ONSHORE CROATIA. Pannonian Basin Ongoing Bid Round. Dinarides Bid Round in preparation

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1 ONSHORE CROATIA Pannonian Basin Ongoing Bid Round Dinarides Bid Round in preparation

2 ONSHORE BIDDING ROUND FOR GRANTING LICENCES FOR EXPLORATION AND PRODUCTION OF HYDROCARBONS 1st Onshore Bidding Round for granting licences for exploration and production of hydrocarbons 18 July February exploration blocks within Pannonian Basin Awarded 5 licences for exploration and production of hydrocarbons 4 Production Sharing Agreements signed with Vermilion Zagreb Exploration Ltd. (DR-04, SA-08, SA-09, SA-10) 1 Production Sharing Agreement signed with INA-Industrija nafte Plc. (DR-02) 2nd Onshore Bidding Round for granting licences for exploration and production of hydrocarbons 7 exploration blocks Remaining part of Pannonian Basin Block DR-03 is also included, it was offered in 1st Onshore bidding round, but PSA was not signed

3 BIDDING ROUND TIME FRAMEWORK, APPLICATION REQUIREMENTS Bidders must satisfy: Administrative requirements Formal requirements Legal requirements Financial requirements Technical requirements Health, safety and environment requirements

4 BIDDER SELECTION CRITERIA Technical, financial and professional capacities of the bidder The manners in which the bidder or the consortium plan to carry out the activities subject to the licence for the exploration and production of hydrocarbons Overall quality of the submitted bid Financial conditions included in the bid submitted by the bidder for issuing the licence for the exploration and production of hydrocarbons (estimated cost of performing minimum work programme) Any lack of efficiency or responsibility in any form which has been displayed in other countries by the petroleum economic entity in previous activities within the scope of the Licence Signature bonus, with the lowest amount set in the Decree on fees for exploaration and production of hydrocarbons

5 BIDDER SELECTION CRITERIA Criteria for exploration blocks SZH-05, SA-11, SA-12 Mark (up to) Weight % 2D seismic survey 40 3D seismic survey 5 Other surveys 15 First exploration phase (3 years) Second exploration phase (2 years) Reprocessing of seismic data 5 Gravimetry and magnetometry 5 Other 5 Number and depth od exploration wells 40 2D seismic survey 30 3D seismic survey 10 Number and depth od exploration wells Signature bonus

6 BIDDER SELECTION CRITERIA Criteria for exploration blocks SZH-01, DR-03, SA-06, SA-07 Mark (up to) Weight % 2D seismic survey 5 3D seismic survey 40 Other surveys 5 First exploration phase (3 years) Second exploration phase (2 years) Reprocessing of seismic data 2 Gravimetry and magnetometry 2 Other 1 Number and depth od exploration wells 50 2D seismic survey 5 3D seismic survey 35 Number and depth od exploration wells Signature bonus

7 ONSHORE BIDDING ROUND FOR GRANTING LICENCES FOR EXPLORATION AND PRODUCTION OF HYDROCARBONS PANNONIAN BASIN 2nd Onshore Bidding Round for granting licences for exploration and production of hydrocarbons include 7 blocks located in southwest and central Croatia and central Slavonia Exploration blocks: Drava-03 (DR-03) Sava-06 (SA-06) Sava-07 (SA-07) Sava-11 (SA-11) Sava-12 (SA-12) Sjeverozapadna Hrvatska-01 (SZH-01) Sjeverozapadna Hrvatska-05 (SZH-05) Nature parks and production areas are excluded from the offered blocks

8 PANNONIAN BASIN

9 SCHEMATIC GEOLOGICAL CROSS SECTIONS OF DEPRESSIONS SCHEMATIC LITHOSTRATIGRAPHIC SECTION

10 STRATIGRAPHIC COLUMNS OF DEPRESSIONS GEOLOGICAL PLAYS Stratigraphic Column of Mura Depression Stratigraphic Column of Drava Depression Stratigraphic Column of Sava Depression 1. Miocene-Pliocene clastic and/or carbonate series draped over basement highs form the most significant play types in the basin (such play types are represented by post-rift compactional drape varieties) 2. Fractured and/or weathered basement (highs) with or without Miocene basal conglomerate and sealed by Miocene mudstones form a very important group of plays (Play types 1 and 2 are sometimes found together) 3. Miocene extension-related, tilted fault blocks containing reservoirs of various ages form an important group of plays (Pre-rift/Basement compactional drape) 4. Inversion-related play types are found in the anticlines associated with reactivation of strike-slip faults and include Miocene-Pliocene clastic reservoirs 5. Syn-rift-related, Miocene sandstone series truncated and sealed by postrift mudstones (this play type formally may belong to type 1 plays)

11 EXPLORATION BLOCKS OFFERED IN 2nd ONSHORE LICENCING ROUND 7 exploration blocks, with total accreage km 2, contain the following data: km of 2D legacy seismic data in stk/mig format km 2 of 3D legacy seismic data in stk/mig format All the data can be seen in our Data Room in Zagreb. If you are interested, please contact us at info@azu.hr Before visiting you will be provided with tendering documentation, data inventory and spatial data.

12 SEISMIC LINE EXAMPLES A B A A B B A B

13 FISCAL TERMS MODEL Exploration area Fee Administration Fee Exploitation area Fee Production Sharing Production Bonus Signature Bonus Royalty

14 SUMMARY OF THE FISCAL TERMS Signature Bonus Biddable subject to a minimum amount Minimum of EUR ( HRK) Surface Fees Exploration Phase - EUR 50 (400 HRK) per km 2 of Agreement Area per year Exploitation Phase - EUR 500 (4.000 HRK) per km 2 of Agreement Area per year Contract Administration Fee EUR ( HRK) per year Payable for the duration of the contract, escalates by 4% per year Production Bonuses OIL FIELDS - EUR ( HRK), payable at each of the following: Start of commercial production After each boe of cumulative production, ending with boe GAS FIELDS - EUR ( HRK), payable at each of the following: Start of commercial production After each boe of cumulative production, ending with boe

15 SUMMARY OF THE FISCAL TERMS Royalty Calculated and payable after the end of each month 10% of monthly production from the Agreement Area Production Sharing - Cost Recovery Investor is entitled to recover 100% of its approved petroleum costs (Operative and Capital Expenditures) Cost recovery ceiling is 70% of annual production less royalty Unrecovered costs may be carried forward until they are fully recovered, or until agreement expiry of termination Excess cost recovery is added to profit sharing pool (Profit Petroleum) Production from Agreement Area remaining after the deduction of royalty and cost recovery is shared between the Government and the contractor, depending on R-Factor

16 SUMMARY OF THE FISCAL TERMS Production Sharing depending on R-Factor R = X / Y R-FACTOR (R) Investor s Profit Share 0 < R % 1.0 < R % 1.5 < R % R > % X = Cumulative Net Revenues (total net revenues received by the investor from the effective date of the PSA until the end of quarter preeceding the relevant quarter, which means total amount actually received by the investor for its share of Profit Petroleum and recovery of its Petroleum Costs in the Agreement Area, decreased for all Operating Expenditures) Y = Cumulative Capital Expenditures (all Capital Exploration, Development and Production Expenditures actually incurred by the investor from the effective date of PSA until the end of quarter preeceding the relevant quarter)

17 Great potential 37 unevaluated oil and gas shows

18 NEXT STEP - BIDDING ROUND FOR GRANTING LICENCES FOR EXPLORATION AND PRODUCTION OF HYDROCARBONS IN DINARIDI AREA After the announcement of the Bidding Round for issuing licenses for exploration and production of hydrocarbons in Pannonian area, the Agency has started with the preparation activities for the bidding procedure for Dinarides Dinaridi area is divided into 4 exploration blocks: Dinaridi-13 Dinaridi-14 Dinaridi-15 Dinaridi-16 Exploration blocks are moved aside from coast line, and national parks and nature parks are excluded from them

19 SEISMIC DATA 4 exploration blocks, with total accreage km 2, contain the following data: 441,86 km of 2D legacy seismic data (in stk/mig format and raw data) Total 545,98 km of 2D legacy seismic data (in stk/mig format and raw data) - whole area

20 Dinarides Area Wells and Seismic Data

21 Keep your eye on Croatia!

22 THANK YOU FOR YOUR ATTENTION

23 EXPLORATION BLOCK DRAVA-03 Exploration block Drava-03 Accreage km 2 It stretches across: Virovitica-Podravina county Bjelovar-Bilogora county Osijek-Baranja county Požega-Slavonia county It contains the following data: km 2D legacy seismic data 985 km 2 3D legacy seismic data

24 EXPLORATION BLOCK SAVA-06 Exploration block Sava-06 Accreage km 2 It stretches across: Zagreb county Bjelovar-Bilogora county Koprivnica-Križevci county Krapina-Zagorje county Sisak-Moslavina county City of Zagreb It contains the following data: km 2D legacy seismic data 500 km 2 3D legacy seismic data

25 EXPLORATION BLOCK SAVA-07 Exploration block Sava-07 Accreage km 2 It stretches across: Bjelovar-Bilogora county Požega-Slavonia county Sisak-Moslavina county It contains the following data: 2010 km 2D legacy seismic data 136 km 2 3D legacy seismic data

26 EXPLORATION BLOCK SAVA-11 Exploration block Sava-11 Accreage km 2 It stretches across: Karlovac county Zagreb county Sisak-Moslavina county City of Zagreb It contains the following data: 501 km 2D legacy seismic data

27 EXPLORATION BLOCK SAVA-12 Exploration block Sava-12 Accreage km 2 It stretches across: Karlovac county Zagreb county Sisak-Moslavina county It contains the following data: 132 km 2D legacy seismic data

28 EXPLORATION BLOCK SJEVEROZAPADNA HRVATSKA-01 Exploration Block Sjeverozapadna Hrvatska-01 Accreage km 2 It stretches across: Varaždin county Međimurje county Koprivnica-Križevci county It contains the following data: km 2D legacy seismic data 175 km 2 3D legacy seismic data

29 EXPLORATION BLOCK SJEVEROZAPADNA HRVATSKA-05 Exploration block Sjeverozapadna Hrvatska-05 Accreage km 2 It stretches across: Krapina-Zagorje county Varaždin county Zagreb county Koprivnica-Križevci county City of Zagreb It contains the following data: 505,9 km 2D legacy seismic data

30 EXPLORATION BLOCK DI-13 Accreage km 2 It stretches across Karlovac county Lika-Senj county Primorje-Gorski Kotar county

31 EXPLORATION BLOCK DI-14 Accreage km 2 It stretches across Karlovac county Lika-Senj county Zadar county

32 EXPLORATION BLOCK DI-15 Accreage km 2 It stretches across Lika-Senj county Šibenik-Knin county Zadar county

33 EXPLORATION BLOCK DI-16 Accreage km 2 I stretchess across Split-Dalmatia county Šibenik-Knin county