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Is EOR beyond the reach of juniors? “LGO pilots N2 EOR in Spain”

Neil Ritson| Chief Executive Officer 27th September 2011| E&P Leaders Summit | London

LSE (AIM): LGO

Forward Looking Statements

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Certain statements in this presentation are “forward looking statements” which are not based on historical facts but rather on the management’s expectations regarding the Company's future growth. These expectations include the results of operations, performance, future capital, other expenditures (amount, nature and sources of funding thereof), competitive advantages, planned exploration and development drilling activity including the results of such drilling activity, business prospects and opportunities. Such statements reflect management's current beliefs and assumptions and are based on information currently available. Forward looking statements involve significant known risks, unknown risks and uncertainties. A number of factors could cause the actual results to differ materially from the results denoted in these statements, including risks associated with vulnerability to general economic market and business conditions, competition, environmental and other regulatory changes, the results of exploration, development drilling and related activities, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although these statements are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that the actual results will be consistent with these forward looking statements.

Summary

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Introduction to the Company

The Ayoluengo Field in Spain

Status of the planned EOR scheme

Challenges and potential solutions

Answer to the question…….. Is it doable?

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UK based - HQ in London LSE AIM Listed - IPO in March 2007 Assets - in Spain, Trinidad, USA, Malta Operator - in Spain and Trinidad Production - in Spain, Trinidad and USA Average Net Production - approx. 300 bopd Current Market Cap - approx. £15 million

Company Profile

Delivering Growth through Acquisition of Proven Reserves & Enhancement of Producing Assets

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Board of Directors and Management

Chairman David Lenigas Holds a Bachelor of Applied Science in Mining Engineering and has 30 years of resources industry experience. Currently he is the Executive Chairman of Lonrho plc, Lonzim plc, Lonrho Mining Ltd and Solo Oil plc. He is an Executive Director of Vatukoula Gold Mines plc and Rare Earth Minerals plc.

Chief Executive Officer

Neil Ritson Has a BSc in Geophysics. He has worked in the energy sector for nearly 35 years, initially with BP plc for 23 years before managing the international operations of Burlington Resources Inc. and more recently as CEO at Regal Petroleum plc, before founding the Vanguard Energy Group where he was Chairman and CEO. He is a Director of Solo Oil plc and a Non-Executive at Enovation Resources Ltd.

Chief Operating Officer

Garry Stoker Is a Chartered Engineer with a BSc in Control Engineering and an MBA. He has worked in the energy sector for over 20 years in UK, India, Nigeria and North Africa. Initially with Occidental Petroleum, he has set up and managed international E&P operations for BHP Billiton, Kellogg Brown and Root, Centrica and most recently with the BG Group as their COO in India and Tunisia.

Finance Director Don Strang A qualified chartered accountant with 20 years experience in the financial and natural resources sectors including extensive experience with AIM. He has also held senior financial positions with Ernst and Young and several publicly listed Australian Resource Companies.

Non-Executive Director

Steve Horton Holds a BSc in Mining Engineering and an MBA. He has 34 years experience working in the energy industry including 27 years with BP plc where he held executive roles including worldwide Director of Drilling. He co-founded Silverstone Energy Limited in 2005.

Outline

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Introduction to the Company

The Ayoluengo Field in Spain

Status of the planned EOR scheme

Challenges and potential solutions

Answer to the question…….. Is it doable?

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Ayoluengo Field

Well Ayo-46, May 2011

Location

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Northern Spain map

Field Location

Brief History

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Discovered in 1964 by Chevron

Largest onshore field in Spain, 53 wells

30-37oAPI fuel oil grade low sulphur crude Total production 17 mmbbls, peak in 1969 of

5,900 bopd by primary depletion

Remaining oil in place 105 mmbbls (P50)

Original facilities handling 10,000 bopd

Acquired by LGO in October 2007

Current production 200-300 bopd

Field-wide 3D seismic, cores and logs Well intervention and facilities upgrades

undertaken in 2011 SMP-2 rig on well Ayo-22, June 2011

Field Outline

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Relatively remote Well established infrastructure Compact (10 km2) Mixed arable & pasture land 1400 metres asl Cool climate, cold winters Located in a National Park

Typical well pad Ayo-46 Central Processing

Facility

CPF and Well Pad

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Oil processing and storage facilities

Workover and logging activities (Ayo-05)

Reservoir Architecture

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Simple faulted anticline 3D seismic Fluvial to shallow marine sands U. Jurassic, Purbeck age Main reservoirs 800 to 1200 mbgl Recovery range from 4 to 20% Compartment-alised and fractured

Potential Prize

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Source: STOOIP Report, Equipoise, March 2010

Incremental Recovery

Factor %

Implied total

recovery %

Incremental Reserves mmboe

5 22 5.27

10 27 10.5

15 32 15.8

20 37 21.0

Operating Margin €/bbl

Estimated Project NPV10

€ million

20 179

25 223

30 271

35 316

40 367

45 (current)

416

50 463

Assumptions: US$100/bbl, BP Contract

Historic recovery by primary depletion = 17%

Outline

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Introduction to the Company

The Ayoluengo Field in Spain

Status of the planned EOR scheme

Challenges and potential solutions

Answer to the question…….. Is it doable?

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2011 Programme

Mar April May June July Aug Sept Oct Nov Dec

Ayoluengo well logging and recompletions

Hontomin fishing and re-perforation

Dynamic Model

EOR Planning

N2 EOR pilot

Facilities up-grading and Environmental Compliance work

Phase 1a

1b Phase 2

Select partners

Outline

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Introduction to the Company

The Ayoluengo Field in Spain

Status of the planned EOR scheme

Challenges and potential solutions

Answer to the question…….. Is it doable?

What do we need?

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For a successful EOR project we will need: 1. Wells, oil-in-place, static and dynamic models

2. Large volume of suitable gas and water handling

3. Land access, planning and environmental permits

4. Confidence and access to capital

5. Patience and perhaps some luck

What do we have (1)?

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Wells, oil-in-place, static and dynamic models Yes: 50 wells, 105 mmbbls OIP, 10-20 mmbbls 3P recoverable However: poor historic pressure data, no dynamic model yet Solution: additional study work Large volume of gas and water handling Land access, plus planning and environmental permits Confidence and access to capital Patience and some luck

What do we have (2)?

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Wells, oil-in-place, static and dynamic models Large volume of suitable gas and water handling Yes: 75,000 m3 water pa available and adequate disposal However: nitrogen limited to ~60 tonnes/day by road tanker Solution: build a dedicated local nitrogen plant (Praxair) Land access, planning and environmental permits Confidence and access to capital Patience and some luck

What do we have (3)?

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Wells, oil-in-place, static and dynamic models Large volume of suitable gas and water handling Land access, planning and environmental permits Yes: field-wide access and large central processing facility Yes: field-wide environmental permit to operate all wells Note: located in a National Park so high level of sensitivity Confidence and access to capital Patience and some luck

What do we have (4)?

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Wells, oil-in-place, static and dynamic models Large volume of suitable gas and water handling Land access, planning and environmental permits Confidence and access to capital Partial: field trials to date with only water, need a gas pilot and access to long-term capital to build reservoir pressure Solution: strategic partnership Patience and some luck

What do we have (5)?

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Wells, oil-in-place, static and dynamic models Large volume of suitable gas and water handling Land access, planning and environmental permits Confidence and access to capital Patience [and some luck] Yes: excellent potential, a team and business plan in place Further improve: reduced impact on LGO portfolio (Trinidad), work with a strategic partner

Summary

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Introduction to the Company

The Ayoluengo Field in Spain

Status of the planned EOR scheme

Challenges and potential solutions

The answer to the question. Is it doable?

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LSE (AIM): LGO

Delivering Growth through Acquisition of Proven Reserves & Enhancement of Producing Assets www.lenigasandoil.com