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Petrel Resources Plc

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    1. 1 Petrel Resources Plc

    2. Important Notice This presentation does not constitute or form any part of any offer for sale or solicitation of any offer to buy or subscribe for any securities in Petrel Resources plc nor shall it or any part of it form the basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on any other document or oral statement or on the completeness, accuracy or fairness of any such information and/or opinions. No undertaking,representation,warranty or other assurance, express or implied, is made or given by or on behalf of Petrel Resources plc or any of their respective directors, employees or advisors, as to the accuracy or completeness of the information or opinions contained in this presentation, and (save in the case of fraud) no responsibility or liability is accepted by any of them for any such information or opinions or for any errors,omissions,misstatements,negligence or otherwise contained or referred to in this presentation. The contents of this presentation have not been approved by the authorised person within the meaning of the Financial Services and Markets Act 2000. This presentation does not constitute an offer to the public as referred to in section 85 of the Financial Services and Markets Act 2000(as amended) of the United Kingdom and accordingly has not been nor will it be approved by any competent authority in the United Kingdom. This presentation is not a prospectus within the meaning of the Prospectus(Directive 2003/71/EC) Regulations 2005 of Ireland and therefore has not been approved by the Irish Financial Services Regulatory Authorities being the competent authority for the purposes of Directive 2003/71/EC in Ireland. This presentation is not an offering document for the purposes of section 49 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland. This presentation has been prepared by the Directors of Petrel Resources plc and is being issued solely to and directed at persons who have professional experience in matters relating to investments falling within Article 19(1)(a)of the Financial Services and Markets Act 2000(Financial Promotion) Order 2001(FPO) or (b)high net worth entities and other persons to whom the presentation may otherwise lawfully be communicated, falling within Article 49(1)(a) of the FPO(all such persons together being referred to as Relevant Persons"). In consideration of the receipt of the presentation each recipient warrants and represents that he or it is a person falling within that description. Delivery of the information to any other person or reproduction, in whole or in part, without the prior consent of Petrel Resources plc is prohibited. This information is being supplied to you, in whole or in part, for information purposes only and not for any other purpose. In particular, the distribution of this document in jurisdictions other than United Kingdom or Ireland may be restricted by laws and persons into whose domain this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of laws of any such other jurisdictions.

    3. Iraqi expert expanding into Africa Iraq is difficult, complicated & dangerous The rules & players have changed repeatedly The Ministry demands unreasonable conditions But it remains the worlds best hydrocarbon province Petrel has operated continuously for 11 years Who we are Iraq projects Latest developments 3

    4. Why Iraq? Worlds largest remaining undeveloped petroleum province Opportunity for re-developing known fields Technical costs are the lowest worldwide Hydrocarbon law allows foreign participation Whether under existing or expected new law Access to equity barrels probably requires ratification of Federal Parliament Iraqs production has languished at c. 2.25mmbod NOCs & IOCs have done mainly preparatory work so far.

    5. Petrel Resources Who we are: background Pure Exploration & Production (E&P) play focused on Arabic Iraq South & Western regions Irish company - listed in London Alternative Investment Market (AIM) Highly experienced Iraqi and international team Group leverages regional expertise adding complementary opportunities in neighbouring countries

    6. Petrel chronology

    7. Iraqi production is only 75% the level of pre-2003 war

    8. OPEC quota will be an issue as Iraq expands:

    9. Petrel top organization

    10. Projects in Iraq

    11. Status of projects in Iraq Block 6 (exploration) Merjan field (technical cooperation) Dhufriya field (technical cooperation) Subba & Luhais (EPC) Work re-started May 2010 Development field

    12. Recent developments affecting Petrel Implementation of new Upstream law suspended - approved by Cabinet, awaiting ratification by Parliament Since law delayed the Government is negotiating service deals under the old law Subba & Luhais work in final phase: Petrel was obliged to suspend equipment deliveries because of slow payments an agreed programme to complete the project now being implemented: Petrel in charge of initial project management / engineering / main (compressor) packages. Iraqi partner run final stage of bulk etc. procurement / supply and construction-related. Discussions are expected to shortly resume with Iraqi authorities on proposals to develop 2 oil projects on a risk-sharing basis the details of which will be determined under the final provisions of the new law

    13. Iraq upstream hydrocarbon law currently service model State of the Art Law comparable to best international practice not yet passed Outgoing Minister prioritised lean Service Contracts for majors/NOCs to develop long-established fields Economic terms marginal (12% to 18%) and many risks Technical difficulties substantial (water, pipelines, services, people) Ministry structures slow & unsatisfactory Authority of Ministry of Oil and Federal Government clear in the centre and south of Iraq, where Petrel operates

    14. Block 6 (exploration): introduction Block 6 is considered one of the most prospective of the Iraqi Western Desert Blocks 3 to 5 billion barrel recoverable potential Large structures identified in Mesozoic (oil-prone) and Paleozoic (gas/condensate prone) Formations World class exploration opportunity

    15. Block 6 (exploration): base map

    16. Merjan field (technical cooperation agreement) Undeveloped discovery Opportunity to work with the Ministry, learn about Iraqs regional geology. First official cooperation with Itochu (50% non-operating partner) Objective: Training and transfer of technology to technical personnel Ministry of Oil Progress to date Seismic reprocessing Stratigraphy & structures identified over the block area Top geological maps compiled for the HARTHA & SAFAWI formations Twenty four well logs have been digitized and being evaluated by Petro-physics group. Well test reports for the HARTHA formation being evaluated Assessment being made of the Gross Rock Volumes (GRVs) of the Structures along with the Porosity and Oil/water contact and saturation factors from the Logs Finalise oil in place ranges, reservoir and drainage scenarios, draft development plans and budgets Near term plans Continue follow-up Technical Cooperation Agreement on Merjan and Dhufriya oil & gas field (circa 225mmbo + circa 5 tcf). Efforts by Ministry to attract majors / NOCs on service basis unsuccessful.

    17. Merjan field (technical cooperation agreement) Basic facts Discovered 1983 (undeveloped) Located near Block 6 Oil In Place est. 760 million barrel (first estimates) Well data available 2D seismic available Completed 4/2007 ongoing follow-up

    18. Subba & Luhais (EPC contract) Project description Working this project since 1999. $197 million contract price. The project is located in Southern Iraq, where security challenges are manageable. There is an established infrastructure: site location is about two hours by road from Basra, whose port facilities can be supplemented, if necessary, by those in neighboring Kuwait Plan is to boost oil production from current levels of under 50,000 b/d to over 200,000 b/d Re-start of implementation phase imminent: Renewed Bank Guarantees are again in place. The Project L/C has been amended & re-issued. Work is again underway Petrel has received $2 million of $7 million due plus a Bank Guarantee for $5 million plus 10% of profits. Iraqi Partner assumes any liabilities and funds implementation.

    19. Subba & Luhais facilities (export infrastructure) Satellite image

    20. Subba & Luhais EPC contract New development plan

    21. Subba & Luhais EPC contract New development plan

    22. Other regional opportunities: Jordan As part of Petrels work on Arabian Desert, our staff collected data from Jordan, Syria, and Saudi Arabia. The cooperation of the Jordanian authorities encouraged Petrel to look at the Jordanian side of the Arabian Desert In January 2005, Petrel signed a MOU with the Jordanian Natural Resources Authority on East Safawi block. PSA signed in May 2007, with King Abdullah in attendance. This is a large exploration block bordering Syria and Saudi Arabia and is beside the producing Risha gas field operated by the Jordanian National Petroleum Company. Drillable targets identified, to target shallow Triassic oil plays similar to Libya also deeper gas and condensate targets

    23. Jordan: East Sawafi block Exploration Block size 9549 km2 Terms of the PSA (60% to 35% share, depending on production) 15% profits tax No Parliamentary queries or press criticism. No security problems Agreement signed May 2007 Farm-out negotiations

    24. Why Africa for oil/gas? Pan Andean focuses on the Andean region. Over 300 companies!Pan Andean focuses on the Andean region. Over 300 companies!

    25. New opportunities rising in West & Central Africa

    26. Sub Saharan Africa Ghana is comparable to Peru & Colombia: West Africa has proven to be attractive due to competitive conditions and large exploration potential Ghana and Uganda among the most attractive

    27. Ghana sweet-spot beside Tullow: Offshore/Onshore Tano Block

    28. Ghanaian opportunity generated over 2 years effort: The combined group controls 60% Working Interest and is the operator of the Offshore/Onshore Tano Block Held via Ghanaian vehicle Block size: c. 1,500 km2 (150k hectares) Basin: Tano Geological Target: Cretaceous Potential : multi-billion barrel recoverable

    29. Now finalising coordinates & work programme: Pan Andean focuses on the Andean region. Over 300 companies!Pan Andean focuses on the Andean region. Over 300 companies!

    30. Competitive Fiscal terms in Ghana:

    31. Near term priorities for Petrel Complete the Subba & Luhais EPC (Engineering, Procurement & Supervision of Construction) Project. Formalise contracts after ratification of Iraqi hydrocarbon law or under existing law. Confirm Block 6 exploration & development contract under new law. Negotiate development field contract. Explore Ghana Tano shallow oil play Widen international institutional shareholding.

    32. Corporate Facts Cash balance: c.$2 million + $5 million due from SCOP for Subba & Luhais Basic Design 77m shares in issue diluted 82m Current Market Cap. (fully-diluted): 22m, 25m, $35m >1800 shareholders 25% institutional share holders; including Swiss institutions Broker/NOMAD : Blue Oar

    33. Petrel Resources Plc 162 Clontarf Road Dublin 3 Ireland Phone: +353 1 833 2833 Fax: +353 1 833 3505 Email: info@petrelresources.com www.petrelresources.com

    34. Intense competition in both regions and very attractive to Asian and Chinese NOCs

    35. Higher price & technology facilitate tapping more hydrocarbons types: Era of easy oil and gas is over Prices are strong and likely to rise over coming years Technology allowing to produce difficult oil for a range of players, not just the biggest players