xv
Estimates of “Chance of success” for prospective resources only take into account the estimated probability that those
prospective resources will achieve the status of a contingent resource (where the geological chance of success is
considered to be 100%);
Estimates of “Chance of success” for prospective resources do not reflect economic uncertainty and commerciality.
All references to “reserves” and “resources” in this Offering Memorandum are to “proved”, “probable” and “possible” or
1P, 2P and 3P in the case of reserves, and to “contingent” and “prospective” in the case of resources. Estimates of
reserves, resources, production levels, revenues and cash flows to be derived therefrom and any associated net present
values are forward-looking statements based on judgments regarding future events that may be inaccurate. The accuracy
of reserves estimates and associated economic analysis is, in part, a function of the quality and quantity of available data
and of engineering and geological interpretation and judgment. Estimates of the quantity of commercially recoverable oil
and gas reserves, rates of production, net present value of future cash flows and the timing of development expenditures
depend upon several variables and assumptions, including the following: (i) historical production from the area; (ii)
interpretation of geological and geophysical data; (iii) effects of regulations adopted by governmental agencies; (iv)
future percentages of domestic and international sales; (v) future oil and gas prices; (vi) capital expenditure; and (vii)
future operating costs, tax on the extraction of commercial minerals and workover and remedial costs. Contingent and
prospective resources relate to undeveloped and/or undiscovered accumulations and accordingly by their nature are
highly speculative. There is a possibility that prospects and leads will not result in the discovery of commercially
recoverable resources in which case they would not be commercially developed. This Offering Memorandum should be
read with the understanding that the Group’s level of reserves and resources and its financial performance subsequent to
the date of the estimates may necessitate revision. These revisions may be material. See “
Risk factors—Risks relating to
the Group—The Group’s estimates of reserves and resources are inherently subjective and may be subject to downward
revision
.” Moreover, the economies of the jurisdictions in which the Group operates are more unstable and subject to
more significant and sudden changes than the economies of many other developed countries and therefore economic
assumptions in these jurisdictions are subject to a high degree of uncertainty. Prospective investors should therefore not
place undue reliance on the forward-looking statements in the CPR, on the ability of the CPR to predict actual reserves
or resources or on comparisons of similar reports concerning companies operating in jurisdictions with more mature
economic systems.
For full definitions of reserves and resources used in the CPR, see “
Competent Person’s Report
.”
Reserves in this Offering Memorandum, unless otherwise specified, are presented on a “net entitlement” basis. Group net
entitlement reserves are reserves estimated to be attributable to the Group based on its contractual working interest of the
costs, benefits and ownership of a particular asset, including cost recovery and profit share amounts, and reduced by
royalties or share of production owing to others under applicable lease and fiscal terms, as adjusted up for any
corporation tax paid on their behalf and in kind. In the case of assets within PSCs, the Group’s net entitlement reserves
are calculated in accordance with the terms of the PSC on the basis of forecast price and cost assumptions as evaluated in
reports prepared by GCA.
GCA has estimated the present values of the Group’s net entitlement reserves of hydrocarbons in its assets based on
GCA’s analysis and assumptions regarding future production and revenues. In particular, GCA has calculated the net
present value estimates for the Group’s reserves based upon the Group’s production, revenues, operating expenses,
capital expenditure forecasts, abandonment expenditure estimates, the level of estimated reserves, marketability of oil
and gas, ultimate reserves recovery, future oil and gas price, licence extensions, royalty rates and current fiscal policies
and regulatory regimes. See “
Risk Factors—Risks relating to the Group—The Group’s estimates of reserves and
resources are inherently subjective and uncertain and may be subject to downward revision
.”
Resources and, in certain cases, reserves, are also presented in this Offering Memorandum on a Group “working interest”
basis. Group working interest reserves and resources are the Group’s working interest fraction of the gross reserves and
resources of a given field. In assets governed by a PSC or service contract (as opposed to assets under a tax/royalty fiscal
regime), Group net entitlement volumes under the terms of the PSC or service contract can be expected to be less than
working interest volumes. Resources are presented on a Group working interest basis because development plans for
resources are, in general, too immature to justify estimation of the production profiles and associated costs necessary to
estimate the Group’s net entitlement. Unless otherwise noted, GCA has not consented to, and takes no responsibility for,
the presentation of the Group’s reserves and resources in this Offering Memorandum on a “working interest” basis.
The reserves data as at 31 May 2014 presented in this Offering Memorandum have been estimated or audited at the
request of the Issuer by GCA according to SPE-PRMS standards, and thus will differ in certain respects from data
estimated according to definitions set out in rules promulgated by certain regulators. Further, by presenting certain
information regarding its contingent and prospective resources the Issuer is presenting certain information in this
Offering Memorandum that certain regulators would prohibit it from including in filings with these regulators.
Accordingly, information concerning descriptions of oil and gas reserves and resources contained in this Offering
