1. Natural Resources & Related Industries Natexis Banques Populaires FINANCING THE INDEPENDENTS NOT AN OFFICIAL UNCTAD RECORD

2. Natural Resources & Related Industries Framework – Part. 1 Independents in the new oil & gas market Independents in the new oil & gas market  Opportunities in emerging markets  Emerging countries: a growth relay  Expansion of oil independents Key challenges to be faced by Independents Advising & financing the independents  Exploration  Financing Development & Acquisitions

3. Natural Resources & Related Industries Independents in the new oil & gas Market Opportunities in Emerging Countries Current production > New reserves discovery  Traditional assets are mature (North Sea, Gulf of Mexico…)  Fierce competition and high production costs  Decreasing replacement rate of World Reserves  Arising of local companies in emerging areas (Africa, Caspian Area, Latin America, Asia) with a strong potential in Africa EMERGING COUNTRIES: THE GROWTH RELAY

4. Natural Resources & Related Industries Independents in the new oil & gas Market Emerging Countries: The Growth Relay Promising zones  Wide range of attractive & still unexploited reserves  Exploration / Early production phase assets  Mature fields no longer profitable  Attractive economic & fiscal environment High potential assets  Favourable price context  Improvement of oil technologies

5. Natural Resources & Related Industries Independents in the new oil & gas Market Expansion of Oil Independants New players face various problematics:  Legal environment  Buying assets through tenders or direct negotiation  Buying companies (100% or less) which own assets or licences in emerging countries  Establishing a JV with local partners  Managing independance  Farming in / Farming out with Independents and/or Big names  Finding relevant partners  Choosing appropriate contractors at an effective cost rate & time schedule  Financing exploration, development and acquisitions

6. Natural Resources & Related Industries Framework – Part. 2 Independents in the new oil & gas market  Opportunities in emerging markets  Emerging countries: a growth relay  Expansion of oil independents Advising & financing the independents Advising & financing the independents A tailor-made approach at each step of Independent’s life:  Exploration  Financing Development & Acquisitions

7. Natural Resources & Related Industries Advising & Financing the Independents Benefiting from our expertise We can assist implementing Independent’s strategy:  Technical & legal advising as well as introduction to a large network of reliable professionals in the oil & gas industry  Raising funds and financing them at each step of exploration, development & acquisitions

8. Natural Resources & Related Industries Advising & Financing the Independants Project stages Exploration phase  High risk / High reward  Investors’ role PRIVATE PLACEMENT PARTNERSHIP BRIDGE FINANCINGRESERVE BASED LENDING IPO Farm-Out Before First Oil  Development risk  Investors / Banks’ role After First Oil  Operational risk  Banks’ role Development phases  Reserves are identified

9. Natural Resources & Related Industries Advising & Financing the Independents What is RBL ? RBL: a US-Born Financial Product  Methodology derived from standard transactions  Valuation of assets Borrowing Base  Lending backed to physical assets generating cash (producing field)  Benefits from well-established legal systems

10. Natural Resources & Related Industries Advising & Financing the Independents Why RBL ? (1/2) Traditional Corporate Lending  Non significant balance sheet and P&L accounts  Corporate banks uncomfortable with emerging countries Pre-Export Financing  Small production (PDP): facility insufficient to fund asset development  Financing long term investments with short term credit ?

11. Natural Resources & Related Industries Advising & Financing the Independents Why RBL ? (2/2) Project Finance  Quality of the Sponsor  Lack of flexibility  Development Risk (full asset development) New Equity  Cost  Dilution of existing shareholders  Time schedule

12. Natural Resources & Related Industries Advising & Financing the Independents RBL: A Structured Instrument adapted to Independents Why is it adapted to Independents ?  Based on asset cash flows, not on corporate CF  Country risk allowable even with limited asset portfolio  Tailored to financing needs and company development  Structured on purpose: Senior debt, Stretch  Allows risk taking without equity dilution

13. Natural Resources & Related Industries Advising & Financing the Independents RBL: A Borrowing Base mechanism  Facility amount determined by a pure cash flow analysis, driven by the value of oil and gas reserves following technical due diligence  The Borrowing Base is a structure that follows the performance of the company, with an amount evolving jointly with:  The development of current assets  The acquisition of new oil and gas interests  The Borrowing Base can be multi assets and multi countries

14. Natural Resources & Related Industries Advising & Financing the Independents RBL: Typical Senior structure BRIDGE  Facility: Amount fixed on a case by case basis  Purpose: Exploration and development of the existing reserve base and acquisition  Tenor: 3 to 6 months, until repaid by Senior facility SENIOR FACILITY  Facility: Fully revolving credit facility  Borrowing Base: Based on Proven reserves (North sea : Proven + Probable)  Purpose: Working capital, exploration and development of the existing reserve base and acquisition  Tenor: 3 to 8 years  Collateral: Charge on interests in oil & gas properties  Collection Account : Domiciliation of revenues at the agent’s counters  Amortization: According to cash flow ratios

15. Natural Resources & Related Industries Advising & Financing the Independents RBL: Typical Junior structure STRETCH Identical to senior except :  Facility: Up to additional $50 million (subordinated credit facility)  Purpose: Development of the existing reserve base and acquisition  Amortization: According to cash flow ratios (less restrictive than senior tranche) MEZZANINE Identical to senior except :  Facility: Amount fixed on a case by case basis (subordinated credit facility)  Purpose: Acquisition  Tenor: Senior facility Tenor + 1 day  Amortization: Bullet

16. Natural Resources & Related Industries EQUITY Advising & Financing the Independents RBL: Typical structure Development Working Capital Acquisition SENIOR STRETCH MEZZ. SENIOR STRETCH MEZZ. ASSET VALUE 50% +7.5% 35% 7.5% Banks finance up to 2/3 rd of asset value

17. Natural Resources & Related Industries Conclusion Your Banker – Your Partner  Technical & Legal Advising  Introduction to Reliable Professionals & Partners  Raising Funds  Financing Development & Acquisitions

18. Natural Resources & Related Industries THANK YOU Natexis – Natural Resources & Related Industries 45, rue Saint Dominique 75007 PARIS phone : + 33 (0) 1 58 19 30 19 Fax : + 33 (0) 1 58 19 38 89 Laure PIRONNEAU Head of Africa & Middle-East e-mail : laure.pironneau@nxbp.fr phone : + 33 (0) 1 58 19 28 79 Pascal NICODEME RBL Team e-mail : pascal.nicodeme@nxbp.fr phone : + 33 (0) 1 58 19 33 41