Angus Energy : Competent Persons Report – Saltfleetby Gas Field

The Directors	13th October 2023
Angus Energy plc and Angus Energy Weald Basin No 3 Ltd
Building 3 Chiswick Park
566 Chiswick High Street
London W4 5YA
Tel: [phone]

Dear Sirs

COMPETENT PERSONS REPORT, SALTFLEETBY GAS FIELD, UK ONSHORE LICENCE, PEDL005.

In accordance with instructions received from Angus Energy plc (hereinafter "AE"), Oilfield International (hereinafter "OIL") has evaluated certain petroleum interests operated by Angus Energy Weald Basin No 3 Ltd (hereinafter "AEWB") on behalf of AE, namely AE's 100% working interest in the Saltfleetby Gas Field which is part of the UK onshore licence PEDL005.

OIL conducted its assessment in compliance with the SPE Petroleum Resource Management System (SPE-PRMS) sponsored by the Society of Petroleum Engineers/American Association of Petroleum Geologists/World Petroleum Council/Society of Petroleum Evaluation Engineers (SPE/ AAPG/ WPC/ SPEE) in 2018 and the PRMS Guidelines 20221. The Effective Date of this report is 1st August 2023. AE has informed us of one material change as of 13th October 2023: the P50 date for first gas from the booster compressor has moved from 1st July 2024 to 1st October 2024. This has only a minor impact on the findings of this report.

OIL has attributed Proved Reserves (1P), Proved plus Probable Reserves (2P), and future cash flows to AE. OIL has calculated Gross Contingent Resources but has not developed production profiles or cash flows attributable to AE because it is still interpreting the recently completed depth-migrated 3D seismic data; and is building new static and dynamic simulation models based on this new geological model and the production data since production restarted in August 2022. Table 0-1refers.

The results presented reflect OIL's judgement based on its understanding of petroleum legislation, taxation and other regulations that currently apply to AE and AEWB.

AE is party to a £12m loan agreement dated 3rd June 2021 which includes a number of material loan costs, cash distribution restrictions, overriding royalty interests and hedging obligations. AE is bound by the terms of this loan agreement and so AE's net entitlement reserves reported here are net of the overriding royalty interest2. £7.35m of the loan is outstanding at the Effective Date3.

OIL cannot attest to the certainty of property title or encumbrances related to AE.

OIL's estimates of pre-tax future cash flows required to assign reserves are based on datasets provided by AE. OIL conducted a site visit to PEDL005 in February 2020 before construction of

1. Refer Petroleum Resources Management System - 2018 Update (spe.org); and Guidelines for Application of the Petroleum Resources Management System eBook (PRMS) (spe.org).
2. With reference to p174 of PRMS Guidelines 2011, OIL has determined that the lenders' ORRI is an "Economic Interest" under clause (ii) of SEC Section S-X, Rule 4-10b Successful Efforts Method: Mineral Interests in Properties.
   Specifically, lenders have: (a) "the right to take produced volumes in kind or share in the proceeds from their sale; and
   (b) "exposure to market risk and technical risk." Therefore, the lenders have entitlement reserves equivalent to the value of the royalty, and these entitlement reserves are given up by the licensees.
3. £0.138m and £1.050m loan repayments were made in September 2023; and circa £0.34m interest.

Angus Energy plc, Saltfleetby Gas Field, PEDL005

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the surface facilities and pipeline extension commenced. The date of First Sales Gas was 30th August 2022 from two wells, B2 and A4. A third well, B7T4, entered production in May 2023. Two further wells on the Main Westphalian reservoir, SF9 and SF10 are scheduled to enter production in January 2025 and January 2026 respectively, to extend plateau production and accelerate the extraction of gas.

OIL has taken all reasonable steps to establish the integrity of source data as well as the accuracy and completeness of key subsurface data, production inventory and internal accounting records. OIL has not independently verified any information provided by or at the direction of AE (and/or obtained from other sources) and has accepted the accuracy and completeness of these data.

OIL notes that the data provided were acquired by reputable oilfield services providers. OIL has no reason to believe that any material facts have been withheld from it but does not warrant that its enquiries have revealed all the matters that a more extensive examination might otherwise disclose.

Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria: Discovered, Recoverable, Commercial, and Remaining (as of the evaluation's effective date) based on the development project(s) applied. Reserves are recommended as sales quantities as metered at the reference point. Where the entity also recognizes quantities Consumed in Operations (CiO), as Reserves these quantities must be recorded separately. Non-hydrocarbon quantities are recognized as Reserves only when sold together with hydrocarbons or CiO associated with petroleum production. If the non- hydrocarbon is separated before sales, it is excluded from Reserves. Reserves are further categorized in accordance with the range of uncertainty and should be subclassified based on project maturity and/or characterized by development and production status.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status.

Table 0-2 and Table 0-3 present the Gross Gas and Condensate Liquids Reserves, and the Reserves attributable to AE. The Reserves are net of Gas Consumed in Operations ("CiO"). The Reserves attributable to AE are additionally net of Overriding Royalty. Table 0-4 presents the investment programme and the annual capex liability to AE. Table 0-5 presents the Net Cash Flow and NPV10 of the Reserves attributable to AE.

4 Wells B2, A4, B7T are also referred to as SF2, SF4, SF7V, respectively by AE.

Angus Energy plc, Saltfleetby Gas Field, PEDL005

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Comparing with OIL's last reserves determination of October 20215:

• The Gross P90 sales gas volume has increased from the October 2021 18 BCF (at August 1st 2023, 16 BCF since 2 BCF has been produced since the October 2021 report) to 24.2 BCF. The reasons are:
• • Higher gas prices: the minimum sales gas flowrate that generates positive net cash flow is therefore lower and so more gas is produced before economic abandonment.
  • Flow from five wells rather than three wells increases the aggregate sales gas flowrate, further extending the time to economic abandonment
  • Clear evidence that the October 2021 P90 gas originally in place (GIIP) estimate of 105 BCF (less 3 BCF CiO = 102 BCF GIIP sales gas reported in October 2021) is not consistent with the pressure buildup data obtained by AEWB during the last year. The P90 value is now 112 BCF GIIP.
  • These increases are offset by an increase in CiO from 2.75% to OIL's P90 estimate of 15%, due to surface facility choices of energy supply and gas processing changes.
• The Gross P50 sales gas volume has decreased from the October 2021 31.8 BCF (at August
  1st 2023, 29.8 BCF) to 27.2 BCF. The reasons are:
• • The increase in CiO from 2.75% to a P50 value of 10%6, due to surface facility choices of energy supply and gas processing changes.
  • Clear evidence that the October 2021 P50 GIIP inc CiO of 121 BCF (less 3 BCF CiO = 118 BCF GIIP sales gas reported in October 2021) is not supported by the latest build up data. The P50 value now is 115 BCF.
  • This decrease is mitigated by higher gas prices and the additional two wells which both extend the economic field life.
• The uncertainty in the reservoir volume has reduced, causing the current P90 and P50 estimates to be closer together.
• As a reality check, a production profile was generated using the reduction in flowing wellhead pressures with cumulative production observed since August 2022. It shows a good match to the P90 recoverable volume.

Upside Recoverable Volumes

In the Main Westphalian Reservoir

• Possible Reserves

In the Southern Satellite Structure Westphalian Reservoir (a contiguous structure to the Main Reservoir)

• Recoverable hydrocarbon volumes, currently categorised as Contingent Resources; Table 0-6 and Table 0-7 refer.7

In the Namurian Reservoir (a deeper reservoir below the main Westphalian Reservoir)

1. Reserves Valuation Report Angus Energy Saltfleetby Assets Effective Date 1st October 2021 Report Date 22nd October 2021
2. AEWB estimate, supported by OIL for the P50 category.
3. Refer to https://www.angusenergy.co.uk/wp-content/uploads/2020/03/Reserves-Resources-Valuation-Report-Angus-Energy-Saltfleetby-Assets-Effective-Date-28th-February-2020-Report-Date-4th-March-2020.pdf

Angus Energy plc, Saltfleetby Gas Field, PEDL005

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• Recoverable hydrocarbon volumes, currently categorised as Contingent Resources. The Contingent Resources stated in Table 0-6 could be used to extend the sales gas plateau.

Table 0-1 Resource structures identified on the Saltfleetby Gas Field

Name of Structure	Reservoirs
Reserves Proved (1P), and Proved plus
Probable (2P) (reported here)
Saltfleetby Main Gas Field	Westphalian
Reserves 3P (Not reported here)
Saltfleetby Main Gas Field	Westphalian
Contingent Resources (reported here)
Saltfleetby Main Gas Field	Namurian
Southern Satellite Structure	Westphalian

Table 0-2 Main Field Westphalian Reservoir: Sales Gas Reserves: Gross, and Net Attributable to AE After Royalties

Saltfleetby Field		Gross	Net Attributable	Operator
	to AE
Sales Gas Reserves	1P		2P	1P		2P
	BCF		BCF	BCF		BCF
Main Field	24.2		27.2	22.4		25.2	AEWB
Westphalian Reservoir

Effective Date: 1st August 2023

Source: Oilfield International

Angus Energy plc, Saltfleetby Gas Field, PEDL005

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Table 0-3 Main Field Westphalian Reservoir: Sales Liquids Reserves: Gross, and Net Attributable to AE After Royalties

Saltfleetby Field		Gross	Net Attributable	Operator
	to AE
Sales Liquids Reserves		1P	2P	1P	2P
		M STB	M STB	M STB	M STB
Main Field		357	447	332	415	AEWB
Westphalian Reservoir
Effective Date: 1st August 2023
Source: Oilfield International

Angus Energy plc, Saltfleetby Gas Field, PEDL005

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