Sensitivity/categoryTotalPresentvaluediscountedat 10%Presentvaluediscountedat 15%Present valuediscounted at20% Sensitivity/category Total10% increase in the price/quantity of gas sales 10% decrease in the price/quantity of gas salesPresentvaluediscountedat 10%Presentvaluediscountedat 15%Present valuediscounted at20%P1 – Proved reserves 9,1,1,953 0,119,818 7,1,0,7 638,695 P1 – Proved reserves 1,605,,58 0,110,691 587,115 ,81,,7,Probable reserves 0,,90,987 083,775 53,091 18,808 Probable reserves 0,059,190 0,5,,71 65,163 11,61,Total P2 – Proved +probable reserves,,,80,8,5 0,,19,639 313,188 516,169 Total P2 – Proved +probable reserves9,583,,37 0,0,7,10, 89,,176 ,3,,377Possible reserves 777,717 58,171 11,161 5,981 Possible reserves 819,795 6,,751 05,,35 6,081Total P3 – Proved +probable + possible reserves6,951,66, 0,,81,789 313,618 590,519 Total P3 – Proved +probable + possible reserves15% increase in the price/quantity of gas sales 15% decrease in the price/quantity of gas sales,,,19,99, 0,111,785 861,870 611,051P1 – Proved reserves 9,080,711 0,187,66, 783,873 518,796 P1 – Proved reserves 1,97,,858 3,,,898 595,181 ,,1,131Probable reserves 0,,37,,56 077,190 81,993 13,113 Probable reserves 0,136,3,, 097,017 69,193 10,037Total P2 – Proved +probable reserves,,581,156 0,,55,87, 361,017 565,7,6 Total P2 – Proved +probable reserves9,,71,800 0,171,755 573,900 ,50,131Possible reserves 391,160 81,975 10,073 5,580 Possible reserves 571,639 60,868 06,665 ,,780Total P3 – Proved +probable + possible reserves6,511,906 0,698,081 389,908 559,606 Total P3 – Proved +probable + possible reserves20% increase in the price/quantity of gas sales 20% decrease in the price/quantity of gas sales,,059,91, 0,09,,511 81,,757 ,55,050P1 – Proved reserves 9,910,710 0,991,,56 307,558 568,616 P1 – Proved reserves 1,16,,703 777,,11 63,,809 ,18,8,5Probable reserves 0,656,661 035,67, 86,663 91,905 Probable reserves 0,117,768 013,886 ,3,703 03,730Total P2 – Proved +probable reserves,,758,969 0,613,1,3 33,,115 578,710 Total P2 reserves – Proved+ probable reserves9,179,585 0,107,085 5,,,690 ,18,597Possible reserves 380,139 89,,30 11,013 5,381 Possible reserves 5,0,960 ,7,560 0,,508 ,,681Total P3 – Proved +probable + possible reserves6,797,5,5 0,511,6,1 0,105,966 53,,839 Total P3 reserves – Proved+ probable + possiblereserves9,316,118 0,155,718 563,0,7 ,91,117A-67
Note: It is clarified that the discounted cash flow figures, whether they have been calculatedat a specific discount rate or without a discount rate, represent the present value but notnecessarily the fair valueForward-looking information: The information about discounted cash flow is forward-lookinginformation as defined in the Securities Law. The discounted cash flow is based on variousassumptions, including in respect of future sales of natural gas from the reservoir, the sellingprice of natural gas (including price indexation) and construction and operating costs whichmay not be realized, and the quantities of natural gas actually produced, if produced and/orconstruction and operating costs and/or selling prices of natural gas, including indexation ofselling prices and/or annual quantities sold may differ from these estimates andassumptions, including due to operational and technical conditions and/or changes inregulation and/or supply and demand conditions in the natural gas market and/or terms ofnatural gas sales contracts from the reservoir that have been signed and/or will be signedand/or implementation of the provisions of the Petroleum Profits Tax Law and/or futureprices and quantities and/or changes in actual costs of the project, which has not beencompleted and/or actual performances of the reservoir.Opinion of the appraiserThe reserves report prepared by NSAI at December 31, <strong>2011</strong> is attached to this report asAppendix D and includes the consent of NSAI to attach it to this report.Management declaration(1) Declaration date: March 28, 2012(2) Name of reporting corporation: <strong>Avner</strong> <strong>Oil</strong> Exploration, Limited Partnership(3) Name of officer for assessment of the resources: Gideon Tadmor(4) We hereby confirm that the assessor received all the relevant information required toperform the work.(5) We hereby confirm that nothing came to our attention that indicates any dependencebetween the assessor and the Partnership.(6) We hereby confirm that the preparation of the resource assessment and thedisclosure therein are our responsibility.(7) We hereby confirm that to the best of our knowledge, the resources assessed by theassessor are the most relevant, accurate and updated estimates available to us.(8) We hereby confirm that no change has been made to the identity of the assessorpreparing the reserves report or the most recent contingent resources report issued bythe Partnership.(9) We agree to include this statement in this report.Gideon Tadmor(B)Contingent and prospective resources in the Dalit lease1announced that it estimates that the gross mean resources in the natural gas reservesprospect in the Dalit formation is 500 BCF (14.2 BCM). According to a report prepared byNSAI, at December 31, <strong>2011</strong>, set out below, there was no change or development that couldhave a material effect on the quantity or probability of these resources as set out in theresources report prior to December 31, 2010. NSAI also believes that the Dalit formation isseparated into a number of fault blocks and that it is possible that the reserves in blocks thatare not connected to the main block of the Dalit 1 drilling will not have the same quality asthose discovered in the main block and that there is also a very small chance that nohydrocarbons whatsoever will be found in these blocks. In view of the above, NSAI hasclassified part of the gas resources in the Dalit lease as contingent resources, at thedevelopment pending stage, and they are contingent on approval of the project, which willinclude an approved development plan and a reasonable expectation for gas sales from thefield, and part of the resources as prospective resources, as described below:A-68
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(B)(C)The report was based on the r
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7.10 Products and servicesDuring th
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energy market is characterized by h
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subsection (4) below exist (conditi
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# Assumption Details and explanatio
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(C)For expenses associated with dev
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(L)(M)(N)(O)accumulated according t
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(D)(E)Subject to the terms of the o
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(I)(J)committee meetings, and will
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obtaining Cypriot government approv
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(5) It is noted that under Regulati
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had not yet been received, although
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Liquefaction (LNG) The Partnership
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in deviations in the budget (expect
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process for transferring the rights
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GlossaryAppraisal well: a drilling
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Avner Oil Exploration Limited Partn
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The effects of the increase in sale
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USD 6.5 million, as noted above. In
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investment in development of the Ta
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marine areas on the Cyprus continen
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Part II: Market Risks - Exposure an
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As collateral for the Partnership's
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3. Independent directorsThe Compani
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5. External auditors' feesThe amoun
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4) Accepting a financial liability
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Project cash flow (in USD millions)
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Auditors' Report to the Partners of
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Regulation 12:Regulation 13:Regulat
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C. Interested parties in the Partne
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Regulation 24:will not be able to d
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Regulation 24B: Holders of the Part
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10. Occupation in the past five yea
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Ronen Edward (ID 024652745)1. Date
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executive liability insurance, base
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