

No document or information included on our website is incorporated by reference into this Prospectus.

2.4 Forwarding-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and our management.

We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

We have no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 7 of this Prospectus.

2.5 Photographs and Diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person show endorses the Prospectus or its contents or that the assets shown in tem are owned by the Company. Diagrams used in this prospectus are illustrative only and may not be drawn to scale.

3. LETTER TO INVESTORS

Dear Investor,

On behalf of the directors of Pura Vida Energy NL (Company ), I am delighted to invite you to become a shareholder of the Company.

The story of Pura Vida begins in Morocco, where we have partnered with the Moroccan national oil company to explore the Mazagan Offshore Area which has the potential to contain over a billion barrels of oil.

The Company has a substantial acreage position off the Atlantic coast of Morocco. Significant progress has already been made in identifying dr illing targets. The Company has over 3,500 square kilometres of modern, high quality 3D seismic data over the Mazagan Area and has an impressive inventory of prospects and leads, many of which are supported by Direct Hydrocarbon Indicators ( DHI’s ).

The Tou bkal prospect has emerged from our technical work as a leading drilling candidate. Toubkal has been independently estimated as having a mean resource potential of nearly 800mmbbl. Toubkal is a possible analogue to t he Jubilee oil field offshore Ghana , the largest discovery made in West Africa in the past decade.

Following the Jubilee discovery in 2007, there have been numerous discoveries in West Africa drilling prospects on 3D seismic with DHI’s. Large independent oil companies operating in Africa h ave been actively taking up acreage positions to pursue this play type. Interestingly, in recent months a number of these companies have taken up acreage in Morocco and this will lead to an unprecedented level of exploration and drilling activity in Moroc co in the near future. Pura Vida welcomes these positive developments and greater exploration activity and endeavour in Morocco . We are glad to be part of th e wider effort and commitment being shown by the industry in Morocco.

Whilst the potential of Maza gan is exciting, we are actively building a diversified portfolio of energy assets to rapidly grow the Company and expand our operations. I look forward to keeping you informed of our progress as Pura Vida evolves into a successful upstream energy company .

This Offer provides shareholders with an early entry opportunity to invest in a newly formed company with significant potential resources coupled with aggressive growth aspirations.

Before making your decision to invest, I ask that you carefully read thi s Prospectus and seek professional advice if required.

On behalf of the Board, I commend the Offer to you and look forward to welcoming you as a Shareholder.

Yours sincerely,

Damon Neaves Managing Director

4. INVESTMENT OVERVIEW

This section is a summary only and not intended to provide full information for investors intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

4.1 The Company

Pura Vida Energy NL ( Pura Vida or the Company ) was incorporated on 28 April 2011 and has headquarters in Perth, Western Australia. The Company has an interest in acreage known as the Mazagan Offshore Area with significant exploration potential off the Atlantic coast of Morocco, Africa.

4.2 The Objectives

The Company’s main objectives on completion of the Offer are to:

(a) explore for oil in the Mazagan Offshore Area;

(b) build a diversified portfolio of oil and gas assets over time; and

4.3 Investment Highlights

• Pura Vida has entered into a Petroleum Agreement with the Office National des Hydrocarbures et des Mines in Morocco (ONHYM), which entitles the Company to a 75% working interest in the highly prospective Mazagan Offshore Area which spans approximately 11,000km 2.

• Several prospects and leads have been identified on modern 3D seismic, many of which are supported by Direct Hydrocarbon Indicators (DHI’s).

• The significant Toubkal prospect has been independently estimated as having a prospective resource range of 180 to 1,670mmbbl. Toubkal is a potential analogue to the Jubilee field offshore Ghana – the largest oil discovery made in West Africa in the past decade.

• Pura Vida has assembled an industry experienced board and management team with a demonstrable track record in both exploration success and securing value accretive acquisitions.

• This Offer provides shareholders with an early entry opportunity to invest in a newly formed company with significant potential resources coupled with aggressive growth aspirations.

4.4 Conditional Offer

The issue of Shares under the Offer is conditional on:

(a) receipt by the Company a joint order issued by the Ministry in charge of Energy and the Ministry of Economy (Morocco) in order to approve the Petroleum Agreement; and

(b) the notification to the Company and publication in the official gazette of the order to be issued by the Ministry of Energy (Morocco) confirming the granting of the Exploration Permits to Pura Vida.

In relation to the above, the Company has received confirmation that the form of the joint order has been approved and it is now simply awaiting signature from both the Minister in charge of Energy and the Minister in charge of Economy. Once this occurs, the joint orders should be published in the official gazette within a matter of days.

Please refer to the Solicitor’s Report on Title in Section 10 for further information.

In the event that above conditions are not satisfied within four (4) months of the date of this Prospectus, the Offer will not proceed and all applicants will be refunded their application proceeds (without interest).

4.5 Key Risks

The business, assets and operations of our Company are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the securities of our Company.

The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can effectively manage them is limited.

Set out below are specific risks that the Company is exposed to. Further risks associated with an investment in the Company are outlined in Section 7.

(a) Sovereign risks

While Morocco is considered to be one of Africa’s most politically stable and prosperous nations, it may nevertheless be subject to social and economic uncertainty. Civil and political unrest and outbreaks of hostilities in Morocco could affect the Company’s access to the Mazagan Offshore Area and subsequent exploration and development.

Adverse changes in government policies or legislation in Morocco affecting foreign ownership of mineral interests, taxation, profit repatriation, royalties, land access, labour relations, and mining and exploration activities may affect the operations of the Company.

(b) Exploration, funding and development risks

The business of oil and gas exploration, project development and production, by its nature, contains elements of significant risk with no guarantee of success. The Blocks are still in its early stage and there is no guarantee of development. Ultimate and continuous success of these activities is dependent on many factors such as:

(i) the discovery and/or acquisition of economically recoverable reserves;

(ii) access to adequate capital for project development;

(iii) design and construction of efficient development and production infrastructure within capital expenditure budgets;

(iv) securing and maintaining title to interests;

(v) obtaining consents and approvals necessary for the conduct of oil and gas exploration, development and production; and

(vi) access to competent operational management and prudent financial administration, including the availability and reliability of appropriately skilled and experienced employees, contractors and consultants.

Exploration wells in the deep water of the Mazagan Offshore Area are likely to cost in the order of $45 million. The Company plans to fund future drilling activity in the Mazagan Offshore Area by farming down its interest to obtain a carry on the costs of those operations. To this end, the work program to be undertaken in the first two years has been designed to de-risk prospects for drilling. It is anticipated that this work will assist in marketing the farmin opportunity to potential operators to fund future drilling campaigns and enhance the value of Pura Vida’s interest in any future dealings.

Notwithstanding the above, there is a risk that the Company will not be able to secure a suitable farmin partner to support future drilling activities on the Blocks and this would materially impact the Company’s ability to proceed into the next stage of exploration on the Blocks.

Drilling oil and gas wells is by its nature highly speculative, may be unprofitable and may result in a total loss of the investments made by the Company. In particular, completed wells may never produce oil or gas or may not produce sufficient quantities or qualities of oil and gas to be profitable or commercially viable.

Whether or not income will result from projects undergoing exploration and development programs depends on successful exploration and establishment of production facilities. Factors including costs, actual hydrocarbons and formations, flow consistency and reliability and commodity prices affect successful project development and operations.

Drilling activities carry risk and as such, activities may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, shortages or delays in the delivery of drill rigs or other equipment. In addition, drilling and operations include reservoir risk such as the presence of shale laminations in the otherwise homogeneous sandstone porosity.

Industry operating risks include fire, explosions, unanticipated reservoir problems which may affect field production performance, industrial disputes, unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment, mechanical failure or breakdown, blow outs, pipe failures and environmental hazards such as accidental spills or leakage of liquids, gas leaks, ruptures, discharges of toxic gases or geological uncertainty (such as lack of sufficient sub- surface data from correlative well logs and/or formation core analyses). The occurrence of any of these risks could result in legal proceedings against the Company and substantial losses to the Company due to injury or loss of life, damage to or destruction of property, natural resources or equipment, pollution or other environmental damage, clean up responsibilities, regulatory investigation, and penalties or

suspension of operations. Damage occurring to third parties as a result of such risks may give rise to claims against the Company.

There is no assurance that any exploration of current or future interests will result in the discovery of an economic deposit of oil or gas. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically developed.

The operations of the Company require licences, concessions, permits and in some cases renewals of existing licences, concessions and permits from various governmental authorities. However, the ability of the Company to obtain, sustain or renew such licences and permits on acceptable terms is subject to change in regulations and policies and to the discretion of the applicable governments.

The oil and gas industry historically has experienced periods of rapid cost increases. Increases in the cost of exploration and development would affect the ability of the Company to invest in prospects and to purchase or hire equipment, supplies and services. In addition, the availability of drilling rigs and other equipment and services is affected by the level and location of drilling activity around the world. The reduced availability of equipment and services may delay or prevent its ability to exploit reserves and adversely affect the Company’s operations and profitability.

(d) Oil and gas price fluctuations

The demand for, and price of, oil and natural gas is highly dependent on a variety of factors, including international supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments.

International oil and gas prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. Fluctuations in oil and gas prices and, in particular, a material decline in the price of oil or gas may have a material adverse effect on the Company's business, financial condition and results of operations.

(e) Hydrocarbon reserves and resource estimates

Hydrocarbon reserve and resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis the estimates are likely to change. This may result in alterations to development and production plans which may in turn, adversely affect the Company’s operations.

(f) Exploration costs

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By

their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

(g) Limited history

The Company was only recently incorporated (28 April 2011) and has no operating history and limited historical financial performance. Exploration has previously been conducted on the Blocks, however, the Company is yet to conduct its own exploration activities and under the terms of the Petroleum Agreement will not commence these activities until the effective date of the Petroleum Agreement. No assurance can be given that the Company will achieve commercial viability through the successful exploration of the Mazagan Offshore Area. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

(h) Operating risks

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

(i) Commodity price volatility and exchange rate prices

If the Company achieves success leading to hydrocarbon production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for oil and gas, technological advancements, forward selling activities and other macro-economic factors.

(j) Joint Venture Partners

The Company is, and may become in the future, a party to joint venture agreements governing the exploration and development of its projects. Specifically, the Company is a party to the Association Agreement summarised in Section 12.2 of this Prospectus.

The Company is subject to the risks normally associated with joint ventures, which include disagreements as to how to develop, operate and finance a project. Where a joint venture partner does not act in the

best interests of the joint venture, it could have an adverse effect on the interests and prospects of the Company. Furthermore, the Directors are unable to predict the risk of financial failure, non compliance with obligations or default by a joint venture partner in any joint venture to which the Company is, or may become, a party. Such an event may have an adverse effect on the interests and prospects of the Company.

(k) Payment Obligations and other work commitments

Under the terms of the joint ventures and other contractual agreements to which the Company is or may in the future become a party, the Company is or may become subject to payment obligations and other work commitments. Failure to meet these work commitments may render the tenement or licence liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies that may be available to other parties, this could result in dilution or forfeiture of the interest held by the Company.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by our Company and you should refer to the additional risk factors in Section 7 of this Prospectus before deciding whether to apply for Shares pursuant to this Prospectus.

4.6 The Offer

The Company invites applications for up to 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000. The key information relating to the Offer and references to further details are set out below.

4.7 Indicative timetable*

Lodgement of Prospectus with the ASIC Friday, 18 November 2011

Opening Date Monday, 28 November 2011

Closing Date Friday, 16 December 2011

Despatch of holding statements Monday, 19 December 2011

Expected date for quotation on ASX Friday, 23 December 2011

* The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice.

4.8 Purpose of the Offer

The purpose of the Offer is to facilitate an application by the Company for admission of the Company to the official list of ASX and position the Company to seek to achieve the objectives set out above in Section 4.2.

4.9 Use of Funds

The Company intends to apply funds raised from the Offer (assuming $4 million is raised), together with existing cash reserves of $3,365,257 1, over the first two years following admission of the Company to the official list of ASX as follows:

Allocation of Year 1 Year 2 Total funds $ $ $

Expenses of the 544,500 - 544,500 Offer 2

Exploration expenditure on 3,000,000 660,000 3,660,000 the Mazagan Project 3

Repayment of Shareholder 500,000 - 500,000 Loans 4

Administration 970,000 970,000 1,940,000 costs

Project generation and 360,000 360,737 720,737 working capital 5

Total 5,374,500 1,990,737 7,365,237

Notes 1 Of the existing cash reserves, US$3,000,000 is currently the subject of the bank guarantee referred to in Section 12.3 of this Prospectus. The Company expects that $1,000,000 of the bank guarantee will be released upon completion of the drop core program (anticipated to occur in the first half of next year) and the balance will be returned upon completion of the remainder of the work commitments for the Blocks in the initial 2 year exploration period.

2 Refer to Section 4.12 and the Investigating Accountant’s Report set out in Section 9 of this Prospectus for further details.

3 Refer to the Independent Technical Report in Section 8 of this Prospectus for further information on the planned exploration activities for the Mazagan Project.

4 Refer to Section 12.6 of this Prospectus for further details on the agreement between the Company and Hemisphere Corporate.

5 This amount includes a corporate advisory fee of $50,000 plus GST payable to CPS Securities in consideration of providing continuing support to Pura Vida throughout the term of the CPS Mandate.

In the event the Company raises less than $4,000,000 but more than $2,000,000 (the minimum subscription), the Company intends to scale back the application of funds in the table above by first reducing expenses of the Offer (to the extent of brokerage (5%)) and thereafter by reducing funds applied towards Administration costs and project generation and working capital on am approximate proportionate basis. In this circumstance, the Company may need to raise additional funds in the first 24 months following listing on ASX.

On completion of the Offer, the Board believes the Company will have sufficient working capital to achieve its objectives.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the

manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

4.10 Capital Structure

The capital structure of the Company following completion of the Offer (assuming full subscription) is summarised below 1:

Shares 2

Number Shares currently on issue 3 20,250,001 Shares to be issued pursuant to the Offer 20,000,000 Total Shares on issue at completion of the Offer 40,250,001

Partly Paid Shares 4

Number Partly Paid Shares currently on issue 22,918,133 Total Partly Paid Shares on issue at completion of the Offer 22,918,133

Performance Rights 5

Number Performance Rights currently on issue 10,000,000 Total Performance Rights on issue at completion of the Offer 10,000,000

Options 6

Number Options currently on issue 5,000,000 Options on issue at completion of the Offer 5,000,000

Notes

1 Refer to the Investigating Accountant’s Report set out in Section 9 of this Prospectus for further details. 2 The rights attaching to the Shares are summarised in Section 13.2 of this Prospectus. 3 1 Share currently on issue was issued at an issue price of $1.00, 1,500,000 Shares currently on issue were issued on 16 November 2011 at an issue price of $0.10 each and 18,750,000 Shares currently on issue were issued on 16 November 2011 at an issue price of $0.16 each to seed capital investors to fund acquisition costs, the listing costs and initial working capital requirements of the Company. These Shares were issued at a discount to the issue price of the Shares offered pursuant to the Offer to reflect the increased risk associated with an investment in the Company at the time of issue of the seed capital. 4 The rights attaching to the Partly Paid Shares are summarised in Section 13.3 of this Prospectus. The Partly Paid Shares are paid up to $0.01, with a further $0.19 payable in order to become fully paid. 5 The rights attaching to the Performance Rights are summarised in Section 13.6 of his Prospectus. 6 The rights attaching to the Options are summarised in Section 13.7 of this Prospectus.

4.11 Substantial Shareholders

Those Shareholders holding 5% or more of the Shares on issue both as at the date of this Prospectus and on completion of the Offer (assuming full subscription) are set out in the respective tables below.

As at the date of the Prospectus

Shareholder Shares 1 Partly Performance Options 4 % % Paid Rights 3 undiluted fully Shares 2 diluted Jewel & Rose 1,562,500 409,800 Nil Nil 7.39% 4.34% Ockwechime Damon Neaves 1,250,000 5,000,000 5,000,000 2,500,000 7.01% 4.12% JP Morgan 1,250,000 600,000 Nil Nil 5.98% 3.51% Nominees Australia Limited MIMO Strategies 1,250,000 550,000 Nil Nil 5.97% 3.51% Pty Ltd

Notes 1 Refers to fully paid ordinary shares in the issued capital of the Company. 2 The Partly Paid Shares are paid up to $0.01, with a further $0.19 payable in order to become fully paid. 3 For further information on the terms and conditions of the Performance Rights refer to Section 13.6 of this Prospectus. 4 For further information on the terms and conditions of the Options refer to Section 13.7 of this Prospectus. Assuming none of the holders of securities referred to in the table above subscribe for any Shares pursuant to the Offer, none of these holders will have an interest of 5% or more in the Company on completion of the Offer.

The Company will announce to the ASX details of its top-20 Shareholders (following completion of the Offer) prior to the Shares commencing trading on ASX.

4.12 Expenses of the Offer

The total expenses of the Offer (based on $4,000,000 being raised) are estimated to be approximately $544,500 and are expected to be applied towards the items set out in the table below:

Item of Expenditure Amount ASIC Fees $2,137 ASX Fees $27,671 Independent Consulting Geologist $45,000 Moroccan Legal Fees $6,000 Australian Legal Fees $55,000

Investigating Accountant $10,000

Corporate Advisory Success Fee 1 $150,000 Registry and Insurance $25,000

Broker Fees 2 $220,000 Printing and Other Expenses $3,692

TOTAL $544,500

Note 1 Refer to Section 12.4 for further details. 2 Broker commissions will only be paid on applications made through a licensed securities dealers or Australian financial services licensee and accepted by the Company (refer to Section 5.9 of this Prospectus for further information). The amount calculated is based on 100% of applications being made in this manner. For those applications made directly to and accepted by the Company no broker commissions will be payable and the expenses of the Offer will be reduced and the additional funds will be put towards working capital.

4.13 Restricted Securities

Subject to the Company being admitted to the Official List, certain Shares, Performance Rights and Options on issue prior to the Offer will be classified by ASX as restricted securities and will be required to be held in escrow for up to 24 months from the date of Official Quotation. During the period in which these securities are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of his or her Shares in a timely manner.

Our Company will announce to the ASX full details (quantity and duration) of the Shares, Performance Shares and Options required to be held in escrow prior to the Shares commencing trading on ASX.

4.14 Financial Information

Our Company was only recently incorporated (28 April 2011) and has limited operating history and limited historical financial performance.

As a result, the Company is not in a position to disclose any key financial ratios other than its balance sheet which is included in the Investigating Accountant’s Report set out in Section 9 of this Prospectus.

The Company’s start-up funding will be generated from the initial public offering of Shares pursuant to this Prospectus. The Company expects to raise further funding from the issue of securities in the future. If the Company’s proposed exploration is successful and the Company chooses to develop its Mazagan Offshore Project then the Company may also consider debt funding.

4.15 Taxation

The acquisition and disposal of Shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

4.16 Dividend Policy

We anticipate that significant expenditure will be incurred in the evaluation and development of our Company’s projects. These activities, together with the possible acquisition of interests in other projects, are expected to dominate the two year period following the date of this Prospectus. Accordingly, the Company does not expect to declare any dividends during that period.

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

4.17 Directors and Key Personnel

Damon Neaves LLB, B.Comm, A.S.I.A Managing Director

Damon Neaves is a founding director and shareholder of the Company. Mr Neaves has worked in various commercial, operational and management roles and brings a wealth of international oil and gas expertise. Most recently he was the Business Development Manager at Tap Oil, having previously held various senior management positions. Mr Neaves’ international experience spans countries throughout Africa, Europe, the Middle East and Asia Pacific. Mr Neaves has established an extensive worldwide network and has fostered key relationships with government and industry organisations. Mr Neaves brings a commercial focus and governance discipline to this role. Prior to working in the oil and gas industry, Mr Neaves practised as a lawyer and corporate advisor.

David Ormerod, Bsc. Geology (Hons) Technical Director

David Ormerod is a founding director and shareholder of the Company. He has over 25 years’ experience in the upstream oil and gas sector. Mr Ormerod has participated in several major discoveries over his career and held a number of senior positions in the industry. He was formerly the New Ventures Manager and South America Exploration Manager for Karoon Gas where he was responsible for entry into Brazil and offshore Peru which saw a period of dramatic growth in shareholder value. Prior to that Mr Ormerod spent 14 years with BHPBP where he gained diverse experience spanning the Gulf of Mexico, West Africa, South East Asia and the North West Shelf. At Woodside, he led the Gulf of Mexico exploration team. Mr Ormerod was also the New Ventures Manager at Tap Oil and managed Sterling Oil & Gas’ assets in West Africa. Mr Ormerod is a geologist and brings exceptional technical skills to this role along with extensive business development experience.

Bevan Tarratt BA (Bus), SDIA Non-Executive Chairman

Mr Tarratt has an extensive background in the accounting industry with over 10 years’ experience in the industry primarily focused on small cap resource

companies. In addition, Mr Tarratt has a comprehensive practical business background having owned various medium sized retail businesses.

Mr Tarratt also has several years’ experience in the evaluation of mineral resources acquisitions, principally in Africa, and has previous equity markets experience with Paterson Securities Limited. Mr Tarratt has extensive experience in primary and secondary capital raisings and corporate strategic consulting having managed several Initial Public and Re-compliance offerings on the ASX and having participated in the re-structuring and re-compliance of numerous ASX listed companies.

Mr Tarratt is currently an Executive Director of ZYL Limited (ASX:ZYL) and a Non- Executive Director of Minerals Corporation Limited (ASX:MSC) and of Stonehenge Metals Ltd (ASX:SHE).

Mr Tarratt does not expect that his directorships with other companies or other business activities will interfere with his ability to act as a Non-Executive Director to the Company.

Management and Consultants

The Company is aware of the need to have sufficient management to properly supervise the exploration and (if successful) for the development of the projects in which the Company has, or will in the future have, an interest and the Board will continually monitor the management roles in the Company. As the projects require an increased level of involvement the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s projects.

4.18 Interests of Directors in the Company’s Securities

Directors are not required under the Company’s Constitution to hold any Shares. As at the date of this Prospectus, the Directors have relevant interests in Shares and Partly Paid Shares as set out in the table below:

Director Shares Partly Paid Performance Options 3 Shares 1 Rights 2 Damon Neaves 1,250,000 5,000,000 5,000,000 2,500,000 David Ormerod Nil 5,000,000 5,000,000 2,500,000

Bevan Tarratt 625,000 4,625,000 Nil Nil

Notes 1 Refer to Section 13.3 for the terms of these Partly Paid Shares. The Partly Paid Shares are paid up to $0.01, with a further $0.19 payable in order to become fully paid. 2 Refer to Section 13.6 for the terms of these Performance Rights. 3 Refer to Section 13.7 for the terms of these Options.

The Directors may participate in the Offer.

4.19 Remuneration of Directors

The Constitution provides that the remuneration of non-executive directors will not be more than the aggregate fixed sum determined by a general meeting. The aggregate remuneration for non-executive Directors has been set at an amount not to exceed $150,000 per annum.

The remuneration of Executive Directors will be fixed by the Directors and may be paid by way of fixed salary or consultancy fee.

The annual remuneration (inclusive of superannuation) payable to each of the Directors as at the date of this Prospectus is as follows:

Director Annual Remuneration Damon Neaves $250,000 David Ormerod $250,000

Bevan Tarratt $36,000

4.20 Agreements with Directors or Related Parties

Our Company’s policy in respect of related party arrangements is:

(a) a Director with a material personal interest in a matter is required to give notice to the other Directors before such a matter is considered by the Board; and

(b) for the Board to consider such a matter, the Director who has a material personal interest is not present while the matter is being considered at the meeting and does not vote on the matter.

Services Agreement – Damon Neaves

In November 2011, the Company and Mr Damon Neaves entered into a service agreement whereby Mr Neaves was engaged as Managing Director of the Company. The term of the service agreement is ongoing until the Company gives 3 months’ notice to Mr Neaves terminating his engagement, or Mr Neaves gives notice to the Company, subject to other standard termination provisions.

Mr Neaves’ salary is $250,000 per annum excluding mandatory superannuation contributions, this will be reviewed annually by the Company in accordance with the policy of the Company.

The Company will reimburse Mr Neaves for all reasonable expenses incurred for general expenses incurred in the performance of his duties. The agreement contains standard confidentiality and termination and other clauses expected to be included in an agreement of this type.

Services Agreement – David Ormerod

In November 2011, the Company and Mr David Ormerod entered into a service agreement whereby Mr Ormerod was engaged as Technical Director of the Company. The term of the service agreement is ongoing until the Company gives 3 months’ notice to Mr Ormerod terminating his engagement, or Mr Ormerod gives notice to the Company, subject to other standard termination provisions.

Mr Ormerod’s salary is $250,000 per annum excluding mandatory superannuation contributions, this will be reviewed annually by the Company in accordance with the policy of the Company.

The Company will reimburse Mr Ormerod for all reasonable expenses incurred for general expenses incurred in the performance of his duties. The agreement contains standard confidentiality and termination and other clauses expected to be included in an agreement of this type.

Deeds of indemnity, insurance and access

The Company has entered into a deed of indemnity, insurance and access with each of its Directors. Under these deeds, the Company agrees to indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company. The Company is also required to maintain insurance policies for the benefit of the relevant officer and must also allow the officers to inspect board papers in certain circumstances.

5. DETAILS OF THE OFFER

5.1 The Offer

Pursuant to this Prospectus, the Company invites applications for up to 20,000,000 Shares at an issue price of $0.20 per Share to raise up to $4,000,000.

The Shares offered under this Prospectus will rank equally with the existing Shares on issue.

5.2 Minimum subscription

The minimum subscription for the Offer is $2,000,000. If the minimum subscription has not been raised within 4 months after the date of this Prospectus, the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

5.3 Applications

Applications for Shares under the Offer must be made using the Application Form.

Applications for Shares must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares and payment for the Shares must be made in full at the issue price of $0.20 per Share.

Completed Application Forms and accompanying cheques, made payable to “Pura Vida Energy NL” and crossed “Not Negotiable” , must be mailed or delivered to the address set out on the Application Form by no later than the Closing Date.

The Company reserves the right to close the Offer early.

5.4 ASX listing

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.

If the Shares are not admitted to Official Quotation by ASX before the expiration of 3 months after the date of issue of this Prospectus, or such period as varied by the ASIC, the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares now offered for subscription.

5.5 Allotment

Subject to the minimum subscription to the Offer being reached and ASX granting conditional approval for the Company to be admitted to the Official List, allotment of Shares offered by this Prospectus will take place as soon as practicable after the Closing Date.

Pending the allotment and issue of the Shares or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act.

The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

The Directors will determine the allottees of all the Shares in their sole discretion. The Directors reserve the right to reject any application or to allocate any applicant fewer Shares than the number applied for. Where the number of Shares issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.

5.6 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Shares or otherwise permit a public offering of the Shares the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

If you are outside Australia it is your responsibility to obtain all necessary approvals for the allotment and issue of the Shares pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by you that all relevant approvals have been obtained.

5.7 Oversubscriptions

No oversubscriptions will be accepted by the Company.

5.8 Not underwritten

The Offer is not underwritten.

5.9 Commissions payable

The Company reserves the right to pay a commission of up to 5% (exclusive of goods and services tax) of amounts subscribed through any licensed securities dealers or Australian financial services licensee in respect of any valid applications lodged and accepted by the Company and bearing the stamp of the licensed securities dealer or Australian financial services licensee. Payments will be subject to the receipt of a proper tax invoice from the licensed securities dealer or Australian financial services licensee.

6. COMPANY AND PROJECT OVERVIEW

6.1 Company Overview

Pura Vida was incorporated on 28 April 2011 for the primary purpose of acquiring an interest in, and exploring, the Mazagan Offshore Area. The Company intends to build a diversified portfolio of oil and gas assets over time to become self- funded upstream energy company.

The Company entered into the Petroleum Agreement in relation to the Mazagan Offshore Area on 20 October 2011 with ONHYM. ONHYM is the national oil company of Morocco and represents the Ministry of Energy in performing regulatory functions for mining and energy in Morocco. Pursuant to the Petroleum Agreement, the Company and ONHYM will explore for hydrocarbons the Mazagan Offshore Area. For more information please refer to Section 12 of this Prospectus.

The Company’s strategy is to:

• explore for oil in the Mazagan Offshore Area; and

• build a diversified portfolio of oil and gas assets over time.

6.2 Business Model

The Company intends to undertake the following to achieve its strategic objectives:

(a) undertake the work program described in section 6.3, including reprocessing 3D seismic and acquiring 50 ocean bed cores in the Mazagan Offshore Area;

(b) progress funding alternatives for drilling activities in the Mazagan Offshore Area, including discussions with potential farmin partners; and

6.3 The Mazagan Offshore Area

Pursuant to the Petroleum Agreement, the Company holds a 75% working interest in the Mazagan Offshore Area, the remaining 25% is held by ONHYM.

The Mazagan Offshore Area comprises six exploration blocks off the Atlantic coast of Morocco representing a total area of approximately 10,900km 2. The area lies about 80km from the coast near the town of Essaouira (see map over page).

Map showing the location of the Mazagan Offshore Area

The initial term of the Exploration Permits under the Petroleum Agreement is two (2) years, after which the Company may elect to continue with the first extension period of two (2) years and a further second extension period of four (4) years (unless otherwise extended in accordance with Moroccan law).

A total of 3,659km 2 of 3D seismic data has been acquired within the Mazagan Offshore Area. Several prospects and leads have been identified as potential drilling candidates, many of which are supported by DHI’s.

The Toubkal prospect within the Mazagan Offshore Area covers an estimated area of 250km 2 and the 3D seismic over this prospect demonstrates DHI’s.

RISC Operations Pty Ltd estimates a gross unrisked prospective resource range (P90 to P10) of 180mmbbl to 1.67 billion barrels, with a mean estimate of 790mmbbl (see the Independent Technical Specialist’s Report in section 8 of this Prospectus).

Map showing the location of the Company’s prospects and leads

Table of Unrisked P rospective Resource estimates of prospects

Table of Gross Unrisked Prospective Resource estimates (mmbbl - recoverable)

PROSPECTS LOW BEST HIGH MEAN Toubkal 180 560 1,670 790 Zagora 13 35 95 47 Amachad 8 26 81 38 Jbel Musa 14 53 195 87 Jbel Ayachi 12 43 153 69 Jbel Lakhdar 12 43 153 69

TOTAL 1,100

Source: Independent Technical Specialist’s Report in Section 8 of this Prospectus Refer to the Independent Technical Specialist’s Report in Section 8 of this Prospectus for further information.

In addition to the prospects referred to in the table above, the Company has identified two Tertiary leads, namely Amtoudi and Tafraoute . These are combined structural/stratigraphic traps similar to Toubkal. Amtoudi is defined on 3D seismic data, whereas Tafraoute is defined on 2D seismic data only. The table below provides Pura Vida’s mean resource estimates for these leads. We

note that the resource estimates for these leads are internal estimates prepared by Pura Vida and have not been independently reviewed.

Table of Gross Unrisked Prospective Resource estimates of leads

Table of prospective resource estimates (mmbbl - recoverable)

LEADS MEAN Amtoudi 700 Tafraoute 800

TOTAL 1,500

Source: Pura Vida internal estimate.

The information in the table above has been prepared using the internationally recognised Petroleum Resources Management System to define resource classification and volumes by Mr David Ormerod BSc. Geology (Hons), a Geologist who has over 25 years experience in petroleum geology, and geophysics, prospect generation and evaluations, and prospect and project level resource and risk estimations. Mr Ormerod is a full time employee of the Company and has consented to inclusion of the above table in this Prospectus in the form and context in which it is included. The resource estimates above are in accordance with the standard definitions set out by the Society of Petroleum Engineers, further information on which is available at www.spe.org.

A number of other prospects and leads have been mapped on 3D seismic, many of which are located within close proximity of one another. Some of these prospects have been included in the Independent Technical Specialist’s Report, namely Zagora, Amchad, Jbel Musa, Jbel Ayachi, Jbel Lakhdar. The mean potential resource estimates for each these prospects range from 38mmbbl to 87mmbbl. The map on page 2 of the Independent Technical Specialist’s Report shows the location of these prospects.

The total gross unrisked prospective mean resource of the prospects and leads within the Mazagan Offshore Area included in the Independent Technical Specialist’s Report exceeds one billion barrels of oil.

Further information in relation to the prospectivity of the Mazagan Offshore Area is contained in the Independent Technical Specialist’s Report in section 8 of this Prospectus.

Water depths range from 1,000-3,000m with the highest ranked drilling prospects and leads typically occurring in water depths of between 1,200 and 1,600m.

6.4 The First 2 Years

The minimum work program for the first 2 years includes reprocessing 3,000km 2 of the existing 3D seismic, acquiring 50 ocean bed drop cores and geological studies. The estimated cost of this work is approximately US$3.66 million. At the end of the first two years, the Company may elect to enter into a further period of 2 years, which includes a commitment to drill an exploration well.

The Company currently expects to complete the minimum work program within the first 12 months and so there is potential to significantly advance the forward work program.

Based on interpretation of 3D seismic data, the Mazagan Offshore Area contains a number of attractive drilling prospects with significant resource potential. These consist of different play types and include the huge Toubkal prospect. Toubkal is a combined structural and stratigraphic play which is analogous to the Jubilee field in Ghana and other recent discoveries along the transverse margin in Africa and the deep water plays in the Campos Basin in Brazil. Recent major discoveries have heightened activity in the region and this play type is being actively sought after by major operators in the region.

6.5 Beyond 2 Years

After the first two years, the Company may exit or elect to enter into an additional 2 year period, relinquish 20% of the area and commit to drill an exploration well to a minimum depth of 3,000m below the sea floor. The Company may again exit or enter into the final 4 year period, relinquish 30% of the original area and drill two exploration wells each to a minimum depth of 3,000m below the sea floor.

The Company intends to bring forward drilling activities so far as possible.

In the event of a commercial discovery, the Company has the right to an exploitation concession over the relevant area for a period of up to 25 years, which may be extended by a further period of up to 10 years.

6.6 Fiscal Terms

Morocco has a hydrocarbon code providing for the royalty rates, rental rates and tax incentives which are also addressed in the Petroleum Agreement (summarised in section 12.1 of the Prospectus).

Under the terms of the Petroleum Agreement, ONHYM has a 25% working interest and a corresponding entitlement to production. The Company will carry ONHYM’s share of costs through exploration and ONHYM will pay its 25% share of any development and production operations.

A royalty of 7% is payable on the Company’s net share of oil production, the first 500,000 tonnes (approximately 4mmbbl) of production is exempt. The royalty on gas production is 3.5%, with the first 500mmcm (approximately 18bcf) being exempt.

Pura Vida is also required to pay a US$1,000,000 discovery bonus payable on declaration of a commercial discovery and the granting of an Exploitation Concession. Further production bonuses are payable once production exceeds 20,000boepd.

Oil companies are subject to income tax under Morocco’s general tax code at the current rate of 30%. Under Morocco’s hydrocarbon law, which is referred to in the Petroleum Agreement, the following two incentives are available to oil and gas companies:

(a) a 10 year tax holiday from the start of commercial production for each exploitation licence; and

(b) consolidation that allows exploration costs, including dry hole costs, to be deducted against revenues of any exploitation concession held by the taxpayer.

Pura Vida is also exempt from withholding tax, import duty and VAT.

No surface rental is payable on the exploration blocks.

Further the Petroleum Agreement provides compensation to Pura Vida in the event of any adverse effect from a change in regulations in Morocco.

6.7 Morocco

The Company believes that Morocco offers a stable political environment with relatively low security risk. Morocco provides a favourable fiscal regime for oil and gas exploration, development and extraction, as well as a favourable domestic market for hydrocarbon products and an established codified petroleum regime with exploration blocks granted under petroleum agreements.

6.8 Other Projects

In addition to holding a 75% interest in the Mazagan Offshore Area, the Company intends to continue to actively pursue new projects in the oil and gas sector, by way of acquisition or investment.

7. RISK FACTORS

7.1 Introduction

The Shares offered under this Prospectus should be considered speculative because of the nature of the Company’s business.

There are numerous risk factors involved with the Company’s business. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which securities will trade.

7.2 Risks Specific to the Company

Specific risks that the Company is exposed to are identified in the Investment Overview Section of the Prospectus. Other more general risks are identified below.

7.3 General Risks

(a) General economic and political risks

Changes in the general economic and political climate in Morocco and on a global basis that could impact on economic growth, oil and gas prices, interest rates, the rate of inflation, taxation and tariff laws, domestic security which may affect the value and viability of any oil and gas activity that may be conducted by Pura Vida.

(b) Contractors and contractual disputes

With respect to this issue, the Directors are unable to predict the risk of:

(i) financial failure or default by a participant in any joint venture to which the Company is a party; or

(ii) insolvency or other managerial failure by any of the operators and contractors used by the Company in its exploration activities; or

(iii) insolvency or other managerial failure by any of the other service providers used by the Company or operators for any activity.

The Company will be subject to environmental laws and regulations in connection with operations it may pursue in the oil and gas industry, its current operations are in Morocco. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Company may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.

Further, the Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals will prevent the Company

from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

(d) Regulatory

Changes in relevant taxes, legal and administration regimes, accounting practice and government policies may adversely affect the financial performance of the Company.

(e) Potential acquisitions

As part of its business strategy, the Company may make acquisitions of, or significant investments in, complementary companies or prospects and additional blocks in Morocco, elsewhere in Africa, or other parts of the world. Any such acquisitions will be accompanied by risks commonly encountered in making such acquisitions.

(f) Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;

(ii) introduction of tax reform or other new legislation;

(iii) interest rates and inflation rates;

(iv) changes in investor sentiment toward particular market sectors;

(v) the demand for, and supply of, capital; and

(vi) terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

(g) Additional requirements for capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to farmdown equity in the Mazagan Offshore Area to obtain a carry on costs or generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional

funding or be able to secure funding on terms favourable to the Company.

(h) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

(i) Insurance

Insurance against all risks associated with oil and gas production is not always available or affordable. The Company will maintain insurance where it is considered appropriate for its needs however it will not be insured against all risks either because appropriate cover is not available or because the Company consider the required premiums to be excessive having regard to the benefits that would accrue.

(j) Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus.

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

8. INDEPENDENT TECHNICAL SPECIALIST’S REPORT

Independent Technical Specialist’s Report on the Mazagan Permit, Morocco

28 September 2011 for Pura Vida Energy NL

Strictly Confidential

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 i DECLARATION Pura Vida Energy NL ('Pura Vida') has commissioned RISC Operations Pty Ltd (RISC) to provide an Independent Technical Specialist's Report on the resources of the Mazagan permit, offshore Morocco. The assessment of petroleum assets is subject to uncertainty because it involves judgments on many variables that cannot be precisely assessed. The statements and opinions attributable to RISC are given in good faith and in the belief that such statements are neither false nor misleading. In carrying out its tasks, RISC has considered and relied upon information obtained by Pura Vida as well as information in the public domain. The information provided to RISC has included both hard copy and electronic information supplemented with discussions between RISC and Pura Vida staff, and contractors to Pura Vida. Whilst every effort has been made to verify data and resolve apparent inconsistencies, we believe our review and conclusions are sound, but neither RISC nor its servants accept any liability, except any liability which cannot be excluded by law, for its accuracy, nor do we warrant that our enquiries have revealed all of the matters, which an extensive examination may disclose. In particular, we have not independently verified property title, encumbrances, regulations that apply to these assets. RISC has no pecuniary interest, other than to the extent of the professional fees receivable for the preparation of this report, or other interest in the assets evaluated, that could reasonably be regarded as affecting our ability to give an unbiased view of these assets. Our review was carried out only for the purpose referred to above and may not have relevance in other contexts.

COPYRIGHT This document is protected by copyright laws and is intended for the use of the Pura Vida only. Any unauthorised reproduction or distribution of the document or any portion of it may entitle a claim for damages.

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 i DOCUMENT CONTROL

Independent Technical Specialist's Report on Pura Vida's Mazagan Permit, offshore Morocco

Client Name Pura Vida Client Representative David Ormerod

RISC Coordinator Steve RISC Job # 11.0034 Client Order # Newman

Approvals

Name Date

Prepared By Nick Eustance 23 September 2011

Prepared By Stephen Newman 23 September 2011

Prepared By

Peer Review By Joe Salomon 23 September 2011

Editorial Review By

Auth orised For Release By Geoff Salter 26 September 2011

Revision History

Revision Date Description Checked By Approved By

Independent Specialist's Report on Mazagan Permit, Morocco September 2011 ii TABLE OF CONTENTS 1 SUMMARY ...... 1 1.1 Overview of Asset ...... 1 1.2 Resources ...... 2 1.3 Qualifications ...... 3 2 BASIS OF ASSESSMENT ...... 4 2.1 Introduction ...... 4 2.2 Resource Classification ...... 4 2.3 Chance of Discovery ...... 6 3 REGIONAL SETTING ...... 7 3.1 Licence and Exploration History ...... 7 3.1.1 Licence Status ...... 7 3.1.2 Exploration Activity ...... 8 3.2 Geological History ...... 14 3.3 Stratigraphy and Reservoir Development ...... 16 3.4 Source Rocks and Hydrocarbon Charge ...... 21 3.4.1 Source Rock Intervals ...... 21 3.4.2 Maturation and charge ...... 24 4 STRUCTURAL DEFINITION...... 27 4.1 Seismic Data ...... 27 4.2 Seismic Interpretation and Mapping ...... 27 4.3 Depth Conversion...... 28 4.4 Seismic Attributes and Prospect Identification ...... 28 4.5 Analogue – Jubilee Field ...... 33 5 PROSPECTIVE RESOURCES ...... 37 5.1 Miocene Prospects ...... 37 5.1.1 Prospective Area ...... 37 5.1.2 Thickness ...... 44 5.1.3 Rock and Fluid Properties ...... 44 5.1.4 Recovery Factor...... 45 5.2 Lower Cretaceous Prospects ...... 46 5.2.1 Prospective Area and Rock and Fluid Properties ...... 46 5.3 Undiscovered hydrocarbons and Prospective Resources ...... 50 6 CHANCE OF SUCCESS ...... 51 6.1 Risking methodology ...... 51 6.2 Miocene : Play Risk ...... 51 6.3 Miocene : Prospect Risk ...... 52 7 SUMMARY OF PROSPECTIVE RESOURCES ...... 55 8 APPENDIX 1 - SUMMARY OF SPE-PRMS RESERVES AND RESOURCES DEFINITIONS ...... 56 9 APPENDIX 2 - LIST OF TERMS ...... 57

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 iii LIST OF FIGURES Figure 1-1 Mazagan permit – location map ...... 1 Figure 1-2 Mazagan permit - prospects and leads ...... 2 Figure 2-1 Resources classification framework ...... 4 Figure 3-1 General setting and bathymetry for offshore Morocco ...... 7 Figure 3-2 Seismic line through Shark-1 well ...... 9 Figure 3-3 Shark-1 summary log...... 10 Figure 3-4 Detail of seismic line through Shark-1 well, showing raised amplitudes over crest ...... 11 Figure 3-5 Hydrocarbon discoveries, offshore Morocco, with Mazagan permit ...... 11 Figure 3-6 Deepwater Morocco stratigraphic correlation (1) (Vanco) ...... 12 Figure 3-7 Deepwater Morocco well correlation (2) (Vanco) ...... 13 Figure 3-8 Simplified tectonic history, Moroccan margin ...... 15 Figure 3-9 Regional seismic line across Tafelney Plateau ...... 16 Figure 3-10 Schematic depositional setting during Jurassic (ONHYM) ...... 17 Figure 3-11 Schematic depositional setting during Lower Cretaceous (ONHYM) ...... 18 Figure 3-12 Summary of DSDP well 416 (left) and Fuertaventura Island outcrop (right) ...... 19 Figure 3-13 Schematic geological history of Moroccan margin from Lower Cretaceous times (Vanco - pre-Shark-1) ...... 20 Figure 3-14 Present day bathymetry and canyon development and sediment pathways (left) and Plio-Pleistocene canyons and sediment pathways (right) (ONHYM)...... 21 Figure 3-15 Lower Jurassic plate tectonic reconstruction showing potential area of source rocks .. 22 Figure 3-16 Location of Deep Sea Drilling Project (DSDP) wells ...... 23 Figure 3-17 Jurassic maximum source rock parameters (Vanco) ...... 24 Figure 3-18 Modelled hydrocarbons expulsion (Pura Vida) ...... 25 Figure 3-19 Hydrocarbon shows offshore Morocco (Vanco) ...... 26 Figure 4-1 Seismic data in the Cape Tafelney permit and vicinity ...... 27 Figure 4-2 Mid Miocene Channel event - seismic amplitude for whole Ras 3D seismic survey ...... 29 Figure 4-3 South (left) to north (right) arbitrary seismic line through Mazagan permit ...... 30 Figure 4-4 Preliminary seismic modelling (Pura Vida) through Toubkal Prospect ...... 30 Figure 4-5 Modelled acoustic impedance versus Vp/Vs for clean sand and silty sands in claystone 32 Figure 4-6 Modelled reflectivity for shallow clean sand in claystone, showing AVO response ...... 32 Figure 4-7 Modelled reflectivity for shallow silty sand in claystone, showing AVO response ...... 33 Figure 4-8 Jubilee Field, Ghana - possible analogue for Miocene prospectivity in Mazagan permit . 34 Figure 4-9 Schematic geological cross-section offshore Ghana ...... 34

Independent Specialist's Report on Mazagan Permit, Morocco September 2011 iv Figure 4-10 Jubliee Field – RMS near offset stack amplitude in Mahogany Fan, and example seismic line (Anardarko 2011) ...... 35 Figure 4-11 Jubilee Field limits ...... 36 Figure 5-1 Arbitrary seismic line through Toubkal prospect ...... 37 Figure 5-2 Implications of raised Mid Miocene Channel RMS amplitudes ...... 38 Figure 5-3 Amplitude termination at common depth at edge of Toubkal prospect...... 39 Figure 5-4 Mid Miocene Channel RMS amplitude defining Toubkal Prospect, with depth contours 40 Figure 5-5 Mid Miocene TWT structure showing Amchad and Zagora Prospects ...... 41 Figure 5-6 Termination of amplitudes at common depth - Zagora prospect ...... 42 Figure 5-7 Mid-Miocene Depth Structure with RMS amplitude overlay - Amchad Prospect ...... 43 Figure 5-8 Mid-Miocene Depth Structure with RMS amplitude overlay - Zagora Prospect ...... 44 Figure 5-9 Albian TWT Map showing Lower Cretaceous structural leads ...... 47 Figure 5-10 Seismic inline and crossline through Jbel Ayachi lead ...... 48

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 v LIST OF TABLES Table 1-1 Pura Vida Energy – Prospective Resources of Mazagan Permit, offshore Morocco ...... 3 Table 2-1 Prospective Resources definition ...... 5 Table 5-1 Volumetric inputs – Toubkal Prospect ...... 45 Table 5-2 Volumetric inputs – Amchad Prospect ...... 46 Table 5-3 Volumetric inputs – Zagora Prospect ...... 46 Table 5-6 Volumetric inputs – Lower Cretaceous prospects ...... 49 Table 5-5 Mazagan permit - unrisked undiscovered oil in-place ...... 50 Table 5-6 Mazagan permit - unrisked prospective oil resources ...... 50 Table 6-1 Mazagan permit Miocene prospectivity – probability of success ...... 53 Table 6-2 Mazagan permit Lower Cretaceous / Jurassic prospectivity – probability of success ...... 54 Table 7-1 Mazagan permit - Summary of prospective resources ...... 55

Independent Specialist's Report on Mazagan Permit, Morocco September 2011 vi

1 SUMMARY 1.1 Overview of Asset Pura Vida Energy Limited (‘Pura Vida’) has advised that they will hold a 75% interest in, and operatorship of, the Mazagan permit, offshore Morocco (Figure 1-1). Within the area covered by 3D seismic, the water depth ranges from about 1000m to 2100m. This permit offers significant frontier exploration potential at moderate to high risk. The current report represents RISC’s conclusions following a review of Pura Vida’s assets on the basis of data provided during July-September 2011.

Figure 1-1 Mazagan permit – location map The permit was acquired by Pura Vida through direct negotiation of a Petroleum Agreement with the Moroccan Government. Pura Vida will hold a 75% working interest in the permit with the remaining 25% held by ONHYM. The total area of the permit is 10,896.6 km 2.

We are advised by Pura Vida that the Petroleum Agreement will be signed on or about 18 October 2011 and the award of the block will be made by order of the Minister for Energy within a period of two months following the date on which the Petroleum Agreement is signed (Effective Date).

The initial term of the permit is two (2) years commencing on the Effective Date, after which time Pura Vida may exit or elect to enter into the first extension period of a further two (2) years and relinquish 20% of the permit area. Following the first extension period, Pura Vida may again elect to exit or continue into the second extension period of four (4) years and relinquish a further 30% of the original permit area.

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 1 A single petroleum exploration well, Shark B-1 was drilled within the acreage by the previous operator, Vanco. This dry well reached a total depth in the Aptian. In the southwest of the permit is Deep Sea Drilling Project (DSDP) site 415, with a well to the Albian. The main play is proposed as Middle Miocene turbidite/debris flow sands within a broad stratigraphic closure (Toubkal prospect; Figure 1-2)) and local structural closures of such sands against salt diapirs (Amchad and Zagora prospects). Prospectivity is defined on good quality 3D seismic data. Raised amplitudes observed on the seismic data suggest sand fairways and independent rock property seismic modeling provides support for oil fill, although calibration is limited. An additional play at Lower Cretaceous/Jurassic levels is based on turbidites within clear four-way dip closures.

Figure 1-2 Mazagan permit - prospects and leads 1.2 Resources RISC has made an independent assessment of the prospective resource volumes and chance of success, as detailed in Table 1-1. Geological chances of success are in the range 0.11 to 0.23. The largest feature is the Toubkal stratigraphic trap, with a mean unrisked prospective oil resource of 790 MMstb, with a geological chance of success of 0.20 (1 in 5).

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Reservoir Prospect/lead Gross Unrisked Prospective Oil Resources, MMstb

Low Best High Mean Chance of Estimate Estimate Estimate Estimate Success

Toubkal 180 560 1670 790 0.20

Miocene Zagora 13 35 95 47 0.23

Amchad 8 26 81 38 0.23

Jbel Musa 14 53 195 87 0.11

Albian Jbel Ayachi 12 43 153 69 0.11

Jbel Lakhdar 12 43 153 69 0.11

Table 1-1 Pura Vida Energy – Prospective Resources of Mazagan Permit, offshore Morocco The mean estimates may be arithmetically summed to provide a total unrisked prospective resource. However, this would not take account of the significant dependency between the prospect volumes and risks. In practice a rigorous treatment of dependency would materially impact the total block risked prospective resources. 1.3 Qualifications RISC was founded in 1994 to provide independent advice to companies associated with the oil and gas industry. Today the company has approximately 40 highly experienced professional staff at offices in Perth, Australia and London, UK. We have completed over 1300 assignments in 68 countries for nearly 500 clients. Our services cover the entire range of the oil and gas business lifecycle and include: • Oil and gas asset valuations, expert advice to banks for debt or equity finance • Exploration / portfolio management • Field development studies and operations planning • Reserves assessment and certification, peer reviews • Gas market advice • Independent Expert / Expert Witness • Strategy and corporate planning This assignment was undertaken primarily by Nick Eustance, Geoscientist, with over 30 years experience, together with Stephen Newman a Geoscientist with over 25 years experience.

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 3 2 BASIS OF ASSESSMENT 2.1 Introduction RISC has made its independent assessment on the basis of data provided by Pura Vida. We believe we have been provided with all relevant documentation. The data reviewed included a seismic workstation project, well data and interpretative reports. Our assessment benefitted from detailed discussion with Pura Vida staff involved in the assets reviewed. Our approach has been to review and adjust the work provided; in all cases, following review of (and support for) the seismic interpretation, we undertook our own volumetric assessment to derive resources. Given the predominantly exploration nature of the assets, the chance of success is a fundamental element in the review. We have defined our own chances of success to apply to the accepted potential resource range. 2.2 Resource Classification RISC has used the internationally recognised Petroleum Resources Management System (PRMS) 1 to define resource classification and volumes. The classification of resources is shown in Figure 2-1.

Figure 2-1 Resources classification framework Pura Vida has no Reserves or Contingent Resources according to this classification. All Pura Vid a’s a ssets are assigned to the Prospective Resources category; in other words petroleum within accumulations that are yet to be discovered. Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered

1 SPE/WPC/AAPG/SPEE 2007 Petroleum Resources Management System

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accumulations by application of future development projects. Under the guidelines, the range of uncertainty in potentially recoverable volumes may be represented by either deterministic scenarios or by a probability distribution derived from the probabilistic simulation of input variables. RISC has calculated resource volumes probabilistically. The guidelines indicate that when the range of uncertainty is represented by a probability distribution, a low, best, and high estimate shall be provided such that: • There should be at least a 90% probability (P90) that the quantities actually recovered equal or exceed the low estimate • There should be at least a 50% probability (P50) that the quantities actually recovered equal or exceed the best estimate • There should be at least a 10% probability (P10) that the quantities actually recovered equal or exceed the high estimate Prospective Resources can be subdivided into Prospect, Lead or Play. The definitions from the guidelines are given in Table 2-1.

Table 2-1 Prospective Resources definition

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 5 2.3 Chance of Discovery Prospective Resources have both an associated chance of discovery and an additional chance of commercial development. By implication, not all discovered volumes are necessarily commercial. For the present study, as no explicit commercial analysis has been undertaken on these assets, RISC has restricted its statement to a view of the chance of discovery – equivalent to the geological chance of success. RISC uses the geological chance of success (POSg) to reflect the chance of encountering a significant volume of recoverable hydrocarbons . In this context, ‘significant’ implies that there is evidence o f a sufficient quantity of petroleum to justify estimating the in-place volume demonstrated by the well(s) and for evaluating the potential for economic recovery (PRMS). Note that there is an additional chance to reach a specific volume, such as a commercial volume. Risking methodology specific to the Mazagan plays is discussed further in Section 6.1.

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3 REGIONAL SETTING 3.1 Licence and Exploration History 3.1.1 Licence Status The Mazagan permit lies offshore Morocco in water depths of 1000m to 3000m (Figure 3-1). The permit was acquired by Pura Vida through direct negotiation with the Moroccan government and with formal date of signing anticipated to be on about 18 October 2011. Note that the same permit was initially called Cape Tafelney. The permit is described as a combined block, and essentially covers the exploration opportunities originally defined by the Moroccan government as Essaouria Offshore IV and Essaouria Offshore V. The permit is held jointly between Pura Vida Energy (75% interest) and the Office National des Hydrocarbures et des Mines (ONHYM; 25% interest). ONHYM’s interest is carried throughout the exploration period.

Figure 3-1 General setting and bathymetry for offshore Morocco The work program for the full three terms comprises the following: • 1st term (2 years): Reprocess 3000 km2 3D seismic and acquire 50 drop cores. At the end of this first term, a ‘drill or drop’ decision is made. Continuati on into the 2 nd term requires a 20% relinquishment of the original area. • 2nd term (2 years): Drill one exploration well to 3000m below mudline At the end of this second term, a further ‘drill or drop’ decision is made. Continuation into the 3 rd term requires a 30% relinquishment of the original area (resulting in an area 50% of the original permit).

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 7 • 3rd term (4 years): Drill two exploration wells to 3000m below mudline Acreage in the vicinity was originally held in two adjacent permits by a group with Vanco as operator and Agip, CNOOC and ONHYM as joint venture partners. These permits covered a different area to the Mazagan permit, and included shallow water acreage closer to the coast. The Ras Tafelney permit lay to the south and covered the most prospective area of the current Mazagan permit. The Safi Haute permit lay to the north. 3.1.2 Exploration Activity The Vanco group acquired a first phase of 2D seismic in 1998, and 3D seismic in 2001. The Shark B-1 well was drilled in 2004 in 2128m water depth. The Shark prospect was a clear four- way dip-closed salt-cored anticline mapped at interpreted Top Cretaceous and Albian levels (Figure 3-2). Reservoir targets were potential sands in the Lower Tertiary, Upper Cretaceous and Lower Cretaceous postulated to correspond to higher amplitude events on seismic (although are not reported to fit structure and were not seen as a direct hydrocarbon indicator [DHI]). Total depth was 3976m MD close to the base Aptian (Figure 3-3). The well was largely on prognosis (<30m), with the deepest target being 65m shallow. However, post-drill reports showed that no significant reservoirs were encountered in any of these intervals (although Pura Vida report that recent work by DownUnder Geophysics suggest that some reservoir potential does exist in the limestones). The strong amplitude responses proved to be related to density contrasts between non-reservoir lithologies of claystone, siltstone, and limestone (e.g. Figure 3-4). No oil shows were seen; a single C1 gas show related to a limestone. More recently, in 2006, a second tranche of 2D seismic lines was acquired. Outside of the Pura Vida acreage, further to the south lies the Shell-operated Amber-1 well. This 2004 well targeted Cretaceous turbidite sands in a trap against a salt ridge. No significant reservoirs were encountered, and the well was plugged and abandoned, although minor oil and gas shows were present in Eocene and Cretaceous levels. Several minor hydrocarbon discoveries have been made close to shore, off Agadir, and onshore to the north (Figure 3-5). Towards the Canary Islands are additional discoveries. Regional well correlations are shown in Figure 3-6 and Figure 3-7. These include wells drilled at Deep Sea Drilling Program sites to the west and north. These provide important information about reservoir and source rock development.

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Figure 3-2 Seismic line through Shark-1 well

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Figure 3-3 Shark-1 summary log

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Figure 3-4 Detail of seismic line through Shark-1 well, showing raised amplitudes over crest

Figure 3-5 Hydrocarbon discoveries, offshore Morocco, with Mazagan permit

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Figure 3-6 Deepwater Morocco stratigraphic correlation (1) (Vanco)

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Figure 3-7 Deepwater Morocco well correlation (2) (Vanco)

Independent Technical Specialist’s Report on Mazagan Permit, Morocco September 2011 13 3.2 Geological History The Mazagan permit forms part of the Atlantic rift succession, and locally covers part of the offshore portion of the Essaouria Basin. Dunlap et al (2010) 2 provide a good description of the geomorphology of the margin, and summarise the geological history, from which we draw this summary. In the vicinity (in the original Safi Haute permit to the north), the continental rise has a slope of between 1 and 6 degrees, with numerous canyons and channels. Prominent bathymetric features near the study area include the Essaouira and Agadir Canyons and the Tafelney Plateau (Figure 3-1). The Tafelney Plateau is interpreted as a high-relief accommodation zone inherited from the rifting stage of the central Atlantic Basin. It has a complex history but most recently has been uplifted as part of the Neogene rise of the Atlas Mountains. Located on the northwest corner of the African craton, the Moroccan margin has a similar history to that developed all along the north African Atlantic margin, with syn-rift continental clastics, carbonates, and evaporites overlain by Cretaceous and Tertiary marine clastics (Figure 3-8). Major tectonic events influencing the development of the margin include the Devonian-to-Westphalian age Hercynian orogeny, rifting of the central Atlantic, and the Late Cretaceous to Miocene aged Alpine orogeny. At the end of the Hercynian orogeny, low-grade-metamorphic Paleozoic basement on the west Moroccan margin was uplifted and eroded. Rifting began in the Triassic, forming normal listric faults striking north-northeast to south-southwest, which created a series of half grabens in which as much as 12 km of syn-rift continental clastics were deposited. Post-rift extension continued through the Triassic, allowing seas to flood the lows created between pre-Mesozoic basement horsts, probably from the north (proto-Atlantic) and east (Tethys), resulting in the creation of a restricted marine environment and evaporite deposition. Southern basins adjacent to Precambrian and Paleozoic highlands were dominated by clastic debris shed into rapidly subsiding half grabens. Evaporite deposition, which exceeded thicknesses of 1.5 km in some basins, continued into the Early Jurassic.

2 Dunlap, D. B. et al 2010 Seismic geomorphology of offshore Morocco ’s east margin, Safi Haute Mer area, AAPG Bulletin, v. 94, no. 5 (May 2010), pp. 615 –642

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Figure 3-8 Simplified tectonic history, Moroccan margin Ongoing extension and subsidence led to communication with the Tethys Sea to the east and, finally, to development of open-marine conditions. Anoxic conditions are postulated for this time (see below), leading to the development of source rocks. Ongoing Atlantic opening during the Bathonian and subsequent carbonate deposition led to the deformation and diapiric rise of underlying evaporites. The DSDP data show that thick turbidites were deposited offshore during the Middle Jurassic (providing potential reservoir for the deeper Mazagan prospectivity, with interruptions during widespread Jurassic carbonate deposition. A global sea level fall in the Early Cretaceous ended carbonate deposition, and progradation of thick Cretaceous-age deltaic deposits commenced, further loading the underlying evaporites. By the Late Cretaceous, clastic influx had decreased, and deep-water muds and marls were being deposited offshore. Several periods of erosion and non- deposition followed at the start of the Tertiary and during the Cenozoic. The Alpine orogeny began during the Late Cretaceous and continued into the Late Tertiary. Inversion and shear along Mesozoic rifts produced the Atlas Mountains, with the main phase occurring during the Miocene-Pliocene. Erosional products at this time are postulated to provide the reservoir for the main play of the Mazagan permit. Mobilisation of the Triassic salt from Jurassic to Holocene times has resulted in diapirs, tongues, sheets, canopies and toe thrusts (Figure 3-9), and has influenced sediment deposition. Depositional styles include sediment waves, slumps and mass transport complexes (MTC), the largest of which is a

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 15 Cretaceous unit of some 500m thick covering a vast area. This MTC is thought to have originated from up-slope collapse of a narrow shelf.

Figure 3-9 Regional seismic line across Tafelney Plateau 3.3 Stratigraphy and Reservoir Development The Atlantic margin history of the permit, and more recent uplift of the Atlas Mountains, suggest that coarse clastic material should be present locally across the margin. ONHYM provide schematic illustrations of the depositional setting for the key Miocene and Lower Cretaceous/Jurassic successions. During the Jurassic, siliciclastic sediments sourced from the Palaeozoic hinterland, widespread alluvial and fluvial systems developed adjacent to Hercynian massifs 3 (Figure 3-10). Local sediment bypass allowed sands to be channelled off the shelf, and deposited as turbidites.

3 Office National des Hydrocarbureset des Mines Oct 2010 Hydrocarbon Potential of the Essaouria Offshore Basin, Morocco (.ppt presentation)

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Figure 3-10 Schematic depositional setting during Jurassic (ONHYM) During the Lower Cretaceous, eroding Palaeozoic massifs provided the provenance for the development of delta settings, as shown by fluivo-deltaic facies in outcrop (Figure 3-11). These would be locally associated with slope fans and in deeper water, basin floor fans were deposited. At DSDP site 416, to the north of the block, distal fan facies are present from the Tithonian through to the Hauterivian (Figure 3-12). Some distance to the southwest, outcrops on Fuertaventura also show turbidite sequences (also Figure 3-12). Such turbidites can only have been derived from the onshore Moroccan hinterland, through acreage such as at the Mazagan permit, where thickened units may also be possible.

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Figure 3-11 Schematic depositional setting during Lower Cretaceous (ONHYM)

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Figure 3-12 Summary of DSDP well 4164 (left) and Fuertaventura Island outcrop5 (right)

4 Lancelot, Y & Winterer, E. L.1980 1. Introduction and summary of results, Deep Sea Drilling Project Leg 50

Independent Technical Specialist's Report on Mazagan Permit, Morocco September 2011 19 A series of schematic geological sections though time produced prior to the drilling of Shark B-1 (Figure 3-13,) suggests that turbidites and debris flows could occur at almost all times since the Lower Cretaceous except for the Aptian. However, the Shark B-1 well results indicate that reservoir development is not ubiquitous. At the Middle Miocene level, the distribution of raised amplitudes suggests that the Shark B-1 location is between sand channels.

Figure 3-13 Schematic geological history of Moroccan margin from Lower Cretaceous times (Vanco - pre- Shark-1) The present-day geological setting gives a clear equivalent process to that envisaged for the Miocene (Figure 3-14). In particular the Agadir Canyons, which lie to the south of the Mazagan permit, are seen to channel sediment out into the deeper water. The Plio-Pleistocene also offers a relatively recent image of similar processes.

5 Vanco Energy Co. October 2006 Ras Tafelney Block Overview

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Note – previous permits shown Figure 3-14 Present day bathymetry and canyon development and sediment pathways (left) and Plio- Pleistocene canyons and sediment pathways (right) (ONHYM) 3.4 Source Rocks and Hydrocarbon Charge 3.4.1 Source Rock Intervals The limited well data suggest that source intervals may occur regionally within the Cretaceous Albian and Aptian, and Upper and Lower Jurassic. Prospectivity within the Mazagan permit calls upon the Jurassic to provide hydrocarbon charge. The Jurassic is known to be a period when source development was regionally significant, for example the Kimmeridge Clay in the North Sea, and equivalents offshore Canada, which were close during this early stage of Atlantic rifting (Figure 3-15).

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