Preliminary high-level plan to 20bcm in 2020 UGV gas production levels, mcm/y 21,000 20,008 18,366 18,000 4,017 16,525 2,940 1,865 15,000 14,778 14,525 828 220 328 769 192 277 1,223 12,000 552 355 1,593 652 426 12,658 11,722 10,786 9,850 2016 2017 2018 2019 2020 Intensification Exploration on new fields Other Tight gas Exploration on existing fields Base

Key success factors for UGV 20/20 strategy Technical Operating framework Intensification (hydraulic fracturing, directional drilling, coil tubing, hydrochloric acid treatment) Booster compressor stations (modernization+new) Drilling rigs renovation and modernization, workover equipment, advanced basin modeling, exploration of tight gas deposits Sufficient funds for CAPEX program Increase of gas prices up to market level Appropriate political and legal climate for international companies and experts Rent decrease to economically feasible levels Preventing political and corruption-motivated meddling

Gas prices relevant for UGV case USD / ‘000m3 2013 2014 2015 2016F Average selling price of gas as commodity for UGV (net of VAT) 43,7 29,4 58,5 101,2 (net of VAT and production tax) 35,0 23,5 24,9 45,6 Estimated selling price of gas as commodity for private producers (net of VAT and production tax) 264,0 149,0 102,0 145,0 Average price of gas as commodity for households** 46,5 41,4 80,6 130,5 Average retail price of gas for households*** 109,8 91,3 137,0 192,5 Notes: * - average annual official UAH//USD exchange rate for 2013-2015 and IMF forecast for 2016-2018 UAH//USD exchange rate are used ** - final retail price excluding transportation and distribution tariffs, regulated retail supplier’s margin, special “mark-up” and VAT. Special “mark-up” comprises 4% for 2013-2015, starting from 2016 it was abolished. *** - final retail price (including transportation and distribution tariffs, regulated retail supplier’s margin, special “mark-up” and VAT. Special “mark-up” comprises 4% for 2013-2015, starting from 2016 it was abolished).

State bodies hamper UGV reform General Prosecutor’s Office’s criminal case against the new management for competitive transparent tender won by American and German producers (NOV Fidmash and KATT) State Geological Service: termination and delays in issuance of new licenses Denial or delay in approvals of permits for drilling State Financial Inspection tries to stop the purchasing reform – ProZorro Political and corruption-motivated interventions of Members of the Parliament in reforming UGV

Gas sales 2015 (unregulated market) Market share (bcm) Preliminary segment results for Naftogaz (UAHbn) Naftogaz 24% Others 76%

Roadmap to efficient gas market in Ukraine Privatization of gas production Corporate Governance reform of Naftogaz Supervisory Board: insulation from political meddling and graft 0% Royalty Tax + Fair Auctions for new gas production licenses Increase in Production Competition in retail Non-regulated household prices

Evolution of market conditions: 2016 to 2020 + 2017-2019 2020+ NON-COMPETITIVE price of gas imported from Russia 2009 Contract terms with Gazprom COMPETITIVE price from the EU EU oriented gas imports Supply from EU dominates, can fully substitute supplies from Russia in 2016 LOW flexibility for flows across the borders Contractual bottlenecks at all but one IPs at the border with EU; Backhaul is not possible under existing contracts structure COMPETITIVE Price of gas imported from Russia Hub-minus-transportation NON-COMPETITIVE price from EU HIGHER import from Russia due to attractive pricing + Possibility to re-export surplus of imported Russian natural gas DEBOTTLENECKING at all interconnection points Backhaul operations are introduced; Bidirectional gas flows at all IPs NO RUSSIAN GAS Under conservative scenario Imports from EU to cover peak consumption FREE flows of gas across the borders Full infrastructural, legal and contractual integration with the EU transmission system GTS and UGS are not attractive for investments Infrastructure is used inefficiently due to uncompetitive practices by Gazprom => future cash flows are uncertain; GTS and UGS are attractive for investments Given predictable cash flows, TSO becomes attractive for Western partners; Very cost-attractive Ukrainian transit route of the East-to-West gas corridor; Attractive capacity products are offered by SSO + competitive gas price from RF => shippers are incentivized to store gas in UGS and trade during the periods of peak consumption

Largest tax payers in Ukraine in 2015, UAH bn Ukrgazvydobuvannya Naftogaz Ukrnafta TOP-20 tax-payers, 112 UAH bn ArcelorMittal Kryvyi Rih TOP-20 tax-payers, 53 UAH bn 2015 2014 Naftogaz Group: 43 UAH bn (38%) Naftogaz Group: 13 UAH bn (25%) ТОP-100 Business digest