1. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
10thMarch2016
Page | 1
M & A Opportunities in
Oil & Gas
Euromoney : 8th Annual
Distressed Investing
and Financial
Restructuring In
Australia Conference
Nicholas Assef LLB (Hons) LLM MBA

2. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
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Work Book Index
1. Macro Picture
i. Long Term Oil Price
ii. Futures Curve : Brent Crude Out To 2018
iii. Deal Activity by Number & Value
2. Observations Of Current Market
3. Validation of M & A Opportunity
Keep your face toward the
sunshine, and the shadows
will fall behind you
Walt Whitman
Thanks to Simon Koay from LCC
who has helped with research on this
presentation

3. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
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Brent (NYMEX) Historic & Futures
Historic from 1983 (Monthly) Futures out to 2018 (2015/16)
• Flat forward Curve –
expectation under
USD $60 a barrel
• Challenge of changing cost
base against free falling
commodity price
• Highlights issues when long
dated hedges roll off
Source: S & P, LCC research

4. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
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Recent Deal Activity : Trend Down But By Value ?
Data By Transaction Count (Global) Data By Transaction Value (Global)
Typically One
Off Deals such
as BG Group
acquired by
Shell for
US$80bln
North America
continues to
dominate deal
activity
Source: S & P, LCC research

5. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
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Deal Count In Last 5 Days
Announced Date Target Buyer/Investors Size ($mm)
Mar-07-2016 Beijing YilongHengye Oil Technical Engineering Co., Ltd. Tong Oil Tools Co., Ltd.
(SZSE:300164)
76.75
Mar-07-2016 Hydrodec (UK) Limited and Hydrodec Re-Refining (UK)
Ltd.
1.71
Mar-07-2016 Mariner Project Siccar Point Energy Limited -
Mar-07-2016 Mesteña Uranium, LLC Energy Fuels Inc. (TSX:EFR) 12.69
Mar-07-2016 Petrus Resources Ltd. (TSX:PRQ) Waters Club Worldw ide Inc. -
Mar-07-2016 Quicksilver Resources Canada, Oil and Gas Assets in
Horseshoe Canyon area of Alberta, Canada
CPC Resources ULC 79.0
Mar-05-2016 40% Stake in Henan Yongyin Chemical Industry Co.,Ltd.
and Unknow n Stake in Zhongyuan Bank Co., Ltd.
Yongcheng Coal & Electricity
Holding Group Co.,Ltd.
-
Mar-05-2016 Emir-Oil, LLC Reach Energy Berhad
(KLSE:REACH)
175.89
Mar-04-2016 PT Cahaya Lembusuana Geo Energy Resources
Limited (SGX:RE4)
13.0
Mar-04-2016 Roca Honda Project Energy Fuels Inc. (TSX:EFR) 7.0
Mar-04-2016 Vertical Services Pty. Ltd. Aecor Pty Ltd. -
Mar-03-2016 800 Commerce, Inc. (OTCPK:ETHG) Petrogres Co. Limited -
Mar-03-2016 Azarga Uranium Corp., Redundant Assets 0.32
Mar-03-2016 Stream Oil & Gas Ltd. GBC Oil Company Ltd. 31.5
Mar-03-2016 Viking Services B.V. -
Mar-02-2016 Altinex Oil Norw ay AS Det Norske Oljeselskap ASA
(OB:DETNOR)
-
Mar-02-2016 Forestar Group Inc., Oil and Gas Assets in Kansas and
Nebraska
21.0
Mar-02-2016 Gas Processing Plant in The Carseland Area Manitok Energy Inc.
(TSXV:MEI)
3.54
Mar-02-2016 NOVA-Brit, OOO Gazpromneft Bitumen
Materials LLC
-
Mar-02-2016 Perpetual Energy Inc., 37 Sections of 425 Net Sections of
Oil sands Leases in Northeast Alberta
4.53
Mar-02-2016 Pryme Energy Limited, Capitola Project in Texas 2.2
Still a reasonable
level of activity –
but last 5 days is an
interesting sample
given the size of
Energy sector
Source: S & P, LCC research

6. WORKBOOK
WWW.LCC.ASIA | Strictly Confidential10 March, 2016
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Observations of Current MarketUpstreamMidstream
Current Observations Core Opportunity
Producers focussed organic transformation
• Cost cutting in field and corporate
• Renegotiate better terms Services contracts
• Optimising rigs in field (dropping)
• Targeted vs general drilling
• Defer / “Modularising” large CAPEX
Inorganic initiatives activated
• Divest sub scale “near core” assets
• Equity capital raisings before distress
• Debt refinancing early before problems
• Creative initiatives : Joint Ventures
Phase1Phase2
 Improve assets in portfolios
 Stock based deals attractive as
preserve upside (for Target)
 Can target small players with cash +
assets (can be cheaper than ECM)
 Streamlined Targets where much of
the integration cost savings have
been already conducted – as such
acquiring higher quality
organisations
 Near Core assets which are of good
value may be disposed – non core
poor quality will not be dealt
Macro Catalysts ?
Debt providers become
more aggressive
Hedge contracts roll off
Explorers under pressure number angles
• Raising debt or equity difficult / expensive
• Illiquidity in stock trading
• Cutting costs takes money – caught in trap
• Belief of “under valued” blocks deals
Long term current oil
price which will continue
to constrain capital
raising potential
Midstream doing ok
• Plenty of refining through put
• Pipelines still in demand
• Infrastructure spend continuing
• Cutting costs takes money – caught in trap
• Belief of “under valued”
 Continued rationalisation assets
 Assets well bid (yields can be quite
low) so need to be highly selective
• BG Group sale of 543km
Qld Pipeline to APA for 13x
2016 EBITDA (deal struck
Dec 2014)
2
Slowdown in debt /
equity capital available
for projects
Asset owners under
pressure elsewhere
1
1

7. WORKBOOK
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Validation of M & A Opportunity
Mar-13 Mar-14 Mar-15
Mar-13 Mar-14 Mar-15 Mar-16
Mar-13 Mar-14 Mar-15
Beach Energy Limited
Drillsearch Energy Limited
Post-merger
Mar-13 Mar-14
Mar-13 Mar-14
Mar-13 Mar-14 Mar-15 Mar-16
Eco (Atlantic) Oil & Gas Ltd
Pan African Oil Ltd.
Post-merger
Large Company Small Company
POST DEAL
Beach Energy Limited (ASX BPT)
POST DEAL
Eco (Atlantic) Oil & Gas Ltd (TSXV EOG)
c. $8m
c. $4m
c. $19m
1. Both hold licenses offshore Namibia –
so increased portfolio
2. Cash reserves increased as a result
3. Able to strip out cost / duplication
4. Higher relevance for investors & brokers
• 58% uplift from simple
“merged Market Caps”
c. $678m
c. $319m
1. More reserves, production & revenue
2. Significant cost savings
3. Becomes Australia’s largest onshore
oil producer
4. Index rating / Institutional relevance
• 45% uplift from simple
“merged Market Caps”
c. $1,442m
Deal Highlights Deal Highlights
Source: S & P, LCC research, Company data

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Contact us
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