Drill Search ASX 20-20 Investor Road Show Presentation

8/9/2019 Drill Search ASX 20-20 Investor Road Show Presentation

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June 2010

20:20 Investor Series

The Cooper Basins LeadingMid-Tier Oil & Gas Explorer


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Drillsearch - a snapshot

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For investors Drillsearch represents . . .

Materiality Largest permit holder in Cooper Basin 17 permits covering 27,000 km2

Control of own Destiny 50% or greater interest in 15 permits 14 permits operated by DLS

Existing Production 39 oil fields in production 10 wet gas discoveries under development

Strong Growth Pipeline Over 60 oil & gas prospects defined & ready to drill

(45 oil & 22 wet gas)

Ready Access to Markets & Infrastructure Excellent Infrastructure in place

Huge Unconventional Opportunity Multi-TCF (10-20 TCF) unconventional gas

potential controlled by DLS


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Our Capital Structure

Listed on ASX (DLS) 1987

Admitted S&P ASX All Ordinaries 6 March 2010

Market cap $103 million

Average Daily Turnover > $1m2,027,544,930 shares on issue

Shares price = 5.1 cents (16/6/10)

52 wk high = 11 cents (24/8/09)

52 wk low = 2.7 cents (9/7/09)

Current Assets $14m (31/3/10)

Cash = $8m

Crude oil sale inventory = $6m

No debt

Shareholding

~5,100 shareholders

Top 20 shareholders hold 60%

98% shareholders hold


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Our plan in a nutshell

Focus on our key position in the Cooper Basin

Expand ownership & production in key oil JVs Aggressive exploration in prime oil acreage in the near term

targeting multiple low risk prospects & plays

Disciplined & determined development of numerous &expanding Wet Gas discoveries

Systematic exploration & appraisal of unconventionalresources to move from resources to reserves

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Why the Cooper Basin? 10 reasons to invest!

1. Australias World class & most prolific onshore oil & gas basin

2. Underexplored - low exploration drilling density only 1 well for every 20km 2 (wellbelow other developed proven oil provinces)

3. High exploration success rates 50% for the region; 75% for Drillsearch

4. Low cost - each well costs less than $2m

5. High profitability profit margins up to AUD65-70/bbl

6. Access to services all oil & gas services represented

7. Access to infrastructure roads, storage, processing plant, pipelines, markets

8. New technologies - increase opportunities (e.g.: unconventional resources)

9. Highly attractive exploration environment high success rates + low capital cost

10. Prime acreage position DLS has built one of the most material portfolios in theCooper Basin providing exposure to oil, gas and unconventional resource plays

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Our four businesses in the Cooper Basin

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Shortterm

Mediumterm Long term

Value

Mature Oil

New Oil

Wet Gas

Unconventional


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Our mature oil business

Tintaburra Block Core of the Cooper Basin Oil Project 8.9 mmbbls 2P reserves (100%) DLS 11% / Santos 89%

11 producing fields 4 wells planned for 2010 New 200 km2 3D Expanding exploration targeting Birkhead

oil fairway

Naccowlah Block 7.7 mmbbls 2P reserves (100%) DLS 2% Santos operated (63%) 26 producing fields 5 wells planned for 2010

Oil Production ~325 BOPD (excluding Chiton) Seeking to expand holdings in core assets

Rationalize marginal interests

New Tarbat JacksonPipeline ( DLS 11%)

New Crude West

Pipeline

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8/20

Our new oil business

Major position in Western Flank Oil Fairway PEL 91 DLS (60%) / Beach (40%-operator) 22mmbbls (DLS Net) Total Mean Unrisked Prospective Resource

Chiton-1 oil discovery now in production Over 2400 BOPD unassisted flow test Facilities to handle up to 1000 BOPD First oil achieved February 2010 Currently shut-in due to Cooper flooding

Extensive exploration pipeline Over 50 new oil prospects / 12 prospects 3D defined 27 prospects of >500,000 bbls (Unrisked Mean) New Birkhead Channel Oil play discovered with Marino-1

Extensive 3D & 2D seismic coverage 100% drilling success rate on 3D Expanding 3D coverage (430km2) to cover 23 prospects

Next focus - Northern South West QLD Blocks

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9/20

New Oil attractive economics

Return on investment for Cooper Basin exploration is very high

Cost per well is low - $1.8-2.0m for drilling + up to $2m for production facilities (100%)

Low operating cost - ~$24/bbl including transport Current realized oil price A$91/bbl+ less OPEX & royalties

Success rates are very high over 50% post 3D seismic

Short cycle times discovery to first oil 4 months

First year net operating cash flow from each successful discovery is around $10m pa (100%)

Minimum economic pool size ~90,000 bbls

Payback period on invested capital is less than 1 year

Our significant exploration pipeline of 50 defined prospects and 12 post 3D prospects should underpin robust revenue growth and excellent financial

returns from our New Oil business over the next 5 years and beyond

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10/20

New Oil our forward plan

New Oil forward plan is focused on 4 key near term activities . . .

Reinstate Chiton oil production by August 2010 through construction of new

access road to Chiton Oil Field outside Cooper Creek flooding areasKick-off 5-well exploration programme targeting up to prospective oil resources(P10) 7.5 mmbbls (100%) in September/October time frame subject to rigavailability & field access

Complete new Aquillus 3D seismic survey (434km2) covering another 23Western Flank oil prospects

Prepare for next multi-well exploration drilling campaign targeting additionalNew Oil prospects covered by Aquillus 3D seismic

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Our wet gas business

DLS (100%) except Beach Farm-in Area (50%)

10 gas/condensate discoveries out of 12 explorationwells

High liquids & LPG content in all discoveriescontribute significant revenues

Significant Contingent Resources booked &endorsed by Gaffney, Cline & Assoc.

Multiple commercialization options liquidsstripping, small-scale transport LNG or gas sales intoregional pipeline system

Gas marketing rights held by DLS

Located within 5km of SACBJV gas pipelines & 50kmof Moomba

Exploration upside with prospective resources 200BCF sales gas / 8 mmbbls condensate (Best)

Planning significant drilling programme up to 6wells - in 2010/2011 (subject to JV agreement)

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Wet Gas our major accomplishments

Wet Gas project is making major strides forward towards development

Completed commercial pre-feasibility study with Gaffney Cline identifying the

best development optionsCompleted extended production testing of Brownlow Gas Discoverydemonstrating extremely high quality/high deliverability reservoir with high liquidscontent on test Brownlow produced at over 18.4 mmscf/day on 1 inch choke &

produced over 1200 bbls of condensate over test programme & flow rate of up to218 BOPD

Completing major reinterpretation of existing Wet Gas discoveries indicatinglikely potential major upgrade of gas & liquids resources based on Brownlow &Middleton extended production test results

Preparing multi-well drilling locations for appraisal, development & explorationdrilling campaign to upgra de & increase contingent resources of existing Wet Gas

discoveries to commercial reserves

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Wet Gas our forward plan

Wet Gas forward plan is focused on 4 key near term activities . . .

Complete full technical & commercial feasibility study selecting best

technical & commercial option for development of existing Wet Gasdiscoveries for JV approval

Lock-in commercial development arrangements sufficient to justifydevelopment of current Wet Gas field discoveries on a pilot or full scale basis

Complete field development plan, detailed engineering & project executionplan based on selected technical & commercial agreed by JV

Secure JV commitment to 2011 multi-well appraisal, development &exploration drilling campaign to upgrade & increase existing contingentresources to commercial reserves

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Our unconventional Gas business

Western Cooper Deep Coal Seam GasProspective Resources*

Area(km2)

Net CoalThickness (m)

Gas-in-Place(TCF)

Prospective Resource(TCF)

2500 Up to 60m 39.9 9.9 to 19.9

* Source: MBA Petroleum Consultants Cooper Basin CSG Potential Prospective Resource Study.Prospective Resource range based on 25-50% recovery factors

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Western Cooper UnconventionalDeep Coal Seam Gas Conventional exploration drilling intersecting many thick

gassy coals & shales

Mixed unconventional resource system containing deep

Permian coal seams, shales, tight sand reservoirs presentsignificant unconventional resource potential

Preliminary evaluation of prospective resource potential ofdeep coal seams completed results encouraging

Extraction and commercialisation very achievable - technicaldifficulty only moderate; infrastructure in place


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Western Cooper Unconventional The Hard Facts

Western Cooper unconventional resource potential is based on (10 points):

1.Strong fundamentals / robust G&G database

2.Review & interpretation of 450 well digital well log data base in the project area

3.Every coal gas interval penetrated was assessed and ranked (Jurassic thru Permian) on thickness andmud log gas values

4.Maximum recorded total mud log hydrocarbon gases (units in air) for target coals in project area Patchawarra = 20,000 units / Epsilon = 5,000 units / Toolachee = 9,000 units

5.Derived Net Coal from digital logs using the parameters of Density and Sonic

6.Net Coal grids calculated for each of the coal bearing Formations and clipped to the erosional edge

7.Gas in place calculated from the net coal grids / (Net Coal x 1.35 g/cc x 8m 3 /tonne = Gas in Place)

8.Anecdotal evidence suggests up to 32m 3 /tonne gas can be achieved from the Patchawarra coals basedupon unpublished desorption data within project area

9.Moveable gas demonstrated from same coal intervals by adjacent operator within project area

10.Interpretation of Shale Gas & Tight Sand intervals underway

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16/20

Our unconventional gas forward plan

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Phase 1Calculate resourcepotential

Identifyunconventionalleads & prospects

Define workprogramme to moveresource to reserves

Phase 2Define / High gradeunconventionalprospects

Integrateunconventionalprospects with wetgas drilling

Core unconventionaltarget zones inconventional wetgas wells

Establish gascontent,composition, etc

Phase 3 Drill

unconventionalprospects

Demonstratemoveability

Establish

contingentresources

Phase 4 Design

unconventionalpilot projects

Evaluate pilotproductionresults

Calculate/certifyreserves

Works completed


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Our forward plan in summary

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Project activity & timing Short term Medium term Long term

Mature Oil Wells 4 5 1

Other 3D

New Oil Wells 4-5 5-8 12+

Other 3D 3D

Wet Gas Wells 4-6 4+

Other Productiontesting studies

Pilot development

Unconventional Wells Prospectdefinition

Coreholes &test wells

Pilot

Other Resourceestimation

Resource estimation


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Our next steps

Mature Oil Focus on maintaining positive cash flow Additional development drilling to enhance production Divest non-performing minority interest assets

New Oil Accelerate Western Flank Oil Fairway exploration Drill 5 new oil exploration wells in Western Flank 3D Acquire & interpret an additional 430 km 2 3D over main prospect fairway

High-grade next phase of drilling prospects

Wet Gas Extended production test existing discoveriesComplete pilot project pre-feasibility study

Progress pilot project to FEED & FID Drill 4-6 new wet gas exploration/appraisal wells to prove up additional

reserves

Unconventional Programme to move resources from prospective to contingent to reserves Coring & production testing program in conjunction with Wet Gas drilling

programme

PortfolioRationalization Complete divestiture or farm-out of non-core assets

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Our key messages

People, Projects & Plan

Unique acreage position High Profit Western Flank Oil

Major New Conventional Gas & Liquids Development Emerging Unconventional Gas Resources

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Drill Search ASX 20-20 Investor Road Show Presentation

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