Armour EnergyAnnual General Meeting 2012

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Disclaimer

This presentation is not a prospectus, disclosure document or offering document under Ausdoes not constitute, and should not be construed as, an offer to issue or sell or a solicitationACN 141 198 414 (Armour).

Any material used in this presentation is only an overview and summary of certain data seleinformation that a prospective investor may require in evaluating a possible investment in Adocument prepared in accordance with the requirements of the Corporations Act and shoulmust make their own independent investigations, consideration and evaluation of Armour. Ainvestment in Armour is considered to be speculative in nature.p

Statements in this presentation are made only as of the date of this presentation unless othnotice. Reliance should not be placed on information or opinions contained in this presentat

To the maximum extent permitted by law, Armour disclaims any responsibility to inform anyma affect an of the information contained in this doc ment and presentation and ndertakmay affect any of the information contained in this document and presentation and undertakinformation, future events or results or otherwise.

No representation or warranty, express or implied, is made as to the fairness, accuracy, coderived from this presentation or any omission from this presentation or of any other written

To the maximum extent permitted by law, neither Armour nor, any affiliates, related bodies (Relevant Parties), nor any other person, accepts any liability as to or in relation to the accimplied) arising out of, contained in or derived from this presentation or any omission from tfuture to any person.

This presentation contains certain “forward-looking statements”. The words “expect”, “shouintended to identify forward-looking statements. Indications of, and guidance on, future earnforward-looking statements are not guarantees of future performance and involve known anArmour and the Relevant Parties, that may cause actual results to differ materially from thorepresentations as to the accuracy or completeness of any such statement of projections orp y p y p jare attainable or will be realized or that actual outcomes will not differ materially from any fo

The resource estimates used in this announcement were, where indicated, compiled by MBProspectus dated 20 March 2012 for Armour Energy (Chapter 9). Raymond L Johnson Jr.,with the requirements of ASX listing rule 5 11 and has consented to the use of the resourcewith the requirements of ASX listing rule 5.11 and has consented to the use of the resource

stralian law or under any other law. It is for informational purposes only. This document n of an offer or invitation to subscribe for, buy or sell securities in Armour Energy Limited

ected by the management of Armour. The presentation does not purport to contain all the Armour nor does it contain all the information which would be required in a disclosure d not be used in isolation as a basis to invest in Armour. Recipients of this presentation Armour recommends that potential investors consult their professional advisor/s as an

herwise stated and the information in this presentation remains subject to change without tion.

y recipient of this presentation on any matter that subsequently comes to its notice which kes no obligation to pro ide an additional or pdated information hether as a res lt of nekes no obligation to provide any additional or updated information whether as a result of new

mpleteness or correctness of the information, opinions or conclusions contained in or n or oral information or opinions provided now or in the future to any person.

corporate and their respective officers, directors, employees, advisors and agents curacy or completeness of the information, statements, opinions or matters (express or this presentation or of any other written or oral information or opinions provided now or in the

ld”, “could”, “may”, “predict”, “outlook”, “guidance”, “plan” and other similar expressions are nings and financial position and performance are also forward-looking statements. Such nd unknown risks, uncertainties and other factors, many of which are beyond the control of ose predicted or implied by any forward-looking statements. Armour makes no r that any projections will be achieved and there can be no assurance that any projections y p j y p jorward-looking statements.

BA Petroleum Consultants, and detailed in the Independent Expert’s Report, Replacement General Manager Exploration and Production for Armour Energy, is qualified in accordance

e figures in the form and context in which they appear in this presentatione figures in the form and context in which they appear in this presentation.

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Armour Snapshot

100% ownership of an entire petroleum provincep

One of the largest shale acreage positions in Australia –Close to i f t t d k tinfrastructure and markets

41.3 Tcf and 2.2 bbls Prospective Resource assessed in northern Australia alone – could be around 25% of Australia’s known gas resources

$75 IPO thi f ll f d d$75m IPO this year – fully funded exploration program

$40m net cash currently$ y

Accomplished Board with proven track record - four former Arrow Energy Directors

ADirectors

I

M

E

A

Shareholder ownership

DGR Global25%25%

Other50 5% JP Morgan

Asset Management

8%

50.5%

8%

Board and Management

3 5%

Och-Ziff funds13%

3.5%

ASX AJQ

Issued shares 300m

Market cap (@ 24cps) $72m

EV $32m

Acreage 33 million acres

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One of the Largest Shale Gas Positions i

Location Armour permits – size comparable to

in Australia

entire US basins

Covers a new petroleum province - 133,228km² - as extensive as Barnett Shale in Texas100% ownership100% ownership

41 Tcf gas and 2.2 bbls oil upside

Access to pipelines and markets p p

Onshore Gippsland oil and gas upside

Year round drilling action

Proven drilling and completion capability

Proven commercial capability

$$40m cash

Strong forecast Australian gas market

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Armour is Under-Priced

►Valuations of developed US shale oil acreage range between $8,000

June 2012Farm in to

Petro Frontie$27 78/acreg g ,

and $30,000 per acre

► Statoil and Total recently took a

$27.78/acre

Oct 2012Farm in to CTP

$11 28/► Statoil and Total recently took a positions in exploration projects in the Georgina Basin at average price of $32 79/acre

$11.28/acre

70

80

of $32.79/acre

►Armour retains 100% ownership

50

60

/ N

et A

cre

►Armour is less than a quarter of the Central Petroleum market price

30

40

rpris

e Va

lue

per acre

►Armour provides the lowest dollar

10

20

Ente

r►Armour provides the lowest dollar per acre entry into 100% owned shale gas projects in Australia

$1 per acre

0Armour Energy

acre

er Nov 2012Farm in to

CTPCTP$37.79/acre

40

45

25

30

35

lion

acre

s)

EV/acre (left axis)

Net acreage

(right axis)

15

20

25

Acr

eage

(mil

Avg EV/acre

5

10 Net

AAvg EV/acre

0Central

PetroleumPetro

FrontierBaraka Energy

New Standard Energy

Buru Energy

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NT and QLD – A Clear Path to Commerci

Phase 3Phase 2Phase 1

10PJ

600 000 bblVolume 105 PJ

3 5 mmbls60 PJ

3 5 mmbbls

2

600,000 bbls

Ti i

3.5 mmbls

5

3.5 mmbbls

72 yearsTiming 5 years 7 years

Offshore

New Markets

Local mines and existing

pipelines

Northern regional

power supply

export LNG and

petrochemical opportunities

Source: Company publications. PJ represent per annum1 Represents energy consumption 2 35PJ includes gas supplied to Mt Isa, Mica Creek station, Phosphate Hill, Cannington

alisationF

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Global Relevance

Atlantic and Asian markets remain distinct

• US policymakers view LNG export as counter productive to energy independence goals

• Transportation fuel still dependent on imported oil

• DoE has only licensed 1 company to export LNG – slow supply responsiveness

• Asia Pacific gas demand to grow by 150% by 2030 • Australia poised to capitalise with significant LNG export

infrastructure approved and under construction pp• LNG export commitments absorbing domestic supply• World’s major oil companies focussing investment in

Australia• Armour has one of the largest acreage positions in the g g p

region and is strategically located on the coast

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Accomplished Board

Track record of delivering value

Extensive experience building resource production

Armour Energy Board of Directors

companies

Nicholas Mather, Executive Chairman► B.Sc (Hons. Geology)► More than 25 years experience in junior resource

sectorsector► Co-founder and former Executive Director of Arrow

Energy; Chairman of Waratah Coal; Director of Bow Energy

Jeremy Barlow, Non Executive DirectorNon-Executive Director► B.Eng (Mining), MBA► Long and distinguished career in the coal and

petroleum industries and a Fellow of the Australasian Institute of Mining and Metallurgy

► Founder of CH4 Gas Ltd and following merger with► Founder of CH4 Gas Ltd and following merger with Arrow Energy, continued a Non-Executive Director

► Founder of coal consulting company Barlow Jonker, acquired by Wood Mackenzie and currently a Non-executive Director of Bandanna Energy Ltd

William Stubbs, Non-Executive Director► LLB► 35 years experience in commercial law including stock

exchange listings and mining lawexchange listings and mining law► Founding Chairman of Arrow Energy► Non-Executive Chairman of DGR Global Ltd and

Chairman of the Advisory Board of Tetra Q and Non-Executive Director of Coalbank Ltd

Economic alignment with shareholders

Four founding directors of Arrow Energy

Philip McNamara, Chief Executive Officer► B.Eng ► 30 years experience in Australian resource industry► Former Managing Director of Waratah Coal► Former Managing Director of Waratah Coal

Stephen Bizzell,Non Executive DirectorNon-Executive Director► BComm ACA MAICD► Chartered Accountant with extensive corporate structuring and

finance experience, actively involved in the coal seam gas and resource industry

► Co founder of Arrow Energy and currently the Chairman of► Co-founder of Arrow Energy and currently the Chairman of Bizzell Capital Partners

Roland Sleeman, Non-Executive Director► B.Eng (Mechanical), MBA► 34 years experience in oil and gas, utilities and infrastructure► Former Chief Commercial Officer of Eastern Star Gas and► Former Chief Commercial Officer of Eastern Star Gas and

General Manager of the Goldfield Gas Pipeline at AGL

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Strong Technical CapabilityParallel operations streams

Exploration Drilling and Completion R

PROJECT MATURITExploration Drilling and Completion R

Philip McNamara, Chief Executive Officer► B.Eng ► 30 years experience

Nicholas Mather, Executive Chairman► B.Sc (Hons. Geology)► More than 25 years

experience in junior

SU

PER

in Australian resource industry

► Former Managing Director of Waratah Coal

experience in junior resource sector

► Co-founder and former Executive Director of Arrow Energy; Chairman of Waratah Coal; Director of Bow Energy

RV

ISO

RY

of Bow Energy

David Warner, Principal Exploration Advisor► BSc (Hons.), MSc DIC► 38 years in oil and gas (20 of these

with Santos), with a specific focus on

JonatChief ► B.E► Ov

exth

Y -O

P ) punconventional resources

Luke Titus, Chief Geologist► BSc (Geology), M.S. Computer

theDrSa

PE

RATIO

N Expert ( gy) pScience

► 15 years petroleum experience in Australia and the US

► Former Principal Development Geologist with QGC

NAL

pidentifying new plays

Christine Eickhoff, Geological Technician► BSc (Geology), M.Sc. Marine

Geosciences

Armour hcommercia

design

Resource Definition and Modelling

TY Downstream DevelopmentResource Definition and Modelling

Ray Johnson, GM Exploration and Production► B.A. (Chem), M.S.

P t E

Roger Cressey, GM Infrastructure and Project Development► B.Eng (Mechanical)► Over 30 years experience in

Downstream Development

Pet Eng► 31 years experience

in reservoir and completion engineering in Australia and the

► Over 30 years experience in engineering, construction and project management, with 20 years in the oil and gas industry

U.S.than Martin,Well EngineerEngver 12 years petroleum perience in Australia and

U S f S i

Expert defining and appraising

e U.S., former Senior rilling Engineer with antos Greg Smout,

Petroleum Engineering Operations Superintendent ► Over 25 years experience in the oil

and gas industry► Formerly Lead Completion Engineer

with QGC

has innovative technical and al experts and the capacity to p p ysolutions for any problem

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The First 6 Months

Drilled 2 wells in VictoriaMoreys 1 discovered gas and condensateMoreys 1 – discovered gas and condensateHoldgate 1 – tight gas

Spent $19.6m in Northern Territory on 5 wellsDefined gas bearing Proterozoic section Batten TrougMacArthur Basin

100.4 BCF at Cow Lagoon at < 100 mcfd130 BCF at Glyde at 3.3 mmcfd

Demonstrated well completion capabilityX Over budget due to:X Over budget due to:

• Contract difficulties• Hard rock drilling

Native Title Agreements secured for Queensland ATP

• Unsuitable combination of coring and productionholes

gProgram planned for Q1, Q2 Queensland ATP1087Defined 100% Armour oil play, South Nicholson/CarpAppro al for Ot a 1 PEP169 Ot a BasinApproval for Otway 1 PEP169 Otway Basin

gh,

P1087, Environmental authorities advanced

n

,

entaria Basins similar to Cooper/Eromanga Basins

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Very Active Debut - 5 wells, 6 months, 4 d

We used this rig…

...this is w

…to drill this hole at Glyde, NT

What

discoveries

what we found – 3.3mmcfd of gas!

220m lateral unfraccedt do you get with 1.5km fracced?

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The Next 6 Months – Pivotal and Active PNorthern Territory

Gravity, resistivity on Batten Tough to generate furt2 Tcf in 10 new targets2 Tcf in 10 new targetsHigh flow rate Coxco Dolomite breccia play e

Drilling targets Batten Trough, May – October 201Queensland

Environmental approvals and tenure grant ATP108Drill Egilabria #2 - vertical 1750m, #2A - 650m lateProof of concept opens up potential for 6 Tcf targetfacility Assessing potential partnerships with global petrolg p p p g p250km seismic, ATP1087 to define Nicholson EdgeDrill test South Nicholson Edge Oil Play in Octobe

Vi t iVictoria Fraccing moratorium to lift in February 2013Drill Otway 1 and prove up to 10mmcfd gas – earlyCoring Yallourn to reveal oil source onshore GippsWombat testing reveals onshore Gippsland oil storProposed frac and flow test Wombat 2 in May 201Proposed frac and flow test Wombat 2 in May 201Proposed drilling Holdgate 2 in August 2012

Program

ther targets in January 2013

emerging 13

87 in Queensland, December 2012eral, 6 stage frac in May 2013t and development of 950 well - 6mtpa LNG export

eum E&P majors je oil fairway in June 2013

er 2013

y cash flow potential in March 2013sland in March 2013ry in April 201333

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Shale Technology Delivering Rapid ProdApplying proven technology in North America►Developments in technology have unlocked new reso►Economic viability of shale gas production has been

• Confirmed by recent major transactions (e.g. Exxon►Shale gas (and liquids) have underpinned strongest

decade

Shale gas has a growing share of production in th

►Expert US service providers are increasing their pres

g g g p

2000 20

8%

23%

8%

2%

67%34%

2%

Shale gas

Source: Wood Mackenzie (April 2011) Conventional

1.0 bcfdShale gas

production =

uction Growth

ource potentialproven in the U.S.nMobil, BHP Billiton, Chesapeake Energy) production growth in the U.S. energy sector in the last

he U.S.

sence in Australia – Halliburton forecast cost reductions

5%010 2020F

39%

%

27%20%

39% 27%

20% 48%

Shale Tight gas CSG

11.7 bcfd 35.2 bcfd

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Why Shale Gas?

►Shale gas has thicker reservoirs •Coal 5-10m compared to shales 150m

E

►Early peak gas flows

►Early payback and strong returns

►Armour project areas are sparsely populated with no agriculture

►CSG wells require dewatering

Indicative comparison of CSG in QLD compared Armour sha

arly peak gas flows in shale

ale projects

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Armour – 100% Ownership - 3 Basins, A

Armour Tenure on S

NT QLD

Prospective Resource

22.5 Tcf0.2 bn bbl

condensate

18.8 Tcf2.0 bn bbl

condensate condensatecondensate

ATP 1087EP 171 EP

Permit Area

ATP 1087 ATP 1107Preferred Tenderer

15,081 km2

EP 171, EP 176

Granted11,505 km²

Additional Areas

P di

13 (6 ALRA,

7 Native Title)

Source: Modified from FROGT

Pending Grant

7 Native Title)107,364 km²

New Petroleum Province

Sedimentary Basins

TECH

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McArthur Basin – Proterozoic Rocks FlowStratigraphic table of the McArthur Basin

Reward Dolomite

Barney CreeF ti (

Dolomite conventionatarget

0m Formation (show) shaletarget

150

CoxcoDolomite (gas flow, oilshow) conventionatarget

Reservoir

Source rock

UnconventionalReservoirGas ShowOil Show

w Gas and Show Oil

Historical hydrocarbon shows

Formation Hydrocarbon show

Petroleum well 82-5 Lynott Oil Fluorescence y82-6 Yalco Oil Fluorescence 82-7 Yalco Oil Fluorescence Mineral wells GR 3 Barney Creek Live oil GR 9 Barney Creek Live oil GR 9 Coxco Dolomite Gas flow (flared) and ek

il

al

live oil

Source: MBA Petroleum Consultants

oil e

Proterozoic section is very hydrocarbon richl

l

Proterozoic section is very hydrocarbon richFor

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NT - Cow Lagoon and Glyde Point to 2 TBatten Trough

►Glyde Mean Prospective Conventional resource estimated at 130BCF

►Batten Trough Barney Creek shale - Coxco Dolomite breccia fairway up to 100km long

►10 targets up to 3.7 Tcf total prospects

►500km2 airborne gravity and aeromagnetic survey planned to define drill targets

► Resistivity survey could provide a strategic tool for further confirmation of additional targets

►P90 Prospective Resource estimate of 3.7 Tcf of gas and 258 MMbbl liquids

►Local markets and infrastructure

Tcf of Current Targets in F

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NT - Cow Lagoon Confirmed Gas Generain the Batten Trough

► Mean Prospective Resource 100.4 BCF

►Fault bounded structure, no water filledGrea

►Fault bounded structure, no water filled fractures

►Additional targets identifiedB tt C k

indic

• Batten Creek• Looking Glass Creek• Ryan’s Bend

ation and Productive Shales

ater Cow Lagoon Structure – seismic cates intact reservoir

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NT – Small Shows Lead to Big Flows – GPotential for 10 Other Targets

1979 - Gas flow from GlydeRiver GR9 mineral hole

2012 –lateral w

►Gas discovered in 1979 by Amoco Minerals while ex► Reservoir is porous Coxco Dolomite at the base of► Reservoir is porous Coxco Dolomite at the base of ► Armour’s Glyde 1 is 300m to the west of the origina►Lateral intersected 132m of black gas charged natu

C D l it fl d 3 3 fdCoxco Dolomite – flowed 3.3 mmcfd►Numerous shows and blows over 90km ►Now proven Armour drilling capability

Glyde 1

3.3 million cubic feet/day gas flare from Glyde 1 well during air drilling and testing

xploring for ZincBarney Creek ShaleBarney Creek Shale

al GR9 wellrally fractured source Barney Creek shale above the

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QLD - Previous Wells and Seismic Provid

►Extensive seismic data being reprocessedbeing reprocessed

►4 existing wells (C l 1991)(Comalco 1991)

►Strong gas shows

►Deep basin extending into Armour’s NT tenements

►22 Tcf Mean Prospective Resource definedResource defined

de Shale Target DefinitionF

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QLD - 22 Tcf Mean Prospective Resource

►5-10 mmcfd gas flows modelled from 1300m lateral w►Gas shows to 8% in Argyle Creek-1, Desert Creek-1, ►H k t i 1991►However no gas market in 1991 ►Potential for extensive new gas province►Existing seismic defines basin centre

Very s

►Native Title Agreement in place ►Environmental permit conditions finalised ►100% Armour Tenure grant imminent

0.00

►100% Armour Tenure grant imminent►Egilabria #2 lateral planned May 2013

e in Lawn Hill Formation

well with 16 stage fracEgilabria-1, Beamesbrook-1(Comalco 1991)

Egilabria-1

GR DT

TOTALGAS (ppm)

Beamesbrook-1

GR DT

TOTALGAS (ppm)

trong gas shows over 125m, modern wells 30km apart

GR200 140 40.0

0.00 200

1 10000029.8km

(Dist. Between wells)

Dep

th (m

)

1200

GR0.00 200 140 40.0

0.00 200

1 100000

Dep

th (m

)

700

1300

1400

WIDE

800

1500

WIDE

900

1600

1000

1100

1700

1800

1200

1300

Gas shows

? Freegas show ?

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QLD – Oil Play in Basal Jurassic Sand Re

Source: Scott et al. (1998) ’The tectonostratigraphic history of the Prote

eservoirs?

erozoic Northern Lawn Hill Platform, Australia’

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QLD - Mesozoic oil potential overlies theSouth Nicholson Basin

Schematic Structural Cross-Section of Mt Isa Superb

1Cross-section adapted from an interpreted seismic section in Scott et al. (1998) ’The tectonostratigraphic history o

e older Proterozoic

basin in ATP1087P1

of the Proterozoic Northern Lawn Hill Platform, Australia’

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QLD –South Nicholson/Carpentaria, a Co

C B iCooper Basin

Source: Mo

ooper/Eromanga analogue?

dified from FROGTECH

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Low Social Impact, Proactive Stakeholde

►Tenements located within land used for low intensity use• Grazing• Not cropping lands• No freehold land

►Low population density area but accessible to producinfrastructure

►Very few towns►Strong relationship with local community, traditional owng p y,

and government bodies• Native Title Agreements completed on EP171, EP17

EP176 and EP190 and ATP1087• No objections lodged on proposed exploration activit• Employment opportunities for local communities

QLD CBM ARMOUR SHALE PROJECT

TENURE FREEHOLD LEASEHOLDTENURE FREEHOLD LEASEHOLD

RESERVOIR THIN COALS THICK SHALES

LOCAL TOWNS AND POPULATION CENTERS

YES NO

er Engagement

es

ction

ners

18.8 TcfP90 3.7 Tcf, 258mmbo

74

ties

TS22 TcfP90 9 Tcf, 58mmbo

S

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Victoria - An Additional Gas Province

►Acquisition of 13% Lakes Oil (ASX:LKO) complements A

• Brings diversity to the project portfolio the opportunity• Brings diversity to the project portfolio, the opportunity

►Onshore Gippsland and Otway oil and gas focus

►Projects provided walk up drill targets commenced in fi►Projects provided walk up drill targets, commenced in fi

►Moreys gas condensate discovery May 2012

►Drilling Otway 1 March 2013 O h Ot►Drilling Otway 1 March 2013

►Extensive local infrastructure and industrial demand

Onshore Otwa

►Victorian gas projected to $8/GJ

►Abundant gas discoveries in the region

►Fraccing ban to lift in Feb 2013

►Armour can earn 51% of PEP169 and 166 with $14m expenditurePEP169 and 166 with $14m expenditure $6.75m already completed.

►Option to purchase 50% of PRL 2 f $30for $30m

Armour’s existing strategy

y for constant news flow and mitigates risky for constant news flow and mitigates risk

rst half 2012rst half 2012

d Gi l d B i

ay and Gippsland Basin

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Victoria – New Oil Play Onshore Gippsla

Reservoir

Source Rock

Oil h b d f bReservoir

Oil has been extracted from basonshore basin and from all Lakewith approx. 8 bbl live oil recove

Oil in Source RockSimilar geochemical

Oil in Source Rock

nd Basin

l i f h WOMBAT 3sal units of thees Oil wells to dateered in Wombat 3

BOUNDARY CK 2

YALLOURN NTHsignatures

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Victoria – Onshore Strzelecki Oil Identifie

Schematic diagram not to scaleSchematic diagram not to scale

es New Rintouls Oil Play F

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Victoria – Tight Natural Fractures in Sour

Reservoir

Source rock contains abundant natural fractures

rce Rock Host Gas and Oil

Source rock

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Victoria - Otway 1 location map

LA

4.0 BCF4.0 BCF

Moreys and Otway 1 Prospects - Otway Basin

MOREYS PROSPECTAVERS GAS FIELD

MOREYS PROSPECT

3.2 BCF

10.9 BCF

EXISTING PRODUCTIONAREASPRODUCTION AREAS

Otway 1

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Victoria – Drilling Otway 1 in Feb 2013 , B

PEP169 Otway 1 Prospect to drill in Feb 2013drill in Feb 2013

Armour has earned a 51% interest

Located in a proven WNW hydrocarbon fairway in Victoria

Proximate to existingProximate to existing infrastructure

Beside Iona Gas PlantO i i E IConnected to eastern Australian

gas network

Previous Moreys 1 discoveries

Origin Energy IoGas Plant

Previous Moreys 1 discoveries

Tight gas and condensate discovery in the upper Eumerella Formation

Otway 1 targeting 5-10 mmcfdgas flowsgas flows

Beside Iona Gas Plant

ona

Proposed Otway 1 Site

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Victoria - PEP169 Otway 1 Strong Seismi

Time Structure Map

ic Anomaly

Area within PEP169 0.25 sq kms

Amplitude Map

Area within PEP169 0.25 sq kms

Total Area 0.375 sq kms

OTWAY  1

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Victoria – Strong Oil and Gas Prospects

Proposed

THREE POTENTIAL TARGETS

on Seismic at Otway 1

d Otway 1

Oil? Top Pebble Point

Top Waarre C Gas?

Top EumerallaTop Eumeralla

Gas and Condensate?Gas and Condensate?

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Victoria – Strong Oil and Gas Prospects

Iona

Top Eumerallahas gas showlarger than fromlarger than fromWaarre C

on Seismic at Otway 1

a 1 Proposed Otway 1

Top Pebble PointTop Pebble Point

T W CTop Waarre C

Top Eumeralla

34

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Victoria- Tight Gas and Condensate DiscMay 2012

Eumerella Formation– Otway Basin PEP 169 51% A

►30 bbls / 1 mmcf gas - doubles the value

coveries at Moreys 1

Armour

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Victoria - Extensive Gas Potential AdjaceStations, Onshore Gippsland

PEP 166 and PRL2 BoolaBoola - 2

Haunted Hill Prospect

Test RintoulsCk Fm %

Strzelecki tight

Boola - 2Tested tightgas concep

in basin center

Yallourn Power - 1Core hole to test extent

of Rintouls Ck Fm –shale oil test

ggas

Hazelwood -1

Holdgate 1Tight gas Strzelecki Group &

Loy Yang -2

Proven Stzeleckitight gas

Tested for basin centered gas in Strzelecki Group

Group & Rintouls Ck

Fm

ent to Pipelines and Power

Snake RidgeTi ht dTight gas and

Rintouls Ck Fmt t

Trifon Block

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Strong Existing Gas Flows Over Thick St

Gas flare from PRTests on the Wombat 1, 2 and 3 wells realised flows ofand 3 wells realised flows of up to 2 MMcf per day from up to 27 zones over 650m within the thick Strzelecki Groupthe thick Strzelecki Group

Wombat 2 originally drilled in 2004 with a sustainable gas gflow of 0.68 MMcf per day

Following a refrac and open fl t t i 2009 W b t 2flow test in 2009, Wombat 2 flowed at an initial estimated rate of 4.3 MMcf per day and stabilised at 1,350,000 cfd

Impressive upside from horizontal laterals and multihorizontal laterals and multi-stage fracs

Potential for 30 MW power ote t a o 30 po estation development

trzelecki Sections

RL2, Wombat Field Gippsland Basin

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2013 High Level Work Program Planning

Q1 Q2Northern Territory EP 171 and EP 176EP 171 and EP 176

Gravity survey (airborne)

Additional geophysical studies

Drilling (2 x Glyde sub-basin wells)

Shale gas well

QueenslandQueensland ATP1087

Seismic (250km)

Native Title AgreementNative Title Agreement

Drilling (3 x vertical, 1 x lateral -fracced)

Feasibility studies and marketingFeasibility studies and marketing

VictoriaPEP 166 and PEP 169

Otway 1y

Holdgate 2

Total overheads, officers, fees and salaries sa a es

Project Development and Marketing

2013 Budget 2 Q3 Q4 (thousands)

$700

$500

$3,000

$2,500

$2,500

$250$250

$13,000

$1 700$1,700

$1,250$ ,

$4,250

$4,300

$1,700

$35,650

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The Armour Opportunity

Fully funded exploration program 2

Large net acreage position1

Close to infrastructure with commercialis3

E l t d t i t k h d4 Early entry advantage into key hydroca4

Existing shows and flows, proven5

Strong liquids potential 6

Applying proven shale drilling7 pp y g p g

41.3 Tcf and 2.2 bbls Pros8

Pro-active stakeholder9

Proven and expe10

sation opportunities

b iarbon province

hydrocarbon system

g technologyg gy

spective Resource assessed in northern Australia

r engagement and low social impact

rienced Board and management team

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APPENDICESVictoria – Armour Controls Projects and ha

Strategic investment in Lakes Oil (ASX: LK►In 2011 Armour acquired 900mm shares (13►In 2011 Armour acquired 900mm shares (13share

►Two Armour Directors on the Lakes Oil boar►Two Armour Directors on the Lakes Oil boar

►Farm-in rights to PEP 166 (Baragwanath AnL Y D M ll D )Loy Yang Dome, Morwell Dome):

• 25% ownership after year 1 - upon expend• 51% total ownership after year 2 - upon ad

►Farm-in rights to PEP 169, Otway Basin • $2 5mm expenditure on Moreys well has e• $2.5mm expenditure on Moreys well has e• 51% of $5mm expenditure on 2 additional

►3 year option to acquire 50% of Lakes Oil’s in PRL2 and a 25% interest in the balance of P

as Largest Shareholding

KO)3% of issued capital) at 0.25 cents per3% of issued capital) at 0.25 cents per

rdrd

nticline, Flynn Dome, Yallourn Dome,

diture $4.25mm, 2 wellsdditional expenditure $4.75mm, 1 well

earnt 51% interest April 2012earnt 51% interest, April 2012 wells, late 2012 - $2.5mm

interest in the Trifon and Gangell Blocks PRL2 for a total of $30mF

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APPENDICESQLD - Previous Wells and Seismic Providde Shale Target Definition

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