the unconventional opportunity in argentina · phoenix global resources plc vaca muerta vaca muerta...

The unconventional opportunity in ArgentinaCompany presentationJuly 2018

Phoenix Global Resources plc

DisclaimerThis document has been prepared and issued by, Phoenix Global Resources plc (“Phoenix”). For the purposes of this notice, the presentation (the “Presentation”) shall include the slides that follow, hard copies of this document and any materials issued in connection with the Presentation.

This Presentation does not comprise a prospectus relating to Phoenix or any subsidiary of Phoenix or an offer, invitation or recommendation to purchase or subscribe for any securities of Phoenix or any of the business or assets described herein.

No reliance may be placed for any purpose, whatsoever on the information contained in the Presentation or the completeness or accuracy of such information. No guarantee, representation or warranty, express or implied, is given by or on behalf of Phoenix as to the fairness, sufficiency, accuracy or completeness of the information or opinions contained in the Presentation and the accompanying verbal presentation and Phoenix accepts no liability for any loss whatsoever arising from any use of this Presentation or its contents or any such information or opinions (including in the case of negligence or otherwise).

This Presentation should not be considered as the giving of investment advice. Each party to whom this Presentation is made available must make its own independent assessment of Phoenix after making such investigations and taking such advice as may be deemed necessary.

For the purposes of the United Kingdom’s Financial Services and Markets Act 2000 (“FSMA”), the Presentation is exempt from the general restriction in section 21 of FSMA on the communication of invitations or inducements to engage in investment activity on the grounds that they are directed at (i) persons having professional experience in matters relating to investment and who are investment professionals (as defined in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”); or (ii) high net worth companies unincorporated associations and other bodies (as defined in article 49 of the Financial Promotion Order) or (iii) other persons to whom it may be lawfully communicated (all such persons together being referred to as "Relevant Persons. The Presentation must not be acted on by persons who are not Relevant Persons.

This Presentation does not constitute, or form part of or contain any offer or invitation to sell or issue, or any offer to subscribe for, underwrite or otherwise acquire, or dispose of, any securities in Phoenix in any jurisdiction in which such offer or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

The distribution of the Presentation in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any such restrictions. The Presentation is not for distribution in, nor does it constitute an offer of securities for sale in any jurisdiction where such distribution or offer is unlawful. Neither the Presentation nor any copy may be taken or transmitted into the United States of America, its territories or possessions, or to any US person as defined in Regulation S under the US Securities Act 1933, as amended.

The past performance of Phoenix and its securities is not, and should not be relied on as, a guide to the future performance of PGR and its securities.

The information contained in this Presentation includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements involve numerous assumptions, risks, uncertainties and other factors and the actual results may vary. These forward-looking statements may be identified by the use of forward-looking terminology, such as the terms "intends", "expects", "will", or "may", or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions and include estimates, forecasts and statements as to management's expectations. These forward-looking statements include all matters that are not historical facts. Factors that may cause actual results and events to vary include, but are not limited to, general economic and/or business and/or political conditions, changes in law and/or regulation, Phoenix's ability to develop its strategy, competition, and future changes to current plans and strategy. There can be no assurance that the results and events contemplated by the forward-looking statements contained in this Presentation will, in fact, occur. These forward-looking statements made by Phoenix or on behalf of Phoenix speak only as of the date they are made. Phoenix does not undertake any obligation to revise these forward-looking statements after the date of this Presentation.

COMPANY PRESENTATION


About Phoenix

We are investing in the long-term development of Argentina and the future of energy.



Leadership and governance

Sir Michael Rake, non-executive chairman

Former chairman of BT Group plc and Worldpay Group plc

Director of S&P Global

Chairman of Majid Al Futtaim Holdings

Non-executives

Anuj Sharma, chief executive officer20 years’ experience in the oil and gas industry

Headed Mercuria’s upstream investments in Argentina prior to Phoenix

Operational and investment experience in US shale industry

Philip Wolfe, chief financial officer28 years’ experience in the oil and gas industry

Former CFO & board member, Soma Oil & Gas

Head of oil & gas, EMEA at UBS and global head of oil & gas at HSBC

Javier Vallesi, chief operating officer23 years’ operational experience in Argentine oil and gas industry

12 years with Trefoil

Subsurface engineering and reservoir management experience with YPF and Bridas (now Pan American Energy)

Executive management

INDEPENDENT NON-EXECUTIVE DIRECTORS

NON-EXECUTIVE DIRECTORS

John Bentley Javier AlvarezGarrett Soden David Jackson

Matthieu Milandri Guillaume Vermersch Nicolás Mallo Huergo

Mercuria (1) representatives Shareholder representative

COMPANY PRESENTATION 1

1. Mercuria Energy Trading Group owns 80.85% of the issued share capital of Phoenix.


A leading independent Argentinian E&P company

560,000Net Vaca Muerta

acres

1%of Argentineproduction

7.5%of entire

Vaca Muertaacreage

11,070Boepd

conventionalproduction

LISTING INFORMATION

London Stock Exchange AIM:PGR

Buenos Aires Stock Exchange BCBA:PGR

Issued share capital 2.76bn

1 As per WD Von Gonten & Company, NSAI, OPC and Francisco Guilsano reports.

2 As per Gaffney, Cline & Associates year end 2017 reserves audit report.

PHOENIX’S GROWTH POTENTIAL

Phoenix Global Resources plc COMPANY PRESENTATION 2


Strategic priorities

Operatorship is key to implement our strategy and to our success

The combination transaction provided scale and consolidated our unconventional acreage position

We continue to strategically add additional acreage with exposure to Vaca Muerta and other unconventional formations

Exploration and development activity focused on appraising and developing our unconventional acreage

Applying the latest and best US shale technologies

Migrating our significant resource base to reserves

High margin production from conventional oil assets

Balancing existing conventional production with unconventional developments

Reduction of unit cost through growth and synergies

Creating shareholder value through production and capital growth

Disciplined approach to capital allocation

Opportunistic inorganic growth through farm-ins, joint ventures, partnerships and portfolio rationalisations

Control and consolidate

Explore and develop

Profitable production

Realise value



Why Argentina?

The 2015 elections returned a progressive and pro-business government that is focused on economic growth and stability. This progressive administration provides the foundation for real change in the fortunes of Argentina.



Why Argentina?Political change continues to drive reformsPro-business agendaNormalising economic imbalancesDeregulation of capital marketsEquity markets growingFDI and portfolio flows increasingIMF reaches staff-level agreement on three year US$50 billion stand-by arrangement

G20 Chair

Fast track to OECD

membership

25%Corporate tax

reduced to 30% in 2018 and to

25% in 2020



Argentina – an established oil and gas industryOIL PRODUCTION GAS PRODUCTION

UPSTREAM PLAYERS

WELL ESTABLISHED SERVICE INDUSTRY



Vaca Muerta

Vaca Muerta is a world-class unconventional resource play with current production in excess of 90,000 boepd and a production expectation of more than 110,000 boepd in 2018, double 2016 production. Unconventional oil and gas has the potential to transform the future of Argentina’s economy.



RECOVERABLE SHALE GAS RESOURCES (TCF)

Vaca Muerta – a world class shale playESTABLISHED OIL AND GAS INDUSTRY (SINCE 1920S)

Established infrastructure

Skilled and trained personnel with deep understanding of assets

Developed oilfield service sector with international and domestic players

POSITIVE REGULATORY ENVIRONMENT

Federal government actively encourages investment in industry, and has deregulated the oil price

Provincial governments in Neuquén, and more recently in Mendoza, introduced supportive regulations for unconventional oil and gas, and proactive permitting

Industrial, labour and fiscal reforms driving efficiency gains and lowering costs

RECOVERABLE SHALE OIL RESOURCES (BN BBL)

ABOVE GROUND FACTORS

BELOW GROUND FACTORS

Depth typically 2,000 – 3,000

metres

Not to scale Lateral up to3,000 metres

Characteristics Vaca Muerta Wolfcamp Eagle Ford MarcellusOil and liquid

rich gas OilOil and liquid

rich gas Gas

Area (million acres) 7.5 11.2 3.0 6.2Total organic content (%) 3-10 3 3-5 2-12Thickness of shale horizon (ft) ~1,000 ~900 ~250 ~200Reservoir pressure (kpsi) 4.5-9.5 4.6 7.0-12.0 2.0-5.5



Vaca Muerta – a world class shale play

US$7.6BnInvested in

Vaca Muerta

TOTAL VACA MUERTA PRODUCTION (BOEPD)

75,0002017

4,1002013

10,1002014

24,9002015

54,5002016

Source: G&G Energy Consultants

TOTAL DRILLED AND COMPLETED WELLS IN VACA MUERTA (CUMULATIVE)

8142017

2022013

3852014

5852015

7052016

Source: G&G Energy Consultants



Asset overview

We are investing in the long-term development of Argentina and the future of energy.



Overview of Phoenix’s assetsNeuquina basin Austral basin Cuyana basin

Gross acres 2,499,389 1,162,876 70,385

Workinginterest acres 1,028,379 528,567 68,164

Operated workinginterest acres 627,380 — 60,294

Basin production2017 (net WI) 5,026 3,900 2,136

Wells drilled 2017 127 6 1

Capital expenditure 2017 (US$ million) 65.2 9.3 9.6



Overview of Phoenix’s assets – Neuquina basin

LicencesWorking

interest %Vaca Muerta

net acreage

Puesto Rojas area (1) 100 / 67.7 / 20 424,000

Mata Mora 90 50,000

Corralera 90 51,000

Other (2) 90 / 40 37,000

Puesto Rojas area (3) 2,832

Chachahuen (YPF operated) 1,976

Other licences (4) 218

Total Neuquina basin 5,026

UNCONVENTIONAL ACREAGEHIGH LEVEL MAP OF NEUQUINA

CONVENTIONAL PRODUCTION BOEPD (2017)

1. Includes acreage at Puesto Rojas, Cerro Mollar Norte, Cerro Mollar Oeste, La Paloma, La Brea, Vega Grande Rio Atuel (66.7)% and Mallargüe (20%).

2. Includes acreage at La Tropilla I and El Manzano Oeste.

3. Include production from Puesto Rojas, Cerro Mollar Norte, Cerro Mollar Oeste, La Brea and Vega Grande.

4. Includes Cajon de los Caballos and El Manzano Oeste



Puesto Rojas areaWD Von Gontenassessment of 3C+3Pr resources of 1 BnboeNine vertical wells drilled in 20173D seismic completed on southern portion of Puesto Rojas and La Brea (Q1 2018)Nine vertical wells planned for 2018, plus first horizontalTargeting Vaca Muertaand Tight AgrioEstimated 2018 capex up to US$100 million

UNCONVENTIONAL ACREAGE

424,000Net Acres Vaca Muerta

/ Unconventional



Mata MoraSecured 90% stake and operatorship in Q1 2018NSAI assessment of 3C+3Pr WI resources of 540 MMboeTwo horizontal wells planned to be drilled in Q3 and completed Q4 2018Nabors high-spec drill rig contractedEstimated 2018 Capex up to US$40 million



/ Unconventional



CorraleraSecured 90% stake and operatorship in Q1 2018Two horizontal wells planned to be drilled on Corralera Sur and Noreste blocks in 2019-2020




/ Unconventional


2018 work programme2018 Capital

Expenditure US$ million (2)Basin Block Q1 Q2 Q3 Q4

UN

CON

VEN

TIO

NAL

Neuquina Puesto Rojas area (1) 75

Mata Mora 40

Corralera 3

Laguna el Loro 7

TOTAL 125

CON

VEN

TIO

NAL

NeuquinaPuesto Rojas area (1)

Chachahuen (3)

25

20

CuyanaAtamisqui /Tupungato 5

Austral (3) Santa Cruz Sur /Tierra del Fuego 15

TOTAL 65

KEY

SEISMIC

DRILLING

COMPLETIONS

BUSINESS DEVELOPMENT

HORIZONTAL WELL


1. Includes Puesto Rojas, Cerro Mollar Norte, Cerro Mollar Oeste, La Paloma, La Brea, Vega Grande Rio Atuel and Malargüe..

2. Includes US$10 million licence fees for Neuquén bid round and Mata Mora / Corralera renegotiation.

3. Chachahuen operated by YPF; Austral basin assets operated by ROCH S.A.


Financial overview



Financial overview

FY 2017(1) Q1 2018

Revenues 141.8 47.0

Adjusted EBITDAX (2) 40.6 14.4

Capital expenditure 82.8 20.4

Total debt 192.5 99.7

Cash on hand 23.6 15.3

Net debt 168.9 84.4

Strong financial backing from Mercuria Group US$160 million convertible revolving credit facility (3)

Net debt of US$84.4 million at 31 March 2018Available cash and undrawn facilities of US$100 million at 31 March 2018Additional debt capacity in the local bank market

FINANCIAL POSITIONSUMMARY FINANCIALS (US$ MILLION)

1. FY2017 includes Trefoil for full year and former Andes since 10 August 2017.

2. Adjusted EBITDA in FY2017 excludes one-time charges of US$32.9 million.

3. Convertible at 45 pence per share through maturity in December 2021. Interest rate of 3 months LIBOR plus 4%.



Netback analysis by basin Q1 2018 - unaudited (1)

(US$ million) NEUQUINA AUSTRAL CUYANA TOTAL

Oil revenues 24.9 6.1 11.0 41.9

Gas revenues 0.0 5.0 — 5.0

Gross revenues 24.9 11.1 11.0 47.0

Royalties & turnover tax (4.9) (1.7) (2.2) (8.8)

Net revenues 20.0 9.4 8.8 38.1

Operating costs (5.3) (6.4) (5.5) (17.1)

Netback 14.7 3.0 3.3 21.0(US$/boe)

Realised oil price US$/bbl 59.28 59.82 61.15 59.84

Realised gas price US$/MMbtu 5.07 4.06 — 4.06

Realised price US$/boe 59.26 36.02 61.15 51.75

Royalties & turnover tax US$/boe (11.75) (5.61) (12.07) (9.73)

Net revenues US$/boe 47.51 30.40 49.08 42.02

Operating costs US$/boe (12.59) (20.61) (30.46) (18.84)

Netback US$/boe 34.92 9.79 18.63 23.18Oil & gas – sales volume

Oil bopd 4,670 1,126 1,990 7,787

Gas boepd 3 2,297 — 2,301

Total volume boepd 4,674 3,423 1,990 10,0871. Unaudited management information



Conclusion



Appendix



Buyer Seller AnnouncedValue

(US$ Million) US$/Acre Commentary

Jul 2013 1,240 12,900Continuation of previous joint operationsInitial outlays of US$1.24 billion

Sep 2013 120 11,000Initial 16 well programme50:50 joint venture with YPF operating

Apr 2014 140 2,800Four-year 50:50 exploration project to drill and analyse 7 vertical and 2 horizontal wells

Dec 2014 550 N/A Two investments of US$250 million and US$300 million from the partnersIncludes both drilling and processing facilities

Mar 2015 475 10,000Petronas contributing US$475 million of US$550 million over 3 annual phases30 wells planned in 3 year pilot50:50 JV (YPF operator)

Feb 2017 300 6,950 Pilot programme agreed in the block located northeast of Loma Campana50:50 JV (Shell operator)

Apr 2017 500 N/AMOU for development of the area in which partners will invest US$300 million in the AP East block and US$200 million in AP West Agreement includes unitisation of blocks and redistribution of P.I.s

Apr 2017 390 6,900MOU to develop field with the drilling of 26 wells and construction of new infrastructure49:51 JV (YPF operator)

Aug 2017 300 7,730Joint exploration of Bajo del Toro block with the drilling 8 wells and construction of related infrastructure50:50 JV (YPF operator)

Feb 2018 735 13,61059% of PELSA, that holds a 73% operating stake in three exploration concessions, majority of assets cover conventional operations in the Neuquen basin, with acreage in the Vaca Muerta

Jun 2018 N/A N/A 30% stake in two ExxonMobil affiliates with various interests in licenses for seven blocks across Vaca Muerta

Announced investments in the Vaca Muerta

COMPANY PRESENTATION Appendix


Thank you

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