APPENDIX E DESCRIPTION OF OUR SHARES Share Capital As of the Latest Practicable Date, our authorized share capital is US$1,000,000

divided into 100,000,000 Shares of par value US$0.01 each. Under the Cayman Islands Companies Law, certain changes in the share capital of our Company such as an increase, consolidation or subdivision are permitted if authorized by our Articles. Article 53 and Article 54 provide that an ordinary resolution is required for an increase to, consolidation or subdivision of, our Companys share capital. With regard to a reduction of share capital, Article 55, following the requirement of the Cayman Islands Companies Law, requires a special resolution to be passed. Article 1 defines an ordinary resolution as one passed by a simple majority of votes cast by shareholders (i.e. members) at general meetings, and a special resolution as, other than in relation to Article 18, a resolution requiring a 75.0 per cent. majority vote of shareholders at general meetings of which not less than 21 days notice has been given or approved in writing by all shareholders entitled to vote at a general meeting of the Company. As of the date of this document, we have 800,000,000 Shares of par value US$0.00125 each in issue which are fully paid-up. All of our Shares are in registered form. Our Shares, which have identical rights in all respects, rank equally with one another. Subject to the Cayman Islands Companies Law, no Shares may be issued by our Board without the prior approval of our Companys Shareholders in general meeting but subject thereto and to the Articles and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, the unissued Shares of our Company shall be at the disposal of our Board of Directors which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as our Board of Directors may in its absolute discretion determine but so that no Shares shall be issued at a discount, provided always that (a) no Shares shall be issued to transfer a controlling interest in our Company without the prior approval of our Shareholders at a general meeting; (b) subject to any direction to the contrary that may be given by our Companys Shareholders in general meeting, any issue of Shares for cash to our Shareholders of any class shall be offered to such Shareholders in proportion as nearly as may be to the number of shares of the class then held by them and the provisions of the second sentence of Article 56 shall apply with such adaptations as are necessary shall apply; and (c) any other issue of Shares, the aggregate of which would exceed the limits referred to in Article 57 but always subject to such limits, if any, as may be prescribed by the SGX-ST, shall be subject to the approval of our Companys Shareholders in general meeting. In the event of the issuance of preference shares, the total number of such preference shares may not exceed the total number of the issued ordinary shares. Our Articles provide that our Shareholders in general meeting may give to our Directors a general authority to issue Shares subject to such limits as may be prescribed by the SGX-ST of our issued share capital at the time of the passing of the resolution. We may, subject to the Cayman Islands Companies Law and our Articles, purchase our own Shares. We will replace lost or destroyed certificates for Shares provided that the applicant pays a fee which will not exceed S$2.00 together with the amount of duty payable, if any, and furnishes such evidence and a letter of indemnity as our Board of Directors may require. Purchase by our Company of our own Shares Under the laws of the Cayman Islands, a company may, if authorized by its articles of association, purchase its own shares. Our Company has such power to purchase our own Shares under Article 58 of our Articles. Such power of our Company to purchase our own Shares shall, subject to the Cayman Islands Companies Law and our Articles (and if applicable, the rules and regulations of the SGX-ST and other regulatory authorities), be exercisable by the Directors upon such terms and subject to such conditions as they think fit, in accordance with the Articles. Under the laws of the Cayman Islands, such purchases may be effected out of profits of our Company or share premium out of proceeds of a fresh issue of Shares made for that purpose or, in the manner authorized by Cayman Islands Companies Law and our Articles, by a payment out of capital. At no time may our Company purchase our Shares if, as a result of the purchase, there would no longer be any shareholder, in our Company. Only fully paid Shares may be purchased by our Company. A payment out of capital by our Company for the purchase of our Shares is not lawful unless immediately following the date on which the payment out of capital is proposed to be made, our Company shall be able to pay its debts as they fall due in the ordinary course of business. Shares purchased by the Company will be treated as cancelled and our Companys issued, but not our authorized, capital will be diminished accordingly. E-1

For further details, please see Appendix F Summary of Certain Provisions of the Cayman Islands Companies Law and the Memorandum and Articles of Association of Our Company Shareholders We maintain a register of members which contains the particulars as required under the Cayman Islands Companies Law, and only recognize as shareholders of our Company such persons who are holders of Shares and who are registered on the register of members. Except as required by law, no person shall be recognized by the Company as holding any share upon any trust and we will not be bound by or required in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any fractional part of a share or (except only as otherwise provided by our Articles or by law) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder. If any Share stands jointly in the names of two or more persons, the person first named in the register shall as regards service of notices and, subject to the provisions of the Articles, all or any other matters connected with our Company, except with respect to the transfer of Shares, be deemed the sole holder thereof. Subject to the terms and conditions of any application of Shares, we may allot Shares applied for within ten Market Days of the closing date of any such application (or such other period as may be approved by the SGXST). We may close the register of shareholders for any time or times if we provide the SGX-ST with at least ten clear Market Days notice. However, the register may not be closed for more than 40 days in aggregate in any calendar year. We would typically close the register to determine shareholders entitlement to receive dividends and other distributions. Transfer of Shares Subject to our Articles, any shareholder may transfer all or any of his Shares by a duly signed instrument of transfer in the form acceptable to our Board provided always that our Company shall accept for registration an instrument of transfer in a form approved by the SGX-ST. Save as provided in the Articles, there shall be no restriction on the transfer of fully paid up Shares (except where required by law or the rules or regulations of the SGX-ST). Our Board may decline to register a transfer of any Share which is not fully paid or on which our Company has a lien. Our Board may also decline to recognize any instrument of transfer unless, among other things, it is duly stamped and is presented for registration together with the share certificate and such other evidence as our Board may reasonably require, and a fee of such sum (not exceeding two Singapore dollars (S$2.00) or such other maximum sum as the SGX-ST may determine to be payable) as our Board may from time to time require is paid to our Company in respect thereof. General Meetings of Our Shareholders Under the Articles, the annual general meeting is required to be convened at least once in every calendar year whilst our Directors may, whenever they think fit, convene an extraordinary general meeting. Article 63 provides that an annual general meeting of our Company shall be held in each year (within a period of not more than 15 months after the holding of the last preceding annual general meeting unless a longer period would not infringe the rules or regulations of the SGX-ST, if any). In addition, for so long as the Shares of the Company are listed on the Main Board of the SGX-ST, the interval between the close of the Companys financial year and the date of the Companys annual general meeting shall not exceed four months or such period as may be prescribed or permitted by the SGX-ST. Subject to the Cayman Islands Companies Law, Shareholders holding at the date of deposit of the requisition not less than one-tenth of the paid up capital of our Company carrying the right of voting at general meetings of our Company shall at all times have the right, by written requisition to our Board of Directors or the Secretary of our Company, to require an extraordinary general meeting to be called by our Board of Directors for the transaction of any business specified in such requisition; and such meeting shall be convened within 21 days from the deposit of such requisition. If within 45 days of such deposit our Board of Directors fails to proceed to convene such meeting the requisitionists themselves may do so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of our Board of Directors shall be reimbursed to the requisitionist(s) by our Company. E-2

At least 14 days notice of a general meeting shall be given to each shareholder entitled to attend and vote thereat. A general meeting at which the passing of a special resolution is to be considered shall be called by not less than 21 days notice. For so long as the Shares of the Company are listed on the Main Board of the SGX-ST, at least 14 days notice of any general meeting shall be given by advertisement in an English daily newspaper in circulation in Singapore and in writing to the SGX-ST. Under the Cayman Islands Companies Law, only persons who agree to become shareholders of a company and whose names are entered on the register of shareholders of such company are considered shareholders, with rights to attend and vote at general meetings. Accordingly, Depositors (as defined in the Singapore Companies Act) holding Shares through CDP would not be recognized as shareholders of our Company, and would not have a right to attend and to vote at general meetings of our Company. In the event that Depositors wish to attend and vote at general meetings of our Company, CDP will have to appoint them as proxies, pursuant to the Articles and the Cayman Islands Companies Law. In accordance with Article 99(b), unless CDP specifies otherwise in a written notice to our Company, CDP shall be deemed to have appointed as CDPs proxies each of the Depositors who are individuals and whose names are shown in the records of CDP, as at a time not earlier than 48 hours prior to the time of the relevant general meeting, supplied by CDP to our Company. Therefore, Depositors who are individuals can attend and vote at the general meetings of our Company without the lodgment of any proxy form. Depositors who cannot attend a meeting personally may enable their nominees to attend as CDPs proxies. Depositors who are not individuals can only be represented at a general meeting of our Company if their nominees are appointed by CDP as CDPs proxies. Proxy forms appointing nominees of Depositors as proxies of CDP would need to be executed by CDP as member and must be deposited at the specified place and within the specified time frame to enable the nominees to attend and vote at the relevant general meeting of our Company. Voting Rights Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with the Articles, at any general meeting (i) on a show of hands every shareholder present in person (or being a corporation, is present by a representative duly authorized under Articles 108 and 109) or by proxy shall have one vote and the chairman of the meeting shall determine which proxy shall be entitled to vote where a shareholder (other than CDP) is represented by two proxies; and (ii) on a poll every shareholder present in person or by proxy or, in the case of a shareholder being a corporation, by its duly authorized representative shall have one vote for every fully paid share of which he is the holder or which he represents and in respect of which all calls due to our Company have been paid, but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. If the shareholder is CDP, CDP may appoint more than two proxies to attend and vote at the same general meeting and each proxy shall be entitled to exercise the same powers on behalf of CDP as CDP could exercise, including the right to vote individually on a show of hands. Dividends Subject to the Cayman Islands Companies Law, our Company in a general meeting may from time to time declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by a Board of Directors. Dividends may be declared and paid out of the profits of our Company, realized or unrealized, or from any reserve set aside from profits which our Directors determine is no longer needed. With the sanction of an ordinary resolution, dividends may also be declared and paid out of the share premium account or any other fund or account which may be authorized for this purpose in accordance with the Cayman Islands Companies Law, provided that no distribution or dividend may be paid to shareholders out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, our Company shall be able to pay its debts as they fall due in the ordinary course of business. Whenever our Board of Directors or our Company in a general meeting has resolved that a dividend be paid or declared, our Board of Directors may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind and in particular of paid up Shares, debentures or warrants to subscribe for securities of our Company or any other company, or in any one or more of such ways.

E-3

Bonus and Rights Issues Our Company may, upon the recommendation of the Board by Ordinary Resolution, resolve in respect of any one particular dividend of our Company that a dividend may be satisfied wholly in the form of an allotment of Shares credited as fully paid up without offering any right to Shareholders to elect to receive such dividend in cash in lieu of such allotment. Take-overs and Substantial Shareholders Our Company is subject to the Securities and Futures Act and the Singapore Take-Over Code notwithstanding that we are a corporation incorporated in the Cayman Islands. Take-overs Under the Singapore Take-Over Code, issued by the Authority pursuant to Section 321 of the Securities and Futures Act, any person acquiring an interest, either on his own or together with parties acting in concert with him, in 30.0 per cent. or more of the voting Shares must extend a takeover offer for the remaining voting Shares in accordance with the provisions of the Singapore Take-Over Code. In addition, a mandatory takeover offer is also required to be made if a person holding, either on his own or together with parties acting in concert with him, between 30.0 per cent. and 50.0 per cent. of the voting shares acquires additional voting shares representing more than 1.0 per cent. of the voting shares in any six-month period. Under the Singapore Take-Over Code, the following individuals and companies will be presumed to be persons acting in concert with each other unless the contrary is established: (a) the following companies: (i) (ii) (iii) (iv) (v) (vi) (vii) a company; the parent company of (i); the subsidiaries of (i); the fellow subsidiaries of (i); the associated companies of (i), (ii), (iii) or (iv); and companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights;

(b)

a company with any of its directors (together with their close relatives, related trusts as well as companies controlled by any of the directors, their close relatives and related trusts); a company with any of its pension funds and employee share schemes; a person with any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, but only in respect of the investment account which such person manages; a financial or other professional adviser, including a stockbroker, with its customer in respect of the shareholdings of: (i) (ii) the adviser and persons controlling, controlled by or under the same control as the adviser; and all the funds which the adviser manages on a discretionary basis, where the shareholdings of the adviser and any of those funds in the customer total 10.0 per cent. or more of the customers equity share capital;

(c) (d)

(e)

(f)

directors of a company (together with their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent; partners; and E-4

(g)

(h)

the following persons and entities: (i) (ii) (iii) (iv) (v) (vi) an individual; the close relatives of (i); the related trusts of (i); any person who is accustomed to act in accordance with the instructions of (i); companies controlled by any of (i), (ii), (iii) or (iv); and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights.

Under the Singapore Take-Over Code, a mandatory offer made with consideration other than cash must be accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert within the preceding six months. Substantial Shareholders The Securities and Futures Act require our substantial shareholders to give notice to us of certain information as prescribed by the Authority, including particulars of their interest, within two business days of becoming aware of being our Substantial Shareholders, being aware of any change in the percentage level of their interest and being aware of ceasing to be a Substantial Shareholder. Percentage level, in relation to a substantial shareholder, is the percentage figure ascertained by expressing the aggregate of the votes attached to all the voting shares in which the substantial shareholder has an interest (or interests) immediately before or (as the case may be) immediately after the relevant time as a percentage of the total votes attached to all of the voting shares, and if it is not a whole number, rounding that figure down to the next whole number. Under the Securities and Futures Act, a person has a substantial shareholding in us if he has an interest (or interests) in one or more of our voting shares and the total votes attached to those shares are not less than 5.0 per cent. of the aggregate of the total votes attached to all of our voting shares (excluding treasury shares). Liquidation Shareholders are entitled to the surplus assets of the Company in the event that it is wound up. Indemnity Our Articles provide that our Board of Directors and officers shall be indemnified from and against all liability which they incur in execution of their duty in their respective offices, except in respect of negligence, fraud or breach of fiduciary duty. For further details, please see Appendix F Summary of Certain Provisions of the Cayman Islands Companies Law and the Memorandum and Articles of Association of our Company Summary of Certain Provisions of the Cayman Islands Companies Law Indemnification. Limitations on Rights to Hold or Vote Shares There are no limitations, either under Cayman Islands law or our Articles, on the rights of non-Caymanian owners of Shares to hold or vote their Shares. Minority Rights The Cayman Islands courts would ordinarily be expected to treat as persuasive English case law precedents which permit a minority Shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal; (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company; and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority. E-5

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APPENDIX F SUMMARY OF CERTAIN PROVISIONS OF THE CAYMAN ISLANDS COMPANIES LAW AND THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY REGISTRATION NUMBER We were incorporated on October 5, 2009 and our Companys registration number is 231666. SUMMARY OF CERTAIN PROVISIONS OF THE CAYMAN ISLANDS COMPANIES LAW The Company is incorporated in the Cayman Islands subject to the Cayman Islands Companies Law and, therefore, operates subject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman Islands company law, although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman Islands company law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar. (a) Operations

As an exempted company, our operations must be conducted mainly outside the Cayman Islands. We are required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorized share capital. (b) Share Capital

The Cayman Islands Companies Law provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account, to be called the share premium account. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The Cayman Islands Companies Law provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association in (a) paying distributions or dividends to members; (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares; (c) in any manner provided in section 37 of the Cayman Islands Companies Law; (d) writing-off the preliminary expenses of the company; and (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company. No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course business. The Cayman Islands Companies Law provides that, subject to confirmation by the Grand Court of the Cayman Islands, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, by special resolution reduce its share capital in any way. (c) Membership

Under the Cayman Islands Companies Law, only those persons who agree to become members of a Cayman Islands company and whose names are entered on the register of members of such a company are considered members. A Cayman Islands company is also not bound to see to the execution of any trust, whether express, implied or constructive, to which any of its shares are subject and whether or not the company had notice of such trust. Accordingly, persons holding shares through a trustee, nominee or depository will not be recognized as members of a Cayman Islands company under Cayman Islands law and may only have the benefit of rights attaching to the shares or remedies conferred by law on members through or with the assistance of the trustee, nominee or depository. (d) Financial Assistance to Purchase Shares of a Company or its Holding Company

Subject to all applicable laws, we may give financial assistance to our Directors and employees, subsidiaries, holding company or any subsidiary of such holding company in order that they may buy Shares in us or shares in any subsidiary or holding company. Further, subject to all applicable laws, we may give financial assistance to a F-1

trustee for the acquisition of Shares in us or shares in any such subsidiary or holding company to be held for the benefit of employees of us, our subsidiaries, any holding company of us or any subsidiary of any such holding company (including salaried Directors). There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding companys shares. Accordingly, a company may provide financial assistance if the Directors of the company consider, in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arms-length basis. (e) Purchase of Shares and Warrants by a Company and its Subsidiaries

Subject to the provisions of the Cayman Islands Companies Law, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder. In addition, such a company may, if authorized to do so by its articles of association, purchase its own shares, including any redeemable shares. However, if the articles of association do not authorize the manner and terms of the purchase, a company cannot purchase any of its own shares unless the manner and terms of purchase have first been authorized by an ordinary resolution of the company. At no time may a company redeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of us other than shares held as treasury shares. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business. A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under Cayman Islands law that a companys memorandum or articles of association contain a specific provision enabling such purchases and the Directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds. Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares. (f) Dividends and Distributions

With the exception of section 34 of the Cayman Islands Companies Law, there are no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits and retained earnings. In addition, section 34 of the Cayman Islands Companies Law permits, subject to a solvency test and the provisions, if any, of the companys memorandum and articles of association, the payment of dividends and distributions out of the share premium account. (g) Protection of Minorities

The Cayman Islands courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company, and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority. In the case of a company (not being a bank) having a share capital divided into shares, the Court may, on the application of members holding not less than one-fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct. Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up. Or, as an alternative to a winding-up order, the Court may make the following orders: (a) an order regulating the conduct of the companys affairs in the future; (b) an order requiring the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do; (c) an order authorizing civil proceedings to be brought in the name of and on behalf of the company by the petitioner on such terms as the F-2

Court may direct; or (d) an order providing for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, a reduction of the companys capital accordingly. Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the companys memorandum and articles of association. (h) Management

The Cayman Islands Companies Law contains no specific restrictions on the power of directors to dispose of assets of a company. However, as a matter of general law, every officer of a company, which includes a director, managing director and secretary, in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. (i) Accounting and Auditing Requirements

A Cayman Islands exempted company shall cause proper books of account, including, where applicable, material underlying documentation including contracts and invoices to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of the company. Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the companys affairs and to explain its transactions. A Cayman Islands exempted company shall cause all its books of account to be retained for a minimum period of five years from the date on which they are prepared. (j) Exchange Control

There are no exchange control regulations or currency restrictions in the Cayman Islands. (k) Taxation

Pursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Cabinet: (i) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciation shall apply to us or our operations; and that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares, debentures or other obligations of ours.

(ii)

The undertaking for us is for a period of 20 years from October 20, 2009. The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands save certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties. (l) Stamp Duty on Transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands. (m) Loans to Directors

There is no express provision in the Cayman Islands Companies Law prohibiting the making of loans by a company to any of its directors. F-3

(n)

Inspection of Corporate Records

Members of the company will have no general right under the Cayman Islands Companies Law to inspect or obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the companys articles of association. An exempted company may, subject to the provisions of its articles of association, maintain its principal register of members and any branch registers at such locations, whether within or without the Cayman Islands, as the directors may, from time to time, think fit. An exempted company may also maintain a separate register of members in respect of its listed shares. There is no requirement under the Cayman Islands Companies Law for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. (o) Winding Up

A company may be wound up by either an order of the Court, voluntarily or subject to the supervision of the Court. The Court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the Court, just and equitable to do so. A company may be wound up voluntarily (a) when the period (if any) fixed for the duration of the company by its memorandum or articles of association expires; (b) if the event (if any) occurs, on the occurrence of which the memorandum or articles of association provide that the company is to be wound up; (c) if the company resolves by special resolution that it be wound up voluntarily; or (d) if the company in general meeting resolves that it be wound up voluntarily because it is unable to pay its debts as they fall due. In the case of a voluntary winding up, such company shall from the commencement of its winding up, cease to carry on its business except so far as it may be beneficial for its winding up. In circumstances where a company is solvent (the directors of the company will need to provide a statutory declaration to this effect), the company can be wound up by a special resolution of its shareholders, and the liquidation will not require the supervision of the Court. Unless one or more persons have been designated as liquidator or liquidators of the company in the companys memorandum and articles of association, the company in general meeting must appoint one or more liquidators for the purpose of winding up the affairs of the company and distributing its assets. Alternatively, where the financial position of the company is such that a declaration of solvency cannot be given by the directors, the winding up will be initiated by an ordinary resolution of the companys shareholders and will occur subject to the supervision of the Court. In this case, a licensed insolvency practitioner will need to be appointed as liquidator (known as an official liquidator). The Court may determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the Court. The Court may appoint a foreign practitioner to act jointly with a qualified insolvency practitioner. A person may qualify as an official liquidator if that person holds the qualifications specified in the Insolvency Practitioners Regulations of the Cayman Islands. The Court may appoint a foreign practitioner to act jointly with a qualified insolvency practitioner. Upon the appointment of a liquidator, the responsibility for the companys affairs rests entirely in his hands and no future executive action may be carried out without his approval. A liquidators duties are to collect the assets of the company (including the amount (if any) due from the contributories), settle the list of creditors and, subject to the rights of preferred and secured creditors and to any subordination agreements or rights of set-off or netting of claims, discharge the companys liability to them (pari passu if insufficient assets exist to discharge the liabilities in full) and to settle the list of contributories (shareholders) and divide the surplus assets (if any) amongst them in accordance with the rights attaching to the shares. As soon as the affairs of the company are fully wound up, the liquidator must make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation for it. At least 21 days before the meeting the liquidator must send a notice specifying the time, place and object of the meeting to each contributory in any manner authorized by the companys articles of association and published in the Cayman Islands Gazette. F-4

(p)

Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing seventy-five per cent in value of shareholders or class of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned by the Court. While a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management. (q) Mergers and Consolidations

The Cayman Islands Companies Law provides that any two or more Cayman Islands companies limited by shares (other than segregated portfolio companies) may merge or consolidate in accordance with the Cayman Islands Companies Law. The Cayman Islands Companies Law also allows one or more Cayman Islands companies to merge or consolidate with one or more foreign companies (provided that the laws of the foreign jurisdiction permit such merger or consolidation). To effect a merger or consolidation of one or more Cayman Islands companies the directors of each constituent company must approve a written plan of merger or consolidation in accordance with the Cayman Islands Companies Law. The Plan must then be authorized by each constituent company by a special resolution of members and such other authorization, if any, as may be specified in such constituent companys articles of association. Where a Cayman Islands parent is merging with one or more of its Cayman Islands subsidiaries, shareholder consent is not required if a copy of the plan of merger is given to every member of each subsidiary company to be merged, unless that member agrees otherwise. To effect a merger or consolidation of one or more Cayman Islands companies with one or more foreign companies, in addition to the approval requirements applicable to the merger of consolidation of Cayman Islands companies (in relation to Cayman Islands companies only), the merger or consolidation must also be effected in compliance with the constitutional documents of, and laws of the foreign jurisdiction applicable to, the foreign companies. (r) Compulsory Acquisition

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than ninety per cent of the shares which are the subject of the offer accept, the offeror may at any time within two months after the expiration of the said four months, by notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court within one month of the notice objecting to the transfer. The burden is on the dissenting shareholder to show that the Court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders. (s) Indemnification

Cayman Islands law does not limit the extent to which a companys articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime).

F-5

SUMMARY OF CERTAIN PROVISIONS OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY This summary provides information about certain provisions of our Articles and certain aspects of Cayman Islands company law. The description below is only a summary and is qualified in its entirety by reference to our Articles and the Cayman Islands Companies Law. Registration number and Memorandum of Association The registration number with which our Company was incorporated is 231666. Our Memorandum of Association states, among other things, that the liability of shareholders is limited to the amount, if any, for the time being unpaid on the Shares held by them and that our Company is an exempted company as defined in the Cayman Islands Companies Law. Paragraph 3 of our Memorandum of Association states that the objects for which our Company is formed are unrestricted, and the Company shall have fully power and authority to carry out any object not prohibited by prohibited by any law as provided by Section 7(4) of the Cayman Islands Companies Law. Directors Ability of Interested Directors to Vote (Articles 145 and 146) Every Director who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his duties or interests as a Director, shall declare at a meeting of the Directors, the fact and nature, character and extent of the conflict. A Director shall not participate in any discussions and shall not be entitled to vote in respect of any contract, transaction or arrangement, or proposed contract, transaction or arrangement or any other proposal whatsoever (and/or receive any information relating thereto): (i) in which he has any material interest (personal or otherwise), whether directly or indirectly; or (ii) which might, whether directly or indirectly, create a conflict with his duties or interests as a Director; or (iii) in the case of a Director who represents the interests of, or who was nominated for appointment by a Substantial Shareholder, in which such Substantial Shareholder and/or its related corporation may have an interest or potential interest. Remuneration (Articles 115 and 116) The ordinary fees of the Directors shall from time to time be determined by Ordinary Resolution and shall not be increased except pursuant to an Ordinary Resolution passed at a general meeting where notice of the proposed increase shall have been given in the notice convening the general meeting and shall (unless such resolution otherwise provides) be divisible among the Directors as they may agree, or failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such fees is payable shall be entitled only to rank in such division for a proportion of fees related to the period during which he has held office. Each Director shall be entitled to reimbursement for his out of pocket expenses incurred in connection with attending Board meetings. Fees payable to non-executive Directors shall be by a fixed sum and not by a commission on or percentage of the profits or turnover. Salaries payable to executive Directors may not include a commission on or a percentage of turnover. Borrowing Powers (Article 137) Subject to the Articles, the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. Retirement Age Limit There are no provisions relating to retirement of Directors upon reaching any age limit. Shareholding Qualification (Article 117) There shall be no shareholding qualification for Directors unless determined otherwise by Ordinary Resolution. F-6

Share Rights and Restrictions Our Company currently has only one class of shares, which will be designated as ordinary shares. Dividends and Distribution (Articles 169 to 179) Subject to the Cayman Islands Companies Law, our Company in a general meeting may from time to time declare dividends in any currency to be paid to the shareholders but no dividend shall be declared in excess of the amount recommended by the Board. Dividends may be declared and paid out of the profits of the Company, realized or unrealized, or from any reserve set aside from profits which the Directors determine is no longer needed. With the sanction of an ordinary resolution, dividends may also be declared and paid out of the share premium account or any other fund or account which may be authorized for this purpose in accordance with the Cayman Islands Companies Law, provided that no distribution or dividend may be paid to shareholders out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, our Company shall be able to pay its debts as they fall due in the ordinary course of business. Unless and to the extent that the rights attached to any Shares or the terms of issue thereof otherwise provide: (i) all dividends shall be declared and paid according to the amounts paid up on the Shares in respect of which the dividend is paid, but no amount paid up on a Share in advance of calls shall be treated as paid up on the Share; and (ii) all dividends shall be apportioned and paid pro rata according to the amounts paid up on the Shares during any portion or portions of the period in respect of which the dividend is paid. Our Board may deduct from any dividend or other moneys payable to a member by our Company on or in respect of any Shares all sums of money (if any) presently payable by him to our Company on account of calls or otherwise. All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by our Board for the benefit of our Company until claimed. Any dividend or bonuses unclaimed after a period of six years from the date of declaration shall be forfeited and shall revert to our Company. Voting Rights (Articles 84 and 89) Each member who is a holder of Shares in the capital of the Company shall be entitled to be present at any general meeting. Subject to any special rights or restrictions as to voting for the time being attached to any Shares by or in accordance with the Articles, at any general meeting (i) on a show of hands every shareholder present in person (or being a corporation, is present by a representative duly authorized under Articles 108 and 109) or by proxy shall have one vote and the chairman of the meeting shall determine which proxy shall be entitled to vote where a shareholder (other than CDP) is represented by two proxies, and (ii) on a poll every shareholder present in person or by proxy or, in the case of a shareholder being a corporation, by its duly authorized representative shall have one vote for every fully paid share of which he is the holder or which he represents and in respect of which all calls due to our Company have been paid, but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. If the shareholder is CDP, CDP may appoint more than two proxies to attend and vote at the same general meeting and each proxy shall be entitled to exercise the same powers on behalf of CDP as CDP could exercise, including the right to vote individually on a show of hands. Share in Profits Holders of Shares shall be entitled to share in our Companys profits by way of dividends declared or distribution approved by our Company in general meeting in accordance with the Cayman Islands Companies Law. Share in Surplus upon Liquidation (Articles 206 and 207) If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by the court), the liquidator may, with the sanction of a Special Resolution divide amongst the Shareholders in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different Classes. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Shareholders as the liquidator, with the like sanction shall think fit, but so that no Shareholder shall be compelled to accept any assets whereon there is any liability. F-7

Redemption Provisions (Articles 58 to 62) Subject to the Cayman Islands Companies Law and the bye-laws or listing rules of the Designated Stock Exchange, the Company may: (a) issue Shares on terms that they are to be redeemed or are liable to be redeemed at the option of the Company or the Shareholder on such terms and in such manner as the Directors may determine; (b) purchase its own Shares (including any redeemable Shares) on such terms and in such manner as the Directors may determine and agree with the Shareholder; and (c) make a payment in respect of the redemption or purchase of its own Shares in any manner authorized by the Law, the bye-laws, listing rules of the Designated Stock Exchange or the Singapore Securities and Futures Act (Cap. 289). Sinking Fund The Articles do not contain sinking fund provisions. Calls on Shares (Articles 27, 28, 29, 30, 30, 31 and 32) Subject to the Articles and to the terms of allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least 14 clear days written notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. The joint holders of a share shall be jointly and severally liable to pay calls in respect thereof. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. The provisions of the Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. The Directors may make arrangements on the issue of partly paid shares for a difference between the shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. The Directors may, if they think fit, receive from any shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an ordinary resolution, eight per cent. per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. Capital paid on shares in advance of calls shall not, whilst carrying interest, confer a right to participate in profits. The Memorandum of Association states that the liability of shareholders of our Company is limited to the amount, if any, for the time being unpaid on the Shares held by them. Discriminatory Provisions against Substantial Shareholder (Article 215) The Articles do not contain any provision discriminating against any existing or prospective holder of Shares as a result of such shareholder owning a substantial number of shares save that for so long as the shares of the Company are listed on the SGX-ST, substantial shareholders (having the meaning ascribed to it in the Singapore Companies Act) have to disclose particulars of their interest in our Company and of any change in the percentage level of such interest. Such requirement to disclose does not apply to CDP. Variation of Rights of Existing Shares or Classes of Shares (Article 16) Whenever the capital of the Company is divided into different classes the rights attached to any such class may, subject to and any other rights or restrictions for the time being attached to any class, only be materially adversely varied or abrogated with the consent in writing of the holders of not less than three-fourths of the issued shares of the relevant class, or with the sanction of a resolution passed at a separate meeting of the holders F-8

of the shares of such class by a majority of three-fourths of the votes cast at such a meeting, provided that, where the necessary majority for such a resolution is not obtained at the meeting, consent in writing if obtained from holders who represent at least three-quarters of the total voting rights of the shares concerned within two months of the meeting, shall be as valid and effectual as a resolution carried at the meeting. To every such separate meeting all the provisions of the Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more persons at least holding or representing by proxy one-third in nominal or par value amount of the issued shares of the relevant class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the shares of that class, every shareholder of the class shall on a poll have one vote for each share of the class held by him. The Directors may treat all the classes or any two or more classes as forming one class if they consider that all such classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes. General Meetings (Articles 63, 103 and 108) Under the Articles, the annual general meeting is required to be convened at least once in every calendar year whilst the Directors may, whenever they think fit, convene an extraordinary general meeting. Article 1 defines an ordinary resolution as one passed by a simple majority of votes cast by shareholders (i.e. members) at general meetings, and a special resolution as, other than in relation to Article 18 a resolution requiring a 75.0 per cent. majority vote of shareholders at general meetings of which not less than 21 days notice has been given or approved in writing by all shareholders entitled to vote at a general meeting of the Company. Subject to certain requirements in the Articles, all registered shareholders of the Company are entitled to attend general meetings of our Company. The Cayman Islands Companies Law does not contain provisions as to any documentary evidence to be produced by proxies and corporate representatives. However, such provisions may be contained in the Articles. Where, for example, it is stated that an instrument of proxy must be deposited a specified number of hours before the meeting (see Article 103), proxies deposited after that time cannot be admitted. Corporate representatives are different from proxies and unless specifically required by the Articles, a letter of appointment does not need to be lodged before the meeting. No Limitation on Non-Cayman Shareholders Subject to the Articles there are no limitations, either under Cayman Islands law on the rights of non Caymanian owners of the Companys shares to hold or vote their Shares. Changes in Control Issue of Shares (Article 8(c)) No Shares shall be issued to transfer a controlling interest in the Company without the prior approval of the shareholders in a general meeting. Shareholding Disclosure Requirement (Article 215) The Cayman Islands Companies Law does not require disclosure of shareholder ownership beyond a certain threshold. However, Article 215 contains provisions to the effect that for so long as the shares of the Company are listed on the SGX-ST, Directors and substantial shareholders (having the meaning ascribed to it in the Singapore Companies Act) of our Company will have to disclose particulars of their interest in our Company and any change in the percentage level of such interest. Article 215 does not apply to CDP. Changes in Capital (Articles 53, 54 and 55) Under the Cayman Islands Companies Law, certain changes in the capital of our Company such as an increase, consolidation or subdivision are permitted if authorized by its shareholders. Article 53 and 54 provides that an ordinary resolution is required for an increase to, consolidation or subdivision of, our Companys share capital. With regard to a reduction of share capital, Article 55, following the requirement of the Cayman Islands Companies Law, requires a special resolution to be passed. F-9

Forced transfers or sales of Shares (Article 50) Where the Company or the Directors determine, in their absolute discretion, or are of the opinion (but without imposing an obligation on them to so determine or opine) that Shares of our Company are being held, directly or indirectly, by any shareholder (each of the persons listed in (a) to (d) below, a Non-Qualifying Person): (a) whose ownership of Shares may cause our Companys tax status or residence to be prejudiced or may cause our Company to suffer any pecuniary disadvantage (including any excise tax, penalties or liabilities under the United States Employee Retirement Income Securities Act of 1974, as amended (ERISA)); or whose ownership of Shares may cause our Company to be required to comply with any registration or filing requirements in any jurisdiction, with which it would not otherwise be required to comply; or whose ownership of Shares may cause our Company to be required to register as an investment company under the United States Investment Company Act of 1940, as amended, and the rules thereunder (the US Investment Company Act); or who is a US Person (as defined in Regulation S under the United States Securities Act of 1933, as amended) but is not a qualified purchaser within the meaning of Section 2(a)(51)(A) of the US Investment Company Act;

(b)

(c)

(d)

then, in each such case, our Company may at its option direct the Non-Qualifying Person to transfer the whole or a specified percentage of such Non-Qualifying Persons Shares to a person who is not a Non-Qualifying Person and would not by reason of a transfer become a Non-Qualifying Person. If the required transfer is not effected within 30 days after service of notice by our Company and such Non-Qualifying Person directed to transfer his Shares has not established to the reasonable satisfaction of the Board or the designated person within the Company (whose judgment shall be final and binding) that he is not a Non-Qualifying Person, the Shares concerned may be sold by our Company in any manner it thinks fit on behalf of the said shareholder. The consent of such shareholder for the transfer of his Shares by our Company is not required and, notwithstanding any provisions to the contrary in our Articles of Association, until such transfer is effected, the holder of such Shares will not be entitled to receive or exercise any rights, benefits or privileges (including without limitation voting rights, dividends or other distributions) attaching to such Shares, and the Company may deal with any such rights, benefits or privileges of such shareholder at its absolute discretion.

F-10

APPENDIX G LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS The list of present and past principal directorships held by our Directors and Executive Officers in the last five years preceding the Latest Practicable Date is as follows:
Name Directors Will Honeybourne . . . . . . . . . . Barra Holdings GP Limited Exterran Holdings, Inc. First Reserve Asia Limited First Reserve Energy Infrastructure GP Limited First Reserve GP XII Limited First Reserve GP XIII Limited FR Acteon Holdings, Ltd. FR Horizon GP Limited FR X Offshore GP Limited FR XI Offshore GP Limited FR XII Alternative GP Ltd. KrisEnergy Holdings Ltd. KrisEnergy Ltd. Petroleum Equipment Suppliers Association Keith Cameron . . . . . . . . . . . . B Block Ltd BEM Resources Ltd CKR Resources (B.V.I.) Ltd CKR Resources Pte Ltd EM Block Ltd KrisEnergy (Asia) Ltd KrisEnergy (Cambodia) Holding Ltd KrisEnergy (Cambodia) Ltd KrisEnergy (East Muriah) Ltd KrisEnergy (Gulf of Thailand) Ltd KrisEnergy (Phu Khanh 120) Ltd KrisEnergy (Song Hong 115) Ltd KrisEnergy (Satria) Ltd KrisEnergy (Song Hong 105) Ltd KrisEnergy Holding Company Ltd KrisEnergy International (Thailand) Holdings Ltd KrisEnergy Ltd. KrisEnergy Management Ltd KrisEnergy Management Services Ltd KrisEnergy Oil & Gas (Thailand) Ltd KrisEnergy Pte Ltd KrisEnergy Resources (Thailand) Ltd Puri Aircraft Ltd Wassana MOPU Pte. Ltd.(1) Chris Gibson-Robinson . . . . . . B Block Ltd BEM Resources Ltd CKR Resources (B.V.I.) Ltd CKR Resources Pte Ltd EM Block Ltd KrisEnergy (Asia) Ltd KrisEnergy (Cambodia) Holding Ltd KrisEnergy (Cambodia) Ltd KrisEnergy (East Muriah) Ltd KrisEnergy (Gulf of Thailand) Ltd KrisEnergy (Phu Khanh 120) Ltd KrisEnergy (Song Hong 115) Ltd KrisEnergy (Satria) Ltd KrisEnergy (Song Hong 105) Ltd KrisEnergy (Udan Emas) B.V. KrisEnergy Holding Company Ltd KrisEnergy International (Thailand) Holdings Ltd KrisEnergy Ltd. KrisEnergy Management Ltd KrisEnergy Management Services Ltd KrisEnergy Oil & Gas (Thailand) Ltd KrisEnergy Pte Ltd Acteon Group Limited CNOOC (China National Offshore Oil Corporation) First Reserve International Limited FR IX Offshore GP Limited KrisEnergy Pte Ltd. Red Technology Alliance, LLC Turbo Cayman Limited Present Past

Jasmine Venture Limited KrisEnergy Holdings Ltd. Mont DOr Petroleum Limited

Mubadala Petroleum (SE Asia) Holdings Limited (formerly PearlOil Holdings Ltd) Mubadala Petroleum (SE Asia) Limited (formerly Pearl Energy Limited) Mubadala Petroleum (Thailand) Holdings Limited (formerly PearlOil (Siam) Limited) Pearl Oil (Amata) Limited Pearl Oil (Aoa Thai) Limited Pearl Oil (Jambi) Limited Pearl Oil (Petroleum) Limited Pearl Oil (Resources) Limited Pearl Oil (Thailand) Limited Pearl Oil Bangkok Limited Pearl Oil Offshore Limited Pearl Oil Onshore Limited PearlGas (Siam) Limited PearlOil (Basin) Limited (disposed on December 29, 2010) PearlOil (Island) Limited (disposed on December 29, 2010) PearlOil (K) Limited PearlOil (Nam Con Son) Limited

G-1

Name

Present

Past

. . . . . . . . . . . . . . . . . . . . . . . . . KrisEnergy Resources (Thailand) Ltd Wassana MOPU Pte. Ltd.(1) PearlOil (Obsidian) Limited PearlOil (Ophiolite) Limited PearlOil (Ragay) Limited PearlOil (Salawati) Limited (disposed on January 19, 2011) PearlOil (Sandstone) Limited PearlOil (Satria) Limited PearlOil (Sebuku) Limited PearlOil (Tachylyte) Limited PearlOil (Tephrite) Limited PearlOil (Theralite) Limited PearlOil (UK) Limited Richard Lorentz . . . . . . . . . . . . B Block Ltd BEM Resources Ltd CKR Resources (B.V.I.) Ltd CKR Resources Pte Ltd EM Block Ltd KrisEnergy (Asia) Ltd KrisEnergy (Cambodia) Holding Ltd KrisEnergy (Cambodia) Ltd KrisEnergy (East Muriah) Ltd KrisEnergy (Gulf of Thailand) Ltd KrisEnergy (Phu Khanh 120) Ltd KrisEnergy (Song Hong 115) Ltd KrisEnergy (Satria) Ltd KrisEnergy (Song Hong 105) Ltd KrisEnergy Holding Company Ltd KrisEnergy International (Thailand) Holdings Ltd KrisEnergy Ltd. KrisEnergy Management Ltd KrisEnergy Management Services Ltd KrisEnergy Oil & Gas (Thailand) Ltd KrisEnergy Pte Ltd KrisEnergy Resources (Thailand) Ltd Wassana MOPU Pte. Ltd.(1) Franklin Offshore Holding Pte Ltd. Global Tender Barge Pte Ltd Mubadala Petroleum (SE Asia) Holdings Limited Mubadala Petroleum (SE Asia) Limited Pearl Oil (Amata) Limited Pearl Oil (Aoa Thai) Limited Pearl Oil (Jambi) Limited Pearl Oil (Petroleum) Limited Pearl Oil (Resources) Limited Pearl Oil (Thailand) Limited Pearl Oil Bangkok Limited Pearl Oil Offshore Limited Pearl Oil Onshore Limited PearlGas (Siam) Limited PearlOil (Basin) Limited PearlOil (Island) Limited PearlOil (K) Limited PearlOil (Nam Con Son) Limited PearlOil (Obsidian) Limited PearlOil (Ophiolite) Limited PearlOil (Ragay) Limited PearlOil (Salawati) Limited PearlOil (Sandstone) Limited PearlOil (Satria) Limited PearlOil (Sebuku) Limited PearlOil (Tachylyte) Limited PearlOil (Tephrite) Limited PearlOil (Theralite) Limited PearlOil (UK) Limited -

Brooks Shughart . . . . . . . . . . . KIPP, Inc. KrisEnergy Holdings Ltd. KrisEnergy Ltd Sabine Oil & Gas Holdings LLC Choo Chiau Beng . . . . . . . . . . Asian Lift Pte Ltd K1 Ventures Ltd Keppel Capital Holdings Pte Ltd Keppel Capital One Pte Ltd Keppel Capital Pte Ltd Keppel Care Foundation Limited Keppel Energy Pte Ltd Keppel FELS Limited Keppel Infrastructure Holdings Pte. Ltd. Keppel Land China Limited Keppel Land Limited KrisEnergy Ltd. Keppel Offshore & Marine Ltd Keppel Offshore & Marine Technology Centre Pte Ltd Keppel Shipyard Limited KrisEnergy Ltd Singapore University of Technology and Design Tianjin Eco-city Keppel New Energy Development Co., Ltd

Keppel Norway AS Maritime and Port Authority of Singapore Singapore Maritime Foundation Limited Singapore Petroleum Company Singapore Refining Company SMRT Corporation Ltd SMRT Buses Ltd SMRT Light Rail Pte Ltd SMRT Road Holdings Ltd SMRT Trains Ltd

G-2

Name

Present

Past AAJ Investment Pte. Ltd. AIBJ Hero Pte. Ltd. AIBJ Roppongi Pte. Ltd. AIPJ Investment Pte. Ltd. All Fortune International Limited Allenstand Limited Anderhill Limited ANOF Korea 1 Private Limited Antrohorne Ltd Applause Investments Limited Ash Springs Limited Assibere Limited Best Inspire International Limited Brenspere Ltd Bugis City Holdings Pte Ltd Canyonwater Limited Caray Gardens Holdings Ltd Casa Vista Investments Limited Chiba Investment Private Limited Christus Limited Comprohorne Limited Core Plus Investment Private Limited Daikanyama (CP) Investment Private Limited Dapenso (CP) Investment Private Limited Divine (AMT) Pte. Ltd. Equity (CP) Private Limited Ever Gain Logistics Private Limited Fertile Crescent Ltd Fusiongold Private Limited Garrard Ventures Private Limited Grathfield Ltd Great Insight Investments Limited Greateast Investments Limited Highland Flow Pte. Ltd. Hubville Co., Ltd. Japan Core Investment Private Limited Kinetic (AMT) Limited Kynson (AMT) Pte. Ltd. Lavenson Investment Private Limited Macro (AMT) Pte. Ltd. Majesty Power International Limited Manesar (AMT) Pte. Ltd. Matrix (CP) Investment Private Limited Max Platinum Limited Midcentral Holdings Limited Myrick Investment Private Limited Nordic (CP) Private Limited Northern Tech Private Limited Noxh Developments (Cecil) Pte. Ltd. Numberspring Ltd Omnibury Ltd Oscar Honour International Limited Pessiborge Limited Practical Asia Limited Preciousbud Limited Prestimorne Ltd Prime Industrial Holdings Private Limited Primiscorne Ltd Pteris Global Ltd Regal (1886) Pte. Ltd. Rightbridge Ltd Ristoria (AMT) Pte. Ltd. Rochor Investment Ltd Sacremorne Ltd Samnorwood Limited Sanholpark Ltd Sheung Wan (AMT) Pte. Ltd. Shibuya (AMT) Pte. Ltd. Shine City Investment Limited

Loh Chin Hua . . . . . . . . . . . . . AAMTF II (Ex-Korea) Private Limited AIB Alpha Japan Fund Pte. Ltd. Alpha Asia Macro Trends Fund II Private Limited Alpha Asia Macro Trends Fund Private Limited Alpha Core Plus Real Estate Fund Private Limited Alpha Investment Partners (B.V.I.) Limited Alpha Investment Partners China Limited Alpha Investment Partners Japan Limited Alpha Investment Partners Korea Private Limited Alpha Investment Partners Limited Alpha Reits Manager Limited AREFM (BVI) Limited Asia No. 1 Property Fund Limited Asia Real Estate Fund Management Limited D. L. Properties Ltd Fels SES International Pte Ltd Harbourfront One Pte Ltd Harbourfront Three Pte Ltd Harbourfront Two Pte Ltd Katong AMC Pte. Ltd. Kephinance Investment Pte Ltd Keppel Capital Holdings Pte Ltd Keppel Capital One Pte Ltd Keppel Capital Pte Ltd Keppel Energy Pte. Ltd. Keppel FELS Limited Keppel Funds Investment Pte Ltd (formerly known as Kepindia Investment Pte Ltd) Keppel Infrastructure Holdings Pte Ltd Keppel Investment Limited Keppel Land China Limited (formerly known as Keppel Land China Holdings Pte Ltd) Keppel Land Limited Keppel Offshore & Marine Ltd Keppel Offshore & Marine Technology Centre Pte Ltd Keppel Oil & Gas Pte. Ltd. Keppel Real Estate Investment Pte. Ltd. Keppel REIT Management Limited (as the Manager of Keppel REIT) Keppel Shipyard Limited KrisEnergy Ltd. Primero Investments Pte Ltd Red Daisy Enterprises BVI Senette Investment Ltd The Vietnam Investment Fund (Singapore) Ltd Zattarra Ltd

G-3

Name

Present

Past Shiodo (CP) Investment Private Limited Solitaire (AMT) Private Limited Sound Investments Limited Spellworth Ltd Sperishorne Ltd Tannehill Limited Trends (AMT) Pte. Ltd. Trillington (AMT) Pte. Ltd. Tsukiji (CP) Investment Private Limited UL (CP) Investment Private Limited Wallwrick Ltd Zelkova (AMT) Pte. Ltd.

John Koh . . . . . . . . . . . . . . . . . Artfx Fine Art Services Limited Artpac Management Limited Bernard Quaritch Limited BMH Management Pte Ltd Brandmine Properties Limited China Lumena New Materials Corp. Genphar, Inc. KrisEnergy Ltd. Mapletree Industrial Fund Ltd Mapletree Industrial Trust Management Ltd Mapp Editions Ltd Mission Impossible Pte. Ltd. NSL Limited Singapore Arts School Singapore National Library Worldwide Books Corporation Duane Radtke . . . . . . . . . . . . . Devon Energy Corporation KrisEnergy Ltd. NFR Energy LLC (now Sabine Oil & Gas LLC) Jeff MacDonald . . . . . . . . . . . . Empire Oil & Gas KrisEnergy Ltd.

Afa Management LLC Arbutus International Limited Easy Capital Limited Mandra Forestry Finance Limited Mandra Forestry Holdings Limited Mission Impossible International Limited Straits Capital Investments Limited

Smith International (merged w/Schlumberger in 2010)

Delta Energy Limited Remora Energy Stone Mountain Resources InterGlobal Offshore Pte Ltd Orchard Energy Pte Ltd PowerSeraya Ltd

Tan Ek Kia . . . . . . . . . . . . . . . CityGas Pte Ltd CitySpring Infrastructure Management Pte Ltd Dialog Systems (Asia) Pte Ltd Keppel Corporation Ltd Keppel Offshore and Marine Ltd KrisEnergy Ltd. PT Chandra Asri Petrochemical Tbk Singapore LNG Corporation Pte Ltd. SMRT Corporation Ltd Star Energy Geothermal; Pte Ltd Star Energy Group Holdings Pte Ltd Star Energy Oil and Gas Pte Ltd Transocean Ltd Executive Officers Kiran Raj . . . . . . . . . . . . . . . . . -

CLSA Merchant Bankers Limited Brighton Capital Advisors Pte Ltd Pearl Oil (Amata) Limited Pearl Oil (Aoa Thai) Limited Pearl Oil (Petroleum) Limited Pearl Oil (Resources) Limited Pearl Oil Onshore Limited PearlOil (Siam) Limited

Stephen Clifford . . . . . . . . . . . B Block Ltd BEM Resources Ltd EM Block Ltd Komodo (B.V.I.) Ltd KrisEnergy (Ageng) B.V. KrisEnergy (Andaman Timur) B.V. KrisEnergy (Asia) Ltd KrisEnergy (Cambodia) Holding Ltd KrisEnergy (Cambodia) Ltd KrisEnergy (East Muriah) Ltd KrisEnergy (Gulf of Thailand) Ltd KrisEnergy (Nemo) B.V. KrisEnergy (Phu Khanh 120) Ltd KrisEnergy (Song Hong 115) Ltd

G-4

Name

Present KrisEnergy (Sakti) B.V. KrisEnergy (Satria) Ltd KrisEnergy (Song Hong 105) Ltd KrisEnergy (Tanjung Aru) B.V. KrisEnergy (Udan Emas) B.V. KrisEnergy Asia Coperatief U.A. KrisEnergy Asia Holdings B.V. KrisEnergy East Seruway B.V. KrisEnergy Glagah-Kambuna B.V. KrisEnergy Holding Company Ltd KrisEnergy (Andaman II) B.V. KrisEnergy International (Thailand) Holdings Ltd KrisEnergy Kutai B.V. KrisEnergy Kutei B.V. KrisEnergy Management Ltd KrisEnergy Management Services Ltd KrisEnergy (Bangora) B.V. KrisEnergy Oil & Gas (Thailand) Ltd KrisEnergy Pte Ltd KrisEnergy Resources (Thailand) Ltd Wassana MOPU Pte. Ltd.(1)

Past

Kelvin Tang . . . . . . . . . . . . . . . B Block Ltd BEM Resources Ltd EM Block Ltd Komodo (B.V.I.) Ltd KrisEnergy (Asia) Ltd KrisEnergy (Cambodia) Holding Ltd KrisEnergy (Cambodia) Ltd KrisEnergy (East Muriah) Ltd KrisEnergy (Gulf of Thailand) Ltd KrisEnergy (Phu Khanh 120) Ltd KrisEnergy (Song Hong 115) Ltd KrisEnergy (Satria) Ltd KrisEnergy (Song Hong 105) Ltd KrisEnergy Holding Company Ltd KrisEnergy International (Thailand) Holdings Ltd KrisEnergy Management Ltd KrisEnergy Management Services Ltd KrisEnergy Oil & Gas (Thailand) Ltd KrisEnergy Pte Ltd KrisEnergy Resources (Thailand) Ltd Wassana MOPU Pte. Ltd.(1)

KrisEnergy (Ageng) B.V. KrisEnergy (Andaman Timur) B.V. KrisEnergy Asia Coperatief U.A. KrisEnergy Asia Holdings B.V. KrisEnergy (Nemo) B.V. KrisEnergy (Sakti) B.V. KrisEnergy (Tanjung Aru) B.V. KrisEnergy (Udan Emas) B.V. KrisEnergy East Seruway B.V. KrisEnergy Glagah-Kambuna B.V. KrisEnergy (Andaman II) B.V. KrisEnergy Kutai B.V. KrisEnergy Kutei B.V. KrisEnergy (Bangora) B.V. Pearl Energy Ltd PearlOil Holdings Limited PearlOil (Sebuku) Limited PearlOil (Ragay) Limited PearlOil (Tachylyte) Limited PearlOil (Nam Con Son) Limited PearlOil (Tephrite) Limited Pearl Oil (Amata) Limited Pearl Oil (Aoa Thai) Limited Pearl Oil (Petroleum) Limited Pearl Oil (Resources) Limited PearlOil (Theralite) Limited PearlOil (UK) Limited PearlOil (Siam) Limited Pearl Oil Onshore Limited Pearl Oil (Tungkal) Limited Pa 80 GmbH Pa 73 GmbH Soturo GmbH Sopela GmbH Gutiba GmbH Semare GmbH -

James Parkin . . . . . . . . . . . . . . Komodo (B.V.I.) Ltd Tim Kelly . . . . . . . . . . . . . . . . Komodo (B.V.I.) Ltd Michael Whibley . . . . . . . . . . . Komodo (B.V.I.) Ltd Chris Wilson . . . . . . . . . . . . . . Komodo (B.V.I.) Ltd Panoteck Pte. Ltd. John Bujnoch, Jr. . . . . . . . . . . . Brian Helyer . . . . . . . . . . . . . . Tanya Pang . . . . . . . . . . . . . . . Note: (1)

Chicane Pte. Ltd. (voluntarily wound up) -

The name of Wassana MOPU Pte. Ltd. is currently being changed to KrisEnergy (Development) Pte. Ltd.

G-5

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APPENDIX H RULES OF THE KRISENERGY EMPLOYEE SHARE OPTION SCHEME 1. NAME OF THE SCHEME The Scheme shall be called the KrisEnergy Employee Share Option Scheme (the Scheme). 2. DEFINITIONS In this Scheme, except where the context otherwise requires, the following words and expressions shall have the following meanings. Acceptance Period The period within which an Option maybe accepted, as described in Rule 7.2. The Singapore Companies Act, Chapter 50 of Singapore as amended or modified from time to time. The date on which this Scheme is adopted by our Company in general meeting. The Articles of Association of the Company, as amended, supplemented or modified from time to time. The term shall have the meaning assigned to it in the Listing Manual. The auditors of our Company for the time being. The Board of Directors of our Company for the time being. The Central Depository (Pte) Limited. Singapore Code of Corporate Governance. KrisEnergy Ltd. The capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of our Company. A Shareholder who has control over our Company and unless rebutted, a person who controls directly or indirectly a shareholding of 15.0 per cent. or more of our Companys issued share capital shall be presumed to be a Controlling Shareholder of our Company. A person being a Depository Agent or holder of a securities account maintained with CDP but not including a holder of a sub-account maintained with a Depository Agent. A person holding office as a director for the time being of our Group. Any confirmed employee of our Group to participate in this Scheme in accordance with Rule 4. A Director of our Group who performs an executive function. The date on which an Option is exercised pursuant to Rule 9.1. The price at which a Participant shall subscribe for each Share upon the exercise of an Option as determined in accordance with Rule 8. Financial year ended or, as the case may be, ending December 31. H-1

Act

Adoption Date

Articles of Association

Associate or associate Auditors Board CDP Code Company Control

Controlling Shareholder

Depositor

Director Employee

Executive Director Exercise Date Exercise Price

Financial Year

Grantee Group Independent Director

The person to whom an offer of an Option is made. Our Company and our Subsidiaries. An independent director for the purposes of the Code is one who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors independent business judgment with a view to the best interests of the Company. The Listing Manual of the SGX-ST, as amended, supplemented or modified from time to time. A day on which the SGX-ST is open for trading of securities. A price equal to the average of the last dealt prices for the Shares on the SGX-ST over the five consecutive Trading Days immediately preceding the Offering Date, as determined by the Remuneration Committee by reference to the daily official list or any other publication published by the SGX-ST, rounded to the nearest whole cent on the event of fractional prices. A Director of our Group who is not an Executive Director (including an Independent Director). The date on which an Option is granted pursuant to Rule 6.1. The right to subscribe for Shares granted or to be granted pursuant to this Scheme and for the time being subsisting, and in respect of which the Exercise Price is determined in accordance with Rule 8. The period for the exercise of an Option as set out in Rule 9.1. A holder of an Option. Per centum. A committee comprising Directors of our Company, duly authorized and appointed by the Board pursuant to Rule 13 to administer this Scheme. The rules of this Scheme, as the same may be amended from time to time. Singapore dollars. The KrisEnergy Employee Share Option Scheme, as modified or amended from time to time. The Singapore Exchange Securities Trading Limited. The registered holders for the time being of the Shares (other than CDP) or in the case of Depositors, Depositors who have Shares entered against their names in the Depository Register. Fully paid ordinary shares in the capital of our Company. A company which is for the time being a subsidiary of our Company as defined by Section 5 of the Act. A day on which the Shares are traded on the SGX-ST. H-2

Listing Manual

Market Day Market Price

Non-Executive Director

Offering Date Option

Option Period Participant per cent. Remuneration Committee

Rules

S$ Scheme

SGX-ST Shareholders

Shares Subsidiary

Trading Day

The terms Depository Register and Depository Agent shall have the meanings ascribed to them respectively by Section 130A of the Act. The term associate shall have the meaning ascribed to it by the Listing Manual. Words denoting the singular shall, where applicable, include the plural and vice versa and words denoting the masculine gender shall, where applicable, include the feminine and neuter gender. References to persons shall include corporations. References to Rules and Appendices shall be construed as references to Rules of and the Appendices to this Scheme. Any reference to this Scheme to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and used in this Scheme shall, where applicable, have the same meaning assigned to it under the Act. Any reference in this Scheme to a time of day shall be a reference to Singapore time unless otherwise stated. 3. OBJECTIVES OF THIS SCHEME This Scheme is a share option incentive scheme. The purpose of this Scheme is to provide an opportunity for our Directors and Employees who satisfy the eligibility criteria as set out in Rule 4 of the Scheme, to participate in the equity of our Company so as to motivate them to greater dedication, loyalty and higher standards of performance, and to give recognition to those who have contributed significantly to our growth and performance. This Scheme is proposed on the basis that it is important to recognize the fact that the services of such Employees and Directors are important to our success and continued well-being. Implementation of this Scheme will enable our Company to give recognition to the contributions made by such Employees and Directors, which is essential to our well-being and prosperity. At the same time, it will give such Employees and Directors an opportunity to have a direct interest in our Company and will also help to achieve the following positive objectives:
(i)

the motivation of Participants to optimize performance standards and efficiency and to maintain a high level of contribution; the retention of key employees whose contributions are important to our long term growth and prosperity; the attainment of harmonious employer/employee relations as well as the strengthening of working relationships with our close business associates; to align the interest of employees and other Participants with the interests of the Shareholders; and the development of a participatory style of management which promotes greater commitment and dedication amongst the employees and instills loyalty and a stronger sense of identification with our long term prosperity

(ii)

(iii)

(iv) (v)

4.
4.1

ELIGIBILITY The following persons shall be eligible to participate in this Scheme at the absolute discretion of the Remuneration Committee:
(i)

Our Employees who are not on probation and have attained the age of 21 years on or before the Offering Date; and Executive Directors, Non-Executive Directors and Independent Directors who have attained the age of 21 years on or before the Offering Date.

(ii)

4.2

Controlling Shareholders and their Associates who are Employees, Non-Executive Directors and Independent Directors who satisfy the requirements in Rule 4.1(i) and (ii) shall also be eligible to participate in our Scheme. The Participant must not be an undischarged bankrupt and must not have entered into a composition with his creditors. H-3

4.3

Persons who are Controlling Shareholders and their respective Associates shall, if each such person meets the eligibility criteria in Rules 4.1 and 4.2, be eligible to participate in the Scheme provided that:
(i)

their participation in the Scheme is specifically approved by independent Shareholders in a separate resolution for each such person; the aggregate number of Shares which may be offered by way of grant of Options to all Controlling Shareholders and their respective Associates under the Scheme shall not exceed 25.0 per cent. of the total number of Shares available under the Scheme; and the number of Shares which may be offered by way of grant of Options to each Controlling Shareholder and his respective Associate under the Scheme shall not exceed 10.0 per cent. of the total number of Shares available under the Scheme.

(ii)

(iii)

No Option shall be granted to such Controlling Shareholders or their respective Associates unless the actual number and terms of Options to be granted shall be approved by independent Shareholders in a separate resolution for each such person. A circular, letter or notice to Shareholders proposing such a resolution shall include a clear rationale for the proposed participation by such Controlling Shareholders or their respective Associates. Such circular, letter or notice to Shareholders shall also include a clear rationale for the number and terms (including Exercise Price) of the Options to be granted. Although our Non-Executive Directors are not involved in running our day-to-day operations, they play an invaluable role in furthering our business interests by contributing their experience and expertise. The participation by Non-Executive Directors in the Scheme will provide our Company with a further avenue to acknowledge and recognize their services and contributions to us as it may not always be possible to compensate them fully or appropriately by increasing the directors fees or other forms of cash payment. For instance, the Non-Executive Directors may bring strategic or other value to our Company which may be difficult to quantify in monetary terms. The grant of Options to Non-Executive Directors will allow our Company to attract and retain experienced and qualified persons from different professional backgrounds to join our Company as Non-Executive Directors, and to motivate existing Non-Executive Directors to take extra efforts to promote our interests. Although our Controlling Shareholders and their respective Associates have or may already have shareholding interest in our Company, the extension of the Scheme to allow Controlling Shareholders and their respective Associates the opportunity to participate in the Scheme will ensure that they are equally entitled, with our other employees, to participate in and benefit from this system of remuneration. The Scheme is intended to be part of our Companys system of employee remuneration and our Company is of the view that employees who are Controlling Shareholders or their respective Associates should not be unduly discriminated against by virtue only of their shareholding in our Company.
4.4 4.5

Employees and directors of associate companies will not be eligible to participate in the Scheme. There shall be no restriction on the eligibility of any Grantee or Participant to participate in any other share option or share incentive scheme, whether or not implemented by any other companies within our Group. Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted, the terms of eligibility for participation in this Scheme may be amended from time to time at the absolute discretion of the Remuneration Committee. LIMITATIONS OF THIS SCHEME The aggregate number amount of Shares over which the Remuneration Committee may grant Options on any date, when added to the number Shares issued and issuable in respect of (i) all Options granted under the Scheme and (ii) all awards granted under any other share option, share incentive, performance share or restricted share plan implemented by the Company and for the time being in force shall not exceed 15.0 per cent. of the issued shares of the Company (excluding treasury shares) on the day immediately preceding the grant of an Option. H-4

4.6

5.
5.1

5.2

Subject to Rule 4 and Rule 12, the aggregate number of Shares in respect of which Options may be offered to any Grantee in accordance with this Scheme shall be determined at the absolute discretion of the Remuneration Committee, who shall take into account, in respect of a Grantee, criteria such as rank, past performance, years of service and potential for future development of that employee. OFFERING DATE The Remuneration Committee may, save as provided in Rule 4 and Rule 5, offer to grant Options to such Grantees as it may select in its absolute discretion at any time during the period when this Scheme is in force, provided that in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, Options may only be granted on or after the second Market Day from the date on which the aforesaid announcement is released. An offer to grant the Option to a Grantee shall be made by way of a letter (the Letter of Offer) in the form or substantially in the form set out in Schedule A, subject to such modification including, but not limited to imposing restrictions on the number of Options that may be exercised within particular sections of the relevant Option Period, as the Remuneration Committee may from time to time determine. ACCEPTANCE OF OFFER An Option shall be personal to the Participant to whom it is granted and shall not be transferred (other than to a Participants personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, unless with the prior approval in writing of the Remuneration Committee. The closing date for the acceptance for the grant of any Option under this Rule 7 shall not be less than 15 days and not more than 30 days from the Offering Date of that Option. The grant of an Option must be accepted by completing, signing and returning of the Acceptance Form in or substantially in the form set out in Schedule B, subject to such modification as the Remuneration Committee may from time to time determine, accompanied by payment of S$1.00 as consideration or such other amount and such other documentation as the Remuneration Committee may require. The Option is deemed not accepted until actual receipt by our Company of the Acceptance Form. Our Company shall be entitled at its absolute discretion to reject any purported acceptance of a grant of an Option made pursuant to this Rule 7 or Exercise Notice given pursuant to Rule 11 which does not strictly comply with the terms of this Scheme. In the event that an Option results in a contravention of any applicable law or regulation, such grant shall be null and void and of no effect and the relevant Participant shall have no claim whatsoever against our Company. EXERCISE PRICE Subject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect of which an Option is exercisable shall be determined by the Remuneration Committee at its absolute discretion, and fixed by the Remuneration Committee on the date of the grant of Option: (i) (ii) a price equal to the Market Price; or a price which is set at a discount to the Market Price, provided that: (a) the maximum discount shall not exceed 20.0 per cent. of the Market Price (or such other percentage or amount as may be prescribed or permitted for the time being by the SGXST); and the Shareholders in general meeting shall have authorized, in a separate resolution, the making of offers and grants of Options under the Scheme at a discount not exceeding the maximum discount as aforesaid. H-5

6.
6.1

6.2

7.
7.1

7.2

7.3

7.4

8.
8.1

(b)

8.2

In making any determination under Rule 8.1(ii), the Remuneration Committee shall take into consideration such criteria as the Remuneration Committee may, in its absolute discretion, deem appropriate including but not limited to: (i) (ii) (iii) (iv) our performance; the performance of the individual Participant; the contribution of the Participant to our success and development; and the prevailing market conditions.

9.
9.1

EXERCISE OF OPTION Subject as provided in this Rule 9 and Rule 10 and any other conditions as may be introduced by the Remuneration Committee from time to time: (i) each Option granted with the Exercise Price set at Market Price shall only be exercisable, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiples thereof) at any time, by a Participant during the period commencing after the first anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date or such earlier date as may be determined by the Remuneration Committee; and each Option granted with the Exercise Price set at a discount to Market Price shall only be exercisable, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiples thereof) at any time, by a Participant during the period commencing after the second anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date or such earlier date as may be determined by the Remuneration Committee.

(ii)

9.2

In the event of an Option being exercised in part only (provided that an option may be exercised in part only in respect of 1,000 Shares or any multiples thereof), the balance of the option not thereby exercised shall continue to be exercisable in accordance with this Scheme until such time as it shall lapse in accordance with the Rules of this Scheme. Subject to Rule 9.4, an Option shall, to the extent unexercised, immediately lapse and become null and void and a Participant shall have no claim against us: (i) a grant of an Option is not accepted strictly in the manner as provided in Rule 7.2, such offer within the Acceptance Period; or upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option; or in the event of misconduct on the part of the Participant, as determined by the Remuneration Committee in its absolute discretion; or subject to Rules 9.4 and 9.5, upon the Participant ceasing to be in our employment, for any reason whatsoever; or in the event that the Remuneration Committee shall, at its sole and absolute discretion, deem it appropriate that such Option granted to a Participant shall so lapse on the grounds that any of the objectives of this Scheme (as set out in Rule 3) have not been met.

9.3

(ii)

(iii)

(iv)

(v)

For the purpose of Rule 9.3(iv), the Participant shall be deemed to have ceased to be so employed as of the earlier of the date of the Participants notice of resignation of employment or the cessation of his employment/appointment with us. H-6

9.4

Where a Participant who is an Executive Director or Non-Executive Director ceases to be our employee due to a change in control of the Board of Directors, he shall, notwithstanding Rule 9.3, be entitled to exercise in full all unexercised Options from the last date of employment with us until the end of the relevant Option Period. If a Participant dies and at the date of his death holds any unexercised Option, such Option may, at the absolute discretion of the Remuneration Committee, be fully exercisable by the duly appointed legal personal representatives of the Participant from the date of his death to the end of the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void. TAKE-OVER AND WINDING-UP OF OUR COMPANY Notwithstanding Rule 9 but subject to Rule 10.5, in the event of a take-over being made for the Shares, a Participant (including Participants holding Options which are then not exercisable pursuant to the provisions of Rule 9.1) shall be entitled to exercise in full or in part any Option held by him and as yet unexercised, in the period commencing on the date on which such offer is made or, if such offer is conditional, the date on which such offer becomes or is declared unconditional, as the case may be, and ending on the earlier of: (i) the expiry of six months thereafter, unless prior to the expiry of such six month period, at the recommendation of the offeror and with the approvals of the Remuneration Committee and the SGX-ST, such expiry date is extended to a later date (being a date falling not later than the date of expiry of the Option Period relating thereto); or the date of the expiry of the Option Period relating thereto,

9.5

10.
10.1

(ii)

whereupon any Option then remaining unexercised shall immediately lapse and become null and void. Provided always that if during such period the offeror becomes entitled or bound to exercise the rights of compulsory acquisition of the Shares under the provisions of the Act and, being entitled to do so, gives notice to the Participants that it intends to exercise such rights on a specified date, the Option shall remain exercisable by the Participants until such specified date or the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so exercised by the said specified date shall lapse and become null and void provided that the rights of acquisition or obligation to acquire shall have been exercised or performed, as the case may be. If such rights of acquisition or obligations have not been exercised or performed, all Options shall subject to Rule 9 remain exercisable until the expiry of the Option Period relating thereto.
10.2

If under the Act, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of our Company or its amalgamation with another company or companies, each Participant (including Participants holding Options which are then not exercisable pursuant to the provisions of Rule 9.1) be entitled, notwithstanding Rule 9 but subject to Rule 10.5, to exercise any Option then held by him during the period commencing on the date upon which the compromise or arrangement is sanctioned by the court and ending either on the expiry of 60 days thereafter or the date upon which the compromise or arrangement becomes effective, whichever is later (but not after the expiry of the Option period relating thereto), whereupon the Option shall lapse and become null and void. If an order is made for the winding-up of our Company on the basis of its insolvency, all Options to the extent unexercised, shall lapse and become null and void. In the event of a members voluntary winding-up (other than amalgamation or reconstruction), the Participants (including Participants holding Options which are not exercisable pursuant to the provisions of Rule 9.1) shall be entitled within 30 days of the passing of the resolution of such winding-up (but not after the expiry of the Option Period relating thereto), to exercise any unexercised Option, after which period such unexercised Option shall lapse and become null and void. If in connection with the making of a general offer referred to in Rule 10.1 or this Scheme referred to in Rule 10.2 or the winding-up referred to in Rule 10.4, arrangements are made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable) for the compensation of H-7

10.3

10.4

10.5

Participants, whether by the continuation of their Options or the payment of cash or the grant of other options or otherwise, a Participant holding an Option, as yet not exercised, may not, at the discretion of the Remuneration Committee, be permitted to exercise that Option as provided for in this Rule 10.
10.6

To the extent that an Option is not exercised within the periods referred to in this Rule 10, it shall lapse and become null and void. MANNER OF EXERCISE An Option may be exercised during the Option Period, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiples thereof), by a Participant giving notice in writing to our Company in or substantially in the form set out in Schedule C (the Exercise Notice), subject to each case to such modifications as the Remuneration Committee may from time to time determine. Every Exercise Notice must be accompanied by a remittance for the full amount of the aggregate Exercise Price in respect of the Shares which have been exercised under the Option, the relevant CDP charges (if any) and any other documentation the Remuneration Committee may require. An Option shall be deemed to be exercised upon the receipt by our Company of Exercise Notice duly completed, the relevant documentation required by the Remuneration Committee and the aggregate Exercise Price. All payment shall be made by cheque, cashiers order, bank draft or postal order made out in favor of our Company or such other mode of payment as may be acceptable to our Company. Subject to: (i) such consents or other required actions of any competent authority under any regulations or enactments for the time being in force as may be necessary (including any approvals required from the SGX-ST); and compliance with the Rules of this Scheme and the Memorandum and Articles of Association of our Company

11.
11.1

11.2

11.3

(ii)

our Company shall, as soon as practicable after the exercise of an Option by a Participant but in any event within ten Market Days after the date of the exercise of the Option in accordance with Rule 11.1, allot the relevant Shares and within five Market Days from the date of such allotment, dispatch the relevant share certificates to CDP for the credit of the securities account of that Participant by ordinary post or such other mode of delivery as the Remuneration Committee may deem fit.
11.4

Our Company shall as soon as practicable after the exercise of an Option, apply to the SGX-ST and any other stock exchange on which the Shares are quoted or listed for permission to deal in and for quotation of the Shares which may be issued upon exercise of the Option and the Shares (if any) which may be issued to the Participant pursuant to any adjustments made in accordance with Rule 12. Shares which are all allotted on the exercise of an Option by a Participant shall be issued, as the Participant may elect, in the name of CDP to the credit of the securities account of the Participant maintained with CDP, the Participants securities sub-account with a CDP Depository Agent. Shares allotted and issued upon the exercise of an Option shall be subject to all provisions of the Memorandum and Articles of Association of our Company and shall rank pari passu in all respects with the then existing issued Shares in the capital of our Company except for any dividends, rights, allotments or other distributions, the record date of which is prior to the date such Option is exercised. Our Company shall keep available sufficient unissued Shares to satisfy the full exercise of all Options for the time being remaining capable of being exercised. ALTERATION OF CAPITAL If a variation in the issued share capital of our Company (whether by way of a capitalization of profits or reserves or rights issue or reduction, subdivision, consolidation or distribution, or issues for cash or for shares or otherwise than for cash or otherwise howsoever) should take place, then: (i) the Exercise Price in respect of the Shares comprised in the Option to the extent unexercised; and/ or H-8

11.5

11.6

11.7

12.
12.1

(ii)

the class and/or number of Shares comprised in the Option to the extent unexercised and the rights attached thereto; and/or the class and/or number of Shares in respect of which additional Options may be granted to Participants,

(iii)

shall, at the option of the Remuneration Committee, be adjusted in such manner as the Remuneration Committee may determine to be appropriate including retrospective adjustments where such variation occurs after the date of exercise of an Option but the Record Date relating to such variation precedes such date of exercise and, except in relation to a capitalization issue, upon the written confirmation of the Auditors (acting only as experts and not as arbitrators), that in their opinion, such adjustment is fair and reasonable. For this purpose, Record Date means the date as of the close of business on which shareholders must be registered in order to participate in any dividends, rights, allotments or other distributions (as the case may be).
12.2

Unless the Remuneration Committee considers an adjustment to be appropriate, the following shall not be regarded as a circumstance requiring adjustment under the provisions of this Rule 12: (i) the issue of securities as consideration for an acquisition of any assets or private placement of securities by our Company; and the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on the SGX-ST during the period when a share purchase mandate granted by shareholders of our Company (including any renewal of such mandate) is in force.

(ii)

12.3

Notwithstanding the provisions of Rule 12.1 above: (i) no such adjustment shall be made if as a result the Participant receives a benefit that a shareholder does not receive; and any determination by the Remuneration Committee as to whether to make any adjustment and if so, the manner in which such adjustment should be made, must (except in relation to a capitalization issue) be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.

(ii)

12.4

Upon any adjustment required to be made, our Company shall notify each Participant (or his duly appointed personal representative(s)) in writing and deliver to him (or, where applicable, his duly appointed personal representative(s)) a statement setting forth the new Exercise Price thereafter in effect and the class and/or number of Shares thereafter comprised in the Option so far as unexercised and the maximum interest in any one Financial Year. Any adjustment shall take effect upon such written notification being given. The restriction on the number of Shares to be offered to any Grantee under Rule 5 above, shall not apply to the number of additional Shares or Options over additional Shares issued by virtue of any adjustment to the number of Shares and/or Options pursuant to this Rule 12. ADMINISTRATION This Scheme shall be administered by the Remuneration Committee in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Remuneration Committee shall participate in any deliberation or decision in respect of Options granted or to be granted to him. The Remuneration Committee shall have the power, from time to time, to make or vary such regulations (not being inconsistent with this Scheme) for the implementation and administration of this Scheme as it thinks fit including, but not limited to, imposing restrictions on the number of Options that may be exercised within particular sections of the relevant Option Period.

12.5

13.
13.1

13.2

H-9

13.3

Any decision of the Remuneration Committee made pursuant to any provision of this Scheme (other than a matter to be certified by the Auditors) shall be final, binding and conclusive (including any decisions pertaining to quantum of discount applicable to an Option pursuant to Rule 8.2 or to disputes as to the interpretation of this Scheme or any rule, regulation or procedure thereunder or as to any rights under this Scheme). NOTICES AND ANNUAL REPORT Any notice given by a Participant to our Company shall be sent by post or delivered to the registered office of our Company or such other address as may be notified by our Company to the Participant in writing. Any notice, documents or correspondence given by our Company to a Participant shall be sent to the Participant by the Remuneration Committee (or such person(s) as it may from time to time direct) on behalf of our Company and shall be delivered to him by hand or sent to him at his home address stated in the records of the Company or the last known address of the Participant, and if sent by post shall be deemed to have been given on the day immediately following the date of posting. Our Company shall in relation to this Scheme, as required by law, the SGX-ST or other relevant authority, make the following disclosures in its annual report to Shareholders: (i) (ii) the names of the members of the Remuneration Committee; the following details in respect of each Participant who is a Director or Controlling Shareholder or its Associate or a person who received Options pursuant to the grant of the Options under the Scheme which, in aggregate, represent five per cent. or more of the total number of Options available under the Scheme: (a) (b) name; the number of Options granted during the Financial Year in review (including the terms of the Options granted); the aggregate number of Options granted since the commencement of this Scheme up to the end of the Financial Year in review; the aggregate number of Options exercised since the commencement of this Scheme up to the Financial Year in review; and the aggregate number of Options outstanding as of the end of the Financial Year in review;

14.
14.1

14.2

14.3

(c)

(d)

(e) (iii)

the number and proportion of Options granted at a discount during the Financial Year in review in respect of every 10 per cent. range, up to the maximum quantum of discount granted; and an appropriate negative statement will be included in the annual report to the Shareholders in the event the disclosure of any of the abovementioned information is not applicable.

(iv)

15.
15.1

MODIFICATIONS TO THE SCHEME Any or all of the provisions of this Scheme may be modified and/or altered at any time and from time to time by resolution of the Remuneration Committee except that: (i) any modification or alteration which shall alter adversely the rights attaching to any Option granted prior to such modification or alteration and which in the opinion of the Remuneration Committee, materially alters the rights attaching to any Option granted prior to such modification or alteration may only be made with the consent in writing of such number of Participants who, if they exercised their Options in full, would thereby become entitled to not less than three-quarters of all the Shares which would be issued and allotted upon exercise in full of all outstanding Options; any modification or alteration which would be to the advantage of Participants shall be subject to the prior approval of Shareholders at a general meeting; and H-10

(ii)

(iii)

no modification or alteration shall be made without the prior approval of the SGX-ST or (if required) any other stock exchange on which the Shares are quoted or listed, and such other regulatory authorities as may be necessary.

For the purposes of Rule 15.1 (i), the opinion of the Remuneration Committee as to whether any modification or alteration would alter adversely the rights attaching to any Option shall be final and conclusive.
15.2

Notwithstanding anything to the contrary contained in Rule 15.1, the Remuneration Committee may at any time by resolution (and without any other formality save for the prior approval of the SGX-ST or (if required) any other stock exchange on which the Shares are quoted or listed) amend or alter this Scheme in any way to the extent necessary to cause this Scheme to comply with any statutory provision or the provisions or the regulations of any regulatory or other relevant authority or body. Shareholders who are eligible to participate in this Scheme must abstain from voting on any resolution relating to the Scheme (other than a resolution relating to the participation of, or grant of Options to the Employees). In particular, all Shareholders who are eligible to participate in the Scheme shall abstain from voting on resolutions of the Shareholders relating to the implementation of the Scheme. Notwithstanding the foregoing, Participants of the Scheme may act as proxies, but such Participants who are appointed as proxies will not vote on the aforementioned resolutions unless specific instructions have been given in the proxy instrument on how the Shareholders wish their votes to be cast for the said resolutions.

15.3

15.4

Employees who are also Shareholders and are eligible to participate in this Scheme must abstain from voting on any resolution relating to the participation of, or grant of Options to the Employees. Written notice of any modification or alteration made in accordance with this Rule shall be given to all Participants. VESTING The Options may, at the discretion of the Remuneration Committee, be vested partially over a number of years. The periods over which the Options will vest may exceed any minimum vesting periods prescribed by any laws, regulations or rules to which this Scheme may be subject, including the regulations of any stock exchange on which the Shares may be listed and quoted. Further, the Shares to be issued and allotted to a Participant pursuant to the exercise of any Option under this Scheme may or may not at the discretion of the Remuneration Committee, be subject to any retention period. TERMS OF EMPLOYMENT UNAFFECTED This Scheme shall not form part of any contract of employment within our Group and any Participant and the rights and obligations of a Participant under the terms of the office or employment with such company within our Group shall not be affected by his participation in this Scheme or any right which he may have to participate in it or any Option which he may hold and this Scheme shall afford such an individual no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever. This Scheme shall not confer on any person any legal or equitable rights (other than those constituting the Options themselves) against us directly or indirectly or give rise to any cause of action at law or in equity against us. DURATION OF THIS SCHEME This Scheme shall continue to be in force at the discretion of the Remuneration Committee, for a maximum period of 10 years commencing on the Adoption Date. Subject to compliance with any applicable laws and regulations in Singapore, this Scheme may be continued beyond the above stipulated period with the approval of the Shareholders by ordinary resolution at a general meeting and of any relevant authorities which may then be required. H-11

15.5

16.
16.1

17.
17.1

17.2

18.
18.1

18.2

This Scheme may be terminated at any time by the Remuneration Committee or by resolution of the Shareholders at a general meeting subject to all other relevant approvals which may be required and if this Scheme is so terminated, no further Options shall be offered by our Company hereunder. The termination, discontinuance or expiry of this Scheme shall be without prejudice to the rights accrued to Options which have been granted and accepted as provided in Rule 7.2, whether such Options have been exercised (whether fully or partially) or not. TAXES All taxes (including income tax) arising from the exercise of any Option granted to any Participant under this Scheme shall be borne by that Participant.

18.3

19.

20.
20.1

COSTS AND EXPENSES OF THIS SCHEME Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares pursuant to the exercise of any Option in CDPs name, the deposit of share certificate(s) with CDP, the Participants securities account with CDP or the Participants securities subaccount with a CDP Depository Agent. Save for the taxes referred to in Rule 19 and such costs and expenses expressly provided in this Scheme to be payable by the Participants, all fees, costs, and expenses incurred by our Company in relation to this Scheme including but not limited to the fees, costs and expenses relating to the issue and allotment of the Shares pursuant to the exercise of any Option shall be borne by the Company. DISCLAIMER OF LIABILITY Notwithstanding any provisions herein contained and subject to the Act, the Board, the Remuneration Committee and our Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in respect of any matter under or in connection with this Scheme including but not limited to our Companys delay or failure in issuing and allotting the Shares or in applying for or procuring the listing of and quotation for the Shares on the SGX-ST in accordance with Rule 11.4.

20.2

21.

22.

DISPUTES Any disputes or differences of any nature in connection with this Scheme shall be referred to the Remuneration Committee and its decision shall be final and binding in all respects.

23.

CONDITION OF OPTION Every Option shall be subject to the condition that no Shares shall be issued pursuant to the exercise of an Option if such issue would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore.

23.

GOVERNING LAW This Scheme shall be governed by and construed in accordance with the laws of the Republic of Singapore. The Participants, by accepting the offer of the grant of Options in accordance with this Scheme, and our Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

24.

EXCLUSION OF THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT No person other than the Company or a Participant shall have any right to enforce any provision of the Scheme.

H-12

SCHEDULE A KRISENERGY EMPLOYEE SHARE OPTION SCHEME LETTER OF OFFER Serial No: Date: To: Name Designation Address PRIVATE AND CONFIDENTIAL

Dear Sir/Madam We are pleased to inform you that you have been nominated by the Remuneration Committee of the Board of Directors of KrisEnergy Ltd. (the Company) to participate in the KrisEnergy Employee Share Option Scheme (the Scheme). Terms as defined in the Scheme shall have the same meaning when used in this letter. Accordingly an offer is hereby made to grant you an Option, in consideration of the payment of a sum of S$1.00, to subscribe for and be allotted Shares at the price of S$ per Share. The Option shall be subject to the terms of the Scheme (as the same may be amended from time to time pursuant to the terms and conditions of the Scheme). A copy of the Scheme is available for inspection at the business address of the Company. The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in part, except with the prior approval of the Remuneration Committee. If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on failing which this offer will forthwith lapse. Yours faithfully for and on behalf of KrisEnergy Ltd.

..................................................................................... Name: Designation:

H-13

SCHEDULE B KRISENERGY EMPLOYEE SHARE OPTION SCHEME ACCEPTANCE FORM Serial No: To: The Remuneration Committee KrisEnergy Employee Share Option Scheme c/o The Company Secretary 83 Clemenceau Avenue #10-05 UE Square Singapore 239920 :

Closing Date and Time for Acceptance of Option

No. of Shares in respect of which Option is offered Exercise Price per Share

: : : S$ S$

Total Amount Payable on acceptance of Option (exclusive of the relevant CDP charges)

I have read your Letter of Offer dated (the Offering Date) and agree to be bound by the terms hereof and of the KrisEnergy Employee Share Option Scheme stated therein. I confirm that my acceptance of the Option will not result in the contravention of any applicable law or regulation in relation to the ownership of shares in the Company or options to subscribe for such shares. I hereby accept the Option to subscribe for Shares of S$ each in the capital of KrisEnergy Ltd. (the Shares) at S$ per Share and enclose a *cheque/bankers draft/cashiers order/postal order no. for S$1.00 being payment for the purchase of the Option. I understand that I am not obliged to exercise the Option. I also understand that I shall be responsible for all the fees of The Central Depository (Pte) Limited (CDP) relating to or in connection with the issue and allotment of any Shares in CDPs name, the deposit of share certificate(s) with CDP, my securities account with CDP or my securities sub-account with a CDP Depository Agent (the CDP Charges). I confirm as of the date hereof: (a) I am not less than 21 years old and nor an undischarged bankrupt nor have I entered into a composition with any of my creditors; I satisfy the eligibility requirements to participate in the Scheme as defined in Rule 4 of the Scheme; and I satisfy the other requirements to participate in the Scheme as set out in the Rules of the Scheme.

(b) (c)

I hereby acknowledge that you have not made any representation or warranty or given me any expectation of employment or continued employment to induce me to accept the offer and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to the offer. I agree to keep all information pertaining to the grant of the Option to me confidential.

H-14

PLEASE PRINT IN BLOCK LETTERS Name in Full Designation Address Nationality : : : :

*NRIC/Passport No. : Signature Date : :

Delete where inapplicable Notes: 1. 2. Option must be accepted in full or in multiples of 1,000 Shares. The Acceptance Form must be forwarded to the Company Secretary in an envelope marked Private and Confidential. The Participant shall be informed by the Company of the relevant CDP charges payable at the time of the exercise of an Option.

3.

H-15

SCHEDULE C KRISENERGY EMPLOYEE SHARE OPTION SCHEME EXERCISE NOTICE To: The Remuneration Committee KrisEnergy Employee Share Option Scheme c/o The Company Secretary 83 Clemenceau Avenue #10-05 UE Square Singapore 239920

Total Number of Shares of S$[] each (the Shares) at S$ per Share under an Option granted on (the Offering Date) Number of Shares previously allotted and issued thereunder Outstanding balance of Shares which may be allotted and issued thereunder Number of Shares now to be subscribed (in multiples of 1,000) 1.

: : : :

Pursuant to your Letter of Offer dated (the Offering Date) and my acceptance thereof, I hereby exercise the Option to subscribe for Shares in KrisEnergy Ltd. (the Company) at S$ per Share. I hereby request the Company to allot and issue to me the number of Shares specified in paragraph 1 in the name of The Central Depository (Pte) Limited (CDP) to the credit of my Securities Account with a CDP/*Securities Sub-Account with a CDP Depository Agent and to deliver the share certificates relating thereto to CDP at my own risk. I further agree to bear such fees or other charges as may be imposed by CDP/CPF (the CDP charges) and any stamp duties in respect thereof: (a) (b) (c) (d) (e)
*(f) *(g)

2.

Name in Full Designation Address Nationality

*NRIC/Passport

: : : : No. : : : :

Direct Securities Account Number Securities Sub-Account Number Name of CDP Depository Agent

3.

I enclose a *cheque/cashiers order/bank draft/postal order no. for S$ in payment for the subscription of S$ for the total number of the said Shares and the applicable CDP charges. I agree to subscribe for the Shares subject to the terms of the Letter of Offer, the KrisEnergy Employee Share Option Scheme (as the same may be amended pursuant to the terms thereof from time to time) and the Memorandum and Articles of Association of the Company. I declare that I am subscribing for the Shares for myself and not as a nominee for any other person. Delete where inapplicable H-16

4.

5. *

APPENDIX I RULES OF THE KRISENERGY PERFORMANCE SHARE PLAN 1. NAME OF THE PLAN The Scheme shall be called the KrisEnergy Performance Share Plan (the Plan). 2. DEFINITIONS In this Plan, except where the context otherwise requires, the following words and expressions shall have the following meanings. Act The Singapore Companies Act, Chapter 50 of Singapore, as amended or modified from time to time. The date on which this Plan is adopted by our Company in general meeting. The Articles of Association of the Company, as amended, supplemented or modified from time to time. The term shall have the meaning assigned to it in the Listing Manual. The auditors of the Company for the time being. A contingent award of Shares granted under Rule 6. The date on which an Award is granted. A letter in such form as the Remuneration Committee shall approve confirming an Award granted to a Participant by the Remuneration Committee. The Board of Directors of the Company for the time being. The Central Depository (Pte) Limited. Singapore Code of Corporate Governance. KrisEnergy Ltd. The capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of our Company. A Shareholder who has control over our Company and unless rebutted, a person who controls directly or indirectly a shareholding of 15.0 per cent. or more of our Companys issued share capital shall be presumed to be a Controlling Shareholder of our Company. A person being a Depository Agent or holder of a securities account maintained with CDP but not including a holder of a sub-account maintained with a Depository Agent. A person holding office as a director for the time being of our Group. Any confirmed employee of the Group to participate in this Plan in accordance Rule 4. A Director of our Group who performs an executive function. Financial year ended or, as the case may be, ending December 31. I-1

Adoption Date

Articles of Association

Associate or associate Auditors Award Award Date Award Letter

Board CDP Code Company Control

Controlling Shareholder

Depositor

Director Employee

Executive Director Financial Year

Group Group Executive

Our Company and our Subsidiaries. Any employee of the Group (including any Executive Director of our Group or Non-Executive Director of our Group who meets the relevant age and rank criteria and who shall be regarded as a Group Executive for the purposes of the Plan) selected by the Remuneration Committee to participate in the Plan in accordance with Rule 4. An independent director for the purposes of the Code is one who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors independent business judgment with a view to the best interests of the Company. The Listing Manual of the SGX-ST. In relation to a Share, on any day, the average of the last dealt price of a Share, as determined by reference to the daily official list or other publication published by the SGX-ST for the five consecutive trading days immediately preceding the Offering Date, rounded up to the nearest whole cent in the event of fractional prices. A Director of our Group who is not an Executive Director (including an Independent Director). The date on which an Award is granted pursuant to Rule 6. A person who has been granted an Award. Per centum. The performance condition(s) specified on the Award Date in relation to that Award. A period, the duration of which is to be determined by the Remuneration Committee on the Award Date, during which the Performance Condition is to be satisfied. The KrisEnergy Performance Share Plan, as modified or amended from time to time. In relation to an Award, the release, at the end of each Vesting Period, of the Shares to be released on such date and Released shall be construed accordingly. In relation to an Award, a schedule as the Remuneration Committee shall determine, in accordance with which Shares which are the subject of that Award shall be Released at the end of each Vesting Period. An Award which has been released in accordance with Rule 8. A committee comprising Directors of our Company, duly authorized and appointed by the Board pursuant to Rule 10 to administer this Plan. The rules of this Plan, as the same may be amended from time to time. Singapore dollars. The Singapore Exchange Securities Trading Limited. I-2

Independent Director

Listing Manual Market Price

Non-Executive Director

Award Date Participant per cent. Performance Condition

Performance Period

Plan

Release

Release Schedule

Released Award Remuneration Committee Rules S$ SGX-ST

Shareholders

The registered holders for the time being of Shares, except that where the registered holder is CDP, the term Shareholders shall, where the context admits, mean the Depositors who have Shares entered against their names in the Depository Register. Fully paid ordinary shares in the capital of our Company. A company which is for the time being a subsidiary of our Company as defined by Section 5 of the Act. A day on which the Shares are traded on the SGX-ST. In relation to Shares which are the subject of a Released Award, the date (as determined by the Committee and notified to the relevant Participant) on which those Shares have vested pursuant to Rule 8. The vesting period for Shares comprised in Awards as determined by the Remuneration Committee.

Shares Subsidiary

Trading Day Vesting Date

Vesting Period

The terms Depository Register and Depository Agent shall have the meanings ascribed to them respectively by Section 130A of the Act. Words denoting the singular shall, where applicable, include the plural and vice versa and words denoting the masculine gender shall, where applicable, include the feminine and neuter gender. References to persons shall include corporations. References to Rules and Appendices shall be construed as references to Rules of and the Appendices to this Plan. Any reference to this Plan to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and used in this Plan shall, where applicable, have the same meaning assigned to it under the Act. Any reference in this Plan to a time of day shall be a reference to Singapore time unless otherwise stated. 3. OBJECTIVES OF THE PLAN The Plan will provide an opportunity for the selected Group Executives who have contributed significantly to the growth and performance of the Group and who satisfy the eligibility criteria as set out in Rule 4 of the Plan, to participate in the equity of the Company. The Plan is primarily a share incentive scheme. It recognizes the fact that the services of such Group Executives are important to the success and continued well-being of the Group. Implementation of the Plan will enable the Company to give recognition to the contributions made by such selected Group Executives. At the same time, it will give such selected Group Executives an opportunity to have a direct interest in the Company at no direct cost to its profitability and will also help to achieve the following positive objectives: (i) the motivation of Participants to optimize performance standards and efficiency and to maintain a high level of contribution; the retention of key employees whose contributions are important to the long-term growth and prosperity of our Group; the attainment of harmonious employer/employee relations as well as the strengthening of working relationships with our close business associates; to align the interest of employees and other Participants with the interests of the Shareholders; and the development of a participatory style of management which promotes greater commitment and dedication amongst the employees and instills loyalty and a stronger sense of identification with our long term prosperity. I-3

(ii)

(iii)

(iv) (v)

4.
4.1

ELIGIBILITY The following persons shall be eligible to participate in this Plan at the absolute discretion of the Remuneration Committee: (i) Our Employees who are not on probation and have attained the age of 21 years on or before the Offering Date; and Executive Directors, Non-Executive Directors and Independent Directors who have attained the age of 21 years on or before the Offering Date.

(ii)

4.2

Controlling Shareholders and their Associates who are Employees, Non-Executive Directors and Independent Directors who satisfy the requirements in Rule 4.1(i) and (ii) shall also be eligible to participate in our Plan. The Participant must not be an undischarged bankrupt and must not have entered into a composition with his creditors. Persons who are Controlling Shareholders and their respective Associates shall, if each such person meets the eligibility criteria in Rules 4.1 and 4.2, be eligible to participate in the Plan provided that:(i) their participation in the Plan is specifically approved by independent Shareholders in a separate resolution for each such person; the aggregate number of Shares which may be awarded to all Controlling Shareholders and their respective Associates under the Plan shall not exceed 25.0 per cent. of the total number of Shares available under the Plan; and the number of Shares which may be awarded to each Controlling Shareholder and his respective Associate under the Plan shall not exceed 10.0 per cent. of the total number of Shares available under the Plan.

4.3

(ii)

(iii)

No Award shall be granted to such Controlling Shareholders or their respective Associates unless the actual number and terms of Awards to be granted shall be approved by independent Shareholders in a separate resolution for each such person. A circular, letter or notice to Shareholders proposing such a resolution shall include a clear rationale for the proposed participation by such Controlling Shareholders or their respective Associates. Such circular, letter or notice to Shareholders shall also include a clear rationale for the number of the Awards to be granted. Although our Non-Executive Directors are not involved in running our day-to-day operations, they play an invaluable role in furthering our business interests by contributing their experience and expertise. The participation by Non-Executive Directors in the Plan will provide our Company with a further avenue to acknowledge and recognize their services and contributions to us as it may not always be possible to compensate them fully or appropriately by increasing the directors fees or other forms of cash payment. For instance, the Non-Executive Directors may bring strategic or other value to our Company which may be difficult to quantify in monetary terms. The grant of Awards to Non-Executive Directors will allow our Company to attract and retain experienced and qualified persons from different professional backgrounds to join our Company as Non-Executive Directors, and to motivate existing Non-Executive Directors to take extra efforts to promote our interests. One of the main objectives of the Plan is to provide an opportunity for participants to participate in the equity of our Company, thereby promoting organizational commitment, dedication and loyalty. The objectives of the Plan will apply equally to our employees who are Controlling Shareholders or their respective Associates. Our view is that all deserving and eligible participants should be motivated, regardless of whether they are Controlling Shareholders or their respective Associates. It is in our interest to incentivize outstanding employees who have contributed to our growth to continue to remain with us. Although our Controlling Shareholders and their respective Associates have or may already have shareholding interests in our Company, the extension of the Plan to allow Controlling Shareholders and their respective Associates the opportunity to participate in the Plan will ensure that they are equally entitled, with our other employees, to participate in and benefit from this system of remuneration. The Plan is intended to be part of our Companys system of employee remuneration and our Company is of I-4

the view that employees who are Controlling Shareholders or their respective Associates should not be unduly discriminated against by virtue only of their shareholding in our Company.
4.4

Controlling Shareholders and their Associates who have contributed to the success and development of the Group are, subject to the absolute discretion of the Administration Committee, eligible to participate in the Plan provided that the participation by each such Controlling Shareholder or Associate and each grant of Awards to any one of them may be effected only with the specific prior approval of independent Shareholders at a general meeting in separate resolutions and to approve the actual number and terms of Awards to be granted. The Company will at such time provide the rationale and justification for any proposal to grant Awards to Controlling Shareholders or their Associates. Employees and directors of associate companies will not be eligible to participate in the Plan There shall be no restriction on the eligibility of any Grantee or Participant to participate in any other share option or share incentive scheme, whether or not implemented by any other companies within our Group. Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted, the terms of eligibility for participation in this Scheme may be amended from time to time at the absolute discretion of the Remuneration Committee. LIMITATIONS OF THIS PLAN The aggregate number of Shares which may be issued pursuant to Awards granted under the Plan, when added to the number of Shares issued and/or issuable in respect of all Awards granted under this Plan and other Shares issued and/or issuable under other share-based incentive schemes of our Company, shall not exceed 15.0 per cent. of the issued share capital of our Company on the day preceding the relevant date of Award. Shares which are the subject of Awards which have lapsed for any reason whatsoever may be the subject of further Awards granted by the Remuneration Committee under this Plan. GRANT OF AWARDS Subject to Rule 4 and Rule 5, the Remuneration Committee may grant Awards to Employees and/or Directors, as the Remuneration Committee may select, in its absolute discretion, at any time during the period when this Plan is in force, provided that no Participant who is a member of the Committee shall participate in any deliberation or decision in respect of Awards granted or to be granted to him. The maximum number of Shares which are the subject of each Award to be granted to a Participant in accordance with this Plan shall be determined at the absolute discretion of the Remuneration Committee, which shall take into account criteria such as his rank, job performance, level of responsibility, years of service and potential for future development, his contribution to the success and development of our Group and the difficulty with which the Performance Condition may be achieved within the Performance Period. The Remuneration Committee has the discretion under the terms of the Plan to make payment in the form of cash instead of issuing fully paid Shares. If the Remuneration Committee exercises its discretion to make cash payments instead of issuing fully paid Shares, the Remuneration Committee will make a cash payment to the Participant of an amount equal to aggregate fair market value of the Shares that should otherwise have been issued at such time. The Remuneration Committee, in its absolute discretion, shall decide in relation to an Award: (i) (ii) (iii) (iv) (v) the Participant; the Award Date; the maximum number of Shares which are the subject of the Award; the Performance Period; the Performance Condition; I-5

4.5 4.6

4.7

5.
5.1

5.2

6.
6.1

6.2

6.3

(vi) (vii)
6.4

the Vesting Period(s); and the Release Schedule.

As soon as reasonably practicable after making an Award, the Remuneration Committee shall send to each Participant an Award Letter confirming the Award and specifying in relation to the Award: (i) (ii) (iii) (iv) (v) (vi) the Award Date; the maximum number of Shares which are the subject of the Award; the Performance Period; the Performance Condition; the Vesting Period(s); and the Release Schedule.

6.5

At any time prior to the vesting of an Award, the Remuneration Committee may, in its absolute discretion, amend or waive, as the case may be, the maximum number of Shares which are the subject of the Award, the Performance Period, Performance Condition, the Vesting Period(s), and/or the Release Schedule in respect of that Award. The Remuneration Committee shall notify any such amendment or waiver to the relevant Participant. Participants are not required to pay for the grant of Awards. An Award or Released Award shall be personal to the Participant to whom it is granted and, prior to the allotment and/or transfer of the Shares to which the Released Award relates, shall not be transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part, unless with the prior approval in writing of the Remuneration Committee and if a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an Award or Released Award, that Award or Released Award shall immediately lapse. For the avoidance of doubt and notwithstanding the discretionary powers vested in the Remuneration Committee to, inter alia, determine the grant of the Awards pursuant to Rule 6 and the Release of Awards pursuant to Rule 8, the Rules of this Plan shall constitute a valid and binding unilateral offer of reward and incentive from our Group to the Participants to which the Participants are entitled to rely upon, unless amended, withdrawn or terminated in accordance with its terms. EVENTS PRIOR TO THE VESTING DATE An Award shall, to the extent not yet Released, immediately lapse and become null and void and a Participant shall have no claim against our Company and/or our Group: (i) upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of an Award; or in the event of misconduct on the part of the Participant, as determined by the Remuneration Committee in its absolute discretion; or subject to Rule 7.2, upon the Participant ceasing to be in the employment of our Group for any reason whatsoever; or in the event that the Remuneration Committee shall, at its sole and absolute discretion, deem it appropriate to revoke or annul such Award on the grounds that any of the objectives of this Plan (as set out in Rule 3) have not been met.

6.6 6.7

6.8

7.
7.1

(ii)

(iii)

(iv)

For the purpose of Rule 7.1 (iii), the Participant shall be deemed to have ceased to be so employed as of the earlier of the date of the Participants notice of resignation of employment or the cessation of his employment/appointment with our Group. I-6

7.2

In any of the following events, namely: (i) where the Participant ceases at any time to be in the employment of any company within our Group by reason of: (a) ill health, injury or disability (in each case, evidenced to the satisfaction of the Remuneration Committee); redundancy; retirement at or after the legal retirement age; retirement before the legal retirement age with the consent of the Remuneration Committee; or the company by which he is employed ceasing to be a company within our Group;

(b) (c) (d)

(e) (ii) (iii)

the death of a Participant; or any other event approved by the Remuneration Committee,

then the Remuneration Committee may, in its absolute discretion but shall not be obliged to, preserve all or any part of any Award and decide as soon as reasonably practicable following such event either to vest some or all of the Shares which are the subject of any Award or to preserve all or part of any Award until the end of each Vesting Period and subject to the provisions of this Plan.
7.3

Without prejudice to the provisions of Rule 6.5, if before the Vesting Date, any of the following occurs: (i) (ii) a take-over offer for the Shares becomes or is declared unconditional; the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of our Company or its amalgamation with another company or companies under the Act; or the Shareholders of our Company pass a resolution for a members solvent voluntary winding-up (other than for amalgamation or reconstruction),

(iii)

the Remuneration Committee will consider, at its discretion, whether or not to Release any Award. If the Remuneration Committee decides to Release any Award, it shall in determining the number of Shares to be vested in respect of such Award, have regard to the proportion of the Performance Period which has elapsed and the extent to which the Performance Condition has been satisfied. Where Awards are Released, the Remuneration Committee will, as soon as practicable after the Awards have been Released, procure the allotment or transfer to each Participant of the number of Shares so determined, such allotment or transfer to be made in accordance with Rule 8. If the Remuneration Committee so determines, the Release of Awards may be satisfied in cash instead of issuing fully paid Shares. 8.
8.1

RELEASE OF AWARDS Review of Performance Condition 8.1.1 In relation to each Award, as soon as reasonably practicable after the end of the relevant Performance Period, the Remuneration Committee shall review the Performance Condition specified in respect of that Award and determine in its absolute discretion: (i) whether the Performance Condition has been satisfied and, if so, the extent to which it has been satisfied; and the number of Shares to be Released.

(ii)

I-7

8.1.2

If the Remuneration Committee determines in its sole discretion that the Performance Condition has not been satisfied or if the relevant Participant has not continued to be an Employee or a Director, as the case may be, from the Award Date up to the end of the relevant Vesting Period, that Award shall (subject to Rule 7) lapse and be of no value and the provisions of Rules 8.2 to 8.5 shall be of no effect. In determining whether the Performance Condition has been satisfied (whether fully or partially) and the number of Shares to be Released in relation to each Award, the Remuneration Committee shall have the right to make computational adjustments to the audited results of the Company or the Group, as the case may be, and take into account such factors as it may determine to be relevant, including but not limited to changes in accounting methods, taxes and extraordinary events.

8.1.3

8.2

Vesting Period(s) 8.2.1 Subject to the Remuneration Committee having determined that the Performance Condition has been satisfied and provided, in relation to all Awards, that the relevant Participant has continued to be an Employee or a Director, as the case may be, from the Award Date up to the end of the relevant Vesting Period and provided further that, in the opinion of the Remuneration Committee, the job performance of the relevant Participant has been satisfactory, upon the expiry of each Vesting Period in relation to an Award, the Company shall Release to the relevant Participant the Shares to which his Award relates in accordance with the Release Schedule specified in respect of his Award, and procure the allotment or transfer to each Participant of the relevant number of Shares. Where new Shares are allotted upon the vesting of any Award, the Company shall, as soon as practicable after such allotment, apply to the SGX-ST (and any other stock exchange on which the Shares are quoted or listed) for permission to deal in and for quotation of such Shares.

8.2.2

8.3

Release of Award Shares which are to be allotted or transferred on the Release of an Award to a Participant shall be issued in the name of, or transferred to, CDP to the credit of either: (i) (ii) the securities account of that Participant maintained with CDP; or the securities sub-account of that Participant maintained with a Depository Agent,

in each case, as designated by that Participant. Until such issue or transfer of such Shares has been effected, that Participant shall have no voting rights nor any interests to dividends or other distributions declared or recommended in respect of any Shares which are the subject of the Award granted to him. The Remuneration Committee has the discretion for the Release of an Award to a Participant to be satisfied by cash payment instead of fully paid Shares.
8.4

Ranking of Shares New Shares allotted and issued, and existing Shares procured by our Company for transfer, on the Release of an Award shall: (i) be subject to all the provisions of the Memorandum and Articles of Association of our Company; and rank in full for all interests, including dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date for which is on or after the relevant Vesting Date, and shall in all other respects rank pari passu with other existing Shares then in issue.

(ii)

Record Date means the date as of the close of business on which shareholders must be registered in order to participate in any dividends, rights, allotments or other distributions (as the case may be).

I-8

9.
9.1

ALTERATION OF CAPITAL If a variation in the issued share capital of our Company (whether by way of a capitalization of profits or reserves or rights issue or reduction, subdivision, consolidation or distribution, or issues for cash or for shares or otherwise than for cash or otherwise howsoever) should take place, then: (i) (ii) the class and/or number of Shares which are the subject of an Award to the extent not yet vested; and/or the class and/or number of Shares in respect of which future Awards may be granted under the Plan,

shall, at the option of the Remuneration Committee, be adjusted in such manner as the Remuneration Committee may determine to be appropriate.
9.2

Unless the Remuneration Committee considers an adjustment to be appropriate, the following shall not be regarded as a circumstance requiring adjustment under the provisions of this Rule 9: (i) (ii) the issue of securities as consideration for an acquisition or a private placement of securities by our Company; and the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on the SGX-ST or any other stock exchange on which the Shares are quoted or listed during the period when a share purchase mandate granted by shareholders of our Company (including any renewal of such mandate) is in force.

9.3

Notwithstanding the provisions of Rule 9.1 above: (i) (ii) no such adjustment shall be made if as a result the Participant receives a benefit that a Shareholder does not receive; and any determination by the Remuneration Committee as to whether to make any adjustment and if so, the manner in which such adjustment should be made, must (except in relation to a capitalization issue) be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.

9.4

Upon any adjustment required to be made, our Company shall notify each Participant (or his duly appointed personal representative(s)) in writing and deliver to him (or, where applicable, his duly appointed personal representative(s)) a statement setting forth the class and/or number of Shares thereafter to be transferred on the vesting of an Award. Any adjustment shall take effect upon such written notification being given. ADMINISTRATION The Plan shall be administered by the Remuneration Committee in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Remuneration Committee shall participate in any deliberation or decision in respect of Awards to be granted to him or held by him. The Remuneration Committee shall have the power, from time to time, to make and vary such regulations (not being inconsistent with this Plan) for the implementation and administration of this Plan, to give effect to the provisions of the Plan and/or to enhance the benefit of the Awards and the Released Awards to the Participants, as they may, in their absolute discretion, think fit. Any matter pertaining or pursuant to the Plan and any dispute and uncertainty as to the interpretation of the Plan, any rule, regulation or procedure thereunder or any rights under the Plan shall be determined by the Remuneration Committee. Neither the Plan nor the grant of Awards under the Plan shall impose on our Company or the Remuneration Committee any liability whatsoever in connection with: (i) (ii) the lapsing of any Awards pursuant to any provision of the Plan; the failure or refusal by the Remuneration Committee to exercise, or the exercise by the Remuneration Committee of, any discretion under the Plan; and/or I-9

10.
10.1

10.2

10.3

(iii)

any decision or determination of the Remuneration Committee made pursuant to any provision of the Plan.

10.4

Any decision of the Remuneration Committee made pursuant to any provision of this Plan (other than a matter to be certified by the Auditors) shall be final, binding and conclusive (including any decisions pertaining to disputes as to the interpretation of this Plan or any rule, regulation or procedure thereunder or as to any rights under this Plan). NOTICES AND ANNUAL REPORT Any notice given by a Participant to our Company shall be sent by post or delivered to the registered office of our Company or such other address as may be notified by our Company to the Participant in writing. Any notice, documents or correspondence given by our Company to a Participant shall be sent to the Participant by the Remuneration Committee (or such person(s) as it may from time to time direct) on behalf of our Company and shall be delivered to him by hand or sent to him at his home address stated in the records of the Company or the last known address of the Participant, and if sent by post shall be deemed to have been given on the day immediately following the date of posting. Our Company shall in relation to this Plan, as required by law, the SGX-ST or other relevant authority, make the following disclosures in its annual report to Shareholders: (i) (ii) the names of the members of the Remuneration Committee; the following details in respect of each Participant who is a Director or Controlling Shareholder or its Associate or a person who received Shares pursuant to the vesting of the Awards granted under the Plan which, in aggregate, represent five per cent. or more of the total number of New Shares available under the Plan: (a) (b) name; the number of Shares comprised in Awards during the Financial Year in review (including the terms of the Awards granted); the aggregate number of Shares comprised in Awards since the commencement of this Plan up to the end of the Financial Year in review; the aggregate number of Shares comprised in Awards which have vested since the commencement of this Plan up to the Financial Year in review; and the aggregate number of Shares comprised in Awards not released as of the end of the Financial Year in review;

11.
11.1

11.2

11.3

(c)

(d)

(e)

(iii)

an appropriate negative statement will be included in the annual report to the Shareholders in the event the disclosure of any of the abovementioned information is not applicable.

12.
12.1

MODIFICATIONS TO THE PLAN Any or all the provisions of this Plan may be modified and/or altered at any time and from time to time by resolution of the Remuneration Committee except that: (i) any modification or alteration which shall alter adversely the rights attaching to any Award granted prior to such modification or alteration, and which in the opinion of the Remuneration Committee, materially alters the rights attaching to any Award granted prior to such modification or alteration, may only be made with the consent in writing of such number of Participants who, if their Awards were Released to them, would thereby become entitled to not less than three-quarters of all the Shares which would be issued and allotted pursuant to the Awards;

I-10

(ii)

any modification or alteration which would be to the advantage of Participants shall be subject to the prior approval of the Shareholders at a general meeting; and no modification or alteration shall be made without the prior approval of the SGX-ST, or (if required) any other stock exchange on which the Shares are quoted or listed, and such other regulatory authorities as may be necessary.

(iii)

For the purposes of Rule 12.1 (i), the opinion of the Remuneration Committee as to whether any modification or alteration would alter adversely the rights attaching to any Award shall be final and conclusive.
12.2

Notwithstanding anything to the contrary contained in Rule 12.1, the Remuneration Committee may at any time by resolution (and without other formality save for the prior approval of the SGX-ST or (if required) any other stock exchange on which the Shares are quoted or listed) amend or alter this Plan in any way to the extent necessary to cause this Plan to comply with any statutory provision or the provision or the regulations of any regulatory or other relevant authority or body (including the SGX-ST or any other stock exchange on which the Shares are quoted or listed). Shareholders who are eligible to participate in this Plan must abstain from voting on any resolution relating to the Plan (other than a resolution relating to the participation of, or grant of Awards to the Employees). In particular, all Shareholders who are eligible to participate in the Plan shall abstain from voting on resolutions of the Shareholders relating to the implementation of the Plan. Notwithstanding the foregoing, Participants of the Plan may act as proxies, but such Participants who are appointed as proxies will not vote on the aforementioned resolutions unless specific instructions have been given in the proxy instrument on how the Shareholders wish their votes to be cast for the said resolutions.

12.3

12.4

Employees who are also Shareholders and are eligible to participate in this Plan must abstain from voting on any resolution relating to the participation of, or grant of Awards to the Employees. Written notice of any modification or alteration made in accordance with this Rule shall be given to all Participants. TERMS OF EMPLOYMENT UNAFFECTED The terms of employment of a Participant (being an Employee or Director, as the case may be) shall not be affected by his participation in the Plan, which shall neither form part of such terms nor entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for any reason.

12.5

13.

14.
14.1

DURATION OF THIS PLAN This Plan shall continue to be in force at the discretion of the Remuneration Committee, for a maximum period of 10 years commencing on the Adoption Date. Subject to compliance with any applicable laws and regulations in Singapore, this Plan may be continued beyond the above stipulated period with the approval of the shareholders by ordinary resolution at a general meeting and of any relevant authorities which may then be required. This Plan may be terminated at any time by the Remuneration Committee or by resolution of the shareholders at a general meeting, subject to all other relevant approvals which may be required and if this Plan is so terminated, no further Awards shall be granted by the Remuneration Committee hereunder. The termination, discontinuance or expiry of this Plan shall be without prejudice to the rights accrued to Awards which have been granted, whether such Awards have been Released (whether fully or partially) or not. TAXES All taxes (including income tax) arising from the grant or Release of any Award granted to any Participant under this Plan shall be borne by that Participant. I-11

14.2

14.3

15.

16.
16.1

COSTS AND EXPENSES OF THIS PLAN Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment or transfer of any Shares pursuant to the Release of any Award in CDPs name, the deposit of share certificate(s) with CDP, the Participants securities account with CDP, or the Participants securities sub-account with a CDP Depository Agent. Save for the taxes referred to in Rule 15 and such costs and expenses expressly provided in this Plan to be payable by the Participants, all fees, costs and expenses incurred by our Company in relation to this Plan including but not limited to the fees, costs and expenses relating to the issue and allotment or transfer of Shares pursuant to the Release of any Award shall be borne by the Company. DISCLAIMER OF LIABILITY Notwithstanding any provisions herein contained and subject to the Act, the Board, the Remuneration Committee and our Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in respect of any matter under or in connection with this Plan including but not limited to our Companys delay or failure in issuing and allotting, or procuring the transfer of, the Shares or in applying for or procuring the listing of and quotation for the Shares on the SGX-ST in accordance with Rule 8.2.3 (and any other stock exchange on which the Shares are quoted or listed).

16.2

17.

18.

DISPUTES Any disputes or differences of any nature in connection with this Plan shall be referred to the Remuneration Committee and its decision shall be final and binding in all respects.

19.

CONDITION OF AWARD Every Award shall be subject to the condition that no Shares shall be issued or transferred pursuant to the Release of any Award if such issue or transfer would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore or any other relevant country having jurisdiction in relation to the issue of Shares hereto.

20.

GOVERNING LAW This Plan shall be governed by and construed in accordance with the laws of the Republic of Singapore. The Participants, by accepting grants of Awards in accordance with this Plan, and our Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

21.

EXCLUSION OF THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT No person other than the Company or a Participant shall have any right to enforce any provision of the Plan or any Award by virtue of the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore.

I-12

APPENDIX J INDEPENDENT AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010, 2011 AND 2012

J-1

Report From the Independent Auditors Report in relation to the Audited Consolidated Financial Statements of KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) For the Financial Years ended December 31, 2010, 2011 and 2012

July 1, 2013 The Board of Directors KrisEnergy Ltd. 83 Clemenceau Avenue #10-05, UE Square Singapore 239920 Dear Sirs: Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of KrisEnergy Ltd. (the Company; formerly known as KrisEnergy Holdings II Limited) and its subsidiaries (collectively, the Group), which comprise the consolidated statement of financial position as at December 31, 2010, 2011 and 2012 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the financial years then ended, and a summary of significant accounting policies and other explanatory information. Managements responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

J-2

Report From the Independent Auditors Report in relation to the Audited Consolidated Financial Statements of KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) For the Financial Years ended December 31, 2010, 2011 and 2012

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2010, 2011 and 2012, and their financial performance and cash flows for the years then ended in accordance with International Financial Reporting Standards. Other matter This Report has been prepared for inclusion in the offering documents of KrisEnergy Ltd. in connection with the initial public offering of the ordinary shares of the Company.

Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore

Partner-in-Charge: Toong Weng Sum, Vincent

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[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX K CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010, 2011 AND 2012 KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Comprehensive Income For the Financial Years ended December 31, 2010, 2011 and 2012

Note Revenue Cost of sales Gross profit Other income General and administrative expenses Other operating expenses Finance income Finance costs (Loss)/profit before tax Tax benefit/(expense) Loss for the year Other comprehensive income: Exchange differences on translation of foreign operations Total comprehensive income attributable to owners of the Company Loss per share attributable to owners of the Company (cents per share) 6 6 6

2010 US$ 81,781,396 (69,885,645) 11,895,751 10,701,310 (16,770,159) (71,321,433) 78,936 (6,761,429) (72,177,024) 492,555 (71,684,469)

2011 US$ 100,221,088 (97,291,257) 2,929,831 13,557,312 (21,176,927) (1,168,491) 279,101 (10,103,196) (15,682,370) (18,479,641) (34,162,011)

2012 US$ 89,592,582 (52,729,286) 36,863,296 1,865,296 (24,294,905) (2,028,837) 411,332 (11,970,662) 845,520 (18,518,399) (17,672,879)

6 6 6 6 6 6 7

1,524,053

(2,695,419)

(64,809)

(70,160,416) (71,684,469)

(36,857,430) (34,162,011)

(17,737,688) (36)

The accompanying notes form an integral part of the consolidated financial statements. K-1

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Financial Position as at December 31, 2010, 2011 and 2012

Note ASSETS Non-current assets Exploration and evaluation assets Oil and gas properties Other property, plant and equipment Intangible assets Embedded derivatives Investment securities Other receivables 8 9 10 11 12 13 15

2010 US$

2011 US$

2012 US$

91,588,595 176,239,684 616,344 36,096,174 304,540,797

120,097,447 111,831,590 566,560 43,890,735 1,420,000 769,865 278,576,197 6,918,469 29,182,528 327,915 2,491,314 42,659,700 81,579,926 360,156,123

135,653,818 104,691,623 254,769 43,890,735 2,864,000 182,057 287,537,002 6,054,728 34,743,446 1,108,574 500,000 129,900,954 172,307,702 459,844,704

Current assets Inventories Trade and other receivables Prepayments Other current assets Cash and bank balances

14 15 16 17

6,293,812 26,562,288 137,209 11,721,543 35,345,976 80,060,828

Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Foreign currency translation reserve Accumulated losses Total equity Non-current liabilities Loans and borrowings Deferred tax liabilities Other payables Provisions 20 7 19 21 18 18 18

384,601,625

1 1,540,143 (72,161,338) (70,621,194) 53,029,906 283,471,933 17,188,619 353,690,458

1 (1,155,276) (106,323,349) (107,478,624) 80,317,463 42,490,585 290,276,833 18,048,096 431,132,977 13,671,011 7,061,438 134,925 15,634,396 36,501,770 467,634,747 360,156,123

1,000,000 402,750,000 (1,220,085) (123,996,228) 278,533,687 81,142,055 41,744,525 22,024,643 144,911,223 11,961,015 9,902,998 2,500,000 30,427 12,005,354 36,399,794 181,311,017 459,844,704

Current liabilities Trade and other payables Accrued operating expenses Loans and borrowings Provisions Withholding tax payable Tax payable

19 19 20 21

13,034,734 9,999,770 68,000,000 191,290 10,306,567 101,532,361

Total liabilities Total equity and liabilities

455,222,819 384,601,625

The accompanying notes form an integral part of the consolidated financial statements. K-2

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Changes in Equity For the Financial Years ended December 31, 2010, 2011 and 2012

Share Note capital US$ Balance at January 1, 2010 Loss for the year Other comprehensive income Total comprehensive income for the year Balance at December 31, 2010 Balance at January 1, 2011 Loss for the year Other comprehensive income Total comprehensive income for the year Balance at December 31, 2011 1

Attributable to owners of the Company Foreign currency Share Accumulated translation premium losses reserve US$ US$ US$ (476,869) (71,684,469) 16,090 1,524,053

Total equity US$ (460,778) (71,684,469) 1,524,053

(71,684,469)

1,524,053

(70,160,416)

1 1

(72,161,338) (72,161,338) (34,162,011)

1,540,143 1,540,143 (2,695,419)

(70,621,194) (70,621,194) (34,162,011) (2,695,419)

(34,162,011)

(2,695,419)

(36,857,430)

(106,323,349)

(1,155,276)

(107,478,624)

K-3

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Changes in Equity For the Financial Years ended December 31, 2010, 2011 and 2012

Note Balance at January 1, 2012 Loss for the year Other comprehensive income Total comprehensive income for the year Issue of shares Balance at December 31, 2012 18

Share capital US$ 1 999,999

Attributable to the equity holders of the Company Foreign currency Share Accumulated translation Total premium losses reserve equity US$ US$ US$ US$ 402,750,000 (106,323,349) (17,672,879) (17,672,879) (1,155,276) (64,809) (64,809) (107,478,624) (17,672,879) (64,809) (17,737,688) 403,749,999

1,000,000

402,750,000

(123,996,228)

(1,220,085)

278,533,687

The accompanying notes form an integral part of the consolidated financial statements K-4

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Cash Flows For the Financial Years ended December 31, 2010, 2011 and 2012

Note Operating activities (Loss)/profit before tax Adjustment to reconcile (loss)/profit before tax to net cash flows: Depreciation, depletion and amortization Dry hole expenses Excess of fair value of identifiable net assets acquired over consideration paid Impairment of goodwill Impairment of oil and gas properties Net fair value loss/(gain) on embedded derivatives Finance cost Unwinding of discount on decommissioning provisions Interest income Operating cash flows before changes in working capital Changes in working capital: (Increase)/decrease in inventories Increase in trade and other receivables Decrease in other current assets Increase/(decrease) in trade and other payables Cash flows from operations Interest received Interest paid Taxes paid Net cash flows from operating activities Investing activities Additions to exploration and evaluation assets Addition to oil and gas properties Addition to intangible assets Purchase of other plant and equipment Purchase of investment securities Advance payment pursuant to farm-in arrangements Advance payment for acquisition of interests in joint operations Advance payment for signature bonus Acquisition of subsidiaries, net of cash acquired Farm-in arrangement, net of cash acquired Proceeds from disposal of other plant and equipment Net cash flows used in investing activities K-5

2010 US$ (72,177,024) 50,560,989 32,217,835 (21,646) 16,256,809 22,846,789 6,761,429

2011 US$ (15,682,370) 68,776,871 430,691 (12,162,008) 106,000 9,567,082 536,114 (279,101)

2012 US$ 845,520 23,221,442 1,283,288 (1,444,000) 11,571,101 399,561 (411,332)

8 4 11 9

21

(78,936)

56,366,245 (626,120) (873,148) 18,559,435 1,292,807 74,719,219 78,936 (6,761,429) (17,188,913) 50,847,813

51,293,279 436,106 (760,733) 4,037,074 (6,104,224) 48,901,502 279,101 (5,295,426) (23,163,678) 20,721,499

35,465,580 863,741 (6,341,577) 1,991,314 (1,710,505) 30,268,553 411,332 (1,821,509) (20,155,928) 8,702,448

8 9 11 10 13 16 16 16 4 5

(52,308,893) (19,300,347) (780,502) (6,193,155) (1,275,000) (217,400,374) 7,140

(9,016,926) (7,999,017) (649,955) (428,845) (1,000,000) (9,698,189) (146,463)

(16,839,659) (9,421,089) (253,037) (182,057)

(297,251,131)

(28,939,395)

(26,695,842)

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Cash Flows For the Financial Years ended December 31, 2010, 2011 and 2012 Note Financing activities Proceeds from issuance of shares Proceeds from issuance of bonds Increase/(decrease) in amount due to holding company Proceeds from bank borrowing Repayment of bank borrowing Payment of bond interest (Increase)/decrease in restricted cash 2010 US$ 106,873,730 68,000,000 (10,004,932) 2011 US$ 78,455,000 3,849,263 (68,000,000) 2,004,932 2012 US$ 115,000,000 (756,969) (8,925,000)

18 20

20 20 17

Net cash flows from financing activities Net (decrease)/increase in cash and cash equivalents Net effect of exchange rate changes Cash and cash equivalents at January 1

164,868,798 (81,534,520) 1,907,471 104,968,093

16,309,195 8,091,299 1,227,357 25,341,044

105,318,031 87,324,637 (83,383) 34,659,700

Cash and cash equivalents at December 31

17

25,341,044

34,659,700

121,900,954

The accompanying notes form an integral part of the consolidated financial statements. K-6

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

1.

Corporate information KrisEnergy Ltd. (the Company) was incorporated on October 5, 2009 as a limited liability company in Cayman Islands. With effect from July 4, 2012, the name of the Company was changed from KrisEnergy Holdings II Limited to KrisEnergy Ltd. The registered office of the Company is located at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. Its immediate holding company is KrisEnergy Holdings Limited, a company incorporated in Cayman Islands. The ultimate controlling party is First Reserve Corporation. The principal activity of the Company is that of investment holding and the principal place of business is Singapore. The principal activities of the subsidiaries and joint arrangements are disclosed in Note 23 to the financial statements.

2. 2.1

Summary of significant accounting policies Basis of preparation The consolidated financial statements of the Company and its subsidiaries, (collectively the Group) have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below. The consolidated financial statements are presented in United States Dollars (USD or US$).

2.2

Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at December 31, 2010, 2011 and 2012. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. Where the ownership of a subsidiary is less than 100% and, therefore, a non-controlling interest (NCI) exists, the NCI is allocated its share of the total comprehensive income of the period, even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: Derecognizes the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts as at the date when controls is lost K-7

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.2

Summary of significant accounting policies (contd) Basis of consolidation (contd) Derecognizes the carrying amount of any NCI Derecognizes the cumulative translation differences recognized in equity Recognizes the fair value of the consideration received Recognizes the fair value of any investment retained Recognizes any surplus or deficit in profit or loss Reclassifies the parents share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate.

2.3

Changes in accounting policy and disclosures Changes in accounting policies The accounting policies adopted are consistent with those of the previous years except that the Group has adopted all the new and revised standards that are effective for annual period beginning on or before January 1, 2012. The adoption of these standards did not have any effect on the financial performance of the Group. IFRS 3 Business Combinations (revised) The revised IFRS 3 introduces a number of changes to the accounting for business combinations that will impact the amount of goodwill recognized, the reported results in the period that an acquisition occurs, and future reported results. Changes in significant accounting policies resulting from the adoption of the revised IFRS 3 include: Transaction costs would no longer be capitalized as part of the cost of acquisition but will be expensed immediately; Consideration contingent on future events are recognized at fair value on the acquisition date and any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognized in profit or loss; The Group elects for each acquisition of a business, to measure non-controlling interest at fair value, or at the non-controlling interests proportionate share of the acquirees identifiable net assets, and this impacts the amount of goodwill recognized; and When a business is acquired in stages, the previously held equity interests in the acquiree is remeasured to fair value at the acquisition date with any corresponding gain or loss recognized in profit or loss, and this impacts the amount of goodwill recognized.

The revised IFRS 3 has been applied prospectively for the business combinations acquired in Note 4. IAS 24 Related Party Transactions (Amendment) The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions emphasize a symmetrical view of related party relationships and clarify the circumstances in which persons and key management personnel affect related party relationships of an entity. In addition, the amendment introduces an exemption from the general related party disclosure requirements for transactions with government and entities K-8

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.3

Summary of significant accounting policies (contd) Changes in accounting policy and disclosures (contd) Changes in accounting policies (contd) IAS 24 Related Party Transactions (Amendment) (contd) that are controlled, jointly controlled or significantly influenced by the same government as the reporting entity. The adoption of the amendment did not have any impact on the financial position or performance of the Group. On January 1, 2012, the Group early adopted IFRS 10, IFRS 11, IFRS 12 and the consequential amendments to Revised IAS 27 and Revised IAS 28 which are effective for annual periods beginning on or after January 1, 2013. IFRS 10 Consolidated Financial Statements and Revised IAS 27 Separate Financial Statements IFRS 10 replaces the portion of IAS 27 Consolidation and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues covered in Standing Interpretations Committee (SIC) Interpretation 12 Consolidation Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including structured entities (previously referred to as special purpose entities). The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements in IAS 27. The adoption of IFRS 10 does not have any impact on the Groups financial position or performance. As a consequence of the new IFRS 10 and IFRS 12, what remains in IAS 27 is limited to accounting for subsidiaries, jointly arrangements and associates in separate financial statements. The Group does not present separate financial statements. IFRS 11 Joint Arrangements and Revised IAS 28 Investments in Associates and Joint Ventures IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities Non-monetary Contributions by Venturers. IFRS 11 uses the principle of control in IFRS 10 to define joint control and removes the option to account for joint ventures using proportionate consolidation. Accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the parties a right to the underlying assets and obligations is accounted for by recognizing the share of those assets and obligations. Joint ventures that give the parties a right to the net assets is accounted for using the equity method. The revised IAS 28 was amended to describe the application of equity method to investments in joint ventures in addition to associates. The adoption of IFRS 11 did not result in the Group having to revise its method of accounting for its joint operations, which continues to be recognized in relation to its interest in a joint operation. K-9

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.3

Summary of significant accounting policies (contd) Changes in accounting policy and disclosures (contd) Changes in accounting policies (contd) IFRS 12 Disclosure of Interests in Other Entities IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entitys interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required but have no impact on the Groups financial position or performance.

2.4

Standards issued but not yet effective The Group has not adopted the following standards and interpretations that have been issued but not yet effective: Effective for annual periods beginning on or after July 1, 2012 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2014 January 1, 2015

Description Amendments to IAS 1 Presentation of Items of Other Comprehensive Income Revised IAS 19 Employee Benefits IFRS 13 Fair Value Measurement Amendments to IFRS 7 Disclosures Offsetting Financial Assets and Financial Liabilities Instruments: Disclosures Improvements to IASs 2012 - Amendment to IAS 1 Presentation of Financial Statements - Amendment to IAS 16 Property, Plant and Equipment - Amendment to IAS 32 Financial Instruments: Presentation Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities IFRS 9 Financial Instruments: Classification and Measurement

Except for the Amendments to IAS 1, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the Amendments to IAS 1 is described below. IAS 1 Presentation of Items of Other Comprehensive Income Amendments to IAS 1 The amendments to IAS 1 change the grouping of items presentation in Other Comprehensive Income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time would be presented separately from items which will never be reclassified. The amendment affects presentation only and therefore will have no impact on the Groups financial position or performance. The amendments to IAS are effective for annual periods beginning on or after July 1, 2012 and, therefore, will be applied in the Groups first annual report after becoming effective. K-10

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.5

Summary of significant accounting policies (contd) Business combination and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate the consideration transferred, measured at acquisition date fair value and the amount of any NCI in the acquiree. For each business combination, the Group elects whether it measures NCI in the acquiree at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition related costs are expensed as incurred and included in general and administrative expenses. When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Those petroleum reserves and resources that are able to be reliably measured are recognized in the assessment of fair values on acquisition. Other potential reserves, resources and rights, for which fair values cannot be reliably measured, are not recognized. If the business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured as its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognized either in profit or loss or as a change to other comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the fair value of the identifiable net assets acquired and liabilities assumed. If fair value of the identifiable net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash generated units (CGU) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a CGU and part of the operation in that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU retained.

K-11

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.6

Summary of significant accounting policies (contd) Joint arrangements A joint arrangement is a contractual arrangement whereby two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of the parties to the arrangement. To the extent the joint arrangement provides the Group with rights to the assets and obligations for the liabilities relating to the arrangement, the arrangement is a joint operation. To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the arrangement is a joint venture. The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts and circumstances change. (a) Joint operations/party to joint arrangements The Group recognizes in relation to its interest in a joint operation/party to joint arrangements, its assets, including its share of any assets held jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from the sale of its share of the output arising from the joint operation; its share of the revenue from the sale of the output by the joint operation; and its expenses, including its share of any expenses incurred jointly.

The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the accounting policies applicable to the particular assets, liabilities, revenues and expenses. When the Group enters into transaction involving a sale or contribution of assets with a joint operation in which it is a joint operator, the Group recognizes gains and losses resulting from such a transaction only to the extent of the interests held by the other parties to the joint operation. When the Group enters into a transaction involving purchase of assets with a joint operation in which it is a joint operator, the Group does not recognize its share of the gains and losses until it resells those assets to a third party. When such transactions provide evidence of a reduction in the net realizable value of the assets to be purchased or of an impairment loss of those assets, the Group recognizes its share of those losses.

K-12

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.6

Summary of significant accounting policies (contd) Joint arrangements (contd) (b) Joint ventures The Group recognizes its interest in a joint venture as an investment and accounts for the investment using the equity method from the date on which its becomes a joint venture. On acquisition of the investment, any excess of the cost of the investment over the Groups share of the net fair value of the investees identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the investment. Any excess of the Groups share of the net fair value of the investees identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entitys share of the joint ventures profit or loss in the period in which the investment is acquired. Under the equity method, the investment in joint ventures are carried in the balance sheet at cost plus post-acquisition changes in the Groups share of net assets of the joint ventures. The profit or loss reflects the share of results of operations of the joint ventures. Distributions received from joint ventures reduce the carrying amount of the investment. Where there has been a change recognized in other comprehensive income by the joint ventures, the Group recognizes its share of such changes in other comprehensive income. Unrealized gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint ventures. When the Groups share of losses in a joint venture equals or exceeds its interest in the joint venture, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on the Groups investment in joint ventures. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognizes the amount in profit or loss. The financial statements of the joint ventures are prepared as the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of significant influence or joint control over the joint venture, the Group measures the retained interest at fair value. Any difference between the fair value of the aggregate of the retained interest and proceeds from disposal and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss.

K-13

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.6

Summary of significant accounting policies (contd) Joint arrangements (contd) (b) Joint ventures (contd) The Group accounts for all amounts previously recognized in other comprehensive income in relation to that joint venture on the same basis as would have been required if that joint venture had directly disposed of the related assets or liabilities. When an investment in joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest. The Group does not have any investment in joint ventures for the year ended December 31, 2010, 2011 and 2012.

2.7

Foreign currency The Groups consolidated financial statements are presented in USD, which is also the Companys functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (i) Transactions and balances Transactions in foreign currencies are initially recorded by the Groups entities at their respective currency spot rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss with the exception of monetary items that are designated as part of the hedge of the Groups net investment of a foreign operation. These are recognized in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the date of the initial transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss are also recognized in other comprehensive income or profit or loss, respectively.) Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date. K-14

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.7

Summary of significant accounting policies (contd) Foreign currency (contd) (ii) Group companies On consolidation, the assets and liabilities of foreign operations are translated into USD at the rate of exchange prevailing at the reporting date and their profit or loss are translated at exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation for consolidation purposes are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in profit or loss. In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognized in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

2.8

Oil and natural gas exploration, evaluation and development expenditure Oil and natural gas exploration, evaluation and development expenditure is accounted for using the successful efforts method of accounting. Pre-license costs Pre-license costs are expensed in the period in which they are incurred. License and property acquisition costs Exploration license and leasehold property acquisition costs are capitalized in intangible assets. License costs paid in connection with a right to explore in an existing exploration area are capitalized and amortized over the term of the permit. License and property acquisition costs are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable amount. This review includes confirming that exploration drilling is still under way or firmly planned, or that it has been determined, or work is under way to determine that the discovery is economically viable based on a range of technical and commercial considerations and sufficient progress is being made on establishing development plans and timing. If no future activity is planned or the license has been relinquished or has expired, the carrying value of the license and property acquisition costs is written off through profit or loss. Upon recognition of proved reserves and internal approval for development, the relevant expenditure is transferred to oil and gas properties. K-15

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.8

Summary of significant accounting policies (contd) Oil and natural gas exploration, evaluation and development expenditure (contd) Exploration and evaluation costs Exploration and evaluation activity involves the search for hydrocarbon resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Once the legal right to explore has been acquired, costs directly associated with an exploration well are capitalized as exploration and evaluation intangible assets until the drilling of the well is completed and the results have been evaluated. These costs include directly attributable employee remuneration, materials and fuel used, rig costs and payments made to contractors. Geological and geophysical costs are recognized in profit or loss as incurred. If no potentially commercial hydrocarbons are discovered, the exploration asset is written off through profit or loss as a dry hole. If extractable hydrocarbons are found and, subject to further appraisal activity (e.g. the drilling of additional wells), are likely to be capable of being commercially developed, the costs continue to be carried as an intangible asset while sufficient/continued progress is made in assessing the commerciality of the hydrocarbons. Costs directly associated with appraisal activity undertaken to determine the size, characteristics and commercial potential of a reservoir following the initial discovery of hydrocarbons, including the costs of appraisal wells where hydrocarbons were not found, are initially capitalized as an intangible asset. All such capitalized costs are subject to technical, commercial and management review, as well as review for indicators of impairment at least once a year. This is to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off through profit or loss. When proved reserves of oil and natural gas are identified and development is sanctioned by management, the relevant capitalized expenditure is first assessed for impairment and (if required) any impairment loss is recognized, then the remaining balance is transferred to oil and gas properties. Other than license costs, no amortization is charged during the exploration and evaluation phase. Farm-outs in the exploration and evaluation phase The Group does not record any expenditure made by the farmee on its account. It also does not recognize any gain or loss on its exploration and evaluation farm-out arrangements, but redesignates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained. Any cash consideration received directly from the farmee is credited against costs previously capitalized in relation to the whole interest with any excess accounted for by the farmor as a gain on disposal. Development costs Expenditure on the construction, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells, including unsuccessful development on delineation wells, is capitalized within oil and gas properties. K-16

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.9

Summary of significant accounting policies (contd) Oil and gas properties and other property, plant and equipment Initial recognition Oil and gas properties and other property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of the decommissioning obligation, and for qualifying assets (where relevant), borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. The capitalized value of a finance lease is also included within property, plant and equipment. When a development project moves into the production stage, the capitalization of certain construction/development costs ceases and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for capitalization relating to oil and gas property asset additions, improvements or new developments. Depreciation, depletion and amortization Oil and gas properties are depreciated, depleted and amortized on a unit-of-production basis over the total proved developed and undeveloped reserves of the field concerned. The unitof-production rate calculation for the depreciation, depletion and amortization of field development costs takes into account expenditures incurred to date, together with sanctioned future development expenditure. Other property, plant and equipment are generally depreciated on a straight-line basis over their estimated useful lives which are as follows: Renovation Furniture and fittings Office equipment Computers 3 years 3 years 3 years 2 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognized. The assets residual values, useful lives and methods of depreciation, depletion and amortization are reviewed at each reporting period, and adjusted prospectively, if appropriate. Farm-outs outside the exploration and evaluation phase In accounting for a farm-out arrangement outside the exploration and evaluation phase, the Group: Derecognizes the proportion of the asset that it has sold to the farmee Recognizes the consideration received or receivable from the farmee, which represents the cash received and/or the farmees obligation to fund the capital expenditure in relation to the interest retained by the farmor K-17

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.9

Summary of significant accounting policies (contd) Oil and gas properties and other property, plant and equipment (contd) Farm-outs outside the exploration and evaluation phase (contd) Recognizes a gain or loss on the transaction for the difference between the net disposal proceeds and the carrying amount of the asset disposed of. A gain is only recognized when the value of the consideration can be determined reliably. If not, then the Group accounts for the consideration received as a reduction in the carrying amount of the underlying assets Tests the retained interests for impairment if the terms of the arrangement indicate that the retained interest may be impaired.

The consideration receivable on disposal of an item of property, plant and equipment or an intangible asset is recognized initially at its fair value by the Group. However, if payment for the item is deferred, the consideration received is recognized initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognized as interest revenue. Any part of the consideration that is receivable in the form of cash is treated as a definition of a financial asset and is accounted for at amortized cost. Major maintenance, inspection and repairs Expenditure on major maintenance re-fits, inspections or repairs comprises the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset, that was separately depreciated and is now written off, is replaced and it is probable that future economic benefits associated with the item will flow to the Group, the expenditure is capitalized. When part of the asset replaced was not separately considered as a component and therefore not depreciated separately, the replacement value is used to estimate the carrying amount of the replaced asset(s) which is immediately written off. Inspection costs associated with major maintenance programs are capitalized and amortized over the period to the next inspection. All other day-to-day repairs and maintenance costs are expensed as incurred. 2.10 Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization (calculated on a straight line basis over their useful lives) and any accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized. Instead, the related expenditure is recognized in profit or loss in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The K-18

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.10

Summary of significant accounting policies (contd) Intangible assets (contd) amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in profit or loss in the expense category consistent with the function of the intangible assets. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

2.11

Impairment of non-financial assets Assets (excluding goodwill and indefinite life intangibles) The Group assesses at each reporting date whether there is an indication that an asset or CGU may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets or CGUs recoverable amount. The recoverable amount is the higher of an assets or CGUs fair value less costs to sell (FVLCS) and value in use (VIU). The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the asset is tested as part of a larger CGU to it belongs. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset/CGU is considered impaired and is written down to its recoverable amount. The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Groups CGUs to which the individual assets are allocated. These budgets and forecasts generally cover the term of the contract area. VIU does not reflect future cash flows associated with improving or enhancing an assets performance, whereas anticipated enhancements to assets are included in FVLCS calculations. In calculating VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset/CGU. In determining FVLCS, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

K-19

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.11

Summary of significant accounting policies (contd) Impairment of non-financial assets (contd) Assets (excluding goodwill and indefinite life intangibles) (contd) Impairment losses are recognized in profit or loss in those expense categories consistent with the function of the impaired asset, except for property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognized in other comprehensive income up to the amount of any previous revaluation. For assets/CGUs excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets/CGUs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset/CGU does not exceed its recoverable amount, or the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset/CGU in prior years. Such reversal is recognized in profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase and is recognized through other comprehensive income. Goodwill Goodwill is tested for impairment annually (as at December 31) and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU is less than their carrying amount including goodwill, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives Intangible assets with indefinite useful lives are tested for impairment annually (as at December 31) either individually or at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

2.12

Financial instruments initial recognition and subsequent measurement

2.12.1 Financial assets Initial recognition and measurement Financial assets within the scope of IAS 39 Financial Instruments: Recognition and Measurement are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition. All financial assets are recognized initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss which do not include transaction costs. K-20

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Initial recognition and measurement (contd) Purchases or sales of financial assets that require delivery of assets in a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e. the date at which the Group commits to purchase or sell the asset. The Groups financial assets include cash and bank balances, trade and other receivables, investment securities and embedded derivatives. Subsequent measurement The subsequent measurement of financial assets depends on their classification, as follows: Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as defined by IAS 39. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative changes in fair value) or finance revenue (positive net changes in fair value) in profit or loss. Financial assets designated upon initial recognition at fair value through profit or loss are designated at the initial recognition date and only if the criteria set out in IAS 39 are satisfied. The Group has not designated any financial assets upon initial recognition as at fair value through profit or loss. The Group evaluated its financial assets as held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and managements intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify them. The reclassification to loans and receivables, available-for-sale or held-to-maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation, as these instruments cannot be reclassified after initial recognition. Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value, with changes in fair value recognized in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required. K-21

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Subsequent measurement (contd) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in other operating expenses for receivables. Available-for-sale financial investments Available-for-sale financial investments include equity investments and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions. After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income in available-for-sale reserves until the investment is derecognized, at which time the cumulative gain or loss is recognized in other operating income, or the investment is determined to be impaired, when the cumulative loss reclassified from available-for-sale reserve to profit or loss in finance costs. Interest earned whilst holding available-for-sale financial investments is reported as interest income using the EIR method. The Group evaluates whether the ability and intention to sell its available-for-sale financial assets in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and managements intention to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held to maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly. For a financial asset reclassified from the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized cost and any previous gain or loss on the asset that has been recognized in equity is amortized to profit or loss over the remaining life of the investment using EIR. Any difference been the new amortized cost and the maturity amount is also amortized over the remaining life of the asset using EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to profit or loss. K-22

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Subsequent measurement (contd) Available-for-sale financial investments (contd) Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when: The rights to receive cash flows from the asset have expired, or The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Groups continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. K-23

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Impairment of financial assets (contd) Financial assets carried at amortized cost For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assets original EIR. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to profit or loss. Available-for-sale financial investments For available-for-sale financial investments, the Group reassesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its costs. Significant is evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss measured as the difference between its acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss is removed from other comprehensive income and recognized in profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increase in their fair value after impairment are recognized directly in other comprehensive income. K-24

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Impairment of financial assets (contd) Available-for-sale financial investments (contd) In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortized cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increases can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed in profit or loss. 2.12.2 Financial liabilities Initial recognition and measurement Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognized initially at fair value and, in the case of loans borrowings, net of directly attributable transaction costs. The Groups financial liabilities include trade and other payables, accrued operating expenses and loans and borrowings. Subsequent measurement The measurement of financial liabilities depends on their classification as described below: Other financial liabilities After initial recognition, other financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized, as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in profit or loss. K-25

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.2 Financial liabilities (contd) Derecognition A financial liability is derecognized when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss. 2.12.3 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. 2.12.4 Fair value of financial instruments The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arms length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models. An analysis of fair value of financial instruments and further details as to how they are measured are provided in Note 24. 2.12.5 Current versus non-current classification Derivative instruments that are not designated as effective hedging instruments are classified as current or non-current or separated in a current and non-current portion based on an assessment of facts and circumstances (i.e., the underlying contracted cash flows): Where the Group expects to hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 months after the reporting date, the derivative is classified as non-current (or separated into current and non-current portions) consistent with the classification of the underlying item. Embedded derivatives that are not closely related to the host contract are classified consistent with the cash flows of the host contract. K-26

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.5 Current versus non-current classification (contd) Derivatives instruments that are designed as, and are effective hedging instruments, are classified consistently with the classification of the underlying hedged item. The derivative instrument is separated into a current portion and a non-current portion only if a reliable allocation can be made.

2.12.6 Cash and cash equivalents Cash and cash equivalents comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, but exclude any restricted cash which is not available for use by the Group and therefore not considered highly liquid. 2.13 Inventories Inventories are stated at the lower of cost and net realizable value. Cost includes all costs incurred in the normal course of business in bringing each product to its present location and condition and is accounted for on a first-in first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. 2.14 Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at date of inception. The arrangement is assessed to determine whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. Operating lease payments are recognized as an operating expense in profit or loss on a straight-line basis over the lease term. 2.15 Provisions General Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as part of finance costs in profit or loss. K-27

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.15

Summary of significant accounting policies (contd) Provisions (contd) Decommissioning liability The Group recognizes a decommissioning liability when it has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can be made. The obligation generally arises when the asset is installed or the ground/environment is disturbed at the field location. When the liability is initially recognized, the present value of the estimated costs is capitalized by increasing the carrying amount of the related oil and gas assets to the extent that it was incurred by the development/construction of the field. Any decommissioning obligations that arise through the production of inventory are expensed as incurred. Changes in the estimated timing of decommissioning or changes to the decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision, and a corresponding adjustment to oil and gas assets. Any reduction in the decommissioning liability and, therefore, any deduction from the asset to which it relates, may not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to profit or loss. If the change in estimate results in an increase in the decommissioning liability and, therefore, an addition to the carrying value of the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for impairment in accordance with IAS 36. If, for mature fields, the estimate for the revised value of oil and gas assets net of decommissioning provisions exceeds the recoverable value, that portion of the increase is charged directly to expense. Over time, the discount liability is increased for the change in present value based on the discount rate that reflects current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in profit or loss as a finance cost. The Group recognizes neither the deferred tax asset in respect of the temporary difference on the decommissioning liability nor the corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset. Environmental expenditures and liabilities Environmental expenditures that relate to current or future revenues are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future earnings are expensed. Liabilities for environmental costs are recognized when a clean-up is probable and the associated costs can be reliably estimated. Generally, the timing of recognition of these provisions coincides with the commitment to a formal plan of action or, if earlier, on divestment or on closure of inactive sites. K-28

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.15

Summary of significant accounting policies (contd) Provisions (contd) Environmental expenditures and liabilities (contd) The amount recognized is the best estimate of the expenditure required. Where the liability will not be settled for a number of years, the amount recognized is the present value of the estimated future expenditure

2.16

Revenue recognition Revenue is recognized to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, sale taxes, excise duties and similar levies. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. Revenue from the sale of oil and gas is recognized when the significant risks and rewards of ownership have been transferred, which is considered to occur when title passes to the customer. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism. Revenue from the production of oil, in which the Group has an interest with other producers, is recognized based on the Groups working interest and the terms of the relevant production sharing contracts. Differences between oil lifted and sold and the Groups share of production are not significant. Where forward sale and purchase contracts for oil or natural gas have been determined to be for trading purposes, the associated sales and purchases are reported net. The following criteria are also applicable to other specific revenue transactions: Take or pay contracts Under these contracts, the Group makes a long-term supply commitment in return for a commitment from the buyer to pay for minimum quantities, whether or not the customer takes delivery. These commitments contain protective (force majeure) and adjustment provisions. If a buyer has a right to get a make-up delivery at a later date, revenue recognition is deferred and only recognized when the product is delivered, or the make-up product can no longer be taken. If no such option exists within the contractual terms, revenue is recognized when the take-or-pay penalty is triggered. Interest income Interest income is recognized using the effective interest method.

2.17

Employee benefits (a) Defined contribution plans The Group makes contributions to the defined contribution pension schemes. Contributions to defined contribution pension schemes are recognized as an expense in the period in which the related service is performed. K-29

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.17

Summary of significant accounting policies (contd) Employee benefits (contd) (b) Employee leave entitlement Employee entitlements to annual leave are recognized as a liability when they accrue to the employees. The estimated liability for leave is recognized for services rendered by employees up to the end of the reporting date.

2.18

Taxes Current tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income. Current tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretations and establishes provisions where appropriate. Deferred tax Deferred tax is provided using the balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except: Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled by the parent, investor or venturer and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except: Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. K-30

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.18

Summary of significant accounting policies (contd) Taxes (contd) Deferred tax (contd) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available, against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profits will be available to allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting date. Deferred tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances arises. The adjustment is either treated as a reduction to goodwill (as long as it does not exceed goodwill) if it occurred during the measurement period or recognized in profit or loss. Royalties, resource rent tax and revenue-based taxes In addition to corporate taxes, the Groups consolidated financial statements also include and recognize as taxes on income, other type of taxes on net income which are calculated based on oil and gas production. Royalties, resource rent taxes and revenue-based taxes are accounted for under IAS 12 when they have the characteristics of an income tax. This is considered to be the case when they are imposed under government tax authority and the amount payable is based on taxable income rather than based on physical quantity produced or as a percentage of revenue after adjustment for temporary differences. For such arrangements, current and deferred tax is provided on the same basis as described above for other forms of taxation. Obligations arising from royalty arrangements and other types of taxes that do not satisfy these criteria are recognized as current provisions and included in cost of sales. K-31

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

2. 2.18

Summary of significant accounting policies (contd) Taxes (contd) Production-sharing arrangements According to the production-sharing agreement (PSA), the share of the profit oil to which the government is entitled in any calendar year, is deemed to include a portion representing the corporate income tax imposed upon and due by the Group. This amount will be paid directly by the government on behalf of the Group to the appropriate tax authorities. This portion of tax and revenue are presented net in profit or loss.

3.

Significant accounting judgments, estimates and assumptions The preparation of the Groups consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affects the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates and assumptions are continuously evaluated and are based on managements experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In particular, the Group has identified the following areas where significant judgments, estimates and assumptions are required. Changes in these assumptions may materially affect the financial position or financial results reported in future periods. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Hydrocarbon reserve and resource estimates (Note 7, 8, 9, 10, 11 and 21) Oil and gas properties are depreciated on a units of production (UOP) basis at a rate calculated by reference to total proved and probable developed and undeveloped reserves determined in accordance with Society of Petroleum Engineers rules and incorporating the estimated future cost of developing those reserves. The Group estimates its commercial reserves based on information compiled by appropriately qualified persons relating to the geological and technical data on the size, depth, shape and grade of the hydrocarbon body and suitable production techniques and recovery rates. Commercial reserves are determined using estimates of oil in place, recovery factors and future commodity prices, the latter having an impact on the total amount of recoverable reserves and the proportion of the gross reserves which are attributable to the host government under the terms of the Production-Sharing Agreements. Future development costs are estimated using assumptions as to number of wells required to produce the commercial reserves, the cost of such wells and associated production facilities, and other capital costs. The current long-term Brent oil price assumption used in the estimation of commercial reserves is US$110.08. The carrying amount of oil and gas properties at December 31 is shown in Note 9.

K-32

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

3.

Significant accounting judgments, estimates and assumptions (contd) Hydrocarbon reserve and resource estimates (Note 7, 8, 9, 10, 11 and 21) (contd) As the economic assumptions used may change and as additional geological information is obtained during the operation of a field, estimates of recoverable reserves may change. Such changes may impact the Groups reported financial position and results, which include: The carrying value of exploration and evaluation assets, oil and gas properties, property, plant and equipment, and goodwill may be affected due to changes in estimated future cash flows Depreciation and amortization charges in profit or loss may change where such charges are determined using the UOP method, or where the useful life of the related assets change Provisions for decommissioning may change where changes to the reserve estimates affect expectations about when such activities will occur and the associated cost of these activities The recognition and carrying value of deferred tax assets may change due to changes in judgments regarding the existence of such assets and in estimates of the likely recovery of such assets

Exploration and evaluation expenditures (Note 8) The application of the Groups accounting policy for exploration and evaluation expenditure requires judgment to determine whether it is likely that future economic benefits are likely, either from future exploitation or sale, or whether activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of reserves and resources is itself an estimation process that requires varying degrees of uncertainty depending on how the resources are classified. These estimates directly impact when the Group defers exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, whether an economical viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant capitalized amount is written off in profit or loss in the period when the new information becomes available. Units of production depreciation of oil and gas assets (Note 9) Oil and gas properties are depreciated using the UOP method over total proved and probable developed and undeveloped hydrocarbon reserves. This results in a depreciation, depletion and amortization charge proportional to the depletion of the anticipated remaining production from the field. The life of each item, which is assessed at least annually, has regard to both its physical life limitations and present assessments of economically recoverable reserves of the field at which the asset is located. These calculations require use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure. The calculation of the UOP rate of depreciation could be impacted to the extent that actual production in the future is different from current forecast production based on total proved and

K-33

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

3.

Significant accounting judgments, estimates and assumptions (contd) Units of production depreciation of oil and gas assets (Note 9) (contd) probable reserves, or future capital expenditure estimates changes. Changes to proved and probable reserves could arise due to changes in the factors or assumptions used in estimating reserves, including: The effect on proved and probable reserves of differences between actual commodity prices and commodity price assumptions; or Unforeseen operational issues

Any changes in estimates are accounted for prospectively. A 1% difference in the forecast production based on total proved and probable reserves from managements estimates would result in approximately 26% (2011: 4%, 2010: 1%) variance in the Groups profit/(loss) before tax. Recoverability of oil and gas assets (Note 8, 9, 11) The Group assesses each asset or CGU (excluding goodwill, which is assessed annually regardless of indicators) each reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amounts is made, which is considered to be the higher of fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions, such as long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, decommissioning costs, exploration potential, reserves and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGU. Fair value is determined as the amount that would be obtained from the sale of the asset in an arms length transaction between knowledgeable and willing parties. Fair value for oil and gas assets is generally determined as the present value of estimated future cash flows arising from the continued use of the assets, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset/CGU. Management has assessed its CGUs as being an individual field, which is the lowest level for which cash inflows are largely independent of those of other assets. Decommissioning costs (Note 21) Decommissioning costs will be incurred by the Group at the end of the operating life of some of the Groups facilities and properties. The Group assesses its decommissioning provision at each reporting date. The ultimate decommissioning costs are uncertain and cost estimates can vary in response to many factors, including changes to relevant legal requirements, the emergence of new restoration techniques or experience at other production sites. The expected timing, extent and amount of expenditure can also change, for example, in response to changes in reserves or changes in laws and regulations or their interpretation. Therefore, significant estimates and assumptions are made in determining the provision for decommissioning As a result, there could be significant adjustments to the provisions established which would affect future financial results. The provision at reporting date represent managements best estimate of the present value of the future decommissioning K-34

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

3.

Significant accounting judgments, estimates and assumptions (contd) Decommissioning costs (Note 21) (contd) costs required. If the estimated pre-tax discount rate used in the calculation had been 1% higher than managements estimate, the carrying amount of the provision would have been US$2,675,059 (2011: US$2,122,639, 2010: US$2,166,834) lower. Fair value hierarchy (Note 24) If the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, then fair value is determined using valuation techniques such as discounted cash flow models. The inputs to these models are taken from observable markets where possible, but if this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Taxes (Note 7) Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Group companies. Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The Group has US$12,857,301 (2011: US$13,547,955, 2010: US$11,552,782) of tax losses carried forward. These losses relate to subsidiaries that have a history of losses, do not expire and may not be used to offset taxable income elsewhere in the Group. The subsidiaries have no taxable temporary differences nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on the tax losses carried forward. Further details on taxes are disclosed in Note 7.

K-35

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations Acquisitions in 2010 KrisEnergy Glagah-Kambuna B.V. and KrisEnergy Nam Con Son B.V. On January 21, 2010, the Group acquired 100% equity interest in KrisEnergy GlagahKambuna B.V. (KEGKBV), which holds 25% working interest in Glagah Kambuna Technical Assistance Contract (TAC) in offshore Indonesia, and KrisEnergy Nam Con Son B.V. (KENCSBV), which holds 33.333% working interest in Block 06/94 PSC in offshore Vietnam, from Serica Asia Holdings B.V. for a consideration of US$106,065,492. The Group has acquired KEGKBV and KENCSBV to build up its portfolio for producing assets in Indonesia and increase its presence for exploration assets in Vietnam. The fair value of the identifiable assets and liabilities of KEGKBV and KENCSBV as at date of acquisition was: Fair value recognized on acquisition US$ Assets: Oil and gas properties Inventories Trade and other receivables Cash at banks and on hand 112,000,000 1,114,986 6,978,484 26,075 120,119,545 Liabilities: Trade and other payables Deferred tax liabilities

(82,290,064) (25,546,538) (107,836,602)

Total identifiable net assets acquired Intra-group debt assignments Goodwill arising on acquisition (Note 11) Consideration settled in cash Less: Cash and bank balances of subsidiaries acquired Net cash outflow on acquisition

12,282,943 77,525,740 16,256,809 106,065,492 (26,075) 106,039,417

As part of the purchase price allocation, management engaged a technical specialist, RPS Group Plc (RPS), to perform an assessment of the Kambuna fields reserves and their value as at December 31, 2009. The assumptions and estimates provided by RPS, together with adjustments made by management formed the basis of the valuation. K-36

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2010 (contd) KrisEnergy Glagah-Kambuna B.V. and KrisEnergy Nam Con Son B.V. (contd) As the result of the fair value adjustment, management has provided for deferred tax liabilities of US$25,546,538 computed at the effective tax rate of 44%. The carrying value of the trade and other receivables amounting to US$6,978,484 was an approximate of its fair value. None of the trade and other receivables has been impaired and it was expected that the full contractual amounts can be collected. Included in trade and other payables are KEGKBV and KENCSBV intra-group debts owing to Serica Asia Holdings B.V. amounting to US$77,525,740, for payment on behalf of consideration for acquisition of working interests in Glagah Kambuna TAC and Block 06/94 PSC. At date of acquisition, the Group undertakes to settle the intra-group debt on behalf of KEGKBV and KENCSBV as part of the cash consideration paid to Serica Asia Holdings B.V. The goodwill of US$16,259,809 comprises the value of acquiring a producing asset in the Indonesia region and gaining access to additional reserves for the Group. None of the goodwill recognized is expected to be deductible for tax purposes. From the date of acquisition to December 31, 2010, KEGKBV and KENCSBV have contributed US$32,433,499 of revenue to the Group revenue and US$52,472,472 of net loss to the Group loss. If the business combination had taken place at the beginning of the year, the Group revenue would have been US$81,781,396 and the loss for the year would have been US$91,967,452. KrisEnergy Kutai B.V. On June 8, 2010, the Group acquired 100% equity interest in KrisEnergy Kutai B.V. (KEKBV), which holds a 24.6% working interest in Kutai PSC, for a consideration of US$653,623. The Group acquired KEKBV to expand its portfolio of exploration assets held.

K-37

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2010 (contd) KrisEnergy Kutai B.V. (contd) The fair value of the identifiable assets and liabilities of KEKBV as at date of acquisition was: Fair value recognized on acquisition US$ Assets: Exploration and evaluation assets Trade and other receivables Cash at banks and on hand 804,724 131,060 26,075 961,859 Liabilities: Trade and other payables Total identifiable net assets at fair value Intra-group debt assignments Excess of fair value of net assets acquired over consideration paid Total consideration settled in cash Less: Cash at banks and on hand of subsidiary acquired Net cash outflow on acquisition (940,213) 21,646 653,623 (21,646) 653,623 (26,075) 627,548

The carrying value of the trade and other receivables amounting to US$131,060 was an approximate of its fair value. None of the trade and other receivables has been impaired and it was expected that the full contractual amounts can be collected. Pursuant to the acquisition of KEKBV, the Group accepts the assignment of KEKBV intragroup debt of US$653,623. This intra-group debt includes the consideration for acquisition of working interests in Kutai PSC. From the date of acquisition to December 31, 2010, KEKBV did not contribute to the Group revenue and have contributed US$4,444,662 of net loss to the Group loss. If the business combination had taken place at the beginning of the year, the Group revenue would have been US$81,781,396 and the loss for the year would have been US$71,688,897. KrisEnergy (Gulf of Thailand) Ltd On April 18, 2010, the Group acquired 100% equity interest in KrisEnergy (Gulf of Thailand) Ltd (KEGOT), which effectively holds an indirect interest of 4.6345% in two concession blocks, known as Block 9A and Block 8/32 located in the Gulf of Thailand, from Palang Sophon Offshore. The Group has acquired KEGOT to strengthen its portfolio for producing assets held. K-38

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2010 (contd) KrisEnergy (Gulf of Thailand) Ltd (contd) The fair value of the identifiable assets and liabilities of KEGOT as at date of acquisition was: Fair value recognized on acquisition US$ Assets: Oil and gas properties Exploration and evaluation assets Deferred tax assets Inventories Trade and other receivables Cash at banks and on hand 115,442,320 46,321,905 545,346 4,275,296 9,123,086 35,370,789 211,078,742 Liabilities: Trade and other payables Tax payables Deferred tax liabilities Decommissioning provisions (8,082,169) (13,596,248) (42,016,445) (14,581,258) (78,276,120) Total identifiable net assets at fair value Goodwill arising on acquisition (Note 11) Total consideration settled in cash Less: Cash at banks and on hand of subsidiaries acquired Net cash outflow on acquisition 132,802,622 13,301,576 146,104,198 (35,370,789) 110,733,409

As part of the purchase price allocation, management engaged a technical specialist, Netherland, Sewell & Associates, Inc. (NSAI), to perform an assessment of the fields reserves and their value as at December 31, 2009. The assumptions and estimates provided by NSAI, together with adjustments made by management formed the basis of the valuation. As the result of the fair value adjustment, management has provided for deferred tax liabilities of US$42,016,445 computed at the effective tax rate of 37%. The carrying value of the trade and other receivables amounting to US$9,123,086 was an approximate of its fair value. None of the trade and other receivables has been impaired and it was expected that the full contractual amounts can be collected. The goodwill of US$13,301,576 arising from the acquisition comprises the value of strengthening the Groups portfolio for producing assets held in the region. None of the goodwill recognized is expected to be deductible for tax purposes. K-39

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2010 (contd) KrisEnergy (Gulf of Thailand) Ltd (contd) From the date of acquisition to December 31, 2010, KEGOT has contributed US$49,347,898 of revenue to the Group revenue and US$24,409,667 of net profit to the Group loss. If the business combination had taken place at the beginning of the year, the Group revenue would have been US$110,100,030 and the loss for the year would have been US$67,817,099. Acquisitions in 2011 KrisEnergy Indonesia Holdings BV [SIHBV], Serica Energy Pte Ltd [SEPL], KrisEnergy Kutei BV [SKBV] and KrisEnergy East Seruway BV [SESBV] On October 11, 2011, the Group entered into a share sale and purchase agreement to acquire 100% equity interest in KrisEnergy Indonesia Holdings BV (formerly known as Serica Indonesia Holdings BV) and its wholly owned subsidiaries, Serica Energy Pte Ltd, KrisEnergy Kutei BV (formerly known as Serica Kutei BV) and KrisEnergy East Seruway BV (formerly known as Serica East Seruway BV) for a consideration of US$3,142,000. SEPL, SKBV and SESBV holds a 43% working interest in Tanjung Aru Joint Study Agreement (JSA), a 30% working interest in Kutai Production Sharing Contract (PSC), and a 100% working interest in East Seruway PSC, respectively. SIHBV and its subsidiaries have been acquired to gain access to additional reserves for the Group. The fair value of the identifiable assets and liabilities of SIHBV and its subsidiaries at the date of acquisition were: Fair value recognized on acquisition US$ Assets: Exploration and evaluation assets Inventories Trade and other receivables Cash and bank balances 13,476,079 247,940 1,818,992 775,841 16,318,852 Liabilities: Trade and other payables Total identifiable net assets at fair value Excess of fair value of net assets acquired over consideration paid Total consideration settled in cash Less: Cash and bank balances of subsidiaries acquired Net cash outflow on acquisition (1,014,844) 15,304,008 (12,162,008) 3,142,000 (775,841) 2,366,159

The excess of fair value of net assets acquired over consideration paid of US$12,162,008 arises from the probable, possible and contingent reserves arising from the exploration and evaluation assets acquired. K-40

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2011 (contd) KrisEnergy Indonesia Holdings BV [SIHBV], Serica Energy Pte Ltd [SEPL], KrisEnergy Kutei BV [SKBV] and KrisEnergy East Seruway BV [SESBV] (contd) From the date of acquisition to December 31, 2011, SIHBV and its subsidiaries did not contribute to the Group revenue and have contributed US$212,337 of net loss to the Group loss. If the business combination had taken place at the beginning of the year, the Group revenue would have been US$100,221,088 and the loss for the year would have been US$34,195,676. BEM Resources Ltd [BEM], EM Block Ltd [EMB], B Block Ltd [BBL] and KrisEnergy (Satria) Ltd [POSL] On October 16, 2011, the Group acquired 100% equity interest in BEM Resources Ltd and its wholly owned subsidiaries, EM Block Ltd and B Block Ltd, for a consideration of US$7,500,000. BEM and its subsidiaries have been acquired to strengthen its portfolio in Indonesia where the Group has experience and technical expertise. B Block Ltd in turn holds 100% equity interest in KrisEnergy (Satria) Ltd (formerly known as Pearl Oil (Satria) Limited), which holds a 42.5% working interest in Bulu PSC. EM Block Ltd in turn holds 100% equity interest in Pearl Oil (East Muriah) Limited, which holds a 50% working interest in East Muriah PSC. The latter transaction for acquisition of East Muriah PSC was completed on September 25, 2012. The fair value of the identifiable assets and liabilities of BEM and its subsidiaries as at the date of acquisition was: Fair value recognized on acquisition US$ Assets: Trade and other receivables Inventories Cash at banks and on hand 170,227 812,823 167,970 1,151,020 Liabilities: Trade and other payables Total identifiable net assets at fair value Goodwill arising on acquisition (Note 11) Total consideration settled in cash Less: Cash at banks and on hand of subsidiaries acquired Net cash outflow on acquisition K-41 (795,626) 355,394 7,144,606 7,500,000 (167,970) 7,332,030

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Acquisitions in 2011 (contd) BEM Resources Ltd [BEM], EM Block Ltd [EMB], B Block Ltd [BBL] and KrisEnergy (Satria) Ltd [POSL] (contd) From the date of acquisition to December 31, 2011, BEM and its subsidiaries did not contribute to the Group revenue and have contributed US$22,378 of net loss to the Group loss. If the business combination had taken place at the beginning of the year, the Group revenue would have been US$100,221,088 and the loss for the year would have been US$51,371,544. Goodwill arises principally because of the following factors: (a) (b) The going concern value implicit in our ability to sustain and/or grow our business by increasing revenue and resources through new discoveries The ability to capture unique synergies that can be realized from managing a portfolio of both acquired and existing fields.

None of the goodwill recognized is expected to be deductible for tax purposes. The table below summaries the fair value of the identifiable assets and liabilities of the above business combinations: Fair value recognized on acquisition
2010 US$ Assets: Oil and gas properties Exploration and evaluation assets Deferred tax assets Inventories Trade and other receivables Cash at bank and on hand 227,442,320 47,126,629 545,346 5,390,282 16,232,630 35,422,939 332,160,146 Liabilities: Trade and other payables Tax payables Deferred tax liabilities Decommissioning provisions (91,312,446) (13,596,248) (67,562,983) (14,581,258) (187,052,935) Total identifiable net assets at fair value Intra-group debt assignments Goodwill arising on acquisition Excess of fair value of net assets acquired over consideration paid Total consideration settled in cash Less: Cash at banks and on hand of subsidiaries acquired Net cash outflow on acquisition 145,107,211 78,179,363 29,558,385 (21,646) 252,823,313 (35,422,939) 217,400,374 2011 US$ 13,476,079 1,060,763 1,989,219 943,811 17,469,872 (1,810,470) (1,810,470) 15,659,402 7,144,606 (12,162,008) 10,642,000 (943,811) 9,698,189

K-42

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

4.

Business combinations (contd) Fair value recognized on acquisition (contd) If the above business combinations had taken place at the beginning of 2011, Group revenue and loss for the year would have been US$100,221,088 (2010: US$110,100,030) and US$51,405,209 (2010: US$88,104,510), respectively. There were no business combinations in 2012.

5.

Interests in joint arrangements The Group has interests in the following joint arrangements: Contract area (Date of expiry) G10/48 Concession(1) (December 7, 2012) Held by KrisEnergy Oil and Gas (Thailand) Ltd Description Exploration and production of petroleum under Concession Agreement with Department of Mineral Fuels Exploration and production of petroleum under Concession Agreement with Department of Mineral Fuels Place of operation % of working interest 2010 2011 2012 Gulf of Thailand 25.00 25.00 25.00

G11/48 Concession(1) (February 12, 2013)

KrisEnergy Resources (Thailand) Ltd

Gulf of Thailand

25.00 25.00 25.00

Block A PSC (No expiry date for exploration stage)(2)

KrisEnergy Drilling of (Cambodia) exploration wells Ltd under the Petroleum Agreement with Cambodian National Petroleum Authority KrisEnergy GlagahKambuna B.V. Exploration and production of petroleum under Technical Assistance contract with Indonesia Governmental Authority K-43

Offshore 25.00 25.00 25.00 Cambodia

Glagah Kambuna TAC (December 16, 2016)

Indonesia 25.00 25.00 25.00

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

5.

Interests in joint arrangements (contd) Contract area (Date of expiry) Kutai PSC (January 15, 2037) Held by KrisEnergy Kutai B.V. (24.6%) and KrisEnergy Kutei B.V. (30.0%) Description Exploration and production of petroleum under Production Sharing contract with Indonesia Governmental Authority Place of operation % of working interest 2010 2011 2012 Indonesia 24.60 54.60 54.60

Block B8/32 Concession KrisEnergy Exploration and (October 18, 2029) (Gulf of production of Thailand) petroleum under Concession Ltd Agreement with Department of Mineral Fuels Block B9A Concession (May 18, 2024) KrisEnergy (Gulf of Thailand) Ltd Exploration and production of petroleum under Concession Agreement with Department of Mineral Fuels Exploration and development of petroleum under Production Sharing Contract with Vietnam Government Authority Exploration and development of petroleum under Production Sharing Contract with Vietnam Government Authority

Gulf of Thailand

4.63

4.63

4.63

Gulf of Thailand

4.63

4.63

4.63

Block 105 PSC (February 2, 2040)

KrisEnergy (Song Hong 105) Ltd

Offshore Vietnam

50.00 50.00 25.00

Block 120 PSC (January 22, 2039)

KrisEnergy (Phu Khanh 120) Ltd

Offshore Vietnam

50.00 50.00 25.00

K-44

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

5.

Interests in joint arrangements (contd) Contract area (Date of expiry) Block 06/94 PSC(3) (April 1, 2037) Held by Description Place of operation % of working interest 2010 2011 2012 Offshore Vietnam 33.33

KrisEnergy Exploration and Nam Con development of Son B.V.(4) petroleum under Production Sharing Contract with Vietnam Government Authority KrisEnergy East Seruway B.V Exploration and production of petroleum under Production Sharing contract with Indonesia Governmental Authority

East Seruway PSC (November 12, 2014)

Indonesia

100.00 100.00

Bulu PSC (October 13, 2013)

KrisEnergy Exploration and (Satria) production of Ltd petroleum under Production Sharing contract with Indonesia Governmental Authority KrisEnergy (East Muriah) B.V. Exploration and production of petroleum under Production Sharing contract with Indonesia Governmental Authority

Indonesia

42.50 42.50

East Muriah PSC (November 12, 2038)

Indonesia

50.00

Tanjung Aru PSC (December 13, 2041)

KrisEnergy Exploration and (Tanjung production of Aru) B.V. petroleum under Production Sharing contract with Indonesia Governmental Authority

Indonesia

43.00

K-45

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

5.

Interests in joint arrangements (contd) Contract area (Date of expiry) Udan Emas PSC (July 19, 2041) Held by KrisEnergy (Udan Emas) B.V. Description Exploration and production of petroleum under Production Sharing contract with Indonesia Governmental Authority Place of operation % of working interest 2010 2011 2012 Indonesia 100.00

(1)

(2)

(3) (4)

Application for extension of the contract area has been submitted to the Department of Mineral Fuels of Thailand. As at December 31, 2012, the approval for the extension of the contract area has not been received. On April 11, 2013, the supplementary agreements for extension of the contract area for three years have been approved by the Minister. On November 15, 2011, Cambodian National Petroleum Authority announced its intention to exercise its right to take 5% working interest in the contract area. Upon governments approval, the Groups working interests in the contract area will decrease from 25.00% to 23.75%. As at December 31, 2012, the approval from the government has not been received. Block relinquished on December 12, 2011 With effect from April 9, 2013, the name of the Company was changed from KrisEnergy Nam Con Son B.V. to KrisEnergy (Bangora) B.V.

Farm-in arrangements Block 105 PSC and Block 120 PSC On March 23, 2010, KrisEnergy (Phu Khanh 120) Ltd entered into a Farm-out Agreement with Neon Energy (Song Hong) Pty Ltd (Neon Energy), whereby the Group will farm-in and acquire 40% participating interest in Block 120 PSC, offshore Vietnam. KrisEnergy (Phu Khanh 120) Ltd is to pay Neon Energy for past cost of US$375,000, seismic costs of Block 2D (to the extent then incurred), and all amounts that it will become liable under the Joint Operating Agreement (JOA) incurred in the period between the Effective Date (January 1, 2010) and the Farm-in Date (May 17, 2011). Total consideration was US$2,927,802, of which US$2,835,438 was paid in 2010 and included in advance payments (see Note 16). On May 3, 2010, KrisEnergy (Song Hong 105) Ltd entered into a Farm-out Agreement with Neon Energy, whereby it will farm-in and acquire 40% participating interest in Block 105 PSC, Offshore Vietnam. KrisEnergy (Song Hong 105) Ltd is to pay Neon Energy the past costs of US$562,000, seismic costs of up to a maximum of US$2,750,000, and all the amounts that it will become liable for under the Joint Operating Agreement incurred in the period between the Effective Date, January 1, 2010, and the Farm-in Date (May 17, 2011). Total consideration was US$3,431,081, of which US$3,357,717 was paid in 2010 and included in advance payments (see Note 16).

K-46

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

5.

Interests in joint arrangements (contd) Farm-in arrangements (contd) Block 105 PSC and Block 120 PSC (contd) The fair value of the identifiable assets and liabilities of Block 105 PSC and Block 120 PSC as at the Farm-in Date was: Fair value recognized on farm-in Block 105 Block 120 Total US$ US$ US$ Exploration and evaluation assets Trade and other receivables Cash and bank balances Trade and other payables Total identifiable net assets at fair value, representing total consideration settled in cash Less: Cash and bank balances of farm-in arrangement Less: Advance payments (Note 16) Net cash outflow on farm-in Acquisition of interests in joint arrangements Tanjung Aru PSC On December 19, 2011, a production sharing contract has been signed with BPMIGAS(3) for a 43% interest in Tanjung Aru PSC. An advance payment of US$1,000,000 was paid on December 27, 2011. The approval for Tanjung Aru PSC was obtained on January 13, 2012. Udan Emas PSC On July 20, 2012, a production sharing contract has been signed with BPMIGAS(3) for a 100% interest in Udan Emas PSC. A signature bonus of US$1,000,000 was paid on August 7, 2012. 3,456,554 26,004 5,345 (56,822) 2,989,984 34,988 13,920 (111,090) 6,446,538 60,992 19,265 (167,912)

3,431,081 (5,345) (2,835,438) 590,298

2,927,802

6,358,883

(13,920) (19,265) (3,357,717) (6,193,155) (443,835) 146,463

(3) On November 13, 2012, the Constitutional Court of Indonesia ordered the dissolution of Satuan Kerja Khusus Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi (BPMIGAS). The Government of Indonesia created an interim task force, referred to as Satuan Kerja MIGAS (SKMIGAS), within the Ministry of Energy and Mineral Resources to assume the work of BPMIGAS until a new permanent regulatory body is formed. All existing agreements remain valid until their expiry dates.

K-47

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

6.

(Loss)/profit before tax The following items have been included in arriving at (loss)/profit before tax: 2010 US$ Revenue: Sale of crude oil Sale of gas 55,164,247 26,617,149 81,781,396 Cost of sales: Depreciation, depletion and amortization of oil and gas properties (Note 9) Operating costs Thai petroleum special remuneratory benefits and royalties paid 2011 US$ 70,254,234 29,966,854 100,221,088 2012 US$ 67,404,375 22,188,207 89,592,582

(50,263,555) (11,224,095) (8,397,995) (69,885,645)

(68,293,048) (18,032,493) (10,965,716) (97,291,257)

(22,638,042) (18,741,758) (11,349,486) (52,729,286)

Other income is mainly made up of the following items: Excess of fair value of net assets acquired over consideration paid (Note 4) Joint operator overhead charges Management service fee income from holding company Net foreign exchange differences Income from shared facilities in joint operations General and administrative expenses is mainly made up of the following items: Consultants fees Data purchase and subscriptions Database rental Depreciation of other property, plant and equipment (Note 10) Doubtful debt expense Employee benefits expense: - Salaries and bonuses - Central Provident Fund contributions - Other short-term benefits Expenses incurred for acquisition of joint operations Operating lease expense Professional fees Travel and entertainment

21,646 8,943,445 1,104,641

12,162,008 26,376 108,053 751,291

497,667 97,502 674,367

(1,031,804) (252,838) (252,558) (297,434) (6,878,317) (82,467) (185,496) (414,671) (4,354,872) (940,758) K-48

(854,695) (1,275,083) (278,676) (483,823) (9,119,172) (158,654) (365,410) (518,463) (4,838,489) (1,264,160)

(408,348) (501,953) (203,705) (583,400) (2,333,106) (10,730,440) (161,771) (529,680) (2,000,000) (538,688) (3,199,930) (1,366,734)

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

6.

(Loss)/profit before tax (contd) 2010 US$ Other operating expenses is mainly made up of the following items: Dry hole expenses (Note 8) Gain on settlement of commodity options Goodwill impairment (Note 11) Impairment of oil and gas properties (Note 9) Joint study expenses Net fair value (loss)/gain on embedded derivatives Premium paid on commodity options Finance income: Interest income from banks Finance costs: Accretion of interest on bonds Banking facility fees Interest on bank borrowings Interest expenses paid to vendors upon acquisition of subsidiaries Interest on callable bonds Unwinding of discount on decommissioning provisions (Note 21) 2011 US$ 2012 US$

(32,217,835) (16,256,809) (22,846,789)

(430,691) (106,000) (631,800)

(1,283,288) 121,980 (1,771,529) 1,444,000 (540,000)

78,936

279,101

411,332

(3,082,853) (2,963,107) (715,469)

(336,463) (3,148,446) (2,128,980) (3,953,193)

(824,592) (1,528,851) (292,658) (8,925,000)

(6,761,429)

(536,114) (10,103,196)

(399,561) (11,970,662)

Thai petroleum special remuneratory benefits and royalties paid Under the terms of the Thai I regime, the concessionaire is required to pay production royalties to the Royal Thai Government computed based on 12.5% of income from sale or disposal of petroleum which may be treated as tax credit. Under the Thai III tax regime, the concessionaire is required to pay production royalties to the Royal Thai Government computed based on sliding scale rates from 5% to 15% of the value of petroleum sold or disposed during the month, depending on the number of barrels sold or disposed during the month. Special remuneration benefit (SRB) is tax payable only in years concessionaire has petroleum profit. In calculating such profit (or loss), capital expenditure, operating costs and a special reduction of 35% operating expenses for the year and petroleum loss carried forward indefinitely from prior years may be deducted. SRB is calculated by exploration block on income per meter of well, subject to a ceiling of 75% of petroleum profit for the year. K-49

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

6.

(Loss)/profit before tax (contd) Loss per share The basic and diluted loss per share is calculated by dividing loss for the year attributable to owners of the Company by the weighted average number of ordinary shares during the financial year. The following tables reflect the profit and share data used in the computation of basic and diluted loss per share for the years ended December 31: 2010 US$ Loss for the year attributable to owners of the Company used in the computation of basic and diluted loss per share 2011 US$ 2012 US$

(71,684,469) 2010 No. of shares

(34,162,011) 2011 No. of shares

(17,672,879) 2012 No. of shares

Weighted average number of ordinary shares for computation of basic and diluted loss per share 7. Taxation

100

100

49,041,147

The major components of tax (benefit)/expense for the years ended December 31, 2010, 2011 and 2012 are: 2010 US$ Current tax: - Current tax charge - Under/(over) provision in respect of previous years 12,321,153 1,557,318 13,878,471 Deferred tax: - Reversal of temporary differences Tax (benefit)/expense recognized in profit or loss (14,371,026) 2011 US$ 29,012,724 6,238 29,018,962 (10,539,321) 2012 US$ 19,403,263 (138,804) 19,264,459 (746,060)

(492,555)

18,479,641

18,518,399

K-50

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

7.

Taxation (contd) Relationship between tax (benefit)/expense and accounting profit A reconciliation between tax (benefit)/expense and the accounting profit multiplied by the applicable tax rate for the years ended December 31, 2010, 2011 and 2012 are as follows: 2010 US$ (Loss)/profit before tax Tax at domestic rates applicable in the countries where the Group operates Adjustments: Non-deductible expenses Income not subject to tax Effect of partial tax exemption and tax relief Deferred tax assets not recognized Under/(over) provision in respect of previous years Other Tax (benefit)/expense recognized in profit or loss (72,177,024) 2011 US$ (15,682,370) 2012 US$ 845,520

(15,206,998) 1,593,766 (19,304) 11,552,782 1,557,318 29,881

1,999,781 567,087 (19,752) 15,900,315 6,238 25,972

16,046,954 1,136,755 (348,768) (21,204) 1,807,386 (138,804) 36,080

(492,555)

18,479,641

18,518,399

The above reconciliation is prepared by aggregating separate reconciliation for each national jurisdiction. The nature of expenses that is not deductible for tax purposes are mainly made up of the following items: 2010 US$ Expenses attributable to joint operations overhead charges Doubtful debts Interest expenses Settlement of claim 2011 US$ 2012 US$

873,200 271,463

110,627 319,979

85,184 1,026,741

K-51

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

7.

Taxation (contd) Deferred tax Deferred tax at December 31 relates to the following: Consolidated statement of financial position
2010 US$ 2011 US$ 2012 US$

Consolidated statement of comprehensive income

2010 US$ 2011 US$ 2012 US$

Deferred tax liabilities Fair value adjustment on acquisition Deferred tax assets Provisions Deferred tax benefit Net deferred tax liabilities 53,029,906 (491,887) (2,975,031) (2,226,477) (616,000) (2,483,144) 748,554

53,521,793

45,465,616

43,971,002

(13,755,026)

(8,056,177) (1,494,614)

(14,371,026) (10,539,321)

(746,060)

42,490,585

41,744,525

Deferred tax assets not recognized 2010 US$ Differences in depreciation, depletion and amortization for tax purposes Unutilized tax losses 11,552,782 11,552,782 2011 US$ 13,905,142 13,547,955 27,453,097 2012 US$ 16,403,182 12,857,301 29,260,483

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Deferred tax assets have not been recognized in respect of these temporary differences and tax losses as they may not be used to offset taxable profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other evidence of recoverability in the near future. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operates.

K-52

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

8.

Exploration and evaluation assets 2010 US$ Cost At January 1 Acquisition of subsidiaries (Note 4) Farm-in arrangement (Note 5) Additions Dry hole expenses At December 31 24,370,908 47,126,629 52,308,893 (32,217,835) 91,588,595 2011 US$ 91,588,595 13,476,079 6,446,538 9,016,926 (430,691) 120,097,447 2012 US$ 120,097,447 16,839,659 (1,283,288) 135,653,818

9.

Oil and gas properties US$ Cost At January 1, 2010 Acquisition of subsidiaries (Note 4) Additions At December 31, 2010 and January 1, 2011 Additions Exchange difference At December 31, 2011 and January 1, 2012 Additions As at December 31, 2012 Depletion, amortization and impairment At January 1, 2010 Charge for the year Impairment loss (Note 11) At December 31, 2010 and January 1, 2011 Charge for the year Exchange difference At December 31, 2011 and January 1, 2012 Charge for the year As at December 31, 2012 Net book value As at December 31, 2010 As at December 31, 2011 As at December 31, 2012 K-53 227,442,320 21,907,708 249,350,028 8,322,380 (31,637,654) 226,034,754 15,498,075 241,532,829

50,263,555 22,846,789 73,110,344 68,293,048 (27,200,228) 114,203,164 22,638,042 136,841,206

176,239,684 111,831,590 104,691,623

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

9.

Oil and gas properties (contd) For the purpose of consolidated statement of cash flows, purchase of oil and gas properties comprise the following at December 31: 2010 US$ Additions Add: Write back of unused provisions (Note 21) Less: Decommissioning provisions arising during the year (Note 21) Purchase of oil and gas properties 21,907,708 268,002 (2,875,363) 19,300,347 2011 US$ 8,322,380 776,637 (1,100,000) 7,999,017 2012 US$ 15,498,075 (6,076,986) 9,421,089

As at December 31, 2010, the Groups oil and gas properties with carrying amount of US$176,239,684 was pledged to secure the Groups bank loans. These bank loans have been fully settled in 2011 and the pledges over the Groups oil and gas properties have been released (Note 20).

K-54

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

10.

Other property, plant and equipment Furniture and Fittings US$ Office equipment US$

Renovation US$ Cost At January 1, 2010 Additions Disposals Exchange differences At December 31, 2010 and January 1, 2011 Additions Exchange differences At December 31, 2011 and January 1, 2012 Additions Exchange differences At December 31, 2012 Accumulated depreciation At January 1, 2010 Charge for the year Disposals Exchange differences At December 31, 2010 and January 1, 2011 Charge for the year Exchange differences At December 31, 2011 and January 1, 2012 Charge for the year Exchange differences At December 31, 2012 Net carrying amount At December 31, 2010 At December 31, 2011 At December 31, 2012

Computers US$

Total US$

15,547 572,871 847

27,599 8,181 (10,680) 1,504

3,347 7,488 (665) 182

125,400 191,962 6,925

171,893 780,502 (11,345) 9,458

589,265 119,196 (18,731)

26,604 23,644 (113)

10,352 16,129 (424)

324,287 269,876 (12,084)

950,508 428,845 (31,352)

689,730 106,188 43,137 839,055

50,135 2,014 52,149

26,057 793 812 27,662

582,079 146,056 41,659 769,794

1,348,001 253,037 87,622 1,688,660

15,547 169,384 5,345

2,577 11,255 (3,879) 335

473 4,603 (326) 141

12,759 112,192 3,758

31,356 297,434 (4,205) 9,579

190,276 217,931 (25,219)

10,288 12,742 (672)

4,891 6,392 7

128,709 246,758 (10,662)

334,164 483,823 (36,546)

382,988 337,105 34,045 754,138

22,358 15,476 1,652 39,486

11,290 6,104 781 18,175

364,805 224,715 32,572 622,092

781,441 583,400 69,050 1,433,891

398,989 306,742 84,917

16,316 27,777 12,663

5,461 14,767 9,487

195,578 217,274 147,702

616,344 566,560 254,769

K-55

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

11.

Intangible assets Goodwill US$ Cost At January 1, 2010 Acquisitions of subsidiaries (Note 4) At December 31, 2010 and January 1, 2011 Acquisitions of subsidiaries (Note 4) Additions At December 31, 2011, January 1, 2012 and December 31, 2012 Accumulated amortization and impairment loss At January 1, 2010 Impairment loss At December 31, 2010, January 1, 2011, December 31, 2011, January 1, 2012 and December 31, 2012 Net carrying amount At December 31, 2010 At December 31, 2011 and 2012 Goodwill Goodwill arises principally because of the following factors: (a) (b) (c) The going concern value implicit in our ability to sustain and/or grow our business by increasing reserves and resources through new discoveries. The ability to capture unique synergies that can be realized from managing a portfolio of both acquired and existing fields. The requirement to recognize deferred tax assets and liabilities for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value. 21,774,832 29,558,385 51,333,217 7,144,606 58,477,823 Others US$ 1,019,766 1,019,766 649,955 1,669,721 Total US$ 22,794,598 29,558,385 52,352,983 7,144,606 649,955 60,147,544

16,256,809

16,256,809

16,256,809

16,256,809

35,076,408 42,221,014

1,019,766 1,669,721

36,096,174 43,890,735

Other intangible assets 2010 US$ 0.75% overriding royalty interest in Concession Block G10/48 and G11/48 Leasehold bonus for Concession Block G10/48 Others 750,000 269,721 45 1,019,766 K-56 2011 US$ 1,300,000 269,721 100,000 1,669,721 2012 US$ 1,300,000 269,721 100,000 1,669,721

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

11.

Intangible assets (contd) The Group was assigned the overriding royalty interest from the acquisition of KrisEnergy Oil and Gas (Thailand) Ltd (KEOG) and KrisEnergy Resources (Thailand) Ltd (KER). The overriding royalty interest entitles the Group rights to the revenues derived from the production and disposal of all of the oil, gas, and other minerals, in, on, under, and that may be produced and saved from Concession Block G10/48 and G11/48. The useful lives of these other intangible assets are estimated to be indefinite as the exploration period of the blocks are extended every three years and cannot be reliably estimated. Impairment testing For impairment testing purposes, goodwill acquired through business combinations has been allocated as follows: 2010 US$ G10/48 and G11/48 Concession Block 9A and Block 8/32 Concession Bulu PSC 21,774,832 13,301,576 35,076,408 2011 US$ 21,774,832 13,301,576 7,144,606 42,221,014 2012 US$ 21,774,832 13,301,576 7,144,606 42,221,014

The recoverable amount of each field is determined on a value-in-use calculation. The calculation of value in use of the oil exploration and production CGU is most sensitive to the following assumptions: Production volumes Discount rates Crude oil prices

Estimated production volumes are based on detailed date for the fields and take into account development plans for the fields agreed by management as part of the long-term planning process. It is estimated that, if all production were to be reduced by 2% for the whole term of the contract area, this would not be sufficient to reduce the excess of recoverable amount over the carrying amounts of the individual CGUs to zero. Consequently, management believes no reasonably possible change in the production assumptions would cause the carrying amount of goodwill and/or other non-current assets to exceed their recoverable amount. The Group generally estimates value in use for the oil exploration and production CGU using a discount cash flow model. The future cash flows are discounted to their present value using a pre-tax discount rate of 8% to 10% that reflects current market assessments of the time value of money and the risks specific to the asset. The discount rate is derived from the Groups weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific to the asset/CGU. Oil prices are based on Brent future prices at the reporting date and adjusted for quality, transportation fees and regional price differences. K-57

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

11.

Intangible assets (contd) During the year ended December 31, 2010, the Group engaged RPS to carry out an assessment of the Glagah Kambuna Block and its reserves value. As a result, an impairment loss of US$23,627,101 was recognized, of which US$780,312 and US$22,846,789 was allocated to goodwill and oil and gas properties, respectively. In 2010, an impairment loss of US$15,476,497 relating to goodwill arising from the acquisition of KrisEnergy Nam Con Son B.V. was also recognized. This was triggered by unsuccessful exploration results.

12.

Embedded derivatives In 2011, the Group issued callable bonds (Note 20), which have embedded derivatives that require bifurcation and separately recognized and accounted for at fair value with any changes to fair value credited or charge to profit or loss. The carrying value of the embedded derivatives as at December 31, 2011 and 2012 amounted to US$1,420,000 and US$2,864,000 respectively. The effect on profit or loss is reflected in other operating expenses (Note 6).

13.

Investment securities 2010 US$ Available for sale investments Unquoted equity shares, at cost 2011 US$ 2012 US$

182,057

14.

Inventories 2010 US$ Statement of financial position: Drilling supplies and materials Crude oil 2011 US$ 2012 US$

5,570,791 723,021 6,293,812

5,954,438 964,031 6,918,469

5,309,628 745,100 6,054,728

Profit or loss: Inventories recognized as an expense in cost of sales

170,973

241,922

1,518,421

K-58

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

15.

Trade and other receivables 2010 US$ Trade and other receivables (current): Trade receivables Refundable deposits Other receivables Joint operation receivables 2011 US$ 2012 US$

17,357,761 1,387,185 4,154,463 3,662,879 26,562,288

13,336,750 482,751 8,105,586 7,257,441 29,182,528 769,865 29,952,393 42,659,700 72,612,093

11,180,087 282,210 14,352,815 8,928,334 34,743,446 34,743,446 129,900,954 164,644,400

Other receivables (non-current): Amount due from holding company Total trade and other receivables (current and non-current) Add: Cash and bank balances (Note 17) Total loans and receivables

26,562,288 35,345,976 61,908,264

Trade receivables are non-interest bearing and are generally on 30 days terms. They are recognized at their original invoice amounts which represent their fair values on initial recognition. Joint operation receivables relate to amounts due from the joint operators for cash calls in excess of the Groups obligation. These amounts are unsecured, non-interest bearing, and will be offset against future cash calls. Amount due from holding company was unsecured and non-interest bearing. The amount was fully settled in 2012. Other receivables (current) comprise: 2010 US$ Payment on behalf of joint operations partners Proportionate share of joint operations other receivables Value added tax receivables Others 4,125,410 29,053 4,154,463 2011 US$ 7,978,075 36,017 91,494 8,105,586 2012 US$ 7,646,320 5,905,932 701,530 99,033 14,352,815

Value added tax receivables include value added tax claim made to the Indonesian Government in respect of Glagah Kambuna TAC of US$3,013,204. For the year ended December 31, 2012, an allowance for doubtful debt of US$2,333,106 was made against the value added tax receivables as the value added tax claim may not be recoverable due to the anticipated relinquishment of the contract area in 2013. K-59

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

15.

Trade and other receivables (contd) Trade and other receivables denominated in foreign currencies at December 31 are as follows: 2010 US$ Thai Baht 5,398 2011 US$ 73,312 2012 US$ 20,679

At the reporting date, except for the allowance made on the value added tax receivables, the Group does not have any receivables that are past due or impaired, or would otherwise be past due but not impaired. 16. Other current assets 2010 US$ Advance payment pursuant to farm-in arrangements Advance payment for acquisition of interests in joint operations Advance payment for signature bonus Cash calls paid in respect of 10% participating interest in Block 105 and Block 120 that have yet to be legally transferred to the Group Cash calls paid in advance Cash calls paid in advance on behalf of carried party Expenses directly attributable to proposed share issue Past costs of Tanjung Aru JSA 2011 US$ 2012 US$

6,193,155 1,275,000

1,275,000 1,000,000

1,066,086 3,187,302 11,721,543

142,577 73,737 2,491,314

500,000 500,000

Advance payment pursuant to farm-in arrangements On March 23, 2010, KrisEnergy (Phu Khanh 120) Ltd entered into Farm-out Agreement with Neon Energy (Song Hong) Pty Ltd (Neon Energy), whereby KrisEnergy (Phu Khanh 120) Ltd acquired 40% participating interest in Block 120 PSC, offshore Vietnam. Pursuant to the Farmout Agreement, KrisEnergy (Phu Khanh 120) Ltd is to pay Neon Energy the past costs of US$375,000 seismic costs of Block 2D (to the extent then incurred), and all amounts that it will become liable for under the Joint Operating Agreement (JOA) incurred in the period between the Effective Date, January 1, 2010, and the Farm-in Date. On May 3, 2010, KrisEnergy (Song Hong 105) Ltd entered into Farm-out Agreement with Neon Energy, whereby it acquired 40% participating interest in Block 105 110/04, offshore Vietnam. Pursuant to the Farm-out Agreement, KrisEnergy (Song Hong 105) Ltd is to pay Neon Energy the past costs of US$562,000, seismic costs of up to a maximum of US$2,750,000, and all the amounts that it will become liable for under the Joint Operating Agreement incurred in the period between the Effective Date, January 1, 2010, and the Farmin Date. K-60

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

16.

Other current assets (contd) Advance payment pursuant to farm-in arrangements (contd) As at December 31, 2010, the approval from the Vietnamese Government in connection with the assignment of the farm-in interest has not been received. As a result, the Group recorded payments to Neon Energy for Block 120 and Block 105 110/04 amounting to US$2,835,438 and US$3,357,717, respectively, as advance payments. The approval for farm-in arrangements were obtained on May 17, 2011. Advance payment for acquisition of interests in joint operations On May 22, 2010, KrisEnergy (Phu Khanh 120) Ltd acquired an additional 10% participating interest in Block 120 PSC from Enovation Resources Ltd (Enovation) for a total consideration of US$575,000. On the same day, KrisEnergy (Song Hong 105) Ltd acquired an additional 10% participating interest in Block 105 PSC from Enovation for a total consideration of US$700,000. As at December 31, 2010 and 2011, the approval from the Vietnamese Government in connection with the acquisition of interests in joint operations has not been received. As a result, the Group has continued to record the payments made to Enovation as advance payments. The approval for the acquisition of interests in Block 105 PSC and Block 120 PSC was obtained on June 5, 2012. Advance payment for signature bonus On December 19, 2011, KrisEnergy (Tanjung Aru) B.V. acquired a 43% participating interest in Tanjung Aru PSC from BPMIGAS. As at December 31, 2011, the approval from the Indonesian Government for Tanjung Aru PSC has not been received. As a result, the Group has recorded the payment made to Serica Energy Holdings B.V. amounting to US$1,000,000 as an advance payment. The approval for Tanjung Aru PSC was obtained on January 13, 2012. Cash calls paid in advance On November 1, 2009, KrisEnergy Ltd. (the Farmee) entered into a Farm-out Agreement with Chevron Overseas Petroleum (Cambodia) Limited (Chervon), whereby KrisEnergy Ltd. acquired a 25% participating interest in Block A, Kingdom of Cambodia in exchange for the costs to drill and fulfill all the ongoing obligations during the Block A extension period. An advance payment of US$8,227,273 was made by KrisEnergy Ltd. for its Farm-in Interests share of costs from November 1, 2009 (the Effective Date). In 2010, the operator refunded US$1,590,000 of this cash calls paid in advance and made cash calls for US$5,571,187, leaving a balance of US$1,066,086 as at December 31, 2010, which was extinguished in 2011 when the operator made further cash calls.

K-61

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

16.

Other current assets (contd) Cash calls paid in advance on behalf of carried party In addition, KrisEnergy Ltd. also paid US$9,872,727 for the Chervons 30% participating interest of all the costs and expenses associated with the Farming Obligations (the Carry Amount) pursuant to the Farmout Agreement dated November 1, 2009. Any additional farm-in obligation costs associated with Chevrons 30% participating interest shall be borne solely by Chevron. In 2010, the operator made cash calls for US$6,685,423, leaving a balance of US$3,187,302 as at December 31, 2010, which was extinguished in 2011 when the operator made further cash calls.

17.

Cash and bank balances 2010 US$ Cash at banks and on hand Short-term structured deposits Cash and bank balances 27,345,976 8,000,000 35,345,976 2011 US$ 34,659,700 8,000,000 42,659,700 2012 US$ 121,900,954 8,000,000 129,900,954

Cash at banks earn interest at floating rates based on daily bank deposit rates. Included in cash at banks and on hand is a short-term structured deposit of US$8,000,000 placed with and pledged to a bank for issuance of guarantees on behalf of KrisEnergy (Song Hong 105) Ltd and KrisEnergy (Phu Khanh 120) Ltd. These deposits had a minimum yield of 0.5% per annum. As at December 31, 2010, an amount of US$2,004,932 in debt servicing reserve account has been pledged to secure banking facilities (Note 20). For the purpose of consolidated statement of cash flows, cash and cash equivalents comprise the following at December 31: 2010 US$ Cash and bank balances Less: Restricted cash Cash and cash equivalents 35,345,976 (10,004,932) 25,341,044 2011 US$ 42,659,700 (8,000,000) 34,659,700 2012 US$ 129,900,954 (8,000,000) 121,900,954

Cash at banks and on hand denominated in foreign currencies at December 31 are as follows: 2010 US$ Thai Baht Euro Dollar Indonesia Rupiah Singapore Dollar United States Dollar K-62 5,699 36,690 1,645,210 2011 US$ 76,748 5,724 86,490 491 68,339 2012 US$ 37,185 193,322 49,901 460 140,938

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

18.

Share capital and reserve Share capital 2010 and 2011 No of Shares US$ Issued and fully paid ordinary shares At January 1 Issued on July 4, 2012 by way of capitalization of amount due to holding company Issued on July 9, 2012 for cash At December 31 2012 No of shares US$

100

100

100

79,999,900 20,000,000 100,000,000

799,999 200,000 1,000,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share. The ordinary shares have a par value of US$0.01 each. Share premium 2010 US$ At January 1 Increase on July 4, 2012 by way of capitalization of amount due to holding company into new shares Increase on July 9, 2012 for cash arising from an issuance of share capital At December 31 Foreign currency translation reserve The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign subsidiaries whose functional currencies are different from that of the Groups presentation currency. 2011 US$ 2012 US$

287,950,000 114,800,000 402,750,000

K-63

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

19.

Trade and other payables 2010 US$ Trade and other payables (current): Trade payables Joint operation payables Staff payroll and bonus payables Other payables 2011 US$ 2012 US$

2,136,549 6,141,360 2,081,687 2,675,138 13,034,734

2,409,652 1,505,856 2,737,985 7,017,518 13,671,011

2,726,314 878,884 2,394,288 5,961,529 11,961,015

Other payables (non-current): Amount due to holding company Total trade and other payables (current and non-current) Accrued operating expenses Loans and borrowings (Note 20) Less: Staff payroll and bonus payables Total financial liabilities at amortized costs

283,471,993 296,506,727 9,999,770 68,000,000 (2,081,687) 372,424,810

290,276,833 303,947,844 7,061,438 80,317,463 (2,737,985) 388,588,760

11,961,015 9,902,998 81,142,055 (2,394,288) 100,611,780

Trade payables are non-interest bearing and are normally settled on 60-day terms. Joint operation payables are cash calls due to the operator of joint operations. These amounts are unsecured, non-interest bearing, and are to be settled in cash. Other payables (current) comprise: 2010 US$ Cash calls received in relation to Tanjung Aru PSC Settlement of claim Proportionate share of joint operations other payables Accrued interest payable for callable bonds Others 2011 US$ 2012 US$

1,600,000 1,009,229 65,909 2,675,138

1,235,344 1,693,742 3,953,193 135,239 7,017,518

1,723,607 3,953,193 284,729 5,961,529

Settlement of claim relates to a US$1,600,000 payable to an external partner as an agreed settlement for their claim relating to Block A Cambodia farm-in arrangement in 2009. The Tanjung Aru PSC was signed on December 19, 2011. Cash calls received on behalf were transferred to Tanjung Aru PSCs bank account in 2012. Amount due to holding company was unsecured and non-interest bearing. The amounts were fully settled in 2012, of which US$288,749,999 was converted into share capital of the Company (Note 18). K-64

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

19.

Trade and other payables (contd) Included in accrued operating expenses is the Groups proportionate share of joint operations accrued expenses for 2010, 2011 and 2012 amounting to US$5,764,193, US$2,988,163 and US$4,047,565, respectively. Trade and other payables denominated in foreign currencies at December 31 are as follows: 2010 US$ Thai Baht Indonesia Rupiah 48,257 2011 US$ 244,314 41,876 2012 US$ 254,971 167,186

20.

Loans and borrowings Maturity Current: USD loan at LIBOR + 4.5% p.a. USD loan at LIBOR + 6.5% p.a. 2010 US$ 45,000,000 23,000,000 68,000,000 Non-current: Callable bonds 2016 68,000,000 Bank loans The London Interbank Offered Rate (LIBOR) rate ranges from 0.25% to 0.3425%. The loans were repayable within 18 months from the drawdown date. The facility has a 6-month extension option, subject to lenders approval and extension for payment. The facility was secured by: (1) Fixed and floating charges over the acquired producing oil and gas assets in Indonesia and Thailand (the Assets) of KrisEnergy Asia Holdings B.V. (KEAH) and KrisEnergy (Gulf of Thailand) Ltd (KEGOT) (Note 9); Pledge over shares of KEAH and KEGOT and all existing and future rights directly or indirectly related to the Assets; Assignment and subordination of all inter-company/shareholders loans; Security over all other material tangible or intangible assets relating to Thailand and Indonesian assets owned by the Group (Note 9); and Charge over the debt service reserve accounts in KrisEnergy (KEITH) and KrisEnergy Asia Holdings B.V. (KEAH) (Note 17). 2011 US$ 80,317,463 80,317,463 2012 US$ 81,142,055 81,142,055

2011 2011

(2) (3) (4) (5)

The bank loans were fully repaid in 2011.

K-65

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

20.

Loans and borrowings (contd) Callable bonds KrisEnergy Holding Company Ltd (Issuer), a wholly owned subsidiary, issued a US$85,000,000 10.5% Senior Guaranteed Secured Bonds (Bonds) due July 21, 2016 at issue price of 92.3%. Interest on the Bonds will accrue at the rate of 10.5% per annum and will be payable semi-annually in arrears on January 21, and July 21 in each year, commencing on January 21, 2012. The Bonds include an option for the Issuer to redeem all or a part of the Bonds at the redemption prices, giving rise to an embedded derivative that require bifurcation and is separately recognized and accounted for at fair value (Note 12). The carrying amount of the liability component of the Bonds at reporting date is arrived at as follows: 2010 US$ Face value of bonds Discount on bonds Proceeds from issuance of Bonds Embedded derivatives (Note 12) at initial recognition Liability component at initial recognition Add: Accretion of interest on bonds At December 31 2011 US$ 85,000,000 (6,545,000) 78,455,000 1,526,000 79,981,000 336,463 80,317,463 2012 US$ 85,000,000 (6,545,000) 78,455,000 1,526,000 79,981,000 1,161,055 81,142,055

All obligations with respect to the Bonds are secured as follows: (a) (b) (c) (d) A first priority pledge over all of the share capital in certain subsidiaries and KrisEnergy (Gulf of Thailand) Ltds equity interest in B8/32 Partners Ltd and Orange Energy Ltd; A first priority floating charge granted by certain subsidiaries over each of their present and future assets; A first priority assignment by certain subsidiaries of each of their present and future money claims under the internal loans; and A pledge by KrisEnergy Asia Holdings B.V. of its present and future receivables under the internal loans and certain insurances in relation to hydrocarbon assets.

Revolving credit On July 21, 2011 the Issuer also entered into a credit agreement with banks for a US$30,000,000 revolving credit facility (Revolving Credit). The Revolving Credit has an interest rate of LIBOR plus an applicable margin ranging from 4.0% to 5.0% (in increments of 0.25%), depending on the percentage of commitment utilized at the relevant time. The Revolving Credit is used to finance the Groups working capital requirements, capital expenditure, acquisitions and payment of fees and expenses related to obtaining debt funding. K-66

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

20.

Loans and borrowings (contd) Revolving credit (contd) As at December 31, 2011 and 2012, there is no amount drawn under the Revolving Credit. The Parent Guarantor of the Bonds and Revolving Credit is the Company and the Subsidiary Guarantors are KrisEnergy Asia Coperatief U.A., KrisEnergy Ltd, KrisEnergy GlagahKambuna B.V., Kutai B.V., KrisEnergy Nam Con Son B.V., KrisEnergy Oil & Gas (Thailand) Ltd, KrisEnergy Resources (Thailand) Ltd, KrisEnergy (Gulf of Thailand) Ltd., KrisEnergy (Cambodia) Ltd, KrisEnergy (Phu Khanh 120) Ltd. and KrisEnergy (Song Hong 105) Ltd. Please refer to Note 23 for subsidiaries that provide the above collaterals.

21.

Provisions US$ Decommissioning provisions At January 1, 2010 Acquisition of a subsidiary (Note 4) Arising during the year Write back of unused provisions At December 31, 2010 and January 1, 2011 Arising during the year Unwinding of discount on decommissioning provisions Write back of unused provisions At December 31, 2011 and January 1, 2012 Arising during the year Unwinding of discount on decommissioning provisions At December 31, 2012 2010 US$ Current Non-current At December 31 17,188,619 17,188,619 2011 US$ 18,048,096 18,048,096 14,581,258 2,875,363 (268,002) 17,188,619 1,100,000 536,114 (776,637) 18,048,096 6,076,986 399,561 24,524,643 2012 US$ 2,500,000 22,024,643 24,524,643

The Group makes full provision for the future cost of decommissioning oil production facilities and pipelines on a discounted basis on the installation of those facilities. The decommissioning provision represents the present value of decommissioning costs relating to oil and gas properties, which are expected to be incurred up to 2039. These provisions have been created based on the Groups internal estimates. Assumptions based on the current economic environment have been made, which management believe are a reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions. However, actual decommissioning costs will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time. K-67

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

21.

Provisions (contd) Furthermore, the timing of decommissioning is likely to depend on when the fields cease to produce at economically viable rates. This in turn will depend upon future oil and gas prices, which are inherently uncertain.

22.

Commitments (a) Operating lease commitments The Group has entered into non-cancellable commercial property leases for the office operations. These operating leases have remaining lease terms of one year or more. Future minimum lease payments payable under non-cancellable operating leases as at December 31 are as follows: 2010 US$ Not later than one year Later than one year but not later than five years 413,352 447,798 861,150 (b) Capital commitments Certain joint operations are required to incur minimum exploration activities of which the Groups share of the estimated minimum budget for 2010, 2011 and 2012 is approximately US$615,000, US$66,105,500 and US$93,295,534 respectively. At the reporting date, the Groups outstanding minimum exploration commitments will fall due as follows: 2010 US$ Within one year Within two to five years Total 615,000 615,000 2011 US$ 30,854,500 35,251,000 66,105,500 2012 US$ 13,627,034 79,668,500 93,295,534 2011 US$ 466,155 120,440 586,595 2012 US$ 679,980 1,331,608 2,011,588

K-68

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

23.

Related party disclosures The financial statements include the financial statements of KrisEnergy Ltd., the subsidiaries and joint arrangements listed in the following table:

Name of entities

Principal activities Investment holding

Principal place of Country of business incorporation Singapore

% of equity interest 2010 2011 2012 100 100

KrisEnergy Holding Company Ltd (formerly known as KrisEnergy (NE Natuna) Ltd)(1)(2)(3)

British Virgin 100 Islands

KrisEnergy Pte Ltd(1)(2)(3) Provision of management support service KrisEnergy (Management Services) Ltd(1)(2)(3) KrisEnergy Ltd(1)(2)(3)(4) Provision of offshore management support service Investment holding

Singapore

Singapore

100

100

100

Singapore

British Virgin 100 Islands British Virgin 100 Islands British Virgin 100 Islands Cayman Islands Thailand 100 100

100

100

Singapore Thailand

100 100

100 100

KrisEnergy International Investment holding (Thailand) Holdings Ltd(1)(2)(3) KrisEnergy (Gulf of Thailand) Ltd. Investment holding

Thailand Thailand

100 100

100 100

KrisEnergy Oil and Gas Exploration and (Thailand) Ltd production of oil and gas KrisEnergy Resources (Thailand) Ltd KrisEnergy Management Ltd Exploration and production of oil and gas Dormant

Thailand

Thailand

100

100

100

Thailand Cambodia Cambodia

British Virgin 100 Islands British Virgin 100 Islands Cambodia 100

100 100 100

100 100 100

KrisEnergy (Cambodia) Investment holding Holding Ltd(1)(2)(3) KrisEnergy (Cambodia) Exploration and Ltd production of oil and gas KrisEnergy (Phu Khanh Exploration and production of oil and 120) Ltd(1)(2)(3) gas KrisEnergy (Song Hong Exploration and 105) Ltd(1)(2)(3) production of oil and gas KrisEnergy (Production) Dormant Ltd(9)

Vietnam

British Virgin 100 Islands British Virgin 100 Islands British Virgin 100 Islands

100

100

Vietnam

100

100

Singapore

100

100

K-69

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

23.

Related party disclosures (contd) Principal activities Investment holding Investment holding Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Principal place of Country of business incorporation Singapore Singapore Indonesia % of equity interest 2010 2011 2012 100 100 100 100 100 100

Name of entities

KrisEnergy Asia Coperatief U.A. KrisEnergy Asia Holdings B.V.(1) KrisEnergy GlagahKambuna B.V. KrisEnergy Nam Con Son B.V.(5) KrisEnergy Kutai B.V.

The 100 Netherlands The 100 Netherlands The 100 Netherlands The 100 Netherlands The 100 Netherlands The Netherlands

Indonesia

100

100

Indonesia

100

100

KrisEnergy Indonesia Holdings B.V. (formerly known as Serica Indonesia Holdings B.V.)(6) KrisEnergy Kutei B.V. (formerly known as Serica Kutei B.V.) KrisEnergy East Seruway B.V. (formerly known as Serica East Seruway B.V.)

Indonesia

100

100

Serica Energy Pte Ltd(7) Investment holding Exploration and production of oil and gas Exploration and production of oil and gas

Singapore Indonesia

Singapore The Netherlands The Netherlands

100 100

100 100

Indonesia

100

100

BEM Resources Limited Investment holding EM Block Limited Exploration and production of oil and gas Investment holding Exploration and production of oil and gas Exploration and production of oil and gas

Indonesia Indonesia

British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands

100 100

100 100

B Block Limited KrisEnergy (Satria) Ltd (formerly known as Pearl Oil (Satria) Limited) KrisEnergy (East Muriah) Limited

Indonesia Indonesia

100 100

100 100

Indonesia

British Virgin Islands The Netherlands

100

KrisEnergy (Ageng) B.V. Exploration and production of oil and gas

Indonesia

100

K-70

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

23.

Related party disclosures (contd) Principal activities Exploration and production of oil and gas Principal place of Country of business incorporation Indonesia The Netherlands The Netherlands % of equity interest 2010 2011 2012 100

Name of entities KrisEnergy (Andaman Timur) B.V.

KrisEnergy (Nemo) B.V. Exploration and production of oil and gas KrisEnergy (Rembang) B.V.(8) Exploration and production of oil and gas

Indonesia

100

Indonesia The Netherlands Indonesia The Netherlands Indonesia The Netherlands Thailand Thailand 10

100

KrisEnergy (Tanjung Aru) Exploration and B.V. production of oil and gas KrisEnergy (Udan Emas) Exploration and B.V. production of oil and gas Orange Energy Ltd Exploration and production of oil and gas Exploration and production of oil and gas

100

100

10

10

B8/32 Partners Ltd

Thailand

Thailand

4.63

4.63

4.63

(1) (2) (3) (4) (5)

(6)

(7)

(8)

(9)

Capital Stock in this entity pledged as collateral for callable bonds First priority floating charge provided by this entity over present and future assets as collateral for callable bonds Assignment of internal loans by this entity as collateral for callable bonds With effect from February 26, 2013, the name of the Company was changed from KrisEnergy Ltd to KrisEnergy (Asia) Ltd. With effect from April 9, 2013, the name of the Company was changed from KrisEnergy Nam Con Son B.V. to KrisEnergy (Bangora) B.V. With effect from April 9, 2013, the name of the Company was changed from KrisEnergy Indonesia Holdings B.V. to KrisEnergy (Andaman II) B.V. With effect from February 28, 2013, the name of the Company was changed from Serica Energy Pte Ltd to Wassana MOPU Pte. Ltd. With effect from April 9, 2013, the name of the Company was changed from KrisEnergy (Rembang) B.V. to KrisEnergy (Sakti) B.V. With effect from May 2, 2013, the name of the Company was changed from KrisEnergy (Production) Ltd to KrisEnergy (Song Hong 115) Ltd.

Sale and purchase of goods and services In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year: 2010 US$ Management fee from holding company K-71 8,943,445 2011 US$ 2012 US$

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

23.

Related party disclosures (contd)

Compensation of directors and key management personnel The remuneration of directors and other members of key management during the year was as follows: 2010 US$ Salaries and bonus Central Provident Fund contributions 3,382,484 13,449 3,395,933 Comprise amounts paid to: Directors of the Company Other key management personnel 2,284,302 1,111,631 3,395,933 2011 US$ 3,521,763 16,537 3,538,300 2,414,108 1,124,192 3,538,300 2012 US$ 3,762,717 16,317 3,779,034 2,578,112 1,200,922 3,779,034

24.

Fair value of financial instruments (a) Fair value of financial instruments that are carried at fair value The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy: Level 1 US$ 2011 Financial assets: Embedded derivatives 2012 Financial assets: Embedded derivatives Level 2 US$ 1,420,000 Level 3 US$ Total US$ 1,420,000

2,864,000

2,864,000

At December 31, 2010, there are no financial instruments carried at fair value. Fair value hierarchy The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There have been no transfers between fair value measurements level during the financial years ended December 31, 2010, 2011 and 2012. K-72

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

24.

Fair value of financial instruments (contd) (a) Fair value of financial instruments that are carried at fair value (contd) Determination of fair value Embedded derivatives Fair value of embedded derivatives are determined using valuation models with both observable and non-observable data inputs. The nonobservable inputs to the models include assumptions regarding the bond price, bond yield and sigma (bond price volatility). (b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value Trade and other receivables and payables and accrued operating expenses, and short-term loans and borrowings The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values due to their short-term nature. (c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value The fair value of financial instruments that are not carried at fair value and whose carrying amounts are not reasonable approximate of fair value are as follows:
2010 Carrying amount Fair value US$ US$ Financial assets Amount due from holding company Equity securities, at cost 2011 Carrying amount US$ Fair value US$ Carrying amount US$ 2012 Fair value US$

769,865

182,057

**

Financial liabilities: Amount due to holding company 283,471,993 Loans and borrowings (non-current) - amortized cost

290,276,833

80,317,463

80,307,945

81,142,055

81,041,256

* Amounts due from/to holding company Fair value information has not been disclosed for amounts due from/to holding companies that are carried at cost because fair value cannot be measured reliably. The amounts have no fixed terms of repayment and are repayable only when the cash flows of the borrower permits. Accordingly, the fair values of the amounts due from/to holding companies are not determinable as the timing of the future cash arising from the amounts cannot be estimated reliably. K-73

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

24.

Fair value of financial instruments (contd) (c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value (contd)

** Investment in equity securities carried at cost Fair value information has not been disclosed for the Groups investment in equity securities that are carried at cost because fair value cannot be measured reliably. These equity securities are not quoted on any market and does not have any comparable industry peer that is listed. The Group does not intend to dispose of this investment in the foreseeable future. Determination of fair value Fixed rate callable loans The fair value disclosed in the table above is estimated by discounting expected cash flows at market incremental lending rate for similar types of borrowing arrangements at the reporting date.

25.

Financial risk management objectives and policies The Group is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, interest rate risk, and liquidity risk. It is, and has been throughout the current financial year, the Groups policy that no derivatives shall be undertaken, except for the use as hedging instruments where appropriate and cost-efficient. The following sections provide details regarding the Groups exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Groups exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances and derivatives), the Group minimizes credit risk by dealing exclusively with high credit rating counterparties. Exposure to credit risk At the end of the reporting date, the Groups maximum exposure to credit risk is represented by: - the carrying amount of each class of financial assets recognized in the consolidated statement of financial position - the carrying amount of loans and borrowings recognized in the consolidated statement of financial position relating to a corporate guarantee for the Bonds

K-74

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

25.

Financial risk management objectives and policies (contd) Credit risk (contd) Credit risk concentration profile At the report date, approximately 46.5% (2011: 67.4%, 2010: 83.5%) of the Groups receivables arises from the Groups working interest in Glagah Kambuna TAC, Block B8/32 concession and Block B9A concession. Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the Group. Cash and cash equivalents, investment securities and derivatives are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 15 (Trade and other receivables). Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Groups financial instrument will fluctuate because of changes in market interest rates. At December 31, 2011 and 2012, the Group has insignificant financial instruments that are exposed to interest rate risk. In 2010, the Groups exposure to interest rate risk arises primarily from the Groups short-term debt obligations with floating interest rates. With all other variables held constant, a hundred basis points increase (decrease) in interest rate would increase (decrease) the Groups loss after tax by approximately US$340,000 arising mainly as a result of higher (lower) interest expense on net floating borrowing position.

K-75

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

25.

Financial risk management objectives and policies (contd) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Groups exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The table below summaries the maturity profile of the Groups financial liabilities at the reporting date based on contractual undiscounted repayments obligations. One year or less US$ 2010 Financial liabilities: Trade and other payables Accrued operating expenses Amount due to holding company Loans and borrowings Total undiscounted financial liabilities 2011 Financial liabilities: Trade and other payables Accrued operating expenses Amount due to holding company Loans and borrowings Total undiscounted financial liabilities 2012 Financial liabilities: Trade and other payables Accrued operating expenses Amount due to holding company Loans and borrowings Total undiscounted financial liabilities One to five years US$ More than five years US$ Total US$

13,034,734 9,999,770 68,000,000 91,034,504

283,471,933 283,471,933

13,034,734 9,999,770 283,471,933 68,000,000 374,506,437

13,671,011 7,061,438 20,732,449

125,671,807 125,671,807

290,276,833 290,276,833

13,671,011 7,061,438 290,276,833 125,671,807 436,681,089

11,961,015 9,902,998

11,961,015 9,902,998

21,864,013

116,746,808 116,746,808 K-76

116,746,808 138,610,821

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

25.

Financial risk management objectives and policies (contd) Liquidity risk (contd) The table below shows the contractual expiry by maturity of the Groups contingent liabilities and commitments. The maximum amount of the corporate guarantee for the callable bonds (Note 20) is allocated to the earliest period in which the guarantee could be called. One year or less US$ 2011 Corporate guarantees 2012 Corporate guarantees 116,746,808 116,746,808 125,671,807 125,671,807 One to five years US$ More than five years US$ Total US$

26.

Capital management Capital includes debt and equity items as disclosed in the table below. The primary objective of the Groups capital management is to ensure that it maintain a healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended December 31, 2010, 2011 and 2012 respectively. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Groups policy is to keep the gearing ratio between 20% and 40%. The Group includes within net debts, trade and other payables, accrued operating expenses, and loans and borrowings less cash and cash equivalents. Capital includes equity attributable to the owners of the Company and amount due to holding company.

K-77

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

26.

Capital management (contd) 2010 US$ Trade and other payables (Note 19) Accrued operating expenses (Note 19) Loans and borrowings (Note 20) Less: cash and cash equivalents (Note 17) Net debt/(cash position) Equity attributable to the owners of the Company Amount due to holding company Total capital Capital and net debt Gearing ratio 13,034,734 9,999,770 68,000,000 (27,345,976) 63,688,528 (70,621,194) 283,471,933 212,850,739 276,539,267 23% 2011 US$ 13,671,011 7,061,438 80,317,463 (34,659,700) 66,390,212 (107,478,624) 290,276,833 182,798,209 249,188,421 27% 2012 US$ 11,961,015 9,902,998 81,142,055 (121,900,954) (18,894,886) 278,533,687 278,533,687 278,533,687

27.

Segment reporting For management purposes, the Group operates in one business segment, that is exploration and production of oil and gas in Southeast Asia. Revenue and non-current assets information based on the geographical location of assets respectively are as follows:
2010 US$ Cambodia Indonesia Thailand Vietnam 32,433,632 49,347,764 81,781,396 Revenue 2011 US$ 27,111,442 73,109,646 100,221,088 2012 US$ 15,403,798 74,188,784 89,592,582 2010 US$ Non-current assets 2011 US$ 19,010,324 23,845,946 226,108,453 6,855,049 275,819,772 2012 US$

12,608,234 62,270,668 229,045,551 303,924,453

21,797,456 25,203,134 226,656,954 10,578,632 284,236,176

Non-current assets information presented above consist of exploration and evaluation assets, oil and gas properties and intangible assets as presented in the consolidated statement of financial position. Information about major customers The Group identifies a major customer as one who contributes to 10 per cent or more of the total revenue. As at December 31, 2010, 2011 and 2012, revenue from four major customers contributed to 22%, 26%, 22% and 12%, 33%, 29%, 14% and 11%, and 38%, 30%, 9% and 12% of the total revenue respectively. K-78

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to Consolidated Financial Statements December 31, 2010, 2011 and 2012

28.

Subsequent events On March 15, 2013, KrisEnergy (Gulf of Thailand) Ltd entered into a Farm-out Agreement with Pearl Oil (Amata) Limited, whereby it acquired 30% participating interest and operatorship in G6/48 concession, located at the Gulf of Thailand. As at date of the consolidated financial statements, the approval from the Thai Government in connection with the assignment of the farm-in interest and operatorship has not been received. On April 8, 2013, KrisEnergy Ltd has entered into a sales and purchase agreement with Tullow Oil International Limited to acquire 100% of the share capital of Tullow Bangladesh Limited (TBL) through its wholly owned subsidiary, KrisEnergy Asia Holdings B.V. As at date of the unaudited interim consolidated financial statements, the transaction is pending approval from Bangladesh Mineral Oil and Gas Corporation (Petrobangla) and the Government of the Peoples Republic of Bangladesh. TBL holds a 30% working interest and operatorship of the producing Bangora Block 9 onshore gas field. On May 2, 2013, the US$30,000,000 revolving credit facility (Note 20) between KrisEnergy Holding Company Ltd and Standard Bank plc as administrative agent, Standard Bank plc and Sumitomo Mitsui Banking Corporation as mandated lead arrangers, as issuing banks and as initial lenders and The Bank of New York Mellon, Singapore branch as security trustee, has been amended and restated to increase the total commitments to US$42,500,000. On May 31, 2013, the Issuer of the Bonds (Note 20) issued an additional US$35,000,000 Bonds under the same terms, including the same interest rate and maturity date, increasing the total principal amount of the 10.5% Senior Guaranteed Secured Bonds to US$120,000,000.

29.

Authorization of consolidated financial statements for issue The consolidated financial statements for the financial year ended December 31, 2010, 2011 and 2012 were authorized for issue in accordance with a resolution of the directors on July 1, 2013.

K-79

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APPENDIX L INDEPENDENT AUDITORS REPORT ON THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2013

L-1

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Report on Unaudited Interim Consolidated Financial Statements For the three months period ended March 31, 2013

July 1, 2013 The Board of Directors KrisEnergy Ltd 83 Clemenceau Avenue #10-05, UE Square Singapore 239920 Dear Sirs: Introduction We have reviewed the accompanying interim consolidated statement of financial position of KrisEnergy Ltd. (the Company; formerly known as KrisEnergy Holdings II Limited) and its subsidiaries (collectively, the Group) as at March 31, 2013 and the related interim consolidated statement of comprehensive income, changes in equity and cash flows for the three-month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of these interim consolidated financial statements in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34). Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements do not present fairly, in all material respects, the financial position of the Group as at March 31, 2013, and of its financial performance and its cash flows for the three-month period then ended in accordance with IAS 34.

L-2

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Report on Unaudited Interim Consolidated Financial Statements For the three months period ended March 31, 2013

Other matter This Report has been prepared for inclusion in the offering documents of KrisEnergy Ltd. in connection with the initial public offering of the ordinary shares of the Company.

Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore

Partner-in-Charge: Toong Weng Sum, Vincent

L-3

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APPENDIX M UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2013 KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Consolidated Comprehensive Income For the three months period ended March 31, 2013

Note

Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) 24,539,778 (13,042,561) 11,497,217 591,336 (3,480,594) 287,000 103,381 (2,524,706) 6,473,634 (5,011,554) 1,462,080 20,067,114 (10,856,270) 9,210,844 871,936 (4,739,059) 251,424 210,241 (2,551,748) 3,253,638 (3,792,509) (538,871)

Revenue Cost of sales Gross profit Other income General and administrative expenses Other operating expenses Finance income Finance costs Profit before tax Tax expense (Loss)/profit for the period Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Total comprehensive income attributable to owners of the Company (Loss)/earnings per share attributable to owners of the Company (cents per share)

5 5

5 5 5 5 5 5 6

6,446

(29,321)

1,468,526 5 1,462,080

(568,192) (1)

The accompanying notes form an integral part of the interim consolidated financial statements.

M-1

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Financial Position as at March 31, 2013

Note ASSETS Non-current assets Exploration and evaluation assets Oil and gas properties Other property, plant and equipment Intangible assets Embedded derivatives Investment securities 7 8 9 10 11 12

December 31, 2012 US$ (Audited)

March 31, 2013 US$ (Unaudited)

135,653,818 104,691,623 254,769 43,890,735 2,864,000 182,057 287,537,002

139,885,794 102,938,824 380,008 43,890,735 3,176,000 182,057 290,453,418

Current assets Inventories Trade and other receivables Prepayments Other current assets Cash and bank balances

13 14 15 16

6,054,728 34,743,446 1,108,574 500,000 129,900,954 172,307,702

6,972,066 33,875,605 767,002 500,000 128,262,118 170,376,791 460,830,209

Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Foreign currency translation reserve Accumulated losses Total equity Non-current liabilities Loans and borrowings Deferred tax liabilities Provisions 17 17 17

459,844,704

1,000,000 402,750,000 (1,220,085) (123,996,228) 278,533,687

1,000,000 402,750,000 (1,249,406) (124,535,099) 277,965,495

19 6 20

81,142,055 41,744,525 22,024,643 144,911,223

81,353,663 40,969,036 22,132,592 144,455,291

The accompanying notes form an integral part of the interim consolidated financial statements. M-2

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Financial Position as at March 31, 2013

Note Current liabilities Trade and other payables Accrued operating expenses Provisions Withholding tax payable Tax payable

December 31, 2012 US$ (Audited) 11,961,015 9,902,998 2,500,000 30,427 12,005,354 36,399,794

March 31, 2013 US$ (Unaudited) 10,884,976 7,859,521 2,500,000 14,695 17,150,231 38,409,423 182,864,714 460,830,209

18 18 20

Total liabilities Total equity and liabilities

181,311,017 459,844,704

The accompanying notes form an integral part of the interim consolidated financial statements. M-3

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Changes in Equity for the three months period ended March 31, 2013

Note Balance at January 1, 2012 Profit for the period Other comprehensive income Total comprehensive income for the year Balance at March 31, 2012 (Unaudited) Balance at January 1, 2013 Loss for the period Other comprehensive income Total comprehensive income for the period Balance at March 31, 2013 (Unaudited)

Share capital US$ 1

Attributable to owners of the Company Foreign currency Share Accumulated translation premium losses reserve US$ US$ US$ (106,323,349) 1,462,080

Total equity US$

(1,155,276) (107,478,624) 6,446 1,462,080 6,446

1,462,080

6,446

1,468,526

(104,861,269)

(1,148,830) (106,010,098)

1,000,000

402,750,000

(123,996,228) (538,871)

(1,220,085) (29,321)

278,533,687 (538,871) (29,321)

(538,871)

(29,321)

(568,192)

1,000,000

402,750,000

(124,535,099)

(1,249,406)

277,965,495

The accompanying accounting policies and explanatory notes form an integral part of the interim consolidated financial statements. M-4

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Consolidated Statement of Cash Flows For the three months period ended March 31, 2013

Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Operating activities Profit before tax Adjustment to reconcile profit before tax to net cash flows: Depreciation, depletion and amortization Net fair value gain on embedded derivatives Finance cost Unwinding of discount on decommissioning provisions Interest income Operating cash flows before changes in working capital Changes in working capital: Increase in inventories Decrease/(increase) in trade and other receivables Increase in other current assets Decrease in trade and other payables Cash flows from operations Interest received Interest paid Net cash flows from operating activities Investing activities Additions to exploration and evaluation assets Addition to oil and gas properties Purchase of other plant and equipment Purchase of investment securities Net cash flows used in investing activities Financing activities Proceeds from bank borrowings Decrease in amount due to holding company Payment of bond interest Net cash flows (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Net effect of exchange rate changes Cash and cash equivalents at January 1 Cash and cash equivalents at March 31 (Note 16) 6,473,634 4,739,834 (287,000) 2,424,816 99,890 (103,381) 13,347,793 (390,526) (5,513,666) (129,604) (1,137,149) 6,176,848 103,381 (889) 6,279,340 (780,404) (1,800,472) (68,886) (184,393) (2,834,155) 5,000,000 (103,212) (4,462,500) 434,288 3,879,473 (13,184) 34,659,700 38,525,989 3,253,638 4,629,434 (312,000) 2,443,799 107,949 (210,241) 9,912,579 (917,338) 1,209,413 (306,350) 9,898,304 210,241 (21,710) 10,086,835 (4,231,976) (2,767,125) (233,251) (7,232,352) (4,462,500) (4,462,500) (1,608,017) (30,819) 121,900,954 120,262,118

The accompanying notes form an integral part of the interim consolidated financial statements. M-5

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

1.

Corporate information KrisEnergy Ltd. (the Company) was incorporated on October 5, 2009 as a limited liability company in Cayman Islands. With effect from July 4, 2012, the name of the Company was changed from KrisEnergy Holdings II Limited to KrisEnergy Ltd. The registered office of the Company is located at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. Its immediate holding company is KrisEnergy Holdings Limited, a company incorporated in Cayman Islands. The ultimate controlling party is First Reserve Corporation. The principal activity of the Company is that of investment holding and the principal place of business is Singapore. The principal activities of the subsidiaries and joint arrangements are disclosed in Note 22 to the financial statements.

2. 2.1

Summary of significant accounting policies Basis of preparation The interim consolidated financial statements of the Company and its subsidiaries, (collectively the Group) have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The interim consolidated financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below. The interim consolidated financial statements are presented in United States Dollars (USD or US$).

2.2

Basis of consolidation The interim consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at March 31, 2013. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. Where the ownership of a subsidiary is less than 100% and, therefore, a non-controlling interest (NCI) exists, the NCI is allocated its share of the total comprehensive income of the period, even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: Derecognizes the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts as at the date when controls is lost Derecognizes the carrying amount of any NCI M-6

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.2

Summary of significant accounting policies (contd) Basis of consolidation (contd) Derecognizes the cumulative translation differences recognized in equity Recognizes the fair value of the consideration received Recognizes the fair value of any investment retained Recognizes any surplus or deficit in profit or loss Reclassifies the parents share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate.

2.3

Changes in accounting policy and disclosures Changes in accounting policies The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Groups annual consolidated financial statements for the year ended December 31, 2012, except for the adoption of new standards and interpretations effective as at January 1, 2013. The nature and the impact of the new standard/amendment is described below: IAS 1 Presentation of Items of Other Comprehensive Income Amendments to IAS 1 The amendments to IAS 1 change the grouping of items presentation in Other Comprehensive Income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time would be presented separately from items which will never be reclassified. The amendment affects presentation only and therefore will have no impact on the Groups financial position or performance.

2.4

Standards issued but not yet effective The Group has not adopted the following standards and interpretations that have been issued but not yet effective: Effective for annual periods beginning on or after January 1, 2014 January 1, 2015

Description Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities IFRS 9 Financial Instruments: Classification and Measurement

The directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application. 2.5 Business combination and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate the consideration transferred, measured at acquisition date fair value and the amount of any NCI in the acquiree. For each business combination, the Group elects whether it measures NCI in the acquiree at fair value or at the M-7

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.5

Summary of significant accounting policies (contd) Business combination and goodwill (contd) proportionate share of the acquirees identifiable net assets. Acquisition related costs are expensed as incurred and included in general and administrative expenses. When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Those petroleum reserves and resources that are able to be reliably measured are recognized in the assessment of fair values on acquisition. Other potential reserves, resources and rights, for which fair values cannot be reliably measured, are not recognized. If the business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured as its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognized either in profit or loss or as a change to other comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the fair value of the identifiable net assets acquired and liabilities assumed. If fair value of the identifiable net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash generated units (CGU) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a CGU and part of the operation in that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU retained.

2.6

Joint arrangements A joint arrangement is a contractual arrangement whereby two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of the parties to the arrangement. M-8

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.6

Summary of significant accounting policies (contd) Joint arrangements (contd) To the extent the joint arrangement provides the Group with rights to the assets and obligations for the liabilities relating to the arrangement, the arrangement is a joint operation. To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the arrangement is a joint venture. The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts and circumstances change. (a) Joint operations/party to joint arrangements The Group recognizes in relation to its interest in a joint operation/party to joint arrangements, its assets, including its share of any assets held jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from the sale of its share of the output arising from the joint operation; its share of the revenue from the sale of the output by the joint operation; and its expenses, including its share of any expenses incurred jointly.

The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the accounting policies applicable to the particular assets, liabilities, revenues and expenses. When the Group enters into transaction involving a sale or contribution of assets with a joint operation in which it is a joint operator, the Group recognizes gains and losses resulting from such a transaction only to the extent of the interests held by the other parties to the joint operation. When the Group enters into a transaction involving purchase of assets with a joint operation in which it is a joint operator, the Group does not recognize its share of the gains and losses until it resells those assets to a third party. When such transactions provide evidence of a reduction in the net realizable value of the assets to be purchased or of an impairment loss of those assets, the Group recognizes its share of those losses. (b) Joint ventures The Group recognizes its interest in a joint venture as an investment and accounts for the investment using the equity method from the date on which its becomes a joint venture. On acquisition of the investment, any excess of the cost of the investment over the Groups share of the net fair value of the investees identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the investment. Any excess of the Groups share of the net fair value of the investees identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entitys share of the joint ventures profit or loss in the period in which the investment is acquired. M-9

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.6

Summary of significant accounting policies (contd) Joint arrangements (contd) (b) Joint ventures (contd) Under the equity method, the investment in joint ventures are carried in the balance sheet at cost plus post-acquisition changes in the Groups share of net assets of the joint ventures. The profit or loss reflects the share of results of operations of the joint ventures. Distributions received from joint ventures reduce the carrying amount of the investment. Where there has been a change recognized in other comprehensive income by the joint ventures, the Group recognizes its share of such changes in other comprehensive income. Unrealized gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint ventures. When the Groups share of losses in a joint venture equals or exceeds its interest in the joint venture, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on the Groups investment in joint ventures. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognizes the amount in profit or loss. The financial statements of the joint ventures are prepared as the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of significant influence or joint control over the joint venture, the Group measures the retained interest at fair value. Any difference between the fair value of the aggregate of the retained interest and proceeds from disposal and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that joint venture on the same basis as would have been required if that joint venture had directly disposed of the related assets or liabilities. When an investment in joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest. The Group does not have any investment in joint ventures for the period and year ended March 31, 2013.

M-10

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.7

Summary of significant accounting policies (contd) Foreign currency The Groups consolidated financial statements are presented in USD, which is also the Companys functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (i) Transactions and balances Transactions in foreign currencies are initially recorded by the Groups entities at their respective currency spot rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss with the exception of monetary items that are designated as part of the hedge of the Groups net investment of a foreign operation. These are recognized in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the date of the initial transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss are also recognized in other comprehensive income or profit or loss, respectively.) Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date. (ii) Group companies On consolidation, the assets and liabilities of foreign operations are translated into USD at the rate of exchange prevailing at the reporting date and their profit or loss are translated at exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation for consolidation purposes are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in profit or loss.

M-11

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.7

Summary of significant accounting policies (contd) Foreign currency (contd) (ii) Group companies (contd) In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognized in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

2.8

Oil and natural gas exploration, evaluation and development expenditure Oil and natural gas exploration, evaluation and development expenditure is accounted for using the successful efforts method of accounting. Pre-license costs Pre-license costs are expensed in the period in which they are incurred. License and property acquisition costs Exploration license and leasehold property acquisition costs are capitalized in intangible assets. License costs paid in connection with a right to explore in an existing exploration area are capitalized and amortized over the term of the permit. License and property acquisition costs are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable amount. This review includes confirming that exploration drilling is still under way or firmly planned, or that it has been determined, or work is under way to determine that the discovery is economically viable based on a range of technical and commercial considerations and sufficient progress is being made on establishing development plans and timing. If no future activity is planned or the license has been relinquished or has expired, the carrying value of the license and property acquisition costs is written off through profit or loss. Upon recognition of proved reserves and internal approval for development, the relevant expenditure is transferred to oil and gas properties. Exploration and evaluation costs Exploration and evaluation activity involves the search for hydrocarbon resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Once the legal right to explore has been acquired, costs directly associated with an exploration well are capitalized as exploration and evaluation intangible assets until the drilling of the well is completed and the results have been evaluated. These costs include directly attributable employee remuneration, materials and fuel used, rig costs and payments made to contractors. Geological and geophysical costs are recognized in profit or loss as incurred. M-12

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.8

Summary of significant accounting policies (contd) Oil and natural gas exploration, evaluation and development expenditure (contd) Exploration and evaluation costs (contd) If no potentially commercial hydrocarbons are discovered, the exploration asset is written off through profit or loss as a dry hole. If extractable hydrocarbons are found and, subject to further appraisal activity (e.g. the drilling of additional wells), are likely to be capable of being commercially developed, the costs continue to be carried as an intangible asset while sufficient/continued progress is made in assessing the commerciality of the hydrocarbons. Costs directly associated with appraisal activity undertaken to determine the size, characteristics and commercial potential of a reservoir following the initial discovery of hydrocarbons, including the costs of appraisal wells where hydrocarbons were not found, are initially capitalized as an intangible asset. All such capitalized costs are subject to technical, commercial and management review, as well as review for indicators of impairment at least once a year. This is to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off through profit or loss. When proved reserves of oil and natural gas are identified and development is sanctioned by management, the relevant capitalized expenditure is first assessed for impairment and (if required) any impairment loss is recognized, then the remaining balance is transferred to oil and gas properties. Other than license costs, no amortization is charged during the exploration and evaluation phase. Farm-outs in the exploration and evaluation phase The Group does not record any expenditure made by the farmee on its account. It also does not recognize any gain or loss on its exploration and evaluation farm-out arrangements, but redesignates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained. Any cash consideration received directly from the farmee is credited against costs previously capitalized in relation to the whole interest with any excess accounted for by the farmor as a gain on disposal. Development costs Expenditure on the construction, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells, including unsuccessful development on delineation wells, is capitalized within oil and gas properties.

2.9

Oil and gas properties and other property, plant and equipment Initial recognition Oil and gas properties and other property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of the decommissioning M-13

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.9

Summary of significant accounting policies (contd) Oil and gas properties and other property, plant and equipment (contd) Initial recognition (contd) obligation, and for qualifying assets (where relevant), borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. The capitalized value of a finance lease is also included within property, plant and equipment. When a development project moves into the production stage, the capitalization of certain construction/development costs ceases and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for capitalization relating to oil and gas property asset additions, improvements or new developments. Depreciation, depletion and amortization Oil and gas properties are depreciated, depleted and amortized on a unit-of-production basis over the total proved developed and undeveloped reserves of the field concerned. The unit-of-production rate calculation for the depreciation, depletion and amortization of field development costs takes into account expenditures incurred to date, together with sanctioned future development expenditure. Other property, plant and equipment are generally depreciated on a straight-line basis over their estimated useful lives which are as follows: Renovation Furniture and fittings Office equipment Computers 3 years 3 years 3 years 2 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognized. The assets residual values, useful lives and methods of depreciation, depletion and amortization are reviewed at each reporting period, and adjusted prospectively, if appropriate. Farm-outs outside the exploration and evaluation phase In accounting for a farm-out arrangement outside the exploration and evaluation phase, the Group: Derecognizes the proportion of the asset that it has sold to the farmee Recognizes the consideration received or receivable from the farmee, which represents the cash received and/or the farmees obligation to fund the capital expenditure in relation to the interest retained by the farmor Recognizes a gain or loss on the transaction for the difference between the net disposal proceeds and the carrying amount of the asset disposed of. A gain is only recognized when the value of the consideration can be determined reliably. If not, then the Group accounts for the consideration received as a reduction in the carrying amount of the underlying assets M-14

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.9

Summary of significant accounting policies (contd) Oil and gas properties and other property, plant and equipment (contd) Farm-outs outside the exploration and evaluation phase (contd) Tests the retained interests for impairment if the terms of the arrangement indicate that the retained interest may be impaired.

The consideration receivable on disposal of an item of property, plant and equipment or an intangible asset is recognized initially at its fair value by the Group. However, if payment for the item is deferred, the consideration received is recognized initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognized as interest revenue. Any part of the consideration that is receivable in the form of cash is treated as a definition of a financial asset and is accounted for at amortized cost. Major maintenance, inspection and repairs Expenditure on major maintenance re-fits, inspections or repairs comprises the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset, that was separately depreciated and is now written off, is replaced and it is probable that future economic benefits associated with the item will flow to the Group, the expenditure is capitalized. When part of the asset replaced was not separately considered as a component and therefore not depreciated separately, the replacement value is used to estimate the carrying amount of the replaced asset(s) which is immediately written off. Inspection costs associated with major maintenance programs are capitalized and amortized over the period to the next inspection. All other day-to-day repairs and maintenance costs are expensed as incurred. 2.10 Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization (calculated on a straight line basis over their useful lives) and any accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized. Instead, the related expenditure is recognized in profit or loss in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in profit or loss in the expense category consistent with the function of the intangible assets. M-15

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.10

Summary of significant accounting policies (contd) Intangible assets (contd) Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

2.11

Impairment of non-financial assets Assets (excluding goodwill and indefinite life intangibles) The Group assesses at each reporting date whether there is an indication that an asset (or CGU) may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets or CGUs recoverable amount. The recoverable amount is the higher of an assets or CGUs fair value less costs to sell (FVLCS) and value in use (VIU). The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the asset is tested as part of a larger CGU to it belongs. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset/CGU is considered impaired and is written down to its recoverable amount. The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Groups CGUs to which the individual assets are allocated. These budgets and forecasts generally cover the term of the contract area. VIU does not reflect future cash flows associated with improving or enhancing an assets performance, whereas anticipated enhancements to assets are included in FVLCS calculations. In calculating VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset/CGU. In determining FVLCS, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators. Impairment losses are recognized in profit or loss in those expense categories consistent with the function of the impaired asset, except for property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognized in other comprehensive income up to the amount of any previous revaluation. For assets/CGUs excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognized impairment loss is reversed only if M-16

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.11

Summary of significant accounting policies (contd) Impairment of non-financial assets (contd) Assets (excluding goodwill and indefinite life intangibles) (contd) there has been a change in the assumptions used to determine the assets/CGUs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset/CGU does not exceed its recoverable amount, or the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset/CGU in prior years. Such reversal is recognized in profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase and is recognized through other comprehensive income. Goodwill Goodwill is tested for impairment annually (as at December 31) and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU is less than their carrying amount including goodwill, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives Intangible assets with indefinite useful lives are tested for impairment annually (as at December 31) either individually or at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

2.12

Financial instruments initial recognition and subsequent measurement

2.12.1 Financial assets Initial recognition and measurement Financial assets within the scope of IAS 39 Financial Instruments: Recognition and Measurement are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition. All financial assets are recognized initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss which do not include transaction costs. Purchases or sales of financial assets that require delivery of assets in a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e. the date at which the Group commits to purchase or sell the asset. The Groups financial assets include cash and bank balances, trade and other receivables, investment securities and embedded derivatives. M-17

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Subsequent measurement The subsequent measurement of financial assets depends on their classification, as follows: Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as defined by IAS 39. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative changes in fair value) or finance revenue (positive net changes in fair value) in profit or loss. Financial assets designated upon initial recognition at fair value through profit or loss are designated at the initial recognition date and only if the criteria set out in IAS 39 are satisfied. The Group has not designated any financial assets upon initial recognition as at fair value through profit or loss. The Group evaluated its financial assets as held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and managements intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify them. The reclassification to loans and receivables, available-for-sale or held-to-maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation, as these instruments cannot be reclassified after initial recognition. Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value, with changes in fair value recognized in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in other operating expenses for receivables. M-18

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Subsequent measurement (contd) Available-for-sale financial investments Available-for-sale financial investments include equity investments and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions. After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income in available-for-sale reserves until the investment is derecognized, at which time the cumulative gain or loss is recognized in other operating income, or the investment is determined to be impaired, when the cumulative loss reclassified from available-for-sale reserve to profit or loss in finance costs. Interest earned whilst holding available-for-sale financial investments is reported as interest income using the EIR method. The Group evaluates whether the ability and intention to sell its available-for-sale financial assets in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and managements intention to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held to maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly. For a financial asset reclassified from the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized cost and any previous gain or loss on the asset that has been recognized in equity is amortized to profit or loss over the remaining life of the investment using EIR. Any difference been the new amortized cost and the maturity amount is also amortized over the remaining life of the asset using EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to profit or loss. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when: The rights to receive cash flows from the asset have expired, or M-19

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Derecognition (contd) The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Groups continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortized cost For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. M-20

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Impairment of financial assets (contd) Financial assets carried at amortized cost (contd) If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assets original EIR. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to profit or loss. Available-for-sale financial investments For available-for-sale financial investments, the Group reassesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its costs. Significant is evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss measured as the difference between its acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss is removed from other comprehensive income and recognized in profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increase in their fair value after impairment are recognized directly in other comprehensive income. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortized cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of M-21

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.1 Financial assets (contd) Impairment of financial assets (contd) Available-for-sale financial investments (contd) measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increases can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed in profit or loss. 2.12.2 Financial liabilities Initial recognition and measurement Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognized initially at fair value and, in the case of loans borrowings, net of directly attributable transaction costs. The Groups financial liabilities include trade and other payables, accrued operating expenses and loans and borrowings. Subsequent measurement The measurement of financial liabilities depends on their classification as described below: Other financial liabilities After initial recognition, other financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized, as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in profit or loss. Derecognition A financial liability is derecognized when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss. M-22

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.12

Summary of significant accounting policies (contd) Financial instruments initial recognition and subsequent measurement (contd)

2.12.3 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the interim consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. 2.12.4 Fair value of financial instruments The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arms length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models. An analysis of fair value of financial instruments and further details as to how they are measured are provided in Note 23. 2.12.5 Current versus non-current classification Derivative instruments that are not designated as effective hedging instruments are classified as current or non-current or separated in a current and non-current portion based on an assessment of facts and circumstances (i.e., the underlying contracted cash flows): Where the Group expects to hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 months after the reporting date, the derivative is classified as non-current (or separated into current and non-current portions) consistent with the classification of the underlying item. Embedded derivatives that are not closely related to the host contract are classified consistent with the cash flows of the host contract. Derivatives instruments that are designed as, and are effective hedging instruments, are classified consistently with the classification of the underlying hedged item. The derivative instrument is separated into a current portion and a non-current portion only if a reliable allocation can be made.

2.12.6 Cash and cash equivalents Cash and cash equivalents comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, but exclude any restricted cash which is not available for use by the Group and therefore not considered highly liquid.

M-23

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.13

Summary of significant accounting policies (contd) Inventories Inventories are stated at the lower of cost and net realizable value. Cost includes all costs incurred in the normal course of business in bringing each product to its present location and condition and is accounted for on a first-in first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

2.14

Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at date of inception. The arrangement is assessed to determine whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. Operating lease payments are recognized as an operating expense in profit or loss on a straight-line basis over the lease term.

2.15

Provisions General Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as part of finance costs in profit or loss. Decommissioning liability The Group recognizes a decommissioning liability when it has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can be made. The obligation generally arises when the asset is installed or the ground/environment is disturbed at the field location. When the liability is initially recognized, the present value of the estimated costs is capitalized by increasing the carrying amount of the related oil and gas assets to the extent that it was incurred by the development/construction of the field. Any decommissioning obligations that arise through the production of inventory are expensed as incurred. Changes in the estimated timing of decommissioning or changes to the decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision, and a corresponding adjustment to oil and gas assets. M-24

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.15

Summary of significant accounting policies (contd) Provisions (contd) Decommissioning liability (contd) Any reduction in the decommissioning liability and, therefore, any deduction from the asset to which it relates, may not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to profit or loss. If the change in estimate results in an increase in the decommissioning liability and, therefore, an addition to the carrying value of the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for impairment in accordance with IAS 36. If, for mature fields, the estimate for the revised value of oil and gas assets net of decommissioning provisions exceeds the recoverable value, that portion of the increase is charged directly to expense. Over time, the discount liability is increased for the change in present value based on the discount rate that reflects current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in profit or loss as a finance cost. The Group recognizes neither the deferred tax asset in respect of the temporary difference on the decommissioning liability nor the corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset. Environmental expenditures and liabilities Environmental expenditures that relate to current or future revenues are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future earnings are expensed. Liabilities for environmental costs are recognized when a clean-up is probable and the associated costs can be reliably estimated. Generally, the timing of recognition of these provisions coincides with the commitment to a formal plan of action or, if earlier, on divestment or on closure of inactive sites. The amount recognized is the best estimate of the expenditure required. Where the liability will not be settled for a number of years, the amount recognized is the present value of the estimated future expenditure.

2.16

Revenue recognition Revenue is recognized to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, sale taxes, excise duties and similar levies. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. Revenue from the sale of oil and gas is recognized when the significant risks and rewards of ownership have been transferred, which is considered to occur when title passes to the customer. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism. M-25

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.16

Summary of significant accounting policies (contd) Revenue recognition (contd) Revenue from the production of oil, in which the Group has an interest with other producers, is recognized based on the Groups working interest and the terms of the relevant production sharing contracts. Differences between oil lifted and sold and the Groups share of production are not significant. Where forward sale and purchase contracts for oil or natural gas have been determined to be for trading purposes, the associated sales and purchases are reported net. Take or pay contracts Under these contracts, the Group makes a long-term supply commitment in return for a commitment from the buyer to pay for minimum quantities, whether or not the customer takes delivery. These commitments contain protective (force majeure) and adjustment provisions. If a buyer has a right to get a make-up delivery at a later date, revenue recognition is deferred and only recognized when the product is delivered, or the make-up product can no longer be taken. If no such option exists within the contractual terms, revenue is recognized when the take-or-pay penalty is triggered. Interest income Interest income is recognized using the effective interest method.

2.17

Employee benefits (a) Defined contribution plans The Group makes contributions to the defined contribution pension schemes. Contributions to defined contribution pension schemes are recognized as an expense in the period in which the related service is performed. (b) Employee leave entitlement Employee entitlements to annual leave are recognized as a liability when they accrue to the employees. The estimated liability for leave is recognized for services rendered by employees up to the end of the reporting date.

2.18

Taxes Current tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income. Current tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretations and establishes provisions where appropriate. M-26

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.18

Summary of significant accounting policies (contd) Taxes (contd) Deferred tax Deferred tax is provided using the balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except: Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled by the parent, investor or venturer and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except: Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available, against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profits will be available to allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting date. Deferred tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. M-27

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

2. 2.18

Summary of significant accounting policies (contd) Taxes (contd) Deferred tax (contd) Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances arises. The adjustment is either treated as a reduction to goodwill (as long as it does not exceed goodwill) if it occurred during the measurement period or recognized in profit or loss. Royalties, resource rent tax and revenue-based taxes In addition to corporate taxes, the Groups consolidated financial statements also include and recognize as taxes on income, other type of taxes on net income which are calculated based on oil and gas production. Royalties, resource rent taxes and revenue-based taxes are accounted for under IAS 12 when they have the characteristics of an income tax. This is considered to be the case when they are imposed under government tax authority and the amount payable is based on taxable income rather than based on physical quantity produced or as a percentage of revenue after adjustment for temporary differences. For such arrangements, current and deferred tax is provided on the same basis as described above for other forms of taxation. Obligations arising from royalty arrangements and other types of taxes that do not satisfy these criteria are recognized as current provisions and included in cost of sales. Production-sharing arrangements According to the production-sharing agreement (PSA), the share of the profit oil to which the government is entitled in any calendar year, is deemed to include a portion representing the corporate income tax imposed upon and due by the Group. This amount will be paid directly by the government on behalf of the Group to the appropriate tax authorities. This portion of tax and revenue are presented net in profit or loss.

3.

Significant accounting judgments, estimates and assumptions The preparation of the Groups consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affects the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the interim consolidated financial statements. Estimates and assumptions are continuously evaluated and are based on managements experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. M-28

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

3.

Significant accounting judgments, estimates and assumptions (contd) In particular, the Group has identified the following areas where significant judgments, estimates and assumptions are required. Changes in these assumptions may materially affect the financial position or financial results reported in future periods. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Hydrocarbon reserve and resource estimates (Note 6, 7, 8, 9, 10 and 20) Oil and gas properties are depreciated on a units of production (UOP) basis at a rate calculated by reference to total proved and probable developed and undeveloped reserves determined in accordance with Society of Petroleum Engineers rules and incorporating the estimated future cost of developing those reserves. The Group estimates its commercial reserves based on information compiled by appropriately qualified persons relating to the geological and technical data on the size, depth, shape and grade of the hydrocarbon body and suitable production techniques and recovery rates. Commercial reserves are determined using estimates of oil in place, recovery factors and future commodity prices, the latter having an impact on the total amount of recoverable reserves and the proportion of the gross reserves which are attributable to the host government under the terms of the Production-Sharing Agreements. Future development costs are estimated using assumptions as to number of wells required to produce the commercial reserves, the cost of such wells and associated production facilities, and other capital costs. The current long-term Brent oil price assumption used in the estimation of commercial reserves is US$110.08. The carrying amount of oil and gas properties at March 31, 2013 is shown in Note 8. As the economic assumptions used may change and as additional geological information is obtained during the operation of a field, estimates of recoverable reserves may change. Such changes may impact the Groups reported financial position and results, which include: The carrying value of exploration and evaluation assets, oil and gas properties, property, plant and equipment, and goodwill may be affected due to changes in estimated future cash flows Depreciation and amortization charges in profit or loss may change where such charges are determined using the UOP method, or where the useful life of the related assets change Provisions for decommissioning may change where changes to the reserve estimates affect expectations about when such activities will occur and the associated cost of these activities The recognition and carrying value of deferred tax assets may change due to changes in judgments regarding the existence of such assets and in estimates of the likely recovery of such assets

Exploration and evaluation expenditures (Note 7) The application of the Groups accounting policy for exploration and evaluation expenditure requires judgment to determine whether it is likely that future economic benefits are likely, either from future exploitation or sale, or whether activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of reserves and resources is itself an estimation process that requires varying degrees of uncertainty depending on how the resources are classified. These estimates directly impact when the M-29

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

3.

Significant accounting judgments, estimates and assumptions (contd) Exploration and evaluation expenditures (Note 7) (contd) Group defers exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, whether an economical viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant capitalized amount is written off in profit or loss in the period when the new information becomes available. Units of production depreciation of oil and gas assets (Note 8) Oil and gas properties are depreciated using the UOP method over total proved and probable developed and undeveloped hydrocarbon reserves. This results in a depreciation, depletion and amortization charge proportional to the depletion of the anticipated remaining production from the field. The life of each item, which is assessed at least annually, has regard to both its physical life limitations and present assessments of economically recoverable reserves of the field at which the asset is located. These calculations require use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure. The calculation of the UOP rate of depreciation could be impacted to the extent that actual production in the future is different from current forecast production based on total proved and probable reserves, or future capital expenditure estimates changes. Changes to proved and probable reserves could arise due to changes in the factors or assumptions used in estimating reserves, including: The effect on proved and probable reserves of differences between actual commodity prices and commodity price assumptions; or Unforeseen operational issues

Any changes in estimates are accounted for prospectively. Recoverability of oil and gas assets (Note 7, 8, 10) The Group assesses each asset or CGU (excluding goodwill, which is assessed annually regardless of indicators) each reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amounts is made, which is considered to be the higher of fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions, such as long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, decommissioning costs, exploration potential, reserves and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGU. Fair value is determined as the amount that would be obtained from the sale of the asset in an arms length transaction between knowledgeable and willing parties. Fair value for oil and gas assets is generally determined as the present value of estimated future cash flows arising from M-30

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

3.

Significant accounting judgments, estimates and assumptions (contd) Recoverability of oil and gas assets (Note 7, 8, 10) (contd) the continued use of the assets, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset/CGU. Management has assessed its CGUs as being an individual field, which is the lowest level for which cash inflows are largely independent of those of other assets. Decommissioning costs (Note 20) Decommissioning costs will be incurred by the Group at the end of the operating life of some of the Groups facilities and properties. The Group assesses its decommissioning provision at each reporting date. The ultimate decommissioning costs are uncertain and cost estimates can vary in response to many factors, including changes to relevant legal requirements, the emergence of new restoration techniques or experience at other production sites. The expected timing, extent and amount of expenditure can also change, for example, in response to changes in reserves or changes in laws and regulations or their interpretation. Therefore, significant estimates and assumptions are made in determining the provision for decommissioning As a result, there could be significant adjustments to the provisions established which would affect future financial results. The provision at reporting date represent managements best estimate of the present value of the future decommissioning costs required. Fair value hierarchy (Note 23) If the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, then fair value is determined using valuation techniques such as discounted cash flow models. The inputs to these models are taken from observable markets where possible, but if this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Taxes (Note 6) Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Group companies. M-31

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

3.

Significant accounting judgments, estimates and assumptions (contd) Taxes (Note 6) (contd) Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The Group has US$12,524,694 (2012: US$12,857,301) of tax losses carried forward. These losses relate to subsidiaries that have a history of losses, do not expire and may not be used to offset taxable income elsewhere in the Group. The subsidiaries have no taxable temporary differences nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on the tax losses carried forward. Further details on taxes are disclosed in Note 6.

M-32

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

4.

Interests in joint arrangements The Group has interests in the following joint arrangements: Contract area (Date of expiry) Held by Description Place of operation % of working interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 25.00 25.00

G10/48 Concession (December 7, 2012)(1)

KrisEnergy Oil and Gas (Thailand) Ltd

Exploration and Gulf of production of Thailand petroleum under Concession Agreement with Department of Mineral Fuels Exploration and Gulf of production of Thailand petroleum under Concession Agreement with Department of Mineral Fuels

G11/48 Concession (February 12, 2013)(1)

KrisEnergy Resources (Thailand) Ltd

25.00

25.00

Block A PSC (No expiry date for exploration stage)(2)

KrisEnergy Drilling of Offshore (Cambodia) exploration Cambodia Ltd wells under the Petroleum Agreement with Cambodian National Petroleum Authority Exploration and Indonesia production of petroleum under Technical Assistance contract with Indonesia Governmental Authority

25.00

25.00

Glagah Kambuna TAC KrisEnergy (December 16, 2016) GlagahKambuna B.V.

25.00

25.00

M-33

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

4.

Interests in joint arrangements (contd) Contract area (Date of expiry) Held by Description Place of operation % of working interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 54.60 54.60

Kutai PSC (January 15, 2037)

KrisEnergy Exploration and Indonesia Kutai B.V. production of (24.6%) and petroleum KrisEnergy under Kutei B.V. Production (30.0%) Sharing contract with Indonesia Governmental Authority KrisEnergy (Gulf of Thailand) Ltd Exploration and Gulf of production of Thailand petroleum under Concession Agreement with Department of Mineral Fuels

Block B8/32 Concession (October 18, 2029)

4.63

4.63

Block B9A Concession KrisEnergy Exploration and Gulf of Thailand (May 18, 2024) (Gulf of production of Thailand) petroleum Ltd under Concession Agreement with Department of Mineral Fuels Block 105 PSC (February 2, 2040) KrisEnergy (Song Hong 105) Ltd Exploration and development of petroleum under Production Sharing Contract with Vietnam Government Authority Offshore Vietnam

4.63

4.63

50.00

25.00

M-34

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

4.

Interests in joint arrangements (contd) Contract area (Date of expiry) Held by Description Place of operation % of working interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 50.00 25.00

Block 120 PSC (January 22, 2039)

KrisEnergy (Phu Khanh 120) Ltd

Exploration and Offshore development of Vietnam petroleum under Production Sharing Contract with Vietnam Government Authority Exploration and Indonesia production of petroleum under Production Sharing contract with Indonesia Governmental Authority

East Seruway PSC (November 12, 2014)

KrisEnergy East Seruway B.V.

100.00

100.00

Bulu PSC (October 13, 2013)

KrisEnergy Exploration and Indonesia (Satria) production of Ltd petroleum under Production Sharing contract with Indonesia Governmental Authority KrisEnergy (East Muriah) B.V. Exploration and Indonesia production of petroleum under Production Sharing contract with Indonesia Governmental Authority

42.50

42.50

East Muriah PSC (November 12, 2038)

50.00

50.00

M-35

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

4.

Interests in joint arrangements (contd) Contract area (Date of expiry) Held by Description Place of operation % of working interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 50.00 43.00

Tanjung Aru PSC (December 13, 2041)

KrisEnergy Exploration and Indonesia (Tanjung production of Aru) B.V. petroleum under Production Sharing contract with Indonesia Governmental Authority KrisEnergy (Udan Emas) B.V. Exploration and Indonesia production of petroleum under Production Sharing contract with Indonesia Governmental Authority Exploration and Thailand production of petroleum under Concession Agreement with Department of Mineral Fuels

Udan Emas PSC (July 19, 2041)

100.00

100,00

G6/48 Concession (January 7, 2016)(3)

KrisEnergy (Gulf of Thailand) Ltd

30.00

(1)

(2)

(3)

Application for extension of the contract area has been submitted to the Department of Mineral Fuels of Thailand. As at March 31, 2012, the approval for the extension of the contract area has not been received. On April 11, 2013, the supplementary agreements for extension of the contract area for three years have been approved by the Minister. On November 15, 2011, Cambodian National Petroleum Authority announced its intention to exercise its right to take 5% working interest in the contract area. Upon governments approval, the Groups working interests in the contract area will decrease from 25.00% to 23.75%. As at March 31, 2013, the approval from the government has not been received. On March 15, 2013, KrisEnergy (Gulf of Thailand) Ltd entered into a Farm-out Agreement with Pearl Oil (Amata) Limited, whereby it acquired 30% participating interest and operatorship in G6/48 concession, located at the Gulf of Thailand. As at March 31, 2013, the approval from the Thai Government in connection with the assignment of the farm-in interest and operatorship has not been received.

M-36

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

5.

Profit before tax The following items have been included in arriving at profit before tax: Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Revenue: Sale of crude oil Sale of gas 18,622,317 5,917,461 24,539,778 Cost of sales: Depletion and amortization of oil and gas properties Operating costs Thai petroleum special remuneratory benefits and royalties paid (4,610,238) (5,597,605) (2,834,718) (13,042,561) Other income is mainly made up of the following items: Joint operator overhead charges Net foreign exchange differences Income from shared facilities in joint operations General and administrative expenses is mainly made up of the following items: Consultants fees Data purchase and subscriptions Database rental Depreciation of other property, plant and equipment Employee benefits expense: - Salaries and bonuses - Central Provident Fund contributions - Other short-term benefits Expenses incurred for acquisition of joint operations Operating lease expense Professional fees Travel and entertainment Other operating expenses is mainly made up of the following items: Joint study expenses Net fair value gain on embedded derivatives Finance income: Interest income from banks 15,920,582 4,146,532 20,067,114 (4,519,924) (3,850,950) (2,485,396) (10,856,270)

23,069 193,349 208,926

40,844 514,407 55,261

(108,981) (35,658) (44,882) (129,596) (1,761,252) (20,904) (108,509) (121,315) (489,370) (285,095)

(172,395) (157,217) (67,248) (109,510) (2,486,100) (32,102) (134,524) (193,617) (697,959) (221,276)

287,000

(60,576) 312,000

103,381

210,241

M-37

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

5.

Profit before tax (contd) Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Finance costs: Accretion of interest on bonds Banking facility fees Interest on bank borrowings Interest on callable bonds Unwinding of discount on decommissioning provisions (198,273) (306) (584) (2,225,653) (99,890) (2,524,706) Thai petroleum special remuneratory benefits and royalties paid Under the terms of the Thai I regime, the concessionaire is required to pay production royalties to the Royal Thai Government computed based on 12.5% of income from sale or disposal of petroleum which may be treated as tax credit. Under the Thai III tax regime, the concessionaire is required to pay production royalties to the Royal Thai Government computed based on sliding scale rates from 5% to 15% of the value of petroleum sold or disposed during the month, depending on the number of barrels sold or disposed during the month. Special remuneration benefit (SRB) is tax payable only in years concessionaire has petroleum profit. In calculating such profit (or loss), capital expenditure, operating costs and a special reduction of 35% operating expenses for the year and petroleum loss carried forward indefinitely from prior years may be deducted. SRB is calculated by exploration block on income per meter of well, subject to a ceiling of 75% of petroleum profit for the year. (Loss)/earnings per share The basic and diluted (loss)/earnings per share is calculated by dividing (loss)/profit for the year attributable to owners of the Company by the weighted average number of ordinary shares during the financial period. (211,608) (21,710) (2,210,481) (107,949) (2,551,748)

M-38

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

5.

Profit before tax (contd) (Loss)/earnings per share (contd) The following tables reflect the profit and share data used in the computation of basic and diluted (loss)/earnings per share for the three-month periods ended: Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) (Loss)/profit for the period attributable to owners of the Company used in the computation of basic and diluted (loss)/earnings per share Weighted average number of ordinary shares for computation of basic and diluted (loss)/earnings per share 1,462,080 (538,871)

100

100,000,000

6.

Tax expense The major components of tax expense for the periods ended March 31, 2013 and 2012 are: Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Current tax: - Current tax charge - Overprovision in respect of previous years 6,194,164 (225,955) 5,968,209 Deferred tax: - Reversal of temporary differences Tax expense recognized in profit or loss (956,655) 5,011,554 4,933,497 (365,499) 4,567,998 (775,489) 3,792,509

M-39

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

6.

Tax expense (contd) Relationship between tax expense and accounting profit The reconciliation between tax expense and the accounting profit multiplied by the applicable tax rate were as follows: Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Profit before tax Tax at domestic rates applicable in the countries where the Group operates Adjustments: Non-deductible expenses Income not subject to tax Effect of partial tax exemption and tax relief Deferred tax assets not recognized Overprovision in respect of previous years Others Tax expense recognized in profit or loss 6,473,634 3,253,638

5,223,864 35,035 (191,678) (20,646) 198,005 (225,955) (7,071) 5,011,554

4,072,880 112,466 (20,646) 24,148 (365,499) (30,840) 3,792,509

The above reconciliation is prepared by aggregating separate reconciliation for each national jurisdiction. Deferred tax Deferred tax at March 31, relates to the following: Consolidated statement of financial position December 31, 2012 US$ (Audited) Deferred tax liabilities Fair value adjustment on acquisition Deferred tax assets Provisions Deferred tax benefit Net deferred tax liabilities 43,971,002 (2,226,477) March 31, 2013 US$ (Unaudited) 43,606,011 (2,636,975) Consolidated statement of comprehensive income Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) (375,191) (581,464) (956,655) (364,991) (410,498) (775,489)

41,744,525

40,969,036

M-40

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

6.

Tax expense (contd) Deferred tax (contd) Deferred tax assets not recognized December 31, 2012 US$ (Audited) Differences in depreciation, depletion and amortization for tax purposes Unutilized tax losses 16,403,182 12,857,301 29,260,483 March 31, 2013 US$ (Unaudited) 16,759,937 12,524,694 29,284,631

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Deferred tax assets have not been recognized in respect of these temporary differences and tax losses as they may not be used to offset taxable profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other evidence of recoverability in the near future. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operates.

7.

Exploration and evaluation assets December 31, 2012 US$ (Audited) Cost At January 1, Additions Dry hole expenses At December 31, 2012 (Audited) and March 31, 2013 (Unaudited) 120,097,447 16,839,659 (1,283,288) March 31, 2013 US$ (Unaudited) 135,653,818 4,231,976

135,653,818

139,885,794

M-41

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

8.

Oil and gas properties US$ Cost At January 1, 2012 Additions At December 31, 2012 and January 1, 2013 (Audited) Additions As at March 31, 2013 (Unaudited) Depletion, amortization and impairment At January 1, 2012 Charge for the year At December 31, 2012 and January 1, 2013 (Audited) Charge for the period As at March 31, 2013 (Unaudited) Net book value As at December 31, 2012 (Audited) As at March 31, 2013 (Unaudited) 226,034,754 15,498,075 241,532,829 2,767,125 244,299,954 114,203,164 22,638,042 136,841,206 4,519,924 141,361,130 104,691,623 102,938,824

9.

Other property, plant and equipment Furniture and Fittings US$ 50,135 2,014 Office equipment US$ 26,057 793 812

Renovation US$ Cost At January 1, 2012 Additions Exchange differences At December 31, 2012 and January 1, 2013 (Audited) Additions Exchange differences At March 31, 2013 (Unaudited) 689,730 106,188 43,137

Computers US$ 582,079 146,056 41,659

Total US$ 1,348,001 253,037 87,622

839,055 75,299 (9,272) 905,082

52,149 48,104 (385) 99,868

27,662 9,693 (157) 37,198

769,794 100,155 (7,203) 862,746

1,688,660 233,251 (17,017) 1,904,894

M-42

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

9.

Other property, plant and equipment (contd) Furniture and Fittings US$ Office equipment US$

Renovation US$ Accumulated depreciation At January 1, 2012 Charge for the year Exchange differences At December 31, 2012 and January 1, 2013 (Audited) Charge for the period Exchange differences At March 31, 2013 (Unaudited) Net carrying amount At December 31, 2012 (Audited) At March 31, 2013 (Unaudited)

Computers US$

Total US$

382,988 337,105 34,045

22,358 15,476 1,652

11,290 6,104 781

364,805 224,715 32,572

781,441 583,400 69,050

754,138 45,746 (9,677) 790,207

39,486 7,516 (378) 46,624

18,175 2,706 (156) 20,725

622,092 53,542 (8,304) 667,330

1,433,891 109,510 (18,515) 1,524,886

84,917 114,875

12,663 53,244

9,487 16,473

147,702 195,416

254,769 380,008

10.

Intangible assets Goodwill US$ Cost At January 1, 2012, December 31, 2012, January 1, 2013 and March 31, 2013 Accumulated amortization and impairment loss At January 1, 2012, December 31, 2012, January 1, 2013 and March 31, 2013 Carrying amounts At December 31, 2012 (Audited) and March 31, 2013 (Unaudited) 42,221,014 1,669,721 43,890,735 58,477,823 Others US$ 1,669,721 Total US$ 60,147,544

16,256,809

16,256,809

M-43

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

10.

Intangible assets (contd) Goodwill Goodwill arises principally because of the following factors: (a) (b) (c) The going concern value implicit in our ability to sustain and/or grow our business by increasing reserves and resources through new discoveries. The ability to capture unique synergies that can be realized from managing a portfolio of both acquired and existing fields. The requirement to recognize deferred tax assets and liabilities for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value.

Other intangible assets December 31, 2012 US$ (Audited) 0.75% overriding royalty interest in Concession Block G10/48 and G11/48 Leasehold bonus for Concession Block G10/48 Others 1,300,000 269,721 100,000 1,669,721 March 31, 2013 US$ (Unaudited) 1,300,000 269,721 100,000 1,669,721

The Group was assigned the overriding royalty interest from the acquisition of KrisEnergy Oil and Gas (Thailand) Ltd (KEOG) and KrisEnergy Resources (Thailand) Ltd (KER). The overriding royalty interest entitles the Group rights to the revenues derived from the production and disposal of all of the oil, gas, and other minerals, in, on, under, and that may be produced and saved from Concession Block G10/48 and G11/48. The useful lives of these other intangible assets are estimated to be indefinite as the exploration period of the blocks are extended every three years and cannot be reliably estimated. Impairment testing For impairment testing purposes, goodwill acquired through business combinations has been allocated as follows: December 31, 2012 US$ (Audited) G10/48 and G11/48 Concession Block 9A and Block 8/32 Concession Bulu PSC 21,774,832 13,301,576 7,144,606 42,221,014 M-44 March 31, 2013 US$ (Unaudited) 21,774,832 13,301,576 7,144,606 42,221,014

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

10.

Intangible assets (contd) Impairment testing (contd) The recoverable amount of each field is determined on a value-in-use calculation. The calculation of value in use of the oil exploration and production CGU is most sensitive to the following assumptions: Production volumes Discount rates Crude oil prices

Estimated production volumes are based on detailed date for the fields and take into account development plans for the fields agreed by management as part of the long-term planning process. It is estimated that, if all production were to be reduced by 2% for the whole term of the contract area, this would not be sufficient to reduce the excess of recoverable amount over the carrying amounts of the individual CGUs to zero. Consequently, management believes no reasonably possible change in the production assumptions would cause the carrying amount of goodwill and/or other non-current assets to exceed their recoverable amount. The Group generally estimates value in use for the oil exploration and production CGU using a discount cash flow model. The future cash flows are discounted to their present value using a pre-tax discount rate of 8% to 10% that reflects current market assessments of the time value of money and the risks specific to the asset. The discount rate is derived from the Groups weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific to the asset/CGU. Oil prices are based on Brent future prices at the reporting date and adjusted for quality, transportation fees and regional price differences. 11. Embedded derivatives In 2011, the Group issued callable bonds (Note 19), which have embedded derivatives that require bifurcation and separately recognized and accounted for at fair value with any changes to fair value credited or charge to profit or loss. The carrying value of the embedded derivatives as at December 31, 2012 and March 31, 2013 amounted to US$2,864,000 and US$3,176,000, respectively. The effect on profit or loss is reflected in other operating expenses (Note 5).

12.

Investment securities December 31, 2012 US$ (Audited) Available for sale investments Unquoted equity shares, at cost 182,057 March 31, 2013 US$ (Unaudited) 182,057

M-45

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

13.

Inventories December 31, 2012 US$ (Audited) Statement of financial position: Drilling supplies and materials Crude oil 5,309,628 745,100 6,054,728 Profit or loss: Inventories recognized as an expense in cost of sales March 31, 2013 US$ (Unaudited) 6,100,486 871,580 6,972,066

1,518,421

244,480

14.

Trade and other receivables December 31, 2012 US$ (Audited) Trade and other receivables (current): Trade receivables Refundable deposits Other receivables Joint operation receivables Total trade and other receivables Add: Cash and bank balances (Note 16) Total loans and receivables 11,180,087 282,210 14,352,815 8,928,334 34,743,446 129,900,954 164,644,400 March 31, 2013 US$ (Unaudited) 9,024,044 5,113,479 9,720,646 10,017,436 33,875,605 128,262,118 162,137,723

Trade receivables are non-interest bearing and are generally on 30 days terms. They are recognized at their original invoice amounts which represent their fair values on initial recognition. Joint operation receivables relate to amounts due from the joint operators for cash calls in excess of the Groups obligation. These amounts are unsecured, non-interest bearing, and will be offset against future cash calls.

M-46

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

14.

Trade and other receivables (contd) Other receivables (current) comprise: December 31, 2012 US$ (Audited) Payment on behalf of joint operations partners Proportionate share of joint operations other receivables Value added tax receivables Others 7,646,320 5,905,932 701,530 99,033 14,352,815 March 31, 2013 US$ (Unaudited) 192,028 8,773,725 717,584 37,309 9,720,646

Value added tax receivables include value added tax claim made to the Indonesian Government in respect of Glagah Kambuna TAC of US$3,013,204. For the year ended December 31, 2012, an allowance for doubtful debt of US$2,333,106 was made against the value added tax receivables as the value added tax claim may not be recoverable due to the anticipated relinquishment of the contract area in 2013. There is no movement in allowance for doubtful debt for the period ended March 31, 2013. Trade and other receivables denominated in foreign currencies at reporting date are as follows: December 31, 2012 US$ (Audited) Thai Baht 20,679 March 31, 2013 US$ (Unaudited) 23,469

At the reporting date, except for the allowance made on the value added tax receivables, the Group does not have any receivables that are past due or impaired, or would otherwise be past due but not impaired.

15.

Other current assets December 31, 2012 US$ (Audited) Expenses directly attributable to proposed share issue 500,000 March 31, 2013 US$ (Unaudited) 500,000

M-47

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

16.

Cash and bank balances December 31, 2012 US$ (Audited) Cash at banks and on hand Short-term structured deposits Cash and bank balances 121,900,954 8,000,000 129,900,954 March 31, 2013 US$ (Unaudited) 120,262,118 8,000,000 128,262,118

Cash at banks earn interest at floating rates based on daily bank deposit rates. Included in cash at banks and on hand is a short-term structured deposit of US$8,000,000 placed with and pledged to a bank for issuance of guarantees on behalf of KrisEnergy (Song Hong 105) Ltd and KrisEnergy (Phu Khanh 120) Ltd. These deposits had a minimum yield of 0.5% per annum. For the purpose of the interim consolidated statement of cash flows, cash and cash equivalents comprise the following at March 31: March 31, 2012 US$ (Unaudited) Cash and bank balances Less: Restricted cash Cash and cash equivalents 46,525,989 (8,000,000) 38,525,989 March 31, 2013 US$ (Unaudited) 128,262,118 (8,000,000) 120,262,118

Cash at banks and on hand denominated in foreign currencies at reporting date are as follows: December 31, 2012 US$ (Audited) Thai Baht Euro Dollar Indonesia Rupiah Singapore Dollar United States Dollar 37,185 193,322 49,901 460 140,938 March 31, 2013 US$ (Unaudited) 73,137 164,614 17,404 4,497 31,055

M-48

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

17.

Share capital and reserve Share capital December 31, 2012 (Audited) No of shares US$ Issued and fully paid ordinary shares At January 1, Issued on July 4, 2012 by way of capitalization of amount due to holding company Issued on July 9, 2012 for cash At reporting date 100 1 March 31, 2013 (Unaudited) No of Shares US$ 100,000,000 1,000,000

79,999,900 20,000,000 100,000,000

799,999 200,000 1,000,000

100,000,000

1,000,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share. The ordinary shares have a par value of US$0.01 each. Share premium December 31, 2012 US$ (Audited) At January 1, Increase on July 4, 2012 by way of capitalization of amount due to holding company into new shares Increase on July 9, 2012 for cash arising from an issuance of share capital At reporting date Foreign currency translation reserve The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign subsidiaries whose functional currencies are different from that of the Groups presentation currency. 287,950,000 114,800,000 402,750,000 March 31, 2013 US$ (Unaudited) 402,750,000 402,750,000

M-49

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

18.

Trade and other payables December 31, 2012 US$ (Audited) Trade and other payables (current): Trade payables Joint operation payables Staff payroll and bonus payables Other payables Total trade and other payables Accrued operating expenses Loans and borrowings (Note 19) Less: Staff payroll and bonus payables Total financial liabilities at amortized costs 2,726,314 878,884 2,394,288 5,961,529 11,961,015 9,902,998 81,142,055 (2,394,288) 100,611,780 March 31, 2013 US$ (Unaudited) 2,090,490 1,847,057 2,520,475 4,426,954 10,884,976 7,859,521 81,353,663 (2,520,475) 97,577,685

Trade payables are non-interest bearing and are normally settled on 60-day terms. Joint operation payables are cash calls due to the operator of the joint operations. These amounts are unsecured, non-interest bearing, and will be settled in cash. Other payables (current) comprise: December 31, 2012 US$ (Audited) Proportionate share of joint operations other payables Accrued interest payable for callable bonds Joint operator overhead charges Others 1,723,607 3,953,193 284,729 5,961,529 March 31, 2013 US$ (Unaudited) 2,148,347 1,701,174 206,004 371,429 4,426,954

Included in accrued operating expenses is the Groups proportionate share of joint operations accrued expenses amounting to US$2,619,591 (2012: US$4,047,565). Trade and other payables denominated in foreign currencies at reporting date are as follows: December 31, 2012 US$ (Audited) Thai Baht Indonesia Rupiah M-50 254,971 167,186 March 31, 2013 US$ (Unaudited) 219,414 163,487

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

19.

Loans and borrowings Maturity December 31, 2012 US$ (Audited) 81,142,055 March 31, 2013 US$ (Unaudited) 81,353,663

Callable bonds Callable bonds

2016

KrisEnergy Holding Company Ltd (Issuer), a wholly owned subsidiary, issued a US$85,000,000 10.5% Senior Guaranteed Secured Bonds (Bonds) due July 21, 2016 at issue price of 92.3%. Interest on the Bonds will accrue at the rate of 10.5% per annum and will be payable semi-annually in arrears on January 21 and July 21 in each year, commencing on January 21, 2012. The Bonds include an option for the Issuer to redeem all or a part of the Bonds at the redemption prices, giving rise to an embedded derivative that require bifurcation and is separately recognized and accounted for at fair value (Note 11). The carrying amount of the liability component of the Bonds at reporting date is arrived at as follows: December 31, 2012 US$ (Audited) Face value of bonds Discount on bonds Proceeds from issuance of Bonds Embedded derivatives (Note 11) at initial recognition Liability component at initial recognition Add: Accretion of interest on bonds 85,000,000 (6,545,000) 78,455,000 1,526,000 79,981,000 1,161,055 81,142,055 All obligations with respect to the Bonds are secured as follows: (a) (b) (c) (d) A first priority pledge over all of the share capital in certain subsidiaries and KrisEnergy (Gulf of Thailand) Ltds equity interest in B8/32 Partners Ltd and Orange Energy Ltd; A first priority floating charge granted by certain subsidiaries over each of their present and future assets; An first priority assignment by certain subsidiaries of each of their present and future money claims under the internal loans; and A pledge by KrisEnergy Asia Holdings B.V. of its present and future receivables under the internal loans and certain insurances in relation to hydrocarbon assets. M-51 March 31, 2013 US$ (Unaudited) 85,000,000 (6,545,000) 78,455,000 1,526,000 79,981,000 1,372,663 81,353,663

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

19.

Loans and borrowings (contd) Revolving credit On July 21, 2011 the Issuer also entered into a credit agreement with banks for a US$30,000,000 revolving credit facility (Revolving Credit). The Revolving Credit has an interest rate of LIBOR plus an applicable margin ranging from 4.0% to 5.0% (in increments of 0.25%), depending on the percentage of commitment utilized at the relevant time. The Revolving Credit is used to finance the Groups working capital requirements, capital expenditure, acquisitions and payment of fees and expenses related to obtaining debt funding. As at December 31, 2012 and March 31, 2013, there is no amount drawn under the Revolving Credit. The Parent Guarantor of the Bonds and Revolving Credit is the Company and the Subsidiary Guarantors are KrisEnergy Asia Coperatief U.A., KrisEnergy Ltd, KrisEnergy Glagah Kambuna B.V., Kutai B.V., KrisEnergy Nam Con Son B.V., KrisEnergy Oil & Gas (Thailand) Ltd, KrisEnergy Resources (Thailand) Ltd, KrisEnergy (Gulf of Thailand) Ltd., KrisEnergy (Cambodia) Ltd, KrisEnergy (Phu Khanh 120) Ltd. and KrisEnergy (Song Hong 105) Ltd. Please refer to Note 22 for subsidiaries that provide the above collaterals.

20.

Provisions US$ Decommissioning provisions At January 1, 2012 Arising during the year Unwinding of discount on decommissioning provisions Write back of unused provisions At December 31, 2012 and March 1, 2013 Unwinding of discount on decommissioning provisions At March 31, 2013 December 31, 2012 US$ (Audited) Current Non-current 2,500,000 22,024,643 24,524,643

18,048,096 6,076,986 399,561 24,524,643 107,949 24,632,592 March 31, 2013 US$ (Unaudited) 2,500,000 22,132,592 24,632,592

The Group makes full provision for the future cost of decommissioning oil production facilities and pipelines on a discounted basis on the installation of those facilities. M-52

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

20.

Provisions (contd) The decommissioning provision represents the present value of decommissioning costs relating to oil and gas properties, which are expected to be incurred up to 2039. These provisions have been created based on the Groups internal estimates. Assumptions based on the current economic environment have been made, which management believe are a reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions. However, actual decommissioning costs will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time. Furthermore, the timing of decommissioning is likely to depend on when the fields cease to produce at economically viable rates. This in turn will depend upon future oil and gas prices, which are inherently uncertain.

21.

Commitments (a) Operating lease commitments The Group has entered into non-cancellable commercial property leases for the office operations. These operating leases have remaining lease terms of one year or more. Future minimum lease payments payable under non-cancellable operating leases as at reporting date are as follows: December 31, 2012 US$ (Audited) 679,980 1,331,608 2,011,588 March 31, 2013 US$ (Unaudited) 679,870 1,145,367 1,825,237

Not later than one year Later than two year but not later than five years

A leasing arrangement where the lessee has the right to terminate lease by providing a written notice to the lessor without incurring losses significant in comparison to the value of remaining lease payments is generally not considered a non-cancellable lease and is not included in such disclosure. (b) Capital commitments Certain joint operations are required to incur minimum exploration activities of which the Groups share of the estimated minimum budget is approximately US$96,420,026 (2012: US$93,295,534).

M-53

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

21.

Commitments (contd) (b) Capital commitments (contd) At the reporting date, the Groups outstanding minimum exploration commitments will fall due as follows: December 31, 2012 US$ (Audited) 13,627,034 79,668,500 93,295,534 March 31, 2013 US$ (Unaudited) 12,423,901 83,996,125 96,420,026

Within one year Within one to five years Total

22.

Related party disclosures The financial statements include the financial statements of KrisEnergy Ltd., the subsidiaries and joint arrangements listed in the following table: Principal activities Principal place of business Country of incorporation

Name of entities

% of equity interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 100 100 100 100

KrisEnergy Holding Company Ltd(1)(2)(3) KrisEnergy Pte Ltd(1)(2)(3)

Investment holding Provision of management support service Provision of offshore management support service Investment holding Investment holding

Singapore Singapore

British Virgin Islands Singapore

KrisEnergy (Management Services) Ltd(1)(2)(3)

Singapore

British Virgin Islands

100

100

KrisEnergy (Asia) Ltd (formerly known as KrisEnergy Ltd)(1)(2)(3) KrisEnergy International (Thailand) Holdings Ltd(1)(2)(3) KrisEnergy (Gulf of Thailand) Ltd. KrisEnergy Oil and Gas (Thailand) Ltd

Singapore

British Virgin Islands British Virgin Islands

100

100

Thailand

100

100

Investment holding Exploration and production of oil and gas

Thailand Thailand

Cayman Islands Thailand

100 100

100 100

M-54

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

22.

Related party disclosures (contd) Principal activities Principal place of business Country of incorporation

Name of entities

% of equity interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 100 100

KrisEnergy Resources (Thailand) Ltd

Exploration and production of oil and gas Dormant Investment holding Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Dormant Investment holding Dormant Investment holding Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas

Thailand

Thailand

KrisEnergy Management Ltd KrisEnergy (Cambodia) Holding Ltd(1)(2)(3) KrisEnergy (Cambodia) Ltd

Thailand Cambodia

British Virgin Islands British Virgin Islands Cambodia

100 100

100 100

Cambodia

100

100

KrisEnergy (Phu Khanh 120) Ltd(1)(2)(3)

Vietnam

British Virgin Islands

100

100

KrisEnergy (Song Hong 105) Ltd(1)(2)(3)

Vietnam

British Virgin Islands

100

100

KrisEnergy (Production) Ltd(7) KrisEnergy Asia Coperatief U.A. KrisEnergy Asia Holdings II B.V. KrisEnergy Asia Holdings B.V.(1) KrisEnergy GlagahKambuna B.V.

Singapore Singapore Singapore Singapore Indonesia

British Virgin Islands The Netherlands The Netherlands The Netherlands The Netherlands

100 100 100 100 100

100 100 100 100 100

KrisEnergy Nam Con Son B.V.(4)

Indonesia

The Netherlands

100

100

KrisEnergy Kutai B.V.

Indonesia

The Netherlands

100

100

M-55

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

22.

Related party disclosures (contd) Principal activities Principal place of business Country of incorporation

Name of entities

% of equity interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 100 100

KrisEnergy Indonesia Holdings B.V.(5)

Exploration and production of oil and gas Investment holding

Indonesia

The Netherlands

Wassana MOPU Pte. Ltd. (formerly known as Serica Energy Pte Ltd) KrisEnergy Kutei B.V.

Singapore

Singapore

100

100

Exploration and production of oil and gas Exploration and production of oil and gas Investment holding Exploration and production of oil and gas Investment holding Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas

Indonesia

The Netherlands

100

100

KrisEnergy East Seruway B.V.

Indonesia

The Netherlands

100

100

BEM Resources Limited EM Block Limited

Indonesia Indonesia

British Virgin Islands British Virgin Islands

100 100

100 100

B Block Limited KrisEnergy (Satria) Ltd

Indonesia Indonesia

British Virgin Islands British Virgin Islands

100 100

100 100

KrisEnergy (East Muriah) Ltd

Indonesia

British Virgin Islands

100

100

KrisEnergy (Ageng) B.V.

Indonesia

The Netherlands

100

100

KrisEnergy (Andaman Timur) B.V.

Indonesia

The Netherlands

100

100

M-56

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

22.

Related party disclosures (contd) Principal activities Principal place of business Country of incorporation

Name of entities

% of equity interest December 31, March 31, 2012 2013 (Audited) (Unaudited) 100 100

KrisEnergy (Nemo) B.V.

Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas Exploration and production of oil and gas

Indonesia

The Netherlands

KrisEnergy (Rembang) B.V.(6)

Indonesia

The Netherlands

100

100

KrisEnergy (Tanjung Aru) B.V.

Indonesia

The Netherlands

100

100

KrisEnergy (Udan Emas) B.V.

Indonesia

The Netherlands

100

100

Orange Energy Ltd

Thailand

Thailand

10

10

B8/32 Partners Ltd

Thailand

Thailand

4.63

4.63

(1) (2) (3) (4)

(5)

(6)

(7)

Capital Stock in this entity pledged as collateral for callable bonds First priority floating charge provided by this entity over present and future assets as collateral for callable bonds Assignment of internal loans by this entity as collateral for callable bonds With effect from April 9, 2013, the name of the Company was changed from KrisEnergy Nam Con Son B.V. to KrisEnergy (Bangora) B.V. With effect from April 9, 2013, the name of the Company was changed from KrisEnergy Indonesia Holdings B.V. to KrisEnergy (Andaman II) B.V. With effect from April 9, 2013, the name of the Company was changed from KrisEnergy (Rembang) B.V. to KrisEnergy (Sakti) B.V. With effect from May 2, 2013, the name of the Company was changed from KrisEnergy (Production) Ltd to KristEnergy (Song Hong 115) Ltd.

M-57

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

22.

Related party disclosures (contd) Compensation of directors and key management personnel The remuneration of directors and other members of key management during the period was as follows: Three-month period ended March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) Salaries and bonus Central Provident Fund contributions 586,688 3,417 590,105 Comprise amounts paid to: Directors of the Company Other key management personnel 394,811 195,294 590,105 645,356 4,322 649,678 434,403 215,275 649,678

23.

Fair value of financial instruments (a) Fair value of financial instruments that are carried at fair value The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy: Level 1 US$ December 31, 2012 (Audited) Financial assets: Embedded derivatives March 31, 2013 (Unaudited) Financial assets: Embedded derivatives Fair value hierarchy The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) M-58 Level 2 US$ Level 3 US$ Total US$

2,864,000

2,864,000

3,176,000

3,176,000

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

23.

Fair value of financial instruments (contd) (a) Fair value of financial instruments that are carried at fair value (contd) Fair value hierarchy (contd) Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There have been no transfers between fair value measurements level during the 3 months period ended March 31, 2013 and year ended December 31, 2012. Determination of fair value Embedded derivatives Fair value of embedded derivatives are determined using valuation models with both observable and non-observable data inputs. The nonobservable inputs to the models include assumptions regarding the bond price, bond yield and sigma (bond price volatility). (b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value Trade and other receivables and payables and accrued operating expenses The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values due to their short-term nature. (c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value The fair value of financial instruments that are not carried at fair value and whose carrying amounts are not reasonable approximate of fair value are as follows: December 31, 2012 (Audited) Carrying amount Fair value US$ US$ Financial assets Equity securities, at cost Financial liabilities: Loans and borrowings (non-current) amortized cost 182,057 * March 31, 2013 (Unaudited) Carrying amount Fair value US$ US$ 182,057 *

81,142,055

81,041,256

81,353,663

81,441,232

* Investment in equity securities carried at cost Fair value information has not been disclosed for the Groups investment in equity securities that are carried at cost because fair value cannot be measured reliably. These equity securities are not quoted on any market and does not have any comparable industry peer that is listed. The Group does not intend to dispose of this investment in the foreseeable future. M-59

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

23.

Fair value of financial instruments (contd) (c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value (contd) Determination of fair value Fixed rate callable loans The fair value disclosed in the table above is estimated by discounting expected cash flows at market incremental lending rate for similar types of borrowing arrangements at the reporting date.

24.

Financial risk management objectives and policies The Group is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, interest rate risk, and liquidity risk. It is, and has been throughout the current financial year, the Groups policy that no derivatives shall be undertaken, except for the use as hedging instruments where appropriate and cost-efficient. The following sections provide details regarding the Groups exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Groups exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances and derivatives), the Group minimizes credit risk by dealing exclusively with high credit rating counterparties. Exposure to credit risk At the end of the reporting date, the Groups maximum exposure to credit risk is represented by: - the carrying amount of each class of financial assets recognized in the interim consolidated statement of financial position - the carrying amount of loans and borrowings recognized in the interim consolidated statement of financial position relating to a corporate guarantee for the Bonds Credit risk concentration profile At the report date, approximately 42.6% (2012: 46.5%) of the Groups receivables arises from the Groups working interest in Glagah Kambuna TAC, Block B8/32 concession and Block B9A concession. Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the Group. Cash and cash equivalents, investment securities and derivatives are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default. M-60

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

24.

Financial risk management objectives and policies (contd) Credit risk (contd) Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 14 (Trade and other receivables). Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Groups financial instrument will fluctuate because of changes in market interest rates. At March 31, 2013 and December 31, 2012, the Group has insignificant financial instruments that are exposed to interest rate risk. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Groups exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The table below summaries the maturity profile of the Groups financial liabilities at the reporting date based on contractual undiscounted repayments obligations. One year or less US$ December 31, 2012 (Audited) Financial liabilities: Trade and other payables Accrued operating expenses Loans and borrowings Total undiscounted financial liabilities March 31, 2013 (Unaudited) Financial liabilities: Trade and other payables Accrued operating expenses Loans and borrowings Total undiscounted financial liabilities 10,884,976 7,859,521 114,526,467 10,884,976 7,859,521 114,526,467 11,961,015 9,902,998 116,746,808 11,961,015 9,902,998 116,746,808 One to five years US$ More than five years US$ Total US$

21,864,013

116,746,808

138,610,821

18,744,497

114,526,467

133,270,964

M-61

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

24.

Financial risk management objectives and policies (contd) Liquidity risk (contd) The table below shows the contractual expiry by maturity of the Groups contingent liabilities and commitments. The maximum amount of the corporate guarantee for the callable bonds (Note 19) is allocated to the earliest period in which the guarantee could be called. One year or less US$
December 31, 2012 (Audited) Corporate guarantees March 31, 2013 (Unaudited) Corporate guarantees 116,746,808 116,746,808

One to five years US$

More than five years US$

Total US$

114,526,467

114,526,467

25.

Capital management Capital includes debt and equity items as disclosed in the table below. The primary objective of the Groups capital management is to ensure that it maintain a healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year and period ended December 31, 2012 and March 31, 2013. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Groups policy is to keep the gearing ratio between 20% and 40%. The Group includes within net debts, trade and other payables, accrued operating expenses, and loans and borrowings less cash and cash equivalents. Capital includes equity attributable to the owners of the Company. December 31, 2012 US$ (Audited)
Trade and other payables (Note 18) Accrued operating expenses (Note 18) Loans and borrowings (Note 19) Less: cash and cash equivalents (Note 16) Net cash position Equity attributable to the owners of the Company Capital and net debt Gearing ratio 11,961,015 9,902,998 81,142,055 (121,900,954) (18,894,886) 278,533,687 278,533,687

March 31, 2013 US$ (Unaudited)

10,884,976 7,859,521 81,353,663 (120,262,118) (20,163,958) 277,965,495 277,965,495

M-62

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

26.

Segment reporting For management purposes, the Group operates in one business segment, that is exploration and production of oil and gas in Southeast Asia. Revenue and non-current assets information based on the geographical location of assets respectively are as follows: Revenue March 31, March 31, 2012 2013 US$ US$ (Unaudited) (Unaudited) 4,154,553 1,865,120 20,385,225 18,201,994 24,539,778 20,067,114 Non-current assets December 31, March 31, 2012 2013 US$ US$ (Audited) (Unaudited) 21,797,456 22,380,213 25,203,134 34,811,416 226,656,954 219,066,857 10,578,632 10,456,867 284,236,176 286,715,353

Cambodia Indonesia Thailand Vietnam

Non-current assets information presented above consist of exploration and evaluation assets, oil and gas properties and intangible assets as presented in the interim consolidated statement of financial position. Information about major customers The Group identifies a major customer as one who contributes to 10 per cent or more of the total revenue. As at December 31, 2012 and March 31, 2013, revenue from four major customers contributed to 38%, 30%, 9% and 12%, and 35%, 55%, 5% and 1% of the total revenue respectively. Seasonality of operation Seasonal weather conditions can limit the Groups exploration, drilling and production activities and other oil and gas operations in certain areas. The Group does not experience and have not experienced any other significant seasonality in the operations. 27. Subsequent events On April 8, 2013, KrisEnergy Ltd has entered into a sales and purchase agreement with Tullow Oil International Limited to acquire 100% of the share capital of Tullow Bangladesh Limited (TBL) through its wholly owned subsidiary, KrisEnergy Asia Holdings B.V. As at date of the unaudited interim consolidated financial statements, the transaction is pending approval from Bangladesh Mineral Oil and Gas Corporation (Petrobangla) and the Government of the Peoples Republic of Bangladesh. TBL holds a 30% working interest and operatorship of the producing Bangora Block 9 onshore gas field. On May 2, 2013, the US$30,000,000 revolving credit facility (Note 19) between KrisEnergy Holding Company Ltd and Standard Bank plc as administrative agent, Standard Bank plc and Sumitomo Mitsui Banking Corporation as mandated lead arrangers, as issuing banks and as initial lenders and The Bank of New York Mellon, Singapore branch as security trustee, has been amended and restated to increase the total commitments to US$42,500,000. M-63

KrisEnergy Ltd (Formerly known as KrisEnergy Holdings II Limited) Notes to Interim Consolidated Financial Statements March 31, 2013

27.

Subsequent events (contd) On May 31, 2013, the Issuer of the Bonds (Note 19) issued an additional US$35,000,000 Bonds under the same terms, including the same interest rate and maturity date, increasing the total principal amount of the 10.5% Senior Guaranteed Secured Bonds to US$120,000,000.

28.

Authorization of unaudited interim consolidated financial statements for issue The unaudited interim consolidated financial statements for the 3 months period ended March 31, 2013 were authorized for issue in accordance with a resolution of the directors on July 1, 2013.

M-64

APPENDIX N INDEPENDENT AUDITORS REPORT ON THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2012 AND THE THREE MONTHS ENDED MARCH 31, 2013

N-1

Report from the Independent Auditors in relation to the Unaudited Pro Forma Consolidated Financial Information of KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) For the financial year ended December 31, 2012 and the three months ended March 31, 2013

July 1, 2013 The Board of Directors KrisEnergy Ltd. 83 Clemenceau Avenue #10-05, UE Square Singapore 239920 Dear Sirs: Report on Unaudited Pro Forma Consolidated Financial Information We report on the unaudited pro forma consolidated financial information set out in page O-1 to O-17 of the prospectus dated July 1, 2013, which has been prepared, for illustrative purposes only and based on certain assumptions and after making certain adjustments to show : (i) what the financial results and cash flows of KrisEnergy Ltd (the Company; formerly known as KrisEnergy Holdings II Ltd.) and its subsidiaries (collectively, the Group) for the year ended December 31, 2012 and the three months ended March 31, 2013 would have been if the significant event as disclosed in Note 2 had occurred on January 1, 2012; and what the financial position of the Group as at December 31, 2012 and March 31, 2013 would have been if the significant event as disclosed in Note 2 had occurred at the end of December 31, 2012 and March 31, 2013.

(ii)

The unaudited pro forma consolidated financial information, because of its nature, may not give a true picture of the Groups actual financial position, results or cash flows of the Group. The unaudited pro forma consolidated financial information is the responsibility of the directors of the Company. Our responsibility is to express an opinion on the pro forma consolidated financial information based on our work. We carried out procedures in accordance with Singapore Statement of Auditing Practice 2, Auditors and Public Offering Documents (SSAP 2). Our work, which involved no independent examination of the underlying financial information, consisted primarily of comparing the pro forma consolidated financial information to the Company and its subsidiaries financial statements (or where information is not available in the Companys financial statements, to accounting records), considering the evidence supporting the adjustments and discussing the pro forma consolidated financial information with the directors of the Company. In our opinion, (a) the unaudited pro forma consolidated financial information has been properly prepared: (i) (ii) (b) on the basis stated in Note 3; and in a manner consistent with the accounting policies of the Group.

each material adjustment made to the information used in the preparation of the pro forma consolidated financial information is appropriate for the purpose of preparing such financial information. N-2

Report from the Independent Auditors in relation to the Unaudited Pro Forma Consolidated Financial Information of KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) For the financial year ended December 31, 2012 and the three months ended March 31, 2013

This report has been prepared solely for inclusion in the offering document of KrisEnergy Ltd. in connection with the initial public offering of the ordinary shares of the Company on the Singapore Exchange Securities Trading Limited. Our work has not been carried out in accordance with auditing, assurance or other standards and practices generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. Therefore, this report is not appropriate in other jurisdictions and should not be used or relied upon for any purpose other than the proposed public offering described above. We accept no duty or responsibility to and deny any liability to any party in respect of any use of, or reliance upon, this report other than the proposed public offering described above.

Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore Partner-in-Charge: Toong Weng Sum, Vincent

N-3

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX O UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2012 AND THE THREE MONTHS ENDED MARCH 31, 2013 KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Unaudited Pro Forma Consolidated Statement of Comprehensive Income For the financial year ended December 31, 2012 and the three months ended March 31, 2013

Note Revenue Cost of sales Gross profit Other income General and administrative expenses Other operating expenses Finance income Finance costs Profit before tax Tax expense (Loss)/profit for the year/period Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Total comprehensive income attributable to owners of the Company (Loss)/earnings per share attributable to owners of the Company (cents per share) 5 6

Year ended December 31, 2012 US$ 108,211,304 (61,977,931) 46,233,373 1,865,296 (25,286,545) (1,784,734) 411,332 (12,046,201) 9,392,521 (18,518,399) (9,125,878)

Three-month ended March 31, 2013 US$ 24,042,471 (13,188,013) 10,854,458 871,936 (4,821,673) 245,829 210,241 (2,570,529) 4,790,262 (3,792,509) 997,753

(64,809)

(29,321)

(9,190,687) (19)

968,432 1

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-1

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Unaudited Pro Forma Consolidated Statement of Financial Position as at December 31, 2012 and March 31, 2013

Note ASSETS Non-current assets Exploration and evaluation assets Oil and gas properties Other property, plant and equipment Intangible assets Embedded derivatives Investment securities

As at December 31, 2012 US$

As at March 31, 2013 US$

135,653,818 134,188,470 254,769 50,524,310 2,864,000 182,057 323,667,424

139,885,794 131,224,107 380,008 50,203,464 3,176,000 182,057 325,051,430 6,972,066 45,095,595 767,002 500,000 86,129,863 139,464,526 464,515,956

Current assets Inventories Trade and other receivables Prepayments Other current assets Cash and bank balances

6,054,728 45,614,165 1,108,574 500,000 87,969,692 141,247,159

Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Foreign currency translation reserve Accumulated losses Total equity Non-current liabilities Loans and borrowings Deferred tax liabilities Provisions Current liabilities Trade and other payables Accrued operating expenses Provisions Withholding tax payable Tax payable

464,914,583

1,000,000 402,750,000 (1,220,085) (123,599,705) 278,930,210 81,142,055 41,744,525 23,101,127 145,987,707 12,078,645 13,252,007 2,500,000 160,660 12,005,354 39,996,666

1,000,000 402,750,000 (1,249,406) (124,505,582) 277,995,012 81,353,663 40,969,036 23,227,821 145,550,520 10,975,835 10,248,356 2,500,000 96,002 17,150,231 40,970,424 186,520,944 464,515,956

Total liabilities Total equity and liabilities

185,984,373 464,914,583

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-2

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Unaudited Pro Forma Consolidated Statement of Cash Flows For the financial year ended December 31, 2012 and the three months ended March 31, 2013

Year ended December 31, 2012 US$ Profit before tax Adjustment to reconcile profit before tax to net cash flows: Depreciation, depletion and amortization Dry hole expense Net fair value gain on embedded derivatives Finance cost Unwinding of discount on decommissioning provisions Interest income Operating cash flows before changes in working capital Changes in working capital: Decrease/(increase) in inventories (Increase)/decrease in trade and other receivables Decrease in other current assets Decrease in trade and other payables Cash flows from operations Interest received Interest paid Tax paid Net cash flows from operating activities Investing activities Additions to exploration and evaluation assets Addition to oil and gas properties Acquisition of subsidiary Purchase of investment securities Purchase of other plant and equipment Net cash flows used in investing activities Financing activities Proceeds from share issuance Decrease in amount due to holding company Payment of bond interest Net cash flows from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Net effect of exchange rate changes Cash and cash equivalents at January 1 Cash and cash equivalents (Note 7) 9,392,521 27,616,346 1,283,288 (1,444,000) 11,575,176 471,025 (411,332) 48,483,024 863,741 (12,294,407) 1,991,314 (5,517,185) 33,526,487 411,332 (1,825,584) (20,155,928) 11,956,307

Three-month ended March 31, 2013 US$ 4,790,262 5,554,699 (312,000) 2,443,835 126,694 (210,241) 12,393,249 (917,338) 9,622,724 (10,872,243) 10,226,392 210,241 (21,746) 10,414,887

(16,839,659) (12,256,126) (42,350,084) (182,057) (253,037) (71,880,963) 115,000,000 (756,969) (8,925,000) 105,318,031 45,393,375 (83,383) 34,659,700 79,969,692

(4,231,976) (2,877,348) (42,350,084) (233,251) (49,692,659) (4,462,500) (4,462,500) (43,740,272) (30,819) 121,900,954 78,129,863

The accompanying notes form an integral part of the consolidated financial statements. O-3

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Comprehensive Income for the financial year ended December 31, 2012

Audited Consolidated Statement of Comprehensive Income US$ Revenue Cost of sales Gross profit Other income General and administrative expenses Other operating expenses Finance income Finance costs Profit before tax Tax expense (Loss)/profit for the year Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Total comprehensive income attributable to owners of the Company 89,592,582 (52,729,286) 36,863,296 1,865,296 (24,294,905) (2,028,837) 411,332 (11,970,662) 845,520 (18,518,399) (17,672,879)

Pro Forma Adjustments Note 3 US$ 18,618,722 (9,248,645) 9,370,077 (991,640) 244,103 (75,539) 8,547,001 8,547,001

Unaudited Pro Forma Consolidated Statement of Comprehensive Income US$ 108,211,304 (61,977,931) 46,233,373 1,865,296 (25,286,545) (1,784,734) 411,332 (12,046,201) 9,392,521 (18,518,399) (9,125,878)

(64,809)

(64,809)

(17,737,688)

8,547,001

(9,190,687)

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-4

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Comprehensive Income for the three months ended March 31, 2013

Unaudited Consolidated Statement of Comprehensive Income US$ Revenue Cost of sales Gross profit Other income General and administrative expenses Other operating expenses Finance income Finance costs Profit before tax Tax expense (Loss)/profit for the period Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Total comprehensive income attributable to owners of the Company 20,067,114 (10,856,270) 9,210,844 871,936 (4,739,059) 251,424 210,241 (2,551,748) 3,253,638 (3,792,509) (538,871)

Pro Forma Adjustments Note 3 US$ 3,975,357 (2,331,743) 1,643,614 (82,614) (5,595) (18,781) 1,536,624 1,536,624

Unaudited Pro Forma Consolidated Statement of Comprehensive Income US$ 24,042,471 (13,188,013) 10,854,458 871,936 (4,821,673) 245,829 210,241 (2,570,529) 4,790,262 (3,792,509) 997,753

(29,321)

(29,321)

(568,192)

1,536,624

968,432

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-5

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Financial Position as at December 31, 2012

Audited Consolidated Statement of Financial Position US$ ASSETS Non-current assets Exploration and evaluation assets Oil and gas properties Other property, plant and equipment Intangible assets Embedded derivatives Investment securities

Pro Forma Adjustments Note 3 US$

Unaudited Pro Forma Consolidated Statement of Financial Position US$

135,653,818 104,691,623 254,769 43,890,735 2,864,000 182,057 287,537,002

29,496,847 6,633,575 36,130,422 10,870,719 (41,931,262) (31,060,543) 5,069,879

135,653,818 134,188,470 254,769 50,524,310 2,864,000 182,057 323,667,424 6,054,728 45,614,165 1,108,574 500,000 87,969,692 141,247,159 464,914,583

Current assets Inventories Trade and other receivables Prepayments Other current assets Cash and bank balances

6,054,728 34,743,446 1,108,574 500,000 129,900,954 172,307,702

Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Foreign currency translation reserve Accumulated losses Total equity Non-current liabilities Loans and borrowings Deferred tax liabilities Provisions

459,844,704

1,000,000 402,750,000 (1,220,085) (123,996,228) 278,533,687

396,523 396,523

1,000,000 402,750,000 (1,220,085) (123,599,705) 278,930,210

81,142,055 41,744,525 22,024,643 144,911,223

1,076,484 1,076,484

81,142,055 41,744,525 23,101,127 145,987,707

O-6

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Financial Position as at December 31, 2012

Audited Consolidated Statement of Financial Position US$ Current liabilities Trade and other payables Accrued operating expenses Provisions Withholding tax payable Tax payable

Pro Forma Adjustments Note 3 US$

Unaudited Pro Forma Consolidated Statement of Financial Position US$

11,961,015 9,902,998 2,500,000 30,427 12,005,354 36,399,794

117,630 3,349,009 130,233 3,596,872 4,673,356 5,069,879

12,078,645 13,252,007 2,500,000 160,660 12,005,354 39,996,666 185,984,373 464,914,583

Total liabilities Total equity and liabilities

181,311,017 459,844,704

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-7

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Financial Position as at March 31, 2013

Unaudited Consolidated Statement of Financial Position US$ ASSETS Non-current assets Exploration and evaluation assets Oil and gas properties Other property, plant and equipment Intangible assets Embedded derivatives Investment securities 139,885,794 102,938,824 380,008 43,890,735 3,176,000 182,057 290,453,418 Current assets Inventories Trade and other receivables Prepayments Other current assets Cash and bank balances

Pro Forma Adjustments Note 3 US$

Unaudited Pro Forma Consolidated Statement of Financial Position US$

28,285,283 6,312,729 34,598,012

139,885,794 131,224,107 380,008 50,203,464 3,176,000 182,057 325,051,430

6,972,066 33,875,605 767,002 500,000 128,262,118 170,376,791

11,219,990 (42,132,255) (30,912,265) 3,685,747

6,972,066 45,095,595 767,002 500,000 86,129,863 139,464,526 464,515,956

Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Foreign currency translation reserve Accumulated losses Total equity Non-current liabilities Loans and borrowings Deferred tax liabilities Provisions

460,830,209

1,000,000 402,750,000 (1,249,406) (124,535,099) 277,965,495

29,517 29,517

1,000,000 402,750,000 (1,249,406) (124,505,582) 277,995,012

81,353,663 40,969,036 22,132,592 144,455,291

1,095,229 1,095,229

81,353,663 40,969,036 23,227,821 145,550,520

O-8

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Financial Position as at March 31, 2013

Unaudited Consolidated Statement of Financial Position US$ Current liabilities Trade and other payables Accrued operating expenses Provisions Withholding tax payable Tax payable 10,884,976 7,859,521 2,500,000 14,695 17,150,231 38,409,423 Total liabilities Total equity and liabilities 182,864,714 460,830,209

Pro Forma Adjustments Note 3 US$ 90,859 2,388,835 81,307 2,561,001 3,656,230 3,685,747

Unaudited Pro Forma Consolidated Statement of Financial Position US$ 10,975,835 10,248,356 2,500,000 96,002 17,150,231 40,970,424 186,520,944 464,515,956

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-9

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Cash Flows For the financial year ended December 31, 2012

Audited Consolidated Statement of Cash Flows US$ Operating activities Profit before tax Adjustment to reconcile profit before tax to net cash flows: Depreciation, depletion and amortization Dry hole expenses Net fair value gain on embedded derivatives Finance cost Unwinding of discount on decommissioning provisions Interest income Operating cash flows before changes in working capital Changes in working capital: Decrease in inventories Increase in trade and other receivables Decrease in other current assets Decrease in trade and other payables Cash flows from operations Interest received Interest paid Taxes paid Net cash flows from operating activities 845,520 23,221,442 1,283,288 (1,444,000) 11,571,101 399,561 (411,332)

Pro Forma Adjustments Note 3 US$ 8,547,001 4,394,904 4,075 71,464

Unaudited Pro Forma Consolidated Statement of Cash Flows US$ 9,392,521 27,616,346 1,283,288 (1,444,000) 11,575,176 471,025 (411,332)

35,465,580 863,741 (6,341,577) 1,991,314 (1,710,505) 30,268,553 411,332 (1,821,509) (20,155,928) 8,702,448

13,017,444 (5,952,830) (3,806,680) 3,257,934 (4,075) 3,253,859

48,483,024 863,741 (12,294,407) 1,991,314 (5,517,185) 33,526,487 411,332 (1,825,584) (20,155,928) 11,956,307

O-10

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Cash Flows For the financial year ended December 31, 2012

Audited Consolidated Statement of Cash Flows US$ Investing activities Additions to exploration and evaluation assets Addition to oil and gas properties Acquisition of subsidiary Purchase of investment securities Purchase of other plant and equipment Net cash flows used in investing activities Financing activities Proceeds from issuance of shares Decrease in amount due to holding company Payment of bond interest Net cash flows from financing activities Net increase in cash and cash equivalents Net effect of exchange rate changes Cash and cash equivalents at January 1 Cash and cash equivalents at December 31

Pro Forma Adjustments Note 3 US$

Unaudited Pro Forma Consolidated Statement of Cash Flows US$

(16,839,659) (9,421,089) (182,057) (253,037) (26,695,842)

(2,835,037) (42,350,084) (45,185,121)

(16,839,659) (12,256,126) (42,350,084) (182,057) (253,037) (71,880,963)

115,000,000 (756,969) (8,925,000) 105,318,031 87,324,637 (83,383) 34,659,700

(41,931,262)

115,000,000 (756,969) (8,925,000) 105,318,031 45,393,375 (83,383) 34,659,700

121,900,954

(41,931,262)

79,969,692

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information.

O-11

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Cash Flows For the financial year ended December 31, 2012

Unaudited Consolidated Statement of Cash Flows US$ Operating activities Profit before tax Adjustment to reconcile profit before tax to net cash flows: Depreciation, depletion and amortization Net fair value gain on embedded derivatives Finance cost Unwinding of discount on decommissioning provisions Interest income Operating cash flows before changes in working capital Changes in working capital: Increase in inventories Decrease in trade and other receivables Decrease in trade and other payables Cash flows from operations Interest received Interest paid Net cash flows from operating activities 3,253,638 4,629,434 (312,000) 2,443,799 107,949 (210,241)

Pro Forma Adjustments Note 3 US$ 1,536,624 925,265 36 18,745

Unaudited Pro Forma Consolidated Statement of Cash Flows US$ 4,790,262 5,554,699 (312,000) 2,443,835 126,694 (210,241)

9,912,579 (917,338) 1,209,413 (306,350) 9,898,304 210,241 (21,710) 10,086,835

2,480,670 8,413,311 (10,565,893) 328,088 (36) 328,052

12,393,249 (917,338) 9,622,724 (10,872,243) 10,226,392 210,241 (21,746) 10,414,887

O-12

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Statement of Adjustments for the Unaudited Pro Forma Consolidated Statement of Cash Flows For the for the three months ended March 31, 2013

Unaudited Consolidated Statement of Cash Flows US$ Investing activities Additions to exploration and evaluation assets Addition to oil and gas properties Acquisition of subsidiary Purchase of other plant and equipment Net cash flows used in investing activities Financing activities Payment of bond interest Net cash flows used in financing activities Net decrease in cash and cash equivalents Net effect of exchange rate changes Cash and cash equivalents at January 1 Cash and cash equivalents at March 31 (4,231,976) (2,767,125) (233,251) (7,232,352) (4,462,500) (4,462,500) (1,608,017) (30,819) 121,900,954 120,262,118

Pro Forma Adjustments Note 3 US$ (110,223) (42,350,084) (42,460,307) (42,132,255) (42,132,255)

Unaudited Pro Forma Consolidated Statement of Cash Flows US$ (4,231,976) (2,877,348) (42,350,084) (233,251) (49,692,659) (4,462,500) (4,462,500) (43,740,272) (30,819) 121,900,954 78,129,863

The accompanying notes form an integral part of the unaudited pro forma consolidated financial information. O-13

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to the Unaudited Pro Forma Consolidated Financial Information for the financial year ended December 31, 2012 and the three months ended March 31, 2013

The unaudited pro forma consolidated financial information should be read in conjunction with the audited consolidated financial statements of KrisEnergy Ltd. (the Company) and its subsidiaries (collectively the Group) for the financial year ended December 31, 2012 as set out in Appendix K of the Offering Document respectively.

1.

Corporate information KrisEnergy Ltd was incorporated on October 5, 2009 as a limited liability company in Cayman Islands. With effect from July 4, 2012, the name of the Company was changed from KrisEnergy Holdings II Limited to KrisEnergy Ltd. The registered office of the Company is located at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. Its immediate holding company is KrisEnergy Holdings Limited, a company incorporated in Cayman Islands. The ultimate controlling party is First Reserve Corporation. The principal activity of the Company is that of investment holding.

2.

Acquisition of Tullow Bangladesh Limited On April 8, 2013, the Group entered into a sales and purchase agreement with Tullow Oil International Limited (Tullow) to acquire 100% of the share capital of Tullow Bangladesh Limited (TBL) through its wholly owned subsidiary, KrisEnergy Asia Holdings B.V. TBL holds a 30% working interest and operatorship of the producing Bangora Block 9 onshore gas field. The purchase consideration for this acquisition is US$42,350,084, which shall be deemed to include all of the effective date working capital except for the effective date intercompany balance. This transaction is pending approval from Bangladesh Mineral Oil and Gas Corporation (Petrobangla) and the Government of the Peoples Republic of Bangladesh. The Group and TBL are herein referred to as the Pro Forma Group for the purposes of these unaudited pro forma consolidated financial information.

3.

Basis of preparation of unaudited pro forma consolidated financial information The unaudited pro forma consolidated financial information set out in this report has been prepared for illustrative purposes only. It has been prepared to illustrate what: (i) the financial results and cash flows of the Group for the year ended December 31, 2012 and three months ended March 31, 2013 would have been if the acquisition of TBL (as discussed in Note 2) had taken place on January 1, 2012 and the financial position of the Group as at December 31, 2012 and March 31, 2013 if the acquisition of TBL (as discussed in Note 2) had taken place as at the end of December 31, 2012 and March 31, 2013.

(ii)

O-14

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to the Unaudited Pro Forma Consolidated Financial Information for the financial year ended December 31, 2012 and the three months ended March 31, 2013

3.

Basis of preparation of unaudited pro forma consolidated financial information (contd) The unaudited pro forma consolidated financial information has been prepared based on the following: (i) audited consolidated financial statements of the Group for the financial year ended December 31, 2012 and the interim unaudited consolidated financial statements of the Group for the three months ended March 31, 2013 which were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). audited financial statements of TBL for the financial year ended December 31, 2012. unaudited management accounts of TBL for the period ended March 31, 2013.

(ii) (iii)

The audited consolidated financial statements of the Group for the financial year ended December 31, 2012 and the interim unaudited consolidated financial statements of the Group for the three months ended March 31, 2013 were audited and reviewed by Ernst & Young LLP Singapore, Public Accountants and Certified Public Accountants. The audited financial statements of TBL for the financial year ended December 31, 2012 was audited by Robert J. Kidney & Co., another firm of Certified Public Accountants, in accordance to United Kingdom Accounting Standards and International Standards on Auditing (UK and Ireland). No material adjustments are required to restate the financial statements of TBL to be in accordance to IFRS. The auditors report on the above financial statements was not subject to any qualification, modification or disclaimer. The objective of the unaudited pro forma consolidated financial information is to show what the historical financial information might have been had the Pro Forma Group existed since January 1, 2012, and as at December 31, 2012 and March 31, 2013. However, the unaudited pro forma consolidated financial information of the Pro Forma Group is not necessarily indicative of results of the operations or related effects on the financial position that would have been attained had the Pro Forma Group actually existed earlier. The following adjustments were made for each of the periods presented: (1) To account for the acquisition of TBL: a. The purchase consideration is the aggregate of US$42,350,084 and balances between Tullow and TBL as at December 31, 2012 and March 31, 2013. The consideration is funded by internal cash. b. For the purposes of the unaudited Pro Forma Consolidated Statement of Financial Position, the carrying amount of identifiable assets and liabilities approximate their fair values, at December 31, 2012 and March 31, 2013. c. For the purposes of the unaudited Pro Forma Consolidated Statement of Comprehensive Income and unaudited Pro Forma Consolidated Statement of Cash Flows, the date of acquisition is assumed to be January 1, 2012 and the carrying amount of identifiable assets and liabilities approximate their fair values, at those dates. O-15

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to the Unaudited Pro Forma Consolidated Financial Information for the financial year ended December 31, 2012 and the three months ended March 31, 2013

3.

Basis of preparation of unaudited pro forma consolidated financial information (contd) (2) (3) (4) (5) Elimination of investment in TBL as at December 31, 2012 and March 31, 2013 Recognition of depreciation, depletion and amortization per Group accounting policies Recognition of decommissioning provisions per Group accounting policies Derecognition of employee stock option scheme attributable to TBL employees

The unaudited pro forma consolidated financial information, because of its nature, may not give a true picture of the Groups actual financial position, results or cash flows of the Group.

4.

Significant accounting policies The unaudited pro forma consolidated financial information is prepared using the same accounting policies as the audited consolidated financial statements of the Group as disclosed in Note 2 to the Audited Consolidated Financial Statements of KrisEnergy Ltd. for the financial year ended December 31, 2012.

5.

(Loss)/earnings per share The basic and diluted (loss)/earnings per share is calculated by dividing Pro Forma Groups (loss)/profit for the year and period attributable to owners of the Company by the weighted average number of ordinary shares during the year and period respectively. The following tables reflect the (loss)/profit and share data used in the computation of basic and diluted (loss)/earnings per share for the year ended December 31, 2012 and period ended March 31, 2013: 2012 US$ (Loss)/profit for the period attributable to owners of the Company used in the computation of basic and diluted (loss)/earnings per share Weighted average number of ordinary shares for computation of basic and diluted (loss)/earnings per share 2013 US$

(9,125,878)

997,753

49,041,147

100,000,000

6.

Revenue 2012 US$ Sale of crude oil Sale of gas 69,797,244 38,414,060 108,211,304 2013 US$ 16,391,960 7,650,511 24,042,471

O-16

KrisEnergy Ltd. (formerly known as KrisEnergy Holdings II Limited) Notes to the Unaudited Pro Forma Consolidated Financial Information for the financial year ended December 31, 2012 and the three months ended March 31, 2013

7.

Cash and bank balances 2012 US$ Cash at banks and on hand Short-term structured deposits Cash and bank balances 79,969,692 8,000,000 87,969,692 2013 US$ 78,129,863 8,000,000 86,129,863

Cash at banks earn interest at floating rates based on daily bank deposit rates. Included in cash at banks and on hand is a short-term structured deposit of US$8,000,000 placed with and pledged to a bank for issuance of guarantees on behalf of KrisEnergy (Song Hong 105) Ltd and KrisEnergy (Phu Khanh 120) Ltd. These deposits had a minimum yield of 0.5% per annum. For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following for the year ended December 31, 2012 and period ended March 31, 2013: 2012 US$ Cash and bank balances Less: Restricted cash Cash and cash equivalents 87,969,692 (8,000,000) 79,969,692 2013 US$ 86,129,863 (8,000,000) 78,129,863

O-17

[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX P US QUALIFIED PURCHASERS LETTER [on the letterhead of the investor; to be executed prior to purchase from the Joint Issue Managers, Global Coordinators, Bookrunners and Underwriters] To: KrisEnergy Ltd. (the Company) CLSA Singapore Pte Ltd and Merrill Lynch (Singapore) Pte. Ltd. (together, the Joint Issue Managers, Global Coordinators, Bookrunners and Underwriters)

Ladies and Gentlemen: We are delivering this letter (US Qualified Purchasers Letter) in connection with our purchase(s) of ordinary shares (the Shares) of the Company in its initial public offering on the Singapore Exchange. The term US person as used in this US Qualified Purchasers Letter is understood to have the meaning given to it in Regulation S (Regulation S) under the United States Securities Act of 1933, as amended (the US Securities Act). We represent and warrant to and agree with you as follows: 1. We are purchasing the Shares for our own account or for one or more beneficial owners for which we are acting as fiduciary or agent, with complete investment discretion and with authority to bind each such person and not with a view to any public resale or distribution of such Shares. We, and each account for which we are acting, are each purchasing Shares amounting to at least US$250,000 or its equivalent in another currency. All references in this US Qualified Purchasers Letter to us are understood to include each such beneficial owner for whom we may be acting. We understand and acknowledge that: (a) no registration has been or will be undertaken by the Company under the United States Investment Company Act of 1940, as amended, and the rules and regulations thereunder (the US Investment Company Act); and the Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States.

2.

(b)

3.

If we are in the United States, we (and each beneficial owner for whom we may be acting): (a) are a qualified institutional buyer as defined in Rule 144A under the US Securities Act (Rule 144A); and understand, agree and are aware that the sale to us of Shares is being made in reliance on the exemption provided by Rule 144A from registration under the provisions of Section 5 of the US Securities Act.

(b)

4.

If we are outside the United States, we understand and agree that we are purchasing the shares in an offshore transaction as defined in and in reliance on Regulation S. We agree that neither we, nor any of our affiliates, nor any person acting on our or their behalf, will make, and represent and warrant that our purchase of Shares is not the result of, and that we have not at any time initiated any process in relation to any purchase of Shares as a result of nor considered any purchase of Shares as a result of: (a) any directed selling efforts (as defined in Regulation S) in the United States in connection with any offer or sale of the Shares; any general solicitation or general advertising (as defined in Regulation D under the US Securities Act) in the United States in connection with any offer or sale of the Shares; in any manner involving a public offering within the meaning of Section 4(2) of the US Securities Act; P-1

5.

(b)

(c)

(d)

any statement or information found on any website of the Company, or any of their affiliates or the Singapore Exchange Securities Trading Limited (the SGX- ST) or the Monetary Authority of Singapore (the MAS); and any statement or information found in any announcement, press release or press-related materials released by the Company, any of their affiliates or any person acting on its or their behalf, including the Joint Issue Managers, Global Coordinators, Bookrunners and Underwriters, their affiliates or any person acting on its or their behalf and including any such announcement, press release or materials released by or through the SGX-ST or the MAS.

(e)

We further represent and agree that neither we, nor any of our affiliates, nor any person acting on our or their behalf, has relied nor will rely upon any statement or information described in subparagraphs 5(d) and 5(e) above and that we waive, and will procure that each of our affiliates and each person acting on our or their behalf will waive, all claims with respect to any inaccuracy or omission in any such statement or information. 6. If we are in the United States or a US person at the time this US Qualified Purchasers Letter is executed and at the time of our acquisition of the Shares, we (and each beneficial owner for whom we may be acting): (a) understand and acknowledge that the sale to us of Shares is being made in reliance on the exemption from registration provided by Section 3(c)(7) of the US Investment Company Act; are a qualified purchaser (Qualified Purchaser) as defined in Section 2(a)(51) of, and related rules under, the US Investment Company Act; understand that, subject to certain exceptions, to be a Qualified Purchaser, entities must have US$25 million in investments as defined in Rule 2a51-1 under the US Investment Company Act; confirm and represent that: (i) we were not formed for the purpose of investing in the Company; (ii) if we are a private investment company relying upon Section 3(c)(1) or 3(c)(7) of the US Investment Company Act or a foreign investment company relying upon Section 7(d) and Section 3(c)(1) or 3(c)(7) with respect to its US holders and were formed on or before April 30, 1996, we have received the necessary consent from our beneficial owners pursuant to the US Investment Company Act; (iii) we do not and will not invest more than 40% of our total assets in the Company; and (iv) we are not managed as a device for facilitating individual investment decisions of our beneficial owners, but rather are managed as a collective investment vehicle; are not a broker-dealer which owns and invests on a discretionary basis less than $25 million in securities of unaffiliated issuers; are not a participant-directed employee plan, such as a plan described in subsections (a)(1)(i)(D), (E) or (F) of Rule 144A; and are not a partnership; common trust fund; or corporation, special trust, pension fund or retirement plan, or other entity, in which the partners, beneficiaries, beneficial owners, participants, shareholders or other equity owners, as the case may be, may designate the particular investment to be made, or the allocation thereof.

(b)

(c)

(d)

(e)

(f)

(g)

7.

We are not, are not using the assets of and shall not at any time hold the Shares for or on behalf of an employee benefit plan as defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA) which is subject to Title I of ERISA, a plan subject to Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the Code), an entity whose underlying assets include the assets of such plans by reason of a plans investment in such entity, or a governmental, church or non-U.S. plan subject to federal, state, local or non-U.S. laws substantially similar to Section 406 of ERISA or Section 4975 of the Code (Similar Law) unless, in either case, the purchase of the Shares would not constitute a non-exempt prohibited transaction or the violation of any Similar Law. We agree that the Shares we purchase, or any interest therein, may be sold, transferred, assigned, pledged or otherwise disposed of, only in bona fide offshore transactions (as defined in and in reliance on, P-2

8.

Regulation S. We also agree not to effect any sale, transfer, assignment, pledge or other disposition unless we first execute a US Resale Letter in the form of Appendix Q of the offering document for the Shares and deliver such letter to the Company prior to the settlement of any sale, transfer, assignment, pledge or other disposition of the Shares. We understand that these transfer restrictions will remain in effect until the Company determines, in its sole discretion, to remove them. 9. We understand and acknowledge that if any Shares are issued to us in certificated form, they will bear a legend to the following effect. In addition, we understand that the legend shall not be removed from the Shares unless the Company agrees, in its sole discretion, to remove the legend. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE US SECURITIES ACT), THE SECURITIES LAWS OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND HAS BEEN INITIALLY PLACED PURSUANT TO EXEMPTIONS FROM THE US SECURITIES ACT AND THE US INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE US INVESTMENT COMPANY ACT) AND MAY NOT BE REOFFERED, RE-SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT THAT THIS SECURITY MAY BE RE-OFFERED, RE-SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN AN OFFSHORE TRANSACTION AS DEFINED IN AND PURSUANT TO REGULATION S UNDER THE US SECURITIES ACT (REGULATION S) TO A PERSON OUTSIDE THE UNITED STATES AND NOT KNOWN BY THE TRANSFEROR TO BE A US PERSON BY PRE-ARRANGEMENT OR OTHERWISE, AND UPON CERTIFICATION TO THAT EFFECT BY THE TRANSFEROR IN WRITING IN A FORM ACCEPTABLE TO THE COMPANY. THE TERM US PERSON AS USED HEREIN HAS THE MEANING GIVEN TO IT IN REGULATION S. THE COMPANY, ITS AFFILIATES AND ITS AGENTS SHALL NOT BE OBLIGATED TO RECOGNIZE ANY RESALE OR OTHER TRANSFER OF THIS SECURITY MADE OTHER THAN IN COMPLIANCE WITH THESE RESTRICTIONS. THE COMPANY, ITS AFFILIATES AND ITS AGENTS MAY REQUIRE ANY PERSON WITHIN THE UNITED STATES OR ANY US PERSON WHO IS REQUIRED UNDER THESE RESTRICTIONS TO BE A QUALIFIED PURCHASER (AS DEFINED UNDER THE US INVESTMENT COMPANY ACT AND THE RULES THEREUNDER (A QUALIFIED PURCHASER)) BUT WHO IS NOT A QUALIFIED PURCHASER AT THE TIME IT ACQUIRES THIS SECURITY, TO TRANSFER THIS SECURITY IMMEDIATELY TO A NON-US PERSON IN AN OFFSHORE TRANSACTION PURSUANT TO REGULATION S. THE COMPANY MAY ALSO PURCHASE FOR CANCELLATION (TO THE EXTENT PERMITTED BY THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED) ANY SUCH SHARES FROM ANY SUCH PERSON ON A COMPULSORY BASIS. FURTHER, EACH PURCHASER OR TRANSFEREE OF THIS SECURITY WILL BE REQUIRED TO REPRESENT OR WILL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT AND IS NOT USING THE ASSETS OF AND SHALL NOT AT ANY TIME HOLD SUCH SHARE FOR OR ON BEHALF OF A EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (ERISA) WHICH IS SUBJECT TO TITLE I OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE CODE), AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF SUCH PLANS BY REASON OF A PLANS INVESTMENT IN SUCH ENTITY OR A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN SUBJECT TO FEDERAL, STATE, LOCAL OR NON-U.S. LAWS SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (SIMILAR LAW) OR, IN EITHER CASE, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SHARE OR OF ANY INTEREST THEREIN, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR, IN THE CASE OF A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN, A VIOLATION OF ANY APPLICABLE SIMILAR LAWS. THIS SECURITY IS NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS DESCRIBED HEREIN. EACH TRANSFEROR OF THIS SECURITY AGREES TO PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE COMPANYS PROSPECTUS TO THE TRANSFEREE AND TO ANY EXECUTING BROKER.

P-3

10.

We understand and agree that our purchase of Shares and any subsequent sale or transfer of Shares (or beneficial interest therein) to a person may be void and of no effect if such purchase, sale or transfer does not comply with the representations, warranties and agreements set out in this US Qualified Purchasers Letter. We understand and agree that the Company is authorized to compel us to sell or transfer Shares which we purchase or to compel a person who, directly or indirectly, holds a beneficial interest in such Shares through us in certain circumstances set out in Appendix F Summary of Certain Provisions of the Cayman Islands Companies Law and the Memorandum and Articles of Association of Our Company of the offering document for the Shares. We acknowledge that you and your affiliates are relying on the truth and accuracy of, and compliance with, the foregoing acknowledgements, representations and agreements and agree that if we, or any transferee, breach any agreement contained herein or have made any misrepresentation herein or if any US Person or any person within the United States acquires a beneficial interest in the Shares, the Company may (to the extent permitted by the Singapore Exchange Securities Trading Limited) purchase our Shares for cancellation or sell our interest in the Shares without our consent to a person designated by the Company on such terms as the Company shall determine in its sole discretion. Upon a proposed sale, transfer, assignment, pledge or other disposition of the Shares, we will notify any purchaser of such Shares, the executing broker and any other agent of the transferor involved in selling the Shares, as applicable, of the transfer restrictions set forth in this US Qualified Purchasers Letter that are applicable to the Shares being sold and will require the broker and such other agent, as applicable, to comply with such restrictions.

11.

12.

13.

Where there are joint applicants, each must sign this US Qualified Purchasers Letter. Applications from a corporation must be signed by an authorized officer or be completed otherwise in accordance with such corporations constitutional documents (and evidence of such authority may be required).

(Name of Purchaser) By: Title: Date:

P-4

APPENDIX Q US RESALE LETTER [on the letterhead of the investor; to be executed after resale of the Shares outside the United States; to be delivered to the Company prior to the settlement of any sale or other transfer of Shares] KrisEnergy Ltd. (the Company) 83 Clemenceau Avenue #10-05 , UE Square Singapore 239920 Ladies and Gentlemen: This letter (Resale Letter) relates to the sale or other transfer by us of ordinary shares (the Shares) of the Company, which is required to be in an offshore transaction pursuant to Regulation S (Regulation S) under the US Securities Act of 1933, as amended (the US Securities Act). Terms used in this Resale Letter are used as defined in Regulation S, except as otherwise stated herein. We hereby represent and warrant to you as follows: (a) We previously purchased the Shares for our own account (or for one or more beneficial owners for which we have acted as fiduciary or agent, with complete investment discretion and with authority to bind each such person), executed a US Qualified Purchasers Letter in the form in Appendix P of the offering document of the Company prepared in relation to the Shares (the Offering Prospectus) on our own behalf and on behalf of each beneficial owner we have acted for and delivered such US Qualified Purchasers Letter to you. We understand that the Shares have not been and will not be registered under the US Securities Act and that the Company has not registered and will not register as an investment company under the Investment Company Act of 1940, as amended, and the rules thereunder (the Investment Company Act). The offer and sale of the Shares by us was not made to a person in the United States or to a US Person (as defined in Regulation S). Either: (i) at the time the buy order for the sale of the Shares by us was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States; or the transfer of the Shares by us was executed in, on or through the facilities of a designated offshore securities market as defined in Regulation S (including, for the avoidance of doubt, a bona fide sale on the Singapore Exchange Securities Trading Limited), and neither we nor any person acting on our behalf has reason to believe that the transaction was pre-arranged with a buyer in the United States.

(b)

(c)

(ii)

(d)

We have no reason to believe that the person to whom we are transferring the Shares is, or is using the assets of or shall at any time hold the Shares for or on behalf of, an employee benefit plan as defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA) which is subject to Title I of ERISA, a plan subject to Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the Code), an entity whose underlying assets include the assets of such plans by reason of a plans investment in such entity, or a governmental, church or non-U.S. plan subject to federal, state, local or non-U.S. laws substantially similar to Section 406 of ERISA or Section 4975 of the Code (Similar Law) unless, in either case, the purchase of the Shares would not constitute a nonexempt prohibited transaction or the violation of any Similar Law. Neither we, nor any of our affiliates, nor any person acting on our or their behalf, has made any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to the Shares. The transfer of the Shares by us was not and is not part of a plan or scheme to evade the registration requirements of the US Securities Act or the Investment Company Act. Q-1

(e)

(f)

(g)

None of the Company, any of its agents nor any of their respective affiliates participated in the sale of the Shares by us. We agree that the Company, its agents and their respective affiliates may rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements.

(h)

Where there are joint transferors, each must sign this US Resale Letter. A US Resale Letter of a corporation must be signed by an authorized officer or be completed otherwise in accordance with such corporations constitution (and evidence of such authority may be required). Yours sincerely,

(Name of Transferor)

By: Title: Date:

Q-2

APPENDIX R DEFINITIONS This glossary contains explanations and definitions of certain terms used in this offering document in connection with our business. The terms and their assigned meaning may not correspond to standard industry or common meaning or usage of these terms. 1C 1P 2007 PRMS Low estimate scenario of contingent resources. Equivalent to proved reserves; denotes low estimate scenario of reserves. The Petroleum Resources Management System jointly set out by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers in April 2007. Best estimate scenario of contingent resources. Geophysical data that depicts the subsurface strata in two dimensions. Equivalent to proved plus probable reserves; denotes best estimate scenario of reserves. High estimate scenario of contingent resources. Geophysical data that depicts the subsurface strata in three dimensions. 3D seismic typically provides a more detailed and accurate interpretation of the subsurface strata than 2D seismic. Equivalent to proved plus probable plus possible reserves; denotes high estimate scenario of reserves. Aabar Petroleum Investments Company PJSC. AWE Limited. B8/32 Partners Ltd. the government of the Peoples Republic of Bangladesh. Areas where sedimentary rocks have accumulated over time, which are regarded as good prospects for oil and gas exploration. Barrel. Billion cubic feet. Billion cubic feet per day. Block 105-110/04. Barrels of oil equivalent per day. Barrels of oil per day. Badan Pelaksana Kegiatan Hulu Minyak dan Gas Bumi, the former Indonesian regulator of upstream oil and gas activities. A blended crude stream produced in the North Sea region which serves as a reference or marker for pricing a number of other crude streams. Royal government of the Kingdom of Cambodia. Chevron Corporation and its subsidiaries. Cambodian National Petroleum Authority. R-1

2C 2D seismic 2P 3C 3D seismic

3P Aabar AWE B8/32 Partners Bangladesh Government basin bbl bcf bcfd Block 105 boepd bopd BP Migas Brent Cambodian Government Chevron CNPA

commercial

When a project is commercial, this implies that the essential social, environmental and economic conditions are met, including political, legal, regulatory and contractual conditions. In addition, a project is commercial if the degree of commitment is such that the accumulation is expected to be developed and placed on production within a reasonable time frame. A mixture of liquid hydrocarbons (mostly pentanes and heavier) that exist in the gaseous phase at original reservoir temperature and pressure, but when the gas is produced and processed through the dew point, are in the liquid phase at surface temperature and pressure conditions. 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. A specified geographic area that is the subject of an agreement with the host government pursuant to which an operator and its partners provide financing and technical expertise to conduct exploration, development and production operations. First Reserve and Keppel. Under certain fiscal regimes, such as those in Cambodia, Indonesia and Vietnam, the contractor is entitled to recover its costs out of net production. The cost recovery limit is the maximum percentage of hydrocarbons which is permitted to be allocated to cost recovery. The project is seen to have reasonable potential for eventual commercial development, to the extent that further data acquisition (e.g. drilling, seismic data) and/or evaluations are currently ongoing with a view to confirming that the project is commercially viable and providing the basis for selection of an appropriate development plan. The critical contingencies have been identified and are reasonably expected to be resolved within a reasonable time frame. Disappointing appraisal/evaluation results could lead to a re-classification of the project to On Hold or Not Viable status. A discovered accumulation where project activities are on hold and/or where justification as a commercial development may be subject to significant delay. The project is seen to have potential for eventual commercial development, but further appraisal/evaluation activities are on hold pending the removal of significant contingencies external to the project, or substantial further appraisal and/or evaluation activities are required to clarify the potential for eventual commercial development. Development may be subject to a significant time delay.

condensate

contingent resources

contract areas

Controlling Shareholders cost recovery limit

Development Pending

Development Unclarified

development well discovery

A well drilled to obtain production from a proven oil or gas field. One petroleum accumulation, or several petroleum accumulations collectively, for which one or several exploratory wells have established through testing, sampling, and/or logging the existence of a significant quantity of potentially moveable hydrocarbons. In this context, significant implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in place volume demonstrated by the well(s) and for evaluating the potential for economic recovery. An obligation that a contractor to a PSC supply the Indonesian market a proportion of its entitlement from oil and gas production, up to a maximum of 25.0 per cent., at a specified price (often expressed as a percentage of market price). R-2

domestic market obligation or DMO

Employee Eni Enovation EIA Executive Director exploration well farm-in / farm-out field

Any confirmed employee of our Group to participate in the Scheme and/or the Plan. Eni S.p.A. and its subsidiaries. Enovation Resources Ltd. Environmental Impact Assessment. A Director of our Group who performs an executive function. A well drilled to find hydrocarbons in an unproved area or to extend significantly a known oil or gas reservoir. Process where the owner of an interest in a contract area invites third parties to participate in and assume some of the risks of developing the contract area. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature and/or stratigraphic condition. The decision by a joint venture to commence development of the relevant field pursuant to the relevant approved PAA, PPA, plan of development or development plans, as the case may be. First Reserve Management, L.P., together with its affiliated funds. The scientific study of the origin, history and structure of the earth (adj. geological). Matters concerning the physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. In oil and gas exploration, this refers to geophysical methods of imaging the subsurface such as gravity, magnetic and seismic (adj. geophysical). An elongated block of the earths crust lying between two faults and displaced downwards relative to the blocks on either side. The total volume of oil and/or gas anticipated to be commercially produced in the future. A raised elongated block of the earths crust lying between two faults. The government of the Republic of Indonesia. Wood Mackenzie Asia-Pacific Pte Limited. Joint operating agreement. Keppel Corporation Limited. A project associated with a potential accumulation that is currently poorly defined and requires more data acquisition and/or evaluation in order to be classified as a prospect. The Listing Manual of the SGX-ST. Liquefied natural gas; gas that has been liquefied by cooling for the purpose of shipment and storage. Thousand cubic feet. Mitsui Oil Exploration Co. Ltd. Million barrels of oil. R-3

final investment decision

First Reserve geology geophysics

graben gross reserves horst Indonesian Government Industry Consultant JOA Keppel leads

Listing Manual LNG mcf MOECO mmbo

mmboe mmbtu mmcfd Mubadala Neon Energy Non-Executive Director Northern Gulf OEL PAA Participants Pearl Energy Petrobangla Petro Vietnam pigging Plan Plan Shares Play

Million barrels of oil equivalent. Million British thermal units. Million cubic feet per day. Mubadala Development Corporation and its subsidiaries, including Pearl Energy after its acquisition in 2008. Neon Energy Ltd and its subsidiaries. A Director of our Group who is not an Executive Director (including an Independent Director). Northern Gulf Petroleum Pte Ltd and its subsidiaries. Orange Energy Ltd. Production Area Application. Eligible participants of the Scheme and the Plan. Pearl Energy Limited, prior to its takeover by Mubadala in 2008. Bangladesh Oil, Gas and Mineral Corporation. The Vietnam Oil and Gas Group. The act of forcing a device called a pig through a pipeline for the purposes of displacing or separating fluids and cleaning or inspecting the line. KrisEnergy Performance Share Plan. Shares released under the Plan. A project associated with a prospective trend of potential prospects, but which requires more data acquisition and/or evaluation in order to define specific leads or prospects. Those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than probable reserves. Production Permit Application. Those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than proved reserves but more certain to be recovered than possible reserves. An area defined by the Thai Government authorities where oil and gas may be produced from oil and gas production material. A project associated with a potential accumulation that is sufficiently well defined to represent a viable exploration drilling target. Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. Those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. Production sharing contract, which is an agreement with the relevant host government, which outlines the fiscal terms for exploring, developing and producing oil and gas within a specified contract area. R-4

possible reserves PPA probable reserves

production area or PA prospect prospective resources proved reserves

PSC

psig Qualified Person Qualified Persons Report reserves

Pounds per square inch. Netherlands, Sewell & Associates, Inc. The summarizing an estimate of our reserves and contingent and prospective resources prepared by the Qualified Person and set out in Appendix D of this offering document. 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. All quantities of petroleum (recoverable and unrecoverable) naturally occurring on or within the earths crust, discovered and undiscovered, plus those quantities already produced. KrisEnergy Employee Share Option Scheme. Shares released under the Scheme. Serica Energy, together with its subsidiaries. A payment made to a host government body upon entering into a PSC. Satuan Kerja Khusus Sementara Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi, the Indonesian Governments Special Work Unit for Upstream Oil and Gas Activities, including BP Migas in its former capacity as the Indonesian regulator of upstream oil and gas activities unless the context otherwise requires. One cubic foot of gas at standard conditions of 60 degrees Fahrenheit and 14.696 psia. The volume of stabilized oil, equivalent to one barrel (42 US gallons or approximately 158.987 liters) at stock tank conditions of 60 degrees Fahrenheit and 14.696 psia. Began to drill a well. PT Satria Wijayakusuma. A depocenter filled with sediments of Paleogene and Neogene Age, deposited between 65 million and 1.8 million years ago. The government of the Kingdom of Thailand. Under a PSC environment, the contractors revenue entitlements include a component that provides the contractor with the right to recover eligible operating and capital costs that the contractor has incurred unrecovered cost pools are the outstanding balances of recoverable costs that the contractor is entitled to receive from future revenue streams. These balances occur when eligible expenditures are greater than revenue streams. A crude stream produced in Texas and southern Oklahoma which serves as a reference or marker for pricing a number of other crude streams and which is traded in the domestic spot market at Cushing, Oklahoma. An annual budget program that defines the seismic, well drilling and facilities construction plans. Percentage ownership in a joint operation associated with revenue and costs. Working Interests do not take into account the terms of any royalties, government shares of production, or similar fiscal terms, and thus do not reflect net entitlement to any oil or gas produced. R-5

resources

Scheme Scheme Shares Serica signature bonus SKK Migas

standard cubic foot stock tank barrel

spudded SWK tertiary basin Thai Government unrecovered cost pools

West Texas Intermediate or WTI work program Working Interest

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APPENDIX S SUMMARY OF CERTAIN COVENANTS IN OUR FINANCE AGREEMENTS The covenants contained in the documentation relating to our 2016 Notes and 2011 Revolving Credit Facility limit KEHCLs ability to undertake certain transactions, including, among others, incurring indebtedness, making restricted payments and entering into transactions with affiliates. The covenant limiting KEHCLs ability to incur indebtedness applies if KEHCLs fixed charge coverage ratio (the ratio of its consolidated adjusted EBITDAX to its fixed charges for a specified period) is less than 2.25 to 1, and has carveouts allowing for, among others, (i) the incurrence of permitted refinancing indebtedness, (ii) ordinary course hedging obligations, (iii) ordinary course cash management obligations and (iv) the incurrence of up to US$5 million or 1.5 per cent. of total assets in additional debt, whichever is lower. The covenant limiting the making of restricted payments restricts KEHCL from (i) the declaration or payment of any dividends or any distribution on account of its or any of its subsidiaries equity interests (including, without limitation, any payment in connection with any merger or consolidation involving it or any of our subsidiaries), or to the direct or indirect holders of its or any of its subsidiaries equity interests in their capacity as such (other than distributions payable to it or any of its subsidiaries), (ii) the purchase, redemption or other acquisition or retirement for value (including, without limitation, in connection with any merger or consolidation involving KEHCL) of any equity interest of it or any of its direct or indirect parents, (iii) the repayment of any shareholder loans or granting of any loans to its shareholders (other than shareholder loans granted by its subsidiary to another subsidiary), (iv) the making of any payment on or with respect to, purchase, redemption, defeasance of other acquisition or retirement for value, of any indebtedness of it or any subsidiary that is contractually subordinated to the 2016 Notes or to the guarantees (excluding any intercompany Indebtedness between or among KEHCL and any of its subsidiaries) held by the direct or indirect holders of its equity interests or (v) the making of any restricted investment. The limitation on restricted payments does not apply to any permitted dividend payments, which are payments of dividends up to (i) 50.0 per cent. of KEHCLs consolidated net income for the period beginning on the first day of its fiscal quarter in which the 2016 Notes were issued to the end of its most recently ended fiscal quarter for which financial statements are available at the time of such restricted payment, plus (ii) 100.0 per cent. of the aggregate net proceeds, including cash and the fair market value of property other than cash, received by it since the issue date of the 2016 Notes (x) as a contribution to its common equity capital or (y) from the issue or sale of equity interests of it or any direct or indirect parent of it (other than certain disqualified stock or excluded contributions) or from the issue or sale of convertible or exchangeable disqualified stock or convertible or exchangeable debt securities that have converted into or exchange from such equity interests (other than equity interests (or disqualified stock or debt securities) sold to one of its subsidiaries, minus (iii) the amount of such restricted payment, together with the aggregate amount of all other restricted payments made by it and its subsidiaries since the date of issue of the 2016 Notes (excluding restricted payments in an aggregate amount equal to the amount of excluded contributions previously received by it and its subsidiaries), in each case provided that it would, after giving pro forma effect to the payment in question, have been able to incur at least US$1.00 of additional indebtedness pursuant to the fixed charge coverage ratio test forth in the incurrence of indebtedness test. Under the covenant restricting transactions with affiliates, KEHCL may not, and will not permit any of its subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend an transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any of its affiliates (an affiliate of KEHCL being defined as any other person directly or indirectly controlling or controlled by or under direct or indirect common control with KEHCL) (each, an Affiliate Transaction), unless: (1) the Affiliate Transaction is in the ordinary course of business and pursuant to the reasonable requirements of KEHCLs business; the Affiliate Transaction is on fair and reasonable terms that are not less favorable to KEHCL or the relevant subsidiary than those that would have been obtained in a comparable transaction on an arms length basis by KEHCL or such subsidiary with an unrelated person; and KEHCL delivers to the trustee (x) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$5 million, a resolution of its board of S-1

(2)

(3)

directors certifying that such Affiliate Transaction complies with this condition and that such Affiliate Transaction has been approved by a majority of the disinterested members, if any, of KEHCLs Board of Directors and (y) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$15 million, an opinion as to the fairness to KEHCL or such subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. The limitation on entering into Affiliate Transactions contains carveouts for (i) employment agreements, employee benefit plans, officer or director indemnification agreements or any similar arrangement entered into in the ordinary course of business or consistent with past practice and payments pursuant thereto, (ii) transactions (including a merger) between or among KEHCL and/or any of its subsidiaries, (iii) the payment of reasonable fees to, and indemnity provided on behalf of, officers, directors, employees or consultants of KEHCL or any of its subsidiaries or any direct or indirect parent company of KEHCL, (iv) restricted payments and investments that do not otherwise violate the covenant on restricted payments, (v) the issuance of any equity interests (other than disqualified stock) of KEHCL to its affiliates, directors, officers, employees or consultants or any of its direct or indirect parent companies, and the granting and performance of registration rights, and (vi) transactions effected pursuant to agreements in effect on the date of issue of the 2016 Notes and any amendment, modification or replacement of such agreement (so long as such amendment or replacement is not materially more disadvantageous to the holders of the 2016 Notes, taken as a whole). Non-compliance with any of the covenants in the trust deed after any applicable cure period (which ranges from 30 days to 180 days, depending on the covenant in question) gives rise to a right for bondholders to declare the bonds due and payable at their principal amount together with all accrued and unpaid interest. The trustee may act on the request of at least one-quarter of the principal amount of the notes then outstanding or by extraordinary resolution. To the extent that 25.0 per cent. of the bondholders and extraordinary resolution are not received, this in effect acts as a waiver of any breach of the covenants.

S-2

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EXPLORE DISCOVER DEVELOP PRODUCE

krisenergy.com
KRISENERGY REGIONAL OFFICES SINGAPORE 83 Clemenceau Avenue #10-05, UE Square Singapore 239920
T: (65) 6838 5430 F: (65) 6538 3622

INDONESIA Talavera Office Park 3rd Floor, Jln. Let. Jend. TB. Simatupang, Kav. 22-26, Cilandak Jakarta 12430
T: (62) 21 2934 2700 F: (62) 21 2934 2710

THAILAND 16F, Asia Center, No. 173/16 South Sathorn Road Thungmahamek, Sathorn Bangkok 10120
T: (66) 2 670 8448 F: (66) 2 670 8449

VIETNAM 19F, Bitexco Financial Tower No. 2, Hai Trieu Street Dist. 1 Ho Chi Minh City
T: (84) 8 3915 6009 F: (84) 8 3915 6008