b'MERIAN GOLD MINEPlacing of resources in operational readiness forForameasureofdiversification,Staatsolieowns 2019. a 25% Equity share in the Merian gold mine CV.These successful preparations were optimized Merians consolidated production was 534,000by improved internal processes, including the oz. of gold in 2018, compared to 513,000 oz.reorganization of our Exploration Division, in 2017. The construction of the new Sabajo pitand by prioritizing projects using a play-based is scheduled for 2020. Merians consolidatedexploration approach.gross property, plant and mine developmentWe began exploration with the evaluation of at December 31, 2018 was US$ 782 million,the shallow offshore area (a continuation of compared to US$ 787 million the prior year. Totalthe nearshore area, with water depths of 25-consolidated proven and probable reserves at60 meters), with reprocessed seismic data and the end of 2018 were 4,970,000 oz. Projectedplay-basedworkflowsinformingthecreationofaproduction for 2019 is estimated at 520,000 oz. shallow offshore prospect portfolio in 2019.UPSTREAM OPERATIONAL PERFORMANCE CRUDE PRODUCTIONIn 2018, crude production from our three onshore RESERVES fieldsCalcutta,TambaredjoandTambaredjoStaatsolies proven reserves at the end of 2018Northwestwas16,383bopd,comparedstood at 74.4 MMbbls, down from 84.4 MMbbls.to 16,300 bopd in 2017. Going forward, our Reasons for the decline include attaining 6 MMbblsproduction goal is 6 MMbbls per year.of production per year, a higher decline rate in someThe average production cost per barrel in 2018 areas and limited new reserves from appraisalwas US$ 9.43 (2017: US$ 8.60), keeping us drilling and EOR methods. A second phase ofwhere we need to be to compete: in the lowest polymerfloodingin2019isexpectedtoaddtoour cost quartile.proven reserves. During our 2018 Development Drilling Program (DDP), 152 wells were drilled, of which 127 EXPLORATION hadsufficientoilvolumestoberegardedasIn 2018, extensive preparations were made forproducers; 117 of these wells were put into the NSD Project, which will begin its nearshoreproduction, along with 18 wells remaining from exploration drilling program of up to 9 wells inthe 2017 DDP. These 135 wells were distributed 2019. The most promising prospect is Kankantrie,acrossourthreeonshoreoilfields.with expected recoverable volumes of 826In2018,34appraisalwellsweredrilledtofindMMbbls. Preparations included: newreservesclosetoourcurrentfields,with Prospect volume updates; interesting results north of Calcutta and northeast of Tambaredjo. Production tests will be conductedFarmout sessions to explore the possibility ofin these areas in 2019. IOC partnerships (which Staatsolie decided notWith an eye to acquiring new reserves with EOR/to pursue prior to a discovery); IOR, preparations were made to implementExpanding our data acquisition program; polymerfloodingonalargescalein2019andWell proposals; 2020. In addition, based on a re-evaluation of the pilot Cyclic Steam Stimulation (CSS) projectTechnical feasibility assessments; that was implemented in 1985, a second pilot for Reprocessing and inversion of 2D seismic data; CSSintheTambaredjofieldisplannedtostartinthe third quarter of 2020. Preparations were alsoAn Environmental and Social Impactmade to start with a large-scale 2D/3D seismic program beginning in 2019. The focus will be Assessment (ESIA); on Uitkijk and the northern areas of Calcutta,Geophysical and geotechnical surveys; Tambaredjo and Tambaredjo Northwest. ONSHORE OILFIELDSBLOCK A BLOCK B BLOCK C BLOCK DTAMBAREDJO BLOCK UITKIJK BLOCK WEG NAAR ZEE BLOCKCOMMEWIJNE BLOCKCALCUTTANICKERIE BLOCK CORONIE BLOCK BLOCK13'