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Flax Field

Flax Field Major Growth Potential

June 2012

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Flax Field Major Growth Potential Multiple large proven oil discoveries (Flax and Juniper) – 100%

owned and operated by Acer Energy.

Flax field already on production (with the benefit of >$50M

infrastructure footprint).

Flax field historical production performance impacted by sub-

optimal well completions.

Multiple new target reservoirs identified above the current

producing zones (potential for material reserves increase).

Successful well re-entry and test of the first of these zones.

Results from 3D seismic and engineering review indicates

upside potential around optimum new well locations and

modern fit for purpose well completions and work overs.

34 Bcf (P50 OGIP) of liquids rich gas quantified for the 1st time.

Small scale LNG opportunity being pursued to provide path to

market for gas from both Flax and surrounding discoveries.

Active work program commencing in Q3 2012.

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15 mmbbls P50 OOIP, 34 Bcf P50 OGIP, 6 wells tied back to production facilities with a

further 2 wells drilled and cased

1000 barrel per day oil production facilities with 2400 barrel storage capacity

Capable of handling up to 3.5 TJ/day of gas

Infrastructure hub (laydown yard, storage, drilling campaign support access)

Key service contract alliances in place (wells, civil, camp, plant)

Fully functional and expandable 10 man camp

Flax Field – PRL 14 – 100% Acer Energy

Resource numbers from RISC Independent Technical Specialist’s Report Jan 2011 and Feb 2012

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Both Flax and Juniper oil are very light

at 54 & 52 API gravity respectively.

Higher API petroleum is less dense (or

lighter) and generally the higher the

API the higher the value (requires less

refining).

Flax oil is sold based on Tapis pricing.

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Oil Type & Pricing Comparison

API Gravity Liquid Relative Density >55 Condensate Lightest ~54 Flax Field ~52 Juniper Field >38 Light Crude Oil 22 - 38 Medium Crude Oil 10 - 22 Heavy Crude Oil 10 Water 0 - 10 Extra Heavy Crude (Tar sands/Bitumen) Heaviest

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Flax Field – Recent Activities 1. Geological and Geophysical (G&G) activities:

Acquired, processed and interpreted 141 km2 of new 3D seismic (Flax and Juniper).

2D seismic reprocessing.

2D & 3D seismic inversion.

Full petrophysics review of all wells.

2. Tight Reservoir Evaluation Study (Schlumberger):

Phase 1 - Review of all production, G&G and engineering data (logs, cores, etc), forensic

review of the Flax field development and well completions.

Phase 2 - MEM model, Flax field analogues, new modern fracture stimulation design.

Peer review undertaken by Tight Reservoir Centre in Denver.

3. Successful intervention on the Flax 5 well to confirm suitability for artificial lift trial.

4. Successful well re-entry and test of a Mid Patchawarra channel sand in the Flax 1 well.

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Flax Field – G&G Results The Tirrawarra and Patchawarra intervals are mapped with increased confidence.

The crestal area between Flax 1 and Flax 2 offers an attractive infill well location.

As independent structures Flax and Juniper appear connected on 3D seismic at a depth

similar to Flax 5.

Increased section thickness between Flax and Juniper appears prospective for reservoir

Integration of all well/log data and consistent petrophysics analysis has increased the

confidence that productive reservoir potential exists from the Mid/Upper Patchawarra sands.

Inversion of seismic data has provided additional clarity in mapping reservoir units.

Inversion attributes are proving to have good correlation with gross reservoir in wells.

Jurassic Birkhead channel sands are a secondary target for new Flax and Juniper wells.

Seismic amplitude Acoustic impedance

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Flax - Juniper 3D: Near Top Tirrawarra Depth Map 3D seismic has identified

locations estimated at ~30 metres up dip of Juniper 1

Flax South – 3D seismic has confirmed a structural

closure adjacent to Flax

PRL 17

PRL 18

PRL 14

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Flax Field – New Reservoir New productive reservoir with

encouraging oil/gas ratios.

The same and similar reservoirs

appear in other wells.

Reservoirs can be tested without

drilling new wells.

New reservoirs are in addition to

the existing resource estimates.

New Reservoirs – Yet to be Tested

New Productive Reservoir

Current Productive Reservoirs 15 mmbbls P50 OOIP and 34 Bcf P50 OGIP

0.572km

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Reservoir P50

P50

Tirrawarra / Basal Patchawarra 15 34

Mid Patchawarra To be Appraised To be Appraised

Upper Patchawarra To be Appraised To be Appraised

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Flax Field – Productive Reservoirs

Oil Resource (OOIP - mmbbls) Gas Resource (OGIP – Bcf)

Resource numbers from RISC Independent Technical Specialist’s Report Jan 2011 and Feb 2012

The Flax field is a solution gas drive reservoir and relies on the natural gas drive in the reservoir to

lift crude oil from a depth of 2,800 metres to surface.

Hence the Flax field also contains significant amounts of wet gas, with RISC estimating the P50

OGIP estimate to be ~34 Bcf across the Tirrawarra and Basal Patchawarra reservoirs which is in

addition to their P50 oil resource estimate of 15 mmbbls OOIP from the same reservoirs.

Recent successful testing of a mid-Patchawarra sand in Flax 1 indicates potential exists for a

material increase in both the oil and gas resource estimates across the Flax field.

Further value enhancement is possible from the Flax field if a market can be secured for the liquids

rich gas currently flared as a bi-product of existing oil production. The company is currently

reviewing a number of options with respect to gas off take opportunities from the Flax field including

the feasibility of establishing a small scale LNG hub in the permit area.

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Cooper Basin - Natural Gas Liquids

Flax Field Gas ~29% Heavy Hydrocarbons

Source: PEPS

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Flax Field – New Approach The Flax well locations were chosen based on an EOR development plan rather than seismic

based locations. With the benefit of the existing wells and new 3D seismic, upside exists to

locate future wells in optimum locations.

Lower strength proppant was used in all wells except Flax 1 (premium grade proppant).

Notably Flax 1 has produced >50% of total field production to date.

A number of well completion issues were encountered during initial development. Several

identified remedial activities have the potential to significantly improve well production

performance without the need to drill new wells.

Previous Stimulations New Stimulations

Proppant 50,000 – 120,000 lbs 150,000 - 300,000 lbs

Flow rate 14 bbl/min 30 bbl/min

Fracture half length ~100 metres ~350 metres

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Flax Field – Artificial Lift Trial The Eastern flank of the Flax structure looks to

have improved reservoir quality in the

Patchawarra formation.

These conditions support trialling artificial lift

(pumping) to assist well production and test the

improved field production capability.

Artificial lift is planned to be trialled on Flax 5

where in flow to the well bore is between 50 -

100 bbls/day (under reservoir drive) however

due to reduced bottom hole pressures

production has declined.

• If proven successful, artificial lift may well apply

to other wells (equipment is re-useable).

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Provides a potential path to market for gas currently produced from the Flax oil field as well

as surrounding discoveries/prospects (Juniper, Yarrow, Crocus, Ginko, Tallow, Cyprus).

Introduces multiple new sources of revenue – LNG sales, Ethane, Propane, Butane.

Ability to leverage existing sunk capital and operational footprint.

The Acer Energy team has a successful track record of vertically integrating upstream gas

resources with downstream infrastructure.

Small Scale LNG Opportunity F

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Small Scale LNG Business Build Flax Field (PRL 14) Flax Field LNG Plant

Flare Gas

1. Juniper (PRL 17 & 18) 2. Yarrow Field (PRL 17) 3. PEL 103 (Tallow & Cyprus) 4. PEL 101 (Crocus & Ginko)

Oil/Condensate (bbls)

Market

Increased production from New Patchawarra Reservoirs

Optimised Flax Oil Production

LNG

LPG

Additional Gas Sources

Liquids Optimised Production

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Acer Energy LNG – Why the Opportunity Exists Major increase in oil/diesel prices (Aust. is a large importer of diesel with growing demand).

Significant advancements in small scale LNG technology including cost (modular design).

Multiple small scale LNG plants built in Australia have proven the technology and reliability.

Ability to leverage sunk capital as well as the existing operational footprint (i.e. Flax field

facility infrastructure, operational personnel/capability and multiple sources of gas supply).

Flax field gas is very rich in heavy hydrocarbons thereby introducing additional liquids

based revenue streams (ethane, LPG’s).

The Flax field is unique in that it is the only existing operation of its type in the Cooper Basin

outside of the Santos operated fields.

Diesel consumption alone in the Cooper Basin is estimated to be >200 million litres p.a.

Imposition of carbon scheme could assist market off take opportunities (gas produces

~27% less CO2 emissions than diesel on an energy equivalent basis).

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Acer Energy LNG - Major Geographic Advantage Unique location allows access to QLD/NSW/Victoria/SA markets. Market study has identified

sufficient regional customers necessary to underwrite the initial development.

Flax field is located in South Australia (SA) midway between Moomba and Ballera (excellent

for rotation of field staff and access to services). SA regulatory environment is extremely

functional and pro development.

Being adjacent to the QLD border enables access to government maintained bitumen roads.

Flax field is situated on the Innamincka Dome which is structurally a high point in the Cooper

Basin. The Flax field had the least operational interruption of all producers following the

regional flooding in 2010/2011. The Flax field also has two separate entry and exit roads.

Flax field is extremely well located relative to the wet gas resources of the Northern

Patchawarra Trough which has historically indicated higher liquids and lower CO2 levels.

Significant expansion potential exists with the foundation infrastructure representing the only

other alternative path to market for gas in over four decades of operations in the Basin. For

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Flax Field – Next Steps Undertake modern stimulation across the Tirrawarra / Basal Patchawarra sands in Flax 2.

Test the productive capability of the new upper Patchawarra reservoirs identified in Flax 2.

Recomplete Flax 1 across the full 9 metres of the newly proven mid Patchawarra pay

interval and undertake a new modern fracture stimulation.

Recomplete Flax 3 to access the same mid-Patchawarra reservoir identified in Flax 1.

Test the productive capability of the new upper Patchawarra reservoir identified in Flax 3.

Install Artificial Lift on Flax 5 and test the improved well production capability.

Make final decision as to best location for a new Flax field development well.

Confirm gas reserves and commence approval process for proposed LNG facility.

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Important Notice and Disclaimer Important Information This presentation contains forward-looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables outside the control of Acer Energy Limited and its Directors which could cause actual results or trends to differ materially, including but not limited to: price and currency fluctuations, geotechnical factors, drilling and production results, development progress, operating results, reserve estimates, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates. Therefore, undue reliance should not be placed on forward-looking statements.

All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated.

This presentation is not an offer or recommendation in relation to securities in Acer Energy Limited. It includes only a summary of select information and does not, and does not purport to, contain all information relevant to those securities. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Except to the extent required by law, Acer Energy Limited disclaims any obligation to correct, update or revise this presentation or oral communications associated with this presentation.

Reserves & Resources The resource estimates used in this statement were compiled by RISC Pty Ltd (ABN 75249408310) as part of an Independent Expert’s Report for the placement of shares in March 2011 and for an in-house company assessment undertaken in February 2012. Specifically the resource information was compiled for RISC by Peter Stephenson (partner and director of RISC and member of the Institute of Chemical Engineers) and Joe Salomon (RISC’s Geoscience Manager) who are qualified in accordance with ASX listing rule 5.11 and has consented to the form and context in which this statement appears. F

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