Investment in Horse Hill Developments Limited
(5% interest in HHDL)

The Company currently owns a 5% direct interest in Horse Hill Developments Limited, which is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

As reported in March 2016, the final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the overlying Portland sandstone in HH-1 stands at 1,688 barrels of oil per day (“bopd”), a UK record for an onshore discovery well. Over the 30 to 90 hour flow periods from each of the 3 zones in HH-1, no clear indication of any reservoir pressure depletion was observed.

The carrying value of this investment remains unchanged since our most recently published audits accounts, however the Board looks forward with considerable interest to the upcoming long-term flow test programme and its likely potential impact on our investment value going forward.