#1only For pe Muara Enim Pilot, 24 October: gas flared within 14 hours of dewatering NuEnergy GAS LTD ABN 50 009 126 238 NuEnergy Gas In Indonesia 6th ANNUAL CBM CONFERENCE SINGAPORE 19 June 2013 Transforming Resources to Reserves and the Global Impact of Unconventional Resources Christopher Newport - CEO#2For personal use only AGENDA ☐ Introduction ☐ NuEnergy Company Snapshot ☐ 2012/13 Indonesian Operational Highlights ☐ Fundamentals for CBM in Indonesia ☐ Unconventional Gas - Global Impact ☐ Fundamentals for Commercialising CBM in Indonesia ☐ Progress to Date for Indonesian Unconventional ☐ Challenges on the Path to Reserves. ☐ Looking Ahead 2013/14 - The Step Change Year ☐ Concluding Comments NuEnergy#3COMPANY SNAPSHOT Corporate Snapshot Shares on Issue / Unlisted Options (Ordinary Shares - ASX:NGY) personal use only 281m/ 9.8m NuEnergy NGY: Indonesian CBM Industry Leader Two Prime South Sumatra Basin Production Sharing Contracts (PSC): Muara Enim (ME) (40% participating share, Partner: PERTAMINA^) Completed 2 core wells. Conversion of well #2 for pilot production testing now in final stages Commence drilling of 3rd well (second pilot) in Q2 2013 Muara Enim 2 (ME II) (30% participating share, Partners: PERTAMINA and Sugico) Central Sumatra Basin PSC: Market Cap at $0.041/Share Gross South Sumatra Prospective Resource AUD$12m • 4.2 Tcf* Net South Sumatra Prospective Resource 1.1 Tcf * Contingent Gas Resource 98 Bcf ** Rengat (100% participating share) Gross Acreage (Indonesia) 4,819 km² Indonesian PSC's Tanzanian JV's Malawi EPL Acreage Major Shareholders: 3 2 346 km² • 1. Farjoy Pty Ltd 2. Aspac Mining Ltd EASTERN AFRICA - First CBM Explorer in Eastern Africa Tanzania: • 2 Joint Ventures with Intra Energy Corporation (ASX:IEC) – NGY 70% participating interest and operator 2 core well CBM drilling programme commenced in September 2012 2 significant shale gas and CBM Licenses under application Malawi: Exclusive Prospecting Licence (EPL) covering 346 km2 for CBM and shale gas granted in June 2012 - aero magnetic/ gravity survey completed 25.9% . 15.3% 6.0% . 3. Republic Investment Management * NSAI: Netherland Sewell & Associates Incorporated, Houston **RPS: RPS Group Plc - Gross A PERTAMINA: The Indonesian National Oil Company Tcf: Trillion Cubic feet 3#4For personal use only NUENERGY INDONESIAN PSC ASSET LOCATION Singapore • Duri Batam NuEnergy Rengat PSC Legend: Gas Pipeline Rengat PSC NuEnergy NuEnergy ME& ME II PSC Areas Muara Enim CBM PSC 1 Pertamina NuEnergy 2 Muara Enim II CBM PSC Pertamina-NuEnergy-Sugico Other CBM Operators Denoted by Clear bounds Jambi Palembang Lampung Jakarta NuEnergy NuEnergy holds substantial CBM interests within Sumatra with a total exploration area of 4,819km² 1. Muara Enim PSC • NuEnergy operator • ME Working Interest (WI) NGY 40% Pertamina 60% 1. Muara Enim II PSC • NuEnergy operator • ME2 WI NGY 30% 1. Rengat PSC Pertamina 40% Sugico 30% • NuEnergy Operator - 100% WI Prime Basin Positions High Growth Markets with Robust Pricing Gas Pipelines through PSCs to Domestic & Export Markets#52012/13 NGY INDONESIAN OPERATIONAL HIGHLIGHTS NuEnergy For personal use only. LL MoU signed @ $10/mmBtu gas sales price to CNG developer with first revenue expected Q4 2013 - setting a new Indonesian benchmark for CBM pricing Gas Flared within 14 hours of commencement of dewatering operations with permeability of 11 mD, high gas content, gas quality with methane content in excess of 98 % and produced water quality that meets drinking water standards for salinity NSAI* Independent Resource Certification showing 4.2 Tcf of prospective gas resources gross across concession areas Significant shale gas potential in both the Central and South Sumatra basins. Shale Gas-in-Place under NuEnergy's PSCs is estimated to @ 6.1 Tcf^ RPS independent Resource Certification 98 Bcf of 3C and 2 Bcf of 1C & 2C Contingent Gas Resources - Gross World class coal seams identified in PSCs with gross coal seam thickness in excess of 120 Metres or 393 feet *Netherland Sewell & Associates Incorporated, Houston ^ Source: Institute of Technology Bandung (ITB) independent GIP resource estimate 5#6FUNDAMENTALS FOR CBM IN INDONESIA For personal use only Aceh NuEnergy Significant coal and shale basins with estimated gas in place resources in excess of +1000 Tcf of CBM and +4000 Tcf of shale gas Well established open access gas pipeline infrastructure that connects PSCs to the undersupplied Sumatra, Singapore and Java markets. There are often under-utilised pipelines within meters or kilometers of drill sites the inventory of old wells connected to infrastructure will deliver substantial cost savings to operators in the appraisal process. The gas infrastructure is connected to as markets short on supply on a go forward basis by 1-2 Bcf per day. Prices in excess of LNG netback pricing without having to build an LNG plant - between $10 and $15 /mmbtu netback to the producer at the plant gate Robust well proven regulatory system which has been successfully worked with by super majors and minnows alike Medan Rengat PSC $150 Cament Oil Price $100 $200 North Sumatra Shale Gas-338 Tcf $150 $100 $50 $50 -Chevron Duri Gas Price (Crude linked) Singapore Gas Price (HSFO linked) Singapore 50 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 Gas Price (US$/mmbtu) Jambi ME & ME2 PSCs PAGARDEWA Gas Transmission Pipeline "HSFO: High Sulphur Fuel Oil Lampung Jakarta / Singapore gas market Gas price: 90% (115% HSFOA) +10% (inflation rate) - producer netback gas price circa US$15.00/mmbtu Chevron - Duri Steam flood gas market Gas Price: (75%-95% of Indonesian Crude Price)/BTU conversion factor- producer netback gas price circa US$15.00/mmbtu High Pressure Gas Transmission Pipeline (Open Access pipeline by regulation) West Java gas market Producer Netback Gas Price: US$6.50- US$12.00/mmbtu South Sumatra Shale Gas-964 Tcf CBM-375 Tcf Shale gas play CBM play East Kalimantan Central Sumatra Shale Gas-558 Tcf CBM-165 Tcf Shale Gas-1,723 Tcf CBM-496 Tcf West & East Java Shale Gas-722 Tcf CBM-56 Tcf West Papua Shale Gas-648 Tcf#7For personal use only. ADVANTAGE FACTORS IN SUMATRA FOR DELIVERING RESERVES NuEnergy Over 1500 wells drilled in the South Sumatra basin and there are several hundred lines of seismic shot over ME & ME2 PSCs. This data is being integrated into the NGY geological model – chance to significantly enhance contingent resources A number of these wells (estimated to be over 30) have been abandoned but not plugged so could be used (at no cost) NGY plans to use these abandoned / not plugged oil & gas wells (with anticline structures) with overlying coals - these are often connected to operating gas pipelines..... Enhanced gas content and permeability in the coals is likely above such structures from fissure fracturing and from gas in coal which migrates to the top of the structure These competitive advantages give NGY a possible fast track to proving reserves across ME & ME2 at a much lower cost. 100 metre Coal Seams Thickness -140 -130 -120 10 -100 -90 -80 -70 -60 -50 New Target Well Locations ME-CBM-01 ME-CBM-02 30 -20 CENTER OR AXIS B ANTICLINE Migration SYNCLINE#8PROGRESS OF INDONESIAN CBM INDUSTRY TO DATE NuEnergy The most active CBM exploration operators in Indonesia are: - - - - NuEnergy Dart Energy Ephindo Medco PERTAMINA Santos Vico No commercial development thus far but close...... Santos is currently undertaking a major appraisal program For personal use only. Three CBM Pilot projects active in South Sumatra and two in East Kalimantan - NuEnergy Ephindo/Medco - Dart - Vico Muara Enim PSC South Sumatra Sukayu PSC South Sumatra Tanjung Enim PSC South Sumatra Sangatta PSC East Kalimantan Sanga Sanga PSC East Kalimantan No active Shale gas exploration at this stage - the resource is thought often to be too young/too shallow but perhaps the higher thermal gradient in Indonesia may mitigate this issue.... 8#9For personal use only CHALLENGES ON THE PATH TO RESERVES Approval Processes NuEnergy Approval process and tendering is cumbersome and this promotes a slow moving high cost environment the tendering process substantially impairs the chance of gaining economies of scale & makes dealing with short term operational issues that require rapid approval difficult Pre-approved cost recovery limits (eg cost recovery ceiling for well cost using benchmark costs) could be a way of avoiding lengthy delays for tendering where time is of the essence... Getting The Job Done in Timely Manner Can Penalise Contractors Cost recovery processes and audits often exclude costs necessarily incurred to get timely results / to deal with operational issues expeditiously On The Ground Support Increased federal support is required on the ground in regions with local authorities, the police and with other Government departments to obtain co-ordinated local / regional approvals in a timely manner LCBM Service and Equipment Suppliers Increased supplier support for consumables, spare parts and drilling - this issue being proactively addressed by operators working together#10or personal use only UNCONVENTIONAL GAS - GLOBAL IMPACT ✓ NuEnergy Positive US Economic Impact - Unconventional Oil and Gas will be the largest Global Positive Economic Force in 2013. A significant demand stimulus / downturn mitigation impact is seen as likely. Geopolitical Consequences - less reason for conflict over energy is good for trade Gas to Displace Liquid Fuels - acceleration expected for gas penetration in motor vehicle and power market segments via CNG and Mini LNG ✓ Material Potential for UK Unconventional Gas to displace European imports ✓ Unconventional Gas also to Displace Coal and Nuclear given its abundance and more favourable relative economics and environmental impact ✓ Capital Costs of CNG and mini LNG to reduce as economies of scale increase ✓ Potential Impact on LNG Pricing - no short to medium term impact likely in Indonesia given import costs, capacity limitations, domestic supply focus and demand significantly outstripping supply 10#11For personal use only LOOKING AHEAD 2013/14 - THE STEP CHANGE YEAR NuEnergy CBM Pilot Programs Projects Mature to Production Phase Significant Appraisal programs completed (NGY and Santos) in Basin Significant Geology & Geophysics and commercial work completed across basins identifying areas of enhanced permeability and commerciality (sweet spots) First Plans of Development and Commercial Gas Sales Submitted for Approval CBM Proved Reserves Booked Shale Gas Concessions Licensed and Exploration Commences Demand for Gas and Gas Supply Shortfalls In Indonesia Increase Further LNG terminal in Singapore Commences Operations 11#12For personal use only CONCLUDING COMMENTS NuEnergy The Indonesian Unconventional Gas Business will prove itself in the next 12-24 months through first commercialisation of the resource Companies such as NuEnergy Gas and its partner PERTAMINA are at the forefront of proving the resource and are demonstrating the larger than expected potential of Indonesian coal seams which have been found in some cases to be between 80-120m thick with high gas content, gas quality and water quality Key relationships with the Government regulators and the local communities are key to ensuring the successful implementation of projects which benefit the people of Indonesia through : ✓ significant tax revenues generated by the state; ✓ local direct and indirect employment opportunities generated by the new business; and ✓ electrification of local villages that have not had access to electricity up until now. The global impact of the success of the unconventional gas business in the USA will be enjoyed through the positive impact the industry will provide to growth and trade in the USA as imports are displaced It is seen as unlikely that this success will translate into any short to medium term disruption of Indonesian gas markets through the export of LNG from the USA 12#13For personal use only Thankyou www.cbmconference.com 13 NuEnergy#14se only BOARD & MANAGEMENT NuEnergy Core management team has over twenty years of experience in selling gas into Indonesian/Asian gas pipelines and markets Key Geological and Technical knowledge secured from past thousands of wells drilled and NuEnergy Drilling activity confirms South Sumatra basin potential • One of the first Company's in South Sumatra to produce CBM Graeme Robertson (Non-Executive Chairman) 30 years in coal, infrastructure and power development. CEO (1985-2005) and MD (1987-2005) of New Hope Corporation from during which time he was President Director of Adaro Indonesia, now the biggest coal mining company in Indonesia. Alan Fraser (Non-Executive Director) Director since 1992, 30 years of exploration and mining industry experience Peter Cockcroft (Non-Executive Director) Over 30 years of gas industry experience in Asia. Has held management and executive positions with Shell, BHP and Premier Oil. Also advised the Indonesian government on the formation of a CBM fiscal regime Jonathan Warrand (Non-Executive Director) 25 years corporate advisory experience across the mining, energy, financial services and real estate sectors covering equity and debt capital markets, strategic planning and capital management Christopher Newport (Chief Executive Officer) Over 30 years experience in upstream and mid-stream industries working at senior executive and COO level for companies such as Corsair, Hess, Gulf Indonesia, Santos, Delhi Petroleum and BHP Petroleum. NuEnergy's Board and management team have a proven track record in developing energy resources and have strong relationships with Governments in both Indonesia and Eastern Africa 14#15For personal use only DISCLAIMER NuEnergy This presentation has been prepared by NuEnergy Gas Limited ("NuEnergy" or the "Company") and is being provided for the sole purpose of providing preliminary background financial, operational and other information to enable shareholders and/or prospective investors to review the business activities of the Company. It is not intended as an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities This presentation should not be relied upon as a representation of any matter that a potential investor should consider in evaluating the Company. The Company and its respective directors, agents, officers or employees do not make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this presentation, and they do not accept any liability for any statement made in, or omitted from, this presentation This presentation contains forward looking statements that are subject to risk factors associated with Coal Bed Methane businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, resource estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates Before acting in reliance on any information contained in this presentation, potential investors should conduct their own investigation and analysis in relation to the Company and should check the accuracy, reliability and completeness of the information contained in this presentation and obtain their own independent professional advice All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated 15