Issued 03 May 2018

TRADING AND OPERATIONAL UPDATE REPORT For Q1 2018

South Kheir-1X (SK-1X) exploration well located in Area A, Egypt

1

Who We Are

Kuwait Energy (the “Company”) is an independent oil and gas company actively engaged in the exploration, appraisal, development and production of hydrocarbons. Since establishment in 2005, we have built a high-quality, diversified portfolio of oil and gas assets in the MENA region across Iraq, Egypt, Yemen and Oman. Our MENA portfolio consists of 10 exploration, development and production assets, of which we operate seven.

Kuwait Energy has its registered office in Jersey, its head office in Bahrain, its regional operational hub in Kuwait and area offices in Basra, Baghdad, Cairo and Sana’a.

Q1 2018 Key Highlights

• No incidents categorised as a recordable Lost Time Incident (“LTI”) have taken place in the reporting period Q1 2018 within Kuwait Energy’s operated concessions.

• The Company on 11 February 2018 signed an Agreement with Dragon Oil (a wholly-owned subsidiary of Emirates National Oil Company Ltd, the national oil company of Dubai) in relation to the transfer of a 15% participating interest in Block 9 (Iraq). The Agreement is composed of two different parts: i) a sale of 8.57% interest in Block 9 for US$100 million cash; and ii) and a transfer of 6.43% interest as settlement of a dispute with Dragon Oil in relation to a non-controlling interest in Block 9. The transaction is pending approval by the Iraqi Government.

• Average daily WI production for the quarter is 28,027 boepd. The total WI production volume for the reporting period stands at 2.5 mmboe. These figures are based on a Block 9 WI of 60% which we will continue to report until the Farm-out to Dragon Oil has been completed (where the new WI will be 45%).

• Following an audit of the year-end 2017 Reserves and Resources, the Company’s WI Proven and Probable (“2P”) reserves are 580 mmboe; a 28% decrease from the previous year. The decrease in reserves is primarily due to the Block 9 transaction for 15% WI (170.0 mmboe) to Dragon Oil and the reclassification of reserves to contingent resources (2C) for Mansuriya, Iraq (42.8 mmboe) and Block 5, Yemen (6.1 mmboe).

• At Block 9 (Iraq), Kuwait Energy saw the commencement of production of its 4th well Faihaa-4 (current production is ~3,000 boepd – Kuwait Energy share), exit production at Block 9 for the reporting period (31 March 2018) was a record 12,232 boepd (Kuwait Energy share). Drilling of Faihaa-5 is completed and the well is expected to come online in mid-2018. Interpretation of the Block 9 Seismic data acquired in 2017 was conducted with the results to be incorporated in the mid-year 2018 reserve calculations.

• At the Siba gas plant (Iraq), the remaining construction and pre-commissioning activities are expected to be completed by the end of Q2 2018, with commercial production at Siba (of 25 mmscfd) expected in Q3 2018. In March 2018, the Company spud the first two wells of the four well 2018 Siba drilling programme.

• In Basra (Iraq), at the end of January 2018, the Company was assigned by the Iraqi State Oil Marketing Company (“SOMO”) a crude cargo shipment totalling 0.8 mmbbls (Kuwait Energy share) of Basra Light - with a total value of approximately US$45 million. To date the total amount received from Iraqi operations is US$120 million, with this last crude payment Kuwait Energy can also confirm that it has settled the outstanding loan under the Forward Sales Agreement signed with Vitol in December 2016.

• Area A (Egypt), on 13 February 2018 Kuwait Energy was pleased to announce a successful oil discovery with

the South Kheir-1X (SK-1X) well. The new discovery is on production at a gross stable rate of 1,900 boepd. To

date the Company has had success in over 50% of the explorations wells drilled in Egypt.

AT A GLANCE

The numbers below are preliminary financial result for the reporting period ended 31 March 2018 (Q1 2018).

Q1 2018 Financial Highlights

• The Company closed the quarter with a cash balance of ~US$50 million.

• Net debt for the Company at the end of the reporting period was ~US$360 million.

• In March 2018, the process for the conversion of the QFB convertible loan was commenced.

• Revenue for the reporting period was ~US$50 million.

• Trade receivables balance as of the end of the reporting period was ~US$110 million.

• Operating costs for Q1 2018 were under ~US$5/boe.

• Cash capital expenditure for the quarter was around US$~20 million – the majority of which related to the construction of the Siba gas plant and Block 9 concession (both in Iraq).

Next Financial Update 2017 audited financials were issued mid-April 2018 and the next financial report will be the unaudited Q1 2018

financials, which are expected to be issued before the end of June 2018.

FINANCIAL UPDATE

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Health, Safety, Sustainability and Environment

Kuwait Energy classifies its recordable incidents as being either a Fatality, Lost Time Incident (“LTI”), Restricted Work Incident or Medical Treatment Incident. Kuwait Energy in the reporting period of Q1 2018 had no incidents that were classified as LTI on its operated assets while completing 1.7 million man-hours. The table below provides the number of days without an LTI in Kuwait Energy’s countries of operation both at the end of the Q1 2018 and at the end of 2017:

Country Days without LTI (at the end of Q1

2018) Days without LTI (at the end of 2017)

Iraq 234 144

Egypt 775 685

Yemen 1,031 941

Production For the reporting period, Kuwait Energy achieved an average daily WI production of 28,027 boepd, an increase of 4.5% on the 2017 average (26,819 boepd). Total WI production for the reporting period was 2.5 mmboe. The Company’s production growth in Q1 2018 compared to 2017 of 4.5% was the result of the successful oil discovery in Area A (Egypt) and work over programme at Abu Sennan and BEA; Block 9 (Iraq) production also increased in the period due to an additional Faihaa well commencing production. The new discovery, South Kheir-1X (SK-1X) initially stabilised at a production rate of ~1900 boepd (Gross). The Faihaa-4 well at Block 9 (Iraq) has been producing at a rate of ~5,000 boepd (Gross). In Iraq, the Company expects production to continue increasing with the anticipated start-up of Faihaa-5, completion of Faihaa-6 and Siba start-up expected within the coming months. It must be noted that the slight dip in Block 9 production when comparing this quarter to the last one (Q4 2017) was primarily due to planned shut-ins and maintenance work, restricting production. As of the date of the report, the Company is producing at record levels in Iraq - with production in excess of 12,500 boepd (Kuwait Energy share).

In Egypt, as explained above the successful discovery at Area A has meant production targets for the period have been exceeded, with the average daily WI production for Q1 2018 being 15,871 boepd (an increase on the last quarter of 12.5%).

Our Yemen production remains suspended; however, the Company is positioned to restart activities when the situation in the area permits.

OPERATIONAL ACTIVITY

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The chart below shows the quarter-by-quarter average daily WI production of the Company from Q1 2016 to Q1 2018:

¹2017 figures have been updated to take into consideration the farm-down of Abu Sennan effective 31 December 2016

Kuwait Energy’s daily average WI share of production for Q1 2018 compared to 2017, and a comparison of the last two quarters daily production averages per asset are shown in the tables below (in boepd):

Year on Year Comparison Quarter on Quarter Comparison

Q1 2018 2017 % Change Q1 2018 Q4 2017 % Change

Abu Sennan 982 867 13.3% 982 952 3.2%

BEA 1,447 1,257 15.1% 1,447 1,462 -1.0%

Area A 5,630 4,654 21.0% 5,630 4,463 26.1%

ERQ 7,812 8,081 -3.3% 7,812 7,225 8.1%

Egypt Total 15,871 14,859 6.8% 15,871 14,102 12.5%

Iraq Total¹ (Block 9)

9,955 9,583 3.9% 9,955 10,059 -1.0%

Oman Total (Karim Small Fields)

2,201 2,377 -7.4% 2,201 2,233 -1.4%

Production Total 28,027 26,819 4.5% 28,027 26,394 6.2%

¹ Block 9 production is reported on the basis of 60% WI, however once the transfer of 15% WI to Dragon Oil is completed this will change Kuwait Energy’s share to 45% WI, effective 1 January 2018.

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18

Avg WI producion 25,679 23,859 22,742 26,041 26,123 27,014 27,731 26,394 28,027

0

5,000

10,000

15,000

20,000

25,000

30,000

BO

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Quarter-by-Quarter Average Daily WI Production¹

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Development & Exploration

The main development and exploration activities highlights for the quarter:

• Faihaa-5, Block 9 (Iraq) well drilling completed with start-up expected in mid-2018;

• Spudding the first two wells of the 2018 four well programme in Siba (Iraq);

• Commencement of production from ERQ (Egypt) development wells Shahd SE-10 and 18; and

• The success of the South Kheir-1X exploration well in Area A (Egypt).

The table below provides the status of the development and exploration wells for the reporting period:

Country Basin/Area Well Name No. of

Wells

Cost Interest

Status at end of Q1 2018

2017 Carry-over Wells

Egypt Area A South Kheir-1X 1 70% Spud 11 Dec 2017, rig released on 25 Jan 2018. Production now stabilised at a naturally flowing

rate of 1,900 boepd

Oman Karim Small

Fields SL-P2 1 15% Spud 25 Dec 2017

Iraq Block 9 Faihaa-5 1 60% Spud 16 Dec 2017, rig released 29 Mar 2018 –

production to commence in mid-2018

2018

Egypt ERQ Shahd SE-10, Shahd SE-18 2 53%

Shahd SE-10 spud 1 Jan 2018, rig released on 9 Feb 2018 - currently on production at a stable

rate of ~3,200 boepd

Shahd SE-18 spud on 20 Feb 2018 rig released on 31 Mar 2018, well tests showed 695 boepd

Egypt Area A Yusr-64 1 70% Spud 4 Feb 2018, rig released 19 Feb now on

production at stable rate of 390 boepd

Oman Karim Small

Fields SMPH-15/16/17, ZHRM-14, Ilham-

3H3ST, WRDM-M36 6 15% NSM-P6 on drilling

Iraq Siba Siba-7, Siba-5b 2 40% Siba-7 well spud on 5 Mar 2018

Siba-5b well spud on 10 Mar 2018

Total for 2018 11

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As of 31 December 2017, Kuwait Energy’s WI Proven and Probable (“2P”) reserves were 580 mmboe; a decrease from the previous year by 28%. The decrease in reserves is primarily due to the Block 9 (Iraq) Agreement to transfer 15% WI to Dragon Oil and the reclassification of reserves to contingent resources (2C) for Block 5 (Yemen) and Mansuriya (Iraq). The WI contingent resources (“2C”) was 805 mmboe and the best estimate of risked prospective resources (“P50”) was 26 mmboe.

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Kuwait Energy Reserves and Resources (in mmboe)

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Reserves

1P 328

-9

0 -18 -68 234 61

2P 810 0 -52 -170 580 108

3P 1,656 0 -82 -367 1,198 165

Contingent Resources

2C 1,040

0 -3 -232 805

Prospective Resources

Best 28 0 0 -1 26

Total

Year-End 2017 Year-End 2016

1P RRR =

-990% 1P

RRR = 307%

2P RRR =

-2,573% 2P

RRR = -3%

Notes:

• Audited figures by GCA as of 31 December 2017.

• 45% working interest in Block 9, Iraq, due to the Agreement to transfer 15% WI to Dragon Oil effective 1 January 2018 which is pending Iraqi government approval.

• Excludes KSF, Oman which cannot be included in external reserves reporting as per the service contract.

• Reserves Replacement Ratio considers acquisitions and divestment.

• Prospective Resources estimates are risked.

• N/E stands for Net Entitlement.

• Totals may not exactly equal the sum of the individual entries due to rounding to nearest whole number.

RESERVES AND RESOURCES

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Detailed Reserves & Resources by Asset

Asset Country

WI Reserves and Resources (mmboe)

1P 2P 2C

Block 9 Iraq 202.6 510.1 695.9

Siba Iraq 18.9 41.4 2.5

Mansuriya (see notes) Iraq - - 65.3

Iraq Total Iraq 221.5 551.5 763.7

Abu Sennan Egypt 0.3 2.6 -

Burg El Arab Egypt 2.3 6.1 13.9

Area A Egypt 1.8 8.9 1.7

East Ras Qattara Egypt 8.3 10.3 2.4

Egypt Total Egypt 12.7 27.9 18.0

Block 5 Yemen - - 11.4

Block 49 Yemen - - 11.7

Yemen Total Yemen - - 23.1

Karim Small Fields Oman - - -

Oman Total Oman - - -

Total 234.3 579.5 804.8

Notes:

• Audited figures by GCA as of 31 December 2016.

• 45% working interest in Block 9, Iraq, due to the Agreement to transfer 15% WI to Dragon Oil effective 1 January 2018 which is pending Iraqi government approval.

• Excludes KSF, Oman which cannot be included in external reserves reporting as per the service contract.

• The Company as part of its YE17 audit has reclassified all its Mansuriya, Iraq and Block 5, Yemen reserves as contingent resources.

• Totals may not exactly equal the sum of the individual entries due to rounding to nearest whole number.

8

Operations

Kuwait Energy continues to focus on the MENA region with a direct presence in Iraq, Egypt, Yemen and Oman. In Iraq the key milestone for the Company in 2018 will be bringing the Siba gas field online mid-year 2018. Construction of the facilities at Siba are now complete, with the Company hosting an inauguration event in late April with its key stakeholders to celebrate this crucial milestone. Once online, the Siba gas field is expected to initially process 25 mmscfd of gas (Gross) before ramping up to the plateau gas rate of 100 mmscfd in 2019. In addition to the Siba gas production, the facilities will also process associated condensate which is expected to yield an extra 15,000 boepd (Gross) when gas production reaches the full plateau rate. In Block 9 (Iraq), the Company envisages production of the Faihaa-5 well in mid-2018 at an anticipated rate of 5,000 boepd (gross), and Faihaa-6 (spud on 27 April 2018) in 2H 2018. The major milestone in relation to Block 9 will be the submission to the Iraqi government of the Block 9 Full Field Development Plan, scheduled to occur next year. Once approved the Company can begin the next phase of Block 9’s expansion and development – resulting in a significant ramp up of production. In Egypt, Kuwait Energy will continue its well management and work over program to optimize production from its mature assets; whilst also potentially adding to Egyptian reserves and production via its exploration program, which has historically yielded a 50% success rate. In Yemen, Kuwait Energy continues to monitor the situation and is operationally-ready to commence production when the situation permits. While merger discussions with a publicly listed company were terminated in March 2018, the Board of Kuwait Energy remains committed to serving the best interest of all its stakeholders and actively continues to consider and assess its options to create the desired liquidity for its shareholders.

OUTLOOK

Abbreviation Definition

1H First half

1P Proven reserves

2C Contingent resources mid-case recoverable volume

2H Second half

2P Proven plus probable reserves

3P Proven, probable and possible reserves

Barrel The standard of crude oil or other petroleum product contains 42 US gallons, 35 Imperial gallons or 159 litres.

Bcf Billion cubic feet

Bcpd Barrels of (oil or gas) condensate per day

BEA Burg El Arab

BOC Basra Oil Company

Boe Barrels of oil equivalent

Boepd Barrels of oil equivalent per day

Bopd Barrels of oil per day

EGPC Egyptian General Petroleum Corporation (Egypt State Oil Company)

ERQ East Ras Qattara

ERW Explosive Remnants of War

G&A General and Administrative

GCA Gaffney, Cline & Associates (Reserves & Resources Auditors)

HSSE Health, Safety, Sustainability and Environment

KSF Karim Small Fields

LTI Lost Time Incidents

M Metres

MENA Middle East and North Africa

GLOSSARY

Abbreviation Definition

Mmbbl Million barrels

Mmboe Million barrels of oil equivalent

Mmscfd Million metric standard cubic feet per day

Mscf Thousand standard cubic feet

OEC Oil Exploration Company (Iraq’s Ministry of Oil seismic company)

Q1 First Quarter

Q2 Second Quarter

Q3 Third Quarter

Q4 Fourth Quarter

RRR Reserves Replacement Ratio

Scf Standard cubic feet

SOMO State Oil Marketing Company (The Iraqi national company responsible for marketing Iraq’s oil)

TOUR Trading and Operational Activity Report

US$ United States Dollars

WI Working Interest: a company’s interest in a project before reduction for royalties or production share owed to others under the applicable fiscal terms

YTD Year to Date

Investor Affairs Department Kuwait Energy plc Tel: +965 25767700, Fax: +965 25767709 Email: ir@kec.com.kw Web: www.kuwaitenergy.co

Kuwait Energy plc, Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES, Channel Islands