Celtique Board Meeting September 2011

Confidential

September 2011 Board of Directors Meeting

September 2011

Agenda1. Approval of board minutes – June 2011

2. Operations Overview

3. Farmout status

4. Business Development

5. Corporate, Legal & Tax Matters

6. Environmental & Political impacts

7. Financial Summary

8. Proposed Board Actions

9. Appendix

A. Project Area Cost Forecasts

B. Activity Schedule & Licence Summary

2. Operations Overview

4

New License Awards / Renewals status

• Assignment of PEDL 180 and 181 to CEPL was completed on 19th July following DECC approval on 20th June

• Romania – Grivita Licence ratification received on 21st July – Stoeinita Licence ratification received on 21st July

• Switzerland (Neuchatel – Jura) - Formal Exploration permit award to be granted post well permitting approval (exclusive rights)

• France requirement for all permit holders to issue “non fracking” confirmation report to retain permits - these were sent to the ministry on 9th September

5

Jura

30/6/11 Resource Potential:

Land Position at 30/6/11 :

Production:

Wells Planned:

Seismic Plans:

Ownership:

Operator:

300+ mmboe

6,344 net square kms

NA

2 wells - 2012

Contingent on drilling

100% (subject to farmouts)

Celtique

Jura

Neuchatel & Vaud

6

Jura Exploration Activity Update

• Submitted non fracking report to Ministry on 9th September (Pontarlier and Les Moussieres permits)

• Initial evaluation of the seismic data over Pontarlier Licence is complete. The integration from the specialist structural geologist began in early September. The results from this work are expected in 4Q 2011

• Attempts to access information on Autunian shales seen in the Noville well drilled below Lake Geneva are ongoing

• Detailed evaluation of wells in Pontarlier is underway• A SARL Board meeting in Paris was held in mid August to approve

SARL accounts and forward exploration plan

Forward Plan• Complete geological studies to see whether a play extension exists to

the north

7

La Chandeliere - Well Planning Status (Lantenay 1D)

Activity Progress CommentsWell Proposal (design basis) Complete

Drilling Programme (1st) Complete

EIA Requires update for Lantenay

Archeological Study Not required

Specific flora/fauna studies Carried out for Corcelles but Lantenay requirement unknown

Aquifer Impact Study Requires update for Lantenay

Drilling Programme (review & final draft)

Requires peer review

Well Testing Programme Evaluating artificial lift options

Land Acquisition Awaiting council decision

Planning Submission/DOT document

Georex co-ordinating dossier

Post submission work

Rig/services tendering Initial tendering required update

AFE First revision prepared

8

Jura – Les Moussieres permit , La Chandeliere Field- Preferred Lantenay surface location

Selected site under discussion with Lantenay commune.Well cost estimate €6.5 mm (DHC), €6.9mm completed (15% contingency)

Lantenay mayor and council indicated their support and are voting on the issue at their meeting on 19th September

9

Jura – Swiss Neuchatel

• Neuchatel Canton contracted independent environmental studies (drilling through aquifer issue), formal feedback on well proposal now expected September 2011 • Royalty and permit terms proposal expected after well approval• Well cost estimate €5.8 mm (DHC), €6.5mm completed (15% contingency)• Gaznat bottom hole contribution/farmin – further meetings planned• Geothermal well use enquiry (dry hole basis)

Forward Plan:Well Approval dates uncertain owing to government approval timescale:

– Forecast submit formal Well Plan Oct 2011 (could be later)– Public Enquiry Consultation end Oct 2011 (could be later)– Canton formal Approval to proceed Dec 2011– Finalise Farmout definitive agreements Dec 2011– Forecast prepare wellsite 1Q2012 (could be later) , drill 3Q2012

10

Neuchatel - Well Planning Status (Le Cygne Blanc 1)


Drilling Programme (1st) Complete

EIA Complete


Specific flora/fauna studies Not required

Aquifer Impact Study Complete


Requires peer review

Well Testing Programme Not started

Land Acquisition Awaiting canton review


Dossier submitted to canton in Draft form for comments

Post submission work Awaiting feedback from Canton

Rig/services tendering Initial tendering requires update


11

Aquitaine Basin



Production:

Wells Planned:

Seismic Plans:

Ownership:

Operator:

50 mmboe (net) (1)

463 net square kms

NA

1 well Beyrie in 2012, possible rapid Garos follow up if Beyrie successful

Probable 2012 3D after Beyrie reef discovery

100%(1)

Celtique

(1) Farmout to SCDM/Investaq estimated to be completed 1Q 2012 and Celtique equity reduces to 50%

Garlin

Beyrie

Garos

12

Claracq License

• The well sites have been renamed – Loncon becomes Beyrie, Bouillon becomes Garos

• A reservoir fracture study is completed in the Garlin 6 well. Total have granted access to review the Garlin 6 core but will not release any other geological data. Total did release operational data from the wells to aid well planning

• Interpretation of the recently reprocessed seismic data over the Garlin structure has begun with maps expected in late September

• The surface Beyrie prospect surface location has been approved by SCDM and negotiations with landowners for rental agreements underway. Well design work on Beyrie well is underway

• The non fracking report to the Ministry was submitted on 9th September

• A TCM/OCM will be held in mid November to discuss the well plan and the 2012 Budget. A site meeting to review the wellsite will also occur at the same time

Forward Plan:

• Submit DOT well programme DREAL (Oct 2011), (2/3 month review before approval but delays in processing all the permit frack reports may delay this schedule)

• SCDM permit mutation approval before major expenditure - forecast 4Q2011/1Q2012

• Prepare wellsite for drilling – 1Q2012, Drill Beyrie (ex Loncon) well 3Q2012

13

Claracq- Well Planning Status (Beyrie 1D & Garos)


Drilling Programme (1st) Awaiting land to finalise surface location

EIA Consultant not appointed

Archeological Study Requirement unknown

Specific flora/fauna studies Requirement unknown

Aquifer Impact Study Requirement unknown


Well Testing Programme

Land Acquisition Positive local response


??


Rig/services tendering Initial tendering requires update


14

Southern England



Production:

Seismic Completed:

Well Plans:

Ownership:

Operator:

150+ mmboe (net)

547 net square kms

NA

3 Q2011

2 in 2012

50%

Celtique

Prospects and Leads

15

Southern England – PEDLs 231, 234 and 243 – Seismic Program

•Seismic acquisition by Tesla-IMC began in the east of the area on 20 July. The programme was completed in the west on 3rd September after 194 kms of data was acquired. The actual cost of the programme was £1.17 million (Celtique share £0.585 million) vs the budget estimate of £1.3 million (all excl VAT)

•It is clear based on news reports and people contacting the company that the population to the west (characterised by driving big 4 wheel drive vehicles) are not supportive of hydrocarbon exploration activities. The MOD and National Trust did not allow access onto their land

•Interpretation of the data will follow processing and will begin in early December

16

• Permitting of 2 surface sites is underway - one for conventional well at Willow and one for unconventional well. Agreements with landowners are being negotiated. Planning unlikely to be received before 2Q 2012

• Study of the Jurassic source potential continues. All wells have been resampled and these results show better potential than originally envisaged. The oil shale play in the Kimmeridgian interval has been confirmed – the major risk is reservoir development

• Active marketing of the opportunity is underway

• A TCM/OCM will be held in late September with Magellan to review work that has been carried out and to present our future plans

Forward Plan:

• Process and interpret recently acquired seismic data

• Finalise geological studies for conventional and unconventional plays

• Market farmouts aggressively post new seismic interpretation

• Well permitting ongoing (final locations subject to new seismic interpretation)

Southern England – PEDLs 231, 234 and 243

17

Southern England – PEDL232• A surface well location for

testing the Singleton South prospect has been identified. The landowner is in agreement subject to financial terms. This site lies close to an archaeological site which could pose problems. A detailed survey has been started.

• Discussions with neighbouring licencees (Providence/Northern Petroleum) continue

• A farmout package has been prepared and discussions have begun

Forward Plan:• Permit surface location

18

Weald Basin (Willow) - Well Planning Status

Activity Progress CommentsWell Proposal (design basis) Initial draft. Work ongoing

Drilling Programme (1st) Not started

EIA Full EIA not required


Specific flora/fauna studies Underway

Aquifer studies Requirement Unknown


Not started


Land Acquisition Sites identified, negotiations started


Barton Wilmore co-ordinating


Rig/services tendering Not started

AFE Initial cost estimate made

19

Weald Basin (Singleton South) - Well Planning Status

Activity Progress CommentsWell Proposal (design basis) Geological Well Proposal in preparation


EIA Required, not started

Archeological Study Requirement. RFQ sent out.


Aquifer studies Requirement unknown


Not started








20

Weald Basin (Tennyson unconventional) - Well Planning Status

Activity Progress CommentsWell Proposal (design basis) Geological well proposal in preparation


EIA Required, not started



Aquifer Studies Requirement unknown


Not started








21

Cheshire Basin – PEDL 197 30/6/11 Resource Potential:


Production:

Wells Planned:

Seismic Plan:

Ownership:

Operator:

42 mmboe

200 net square kms

NA

1 well in 2013

Researching north area

100%

Celtique

• Permitting of a surface well location has begun and three potential surface sites have been identified that will fulfil the tight subsurface bottom hole constraints – the landowner is about to be approached. It may prove cheaper to buy the land outright

• A large but high risk prospect has been identified. The prospect is shallow (at 2,600 ft) with mean reserve potential of 42 mmbbls. Discussions ongoing with potential farminees

22

Cheshire Basin - Well Planning Status (Hoyle 1)

Activity Progress CommentsWell Proposal (design basis) Started (Turnkey Well)


EIA Not started





Not started

Well Test Programme Not started



Hendersons co-ordinating


Rig/services tendering Favoured Turnkey with Geometric Cofor

AFE Turnkey Price

23

East Midlands



Production:

Wells Planned:

Seismic Plans:

Ownership:

Operator: Egdon operate all except 181 (Europa)

TBD mmboe

890 gross, 293 net (square kms)

NA

3 contingent wells in 2012 2 wells likely to become firm

Q2-Q4 2011

180 (33%), 181 (25%), 182 (33%), 201 (50%), 241 (50%)

24

• Celtique equity in PEDL 182 has dropped from 50% to 33.3% as part of the equity area alignment with PEDL 180

• Egdon have signed a seismic contract with Tesla-IMC for the shooting of a 3D programme (of 49 sq.kms) over the Broughton and Wressel leads in PEDLs 180 and 182. The programme would be split between PEDL 180 (43%), 182 (37%) and 241 (20%). The programme would tie into the existing 3D in PEDL 241. The estimated cost of the 3D is £800,000 (100%). Celtique cost share covering the 3 licences is estimated at £294,000 (equiv 36.6%). It is expected shooting will commence late in 4Q 2011. Assuming the prospects are confirmed Egdon plan to drill in 2012

• The second attempt to reprocess the seismic data over the East Kelsey prospect in PEDL 241 is complete and interpretation has begun. If the prospect is confirmed Egdon plan to drill a well to 1950m well (£1.85mm, 100%) to test the structure

Forward Plan

• Complete interpretation over PEDL 241

• Shoot 3D programme and evaluate

East Midlands – PEDL 182 and 241

25

• The licence interests across PEDLs 180 and 182 have now been harmonised; Celtique equity in PEDLs 180 will increase from 25% to 33.33%. Equity in PEDL 181 will be Europa 50%, Celtique 25% and Egdon 25%

• JOA voting agreed as majority vote on well commitments and unanimous on other wells (subject to sole risk). Novations and assignment and DECC registration agreements are being finalised

• The principal target in PEDL 180 is the Wressel Lead that extends into PEDL 182 and it will be delineated by the new 3D seismic discussed under PEDL 182. Egdon would like to drill in 2012 subject to 3D confirmation

• In PEDL 181 the main potential lies in the Caister fault trend that lies to the southeast although concerns exists over timing and migration. The feature has potential for 5.5mmbbls. The work by the operator, Europa, is awaited

East Midlands PEDL 180 and 181 (new licences)

26

East Midlands – PEDL 201

• The recently acquired seismic over the main lead identified, Burton on the Wolds, has now been processed and interpretation has begun

• A well to 500m (£1 mm, 100%) is required to hold licence beyond the first term

Future Plans

• Await interpretation of new seismic before making drill or drop decision in June 2012

27

Zechstein Basin



Production:

Wells Planned:

Seismic Plans:

Ownership:

Operator:

100 mmboe (gross contingent)

2,137 net square kms

NA

Laski well 4Q2012, Drill or drop decision before Oct 2011 (Block 243)

Q4 2011 in Germany

100%

Celtique

(Block 242 relinquished)

28

Germany Exploration• Working to resolve the seismic permitting issue in Germany Pillgram licence (CO₂ sequestration

concerns). Meetings of local councils are now scheduled for late September. If the problem can’t be resolved Celtique can ask for LBGR to enforce our right to shoot seismic under the Mining Law. Seismic is still planned for 4Q2011, after the bird breeding season

• Farminee wishes to extend seismic acquisition to the south – an extension of the seismic permitting permission to the south is underway to provide this option

• LBGR have agreed to a two year licence Pillgram licence extension to July 2014Future Plans• Finalise seismic permitting & pursue farmout of Pillgram for past costs, seismic contribution and

well promote

110 kms of 2D seismic estimated cost - € 1.3 mm but planning increase to over 200 kms estimated cost - € 2 mm

29

Polish License Renewals and Timetable

• At a meeting with the Polish Ministry in early August Celtique committed to the extension of the Laski Permit into the second licence phase with a well obligation which must be drilled before August 2014

• At that meeting it was demonstrated that a structure extends from Laski into the adjacent licence Block 243. A well in LASKI is the best location to test it. It was also explained that Block 243 has a drill or drop decision by October 2011. The Ministry recommended that we renew the licence in October 2011 (with a well commitment) but apply for a licence extension on the Block when the Laski well plans are more advanced so that the licence term will be extended to October 2014 to bring it in line with the Laski Permit

• The future of block 243 would then be determined by the well result: - If successful we would drill the well in 243 as an appraisal well- If the Laski well fails we would drop the licence without drilling

• A new Polish manager will be required by end September 2011

Forward Plan• Pursue farmout of LASKI/243 concessions for past costs and well promote

30

Poland - Well Planning Status (Laski prospect)

Activity Progress CommentsWell Proposal (design basis) Not started


EIA Not started





Not started

Well Test Programme Not started

Land Acquisition Not started


Not started

Post submission work Not started


AFE Not started

31

Italy



Production:

Wells Planned:

Seismic Plans:

Drilling Locations:

Ownership:

Operator:

6 mmboe (gross contingent)

444 net square kms (gross)

NA

Drilling in 2012 (Nervesa)

Purchase old data in 2011, contingent new seismic 2012 (Bradano only)

Crestal Nervesa appraisal,

Horizontal Strombone appraisal

50%

Apennine (Carita)Celtique (Monte Negro, Torrente Alvo)

32

Carita permit

At the April OCM Apennine agreed to undertake preparatory work for commitment drilling in 2012 (earliest 1Q2012) and purchase 50Km seismic and source long-lead items for first well

Apennine have not yet been able to access seismic data from ENI and reprocess it and therefore requested approval to drill a high angle well based on the old seismic.

Celtique refused to agree to the proposed BHL based on the existing data and therefore the surface location cannot be agreed for permitting.

Bradano permits

•An OCM was held in early August. Torrente Alvo permit : to propose purchase 59 Km ENI data €310,000 (gross, 2011) and contingent budget to shoot 200 Km of new 2D seismic at €450,000 (gross, 2012). MonteNegro permit : to propose purchase 112.4 Km ENI seismic €605,000 (gross, 2012)

•Net cost to Celtique : Firm €155,000, Contingent €527,500

•Apennine have not approved the programme, they prefer early drilling to new seismic and wish to await the outcome of the Celtique sale to discuss with the new owner. Apennine have subsequently made an offer for the position (see farmout section)

Italy

33

Romania



Production:

Wells Planned:

Seismic Plans:

Ownership:

Operator:

TBD mmboe

3 net square kms

NA

2 wells in 2012/2013

Possible Stoeinita 2D

50%

Expert Petroleum

34

Romania

• The Licences were formally gazetted on 21st July

• A meeting was held in late July with Expert to discuss their technical views of the licences and their forward plans, as well as a briefing on their recent operations on their neighbouring acreage at the Valuta Field

• It was agreed that the 2D seismic data over the licences be obtained from Petrom (OMV). This data has now been received and will be reprocessed immediately. It is anticipated that revised maps will be available by year end

• Since the amount of free 3D was very limited and therefore virtually uninterpretable it was decided not to purchase a larger 3D volume at this stage until the 2D data has been reviewed based on considerations of cost

• Expert will also be accessing digital well data from Petrom

• NAMR approval requested to assign the concessions to the Romanian SRL subsidiary

Forward Plan

• Evaluate fields to determine whether to swop interests with Expert, market position with a view to selling SRL subsidiary or farmout/drill

3. Farmout Status

36

Farmout / Sale status• Aquitaine - Claracq

– SCDM providing for 2:1 drilling carry (fund up to €8 million of the Loncon well) for 50% of Claracq equity, await mutation approval

• Poland/Germany

– Jura Energy (Canada) – Exclusivity granted until end Sept 2011. Term Sheets signed definitive agreements advanced nearing signature

• To fund $US19 million work programme for 40% equity in Poland & Germany positions, past costs paid on completion and future work programme all in escrow

• Poland: €1.76mm past costs + 70% of €6.39mm well + 2011 G&A = total €6.4mm

• Germany: pay €0.7mm past costs, plus €1.3mm plus 70% of €7.1mm well + 2011 G&A = total €7.1 mm

– Gallic Energy (Canada) – withdrawn owing to fund raising difficulties in the current market

• Italy sale– Oilquest (private company) offer $5mm cash – still negotiating SPA (deal subject to finance )

– Sound Oil (Apennine) recent offer $6.5mm cash + $2.5mm performance payment – negotiating for increase in cash and SPA terms (they have advised finance is in place)

– ADX (ASX:ADX - market cap $AUS 39mm) – discussions ongoing (unlikely)

– BRS Resources (CVE:BRS – market Cap $7.5mm), now undertaking technical review

– ENEL (Italy utility BIT:ENEL - market cap €28.8 billion) now signed CA, technical review

37

Italy sale – Revised Sound Oil offers (2 alternatives)A)US$6.5mm cash plus US$3.0mm cash contingent on a production metric to be

agreed (US$9.5mm in total)

Triggers for the contingent payment to be negotiated:

33.33% on start-up of first production from any licence,

33.33% on first production threshold (to be agreed),

33.33% on a second production threshold (to be agreed)

B) US$6.5mm cash plus US$2.5mm in shares immediately (US$9mm in total but no contingent element)

Some form of lock to be negotiated (linked to warranties / indemnities as a minimum)

Forecast end November Sound Oil completion, to give time for tax/legal diligence which would commence after we accept their offer

38

Italy sale - Options• Wait for other offers from BRS, ADX and or ENEL (may take 2+

months before offers and will delay completion).

• BRS and ADX (minnows) are highly unlikely to beat the Sound offer

• ENEL might bid much higher but the deal may take a long time to complete. ENEL may consider assets immaterial

• Ask Oilquest to increase bid from $5mm to $10mm cash - no longer to be subject to finance. Sound oil might remain as a first reserve (whilst they still have funds) but the Sound offer price could change over time (Italy political/environmental risk may reduce value)

• Pursue Sound Oil offer now and tie down share lockin. Propose Sound Oil option B (cash + shares) as preference because they may never be allowed to drill Nervesa to trigger the production payment thresholds (environmental risk – parliament review of Venice subsidence).

39

Farmout status (continued)• Central Weald (PEDL 231, 234, 243)

– Halliburton – Meetings held and data being reviewed – appear keen

– Alliance Bernstein – Meetings held more diligence underway, tyre kicking?

• South Weald PEDL 232

– Newton Energy in diligence

• France/Swiss Jura

– Halliburton (unconventional) – no discussion yet whilst focus is on Weald

– Alliance Bernstein (conventional/unconventional) – no discussion yet

– Neuchatel

• definitive agreements on hold with Sorgenia and Sun Resources

• Gaznat Bottom Hole Cost contribution (10%) and non compete agreement concept proposed, possible farmin alternative with extra salt coring – more meetings planned

• Cheshire

– Newton Energy

– Challenger Energy

4. Business Development

41

New Ventures Update• Evaluation of areas has begun. A special study on acreage availability and data access in

Germany is nearing completion

• Work on the Triassic Bunter Sandstone play fairway in Germany, France and Switzerland is underway

• Evaluations of open acreage in the Molasse Basin and Rhine Graben in Germany are underway. In both areas the principal objectives are the Triassic Bunter sandstone

• Data gathering trips to visit data archives have been made in France and Switzerland and the collected data has been used to update the maps in the area. The work confirms that the Triassic sand fairway extends into open acreage northeast of Neuchatel. Access to well data in parts of Switzerland and Germany is still difficult. No access to the very limited seismic data is possible at the moment

• The next UK Onshore Round is likely to be delayed until next year. DECC is currently awaiting reports on Cuadrilla’s earthquake incidents in the Blackpool area, which are expected in late October. The Round will not take place until they have had the chance to review this work in detail

42

Swiss Jura New Ventures – Status• Meetings to introduce Celtique to Canton Authorities in Berne, Basel Land and Solothurn have been undertaken. Attempts have been made to set up a meeting with the Jura Canton. All areas are open and unlicensed. Information on the current licensing framework and fiscal terms has been collected. Energy Policy and therefore fossil fuel exploration is a very key political issue at the moment

• There is limited heritage seismic data and therefore a subsurface structural understanding will be based largely on geological models until new data is acquired. Due to the difficult terrain this data will be expensive to acquire

43

Swiss Jura New Ventures – Application Proposal• A Proposal has been made and submitted to the Board to apply for all the remaining open acreage in the Swiss Jura mountains area covering 4 Cantons

•It is intended to apply for the licences with a commitment to review all the available geological and geophysical data as well as some geological studies. We will also try to access and reprocess the previously acquired seismic data. No geophysical data acquisition will take place in the first licence period. The work programme is expected to cost £1 million, split £0.5mm over first 3 years and £0.5mm following 2 years (excluding tax/legal)

44

New Ventures – Forward Plan• Make Application in the four Cantons in the Jura Mountains, Switzerland

• Complete studies on the Triassic Bunter Sandstone play fairway in Germany, France and Switzerland

• Complete evaluations of open acreage in the Molasse Basin and Rhine Graben in Germany

• Discuss with Egdon and Magellan their plans for the next UK Onshore Licensing round

• Review open acreage in the French part of the Jura mountains

5. Corporate Legal and Tax Matters

46

Staff• COO - Stuart Catterall (Employment Contract signed, started 5th Sept 2011)• CFO - Peter Coulson (Employment Contract signed August, to start 14th Nov 2011)

Geoff DaviesCEO

Chris PullanExploration Director Country Managers

(France, Germany, Italy, Poland,

Romania, Switzerland)

Val WroeOffice Manager

Martin BerryChief Geologist

Sarah ShirtGeologist

Ken Dups/ Brian HodgsonContract Geophysics

Staff Vacant Contractor Country Manager

Stuart CatterallCOO

Peter CoulsonCFO

Derek Howard OrchardDrilling Manager

MichaelidesBookeepers

TBATechnical Assistant

HSE & OTHER SPECIALISTSContractors

Gavin MilneFinance Controller

Joe StaffurthContract Geologist

Akin Gump / MildwatersLegal

47

Accounts/Tax/Legal• Auditors / Accounts

– Audited accounts approved IN Sept 2011

– New Sun Accounts system implemented, effective 1st April 2011, live from Oct 2011:• Tried and tested within the oil and gas industry for independent / medium cap players

• Bespoke accounting structure for Joint Venture Accounting, Multi currency facility

• More transparent absorption of UK office and general overheads to corporate / licence / permit / asset activities

• Monthly management accounts will be prepared with greater alignment / reconciliation to statutory format

• Tax

– CW Energy Tax residency Report finalised and issued

– Jurisdiction board meetings in Neuchatel, Poland, Germany and Italy were held in June/July 2011

– New subsidiary board members Guy Feugere and Raffa Di Cuia proposed to be in place before year end

• Legal– Articles to implement C share scheme approved and registered at Companies House

– To initiate the C share test issue for HMRC valuation and to use Stuart Catterall’s award and subsequently apply same ruling to Peter Coulson. Baker Tilly to draft letter

– Bribery Policy & Procedures implemented and compliance request certificates issued to partners and key contractors

6. Environmental & political impacts & Public Relations

49

Environmental & political impacts• UK planning issues

• New UK Planning laws causing headlines

• Drilling through aquifers

• France and Swiss Jura – not a big government/canton issue but strong local sensitivity

• Fracking

• France has implemented fracking moratorium - knock on effects, industry image, potential permit work approval delays for drilling

• Germany/Switzerland – frack moratorium predicted (recent Canton Vaud formal non frack letter)

• Poland – full steam ahead with fracking - but new tax being mooted

• Frack induced earthquakes

• Fylde UK, Cuadrilla Bowland Shale frack induced minor earthquakes in 2011, impact next UK onshore Round

• Public Relations

• Considering position, corporate and local PR, plan management workshop in November with recommendations for Dec board meeting

50

UK shale gas - Cuadrilla• On 22nd Sept Cuadrilla announced a 200 TCF gas resource (in place) in

the UK Bowland shale. Appear to be emphasing reserve upside to concentrate minds (comparing their gas in place with recoverable gas in Norway)

• Clearly initiating a national and local debate on benefits of shale gas exploitation, quantifying local benefits - before drilling 10 more wells

• Threatened UK withdrawal to Netherlands/Poland if not supported

• Appear to have a very focused PR strategy

• Outcome of this debate may impact Celtique UK unconventional viability – are Cuadrilla paving the way for us in the UK?

• Do Celtique stay below the parapet on UK unconventional whilst permitting Weald conventional or do we join the debate now?

• Halliburton farmin to Weald unconventional may force this issue early• Multi well (3 wells + contingent frac) farmin offer expected in October

7. Financial Summary

52

Work programme – net Celtique equity (pre farmout)

Net equity, pre-farmout 2011 2012 2013$ * 1,000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Claracq France 268 338 249 249 11,849 11,511 0 0 0 0Vallorbes Swiss 25 25 5 5 705 5 50 50 8,640 0Subtotal CEL 293 363 254 254 12,554 11,516 50 50 8,640 0CEPLLes Moussieres France 197 182 162 9,832 40 62 6,562 2,062 62 6,745Pontarlier France 33 33 53 3 0 700 100 203 8,049 0Block 242/243 Laski Poland 154 59 59 59 159 8,779 0 0 0 0Stoeinita & Grivita Field Romania 84 17 29 29 29 1,059 1,059 0 0 0Pillgram / Guben Germany 112 80 3,057 457 157 157 9,697 0 0 0Neuchatel Swiss 82 217 167 67 8,139 35 0 0 0 0S England (Triassic) UK 968 378 51 25 64 3,028 3,020 0 0 0S England PEDL 232 UK 14 27 17 46 70 2,964 0 0 4 0East Midl - PEDL 201 UK 69 6 4 6 5 55 54 1,456 5 5East Midl - PEDL241 UK 8 142 29 29 31 179 979 29 31 29East Midl - PEDL 182 UK 1 170 0 0 967 0 0 0 0 0East Midl - PEDL 180 UK 3 187 2 37 37 990 2 4 3 3East Midl - PEDL 181 UK 8 7 8 8 8 7 6 5 6 4Cheshire Basin UK 75 65 25 25 35 25 1,700 0 0 0Veneto Basin Italy 20 275 638 2,035 500 2,000 0 0 0 0Bradano - Torrente Alvo Italy 29 9 381 59 4,465 0 0 0 0 0Bradano Montenegro Italy 49 49 457 62 12 1,562 69 62 4,012 0Subtotal CEPL 1,906 1,901 5,139 12,778 14,718 21,601 23,248 3,821 12,172 6,786G&A costs 764 1,161 1,240 919 919 919 917 916 914 913Total (CEL & CEPL) 2,963 3,425 6,633 13,951 28,191 34,036 24,215 4,786 21,726 7,699Accumulated 2,963 6,388 13,021 26,972 55,163 89,198 113,413 118,199 139,926 147,625

WellsWells contingent

SeismicSeismic contingent

53

Work programme – net Celtique equity (post farmout)• Seismic in Germany, South England, East Midlands included (no seismic farmed out) • All drill costs assumed farmed out except La Chandeliere horizontal well, 60% Neuchatel well and all E. Midlands wells • All contingent wells (except East Midlands) assumed to be farmed out• Claracq SCDM past cost recovery assumed 2Q2012• No Italy SPA sale proceeds or past cost refunds from farmouts includedExpenditure Forecast (post farmout) 2011 2012 2013$ * 1,000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Claracq France 268 338 249 -695 124 0 0 0 0 0Vallorbes Swiss 25 25 5 5 5 5 50 50 0 0Les Moussieres France 197 182 162 9832 40 62 6562 62 62 62Pontarlier France 33 33 53 3 0 0 50 102 2 0Block 242/243 Laski Poland 154 59 59 59 159 159 0 0 0 0Stoeinita & Grivita Field Romania 84 17 29 29 29 59 59 0 0 0Pillgram Germany 112 80 3057 457 157 157 20 0 0 0Neuchatel Swiss 82 217 167 67 3750 25 0 0 0 0S England (Triassic) UK 968 378 51 25 64 8 0 0 0 0S England PEDL 232 UK 14 13 17 46 70 4 0 0 2 0East Midl - PEDL 201 UK 69 6 4 6 5 55 54 1456 5 5East Midl - PEDL241 UK 8 95 19 19 21 119 653 19 21 19East Midl - PEDL 182 UK 1 170 0 0 967 0 0 0 0 0East Midl - PEDL 180 UK 10 187 2 37 37 990 2 4 3 3East Midl - PEDL 181 UK 8 7 8 8 8 7 6 5 6 4Cheshire Basin UK 75 65 25 25 35 25 0 0 0 0Veneto Basin Italy 20 275 77 0 250 0 0 0 0 0Bradano - Torrente Alvo Italy 29 9 381 59 65 0 0 0 0 0Bradano Montenegro Italy 49 49 457 62 12 62 69 62 12 0Subtotal licences 2206 2203 4822 10043 5798 1736 7524 1760 112 94G&A costs 764 1161 1240 919 919 919 917 916 914 913Accruals 1156Total 4126 3364 6063 10962 6717 2655 8441 2675 1026 1007Accumulated 4126 7490 13553 24515 31232 33887 42328 45003 46030 47036

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1H 2011 Expenditure Forecast Variance to Control BudgetCeltique 2011 2011 Variance Variance Comments$ * 1,000 Q1+Q2 Q1+Q2

actual budgetClaracq France 68 790 722 91% Jura focus, deferred well reduced activityVallorbes Swiss 6 120 114 95% deferred activityLes Moussieres France 258 280 22 8%Pontarlier France 147 116 -31 -27% accelerated seimic interpretationNew Ventures France 4 0 -4 new activityBlock 242/243 Laski Poland 1,216 1,869 653 35% lower cost seismic shootStoeinita & Grivita Field Romania 3 59 56 95% deferred concession awardPillgram Germany 266 1,894 1,628 86% deferred seismicNeuchatel Swiss 239 556 317 57% deferred well approvalsNew Ventures Swiss 20 0 -20 new activityS England (Triassic) UK 105 570 465 82% accelerated workS England (Singleton South) UK 201 81 -121 -150% accelerated workEast Midl - PEDL 201 UK 6 150 144 96% Egdon defer seimicEast Midl - PEDL241 UK 19 38 20 51% Egdon defer seimicEast Midl - PEDL 182 UK 1 0 -1 Egdon defer seimicEast Midl - PEDL 180 UK 1 0 -1 new licenceEast Midl - PEDL 181 UK 15 240 224 new licenceCheshire Basin UK 24 210 186 89% deferred activityVeneto Basin Italy 99 947 848 89% deferred activityBradano - Torrente Alvo Italy 107 316 209 66% deferred activityBradano Montenegro Italy 90 414 323 78% deferred activitySubtotal licences 2,896 8,649 5,753 67%G&A costs 2,392 1,815 -577 -32%Diligence costs 2,219 1,100 -1,119 -102% higher legal feesAccruals 240 619 379 61% lower accruals value of work doneGrand Total 7,747 12,183 4,437 36%

55

Subscription Agreement compared to forecast for 2011Celtique 2011 2011 Variance Variance Comments$ * 1,000 Total Total

fcast budgetClaracq France 674 82 -591 -719% deferred well to 2Q 2012 delays SCDM past cost paymentVallorbes Swiss 56 245 189 77% resource allocationLes Moussieres France 637 9,693 9,056 93% deferred well Pontarlier France 213 272 59 22%New Ventures France 4 0 -4 new activityBlock 242/243 Laski Poland 1,429 1,954 525 27% lower cost seismic shootStoeinita & Grivita Field Romania 103 118 15 12% late concession awardPillgram Germany 458 1,946 1,488 76% deferred seismicNeuchatel Swiss 538 3,900 3,362 86% deferred well New Ventures Swiss 20 0 -20 new activityS England (Triassic) UK 1,451 1,342 -108 -8%S England (Singleton South) UK 229 128 -101 -78% accelerated workEast Midl - PEDL 201 UK 81 170 89 52% deferred workEast Midl - PEDL241 UK 122 61 -61 -100% increased scope for share of Wressle prospect seismic shootEast Midl - PEDL 182 UK 172 258 86 33% shared seismic cost with 180East Midl - PEDL 180 UK 198 0 -198 na new licenceEast Midl - PEDL 181 UK 30 0 -30 na new licenceCheshire Basin UK 164 278 114 41%Veneto Basin Italy 394 1,028 634 62% lower data purchase costsBradano - Torrente Alvo Italy 145 386 241 63%Bradano Montenegro Italy 188 514 325 63%Subtotal licences 7,305 22,375 15,070 67%G&A costs 4,318 3,630 -687 -19%Diligence costs 2,219 1,100 -1,119 -102% higher legal feesAccruals 1,395 619 -777 -125%Grand Total 15,237 27,724 12,487 45%

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Short Term Expenditure and Cash Requirement

Monthly forecasts divided from quarterly estimatesNew share issue required Nov 2011 unless Germany seismic slips or is farmed outCOO commences Sept 2011 and CFO commences mid Nov 2011

Cost and Cash forecast Cash end Sep-11 Oct-11 Nov-11 Dec-11 2012 2012 2012 2012$ * 1,000 Jul-11 Q1 Q2 Q3 Q4

CELClaracq France $89 $113 $113 $113 $249 -$695 $124 $0Vallorbes Swiss $8 $8 $8 $8 $5 $5 $5 $5Subtotal CEL costs $98 $121 $121 $121 $254 -$690 $129 $5CEPLLes Moussieres France $66 $61 $61 $61 $162 $9,832 $40 $62Pontarlier France $11 $11 $11 $11 $53 $3 $0 $0Block 242/243 Laski Poland $51 $20 $20 $20 $59 $59 $159 $159Stoeinita & Grivita Field Romania $28 $6 $6 $6 $29 $29 $29 $59Pillgram Germany $37 $27 $27 $27 $3,057 $457 $157 $157Neuchatel Swiss $27 $72 $72 $72 $167 $67 $3,750 $25S England (Triassic) UK $628 $126 $126 $126 $51 $25 $64 $8S England (Singleton South) UK $5 $4 $4 $4 $17 $46 $70 $4East Midl - PEDL 201 UK $23 $2 $2 $2 $4 $6 $5 $55East Midl - PEDL241 UK $3 $32 $32 $32 $19 $19 $21 $119East Midl - PEDL 182 UK $0 $57 $57 $57 $0 $0 $967 $0East Midl - PEDL 180 UK $3 $62 $62 $62 $2 $37 $37 $990East Midl - PEDL 181 UK $3 $2 $2 $2 $8 $8 $8 $7Cheshire Basin UK $25 $22 $22 $22 $25 $25 $35 $25Veneto Basin Italy $7 $92 $92 $92 $77 $0 $250 $0Bradano - Torrente Alvo Italy $10 $3 $3 $3 $381 $59 $65 $0Bradano Montenegro Italy $16 $16 $16 $16 $457 $62 $12 $62Subtotal CEPL costs $943 $613 $613 $613 $4,569 $10,734 $5,669 $1,731G&A costs $255 $387 $387 $387 $1,240 $919 $919 $919Accruals $578 $578Subtotal G&A / accruals $833 $965 $387 $387 $1,240 $919 $919 $919Total Expenditure $1,873 $1,699 $1,121 $1,121 $6,063 $10,962 $6,717 $2,655

Accumulated cash position $4,955 $3,082 $1,382 $261 -$860 -$6,923 -$17,885 -$24,602 -$27,257

8. Proposed Board Actions

58

Proposed Board Actions and Proposals

Approval of the Board is requested for the following:

• Pursue Swiss Jura new venture permit applications in 4 cantons

The Subsidiary Board’s met to agree:

• A commitment to apply for a commitment well in Poland 243 to enter in to 3rd Exploration phase (1 year period)

• Romania SRL agreed to purchase Grivita and Stoeinita from CEPL under an SPA for a consideration of $US500,000

Appendix – A. Project Area Forecasts

60

Expenditure Forecast – Gross 100% licence basis

Unrisked (100% pre-farmout) 2011 2012 2013$ * 1,000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Claracq France 268 338 249 249 11849 11511 0 0 0 0Vallorbes Swiss 25 25 5 5 705 5 50 50 8640 0Subtotal CEL 293 363 254 254 12554 11516 50 50 8640 0CEPLLes Moussieres France 197 182 162 9832 40 62 6562 2062 62 6745Pontarlier France 33 33 53 3 0 700 100 203 8049 0Block 242/243 Laski Poland 154 59 59 59 159 8779 0 0 0 0Stoeinita & Grivita Field Romania 168 33 59 59 59 2119 2119 0 0 0Pillgram / Guben Germany 112 80 3057 457 157 157 9697 0 0 0Neuchatel Swiss 82 217 167 67 8139 35 0 0 0 0S England (Triassic) UK 1936 755 102 49 128 6056 6040 0 0 0S England PEDL 232 UK 29 53 33 91 140 5928 0 0 9 0East Midl - PEDL 201 UK 138 12 7 12 10 110 107 2912 10 10East Midl - PEDL241 UK 17 284 58 58 62 358 1958 58 62 58East Midl - PEDL 182 UK 2 510 0 0 2902 0 0 0 0 0East Midl - PEDL 180 UK 10 560 7 112 110 2970 7 12 10 10East Midl - PEDL 181 UK 32 26 32 31 32 26 22 21 22 16Cheshire Basin UK 75 65 25 25 35 25 1700 0 0 0Veneto Basin Italy 39 550 1275 4070 1000 4000 0 0 0 0Bradano - Torrente Alvo Italy 58 18 762 118 8930 0 0 0 0 0Bradano Montenegro Italy 98 98 914 123 23 3123 137 123 8023 0Subtotal CEPL 3180 3536 6773 15166 21927 34448 28450 5391 16248 6839G&A costs 764 1161 1240 919 919 919 917 916 914 913Total 4237 5060 8268 16339 35399 46882 29417 6357 25802 7752

4237 9296 17564 33903 69302 116184 145601 151958 177760 185512

Appendix – B. Activity Schedule & Licence summary

62

Activity ForecastSept 2011 forecast Operator 2011 2012 2013

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Les Moussieres France Celtique appraisal End 1st Term seismic drill

Claracq France Celtique drill drill

Pontarlier France Celtique seismic drill

Neuchatel Swiss Celtique drill

Vallorbes Swiss Celtique seismic drill

Cheshire Basin UK Celtique (drill/drop decision) drill

S England (Singleton South) UK Celtique (drill/drop decision) drill

S England (Triassic) UK Celtique seismic seismic drill drill

Block 243/LASKI Poland Celtique seismic End 2nd Term 243 End 3rd Term drill

Pillgram Germany Celtique seismic seismic drill

Stoeinita & Grivita Field Romania Expert award appraisal appraisal End 1st Term

East Midl - PEDL 201 UK Egdon seismic (drill/drop decision) drill

East Midl - PEDL241 UK Egdon seismic seismic (drill/drop decision) drill

East Midl - PEDL 182 UK Egdon seismic seismic drill

East Midl - PEDL 180 UK Egdon (drill/drop decision) drill

East Midl - PEDL 181 UK Egdon seismic seismic (drill/drop decision)

Veneto Basin Italy Apennine appraisal drill

Bradano - Torrente Alvo Italy Apennine seismic appraisal

Bradano Montenegro Italy Apennine seismic

Firm drillFirm seismicContingent seismic/drill

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Licence SummaryCountry Region Licence

Celtique Equity Licence Holder Operator Award Date Expiry date Gross(km2) Net (km2)

Licences awardedFrance Aquitaine Basin Claracq 100% CEL Celtique 03-Nov-06 03-Nov-12 463 463

France Jura Les Moussieres 100% CEPL Celtique 04-Mar-08 04-Mar-13 3269 3269

France Jura Pontarlier 100% CEP SARL Celtique 30-Sep-10 5 year period 1470 1470

Switzerland Jura Leman Vallorbe 100% CEL Celtique 23-May-06 09-Jun-12 802 802

Switzerland Jura Neuchatel 100% CEPL Celtique (exclusive to 2012) 803 803

Germany Zechstein Basin Pillgram 100% CE GmbH Celtique 26-Jul-07 26-Jul-12 938 938

Poland Zechstein Basin Laski 100% CEP Celtique 29-Aug-08 29-Aug-14 242 242

Poland Zechstein Basin Block 242 100% CEP Celtique 07-Oct-07 07-Oct-12 533 533

Poland Zechstein Basin Block 243 100% CEP Celtique 07-Oct-07 07-Oct-12 957 957

Italy Veneto Basin Carita 50% CE SpA Apennine 09-Jul-10 5 year period 529 264.5

Italy Bradano Basin Torrente Alvo 50% CE SpA Celtique Oct-10 5 year period 81 40.5

Italy Bradano Basin Monte Negro 50% CE SpA Celtique Oct-10 5 year period 277 138.5

UK Cheshire PEDL 197 100% CEPL Celtique 01-Jul-08 01-Jul-14 200 200

UK East Midlands PEDL 182 50% CEPL & Egdon Egdon 01-Jul-08 01-Jul-14 40 20



UK Southern England PEDL 231 50% CEWL &Magellan Celtique 01-Jul-08 01-Jul-14 400 200




Romania Eastern Romania Grivita 50% CEPL & Expert Expert Jul-11 2 year period 3 1.5

Romania SW Romania Stoeinita 50% CEPL & Expert Expert Jul-11 2 year period 3 1.5

Total 11914 10796

Documents

Celtique Board Meeting September 2011