On April 9th 2013, CalEnergy acceded as a limited partner to the Baltic Gas Sp. z o.o. i Wspólnicy Spółka Komandytowa, a limited liability partnership created earlier by LOTOS Petrobaltic to implement an investment agreement with CalEnergy of October 30th on cooperation in development of gas fields B4 and B6 in the Baltic Sea. The recoverable reserves at B4 and B6 are estimated at 4 billion m3 of gas.

Acquisition of the equity interest in the company marks the end of preparation for joint operation of the fields and the beginning of CalEnergy’s financial commitment to the project. In preparation, a number of conditions precedent were met, including the transfer of the license to Baltic Gas. The partners’ will to work together has resulted in the closure of the transaction, despite an adverse and changing regulatory environment.

“We are starting a new phase of cooperation,” says Zbigniew Paszkowicz, LOTOS Group Vice President for Exploration and Production, and president of LOTOS Petrobaltic SA. “We are very pleased with our progress so far, and highly value the expertise and experience of our partner. I am convinced that moving forwards, it will be with equally great determination that we lead the work on development of the B4 and B6 fields and their operation.”

Peter Youngs, the Managing Director of the CalEnergy Resources group of companies, said „ I am very pleased to have completed this transaction and looked forward to working closely with LOTOS to develop the full potential of the assets. However, it is important to note that the forward success of the project still very much depends upon a speedy and sensible stabilisation of Poland’s fiscal, legislative and regulatory environment in manner that is not misaligned with competing international markets”.

Under the pre-construction work programme, seismic acquisition and selection of the field development concept are scheduled for 2013 with front-end engineering and design to follow in 2014. After this work both parties will be capable to make the final investment decision (FID) regarding gas fields development. Moreover the project enables LOTOS Petrobaltic to pursue other gas field exploration and development as a potential tie-ins to B4 and B6.

Under the terms of the Investment Agreement CalEnergy Resources Poland Sp. z o.o. will fund both CalEnergy Resources Poland Sp. z o.o.’s and LOTOS Petrobaltic’s share of the seismic survey acquisition, the field development concept select and front-end engineering and design expenditures.

CalEnergy Resources Poland Sp. z o.o. is a member of MidAmerican Energy Holdings Company, a consolidated subsidiary of Berkshire Hathaway Inc.

Being part of the LOTOS Group, LOTOS Petrobaltic S.A. is responsible for implementing its strategic objectives related to exploration for and production of crude oil and natural gas. The company operates in the Polish offshore area covering approximately 29 thousand km2. LOTOS Petrobaltic holds licences for exploration and appraisal of hydrocarbon reserves, which cover seven areas totalling over 7,100 km2, situated in the eastern part of the Polish offshore area. The company has also been awarded production licences relating to the B3, B4, B6 and B8 fields. The B3 field is currently in production, while the B8 field is being prepared to come on stream. LOTOS Petrobaltic has established its own group of companies, which comprises more than a dozen of subsidiaries. LOTOS Exploration & Production Norge AS is to ensure access to crude oil under the Norwegian Continental Shelf in the North and Norwegian Seas. AB LOTOS Geonafta operates in the Lithuanian oil sector. Energobaltic Sp. z o.o. is responsible for managing tail gas generated in the process of oil production from fields located in the Baltic Sea. The other group companies provide sea transport services.

Communications Office, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. (+48) 58 308 87 31, (+48) 58 308 83 88, (+48) 58 308 83 55, e-mail: media@grupalotos.pl

CalEnergy Resources Poland Sp. z o.o., Al. Wilanowska 206 app.19, 02-765 Warsaw, Poland tel. (+48) 22 853 0176