Seven Energy employs know how gained from our experience combined with business systems designed to create repeatable and valuable drilling and production results in our projects, for the benefit of our partners and shareholders. We combine the discipline and processes more typically associated with large companies with the creativity, pragmatism and responsiveness of a small company.

Group Business Model

Opportunity Identification and Screening

We are clear about wishing to participate in gas projects in Nigeria and Canada - however even within this area of focus, we have the opportunity to participate in many potential projects. This presents a challenge - how do we select the best opportunities in a timely manner? Seven Energy believes that screening of opportunities at an early stage is critical to building an efficient business.

In Nigeria we have surveyed the Niger Delta geo-depositional, surface and gas demand environments to identify the areas best suited to Seven's expertise, financial appetite and risk profile. This has been evolved into the selection of core operating areas and we prioritise projects in these locations. We are less likely to pursue projects outwith these areas and will exclude projects in certain locations at an early stage.

In Canada, we pursue only Shallow Gas opportunities, where our proprietary subsurface mapping techniques and diligent drilling and completion performance management, are key, repeatable strengths. Initial focus on the Penhold area is currently being leveraged to analogous plays in Alberta.

This approach has resulted in screening tools which generate maps to illustrate relative economic potential of the discovered gas fields in our core areas.

A key outcome of Opportunity Identification is a clear and concise agreement between the parties on the deal terms, summarized in a Memorandum of Understanding, prior to any costly Detailed Evaluation.

This screening process eliminates many potential projects immediately and avoids wasting prospective partners' time and effort in pursuing opportunities which are unlikely to be executed by Seven Energy.

Deailed Evaluation and Commercial Negotiation

Once an opportunity passes our Identification and Screening phases, a Detailed Evaluation is undertaken, with emphasis on Technical, Financial, Reputational and Legal aspects in order to support Executive Committee and Board of Directors approvals for a transaction. The transaction documentation is then undertaken in the Commercial Negotiation phase, the key elements of which will already have been agreed by the parties in the Memorandum of Understanding, generated in the Opportunity Identification phase.

Project Execution and Asset Management

Successful project execution involves delivering the required levels of performance across a broad range of criteria, including health, safety, security, environment and cost control. We employ the highest standards of planning and review to ensure that we capture and apply all that we learn from our operations. Some key examples of the techniques that we employ are:

Peer review. We require that our operations teams undergo frequent reviews of their work by a group of peers not involved with the project. This helps ensure that the teams are regularly exposed to new ideas, combating the "groupthink" that can otherwise occur.

Drill Well On Paper. DWOP involves a systematic review of planned and contingent well operations. Using DWOP we can identify critical operations, and ensure that we have suitable procedures, without the pressurised environment imposed by rig operations. We invite key project stakeholders to participate in the DWOP so that knowledge and learning can be shared widely and efficiently.

Hazard identification and mitigation. We have a policy of hazard assessment that requires us to assess risks against a standard matrix. This allows us to ensure that we reduce risks to a level as low as reasonably practicable. We will not undertake operations where the level of risk remains "high".