Evaluate Energy Oil & Gas Review Q1 2010

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1 Evaluate Energy Oil & Gas Review Q1 21 Eoin Coyne +44 () eoinc@evaluategroup.com Richard Krijgsman +44 () richardk@evaluategroup.com New Uncertainties Despite Earnings Boost Reported net income for the Evaluate Energy Group of global oil and gas companies continued to move closer to pre credit crunch levels in Q1 1 with a close to five fold increase in quarter-on-quarter net income (9% increase on a normalised basis). The large difference between the reported income for the group and the income normalised by Evaluate Energy, is the massive value of write downs in asset values, goodwill impairments and write down of investments that occurred in Q1 9, after commodity prices and refining margins plummeted following the global credit crisis. Income and cash flow results for the group are positive but there is a feeling of wariness in the group to any more supply or demand shocks evidenced by: Capex levels that are lower than Q1 9 despite a higher oil and gas price, with the oil price in particular 84% higher. The group continuing to use spare cash to reduce debt. Many companies in the group trying to downsize refining and marketing operations via dispositions. Upstream earnings have improved significantly, doubling since Q1 9 and increasing by 14% since Q4 9. Rising oil and gas prices has been the chief driver for increased earnings and have been complimented by increases in oil and gas production. Downstream earnings improved on Q4 9 levels but are still far below earnings enjoyed before the global recession sapped away a large amount of demand. The segment continues to be barely profitable for many companies and has led to the re-evaluation of downstream portfolios. With a lack of buyers in the market this means either converting refineries into storage or distribution facilities or closing them altogether. Horizon Disaster Spills into M&A activity With a flurry of asset deals and the shale sector in particular attracting a large amount of investment, Evaluate Energy tracked $39 billion worth of upstream deals announced during Q1 1. A significant portion of the deal value may be under threat however from the Horizon oil disaster and the expected ramifications that will change the economics of the Gulf of Mexico, and the initial rationale behind such deals may be eroded away. Expanded Company coverage Due to the expanding coverage of companies tracked on a quarterly basis by Evaluate Energy there are now 76 companies covered in this report. Oil & Gas Prices Hannah Mumby +44 () hannahm@evaluategroup.com EvaluateEnergy Fashion Street London E1 6PX T: +44 () F: +44 () E: energyinfo@evaluategroup.com Oil Price in US$ Gas Price in US$ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr WTI Brent Henry Hub

2 1st Quarter 21 Review M&A Review M&A - Horizon Disaster Alters Focus of M&A Deals 21 started with a vibrant M&A market with $39 billion of global upstream deals announced during the first quarter of the year. The pace of deals shows no signs of faltering to date as total upstream deal value for Q2 1 has already matched the first quarter with much of the quarter still to play out. The M&A market has been reinforced by rising oil and gas prices and further recovery of the global economy, with no major shocks barring the recent European debt crisis. The largest upstream acquisition of Q1 1 was by BP who acquired a portfolio of assets from Devon which were weighted towards the deepwater of the Gulf of Mexico for $7 billion. This deal is still open and with the recent Deepwater Horizon explosion and subsequent major oil leak it is unclear whether BP will wish to complete the deal to add further deepwater assets in an area where they will be facing a huge amount of scrutiny and inevitable litigation. The fallout from the deepwater oil leak may also have a bearing on other deals, in particular Apache Corp s $3.9 bln acquisition of Mariner Energy announced in April 21. Investors are concerned that additional regulation and safety measures may push operating costs higher in the Gulf of Mexico or a prolonged suspension of drilling activities may occur. This will affect the bulk of Mariner Energy s assets and the apprehension of shareholders can be seen by a share price for Mariner Energy trading $5 below Apache Corp s offer. The largest deal of any segment during Q1 1 was by Williams Partners LP, who received the midstream and pipeline assets spun off by its general partner, Williams Companies to the value of $11.75 billion. The reorganization was to the benefit of the shareholders of Williams Companies, due to the tax benefits enjoyed by master limited companies in the US pipeline sector. In a similar deal El Paso Pipeline partners acquired US midstream and pipeline assets from their general partner El Paso Corp for $82 million. National Oil Companies within Asia continued to figure prominently in the top 2 deals with China securing additional foreign reserves in Argentina via CNOOC s acquisition of a 5% stake in Bridas Corp. A large portfolio of Coal Bed Methane assets were added closer to home in Australia via PetroChina s acquisition of Arrow Energy in tandem with Royal Dutch Shell. Korea Gas Corp added to South Korea s existing investment in unconventional Canadian resources with a C$565 million farm-in with Encana in the Horn River and Montney shale plays. Korea already have a large presence in unconventional oil in the country via KNOC s previous acquisitions of Harvest Energy and Black- Gold Oilsands. Chinese National Oil Companies in particular have dramatically increased the rate of their global asset grab in the past 14 months with $33 billion of upstream acquisitions. The scope of the assets acquired has spanned the world with countries including Angola, Argentina, Australia, Brazil, Canada, Iraq Kazakhstan, Nigeria and Turkmenistan and the type of assets targeted has included conventional resources, oil sands, coal bed methane and offshore deepwater assets. Top 2 Deals Announced in Q1 21 Rank Acquirer Target Company Target Country Target Business Segment Total Acquisition Cost () Cost per boe/d of Production Cost per boe of 1P Reserves 1 Williams Partners Williams Companies United States Midstream 11,75, BP Devon Energy Corp. Various E&P 7,, CONSOL Energy Inc Dominion Resources United States E&P 3,475, 145, Sistema Russneft Russia E&P 3,278,59 23, CNOOC Bridas Corporation Argentina E&P 3,1, 67, Sinopec Sonangol Sinopec International Limited Angola E&P 2,457, 33, Total Chesapeake United States E&P 2,25, 77, Royal Dutch Shell Arrow Energy Australia E&P 1,584,31 365,41-9 PetroChina Arrow Energy Australia E&P 1,584,31 365,41-1 Tullow Oil Heritage Oil Plc Uganda E&P 1,35, BP Value Creation Inc. Canada E&P 9, Publigaz SA Fluxys Belgium Midstream 848, Mitsui & Co Anadarko United States E&P 84, El Paso Pipeline Partners El Paso Corp United States Midstream 82, CCMP Capital Advisors, LLC Chaparral Energy United States E&P 814,584 38, SteelRiver Infrastructure Partners Dominion Peoples United States Midstream 78, ENI PDVSA Venezuela E&P 646, Devon Energy Corp. BP Canada E&P 65, Mitsui Oil Exploration Co, Ltd Anadarko United States E&P 56, Korea Gas Corporation EnCana Corporation Canada E&P 556, Evaluate Energy Ltd Date: 8th June 21

3 1st Quarter 21 Review 21 Shale Gas Deal Focus The North American shale gas sector has emerged as the major M&A trend of the year so far with $14 billion worth of deals. This dwarfs the $3 billion of pure shale deals conducted in 29 although this excludes ExxonMobil s $41 bln acquisition of XTO Energy who have a large portfolio of shale assets. The unconventional US gas sector had been an area that was largely ignored by the majors, who left the relatively high risk projects to the smaller players. Over the past few years the technology and techniques needed to release gas trapped in shale economically has been honed and a large queue of companies wishing to jump into the increasingly prosperous sector has emerged and not even suppressed natural gas prices has been able to hold them back. Shale Gas Deals by Value 21 Marcellus Barnett Montney Haynesville-Bossier Eagle Ford Antrim Woodford Collingwood Many of the deals have been advantageous to both parties with many smaller cap companies holding large areas of shale acreage but lacking the resources to fully capitalise on their portfolios in the short to medium term. There is also the added caveat that lease terms can often specify that drilling has to commence within a certain timeframe or the land will be forfeited. This has made farm ins a popular entry route where the acquirer pays all of its own costs relating to their interest in the project but also a portion of the target companies costs as a free carry. This has been the case in two of the largest shale deals during 21 with Total farming into 67,5 acres of Chesapeake s Barnett shale acreage and Reliance Industries farming into 12, acres in Atlas Energy s Marcellus shale holdings. Chesapeake and Atlas Energy were both highly geared prior to the farm-ins with Chesapeake in particular under pressure from shareholders not to increase their debt an further. The largest shale gas acquisition of the year was by Royal Dutch Shell, who entered a deal to acquire East Resources, Inc, a company active in the Marcellus shale for $4.7 billion. The acquisi tion by Shell adds to similar recent entries by ExxonMobil, Total and BP and leaves Chevron as the only super major left not to make a sizeable acquisition. Chevron have however joined a number of North American companies to acquire a small concession in Europe with shale potential. The Barnett and Haynesville plays in Texas and Louisiana led the way for the shale gas sector with the majority of acquisitions and technology development in It is now the far larger Marcellus shale in the Appalachian basin that has been dominating 21 with $1.3 billion of deals, representing 71% of total shale gas deal value so far in 21. The most recent US shale play to show potential is the Collingwood play located in Michigan due to a successful production test by Encana. Encana accumulated their holdings in the area at an average cost of $15 per acre but following the news of the flow of gas from the test well, the average price shot up to $1,5 per acre and led to a record $178 million land sale for Michigan in May 21. Top 2 Shale Gas Deals of 21 Rank Acquirer Target Company Total Acquisition Cost () Target Play Cost per boe of 1P Reserves Cost per boe/d of Production Undeveloped Land - Net Acres 1 Royal Dutch Shell East Resources, Inc 4,7, Marcellus - 47, - 2 Total Chesapeake 2,25, Barnett ,143-3 Reliance Industries Limited Atlas Energy Inc 1,7, Marcellus BG Group EXCO Resources 985,2 Marcellus ,783-5 Mitsui & Co Anadarko 84, Marcellus Mitsui Oil Exploration Co, Ltd Anadarko 56, Marcellus Williams Companies Alta Resources LLC 51, Marcellus , 8 Talisman Energy Common Resources, L.L.C 359, Eagle Ford - 179,5-9 Linn Energy HighMount Exploration & Production LLC 33, Antrim , - 1 EQT Corp Unspecified 28, Marcellus Statoil ASA Chesapeake 253, Marcellus , 12 BG Group Common Resources, L.L.C 22,8 Haynesville ,4 14,6 13 EXCO Resources Common Resources, L.L.C 22,8 Haynesville ,4 14,6 14 Atlas Energy Inc Unspecified 115,142 Marcellus ,46 15 NextEra Energy Resources PetroQuest Energy, Inc. 114, Woodford Chesapeake Energy Corp. Epsilon Energy Ltd 1, Marcellus - 12, 5,75 17 Williams Companies Unspecified 84, Marcellus Reliance Industries Limited Unspecified 76,761 Marcellus , Hess Corp Toreador Resources Corporation 75, n/a Norse Energy Corporation Strategic Petroleum Investment Consultants Enterprise Inc, Paris Oil & Gas Corporation and Eleon Operators LLC 65,996 Barnett - 19, Evaluate Energy Ltd Date: 8th June 21

4 1st Quarter 21 Review Financials Net Income Doubles Quarter-on-Quarter Net income for the Evaluate Energy group of oil and gas companies moved closer to pre credit crunch levels as Q1 1 normalised net income for the group to reach its highest level since Q3 8. With oil prices 8% higher in Q1 1 than Q1 9, normalised net income doubled quarter-on-quarter and moved 56% higher than the Q4 9 performance. Net income on a reported basis increased by just under 4% quarter-on-quarter. Reported and normalised net income differed greatly in Q1 9 due to a large amount of asset and goodwill impairments on the back of low commodity prices. Despite the improvement and highly positive quarter-onquarter increases, net income in Q1 1 is still just half the $11 billion dollars that the group made in Q3 8. 7, 6, 5, 4, 3, 2, 1, Total Group Net Income Net income (Unadjusted) Net Income (Normalised) Cash Flow Funnels into Debt Reduction Cash flow from operating activities in Q1 1 increased by 2% quarter-on-quarter and by 13% since Q4 9. As cash flows have been increasing the group has been paying off debt which spiked following the depressed market conditions following the fallout of the credit crunch. The inclusion of smaller cap companies in Evaluate Energy s expanded coverage has made the movement more pronounced with two companies in particular, EXCO Resources and Brigham Exploration, decreasing their debt levels from levels ten times greater than equity in Q1 9 to be less than their total equity in Q1 1. ExxonMobil and Occidental continue to be the only companies with a sub 1% debt-to-equity level. 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Group Total 46.5% 46.% 45.5% 45.% 44.5% 44.% 43.5% 43.% 42.5% Debt/Equity % Operating Cash Flow Weighted Average Debt/Equity Trends in Net Income & Cash Flow Net Income ($mln) % Chg % Chg Operating Cash Flow ($mln) % Chg % Chg Company st Qtr 4th Qtr 1st Qtr vs Q1 9 vs Q4 9 1st Qtr 4th Qtr 1st Qtr vs Q1 9 vs Q4 9 Anadarko Petroleum NM 213% % 2% Apache Corp NM 21% % -25% BG Group % 26% % 11% BP % 42% % 6% Canadian Natural Resources % 93% % -9% Cenovus Energy Inc % 1641% % -6% Chesapeake Energy Corp NM NM % -3% Chevron % 48% % 7% ConocoPhillips % 63% % -4% Devon Energy Corp NM 79% % 3% EnCana % 132% NM NM ENI % 428% 739 n/a % NM EOG Resources % -71% % -25% ExxonMobil % 4% % 53% Gazprom Neft % 14% % -17% Hess Corp NM 5% % -35% Marathon % 29% % -64% Murphy Oil % -53% % 22% Nexen % -28% % 54% Noble Energy NM 2863% % 13% Novatek % 19% % 3% Occidental % 13% % 12% OMV % 211% % 73% PetroChina % 48% % 7% Petrobras (USGAAP) % -16% % -2% Repsol-YPF % 23% % 9% Rosneft % 45% % -25% Royal Dutch Shell % 18% % -16% Southwestern Energy Co NM 9% % 13% Statoil ASA % 49% % 1% Suncor NM 59% % -82% Talisman Energy % NM % 83% Total % 17% % 158% Valero Energy NM NM % NM William s Companies NM NM % -24% XTO % -39% % 72% Sub $1 bln Market Cap Group NM 652% % 14% Group Total % 56% % 13% 21 Evaluate Energy Ltd Date: 8th June 21

5 1st Quarter 21 Review Segmentals Upstream: Earnings Still Rising Upstream earnings for the group continued to progress in Q1 1 with a 14% rise on Q4 9 levels and an 98% rise on Q1 9 performance. Oil prices which have moved erratically from quarter to quarter since 26 have shown some stability since the latter half 29 with an average Q1 1 WTI price per barrel of $78.61, which is only slightly up from Q4 9 but 84% greater than Q1 9. Gas prices have also improved modestly since Q4 9 and Q1 9, helping the gas weighted companies such as Chesapeake and Williams. Gas prices as per the Henry Hub benchmark have risen less dramatically than oil prices, in part due to the amount of extra gas on the North American market coming from ramped up shale gas projects. 45, 4, 35, 3, 25, 2, 15, 1, 5, Total Group Upstream Earnings Total Adjusted Pre-tax Upstream Earnings Total Adjusted Post-tax Upstream Earnings Downstream: Earnings Squeeze Prompts Plant Closures Refining and marketing earnings bounced back from a poor Q4 9 performance but were down 35% on Q1 9 levels. As refinery margins look unlikely to substantially improve in the medium term, many companies in the group have been improving their downstream earnings by streamlining businesses in line with the decrease in global demand. With the poor market conditions streamlining via disposals have been a tough sell which has prompted companies such as Valero, Sunoco and Total to close down certain refining operations. Others are likely to follow if conditions remain, with Shell recently announcing (due to lack of buyer interest) they will be converting their Montreal refinery into a storage facility. 7, 6, 5, 4, 3, 2, 1, Total Group Downstream Total Adjusted Pre-tax Downstream/Midstream Earnings Total Adjusted Post-tax Downstream/Midstream Earnings Trends in Upstream & Downstream Earnings Upstream ($mln) % Chg Refining & Marketing ($ m ln) % Chg Tax Notes Company Reporting 1st Qtr 1st Qtr vs Q1 9 1st Qtr 1st Qtr vs Q1 9 Status Anadarko Petroleum NM n/a n/a NM Pre Re cord quarterly sales volum es, im proved m argins Apache Corp % n/a n/a NM Pre Record production BG Group % n/a n/a NM Pre Lower gas price offset by higher production and liquids prices BP % % Pre Higher realisations Canadian Natural Resources % n/a n/a NM Pre Cenovus Energy Inc % 8-54 NM Pre Higher realisations Chesapeake Energy Corp % n/a n/a NM Pre Lower downstream sales and margins Chevron % % Post Low refinery utilisation, refinery shutdowns ConocoPhillips % % Post Higher realisations Devon Energy Corp % n/a n/a NM Pre EnCana % % Pre Cenovus spun off in late 29 ENI % % Pre Higher upstream production and realisations EOG Resources % n/a n/a NM Pre Lower gains from hedging ExxonM obil % % Post Lower downstream sales and realisations Gazprom Neft % % Pre Higher upstream production and realisations Hess Corp NM % Post Higher liquids realisations Marathon % NM Post Higher realisations Murphy Oil % 11-3 NM Post Higher realisations Nexen % NM Pre Higher realisations Noble Energy % n/a n/a NM Pre Higher realisations Novatek -53 NM n/a n/a N M Pre Occidental % n/a n/a NM Pre OMV % NM Pre Higher realisations Petrobras (USGAAP) % % Post Lower natural gas realisations Repsol-YPF % % Pre Rosneft % n/a n/a NM Pre Higher production and oil realisations Royal Dutch Shell % % Post Increased sales and realisations Southwestern Energy Co % n/a n/a NM Pre Statoil ASA % % Pre Suncor NM % Pre Merged with Petro-Canada in Q3 9 Talisman Energy % n/a n/a NM Pre Higher upstream realisations, lower refinery utilisation Total % % Post Valero Energy n/a n/a NM NM Pre William s Companies % n/a n/a NM Pre XTO % n/a n/a NM Pre Lower gas realisations Sub $1 bln Market Cap Group % n/a n/a NM Group Total % % Please note the total sums pre and post tax earnings 21 Evaluate Energy Ltd Date: 8th June 21

6 1st Quarter 21 Review Financial Analysis Return on Capital Still Rising ROACE (post tax, post non-recurring items) on an annualised basis increased by three percentage points since Q4 9 and doubled compared to Q1 9. Due to the majority of earnings for the group emanating from the upstream segment and weighted towards oil, the improvement in the ROACE for the group is in line with the recovery in the oil price since the start of 29. Improving gas prices have also contributed with two consecutive quarterly increases in the price as per the Henry Hub benchmark. ExxonMobil led their peers during the quarter with a pre tax annualised ROACE of 39.7% whilst Valero Energy was the only company with a negative ROACE due to the troubled US downstream sector. ROACE % 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Group Total Return on Average Capital Employed 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Capital Expenditure Marks Time Capital spending decreased by 3% quarter-on-quarter and by 16% since Q4 9. The drop in capex was larger for the sub $1 bln peer group with their relatively lower asset bases making external financing on attractive terms more unlikely than the larger cap companies. Upstream capex may pick up in the remaining quarters of 21 with commodity prices showing stability around the $75 per barrel mark and predicted to rise further barring anymore supply or demand shocks. Petrobras showed the biggest increase in capital spending quarter on quarter as they spent US$3.4 bln than Q1 9. In March 21 Petrobras announced an expansive capital spending program which at US$44 bln is 26% higher than in 29. Total Capex 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Upstream Refining and Marketing Midstream & Power Chemicals Other Trends in ROACE & Capex RO ACE CAPEX ($mln) Company st Q tr 29 1st Q tr 21 1st Q tr 4th Qtr 1st Q tr E& P R & M O ther Total E& P R &M Other Total Anadarko Petroleum -4% 3% 12% 17 n/a n/a n/a n/a 1188 Apache C orp. 9% 22% 25% 993 n/a n/a n/a n/a 111 BG G roup 33% 27% 31% 1675 n/a n/a 2 15 BP 13% 2% 26% Canadian N atural R esou 5% 12% 15% 11 n/a n/a Cenovus Energy Inc. n/a 11% n/a Chesapeake Energy C or 12% 1% 2% 214 n/a n/a n/a n/a 1299 Chevron 14% 23% 3% ConocoPhillips 1% 14% 2% Devon Energy Corp. 3% 13% 2% 1543 n/a n/a n/a n/a 1573 EnCana 18% 8% 26% n/a EN I 19% 22% 26% EO G Resources % 7% 1% 823 n/a n/a ExxonM obil 25% 32% 4% Gazprom N eft 14% 22% 18% n/a n/a 568 Hess Corp 4% 2% 23% n/a n/a 788 Marathon 8% 13% 13% n/a 1178 Murphy O il 7% 26% 17% Nexen 7% 17% 12% Noble Energy % 14% 1% 342 n/a n/a Novatek 17% 32% 33% 11 n/a n/a 3 21 Occidental 1% 23% 24% 911 n/a n/a OMV 7% 14% 2% PetroC hina 11% 14% 16% n/a n/a n/a n/a n/a n/a n/a n/a Petrobras (U SGAAP) 17% 19% 2% Repsol-YPF 8% 9% 14% Rosneft 1% 17% 19% Royal D utch Shell 13% 8% 21% Southw estern Energy Co 3% 32% 36% 45 n/a n/a Statoil ASA 48% 49% 54% Suncor -1% 5% 6% Talisman Energy -4% 2% 12% 944 n/a n/a n/a n/a 93 Total 19% 2% 24% Va lero E nergy 1% -3 % % n/a 7 35 n/a 7 35 n/a 38 2 n/a 38 2 W illiam s C om panies 1% 1% 12% 444 n/a n/a XTO 18% 14% 9% 1379 n/a n/a n/a n/a 82 Sub $1 bln Market Cap 4% 9% 12% G roup Total Evaluate Energy Ltd Date: 8th June 21

7 1st Quarter 21 Review Upstream Operating Oil Production Holds its Own Crude oil and NGL production increased by 3% quarter-onquarter and stayed in line with Q4 9 levels. Notable increases in production came from Canadian Natural resources and Chevron with the latter increasing quarter-on-quarter production by 17, b/d mainly from two projects, the Tahiti field and the Blind Faith field in the Gulf of Mexico. Canadian Natural Resources have been ramping up production from their Horizon Oil sands project in Canada which added 83, b/d of gross production quarter-on-quarter and will produce 11, b/d when it reaches full capacity. Adversely affecting the results were lower output from production sharing agreements, typically a part of the portfolio of the majors, being negatively affected by the increase in the oil price. () b/d Group Oil/NGL Production 3, 25, 2, 15, 1, 5, US Canada South America Europe Africa Middle East Asia Pacific Rest of World Gas Production Sees Organic Growth Reported natural gas production increased by 5% quarteron-quarter and stayed in line with Q4 9 levels. The majority of the increase in gas production was organic for the group with new fields coming on line and production ramp ups being implemented. Another common contributing factor was the increase in demand. Gas production is typically higher in the first quarter of the year in response to winter demand but with the change quarter-on-quarter due to improved largely improved economic conditions since Q1 9. Significant organic increases in gas production quarter-on-quarter came from Southwestern Energy and Murphy oil with an increase from the Fayettville shale play for Southwestern and an increase in Malaysian production for Murphy. (mmcf/d) Group Gas Production 12, 1, 8, 6, 4, 2, US Canada South America Europe Africa Middle East Asia Pacific Rest of World Trends in Oil & Gas Production Oil Production b/d % Chg Gas Production mm cf/d % Chg Notes Company st Qtr 1st Qtr vs Q1 9 1st Qtr 1st Qtr vs Q1 9 Anadarko Petroleum % % Record quarter for sales volumes Apache Corp % % First production from two Australian oil developments BHP Billiton % % Company has June year-end. BG Group % % Ramp up of Tunisian production BP % % Canadian Natural Resources % % Production increases from Horizon Oil Sands Cenovus Energy Inc % % Chesapeake Energy Corp % % Che vron % % Production ramp ups mainly in the U S ConocoPhillips % % Field declines Devon Energy Corp % % En Ca na % % Production impacted by divestments EN I % % Production ramp ups in Nigeria, Congo and the U S EO G Re sou rces % % Production growth in the Bakken and Fort W orth basins ExxonM obil % % Project ramp ups in Qatar and higher demand in Europe Gazprom N eft % % Hess Corp % % Marathon % % Turnaround of production facilities in Equatorial Guinea Murphy Oil % % M ostly attr ibu table to the r amp up of K ikeh, M alaysia Nexen % % Noble Energy % % Novatek % % Increased domestic demand Occidental % % Ramp up in production in Bahrain OMV % % PetroChina % % Petrobras (USGAAP) % % Repsol-YPF % % Increase in oil production came from the Shenzi field in the Gulf of Mexico Rosneft % % Royal Dutch Shell % % Ramp ups in Russia and Brazil Southwestern Energy Co. 1 35% % Increased production from Fayetteville Shale play Statoil ASA % % Suncor % % Com pleted acquisition of P etro-cana da in Q 3 9 Talisman Energy % % Total % % Va lero Energy n/a n/a NM n /a n /a N M W illiam s C om panies n/a n/a NM % XTO % % Sub $1 bln Market Cap Group % % Group Total % % 21 Evaluate Energy Ltd Date: 8th June 21

8 1st Quarter 21 Review Downstream Operating Product Sales for Majors Feel the Economic Pressure Refined product sales decreased by 1% in Q1 1 compared to Q4 9 and Q1 9. Although downstream earnings showed improvements since Q4 9, this is more to do with increased cost efficiencies than there being a significant improvement on the demand side in the markets in which the Evaluate Energy group of companies operate. The International Energy Agency has reported a gradual increase in forecast global demand for oil products. It is the shift in this demand away form the traditional markets for the group in the United States and Western Europe towards the National Oil Companydominated regions such as China and India, that has led to the sales performance for the group being out of sync to the global trend. () b/d 45, 4, 35, 3, 25, 2, 15, 1, 5, Product Sales US Canada South America Europe Asia Pacific Rest of World Refinery Runs Fall as Plants Close Refinery runs for the group stayed in line since Q4 9 and decreased by 3% since Q1 9. The decrease in refinery runs quarter-on-quarter is directly attributable to the refineries that have been closed down or sold to companies outside of the group since Q1 9 due to the currently poor economics of the segment. The rate of refinery runs is likely to fall further over the next couple of quarters with Sunoco closing their 145 kbd refinery in New Jersey-Eagle Point refinery in February and Shell making the decision to convert their 13 kbd Montreal refinery into a storage and distribution terminal. () b/d 3, 25, 2, 15, 1, 5, Refinery Runs 11,772 12,26 12,74 11,84 11,258 US Europe Rest of World Trends in Product Sales & Refinery Runs Oil Product Sales b/d % Chg % Chg Refinery Runs b/d % Chg % Chg Company st Q tr 4th Qtr 1st Qtr vs Q 1 9 vs Q 4 9 1st Qtr 4th Q tr 1st Q tr vs Q1 9 vs Q4 9 An adark o P e trole um n/a n /a n/a NM N M n /a n/a n/a N M N M Ap ach e C orp. n/a n /a n/a NM N M n /a n/a n/a N M N M BH P B illiton n/a n /a n/a NM N M n /a n/a n/a N M N M BG G roup n/a n /a n/a NM N M n /a n/a n/a N M N M BP % 2% % 5% Can adian N atu ral R es ourc es n/a n/a n/a NM NM n/a n/a n/a NM NM Cen ovus E ne rgy In c. n/a n /a n/a NM N M n /a n/a n/a N M N M Che sap eak e E ne rgy C orp. n/a n /a n/a NM N M n /a n/a n/a N M N M Chevron % -3% % 3% ConocoPhillips % -4% % 1% Devon Energy Corp. n/a n/a n/a NM NM n/a n/a n/a NM NM EnCana 211 n/a n/a NM NM 199 n/a n/a NM NM ENI % -8% % -3% EO G Re sou rces n/a n /a n/a NM N M n /a n/a n/a N M N M ExxonM obil % -5% % -4% Gazprom Neft % -8% % 1% Hess Corp % 4% % -1% Marathon % -7% % % Murphy O il % -13% % -31% Nex en n/a n /a n/a NM N M n /a n/a n/a N M N M Noble Energy n/a n/a n/a NM NM n/a n/a n/a NM NM Nov atek n/a n /a n/a NM N M n /a n/a n/a N M N M O c cid enta l n/a n /a n/a NM N M n /a n/a n/a N M N M OMV % 3% % -4% PetroChina 1364 n/a % NM % -1% Petrobras (USGAAP) % 25% n/a n/a n/a NM NM Repsol-YPF % -2% % 2% Rosneft % 8% n/a n/a n/a NM NM Royal Dutch Shell % -2% % % Southwestern Energy Co. n/a n/a n/a NM NM n/a n/a n/a NM NM Statoil ASA n/a n/a n/a NM NM n/a n/a n/a NM NM Suncor % -2% % 5% T alis m a n E nerg y n/a n /a n/a NM N M n /a n/a n/a N M N M Total % -1% % -3% Valero Energy n/a n/a n/a NM NM % 13% W illiam s C om panies n/a n /a n/a NM N M n /a n/a n/a N M N M X T O n/a n /a n/a NM N M n /a n/a n/a N M N M Sub $1 bln Market Cap G ro % -1% % -14% G roup Total % -1% % % 21 Evaluate Energy Ltd Date: 8th June 21