Energy: Oil & Gas - Bahamas Petroleum Company Plc

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November 5, 2010 Europe: Energy: Oil & Gas - E&P Table of contents Drivers and themes of the E&Ps 4 Valuation methodology 20 Coverage overview 23 Exploration portfolios and themes 27 M&A 45 Commodity price and the E&Ps 55 Focus on the regions 66 Political and technical risk 91 Corporate governance 103 Company snapshots 109 Lundin Petroleum 109 Heritage Oil 110 Tullow Oil 112 New companies (alphabetical order) 114 The prices in the body of this report are based on the market close of November 3, 2010 unless otherwise stated. Goldman Sachs Global Investment Research 2
November 5, 2010 Europe: Energy: Oil & Gas - E&P Expanding our universe: Lower liquidity and market focus but potentially greater rewards We initiate coverage of 41 companies and resume coverage of 2, with average potential upside of 57% (clean) and 47% on a liquidity-adjusted basis for the new stocks under our coverage. A large proportion of these stocks are small cap with limited liquidity, but we believe that the potential rewards from a focus on these stocks more than outweighs the risks inherent in investing in them: � We see a clear correlation between the magnitude of deviation from our price targets and the level of market coverage for each company: the fewer analysts covering the stocks, the greater the potential upside/downside to our target prices – despite the application of a liquidity adjustment of up to 20% of our NAV, offering greater opportunities for alpha generation. � Greater breadth of coverage allows investors access to a variety of different themes (short term/long term exploration, new basins, M&A, unconventional resource etc.). � A larger number of stocks allows exposure to themes through a screen approach which diversifies potentially volatile companyspecific risk. As a result of the increased opportunity we see in our expanded universe, we have upgraded our E&P coverage view to Attractive (from Neutral). Exhibit 1: Lack of coverage could offer investment opportunities Upside/downside to target price and analyst coverage Analyst coverage by stock 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Tullow Premier Oil Dana Petroleum Dragon Oil Heritage Oil Soco Salamander Lundin Petroleum JKX DNO Noreco Valiant Petroleum Bankers Petroleum Ithaca Gulfsands PA Resources Serica BowLeven Maurel & Prom Det Norske EnQuest Faroe Petroleum Gulf Keystone Regal Coastal Energy Desire Petroleum Hardy Oil Max Petroleum Melrose Resources Norse Energy Rockhopper Borders and Southern Dominion Falkland Oil & Gas Nighthawk Energy Sterling Energy Aurelian Chariot Oil & Gas Nautical Petroleum Cove Energy Northern Petroleum Panoro Tower Resources BPC Encore Great Eastern Energy Green Dragon Igas Aminex Plc Global Energy Development Clean upside Liqudity adjusted upside Source: Bloomberg, Goldman Sachs Research estimates. Analyst number Goldman Sachs Global Investment Research 3 Amerisur 250% 200% 150% 100% 50% 0% -50% Upside (%)
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Energy: Oil & Gas - Bahamas Petroleum Company Plc

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