Goldman Sachs CEEMEA 1x1 Conference London, November 14 th Goldman Sachs CEEMEA 1x1 Conference 1

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1 Goldman Sachs CEEMEA 1x1 Conference London, November 14 th

2 LOTOS Group today Trends in the oil & gas market LOTOS Strategy Appendix

3 LOTOS Group today 3

4 LOTOS Group today Upstream competitive advantages Low risk profile of upstream activity: organic growth and selective acquisitions o Expanding Norwegian Continental Shelf upstream position basing on acquired E&P diversified assets portfolio o Risk mitigation by cooperating with top ranked international players : Statoil, Aker-BP 3 countries of operation: o Poland and Norway offshore, o Lithuania on-shore ca. 25,000 boe (1) daily production o Hydrocarbons production breakdown: 60% gas vs. 40% crude oil 72.3 m boe o of 2P oil & gas reserves as of Sept 30th (1) Barrels of oil equivalent crude oil + natural gas

5 LOTOS Group today Favourable conditions for delivering projects from the LOTOS portfolio in Norway Value-driven consolidation of Aker BP's interests in licences north of Heimdal: o o the area solution concept new project delivery model: standardisation of modules, no changes after concept selection, cooperation with suppliers, economies of scale Statoil operator of licences around Sleipner, focus on extending the hub's lifetime o o Utgard exemplary fast-track field development under Statoil model effects of standardised procurement for a number of projects, improved efficiency of drilling work Leveraging opportunities offered by falling costs of oil rig leases and availability of rigs for Yme project revival Sleipner West Greater Heimdal Aker BP, Statoil and Total - key partners for LOTOS in Norwegian Continental Shelf license areas 5

6 LOTOS Group today Downstream competitive advantages One of the most technically advanced refineries in Europe with advantageous logistics o Processing capacity at the level of 10.5 mtpa (210 k tonnes/day) o Solomon Complexity Index of 9.5 (expected 10.6 post EFRA Programme completion) o Advantageous seaside location and above 30% share in domestic wholesale market o Flexibility of crude oil type used in the refinery o Environmental friendly (based on nat gas) o EFRA Programme to give additional c. 2 USD/bbl of additional refining margin - replacing HSFO with additional value generating fuels, beginning with 2019 Retail o Further optimization of countrywide network of 485 petrol stations,

7 LOTOS Group today EFRA programme expected benefits (1) (1) Annual throughput capacity of the refinery: ~75 m barrels 7

8 LOTOS Group today Managing to significantly improve EBITDA despite volatile business environment EBITDA LIFO (1) Business environment % PLN bn +34% USD/boe M M M 2017 Upstream Downstream Other Brent Dated nat gas BTU model refining margin (1) net of one-off items 8

9 LOTOS Group today Sound cash generation, covering investments and improving debt situation Operating CF and CAPEX (1) Net debt/ebitda LIFO (2) 2.7 PLN bn x 3.8x 2.6x 1.8x 1.1x M M Sept 2017 Capital expenditure Net cash from operating activities (1) borrowings, other debt instruments and finance lease liabilities less cash and cash equivalents (2) net of one off items 9

10 Trends in the oil & gas market

11 Trends in the oil & gas market Liquid fuels and natural gas remain important sources of energy despite dynamic growth of renewables Global consumption of primary energy including Europe billion toe (1) Liquid (2) Gas Coal Nuclear Hydro Renewables Key trends o Increase in global demand for energy due to rising per capita GDP and growing population in non-oecd countries o Demand for liquid and gaseous fuels to remain steady, e.g. thanks to strong development of transport in non-oecd countries o Rapidly growing share of renewables in the energy mix (1) tons of oil equivalent (2) biofuels included Source: Grupa LOTOS, Base case, BP Energy Outlook

12 Trends in the oil & gas market Deficit of middle distillates with a concurrent oversupply of gasoline Global demand for refining products (1) mboe/d Europe: demand for key products and international balance mboe/d Europe rest of the world Gasoline Net imports JET Diesel -1.3 Net imports Net imports (2) % +10% % o o 13% drop in demand Increase in exports of gasoline to 1.4 mboe/d o 10% growth in demand o Imports of aviation fuel (3) and kerosene up to 0.5 mboe/d o o 3% growth in demand Imports of diesel and light fuel oil up to 1.0 mboe/d (1) gasoline, naphtha, diesel, light fuel oil, JET, heavy fuel oil and other (2) including light fuel oil (3) including kerosene Source: JBC Energy SuDeP 12

13 Trends in the oil & gas market Regional demand for key fuel products is not forecasted to drop Forecasted demand for main transport fuels gasoline, diesel, light fuel oil, aviation fuel (m tonnes) Western Europe Central and Eastern Europe Key conclusions % % o Continued growth of CEE economies implies further increase in fuel consumption, ultimately to Western European levels o Fuel efficiency measures will only reduce the rate of growth in CEE o The still growing CEE market is considered more promising for fuel producers in the coming years Source: Grupa LOTOS, WoodMckenzie, PWC, in-house analysis 13

14 Trends in the oil & gas market Poland visibly balancing fuel market since legal regulations effective from August 2016 Poland volume (2) Cumulative GDP growth (1) Cumulative fuel market growth (2) (1) based on 9M 2017 annualised (2) gasoline + diesel + gasoil 14

15 LOTOS Strategy

16 LOTOS Strategy Key highlights: summary Average annual EBITDA LIFO doubled in Targeted net debt/ebitda LIFO below 1.5x CAPEX of 9.4bn over 6 years 2P reserves of more than 60 m boe (1) and hydrocarbon production between kboe/d 550 petrol stations LTIF (2) < 3 (1) Boe barrels of oil equivalent (crude oil + natural gas) (2) Lost Time Injury Frequency Rate 16

17 LOTOS Strategy Financial ambitions. Current average annual LIFO-based EBITDA (1) to be doubled in PLN bn doubled Preparation and launch of a balanced portfolio of innovative investment projects ca. 2 ca. 4 Effective implementation of running investment projects Projects under implementation Projects (2) pending FID In 2018, the CAPEX strategy for coming years will be updated and CAPEX of approximately PLN 3.3bn will be allocated to new growth projects (1) net of one-off items (2) Final Investment Decision 17

18 LOTOS Strategy Strong potential for growth investments assuming continuation of current projects: CAPEX in (1) Development (2) : B4/B6, Utgard, Frigg Gamma Delta, Yme Production: B8, B3, Heimdal, Sleipner and Lithuania Exploration: oil and gas fields (on-shore and off-shore licences) 1.3 EFRA Project continued Maintenance upgrade, replacement, catalysts and other Retail network optimalisation CAPEX Upstream Refining Retail New (3) (1) estimates (2) or other similar project (3) growth CAPEX after to 2018 (to be allocated among segments) 18

19 LOTOS Strategy Key performance indicators. Twofold increase in average annual EBITDA LIFO (1) Debt ratio capped at 1.5x (2) and dividend capacity Net debt / EBITDA LIFO 2.6x (3) 1.5x 1.5x 1.1x Average annual EBITDA LIFO (1) PLN bn (4) 9M2017 Average annual CAPEX PLN bn (1) net of one-off items. (2) debt ratio = net debt/ebitda LIFO target level of 1.5 expected to be reached at the end of 2018 (3) value as at December 31st 2015 (4) assuming the B4/B6 project is fully consolidated (LOTOS' interest in the project: 51%) Growth projects after 2018 Upstream Refining Retail 19

20 Appendix 20

21 Appendix Strategy Key performance indicators Safety LTIF (1) < 3 Operational and financial metrics UPSTREAM REFINING RETAIL Operational metrics 2P reserves (2) ca. 60 mboe Production ca. 22 kboe/d (3) 10.5m tonnes 500+ petrol stations; standardisation EBITDA LIFO bn PLN (4) average annual in CAPEX bn PLN total ca. PLN 1.5 ca. PLN 1.8 ca. PLN 0.3 Net debt/ebitda (5) less than 1.5x (5) OPEX savings PLN 200m annually (run rate) vs 2015 cost base Customer satisfaction Net Promoter Score (NPS) implemented, first measurements in 2017 Dividend capacity yes (1) Lost Time Injury Frequency Rate (2) 2P reserves: proved and probable (3) average annual projected production volume in barrels of oil equivalent (oil and gas) per day (4) net of one-off items (5) at the end of

22 Appendix Strategy Key performance indicators Safety LTIF (1) < 3 Operational and financial metrics Operational metrics EBITDA LIFO bn PLN (4) average annual in CAPEX bn PLN total UPSTREAM REFINING RETAIL 2P reserves (2) more than 60 mboe 10.5m tonnes 550 petrol stations Production kboe/d (3) ca. PLN 1.5 ca. PLN 0.7 ca. PLN 0.3 Net debt/ebitda less than 1.5x OPEX savings Customer satisfaction Dividend capacity PLN 300m annually (run rate) vs 2015 cost base positive trend in NPS yes NOTE: Additional CAPEX of approximately PLN 3.3bn, to be allocated among segments in 2018 for (1) Lost Time Injury Frequency Rate (2) 2P reserves: proved and probable (3) average annual projected production volume in barrels of oil equivalent (oil and gas) per day (4) net of one-off items. 22

23 Appendix Macroeconomic environment (1) vs strategic assumptions (2) Brent DTD Product crack spreads 50 +4% USD/bbl 52 USD/tona % Gasoline 2017 strategy 9M strategy 9M % +8% Natural gas USD/boe Diesel strategy 9M 2017 Heavy fuel oil 2017 strategy 9M % (1) Source : Thomson Reuters (2) Full year 2017 strategic assumptions adopted by the company 23

24 Appendix Crude oil, natural gas and product crack spreads Crude oil and nat gas prices Key product crack spreads USD/t (1) Q Q Q Q Q Q Q Q Q Q 2017 Brent DTD (USD/bbl) (1) nat gas NBP (USD/boe) (2) gasoline diesel HSFO (1) Source: Thomson Reuters (2) Source: National Balancing Point 24

25 Appendix FX rate, GDP growth, domestic fuel market FX USD/PLN average rate (1) Diesel domestic consumption (3) m m Q Q Q Q Q Q Q Q Q Q 2017 Polish GDP growth (2) Gasoline domestic consumption (3) 4.0% 3.9% 4.5% m m % 2.5% 3Q Q Q Q Q Q Q Q Q Q 2017 (1) Source : National Bank of Poland (2) Source : European Commision, Oct 31 st 2017 (3) Source : POPiHN Organisation for Oil Trade and Industry 25

26 Appendix Good momentum, lower project costs. Prices of offshore services down approx % Lower break-even point for projects in Norway Lower break-even point (1) Falling prices of offshore services 2-38% -52% 20-25% % % Trestakk 2013 Oseberg Vesflanken Average break-even point for Statoil projects portfolio Today % Greenfield deepwater 30-35% Greenfield shallow water % "Full scale" subsea tie-back % 15-35% Brownfield projects 70 USD/bbl 41 USD/bbl Current prices Permanent price reduction (1) Source: Statoil (2) Source: Pareto 26

27 Appendix Producing fields 9M 2017 operational parameters B3 B8 Sleipner Heimdal Lithuania field B3 B8 Sleipner Heimdal AB Geonafta Baltic Sea Baltic Sea North Sea North Sea Lithuania 9M 2017 production (1) Δ vs 9M boe/d - 21% boe/d - 4% boe/d -10% boe/d +1 % boe/d -10% % of crude oil (2) 2P reserves (3) 92% 8.8m boe 90% 37.2m boe 27% 11.7m boe 21% 2.8m boe 100% 3.7m boe lifting costs (4) ca. 27 USD/boe (5) ca. 7 USD/boe ca. 11 USD/boe (1) total production / calendar days; barrels of oil equivalent (2) share of crude oil in the overall hydrocarbons production of the fields (3) proved oil and gas reserves (2P) as at September (4) approximate direct costs per barrel related to oil production for 1H 2017; average figures per country of operation (5) including leasing costs of the temporary production platform located on the B8 field 27

28 Appendix Overall production and reserves Quarterly production Total sales 2P reserves changes boe/d m boe m boe % Q Q Q 2017 crude oil natural gas 3Q Q Q 2017 Norway 31 Dec 2016 Poland Production 9M 2017 Lithuania reclass Lithuania (1) (2) reclass Poland 30 Sept 2017 (1) Following the audit performed by Miller and Lents on UAB Minijos Nafta (2) Following the revision of the overall reserves volume 28

29 Appendix LOTOS tomorrow: projects to be implemented schedule and economics field CAPEX m PLN (1) reserves m boe (2) production target k boe/d (3) platform reconstruction full production launch B first oil Utgard B4/B6 development development first oil Yme FID development first oil Frigg Gamma Delta and Langfjellet FID preparation of development concept development after FID before FID (1) planned amount of future CAPEX on the project, exclusive of historical CAPEX (2) as per LOTOS stake (3) future output figures are estimates based on average annual amounts for the first five years of production from the field 29

30 Appendix Refining investment project schedule and economics project CAPEX PLN m Working plans and specifications Commercial operation EFRA Construction ca. PLN 2.300m Delayed coking unit (DCU) with auxiliary infrastructure o o o Entire design, purchasing, delivery of equipment and materials finalized Mechanical completion and launched start up activities for Oxygen Generation Unit (OGU) Completion : new power station, water dry-cooler and sulfur recovery units o Completion of work: ca. 85% 30

31 Appendix LOTOS tomorrow: refining superior competitive advantage driven by innovation More high-margin products: enhancing refinery flexibility through investment in state-of-the-art technologies or New products: adding new product categories to expand the offering o Building a new olefin complex (with an ETBE unit) o Producing gasoline from naphtha, which is now sold abroad to extend the margin chain o Production of high-margin Group 2 and Group 3 base oils (using internally generated feedstock hydrowax) or Increased refining efficiency: improving reliability of energy supply and entry into the capacity market (peak demand capacity) o Building a Combined Heat Power plant to meet internal needs electricity and process steam Our ambition: to preserve the technology advantage 31

32 Appendix LOTOS tomorrow: retail optimising the network, innovating the product and services Further standardisation and organic growth petrol stations o Customer service and sales process optimisation 9M o Revamping the loyalty rewards scheme with up-to-date technology solutions o Introducing a new quality in hospitality in partnership with market leaders o Upgrading on-site facilities: car wash stations, electric car charging points o LOTOS Energy Hub, alternative fuels Acquisition opportunities o o Seeking out non-organic opportunities to expand the network Capturing opportunities to acquire complementary petrol station network Our ambition: new quality of LOTOS retail 32 32

33 Appendix Cumulative 9M results evolution 9M M 2017 m PLN % EBIT 9M 2016 LIFO effect One offs Depreciation Clean EBITDA LIFO 9M 2016 Net profit 9M 2016 EBIT 9M 2017 LIFO effect One offs Depreciation Clean EBITDA LIFO 9M 2017 Net profit 9M of which: of which: 132 9M 2016 one offs LIFO inventory impairment -24 FX differences 98 Assets impairments 9M 2017 one offs Maintenance shutdown costs LIFO inventory impairment Other 33

34 Appendix Operating cash flows vs CAPEX Quarterly 9M 2017 m PLN Q Q Q Q Q M M 2017 CAPEX upstream CAPEX downstream operating cash flow CAPEX EFRA CAPEX B8 CAPEX Other Operating cash flows 34

35 Appendix Debt Net debt (1) Gearing ratio (2) Net debt / clean LIFO EBITDA (3) bn PLN % 2.6x % 1.9x % 1.1x Sep Sep Sep 2017 net debt FX USD/PLN o Net debt figures include: interest bearing loans and borrowings, finance lease and bonds less cash&cash equivalents o The current net debt/ebitda ratio at 1.1x (1) End of period (2) gearing ratio = net debt / total shareholders equity (3) LIFO EBITDA for the last 12 months net of one off items. 35

36 Grupa LOTOS S.A. Investor Relations tel fax