Longboat Energy : Presentation Interims

Longboat Energy plc

Interim Results Presentation

September 2021

DISCLAIMER

The information contained herein has been provided solely for information purposes and does not purport to be comprehensive or contain all the information that may be required by recipients to evaluate Longboat Energy plc (the "Company"). This presentation and the information contained in it has not been independently verified and no reliance should be placed on it or the opinions contained within it. In furnishing the presentation, the Company reserves the right to amend or replace the presentation at any time and undertakes no obligation to provide the recipient with access to any additional information. The Company may, but shall not be obliged to, update or correct the information set forth in this presentation or to provide, update or correct any additional information.

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Interim highlights 2021

Company now operational having completed its first transaction

Successfully launched business through three bilateral transactions to acquire a significant, near-term, low- risk exploration drilling programme on the Norwegian Continental Shelf (NCS)

• Seven (7) firm wells drilling over the next 18 months
• Net mean resource potential of 104 mmboe1
• Total net upside case potential of 324 mmboe2
• Gas weighted prospect portfolio (~75%)

£35 million equity raise and NOK 600 million (£50 million) Exploration Finance Facility

• Fully funded through the initial drilling programme3
• Strong support from both existing and new shareholders, aligned management

Completed transactions, reverse takeover and qualified as licence holder on the NCS4

• One of only 38 companies qualified on the NCS (vs >130 on the UKCS)
• New status removes transaction hurdles, positioning Longboat for further value accretive M&A

Replicates Faroe's first steps building a full-cycle E&P company through the drillbit

(1) Mean unrisked prospective and contingent resources net to Longboat (ERCE CPR)
(2) Based on net unrisked "3U" high volumes in ERCE CPR plus operator high unrisked estimates of Fontina-Burrata	3
(3) Under both the existing and proposed Norwegian tax legislation, the latter assuming that the Exploration Finance Facility is amended as referenced in the interim report

(4) Post period end event

Results H1 2021

Strong balance sheet following successful fundraise

	£ million	Notes
Cash	£38.7	Includes fundraise (£32.5 million net) and pre-deal completion payments,
excludes first £5.8 million1 "negative tax instalment" received in August
Debt	£0.0	No drawings on Exploration Finance Facility required until 2022
Operating loss
Staff costs	£0.5
Screening & professional fees	£0.8	Further capitalised acquisition costs (£0.5 million) and capitalised EFF fees
(£0.5 million) released over the facility term
Other	£0.2	Includes IFRS 2, foreign exchange and administrative expenses
Total operating loss	£1.5
Tax income	£0.6	Credit of £0.9 million related to 2020 "negative instalments" under
Norwegian temporary tax regime offset by £0.3 million deferred tax
Loss for the period	£0.9

Source: Longboat interim results for the period to 30 June 2021

(1) Assumes 1 GBP = 12 NOK on NOK 69.7 million receipt

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Proposed Norwegian tax change summary

Move to a 'cash based' system seems to have broad political support

Proposal recently announced to change Norwegian petroleum tax system from 2022 onwards

• Move to a 'cash based' system (i.e. immediate expensing of investments)
• Improved alignment between government and industry (less difference on pre-vs-post-tax economics)
• Seems to have broad political support

Same marginal rate (78%), different calculation

• Special Petroleum Tax (SPT) increases to 71.8% (from 56%)
• Corporation Tax (CT, 22%) fully deductible from SPT, investment uplift removed
• Exploration refund (78%) removed - replaced with 71.8% repayment of alllosses (including capex) in Y+1
• Residual CT element (6.2%) carried forward until profitable

Industry requires further clarifications on aspects of the proposal, including:

• Continued ability to pledge tax refund (as with EFF) - authorities have acknowledged importance
• Potential for a transition period if new system introduced retroactively (Q2-22 approval, 1-Jan-22 effective)
• Longboat has proactively engaged with its lenders to make any necessary adjustments to the EFF

Company remains fully funded for its exploration programme

Note: Please see the Company Interim Results to 30 June 2021 for detailed disclosures relating to the potential tax change

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