Thursday 7 September 2017

Funding package for the Sea Lion development progressing; targeting project sanction during 2018

· Discussions initiated with UK Export Finance, the UK's export credit agency, in relation to a proposed US$800 million senior debt financing for the Sea Lion project

· Discussions progressing with potential contractors to the project for the provision of US$400 million of financing; non-binding proposals received for a significant proportion of funds sought with further proposals expected in the coming weeks

· Sea Lion Phase 1 estimated capex to first oil reduced from US$1.8 billion to US$1.5 billion and life of field costs down to US$35 per bbl

Building a material production base in the Greater Mediterranean to protect balance sheet strength and fund future growth

· Material increase in production - net working interest production averaged 1.2 kboepd in H1 2017 (H1 2016: 0.6 kboepd), up 92% over H1 2016

· H1 2017 revenue increased to US$5.1 million, up 74% over H1 2016

· Cash operating costs in Greater Mediterranean reduced by 44% to US$8.7 per boe (H1 2016: US$15.5 per boe)

· Continued focus on managing corporate costs - H1 2017 general and administrative costs (excluding acquisition related costs) reduced by 34% to US$2.5 million (H1 2016: US$3.8 million)

· General and administrative costs covered by operating cash flows (excluding changes in working capital)

· Sale of non-core interests in Italy - US$9.0 million of future decommissioning liabilities removed from balance sheet upon completion

· Balance sheet strength maintained with cash resources at 30 June 2017 of US$62.5 million and no debt; US$337 million development carry from Premier for Sea Lion Phase 1

· Initiated international arbitration against Republic of Italy to seek significant monetary damages in relation to Ombrina Mare

· Multiple material new venture opportunities being progressed with a focus on adding production and cash flow

Sam Moody, Chief Executive, commented:

"Good progress has been made on a range of commercial, fiscal, regulatory and financing matters associated with the Sea Lion project. The primary focus for the remainder of 2017 will be to further progress funding proposals with the aim of being in a position to sanction the project during 2018.

"In our Greater Mediterranean portfolio, we have benefitted from a material increase in production and revenue following the acquisition of a portfolio of interests in Egypt during the second half of 2016. The payment situation in Egypt has improved markedly with the Company having received approximately US$7.7 million gross year-to-date. As a result, for the first time in the Company's history, operating cash flows (excluding changes in working capital) covered the Group's corporate costs, a significant milestone as we continue to build a balanced portfolio and a full cycle E&P business.

"In that context, the Company continues to examine a number of new venture opportunities aimed at adding further production and enhancing cash flow. The continued challenging commodity price environment creates opportunities of which the Company is well placed to take advantage given its strong balance sheet."