Africa New EnergiesAnnual General Meeting – Sep 14

Overview

Research and Development

Hired by a UN affiliate to assist Namibia to achieve Energy Independence

Acreage Acquisition

22,000 km2 and Petroleum Agreement secured

State-of-the-art technology

Deploy multiple layers of remote and surface exploration techniques

Mathematical Algorithms

Reduce exploration costs to as little as 1/10 of conventional budgets

AfricaNewEnergies

Who we are

Stephen Larkin - CEO & Co-founder CA with a deep understanding of both technology and finance Created an exploration algorithm with Brendon Raw Advised the Namibian government on energy self-sufficiency

Brendon Raw - CTO & Co-founder IT developer with RAD experience in BP and Trafigura Invented the Prophecy Virtual Smart Grid Solar System with Stephen Seed investor in Quirk, Africa’s largest digital marketing agency

Peter Hutchison – Director and Corporate Development BP regional geologist for Africa at the age of 26 after Magnus Discovery Senior executive at BP and VP of exploration for BP’s Canadian and Egypt operations Made multiple discoveries as an entrepreneur using satellite HLI technology

Richard Jones - Legal Director Head of Legal Department in BP Exploration First Russian country manager for BP Drafted ANE’s Namibian Petroleum Exploration Licence Agreement

Measurable effects on the surface Surface exploration

10% - 40%

Indicates depthof resource

Indicates possible fieldedges

Up to 66% for frontierareas such as EL68

66% after successfulstratigraphic well

$7

$30

$1,000

$25,000

$30,000

AfricaNewEnergies

Our technology The integrated approach

Satellite

Airborne Survey

Radiometric

Geochemical Sampling

Passive Telluric

Probabilityof discovery

10% - 40%

Indicates depthof resource

Indicates possible fieldedges

Up to 66% for frontierareas such as EL68

66% after successfulstratigraphic well

Typical costper km2

$7

$30

$1,000

$25,000

$30,000

Tripling the probability of success at 1/10th of the cost

$20m

$40m

$60m

$80m

$100m

$120m

$140m

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Rig mobilisation$8m quoted

Exp

lora

tio

n E

xpen

dit

ure

Probability of Discovery (Px)

Traditional

Our method

Iterative process –radiometrics, ground

tellurics, geochemistry, slim

hole drilling

Drill 3 wells, expect 2 discoveries –

approach 80% probability once

multiple discoveries

Satellite and airborne survey

Drill 4 wells, expect 1 discovery at Px 20% -

25%

3D seismic

2D seismic

Surface Manifestations of Hydrocarbon Microseepage

Geochemical reading shows that paraffin levels are >100 times the expected

background readings

Radiometric readings show a 50% drop-off of

Potassium40 coinciding with the satellite edge of the

field

Visual evidence of bleaching of red earths

AfricaNewEnergies

Using Gore Sorber

1000 0 1000 2000 3000

metres

Scale 1:50000

GORE-SORBER Exploration SurveyR

W.L. GORE & ASSOCIATES, INC.100 CHESAPEAKE BOULEVARD

ELKTON,MD 21921

USA

(410) 392-7600

Petroproduccion Ecuador

Sansahuari-Cuyabeno Prospect, Ecuador

Plate 1: Singue-1 Oil-like Signature (Model 2)

DATE DRAWN: November 15, 2001

REV. DATE:

DRAWN BY: RF

REV. #:

ORIG. CAD:

PROJECT NUMBER:

SITE CODE:

GORE-SORBER

GORE-SORBER

GORE-SORBER

Exploration Survey

Module

IS REG. PAT. & T.M. OFF.

IS A REGISTERED SERVICE MARK OF W.L. GORE & ASSOCIATES

IS A REGISTERED TRADEMARK OF W.L. GORE & ASSOCIATES

2001 W.L. GORE & ASSOCIATESC

THIS DRAWING AND ANY ATTACHMENTS HAVE BEEN PRODUCED FOR THE SOLE USE OF THE RECIPIENT AND MUST NOT BE USED, REUSED, REPRODUCED, MODIFIED OR COPIED IN ANY MANNER WITHOUT THE PROPER WRITTEN APPROVAL OF W.L. GORE & ASSOCIATES. THIS DRAWING MAY CONTAIN CONFIDENTIAL AND PROPRIETARY INFORMATION OF W.L. GORE & ASSOCIATES. ANY UNAUTHORIZED USE OF THIS DRAWING IS STRICTLY PROHIBITED.

NOTES & DEFINITIONS

Geochemical Model: The geochemical difference in surface soil gas signature between

analogous production and background (dry) areas, as defined by groups of model set samples.

This model is used to classify membership of the survey grid samples based on the degree of

similarity to the geochemical signatures of 'production' and 'background'.

Probability Value: The percent probability that the surface geochemical character matches

that modeled over a producing reservoir(s); or in the case of a frontier survey, model set samples

which are selected as exhibiting petroleum-like character.

Anomalous Threshold: The modeled probability value at or above which the geochemical feature

is most likely indicative of petroliferous accumulations

Geochemical Feature: Any collection of contoured surface values which seem to exhibit a common

influence and which may include probability values above and below the anomalous threshold.

NOTE:

This map illustrates a computer-generated contour surface of probability values calculated for each

sample location. Probability values are most accurate AT THE SAMPLED LOCATIONS. The contour

surface developed between the data points is an estimate of the probability and is subject to

uncertainty, which increases with distance from each sample location. Further resolution

of the contoured surface may be appropriate through additional soil gas sampling depending on

the end-use of the data.

15.017.520.022.525.027.530.032.535.037.540.042.545.047.550.052.555.057.560.062.565.067.570.072.575.077.580.082.585.087.590.092.595.0

Threshold value=82

Probability%

0 100

0

30

60

10%

30%

50%

70%

90%

Frequency Distribution for Survey Samples

Probability Value

Fre

qu

ency

Thr

esho

ld v

alue

PROJECTION INFORMATION

Projection: PSAD56 / UTM zone 18N

Ellipsoid: PSAD56

Major axis: 6378388

Ellipticity: 0.08199188998

Prime meridian: 0

Projection Method: TransverseMercator

Coordinate Units: m (=1 meters)

Local Datum: PSAD56toWGS84(2)

dX, dY, dZ: -270, 188, -388

Rx, Ry, Rz: 0, 0, 0

Scale: 0

LEGEND

Probability ValueSample Number

Oil well

Dry well

1000

5000

1001

0000

1001

5000

1002

0000

1002

5000

1000500010010000

1001500010020000

10025000

355000 360000

355000 360000

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

Probability%

OIL Well

DRY Well

AfricaNewEnergies

Ground tellurics

AfricaNewEnergies

Stratigraphic drilling vs conventional

Metric Traditional Modified slim well

Time to mobilise rig 1- 4 years to onshore Africa 3-6 months

Cost of mobilisation and drilling, 2,600 meter well

Mob/Demob = $8,000k Modification = $0k

Drilling = $10,000k Total = $18,000k

Mob/Demob = $250kModification = $150k

Drilling =$2,850kTotal =$3,200k

Timelines Wait – 2-4 year yearsMobilisation – 6 months

Drilling 28 daysTotal – minimum 3 years

Wait – 3 monthsMobilisation 2 weeks

Drilling 150 daysTotal - maximum 1 year

Quality of data Mud log Core library

Completion options 8 inch diameter = completion for production on discovery

3 inchesCan ream to 4.5 inch

Modest Production 1 7/8 inch casing

What do 22,000 square kilometres look like?

Why Namibia? The Infrastructure

AfricaNewEnergies

A bit of history Progress to date

Research and

Development

(UN study)£1.4 million raisedSatellite indicates

potential giant provinceFundraising

startsMay 2011 toApril 2012 April 2013 Sept 2013

Feb 2012 toApril 2013

June 2013 to April 2012

Oct 2013 to Sep 2014

Applied forExclusive License

Exclusive License awarded22,000 sq. km

Completed SatelliteSurvey of the entire

of resourceArea >1.6 bn barrels

Source of funds and use of proceeds Progress to date

Founders R&D -04 - 11, £704k,

27%

Founders loans -11 - 14, £324k,

12%

Equity - seed capital round,

£105k, 4%

Equity - second capital round, £1,256k, 48%

Consulting sales, £43k, 1%

3rd party creditors, £104k,

4%

Shareholder loans, £97k, 4%

Sources of funds - £2.633m

Research and development written off, £704k, 27%

License commitments,

£307k, 12%Exploration costs,

local office and program set up costs, £1,173k,

44%

Corporate finance, legal and

professional costs, £164k, 6%

O&M, £285k, 11%

Use of funds - £2.633m

What is next? Current objectives

Raise estimated £8.5MFull tensor gravity gradiometryProspectivity synthesis

April 2015 to March 2016

Sep 2014 to Apr 2014

Raise £2MComplete geochemical analysisGround magnetotelluricsComplete and synthesis pre-drilling activitiesCompetent persons report

By 2017

Achieve share priceappreciation multi-foldCommercial development andmonetization options

Drilling programme decisions & approvalsDrill first exploration wellsTarget early discovery/(ies)

April 2016 to March 2017

Value per barrel based on progressive resource classification

Contingent PUD to

to Proven Proven

Undeveloped Producing

Value < 3 Value doubles

Current prospective Contingent Proven Undeveloped Proven producing

Unrisked mean prospective scenario 0.021 4.14 11.06 25.23

0.021 4.14

11.06

25.23

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Exp

ecte

d s

har

e p

rice

per

bar

rel

Nam

ibia

n f

isca

l ter

ms

and

loca

l ext

ract

ion

co

sts

Proven Undeveloped

to Proven Producing Value X 2

Prospective to Contingent

200 – fold increase in

value=

ANE focus

Contingent to Proven

Undeveloped

Value X 3

AfricaNewEnergies

To be raised & use of proceeds

3rd Raise – 12.5% of the company post valuation - £13.3m £1,650k

Rentals - years 3,4 £200k

Pre-drilling program - 12- 24 months £1,000k

G&A + Local office costs - years 1 & 2 £450k

4th Raise - Strat wells on existing basin £8,500k

Rentals - years 5 & 6 £400k

Drilling 3 stratigraphic wells - program - 12- 24 months £6,000k

G&A + Local office costs - years 3 & 4 £2,100k

Exploration, appraisal & initial production £25,000k

Purchase truck mounted rig £8,000k

12 exploratory wells £12,000k

Completion - 3 wells £3,000k

G&A + Local office costs - years 1 - 4 £3,000k

AfricaNewEnergies

Competitive position – strengths and weaknesses of fundraising strategy

Strengths

Require 1/10th of the capex – means less dilution

3X more likely to strike

No logistics capex until $800m of free cash

Uniquely positioned to exploit tax advantages in the UK – EIS & R&D tax credits

Access to Crowdfunding

Ultralow burn rates and license commitments

Low valuation relative to our peers

Weaknesses

Poor market sentiment

Frontier acreage

New technology

New management team

Cannot access institutional funding means reliance on network of personal investors for funding

AfricaNewEnergies

How will we raise our funds

Risked Valuation Peer group comparison

32.9

15.0

14.1

13.2

13.8

9.4

7.3

6.4

3.8

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

Borders and Southern

Tower Resources

Range Resources

Azonto Petroleum

Frontier Resources

Energulf Resources

Africa New Energies

Bahamas Petroleum

Chariot Oil & Gas

ANE vs its Peers Enterprise Value / Risked resources

US$c/boe

Risked Valuation Peer group comparison

3.3

2.9

2.8

2.6

2.4

1.7

1.6

1.3

1.3

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Borders and Southern

Chariot Oil & Gas

Azonto Petroleum

Frontier Resources

Tower Resources

Range Resources

Bahamas Petroleum

Energulf Resources

Africa New Energies

Enterprise Value / Unrisked resources US$c/boe

Upside to downside ratio The EIS effect

AIM investor - UK taxpayer Offshore investor EIS marginal rate taxpayer

Downside (100.0%) (100.0%) (38.5%)

Upside 72% 100% 100%

Upside/downside ratio relative to AIM 100% 139% 361%

(100%)

(50%)

0%

50%

100%

150%

200%

250%

300%

350%

400%

AfricaNewEnergies

• Commodity trading

opportunities

• Potential to underwrite

investment with loan

against founder’s shares in

Biogas Plant

• Farm-in using R&D tax

credits

What other funding strategies are we considering?

Three commodity opportunities using UK tax position Commodity Trading

Richards Bay Coal Terminal deal with existing shareholder

Could yield £1 million profits per year if deal goes through

Black Economic Empowerment crude supply deal

Could yield £2 million in profits

Long term supply of hydrocarbons

Vast potential where government relationships could help the company broker a deal

between two governments

Multi-million potential

None have any financial downside, but all carry high execution risk

DEALS OFFER STRATEGIC SUPPLIER RELATIONSHIPS ON DISCOVERY TO THE COMPANY AS WELL AS PRE-PRODUCTION CASHFLOWS

Leveraging biogas assets to raise £2 million in debt Biogas Loan

Brendon Raw and Stephen Larkin have shares in a biogas project that could yield £1.5 million - £2 million of underwriting debt to expedite the next round of funding

Proposed deal is in the form of a convertible debenture, which acts as an underwriting instrument for the EIS equity raise

Creates a UK government revenue stream to repay debt over 6 years – exposure reduced to £2 million with dividend stream to protect it in case of underwriting loan not repaid

Target dilution – around 5% of share capital

Mitigating exploration investment risk Biogas Underwriting Loan

Opportunity to invest in multiple repeatable biogas projects

3.5MW planning permission near Bradford – with intention to increase by further 1.5MW BR & SL will own 17%

Rare RHI planning permission on national gas grid – enough gas for 3,000 households

Innovative risk management

Government guaranteed feed in tariff

Feedstock contract with landowner and Two Sisters – largest producer of chickens in the country – 50k tonnes chicken manure per annum

Insurance guarantees on performance

Attractive financing options

5 MW – dividends to BR and SL = £0.4m per annum

EIS approval possible – only £10 million project in the UK that will still qualify for EIS approval – funds are long capital and short projects

Superb dividend yields

UK Continental Shelf R&D Tax Credit Play R&D Tax Credits

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Corporate tax - small company Marginal tax rate - UKCS - post 1993 Marginal rate - UKCS - pre-1993

Tax rate

Britain’s declining production R&D Tax Credits

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mb

pd

of

bar

rels

per

day

UK Production of Crude Oil vs Consumption

UK consumption UK production

Means UK’s competitive advantage is also declining R&D Tax Credits

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports - % of consumption 69.5% 59.3% 47.8% 47.3% 33.3% 16.8% 2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Imports - % of consumption 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -6.8% -3.4% -7.6% -8.2% -14.3% -27.2% -37.6% -42.4%

Oil exports/imports as % of GBP 0.6% 0.7% 0.5% 0.5% 0.4% 0.2% 0.0% -0.1% -0.1% -0.2% -0.1% -0.3% -0.6% -1.1% -1.1%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

%’a

ge

Imports/Exports as % of UK crude consumption

The prize – UKCS R&D tax credit UK farm-in partner

Step 1 – claim back £20k from historic expenditure on R&D

Step 2 - claim £0.5 million from next round of funding

Step 3 –First prize - to find R&D partner paying 62% or 81% marginal tax – who is deemed to

be SME

Fewer than 500 employees

Less than EUR100 million of turnover

Owned by consortium of private equity players – each with less than 25%

If possible consortium player make a profit on tax credits regardless of outcome of

exploration program

Will need further EIS investment as not all expenses (such as travel and drill-rig hire will get

full tax write-offs

Could take up to 18 months and there is executive risk, but little financial risk

UK Continental Shelf R&D Tax Credit Play R&D Tax Credits

SME - lossmaking SME - profitableLarge corporate -

UKCS - post 93Large corporate -

UKCS - pre 93SME - UKCS post

93SME - UKCS pre

93

%'age recovered from £1 of R&D expendture 32.6% 45.0% 80.6% 105.3% 139.5% 182.3%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

180.0%

200.0%

Per

cen

tage

cas

h r

eco

very

of

qu

alif

yin

g R

&D

ex

pen

dit

ure

%'age recovered from qualifying R&D expenditure

AfricaNewEnergies

ANE’s 20,000 other partners

Why

Why

The electricity effect

AfricaNewEnergies

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ANE’s Carbon Trust - universal electricity access roll-outNamibia - 2000 - 2050

No electricity Basic access to light, cell phone and radio Limited electricity - no heated water

Electricity - heated water - no solar Electricity + solar water heating Electricity + solar water heating + PV

U-BEAP has an immediate and dramatic impact on electricity access, with the entire population getting minimum access of lighting, insulation, mobile phone charging and a radio within two years of the

The revolving carbon fund and pre-paid solar intervention eventually result in 70% of residential customers reducing their consumption by at least 50% from solar, insulating them from

AfricaNewEnergies

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2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050

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Namibian electricity sector carbon emissions - 2000 - 2050Coal-fired + imports vs ANE's Natural Gas scenario

Historic

Nampower coalfired scenario

Pinpoint NG combined cycle with solarreplacement scenario

Note that a second plant, would lower carbon emissions further, as it is assumed that the

AfricaNewEnergies

Questions