ADMISSION DOCUMENT MERKUR MARKET

Transcription

1 ADMISSION DOCUMENT MERKUR MARKET J.P. KENNY PETROLEUM LTD Incorporated as a private company limited by shares under the laws of England and Wales Company number Dated 21 November 2017 This admission document (the "Admission Document") has been prepared by J.P. Kenny Petroleum Ltd (the "Company" or "JPK") solely for use in connection with the admission to trading on Merkur Market (the "Listing") of all the 10,647,060 issued and outstanding shares in the Company (the "Shares"). No shares or other securities are being offered or sold in any jurisdiction pursuant to this Admission Document. Merkur Market is a multilateral trading facility operated by Oslo Børs ASA ("Oslo Børs"). Merkur Market is subject to the rules in the Norwegian Securities Trading Act (Norwegian: "verdipapirhandelloven") and the Norwegian Securities Trading Regulations (Norwegian: "verdipapirhandelforskriften") that apply to such market places. These rules apply to companies admitted to trading on Merkur Market, as to the market place's own rules, which are less comprehensive than the rules and regulations that apply to companies listed on the Oslo Stock Exchange or Oslo Axess. Merkur Market is not a regulated market, and is, therefore, not subject to the Norwegian Stock Exchange Act (Norwegian: "børsloven") or to the Norwegian Stock Exchange Regulations (Norwegian: "børsforskriften"). Investors should take this into account when making investment decisions.

2 Page 2 of 68 IMPORTANT INFORMATION THIS ADMISSION DOCUMENT SERVES AS AN ADMISSION DOCUMENT ONLY, AS REQUIRED BY THE RULES FOR THE ADMISSION OF SHARES TO TRADING ON MERKUR MARKET (THE "ADMISSION TO TRADING RULES"), AND MAY NOT BE RELIED UPON BY ANY PERSONS FOR PURPOSES OTHER THAN THE ADMISSION TO TRADING. THIS ADMISSION DOCUMENT DOES NOT CONSTITUTE AN OFFER TO BUY, SUBSCRIBE FOR OR SELL ANY OF THE SECURITIES ISSUED BY THE COMPANY, AND NO SECURITIES ARE BEING OFFERED OR SOLD PURSUANT HERETO. For the definitions of terms used throughout this Admission Document, see Chapter 12 " Definitions and glossary of terms" of this Admission Document. The Company has furnished the information in this Admission Document. All inquiries relating to this Admission Document should be directed to the Company. No other person has been authorized to give any information, or make any representation, on behalf of the Company in connection with the Admission to Trading, if given or made, such other information or representation must not be relied upon as having been authorized by the Company. This Admission Document has been prepared to comply with the Admission to Trading Rules, and Oslo Børs has reviewed and approved this Admission Document in accordance with the Admission to Trading Rules. Oslo Børs has not controlled or approved the accuracy or completeness of the information contained herein. The approval by Oslo Børs only relates to the information included in accordance with pre-defined disclosure requirements. Oslo Børs has not made any form or control or approval relating to corporate matters described, or referred to, in this Admission Document. This Admission Document is not a prospectus and has neither been inspected nor approved by the Financial Supervisory Authority of Norway (Norwegian: "Finanstilsynet") in accordance with the rules that apply to prospectuses. This Admission Document has been prepared in an English version only. The information contained herein is as per the date hereof and subject to change, completion or amendment without notice. There may have been changes affecting the Company or its subsidiaries (together, the "Group") subsequent to the date of this Admission Document. Any new material information and any material inaccuracy that might have an effect on the assessment of the Shares arising after the publication of this Admission Document and before the Admission to Trading will be published promptly in accordance with the Merkur Market regulations. Neither the delivery of this Admission Document nor the completion of the Admission to Trading at any time after the date hereof will, under any circumstances, create any implication that there has been no change in the Group's affairs since the date hereof or that the information set forth in this Admission Document is correct as per any time since its date. This Admission Document does not constitute an offer to subscribe for shares in the Company. The contents of this Admission Document shall not be construed as legal, business or tax advice. Each reader of this Admission Document should consult its own legal, business or tax advisor as to legal, business or tax advice. If you are in any doubt about the contents of this Admission Document, you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser. The distribution of this Admission Document in certain jurisdictions may be restricted by law. Persons in possession of this Admission Document are required to inform themselves about, and to observe, any such

3 Page 3 of 68 restrictions. No action has been taken or will be taken in any jurisdiction by the Company that would permit the possession or distribution of this Admission Document in any country or jurisdiction where specific action for that purpose is required. The Shares may be subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. This Admission Document shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo District Court (Norwegian: "Oslo tingrett") as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Admission Document. Investing in the Shares in the Company involves risks. See Chapter 1 "Risk factors" of this Admission Document.

4 Page 4 of 68 TABLE OF CONTENT 1 Risk factors General Risks related to the Company and its business and operations Risks associated with industry in which the Company operates Risks related to financing Risks relating to the Shares Statement of responsibility Information about the Company Corporate information History and important events of the Company The Company's planned acquisition of the YD PUT 1 Block License (the Transaction) General The post-transaction group structure Conditions for closing of the Transaction Group structure if the Transaction is not completed Principal activities General The Company's activities following the Closing of the Transaction Operations of the Company Business-critical agreements, patents, etc Industry and market overview Overview of the oil market World oil production, consumption and reserves Oil prices Overview of the global market for gas World gas production, consumption and reserves Gas prices Board of Directors, management and corporate governance The Company's Board of Directors Overview of the Board of Directors The current Board of Directors Brief biographies of the current members of the Board of Directors Shares held by the members of the Board of Directors Management Overview Brief biographies of the members of the Company's management Shares held by the members of the Company's management Remuneration and benefits Remuneration of the Board of Directors Remuneration of the Company's management Benefits upon termination Pensions and retirement benefits Loans and guarantees Conflict of interests and independence of the Board of Directors Convictions for fraudulent offences, bankruptcy, etc Corporate governance requirements... 45

5 Page 5 of Employees Legal matters Material contracts Acquisition of Mompos Oil Company Inc Related party transactions Service agreement with Force Capital Partners AS (Nils Trulsvik's company) Service agreement with Jon Wiggen Borrowings Legal and regulatory proceedings Financial information Introduction, audit and summary of accounting policies Historical financial information Profit and loss statements Balance sheets Statements of cash flows Additional information; significant changes in the Company's financial or trading position Interim and other financial information Liquidity Planned capital spending Expected financing Summary with respect to liquidity Borrowings The Mercantile Bond Agreement The May 2015 Bond Agreement Loans from John P. Kenny Dividend policy Share Capital and the Shares and other shareholder matters Share capital and the Shares Introduction The NOK 400,000 Share Issue and the Fortuna Equity Investment The negotiability of the Shares Treasury shares Rights to subscribe for or acquire shares in the Company Historical development in the share capital and number of Shares Table showing the historical development in the Company's share capital and number of Shares Future change in the share capital of the Company as a result of the Fortuna Equity Investment Major shareholders The Articles of Association Information concerning the securities to be admitted to trading Admission to trading Type, class, currency and ISIN Insider trading Taxation Taxation in England and Wales Introduction Taxation on dividends Taxation on chargeable gains... 60

6 Page 6 of Norwegian taxation Introduction Norwegian shareholders VAT and transfer taxes Inheritance tax Additional information and documents on display Auditor Advisors Documents on display Definitions and glossary of terms Appendices... 68

7 Page 7 of 68 1 Risk factors 1.1 General An investment in the Shares of the Company involves a number of risks, some of which could be substantial and some of which are inherent of the Company's business. The business of exploring, developing and producing oil and natural gas reserves and resources is inherently risky. Oil and natural gas operations involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. By subscribing for an interest in the Company, investors will be deemed to have acknowledged that any investment in the oil and gas sector will carry a high risk and that, accordingly, the investor may suffer a loss on such investment. Such a loss will be limited to the investor's share acquisition. An investment in the Shares in the Company is suitable only for investors who understand the risks associated with this type of investment and who can afford to lose all or part of their investment. The investor's return will be related to the Company's return and will primarily depend on whether the Company will be able to implement its strategy and achieve its objectives, as well as the general development in the oil and gas sector and the financial markets. The risks and uncertainties described in this Chapter 1 are the known risks and uncertainties faced by the Group as at the date hereof that the Company believes are relevant to an investment in the Shares. If any of the following risks were to materialise, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or its business, financial condition, results of operations, cash flows and/or prospects, which may cause a decline in the value and trading price of the Shares, resulting in the loss of all or part of an investment in the same. The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their potential impact on the Group's business, financial condition, results of operations, cash flows and/or prospects. Shareholders and prospective investors are cautioned not to place undue reliance on the Company's forward-looking statements and information. By its nature, forward-looking statements and information involve numerous assumptions, known and unknown risk and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking information or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate. 1.2 Risks related to the Company and its business and operations Dependence of key personnel, employees and ability to recruit skilled personnel for future operations The future success of the Company depends to a significant extent on the continued services of its key personnel, in particular the CEO Nils Trulsvik. If the Company was to lose the services of any of its key personnel, it could have a material adverse effect on the overall performance and the value of the Shares. In addition to the current key personnel, the Company's future success depends on its ability to attract and retain qualified personnel to develop its existing asset base at any time and new business opportunities. If

8 Page 8 of 68 the Company is unable to attract and retain a sufficient number of qualified personnel, it could adversely affect the Company's ability to realize the value potential of its asset base. The Company may not be able to achieve results comparable to the founders' and key personnel's past performance In considering the founders' and key personnel's historic performance, prospective investors should bear in mind that past performance is not necessarily indicative of future results, and there can be no assurance the Company will achieve comparable results, that the returns generated by previous managed companies will equal or exceed those of the Company. Moreover, the principal terms governing the Company, such as operating restrictions imposed upon the Company and the commercial management, the compensation structure, returns and incentives may be different, and in many instances more restrictive, than those related to previous companies and portfolios. The Company's strategy and risk tolerance may be impacted by such differences. Investors should, therefore, not place undue reliance on prior investment information and should take the foregoing additional risks into account in reviewing such information. The Company does not have any operating history upon which to evaluate the Company's likely performance Although the Company's founders and the key personnel have extensive experience investing in the oil and gas sector, the Company has no operating history upon which to evaluate the Company's likely performance going forward. The Company's planned acquisition of 80% of Mompos Oil may fail to be completed or be unsuccessful As part of the Company's strategy, the Company has entered into a sale and purchase agreement dated 10 August 2017 according to which the Company will, indirectly through a holding companies structure, acquire 80% of Mompos Oil Company Inc. (the "Transaction"). Mompos Oil Company Inc.'s Colombian branch (the "Licensee") holds the license (the "YD PUT 1 Block License") for, and is the operator under, the YD PUT 1 block in Caguán-Putumayo Basin in Colombia (the "YD PUT 1 Block"). If the Transaction is completed, there is no assurance that the Company is able to commercially develop its reserves and resources pursuant to the YD PUT 1 Block License, and such inability could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. As at the date of this Admission Document, the completion of the Transaction (the "Closing") has not taken place and such Closing is subject to certain conditions for closing (the "Closing Conditions"), all of which have to be fulfilled. A party may not be able to fulfil its respective Closing Conditions and in such event, the other party may not be willing to waive such unfulfilled Closing Conditions (which such party is not required to under the SPA), and in either case, the Transaction may be terminated. If the Transaction is not completed, for whatever reason, the Company will not hold any material assets, but it will, in such event, continue to seek investment opportunities in oil and gas exploration and production projects in South America.

9 Page 9 of 68 The above-mentioned risks apply similarly to any future acquisitions by the Company of oil and gas properties, and its exploitation and development of such properties (see below). The Company may not be able to successfully implement its strategy and faces risks and challenges from future acquisitions Acquisitions of oil and gas properties in South America, in particular in Colombia, and the exploitation and development of such properties are the key components of the Company's strategy going forward, and the long-term commercial success of the Company depends on its ability to acquire, explore, appraise, develop and exploit commercially productive oil and gas reserves. The Company could, however, be unsuccessful a) in its ability to select and acquire suitable prospects and/or producing assets and b) in its ability to exploit and develop such future assets. There is no assurance that the Company will achieve its objectives or other anticipated benefits, and there are many reasons why it may not be able to acquire or find oil and gas reserves or to develop them for commercially viable production. For example, it could be unable to negotiate commercially reasonable terms for acquisition, exploration, appraisal, development or production activities. Factors such as adverse weather conditions, natural disasters, equipment or services shortages, procurement delays or difficulties arising from the political, environmental and other conditions in the areas where the assets of the Company are located, or through which its products are transported, may also increase costs and make it uneconomical to explore for, appraise and develop potential reserves. Further, there is no assurance that the Company will be able to undertake its activities within the expected time frame, that the investments and costs of any of the Company's objectives will be at expected levels or that the benefits of its objectives will be achieved within the expected time frame or at all. The Company's ability to successfully implement its strategy could also be affected by factors beyond its control, such as the economic development in the markets in which it operates and the availability of acquisition and development opportunities in each market. Without successful acquisition, exploration and development activities, reserves, production and revenues will decline. The Company might not discover, acquire or develop further commercial quantities of oil and gas, which could have a material and adverse effect on its business, results of operations, financial condition and prospects, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Reserves and resource information represents estimates that may turn out to be incorrect or inaccurate The process of estimating oil and gas reserves and resources, and the cash flows that may be derived from them is very complex. In general, estimates of the quantity and value of economically recoverable oil and gas reserves and the possible future net cash flows are based upon a number of variable factors and assumptions, such as historic production rates, ultimate reserves recovery, interpretation of geological and geophysical data, timing and amount of capital expenditures, marketability of oil and gas, royalty rates, continuity of current fiscal policies and regulatory regimes, future oil and gas prices, operating and production costs, all of which may vary from actual results. Estimates are also to some degree speculative, and classifications of reserves are only attempts to define the degree of speculation involved. For these reasons, estimates of the economically recoverable oil and gas reserves attributable to a particular asset or

10 Page 10 of 68 group of assets, the classification of such reserves based on risk of recovery and estimates of expected future net revenues prepared by different engineers, or by the same engineers at a different time may vary. As a result, estimates of the Group's reserves may require substantial upward or downward revisions if subsequent drilling, testing and production reveal differences. Any downward adjustment could indicate lower future production and thus adversely affect the Group's business, financial condition, results of operations and prospects, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Furthermore, a decline in the Group's reserves may affect its ability to raise or access sufficient capital in the longer term for its future operations. Estimates of proved, probable and possible reserves that may be developed and produced in the future are often not based on actual production history, but on volumetric calculations and analogies to similar types of reserves. Estimates based on these methods are generally less reliable than those based on actual production history. Subsequent evaluation of the same reserves based on production history and production practices may result in variations in the estimated reserves and these variations could be material. The Group Companies may be unable to obtain, retain or renew required drilling rights, licenses, concessions, permits and other authorisations necessary for its operations, and certain formalities in relation to agreements may not always be satisfied The Company and its subsidiaries (collectively, the "Group Companies" and individually, a "Group Company") will be conducting their exploration, development and production operations pursuant to rights under leases, licenses, concessions, permits and other authorisations (collectively, "Licenses") from governmental and local authorities. The ability of the Group Companies to operate their business depends on the granting and validity of such Licenses, which may be subject to the discretion of the relevant governmental authorities and cannot be assured. The Group may face significant financial penalties, new claims and/or have its Licenses suspended, terminated or revoked if it fails to fulfil the specific terms of any Licenses or if it operates its business in a manner that violates applicable laws or regulations, which could result in increased costs, reputation harm and adverse changes to its strategy. Even where the relevant Group Company is in compliance with the terms of its Licenses and all applicable laws and regulations, the Licenses could be revoked, materially altered, or successfully challenged or impugned by third parties. Furthermore, production Licenses of a Group Company may expire before the end of what the relevant Group Company estimates to be the productive life of its license fields. There can also be no assurance that the Licenses will be renewed, or that any applications for additional Licenses will be granted, at all or on terms and within a timeframe satisfactory to the Group. Production Licenses and joint operating agreements may include change of control provisions triggering pre-emptive rights or other rights for other stakeholders in case of an indirect change of control in the company holding the license, including an ultimate change of control in the Company. Any inability of a Group Company to comply with the terms of its Licenses, to obtain, retain or renew its Licenses on terms satisfactory or enforce its rights or defend claims in relation to its contracts and government consents could have a material and adverse effect on the Group's business, results of operations, financial condition and prospects, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company.

11 Page 11 of 68 The Group will be reliant on the services of third parties, the quality and availability of which cannot be assured The Group will rely on third parties to carry out various operational tasks in its exploration, appraisal, development and production operations, including carrying out drilling activities, build, install and commission infrastructure and facilities, processing and delivering oil and gas to counterparties and maintenance of assets and infrastructure. As a result, the Group will be reliant on third parties performing satisfactorily and fulfilling their respective obligations. The provision of services and maintenance by third parties is outside the Group's control. Any failure by a third party may lead to delays or curtailment of the production, transportation and delivery of oil and gas. In addition, the costs of third party operators may increase, in particular in periods of high prices for oil and gas, leading to higher production and transportation expenses. Any dispute with, or failure in performance by, third party service providers, external contractors or consultants and associated increases in operating costs or inability on the part of the Group to find adequate replacement services on a timely basis, if at all, could result in delays or curtailment of the production, transportation and delivery of oil and gas, thereby having a material and adverse effect on the business, results of operations, financial condition and prospects of the Group, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. There is also a risk that third parties may not operate in accordance with safety standards or other policies, including anti-corruption and anti-bribery policies and that the Group could incur significant regulatory penalties as a result, which could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Group, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Difficulties in the marketing or exporting of oil and gas could adversely affect revenues of the Group, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company The marketability of any oil or gas acquired or discovered will be affected by numerous factors beyond the control of the Group, such as market fluctuations, availability of international markets and the availability of processing and refining facilities and transportation infrastructure, including access to ports, shipping facilities, pipelines and pipeline capacity. In addition, the right to export oil and gas may depend on obtaining Licenses and export volumes, the granting of which is at the discretion of the relevant regulatory authorities in respect of whom no assurance can be given that the Group will secure the permits required to export oil and gas. Furthermore, there can be no assurance that the Company will be paid its full entitlement for exports sales, or at all. Difficulties that the Group could face in marketing or exporting its oil and gas could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Health, safety and environmental laws and regulations may expose the Company to significant liabilities and increased compliance costs, litigation, interruptions to operations, unforeseen environmental remediation expenses and loss of reputation, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company The operations of the Group are regulated at international, national and regional levels. These include health, safety and environmental ("HSE") laws and regulations governing, among other things, the discharge of hazardous substances into the environment, the handling and disposal of waste, and the

12 Page 12 of 68 health and safety of its employees. The Group may also be subject to obligations concerning the decommissioning of operational facilities and the remediation of soil or groundwater at its facilities when ceasing its operations. The technical requirements of these HSE laws and regulations are becoming increasingly complex, stringently enforced and expensive to comply with, and this trend is likely to continue. The Group is, together with other participants in the oil and gas industry, subject to laws and regulations in relation to the emission of greenhouse gases such as carbon dioxide, methane, nitrous oxide and others. Such emissions legislation is designed to reduce the emissions of greenhouse gases and other emissions. Future legislative initiatives may be designed to reduce further the consumption of hydrocarbons and require stricter regulations on greenhouse gases and other emissions. Future compliance with existing or future emissions legislation could impact the prices of oil and gas and the ability of the Group to market its oil and gas and could involve significant costs. These factors may accordingly have a material and adverse effect on the results of operations, financial condition and prospects of the Group, which in turn could have a material and adverse effect on the value of, and dividends received from, the Company. Certain HSE laws and regulations provide for strict, joint and several liability without regard to negligence or fault in relation to damage caused to persons, property and the environment by exploration and production activities. Such laws and regulations may expose the Group to liability for the conduct of others or for its own conduct that complied with the applicable laws and regulations in force at the time. The Group may incur substantial future expenditure to: modify operations; upgrade employee and contractor accommodation and other infrastructure; install pollution control equipment; perform clean-up operations; curtail or cease certain operations; and make payments for breaches of HSE requirements. Future changes in HSE laws and regulations, stricter enforcement or new interpretations of existing laws and regulations, discovery of previously unknown contamination or community expectations governing the operations of the Group could have a significant impact on compliance and remediation costs. The primary operational HSE risks of the Group are those inherent in the oil and gas industry generally. Any failure by the Group to comply with HSE laws and regulations could result in regulatory actions and liabilities, including withdrawal of Licenses or permits, temporary or permanent closure of facilities, imposition of fines or penalties, obligations to compensate for environmental damage and to restore environmental conditions or other obligations, and payment of compensation to third parties and employees, each of which in turn could lead to a decrease in revenues and/or an increase in costs. The Group may also become involved in claims, lawsuits and administrative proceedings relating to HSE compliance that could result in reputational damage, industrial action or difficulty in recruiting and retaining skilled employees.

13 Page 13 of 68 Any of the factors above could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Group, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Risk relating to operations in foreign countries It is expected that the Group's operations will be conducted in a variety of geographic regions, with a focus on the South American region, in particular Colombia. Consequently, the Company may, indirectly through its underlying investments, be exposed to political risk, corruption, terrorism, outbreak of war, amongst others. The business, financial condition and results of operations of the Company, indirectly, and its underlying investments directly, may accordingly be negatively affected if such events do occur. 1.3 Risks associated with industry in which the Company operates A decline or volatility in the prices of oil and gas could adversely affect the profitability, reserves and net income of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company Future revenues, cash flows, profitability and rate of growth of the Company may depend substantially on prevailing international and local prices of oil and gas. Oil prices are expected to remain volatile and may decline in the near future as a result of global excess supply due to the increased growth of shale oil production in the United States, declines in global demand for exported crude oil commodities, and recent decisions by the Organization of the Petroleum Exporting Countries ("OPEC") in respect of member countries' production of oil, among other factors. These recent fluctuations have had a material impact on the oil and natural gas industry. Historically, prices of oil and gas have been highly volatile and subject to wide fluctuations for many reasons, including, but not limited to: changes in current global and regional supply and demand, and expectations regarding future supply and demand, even relatively minor changes; geopolitical uncertainty; availability in pipelines, tankers and other transportation and processing facilities; proximity to, and the capacity and cost of, transportation; price, availability and government subsidies of alternative fuels; price and availability of new technologies; the ability of oil producing nations to set and maintain specified levels of exports and prices; political, economic and military developments in regions of operations, particularly the Middle East, Russia, Africa and Central and South America, and domestic and foreign governmental regulations and actions, including import and export restrictions, taxes, repatriations and nationalisations;

14 Page 14 of 68 global and regional economic conditions; trading activities by market participants and others either seeking to secure access to oil and gas or to hedge against commercial risks, or as part of investment portfolio activities; weather conditions and natural disasters; the availability of alternative energy sources; technological changes that could make other sources of energy more competitive than oil and gas; and terrorism or the threat of terrorism, war or threat of war, which may affect supply, transportation or demand for oil and gas and refined petroleum products. It is impossible to accurately predict future oil and gas price movements. The profitability of the Company is determined in large part by the difference between the income received from the oil and gas it produces and its operational costs, taxation costs relating to extraction (which are assessable irrespective of sales), as well as costs incurred in transporting and selling its oil and gas. Therefore, lower prices for oil and gas may reduce the amount of oil and gas that the Company is able to produce economically or may reduce the economic viability of the production levels of specific wells or of projects planned or in development to the extent that production costs exceed anticipated revenue from such production. A decline or volatility in the prices of oil and gas could adversely affect the profitability, reserves and net income of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Recent market events and conditions, including global excess in oil and natural gas supply, recent actions taken by OPEC, slowing growth in China and other emerging economies, market volatility and disruptions in Asia, and sovereign debt levels in various countries, have caused significant decrease in the valuation of oil and gas companies and a decrease in confidence in the oil and gas industry. Continued volatility in global financial markets and other macroeconomic factors could adversely affect the revenues and growth strategy of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company Over the past decade, the financial markets have faced periods of significant volatility and liquidity constraints, which in turn have caused the capital markets and lenders to reduce, and in some cases, cease to provide funding to issuers and borrowers. Although the volatility in the financial markets has come down over the last years, a similar situation may occur in the future, which could have an adverse effect on the global economy and financial and commodities markets in particular. Turmoil in the global financial markets and the potential impact on the liquidity of major financial institutions and sovereigns may have a material adverse effect on the cost of, and conditions relating to, funding. General economic conditions and geopolitical turmoil could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Prices for hydrocarbons are affected by global supply and demand, particularly demand in the United States, Europe and Asia (notably China). Changes in the global economic climate could result in lower

15 Page 15 of 68 demand and lower prices for oil and gas, which may adversely affect the revenues and cash flows of the Company. In addition, factors such as trade restrictions, sanctions, embargoes, boycotts, trade measures, and exchange controls, including currency controls and limitations on the repatriation of funds from operations, could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Oil and gas exploration and production are inherently uncertain in its outcome and does not necessarily result in a return on investment, profits or recovery of costs Oil and gas exploration and production activities are capital intensive and inherently uncertain in its outcome. The existing and future oil and gas appraisal and exploration projects of the Company could involve unprofitable efforts, either from dry wells or from wells that are productive but do not produce sufficient net revenues to return a profit after development, operating and other costs. Completion of a well does not guarantee a profit on the investment or recovery of the costs associated with that well. In addition, drilling hazards or environmental damage could significantly increase the cost of operations, and production from successful wells may be adversely affected by various conditions, including delays in obtaining governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, difficulties arising from environmental or other challenges, equipment or services shortages, insufficient storage or transportation capacity, or adverse geological conditions. Any inability to recover costs and generate profits from exploration and production activities could have a material adverse effect on the results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Exploration and production operations involve numerous operational risks and hazards which may result in material losses or additional expenditures for the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company Oil and gas exploration, development and production operations are inherently risky and hazardous. Risks typically associated with these operations include unexpected geological variations and drilling conditions, formations or pressures and premature decline of reservoirs and technical problems with equipment, any of which may result in operating difficulties. Hazards typically associated with these operations include the release of hydrogen sulphide gas during flaring, fires, explosions and blowouts, any of which could result in substantial damage to oil and gas wells, production facilities and other property, the environment, as well as in harm to persons involved in such operations. Drilling operations are also vulnerable to natural disasters, including earthquakes, droughts, floods, fires and tropical storms, all of which are outside the control of the Company. Oil and gas installations are also known to be likely objects, and even targets, of military operations and terrorism. Exploration and production operations are also subject to risks relating to transportation infrastructure, including pipeline failures and problems with tankers, and oil and gas processing, including bottlenecking and other problems associated with petroleum refinery operations. Materialisation of any of these risks, hazards or natural disasters could result in unexpected shutdowns and significant losses and expenditures, including significant clean-up costs in the event of damage to the environment, which could have a material adverse effect on the business, results of operations, financial condition and prospects of the Company, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company.

16 Page 16 of 68 The oil and gas industry is competitive, and other oil and natural gas companies may have greater financial, technical and personnel resources that provide them with technological advantages which may in the future allow them to implement new technologies before the Company The oil and gas industry is competitive in all its phases. The Company's ability to increase reserves in the future will depend not only on its ability to exploit and develop its present assets but also on its ability to select and acquire suitable producing assets or prospects, including those belonging to any future targets, for exploratory and appraisal drilling. The Company competes with numerous other participants in the search for, and the acquisition of, oil and gas assets, and in the marketing of oil and gas. Its competitors include oil and gas companies that may have substantially greater financial and technical resources, staff and facilities than those of the Company. These companies have strong market power as a result of several factors, including the diversification and reduction of risk, including geological, price and currency risks; increased financial strength facilitating major capital expenditures; greater integration and the exploitation of economies of scale in technology and organisation; strong technical experience; increased infrastructure and reserves; and strong brand recognition. Due to this competitive environment, the Company may be unable to acquire attractive, suitable assets or prospects on terms that they consider acceptable. As a result, the revenues of the Company may decline over time, thereby materially and adversely affecting its business, results of operations, financial condition and prospects, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. Oil and natural gas operations (exploration, appraisal, development, production, pricing, marketing and transportation) are subject to extensive controls and regulations imposed by various levels of government that may be amended from time to time. These controls and procedures may change from time to time and the Group's compliance with current and proposed regulations could have a material adverse impact by substantially increasing its capital expenditures and compliance costs All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and federal, provincial and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. The discharge of oil, natural gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require the Group to incur costs to remedy such discharge. Recently, the industry has been subject to increased security and focus related to the environmental impact of drilling and completion techniques relating to the exploration for natural gas. Changes to the requirements for drilling and completion techniques could have a material impact on the ability of the Group to drill and complete wells. Implementation of strategies with respect to climate change and reducing greenhouse gases to meet the limits required by federal or provincial governments could have a material impact on the nature of oil and natural gas operations, including those of the Group. No assurance can be given that the application of new environmental laws to the business and operations of the Group will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect the Group's financial condition, results of operations or prospects.

17 Page 17 of Risks related to financing The Group may require additional capital in the future in order to finance acquisitions and other capital expenditure, which may not be available on favourable terms, or at all The Group's business is capital intensive and, to the extent the Group does not generate sufficient cash, the Company or its subsidiaries may need to raise additional funds through public or private debt or equity financing to fund capital expenditures. Adequate sources of funds may not be available when needed or may not be available on acceptable terms. If the Group raises additional funds by issuing additional equity securities the existing shareholders may be diluted. If funding is insufficient at any time in the future, the Group may be unable to fund acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could adversely impact the Group's business, financial condition, results of operations and prospects. Any inability of the Group to procure sufficient financing for capital expenditures could adversely affect its ability to expand its business and meet production targets, could result in the Group facing unexpected costs and delays in relation to the implementation of its project development plans and could materially and adversely affect its ability to maintain production at current levels. This could have a material and adverse effect on the business, results of operations, financial condition and prospects of the Group, which in turn could have a material and adverse effect on the value of, and the dividends received from, the Company. The Group's future debt arrangements could limit its liquidity and flexibility in obtaining additional financing, in pursuing other business opportunities or corporate activities, or the Company's ability to declare dividends to its shareholders Any future debt arrangements may contain covenants and event of default clauses, typically cross default provisions and restrictive covenants such as change of control provisions and dividend restrictions, which may affect operational and financial flexibility of the Group. The satisfaction of these restrictive covenants may be outside of the Group's control. Such restrictions could affect, and in many respects limit or prohibit, among other things, the Group's ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could further limit the Group's ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not materially and adversely affect the Group's ability to finance its future operations or capital needs. The Group's future cash flows may be insufficient to meet all of its debt obligations and contractual commitments. To the extent that the Group is unable to repay its indebtedness as it becomes due or at maturity, the Group may need to refinance its debt, raise new debt, sell assets or repay the debt with the proceeds from equity offerings. Debt or equity financing may not be available to the Group in the future for the refinancing or repayment of future indebtedness, and the Group may not be able to complete asset sales in a timely manner sufficient to make such repayments.

18 Page 18 of Risks relating to the Shares The Group will incur increased costs as a result of the Listing As a publicly traded company with the Shares listed on Merkur Market, the Company will be required to comply with Merkur Market's reporting and disclosure requirements. The Company will incur additional legal, accounting and other expenses to comply with these and other applicable rules and regulations. The price of the Shares may fluctuate significantly The trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Company's control, including, but not limited to, quarterly variations in operating results, adverse business developments, changes in financial estimates and investment recommendations or ratings by securities analysts, or any other risk discussed herein materialising or the anticipation of such risk materialising. Since year 2000, the global stock markets have experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies. Those changes may occur without regard to the operating performance of these companies. The price of the Shares may, therefore, fluctuate based upon factors that have little or nothing to do with the Group, and these fluctuations may materially affect the price of the Shares. An active trading market may not develop There can be no assurance that an active market for the Shares will be sustained. Securities markets have a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any market for the Shares will be subject to market trends generally and the value of Shares on Merkur Market may be affected by such volatility in response to numerous factors. Factors unrelated to the financial performance or prospects of the Company include macroeconomic developments, and market perceptions of the attractiveness of particular industries. There can be no assurance that continued fluctuations in commodity prices will not occur. As a result of any of these factors, the market price of the securities of the Company at any given point in time may not accurately reflect the long term value of the Company. Future sales, or the possibility for future sales of substantial numbers of Shares may affect the Shares' market price The Company cannot predict what effect, if any, future sales of Shares, or the availability of Shares for future sales, will have on their market price. Sales of substantial amounts of Shares in the public market, or the perception that such sales could occur, may adversely affect the market price of the Shares, making it more difficult for holders to sell their Shares in the future at a time and price that they deem appropriate. Future issuances of shares or other securities may dilute the holdings of shareholders and could materially affect the price of the Shares The Company may issue additional shares in the future, which may dilute a shareholder's holdings in the Company. Such future issuances could also materially affect the price of the Shares.

19 Page 19 of 68 Investors may not be able to exercise their voting rights for Shares registered in a nominee account Beneficial owners of the Shares that are registered in a nominee account (such as through brokers, dealers or other third parties in addition) may not be able to instruct their nominees to vote such Shares unless their beneficial ownership is re-registered in their names with the VPS prior to the general meetings. The Company can provide no assurances that beneficial owners of the Shares will receive the notice of a general meeting in time to instruct their nominees to either effect a re-registration of the beneficial interests registered in the VPS or to vote their Shares in the manner desired by such beneficial owners. The Company may be unwilling or unable to pay any dividends or make distributions The Company has not paid any dividends and is unlikely to pay dividends in the immediate or foreseeable future. The future payment of dividends on Shares will be dependent upon the financial requirements of the Company to finance future growth, the financial condition of the Company and other factors which the Company's board of directors may consider appropriate in the circumstances. The Company may choose not, or may be unable, to pay dividends or make distributions in future years. Furthermore, the amount of dividends paid by the Company, if any, for a given financial period, will depend on, among other things, the Company's future operating results, cash flows, financial condition and capital requirements, the ability of the Company's subsidiaries to pay dividends to the Company, credit terms, general economic conditions, legal restrictions and other factors that the Company may deem to be significant from time to time.

20 Page 20 of 68 2 Statement of responsibility The board of directors of the Company (the "Board of Directors") accepts responsibility for the information contained in this Admission Document. The members of the Board of Directors confirm that, after having taken all reasonable care to ensure that such is the case, the information contained in this Admission Document is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. 21 November 2017 The Board of Directors of J.P. Kenny Petroleum Ltd John P. Kenny Chairman Nils N. Trulsvik Director Jon Wiggen Director Tracey Peverell Director

21 Page 21 of 68 3 Information about the Company 3.1 Corporate information The legal and commercial name of the Company is J.P. Kenny Petroleum Ltd. The Company was incorporated on 18 April 2013 as a private company limited by shares under the name CG Realisations Limited under the laws of England and Wales. The name was changed to J.P. Kenny Petroleum Ltd on 12 September The Company was registered with the Companies House under company number The Company's registered office is at 62 Wilson Street, London EC2A 2BU, United Kingdom, telephone: History and important events of the Company Date Year Event 18 April 2013 The Company was incorporated 12 September 2014 The shares in the Company were acquired by the existing shareholders, except for Tracey Peverell (member of the JPK Board and legal counsel to the Company) who acquired her shares in the Company at a later stage 12 September 2014 The Company's name was changed to J.P. Kenny Petroleum Ltd 27 May 2015 The Company entered into a bond agreement (the "May 2015 Bond Agreement") with a loan amount of USD 600, August 2017 The Company entered into the sale and purchase agreement (the "SPA") according to which the Company, through a newly established holding company, Mompos Holding Inc., a Panamanian corporation ("Mompos Holding"), will acquire 80% of the shares of Zummand Financial Development Inc., a Panamanian corporation ("Zummand"), being the sole shareholder of Mompos Oil. Mompos Oil's Colombian branch (the "Licensee") holds the license (the "YD PUT 1 Block License") for, and is the operator of, the YD PUT 1 block in the Caguán-Putumayo Basin in Colombia (the "YD PUT 1 Block") 28 August 2017 Agincourt Financial Limited operating under the Mercantile Invest brand ("Mercantile Invest") confirmed its intent to fund the Company's million bond programme by GBP 15 million. Such intent was re-confirmed in a subsequent letter from Mercantile Invest to the Company of 3 October October 2017 The Company entered into a share allotment agreement (the "Fortuna Agreement") with Fortuna Opportunities Fund S.C.A., SICAF-RAIF ("Fortuna"), pursuant to which Fortuna will subscribe for, and the Company will allot and issue to Fortuna, 3 million new shares in the Company at minimum subscription price of USD 0.60 per new share (the "Fortuna Equity Investment") 2 1 For further information on the bondholders' right, refer to Chapter "The May 2015 Bond Agreement". 2 The Fortuna Agreement and the Fortuna Equity Investment is further described in Chapter "The NOK 400,000 Share Issue and the Fortuna Equity Investment".

22 Page 22 of The Company's planned acquisition of the YD PUT 1 Block License (the Transaction) General On 10 August 2017, the Company entered into a sale and purchase agreement (the "SPA") according to which the Company, through a newly established holding company, Mompos Holding, will acquire 80% of the shares of Zummand, being the sole shareholder of Mompos Oil (the "Transaction"). Mompos Oil's Colombian branch (the "Licensee") holds, and is the operator under, the YD PUT 1 Block License. Following the Closing of the Transaction, the Company will, indirectly, hold 80% of the ownership interests in the Licensee. A separate shareholders and operating agreement (the "SHA") has also been entered into in relation to the Transaction, and the SHA provides the Company with control over the operations of the Target Company and thus the Licensee. An independent competent person's report (an engineering and economic evaluation) of the interests of Mompos Oil in the YT PUT 1 Block was prepared by Petrotech Engineering Ltd. ("Petrotech"), an independent oil and gas reserve evaluation firm located in Canada with a primary focus on, inter alia, Colombia. The reserve report, dated 22 August 2016 (the "Reserve Report"), and the evaluations made by Petrotech are further described in Chapter "Reserves" of this Admission Document. Prior to the Closing of the Transaction, the Company does not hold shares or ownership interests in any legal entity. Subject to the Closing of the Transaction, the Company's group structure will be as follows: 1. The Company has incorporated the subsidiary Mompos Holding in connection with the Transaction. Mompos Holding will be owned 80% by the Company and 20% jointly by Lyda Erazo and Mario Zamora, with the former, Lyda Erazo (the "Seller"), being the current shareholder of Zummand (as defined below) and therefore the owner of Mompos Oil and also the seller of the 80% ownership interest to the Company under the SPA. 2. Mompos Holding will own 100% of the ownership interests of Zummand. 3. Zummand currently owns, and will continue to own, 100% of the ownership interests of Mompos Oil. 4. The Licensee is a branch of Mompos Oil, and the Licensee is, by definition, not a separate legal entity, but legally a part of Mompos Oil. As consideration for 80% of the ownership interests of Zummand, the Company will pay up to USD 2 million (the "Mompos Oil Purchase Price"); however, the purchase price is split into three (3) tranches and each tranche is subject to certain conditions for payment. The first two (2) tranches of the Mompos Oil Purchase Price of, in aggregate, USD 1.5 million are expected to fall due during the 12 months' period following the Closing, whilst the final tranche of USD 500,000 will not fall due during that period.

23 Page 23 of The post-transaction group structure For further clarity, a group structure chart, subject to the Closing of the Transaction is included below:

24 Page 24 of Conditions for closing of the Transaction The Closing of the Transaction, which shall take place within 30 November 2017, is subject to certain conditions for closing (the "Closing Conditions"), all of which have to be fulfilled by the Company prior to or at Closing, or waived by the Seller at her sole discretion. The Closing Conditions which the Company has to fulfil prior to or at Closing are: 1. The Company shall pay the first tranche of the Mompos Oil Purchase Price of USD 500,000; and 2. The Company shall cause that Mompos Holding issues new shares in Mompos Holding to the Company (80%) and the Seller (20%); the Seller's shares in Mompos Holding will subsequently be distributed to Lyda Erazo and Mario Zamora such that each of them will hold 10% of the issued and outstanding shares in Mompos Holding post-closing. The fulfilment of the first Closing Condition (relating to the Company's payment of the first tranche of the Mompos Oil Purchase Price of USD 500,000) will be funded by the Company through the proceeds from the bond issue connected to the GBP 15 million bond agreement (the "Mercantile Bond Agreement") which the Company expects to enter into with Mercantile Invest within a few weeks from the listing at Merkur Market. 3 Mercantile Invest has, however, already confirmed its intent to fund the Company's million bond programme by GBP 15 million. If the Closing Conditions are not fulfilled by the Company within 30 November 2017, the Transaction could be terminated and in such case, the Company will not acquire the interests in Mompos Oil. 3.4 Group structure if the Transaction is not completed If the Transaction fails to be completed, the Company may still have incorporated Mompos Holding as its wholly-owned subsidiary, and the group structure with the Company as the ultimate parent company will thus be as follows: 3 The Mercantile Bond Agreement is further described in Chapter "The Mercantile Bond Agreement".

25 Page 25 of 68 Neither the Company nor Mompos Holding will, in such event, hold any material assets; however, the Company will continue to seek investment opportunities in oil and gas exploration and production projects in South America, in particular in Columbia. 3.5 Principal activities General The Company is a holding company engaged in the oil and gas exploration and production (upstream) industry and, on the operational side, it does not conduct any business other than, subject to the completion of the Transaction (the "Closing"), the management of its indirect ownership of its interests in Licensee. In addition, the management provides the necessary financing of the Transaction and the subsequent operation of Mompos Oil. Since its incorporation and until today's date, the Company has not carried out any business other than seeking investment opportunities in oil and gas exploration and production projects in Colombia and the Transaction constitutes the Company's first investment in any such project.

26 Page 26 of The Company's activities following the Closing of the Transaction The Putumayo Basin The Putumayo Basin is located in the southern part of Colombia bordering with Ecuador and Peru. The YD PUT 1 Block is located against the mountain range in the north with several oil discoveries located just west of the block Hydrocarbon evidence Hydrocarbon generation and expulsion was identified during the Middle Paleocene period in the Putumayo Basin. The evidence of the hydrocarbon potential of the Putumayo Basin includes significant production, one major oil field (Orito), 37 minor oil fields and the presence of giant oil fields in the nearby Oriente Basin in Ecuador. Also, giant oil-seeps are active in the northern Caguán area. Overall, the area is currently considered to be the most prospective area of Colombia Location The YD PUT 1 Block is located in the northern part of the Putumayo Basin with significant oil discoveries and production nearby. To the west, south-west of the block, there are three discovered and producing fields: Costayaco Field in the Chaza Block, Guayuyaco Field in the Guayuyaco Block and

27 Page 27 of 68 Mary Field in the Santana Block. The nearby production provides Mompos Oil access to infrastructure and pipelines for export and sale of oil. The YD PUT 1 Block, classified as deposit discovered but undeveloped, was part of the exploration and production licenses that was offered for auction by Columbia's Agencia Nacional de Hidrocarburos (the National Hydrocarbons Agency) and Ministry of Mines and Energy in the Colombia Open Round The YD PUT 1 Block is located in the municipal jurisdiction of San José del Fragua in the Colombian Department of Caqueta, and in the town of Piedmonte, in the Department of Cauca. The YD PUT 1 Block License is 23 sq. m Exploration history Within the YD PUT 1 Block, two (2) exploration wells have been drilled, the Palmera-1 well and the Topoyaco-2X well. Both wells discovered and tested heavy oil from the Villeta N and from the Neme and Villeta N Sands respectively. The Palmera-1 well was drilled in 1996 to a total depth of 8,836 feet. The well was plugged and abandoned without testing. In 2011, a new operator re-interpreted the logs and tested the well. Test production recovered initially 148 bopd without any pumping. The Topoyaco-2X well was drilled in 2010 to a depth of 6,859 feet, encountering heavy oil. The well tested 120 bopd initially with natural flow with no attempt made to produce well by pumps.

28 Page 28 of 68 Well 2: Topoyaco 2X Well 1: Palmera Development The planned development of the area will be in phases: Phase 1 Palmera area The first area to be developed is the Palmera area. The planned development drilling will start approximately six (6) months after the Transaction is completed. The period between Closing and commencement of drilling will be spent on achieving the required approvals for the development as well as discussions with local communities on the planned development. Immediately after this period, two (2) wells are planned back to back in Q The cost of the initial wells is expected to be less than USD 3 million per well and the cost per well is expected to go down as more wells are drilled. The initial wells will provide further insight into the reservoir and assist in the planning of a further drilling program- Following review of results from the initial two (2) production wells, Mompos Oil will consider the optimal strategy for exploitation of the Palmera field, but currently estimates that it will drill

29 Page 29 of 68 a further seven (7) production wells in the period from 2018 to 2020 in order to properly deplete the field. However, if it is possible to drill wells with a long horizontal component, the number of wells required to drain the reservoir would go down. Initial production for wells in the Palmera area is estimated at 450 bopd with total production estimated to peak in 2020 with an estimated 3500 bopd. Total capital spending in the Palmera area is estimated at USD 22.5 million, with average development well cost of USD 2.5 million. Production facilities will be rented and are included in the operating costs. Production cost per barrels is estimated at USD 8/bbl with transport and additives (dilutent) at USD 6-8/bbl. There is a complicated formulated to calculate royalty dependent on production rate, oil quality and oil price. Within the parameters estimated for the production from Palmera and oil price going forward, the Company estimates to pay a maximum royalty of 16%. Phase 2 Topoyaco area It is today uncertain how many wells are required to drain this area and the first work to be done is to reinterpret the seismic 3D data that exists over the YD PUT 1 Block License area around Topoyaco. Following this, the Company expects to initially drill two wells in conjunction with the second drilling phase at Palmera, utilizing one or more of the same rigs Reserves As of 30 June 2016, Mompos Oil's proven ("1P") reserves were million barrels ("mmbbl") and the proved plus probable ("2P") reserves are mmbbl. A summary of the proved and of the proved plus

30 Page 30 of 68 probable reserves per 30 June 2016 can be found in Table 1. No activity has been undertaken on the YD PUT 1 Block License since 30 June 2016 and hence the reserve numbers have not changed. Table 1 Oil reserves by geographical region Development producing oil reserves: As of 30 June 2016 Proved (1P) Gross (mmbbl) Interest (%) Net before royalty (mmbbl) Colombia 0 100% 0 Total 0 0 Developed non-producing oil reserves: As of 30 June 2016 Proved 1P Gross (mmbbl) Interest (%) Net before royalty (mmbbl) Colombia 0 100% 0 Total 0 0 Non-developed oil reserves: As of 30 June 2016 Proved (1P) Proved plus probable (2P) Gross (mmbbl) Interest (%) Net before royalty Gross (mmbbl) Interest (%) Net before royalty (mmbbl) (mmbbl) Columbia % % Total Total oil reserves As of 30 June 2016 Proved (1P) Proved plus probable (2P) Gross (mmbbl) Interest (%) Net before royalty Gross (mmbbl) Interest (%) Net before royalty (mmbbl) (mmbbl) Columbia % % Total Notes: Mompos Oil does not carry any reserves for gas or natural gas liquids. "mmbbl" means million stock tank barrels. Gross reserves are operated reserves. Net reserves are Mompos Oil's working interest before royalty. 3.6 Operations of the Company The commercial management is performed by Nils Trulsvik, the Company's chief executive officer, and Jon Wiggen, the chief financial officer ("CFO"), with support from the Company's outside legal counsel Tracey Peverell, who is also a member of the Company's Board of Directors.

31 Page 31 of 68 Nils Trulsvik and Jon Wiggen are not employees of the Company, but they have entered into service agreements with the Company 4 according to which they will perform the duties of the CEO and CFO, respectively. The service agreements are entered into on arm's length terms and in accordance with relevant laws and regulations. 3.7 Business-critical agreements, patents, etc. The Company has entered into the SPA to acquire 80% of the ownership interests in the Licensee. Except for the SPA and the service agreements with Nils Trulsvik and Jon Wiggen, there are no agreements that are critical to the Company's business. The Company has no patents or other registered intellectual property. 4 The service agreement under which Nils Trulsvik performs the duties as the Company's chief executive officer is entered into between the Company and Nils Trulsvik's company, Force Capital Partners AS.

32 Page 32 of 68 4 Industry and market overview Global energy consumption is driven by world population, economic growth and availability of resources. Overall energy consumption has grown consistently and has seen a steady increase throughout modern economic history. Going forward, consumption is expected to increase for all forms of energy, primarily as a result of increased consumption in emerging economies as well as a growing global population and an expanding economy. According to BP s 2017 Statistical review of World Energy, fossil fuels continue to supply more than 85 percent of the world's energy. Oil is still the most consumed energy source with annual consumption of 97 million barrels per day, representing 33.3 percent of global energy consumption. Coal and natural gas are the second and third largest energy sources, accounting for 28.1 percent and 24.1 percent respectively 5. During 2016, consumption of primary energy, including oil, natural gas, coal, nuclear, hydro power and other renewable energy, increased by 1.3 percent. In the same period, global oil and natural gas consumption increased by 1.6 percent and 1.5 percent respectively, equivalent to 1.6 million barrels of oil per day and 5.1 bcf of natural gas per day. Figure 7.1 Global energy consumption by type (Mtoe) Source: Left chart: BP Statistical Review of World Energy 2017, Right chart: IEA World Energy Outlook Overview of the oil market Oil is a common description of hydrocarbons in liquid form. Crude oil produced from different oil fields varies greatly in composition, and the composition and distribution of hydrocarbon components determines the weight of the oil, with light crude oil having a higher percentage of light hydrocarbons than heavier oil. Light oil requires less refinement to be usable and is therefore typically more valuable than heavy oil. Oil is well suited for storage and transportation and is transported over long distances in large crude oil tankers or pipelines. Because of this, oil is a commodity with a well-developed global market. The prices are determined on the world's leading commodities exchanges, with NYMEX in New York and the ICE in London as the most important markets for the determination of global oil prices. Relative oil price differentials are primarily determined by the weight of the oil and its sulfur content, with WTI, the main benchmark for NYMEX, as the lightest and sweetest (lowest in sulfur) of the main benchmarks in oil pricing. Brent crude the main benchmark for ICE is slightly heavier. 5 BP Statistical Review of World Energy June 2017.

33 Page 33 of 68 Crude oil is used for a variety of purposes, the most important being the production of energy rich fuels. Approximately 73 percent of hydrocarbons are used for gasoline, diesel, jet fuel and other fuel oils 6, while the remaining hydrocarbons are used as raw material in different chemical products such as pharmaceuticals, solvents, fertilizers, pesticides and plastics World oil production, consumption and reserves World oil consumption in 2016 was approximately 96.5 million barrels per day, of which Asia Pacific, North America and Europe including Eurasia (most importantly, Russia) accounted for approximately 35 percent, 25 percent and 19 percent, respectively 7. Total oil consumption in 2016 represents an increase of 1.6 per cent from For 2017, global oil consumption is expected to increase to 98 million barrels per day. According to IEA s 2016 World Energy Outlook, global oil consumption is expected to continue to increase going forward, growing to million barrels per day in The geography of oil demand has experienced a fundamental shift over the past 15 years with consumption in OECD countries falling on average by nearly 250,000 barrels per day every year during this period while year-on-year growth in non-oecd countries exceeded 1.1 million barrels per day. OECD countries represented 44.9 percent and non-oecd countries represented 55.1 percent of global oil consumption in Going forward, as a result of inter alia other increased fuel efficiency and stricter environmental policies, consumption in OECD countries is expected to decrease while global consumption is expected to increase overall due to strong consumption growth in emerging economies. Figure 7.2 Global oil consumption by region (mmbbls/day) Source: Left chart: BP Statistical Review of World Energy 2017, Right chart: IEA World Energy Outlook Asia includes Asia Oceania Oil is found in large quantities on most continents of the world. Crude oil production is active in all major populated continents, and in 2016 the global production totalled an estimated 92.1 million barrels per day 9. In 2016, the largest oil producing region was the Middle East with 34 percent of total world production, while North America was the second largest oil producing region, accounting for 21 percent of the world total 10. Despite being the largest consuming region, oil production in the Asia Pacific 6 BP Statistical Review of World Energy June BP Statistical Review of World Energy June IEA World Energy Outlook BP Statistical Review of World Energy June BP Statistical Review of World Energy June 2017

34 Page 34 of 68 accounted for only 9 percent of total world production in From , production grew at an annual compounded rate of 1.3 percent per year, and production grew in all major regions of the world, however, with varying growth between nations. In the period, Russia was the largest growing producer, growing its oil production from 6.6 million barrels per day in the year 2000 to 11.2 million barrels per day in 2016 (70.5 per cent growth). During the period , the United States grew their oil production from 7.7 million barrels per day in the year of 2000 to 12.4 million barrels per day (59.8 per cent growth) in Other countries with large production growth were Saudi Arabia, Canada, Qatar, Angola, Brazil, Iraq, the United Arab Emirates and China, all growing daily production by more than 1 million barrels per day in the period Going forward, oil production growth is expected to be dependent on increased output from the OPEC 11, as well as increased unconventional oil production. Unconventional oil production in the United States increased from below 500,000 barrels per day on 2010 to 4.3 million barrels per day in Chart 7.3 shows the historic development in global oil production per region from 1970 to 2016 and the expected production composition going forward. Figure 7.3 Global oil production by region (mmbbls/day) Source: Left chart: BP Statistical Review of World Energy Right chart: IEA World Energy Outlook *Non-OPEC Worldwide proved oil reserves stood at an estimated 1,706 billion barrels at the end of 2016, sufficient to meet about 51 years of global production at 2016 production levels. The members of OPEC together held approximately 70 percent of total global reserves in OPEC includes the largest Middle East oil producers, namely Iran, Iraq, Kuwait, Saudi Arabia, Qatar and the UAE, in addition to Algeria, Angola, Libya, Nigeria, Gabon, Ecuador, Venezuela and Indonesia. OPEC has historically played the role of swing producer in the global oil market and its decisions have had considerable influence on oil supply availability and thus international oil prices OPEC member countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela 12 IEA World Energy Outlook BP Statistical Review of World Energy June 2017

35 Page 35 of 68 Figure 7.4 Distribution of proved world oil reserves 2015 Source: BP Statistical Review of World Energy June Oil prices Oil prices were close to all-time high for most of 2011, 2012, 2013 and the first half of 2014, with Brent oil trading within a USD /bbl range most of the time. However, during the second half of 2014, oil prices declined steeply and in 2015, Brent averaged USD 54/bbl. Towards the end of 2015 and into 2016, oil prices decreased further and Brent reached a low of USD 28/bbl in January. Since then, oil prices have recovered and the price for Brent has been relatively stable around USD 50/bbl since mid- April As evidenced by the price changes in recent years, the oil price is highly dependent on the current and expected future supply and demand of oil. As such, it is influenced by global macroeconomic conditions and may experience material fluctuations on the basis of economic indicators and material economic events and geopolitical events. Historically, oil prices have also been heavily influenced by organizational and national policies, most significantly the formation of OPEC and the subsequent production policies announced by the organization. The figure below shows Brent oil price development from 1 January 2000 to 29 August Figure 7.5 Brent oil price, daily from Source: Bloomberg oil price data.

36 Page 36 of Overview of the global market for gas Natural gas is typically colorless, odorless and non-toxic at ambient temperatures. It can be found in onshore and offshore reservoirs, either as associated gas in crude oil or condensate, or alone as nonassociated gas. Natural gas is composed primarily of methane, but may also contain ethane, propane and heavier hydrocarbons. Small quantities of nitrogen, oxygen, carbon dioxide, sulfur compounds and water can also be found in natural gas. It is often termed a premium commodity for its value as both an energy source and as a feedstock for petrochemical products, and because it is relatively clean-burning. As a result, natural gas is used in a variety of ways including home and business heating, electric power generation, manufacture of petrochemical products ranging from plastics to fertilizers and intermediate materials, and as a vehicle fuel World gas production, consumption and reserves In 2016, total world consumption of gas was 3,543 billion cubic meters (bcm), of which Europe including Eurasia, North America and the Asia Pacific accounted for approximately 29 percent, 27 percent and 20 percent, respectively. In the period , gas consumption grew at an annual compounded rate of 2.4 percent. The highest growing region was the Middle East, experiencing an annual compounded growth of 6.4 percent over the period. Going forward, consumption of natural gas is expected to continue to grow and according to IEA s World Energy Outlook 2016, world gas consumption is expected to reach approximately 5,150 bcm in In the years leading up to 2040, EIA expects Asia and Africa to experience the highest growth with a compounded annual growth rate of 2.9 percent and 3.5 percent respectively. In the period, Asia will experience the highest absolute growth in demand with an increase of more than 700 bcm. Figure 7.6 Global gas consumption by region (bcm) Source: Left chart: BP Statistical Review of World Energy Right chart: IEA World Energy Outlook In 2016, total gas production amounted to 3,552 bcm of which Europe & Eurasia, Middle East and North America accounted for 28 percent, 27 percent and 18 percent respectively. In the period , natural gas production grew by an annual compounded growth rate of 2.5 percent, with all regions experiencing growth year-on-year. In the period, the majority of the gas production came from Europe including Eurasia as well as North America. Over the period, these regions combined accounted for about

37 Page 37 of percent of world supply of natural gas. Going forward, production of natural gas is expected to continue to grow and according to EIA s World Energy Outlook 2016, production is forecasted to reach in excess of 5,000 bcm in According to EIA, the majority of production will continue to come from the Americas and Europe including Eurasia. Figure 7.6 Global gas production by region Source: Left chart: BP Statistical Review of World Energy Right chart: IEA World Energy Outlook Total world proved gas reserves stood at approximately 187 trillion cubic meters at the end of These reserves are sufficient to meet approximately 53 years of global gas production at 2016 levels. Approximately 43 percent of total world proved gas reserves are located in the Middle East, while Europe including Eurasia account for 30 percent (of which the majority is in Russia and Turkmenistan), and North America 6 percent. Figure 7.7 Distribution of proved world gas reserves, 2015 Source: BP Statistical Review of World Energy BP Statistical Review of World Energy June 2017

38 Page 38 of Gas prices Because gas is not easily transported, gas prices are not determined by a world-wide market. Gas prices are usually determined regionally, with regions defined by pipeline and LNG transportation networks. There is less correlation between regional gas prices than there is between the prices of various types of oil. Gas price volatility is typically significantly higher than oil price volatility. This is primarily due to the fact that gas is more difficult to store than oil, meaning that gas prices are affected by immediate supply and demand within pipeline networks. Three broad pricing mechanisms exist for gas. The first, mostly seen in international trade and in longterm contracts, involves linking gas to either crude or petroleum product prices. The second pricing mechanism is regulated pricing in domestic markets where governments set fixed prices usually reflecting production and transportation costs. The final mechanism is competitive pricing whereby trading points, often called hubs, are established in major markets and price is determined by supply and demand at these hubs. The gas market in North America is largely deregulated. There are multiple trading points across the United States and Canada, with Henry Hub in Louisiana as the most active point. In Europe, gas has historically been traded under long-term contracts with pricing linked to diesel and heavy fuel. In recent years, however, an increasing share of European gas volumes have shifted from oil based to hub-based pricing, where gas supply and demand dynamics determine the price. Several trading hubs for gas have been established, with the most active being National Balancing Point (NBP) in the United Kingdom (the "UK"). Oil-linked pricing has been prevalent in Asia, where large volumes of gas have been imported in liquefied form under long-term contracts. Figure 7.8 Historical gas prices Source: BP Statistical Review of World Energy June 2017.