Q2 2016

Operations

Kuwait Energy continues the focus on the MENA region with its presence in Iraq, Egypt, Yemen and Oman.

In Iraq,

Faihaa-2 well

in Block 9 was spud on 3 January 2016 and

reached target depth on 25 May 2016

. Extensive

testing has been ongoing since then with

expected production to commence in August 2016

. All formation tops

matched the original design prognosis. Furthermore, the Mishrif Reservoir at Faihaa-2 has a shown better reservoir

quality with a thicker and a higher (larger) Net Pay zone than the data obtained for Mishrif at Faihaa-1. This was

expected given the location of Faihaa-2 at the extreme north-western corner of the block. Testing of Yamama-D,

Yamama-C and Yamama-B has been completed and testing of Yamama-A is currently ongoing.

The Group is now preparing to commence the

drilling on the Faihaa-3 well

, located south of Faihaa-1, which is

expected to

commence in September 2016

. Furthermore, the

demining

of the assigned area of Block 9 has been

completed

and the

2D/3D seismic activities have already commenced

and are being conducted by Iraq’s Ministry

of Oil seismic company;

Oil Exploration Company

(

OEC

). The mobilization has already been completed and we are

currently at the testing stage. The

acquisition of the data is expected to commence shortly

Following the signing of the

Export Oil Sales Agreement with State Oil Marketing Company (SOMO)

, the Iraqi

national company responsible for marketing Iraq’s oil, Kuwait Energy is expected to be allocated its

first cargo

shipment from Iraq in September 2016

. The shipment will cover gross production of oil from Block 9 from October

2015 to March 2016 for a

gross amount of US$13.9 million

; where Kuwait Energy’s revenue share is 60%.

For the

Q2 2016 production from Block 9

, Kuwait Energy has already invoiced the Iraqi government for a

gross

amount of US$10.0 million

covering gross production from April to June 2016. A shipment, for this payment, is

expected to be allocated in Q4 2016.

The Siba Gas Plant’s

Engineering, Procurement and Construction

(EPC) works

are ongoing and progressing on the

ground with the aim to commence production by year-end. However, the EPC work continues to be conducted

slower than planned due to non-controllable conditions and hence a delay in the commencement of first gas is

now expected.

Kuwait Energy continues to work actively with South Oil Company (SOC) and the contractor to

ensure that delays are minimized

In Egypt, the Company is keen to

expedite production from Jahraa SE-1X well

in Abu Sennan following the recent

discovery and is engaged with EGPC to attain the necessary development license to do so. On 16 July 2016, the

Company

completed the rigging up for sidetrack drilling from the already producing ASH-1X well to increase

production from the asset.

In Yemen, the Company remains in discussions with different governmental stakeholders and continues to closely

monitor the complex geopolitical situation in the country.

Kuwait Energy remains operationally-ready

and will

resume production as soon as lifting constraints have been removed.

Sustainability

As part of our HSSE efforts, Kuwait Energy continues to apply the leading HSSE auditing programmes; working on

the recertification of the ISO 14001 and OHSAS 18001 certification.

UTLOOK