investor presentation for personal use only setting new

Investor Presentation

1

JULY 2013


Focused on setting new records.

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2 Drillsearch Energy Cooper Basin Oil and Gas Explorer and Producer

2

Source: Market Data as at 29-Jun-2013 *on a fully diluted basis assuming exercise of in the money options ** Reserves and Resources as at 31-Dec-2012. Updated year end Reserves and Resources to be released mid-August 2013

Key Data Share Price (29 July 2013) (A$/sh) 1.255 Shares on Issue (m) 427 Market cap (A$m) 543* Cash (30 Jun 2013) (A$m) 36 Total Debt (30 Jun 2013) (A$m) 129

Reserves** and Production (DLS)

2P Reserves (mmboe) 18.7 2C Resources (mmboe) 23.9

FYE 2013 exit production rate (boepd) ~9,250

Oil (bopd) ~7,500 NGLs (boepd) ~600 Gas (boepd) ~1,150

Three business units: • Oil – Production, development and exploration

• Wet Gas – Production, development and exploration

• Unconventional – Exploration

Material Acreage Position • 22 permits / 14 operated

• Net acreage = 19,100 km2 / 4.7m acres

Share Price Performance (Since 1 Jan 2011)

Key Management Brad Lingo

Managing Director with more than 25 years of oil and gas experience

Ian Bucknell

Chief Financial Officer with more than 15 years upstream oil and gas accounting and finance experience

John Whaley

Chief Operating Officer with more than 20 years upstream, midstream and downstream oil and gas commercial, operational and project development experience

David Evans

Chief Technical Officer with more than 25 years of upstream oil and gas exploration & development experience

Peter Fox Chief Commercial Officer with over 20 years of experience in the oil and gas industry, with a particular focus on the upstream and infrastructure sectors of the gas industry

65%

115%

165%

215%

265%

31 Dec 10 20 May 11 07 Oct 11 24 Feb 12 13 Jul 12 30 Nov 12 30 Apr 13

DLS.ASX XEJ.ASX

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3 June Quarter 2013 Highlights

Record production growth increases over 170% • Record quarterly production = 0.6 mmboe / Record annual production = 1.1 mmboe

• Quarterly oil production increases by 141% to 0.4 mmbbls

• Quarterly wet gas production increases to 0.1 mmboe following new GSA with SACBJV

Record sales growth increases over 340% • Record quarterly sales = $50.7 million

• Record annual sales = $99.0 million

Exploration success continues driving reserves growth • 3 new Western Flank oil discoveries

• 2 new wet gas discoveries deliver continued reserves growth

Ongoing development and new JV drives production growth • Completion and commissioning of the Bauer-to-Lycium pipeline delivers production security

• Canunda Wet Gas Field commissioned to Middleton Gas Plant bringing new production online

• JV with Santos accelerates Western Cooper Wet Gas development and commercialisation

Successful financings • Successful completion of US$125 million long-term convertible bond raising

• Additional liquidity secured with A$50 million credit facility with CBA

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4 Key factors driving investor interest in Cooper Basin

Three key factors are changing the Cooper Basin and driving investor interest:

1. Growth in Oil Production –Oil exploration success in the Western Flank drives

Cooper Basin as bigger oil producer than Gippsland Basin and NW Shelf

2. Growth in Conventional Gas Demand – Rapid growth in Eastern Australian gas

demand and complexity of developing CSG projects is resulting in strong demand for

Cooper Basin Conventional Gas and driving increasing gas prices

3. Emergence of Unconventional – Significant unconventional shale, tight and basin-

centred gas resources have been identified with encouraging early production results

emerging

Drillsearch is the only pure Cooper Basin focused company and is well positioned to capture these opportunities

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5 The Cooper Basin Consists of Four Key Participants

Metric Santos Beach Energy Senex

Market Metrics

Market Cap (A$m) 546 13,432 1,760 790

Total Debt (A$m) 1371 3,704 117 -

Cash (A$m) 362 2,151 3143 127

Reserves & Resources**

2P (mmboe) 18.7 1,406 93 37

2P + 2C (mmboe) 42.7 3,371 559 362

Unconventional Prospective Resource (tcf)

13-32 tcf Recoverable

10-83 tcf Recoverable

300 tcf+ In-place

100 tcf+ In-place

Production (Annual)

FY12A (mboe) 390 52,100 (CY12) 7,500 601

FY13A (mboe) 1,100 53-57,000 (CY13) 8,100-8,500* 1,240

FY14E (mboe) (Guidance) TBA - 29 Aug 2013 n/d n/d 1,400-1,600

Financials

FY13A Revenue (A$m) 99 3,365 703* 138

Corporate

Strategic Shareholders BG – 8.5% Beach – 4.9% - - Sentient Group

– 16.5%

Farm-in

Unconventional JV Partners BG (60%) Chevron (60%) Source: Market Data for Drillsearch as at 29-Jul-2013 and as at 16-Jul-2013 for BPT, STO and SXY. 1 US$125m convertible bond, converted to A$ as at 16-Jul-2013 includes A$10 million currently outstanding under CBA Credit Facility. 2 As at 30-Jun. 3 31-Mar balance, pro forma for Chevron farm-in Stage 1 payment (US$95m), and payment to Icon (US$18m). * Estimated production. ** Reserves and Resources as at 31-Dec-2012. Updated year end Reserves and Resources to be released mid-August 2013

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6 Growth Platform and Strategy

Western and Northern Wet Gas Project Areas • Expand exploration and development through new Santos JV • Increase production from development of existing discoveries • Deliver additional production growth from multiple satellites • Prove up Reserves through expanded exploration

Central and Western Unconventional Fairways

• Explore, appraise & delineate unconventional resource

potential • Continuing Joint Venture interest from major international

petroleum companies

Western Flank and Inland-Cook Oil Fairways

• Develop new oil discoveries

• Accelerate 3D seismic-based exploration

• Expand production capabilities NEA

R T

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7 Complementary Businesses Deliver Production Cashflow and Exploration Upside

Oil Wet Gas Unconventional

Status Production

Development Exploration

Production Development Exploration

Exploration

Project areas Western Flank Oil

Eastern Margin Inland-Cook Oil

Western Wet Gas Northern Wet Gas

Central Unconventional Western Unconventional

Products Oil Gas & Liquids Unconventional Gas

2P Reserves* Oil (mmbbls) 7.8 - -

NGLs (mmboe) - 4.5 -

Gas (mmboe) - 6.4 -

2C Resources* (mmboe) 1.9 22.0 -

Prospective Resources 33 mmbbls 88 mmboe 13-32 TCF

FY2013 exit production rate ~7,500 bopd 1,750 boepd (34% liquids) -

* Reserves and Resources as at 31-Dec-2012. Updated year end Reserves and Resources to be released mid-August 2013

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8 Performance Scorecard

Reserves, Production and Revenue*

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Reserves (2P)**

Oil (mmbbls) 1.1 0.9 0.9 3.7 7.8

Gas (mmboe) 0.0 0.1 7.6 7.6 10.9

Total (mmboe) 1.1 1.0 8.5 11.3 18.7

Production (Annual) (Annual) (Annual) (Annual) (Annual)

Oil (kbbls) 193.0 158.9 123.0 85.1 775.3

NGL (kboe) - - - 80.6 79.1

Gas (kboe) - - - 224.2 211.2

Total (kboe) 193.0 158.9 123.0 389.9 1,065.7

Total boepd 528.7 435.0 536.0 1,068.0 2,920.0

Revenue 10.0m 6.1m 14.4m 22.4m 99.0m

* All estimates provided are based on information as known today. The financial information presented in this table is unaudited and yet to be finalised. The Company will release formal production guidance for FY 2014 on 29 August 2013. * *Reserves and Resources as at 31-Dec-2012. Updated year end Reserves and Resources to be released mid-August 2013

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9

Permit DLS % Operator

2013 2014 2015 Total Sept

Q Dec Q

Mar Q

Jun Q

Sept Q

Dec Q

Mar Q

Jun Q

Oil

Western Flank 60 BPT 15

Eastern Margin 40 STO 18

Wet Gas

Western 40-50 DLS/BPT 4

Northern 100 DLS 1

Unconventional

BG Shale & Tight Gas 40 DLS 6

Active drilling program focused on delivering continuing success 9

Oil Well Wet gas well Unconventional

Active Drilling campaign across all business segments

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10 Oil Business

Key Data

FY2013 Production: 775,374 bbls

Reserves (2P): 7.8 mmbbls

Contingent Resources (2C): 1.9 mmbbls

Prospective Resources (mean): 33 mmbbls

Background

• High profit oil (~$85/bbl operating net back)

• Low development and well cost (~$3.3m)

• Low operating cost (~$25/bbl)

• High success rates – over 50% on 3D seismic

• Short cycle times from discovery to first oil

Note: Reserves and Contingent Resources independently reviewed by RISC Pty Ltd as of 31 December 2012. Updated year end Reserves and Resources to be released mid-August 2013. Prospective Resources reflect operator’s (Beach PEL 91 & Senex PEL 182) current estimate of cumulative unrisked mean. All costs quoted on a 100% JV gross basis. Operating costs are field plus transportation costs. Net back before royalty and assuming A$105 oil price. Based upon Western Flank oil production.

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11 Wet Gas Business

Key Data

FY2013 Production Gas 147,320 boe NGLs 76,710 boe

Reserves (2P): 10.9 mmboe

Contingent Resources (2C): 22.0 mmboe

Prospective Resources (Mean): 86.0 mmboe

Background

• 19 existing wet gas discoveries

• 4 wet gas fields in production

• Low completed well cost (~$4.5m)

• NGL production delivers economics similar to oil

• New Santos JV drives wet gas commercialization

Note: Reserves and Contingent Resources independently reviewed by DeGoyler & MacNaughton as of 31 December 2012. Updated year end Reserves and Resources to be released mid-August 2013. Prospective Resources reflect operator’s (Drillsearch PEL 106/513 & Senex PEL 182) current estimate of cumulative unrisked mean.

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12 Unconventional Business

Key Data Production: Nil

Reserves (2P): Nil

Contingent Resources (2C): Under evaluation

Mean Recoverable Prospective Resources*

Shale Gas = ~24 TCF* Tight Gas = ~8 TCF* Deep CSG = Under evaluation

Background

• Significant leverage to Shale & Tight Gas plays

• Strategic alliance with BG Group

• Interest from Majors in uncommitted unconventional assets

• New JV with Santos also covers unconventional wet gas plays

• Significant potential for liquids-rich gas * Source: DeGoyler & McNaughton Independent Technical Experts Report on Drillsearch’s Cooper Basin Unconventional Resources as of 31 December 2012 Does not include unconventional resources (tight oil or tight gas) associated with the newly acquired Acer Energy permits contained in the Northern Cooper Wet Gas Project.

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13 Outlook and Work Program FY 2013

Further Reserve and Resources growth expected from independent audit due September quarter 2014

Bring new discoveries into production

Development drilling targeting further upgrades in Reserves

Completed oil pipeline to improve production reliability

Significant growth in reserves, production and cash flow

Accelerating Western Flank Oil exploration in 3D seismic areas

Forming Inland-Cook Joint Ventures to continue 3D seismic acquisition and drilling

Expanding footprint and activity in Eastern Margin

Expand and extend Wet Gas Pilot Project

Complete and test Wet Gas discoveries

Expand Wet Gas exploration and development through new Santos Joint Venture

Prove up existing Wet Gas 2C Resources to 2P Reserves by delivering additional wet gas discoveries in Northern and Western Cooper project areas

Accelerating appraisal and development activities in Drillsearch 100% owned Northern Cooper Wet Gas project area

Case and test Western Cooper unconventional targets in Wet Gas drilling program

Central Cooper shale gas 3D seismic program

• Drill, core, test and complete first Central Cooper shale and tight gas wells

• Commence production testing • Book unconventional

Resources and Reserves

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14 Disclaimer and Important Notice

This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

Shareholders should not rely on this presentation. This presentation does not take into account any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

The information set out in this presentation does not purport to be all inclusive or to contain all the information which its recipients may require in order to make an informed assessment of Drillsearch. You should conduct your own investigations and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Drillsearch. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements.

Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Drillsearch does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

The Reserves and Resources assessment follows guidelines set forth by the Society of Petroleum Engineers - Petroleum Resource Management System (SPE-PRMS). The Reserves estimates used in this presentation were compiled by Mr David Evans, Chief Technical Officer of Drillsearch Energy Ltd, who is a qualified person as defined under ASX Listing Rule 5.11 and has consented to the use of the Reserves figures in the form and context in which they appear in this presentation.

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