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PETSEC ENERGY LTD ACN 000 602 700 A A N N 1 March 2011 For personal use only N N PETSEC ENERGY PRESENTATION AT THE EXCELLENCE IN OIL AND GAS CONFERENCE O O SYDNEY U U Attached is a copy of the presentation to be delivered today by


  1. PETSEC ENERGY LTD ACN 000 602 700 A A N N 1 March 2011 For personal use only N N PETSEC ENERGY PRESENTATION AT THE EXCELLENCE IN OIL AND GAS CONFERENCE O O SYDNEY U U Attached is a copy of the presentation to be delivered today by Petsec Energy Ltd’s (ASX: PSA) CEO Mr. Terry Fern at the Excellence in Oil and Gas Conference, held at the Sydney N Convention & Exhibition Centre in Darling Harbour on Tuesday 1 st March to Wednesday 2 nd N March 2011, inclusive. C C A copy of the presentation will also be made available on the company’s website, www.petsec.com.au. E E M M Paul Gahdmar Company Secretary and Group Financial Controller E E Petsec Energy Ltd Ph: (02) 9247-4605 N N T T Level 13, Gold Fields House, 1 Alfred Street, Sydney NSW 2000, Australia PO Box R204, Royal Exchange NSW 1225, Australia Telephone (61 2) 9247 4605 Facsimile (61 2) 9251 2410 Company information is available on: petsec.com.au

  2. FOCUS SHIFTS TO OIL 2011 BUSINESS PLAN: For personal use only

  3. PETSEC ENERGY LTD For personal use only FORWARD LOOKING STATEMENT DISCLAIMER This presentation contains predictions, estimates and other forward looking statements that are subject to risk factors associated with the oil and gas industry. Although the company believes that the expectations reflected in these statements are reasonable, it can give no assurance that its expectations and goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward looking statements include, but are not limited to, commodity prices for oil and gas, currency fluctuations, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about reserve estimates, competition, loss of market, government regulation, economic and financial conditions in various countries, political risks, project delay or advancement, and approvals and cost estimates. All references to dollars in this presentation are to US currency, unless otherwise stated. 2

  4. CORPORATE PROFILE For personal use only Petsec Energy is an independent exploration & production company with operations in the Gulf of Mexico, USA and in the Beibu Gulf, China USA OPERATIONS � Operated in USA, Gulf of Mexico, since 1991 � Drilling success: 95 wells / 74 successful / 78% success � Discovered reserves: ~ 500 Bcfe gross reserves � As of 31 Dec 10: 8 fields / 16.9 Bcfe 2P reserves � Prospect inventory: 10 prospects / 400 - 750 Bcfe (67 – 125 MMboe) � 2011 estimated production: 3 Bcfe / Revenue US$15 m � 2011 Exploration: target 3-5 wells / 10 - 30 Bcfe gas & 15 - 150 MMbbl oil net CHINA OPERATIONS � Block 22/12 Beibu: partners with Roc Oil, Horizon, FAR since 2002 � 5 oil fields: 5 - 15 MMbbl net to Petsec � 2011 development 6.12/12.8W fields / Petsec Net: 2.94 MMbbl � Plus additional exploration prospects identified 3

  5. MARKET INFORMATION For personal use only LISTING � Australia ASX: Ticker PSA � US OTC Pink Sheets: Ticker PSJEY.PK MARKET CAPITALISATION � $39.3 million � Shares on issue: 231.3m; Unlisted Options: 5.3m � Share price: 17 cents (28 Feb 2011) 4

  6. EXPERIENCED BOARD OF DIRECTORS For personal use only Terry Fern, Chairman & CEO � Over 35 years experience in petroleum & minerals exploration, development and financing � Bachelor of Science Degree, University of Sydney � Director, OceanaGold Corporation David Mortimer AO, Non-Executive Director � Over 35 years experience in corporate finance � Bachelor of Economics Degree (First Class Honours), University of Sydney � Ex CEO of TNT Limited Group. Current Chairman of Leighton Holdings and Australia Post Michael Harvey, Non-Executive Director � Over 30 years experience in the establishment and successful growth of E&P companies in South East Asia and the Gulf of Mexico, USA � Bachelor of Business Administration in Finance Degree, Texas A&M � Ex Shell, Huffington, CEO Gryphon Exploration Inc. Current CEO of Stonegate Production Company. 5

  7. SKILLED MANAGEMENT TEAM For personal use only UNITED STATES AUSTRALIA Ross Keogh Fiona Robertson President of Petsec Energy Inc. Chief Financial Officer � Over 30 years of experience in the oil & gas industry � Over 30 years of corporate finance experience � Bachelor of Economics Degree, Macquarie � Master of Arts Degree, Oxford University University � Ex Chase Manhattan Bank & Delta Gold Ltd. Current � Ex Total Oil Company & Bridge Oil Limited director Drill Search Energy Ron Krenzke Paul Gahdmar Executive Vice President Exploration Company Secretary & Group Financial Controller � Over 35 years of experience in the oil & gas industry � Over 15 years of experience working in corporate � Bachelor of Science Degree, Texas A&M University accounting and finance in the oil & gas industry � Ex Mobil, Amerada Hess, VP Exploration Gryphon � Master of Business and Technology Degree, University of Exploration Company. New South Wales � Ex Australian Oil and Gas Corporation & Rothmans of Pall Nick Repar Mall Exploration Manager � Over 29 years of experience in the oil & gas industry � Bachelor of Applied Geophysics, Michigan Technology � Ex Tenneco & Stone Energy Denis Swords General Counsel & Secretary � Over 25 years of experience in the oil & gas industry � Master of Science Degree, University of New Orleans. Juris Doctor Degree, Paul M. Herbert Law Centre. � Ex Gordon, Arata, McCollam, Duplantis & Eagan, LLP, Sanderfer Oil Company & Tenneco 6

  8. PETSEC GULF COAST AND GULF OF MEXICO ASSETS For personal use only Texas, USA Louisiana, USA Mississippi, USA Lafayette Moonshine South Thornwell New Orleans Marathon Prospect South Sunrise Chandeleur 31, 32 Main Pass 18, 19 Main Pass Breton 270,273,274 Sound 39, Ship Shoal 36 42 Main Pass 132 West Cameron Ship Shoal 74 462 Petsec Leases/Prospects Petsec Producing Fields Gulf of Mexico North Padre Island 929. 934 Pipelines Prolific oil and gas producing region 1,094 fields, 34.5 billion barrels, 437 trillion cubic feet gas High drilling success – 53% successful; 41,892 wells drilled with 22,322 productive 7

  9. PETSEC GULF COAST & GULF OF MEXICO ASSETS For personal use only � Reserves: 16.9 Bcfe (Ryder Scott 31 Dec 2010) � Producing Fields : Eight � Net Production : 10 Mcfd gas, 140 bopd oil Main Pass 270 Main Pass 18/19 Chandeleur 31/32 Marathon 2011 Production: � 3 Bcfe / Est. Revenue ~ US$15 m o Prospect inventory: � 18 leases o 10 prospects: 400 – 750 Bcfe o Target sizes: 20 – 200 Bcfe o 8

  10. PETSEC CHINA ASSETS For personal use only RESERVES � 5 oil fields in two granted development areas covering 82.1 km 2 � Petsec 5.2 to 15.2 MMbbl if CNOOC backs ‐ in for 51% and Petsec recovers past costs (currently US$28m) � 2011 ‐ 2012 Develop 6.12/6.12S/12.8W fields. Petsec 2.94 MMbbl. PROSPECTS � 8 undrilled prospects/leads � 100 MMbbl gross potential � 12.25 MMbbl net after CNOOC back ‐ in � 2012: 3 ‐ 4 wells 20 ‐ 40 MMbbl, net 2.5 ‐ 5.0 MMbbl. 9

  11. 2008-2010 MAJOR CHANGES IN US / GULF OF MEXICO ECONOMIC & OPERATING ENVIRONMENT For personal use only Global Financial Crisis Failures and weakness of US banking Lack of credit for small players Weak industrial gas demand Shale Gas Overly successful Major oversupply of natural gas Gas price volatility 2003 – 2008: $5 to $10+/mcf, Avg. $7.20/mcf 2009 – 2010: <$4/mcf BP Macondo Oil Well Blowout Shut down of Gulf of Mexico drilling 2010 Unlikely to recover until 2012 Significantly increased regulation Significant delays and uncertainty in drilling approvals 10

  12. SHARE PRICE HISTORY & EVENTS For personal use only 2002 ‐ 2007 2008 ‐ 2010 Higher gas prices $5/mcf ‐ $10+/mcf Gas price <$4/mcf 2007 -2011 Falling gas prices 2002 – 2006 GFC causes lack of bank credit Drilling success leads to Hurricane Ike in GoM cash flow generation BP oil spill 11

  13. 2008 – 2010 ISSUES: PROBLEMS AND SOLUTIONS For personal use only Problems Solutions Oversupply and low natural gas Target gas condensate & oil prices, likely to remain until 2014 Current 1:25 oil/gas price ratio should return to better energy equivalent ratio over time Small reserve targets uneconomic Big targets >20-200 Bcfe (<5-10 Bcfe) Difficult GoM operating Focus operations on Gulf Coast environment, improving but likely and onshore Louisiana and Texas to continue until 2012/13 12

  14. USA: NEW BUSINESS PLAN - TRANSITION TO OIL AND BIG TARGETS For personal use only Big Targets: Gas/condensate >20-200 Bcfe Oil >10 – 100 MMbbl Geologic Setting: Conventional Deep Section 12,000’ – 20,000’ Gas/condensate Oil Sub salt Unconventional Shale oil Areas: Gulf of Mexico Shelf <300’ water / Gulf Coast / Onshore Louisiana & Texas 13

  15. STATUS OF NEW PLAN For personal use only Big Prospects , Drill-ready Deep section 10 mapped prospects Prospect potential: >20-200 Bcfe each Programme: 400–750 Bcfe (67-125 MMboe) Subsalt Areas identified Prospect generation progressing Shale Oil JV with experienced “resource play” partner Regional work completed Local work nearing completion Land acquisition in 6 months 14

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