Ann: Operations Update - Block 9, page-187

Petro Australis (Perth based unlisted company) operating onshore Cuba to our East, state that CUPET's share is 22.5% They have a similar 8 year tax break.

https://www.petroaustralis.com/
https://www.petroaustralis.com/investing-in-cuba

The investment of foreign capital is governed by Cuban Law No. 118 “The Foreign Investment Act” introduced in 2014, to enable foreign companies to operate within the country under attractive commercial terms.

PAE is in good company, joining a group of well-known foreign enterprises that have successfully operated in Cuba for decades.

• Repatriation of capital enshrined in Foreign Investment Law of Cuba

• International oil prices used

• Company tax holiday for the first 8 years of each production sharing contract, 22.5% thereafter

• PSCs denominated in EurosProduction Sharing Contracts (PSCs)

Production Sharing Contracts enable PAE, as the Operator, to recover costs and share profits with Cupet. The three PSC’s cover 2,610km² and are onshore in the central basin of Cuba, comprising:

• Block 21A-IOR Incremental Oil Recovery PSC (Pina oilfield)

• Block 21A-P Exploration PSC

• Block 14-13NE Exploration PSC

• PAE already owns and operates a fracking spread in-country, substantial operations already performed

• We will own a dedicated Tuff/Efusivo drilling rig and support equipment, critical items identified and deposits paid

Production infrastructure and offtake

• Pina is a producing onshore oilfield, with existing infrastructure, capable of 5000 bpd

• A centrally located facility separates oil from water

• Trucks transport the sale oil 125kms to a refinery

• Offtake agreement between PAE and Cupet in place

Exploration and upside opportunities

The Central Basin of Cuba is very oil-rich and under-exploited. As illustrated below there are several oil discoveries in and around PAE’s PSCs.