TABLE OF CONTENTS

SECTION 1 GENERAL INFORMATION ON SECURITIES ...... 3 SECTION 2 GENERAL INFORMATION ON THE ISSUER ...... 5 SECTION 3 MANAGEMENT AND SHAREHOLDERS ...... 14 SECTION 4 BANKS, ADVISORS AND AUDITORS OF THE ISSUER ...... 20 SECTION 5 DESCRIPTION OF ISSUER’S ACTIVITY...... 21 SECTION 6. FINANCIAL STATEMENTS ...... 40

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SECTION 1 GENERAL INFORMATION ON SECURITIES

1.1. Information on issued shares

Security Type Ordinary Shares

Number of issued shares 1,804,348,012 Ordinary Shares

ISIN Code for Ordinary Shares GB00B0H1P667

CFI Code ESVUFR

UK legislation does not provide for registration of share issues. State registration Therefore no registration certificate has been issued.

The Ordinary Shares were admitted to trading on the Alternative Investment Market of the London Stock Exchange (“AIM”) on 27 Stock exchanges, on which the October 2005 and have a nominal value of 0.01 pence each. Issuer’s shares are traded 73,920,000 Ordinary Shares priced at 35 pence each were placed on AIM on 28 October 2005 in the Issuer’s initial public offering, raising in total 25.87 million pounds sterling..

The Issuer has no current plans to pay dividends and does not have Procedure of dividends distribution a formal procedure for the accrual of dividends.

The holders of Ordinary Shares are entitled: - to receive notice of, attend and vote at any general meeting of the Issuer - to receive dividends as may be declared from time to time and Shareholders’ rights any distribution - on a return of capital on a winding up, to receive payment of the nominal capital of 0.01p for each Ordinary Share held and a share in the Issuer’s residual assets Ordinary Shares are not redeemable by the holder.

Pursuant to tax legislation of the Republic of Kazakhstan the following types of income shall be excluded from taxable income of individuals, both residents and non-residents of the Republic of Kazakhstan (for personal income tax purposes): - Dividends and bonuses on securities that are on the date of accrual of such dividends and bonuses officially listed on the stock exchange, operating on the territory of the Republic of Kazakhstan Procedure for taxation of income (Tax Code, Art. 156, paragraph 1, pp.5 and Art.200-1, p.1, pp.6); earned by shareholders - Capital gains from open sales on the stock exchange, operating on the territory of the Republic of Kazakhstan (Tax Code, Art. 156, p.1, pp. 16 and Art.200-1, p.1, pp.9). - Dividends, except for the dividends paid by closed unit risk investment funds and incorporated risk investment funds, are exempt from total annual income of taxpayers (Tax Code, Article 99, paragraph 1, pp.1).

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Name: Capita Registrars Limited Legal/actual address: The Registry, 34 Beckenham Road, Kent, BR3 4TU, UK. Registrar Tel: +44 (0) 871 664 0300. Fax: +44 (0) 20 8639 2342. Chief Executive Officer: Charles Cryer. Email: [email protected] Bank of New York Mellon Legal/actual address: London Branch, One Canada Square, Payment agent London E14 5AL Placement location JSC Kazakhstan Stock Exchange, Republic of Kazakhstan, 050040, Almaty, Baizakova str. 280, “Almaty Towers” International Finance Complex, North Tower, 8th floor or at the actual location of the Issuer. Alternative Investment Market of the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS, Великобритания

The procedure of public distribution By means of publication of the placing offer in mass media and on of information about placement www.maxpetroleum.com and www.kase.kz.

1.2. Goal of Listing at Kazakhstan Stock Exchange The Issuer’s main operating subsidiary is Samek International LLP, which has operated in the Republic of Kazakhstan since 2005. A listing on the JSC “Kazakhstan Stock Exchange” (“KASE”) will allow the Issuer to attract interested parties and partners in Kazakhstan to participate and receive the rewards from its operations. The Issuer strives for the transparency of its subsoil operations, so listing on KASE in addition to the current listing on AIM will provide information about the Issuer to a wider range of interested parties, like potential investors from Kazakhstan represented by business partners and governmental authorities. In future the Issuer is planning to maintain additional issue of shares and offer for public placing. Pursuant to the requirements of RK legislation the entity – resident of the Republic of Kazakhstan may place its shares on the territory of the foreign country, provided that these shares are included in the official KASE listing, at that at least twenty percent of the total number of shares should be offered on Republic of Kazakhstan securities market. The Issuer has taken the decision for the purposes of complying with the requirements of Kazakhstan legislation that at least twenty percent of the total number of shares to be issued pursuant to future offerings by the Company should be offered for purchase on Republic of Kazakhstan securities market.

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SECTION 2 GENERAL INFORMATION ON THE ISSUER

2.1. Legal Structure

The Issuer’s legal and trading name is Max Petroleum Plc and its registered office is 2nd Floor, 81 Piccadilly, London W1J 8HY, United Kingdom. Tel: +44 (0) 207 355 9590. www.maxpetroleum.com Contacts: Michael Young, President and Chief Financial Officer Tom Randell, Director of Investor Relations The Issuer was incorporated as a private limited company in England and Wales on 8 April 2005 with registered number 05419021. The Issuer was re-registered as a public limited company on 13 September 2005. The liability of the shareholders of the Issuer is limited. The Ordinary Shares were admitted to trading on AIM on 27 October 2005. At the date of this Investment Memorandum the Issuer has the following direct and indirect subsidiaries, all with 100% effective holding and voting rights:

Country of Date of Nature of Subsidiary incorporation incorporation Legal Address Direct parent business Operating company for Samek 4th floor, 32A Manas Blocks A&E in International Republic of St., Almaty, Madiran Investment Atryrau region LLP Kazakhstan 13 May 2005 Kazakhstan B.V. (100%) of RK 9 Greenway Plaza, Max Exploration United States Suite 550, Houston, TX Max Petroleum Plc Operating Services, Inc. of America 01 April 2008 77046, USA (100%) company Holding Company of Orlyplein 10, 21st Floor, Samek Madiran 1043DP, Amsterdam, Max Petroleum Plc International Investment B.V. Netherlands 28 July 2004 Netherlands (100%) LLP Herikerbergweg 238, Luna ArenA, 1101CM Max Petroleum Amsterdam Zuidoost, Max Petroleum Plc Holding Holdings B.V. Netherlands 22 July 2008 Netherlands (100%) Company Sea Meadow House, Max Petroleum PO Box 116, Road Astrakhanskiy British Virgin 10 August Town, Tortola, British Max Petroleum Plc Holding Holding Ltd Islands 2005 Virgin Islands, VG1110 (100%) Company Sea Meadow House, PO Box 116, Road Max Petroleum Vasse British Virgin Town, Tortola, British Astrakhanskiy Holding Investments Ltd Islands 6 July 2005 Virgin Islands, VG1110 Holding Ltd (100%) Company 1.Max Petroleum Herikerbergweg 238, Astrakhanskiy Max Luna ArenA, 1101CM Holding Ltd (30%) Astrakhanskiy Amsterdam Zuidoost, 2. Vasse Invest- Holding Holdings B.V. Netherlands 16 July 2008 Netherlands ments Ltd (70%) Company Herikerbergweg 238, Luna ArenA, 1101CM Cooperative 23 September Amsterdam Zuidoost, Madiran Investment Samek U.A. Netherlands 2008 Netherlands B.V. (100%) Cooperative Herikerbergweg 238, Luna ArenA, 1101CM Max Astrakhanskiy Cooperative 23 September Amsterdam Zuidoost, Holdings B.V. Alga U.A. Netherlands 2008 Netherlands (100%) Cooperative

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The following is the legal structure of the Issuer:

Max Petroleum PLC UK public limited liability company

100% 100% 100% 100% Max Petroleum Max Exploration Madiran Max Petroleum Astrakhanskiy Services, Inc. Investment B.V. Holdings B.V. Holding US limited liability Netherlands limited Netherlands limited BVI limited liability corporation liability company liability company company

100% Vasse Investments Limited 30% BVI limited liability company

70%

Max Astrakhanskiy Holdings B.V.

Netherlands limited liability company

100% 100% 100% Samek Cooperative Cooperative International LLP Samek U.A. Alga U.A. Netherlands Netherlands Kazakhstan limited cooperative cooperative liability partnership association association

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Madiran is the immediate parent company of Samek International Madiran Investment B.V. LLP. The Company acquired 80% of Madiran in October 2005 and the (“Madiran”) remaining 20% in July 2008.

Acquired by the Madiran in September 2005. SI owns a 100% interest Samek International LLP (“SI”) in the Company’s Block A&E Licence.

MPAHL and VASSE were acquired in January 2006 and together Max Petroleum Astrakhanskiy owned a 100% interest in share capital of Alga Caspiygas LLP, the Holding Limited (“MPAHL”) and holder of the Astrakhanskiy Licence. It was intended that these two Vasse Investments Limited companies (incorporated in British Virgin Islands) would transfer their (“VASSE”) interests in Alga Caspiygas LLP to MAH BV and ultimately be removed from the Company’s structure, however this restructuring was only partially completed. The entities have no operations. The

Company plans to liquidate them in due course.

Incorporated in April 2008 to be a corporate cost center for the Company’s Houston office. MES employs two geologists and the Max Exploration Services, Inc Company’s senior executives. The entity is funded by an (“MES”) intercompany loan from its parent, Max Petroleum Plc. The entity has no interests in other entities or in other oil and gas assets.

MPH BV was incorporated in July 2008 as part of a restructuring to create an entity and group structure favorable for a possible farm-out of the Blocks A&E and Astrakhanskiy licences, should they occur. It Max Petroleum Holdings B.V. was intended the entity would become an intermediate holding (“MPH BV”) company directly under Max Petroleum Plc and that it would hold 100% interests in Madiran and MAH BV, however the restructuring was not completed. The entity has no operations.

Max Astrakhanskiy Holdings B.V. MAH BV was incorporated in July 2008 and acquired a 100% interest (“MAH BV”) in share capital of Alga Caspiygas LLP in April 2010 as part of a company restructuring to create a structure favourable for a possible farm-out of the Astrakhanskiy Licence, should it occur. Alga Caspiygas owned a 100% interest in the Astrakhanskiy Licence and was disposed of by MAH BV in January 2011. The entity has no operations and the Company plans to liquidate it in due course.

Coop Samek was incorporated in September 2008 as part of a Cooperative Samek U.A. (“Coop restructuring to create an entity and group structure favorable for a Samek”) possible farm-out of the Blocks A&E Licence, should it occur. The entity has no operations.

Coop Alga was incorporated in September 2008 as part of a restructuring to create an entity and group structure favorable for a Cooperative Alga U.A. “Coop Alga” possible a farm-out of the Astrakhanskiy Licence, should it occur. The entity has no operations and the Company plans to liquidate it in due course.

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2.2. Bank details of the Issuer

BBVA COMPASS BANK Account No 2530030248 ROUTING NO 113010547 Bank Address: Compass Texas PO box 10566 Birmingham AL 35296 USA

HSBC Bank PLC IBAN: USD Current: GB71MIDL40051567517300 Account NO: 67517300 USD Deposit: GB43MIDL40051567517319 Account NO: 67517319 SWIFT-MIDLGB22 Sort code: 40-05-15 GBP Current: GB60MIDL40041081539302 Account NO: 81539302 GBP Deposit: GB64MIDL40041001541099 Account NO: 01541099 SWIFT- MIDLGB2106Y Sort code 40-04-10 Bank Address: HSBC Bank PLC 203-204 Sloane Street Knightsbridge London SW1X 9RG UK

2.3. The history of Issuer’s foundation

Incorporation. Max Petroleum Plc (“Company” or “Issuer”) was incorporated as a private limited company in England and Wales on 8 April 2005 with registered number 05419021. As far as the Company is aware, there were no persons who, immediately following admission to trading on AIM, directly or indirectly, jointly or severally, held shares, amounting to 10% or more of the issued share capital of the Company immediately following the Admission.

Authorised Share Capital. - The initial authorised share capital at incorporation was £10,000 divided into 10,000 Ordinary Shares of £1 each. - On 13 April 2005, a resolution was passed to increase the authorised share capital to £30,000,000 divided into 200,000,000 Ordinary Shares at £0.15 each. - On 22 April 2005, a resolution was passed to increase the authorised share capital to £60,000,000 divided into 400,000,000 Ordinary Shares of £0.15 each. - On 5 August 2005, a resolution was passed to reorganize the authorised share capital into 400,000,000 Ordinary Shares at £0.0001 each and 400,000,000 Deferred Shares at £0.1499 each. - The Issuer was re-registered as a public limited company on 13 September 2005. - Subsequently, the authorised share capital was increased to 800 million shares and further up to 2,000 million Ordinary Shares of 0.01p each. - On 13 October 2009 a special resolution was passed to replace the Articles of Association and, effective 1 October 2009, the Issuer no longer has an authorised share capital and thus no longer has statutory restriction on the maximum allotment of shares.

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Issued Share Capital (major milestones). - Prior to the first public offering, 51,720,329 Ordinary Shares and 28,253,329 Deferred Shares were issued under private placement, raising funds of US$21.2 million. - In August 2005 Max Petroleum issued 134,100,000 Ordinary Shares, representing non-cash consideration of US$59.7 million, as part of total consideration of US$83.9 paid to acquire an 80% interest in two subsoil licences in Kazakhstan: Blocks A&E and East Alibek. - The Company’s Ordinary Shares were admitted to trading on AIM on 27 October 2005, followed by an initial public offering on 28 October 2005, where 73,920,000 Ordinary Shares were issued for cash consideration of US$46.2 million. - On 6 January 2006, Max Petroleum Plc issued 37,650,000 Ordinary Shares for cash consideration of US$66.1 million in an institutional placing. - In March 2006, the Issuer issued 3,500,000 Ordinary Shares as part of the consideration for the acquisition of a 100% interest in the Astrakhanskiy subsoil licence in Kazakhstan. - On 11 July 2008, Max Petroleum Plc issued 37,000,000 Ordinary Shares as non-cash consideration under the Exchange Agreement with Horizon Services N.V. and Oriental Limited (see below). - During the year ended 31 March 2010, Max Petroleum Plc issued 49,160,000 Ordinary Shares upon exercise of Bondholder Warrants for the total cash consideration of US$4.0 million and also issued 20,476,094 Ordinary Shares upon cashless exercise of credit facility warrants per the credit facility terms (“Credit Facility Warrants”) with Macquarie Bank Limited (“Macquarie”). - In March 2011, Max Petroleum Plc issued 309,846,935 new Ordinary Shares to institutional investors at 17p per share, generating cash proceeds of US$85.2 million before issuance costs. - During the year ended 31 March 2011, the Issuer also issued 133,971,947 Ordinary Shares upon exercise of Credit Facility Warrants for proceeds of US$9.8 million and 9,789,899 Ordinary Shares upon cashless exercise of Credit Facility Warrants. - During the year ended 31 March 2011, Max Petroleum Plc issued 27,580,000 Ordinary Shares upon exercise of Bondholder Warrants for the total proceeds of US$2.2 million. - During the year ended 31 March 2012, Max Petroleum Plc issued 94,793,580 Ordinary Shares upon cashless exercise of Credit Facility Warrants and a further 4,920,000 Ordinary Shares upon exercise of Bondholder Warrants for cash proceeds of US$0.4 million. - As part of its agreement with Zhanros Drilling LLP (its drilling contractor) Max Petroleum Plc issued 76,859,169 Ordinary Shares at 5p in exchange for drilling services (see below). - On 21 December 2012, Max Petroleum Plc issued 708,999,985 Ordinary Shares on conversion of US$56.7 million of principal and accrued interest on its Convertible Bonds. - All other issues of share capital up to the date of this Investment Memorandum were made upon exercise of stock options held by management, employees and advisors of the Issuer and from the exercise of options issued to vendors of the Astrakhanskiy Block.

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Key Events - In October 2005, Max Petroleum Plc completed acquisition of an 80% interest in Madiran Investment B.V., the 100% holding company of Samek International LLP, which is the operator of the Blocks A&E subsoil contract. The total consideration of this transaction was US$49.8 million, including cash of US$13.3 million and the issue of 82.1 million Ordinary Shares at 25p for US$36.5 million. - In October 2005, Max Petroleum Plc completed the acquisition of an 80% interest in Sherpico Investments Ltd, the 100% holding company of Samek Development Enterprise LLP, which was the operator of the East Alibek subsoil contract. The total consideration was US$34.1 million, including cash of US$11.0 million and the issue of 52.0 million Ordinary Shares at 25p for US$23.1 million. - After listing on AIM, in January 2006 Max Petroleum Plc acquired 100% of KazGas Ltd (subsequently renamed “Max Petroleum Astrakhanskiy Holding Limited”) and Vasse Investments Ltd, holding companies of 100% of Alga CaspiyGas LLP, which was the operator of Astrakhanskiy subsoil licence. The total consideration of this transaction was US$79.2 million, including cash of US$43.0 million, issue of 3.5 million Ordinary Shares for US$7.6 million at 124p and the grant of 50.0 million share options exercisable at 100p, with a fair value of US$28.6 million. - On 8 September 2006, Max Petroleum Plc completed an offering of convertible bonds, raising a total of US$75.0 million and bearing interest at 6.75% per annum, payable semi-annually, convertible at an initial conversion price of £1.33 per Ordinary Share, subject to certain anti-dilution adjustments. From the date of issuance, the bonds have been listed on the Channel Islands Stock Exchange with ISIN number XS0263784786. The funds were used for the Issuer’s exploration programmes. - On 8 June 2007, Max Petroleum Plc closed a US$100 million credit facility with Macquarie (the “Macquarie Credit Facility”). The facility had an initial borrowing base of US$20 million; which was drawn down and used to fund Max Petroleum’s appraisal and development of the Zhana Makat field on Block E. The borrowing base was subsequently increased to as high as US$80 million in August 2009, and subsequently decreased to US$68.5 million in March 2011 and US$58 million from March 2012. As of 30 September 2012, the balance outstanding under the Macquarie Credit Facility was US$52.2 million. The Macquarie Credit Facility was later refinanced with a new facility provided by SB Sberbank JSC (see below). - In February 2008, the Issuer entered into an exchange agreement (the “Exchange Agreement”) with Horizon Services N.V. (“Horizon”) and Oriental Limited (“Oriental”) to acquire Horizon’s 20% interest in Madiran Investments B.V. in exchange for Oriental receiving the Issuer’s 80% interest in Sherpico Investments Limited (“Sherpico”), and 37 million Ordinary Shares in Max Petroleum Plc. The Issuer closed the Exchange Agreement on 11 July 2008, upon which it fully disposed of its interest in East Alibek subsoil contract and increased its interest in the Blocks A&E subsoil contract to 100%. - In July 2010, the Ministry of Oil and Gas of the Republic of Kazakhstan notified the Issuer of the termination of its subsoil use licence for the Astrakhanskiy Block due to the Issuer’s failure to comply with the work obligations stipulated under the Astrakhanskiy subsoil contract. This notification did not affect the Issuer’s principal asset, its Blocks A&E Licence. The Issuer formally relinquished the Astrakhanskiy Licence in January 2011. On 27 January 2011 the Issuer disposed of its indirectly held subsidiary AlgaCaspiyGas LLP for total cash consideration of US$2.0 million. - In December 2012, the Company closed a new senior secured US$90 million credit line agreement (the “Sberbank Facility”) with SB Sberbank JSC (“Sberbank Kazakhstan” or “Sberbank”). The approved uses of the Sberbank Facility include the repayment of the existing Macquarie Credit Facility with Macquarie, funding the cash portion of the tender office made to Bondholders as part of the bond restructuring (see 6.1.9 below for details), and funding the Company’s post-salt exploration and appraisal programme. The Sberbank Facility comprises two tranches available to draw down as follows: - Up to US$60 million on closing in December 2012; - Up to a further US$30 million as soon as certain conditions precedent are met, including the registering of security and obtaining requisite government regulatory approvals, which are expected to be completed in March 2013.

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- In December 2012, Max Petroleum Plc repaid Macquarie US$47 million, resulting in a US$3 million balance of principal outstanding, to be settled from the proceeds of the second US$30 million tranche of the Sberbank Facility in due course. - The Issuer’s principal asset is its Blocks A&E Licence, where substantial exploration work has been carried out to date. The subsoil Licence was issued with an initial six year exploration period, expiring 4 March 2009, with two possible extensions for two years each. The Issuer obtained these two extensions, following which the exploration period is due to expire on 4 March 2013. Currently, the Issuer is in the process of obtaining a further two year extension to perform appraisal works. Commercial discoveries, once a full field development plan has been approved, can be produced for up to 25 years.

Share Capital The Issuer has two classes of share capital, which carry no right to fixed income: Ordinary Shares and Deferred Shares. Neither class of share is redeemable by the holder. The holders of Ordinary Shares are entitled: - to receive notice of, attend and vote at any general meeting of the Issuer; - to receive dividends as may be declared from time to time and any distribution; and - on a return of capital on a winding up, to receive payment of the nominal capital of 0.01p for each Ordinary Share held and a share in the Issuer’s residual assets. The Deferred Share class was created in 2005 in a capital restructuring and no further Deferred Shares will be issued. A Deferred Share carries no voting or dividend rights. On a return of capital on a winding up, the holders of Deferred Shares shall only be entitled to receive the amounts paid up on such shares after the holders of the Ordinary Shares have received the sum of 0.01p for each Ordinary Share held by them and shall have no other right to participate in the assets of the Issuer. On 13 October 2009 a special resolution was passed to amend the Company’s Articles of Association. Under the new Articles of Association, effective 1 October 2009, the Issuer no longer has an authorised share capital and thus no longer has a statutory restriction on the maximum allotment of shares. As of the date of this Investment Memorandum 1,804,348,012 Ordinary Shares and 28,253,329 Deferred Shares were issued and fully paid up. The Issuer’s Ordinary shares are admitted to trading on AIM in London under the symbol MXP. The Issuer’s shares are not listed on any other stock markets. Mid-market prices of the Issuer’s Ordinary Shares on AIM during the previous eight months were as follows (in UK pence):

Jan 2013 Dec 2012 Nov 2012 Oct 2012 Sept 2012 Aug 2012 Jul 2012 June 2012 High 4.50 4.00 4.81 4.99 4.44 4.96 4.21 10.50 Low 3.65 3.50 3.71 3.75 3.57 3.37 2.60 2.50 Closing 3.95 3.85 3.95 4.61 3.80 3.85 3.70 3.85

Mid-market prices of the Issuer’s Ordinary Shares on AIM during the quarters of the last two years were as follows (in UK pence):

Q4, 2012 Q3, 2012 Q2, 2012 Q1, 2012 Q4, 2011 Q3, 2011 Q2, 2011 Q1, 2011 High 4.99 4.96 12.75 17.50 15.00 16.00 18.77 28.75 Low 3.50 2.60 2.50 9.77 10.13 9.75 11.75 14.75 Closing 3.85 3.80 3.85 12.75 10.75 13.00 12.50 16.00

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Mid-market prices of the Issuer’s Ordinary Shares on AIM during the last five fiscal years were as follows (in UK pence):

6 months ended 30 September Year ended Year ended Year ended Year ended Year ended 2012 31 March 2012 31 March 2011 31 March 2010 31 March 2009 31 March 2008 High 12.75 18.77 34.75 31.75 75.00 219.00 Low 2.50 9.75 9.01 4.30 1.63 48.25 Closing 3.80 12.75 16.00 18.25 4.74 57.50 The Issuer and its securities have not been rated by international and / or domestic rating agencies.

Share Options The Issuer has granted share options to directors, employees, strategic consultants and advisors of the Issuer to provide incentives for long-term performance and retention. Share options are typically granted with an exercise price equal to the closing market price of the Issuer’s shares on the date of grant. The share options granted are not subject to any performance criteria apart from, in respect of directors and employees, their continued service with and employment by the Company. Options are forfeited if the director or employee leaves the Company before the options vest. The share options operate on a wholly equity-settled principle – the Company has no legal or constructive obligation to repurchase or settle the options in cash. The vesting terms of the share options are as follows: Options granted to directors and employees typically vest in part after one year and proportionately thereafter up to a seven year term from date of grant, with the majority fully vesting after three years from the date of grant. Options granted to consultants and advisors typically vest in part within six months and proportionately on anniversaries thereafter with a three year term from date of grant. The maximum term of options granted is 10 years and in the normal course of granting, seven years. As of the date of this Investment Memorandum 217,422,178 share options were outstanding with a weighted average exercise price of 7.8 pence.

Macquarie Credit Facility Warrants In February 2009, the Company amended the terms of the Macquarie Credit Facility and issued Macquarie with an amended and restated warrant deed to subscribe for up to 547,918,106 Ordinary Shares in the Company at exercise prices ranging from 4.54 pence to 6.13 pence per share (the “Credit Facility Warrants”). A total of 365,278,737 of the Credit Facility Warrants vested upon increases in the Macquarie Credit Facility borrowing base, with the remaining 182,639,369 unvested warrants being cancelled in a subsequent restructuring. As of the date of this Investment Memorandum, 48,692,917 Credit Facility Warrants were outstanding with a weighted average exercise price of 5.5 pence – as described in further detail in Note 31 of the Company’s Annual Report and Accounts for the year ended 31 March 2012.

Convertible Bond Warrants Pursuant to the terms of a restructuring of the Bonds in May 2009, the Company issued its Bondholders with a five-year warrant exercisable over 120 million Ordinary Shares at an exercise price of 5 pence per share (the “Bond Warrants”). 90 million of the warrants vested following deferral of the interest payments due 8 March 2009, 8 September 2009 and 8 September 2010. As of the date of this Investment Memorandum, 8,340,000 of the Bond Warrants remained fully vested and exercisable, as described in more detail in Notes 23 and 31 of the Company’s Annual Report and Accounts for the year ended 31 March 2012.

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Issuer’s Borrowings The Issuer’s Borrowings can be summarised into two main categories, Bank borrowings and Convertible bonds

Bank borrowings In June 2007, the Issuer entered into the Macquarie Credit Facility with Macquarie: Interest payable monthly at LIBOR plus 6.5%. Principal repayments commence on 31 July 2012, comprising seven monthly payments of US$2.0 million until 31 January 2013, US$4.0 million on 28 February 2013 and the remaining balance on 31 March 2013. Secured by pledges in favour of Macquarie over substantially all of the Company’s assets. In November 2012, the Issuer announced the execution of a US$90 million senior debt facility with Sberbank at interest rate 11% per annum as part of a broader restructuring proposal of its liabilities to reduce the Issuer’s overall debt burden by approximately 36% to US$90 million (the “Restructuring”). The Restructuring will refinance the Issuer’s existing Macquarie Credit Facility, redeem all of the Company’s outstanding convertible bonds for a combination of cash and shares, and provide up to US$30 million in additional liquidity to fund the Issuer’s post-salt exploration and development programme. The Issuer closed the first US$60 million tranche of the Sberbank Facility in December 2012, as a result the Issuer completed refinancing the Macquarie Credit Facility.

Convertible bonds Max Petroleum completed an offering of convertible bonds on 8 September 2006, raising a total of US$75 million before issuance costs. 750 Bonds were issued, each with a denomination of US$100,000 (“the Bonds”). The Bonds bore interest at 6.75% per annum, payable semi-annually, and were convertible at an initial conversion price of £1.33 per Ordinary Share, subject to certain anti-dilution adjustments. The Bonds were due to mature in September 2011, at which time the Company would be required to redeem the principal amount of the Bonds then outstanding. The Bonds were publicly traded on the Channel Islands Stock Exchange. The Bonds were restructured in May 2009, March 2011 and finally in December 2012. As a result of the 2012 Restructuring, a total of 709 million Ordinary Shares were issued to Bondholders, which represents 39% of the Company’s currently issued share capital. The remainder of the Bonds is due to be mandatorily converted into shares following receipt of the requisite Kazakh regulatory approvals (expected in the first half of 2013).

2.4. Selected Financial Data

As at As at As at As at 30 September 2012 31 March 2012 31 March 2011 31 March 2010 (unaudited) (audited) (audited) (audited) Total Assets (US$’000) 303,334 282,459 231,957 194,313 Net Assets (US$’000) 116,567 115,671 118,396 39,250 Revenue (US$’000) 49,156 50,243 55,309 43,348 Gross profit (US$’000) 13,266 16,723 16,887 11,763 Operating income (loss) 2 354 (5 436) (5 151) (126 251) Loss for the period (3 617) (8 151) (18 242) (253 443) Share Capital (US$’000) 8,036 8,035 8,020 7,942 Share Premium (US$’000) 365,002 364,381 356,598 265,043 Number of Ordinary Shares (units) 1,026,524,566 1,018,488,858 918,133,611 436,451,497 Number of Deferred Shares (units) 28,253,329 28,253,329 28,253,329 28,253,329 Loss per share, basic and diluted (US cents) (0.4) (0.8) (3.8) (64.3) Exchange rate of KZT to US$ 149.86 147.77 145.70 147.11

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2.5. Information on ratings

International and (or) local ratings agencies did not issue any ratings on the Issuer or its securities.

SECTION 3 MANAGEMENT AND SHAREHOLDERS

3.1. Corporate Structure

Supreme body - the General Meeting of Shareholders Supervisory Authority - Board of Directors The Company is governed by the Board of Directors which may exercise all the powers of the Company, including the power to dispose of all or any part of the undertakings of the Company. Although the Company is not required to comply with the UK Corporate Governance Code, the Board is committed where practicable to developing and applying high standards of corporate governance appropriate to the Company’s size. The Board may delegate any of its powers to any committee consisting of one or more directors; the list of existing committees is shown below. The Board may also delegate to any director holding any executive office such of its powers as the Board considers desirable to be exercised by him. The Board may exercise all the powers of the Company to borrow money, to guarantee, to indemnify, to mortgage or charge its undertaking, property, assets (present and future) and uncalled capital, and to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. Board Meetings are held regularly throughout the year.

3.2. The Board currently comprises three executive directors and three non-executive directors:

James A Jeffs Executive Co-Chairman, appointed 1 July 2005 (date of birth 09.12.1952) Mr. Jeffs is a senior executive with extensive experience in investment management, investment banking and as an executive and director of public oil and gas companies. Since 1994, Mr Jeffs has been Managing Director and Chief Investment Officer of the Whittier Trust Company. Mr. Jeffs was formerly Chairman of Whittier Energy Corporation, Chairman and Chief Executive Officer of Chaparral Resources, Inc. and on the Board of the Los Angeles County Employee Retirement Association. He currently serves on the Boards of NYSE listed Strategic Hotels and Resorts and previously served as a director of South Oil Co., a private, Russian-based, oil and gas company.

Robert B Holland III Executive Co-Chairman, appointed 27 April 2006 (date of birth 30.08.1952) Mr. Holland was a member of the Bush Administration until April 2006, serving as United States Executive Director of the World Bank. From 1993 to 1999, he served in various positions, including General Counsel and Chief Executive Officer of Triton Energy Ltd, a New York Stock Exchange listed exploration company that was sold to Amerada Hess. He is a former board member of NYSE listed Pier 1 Imports Inc., Massey Energy Inc. and Ivanhoe Mines Ltd. Mr. Holland is currently a director of the Financial Guaranty Insurance Corporation and the non-profit International Psoriasis Council. From 1977 to 1994 he practiced law with the Texas law firm, Jackson Walker LLP, and is a graduate of Stanford University and the University of Texas Law School.

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Michael B Young Executive Director (President and Chief Financial Officer) (date of birth 16.10.1968) Appointed 22 January 2008, Mr. Young has over 20 years of experience in various financial roles in the oil and gas industry. He was the Chief Financial Officer of Whittier Energy Corporation, a NASDAQ listed oil and gas exploration and production company based in the United States from 2003 to August 2006. Mr. Young also served as the Vice President and Chief Financial Officer of Chaparral Resources, Inc., a US publicly traded company operating in the Republic of Kazakhstan, from 1998 until November 2002. Mr. Young currently serves as Chairman of Alpha Houston, a non-profit organisation.

Lee O Kraus, Jr. Non-executive Director, appointed 10 June 2007 (date of birth 15.09.1955) Mr. Kraus is the Chief Executive Officer and Chairman of the Board of Blue Wolf Mongolia Holdings Corp., a NASDAQ listed company focused on natural resources in Mongolia. Mr. Resigned from the Board of Kraus is also a co-founder and Managing Partner of Composite Capital, LLC, an Directors as announced on investment management and financial advisory firm with a focus on the natural resources 21 December 2012 and was sector. Mr Kraus is a member of the board of directors of Duraseal Holding S.r.l., a replaced by Mr. Malcolm nanotechnology-based coatings company focused on the oil and gas, aerospace and Butler automotive sectors. He has also served as a Managing Director at Dresdner Kleinwort and Lazard Freres & Co., LLC and as Vice President in the investment banking group at Morgan Stanley, focusing on the oil and gas, mining, and chemical industries. He received his Bachelor’s degree in Electrical Engineering from Stanford University and his Masters of Business Administration from the University of Chicago.

David R Belding Non-executive Director, appointed 29 September 2005 (date of birth 08.12.1945) Mr. Belding was previously a senior executive and co-founder of Mandalay Resort Company, which was acquired by MGM Resorts, Inc for US$7.8 billion in June 2005. Mr Belding also co-founded Gold Strike Resorts, a hotel and casino operator, which he developed from 1977 to 1995, when it merged with Circus Enterprises. He was a founder and director of First Independent Bank of Nevada and served on the Board from 1995 to 2004. He is a partner and sits on the board of Valor Equity Partners, an equity capital firm based in Chicago. Mr. Belding serves as a board member of various community and civic organisations, including UNLV, where he has sat on the Board of Trustees since 1992. He also served as a director of the Whittier Trust Company from 1998 to 2008.

Maksut S Narikbayev Non-executive Director, appointed 10 October 2006 (date of birth 30.03.1940) Mr. Narikbayev served as Chairman of the Highest Judicial Board of Kazakhstan from 2003 to 2006, Chairman of the Supreme Court of Kazakhstan from 1996 to 2000, and as Prosecutor General of Kazakhstan from 1995 to 1996. Mr. Narikbayev is a qualified lawyer and has authored a wide range of books covering economic issues of the Supreme Court of Kazakhstan, criminal law, and the protection of civil rights.

Malcolm Butler Non-executive Director, appointed 21 December 2012 (date of birth 27.07.1948) Mr. Butler worked for over 25 years as an explorationist and senior executive in the worldwide oil and gas business before taking on a secondary role as an investment banker. Since 2003, he has acted as senior adviser on energy-related matters to Seymour Pierce Limited. He is Chairman of Wessex Exploration Plc, President of Waterloo Oil & Gas LLC, an exploration and production partnership active in onshore Louisiana as well as Chairman of Brigantes Energy Limited and Corfe Energy Limited, both EIS-funded exploration companies with non-operated activities in the UK. In 1994, Mr Butler was awarded the Aberconway Medal of the Geological Society of London, in recognition of his contributions to the oil and gas industry, and in 1995 he was appointed an Honorary Professor at the University of Aberystwyth.

One third of the existing directors will retire by rotation each year and offer themselves for re-election in accordance with the Issuer’s Articles of Association. Non-executive directors are considered to be independent of management and free from any contractual relationships with the Issuer, thereby allowing them to exercise full independent judgment on any issue. There is a clear division from the responsibilities of the executive directors. All directors are permitted access to independent professional advice in the course of execution of their duties, at the Issuer’s expense.

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The Company has granted share options to directors, strategic consultants and advisors to provide incentives for long-term performance in the Company. The directors had the following interests in the shares capital of the Company:

Share% 31 March 2012 30 September 2012 as of 30 September 2012 James A Jeffs 107,091 107,091 0.01 Robert B Holland III 96,732 96,732 0.01 Michael B Young 235,274 235,274 0.02 Lee O Kraus, Jr* 50,000 50,000 - David R Belding 4,142,729 4,142,729 0.40 Maksut S Narikbayev - -

*resigned 20 December 2012

The Board has established the following committees:

Audit Committee The Audit Committee was formed in June 2006 and is comprised of four directors: Messrs. Butler, Holland, Belding and Jeffs. Mr Butler is the Audit Committee Chairman. The Audit Committee is responsible for selecting the Issuer’s independent auditors, pre-approving all audit and non-audit related services, reviewing with management and the independent auditors the Issuer’s financial statements, significant accounting and financial policies and practices, audit scope and adequacy of internal audit and control systems.

Compensation Committee The Compensation Committee was appointed in June 2006 and is comprised of Messrs. Belding, Holland and Jeffs. Mr Belding is the Compensation Committee Chairman. The Compensation Committee is responsible for determining the terms and conditions of service of the executive directors and of senior management of the Issuer.

Executive Committee The Executive Committee comprises Messrs. Jeffs, Holland, and Young and is responsible for the strategic oversight of the Issuer.

Advisory Committee During the year ended 31 March 2012, the Advisory Committee comprised Messrs. James C Langdon and Peter B Moss, Jr, two independent international advisors with extensive experience in, and knowledge of, the energy sector. The role of this committee is to provide financial, operational, geopolitical and technical advice to the Board and to senior non-Board officers of the Issuer.

Nominations Committee The directors have considered that the Company is not of a size for a nominations committee to be appropriate at the current time. The Board will continue to monitor the situation. In the absence of a nominations committee, all appointments are decided by the full Board.

Investor relations The Board is committed to provide regular communication with shareholders. During the year ended 31 March 2012 and as of the date of this Investment Memorandum, Tom C Randell served as Director of Investor Relations.

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3.3. Remuneration paid to the directors

Remuneration paid to the directors was as follows: Year ended 31 6 months ended 30 September 2012 March 2012 Salary Bonuses Fees Benefits Total Total US$ US$ US$ US$ US$ US$ J A Jeffs - - 90,000 - 90,000 180,000 R B Holland III - - 90,000 - 90,000 180,000 M B Young 196,875 - - 31,966 228,841 441,036 L O Kraus, Jr - - 37,500 - 37,500 75,000 D R Belding - - 37,500 - 37,500 75,000 M S Narikbayev - - 37,500 - 37,500 125,000 196,875 - 292,500 31,966 521,341 1,076,036

Directors’ pension entitlements The Issuer contributes to the retirement savings plan of Michael B Young. The contributions paid by the Issuer during the six months ended 30 September 2012 were US$4,900 and for the year ended 31 March 2012 were US$9,800 (2011: US$9,800).

3.4. Organisation Chart of the Issuer

The Issuer has 6 Financial and Administrative employees.

Personnel of the Company The monthly average number of staff employed during the last three years and six months ended 30 September 2012 was as follows: Six months ended Year ended Year ended Year ended 30 September 31 March 2012 31 March 2011 31 March 2010 2012 (number) (number) (number) (number) Administrative 70 68 71 71 Exploration and production operations 86 87 78 72 Directors 6 6 6 6 Total number of employees 162 161 155 149

3.5. Shareholders of the Issuer

At 10 January 2013 the total number of the Issuer’s shareholders was 2,122 and the following parties had notifiable major interests of 5% or greater in the nominal value of the Company’s issued 0.01p Ordinary Shares:

Shareholder Address Number of shares % One Curzon Street, London, W1J 5HB, United GLG Partners LP Kingdom. 225 260 133 12,48 Ropemaker Place, 28 Ropemaker Street, Macquarie Bank Limited London, EC2Y 9HD, United Kingdom. 197,180,534 10,93 1001 Bayhill Drive, Suite 125, San Bruno, Outrider Master Fund, LP California, United States of America. 177,740,732 9,85 201 Bishopsgate, London, EC2M 3AE, United Henderson Global Investors Kingdom. 150,022,081 8,31 1 Great Winchester, London, EC2N 2EQ, Deutsche Bank AG, London United Kingdom. 104,014,749 5,76

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3.6. Information about transactions which resulted in the changes in major shareholdings (above 5%) during the periods from 1 April 2010 to 31 January 2013:

Six months ended 30 September 2010 Movement Shareholder Name Shareholder Address March 2010 September 2010 Shareholding % Shareholding % % Lynchwood Nominees Limited (Kachshapov Family)55 Moorgate, London, EC2R 6PA, United Kingdom. 11.23 10.68 (0.55) TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 4.83 5.06 0.23

Total number of shares in issue 436.451m 449.575m

Six months ended 31 March 2011 September 2010 March 2011 Movement Shareholder Name Shareholder Address Shareholding % Shareholding % % Lynchwood Nominees Limited (Kachshapov Family)55 Moorgate, London, EC2R 6PA, United Kingdom. 10.68 4.56 (6.12) TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 5.06 4.37 (0.69) Macquarie Bank Limited Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, United Kingdom. 1.68 15.42 13.74 Henderson Global Investors 201 Bishopsgate, London, EC2M 3AE, United Kingdom. 0.00 6.34 6.34

Total number of shares in issue 449.575m 918.133m

Six months ended 30 September 2011 March 2011 September 2011 Movement Shareholder Name Shareholder Address Shareholding % Shareholding % % Macquarie Bank Limited Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, United Kingdom. 15.42 14.44 (0.98) Henderson Global Investors 201 Bishopsgate, London, EC2M 3AE, United Kingdom. 6.34 9.48 3.14 TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 4.37 5.74 1.37 Halifax Share Dealing Limited Lovell Park Road, Leeds, LS1 1NS, United Kingdom. 3.99 5.31 1.32

Total number of shares in issue 918.133m 923.068m

Six months ended 31 March 2012 September 2011 March 2012 Movement Shareholder Name Shareholder Address Shareholding % Shareholding % % Macquarie Bank Limited Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, United Kingdom. 14.44 19.64 5.20 Henderson Global Investors 201 Bishopsgate, London, EC2M 3AE, United Kingdom. 9.48 9.38 (0.10) TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 5.74 5.48 (0.26) Halifax Share Dealing Limited Lovell Park Road, Leeds, LS1 1NS, United Kingdom. 5.31 5.84 0.53

Total number of shares in issue 923.068m 1018.188m

Six months ended 30 September 2012 March 2012 September 2012 Movement Shareholder Name Shareholder Address Shareholding % Shareholding % % Macquarie Bank Limited Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, United Kingdom. 19.64 19.37 (0.27) Henderson Global Investors 201 Bishopsgate, London, EC2M 3AE, United Kingdom. 9.38 9.56 0.18 TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 5.48 7.59 2.11 Halifax Share Dealing Limited Lovell Park Road, Leeds, LS1 1NS, United Kingdom. 5.84 6.98 1.14

Total number of shares in issue 1018.188m 1018.188m

Period from 30 September 2012 to 31 January 2013 September 2012 January 2013 Movement Shareholder Name Shareholder Address Shareholding % Shareholding % % GLG Partners LP 1 Curzon Street, London, W1J 5HB, United Kingdom. 0.00 13.24 13.24 Macquarie Bank Limited Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, United Kingdom. 19.37 11.21 (8.16) Henderson Global Investors 201 Bishopsgate, London, EC2M 3AE, United Kingdom. 9.56 11.18 1.62 Outrider Master Fund, LP 1001 Bayhill Drive, Suite 125, San Bruno, California. United States of America. 0.00 10.08 10.08 Deutsche Bank AG, London 1 Great Winchester, London, EC2N 2EQ, United Kingdom. 0.00 7.04 7.04 TD Direct Investing (Europe) Limited Exchange Court, Duncombe Street, Leeds, LS1 4AX, United Kingdom. 7.59 4.53 (3.06) Halifax Share Dealing Limited Lovell Park Road, Leeds, LS1 1NS, United Kingdom. 6.98 3.95 (3.03)

Total number of shares in issue 1018.188m 1758.852m

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3.7. Financials by entity, where the Issuer has an interest in fifty percent or more of the charter capital Year ended Year ended Year ended Six months ended US$’000 31 March 2010 31 March 2011 31 March 2012 30 September 2012 Samek International LLP Total Assets 115,927 126,056 191,212 210,098 Share Capital 1 1 1 1 Revenue 43,348 55,309 50,243 49,156 Net profit / (loss) (10,184) 3,255 9,632 6,225 Max Exploration Services Inc Total Assets 1,278 1,749 2,123 2,340 Share Capital - - - - Revenue 2,446 330 - - Net profit / (loss) (1,052) (2,641) (3,125) (1,520) Madiran Investment BV Total Assets 105,707 110,490 159,664 159,664 Share Capital 22 22 22 22 Revenue - - - - Net profit / (loss) (16) (18) (28) - Max Petroleum Holdings BV Total Assets 22 14 26 6 Share Capital 32 32 32 32 Revenue - - - - Net profit / (loss) (34) (23) (27) (9) Max Petroleum Astrakhanskiy Holding Limited Total Assets - - - - Share Capital - - - - Revenue - - - - Net profit / (loss) (1) (1) (1) - Vasse Investment Limited Total Assets 1 1 1 1 Share Capital - - - - Revenue - - - - Net profit / (loss) (1) (1) (1) (1) Max Astrakhanskiy Holdings BV Total Assets 24 2,019 2,033 2,012 Share Capital 32 32 32 32 Revenue - - - - Net profit / (loss) (24) 1,971 (31) (10) Cooperative Samek UA Total Assets 8 11 10 3 Share Capital - - - - Revenue - - - - Net profit / (loss) (15) (14) (17) (8) Cooperative Alga UA Total Assets 16 10 11 4 Share Capital 1 1 1 1 Revenue - - - - Net profit / (loss) (14) (14) (18) (7)

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3.8. Industrial, banking and financial groups, holdings, trusts and associations, in which the Issuer participates.

The Issuer does not participate in any industrial, banking and financial groups, holdings and trusts. The Issuer is a member of the Kazakhstan Petroleum Association; however, no profits are received from this association.

SECTION 4 BANKS, ADVISORS AND AUDITORS OF THE ISSUER Banks – operating cash accounts Banks Address Services provided to the Issuer HSBC Bank Plc 203-204 Sloane Street, Operating cash accounts Chairman of the Board – Knightsbridge, London Mr. D.J. Flint SW1X 9RG, United Kingdom BBVA Compass Bank PO Box 10566 Operating cash accounts Chairman and CEO – Birmingham AL 35296 Mr. Francisco González USA SB “Sberbank”JSC 30/26 Gogol/Kaldayakov St., Operating cash accounts Chairman of the Board Almaty, Kazakhstan Provision of credit line facility Mr. Oleg Smirnov SB “RBS (Kazakhstan)” JSC 45 Khadzhy Mukan St., Almaty Operating cash accounts Chairman of the Board – 050059 Kazakhstan Mr. Rudy Gerding SB “HSBC Bank Kazakhstan” JSC 43 Dostyk Ave., Almaty 050010 Operating cash accounts Chairman of the Board – Kazakhstan Mr. Lars Ingemar Rejding

Legal Adviser Akin Gump Strauss Hauer & Feld LLP Eighth Floor, Ten Bishops Square London, E1 6EG, United Kingdom Partner – Mr. Sebastian Rice Provision of legal services to the head office located in London.

Financial Consultant Centras Securities JSC Office 201, 32A Manas St. SAT Business Center Almaty, Kazakhstan Chairman of the Board – Mr. Talgat Kamarov

Centras Securities JSC was appointed as Financial Consultant for the process of registration and listing of the Issuer at the Kazakhstan Stock Exchange. Centras Securities JSC is one of the leading brokerage and investment companies in Kazakhstan, operating with the brokerage licence #0401200886 and investment management licence #0403200223 issued by the Republic of Kazakhstan Agency for Financial Markets Regulation and Supervision.

Auditor PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH, United Kingdom Partner – Mr. Jason Burkitt

PricewaterhouseCoopers LLP was appointed to perform an audit of financial statements of the Issuer for the years ended 31 March 2010, 2011 and 2012 and to review the interim financial statements for the six months ended 30 September 2012. PricewaterhouseCoopers LLP was accepted to the official list of auditors of KASE on 2 October 2012.

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The Financial statements shall be audited during next three years by one of the audit companies from the list of audit companies, complying the qualification requirements to audit companies for admission to financial instruments on special trade sites of the regional financial center of Almaty city, approved by the order of the Chairman of regional financial center of Almaty city as of 20 October 2009 # 04.2-44/172.

SECTION 5 DESCRIPTION OF ISSUER’S ACTIVITY

5.1. Oil business in Kazakhstan

Kazakhstan is included in the fifteen leading countries in the world based on the proved reserves of crude oil. Oil and gas regions make 62% of the total area of the country and include 173 oil fields, out of which more than 80 are producing. More than 90% of the oil reserves are located in fifteen largest fields of the country: Tengiz, Kashagan, Karachaganak, Uzen, Zhetibai, Zhanazhol, Kalamkas, Kenkiyak, Karazhanbas, Kumkol, North Buzachi, Alibekmola, Central and East Prorva, Kenbai, Korolevskoye. The oil fields are located on the territory of six out of total fourteen oblasts of Kazakhstan: Aktobe, Atyrau, West Kazakhstan, Mangistau, Karaganda and Kyzylorda. Approximately 70% of oil reserves are concentrated in western Kazakhstan. Atyrau Oblast is the most explored region, which includes more than 75 discovered fields with the producing reserves of approximately 930 million tonnes. The largest field in the region is Tengiz with the initial recoverable reserves of 781.1 million tonnes. Other fields of this region include approximately 150 million tonnes of the recoverable reserves. More than half of these reserves are located in two fields: Korolevskoye (55.1 million tonnes) and Kenbai (30.9 million tonnes). Mangistau Oblast includes over 70 discovered fields with total recoverable reserves of 725 million tonnes of crude oil and 5.6 million tonnes of condensate. Less than half of the fields are currently producing and the most of these are in the final stages of production. The largest part of the remaining reserves is considered to be difficult to be recovered. The largest fields in this region are Uzen, Zhetibai, Kalamkas and Karazhanbas.

The most significant field in West Kazakhstan Oblast is Karachaganak with its recoverable reserves of about 320 million tonnes of crude oil and more than 450 billion of cubic meters of gas. In September 2005 a new discovery in Fedorovskiy Block was announced, which is located near Karachaganak and where the reserves of crude oil and gas condensate are estimated to be approximately 200 million tonnes.

Aktobe Oblast is believed to have potentially rich crude oil and gas resources, where around 25 fields were discovered. The most significant geological discovery in this area was the Zhanazhol group of fields with recoverable reserves of approximately 170 million tonnes. In 2005 the new field, Umit, was announced as a discovery in the central block of the eastern part of the Pre-Caspian basin. Kyzylorda and Karaganda Oblasts are considered to be the fifth oil region of Kazakhstan with the main resource being the Kumkol group of fields. In summer 2005 PetroKazakhstan, an operating company in this area, announced the discovery of commercial reserves in its Kolzhan license area, which is located to the north of Kyzylkiya field.

Key indicators According to the Ministry of Oil and Gas of the Republic of Kazakhstan (“MOG”), the proved hydrocarbon offshore and onshore reserves are estimated at 4.9 billion tonnes or over 35 billion barrels, while as of 2011 such reserves were estimated at only 2.9 billion tonnes. Moreover, the crude oil reserves estimated by some experts for the fields in the Kazakhstan sector of the Caspian Sea may include more than 17 billion tonnes or 124.3 billion barrels. Taking into account such estimates and the constantly increasing production rates, Kazakhstan will continue to be one of the major participants of the world oil market. According to the MOG, crude oil production for 2012 calendar year was 79.2 million tonnes. This was compared to the production of 25.93 million tonnes in 1998. Kazakhstan is one of the leading CIS (the Commonwealth of Independent States) countries with its production of natural gas, which was 40.1 billion cubic meters in 2012.

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In 2011 the oil and gas refineries of the country produced 2,146.9 thousand tonnes of condensed gas. The volume sold at the domestic market was 10.179 billion cubic meters. Refined crude oil volumes in 2011 was 13.7 million tonnes, including gasoline of 2.76 million tonnes, diesel of 4.06 million tonnes, mazut of 3.66 million tonnes, jet fuel of 387.1 thousand tonnes. According to the data of Kazmunaigas JSC - Processing and Marketing, in 2011 4.47 million tonnes of crude oil were refined by Atyrau refinery, 2.3 million tonnes by PetroKazakhstan Oil Products (Shimkent refinery) and 4.6 million tonnes by Pavlodar refinery. The larger portion of produced crude oil in Kazakhstan is destined for exports by pipelines. In 2011 the export volumes were 69.61 million tonnes, including the volumes transported by the following pipelines: 15.43 million tonnes by Atyrau-Samara pipeline, 28.44 million tonnes by CPC pipeline, and 10.89 million tonnes by Atasu-Alashanku pipeline. Total exports in 2011 were for the equivalent of approximately 55.2 billion US dollars which equaled 62.5% from the total exports of commodities from the country. The gas exports in 2011 were 8.15 billion cubic meters. The volumes of international transit of gas through the territory of Kazakhstan for the same period was 96.67 billion cubic meters, including: 62 billion cubic meters of gas from Russian, 26.5 billion cubic meters of gas from Turkmenistan and 8.2 billion of cubic meters of gas from Uzbekistan. The crude oil and gas production in Kazakhstan trends to significantly increase in the future. Such increase is connected with the three main reasons. Firstly, this will result from the significantly growing investments to the industry. The second reason is the favourably increasing international market conditions. Finally, the hydrocarbon resources in the industry keep growing as a result of the wide research and exploration of the subsoil reserves in the Caspian and Aral Sea areas.

Oil production The oil production in Kazakhstan is maintained by approximately 80 subsoil users on the basis of licenses issued by the country. The oil industry in the country is basically consolidated, as twelve leading producers provided more than 90% of the total production volume of 1.6 million barrels per day in 2011, including three producers which covered more than 62% of this volume. Almost a third of this volume was produced by Tengizchevroil (according to Tengizchevroil, its production for 2011 was 206.2 million barrels), followed by Karachaganak Petroleum Operating with its production volume of 138.5 million barrels in 2011 and Kazmunaigas JSC Exploration and Production. According to Information and Analytical Center of Oil and Gas JSC (АО “Информационно-аналитический центр нефти и газа”), the oil producers in Kazakhstan reported approximately 299 million barrels in the first half of 2012, including the gas condensate. Almost one third of his volume is still provided by Tengizchevroil, followed by Karachaganak Petroleum Operating, Karazhanbasmunai, Kazakhoil Aktobe, Mangistaumunaigas, Kazgermunai JV and PetroKazakhstan Kumkol Resources. The major producers in Kazakhstan are foreign investors from Russia (Lukoil, Rosneft), USA (Chevron, ExxonMobil, ConocoPhillips), Europe (mainly Eni, Total, Royal Dutch Shell, British Gas и Repsol YPF), China (CNPC, China International Trust and Investment Corporation) and other countries. The industry also receives contribution from Asian oil companies, such as Mittal Investments and ONGC Videsh Ltd from India, Kazakhturkmunai, which is a joint venture between Kazmunaigas and TPAO from Turkey, and some other companies. According to MOG estimates, it is expected that the production rates (including gas condensate) will increase from 79.7 million tonnes (584.2 million barrels) in 2010 to 95 million tonnes (696.4 million barrels) in 2015. Per MOG the current estimates indicate that the current production rate may be maintained during the next 60-70 years. The further development of the oil industry will be based on the new discoveries as well as on the modernization of the production technologies in the existing fields.

Demand and consumption According to MOG forecasts, demand for crude oil in the country will grow from 2011 to 2015 at the rate of 7.8% per year, from 13.7 million tonnes (100.4 million barrels) in 2011 to 18.5 million tonnes (135.6 million barrels) in 2015. In order to satisfy the increasing demand on the domestic market, the government of the Republic of Kazakhstan also plans to perform the modernization of the three existing refineries in the country to increase the overall refining capacity to 17.5 million tonnes (128.2 million barrels) by 2015.

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Despite the growing demand in the Caspian region, the total production in Kazakhstan significantly exceeds the overall domestic demand, which allows the country to export large volumes of crude oil, in particular to China, which is the main consumer of oil in the region. China is the important and growing market for many countries in the Caspian region, mainly due to its geographical proximity, advanced transportation infrastructure and increasing demand for hydrocarbons. The main export markets for the Caspian countries are Europe and Russia.

Max Petroleum Plc business overview Max Petroleum Plc and its subsidiaries are in the business of exploration, development and production of oil and gas assets within the Republic of Kazakhstan. The Issuer owns the exploration and production rights to the Blocks A & E Licence (the “Licence”), which comprise two onshore blocks extending over 12,455 km2 in the Pre-Caspian Basin in Western Kazakhstan. The Pre-Caspian Basin, where the contract areas are located, contains six giant and super-giant sub-salt fields: Tengiz, Karachaganak, Kashagan, Zhanazhol, Kairan and Zhambai. In addition, there are a number of smaller, shallower sub-salt fields in the basin which range in size from under 1 million barrels to more than 200 million barrels.

Crude oil Production of the Issuer The Issuer’s subsidiary, Samek International LLP, generated production from its post salt wells as follows:

Six months ended Year ended 31 Year ended 31 Year ended 31 Cumulative 30 September 2012 March 2012 March 2011 March 2010 production1 Total, mbo 689,917 1,027,451 772,948 731,050 4,532,501 Total, bopd 3,770 2,807 2,118 2,003 1 Cumulative production is from the initial start of the production in September 2006.

Kazakh regulations require each discovered field to progress through incremental regulatory stages of appraisal and development, including the testing and appraisal phase (“Test Production”), trial production (“TPP”) and then full field development (“FFD”). Test Production may last between one and three years depending upon the complexity of the field, during which time the Issuer may produce each zone in a well for up to 90 days in order to gather information necessary to move onto TPP. TPP typically lasts two to three years, during which time the field may be fully appraised and wells can be produced continuously. The Company may only sell its production domestically during Test Production and TPP. Once the Issuer has enough information to prepare state reserves and a long-term full field development plan, it may apply for and obtain FFD status. FFD lasts for up to 25 years, during which time the Issuer may sell up to 80% of its production on the export market.

The rate of production from fields on Test Production can be highly variable due to the uncertain production rates which are achievable from different productive zones in new exploration and appraisal wells, downtime incurred for pressure build-up tests, recompletions to move between zones and intentional variable production rates used during testing to gather data necessary to eventually apply to move a field to TPP status.

Zhana Makat was transferred from TPP to FFD status in March 2012. In June 2011, Borkyldakty was granted TPP status and was able to commence continuing production operations. In September 2011, Asanketken started Test Production, followed by East Kyzylzhar I in November 2011 and Sagiz West in December 2011. Uytas was brought back onto Test Production in January 2012, following preliminary tests in early 2011. The Issuer expects both Asanketken to move to TPP status and Borkyldakty to move to FFD status in the first half of 2013, while Sagiz West, Uytas and East Kyzylzhar I are not expected to proceed to TPP until 2014/2015 after the Issuer drills more appraisal wells to gather the additional information necessary to prepare an application for TPP. Test production at Baichonas West started in October 2012.

Issuer’s reserves and resources During the year ended 31 March 2012, the Issuer generated substantial growth in reserves and contingent resources due to new discoveries and further appraisal and analysis of existing discoveries. Given the early stage of the Issuer’s asset base, the majority of the growth is reflected in possible reserves and contingent

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resources, which the Issuer expects to convert into proved and probable (“2P”) reserves as the underlying fields are more fully appraised and developed.

As at 31 March 2012, the Issuer’s competent person, Ryder Scott Company,(“RSC”) estimated that the Issuer had 10.6 mmbo in 2P reserves with an after-tax net present value discounted at 10% (“PV10”) of US$215 million, an increase of 36% from 7.8 mmbo in 2P as at 31 March 2011 with a PV10 of US$176 million. RSC estimated that the Issuer’s total proved, probable and possible (“3P”) reserves increased by 72% to 14.6 mmbo as at 31 March 2012, with a PV10 of US$285 million, from total 3P reserves in the prior year of 8.5 mmbo, with a PV10 of US$194 million.

As at 31 March 2012, RSC estimated the Issuer’s oil-initially-in-place (“OIIP”) for the Sagiz West and Uytas fields, the Issuer’s two largest discoveries to date, of 101.3 mmbo and 64.9 mmbo, respectively, of which 79.8 mmbo and 27.2 mmbo were classified as in-place contingent resources. The Issuer has internally estimated an additional 126 mmbo in non-conventional resources at Uytas from the Cretaceous Albian reservoir which cannot be recovered using conventional primary production techniques. These resources were recognised by RSC in their report as being worthy of further evaluation but cannot be classified as contingent resources until they are demonstrated to be recoverable through a pilot production test. The Issuer did not have any reserves or resources booked for either field as of 31 March 2011.

The Issuer reported total 2P reserves as at 30 September 2011 of 13.3 mmbo, as well as in-place contingent resources at Sagiz West of 61.3 mmbo. The 2P estimate included 4.8 mmbo in reserves based on the initial well drilled in the Sagiz West Field in September 2011. In December 2011, the Issuer drilled a second well in the Sagiz West Field, SAGW-2, that was non-productive and reduced the productive area of the eastern flank of the field from original estimates. The third well, SAGW-3, drilled in February 2012, was successful in confirming the discovery and supporting the Issuer’s view of the field’s overall size and structure. Given the results of SAGW-2 and the greater complexity of the field, however, the estimate for 2P reserves for Sagiz West was adjusted downward as of 31 March 2012 by 2.2 mmbo, while in-place contingent resources for the field increased by 18.5 mmbo. Other changes in the estimate of 2P between the periods relate primarily to production and the revision of reserve estimates based on well performance and estimated recovery factors.

5.2. The information about Company’s competitors, producing crude oil on Republic of Kazakhstan territory

Major competitors

The Company operates within the world class Pre-Caspian Basin which region is largely under explored/developed and has the 9th largest proven reserves globally.

The basin contains the largest oil and gas fields in Kazakhstan which can be summarised between Pre-Salt and Post Salt prospects..

Pre-Salt

The Company’s prospects are analogous to the giant fields that have been discovered in close proximity including the world famous Tengiz, Karachaganak and Kashagan fields (consortia) which are confirmed discoveries from Paleozoic carbonate build ups (reefs) and atolls.

Karachaganak 14 bboe Kashagan 13 bboe Tengiz 9 bboe Zhanazhol 1.8 bboe

The Tengiz field, for example, in the Pre-Caspian Basin is an ancient atoll located adjacent to a geological structure high called the Guriyev Arch. The Company’s Blocks are well positioned for reservoir formation and entrapment along the crest of this Guriyev Arch.

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Post-Salt

As well as the larger Major Oil companies, given the large geographical size of the Company’s Blocks A & E within the Atyrau region, there are in excess of 35 post salt companies with exploration acreage and over 100 different shallow discoveries with fields in the 30 mmbl of reserves size.

The largest of the operators by far is KazMunaiGas Exploration & Production who has 42 fields with an estimated 1.6 bboe of shallow 2P reserves.

Other larger operators in the Atyrau region are JSC KMK Munay and JSC Matin Petroleum. In addition to Kazakh producers there are other junior, foreign-owned companies (Condor Petroleum, Jupiter Energy and Tethys Petroleum, etc.)

5.3. The forecast of the future development of the oil industry and the market environment where the Issuer operates

Kazakhstan is one of the most resource rich regions in the world and very well situated from a geographical perspective to respond to increasing global demand for hydrocarbons in an environment of a rapidly maturing asset base and diminishing inventories. Kazakhstan is a country with a stable government, encouraging foreign investment. The Company’s strategy is to substantially increase reserves, production and cash flow from its existing and future discoveries on Blocks A&E. The Company is aiming to smoothly transfer its existing shallow discoveries into the 25-year production periods.

5.4. Information about the attempts of third parties to take over the Issuer (via purchase of shares) or attempts of the Issuer to take over the other company for the last completed period or current year.

For the last completed period and current year there were no attempts by third parties to take over the Issuer.

5.5. Information about the terms of the most important contracts, agreements, entered into by the Issuer, which may significantly impact the Issuer’s activity.

There are no contracts, agreements, entered into by the Issuer, which may significantly impact the Issuer’s activity, except for its Sberbank Facility as more fully described on p. 11 of this Investment Memorandum and Licence commitments as described in “Work Programme pursuant to the Subsoil Use Contract” below.

5.6. Information about licences of the Issuer

The Issuer does not directly hold any subsoil use licences. The Company operates under the Contract for exploration and production of hydrocarbons on Blocks A&E In Atyrau region signed between subsidiary of the Issuer Samek International LLP and Ministry of Energy and Mineral resources (st present Ministry Oil and Gas) (Contract) of the Republic of Kazakhstan # 1117 of 4 March 2003. - Pursuant to the Contract the exploration period up of 6 years with two extensions for 2 years each, overall expiring March 4, 2013. The Issuer may extend the exploration further for 2 years for the appraisal stage. - Production period up to 25 years from the date a field is transferred to its production period. - Carrying out oil and gas exploration and production operations in accordance with the laws of the Republic of Kazakhstan, uniform rules for gas and oil-field development and approved work programmes.

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Work programme pursuant to the Subsoil use Contract - Funding of not less than 1 percent of total investments per calendar year for training, re-training and improvement of qualifications of Kazakh citizens engaged in the contractual activities. - Funding of not less than 1 percent of total investments per calendar year to a special liquidation fund escrow account to be used for future abandonment. - US$350,000 per annum should be spent for Atyrau social sphere development. - Carrying out all purchases of goods, works and services in accordance with the laws of the Republic of Kazakhstan. - Local content in purchased goods of not less than 30 percent works and services of not less than 70 percent. Non-fulfillment of local content requirements is subject to a fine of up to 30 percent of non- fulfilled liabilities. - Prior to full field development, 100% of a field’s oil production must be sold domestically within Kazakhstan. Once a field has been approved for full field development, up to 80% of production may be exported, with the remainder sold domestically. - According to the Contract, the Company has a liability to compensate the government for its historical costs of US$24.8 million, of which US$0.4 million was paid on initial signing of the Contract. The remaining amount will be allocated to each commercial discovery and paid when each field is in commercial production. - Following Commercial discovery, the Company must pay a commercial discovery bonus equal to 0.1 percent of the discovery’s approved recoverable reserves at the current market prices. - The Company is committed under its Licence to certain future expenditures under a minimum work programme as follows:

At 30 September 2012 US$’000 Minimum work programme 55,313

The minimum work programme is agreed with the Ministry of Oil and Gas of the Republic of Kazakhstan (the “MOG”) and covers exploration and production activities in Blocks A&E. It also includes social infrastructure contributions and commitments for the training of local personnel. Qualifying exploration, development and operating expenditure incurred by the licence holder are deductable from these future commitments.

In March 2003 Samek LLP and Ministry of Energy and Mineral resources signed the Contract for exploration and production of hydrocarbons from the area of Blocks A&E in Atyrau region.

The Contract was signed based on the tender process for the subsoil use right in which Samek LLP was announced the successful bidder.

On 13 May 2005, Samek LLP and Madiran Investment B.V. (subsequently, a subsidiary of Max Petroleum Plc) established Samek International LLP with the interests in share capital of which is distributed as follows:

- Madiran Investment B.V. (49%) - Samek LLP (51%).

In September 2005, Madiran Investment B.V. acquired the 51% interest in Samek International LLP from Samek LLP.

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The following Amendments to the Contract have been executed:

Subsoil use rights assigned from Samek LLP to Samek October 2005 Amendment #1 International LLP Set additional payments to social funds (US$ 150 000 per May 2007 Amendment #2 annum) July 2008 Amendment # 3 Extension of Exploration period until 4 March 2011 July 2010 Amendment # 4 Increase of Work programme December 2010 Amendment # 5 Extension of Exploration period until 4 March 2013 Extension of Trial Production Period (TPP) and increase of June 2011 Amendment # 6 Work Program Increase of Work programme (drilling 2 pre-salt wells) and January 2012 Amendment # 7 extension of TPP until 15 March 2012 March 2012 Amendment # 8 Move to production phase (Zhana Makat field) July 2012 Amendment # 9 Increase of Work programme November 2012 Amendment # 10 Increase of Work programme

Map of geological allotment according to the Licence

The Issuer’s interest in the properties was focused in two directions: Post-Salt (shallow) and Pre-Salt (deep) resources. Its major investments in the last 5-7 years included 3D seismic acquisition and interpretation work for over 5,000 km2, drilling of 60 shallow wells and 1 deep well.

The Issuer has acquired 5,000 km2 of 3D seismic data and 2,091 km of regional 2D seismic data on Blocks A&E as indicated in the map below.

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Post-Salt Activities

As of 31 January 2013, the Issuer had drilled 24 exploration wells in its post-salt drilling campaign since inception, with a 33% success rate generating eight discoveries at the Zhana Makat, Borkyldakty, Uytas, Asanketken, East Kyzylzhar I, Sagiz West, Baichonas West and Eskene North fields, all of which are in various stages of testing, appraisal or development. 2P reserves of 10.6 mmbo and 3P reserves of 14.6 mmbo at 31 March 2012 estimated by the Ryder Scott Company (the Company’s “competent person”), an internationally recognized oil and gas consultancy firm which conducts independent petroleum reserves evaluations and economic analysis for oil and gas companies worldwide. Contingent resources in-place of 107 mmbo at the Sagiz West and Uytas fields at 31 March 2012 estimated by the Ryder Scott Company. Cumulative production across all fields of 4.5 mmbo and cumulative revenue of US$266 million through 30 September 2012. Production for the year ended 31 March 2013 is expected to average between 3,200 and 3,600 bopd, depending upon the variability of wells on Test Production and the timing of applicable regulatory approvals. Post-salt portfolio of two prospects with unrisked mean resources of 23 mmbo.

The Issuer’s 8 discoveries and their status as of the date of this Investment Memorandum are as follows:

Field Discovery Date Current Status Zhana Makat September 2006 FFD since March 2012 Borkyldakty February 2010 TPP since June 2011 Uytas October 2010 Test production, pending appraisal works Asanketken March 2011 Test production, pending appraisal works East Kyzylzhar I August 2011 Test production, pending appraisal works Sagiz West September 2011 Test production, pending appraisal works Baichonas West September 2012 Test production Eskene North December 2012 Test production pending

A table showing the Issuer’s reserves and resources as calculated by RSC for the years ended 31 March 2012 and 31 March 2011 is presented below:-

OIL RESERVES AND CONTINGENT RESOURCES IN-PLACE1 East Sagiz Zhana Makat Borkyldakty Asanketken Kyzylzhar I West Uytas Total

31 MARCH 2012 mbo mbo mbo mbo mbo mbo mbo Proved reserves 3,141 176 1,420 385 - - 5,122 Probable reserves 1,381 276 378 132 2,566 778 5,511 Total 2P reserves 4,522 452 1,798 517 2,566 778 10,633 Possible reserves - - 649 - 1,360 1,971 3,980 Total 3P reserves 4,522 452 2,447 517 3,926 2,749 14,613

Contingent resources in-place - - - - 79,806 27,221 107,027

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31 MARCH 2011

Proved reserves 4,938 242 514 - - - 5,694 Probable reserves 1,414 272 461 - - - 2,147 Total 2P reserves 6,352 514 975 - - - 7,841 Possible reserves - - 664 - - - 664 Total 3P reserves 6,352 514 1,639 - - - 8,505

Contingent resources in- place ------

1 As estimated by Ryder Scott Company, the Company’s competent person. For reserve and resource definitions, see the glossary on pages 85 to 87 of the Annual Report for the year ended 31 March 2012.

Zhana Makat Field

The Zhana Makat Field, discovered in September 2006, continues to perform well, with average daily production of approximately 2,300 bopd for the year ended 31 March 2012 from a combination of Jurassic, Neocomian, and Triassic reservoirs. The field commenced commercial production under TPP in August 2007, with cumulative sales of 3.6 mmbo generating US$211 million in total revenue through 31 March 2012. Zhana Makat was approved for FFD status in March 2012, allowing the Issuer to continue to develop and produce the field for up to 25 years, as well as giving it a right to sell up to 80% of its crude oil production on the export market under the terms of the Licence. The Issuer drilled five exploration, appraisal and development wells in the field in fiscal year 2012, including two Triassic wells in the southern end of the field that were subject to 90-day Test Production constraints given the exploratory nature of the wells. The Issuer expects to return the Triassic wells to production under the field’s FFD permit in 2013 upon receipt of the necessary regulatory approvals. The Issuer also plans to drill up to eight additional appraisal and development wells over the next 12 months under FFD.

The mining allotment for Zhana Makat (see map of the mining allotment below) was received from the regulatory authorities in December 2011 as part of the process of transferring the field from TPP to FFD:

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Borkyldakty Field

The Borkyldakty Field was discovered in Block E in February 2010, with the BOR-1 well encountering five productive Triassic reservoirs in a small four-way anticlinal structure. In June 2011, the Issuer received regulatory approval of Borkyldakty’s TPP, allowing the Issuer to place the field on continuous production and drill further exploration and appraisal wells, if necessary, in order to gather additional data needed to proceed to FFD status. In July 2011, the Issuer successfully drilled and completed the BOR-3 appraisal well, encountering 28 metres of net oil pay over five Triassic sandstone reservoirs and has one additional drilling location planned in 2013. The Issuer expects to obtain FFD status during the first half of 2013.

Uytas Field

The Uytas Field, a shallow, four-way anticline with productive Cretaceous and Jurassic reservoirs, was discovered in Block A in October 2010. Drilled to a depth of 827 metres, the UTS-1 discovery well potentially makes Uytas the Issuer’s largest post-salt discovery to date. Uytas is a unique field given its shallow depth, with productive Cretaceous reservoirs above 160 metres and Jurassic reservoirs between 300 and 400 metres.

Interpretation of 3D seismic data acquired in late 2011 revealed a structure larger than previously identified which enabled the Issuer’s estimate of OIIP to increase to 184 mmbo, including 58 mmbo in conventional Cretaceous Aptian (“Aptian”) and Jurassic reservoirs and 126 mmbo in shallower, non-conventional Cretaceous Albian ("Albian") reservoirs. RSC estimates are in line with this assessment, estimating OIIP of 65 mmbo for the conventional Aptian and Jurassic reservoirs as of 31 March 2012, of which 27 mmbo are classified as contingent resources in-place. The Issuer has internally estimated an additional 126 mmbo in non-conventional resources at Uytas from the Albian reservoir which cannot be recovered using conventional primary production techniques. These resources were recognised by RSC in their report as being worthy of further evaluation but cannot be classified as contingent resources until they are shown to be recoverable through a pilot production test.

Well tests have confirmed commercial productivity from the Aptian and Jurassic sandstone reservoirs, with Phase One of an appraisal and development programme expected to include approximately 30 low-cost, shallow vertical wells with 14 wells planned to be drilled in 2013. The Issuer anticipates up to 200 shallow vertical wells will eventually be drilled in the field to develop its conventional reserves, over a period of several years. Based on testing and core analysis, the Issuer is also planning an enhanced oil recovery pilot project using steam injection to determine the commerciality of the Albian reservoirs.

The OIIP estimates from RSC provide external confirmation of the significant size of the field. Further appraisal drilling and more production history from existing and future wells is expected to lead to much higher recoverable reserves and a higher assumed recovery factor for the field by RSC. The Issuer expects Uytas to move into TPP during [2014 after the Issuer has completed the Phase One appraisal drilling programme and the pilot project to evaluate the non-conventional Albian reservoirs.

Asanketken Field

The Asanketken Field was discovered in March 2011 with the ASK-1 well encountering 24 metres of net oil pay at depths from 1,230 to 1,302 metres in the Jurassic formation in a three-way faulted trap. The ASK-2 well confirmed the Jurassic discovery at the end of 2011, while the field’s deeper Triassic objective was found to be non-productive. The Issuer drilled two additional Jurassic appraisal wells in the field during the quarter ended 30 June 2012, both of which are currently on Test Production.

The Asanketken Field is estimated by RSC to have in-place reserves of approximately eight mmbo, with reservoirs of excellent quality from which the Issuer expects ultimate recovery factors of approximately 35% to 40%.

The Issuer expects that the Asanketken Field will progress to TPP during the first half of 2013, thereby allowing continuous production from the field. FFD is expected to follow in 2014. No additional drilling is expected in the field prior to reaching FFD status. The expected rapid progress of Asanketken through the regulatory approval process is a result of the uncomplicated nature of the field and as it has already been fully appraised by the current producing wells.

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East Kyzylzhar I Field

The East Kyzylzhar I Field, a three-way faulted closure located in Block E, was discovered in August 2011, with the KZIE-1 exploration well encountering 17 metres of net oil pay in two Jurassic sandstone reservoirs at depths ranging from 987 to 1,251 metres. The KZIE-2 appraisal well was drilled later in 2011, confirming the discovery. Reservoir quality is excellent with porosities ranging from 20% to 30%. The Issuer placed both wells on Test Production with very high initial production rates, but water cut increased rapidly in both wells. Further testing of these wells has commenced to determine if the water cut has been caused by a mechanical problem in the wells. If the water production problem can be resolved, the field will move on to TPP during 2013 and the Issuer plans to acquire additional 3D seismic and drill additional development wells over the next several years. If not, then the field may be abandoned. The decrease in RSC 2P reserves from 30 September 2011 reflects the uncertainty of the source of the water production seen in the first two wells.

Sagiz West Field

The SAGW-1 exploration well made the initial discovery of the Sagiz West Field in Block E in September 2011, reaching a depth of 1,406 metres with electric logs indicating 27 metres of net pay, including 21 metres of oil and 6 metres of gas pay, over a 114 metre interval in the Triassic formation at measured depths between 1,177 and 1,291 metres. Reservoir quality is very good with porosities ranging from 18% to 25%. The unsuccessful SAGW-2 appraisal well did not encounter producible hydrocarbons, limiting the eastern flank of the field. However, the SAGW-3 appraisal well confirmed the initial discovery and Issuer’s view of the large potential size and scope of the field.

As of 31 March 2012, RSC estimated 2P reserves for Sagiz West of 2.6 mmbo and contingent resources in- place of approximately 79.8 mmbo. The 2P estimate was adjusted downward by RSC from 30 September 2011 due to the results of SAGW-2 and the greater complexity of the field, but their higher estimate of contingent resources supports the Issuer’s view that Sagiz West has potential ultimate recoverable reserves of between 15 and 20 mmbo. The Issuer expects ultimate recovery factors for the field to range from 20% to 30%.

The Issuer is acquiring additional infill 3D seismic data over the field, and plans to drill a fourth appraisal well, SAGW-4, in 2013 in order to extend the field further south. Development of the field will require the processing and sale of associated natural gas, and while this adds to the cost and time to develop the field, revenues from potential gas sales are expected to more than offset the additional facilities required to process the gas and deliver it to market. The associated gas is also expected to improve oil recoverability in the field.

The Issuer is also planning to drill up to 8 additional wells in Sagiz West during 2013, to appraise the field and gather enough information to design and build the field facilities required to handle the associated gas production expected when Sagiz West enters TPP. The Sagiz West Field is currently shut-in pending drilling additional wells that will be placed on Test Production before moving these and existing wells onto TPP.

Both the SAGW-1 and SAGW-3 wells have additional zones which will ultimately be tested, including lower porosity oil reservoirs in both wells that may respond well to hydraulic fracturing and a possible gas cap in SAGW-1. Further testing is expected to demonstrate additional value both from increased oil production and potential gas sales, but will not yield significant production in the near term and is currently being planned for during the appraisal drilling programme in 2013.

Baichonas West Field

The Baichonas West field was discovered in Block E in September 2012. The BCHW-1 exploration well on the Baichonas West prospect was drilled to a depth of 1,430 metres with electric logs indicating 13 metres of net pay over a 20 metre interval in the Jurassic Formation at measured depths between 1,170 and 1,190 metres. Reservoir quality is good with porosities ranging from 18% to 26%. The well has begun testing in the Jurassic reservoir from depths between 1,184 and 1,190 metres, flowing at an initial stable rate of 450 barrels of 48 degree API gravity oil per day (“bopd”) with no water. This initial zone was produced on test production for 90 days, and a second zone is currently being tested. The results of this test, combined with

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revised mapping of the structure, indicate that it is a commercial discovery with oil in place of approximately 16 mmbo and expected recovery factors between 20% and 40%.

The Issuer plans to drill a second well at the field, BCHW-2, in the first half of 2013 in order to appraise the field, obtain additional data for a reserves report and move the field onto TPP during 2014.

The Issuer is also planning to drill up to 5 additional wells in the Baichonas West field during 2013-2014, in order to appraise the field and gather enough information to handle the associated gas production expected when the field enters TPP.

Eskene North Field

The Eskene North field was discovered in December 2012. The ESKN-1 exploration well on the Eskene North prospect was drilled to a depth of 1,507 metres with electric logs indicating 20 metres of net pay over an 90 metre gross interval in the Triassic Formation at measured depths between 1,272 and 1,362 metres. Reservoir quality is fair with porosities ranging from 15% to 20%. Production casing has been set in the well and testing to determine commerciality is expected to commence in March 2013 once the relevant government approvals have been obtained.

The Issuer is planning to drill up to 3 additional wells in the Eskene North field during 2013-2014 in order to delineate the structure and appraise the field, and move the field to TPP in 2015. The remaining post-salt exploration portfolio is as follows:

Well CoS P10 Pmean P90 Prospect Name Description Depth (m) (%) (mmbo) (mmbo) (mmbo)

Uytas North 4-way closure 900 38 22 11 2

Karasai South 4-way closure 1,600 34 25 12 2

Pre-Salt Activities

On 4 November 2011, the Company began drilling the NUR-1 well on the Emba B prospect in Block E. The well had a target depth of 7,250 metres and targeted reservoirs with unrisked mean resource potential of 467 million barrels of oil equivalent with a 29% geological chance of success.

On 5 April 2012, the NUR-1 well reached the top of the Kungurian salt at a depth of 5,718 metres. However, upon drilling into the salt a high pressure transition was encountered resulting in the drilling tools becoming stuck. After side-tracking the well and setting casing at 5,681 metres, the Company drilled ahead. Progress was slow as the Company drilled alongside the stuck drilling tools. After clearing the old wellbore, the well reached the Kungurian salt on 19 June 2012. Due to encountering anomalously high pressures beyond the scope of the original well design, the drill pipe again become stuck at 5,722 metres, despite using the higher density mud specified for penetrating this section. The Company was unable to free the stuck drill string and decided to suspend drilling operations and release the drilling rig in July given the need to obtain additional capital to complete the well.

Based on a review conducted by the Company’s in-house technical team and external consultants with expertise in drilling high pressure, pre-salt wells, the Company believes it is technically feasible to complete the drilling of NUR-1 with certain modifications to the existing drilling programme to address the higher than expected pressures encountered in the salt. The Company is currently considering options to finance independently the completion of the well and has commenced discussions with the relevant Kazakh Government authorities to seek regulatory approval to allow completion of the drilling of NUR-1 beyond the existing deadline in March 2013.

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The NUR-1 pre-salt well has been drilled and cased down to a depth of 5,681 metres. Subject to financing being obtained to complete this well, and an extension beyond the current 4 March 2013 date of expiry of the exploration period of the Licence, the Issuer intends to bring in another rig and finish testing the well down to its total depth of 7,250 metres. Preliminary discussions with the Kazakh regulatory authorities regarding an extension due to the unexpected high pressures encountered in NUR-1 have been constructive. The Company is continuing to work with external experts to establish how best to deal with this pressure on a resumption of drilling and how, in cooperation with the authorities, to best redesign the well so as to successfully drill through the Kungurian salt layer. Given that the well has been successfully drilled down to the current depth, a broader range of rigs fit the criteria required and would be available. The Company has incurred a total of approximately US$41 million on NUR-1 and estimates it will require between US$12 million and US$20 million in additional capital in order to finish drilling the well to its target depth at a later date.

5.7. Major capital expenditures

Six months ended Year ended Year ended Year ended US$000 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Intangible assets – exploration and appraisal expenditure 22,441 70,327 29,508 23,833 Oil and gas properties 6,924 14,713 7,887 3,316 Property, plant and equipment 1,329 5,169 268 2,592 Total capital expenditures 30,694 90,209 37,663 29,741 Capital expenditures were funded as a combination of cashflow from operating activities and funds received from the Macquarie Credit Facility.

5.8. Crude oil sales in quantities

The volume of crude oil sales Six months ended Year ended Year ended Year ended Sold volumes 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Domestic sales (mbo) 369 954 154 141 Export sales (mbo) 295 50 606 615 Total sales (mbo) 664 1,004 760 756

% of export sales 55.6% 5.0% 79.7% 81.3%

Brief analyses of change crude oil sales volumes The Company’s sales volumes for the year ended 31 March 2012 exceeded 1 million barrels of crude oil, an increase of 32% compared to the prior year. As the Company appraises and develops its post-salt discoveries, more wells have been brought onto production. In May 2011 Max Petroleum began selling 100% of its crude oil production from Zhana Makat on the domestic market pending FFD approval for the field, which was granted on 15 March 2012. FFD approval gives the Company right to sell 80% of its production from Zhana Makat Field on the export market. Since the Company recommences export, sales into the export market are generating after-tax net proceeds that are on average US$16 per barrel higher than comparable domestic sales.

5.9. Positive/negative factors impacting sales profitability

- The most significant positive impact to the Company’s income from sales is increasing crude oil production from the growing number of shallow discoveries (eight at the date of this memorandum) whereby daily production has nearly doubled over the past financial year. - Future production from newly discovered fields can be volatile, as under the current Subsoil Use Law, the Company may only produce each zone in a well for up to 90 days in order to gather information necessary to move onto TPP. After 90 days of test production, the wells are shut in pending TPP.. - Reservoir qualities including natural flow and decline with any required stimulations and well maintenance could also affect production and sales volumes. With careful reservoir maintenance and

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the production experience within the Company, these factors will be proactively managed in future to limit any impact. - Sales income is heavily influenced by the mix of domestic and export sales. The netback received from crude oil export sales is significantly higher than on oil sales delivered domestically to the Atyrau refinery. Given that the majority of production is from the Zhana Makat field, which is under FFD, 80% of the crude production of Zhana Makat can be exported, and therefore income has improved in line with recent high world oil (Brent) prices. -

5.10. The Issuer’s activity on arranging the sales of crude oil

The Issuer sells approximately 80% of its crude oil production on the export market and 20% domestically within Kazakhstan from its Zhana Makat field. Production from the Issuer’s other more recent discoveries will be sold exclusively on the domestic market until each field is approved for FFD. The Issuer generates after-tax net proceeds that are on average US$16 per barrel higher than comparable domestic sales.

Export Sales Netback Domestic Sales Netback 150 US$/BBL 70 US$/BBL

60 100 50 $53.33 $47.13 $41.73 40 $44.13 $35.93 $39.13 $34.13 $28.93 $29.13 $31.66 $22.43 30 $24.13 50 $19.13 20 10

0 0 $70 $80 $90 $100 $110 $120 $35 $40 $45 $48 $50 $55 $60

After Tax Netback After Tax Netback Mineral Extraction Tax Export Customs Duty Production Costs Export Rental Tax Transportation costs Minerals Extraction Tax Production Costs

In Kazakhstan, there are three refineries which are located in Atyrau, Pavlodar, and Shymkent. Given the location of the Issuer’s operations, domestic sales are typically made for refining at the Atyrau refinery. The Atyrau refinery is located approximately 150 km from the closest of the Issuer’s main operating fields.

It is the Issuer’s policy that 100% prepayment is received for the delivered product unless a letter of credit was supplied for the unpaid balance of the cargo value. Export sales are made using pipeline or rail as the main transport modes. Most of the Issuer’s operating fields are located in close proximity to the Kenkiyak-Atyrau pipeline. This pipeline currently flows from east to west and provides for transportation to Atyrau for further transit onward to the Atyrau refinery or export. From Atyrau, exports can be transported using the Atyrau-Samara pipeline which is then connected to the Russian Transneft pipeline system (“Transneft”). The Transneft main options available to Kazakhstan producers include Primorsk and Ust Luga on the Baltic Sea, and Novorossiysk on the Black Sea. Major rail lines provide domestic and export service, including exports to Aktau on the Caspian Sea (with further routes to the Black Sea, the Mediterranean Sea, and the Persian Gulf), various Black Sea ports, various Baltic Sea ports, and direct connections to many Former Soviet Union markets, and certain Eastern Europe markets such as Poland.

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Export sales contracts are typically signed by both parties (buyer and seller) prior to shipment. The sales price is typically set at an adjustment (typically a discount) to world crude prices, most often Dated Brent or Urals RCMB, representing the bulk trader’s costs.

5.11. Information on major suppliers

The Issuer has no suppliers, which account for 10% or more percent of total purchases of goods, works and services.

5.12. Information about main buyers

Below is the list of customers, sales to which were over 10% of total revenues (in %): Six months ended Year ended Year ended Year ended Customer 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Saicat B.V., Netherlands (export) 40.20% - - 8.65% OU Centrobalt, Estonia (export) 22.15% 11.97% 89.77% 67.18% Vitol, Switzerland (export) - - - 13.37% Alem Trading, city of Shimkent (domestic) 13.47% - - - Mega Oil, city of Zhambyl (domestic) 15.87% 61.81% 6.22% 1.12% The Issuer does not depend on any of the above buyers in respect of making decisions on prices, routes, terms of the sales contracts, receiving the quotas and any other sales related issues, as the selection of the buyer is determined based on the best prices and terms available in the market.

5.13. Future obligations

The Issuer has no future obligations exceeding 10% of book value of the Issuer’s assets, except for the terms of the Sberbank Facility and Licence commitments as more fully described above.

5.14. Agreements and Obligations

There have been no transactions for the amounts exceeding 10% of book value of the Issuer’s assets during the six months prior to filing listing application, except for the Sberbank Facility as more fully described above.

5.15. Information about participation in lawsuits and administrative violations

During the last year and as of the date of this Investment Memorandum, the Issuer did not participate in court proceedings in Kazakhstan and overseas, that would result in additional liabilities to the Issuer in the amounts over 1,000 Monthly Calculation Indicators (“MCI”).

5.16. Administrative fines paid by the Issuer during the year ended 31 March 2012, six months ended 30 September 2012 and up to 31 December, 2012:

Controlling body / number and date of Fine, Tenge Type of administrative fine Comments ruling (kzt)

Territorial land inspection of agency of RoK Fine: violation of land use regulating land resources in Atyrau & Paid to Tax Committee of 1. rights (cleanup of well 831,600 kzt Mangistau regions / Regulation №27 dd Atyrau region on 05/05/11 Zharshik-3) 29/04/11

Territorial land inspection of agency of RoK Fine: violation of land use Paid to Tax Committee of 2. regulating land resources in Atyrau & 831,600 kzt rights (cleanup of well Atyrau region on 05/05/11 Mangistau regions / Regulation №28 dd

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29/04/11 Zharshik-10)

Atyrau department of labour / Regulation Fine: Administrative offence of Paid to Tax Committee of 3. 37,800 kzt №308 dd 11/05/11 Labor Code Atyrau region on 13/05/11

Atyrau department of labour / Regulation Fine: Administrative offence of Paid to Tax Committee of 4. №310 dd 11/05/11 Labor Code 75,600 kzt Atyrau region on 13/05/11

Territorial land inspection of agency of RoK regulating land resources in Atyrau & 5. Mangistau regions / Regulation №71 dd Fine: violation of land use Paid to Tax Committee of 03/06/11 rights (re Zhana Makat) 830,088 kzt Atyrau region on 07/06/11

Department of agency of RoK on regulation 6. of natural monopoly in Almaty / Regulation Fine: for late application for Paid to Tax Committee of №62 dd 27/06/11 licence re-registration 151,200 kzt Bostandyk region on 28/06/11

Atyrau emergency situation department / Fine: for the violation of Paid to Tax Committee of 7. Regulation №193 dd 05/10/11 regulations 30,240 kzt Atyrau region on 18/10/11

Atyrau emergency situation department / Fine: for the violation of Paid to Tax Committee of 8. Regulation №194 dd 05/10/11 regulations 45,360 kzt Atyrau region on 18/10/11

Atyrau emergency situation department / Fine: for the violation of Paid to Tax Committee of 9. Regulation №007-009 dd 07/11/11 regulations 15,120 kzt Atyrau region on 10/11/11

Territorial land inspection of agency of RoK 10. regulating land resources in Atyrau region / Fine: for absence of land- Paid to Tax Committee of Regulation №7 dd 16/03/12 marks 64,720 kzt Atyrau region on 20/03/12

Atyrau department of ecology / Regulation Paid to Tax Committee of 11. №022-12 dd 12/06/12 Fine: for environment pollution 258,880 kzt Atyrau region on 11/07/12

Atyrau department of ecology / Regulation Paid to Tax Committee of 12. №022-13 dd 14/06/12 Fine: for environment pollution 40,450 kzt Atyrau region on 11/07/12

Atyrau department of ecology / Regulation Paid to Tax Committee of 13. №04-07/2257 dd 15/06/12 Fine: for environment pollution 169,664 kzt Atyrau region on 11/07/12

Fine: for not submission of 14. Atyrau department of ecology / Regulation waste report to regional Paid to Tax Committee of №005-064 dd 09/07/12 department of ecology 16,180 kzt Atyrau region on 18/07/12

Atyrau emergency situation department / Admin. fine for the violation of Paid to Tax Committee of 15. Regulation №256 dd 01/10/12 regulations 6,472 kzt Atyrau region on 24/10/12

Atyrau emergency situation department / Admin. fine for the violation of Paid to Tax Committee of 16. Regulation №257 dd 01/10/12 regulations 38,832 kzt Atyrau region on 24/10/12

Atyrau department of ecology / Regulation Admin. fine for the violation of Paid to Tax Committee of 17. №39 dd 28/12/12 regulations 194,160 kzt Atyrau region on 23/01/13

Atyrau department of ecology / Regulation Admin. fine for the violation of Paid to Tax Committee of 18. №38 dd 28/12/12 regulations 242,700 kzt Atyrau region on 23/01/13

Committee of Financial Control / Regulation Admin. fine for the violation of Paid to Tax Committee of 19. №10-703/12 dd 23/10/12 regulations 809,000 kzt Bostandyk region on 23/01/13

4,689,666 KZT Total administrative fines KZT (approximately US$32,000)

Fine: for unrepresented 1. Tax Committee of Bostandyk region / f.101.01 of advance payments Paid to Tax Committee of Regulation 005845 dd 31/10/11 of CIT for 2010 151,200 kzt Bostandyk region on 24/11/11

Fine: for unrepresented 2. Tax Committee of Bostandyk region / Paid to Tax Committee of Regulation 005864 dd 31/10/11 f.101.01 of advance payments 45,360 kzt Bostandyk region on 21/12/11 of CIT for 2011 on Company

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executive

Fine: by Social tax for 2006 3. Tax Committee of Bostandyk region / accrued as a result of Paid to Tax Committee of Regulation 003744 dd 28/06/11 Complex tax audit 258,464 kzt Bostandyk region on 01/08/11

Fine: by PIT for 2006 accrued 4. Tax Committee of Bostandyk region / as a result of Complex tax Paid to Tax Committee of Regulation 003744 dd 28/06/11 audit 1,033,859 kzt Bostandyk region on 01/08/11

1,488,883 KZT Total tax related fines KZT: (approximately US$10,000)

5.17. Risk factors

The Issuer is subject to various risks relating to political, economic, legal, social, industry, business and financial conditions. The following risk factors, which are not exhaustive, are particularly relevant to the Issuer’s business activities:

Volatility of prices for oil and gas The supply, demand and prices for oil and gas are volatile and are influenced by factors beyond the Issuer’s control. These factors include global demand and supply, exchange rates, interest and inflation rates and political events. A significant prolonged decline in oil and gas prices could impact the viability of some of the Issuer’s exploration activities. Additionally, production from geographically isolated countries may be sold at a discount to current market prices. Substantially all of the Issuer’s revenues and cash flows will come from the sale of oil and gas. If oil and gas prices should fall below and remain below the Issuer’s cost of production for any sustained period, the Issuer may experience losses and may be forced to curtail or suspend some or all of its production, at the time such conditions exist. In addition, the Issuer would also have to assess the economic impact of low oil and gas prices on its ability to recover any losses it may incur during that period and on its ability to maintain adequate reserves. While the Issuer does not currently hedge its crude oil production to reduce its exposure to oil price volatility, management expects that it may do so in the future as it increases its daily production sold into the export market. The Issuer would enter into price hedging contracts in order to achieve more predictable cash flows from its future crude oil production and to comply with the terms of its Sberbank Facility, if applicable.

Exploration risk The exploration for, and the development of, hydrocarbons is speculative and involves a high degree of risk. These risks include the uncertainty that the Issuer will discover sufficient oil or gas resources to exploit economically or that the Issuer will be able to exploit the discovered resource as intended. Drilling may not result in the discovery of economically viable hydrocarbon resources either due to insufficient resources being discovered, the resources not being of sufficient quality to be developed economically or the cost of any development being in excess of that required for an economic project. Furthermore, there is a risk the Company may be unable to complete the drilling of its remaining exploration portfolio or that it will be successful in obtaining additional time under its Contract to complete its pre-salt exploration past March 2013.

Environmental risk The oil and gas industry is subject to environmental hazards, such as oil spills, gas leaks, ruptures and discharges of petroleum products and hazardous substances. These environmental hazards could expose the Issuer to material liabilities for property damages, personal injuries, or other environmental harm, including costs of investigating and remediating contaminated properties. The Issuer is subject to stringent environmental laws in the Republic of Kazakhstan with regard to its oil and gas operations. Failure to comply with such laws and regulations could subject the Issuer to material administrative, civil, or criminal penalties or other liabilities. Additionally, compliance with these laws may, from time to time, result in increased costs to the Issuer’s operations, impact production, or increase the costs of potential acquisitions. The Issuer was compliant with all material environmental and health and safety laws during the year.

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Risk of operating oil and gas properties The oil and gas business involves certain operating hazards, such as well blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, and releases of toxic substances. Any of these operating hazards could cause serious injuries, fatalities, or property damage, which could expose the Issuer to liabilities. The settlement of these liabilities could materially impact the funds available for the exploration and development of the Issuer’s oil and gas properties. The Issuer maintains insurance against many potential losses and liabilities arising from its operations in accordance with customary industry practices, but the Issuer’s insurance coverage cannot protect it against all operational risks.

Foreign currency risk The Issuer’s operating costs, export revenues, and debt financing facilities are principally denominated in US dollars. The Issuer’s UK Plc office costs and share consideration are in British pounds. Also, some costs are incurred and settled in tenge, the local currency of the Republic of Kazakhstan. Any changes in the relative exchange rates among US dollars, tenge and British pounds could positively or negatively affect the Issuer’s results.

Business in Kazakhstan Amongst the risks that face the Issuer in conducting business and operations in Kazakhstan are: Economic instability, including in other countries or the global economy that could lead to consequences such as hyperinflation, currency fluctuations and a decline in per capita income in the Kazakh economy. Insufficient or underdeveloped physical infrastructure. Governmental and political instability that could disrupt, delay or curtail economic and regulatory reform, increase centralised authority or result in nationalisation. Social instability from any ethnic, religious, historical or other divisions that could lead to a rise in nationalism, social disturbances or conflict. Uncertainties in the developing legal and regulatory environment, including, but not limited to, conflicting laws, decrees and regulations applicable to the oil and gas industry and foreign investment. Unlawful or arbitrary action against the Issuer and its interests by the regulatory authorities, including the suspension or revocation of its Licence or failure to approve extensions or other permits necessary for the Issuer to continue operating its assets. Lack of independence and experience of the judiciary, difficulty in enforcing court or arbitration decisions and governmental discretion in enforcing claims. Laws restricting foreign investment in the oil and gas industry. Regulations which include pre-approval from the National Bank of Kazakhstan for the issuance of equity, as well as obtaining a pre-emption waiver from the Ministry of Oil and Gas.

Taxation The tax environment in Kazakhstan is subject to regular change and varying interpretations. As the tax law evolves, instances of inconsistent opinions between local, regional and national tax authorities are not unusual. Non-compliance with laws and regulations in Kazakhstan, as interpreted by the Kazakh authorities, may lead to severe penalties and interest which can amount to multiples of any assessed taxes. The uncertainty of interpretation and application of tax laws, which are subject to regular change, creates a risk that the ultimate amount of taxes, penalties and interest, if any, may be in excess of the amounts recognised to date, which could have a material adverse impact on the Issuer’s cash flows, results and financial position. Management believes that it is in compliance with the relevant legislation affecting its operations, and that its tax affairs are appropriately accounted for in these financial statements.

Legal systems Kazakhstan, and other countries in which the Issuer may transact business in the future, have or may have legal systems that are less well developed than in the United Kingdom. This could result in risks such as:

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Potential difficulties in obtaining effective legal redress in the courts of such jurisdictions, whether in respect of a breach of contract, law or regulation, including an ownership dispute. A higher degree of discretion on the part of government authorities. The lack of judicial or administrative guidance on interpreting applicable rules and regulations. Inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions. Relative inexperience of the judiciary and courts in such matters. In certain jurisdictions, the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the jurisdictions in which the Issuer operates.

Liquidity risk Liquidity risk is the risk that the Issuer will not be able to meet its financial obligations as they fall due. The Issuer’s approach to managing its liquidity is to ensure, as far as possible, that it will always have sufficient liquid funds and available debt and equity capital to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Issuer’s reputation.

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SECTION 6 SELECTED FINANCIAL STATEMENTS

The Issuer’s prepares its financial statements in accordance with International Financing Reporting Standards (IFRS). All data provided in this section, are taken from Annual Reports for the years ended 31 March 2012 and 2011 2010 and from Interim Report for the six months ended 30 September 2012, including more detailed analysis of certain balance sheet items and events subsequent to 30 September 2012.

The annual financial statements for the year ended 31 March 2012 and 2011 were audited, and the Interim Report for the six months ended 30 September 2012 were reviewed, by PricewaterhouseCoopers LLP (1 Embankment Place, London WC2N 6RH, United Kingdom, Partner – Mr. Jason Burkitt).

6.1. Balance Sheets Unaudited at Name of the item 30 September Audited at Audited at Audited at US$’000 2012 31 March 2012 31 March 2011 31 March 2010

Assets Non-current assets 280,367 261,886 186,031 171,712 Intangible assets – exploration and appraisal expenditure 183,676 175,638 147,796 133,489 Oil and gas properties 72,020 65,957 27,518 26,172 Property, plant and equipment 18,891 14,803 10,717 12,051 Trade and other receivables 5,780 5,488 - -

Current assets 22,967 20,573 45,926 22,601 Inventories 10,636 12,659 13,268 12,990 Trade and other receivables 6,501 4,283 7,124 5,805 Cash and cash equivalents 5,830 3,631 25,534 3,806

Total assets 303,334 282,459 231,957 194,313

Liabilities Non-current liabilities 7,167 83,700 79,514 72,176 Borrowings - 80,872 77,989 70,625 Deferred tax liabilities 3,096 - - - Provision for liabilities and other charges 4,071 2,828 1,525 1,551

Current liabilities 179,600 83,088 34,047 82,887 Trade and other payables 44,967 32,918 18,102 14,484 Current tax liabilities - - 9,919 9,824 Borrowings 134,633 50,170 6,026 58,579

Total liabilities 186,767 166,788 113,561 155,063 Net assets 116,567 115,671 118,396 39,250

Capital and reserves Share capital 8,036 8,035 8,020 7,942 Share premium 365,002 364,381 356,598 265,043 Other reserves 115,965 112,074 114,446 108,691 Accumulated deficit (372,436) (368,819) (360,668) (342,426) Total equity 116,567 115,671 118,396 39,250

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6.1.1. Intangible assets – exploration and appraisal expenditure

COST US$’000 At 1 April 2009 241,452 Additions 23,833 Amounts written off to exploration and appraisal costs (1,799) Change in estimate for decommissioning provision (1,399) At 31 March 2010 262,087 Additions 29,508 Disposals (115,136) Amounts written off to exploration and appraisal costs (8,997) Change in estimate for decommissioning provision (23) At 31 March 2011 167,439 Additions 70,327 Amounts written off to exploration and appraisal costs (4,360) Transfers to oil and gas properties (31,156) Transfers to property, plant and equipment (786) Change in estimate for decommissioning provision 623 At 31 March 2012 202,087 Additions 22,441 Disposals (36) Amounts written off to exploration and appraisal costs (1,789) Change in estimate for decommissioning provision 435 Transfers (9,482) At 30 September 2012 213,656

ACCUMULATED AMORTISATION AND IMPAIRMENT At 1 April 2009 7,499 Amortisation charge for the year 5,915 Impairment loss for the year 115,184 At 31 March 2010 128,598 Amortisation charge for the year 6,234 Disposals (115,189) At 31 March 2011 19,643 Amortisation charge for the year 6,871 Disposals (3) Transfers to oil and gas properties (62) At 31 March 2012 26,449 Charge for the period 3,598 Disposals (27) Transfers (40) At 30 September 2012 29,980

NET BOOK VALUE At 31 March 2010 133,489 At 31 March 2011 147,796 At 31 March 2012 175,638 At 30 September 2012 183,676

Intangible assets – exploration and appraisal expenditure include licence acquisition, capitalized interest, geological and geophysical exploration and appraisal costs, which are initially capitalised to well, field or specific exploration licences as appropriate, pending determination of the existence of commercial reserves. The costs of licence acquisitions and G&G exploration and appraisal costs are amortised straight-line over a

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period of the lower of 25 years, the remaining licence period or the expected life of the reserves from the date the seismic data has been fully evaluated.

When an oil or gas field has been approved for development, the accumulated exploration and appraisal costs are transferred to oil and gas properties.

6.1.2. Oil and gas properties

COST US$’000 At 1 April 2009 35,073 Additions 3,316 Change in estimate for decommissioning provision (574) Disposals (1) At 31 March 2010 37,814 Additions 7,887 Change in estimate for decommissioning provision (129) At 31 March 2011 45,572 Additions 14,713 Transfers from exploration and appraisal expenditure 31,156 Change in estimate for decommissioning provision 546 At 31 March 2012 91,987 Additions 6,924 Amounts written off to exploration and appraisal costs (11) Change in estimate for decommissioning provision 489 Transfers 5,799 At 30 September 2012 105,188

ACCUMULATED DEPRECIATION At 1 April 2009 5,839 Charge for the year 5,803 At 31 March 2010 11,642 Charge for the year 6,412 At 31 March 2011 18,054 Charge for the year 7,914 Transfers from exploration and appraisal expenditure 62 At 31 March 2012 26,030 Charge for the period 7,098 Transfers 40 At 30 September 2012 33,168

NET BOOK VALUE At 31 March 2010 26,172 At 31 March 2011 27,518 At 31 March 2012 65,957 At 30 September 2012 72,020

Oil and gas properties include expenditures incurred for the Issuer’s oil and gas assets proved to be commercial for further development. The cost of oil and gas properties is amortised over the total estimated reserves using a unit-of-production method.

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6.1.3. Property, plant and equipment

US$’000 Office systems, Improvements equipment to leasehold and Plant and Motor property furniture equipment vehicles Total COST At 1 April 2009 422 2,147 10,225 836 13,630 Additions - 7 2,504 81 2,592 Disposals - (87) (25) - (112) At 31 March 2010 422 2,067 12,704 917 16,110 Additions - 27 239 2 268 At 31 March 2011 422 2,094 12,943 919 16,378 Additions - 54 4,810 305 5,169 Transfers from exploration and appraisal assets - - 786 - 786 Disposals - (75) - - (75) At 31 March 2012 422 2,073 18,539 1,224 22,258 Additions - - 1,329 - 1,329 Change in estimate for decommissioning provision - - 255 - 255 Transfers from exploration and appraisal assets - - 539 - 539 Transfers from oil and gas properties - - 3,143 - 3,143 Disposals - - - (103) (103) At 30 September 2012 422 2,073 23,805 1,121 27,421

ACCUMULATED DEPRECIATION At 1 April 2009 177 756 1,291 285 2,509 Charge for the year 94 357 980 146 1,577 Disposals - (26) (1) - (27) At 31 March 2010 271 1,087 2,270 431 4,059 Charge for the year 94 349 979 180 1,602 At 31 March 2011 365 1,436 3,249 611 5,661 Charge for the year 57 249 1,367 196 1,869 Disposals - (75) - - (75) At 31 March 2012 422 1,610 4,616 807 7,455 Charge for the period - 80 1,014 84 1,178 Disposals - - - (103) (103) At 30 September 2012 422 1,690 5,630 788 8,530

NET BOOK VALUE At 31 March 2010 151 980 10,434 486 12,051 At 31 March 2011 57 658 9,694 308 10,717 At 31 March 2012 - 463 13,923 417 14,803 At 30 September 2012 - 383 18,175 333 18,891

There was no revaluation of property, plant and equipment for the last three years.

6.1.4. Investments in subsidiaries

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010

Cost 210,297 209,781 207,679 206,931 Provision for impairment (79,277) (79,277) (79,277) (79,277) Net book value 131,020 130,504 128,402 127,654

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The value of these investments is eliminated in the consolidated financial statements of the Issuer and includes the investments in the following subsidiaries: Proportion of Country of Effective voting rights Nature of Statutory Subsidiary undertakings incorpora-tion holding held business year-end Operating Samek International LLP Kazakhstan (1) 100% 100% company 31 December Operating Max Exploration Services, Inc. USA 100% 100% company 31 December Madiran Investment B.V. Netherlands 100% 100% Holding company 31 December Max Astrakhanskiy Holdings B.V. Netherlands (1) 100% 100% Holding company 31 March Max Petroleum Holdings B.V. Netherlands 100% 100% Holding company 31 March Cooperative Samek U.A. Netherlands (1) 100% 100% Cooperative 31 December Cooperative Alga U.A. Netherlands (1) 100% 100% Cooperative 31 December Max Petroleum Astrakhanskiy British Virgin Holding Ltd Islands 100% 100% Holding company 31 March British Virgin Vasse Investments Ltd Islands (1)100% 100% Holding company 31 March (1) Indirect shareholding of Parent Company.

The issuer has no other investments, except for the stated above.

6.1.5. Trade and other receivables

The structure of trade and other receivables was as follows: US$’000 Unaudited Audited Audited Audited 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Trade receivables 1,373 - 1,460 625 VAT receivable (Kazakhstan) 7,687 7,218 2,732 2,653 Prepayments 1,278 1,950 2,061 2,028 Other receivables 1,943 603 871 499 Total trade and other receivables 12,281 9,771 7,124 5,805 Less long-term VAT receivable (5,780) (5,488) - - (Kazakhstan) Trade and other receivables - current 6,501 4,283 7,124 5,805 Percentage % Percentage % Percentage % Percentage % Trade receivables 11% 0% 20% 11% VAT receivable (Kazakhstan) 63% 74% 38% 46% Prepayments 10% 20% 29% 25% Other receivables 16% 6% 12% 9% Total trade and other receivables 100% 100% 100% 100%

Customers which made up over 5% of total trade and other receivables were as follows:

30 September 2012 Name Location Currency US$’000 Share Timing of payment Reason for debt Saicat B.V. Netherlands USD 1,373 11% October 2012 Current balance due for crude oil exports

31 March 2012 Name Location Currency US$’000 Share Timing of payment Reason for debt None ------

31 March 2011 Name Location Currency US$’000 Share Timing of payment Reason for debt Centrobalt OU Estonia USD 1,460 20% April 2011 Current balance due for crude oil exports

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31 March 2011 Name Location Currency US$’000 Share Timing of payment Reason for debt Centrobalt OU Estonia USD 619 11% April 2010 Current balance due for crude oil exports

Impact of foreign currency exchange rates on Trade and other receivables. As more fully disclosed in Annual Report for year ended 31 March 2012 (Note 25), the Issuer is mainly exposed to currency risks on receivables denominated in GBP and KZT. As the timing of collection of such receivables are short-term, the impact of change in the foreign currencies is not material.

6.1.6. Receivables from affiliated companies

All intercompany balances have been eliminated on consolidation, including the following balances receivable from subsidiaries:

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010

Loans from the Company to its subsidiaries 174,651 169,624 116,935 108,629 Other amounts due from subsidiaries 400 3,745 3,381 5,341 Total intercompany receivables 175,051 173,369 120,316 113,970

6.1.7. Inventories

The structure of inventories was as follows:

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010

Materials and supplies 9,075 11,304 12,248 12,023 Crude oil inventory 1,561 1,355 1,020 967 Total inventory 10,636 12,659 13,268 12,990

Materials and supplies are principally comprised of drilling equipment to be used in the exploration and development of the Company’s oil and gas properties in Kazakhstan.

6.1.8. Cash and cash equivalents

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010

Cash at bank and on hand 5,830 3,631 25,534 3,806

Included in cash at bank and on hand are the following amounts required to be deposited in an environmental restoration and rehabilitation fund under the terms of the Licence: US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010

Cash deposited in an environmental restoration and rehabilitation fund 2,209 2,030 1,615 1,793

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6.1.9. Borrowings

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010 Bank borrowings 52,190 50,170 6,026 58,579 Convertible bonds 82,443 80,872 77,989 70,625 Total borrowings 134,633 131,042 84,015 129,204

Current borrowings 134,633 50,170 6,026 58,579 Non-current borrowings - 80,872 77,989 70,625 Total borrowings 134,633 131,042 84,015 129,204

Bank borrowings

In June 2007, the Company entered into a US$100 million revolving mezzanine credit facility with Macquarie Bank Limited (Macquarie Credit Facility) to finance the development of the Company’s oil and gas assets in Kazakhstan, with an initial borrowing base of US$20 million, which was increased to US$50 million in March 2008. The Macquarie Credit Facility provided for revolving loans and letters of credit from time to time in an aggregate amount not to exceed the borrowing base of which a total of US$23.5 million had been borrowed as of 31 March 2008.

In February 2009, the Company amended the Credit Facility (the “Amendment”) increasing the potential borrowing base available from US$50 million to US$100 million subject to certain terms and conditions. The material provisions of the Amendment were as follows:

- The Macquarie Credit Facility was split between senior and subordinated tranches, with the initial US$25 million of advances comprising the senior tranche. - The senior and subordinated tranches bear interest ranging from LIBOR plus 4% to LIBOR plus 7.5%, depending upon the underlying value of the Company’s oil and gas reserves. - Principal outstanding under the Macquarie Credit Facility to be repaid quarterly beginning 1 December 2009, which was subsequently amended on 13 August 2009 to be deferred until 2011. - Additional events of default based on the Company achieving certain milestones before 30 November 2009 were included in the Macquarie Credit Facility, which were subsequently amended on 13 August 2009. - The Company issued amended and restated warrants (the “Warrant Deed”) to subscribe for up to 547,918,106 new Ordinary Shares in the Company, replacing the existing previous warrants issued to Macquarie in March 2008, of which 121,759,579 warrants with an exercise price of 4.54p per Ordinary Share were fully vested on the date of grant.

The allotment of any new Ordinary Shares of the Company pursuant to the exercise of the Warrant Deed was approved by the Company’s shareholders in an extraordinary general meeting on 12 May 2009.

The Macquarie Credit Facility was secured by pledges in favour of Macquarie over all of the Company’s assets. As of 31 March 2009 the Company had drawn down US$48.6 million, and had letters of credit of approximately $US0.1 million secured under the Macquarie Credit Facility. At 31 March 2009, the borrowing base under the Macquarie Credit Facility was US$50 million (2008: US$50 million). On 12 August 2009, the Macquarie Credit Facility terms were amended, pursuant to which the amount of the borrowing base commitment under the Macquarie Credit Facility was increased from US$50 million to US$80 million. Accordingly, Macquarie’s entitlement to subscribe to a further 243,519,158 additional shares under the Warrant Deed vested on that date with exercise prices between 4.54p and 5.67p.

On 12 August 2009, Macquarie syndicated a portion of the Macquarie Credit Facility to various third party investors. In conjunction with the syndication, Macquarie assigned its vested rights to subscribe for 42,534,841 new Ordinary Shares under the Warrant Deed to those various third-party investors.

On 13 August 2009, the Company further amended the Macquarie Credit Facility. The material provisions of the Macquarie Credit Facility were as follows:

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The Macquarie Credit Facility split between senior and subordinated tranches, with the initial US$25 million of advances comprising the senior tranche. The senior and subordinated tranches bear interest ranging from LIBOR plus 4% to LIBOR plus 7.5%, depending upon the underlying value of the Company’s oil and gas reserves. Repayment of principal outstanding in three equal installments on 31 January 2011, 31 March 2011 and 1 June 2011. The Company issued the Warrant Deed to subscribe for up to 547,918,106 new Ordinary Shares in the Company, replacing the existing previous warrants issued to Macquarie in March 2008.

The amendments to the Macquarie Credit Facility on 13 August 2009 were deemed to trigger a debt extinguishment and recognition of new debt under the requirements of IAS 39 “Financial Instruments: Recognition and Measurement”). Accordingly, all unamortised amounts previously capitalised to the Macquarie Credit Facility as debt issuance costs, including costs recognised in relation to the Warrant Deed, were expensed as an exceptional, non-cash charge of US$90.5 million. The Macquarie Credit Facility restructuring charge included an amount of US$81.7 million relating to the fair value of the additional warrants as of their vesting date on 12 August 2009.

On 10 November 2009, Macquarie syndicated a further portion of the Macquarie Credit Facility to a third party investor, and assigned its vested rights to subscribe for 54,800,001 new Ordinary Shares under the Warrant Deed to that third party investor.

At 31 March 2010, the Macquarie Credit Facility had a total borrowing base of US$80 million, of which US$58.7 million was borrowed, including US$78,000 reserved for outstanding letters of credit.

At 31 March 2010, the Company was in breach of its banking covenants relating to certain financial ratios and although Macquarie subsequently waived all rights in relation to these breaches, the entire loan balance has been classified within current liabilities in the Company balance sheets at 31 March 2010 as required by IAS 1 “Presentation of Financial Statements”.

On 24 January 2011, the terms of the Macquarie Credit Facility were amended to defer principal repayment to two equal installments on 31 March 2011 and 1 June 2011 and then further amended to extend the maturity to 31 March 2013 (the “Credit Facility Extension”) conditional, amongst other things, on the Company obtaining the approval of the holders of the Company’s convertible bonds (the “Bondholders”) to extend the final maturity date of the convertible bonds to 8 September 2013 (the “Bondholder Resolution”) and on the Company raising additional equity financing on or before 31 March 2011. The Bondholders approved the Bondholder Resolution at an extraordinary meeting on 1 March 2011. The Company’s shareholders approved an equity placing of £52.7 million, or US$85.2 million, (the “Placing”) at a general meeting of the shareholders on 1 March 2011. All conditions precedent pursuant to the Macquarie Credit Facility Extension were met on 2 March 2011, at which point it became immediately effective.

On 3 March 2011, the Company paid down US$55 million of the principal outstanding on the revolving Macquarie Credit Facility using proceeds from the Placing, in order to reduce short-term borrowing costs on the Macquarie Credit Facility.

On 10 March 2011, pursuant to the Warrant Deed, Macquarie exercised a right to subscribe for 133,971,947 Ordinary Shares at an exercise price of 4.54p per share. Proceeds from the warrant exercise of US$9.8 million were used to pay down the principal amount outstanding under the Macquarie Credit Facility. The repayment also reduced the total loan commitment under the facility by US$9.8 million.

The material provisions of the Macquarie Credit Facility were as follows: The Macquarie Credit Facility split between senior and subordinated tranches, with the initial US$25 million of advances comprising the senior tranche. The senior and subordinated tranches bear interest ranging from LIBOR plus 4% to LIBOR plus 7.5%, depending upon the underlying value of the Company’s oil and gas reserves. Repayment of principal outstanding in one installment on 31 March 2013.

At 31 March 2011, the Company was in breach of its banking covenants relating to a non-financial event of default and although Macquarie subsequently waived all rights in relation to this breach, the entire loan

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balance has been classified within current liabilities in the Company balance sheets at 31 March 2011 as required by IAS 1 “Presentation of Financial Statements”.

At 31 March 2011, the Macquarie Credit Facility had a total borrowing base of US$68.5 million, of which US$6.0 million was borrowed.

In March 2012, the Macquarie Credit Facility was further amended as follows: Supplemental interest of 2% applies when there has been an event of default, payable monthly. Principal repayments due from 31 July 2012, comprising seven monthly payments of US$2.0 million until 31 January 2013, US$4.0 million on 28 February 2013 and the remaining balance on 31 March 2013.

At 31 March 2012, the Company was in breach of its banking covenants relating to certain financial ratios. At 31 March 2012, the Macquarie Credit Facility had a total borrowing base of US$58.0 million available through 30 June 2012, of which US$50.2 million was borrowed and a further US$3.0 million was reserved for outstanding letters of credit.

At 30 September 2012 no further amounts were available under the Macquarie Credit Facility, with US$52.2 million borrowed and a further US$3.0 million reserved for outstanding letters of credit.

At 30 September 2012, the Company was not in compliance with the terms of the Macquarie Credit Facility, as the principal repayments of US$2.0 million due on 31 July 2012, 31 August 2012 and 30 September 2012 were not paid. Additionally the Company was in breach of its banking covenants relating to certain financial ratios.

On 27 November 2012, the Company announced its intention to implement a refinancing and comprehensive restructuring of its outstanding debt facilities comprising the refinancing of its Macquarie Credit Facility and the restructuring of its Bonds, (together, the “Restructuring”).

The Restructuring was conditional on Bondholder and shareholder approval, with Bondholder and shareholder meetings called for 20 December 2012 which both approved the Restructuring.

The key terms of the Restructuring are as follows:

The Company entered into a new senior secured US$90 million credit line agreement with Sberbank. Up to US$60 million will be available to draw down from the Sberbank Facility by the end of December 2012, conditional, among other things, upon the approval of the Company’s shareholders and Bondholders. Up to a further US$30 million will be available to draw down from the Sberbank Facility (“Tranche 2”) as soon as certain conditions precedent are met, including the registering of security and obtaining requisite government regulatory approvals, which are expected to be completed by 31 March 2013. The Sberbank Facility bears interest at 11% and matures in November 2017 with quarterly amortisation beginning in March 2014. The Company’s existing Macquarie Credit Facility was cancelled, with Macquarie receiving US$47 million plus all accrued but unpaid interest in December 2012 and a further US$3 million in March 2013 from the proceeds of Tranche 2, in full settlement of all monies owed by the Company. Proceeds from the Sberbank Facility of US$47 million were used to pay down the principal amount outstanding under the Macquarie Credit Facility on 27 December 2012.

As of the date of this report, the remaining principal amount owed to Macquarie is US$3 million.

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The amounts outstanding on the Macquarie Credit Facility are reconciled as follows:

US$’000 Balance at 31 March 2010 58,579 Drawdown of loan facility 12,272 Repayment of loan facility (64,825) Balance at 31 March 2011 6,026 Drawdown of loan facility 44,144 Balance at 31 March 2012 50,170 Drawdown of loan facility 2,020 Balance at 30 September 2012 52,190

Convertible bonds

Bond Issuance

Max Petroleum completed an offering of convertible bonds on 8 September 2006, raising a total of US$75 million before issuance costs. 750 Bonds were issued, each with a denomination of US$100,000 (“the Bonds”). The Bonds bore interest at 6.75% per annum, payable semi-annually pursuant to the terms of issue, and were convertible at an initial conversion price of £1.33 per ordinary share, subject to certain anti- dilution adjustments. The Bonds were due to mature in September 2011, at which time the Company would be required to redeem the principal amount of the Bonds then outstanding. The holders of the Bonds (the “Bondholders”) had a right to convert the Bonds through to final maturity. Furthermore, the Bondholders had certain rights to force the Company to redeem the Bonds if certain material events of default occurred such as revocation of the Company’s licences to its oil and gas properties in Kazakhstan. The Company had the right to redeem the Bonds after three years if the Bonds traded at an average price of 130% of the conversion price for a minimum of 20 out of 30 consecutive trading days or if at any time a minimum of 85% of the Bonds had been converted. The Bonds were publicly traded on the Channel Islands Stock Exchange.

2009 Bond Restructuring

On 12 May 2009, the Company convened a meeting of the Bondholders where the following amendments to the Bonds were unanimously approved (the “2009 Restructuring”):

The maturity date was extended from 8 September 2011 to 8 September 2012. The conversion price of the Bonds was reduced from 133p to 35p, with a fixed exchange rate of US$1.49 to £1. The Company was granted the right to convert its semi-annual cash interest payments into additional principal (i.e. payment in kind or “PIK”) through 8 September 2010 instead of cash payments, subject to a higher interest rate of 9% per annum in case the Company elects to use such right. The Company issued its Bondholders a five-year warrant over 120 million Ordinary Shares at an exercise price of 5p per Ordinary Share (in case the Company elects later to pay the interest in PIK) as follows: of which 30 million warrants could be converted in Ordinary shares on 8 September 2009 (the period of which automatically vested on 8 September 2012) and 30 million warrants on 8 March 2010 and 8 September 2010.

The cash interest due 8 March 2009, which had been deferred and accrued at 31 March 2009 with the agreement of a majority of the Bondholders, was converted to US$3.4 million of PIK and added to principal of the Bonds during the year ended 31 March 2010.

On 8 September 2009 and 8 September 2010, the Company further elected to convert its semi-annual cash interest payments due on those dates to PIK, resulting in interest PIKs of US$3.5 million and US$3.7 million, respectively, added to the principal of the Bonds. Following the interest PIKs on 8 March 2009, 8 September 2009 and 8 September 2010 the revised principal of the Bonds was US$85.7 million.

Pursuant to the revised terms of the Bonds arising from the 2009 Bond Restructuring, the interest PIKs on 8 March 2009, 8 September 2009 and 8 September 2010 each vested a five-year warrant exercisable at 5p

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per Ordinary Share over 30 million Ordinary Shares. Subsequently Bondholders exercised warrants over 81,660,000 Ordinary Shares, leaving 8,340,000 vested warrants outstanding.

2011 Bond Restructuring

On 2 March 2011 the Company issued 309,846,935 Ordinary Shares at 17p per share (the “Placing”), generating proceeds of US$85.2 million (£52.7 million). In conjunction with Placing, the Bondholders agreed to defer the final maturity date of the Bonds from 8 September 2012 to 8 September 2013. The Placing also triggered anti-dilution provisions within the terms of the Bonds. As a result, the conversion price of the Bonds was reduced from 35p to 32p, with a fixed exchange rate of US$1.49 to £1.

2012 Bond Restructuring The Company did not pay the US$2.9 million semi-annual coupon interest due 8 September 2012, having previously obtained written assurances from holders representing greater than 75% of the Bonds to defer the coupon payment pending a broader restructuring of the Company’s outstanding debt.

At a meeting of the Company’s Bondholders on 20 December 2012 (the “Restructuring Date”) the following modifications to the Bonds were agreed (the “2012 Restructuring”):

- The US$2.9 million coupon interest payment due 8 September 2012 was capitalised and added to principal, resulting in a revised principal amount of US$88.5 million. - Interest on the revised principal of US$88.5 million was accrued from 8 September 2012 to 19 December 2012 and capitalised, resulting in a revised principal of US$90.2 million, at the Restructuring Date. - 59 Bonds were accepted into a tender offer: the tendering Bondholders agreed to accept a total of US$3.4 million in Promissory Notes plus 4.5 million Ordinary Shares in exchange for cancellation of these Bonds. The US$3.4 million principal of the Promissory Notes, plus interest accruing at 6.75% from 20 December 2012, will be paid in cash on the 30 June 2013, or, if earlier, upon the satisfaction of all conditions precedent to the second tranche of the Sberbank Facility. - 468 Bonds were exchanged for 703 million Ordinary Shares. - The remaining 223 Bonds were exchanged for PIK Notes with a nominal value of US$26.7 million. The PIK Notes are redeemable in cash on 8 March 2018. Interest accrues at 10% per annum from 20 December 2012, compounding semi-annually on 8 March and 8 September, and is payable at maturity on 8 March 2018. The US$26.7 million principal of the PIK Notes, plus accrued interest, will be subject to mandatory conversion into Ordinary Shares upon the receipt of approval under Article 12 of the Kazakhstan Law on Subsoil and Subsoil Use, at a conversion price of 5 pence per share with a fixed exchange rate of US$1.6 per £1. The Company has undertaken to exercise reasonable endeavours to obtain this regulatory approval, and expects to receive it during the first half of calendar year 2013. The PIK Notes are no longer convertible at the option of the holder.

As a result of the 2012 Restructuring, a total of 709 million Ordinary Shares were issued to Bondholders, which represents 39% of the Company’s currently issued share capital.

Movements in the convertible bonds are reconciled as follows:

US$’000 Gross Bond discount(1) Net Balance at 31 March 2010 81,902 (11,277) 70,625 8 September 2010 interest payment-in-kind (“PIK”) added to 3,686 (412) 3,274 principal Notional interest incurred - 4,090 4,090 Balance at 31 March 2011 85,588 (7,599) 77,989 Notional interest incurred - 2,883 2,883 Balance at 31 March 2012 85,588 (4,716) 80,872 Notional interest incurred - 1,571 1,571 Balance at 30 September 2012 85,588 (3,145) 82,443

(1) On initial recognition, the equity component of the convertible bond is booked as a bond discount, which is subsequently amortised over the maturity of the bonds using the effective interest rate.

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6.1.10. Provision for liabilities and other charges

US$’000

Balance at 1 April 2009 3,440 Additions 195 Changes in estimates (802) Adjustment for change in real discount rate (1,366) Unwinding of discount 84 Balance at 31 March 2010 1,551 Additions 122 Utilisation of provision (156) Unused amounts reversed (57) Changes in estimates 71 Adjustment for change in real discount rate (132) Unwinding of discount 126 Balance at 31 March 2011 1,525 Additions 698 Unused amounts reversed (51) Changes in estimates 432 Adjustment for change in real discount rate 90 Unwinding of discount 134 Balance at 31 March 2012 2,828 Additions 288 Utilisation of provision (36) Changes in estimates 809 Adjustment for change in real discount rate 81 Accretion of discount 101 Balance at 30 September 2012 4,071

The decommissioning provision reflects the present value of internal estimates of future decommissioning costs of the Company’s oil and gas wells as at the relevant balance sheet date determined using local pricing conditions and requirements. These costs are expected to be incurred between 2017 and 2034. The timing of payments related to provisions is uncertain and is dependent on various items which are not always within management’s control.

6.1.11. Trade and other payables

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010 Trade payables 11,554 14,994 4,160 2,351 Other payables 561 1,427 3,675 6,950 Social security and other taxes 8,723 711 5,117 3,086 Deferred income 19,326 12,985 100 3 Accruals 4,803 2,801 5,050 2,094 Total Trade and other payables 44,967 32,918 18,102 14,484

Payables which individually comprise over 5% of the total trade and other payables were as follows:

At 30 September 2012 Name Currency Due date US$’000 Share,% Reason for indebtedness Mega Oil Products Prepayment for future shipments of KZT During 2012-2013 17,108 38 LLP crude oil to the domestic market Tax for Quarters 2 and 3 of 2012 (for Export Rental Tax KZT November 2012 6,819 15 export of crude oil) Saipem S.p.A. USD November 2012 4,029 9 Drilling services December 2012 - Accrued coupon interest at 6.75% from 8 Bond interest USD 3,306 7 March 2013 March 2012 to 30 September 2012

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At 31 March 2012 Name Currency Due date US$’000 Share,% Reason for indebtedness Mega Oil Products Prepayment for future shipments of KZT During 2012-2013 8,719 26 LLP crude oil to the domestic market Saipem S.p.A. USD April – May 2012 3,536 11 Drilling services Petro Trade Central Prepayment for future shipments of KZT During 2012 2,753 8 Asia LLP crude oil to the domestic market Schlumberger USD 1,690 5 Directional drilling Logelco Inc April – May 2012

At 31 March 2011 Name Currency Due date US$’000 Share, % Reason for indebtedness Provision for interest relating to tax claim Interest on CIT claim 3,580 20 KZT June 2011 in Kazakhstan Tax for quarter 1 of 2011 (for export of Export Rental Tax 3,322 18 KZT May 2011 crude oil) Sun Drilling LLP 1,812 10 Drilling services KZT April-May 2011 Provision for historical costs payable to Historical costs 997 6 Kazakhstan authorities relating to KZT 2012-2013 commercial discovery at Zhana Makat

At 31 March 2010 Name Currency Due date US$’000 Share,% Reason for indebtedness

Provision for penalty relating to tax claim Penalty for CIT claim December 2010 – 4,912 34% KZT in Kazakhstan February 2011 Provision for interest relating to tax claim Interest on CIT claim 1,956 14% KZT July/Aug 2010 in Kazakhstan Tax for quarter 1 of 2010 (for export of Export Rental Tax 1,788 12% KZT May 2010 crude oil)

6.1.12. Share capital

As was noted above, the Company has two classes of share capital, which carry no right to fixed income: Ordinary Shares and Deferred Shares. Number of shares Issued share capital Ordinary shares of Deferred shares of 0.01p each 14.99p each At 1 April 2009 365,278,737 28,253,329 Increase 71,172,760 - At 31 March 2010 436,451,497 28,253,329 Increase 481,682,114 - At 31 March 2011 918,133,611 28,253,329 Increase 100,355,247 - At 31 March 2012 1,018,488,858 28,253,329 Increase 8,035,708 - At 30 September 2012 1,026,524,566 28,253,329

US$’000 Nominal value Issued share capital Ordinary Deferred Total shares of shares of all 0.01p each 14.99p each classes At 1 April 2009 66 7,864 7,930 Increase 12 - 12 At 31 March 2010 78 7,864 7,942 Increase 78 - 78 At 31 March 2011 156 7,864 8,020 Increase 15 - 15 At 31 March 2012 171 7,864 8,035 Increase 1 - 1 At 30 September 2012 172 7,864 8,036

All shares issued are fully paid up.

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Information about the declared and paid dividends

Max Petroleum Plc did not declare or pay any dividends since its inception.

6.1.13. Share premium

US$’000

At 1 April 2009 259,491 Premium on shares issued during the year 5,552 At 31 March 2010 265,043 Premium on shares issued during the year 97,800 Expenses of issue of equity shares (6,245) At 31 March 2011 356,598 Premium on shares issued during the year 7,783 At 31 March 2012 364,381 Premium on shares issued during the year 621 At 30 September 2012 365,002

The share premium account records the amount paid on the issuance of Ordinary Shares in excess of their nominal value of 0.01 pence per share, less directly attributable expenses of share issuance.

6.1.14. Other reserves

US$’000 At At At At 30 September 31 March 31 March 31 March 2012 2012 2011 2010 Reserve arising on purchase of minority interest (72,495) (72,495) (72,495) (72,495) Convertible bond equity reserve 14,833 14,833 14,833 14,421 Share-based payment reserve 70,054 66,163 61,195 59,234 Warrant reserve 103,573 103,573 110,913 107,531 Total other reserves 115,965 112,074 114,446 108,691

Reserve arising on purchase of minority interest The reserve arising on purchase of minority interest arose on the purchase of a 20% minority interest in Madiran Investment B.V. in July 2008. The reserve represents the difference between the fair value of the consideration paid and the carrying value of the minority interest at the date of the transaction. Convertible bond equity reserve The component parts of compound instruments issued by the Company are accounted for separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. The Company records the proceeds received from the issuance of convertible debt instruments, net of issuance costs, as an allocation between long-term debt and equity based on the Company’s estimate of the fair value of the instrument without consideration of its conversion feature. At the date of issue of the convertible debt instrument, the fair value of the liability component is estimated using the prevailing interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished on conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in the convertible bond reserve within equity, net of income tax effects, and is not subsequently remeasured.

Share-based payment reserve The Company operates an equity-settled share-based compensation plan, under which the Company receives services from employees and others providing similar services as consideration for equity instruments (share options) of the Company. The fair value of the services received in exchange for the grant of the options is recognized as an expense as the services are received with a corresponding credit to the share-based payment reserve in equity. The total amount to be expensed is determined by reference to the fair value of options granted. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest, and at each balance sheet date, the entity revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original

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estimates, if any, in the income statement, with a corresponding adjustment to equity. If the terms and conditions of options are modified, the change in the fair value of the options, measured immediately before and after the modification, is additionally charged to the income statement over the remaining vesting period.

Warrant reserve Warrants to acquire Ordinary Shares in the Company were previously issued to the Company’s Bondholders (“Convertible Bond Warrants”) and to the Macquarie Credit Facility syndicate partners, including Macquarie (the “Credit Facility Warrants”). At the date the warrants vested and became exercisable, the fair value of the warrants issued was estimated by the Company and recorded in the warrant reserve within equity.

Where holders of Credit Facility Warrants elected for cashless exercise of their warrants, a portion of the warrant reserve was transferred within equity to share capital and share premium.

6.2 Consolidated Income Statements Unaudited Audited Audited Audited six months ended year ended year ended year ended US$’000 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Revenue 49,156 50,243 55,309 43,348 Cost of sales (35,890) (33,520) (38,422) (31,585) Gross profit 13,266 16,723 16,887 11,763 Exploration and appraisal costs (2,658) (4,360) (7,007) (1,799) Impairment losses - - - (116,248) Administrative expenses (8,254) (17,799) (15,031) (19,967) Operating profit 2,354 (5,436) (5,151) (126,251) Debt restructuring costs - - - (101,853) Finance income 8 20 12 9 Finance costs (2,852) (2,672) (12,991) (15,463) Loss before taxation (490) (8,088) (18,130) (243,558) Income tax expense (3,127) (63) (112) (9,885) Loss for the period (3,617) (8,151) (18,242) (253,443) Loss per share - Basic (US cents) (0.4) (0.8) (3.8) (64.3) - Diluted (US cents) (0.4) (0.8) (3.8) (64.3)

6.3. Revenues received from sales of crude oil Unaudited Audited Audited Audited six months ended year ended year ended year ended 30 September 2012 31 March 2012 31 March 2011 31 March 2010

Oil sales revenue (US$’000) 49,156 50,243 55,309 43,348 Export sales revenue (US$’000) 30,450 6,016 49,651 38,885 Domestic sales revenue (US$’000) 18,706 44,227 5,658 4,463

Average realised price (US$ per bbl) 74.07 50.04 72.78 57.34 Average realised export price (US$ per bbl) 103.39 120.32 81.93 63.23 Average realised domestic price (US$ per bbl) 50.68 46.36 36.74 31.65

At present the Company is still at the exploration stage and as of the date of this Memorandum did not transfer all of its discoveries to FFD, which resulted in the net losses for the periods mentioned above.

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Actions taken by the Issuer to increase revenues Currently the Issuer is on the exploration stage. Zhana Makat field is on its production stage from March 2012, which allowed to export up to 80% of its production with higher netbacks than on the domestic sales. The remaining seven discoveries are currently on the exploration stage and the Company plans to transfer these fields to commercial production upon completion of appraisal works during the trial production period. As more fully described in Section 5 above, the Company plans to transfer its Borkyldakty field to commercial production in the first half of 2013 and its Asanketken field in 2014, which will allow to further export up to 80% of crude oil produced from these fields. The remaining fields will be transferred to FFD after detailed research and appraisal works during the TPP, which will start during 2013-2014 after the testing period of the wells finishes and regulatory approvals are received. TPP will allow uninterrupted production of crude oil from these fields for sales on the domestic market.

6.4. Structure of income from other (financing) activities

(US$’000) Unaudited Audited Audited Audited six months ended year ended year ended year ended 30 September 2012 31 March 2012 31 March 2011 31 March 2010 Finance income Interest income on short-term bank deposits 8 9 12 9 Other interest income - 11 - -

Total finance income 8 20 12 9

6.5. Structure of expenses from other (financing) activities (US$’000) Unaudited Audited Audited Audited six months ended year ended year ended year ended 30 September 2012 31 March 2012 31 March 2011 31 March 2010

Finance costs (US$’000) 2,852 2,672 12,991 15,463 Interest on bank borrowings 2,070 2,473 5,719 6,599 Interest on convertible bonds 4,508 8,660 14,706 19,366 Unwinding of discount on decommissioning provision 101 134 126 84 Other finance costs 108 396 2,234 2,104 Less interest capitalized to exploration and appraisal expenditure (3,935) (8,991) (9,794) (12,690) Total finance costs 2,852 2,672 12,991 15,463

6.6. Cost of sales (US$’000) Unaudited Audited Audited Audited six months ended year ended year ended year ended 30 September 2012 31 March 2012 31 March 2011 31 March 2010

Cost of sales (US$’000) 35,890 33,520 38,422 31,585 Production costs 6,197 8,248 5,804 6,179 Selling and transportation 7,730 6,379 5,441 4,491 Mineral extraction tax 1,827 1,203 2,768 2,160 Export customs duty/export rental tax 8,584 1,629 10,678 6,047 Depreciation, depletion and amortization 11,552 16,061 13,731 12,708

The cost of sales for the year ended 31 March 2012 was US$33.5 million (2011: US$38.4 million) and included depreciation, depletion and amortization of US$ 16.1 million (2011: 13.7 million). Cost of sales before depreciation, depletion and amortization was US$17.5 million or US$17.39/barrel (2011: US$24.7 million or US$32.49/barrel). This amount includes selling and transportation expenses of US$6.4 million or US$6.35/barrel (2011: US$5.4 million or US$7.16/barrel) and taxes related to production and sales of crude oil of US$2.8 million or US$2.82/barrel (2011: US$13.5 million or US$17.69/barrel). The gross profit after

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deducting cost of sales was US$16.7 million or US$16.66/barrel (2011: US$16.9 million or US$22.22/barrel).

6.7. Forecasted revenues indicators for the nearest 3 years

Year ended Year ended Year ended 31 March 31 March 31 March 2013 2014 2015

Production volumes (bopd) 3,200-3,600 4,500-6,000 6,000-8,000

Revenues (US$ million) 80-90 95-130 130-170

6.8. Consolidated Cash Flow Statements Unaudited Audited Audited Audited six months ended year ended year ended year ended 30 September 31 March 31 March 31 March US$’000 2012 2012 2011 2010 Cash flows from operating activities Cash generated from/(used in) operations 31,061 28,273 16,668 10,149 Income tax paid (31) (9,661) (2,291) (61) Net cash generated from/(used in) operating activities 31,030 18,612 14,377 10,088

Cash flows from investing activities Purchases of property, plant and equipment (1,009) (5,822) (268) (2,526) Payment for exploration and appraisal expenditure (27,815) (67,034) (22,721) (13,642) Proceeds from sale of drilling supplies 167 - - - Disposal of subsidiary - - 2,000 - Interest received 8 20 12 9 Net cash generated from/(used in) investing activities (28,649) (72,836) (20,977) (16,159)

Cash flows from financing activities Proceeds from issuance of ordinary shares - 458 81,166 4,052 Settlement of forward contract - - (469) - Proceeds from borrowings 2,020 44,144 12,272 10,029 Repayment of borrowings - - (55,000) - Interest paid (2,177) (12,224) (9,657) (7,239) Net cash generated (used in) / from financing activities (157) 32,378 28,312 6,842

Net increase / (decrease) in cash and cash equivalents 2,224 (21,846) 21,712 771 Effects of exchange rates on cash and cash equivalents (25) (57) 16 (1) Cash and cash equivalents at beginning of period 3,631 25,534 3,806 3,036 Cash and cash equivalents at end of period 5,830 3,631 25,534 3,806

The Issuer is continuing to generate significant cash flow from operations, with proceeds from the sale of crude oil production averaging approximately US$8 million per month. The Issuer’s daily production from wells on test production is variable and has been reduced in recent months at several fields as the number of wells eligible for test production has declined due to completion of the available testing period. These wells will be turned back onto production when the underlying field moves to TPP. The Issuer expects a substantial increase in average daily production during fiscal year 2014 as Asanketken moves to TPP and additional appraisal and development wells are drilled across the Issuer’s portfolio of existing post-salt discoveries.

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6.9. Consolidated Statements of Changes in Equity

Share Share Other Accumulated Total US$’000 capital premium reserves deficit equity Balance at 1 April 2009 7,930 259,491 9,750 (99,790) 177,381 Loss for the year - - - (253,443) (253,443) Other comprehensive income - - - - - Total comprehensive loss for the year - - - (253,443) (253,443) Issue of share capital 12 5,552 (1,510) - 4,054 Share-based payment - - 2,298 - 2,298 Transfer convertible bond reserve to accumulated deficit - - (10,807) 10,807 - Convertible bond restructuring - - 13,860 - 13,860 Convertible bond interest deferral, equity portion - - 561 - 561 Warrants issued - - 94,539 - 94,539 12 5,552 98,941 10,807 115,312 Balance at 31 March 2010 7,942 265,043 108,691 (342,426) 39,250 Loss for the year - - - (18,242) (18,242) Other comprehensive income - - - - - Total comprehensive loss for the year - - - (18,242) (18,242) Issue of share capital 78 91,555 (643) - 90,990 Share-based payment - - 1,961 - 1,961 Convertible bond interest deferral, equity portion - - 412 - 412 Warrants issued - - 4,025 - 4,025 78 91,555 5,755 - 97,388 Balance at 31 March 2011 8,020 356,598 114,446 (360,668) 118,396 Loss for the year - - - (8,151) (8,151) Other comprehensive income - - - - - Total comprehensive loss for the year - - - (8,151) (8,151) Issue of share capital 15 7,783 (7,340) - 458 Share-based payment - - 4,968 - 4,968 15 7,783 (2,372) - 5,426 Balance at 31 March 2012 8,035 364,381 112,074 (368,819) 115,671 Loss for the period - - - (3,617) (3,617) Other comprehensive income - - - - - Total comprehensive loss for the period - - - (3,617) (3,617) Issue of share capital 1 621 (622) - - Share-based payment – options (note 18) - - 1,198 - 1,198 Share-based payment – Zhanros services - - 3,315 - 3,315 1 621 3,891 - 4,513 Balance at 30 September 2012 8,036 365,002 115,965 (372,436) 116,567

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