Oil and Gas Eye

Q4 2011

Ernst & Youngs Oil and Gas Eye index monitors the performance of AIM oil and gas companies on a weekly basis and can be viewed at www.ey.com/uk/ oilandgaseye. Movements and analysis of the index are reported in this quarterly publication. Oil and Gas Eye also provides regular analysis and commentary on activity driving the AIM market. The Oil and Gas Eye index is constructed on the same basis as the major indices with a normal value of 1,000 assigned to the index levels as of 1 January 2004. It is calculated using the top 20 AIMlisted oil and gas shares by market weight, representing around 57% of the total AIM oil and gas universe. Ernst & Young produces a similar index for the mining sector, which can be viewed at www.ey.com/uk/ miningeye. To receive copies of the Oil and Gas Eye, please contact Michael Simpson at +44 020 7951 8870 or email msimpson2@uk.ey.com; to receive copies of the Mining Eye, please contact Olivia Russell at +44 020 7951 5559 or orussell@uk.ey.com.

A positive end to a difficult year, but there are more challenges to come
Ernst & Youngs Oil and Gas Eye index posted a 24% gain in the last quarter of 2011, reflecting drilling successes and several possible takeover transactions. Nonetheless, the index ended 2011 22% lower than at the start of the year, and the outlook for 2012 remains challenging. One oil and gas IPO during the quarter raised just over 1m. Total oil and gas IPO fund-raising in 2011 was 223m, dwarfed by the 1b of secondary fund-raising. This emphasises the importance of continuing market access for the AIM oil and gas universe and, although a significant amount, this was 47% lower than the secondary fund-raising achieved in 2010. Credit markets are tight and continue to suffer under the cloud of the Eurozone debt crisis. Junior oil and gas companies seeking to deliver on exploration and development projects will need to consider a broad range of options in order to meet their funding requirements. Ironically, these difficult funding dynamics could have a positive impact on the index as they are likely to fuel greater corporate transaction activity in 2012. The largely wellcapitalized majors and national oil companies (NOCs) have a significant balance sheet advantage to exploit.

Oil and Gas Eye Q4 2011 in review

Oil and Gas Eye index ends the year in more positive territory

Index value

Ernst & Youngs Oil and Gas Eye index rose by 24% over the fourth quarter of 2011, recovering some of the losses of the previous two quarters. Despite the positive end to 2011, the performance of the index over the year as a whole was disappointing, compared with the strong recovery seen in 2009 and 2010. The Oil and Gas Eye index ended 2011 22% lower, compared with a gain of 47% in 2010. Volatility in global equity markets typically encourages investors toward larger stocks. However, junior oil and gas companies listed on AIM outperformed their larger peers in the final quarter of 2011, underpinned by drilling successes and potential takeover activity. The FTSE 350 Oil and Gas Producers index rose by 18% over the fourth quarter, ending the year 5% higher. Oil and gas companies listed on AIM also outperformed other sectors, with the FTSE AIM All-Share index rising by just 1% in the final three months of 2011 and ending the year 26% lower than the start. During the final quarter of 2011, uncertainty over the future level of oil demand, a relatively mild start to the winter heating season in the Northern hemisphere and a gradual return of production from Libya helped temper oil prices. The average Brent crude price in the fourth quarter was US$109.34 per barrel, almost 4% lower than the average in the previous quarter. The average Brent price in 2011 was US$111.40 per barrel. This is 40% higher than the average for 2010, reflecting the impact of geopolitical tensions and supply uncertainties during 2011. Stronger commodity prices supported investment levels, which returned to pre-recession levels. Global upstream spending is forecast to increase by a further 10% in 2012, suggesting a more positive outlook for oil companies. However, they are not immune to developments in the wider global economy.

Performance of the Oil and Gas Eye index over Q4 2011

Source: Ernst & Young, Thomson Datastream 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000

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Ernst & Young Oil and Gas Eye

FTSE AIM All-Share (rebased)

Performance of the Oil and Gas Eye Index since 2008

Source: Ernst & Young, Thomson Datastream 3,400 2,900

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2,400 1,900 1,400 900 400

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Ernst & Young Oil and Gas Eye

Oil and Gas Eye Q4 2011

In the Q1 2011 edition of the Oil and Gas Eye, we talked about the uncertain outlook for the global economy. At the end of the year there is even less clarity about shortterm growth prospects in many major economies. Europes recovery has come to a standstill, with the European Commission (EC) revising down forecasts for growth in the region by more than half. The ECs Autumn Economic Forecast, released in November, predicts GDP growth of 0.6% in the EU and 0.5% in the Euro area in 2012, substantial downgrades to GDP growth rates predicted by the EC in its Spring Economic Forecast. Since that forecast was published in May, the EC has concluded that the outlook has taken a turn for the worse. The Eurozone debt crisis continues to cast a shadow over equity markets despite the fiscal compact agreed upon by European leaders on December 9 to move toward

closer fiscal integration. The lack of a long-term solution to the crisis contributes to an increasing lack of investor appetite for exposure to European risk. Access to debt and equity funding, particularly for the independent oil and gas sector, is now extremely challenging. Just 15 AIM-listed oil and gas companies (13% of the universe) were successful in raising funds in the fourth quarter of 2011. Total secondary fund-raising by AIM-listed oil and gas companies in 2011 was 1,013.1m, 47% lower than the amount raised in 2010. In the face of tightening credit markets, junior oil and gas companies will have to consider a broad range of options in order to meet funding requirements. This situation is likely to result in an increase in transaction activity in 2012 as the largely well-capitalized majors and NOCs exploit their balance sheet advantage.

Oil and gas funds raised as a proportion of total funds raised on AIM
Source: Ernst & Young analysis of AIM market statistics
1,200 45% 40% 1,000 35% Oil and gas funds m 800 30% % of AIM funds 25% 600 20% 400 15% 10% 200 5% 0 0%

Oil and gas new issues (m)

Oil and gas further issues (m)

Oil and gas % of all AIM (RH scale)

Oil and Gas Eye Q4 2011

Winners in Q4 2011 had successful drilling results or received take over approaches
In October, New World Oil and Gas announced that it had signed two farm-in agreements to acquire working interests in Licenses 1/09 and 2/09 in the Jutland onshore area in southwestern Denmark. The two licenses comprise the Danica Jutland Project, which New World Oil and Gas assumed operatorship of in November. During the quarter, the company also announced that the Belize Ministry of Natural Resources and the Environment had formally approved the assignment to a New World Oil and Gas subsidiary of an initial 12.5% working interest in the Blue Creek project located in the Peten Basin in northwest Belize. The share price of the company ended the quarter 94% higher than the start. In early October, it was announced that agreement had been reached on the terms of a recommended acquisition by Premier Oil of EnCore Oil. The acquisition will strengthen Premier Oils position in core areas, including an increased interest in the Catcher field and Cladhan discovery in the North Sea. The share price of EnCore Oil ended the fourth quarter 48% higher. Cove Energy announced in October that the Camarao exploration and appraisal well had found natural gas and confirmed gas reservoir connectivity between Camarao and the previously announced Windjammer and Lagosta discoveries offshore Mozambique. The following month Cove Energy announced that gas had also been discovered at the Barquentine-3 appraisal well and, as a result, the recoverable resource range for the Windjammer, Lagosta, Barquentine and Camarao (WLBC) complex would be upgraded to 15 to 30+ trillion cubic feet of gas. Cove Energy announced in December that it had opened a data room to certain parties who had expressed an interest in Coves participation in the Rovuma Area 1 project offshore Mozambique that contains WLBC and that early-stage discussions with major liquified natural gas (LNG) off-takers in Asia and Europe were taking place. The share price of the company gained 53% over the fourth quarter.

In Q4 2011, 50% of the companies in the AIM oil and gas universe recorded share price gains. The winners in this quarter were those companies that had successful drilling results or those who delivered shareholder value through acceptance of a takeover offer from a larger peer. The potential impact of a single well on smaller companies has long been an attraction for investors into the AIM oil and gas universe. The increasing likelihood of corporate transaction activity is an added incentive. Shares in Petroceltic International increased in price by 109% over the fourth quarter of 2011. In December, Petroceltic announced final flow test results from its AT-9 well at the Ain Tsila field in Algeria, indicating that gas flow rates were among the highest ever achieved from an Ordovician well in Algeria without fracture simulation. The AT-9 well is the third of Petroceltics nine appraisal wells to flow at very high rates and supports the production profile anticipated at field start up. Petroceltic International was one of two companies to enter the Oil and Gas Eye index at the end of the fourth quarter. It was joined by EnCore Oil, although the pending takeover of EnCore may make its entry short-lived. The share price of Dominion Petroleum ended the fourth quarter 97% higher compared with the start of the period. In October, it was announced that agreement had been reached for a recommended offer by Main Market-listed Ophir Energy for Dominion Petroleum. In December, Dominion announced that a majority of its shareholders had approved the deal. Completion of the acquisition remains subject to regulatory approvals .

Performance of the Oil and Gas Eye index and oil price over Q4 2011
Source: Ernst & Young, Thomson Datastream

2,600 2,400 2,200 Index value 2,000 1,800 1,600 1,400 1,200 1,000

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Ernst & Young Oil and Gas Eye

Oil and Gas Eye Q4 2011

Fallers in Q4 2011 suffer from disappointing drilling results

drilling program to be undertaken at present. Argos Resources added that it had held preliminary discussions with a number of possible farm-in partners, but arrangements that could have been finalized within the time frame for the availability of the Ocean Guardian rig involved a single well and were therefore not acceptable to the company. The share price of Argos Resources fell by 49% over the fourth quarter. The share price of San Leon Energy ended the fourth quarter 41% lower compared with the start of the period. In October, the company announced that it had completed the drilling and evaluation of its second low-cost conventional exploration well in the Nida Concession in southern Poland but had found no indications of hydrocarbons. The company is plugging the well as a dry hole. During the quarter, San Leon Energy also announced that it had completed the acquisition of Realm Energy International Corporation. In November, Petro Matad announced that no oil was recovered during the testing of the Davsan Tolgoi 11 well (DT-11) in eastern Mongolia. The company added that the oil shows that were encountered and reported during the drilling of DT-11 are now considered to be residual oil. Petro Matad also reported that oil observed in the Tsagaantsav reservoirs in DT-1, DT-2 and DT-3, along the crest of the Davsan Tolgoi anticline, is now also interpreted as residual oil. The share price of Petro Matad fell by 35% over the fourth quarter. Lochard Energy announced in September that it had received a preliminary approach that may or may not lead to an offer being made to acquire the company. In November, Lochard Energy released a statement saying that although no offer had been made, the Board had decided that the indicative proposal did not reflect a fair valuation of the company and that offer discussions had been terminated. Later in the quarter, Lochard Energy announced that proceedings in the case brought by Senergy UK Limited against Zeus Petroleum (a wholly owned subsidiary of Lochard) in the High Court in London had been heard and judgment for liability had been handed down in Senergys favor. The amount of costs or damages has yet to be set by the court, but they will be paid from the cash flow resulting from production from the Athena field, which is due to come onstream in Q1 2012. Zeus Petroleum is the holder of an interest in the Athena oilfield, which is Lochard Energys major asset. The share price of Lochard Energy fell by 25% over the fourth quarter. Two companies exited the Oil and Gas Eye index at the end of the fourth quarter of 2011: Jubilant Energy and Range Resources.

Fifty percent of companies in the AIM oil and gas universe registered a fall in their share price in the fourth quarter, primarily driven by disappointing drilling results. The share price of 3Legs Resources fell 62% during the fourth quarter. In November, the company announced that flow rates from its Warbino LE-1H2 horizontal well in Poland were lower than originally expected. The company added that it believes that the well could benefit from being shut in for an extended period of several months to recover from the fracture stimulation. In November, Argos Resources announced that it had decided not to participate in the current drilling campaign in the North Falkland Basin with the Ocean Guardian rig. The company said that weak capital markets and the restricted availability of the Ocean Guardian rig would not allow a meaningful

Performance of the Oil and Gas Eye index and FTSE 350 Oil & Gas Producers index
Source: Ernst & Young, Thomson Datastream

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Ernst & Young Oil and Gas Eye

FTSE Oil & Gas Producers (rebased)

Oil and Gas Eye Q4 2011

Main Market oil and gas movers

On the Main Market, Exillon Energy was the best-performing company in the FTSE 350 Oil and Gas Producers index in the fourth quarter, with its share price rising by 24%. In October, the company announced that its EWSI-43 well had successfully found oil on the southeastern part of the East EWS I field in West Siberia. Later in the quarter, Exillon announced that the ETP III-76 well in the Timan-Pechora region of Russia had also successfully encountered oil. On completion of testing, both wells will be connected to existing production facilities. The share price of Royal Dutch Shell also increased over the fourth quarter. In November, Shell announced that the Iraqi Cabinet had approved an agreement with Shell and Mitsubishi Corporation to form a joint venture to gather natural gas from three major oil fields to meet growing domestic demand and the potential for gas exports in the future. The JV, which will be called Basrah Gas Company, will gather gas that is currently flared because of a lack of infrastructure to collect it. In December, Shell also announced that it had completed the sale of its 30% interest in two oil leases and related facilities in the Niger Delta. The price of London-listed Shell shares was 22% higher by the end of the fourth quarter. UK-based BG Group announced in November that an extended well test had increased the production potential of the Carioca discovery located in the Santos Basin offshore Brazil. The following month, the company announced that it had reached an agreement with the Republic of Kazakhstan and the contracting companies in the Karachaganak gas-condensate field in northwest Kazakhstan that will support the further development of the field. The agreement, effective from 30 June 2012 on satisfaction of conditions precedent,

involves Kazakhstans KazMunaiGas (KMG) acquiring a 10% interest in the project. This will be done by each of the contracting companies transferring 10% of their rights and interest in the Karachaganak Final Production Sharing Agreement (FPSA) to KMG. BGs share price rose by almost 11% over the fourth quarter. Heritage Oil was one of four Main Market oil and gas companies that suffered a fall in their share price over the fourth quarter. In November, Heritage Oil provided an update on its tax dispute with the Government of Uganda in response to the ruling of the Tax Appeals Tribunal in Uganda dismissing the application of its wholly owned subsidiary, Heritage Oil & Gas Limited. HOGL had challenged the Ugandan tax assessment on the disposal of HOGLs entire interests in Blocks 1 and 3A to Tullow Uganda Limited in July 2010. HOGL intends to appeal the ruling. International arbitration proceedings, which HOGL commenced against the Ugandan Government in May 2011, are ongoing in London. By the end of the quarter, Heritage Oils share price was 17% lower.

In December, Soco International announced that the Makouala Marine 1 exploration well located in the Congo Basin offshore the Republic of Congo (Brazzaville) had encountered hydrocarbons. However, the reservoir sands at the location were not as well-developed as predicted and there was insufficient overall pay thickness for commercial flow rates. The share price of Soco International fell by almost 11% over the quarter. Cairn Energy also experienced some exploration disappointments in the fourth quarter. In November, the company announced that the first phase of the companys exploration program in Greenland had encountered oil and gas shows across multiple basins, but no commercial discovery has yet been made. By the end of 2011, Cairn had drilled eight of the 14 wells drilled offshore Greenland since the 1970s. The company is undertaking further evaluation of its exploration program over the last two years against a backdrop of active farm-out discussions over certain areas for future exploration in Greenland. By the end of the quarter, Cairn Energys share price was more than 5% lower.

Share price movements of FTSE 350 oil and gas producers over Q4 2011
Source: Thomson Datastream

% movement in share price

30% 20% 10% 0% -10% -20% -30%

Soco International

Heritage Oil

Salamander Energy

Royal Dutch Shell B

Royal Dutch Shell A

Oil and Gas Eye Q4 2011

Exillon Energy

Essar Energy

Ophir Energy

Cairn Energy

BG Group

Tullow Oil

Afren

Premier Oil

BP

Enquest

-40%

Ins and outs of the AIM oil and gas universe

The AIM oil and gas universe (including oilfield services companies) stood 117 strong at the end of Q4 2011, compared with 112 at the end of the third quarter and 99 at the start of 2011. The increase in the fourth quarter reflects the admission of three new companies to trading on AIM and the lifting of temporary suspensions of two companies. In the only oil and gas IPO of the quarter, Magnolia Petroleum raised 1.2m (before expenses) from its listing on AIM in November. The company, which was founded in 2008, is focused on oil and gas development in North Dakota and Oklahoma. Shares in Wentworth Resources were admitted to trading on AIM in October following an introduction. The company has interests in three adjacent East African hydrocarbon concessions in Tanzania and Mozambique and also has interests in midstream and downstream assets in Tanzania, including the Mtwara power plant. Jupiter Energy was the second company to be introduced to AIM in the fourth quarter, and its shares began trading on AIM in

November. The company, which owns 100% of Block 31 located in the Mangistau Basin in Kazakhstan, has a primary listing on the Australian Stock Exchange. The temporary suspension of trading in shares in Baltic Oil Terminals was lifted on 15 December following publication of the companys annual audited accounts and semiannual report. In September, IGas Energy announced the temporary suspension of the trading in its shares on AIM following the signing of a sale and purchase agreement for the acquisition of Star Energy from PETRONAS. This suspension was lifted on 23 November after IGas Energy published an admission document giving details of the proposed acquisition. IGas Energy announced in December that it had completed the acquisition of Star Energy Group. The funds raised from new issues on AIM by oil and gas companies in 2011 totaled a modest 223.1m, which was nonetheless 69% higher than the amount raised in the previous year. The annual picture masks a

declining trend, with the 1.2m raised from new issues during the fourth quarter being significantly lower than amounts raised in each of the first three quarters of 2011. There were six IPOs across other sectors on Londons junior market in the fourth quarter. Funds raised from new issues by all companies listed on AIM were 77.3m in the final quarter of 2011, which was 72% lower than the amount raised in the third quarter.

Oil and Gas Eye Q4 2011

Secondary fundraising rebounds in fourth quarter, but outlook remains challenging

In contrast to continuing challenges for potential IPOs, there was more positive news in secondary fund-raising activity, with 265.8m being raised by AIM-listed oil and gas companies in Q4 2011. Although this was 71% lower than the amount raised in the comparable quarter of 2010, it was 58% higher than the total raised in the previous quarter. Secondary fund-raising across the wider AIM market followed a similar trend, with 758.8m raised in the fourth quarter of 2011 being 70% lower than the amount raised in the same quarter of the previous year but 83% higher than the total raised in the third quarter of 2011. Total secondary fund-raising by AIMlisted oil and gas companies in 2011 was 1,013.1m, 47% lower than the amount raised in 2010. This is perhaps more indicative of the underlying funding landscape than the quarterly trend. There is a substantial funding demand from both existing businesses and potential IPO candidates that is unlikely to be fully met. Companies need to consider a broader range of potential capital solutions, particularly where production cash flows may be lower. Over the course of the fourth quarter of 2011, oil and gas companies listed on the Main Market did not undertake any fundraising activity. The AIM-listed oil and gas companies that were successful in raising funds in the fourth quarter included the following: Bowleven raised gross proceeds of 79.8m via a placing in October. The company intends to use the funds raised, in conjunction with existing cash resources and funds from any farmdowns, to pursue its proposed 2012 work program. The program includes the appraisal of recent discoveries in its Etinde Permit, offshore Cameroon, and the advancement of existing discoveries on Block MLHP-7. Rockhopper Exploration successfully raised 46.5m through a placing in October. The funds raised will be used to continue the development of the companys Sea Lion discovery in the North Falkland Basin and its longerterm operational strategy. In December, Xcite Energy received 12.9m from the first phase of a private placement with Socius CG II, Ltd. The companies have agreed to complete the second stage of the placing, which will provide Xcite Energy with gross proceeds of approximately 12.9m, at any time between eight to twelve weeks from 16 December 2011. The funds raised will allow the company to progress to Phase 1A of the development of the Bentley field in the UK North Sea. Wessex Exploration successfully raised 12.0m (before expenses) through a placing at the beginning of December. The funds raised will allow the company to participate fully in the anticipated Guyane forward work program. Wessex holds a net 1.25% working interest in the Guyane Maritime Exclusive Exploration License. In September, current project operator Tullow Oil confirmed that the Zaedyus exploration well, offshore French Guiana, had made an oil discovery. Wessex believes that the Zaedyus discovery is a companychanging event.

Oil and gas funds raised in 2011 and 2010 ( million)

Source: London Stock Exchange

AIM
New issues 2011 total Q4 2011 Q3 2011 Q2 2011 Q1 2011 2010 total Q4 2010 Q3 2010 Q2 2010 Q1 2010 223.1 1.2 93.4 65.5 63.0 131.9 103.9 22.0 0.0 6.0 Further issues 1,013.1 265.8 168.7 268.6 309.9 1,902.7 927.1 326.2 467.0 182.3

Main Market
New issues 234.7 0.0 234.7 0.0 0.0 1,271.7 0.0 0.0 1,271.7 0.0 Further issues 457.0 0.0 203.9 233.1 20.0 1,092.9 6.8 0.0 21.3 1,064.8

AIM and Main Market

Total funds raised 1,927.9 267.0 700.7 567.3 392.9 4,399.2 1,037.8 348.2 1,760.1 1,253.1

Note: New issues include placings, introductions, transfers and readmissions (money-raising and non-money-raising).

Oil and Gas Eye Q4 2011

Oil and Gas Eye constituents at start of each quarter

Source: Ernst & Young, Thomson Data stream

Q3 2011
Energy XXI (Bermuda) Ltd Indus Gas Ltd Bankers Petroleum Ltd Gulf Keystone Petroleum Ltd Green Dragon Gas Ltd Bowleven Plc Rockhopper Exploration Plc Coastal Energy Company Cove Energy Plc Faroe Petroleum Plc Ithaca Energy Inc. Chariot Oil & Gas Ltd Jubilant Energy N.V. Aurelian Oil & Gas Plc Nautical Petroleum Plc Geopark Holdings Ltd Range Resources Ltd Gulfsands Petroleum Plc Petroceltic International Plc Valiant Petroleum Plc

MV m
1,518 1,326 1,088 1,056 900 724 694 575 477 342 340 335 283 282 275 269 260 258 233 233

Q4 2011
Gulf Keystone Petroleum Ltd Indus Gas Ltd Energy XXI (Bermuda) Ltd Green Dragon Gas Ltd Coastal Energy Company Bankers Petroleum Ltd Rockhopper Exploration Plc Cove Energy Plc Faroe Petroleum Plc Ithaca Energy Inc. Nautical Petroleum Plc Xcite Energy Ltd Chariot Oil & Gas Ltd Gulfsands Petroleum Plc Geopark Holdings Ltd Bowleven Plc Borders & Southern Petroleum Plc Valiant Petroleum Plc Range Resources Ltd Jubilant Energy N.V.

MV m
1,236 1,139 1,080 741 680 551 499 372 310 264 249 238 228 224 205 203 196 187 172 160

Q1 2012
Gulf Keystone Petroleum Ltd Energy XXI (Bermuda) Ltd Indus Gas Ltd Coastal Energy Company Rockhopper Exploration Plc Green Dragon Gas Ltd Bankers Petroleum Ltd Cove Energy Plc Ithaca Energy Inc. Faroe Petroleum Plc Borders & Southern Petroleum Plc EnCore Oil Plc Nautical Petroleum Plc Gulfsands Petroleum Plc Bowleven Plc Petroceltic International Plc Chariot Oil & Gas Ltd Geopark Holdings Ltd Valiant Petroleum Plc Xcite Energy Ltd

MV m
1,623 1,452 1,308 1,069 768 734 674 570 351 329 272 231 225 218 198 197 194 187 179 170

Exits EnCore Oil Plc Petro Matad Ltd Xcite Energy Ltd

Exits Aurelian Oil & Gas Plc Petroceltic International Plc

Exits Jubilant Energy N.V. Range Resources Ltd

Entrants Petroceltic International Plc Range Resources Ltd Valiant Petroleum Plc

Entrants Borders & Southern Petroleum Plc Xcite Energy Ltd

Entrants EnCore Oil Plc Petroceltic International Plc

Oil and Gas Eye Q4 2011

Funds raised on AIM to Q4 2011

Source: Ernst & Young analysis of AIM market statistics New issues include placing, introductions, transfers and readmissions.
New issues Oil and gas No. of companies/issues Oil and gas Funds raised (m) All AIM No. of companies/issues All AIM Funds raised (m) Oil and gas as % of all AIM No. of companies/issues Oil and gas as % of all AIM Funds raised

Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Further issues

3 8 2 2 2 1 0 1 0 13 17 28 38 20 5 6 3
Oil and gas No. of companies/issues

1.21 93.4 65.5 63.0 103.9 22.0 0.0 6.0 0.0 190.4 233.8 287.5 470.6 374.0 27.8 29.1 1.0
Oil and gas Funds raised (m)

17 33 23 15 35 31 18 14 35 115 284 462 519 356 163 161 177

All AIM No. of companies/issues

77.3 271.3 182.9 76.5 541.3 290.6 144.6 237.4 740.4 1,079.4 6,828.6 9,908.6 6,460.8 2,776.0 1,095.4 490.1 593.1
All AIM Funds raised (m)

17.6% 24.2% 8.7% 13.3% 5.7% 3.2% 0.0% 7.1% 0.0% 11.3% 6.0% 6.1% 7.3% 5.6% 3.1% 3.7% 1.7%
Oil and gas as % of all AIM No. of companies/issues

1.6% 34.4% 35.8% 82.3% 19.2% 7.6% 0.0% 2.5% 0.0% 17.6% 3.4% 2.9% 7.3% 13.5% 2.5% 5.9% 0.2%
Oil and gas as % of all AIM Funds raised

Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Total issues Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

114 77 61 102 121 58 62 68 262 238 287 261 186 144 80 67 39

Oil and gas No. of companies/issues

265.8 168.7 268.6 309.9 927.1 326.2 467.0 180.6 1,125.2 693.1 858.6 1,262.3 527.0 328.9 193.4 22.7 8.3
Oil and gas Funds raised (m)

548 485 588 753 741 594 679 580 2,596 3,148 3,904 3,389 2,506 2,024 1,473 1,126 1,026
All AIM No. of companies/issues

758.8 413.8 954.0 1,600.6 2,557.1 982.4 1,404.3 694.0 4,771.2 3,214.5 9,610.2 5,734.3 2,481.2 1,880.3 999.7 485.8 535.3
All AIM Funds raised (m)

20.8% 15.9% 10.4% 13.5% 16.3% 9.8% 9.1% 11.7% 10.1% 7.6% 7.4% 7.7% 7.4% 7.1% 5.4% 6.0% 3.8%
Oil and gas as % of all AIM No. of companies/issues

35.0% 40.8% 28.2% 19.4% 36.3% 33.2% 33.3% 26.0% 23.6% 21.6% 8.9% 22.0% 21.2% 17.5% 19.3% 4.7% 1.6%
Oil and gas as % of all AIM Funds raised

117 85 63 104 123 59 62 69 262 251 304 289 224 164 85 73 42

267.0 262.1 334.1 372.9 1,031.0 348.2 467.0 186.6 1,125.2 883.5 1,092.5 1,549.8 997.6 702.9 221.2 51.8 9.3

565 518 611 768 776 625 697 594 2,631 3,263 4,188 3,851 3,025 2,380 1,636 1,287 1,203

836.1 685.2 1,136.9 1,677.1 3,098.4 1,273.0 1,548.9 931.4 5,511.7 4293.9 16,423.7 15,642.9 8,942.4 4,656.2 2,095.2 975.8 1,128.4

20.7% 16.4% 10.3% 13.5% 15.9% 9.4% 8.9% 11.6% 10.0% 7.7% 7.3% 7.5% 7.4% 6.9% 5.2% 5.7% 3.5%

31.9% 38.3% 29.4% 22.2% 33.3% 27.4% 30.2% 20.0% 20.4% 20.6% 6.7% 9.9% 11.2% 15.1% 10.6% 5.3% 0.8%

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Oil and Gas Eye Q4 2011

 Ernst & Young LLP 2011. All rights reserved. The UK rm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member rm of Ernst & Young Global Limited.

Other recent Ernst & Young oil and gas publications are detailed below. Publications can be viewed and downloaded at www.ey.com/oilandgas, or contact Michael Simpson at msimpson2@uk.ey.com for copies.

National Oil Company Monitor Q4 2011

In our quarterly reports we offer insight into the changing economic and political landscape around the world, examining activity in partnerships, M&A, consolidations and government policy developments between IOCs and NOCs. Available now

Oil and gas investment perspectives for Asia

The Asian oil and gas market continues to grow. By 2035, China and India together are expected to account for more than 75% of the worlds net oil demand Petroleum Congress (WPC) As the World growth. This piece covers the broader Asian transactions oil and gathers in Doha, Qatar, Ernst & Young is gas landscape, transaction Congress. delighted to be exhibiting at theactivity, prospects and challenges, as well as Aligned with the theme of the Congress a focus on Chinese company activity. Energy soutions for all promoting
cooperation, innovation and investment, Available now we will be launching several thoughtprovoking papers on issues affecting Global The launches will take the industry.Capital Confidence place Barometer Outlook 3312. at our exhibition stand, no. Oil & Gas Our fifth Global Capital Confidence Our stand will also bethat more to network, Barometer finds available than one access the internet, relax and enjoy ourare half of our oil and gas respondents hospitality. We look forward toregard to you cautiously optimistic with meeting the in Doha. broader economy, with the majority remaining focused on growth over the next 12 months and ey.com/oilandgas only 4% now focusing on survival.

Fuel for thought?

Global oil and gas transactions review 2011

Ernst & Youngs annual review of global oil and gas transaction activity. In this report, we look back at some of the main trends in oil and gas merger and acquisition activity over 2011 and consider the outlook for transactions in the sector in 2012. We analyze the diverse dynamics in the upstream, downstream and oilfield services sectors, as well as the regional trends that underlie this macro picture. Available now

Available now

Oil and Gas Eye Q4 2011 Oil and Gas Eye Q3 2011

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Other recent Ernst & Young oil and gas publications are detailed below. Publications can be viewed and downloaded at www.ey.com/oilandgas, or contact Michael Simpson at msimpson2@uk.ey.com for copies.

Ernst & Young Assurance | Tax | Transactions | Advisory

Global E&P benchmark study

The Global E&P benchmark study is a compilation and analysis of certain oil and gas reserve operational and financial information as reported by companies in their annual reports filed with the United States Securities and Exchange Commission or in their publicly available annual reports. The study presents the worldwide and regional exploration and production results for 75 companies for the five-year period from 2006 through 2010. Available now

About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com. How Ernst & Youngs Global Oil & Gas Center can help your business The oil and gas industry is constantly changing. Increasingly uncertain energy policies, geopolitical complexities, cost management and climate change all present significant challenges. Ernst & Youngs Global Oil & Gas Center supports a global practice of over 9,000 oil and gas professionals with technical experience in providing assurance, tax, transaction and advisory services across the upstream, midstream, downstream and oilfield service sub-sectors. The Center works to anticipate market trends, execute the mobility of our global resources and articulate points of view on relevant key industry issues. With our deep industry focus, we can help your organization drive down costs and compete more effectively to achieve its potential. 2012 EYGM Limited. All Rights Reserved. EYG no. XXXXXX

Global oil and gas tax guide 2011

The Global oil and gas tax guide summarizes the oil and gas corporate tax regimes in 61 countries and also provides a directory of EY oil and gas tax contacts. Available now

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In line with Ernst & Youngs commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. 1145349.indd (UK) 11/11. Creative Services Group.

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Oil and Gas Eye Q4 2011