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For personal use only PETSEC ENERGY PETSEC ENERGY An Exploration and Production Company An Exploration and Production Company USA and China USA and China The Good Oil Conference The Good Oil Conference Perth Perth 4-5 September, 2007 4-5

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PETSEC ENERGY PETSEC ENERGY An Exploration and Production Company An Exploration and Production Company USA and China USA and China The Good Oil Conference The Good Oil Conference Perth Perth 4-5 September, 2007 4-5 September, 2007

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The information presented herein contains predictions, estimates and other forward looking statements that are subject to risk factors that are associated with the oil and gas business. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the company to meet its stated business goals. All references to dollars in this presentation are to US currency, unless otherwise stated.

FORWARD STATEMENT DISCLAIMER

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Petsec Energy

A growth exploration & production company

  • Operations in the Gulf Coast & Gulf of Mexico, USA

& Beibu Gulf China

  • USA
  • Current production of 18 Mmcfe/d
  • Petsec estimated 2P reserves of 33 Bcfe (June 2007)
  • Prospect inventory of 290 Bcf of gas & 30 MMbbl of oil
  • China
  • Petsec estimated 2P reserves of 3.6-4.6 MMbbl of oil
  • Prospect inventory of 5-8 MMbbl of oil
  • Market capitalisation of A$203 million

(@ $1.32/share 30/08/07)

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Areas of Operations

USA Operations Office

China Sydney Head Office

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USA – Gulf of Mexico and Gulf Coast

  • 53 Offshore Leases -

18 Held by production

  • 2 Onshore Projects -

Moonshine, Terrebonne Parish

Terrebone Parish

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Gulf of Mexico – Vast Infrastructure

  • High oil & gas prices - ready market for discoveries
  • Highly productive area - leases readily available
  • Extensive Infrastructure: one land owner - Regulator, 1,141 oil & gas fields,

14,000 miles pipeline

  • Majors moving to deep water leaving opportunities for proven shelf acreage

e.g. W&T Acquisition of KERR-McGEE SHELF 150 MMCFe/D & 330 BCFe MMS ESTIMATE GOM SHELF Remaining Proved Reserves 4,870 MMBO & 21.5 TCF 777 MMBO & 15.4 TCF Unproved Reserves 3,361 MMBO & 9.0 TCF 201 MMBO & 3.1 TCF

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Gulf of Mexico - Lease Turnover

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Current US Gas Prices

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 3 1

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7 US$/Mcf 12mth strip, 3 year average $8.25

  • Petsec av. price received 1st Half 07:

US$8.31/Mcfe US$8.31/Mcfe

  • Nymex:
  • Spot Price -

seasonal low period: US$5.68/Mcf US$5.68/Mcf (at 30 Aug 07)

  • 12 month forward strip gas price: US$7.41/

US$7.41/Mcf Mcf (at 30 Aug 07)

  • 24 month forward strip gas price: US$7.80/

US$7.80/Mcf Mcf (at 30 Aug 07)

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Natural Gas Production, Consumption, and Imports

5 10 15 20 25 30

1960 1970 1980 1990 2000 2010 2020 2030 (trillion cubic feet) 16% 21%

Net Imports Consumption Production

Natural Gas Net Imports, 2005 and 2030 (trillion cubic feet)

3.0 0.6 0.9 4.5

1 2 3 4 5 6 7

Pipeline Liquefied Natural Gas 2005 2030

Source: EIA Annual Energy Outlook 2007

20.5 Tcf 26.1 Tcf

History Projections

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2007 Production

  • Estimated 2007 Production of 7-7.5 Bcfe
  • Estimated 2007 operating cashflow of approximately US$40m*
  • Production fields -

Vermilion 258

  • Main Pass 18
  • Main Pass 19
  • Mobile Bay (from 4th

quarter) (*Assumes 2006 operating margin of US$5.50/Mcfe)

Vermilion 258 Main Pass 19 Mobile Bay 952A

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Mobile Bay 952A Platform

  • May 2007 acquisition:

– Mobile Bay 952A platform & pipelines – Mobile Bay 955 lease, pipelines & 1 producing well – Mobile Bay 953 lease & 2 producing wells – Net remaining reserves of 1.2 Bcfe

  • Host facility for production of discoveries at Mobile Bay 993,

994, 950, 951 & Viosca Knoll 26 - net capital savings of $2.0M

  • Consideration is assumption of abandonment liabilities -

net cost of $1.8M

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Mobile Bay 993, 994, 950 & 951

4” 6” 6” 6” MO 953-1 MO 953-3 MO 950-1 Single Well

IP Rate 5 MMCFD

MO 993-1 Single Well

IP Rate 6 MMCFD

MO 994 A 2 Wells MO994-2

IP Rate 3 MMCFD

VK26-1

IP Rate 3 MMCFD

MO 951-1 Single Well

IP Rate 4.2 MMCFD

MO 952 A Host Platform 40 MMCFD Capacity MO 953-3

Rate 5 MMCFD

Remote Wells

IP Rate 21.2 MMCFD Total

6” Sales Line

IP Sales Rate 26.2 MMCFD Petsec Energy Petsec Energy Petsec Energy Petsec Energy

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Mobile Bay 873

6”

MO 829 Single Well

IP Rate 9 MMCFD Petsec Energy

Subsea Tie In To DIGP Sales Line

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Petsec - Focus Gulf of Mexico Joint Venture

  • Exploration partnership targeting OCS lease sales with complimentary

strengths – Petsec’s offshore operating expertise – Focus’s dedicated full-time prospect generation – Continued participation in 2007 and 2008

  • 50% interest in 33 OCS lease blocks acquired mid-2006

– Continually being high graded – No mandatory commitment to drill – 3D seismic in house

  • 7 wells drilled to date

– 6 completed, 1 dry hole – 16.2 Bcfe net reserves, F & D costs of $2.13/Mcfe

  • 29 undrilled prospects

– 3 to 4 year drilling inventory – Risked target reserves of 165 Bcfe, projected F & D costs of $2.00/Mcfe

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20 40 60 80 100 120 140 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

MMcfe/day Vermilion 258 MP 19/18 Mobile China Onshore Focus Gas Focus Oil

Petsec - Potential Production Profile Existing Reserves + Risked US Prospects

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Gulf Coast - Moonshine Exploration

  • West bank of Mississippi River,

50 miles west of New Orleans

  • 94 square mile area, only 25% cover

with 2D seismic, no previous 3D seismic

  • Known productive area
  • 340 Bcfe gas, 7.3 MMbbl oil
  • 3D seismic programme completed in

August 2005

  • Drilling commenced April 2007

36 - 37.5% NRI Operator

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Moonshine Drilling

  • Bowie Lumber #1 well encountered tight gas and not

completed

  • Rig released and seismic to be reprocessed
  • Drilling potentially to resume in 4th

Quarter of 2007

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Moonshine – Stearman/Dickel/Mooney

  • Drilling to start 4th

Quarter 2007?

  • Test target 5-6 Bcfe net

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Gulf Coast - Terrebonne Parish

  • Acquisition of 20% interest & participation in 3 well program
  • Terrebonne Parish Louisiana
  • First well CL&F #28-1 -

Plugged and abandoned on August 29, 2007

  • Two remaining wells Triple Play & Greywolf to test:

► Targeted gross reserves - 52.7 Bcfe & 1.6 MMbbl ► Net reserve target - 7.9 Bcfe net to Petsec

  • Risk capital -

US$ 5.8m - 3 wells

  • Total risk capital plus development for 3 wells -

US$ 7.5m

  • Finding & Development costs < $1.00/Mcfe

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Terrebonne Parish –Hollywood AVO Prospects

A A’

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LAGCOE – OCTOBER 23–25, 2007

  • Louisiana Gulf Coast Oil Exposition –

Exhibits and technical sessions

  • Second largest oil and gas industry exposition in U.S.
  • Over 330 exhibiting companies displaying state of the

art technology for onshore and offshore drilling, exploration, production and environmental protection

  • Held in Lafayette, Louisiana -

Free admission with over 16,000 attendees from all over the world

  • Opportunity to learn about the U. S. oil and gas industry,

visit with Petsec in the U.S., and go offshore in the Gulf

  • f Mexico
  • Brochures are available at the Petsec booth

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China – Beibu Gulf Block 22/12

  • Six oil field discoveries

OIP of 300-400 MMbbl

  • Recoverable oil 32.5-65 MMbbl

Petsec net 4-8 MMbbl

  • Development

6.12/6.12 South 19-27 MMbbl oil Petsec net 2.3-3.3 MMbbl

  • Exploration 4-6 wells test 40-60

MMbbl (5-7MMbbl net to Petsec) Nov/Dec 2007

25% working interest (12.25% NRI, if CNOOC backs in for 51%)

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6.12 South West Prospect

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China 6-12 South Oil Discovery

  • 320 feet net hydrocarbon pay, including 270

feet net oil

  • Updip side-track -

cores

  • Downdip side-track -

downdip potential

  • Oil extends downdip beyond structural

closure

  • Appraisal flow-test achieved 5,750 boe/day
  • Estimated reserves in the 6.12/6.12.S fields

Gross: 19-27 MMbbl Net: 2.3-3.3 MMbbl

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China 6.12/6.12 South Oil Development

Development Options Development Options

  • WHPP -

FSO

  • WHP -

FPSO

  • Production capacity 25,000 -

30,000 bopd

  • Estimated capex US$100 -

120 million gross

  • Capacity to tie 12.8W/E & 12.2/12.3 into 6.12S

facility

Development Timing Development Timing

  • Feasibility Study 1st

Quarter 2007

  • Overall Development Plan 4th

Quarter 2007

  • Final Investment Decision 4th

Quarter 2007

  • Development commencing 1st

Half 2008

  • Production 1st

Half 2009

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Consistent Growth of Reserves 2002 - 2006

  • US

22 successes from 26 drilled - 85% success

  • China

3 (+2 sidetracks) successes from 5 wells drilled - 60% success

  • Consistent Reserves

Growth – CAGR 38%

  • Net additions 85 Bcfe

Wells Drilled/Successful 2 4 6 8 10 12 2002 2003 2004 2005 2006

Successful Unsuccessful

Number of Wells

59.7 Bcfe

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Financial Performance 2004 - 2006

2 4 6 8 10

2004 2005 2006 2007 1 H

P roduction Bcfe

27.2

15 30 45 60 75 2004 2005 2006 2007 1H Net Revenue US$ Million 18.8 10 20 30 40 50 2004 2005 2006 2007 1H EBITDAX US$ Million

3 yr CAGR 22% 3 yr CAGR 33% 3 yr CAGR 41% 3.3 12 month estimate

3 year Compound Average Growth Rate

  • Production

22%

  • Revenue

33%

  • EBITDAX

41%

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Operating Margins 2002 – 2006

2 4 6 2003 2004 2005 2006

EBITDAX (Cash Operating Margin) US$/Mcfe

0.6 1.2 1.8 2.4 3 2003 2004 2005 2006 Finding & Development Costs (3yr average - 2P Reserves) US$/Mcfe

Underlying Earnings

10 20 30 40 2002 2003 2004 2005 2006

US$/Mcfe

  • Strong Operating Margins
  • Competitive Finding and

Development Costs

  • Strong Underlying Earnings

$5.54 $2.52 $3.02

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3 Year F&D Cost ($/Mcfe)

$0.00 $2.50 $5.00 $7.50 $10.00

2006 LOE and G&A ($/Mcfe)

$0.00 $1.00 $2.00 $3.00 $4.00

2006 Gross Margin %

0% 25% 50% 75% 100%

Source: Enercom PSA F&D cost excludes exploration costs in China & is based on 1P reserves for 3 yrs to December 2006. Gulf of Mexico peers include ATP Oil & Gas, Bois’d Arc Energy, Energy Partners, McMoran Energy, Petroquest, Stone Energy and W&T Offshore.

PSA 77% PSA $4.20 PSA $1.68

Performance relative to US Peers

  • Low Lease Operating Expense's and

Geological, Geophysical & Administration $1.68/Mcfe

  • Competitive Finding & Development

Costs $4.20/Mcfe (SEC 1P) US assets $2.52/Mcfe (SPE 2P) US + China

  • High Gross Margins

77%

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Market Capitalisation A$ 203 million Share Price A$1.32 (30/08/07)

M ay-05 A ug-05 Nov-05 Feb-06 M ay-06 A ug-06 Nov-06 Feb-07 M ay-07 A ug-07 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 A $

Main Pass 19 #1 success Main Pass 19 #2&3 wells success 1st Half Production Hurricanes Katrina & Rita Vermilion production resumes 6.12 South Oil Discovery Main Pass 19 commences Main Pass 19 G-7, G-4, G-5 success Main Pass 18 G-6 success Vermilion 257 Dry Hole Placement 15 million shares @ $2 Mobile Bay 6 Successes Placement 11.5 million shares @ $2.40

ASX Symbol: PSA OTC Symbol: PSJEY.PK 1 ADR: 5 Ordinary Shares

Issued shares: 154,059,341 Options unlisted: 6.1 million

52 week High $2.74 Low $1.11

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Value relative to Australian Peers

  • Petsec Enterprise Value/Reserves

multiple trading at 44% discount to peer average reflecting effective

  • il/gas prices received.

15 30 45 60

PSA AED BPT AZA ROC TAP ARQ AWE NXS

A$/BOE

EV/ Reserves Multiple Price Equivalent Basis

Source: Wilson HTM ( based on market capitalisation at 28 August 2007, cash & debt implicit in EV estimates at 30 June 2007. 2P reserves per company data , generally as of 31 Dec 2006 or 30 June 2007} Average A$36/boe

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Broker Valuations

Cu Current Share Price $1.32 (30/08/07) rrent Share Price $1.32 (30/08/07) Broker Valuations: Broker Valuations:

  • Austock -

BUY core valuation $1.80-$2.36, high case $2.88 (Jul 07)

  • BBY -

BUY valuation $3.04 per share (May 07)

  • Tolhurst -

BUY valuation $2.90 per share (May07)

  • Patersons -

BUY valuation $2.37 per share (Mar 07)

  • Opportunity to buy at deep discount to val

Opportunity to buy at deep discount to valuation ation

Share Price vs Broker Values

$0.00 $1.00 $2.00 $3.00 $4.00

$1.32

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Exploration and Development July - December 2007

USA USA (Bcfe) (Bcfe)

Mobile Bay Fields Production

6 15

Gulf of Mexico Exploration

1 3-5

Moonshine Project Exploration

1-2? 3-5

Hollywood Project Exploration

2 5-10

China China (MMbbl) (MMbbl)

6-12 / 6-12 South FID/Development

1 2.3-3.3

6-12 / 6-12 South Exploration

4-6 5-7

Wells Net Potential Reserves 2007 2008

PRODUCTION PRODUCTION FEASIBILITY / FID DRILLING

DRILLING

DEVELOPMENT DEVELOPMENT

DRILLING

PRODUCTION DRILLING PRODUCTION DRILLING

Key value drivers in the next 3-6 months:

  • China 6.12 South Development decision

Drilling 4-6 wells to test 5-7 Mmbbl net, Nov/Dec 2007

  • US Mobile Bay onstream Sept/Oct 2007 (10+ Mmcf/d production net to PSA)

Drilling 3-5 wells to test 8-20 Bcfe net

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Conclusion

  • Experienced management team with successful track

record

  • Consistent growth in reserves/production/cashflow
  • High profit margin reserves
  • Strong cash flow, zero debt
  • Large prospect inventory provides basis for continuing

growth in the USA & China

  • Significant near term value creation in both the U.S. and

China

  • Opportunity to buy Petsec Energy shares at current deep

Opportunity to buy Petsec Energy shares at current deep discount to valuation discount to valuation

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