Unaudited Full-Year 2013 Financial Statements Announcement

Transcription

1 KRISENERGY LTD Company Registration No: (Incorporated in the Cayman Islands) Unaudited Full-Year 2013 Financial Statements Announcement 28 February 2014 KrisEnergy Ltd. s IPO was sponsored by CLSA Singapore Pte Ltd and Merrill Lynch (Singapore) Pte. Ltd. (the Joint Issue Managers, Global Coordinators, Bookrunners and Underwriters ) as joint issue managers, global coordinators, bookrunners and underwriters of the Offering. The Joint Issue Managers, Global Coordinators, Bookrunners and Underwriters assume no responsibility for the contents of this announcement.

2 The following announcement may contain forward-looking statements by KrisEnergy Ltd. (our Company ) relating to financial trends for future periods. Some of the statements in this presentation which are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. These forward-looking statements are based on our Company s current views, intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks and uncertainties. Because actual results could differ materially from our Company s current views, intentions, plans, expectations, assumptions and beliefs about the future, such forward-looking statements are not and should not be construed as a representation, forecast or projection of future performance of our Company. It should be noted that our actual performance may vary significantly from such statements. No undue reliance should be placed on these forward-looking statements and our Company does not undertake to revise forward-looking statements to reflect future events or circumstances. 2

3 Chief Executive Officer s Report to Shareholders To Our Shareholders, Our vision in 2009 when we established KrisEnergy was to build a sustainable upstream E&P company with a diverse portfolio of assets in core Asian basins and spanning the entire upstream life cycle from exploration to appraisal, development and production. In 2013, we continued to progress towards this vision, ending the year with two important additions to our asset base and a stronger capital structure to fund our growth aspirations going forward. At the start of 2014, we are producing above 7,000 barrels of oil equivalent per day ( boepd ) from two oil and gas fields in the Gulf of Thailand and the Bangora onshore gas field in Bangladesh. We completed the transaction for the Bangladesh asset in December 2013, which brought our average working interest production in the fourth quarter to 4,192 boepd. Going forward, as the Bangora gas field is now fully consolidated into our operations, we expect our working interest production to average above 7,000 boepd for this year. We have six contract areas under development, which we expect to begin to add to our cash flow and hence EBITDAX from 2015, and we have a series of appraisal and exploration targets that we plan to test near term and add to our development portfolio. Our initial public offering ( IPO ) in Singapore in July 2013 was significant in cementing our foundations as an independent, Asian exploration and production ( E&P ) company. Since our debut, we have worked hard to meet the investor community to communicate our strategy. The upstream industry inherently carries risk in all phases of the E&P value chain and it is important that shareholders understand those risks and how we take measures to mitigate them. Smooth execution and success in Indonesia We saw in 2013 that it is not always possible to plan for all eventualities. The typhoon season was particularly hard in the third quarter, which caused widespread destruction in Southeast Asia and resulted in severe delays in our exploration drilling in Vietnam. However, our two-well program as an operator in Indonesia in the first half of the year was executed smoothly and successfully. An appraisal well in the Lengo gas discovery resulted in a 58% uplift in our best estimate contingent resources ( 2C see the section entitled Financial and Operations Updates Full-Year 2013 Financial Update for a definition of 2C and 2P ) in the Bulu production sharing contract ( PSC ) to million of barrels of oil equivalent ( mmboe ). Our team in Jakarta is working on the plan of development for the Lengo field and is in discussions over the gas sales agreement. Directly after Bulu drilling, the Tayum exploration well in the Kutai PSC encountered gas and derisked the three gas discoveries in the block as a development project. We plan to drill an appraisal well in the Kutai area in 2014 prior to submitting the plan of development. Our two non-operated exploration wells offshore Vietnam, whilst both intersected hydrocarbon columns, did not discover commercial volumes, highlighting the risk of drilling in 3

4 unexplored territories and confirming the validity of our strategy of risk mitigation through diversification. Our thesis is to drill a combination of low and high risk prospects each year to achieve modest reserves growth as a minimum with the potential to make a step change in our resource base if a high-impact well is successful. Expanding to new horizons The accumulative years of experience of our teams of geoscientists, engineers and operations specialists, their knowledge base and their ability to think out of the box is at the heart of the company. We were delighted to welcome our new colleagues in Bangladesh into the KrisEnergy network following the completion of a corporate acquisition in December We plan to expand our technical team in Dhaka as we grow our portfolio in Bangladesh. We are also boosting our technical capabilities in Jakarta and Thailand to support our exploration and appraisal work programs and development activities. Our IPO in July 2013 strengthened our capital structure and will allow us greater flexibility with our financing strategy going forward. At the end of January 2014, we redeemed the US$120 million senior guaranteed secured bonds due 2016 and we are currently progressing plans to put in place suitable debt instruments at attractive terms which we believe will further support our capital growth. It is important that we have flexibility in our capital structure to ensure we are fully funded for our activities on the existing portfolio and can act decisively when new venture opportunities arise. Vigilance on EHSS and costs For 2014, we expect to keep up the pace of the last few years and we have a robust work program planned. We will execute and deliver on the six development projects we have in hand. We will step up our operated exploration and appraisal drilling and we will continue to seek opportunities both for organic growth and for a step change. All these activities will require constant vigilance on environment, health, safety and security ( EHSS ) and costs. We are committed to EHSS first and foremost and are implementing monitoring processes to meet or exceed international standards in our operations. We also closely track costs and look for ways to manage any escalation without risk to our EHSS standards. At the same time, we are working with the communities and government authorities in the locations where we are operationally active. Our team in Jakarta has made remarkable progress in reaching out to the communities within the Udan Emas PSC onshore West Papua. This is an extremely remote area and our planned 2D seismic acquisition program will cross numerous villages. Our efforts to communicate each step of our plans have been rewarded with the support of the villages and government officials and we will continue this open dialogue throughout the program. 4

5 KrisEnergy is making great strides across all elements of its business. We believe in our strategy, our people and our assets. We are well positioned geographically in Asia, where energy demand is rising at one of the fastest rates in the world. We have built a strong platform for growth and we have the expertise to create opportunities and to execute on those opportunities. For and on behalf of the Board of Directors Keith Cameron, Chief Executive Officer 28 February

6 Financial and Operations Update We are an independent upstream oil and gas company focused on the exploration, development and production of oil and gas in Asia. Since establishment, we have laid the foundations for our growth ahead and have assembled a diverse portfolio of 17 contract areas (one of which is pending final approval from the host Government), eight of which we operate, in Asia across the exploration and production ( E&P ) lifecycle, balancing cash flow from operations with significant exploration and development potential. Today, we are pleased to present our unaudited full-year financial statements, which reflect our financial and operating results for the year ended 31 December 2013 (our Results or FY2013 ). References made to the Company pertain to KrisEnergy Ltd. and references made to the Group pertain to the Company and its subsidiaries. Financial For the year ended 31 December % Change (US$ thousands, except where otherwise indicated) Sale of crude oil & liquids 54, ,404.4 (18.9) Sale of gas 14, ,188.2 (35.2) Revenue 69, ,592.6 (22.9) EBITDAX (1,2) 27, ,605.0 (41.2) Capital expenditures 79, , Cash and bank balances 247, , Operations (2) Production volumes (boepd) 2,916 (3) 3,384 (13.8) Sales volumes (boepd) 2,801 (3) 3,264 (14.2) Average sales price Oil and liquids (US$/bbl) (4.2) Gas (US$/mcf) (24.6) Average lifting costs (US$/boe) Notes: The financial statements for the year ended 31 December 2012 are audited, while the financial statements for the year ended 31 December 2013 are unaudited. (1) Earnings before interest, taxation, depreciation, amortisation, geological and geophysical expenses and exploration expenses ( EBITDAX ) (2) Non-IFRS measures (3) Includes one month of production volumes from Block 9 onshore Bangladesh. Taking into account the effective date of our acquisition of Tullow Bangladesh Ltd, our pro forma working interest production averaged 7,075 boepd during FY2013 6

7 Full-Year 2013 Financial Update In 2013, we optimised our financial capabilities and the following outlines certain of our key financial highlights: Since completion of our acquisition of Tullow Bangladesh Limited ( Tullow Bangladesh ) on 17 December 2013, we have successfully integrated the Bangladesh operations into KrisEnergy s growing diverse and balanced portfolio. On a pro forma basis (assuming the Tullow Bangladesh transaction was completed on the effective date, being 1 January 2013), our average working interest production for FY2013 would have been 7,075 boepd, revenue US$84.5 million and EBITDAX US$39.8 million. We recognised and consolidated Tullow Bangladesh from 17 December 2013, however, we had the benefit of Tullow Bangladesh s working capital from 1 January 2013 and production and hence revenue from production from 1 December Revenue and EBITDAX amounted to US$69.1 million and US$28.0 million, respectively in FY2013. Average sales price for oils and liquids were US$109.40/bbl during FY2013 (FY2012: US$114.19/bbl), while average sales price for gas was US$4.91/mcf during FY2013 (FY2012: US$6.51/mcf). Working interest production averaged 2,916 boepd for FY2013 (FY2012: 3,384 boepd), with production in the fourth quarter 2013 averaging 4,192 boepd (4Q2012: 2,977 boepd). The decline in production in FY2013 was partially in line with expectations due to the anticipated decline in production from the Kambuna gascondensate field as it approached the end of its economic life. Production at Kambuna ceased on 11 July 2013 and the operator has signed the termination agreement for the Glagah-Kambuna Technical Assistance Contract ( TAC ), however, full relinquishment is not expected until the collection of final value added taxes from the Government of Indonesia. Our share of production and hence revenue from B8/32 and B9A in the Gulf of Thailand declined in FY2013 primarily due to production disruptions, including unplanned shut downs, which were prolonged by bad weather. Cost of sales declined 17.3% during FY2013 compared with the year ended 31 December 2012 ( FY2012 ), which was primarily attributed to a 28.8% reduction in the Thai petroleum special remuneratory benefits and the royalties paid due to lower production from B8/32 and B9A, 14.4% decline in depreciation, depletion and amortisation charges as a result of a reversal of overprovisioning of abandonment costs for the Glagah-Kambuna TAC, and 14.0% decline in operating costs following the closure of the Kambuna field in Indonesia. We recorded a loss after tax during FY2013 of US$12.6 million, representing a 28.4% decrease from FY2012. We successfully completed the US$35.0 million Tap Issue of our senior guaranteed secured bonds due 2016 ( 2016 Notes ) on 31 May 2013, the subscription of which was over three times subscribed. On 2 May 2013, we also successfully increased the size of our revolving credit facility from US$30.0 million to US$42.5 million (

8 RCF ). The 2011 RCF remained undrawn as at 31 December See Recent Developments regarding the redemption of the 2016 Notes. On 19 July 2013, we listed all our existing shares and issued 246,154,000 new shares by way of an IPO on the Mainboard of Singapore Exchange Securities Trading Limited ( SGX-ST ) where we raised US$200.5 million (S$254.6 million) in net proceeds. As at 31 December 2013, our unused sources of liquidity amounted to US$290.3 million, including US$42.5 million from the 2011 RCF. On 30 December 2013, we issued a notice to bondholders and on 30 January 2014, we redeemed all of the 2016 Notes. Including accrued interest, the redemption of the 2016 Notes amounted to US$126.6 million. Apart from the economic benefit (both from an interest cost savings and net present value basis) the rationale to redeem the 2016 Notes was to release the Group from the encumbering security package in place in connection with the 2016 Notes. See Recent Developments regarding the redemption of the 2016 Notes. During FY2013, as we continued to grow our portfolio across the regional basins within Asia, our Exploration and Evaluation assets grew by 47.6% to US$200.3 million and our Oil and Gas properties increased 34.3% to US$140.6 million. Total equity rose 67.6% to US$466.8 million. As at 31 December 2013, our total debt to equity ratio was 25.5% and we retained a net cash position as at 31 December Our share of proved plus probable reserves ( 2P ) 1 increased 88.2% year-on-year ( YoY ) to mmboe and our share of 2C 1 increased 32.4% YoY to mmboe 2 during FY2013 As estimated by the independent third party qualified person, Netherland, Sewell & Associates, Inc. ( NSAI ). We believe there is no material change to our prospective resources. Please see the section titled Reserves and Contingent Resources Summary for a breakdown by asset. Full-Year 2013 Operational Update In line with our core strategy of building a sustainable upstream oil and gas company, we accomplished numerous and significant operational milestones during FY2013 as set out below: Acquisitions: In March 2013, we signed an agreement to acquire 30.0% working interest and operatorship of G6/48 in the Gulf of Thailand. The supplementary concession agreement was signed on 18 December 2013 and we are awaiting final Ministerial approval from the Thai Government. Upon completion, G6/48 will be our first operated 1 2P reserves refers to proved plus probable reserves and 2C resources refers to best estimate contingent resources, in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers. 2 Transaction for our G6/48 acquisition is pending host government approval 8

9 licence in the Gulf of Thailand where our management team has an established track record in oil-field development. On 8 April 2013, we signed a share purchase agreement to acquire Tullow Bangladesh from Tullow Oil plc which held the 30.0% working and operating interest in Block 9 onshore Bangladesh. The transaction was completed on 17 December 2013 and we are pleased that we have successfully integrated the Bangladesh operations into our Group. Portfolio Development: In February 2013, 948 km 2D seismic data was acquired in the East Seruway PSC, in which we hold a 100% working and operating interest. Following the interpretation of the seismic data, we anticipate drilling one exploration well in the second half In April and May 2013, we drilled the Lengo-2 appraisal well in the Bulu PSC, in which we hold a 42.5% working and operating interest, to delineate the Lengo gas discovery in order to demonstrate sufficient reserves to justify development. Lengo-2 was drilled to a total measured depth of 2,748 feet and encountered gas within the Kujung I reservoir formation. A drill stem test ( DST ) over an interval from 2,415 feet to 2,485 feet flowed 4.3 million cubic feet per day ( mmcfd ) with a flowing well head pressure ( FWHP ) of 587 psig. A second DST over the interval between 2,415 feet to 2,511 feet flowed 21 mmcfd with a FWHP of 487 psig with the flow rate limited by equipment. The development concept comprises an unmanned wellhead platform with four to five wells located at Lengo with a possible single well tie-back from the East Lengo gas discovery, 15 km away in the adjacent East Muriah PSC. Production is envisaged to commence in the second half of 2016 with gas evacuation to market via a 65-km pipeline directly to shore. According to our qualified person, NSAI, our working interest 2C resources associated with the Lengo gas discovery is 25.4 mmboe, a 58.1% increase versus FY2012. We are currently drafting the plan of development for submission to SKKMIGAS and we remain encouraged by our gas marketing efforts. At the Kutai PSC, in which we hold a 54.6% working and operating interest, the Tayum-1 exploration well reached a total depth of 11,095 feet measured depth ( MD ) on 30 June Preliminary well log evaluation indicated that the well encountered approximately 49 vertical feet of net gas pay from multiple sandstone intervals between 2,377 feet MD (-2,295 feet total vertical depth subsea ( TVDSS )) and 7,180 feet MD (-5,903 feet TVDSS) within the Miocene to Pliocene section, from which two gas samples were recovered. Two further gas samples were also recovered from what are interpreted to be shaly-sand gas pay intervals between 6,647 feet MD and 6,660 feet MD (-5,567 to -5,575 feet TVDSS) and 7,366 feet MD to 7,402 feet MD (- 6,023 feet TVDSS to -6,046 feet TVDSS). We are evaluating the results together with the data from two earlier gas discoveries, Dambus and Mangkok, and plan to drill an appraisal well in We commenced gas marketing in fourth quarter 2013 and we are encouraged with the negotiations we have had for buyers of the gas. On 11 August 2013, the Cua Lo-1 exploration well commenced drilling in Block /04 ( Block 105 ) offshore northern-central Vietnam. See Recent Developments regarding the completion of drilling of the Cua Lo-1 exploration well. 9

10 On 19 August 2013, together with Mubadala Petroleum, we agreed the final investment decision for the Nong Yao oil development in the G11/48 contract area. First oil is anticipated in the first half The production capacity will be up to 15,000 barrels of oil per day and 30,000 barrels of fluids per day. Also in August 2013, the M/V Voyager Explorer completed a 270 sq km 3D seismic acquisition program over the Rossukon oil discovery in the G6/48 contract area in the Gulf of Thailand. The data is being processed in Singapore and is expected to be ready for interpretation by the end of first quarter Our farm-in to the G6/48 licence and the transfer of operatorship to KrisEnergy is pending final approval by the Thai Government. Workover operations at the BA-02 and BA-05 development wells in the Bangora gas field in Block 9, Bangladesh, were completed in July and August 2013 respectively, and production increased to 110 mmcfd in late August from approximately 85 mmcfd during the workover period. The Phase Three project at the Bangora field, which includes increasing the efficiency of our operations and installation of a compression unit to maintain production at current levels, is progressing according to schedule. We commenced drilling of the Ca Ngu-1 well in Block 120 on 10 October On 31 December 2013, we announced that the well had reached a total depth of 1,290 metres MD, or -1,267 metres TVDSS. Wireline log data confirmed the presence of gas in Pliocene sandstone reservoirs and a 15.2 metre gross hydrocarbon column within the Miocene carbonate reservoir. The well encountered gas and oil volumes in the primary objective and confirmed the existence of a petroleum system in the area which provides valuable data to analyse for further exploration. The Ca Ngu-1 well tested one prospect, which is independent of the three other drillable prospects identified in Block 120. We participated in the drilling of 57 development wells in B8/32 during FY2013 (FY2012: 53 wells) and the operator, Chevron, put two new platforms on stream during FY2013. For recent developments since 31 December 2013, please see paragraph 10 of these Results entitled Recent Developments. Capital Expenditures Our capital expenditures are representative of our rigorous work programs and budgets that have been approved by the partners of the assets and the host governments of the countries in which we operate. For the year ended 31 December (US$ thousands) Capital expenditures: Exploration and appraisal expenditure 64, ,839.7 Development expenditure 14, ,421.1 Others Total capital expenditures 79, ,

11 Pursuant to our Prospectus dated 12 July 2013, under Management s Discussion and Analysis of Financial Condition and Results of Operations Capital Expenditures and Capital Investments Planned Capital Expenditures, we provided guidance of our intended capital expenditures for FY2013 and our financial year ending 31 December 2014 ( FY2014 ). For FY2013, we spent US$29.2 million less than planned which was primarily a result of the following principal factors: Although we elected to delay planned seismic acquisition programs within the East Muriah, Udan Emas and Tanjung Aru PSCs until 2014, which reduced the amount we spent on exploration activities in 2013, our expenditure on exploration and appraisal activities for FY2013 was 2.9% higher than our planned capital expenditure due to our working interest of costs incurred above the agreed farm-in drilling caps for each of Block 105 and Block 120, offshore Vietnam. Our expenditure on development activities for FY2013 was 68.7% lower than our planned capital expenditure primarily due to deferment of development capital expenditure in G11/48 as final investment decision was granted in August 2013; deferral of expenditure in G10/48 pending confirmation of final development concept; deferred spending in Block A in Cambodia on facilities and long-lead items as the operator continued to navigate the final negotiations on fiscal terms for the PSC; and although we participated in the drilling of 57 development wells in B8/32 and B9A, the actual number of wells drilled was lower than originally anticipated. Our planned capital expenditures for FY2014 are derived from our approved annual work programs and budgets for FY2014, our minimum future exploration commitments pursuant to the petroleum licences, which our Group is a party to, as well as management estimates. The following table sets out our updated planned capital expenditures for FY2014. For the year ending 31 December 2014 (US$ thousands) Development Capital Expenditure 70,277 Exploration Capital Expenditure (1) 125,848 Total capital expenditures 196,126 Note: (1) Includes expenditure relating to exploratory activities, regardless of whether it is likely to be expensed or capitalised. We intend to fund our planned capital expenditures, which are estimated at US$196.1 million for the full year 2014, from cash flows from operations, existing cash resources and new debt financing. Our activities and plans for FY2014 are in line with our strategy to continue to build a sustainable upstream oil and gas company in Asia. Our actual capital expenditures may differ significantly from the amounts set out above due to various factors, including but not limited to, our future cash flows, results of operations and financial condition, changes in the local economies in Bangladesh, Cambodia, Indonesia, 11

12 Thailand and Vietnam, in which we have a business presence, the availability of financing on terms acceptable to us, matters relating to possible construction/development delays, defects or cost overrun, delays in obtaining or receipt of governmental approval, acceleration or delays in our exploration and development programs, changes in the legislative and regulatory environment and other factors that are beyond our control. 12

13 Reserves and Contingent Resources Summary as estimated by NSAI as at 31 December 2013 Reserves 1P Reserves 2P Reserves 3P Reserves Gross Working Interest Gross Working Interest Gross Working Interest update (%) (MMbbl) (MMbbl) update (%) (MMbbl) (MMbbl) Oil (MMbbl) 1 (MMbbl) Thailand Block B8/32 and B9A (28) (10) (8) update (%) Block G11/ (10) (10) Estimated based on a 22.5% working interest 2. FID announced in August Bangladesh Block Our acquisition of Tullow Bangladesh completed on 17 December 2013 Indonesia Glagah Kambuna TAC - - (100) - - (100) - - (100) Ceased production on 11 July 2013 Remarks Gas (Bcf) 3 (Bcf) Thailand update (%) (Bcf) (Bcf) update (%) (Bcf) (Bcf) Block B8/32 and B9A , update (%) Remarks 1 MMbbl refers to millions of barrels 2 Our working interest 2P reserves for G11/48, a block under development currently, were reduced by 0.38 mmboe to 3.4 mmboe owing to NSAI taking into account the Thai requirement for a farm-out of a 10% gross working interest to a local Thai participant before the start of production 3 Bcf refers to billions of cubic feet 13

14 Reserves 1P Reserves 2P Reserves 3P Reserves Gross Working Interest Gross Working Interest Gross Working Interest Remarks Gas (Bcf) (Bcf) Bangladesh update (%) (Bcf) (Bcf) update (%) (Bcf) (Bcf) update (%) Block Our acquisition of Tullow Bangladesh completed on 17 December 2013 Indonesia Glagah Kambuna TAC - - (100) - - (100) - - (100) Ceased production on 11 July 2013 Remarks Our 2P annual reserves replacement for FY2013 was 1,523%, compared to 325% as at 31 December

15 Oil 1C Resources 2C Resources 3C Resources Gross Working Interest Gross Working Interest Gross Working Interest (MMbbl) (MMbbl) update (%) (MMbbl) (MMbbl) update (%) (MMbbl) (MMbbl) update (%) Thailand Block G10/ Block G11/ (10) (10) (10) Estimated based on a 22.5% working interest 1 Block G6/ Indonesia Kutai PSC Bangladesh Block Our acquisition of Tullow Bangladesh completed on 17 December 2013 Cambodia Block A Gas (Bcf) (Bcf) update (%) (Bcf) (Bcf) update (%) (Bcf) (Bcf) update (%) Thailand Block G11/ (10) (10) (10) Estimated based on a 22.5% working interest 1 Remarks Remarks 1 Our working interest 2P reserves for G11/48, a block under development currently, were reduced by 0.38 mmboe to 3.4 mmboe owing to NSAI taking into account the Thai requirement for a farm-out of a 10% gross working interest to a local Thai participant before the start of production. 2 Our acquisition of a 30% working interest in G6/48 is pending host government approval 15

16 1C Resources 2C Resources 3C Resources Gross Working Interest Gross Working Interest Gross Working Interest Gas (Bcf) (Bcf) update (%) (Bcf) (Bcf) update (%) (Bcf) (Bcf) update (%) Bangladesh Block Our acquisition of Tullow Bangladesh completed on 17 December 2013 Indonesia Bulu PSC Revised following completion of appraisal well drilling East Muriah PSC Kutai PSC Tanjung Aru PSC Source: All figures estimated by NSAI Name of Qualified Person: NSAI Date: 31 December 2013 Professional Society Affiliation/Membership: NSAI: Texas Board of Professional Engineers Registration No. F-2699 / Mr. Scott Frost: Licensed Professional Engineer in the States of Texas (No ) and Society of Petroleum Engineers / Mr. Allen Evans: Licensed Professional Geoscientist in the State of Texas, Geology (No. 1286) and American Association of Petroleum Geologists Remarks 16

17 Full Year 2013 Financial Statements Announcement Figures for the year ended 31 December 2013 have not been audited. PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL-YEAR RESULTS 1 (a)(i) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year For the year ended 31 December (unaudited) (audited) (US$ thousands) Sales of crude oil 54, ,404.4 Sales of gas 14, ,188.2 Revenue 69, ,592.6 Cost of sales: Operating costs (16,113.0) (18,741.8) Thai petroleum special remuneratory benefits and royalties paid (8,084.7) (11,349.5) Depreciation, depletion and amortisation (19,389.1) (22,638.0) Gross profit 25, ,863.3 Other income 16, ,865.3 General and administrative expenses (31,736.5) (24,294.9) Other operating income/(expense) 1,631.3 (2,028.8) Finance income 1, Finance costs (13,334.0) (11,970.7) Profit before tax Tax expense (12,758.6) (18,518.4) Loss after tax for the year (12,645.1) (17,672.9) Other comprehensive income: Items that may be classified subsequently to profit or loss Exchange differences on translation of foreign operations (79.6) (64.8) Total comprehensive income attributable to owners of the Company (12,724.7) (17,737.7) Loss per share attributable to owners of the Company (cents per share) (2.3) (36.0) Extraordinary items There were no extraordinary items during the period. 17

18 EBITDAX Computation For the year ended 31 December (unaudited) (US$ thousands) Profit before tax Add: Finance costs 13, ,970.7 Depreciation, depletion and amortisation 19, ,221.4 Option paid Excess of fair value of net assets acquired over consideration paid (12,936.3) - Gain on option settlement - (122.0) Net fair value of embedded derivative (2,284.7) (1,444.0) EBITDA 17, ,011.6 Geological and geophysical expense 9, ,538.6 Exploration expense ,054.8 EBITDAX 27, ,605.0 EBITDAX and EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with IFRS. EBITDAX and EBITDA are not measurements of financial performance or liquidity under IFRS and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities as a measure of liquidity. In addition, EBITDAX and EBITDA are not standardised terms, hence, a direct comparison between companies using such terms may not be possible. 1 (b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year As at 31 December The Group As at 31 December As at 31 December The Company As at 31 December (unaudited) (audited) (unaudited) (unaudited) (US$ thousands) ASSETS Non-current assets Exploration and evaluation assets 200, , Oil and gas properties 140, , Other property, plant and equipment Intangible assets 43, , Embedded derivatives 6, , Other investment Investment in subsidiaries , ,700.0 Other receivables , , , , ,

19 Current assets Inventories 7, , Trade and other receivables 54, , Prepayments 2, , Other current assets Cash and bank balances 251, , , , , , , ,671.0 Total Assets 707, , , ,371.0 EQUITY AND LIABILITIES Equity Ordinary shares 201, , , ,000.0 Share premium 402, , , ,750.0 Foreign currency translation reserve (1,299.7) (1,220.1) - - Other capital reserves Accumulated losses (136,641.3) (123,996.2) (1,481.4) (1,965.6) Total Equity 466, , , ,784.4 Non-current liabilities Loans and borrowings - 81, Deferred tax liabilities 41, , Provisions 23, , Other payables , , Current liabilities Trade and other payables 35, , Accrued operating expenses 13, , Loans and borrowings 119, Provisions - 2, Withholding tax payable Tax payable 5, , , , Total Liabilities 240, , Total Equity And Liabilities 707, , , , (b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand As at 31 December 2013 As at 31 December 2012 Secured Unsecured Secured Unsecured (US$ thousands) 127, , Amount repayable after one year As at 31 December 2013 As at 31 December 2012 Secured Unsecured Secured Unsecured (US$ thousands) ,

20 Details of any collateral As at 31 December 2013, certain subsidiaries of the Company pledged their assets with respect to the 2016 Notes and 2011 RCF. For further information, see our Prospectus in the section entitled Liquidity and Capital Resources Borrowings. Pursuant to the redemption of the 2016 Notes and the consequent termination of the 2011 RCF on 30 January 2014, the relevant security is being discharged. 1 (c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year The Group For the year ended 31 December (unaudited) (audited) (US$ thousands) Operating activities: Profit before tax Adjustments for: Depreciation, depletion and amortisation 20, ,638.0 Depreciation of property, plant and equipment Over provision of decommissioning liability (667.2) - Dry hole expenses - 1,283.3 Grant of equity-settled share options to employees Excess of fair value of net assets acquired over consideration paid (12,936.3) - Net fair value gain on embedded derivatives (2,284.7) (1,444.0) Finance cost 12, ,571.1 Unwinding of discount on decommissioning provisions Interest income (1,853.9) (411.3) Operating cash flows before changes in working capital 16, ,465.6 (Increase)/decrease in inventories (883.1) Increase in trade and other receivables (6,458.2) (6,341.6) Decrease in other current assets ,991.3 Increase/(decrease) in trade and other payables 23,896.4 (1,710.5) Cash flows from operations 33, ,268.5 Interest received 1, Interest paid (1,568.4) (1,821.5) Taxes paid (19,019.1) (20,155.9) Net cash flows from operating activities 14, ,702.4 Investing activities: Additions to exploration and evaluation assets (64,607.3) (16,839.7) Addition to oil and gas properties (14,342.3) (9,421.1) Acquisition of subsidiaries (41,396.1) - Purchase of investment securities - (182.1) Purchase of other plant and equipment (427.9) (253.0) Net cash flows used in investing activities (120,773.6) (26,695.9) Financing activities: Proceeds from issuance of bonds 36, Proceeds from issuance of shares 200, Payment of bond interest (9,445.6) (8,925.0) Proceeds from bank borrowing - 115,000.0 Decrease in amount due to holding company - (757.0) Decrease in restricted cash 4, Net cash flows from financing activities 231, ,

21 Net increase in cash and cash equivalents 125, ,324.5 Cash and cash equivalents at beginning of the period 121, ,659.7 Net effect of exchange rate changes (77.5) (83.2) Cash and cash equivalents at end of the period 247, ,901.0 As at 31 December 2013, we had aggregate cash and cash equivalents of US$247.8 million compared with US$121.9 million as at 31 December Net Cash Flow from Operating Activities Our net cash outflow from operating activities was US$15.0 million during the year ended 31 December We generated operating cash flow before changes in working capital of US$16.6 million, which was primarily adjusted for working capital changes such as increases in trade and other payables of US$23.9 million and lower estimated tax payable as revenue derived B8/32 and B9A was lower than FY2012. Net Cash Flow from Investing Activities Our net cash flow used in investing activities was US$120.8 million during the year ended 31 December 2013, mainly attributable to our share of well and drilling costs at the Bulu PSC and Kutai PSC of US$11.7 million and US$11.5 million, respectively, during the first half of the year, and at Block 105 and Block 120 of US$13.4 million and US$14.1 million, respectively during FY2013, drilling costs at both Block 105 and Block 120 have been capitalised. Our share of development drilling costs at B8/32 and B9A, and Block 9 amounted to US$12.1 million and US$1.6 million, respectively for the year ended 31 December Net Cash Flow from Financing Activities Our net cash flow generated from financing activities was US$231.8 million during the year ended 31 December 2013, mainly attributable to receipt of net proceeds of US$200.5 million (S$254.6 million) from our IPO on the SGX-ST, and a tap issue against the 2016 Notes amounting to US$36.8 million, offset by the payment of bond interest amounting to US$9.4 million. Borrowings Our borrowings consist of the 2016 Notes where the total liability as at 31 December 2013 was US$119.1 million. The 2011 RCF remained undrawn as at 31 December On 30 January 2014, our wholly owned subsidiary KrisEnergy Holding Company Limited ( KEHCL ) fully redeemed the outstanding 2016 Notes at % of the principal amount, being US$126.3 million, together with the total amount of accrued interest of US$0.3 million and as a consequence, terminated the 2011 RCF. Capital Expenditures and Capital Investments The following table shows our capital expenditures and capital investments for the year ended 31 December 2013 and Our exploration and development expenditures include, among others, exploration and appraisal well expenditures, geological and 21

22 geophysical activities, general and administrative costs, platform and facility costs, and pipeline and equipment expenditures. For the year ended 31 December (US$ thousands) Capital expenditures and capital investments: Exploration and appraisal expenditure 64, ,839.7 Development expenditure 14, ,421.1 Acquisition of subsidiaries 41, Others Total capital expenditures and capital investments 120, , (d)(i) A statement (for the issuer and group), showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year THE GROUP Share Capital Share Premium Other Capital Accumulated Reserve Losses (US$ thousands) Foreign Currency Translation Reserve Total Equity At 1 January , , (123,996.2) (1,220.1) 278,533.7 Loss net of tax (12,645.1) - (12,645.1) Other comprehensive income (79.6) (79.6) Total comprehensive income for the period (12,645.1) (79.6) (12,724.7) Share-based payment Shares issued 212, ,986.1 Share Issuance expense (12,490.1) (12,490.1) At 31 December , , (136,641.3) (1,299.7) 466,832.8 THE GROUP Share Capital Share Premium Accumulated Losses (US$ thousands) Foreign Currency Translation Reserve Total Equity At 1 January 2012 * - (106,323.3) (1,155.3) (107,478.6) Loss net of tax - - (17,672.9) - (17,672.9) Other comprehensive income (64.8) (64.8) Total comprehensive income for the period - - (17,672.9) (64.8) (17,737.7) Shares issued 1, , ,750.0 At 31 December , ,750.0 (123,996.2) (1,220.1) 278,533.7 Note: * Amount less than US$1,

23 THE COMPANY Share Capital Share Premium Other Capital Reserve Accumulated losses Total Equity (US$ thousands) At 1 January , , (1,965.6) 401,784.4 Profit net of tax Other comprehensive income Total comprehensive income for the period Investment in subsidiaries Share-based payment Share issued 212, ,986.1 Share issuance expense (12,490.1) (12,490.1) At 31 December , , (1,481.4) 603,352.1 THE COMPANY Share Capital Share Premium (US$ thousands) Accumulated losses Total Equity At 1 January 2012 * - (23.8) (23.8) Loss net of tax - - (1,941.8) (1,941.8) Other comprehensive income Total comprehensive income for the period - - (1,941.8) (1,941.8) Issue of shares 1, , ,750.0 At 31 December , ,750.0 (1,965.6) 401,784.4 Note: * Amount less than US$1, (d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as the end of the corresponding period of the immediately preceding financial year On 19 July 2013, we listed all our existing shares and issued 246,154,000 new shares by way of IPO on the SGX-ST, the issue price of each share was S$1.10. There were no outstanding options as at 31 December 2013 (31 December 2012: Nil). The Company did not hold any treasury shares. 23

24 The KrisEnergy performance share plan ( KrisEnergy PSP ) was implemented and adopted during our IPO. The duration of the KrisEnergy PSP is 10 years commencing from 10 July Since the commencement of the KrisEnergy PSP to 31 December 2013, awards comprising an aggregate of 5,429,689 shares in KrisEnergy Ltd ( Shares ) have been granted to our employees, including an aggregate of 963,624 to our Executive Directors. Further, under the management shareholders-awards ( MS-Awards ) (as defined in the Prospectus dated 12 July 2013) granted pursuant to the KrisEnergy PSP, up to 3% of the issued share capital of our Company may be vested upon the fulfillment of the conditions of the MS-Awards. 1 (d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at end of the immediately preceding year SHARE CAPITAL 31 December December 2012 (unaudited) (audited) No of shares US$ No of shares US$ Issued and fully paid ordinary shares At 1 January 100,000,000 1,000, Issued on 4 July 2012 by way of capitalisation of amount due to holding company ,999, ,999 Issued on 9 July 2012 for cash ,000, ,000 One for eight share split on 10 July ,000, Issued on 19 July 2013 for cash 246,154, ,986, Share issuance expense - (12,490,090) - - At reporting date 1,046,154, ,495, ,000,000 1,000,000 SHARE PREMIUM 31 December December 2012 (unaudited) (audited) US$ US$ At 1 January 402,750,000 - Increase on 4 July 2012 by way of capitalisation of amount due to holding company into new shares - 287,950,000 Increase on 9 July 2012 for cash arising from an issuance of share capital - 114,800,000 At reporting date 402,750, ,750,000 1 (d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at end of the current financial period reported on. There were no sales, transfer, disposal, cancellation and/or use of treasury shares as at 31 December 2013 (31 December 2012: Nil). 24

25 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The financial statements have not been audited or reviewed by the Group s external auditors. 3. Where the figures have been audited or reviewed, the auditor s report (including any qualifications or emphasis of matter) Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with those of the audited financial statements as at 31 December 2012, except for those disclosed under paragraph If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changes, as well as the reasons for, and the effect of, the change The Group has adopted the new and revised standards that are effective for annual periods beginning on or after 1 January The adoption of these standards did not have any material effect on the financial performance of the Group for the current financial period. 6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends For the year ended 31 December Loss per share attributable to owners of the Group: (i) Based on a weighted average number of shares (cents per share) (2.3) (36.0) - Weighted average number of shares 544,973,726 49,041,147 (ii) On a fully diluted basis (cents per share) (2.3) (36.0) - Adjusted weighted average number of shares 544,973,726 49,041, Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the (a) current financial period reported on and (b) immediately preceding financial year The Company does not have any treasury shares. 25

26 The Group The Company As at 31 December As at 31 December (US$) Net asset value per ordinary share (1) Net tangible asset per ordinary share (1) Note: (1) Based on share capital of 1,046,154,000 and 100,000,000 ordinary shares as at 31 December 2013 and 31 December 2012, respectively. 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of (a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonable or cyclical factors and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on The following table sets forth a selected summary of our income statement and non-ifrs financial data for the year ended 31 December For the year ended 31 December (unaudited) (audited) (US$ thousands) Sales of crude oil 54, ,404.4 Sales of gas 14, ,188.2 Revenue 69, ,592.6 Cost of sales: Operating costs (16,113.0) (18,741.8) Thai petroleum special remuneratory benefits and royalties paid (8,084.7) (11,349.5) Depreciation, depletion and amortisation (19,389.1) (22,638.0) Gross profit 25, ,863.3 Other income 16, ,865.3 General and administrative expenses (31,736.5) (24,294.9) Other operating income/(expense) 1,631.3 (2,028.8) Finance income 1, Finance costs (13,334.0) (11,970.7) Profit before tax Tax expense (12,758.6) (18,518.4) Loss after tax for the year (12,645.1) (17,672.9) 26

27 For the year ended 31 December (unaudited) (unaudited) Revenue 69, ,592.6 Operating costs (16,113.0) (18,741.8) Thai petroleum special remuneratory benefits and royalties paid (8,084.7) (11,349.5) Gross profit before depreciation, depletion and amortisation 44, ,501.3 Corporate general and administrative expense (16,856.7) (11,896.3) EBITDAX 27, ,605.0 Geological and geophysical expense (9,378.6) (9,538.6) Exploration expense (653.4) (3,054.8) EBITDA 17, ,011.6 Revenue Our revenues decreased by 22.9% to US$69.1 million for the year ended 31 December 2013 from US$89.6 million for the year. The decline is primarily attributed to the cessation of gas and condensate production from the Kambuna gas-condensate field on 11 July 2013 (albeit the field produced for longer than we had expected). Revenues from oil and gas production from B8/32 and B9A declined by approximately 14.6% to US$63.4 million for FY2013 versus FY2012 as a result of an unplanned shutdown between 18 and 24 September 2013 when gas from the Benchamas field was below specification, and several unplanned production disruptions, which were prolonged by bad weather conditions slowing repairs and maintenance. Revenues were also impacted by lower average selling prices for oil and gas at both the Kambuna and B8/32 and B9A fields compared with FY2012. For the year ended 31 December Production volumes (1) Oil and liquids (bopd) 1,366 1,679 Gas (mmcfd) Total (boepd) 2,916 3,384 Sales volumes (1) Oils and liquids (bopd) 1,366 1,679 Gas (mmcfd) Total (boepd) 2,801 3,264 Average sales price (1) Oils and liquids (US$/bbl) Gas (US$/mcf) Note: (1) Following the completion of our acquisition in December 2013, we have included one month (December 2013) of liquids and gas production and sales from the Bangora field at Block 9, Bangladesh. On a pro forma basis (taking into the account the effective date of 1 January 2013 of the Tullow Bangladesh transaction) our revenue would have been US$84.5 million. 27