NOTICE ACCOMPANYING THE ELECTRONIC PROSPECTUS OF REACH ENERGY BERHAD ( REACH ENERGY OR THE COMPANY ) DATED 24 JULY 2014 ( ELECTRONIC PROSPECTUS ) (Unless otherwise indicated, specified or defined in this notice, the definitions in the Prospectus shall apply throughout this notice) Website The Electronic Prospectus can be viewed or downloaded from Bursa Malaysia Securities Berhad s ( Bursa Securities ) website at www.bursamalaysia.com ( Website ). Availability and Location of Paper/Printed Prospectus Any applicant in doubt concerning the validity or integrity of the Electronic Prospectus should immediately request a paper/printed copy of the Prospectus directly from the Company, Hong Leong Investment Bank Berhad ( HLIB ), or Malaysian Issuing House Sdn Bhd. Alternatively, the applicant may obtain a copy of the Prospectus from participating organisations of Bursa Securities, members of the Association of Banks in Malaysia and members of the Malaysian Investment Banking Association. Prospective investors should note that the Application Forms are not available in electronic format. Jurisdictional Disclaimer This distribution of the Electronic Prospectus and the sale of the units are subject to Malaysian law. Bursa Securities, HLIB and Reach Energy take no responsibility for the distribution of the Electronic Prospectus and/or the sale of the units outside Malaysia, which may be restricted by law in other jurisdictions. The Electronic Prospectus does not constitute and may not be used for the purpose of an offer to sell or an invitation of an offer to buy any units, to any person outside Malaysia or in any jurisdiction in which such offer or invitation is not authorised or lawful or to any person to whom it is unlawful to make such offer or invitation. Close of Application Applications will be accepted from 10.00 a.m. on 24 July 2014 and will remain open until 5.00 p.m. on 4 August 2014 or such later date or dates the Board of Directors of Reach Energy and HLIB in their absolute discretion may decide. The Electronic Prospectus made available on the Website after the closing of the application period is made available solely for informational and archiving purposes. No securities will be allotted or issued on the basis of the Electronic Prospectus after the closing of the application period. Persons Responsible for the Internet Site in which the Electronic Prospectus is Posted The Electronic Prospectus which is accessible at the Website is owned by Bursa Securities. Users access to the website and the use of the contents of the Website and/or any information in whatsoever form arising from the Website shall be conditional upon acceptance of the terms and conditions of use as contained in the Website. The contents of the Electronic Prospectus are for informational and archiving purposes only and are not intended to provide investment advice of any form or kind, and shall not at any time be relied upon as such.
WE ARE A SPECIAL PURPOSE ACQUISITION COMPANY. WE CURRENTLY HAVE NO OPERATIONS OR INCOME- GENERATING BUSINESS. INVESTING IN OUR SECURITIES MAY BE OF HIGH INVESTMENT RISK. REACH ENERGY BERHAD ( Company No: 1034400-D ) ( Incorporated in Malaysia under the Companies Act, 1965 ) PROSPECTUS PUBLIC ISSUE OF 1,000,000,000 NEW ORDINARY SHARES OF RMO.01 EACH IN OUR COMPANY ( PUBLIC ISSUE SHARES ), TOGETHER WITH 1,000,000,000 FREE DETACHABLE WARRANTS ( WARRANTS ) ON THE BASIS OF 1 WARRANT FOR EVERY 1 PUBLIC ISSUE SHARE SUBSCRIBED, AT AN ISSUE PRICE OF RMO.75 PER PUBLIC ISSUE SHARE PAYABLE IN FULL UPON APPLICATION COMPRISING: Principal Adviser, Placement Agent and Underwriter 980,000,000 PUBLIC ISSUE SHARES TOGETHER WITH 980,000,000 WARRANTS ON THE BASIS OF 1 WARRANT FOR EVERY 1 PUBLIC ISSUE SHARE SUBSCRIBED BY WAY OF PLACEMENT TO SELECTED INVESTORS; AND Custodian PROSPECTUS 20,000,000 PUBLIC ISSUE SHARES TOGETHER WITH 20,000,000 WARRANTS ON THE BASIS OF 1 WARRANT FOR EVERY 1 PUBLIC ISSUE SHARE SUBSCRIBED AVAILABLE FOR APPLICATION BY THE MALAYSIAN PUBLIC, IN CONJUNCTION WITH OUR LISTING ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD (766894-T) AmanahRaya Trustees Berhad INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THIS PROSPECTUS. IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER. THERE ARE CERTAIN RISK FACTORS WHICH PROSPECTIVE INVESTORS SHOULD CONSIDER TURN TO SECTION 4 FOR RISK FACTORS. This Prospectus is dated 24 July 2014
Exploration and Appraisal Acreage and Seismic, Well Drilling Development and Production Field Development, Production Transportation and Storage Pipelines, Tankers, Logistics Marketing Sales of Hydrocarbons, Processing, Treating Refining Refined Products, Gasoline, Lubricants Distribution Transportation, Retail Locations, Industrial Use Upstream Midstream Downstream Consumer Retail, Residential, Industrial, Commercial, etc 66
The E&P activities can be further segmented into three main phases as illustrated below: Reach Energy 67
69 Reach Energy
Type of Assets Production Development Exploration Notes: Our focus Our priority 71
77
US$/bbl $120 $100 $80 $60 $40 $20 $- Annual Average Price - Brent Crude Oil Brent Crude Price mmtoe 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Global Energy Consumption - By Region Asia Pacific (exc. China) China Africa Middle East Former Soviet Union Europe South America North America 86
88
89 *
Exploration and Appraisal Acreage and Seismic, Well Drilling Development and Production Field Development, Production Transportation and Storage Pipelines, Tankers, Logistics Marketing Sales of Hydrocarbons, Processing, Treating Refining Refined Products, Gasoline, Lubricants Distribution Transportation, Retail Locations, Industrial Use Upstream Midstream Downstream Consumer Retail, Residential, Industrial, Commercial, etc Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 106
14 Discovery to First Production Years to Production 12 10 8 6 4 2 0 Asia-Pacific Africa Middle East Europe North America Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 107
Hydrocarbons Initially-In-Place Discovered Undiscovered Commercial Sub-commercial Commercial Sub-commercial Prospective Resources Reserves Contingent Resources Unrecoverable Unrecoverable Low Estimate Best Estimate. High Estimate. Proved Probable Possible 1C 2C 3C Unrecoverable Unrecoverable Increasing reserves certainty and likelihood of commerciality Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 109
100% Global Ownership of Oil & Gas Resources 80% 60% 40% 20% 0% 85% 13% 8% 7% 1970 1980 1998 2011 NOC Reserves (No/Limited Access) NOC Reserves (Equity Access) Soviet Reserves Full IOC access reserves Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 111
bn boe 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Global Oil Reserves Asia Pacific Africa Middle East Former Soviet Union Europe South America North America Years tln cubic meters 200 150 100 50 0 Global Gas Reserves Asia Pacific Africa Middle East Former Soviet Union Europe South America North America Years Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 112
mmtpa Global Oil Production 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Asia Pacific Africa Middle East Former Soviet Union Europe South America North America Years mmtpa Global Gas Production 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Asia Pacific Africa Middle East Former Soviet Union Europe South America North America Years Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 113
mmtoe 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Global Energy Consumption - Fuel Type Renewables Hydro Nuclear Coal Natural Gas Oil/Liquids Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 114
Reach Energy Berhad - Independent Market Research Analysis Page 12 PFC Energy mmtoe 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Global Energy Consumption - By Region Asia Pacific (exc. China) China Africa Middle East Former Soviet Union Europe South America North America mmtoe 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Global Energy Supply - Fuel Type Biofuels Renewables Hydro Nuclear Coal Natural Gas Oil/Liquids Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 115
mmtoe 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Global Energy Supply - By Region Asia Pacific (exc. China) China Africa Middle East Former Soviet Union Europe South America North America Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 116
bln bbls 45 40 35 30 25 20 15 10 5 0 Asia Pacific Oil Reserves - By Country Thailand Other Brunei Malaysia Indonesia Australia Vietnam India China tln m 3 18 16 14 12 10 8 6 4 2 0 Asia Pacific Gas Reserves - By Country Bangladesh Myanmar Thailand Brunei Other PNG Vietnam Pakistan India Malaysia Indonesia China Australia Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 117
mln bbl/d 8 6 4 2 0 Asia Pacific Oil Production - By Country Myanmar PNG Philippines New Zealand Pakistan Brunei Thailand Vietnam Australia Malaysia Indonesia India China bcf/d 80 60 40 20 0 Asia Pacific Gas Production - By Country PNG Philippines New Zealand Vietnam Brunei Myanmar Bangladesh Thailand Pakistan India Malaysia Australia Indonesia China Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 118
mmtoe 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Asia Pacific Energy Consumption - Fuel Type Renewables Hydro Nuclear Coal Natural Gas Oil/Liquids Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 123
Reach Energy Berhad - Independent Market Research Analysis Page 22 PFC Energy Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 125
E&P Spending (US$bn) $800 $700 $600 $500 $400 $300 $200 Global E&P Spending by Company Type Smaller Independents Smaller NOCs Top 20 NOCs Top 20 IOCs $100 $0 2008 2009 2010 2011 2012 2013 2014F Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 129
US$/bbl $120 $100 $80 $60 $40 $20 $0 Annual Average Price - Brent Crude Oil Dated Brent Crude Price Strategic Advisors in Global Energy Washington Houston Kuala Lumpur Beijing Paris Lausanne Bahrain www.pfcenergy.com 131