Tapping Gas Value in Cameroon 2010

Victoria Oil & Gas Plc

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Key Points o  Victoria Oil & Gas Plc (VOG) is emerging as a

significant player in natural gas production o  Logbaba gas and condensate field in Douala, Cameroon,

is the only onshore gas discovery in the country o  The West Medvezhye (West Med) project in Siberia has

independently estimated recoverable prospective resources of over 5 Tcf of gas

o  Logbaba is poised to deliver first cash flows and profits for VOG o  Over 600 feet of gross sandstone pay in two wells o  In-principal agreements signed with industrial customers

o  First revenues from Logbaba targeted in Q4 2010

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Logbaba: First Mover Advantage o  Government plans announced to triple Cameroon

power generation capacity in the next 10 years, much of which could be generated by gas

o  The Logbaba field represents a unique opportunity to dominate the nascent natural gas market in Cameroon

o  Competitive advantages:   The field lies beneath the major industrial city in the

Central African Region   Agreements for gas off-take already signed with industrial

customers in Douala   The only onshore gas discovery in the country   All facilities (drilling, processing and pipeline) will be

operated by VOG   First gas Q4 2010

o  Plans announced to triple Cameroon power generation in the next 10 years

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ECCAS

Cameroon: Heart of Central Africa o  Cameroon is a member of the

Economic Community of Central African States (ECCAS) o  Members share trade markets

and currency o  Douala is the deep-water port and

industrial heart of the region o  Major companies such as

Guinness and Nestle have facilities there

o  Rio Tinto Alcan have a major aluminium smelter at Edea close to Douala

o  Douala handles around 95% of import/exports for Cameroon, Chad and CAR

o  Logbaba is located in the eastern suburbs of Douala

Cameroon Gas: No Competition

o  Logbaba remains the only onshore natural gas discovery in the country

o  Due to Logbaba’s position and development, VOG also has the opportunity to beat larger operators in feeding new power projects

o  Perenco’s offshore Sanaga Sud field yet to come into development despite location next to Kribi power station

o  Limbe power station, north of Douala, relies solely on liquid fuels despite Total’s offshore discoveries nearby

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Logbaba: Summary Economics Management Forecasts

Prices: Gas price Industrial Gas $16/mmbtu

Industrial Power $16/mmbtu

Grid Power(5) $6.5/mmbtu

LNG $12/mmbtu

Condensate Limbe Refinery $75/bbl

Fiscal Terms: Corporate tax 38.5%

Government Royalty 8.0%

Royalty to Rodeo Resources 1.2%

Royalty to Cameroon Holdings

6.7%

Post-Tax NPV net to VOG ($MM) 10% 15% IRR Industrial to gas & power(1) 405 271 64% Plus mini Power (2) 409 274 64% Plus LNG(3) 681 448 73% Plus large power(4) 819 538 75%

Scenario 4 Reserves & Ratios Net to VOG $MM $/boe

Capex 1055 $9.6

Opex 393 $3.6

Reserves 578 Bcf

R/P ratio 19 Years

Scenarios

(1) 8.5 mmcfd supplied for industrial customers for gas & power rising to 40mmcfd by 2013 (2) Case 1, plus VOG 10MW IPP - (incremental 2mmcfd) to be connected to the power grid (3) As in case 2 but VOG new LNG facility with incremental demand of 40mmcfd on stream by 2013 (4) As in case 3 but VOG supplying power to new IPP 200MW facility (incremental 40mmcfd) by 2013 (5) Gas for power generation to be connected to the grid has been priced at the approximate cost of generation until further negotiation with ARSEL – the state regulator

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Early Cash Flow – Captive Market

•  Gas price is fixed at $16/MMBtu for first 5 years

•  20 year exclusive gas supply agreements

•  Base Case Payback in 2011

•  Low cost, first mover advantage for a captive market with severe power disruption and energy constraints

•  Possible expansion in the future (2013 onwards) with mini-LNG & IPP options to markets further afield

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Logbaba: Exceptional Progress Winter 2008 Spring 2009

Autumn 2009 Summer 2009

Logbaba: Well La-105 Drilling o  La-105 was drilled to a total

depth of 8,920 feet

o  Multiple gas-bearing sands with over 300 feet of gross pay between 1,836 and 2,540 m correlating to La-103

o  La-105 was completed as a production well

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o  Logbaba wells are more complex and difficult to control than predicted

o  Chronic lack of oil and gas infrastructure

o  Drilling progress being far slower than expected due to the need for heavier mud weights.

Logbaba: Encouraging Early Results

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LWD GR/Res Log from La-105

Sandstone

Sandstone

Sandstone

Sandstone

Top Logbaba Fm at 1,735m TVDRKB

Due to encouraging initial results, significant additional rig-time and expenditure was devoted to subsurface data acquisition to better evaluate the reservoir rock and fluid properties.

This and the application of latest technology are enabling VOG to realise the true reservoir and well potential at Logbaba.

Logbaba: Well La-105 Testing

o  Multiple pay zones tested at depths between 7,005 - 8,500 feet.

o  Rates between 11 - 56 million standard cubic feet per day (MMscf/d) of natural gas and 210 - 1,000 barrels per day of condensate. Flowing wellhead pressures varied between 2,750 - 4,552 psi.

o  The Upper Logbaba A through C sands, although indicated as the best quality hydrocarbon-bearing sands encountered in the well logs, were not tested as the well indicated more than sufficient production capacity to meet initial gas demand of 8 MMscf/d. 12

La-105 Testing

  Drilled deeper than planned to 10509 ft due to the better than expected observed sand quality in the Lower Logbaba sections.

  Multiple gas-bearing sands encountered between 5482 feet and 10400 feet (measured depth) - Over 300 feet of gross pay

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Logbaba: Well La-106 – Initial Data

Example of deeper sand 9100 ft (2773m)

Top most sand starts at 5482 ft (1671m)

Logbaba: Further Exploration

o  90% of the block remains unexplored

o  In late 2009, a passive seismic survey was commissioned o  Passive seismic is a

direct hydrocarbon indicator

o  Significant new structure 4 km north of the current well sites

o  Best location on the current structure is as yet undrilled

o  The new accumulations lie outside the area evaluated by RPS

Passive Seismic Survey

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Wells 105+106 and processing

facility

Approx 85% of industrial market

within 10km

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VOG plans to install and commission a gas processing facility and its own gas pipeline to the industrial customers

Vertically Integrated Strategy Pipeline Route

Wells Well Chokes

Manifold LP

Separator Skid

LP Pipeline System

Diesel Generator (own use)

Flare

Condensate Storage

Condensate Tanker Loading

Condensate Tankers

To Limbe Refinery

To Industrial Consumers

(Condensate)

Resurfaced Road

~ ~

Power Generator

Transformer

Transmission Line

To Substation

Switchgear

~ ~

Pressure Let Down

Station

Concept Block Diagram

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Front End Engineering Design (FEED) Data collection studies

o  Graphical Information System Project to merge satellite data with site and pipeline route survey

o  Pipeline Route Selection and Network Design o  Definition of Customer Conversions o  Logbaba Site and Pipeline Route Survey o  Civil works

  Soil sampling and analysis   Logbaba Site-

•  Essential requirements: Process and Power Plant •  Accommodation, offices and warehousing

  Pipeline construction and installation   Pre-qualification of Cameroon Civils Contractors   HV Transmission Line to Logbaba Substation

We have commenced and nearly completed FEED studies

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Production Facilities Schedule

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VOG: High Impact Events o  VOG is targeting first revenues in Q4-2010

o  Test data and superior modern logs will be incorporated in an independent reserve re-estimation due in July 2010

o  Installation of the facility and construction of the pipeline is expected to be completed relatively quickly now that concept is confirmed

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Douala: Cicam Case Study

o  Cotonniére Industrielle du Cameroun (Cicam) is the largest textile producer in ECCAS, with approximately 60% market share

o  Current fuel cost for Douala facilities is around CFA 1Bn ($2.2 MM)

o  Machinery purchased over a year ago still idle due to prohibitive energy cost

o  Cicam estimate that converting to Logbaba gas would lower their energy cost by 30% and increase productivity by 400%

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Douala: Industrial Market

o  Douala is one of Africa’s most important trade centres

o  Energy needs satisfied by high-cost fuels such as diesel and fuel oil

o  Almost all fuels imported

o  Petrol and diesel costs are equivalent to UK

o  Douala industrial market consumption estimated at 15MMcf/d equivalent o  Market expansion is stifled

by the high cost of energy

Principal Businesses

VOG has signed gas off-take agreements for 8MMcf/d fixed for 5 years at $16/mcf

NB: Prevailing WTI price = $37/bbl

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RPS Independent Valuation

o  RPS Energy undertook an evaluation of the Logbaba field in July 2008

o  65Bcf of 2P reserves with an NPV10 valuation of $169MM

o  The evaluation only encompassed a small section of the total 64km2 licence area

RSP Energy Competent Person’s Report Net Attributable Reserves and Resources

1P 2P 3P Total Liquids MMbbl 0.28 2.35 4.51

Natural Gas Bcf 7.92 64.53 123.91

Total MMboe 1.71 13.97 26.81

NPV valuation at 10% $MM 18.17 168.65 412.16

RPS review area (~6km2)

Source: RPS Energy

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West Med, Russia: Land of Supergiants

o  West Med lies next to the super-giant Medvezhye field and the world’s largest field, Urengoy

o  Medvezhye has produced about 75 Tcf of gas since 1972

o  Independent reserve auditors DeGolyer & MacNaughton estimated recoverable gross prospective resources of 1.1 Bnboe:

o  5.1 Tcf gas o  247 MMbbl condensate o  25 MMbbl oil

23 Source: Gazprom

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West Med: New Exploration

o  Second IPDS passive seismic survey completed Spring 2010 o  Geochemical survey over

the same area also completed

o  Stratigraphic traps could exist where West Med meets Medvezhye field

o  Targets for further 2D and new drilling to be determined during summer 2010

Exploration target area

Well 103 discovery

West Med Exploration Targets

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Key Management Team

Radwan Hadi

COO VOG

Sam Metcalfe Assistant Project

Manager Senior petroleum engineer with over 30 yrs experience in oil and gas including in Nigeria, Ghana and Equatorial Guinea. Former Head of Planning in ADCO

Over 25 yrs oil industry experience, worldwide. Has brought several North Sea gas projects into production for major corporations

Kevin Foo

Chairman

39 yr career in the resources sector including 19 years in the FSU; former MD of Celtic Resources Holdings

Austen Titford Financial Director

Jonathan Scott Barratt Commercial

Director

Francois Nguene Gov’t Relations

Manager

Chartered Accountant with more than 17 years experience, covering both the project development and operational phases in quoted natural resource companies.

Former Exploration and Production Manager for SNH in charge of Chad-Cameroon Pipeline

Former CEO of Eureka Mining Plc & executive director of Celtic Resources Plc

TEC

HN

ICA

L C

OM

MER

CIA

L Geoff Gill

Senior Petroleum Engineer

15 yr career in oil and gas, predominantly with Schlumberger Testing and then senior petroleum engineer with Blackwatch

Kamal Jardaneh Drilling

Supervisor

30 yrs of oil and gas experience, 23 yrs as drilling superintendent / senior drilling engineer for BP and currently a drilling consultant

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Abbreviations Bnboe Billion barrels of oil equivalent

MMboe Million barrels of oil equivalent

MMbbl Million barrels of oil

bbl/d Barrels per day

mcf Thousand cubic feet of natural gas

mcf/d Thousand cubic feet per day

MMcf/d Million standard cubic feet of gas per day

Bcf Billion cubic feet of natural gas

Tcf Trillion cubic feet of natural gas

$MM Million US$

$Bn Billion US$

km2 Square kilometres

m Metres

MMBtu Million British thermal units

MW Megawatts

tpa Tonnes per annum

CFA Central African Franc

VICTORIA OIL & GAS PLC HATFIELD HOUSE

52-54 STAMFORD STREET LONDON SE1 9LX

Tel: + 44 (0)207 921 8820 Fax: +44 (0)207 921 8821

www.victoriaoilandgas.com info@victoriaoilandgas.com