JKX Oil & Gas plc Annual Report 20117At a glance01-17Board statements18-23Operational review24-36Financial review37-47CSR review48-61Directors' reports62-83Financial statements84-136Reserves proved and probable MMboe/depth as at 31 December 2011FieldsIgnatovskoye>p26Molchanovskoye North & Main>p27Novo-Nikolaevskoye>p25, 28RudenkovskoyeElizavetovskoye>p29>p31Koshekhablskoye>p32Hajdunanas and Gorbehaza>p34UKRAINERUSSIAHUNGARYRemaining total reserves as at 31 December 20111 Jan 2011 Revisions Production 31 Dec 2011TOTALOil MMbbl 7.0 (2.8) (0.9) 3.3GasBcf 468.5 70.3 (14.7) 524.1Oil + GasMMboe85.1 8.9 (3.3) 90.7UKRAINEOil MMbbl 6.5 (3.0) (0.9) 2.6GasBcf 195.3 (26.1) (13.9) 155.3Oil + GasMMboe39.1 (7.4) (3.2) 28.5RUSSIAOil MMbbl 0.3 0.1 0.0 0.4GasBcf 267.0 97.8 0.0 364.8Oil + GasMMboe44.8 16.4 0.0 61.2HUNGARYOil MMbbl 0.2 0.1 0.0 0.3GasBcf 6.2 (1.4) (0.8) 4.0Oil + GasMMboe1.2 (0.1) (0.1) 1.0At 31 December 2011 we updated our estimation of the Group's proved and probable reserves. The estimations for our reserves in Ukraine and Russia have been reviewed by an independent engineer, Senergy (GB) Limited.1km2km3km4km5km6kmOilGas0.21.01.00.30.12.30.82.11.20.420.460.80.30.70.3

8Our strategy to develop the opportunityWhat makes JKX special? We are successful because of the core strengths that we have built through the people that we employ and through many years of operational experience in the oil and gas industry in central and eastern Europe.3. Superior stakeholder management. Effective licencing management - continued acquisition of new acreage in Ukraine and commissioning of LPG (Ukraine) and GPF (Russia) plants in 2011. Many years experience of stakeholder management in Ukraine from national government to employee level. Significant Board expertise in our challenging operating environments. Local management with western education and governance standards with extensive experience managing local relationships1. Visionary: market identifi cation/analysis/positioning. Identified price and production gap in eastern European Markets (in Ukraine, Russia and Hungary). Positioned Company to be the first mover in target markets 2. World class subsurface expertise. Highly experienced technical teams both in-country and in head office in London. In-house subsurface expertise being used to manage asset portfolio4. Organisational acumen. Organisational infra-structure well established in country with tried and tested policies and procedures - 17 years of commercial production in Ukraine. Ability to replicate our expertise in new markets (eg Russia) through cross fertilisation and use of basic but tested organisational framework . Demonstrated ability to manage all phases of oil operations from exploration, appraisal and development through to production5. Demonstrated operational excellence/low cost drilling and extensive fi eld management experience. 41 wells drilled/worked over in 2011 . Currently over 40 producing wells. Proactive amendment and efficient management of licence requirements in Russia (reducing our commitment from 5 wells to 2 workovers). Continuous review of prospect inventory to prioritise spend on high impact drillingJKXcore strengths52143