1

PETSEC ENERGY An Exploration and Production Company in

The USA and China

Macquarie Bank Emerging Oil Corporate Day

Sydney, AustraliaJuly 11, 2007

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The information presented herein contains predictions, estimates and other forward looking statements that are subject to risk factors that are associated with the oil and gas business. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodityprices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the company to meet its stated business goals.

All references to dollars in this presentation are to US currency, unless otherwise stated.

FORWARD STATEMENT DISCLAIMER

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Petsec Energy LtdA growth exploration & production company

Operations in the Gulf of Mexico, USA andBeibu Gulf, China

2P Reserves at 31 December 2006 (Petsec estimate) USA: 38 Billion cubic feet of gas equivalentChina: 3.6 – 4.6 Million barrels of oil

Prospect InventoryUSA: 290 Bcf + 30 MMbbl oilChina: 5 – 8 MMbbl oil

2006 Cashflow of US$45 millionCurrent production of 20 MMcfe/dMarket capitalisation A$220 (9/7/07)

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Personnel - USA

Ross Keogh – President• 25 years experience in the oil & gas industry• Bachelor of Economics degree

Michael Radabaugh – Vice President of Business Development and Planning• 25+ years experience in petroleum exploration and production• Bachelor of Science in Civil Engineering

Denis Swords – General Counsel and Secretary• 7 years experience as an exploration geologist• 15+ years experience as legal counsel for oil and gas companies• Master of Science in Geology; Juris Doctorate

Frank Steele – Land Manager Edward Blaise - Geologist• 25+ years landman experience 30+ years experience in the oil and gas industry• Certified Professional Landman Bachelor of Science in Geology

Nick Repar – Geophysicist Larry Teter - Geophysicist• 25+ years experience in the oil and gas industry 25 years as a geophysicist• Bachelor of Science in Applied Geophysics Bachelor of Science in Geology

Michael Welborn – Reservoir Engineer Team of 30• 30 years in the oil and gas industry• Bachelor of Science – Petroleum Engineering

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Gulf of Mexico

53 Offshore Leases 18 Held by production

Terrebone Parish

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Why the Gulf of Mexico

Infrastructure (One Land Owner - Regulator)1,141 Oil & Gas Fields - 1.6 MMBO & 10.1 BCF Per Day14,000 Miles of Pipeline

Majors exploring/developing deep water leaves opportunitiesfor proven shelf acreage

e.g. W&T ACQ KERR-McGEE SHELF 150 MMCFe/D & 330 BCFe

MMS ESTIMATE GOM SHELFRemaining Proved Reserves 4,870 MMBO & 21.5 TCF 777 MMBO & 15.4 TCFUnproved Reserves 3,361 MMBO & 9.0 TCF 201 MMBO & 3.1 TCF

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Gulf of Mexico - Lease Turnover

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Gulf of Mexico – Top 50 Producer

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Gulf of Mexico – Producing Assets

• Production 8.2 Bcfe (2006 year)• Operating Cashflow US$ 44.4m (2006 year)• Producing fields - Vermilion 258

- Main Pass 18/19- Mobile Bay 953/955

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Mobile Bay Development – Q4 ‘07

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Mobile Bay 952A Platform

• Acquisition:

- Mobile Bay 952A platform & pipelines

- Mobile Bay 955 lease, pipelines & 1producing well

- Mobile Bay 953 lease & 2 producing wells

• Host facility for production of discoveries at Mobile Bay 993, 994, 950, 951 & VK26.

• Consideration is assumption of abandonment liabilities

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Mobile Bay 993, 994, 950 & 951

4”

6”

6”

6”

MO 953-1 MO 953-3

MO 950-1Single Well

IP Rate 5 MMCFD

MO 993-1Single Well

IP Rate 6 MMCFD

MO 994 A2 Wells

MO994-2IP Rate 3 MMCFD

VK26-1IP Rate 3 MMCFD

MO 951-1Single Well

IP Rate 4.2 MMCFDMO 952 A

Host Platform40 MMCFD Capacity

MO 953-3Rate 5 MMCFD

Remote WellsIP Rate 21.2 MMCFD Total

6” Sales LineIP Sales Rate 26.2 MMCFD

Petsec Energy Petsec Energy

Petsec EnergyPetsec Energy

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Mobile Bay 873

6”

MO 829Single Well

IP Rate 9 MMCFD

Petsec Energy

Subsea Tie In To DIGP Sales Line

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Petsec - Focus Gulf of Mexico Joint Venture

• Exploration partnership targeting OCS lease sales• Complimentary strengths

– Petsec’s offshore operating expertise– Focus’s dedicated full-time prospect generation

• 50% interest in 33 OCS lease blocks acquired mid-2006– Continually being high graded – No mandatory commitment to drill– 3D seismic in house

• JV to continue in 2007 & 2008 with a 35% W.I

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Petsec - FocusJoint Venture Current Status

7 wells drilled to date• 6 successful – Mobile Bay• 1 dry hole – Eugene Island 310• Petsec expected reserves 59 BCFE gross, 19.6 MCFE net• F&D costs to date including Eugene Island 310 - $1.76/mcfe

29 currently identified prospects remaining• Expect to drill approximately 60% over next 3 – 4 years• Petsec risked expected reserves 165 BCFE• Future capital - $120 MM for drilling & $210 MM for development• Projected F&D costs $2.00/mcfe

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0

20

40

60

80

100

120

140

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

MM

cfe/

day

Vermilion 258 MP 19/18 Mobile China Onshore Focus Gas Focus Oil

Petsec – Indicative Production ProfileExisting Reserves + US Prospects

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Gulf Coast - Moonshine Exploration

• West bank of Mississippi River,50 miles west of New Orleans

• 94 square mile area, only 25% cover with 2D seismic, no previous 3D seismic

• Known productive area- 340 Bcfe gas, 7.3 MMbbl oil

• 3D seismic programme completed in August 2005

• Drilling commenced April 2007

36 - 37.5% NRIOperator

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Moonshine Drilling

•Bowie Lumber # 1 well encountered tight gas and not completed•Rig released and seismic to be reprocessed •Drilling potentially to resume in 4th qtr of 2007

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Terrebonne Parish- AVO Prospect Package

A

A’

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China – Beibu Gulf

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China 6-12 South Oil Discovery

• 320 feet net hydrocarbon pay, including 270 feet net oil

• Oil extends down dip beyond structural closure

• 70-100 MMbbl OIP

• 30 - 50% oil recovery

• Appraisal flow-test 5,750 boe/day

• Updip side-track - cores

• Downdip side-track - downdip potential

• Estimated reserves 6.12/6.12.S Area19-37 MMbbl2.3-4.5 MMbbl net to Petsec

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China 6.12/6.12 South Oil Development

Development Options• WHPP – FSO• WHP - FPSO• Production capacity 20,000-25,000 bopd• Capacity to tie 12.8W/E & 12.2/12.3 into

6.12S facility• Development Timing

– Feasibility Study 1Q 2007– Overall Development Plan

mid 2007– Final Investment Decision

3Q 2007– Start development 4Q 2007– Production 1st half 2009

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China 6.12 Area Exploration– 4 wells Q4

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Financial Performance 2002-2006

02

46

810

2003 2004 2005 2006

ProductionBcfe

0

15

30

45

60

75

2003 2004 2005 2006

Net RevenueUS$ Million

0

10

20

30

40

50

2003 2004 2005 2006

EBITDAXUS$ Million

0

10

20

30

40

50

2003 2004 2005 2006

Net Operating CashflowUS$ Million

3 yr CAGR 33%

3 yr CAGR 35%

3 yr CAGR 22%

3 yr CAGR 41%

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Operating Margins 2002 – 2006

0

2

4

6

8

2003 2004 2005 2006

Gas Price ReceivedUS$/Mcfe

0

0.5

1

1.5

2

2003 2004 2005 2006

Total Operating ExpensesUS$/Mcfe

0

2

4

6

2003 2004 2005 2006

EBITDAX (Cash Operating Margin)US$/Mcfe

0

0.6

1.2

1.8

2.4

3

2003 2004 2005 2006

Finding & Development Costs(3yr average - 2P Reserves)US$/Mcfe

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2007 Outlook

• Development Main Pass 18 gas China 6.12/6.12 South Mobile Bay gas

• Exploration US 20 - 40 Bcfe gas China 4 - 6 MMbbl oil- GOM 4 - 6 wells - China 4 - 6 wells- Onshore 4 - 6 wells

• Cash on hand US$ 33 million (April 30 2007)

• Production 7.5 - 8.5 Bcfe

• Cashflow US$ 40 - 45 million

• Capex US/China Exploration US$ 30 - 35 millionDevelopment US$ 28 million

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0

10

20

30

40

50

60

1980 1990 2000 2005 2010 2020 2030

Natural Gas

Petroleum

Nuclear

Coal

Nonhydro renewables

Hydropower

History

quadrillion Btu

Energy Consumption by Fuel1980-2030

Source: EIA Annual Energy Outlook 2007

Projections

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0

20

40

60

80

100

120

140

1980 1990 2000 2005 2010 2020 2030

Net imports

Consumption

Production

ProjectionsHistory

Total Energy Production & Consumption 1980-2030

quadrillion Btu

Source: EIA Annual Energy Outlook 2007

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Natural Gas Production, Consumption,and Imports

0

5

10

15

20

25

30

1960 1970 1980 1990 2000 2010 2020 2030

(trill

ion

cubi

c fe

et 16%21%Net ImportsConsumption

ProductionNatural Gas Net Imports, 2005 and 2030

(trillion cubic feet)

3.0

0.60.9

4.5

01234567

Pipeline Liquefied Natural Gas

20052030

Source: EIA Annual Energy Outlook 2007

20.5 Tcf

26.1 Tcf

History Projections

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Conclusion

• Successful explorer• Strong growth in reserves/production/cashflow• High profit margin reserves• Strong cash flow• Large prospect inventory provides basis for

continuing growth• Experienced management team• Exposure to two recognised regions