Enteq May2012

Reach & Recovery Technologies For Upstream Oil & Gas

Acquisition of XXT

A growing sector A well-defined business plan An experienced team

Disclaimer

This presentation (this "presentation") is for general information only and is the property of Enteq Upstream plc ("Enteq"). Making this presentation available in no circumstances whatsoever implies the existence of a commitment or contract by or with Enteq, or any of its affiliated entities, or any of its or their respective subsidiaries, directors, officers, representatives, employees, advisers or agents ("Affiliates") for any purpose.

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All projections, estimations, forecasts, budgets and the like in this presentation are illustrative exercises involving significant elements of judgement and analysis and using assumptions, which assumptions, judgements and analyses may or may not prove to be correct. The actual outcome may be materially affected by changes in e.g. economic and/or other circumstances. Therefore, in particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievability or reasonableness or any projection of the future, budgets, forecasts, management targets or estimates, prospects or returns. You should not do anything (including entry into any transaction of any kind) or forebear to do anything on the basis of this presentation. Before entering into any arrangement, commitment or transaction you should take steps to ensure that you understand the arrangement, commitment or transaction and have made an independent assessment of the appropriateness of the arrangement, commitment or transaction in light of your own objectives and circumstances, including the possible risks and benefits of entering into such an arrangement, commitment or transaction.

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Date: 30 April 2012


International and National Oil & Gas Companies

Enteq customers: Oilfield service companies

Strategy

2

Strategy & Financial Control

Regional Sales & Support

Supply Chain & Manufacturing

Americas Americas

Middle East Middle East

Far East Far East

Europe Europe

Geophysical Drilling Intervention

Products & Services


A strong management team

3

Martin Perry Chief Executive Officer

A graduate Engineer with a history in offshore oil & gas and the Datacomms industry. CEO of Sondex for 10 years prior to acquisition by GE. Recently Non-Executive Chairman of three PE-backed technology businesses

Raymond Garcia Chief Operating Officer

Formerly Country Manager with Baker Hughes, Senior VP of Sondex and NED of Tendeka. VP of Tucker Energy, an Americas-based oilfield service company

• Track record of creating value through organic and acquisition growth

• Strong industry relationships

• 10 years working together for majority of the team

Ian Leaman Chief Financial Officer

A Chartered Accountant who has held CFO and advisory positions and has specialised in providing corporate finance advice to corporates. He is NED of Octopus VCT3 plc

Neil Warner Non-Executive Chairman

Ex-Finance Director of Chloride, sold to Emerson in 2010. Currently NED at Vectura and SID at Dechra Pharmaceuticals

Iain Paterson Non-Executive Director

NED of MOL NyRt and a member of the Advisory Board of the Oman Oil Company. Formerly Chairman of Sondex and ITE and NED of Hunting, Paladin Resources and ArmorGroup

Robin Pinchbeck Non-Executive Director

Chairman of Sparrows Offshore Limited. Formerly Director of Strategy at Petrofac, NED of Sondex, EnQuest and SLR Consulting


Enteq Upstream

4

Building a growth focused oilfield services business

Create a significant company in the medium term by:

• Identifying, acquiring, integrating and growing specialist technology & products businesses

• Enabling international and regional oilfield service businesses to optimise recovery and production for international and national oil companies

• Developing, selling and renting equipment plus specialist services

An attractive market sector

• Industry drive to optimise the efficiency of reaching and recovering hydrocarbons

• Technology continues to enable incremental production from non-conventional reserves

• Drilling activity at all time high and likely to remain so


North American Rig Count (at year end)

High margin & high growth sector

5

Market

• Enteq will operate in c.$31bn sub-sectors of the global $340bn oilfield equipment and services market

• Sub-sectors related to ‘reach & recovery’ grow at >10% in 2012 (Spears market report 2011)

• Technology is enabling production from new areas and previously inaccessible reservoirs

• Global rig count at close to all time high with trend expected to continue

Global Rig Count (at year end)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

RoW N.America

0

500

1,000

1,500

2,000

2,500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Vertical Horizontal & Directional

Source: Baker Hughes, Inc.

Source: Baker Hughes, Inc.


0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual US horizontal footage drilled - million

6

Source: Spears 2012

• Directional and Horizontal drilling operations in hostile environments becoming standard, requiring robust equipment






Americas Americas


Far East Far East

Europe Europe

Geophysical Intervention

Strategy

7


Drilling

XXT

Products & Services


XXT (Extended Exploration Technology)

8

• Designs and manufactures ruggedized electronic monitoring equipment for the oil & gas drilling market

• Customers are currently N American directional drilling service companies

– XXT enables customers to compete in broader markets

– Specialist operations in technically demanding environments

– High barriers to entry

• Founded in 2002, through ongoing R&D, XXT has evolved commercial and competitive products which enhance performance for customers

• Principals are seasoned oil industry technology professionals

– Supported by small focused engineering and operations team

• Aligned with Enteq management’s direct experience


XXT’s enhanced Measurement While Driving (MWD)

9

• Transmits information from the drill bit to the driller

• Allows drilling control for positioning the well

– Provide accurate position of drill bit

– Vibration monitoring improves drilling efficiency

• XXT provides robust MWD solutions

– Rugged, high temperature

– Up to 175 deg C

– Embedded software and firmware

– Downhole interface Module

• Growing demand to satisfy

ENABLES CUSTOMERS TO COMPETE & GROW SERVICE MARKET SHARE

Traditional Vertical Well

Horizontal Well


XXT MWD System

10


Clear growth strategy for XXT

11

• Additional management

– Take full advantage of market potential

– Build on technical advantage

• Broaden customer base

– Invest in sales and marketing

– Initiate international markets

• Extend product line

– Enhance engineering capability

– Create complete ‘system’

• Add capacity for growth

– Introduce MRP and control systems

– Additional facility and supply chain requirement

• Complementary acquisition targets

– Common customer base

– Share additional resource


Fit of XXT with strategy - ticks the boxes

12

Mutually beneficial

XXT

Enteq

• Recognised industry team

• A “good home”

• Offers access to broader markets

• Flexibility in purchase terms

– Cash / Shares / Earn-out

• Delivering growth through

– Addition of sales & distribution resources

– International reach

– Integration and development of products / technologies to give broader solutions

– Use of rental and flexible supply models

Target company profile

• Specialist

– Products

– Technology

– Services

• Fit with platform approach, close to core competencies

• Cash generative

• High margin

• Potential for global sales

• Sources will be

– Manager / founder-owned

– Divisions / subsidiaries of majors

– Exit for existing buy-out


Further acquisition targets

13

• Active negotiations are ongoing

• Drilling

– Add complementary products to XXT in MWD

– Drilling tools

• Intervention

– Wireline solutions

– Downhole tools

– Surface equipment

• Regional specialists to give international distribution

• Ongoing acquisition strategy to create significant player with global potential


Investment highlights

14

• The market for ‘reach & recovery’ products and technology is large and growing

• Enteq has an experienced, ambitious and cohesive management team with deep knowledge of, and connections to, the industry

• XXT gives excellent market entry

– Specialist technology

– Enables customer to improve efficiencies

– Cash generative

• Many further acquisition opportunities

• Significant organic growth potential

• Enteq intends to give investors exposure to a range of technologies and global markets




Strategy

15




Americas Americas


Far East Far East

Europe Europe

Geophysical Drilling Intervention

Products & Services

Enteq May2012

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