31
In estimating and/or auditing the Group’s reserves and resources, GCA has also applied an estimate of future
increases in the Group’s operating costs. If the Group’s operating costs increase at a substantially higher rate
than that which is reflected in these forecasts, the Group’s reserves and resources could be subject to material
downward revision.
As a result of the uncertainties described above, the Group’s estimated reserves and resources data and the net present
value information contained in this Offering Memorandum and the report prepared by GCA should not be interpreted as
a statement of the commercial viability or market value of the Group’s present or future operations. Material differences
between the Group’s estimated and actual reserves and resources could have a material adverse effect on the Group’s
business, prospects and financial condition.
The estimated reserves, resources and net present values set out by GCA in this Offering Memorandum represent
estimates only and should not be relied upon as representing exact quantities. These estimates include a number of
assumptions relating to factors such as production, revenues, operating expenses, capital expenditure forecasts,
abandonment expenditure estimates, marketability of oil and gas, ultimate reserves recovery, future oil and gas prices,
licence extensions, royalty rates and current fiscal policies and regulatory regimes. If the assumptions upon which the
estimates of the Group’s reserves and resources are inaccurate, this may indicate lower future production than projected,
which in turn may materially adversely affect the Group’s financial condition and the net present value of its reserves.
The economic valuations contained in the CPR may not provide an accurate estimate of the value of the Group or its
assets.
The CPR included in this Offering Memorandum includes the NPV of the Group’s 1P, 2P and 3P net entitlement
reserves based on its exploration, appraisal and development programmes over the course of the contractual lives of the
Group’s assets. These net present value estimates, as prepared by GCA, are based on the Group’s forecast production,
revenues, operating expenses, capital expenditure forecasts and on the level of estimated reserves. Several methodologies
are available to assess the value of the Group and its assets, and the methodologies used by GCA may not be the most
appropriate to assess the value of the Group or its assets. In addition, the exploration, appraisal and development
programmes of the Group, and the estimated net present values included in the CPR, were prepared on the basis of
forecasts, assumptions and estimates, which involve known and unknown risks, uncertainties and other important factors
beyond the control of the Group that could cause the actual performance, reserves or net present values to be materially
different from those expressed or implied in this Offering Memorandum. Actual results could require the Group or GCA
to significantly revise the forecasts, assumptions and estimates relating to the Group or its 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. As a result of such revisions, the Group may be required to raise additional
debt or issue additional equity in order to successfully implement its exploration, appraisal and development programme.
See “
—The Group’s exploration, appraisal and development programmes are capital intensive and the Group will be
unable to implement these programmes and fulfil its licensing commitments without significant capital expenditure for
which funding may not be available
.” For the purpose of the net present values included in the CPR, GCA applied a
Brent Crude oil price scenario based on forecast prices for hydrocarbons in effect as at 31 May 2014, adjusted for
location and quality for each field in the Group’s portfolio, rather than on historical oil and gas prices. However, the
expectations, forecasts and assumptions underlying the Brent Crude oil price scenario applied by GCA may prove to be
inaccurate.
Since such forecasts, assumptions, estimates and economic valuations carry an inherent degree of uncertainty and may
not take into account all relevant considerations, investors are advised not to place undue reliance on them and to consult
their own professional advisers in order to assess the value of the Group. The net present values of the Group’s reserves
included in this Offering Memorandum are based on a range of discount rates which, in the judgment of GCA, are
appropriate to calculate the net present value of the Group’s reserves, but which may not reflect properly the likelihood
that any risk event discussed in this “
Risk factors
” section of the Offering Memorandum or other risk unknown to the
Group may occur. As a result, the net present values based on these discount rates may not accurately reflect the real
value of the Group or any of its assets. Finally, the net present values of the Group’s reserves included in this Offering
Memorandum may be affected by other risks relating to estimating reserves, producing oil or any other risk discussed in
this “
Risk factors
” section of the Offering Memorandum.
The reserves data presented in this Offering Memorandum have been estimated and/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 Memorandum may not be comparable to
information required or permitted to be made public by other international companies engaged in oil and gas producing
