FARM-IN OPPORTUNITY – STRATEGIC UKCS GAS ASSET

FARM-IN OPPORTUNITY – STRATEGIC UKCS GAS ASSET

P50 Prospective Resource = 1.73 TCFBlock 43/11 – Southern North Sea Gas Basin (CLNR 100%)

CADENCE CARBONIFEROUS PROSPECT - HIGHLIGHTSIndependently assessed P50 Prospective Resources of 929 BCF (Range 228-2,990 BCF)

Stacked early Carboniferous Reservoirs in faulted 3-way dip closed structure

Closure area >47km2 and potential for hydrocarbon column heights >400m

Exploration well costed at circa £10M

Significant upside in three Bunter Sandstone prospects

Operatorship and significant equity position available

1 Figure 1. 3D image of the Cadence structure

CONTACT DETAILS Andrew Nunn – Chief Operating Officer Email: andrew@cluffnaturalresources.com Phone: 0207 887 2630 (office) or 07738 846069 (mobile)

FARM-IN OPPORTUNITY – STRATEGIC UKCS GAS ASSET

INTRODUCTIONLicence P2248 is located in the shallow water of the SNS and contains 4 drilling opportunities with a combined, independently assessed P50 Prospective Resource of 1.73 TCF. This high impact exploration asset is strategically located on-trend from existing Carboniferous production and recent undeveloped discoveries including Pegasus and Crosgan. Additional exploration wells are expected on adjacent blocks in 2017/18.

LICENCE BACKGROUNDP2248 (Block 43/11) is a 28th Round Promote Licence in which CLNR has a 100% equity interest

Initial ‘Promote’ period extended until end November 2017 by the OGA

‘Promote’ work commitments have been met, requires a commitment to drill a firm well to carry on beyond November 2017

Figure 2. Location map of block 43/11 in relation to other Carboniferous prospects and fields2

CADENCE PROSPECT SUMMARYLies on a proven trend of Carboniferous fields which stretches from Caister in the far south east, through Murdoch, Copernicus, Kepler, Cavendish, Pegasus and onto Crosgan to the north west

3-way dip and fault controlled structure which formed pre-BPU and extends to a maximum area in excess of 47km2

Proven producing reservoirs present at multiple levels within Cadence closure

- Yoredale / Millstone Grit – producing formation at Pegasus & Crosgan

- Scremerston Formation – producing formation at Breagh

- Fell Sandstone Formation – exploration target on the Aurora prospect

Combination of Zechstein evaporates and intra-Carboniferous seals which have been proven regionally

Self-sourced from mature interbedded coals and organic shales located down dip with potential contribution from the adjacent Silverpit Basin

Hydrocarbon generation commenced with deep burial in Carboniferous for deeper source rock formations including Scremerston

Possible amplitude support at Scremerston and Fell Sandstone levels

FARM-IN OPPORTUNITY – STRATEGIC UKCS GAS ASSET

Figure 3. Crossline interpretation across the Cadence prospect3

Figure 4. Inline interpretation across the Cadence prospect4

CADENCE PROSPECT – VOLUMETRICS

The Carboniferous prospects have been independently assessed by the Xodus Group and results reported in a Competent Persons Report published in October 2016.

A copy of the CPR report can be found at Cluff Natural Resources website.

UPSIDE POTENTIAL – BUNTER SANDSTONE PROSPECTS

Significant upside potential identified in the Bunter Sandstone

Three separate amplitude supported prospects

Combined P50 Prospective Resource of 806 BCF

Exploration well costs expected in range of £6M to £8M

OPPORTUNITY

A significant equity position and operatorship in this strategic asset is available in return for a package that could contain a commitment to a well or wells, a minor non-operated equity interest in a producing asset and/or a cash element.

TRANSACTION PROCESS

On execution of a Non-Disclosure Agreement (‘NDA’) interested parties will be invited to attend a technical overview presentation by CLNR personnel, following which access to a dataroom will be made available. The dataroom will be available online with access to the geological model via a workstation located in CLNR’s London offices.

Please contact Andrew Nunn (andrew@cluffnaturalresources.com) to arrange the NDA and further information.

FARM-IN OPPORTUNITY – STRATEGIC UKCS GAS ASSET

Prospect On-block GIIP Prospective Resources CoS %

P90 P50 Mean P10 P90 P50 Mean P10

Millstone Grit / 120 322 401 782 58 160 204 405 15 Yoredale (Camden)

Scremerston 101 274 337 658 59 165 206 410 16 (Cadence)

Fell Sandstone 187 1,008 1,523 3,574 111 604 923 2,175 9 (Cadence)

TOTALS 408 1,604 2,261 5,014 228 929 1,333 2,990

Prospect On-block GIIP Prospective Resources CoS %

P90 P50 Mean P10 P90 P50 Mean P10

Basset 49 169 195 374 36 128 153 303 29

Bathurst 169 357 404 704 119 275 317 571 18

Beckett 134 532 586 1095 97 403 460 892 18

TOTALS 1,852 1,058 1,185 2,173 252 806 930 1,766