Closed-Joint Stock Company « SUNTARNEFTEGAS » current projects

« Suntarneftegas » (current projects)  Closed-Joint Stock Company « Suntarneftegas » was registered in the Republic of Sakha (Yakutia) in March 21st 2006  The main activities of the Company : o prospecting, exploration and extraction of hydrocarbons o processing and marketing of hydrocarbons and their processed products o providing services of drilling related to the production of hydrocarbons  Permanent staff of the company – 15 persons The Company

Management team of the Company Khmarin Viktor Nikolaevich (Member of the Board of Directors) Maksimov Afanasy Nikolaevich (General Director): Founded airline «Ilin» and oil company «Yakol». Managed OAO NNGK «Sakhaneftegaz» as president of the corporation for 5 years. In 2002 has been elected as the most successful entrepreneur in the Republic of Sakha (Yakutia). Deputy of the National Assembly of the Republic of Sakha (Il Tumen). Chikachev Igor Alekseevich (Executive Director): Worked in oil and gas industry for 28 years. Worked as vice-president of OAO NNGK «Sakhaneftegaz» for 12 years. Elected member of the Board of Directors for oil and gas companies in Yakutia. Former vice-president of «Association of auditors and accountants of the Republic of Sakha (Yakutia)». « Suntarneftegas » (current projects)

Management team of the company Matveev Vladimir Danilovich (Deputy General Director): PhD in Geology and Mineralogy. Geological experience in the Republic Sakha (Yakutia) – 42 years. Former Chief Geologist of «Yakutgeofizika», former Vice- President of OAO NNGK «Sakhaneftegaz». Participated in discovering and exploring most of the oil and gas deposits in the Republic of Sakha (Yakutia). Responsible of feasibility study of gas supply from Chayandinsky gas deposit to China (with CNPC). Managed Oil and Gas companies and Geophysical enterprises. Soloschak Mikhail Mikhailovich (Chief Geologist): Geological experience in the Republic Sakha (Yakutia) – 25 years. As Geological Expert took part on the following projects:  Sakha Gas (Russia – South Korea), 1995  Sakha – CNPC (Russia – China), 2000 « Suntarneftegas » (current projects)

 « Suntarneftegas » acquired through auctions 2 licences for exploration and extraction of hydrocarbons in the following licence plots:  Yuzhno-Berezovsky (registered on March 2 nd 2007)  Cherendeisky (registered on April 2 nd 2008)  The licences are granted for 25 years  The plots are located closed to the corridor of the ESPO (oil) and the Eastern Programme (gas) export pipeline « Suntarneftegas » (current projects)

Characteristic of resources * Distance from the northern border of the plot to the ESPO (oil) and Eastern Programme (gas) pipeline corridor ** Conditional Hydrocarbon unit (CH), 1 ton of CH = 1 ton of oil or condensate = m 3 gas Licence plotSurface, km 2 ESPO* km Resources assessed by The Ministry of Natural Resources« Suntarneftegas » gas, bln. m 3 oil, mln.ton CH**, mln.ton gas, bln. m 3 Gas condensate, mln.ton CH**, mln.ton Yuzhno- Berezovsky D D D 1L 4.8-D Cherendesky D 1L 47.1-D D 1L 59.3-D Total D D D D D « Suntarneftegas » (current projects)

The program of geological prospect – valuation works (2010 – 2013) DescriptionUnit Licence plot Yuzhno-BerezovskyCherendeisky Seismic works 2Dlinear km Prospect drillinglinear km Number prospect wellswells23 Cost of worksmln $ « Suntarneftegas » (current projects)

Expected growth of reserves C1 + C2 from the results of prospect – valuation works « Suntarneftegas » (current projects) DescriptionUnit Licence plot Yuzhno-BerezovskyCherendeisky Expected growth of reserves С 1 +C 2 million ton CH* Including: Oilmillion ton-- Gasbillion m Gas condensatemillion ton * Conditional Hydrocarbon unit (CH), 1 ton of CH = 1 ton of oil or condensate = m 3 gas

D.I.E.* - period of Development and Industrial Exploitation The main geological and technical indicators of reserves « Suntarneftegas » (current projects) DescriptionUnit Licence plot Yuzhno-BerezovskyCherendeisky Initial expected reserves of the projects Gasbillion m Gas condensatemillion ton Number of wellswell23 Max gas rate of wellsthousand m. 3 / day Annual production of gasmillion m. 3 / year Annual production of gas condensate thousand ton / year Expected production during the period D.I.E.* ( ): Gasmillion m Gas condensatethousand ton

Main assumptions and indicators for economic appraisal of the projects IndicatorsUnitsValue Part of gas production for export%100.0 Part of gas condensate production for internal Russian market %100.0 Sale price of gas condensate in Russian market RUB/ton Sale price of gas for exportation*$/thousand m VAT tax rate%18.0 Income tax rate%20.0 Severance tax rate for gasRUB/thousand m Severance tax rate for condensate%17.5 Social contribution rate of deducted from payroll %26.0 Property tax rate%2.2 Project length used for valuationyears9 The exchange rate of USDRUB/$30.0 « Suntarneftegas » (current projects) * It has been assumed that from 2014 the gas will be supplyed to the Russian market (with market price) and the northern provinces of China through the Eastern Programme gas pipeline

Main economic indicators of project valuation of the Yuzhno-berezovsky licence plot for the period 2010 – 2018 Discount rate – 10% Project length used for valuation – 9 years Payback (with discounting) – 7 years NPV – million $ IRR – 19.74% Capital investment: seismic works (2010 – 2011) – 3.27 million $ prospect drilling (2011 – 2012) – million $ engineering, ecology, monitoring ( ) – 1.40 million $ cost of project management – 1.50 million $ / year construction of facilities (2013) – million $ costruction of external pipeline (2013) – 5.00 million $ Start of investment – 2010 Start of production and generation of positive cash flow – 2014 Sales revenue: annual average – million $ cumulated – million $ Payback (without discounting) – 6 years « Suntarneftegas » (current projects)

Discount rate – 10% Project length used for valuation – 9 years Payback (with discounting) – 8 years NPV – 8.90 million $ IRR – 13.30% Capital investment: seismic works (2010 – 2011) – million $ prospect drilling (2011 – 2013) – million $ engineering, ecology, monitoring ( ) – 1.88 million $ cost of project management – 1.60 million $ / year construction of facilities (2013) – million $ costruction of external pipeline (2013) – 8.00 million $ Start of investment – 2010 Start of production and generation of positive cash flow – 2014 Sales revenue: annual average – 60,00 million $ cumulated – million $ Payback (without discounting) – 6 years Main economic indicators of project valuation of the Cherendeisky licence plot for the period 2010 – 2018 « Suntarneftegas » (current projects)

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