Annual General Meeting Presentation 2021

For personal use only

GENERATING VALUE THROUGH THE ENERGY TRANSITION

ANNUAL GENERAL MEETING PRESENTATION

12 NOVEMBER 2021

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For personal use only

Disclaimer

The resource estimates outlined in this presentation are based on and fairly represent information and supporting documentation prepared by Carnarvon's Chief Operating Officer, Mr Philip Huizenga, who is a full-time employee of the company. Mr Huizenga has over 25 years experience in petroleum exploration and engineering. Mr Huizenga holds a Bachelor Degree in Engineering, a Masters Degree in Petroleum Engineering and is a member of the society of Petroleum Engineers. Mr Huizenga is qualified in accordance with the ASX Listing Rules and has consented to the form and context in which this statement appears.

All contingent and prospective resources presented in this presentation are prepared as at 28 August 2017, 23 April 2018, 20 August 2018, 15 October 2018, 15 July 2019 and 17 September 2020 pursuant to the announcements released to the ASX on 28 August 2017, 23 April 2018, 20 August 2018, 15 October 2018, 15 July 2019 and 17 September 2020. The estimates of contingent and prospective resources included in this presentation have been prepared in accordance with the definitions and guidelines set forth in the SPE-PRMS. Carnarvon is not aware of any new information or data that materially affects the information included in this presentation, and that all material assumptions and technical parameters underpinning the estimates in this presentation continue to apply and have not materially changed. Deterministic and probabilistic methods have been used to prepare the estimates of contingent resources. These contingent resources have been aggregated by arithmetic summation and hence the aggregate 1C may be a very conservative estimate, and the 3C may be a very optimistic estimate, due to the portfolio effects of arithmetic summation.

There are numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures, operating expenses and cash flows. Oil and gas reserve engineering and resource assessment are subjective processes of estimating subsurface accumulations of oil and gas that cannot be measured in an exact way. These prospective resource estimates have an associated risk of discovery and risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

This presentation contains certain "forward looking statements" which involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies including those risk factors associated with the oil and gas industry, many of which are outside the control of, change without notice, and may be unknown to Carnarvon, as are statements about market and industry trends, which are based on an interpretation of market conditions. Forward looking statements can generally be identified by the use of forward looking words such as "anticipate", "expect", "likely" "propose", "will", "intend", "should", "could", "may", "propose", "believe", "forecast", "estimate", "target", "outlook", "guidance" and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but are not limited to, the future performance of Carnarvon.

No representation, warranty or assurance, express or implied, is given or made in relation to any forward looking statement. In particular no representation, warranty or assumption, express or implied, is given in relation to any underlying assumption or that any forward looking statement will be achieved. Actual and future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements were based, because events and actual circumstances frequently do not occur as forecast and future results are subject to known and unknown risks such as changes in market conditions and regulations.

Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements, and should rely on their own independent enquiries, investigations and advice regarding the information contained in this presentation. Any reliance by a recipient on the information contained in this presentation is wholly at the recipient's own risk.

Carnarvon and its related bodies corporate and their respective directors, officers, employees, agents and advisors disclaim any liability for any direct, indirect or consequential loss or damages suffered by a recipient as a result of relying on any statement in, or omission from, this presentation.

To the maximum extent permitted by law or any relevant ASX Listing Rules, Carnarvon and its related bodies corporate and their respective directors, officers, employees, advisors and agents disclaim any obligation or undertaking to disseminate any updates or revisions to the information in this presentation to reflect any change in expectations in relation to any forward looking statements or any such change in events, conditions or circumstances on which any such statements were based.

Nothing contained in this presentation constitutes investment, legal, tax or other advice. This presentation, and the information contained within it, does not take into account the investment objectives, financial situation or particular needs of any recipient. Before making an investment decision based on the information contained in this presentation you should consider seeking independent professional advice.

This presentation has been prepared by Carnarvon. No party other than Carnarvon has authorised or caused the issue of this presentation, or takes responsibility for, or makes any statements, representations or undertakings relating to, this presentation.

GENERATING VALUE THROUGH THE ENERGY TRANSITION

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For personal use only

Highlights

1. Transformational year ahead

Signature moment coming on Dorado FID in 2022

Potential for Buffalo, Pavo and Apus to quadruple CVN's liquids resource

Extensive Bedout exploration upside a catalyst for future growth

2. Diversifying revenue stream

New biorefinery project commenced with FID scheduled for 2022

GENERATING VALUE THROUGH THE ENERGY TRANSITION

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Welcome everyone to the 2021 Annual General Meeting.

In 2018 and 2019 the Dorado discovery and successful appraisal drilling truly transformed Carnarvon. Today we are at another exciting juncture, with arguably an even greater suite of transformational opportunities before us.

The Dorado field is a valuable and strategic asset that is expected to reach its signature moment in 2022 when the joint venture partners make the Final Investment Decision ("FID"). Based on pre-FEED estimates this field is expected to have an early life cost profile well within our target US$25 a barrel, covering both capital and operating costs.

Strategically, even moderate exploration success near the Dorado field can enhance these economics because the Dorado facilities can support the production of these other fields. It is worth noting that the Pavo and Apus prospects, which we will drill soon, could deliver resources of a scale that are too big for the Dorado plant and therefore would require their own facilities.

Such is the potential from these two wells that Carnarvon's net resource could increase in multiples on the current resource at Dorado. Another example of the transformational potential in the period ahead for shareholders.

The third well in our soon-to-commence drilling campaign is the Buffalo-10 well, which Carnarvon operates. If this well confirms our mid-case resource objective, then we will have yet another important and valuable asset within our portfolio.

During the year we have been actively considering the changes in the energy market and moved on our first investment in a renewable diesel venture. We particularly like the linkage of this investment to oil prices and for its potential to generate a new and diversified revenue stream in the near to medium term.

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Market trends

Example of changing energy environment

GENERATING VALUE THROUGH THE ENERGY TRANSITION

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As is currently being witnessed around the world, energy markets are changing. The rate of change and the direction of the changes is complex and something that we need to be considering as a business.

By way of example, this Morgan Stanley Research chart covers electric vehicle ("EV") new car sales and oil consumption in Norway over the last decade. The chart shows that there has been a strong adoption of EV's over this period but also that there has been little change in oil consumption.

This chart is one example of the complexity of the energy transition that is before us.

At Carnarvon, we expect to continue to assess business opportunities that are part of the energy transition, but also to pursue opportunities that contribute to the reliable and cost-effective supply of oil and gas resources.

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Additional oil supplies critical

For an orderly and economically responsible transition

			125
			100											Oil demand
		day												range
		of oil per	75											scenarios
		barrels	50
		Million												Cumulative
		25											supply gap
														Oil supply
														without
			0											new fields
			2020	2025	2030	2035	2040	2045	2050
			Source: Equinor Energy Perspectives 2021,
			IEA
GENERATING VALUE THROUGH THE ENERGY TRANSITION								5

We have recently seen oil prices rising to over US$80 per barrel, and commentators predicting higher prices in 2022.

A major macro risk that we foresee arises from the current critical underinvestment in new oil supplies. The outcome of concern is that a large supply-driven shortage occurs that is difficult to address.

The resulting increase in the oil price would likely result in an increase in investment, but as we know, the cycle time to introduce material new supply volumes is long.

This macro thematic is why we remain attracted to new oil supply investment in the near term, particularly in high quality, low cost assets.

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