EnQuest

Investor Presentation
March 2010

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EnQuest
Introduction Skills, Scale and Strength

The EnQuest opportunity: The UKCS production

& development focused independent

Visible growth from existing assets

Production and development bias

Geographic focusUKCS

Significant free cash flow generation

Oil price exposure

Financial strength
Skills, Scale and Strength
4

EnQuest management team: combination of

strong development and operational skills
Amjad Bseisu (CEO)

Nigel Hares (COO)

CEO and founder

of Petrofac Energy
Developments
business

Former Executive
Vice President in
charge of
International
Operations (incl.
North Sea) for
Talisman Energy
(1994-2009)

Joined Petrofac in
1998

Petrofac achievements include:

UK North Sea (Don assets)

Cendor, Malaysia

Chergui, Tunisia

Ohanet, Algeria

Will step down from Board of

Petrofac upon admission
Founding NED of Serica Energy and
Stratic Energy
Worked previously for the Atlantic
Richfield Company in number of
senior roles (1984-1998)

Completed over 30 successful

acquisitions

During this period international

production increased from zero to
250,000 boepd net

Over 100 successful

transactions in the North Sea

Worked previously for BP in drilling,

production operations, reservoir
engineering, petroleum engineering
and strategy and business
development (1972-1994)

Jonathan Swinney (CFO)

Head of M&A,
Petrofac
Joined Petrofac in
2008

Non-executive Directors
Dr James Buckee
(Chairman)
Former CEO of
Talisman Energy
(19922007)
Current NED of
Cairn Energy

Qualified solicitor with Cameron

McKenna and chartered accountant
with Arthur Andersen
Joined Credit Suisse First Boston in
1998 in the corporate broking team
and advised on M&A, IPOs and
equity raisings

Prior to Talisman, formerly at Shell

and Burmah Oil and also held several
positions at BP (19771992) including
President and CEO of BP Canada
(predecessor to Talisman) and
Manager, Planning for BP Exploration

Former Managing Director of

Corporate Broking, Lehman Brothers

Helmut Langanger
Jock Lennox
Robin Pinchbeck
Alexandre Schneiter

EnQuest at a glance

62N

211/1a, 2a & 3a
0

55%

km

100

W. Don & Don SW

45%

UKCS assets and operations

211/17

Thistle

Heather & Broom

Shetland

3/11a

60N

Annualised net production by asset (barrels of oil per day)

Peik

Asset

2008

2009

Heather

1,200

1,850

Thistle/Deveron

2,600

3,850

Broom

6,350

4,550

Don Southwest

1,930

West Don

1,440

2010E

Orkney

32% yoy
growth
14/30a
58N

ScoltyArea

Total
(pro forma)

10,150

13,620

18,000

Scotland

Source: Company

Elke
2W

0W

2E

Source: Company

Visible growth from assets

Combination of complementary assets

portfolios and skills

EnQuest: Net 2P Reserves and Contingent Resources

Working interest

2P reserves
(MMbbl)

Contingent Resources
2C (MMbbl)

99%

31.6

14.9

100%

20.5

16.6

Don South West

60%

13.9

4.9

Broom

55%

10.8

11.3

West Don

27.7%

3.8

Elke

100%

15.0

Peik

17.66%

6.63

40%

3.2

80.5

72.6

Asset
Thistle/Deveron
Heather

Scolty
Total

Proximity of asset portfolio

Long life assets with significant developed
and undeveloped reserves in place
High working interest and operatorship of
all assets
Opportunity to further improve recovery
rates
Appraisal and exploration upside

Target 10% per annum longer term

production and reserves growth

2P Reserves and 2C Contingent Resources (apart from Peik) figures are sourced from Competent Persons Report (Gaffney, Cline & Associates)
Based on Unitisation Agreement to be ratified
Includes 3.8MMbbl for South West Heather
3
Source: CompanyPeik figure is MMboe; includes 1.5MMbbl of net oil and 30.6BCF of gas contingent resources; gas contingent resources have
been converted into MMboe figure by Company

EnQuest will aim to capitalise on the available

UKCS opportunity set
To become one of the UK's leading independent oil and gas production and
development companies

Vision

To become a technical leader in integrated development

To maximise potential from existing fields and future developments in the UKCS
Innovative and cost-efficient development solutions

Core
Strengths

Strong technical, operational, commercial and financial team

Continuous improvement in health, safety and environmental performance
Delivering growth

Focus on hubs

Near field appraisal and

exploration

Business development

Significant opportunities remain in the

UKCS
Combined majors North Sea UK remaining reserves

UKCS projected reserves and resources

MMboe

4,500

Cumulative reserves

20% of remaining reserves 853MMboe

126 smaller fields (80% of total number of fields)

Estimated at 15.525 billion boe at January 1, 2009

Billion boe (reserves/resources)

4,000
3,500
3,000
2,500

EnQuests
Opportunity

2,000
1,500

Average
104 MMboe
per field

1,000
500

59

Exploration
(yet-to-find)

35

Undeveloped
discoveries

1.5 4

80% of remaining
reserves
3,326MMboe
6.1

32 fields (20% of
total number of
fields)

Brownfield
development

Existing fields &

sanctioned
developments

Total reserves: 4,179MMboe

0
0

20

40

60

80

100

120

Source: Wood Mackenzie

Majors include BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Shell and Total

140

160

Number of fields

Source: Oil & Gas UK, 2009 Economic Report

99

Don case study: Value creation through

engineering expertise
Overview of assets

1. Expeditious project execution

2. Expertise

Don Southwest discovered by Britoil in 1976;

West Don discovered in 1975 by Burmah Oil

Feb-06: Acquisition of West Don from BP and Conoco; fixed

field unitisation results in 27.7% interest; assume
operatorship

Refurbishment of Northern Producer

Both assets lay fallow until 2006

Dec-06: Acquisition of Don Southwest from BP and Conoco;

60% interest; assumed operatorship
Dec-07: Commitment to use the Northern Producer
Feb-08: Field Development Programme submitted for approval
May-08: Commencement of Northern Producer modification
May-08: Field Development Programme approval

Familiarity with infrastructure

Minimised capex and offshore work

Reduced in-field development time

Engineering heritage

Able to move rapidly through development

stages

Able to progress numerous workstreams in

parallel

Oct-08: Completion of Northern Producer modification

Nov-08: Safe mooring of Northern Producer
Apr-09: First oil at West Don, less than one year from FDP
approval
Jun-09: First oil at Don Southwest

3. Innovation
Operatorship of assets enabled ability to seek
agreement from partners to develop the fields
together
Streamlined project structure and limited
reliance on external suppliers

Northern Producer

Innovative commercial structureoil price and

production related tariffs aligned interests of
suppliers with partners

Commercial production achieved within one year from FDP approval

10

Heather/Broom case study: Focus on hubs to

reduce costs and maximise field value
Development highlights

Broom tied back to

Heather in August 2004
Material investment on
Heather platform

45mm platform
investment

15,000
9,000

Investment in
accommodation,
control room, water
handling, cranes

3,000
2009

2008

2007

0
2006

Infill drilling and

workover potential

6,000

2005

3D seismic

Upside potential
identified

Broom

12,000

Overhaul of gaslift
compressors

Drilled four producing

wells and two water
injection wells

Heather

2004

Injection support
established early in field
life

18,000

2002

Achievements

Production started in
August 2004

Extension of field life

2001

Umbilical constructed
and installed

Adding value

Broomdevelopment
wells drilled

Field production profile (net)

boe/d

Status of assets on
acquisition
Heatherin production

Heather - host field

2003

Broom - satellite field

Heather field and Broom

discovery acquired from DNO
Britain in February 2004,
along with Thistle/Deveron

2000

Overview of assets

Heather platform

Extension of field lives

Identified infill
opportunities

9 Value created from satellite field development

9 Reduced unit operating costs
9 Host field life extension
9 Deferral of decommissioning

Delivering value creation and production growth from mature owned infrastructure
11

EnQuest
Asset portfolio

EnQuest producing assets:

Operatorship and high working interest
Field (first oil)

Operator

(1978)

Heather
(1978)

Broom
(2004)

Recovery to end
2009%2

Contingent
Resources
(MMbbl) 2C 4

926

31.6

47

14.9

100%

502

20.5

27

16.6

55%

108

10.8

30

11.36

86

13.9

4.9

46

3.8

1,668

80.5

Working interest
BP 1%

Thistle/Deveron

Original oil in
place2 (MMbbl)

Net reserves 3
(MMbbl)
2P

99%

EnQuest

EnQuest

Dyas UK 8%
Challenger Minerals 8%

EnQuest
Wintershall 29%

60%

Don SW
5

(2009 )

West Don
(20095)

EnQuest

Valiant 40%

Valiant 17.3%

EnQuest

27.7%

First Oil 19.3%

Stratic 17.2%

Nippon 18.5%

Group

47.8

Note: Reserves and Resources Estimates in MMbbl as at 1 January 2010. It is inappropriate to aggregate different categories
On completion of the transfer of Lundin and Petrofac assets to EnQuest, EnQuest
will be appointed as operator of these fields
Source: Company
3 Source: Competent Persons Report (Gaffney, Cline & Associates); Economic net reserves at US$75/bbl 2010

Source: Competent Persons Report (Gaffney, Cline & Associates)

Post Petrofac redevelopment
6 Includes 3.8MMbbl for South West Heather
5

13

EnQuest asset portfolio

41.6 2

2P Reserves = 80.5MMbbl

Contingent Resources 2C = 72.6MMbbl

15.0

3.2

72.6

7.5

3.8

4.9

16.6

6.6

Discoveries

14.9
13.9

3.8

80.5

10.8
20.5
31.6

Thistle/
Deveron

Heather

Broom

Don SW West Don

2P
total

Thistle/
Deveron

Heather

Broom SW Heather Don SW

Peik1

Elke

Scolty

Contingent
Prospective
2C
Prospective
Resources
Resources22
total
resources
2C

Note: Reserves and Resources Estimates in MMbbl as at 1 January 2010. It is inappropriate to aggregate different categories
2P Reserves and Contingent Resources 2C (apart from Peik) figures are sourced from Competent Persons Report (Gaffney, Cline & Associates); Prospective Resources sourced from Company
1 Source: CompanyPeik figure is MMboe; includes 1.5MMbbl of net oil and 30.6BCF of gas contingent resources; gas contingent resources have been converted into MMboe figure by Company
2 Source: Company, Unrisked, partial farmout planned

14

5-year drilling programme

2010
J F M A M J

J A S O N D

2011
J F M A M J

2012
A S O N D

J F M A M J

2013
A S O N D

F M A M J

2014
A S O N D

F M A M J

J A S O N D

Thistle

Thistle Base
A46 Jet Pump
Thistle Abandonments
NW FB-P1
SFB-P1
NW FB-P2
EFB-P1
T W ell integrity
NFB-I1
Area6-P1
W/O inj #1
W/O inj #1
Area6-I1
Deveron Base
Dev-P1

Heather

Heather Base
Rig start-up
HHP1
H Well integrity
HDP1
HBP1
H50
H55
H07
CT
H48

Mobile

Activity

Broom base
NW T1
NW T1ST
Expl SW H
Expl 3/11a
Don West Base
W4 ST2
Don SW Area 5 Base
Don SW Area 22
Don SW Area 5 Horst P
Don SW Area 5 Horst I
Don SW Area 6P
Don SW Area 6I

Note: Represent management estimates. Drilling programme is subject to availability of rigs at scheduled times

Continuous drilling programme scheduled for next five years 24 identified wells
15

Targeting production growth

bbl/d
2P production

40,000

Organic

Business Development

35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2009

2010

2011

2012

2013

2014

Source: 2P Production taken from Competent Persons Report (Gaffney, Cline & Associates);
Organic and Business Development Production taken from Company estimates

16

EnQuest
Financial Highlights

Financial Strength

$280m committed banking facility

$200m for general corporate purposes
$80m for letters of credit
Material cash flow generation expected from producing assets
Ability to fund discretionary expenditure on exploration and appraisal
Facilitates business development opportunities that fit strategy
DD&A charge anticipated to be c.$22/bbl
Deferred tax assets do not expect to pay tax end 2011/ beginning 2012
Limited decommissioning liabilities
18

Material cash flow generation from producing

assets
2010

2011
Capex

In US$m

2012
Opex

741
704

498

390

368
279

210

223
208

180

145
71

Revenue 1

1
2

Cash costs (Pre-tax) 2

Revenue1

Cash costs (Pre-tax) 2

Revenue1

Cash costs (Pre-tax)2

Production profile and assumptions sourced from Competent Persons Report (Gaffney, Cline & Associates); calculations sourced from Company
Capex and opex profiles sourced from Competent Persons Report (Gaffney, Cline & Associates); calculations sourced from Company

Note: As per assumptions used in Competent Persons Report (Gaffney, Cline & Associates)oil price assumption US$75 2010; oil premium of US$0.85/bbl to dated Brent; inflation
rate of 2% p.a. applied to 2011 and 2012; exchange rate of US$1.65 per GBP Sterling

19

Limited decommissioning obligations

Field

Working interest

Decommissioning interest
Chevron
31.25%

Heather

100%

Current cost estimates (EnQuest share only)

37.5%

49.8m

BG
31.25%
Dyas UK 8%
Challenger Minerals 8%

Broom

55%

Wintershall
29%

ConocoPhillips
18.28%

Thistle/Deveron

99%

Valiant
40%

Don SW

60%

Valiant 17.3%

West Don

27.7%

First Oil
19.3%
Stratic 17.2%

55%

Britoil
81.72%

8.8m

Existing obligations remain with former owners

60%

58.2m
27.7%

Nippon
18.5%

Limited abandonment obligations on existing assets

Aim to keep decommissioning liabilities to a minimum
Source: Company
Of existing facilities

20

Conclusion

Visible growth from existing assets

Production and development bias

Geographic focusUKCS

Significant free cash flow generation

Oil price exposure

Financial strength
Skills, Scale and Strength
21

EnQuest
Transaction overview

Indicative transaction summary

Issuer

Offer size

Listing

UK incorporated

Any offer would be 100% secondary

To be determined by any selling shareholders

London Stock Exchange (premium listing) FTSE index inclusion

NASDAQ OMX Stockholm Stock Exchange (secondary listing) OMX Nordic index inclusion

Offering
syndicate

Institutional offering

Free float1

Expected to be around 73% pre any secondary offering

Lock-up period

Global coordination and

co-leads
1

EnQuest

Reg S only

12 months for EnQuest

6 months for management and any selling shareholders
Global co-ordinator: J.P. Morgan Cazenove
Joint lead manager Nordic region: Nordea
Co-lead managers: Oriel, RBC

Free float as defined by the FSAs Listing Rules

23

Envisaged timetable

Key events
Thursday 18 March
Management Roadshow launched, start of Bookbuilding
Prospectus published
Monday 29 March
Management Roadshow completed
Books close
Tuesday 30 March

Indicative timetable (March-April 2010)

Mon

Tue

Wed

Thu

Fri

Sat

Sun

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

10

11

Mar

Pricing and allocation announcement

Start of conditional trading on London Stock Exchange

Apr

Tuesday 6 April
Admission to the London Stock Exchange (Unconditional trading)
Start of conditional trading on NASDAQ OMX Stockholm
Friday 9 April
Unconditional trading on NASDAQ OMX Stockholm

Management roadshow

Bank holiday

Shareholders approval process

Monday 22 March
Lundin Petroleum General Meeting
Monday 29 March
Petrofac General Meeting

24

EnQuest
Appendix

Thistle/Deveron overview

Interest/
Operator

Working interest: 99 %

History

Operator: EnQuest
Field structures discovered by Signal, in 1973 and 1972 respectively

Reservoir: Brent

Reserves/
Resources

2P: 31.55 MMbbl net

Contingent Resources 2C: 14.9 MMbbl net

First oil in 1978 with peak production in 1982

Lundin acquired 99% stake from DNO in February 2004 with the
acquisition of DNO Britain. Existing decommissioning costs for these fields
assumed by previous owners Britoil and ConocoPhillips

Production Start: 1978

STOIIP: 926 MMstb

Produced/
Recovery

Field redevelopment commenced in 2007

Cumulative production: 431 MMbbl

Detailed subsurface studies completed

Recovery factor end 2009: 46.5%

Extensive refurbishment of Thistle platform

Ultimate recovery: 50%

Up and Over arrangements over Thistle platform commissioned in

March 2010

Field life: 2028

Workover of an inactive producer and installation of ESP pump ongoing

Infrastructure

Source: Company

Processing facility, a 60-slot, single steel jacket

platform installed in 1976
17 producer and 6 injector wells on Thistle and one
producer on Deveron

Oil via Dunlin to Cormorant; into Brent system to

Sullom Voe

Gas import via Northern Leg Gas Pipeline

Outlookactivity planned
Next five years
12 sidetrack wells and workovers
Development of further drilling inventory

26

Thistle ready to drill for the first time in 20

years

27

Thistle platform improvements

Thistle Platform

28

Heather overview

Interest/
Operator

Working interest: 100%

History

Operator: EnQuest
Field discovered by Unocal in 1973

Reservoir: Brent

Reserves/
Resources

2P: 20.5 MMbbl net

Contingent Resources 2C : 7.3 MMbbl net (plus 9.3 in
Triassic Reservoir1)
Production Start: 1978
STOIIP: 502 MMstb

Produced/
Recovery

Cumulative production: 134 MMbbl

Recovery factor end 2009: 27%
Ultimate recovery: 31%
Field life: 2029
Processing facility, 40 slot single steel jacket platform
Heather Alpha installed in 1976

Infrastructure

Host for nearby Broom sub-sea development

servicing Broom wells and processing produced
fluids

First oil in 1978 with peak production in 1982

Lundin acquired a 100% stake from DNO in February 2004 with the
acquisition of DNO Britain. Decommissioning costs shared with former
owners Chevron and BG (EnQuest liability limited to 37.5% of
decommissioning costs)
Field redevelopment commenced in 2008
PSDM 3-D seismic survey acquired and analysed with 10 horizons
mapped
Crane replaced to improve operations efficiency and future drilling
activities
Compressors reinstated (2 running, 1 spare)

Outlookactivity planned
Heather rig re-activation for 2012

14 producer and 1 injector wells

Continue to build drilling inventory

Oil via Ninian into Ninian pipeline to Sullom Voe

Mixture of workovers / re-instatement of water injectors and attic

opportunities

Gas import via Western Leg Gas pipeline

Source: Company
1 Triassic STOIIP: 50MMbbl

Further targets will be matured over next 2 years

29

Broom overview

Interest/
Operator

Reserves/
Resources

Working interest: 55%

History

Operator: EnQuest
Reservoir: Emerald Brent

Field comprises West Heather and North Terrace structures, oil

discovered by Unocal in 1977 and 1976 respectively

2P: 10.76 MMbbl net

First oil in 2004 with peak production in 2005

Contingent Resources 2C: 7.6 MMbbl net (Broom) plus

3.8 MMbbl net (SW Heather)

Lundin acquired a 55% stake from DNO in February 2004 with the
acquisition of DNO Britain

Production Start: 2004

STOIIP: 108 MMstb

Produced/
Recovery

Cumulative production : 30.6 MMbbl

Recovery factor end 2009: 30%
Ultimate recovery: 48%

Field development commenced in 2003

2-stage development successfully completed with a total of 6 subsea
wells tied back to the Heather platform
Flowline 1 failure (corrosion). Production restricted to second flowline

Field life: 2029

4 producer and 2 injector wells

Outlookactivity planned

Sub-sea tie-back to nearby Heather platform

Infrastructure

Source: Company

Oil via Heather and Ninian into Ninian pipeline to

SullomVoe

Replacement of flowline expected in 2010

North West Terrace appraisal well to be drilled in 2010

Gas import via Western Leg Gas pipeline and Heather

platform

30

Don Southwest overview

Interest/
Operator

Working interest: 60%

History

Operator: EnQuest
Discovered in 1981 and produced by BP for several years until 2003

Reservoir: Brent

Reserves/
Resources

Produced/
Recovery

2P: 13.89 MMbbl net

Petrofac and its field partner Valiant Petroleum acquired field in 2006

Contingent Resources 2C: 4.9 MMbbl net

Decommissioning of existing facilities at acquisition will be undertaken by

former co-owners BP and Conoco

Production Start: 2009

Field redevelopment commenced in 2008

STOIIP: 86 MMstb

Field Development Plan approval obtained in May 2008

Cumulative production: 1.17 MMbbl

Extensive refurbishment of Northern Producer achieved on schedule

Recovery factor end 2009: 1%

Ultimate recovery: 28%

4 wells drilled: 2 producers, 2 injectors

Tie-in to Thistle platform completed in March 2010

Field life: 2019

Infrastructure

2 producing wells

2 water injection wells

Production via floating production and processing

facility Northern Producer (life of field contract)

Up and over Thistle tie-in for pipeline export to

Sullom Voe Terminal

Source: Company
Post Petrofac redevelopment

Outlookactivity planned
Further development over the next 2 years includes drilling of 2
producer/injector pairs to target reserves in Area 5 Horst structure (S5,
S6) and Area 6 (S7,S8)

31

Don Southwest upside

Area 22 West
Don NE

Contingent Resources 2C: 3.6 MMbbl net

Timing of appraisal to be determined

Area E

Area 26
Contingent Resources 2C: 1.3 MMbbl net
Unrisked prospective resources: 9.2 MMbbl net

Don SW

Proven Oil in un-differentiated

Triassic/Jurassic Sands

Appraisal planned in 2011

Area H

Area G
Possible Oil
Probable Oil

Unrisked prospective resources: 6.5 MMbbl net

Proven Oil
Area H

Appraisal planned in 2010

Brent Group Accumulation Map

(Top Brent Fault Pattern)

Note: Activity around these areas is subject to partner approval

Source: Company

32

West Don overview

Interest/
Operator

Working interest: 27.7%

History

Operator: EnQuest
Field structures discovered by Burmah Oil in 1975 and lay fallow until 2006

Reservoir: Brent

Reserves/
Resources

2P: 3.76 MMbbl net

Petrofac purchased a 40% interest from Britoil and Conoco-Phillips in

Block 211/18a in February 2006, which was later unitised with Block
211/13b and renamed West Don. Petrofacs final stake is 27.7%
Field redevelopment commenced in 2008

Produced/
Recovery

Production Start: 2009

Joint development with Don Southwest

STOIIP: 46 MMstb
Cumulative production: 1.9 MMbbl

Development to date includes two high angle producing wells supported

by a single slant water injection well

Recovery factor end 2009: 4%

Production commenced in April 2009

Ultimate recovery: 33%

Tie-in to Thistle platform completed in March 2010

Oil export tie-in to Thistle platform commenced in March 2010

2 horizontal producer wells and 1 water injector

Production tied back to Northern Producer

Infrastructure

Source: Company
Post Petrofac redevelopment

Outlookactivity planned

Drilling of high angle producing well to target southern part of field in 2010

33

Don assets - Infrastructure

Source: Company

34

Overview of discoveries

Elke field

Peik overview
Interest/
Operator

Working interest: 17.66%

Interest: 100%

Operator: EnQuest

Operator: EnQuest
Contingent resources 2C: 15.0 MMbbl net

Reservoir: Middle Jurassic Hugin Sands

Contingent
Resources

Contingent Resources 2C: 1.5 MMbbl net

Discovered in 2002 by OMV

Contingent Resources 2C: 30.6 Bcf net

Acquired by Petrofac in August 2004 through the acquisition of a 100%

interest in Block 28/3a which contains the Elke field

Norwegian structure discovered in 1985, the UK extensions was

confirmed in 1987

Possible development to comprise drilling of three high angle producing

wells and one water injection well

Lundin acquired the high pressure and high temperature gas-condensate

discovery from Total in February 2007

Scolty discovery

Peik field is subject to unitisation between Norway and the United

Kingdom; the calculated interest is based on an estimated volume split of
53/47 between Norway/UK

Interest: 40%
Operator: EnQuest
Contingent Resources 2C: 3.2 MMbbl net

Project on hold, subject to improved gas market

Seismic studies showed massive, blocky high quality reservoir
Discovery well drilled in late 2007
Palaeocene sweet crude
Work ongoing to evaluate options for commercial development

Source: Company
Estimated, based on unitisation of the field
In respect of UK License P090

35

Historical income statements

Petrofac Energy Developments Limited (PEDL)

YE December 31 (000s)

Lundin North Sea BV Group (LNS)

2009

2008

2007

YE December 31 (000s)

84,971

2,727

3,307

Revenue

Cost of sales

(66,425)

(2,045)

(2,480)

Gross profit

18,546

682

827

(9,821)

(11,292)

(10,237)

(7,108)

Revenue

Evaluation costs
General and Admin expenses
Other income

2009

2008

2007

234,017

348,781

376,542

Cost of sales

(193,146)

(231,421)

(249,644)

Gross profit

40,871

117,360

126,898

Exploration & Evaluation expenses

(6,149)

(20,642)

(25,535)

(135)

(69)

(417)

(17,953)

27,953

(2,280)

16,634

124,602

98,666

827

9,167

7,205

737

Other expenses

(1,014)

Negative goodwill

6,618

Profit/(loss) from operations before tax and

finance income/(costs)

7,991

(13,772)

(6,275)

Finance income

1,002

146

21

Finance income
Finance costs

(6,444)

(10,337)

(10,379)

Profit/(loss) before tax

11,017

123,432

95,492

Taxation

(3,025)

(59,058)

(43,292)

7,992

64,374

52,200

Finance costs
Profit/(loss) before tax
Income tax
Profit/(loss) for the year attributable to
Petrofac Energy Developments Limited
shareholders

Source: Company

(8,726)

267

(13,626)

(6,254)

12,387

6,826

6,524

12,654

(6,800)

270

General, admin & depreciation expenses

Other income/expenses
Profit/(loss) from operations before tax and
finance income/(costs)

Profit/(loss) for the year attributable to

Lundin North Sea BV Group
shareholders

Source: Company

36

Unaudited pro-forma balance sheet

LNS

PEDL

Adjustments
2

Group

518,558
71,641
21,443
156
611,798

406,808

21,326
428,134

(21,443)

(21,443)

(357)

(357)

925,009
71,641

21,482
1,018,132

Total Assets

1,297
35,782
552
7,893
45,524
657,322

3,899
71,460
4,922
16,089
96,370
524,504

(21.443)

(3,686)

(3,686)
(4,043)

5,196
103,556
5,474
23,982
138,208
1,156,340

EQUITY AND LIABILITIES

Equity

160,200

7,437

124,052

367,714

(179)

659,224

156,000
53,198
252,483
461,681

55,359

55,359

(156,000)

(156,000)

(178)
(178)

108,557
252,305
360,862

Total Liabilities

33,326

497
1,618
35,441
497,122

64,381
394,898
2,429

461,708
517,067

10,505

10,505
(145,495)

(394,898)
27,184

(367,714)
(367,714)

(3,686)

(3,686)
(3,864)

94,021

40,615
1,618
136,254
497,116

Total Equity and Liabilities

657,322

524,504

(21,443)

(4,043)

1,156,340

YE December 31 (000s)
ASSETS
Non-Current Assets
Property, Plant and Equipment
Intangible assets
Loan receivable from related party
Deferred income tax assets
Current Assets
Inventories
Trade and other receivables
Due from related parties
Cash & Cash equivalents

Non-current liabilities
Loans and borrowings
Provisions
Deferred income tax liabilities
Current Liabilities
Trade and other payables
Loans due to related parties
Due to related parties
Income tax payable

Source: Company
Notes:
1. The consolidated balance sheets of LNS and PEDL as at 31 December 2009 have been extracted without material adjustment from Section B of Part VI and
Section B of Part VII, respectively, of the prospectus
2. The adjustments are as follows:
(1) Replacement of loans due to BNP Paribas of US$156,000,000 with loans due to related parties of US$156,000,000 followed by capitalisation, in equity share
capital, of US$124,052,000 representing net loans due to related parties of US$156,000,000, less US$21,443,000 less adjusted net working capital plus cash of
US$10,505,000 (see note 5 below).
(2) Capitalisation, in equity share capital, of US$367,714,000 representing loans due to related parties of US$394,898,000 less adjusted net working capital plus
cash of US$27,184,000 (see note 5 below); and
(3) Consolidation adjustment to eliminate unrealised profit of US$357,000 less tax of US$178,000, arising on trading between the LNS Group and the PEDL
Group and to eliminate related trading balances of US$3,686,000. The combined adjustments result in a decrease in retained earnings of US$179,000.
3. The adjustments do not reflect any fair value adjustments to the assets and liabilities acquired, which will ultimately be required, since these cannot be
accurately determined as at the date of this document.
4. No account has been taken of any trading or other transactions since 31 December 2009.
5. The LNS Group adjusted net working capital plus cash of US$10,505,000 represents current assets of US$45,524,000 less current liabilities of US$35,441,000
plus upward adjustment, under the Lundin SPA, of US$422,000 to reflect inventory at market value rather than cost. The PEDL Group adjusted net working
capital plus cash of US$27,184,000 represents current assets of US$96,370,000 less current liabilities, excluding loans due to related parties of
US$394,898,000, of US$66,810,000 plus upward adjustment, under the Petrofac SPA, of US$347,000 to reflect inventory at market value rather than cost and
downward adjustments of US$552,000 to exclude assets not transferred as part of the Petrofac Acquisition and US$2,171,000 to exclude assets paid for at a
later date under the Petrofac SPA.

Commentary
Had the transaction occurred at 1 January
2009, the income statement for the year
ended 31 December 2009 would have
represented the combined results of the LNS
Group and the PEDL Group adjusted as
follows:
Profit would have been reduced by the
elimination of unrealised profit (net of tax)
arising from trading between the LNS
Group and the PEDL Group;
Profit would have been reduced as the
result of an increase in depreciation of
tangible assets, as a result of the
allocation of the fair value of consideration
given by LNS to the identifiable net assets
acquired of PEDL; and
Profit would have been increased because
the capitalisation of interest bearing
funding received from related parties of
PEDL and LNS would have reduced the
interest charge for the year. The tax
charge for the year would have been
increased by the reduced interest charge.
This statement should not be taken to mean
that the earnings per share of the Group on a
consolidated basis will necessarily match or
exceed the historical reported consolidated
earnings or loss per share of LNS and PEDL
and no forecast is intended or implied.

37