WAIN BLOCK KUTAI BASIN EAST KALIMANTAN

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1 EXECUTIVE SUMMARY WAIN BLOCK KUTAI BASIN EAST KALIMANTAN PT. PANDAWA PRIMA LESTARI September 2016

2 INTRODUCTION Wain Block is located in East Kalimantan that covers 3 regencies: Balikpapan, Penajam Paser Utara and Kutai Kertanegara. Presently, the working area of Wain Block is sq. Km. Firm Commitments (seismic, reprocessing, study, and drilling two exploratory wells) have been completed after drilling the discovery Karamba Updip-1 well early this year. Results of the KUD-1 well is far exceeded our expectation; the well encountered seven (7) reservoir sands with very good gas shows (up to C5) during drilling; we tested 5 intervals, 3 of them flowed at a total rate of 20 mmcfg/d using 2 7/8" tubing; if we use 3 1/2" tubing for production, the rate could easily reach 50 mmcfg/d, with no water. Total Net Gas Pay was expected to be 60 feet, and the well encountered 172 feet Net Gas Pay. The P1 Recoverable Reserves based on 3 DSTs (72 hours each) indicated 120 bcf. The original calculations of the Recoverable Resources on the KUD structure was 129 bcf; and after drilling the KUD-1 well, the RR of the structure now is calculated to be more than 300 bcf. Total Recoverable Resources of the 10 existing prospects is now 1.5 TCF (previously 1.24 TCF). Development of the ten prospective structural closures that have 1,5 TCF recoverable reserves for gas will generate (assuming gas USD 5.0/mscfg): a Net Cash Flow of MUSD 1,507, NPV of MUSD 247 at discount rate of 10%, the Project POT of 0.9 years after development of the fields, and IRR of 34.8 %. September 2016 Page 1

3 In geological view, Wain Block is located on Kutai Basin. Kutai basin is one of the most productive hydrocarbon basins in Indonesia (see Fig. 1). Based on the Geological Risk Evaluation to all prospects in Kutai Basin give the ratio of between which can be classified as low to moderate risk. Moreover, Wailawi gas field, discovered in 1975 by Vico, and has been producing gas, is located adjacent to the Wain Block and has the same stratigraphic and structural regime. September 2016 Page 2

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6 SUMMARY OF WAIN PSC Location Contract Area Type of Contract Term of Contract : Located onshore, eastern of Kalimantan island and part of Kutai Basin. This Block located in 3 regencies ; Balikpapan, Penajam Paser Utara and Kutai. : 1, sq. Km. : Production Sharing Contract with the following equity split: For Oil:Government entitled to take and receive eighty percent (80%) after tax and Contractor entitled to take and receive twenty percent (20%) after tax, For Gas: Government entitled to take and receive seventy percent (70%) after tax and Contractor entitled to take and receive thirty percent (30%) after tax. : Thirty (30) years from effective date (January 16, 2007). FTP : Ten percent (10%). DMO : DMO = Twenty five percent (25%) x Contractor share. DMO = Twenty five percent (25%) x Oil Price. Government Tax : Forty four percent (44%). Maximum Cost Recovery Relinquishment : Ninety percent (90%) of gross revenue. : Twenty percent (20%) in third year. Retain Twenty percent (20%) in sixth year, or as large as the producing fields. September 2016 Page 5

7 AVAILABLE SUPPORTING DATA & POTENTIAL OF WAIN BLOCK Geological Data Provided Geophysical Data Provided Source Rock / Reservoir Estimated Total Target Depth Identified of Prospect & Lead Potential Hydrocarbon : Six (6) packagess of well data (Loa Haur 1, Saka Kanan 1, Mentawir 1, Semoi 1, Penajam 1 and Rico 1). New exploration well, South Karamba-1, drilled in : 2D seismic data with total of length more and less 1,337 kms with different interval shot points; 30, 60 and 120 m multi-vintages (from year 1970, 1980 & 1990 s). New seismic acquisition in D (100 km) & 3D (20 km 2 ). : Main target: Sandstones, Pulau Balang formation. Second target: Sandstones, Balikpapan formation. Third target: Carbonates, Bebulu formation. : Between one thousand (1,000) to two thousand (2,000) m. under sea level. : Based on seismic mapping, eleven Leads and ten drillable prospects have been identified in the Wain Block. : Reserve hydrocarbon calculation in the Wain Block (For 100% filled with oil and gas respectively) shows the OOIP (Original Oil in Place) is 3,725 MMBO for unrisked oil case (P50) and 745 MMBO for recovered oil case (P50), while the OGIP (Original Gas in Place) is 3,820 BSCF for unrisked gas case (P50) and 3,247 BSCF for recovered gas case (P50). September 2016 Page 6

8 EXPLORATION COMMITMENT All firmed commitments have been completed after 1 st quarter this year : o 2D and 3D Seismic Acquisition o Surface Mapping o Geochemical Survey o Resistivity Survey o South Karamba-1 well - suspended o Karamba Updip-1 well - discovery The first 10 years of the 30 years PSC contract is dedicated as exploration phase. PROGRAM & BUDGET The estimated budget for drilling two (2) exploratory well is about fifteen million US dollars (US $ 15,000,000). Also for General Administration is about one and half million US dollars (US $ 1,500,000) and for Exploration Administration is about five hundred thousand US dollars (US $ 500,000) September 2016 Page 7

9 PRESENT OWNERSHIP PT. Pandawa Prima Lestari hold 100% of Participating Interest. INVESTMENT OPPORTUNITY PT. Pandawa Prima Lestari plan to farm out 35% of its Participating Interest in Production Sharing Contract of Wain Block. September 2016 Page 8