1

PETSEC ENERGY An Exploration and Production Company

USA and China

The Good Oil ConferencePerth

4-5 September, 2007

2

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 commodity

prices 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

3

Petsec Energy A growth exploration & production company

•

Operations in the Gulf Coast & Gulf of Mexico, USA & Beibu Gulf China

•

USA

-

Current production of 18 Mmcfe/d

-

Petsec estimated 2P reserves of 33 Bcfe (June 2007)

-

Prospect inventory of 290 Bcf of gas & 30 MMbbl of oil

•

China

-

Petsec estimated 2P reserves of 3.6-4.6 MMbbl of oil

-

Prospect inventory of 5-8 MMbbl of oil

•

Market capitalisation of A$203 million (@ $1.32/share 30/08/07)

4

Areas of

Operations

USAOperations

Office

China

Sydney Head Office

5

USA –

Gulf of Mexico and Gulf Coast

•

53 Offshore Leases -

18 Held by production

•

2 Onshore Projects -

Moonshine, Terrebonne Parish

Terrebone Parish

6

Gulf of Mexico –

Vast Infrastructure

• High oil & gas prices - ready market for discoveries• Highly productive area - leases readily available• Extensive Infrastructure: one land owner - Regulator, 1,141 oil & gas fields,

14,000 miles pipeline• Majors moving to deep water leaving opportunities for proven shelf acreage

e.g. W&T Acquisition of KERR-McGEE SHELF 150 MMCFe/D & 330 BCFeMMS 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

7

Gulf of Mexico -

Lease Turnover

8

Current US Gas Prices

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

31-Jan-04

31-Apr-04

30-Jul-04

29-Oct-04

07-Feb-05

15-May-05

15-Aug-05

11-Nov-05

23-Feb-06

5-Dec-06

4-Apr-07

24-Aug-07

US$/Mcf

12mth strip, 3 year average $8.25

•

Petsec av. price received 1st Half 07:

US$8.31/Mcfe•

Nymex:•

Spot Price -

seasonal low period: US$5.68/Mcf (at 30 Aug 07)•

12 month forward strip gas price: US$7.41/Mcf (at 30 Aug 07)•

24 month forward strip gas price: US$7.80/Mcf

(at 30 Aug 07)

9

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

10

2007 Production

•

Estimated 2007 Production of 7-7.5 Bcfe

•

Estimated 2007 operating cashflow of approximately US$40m*

•

Production fields -

Vermilion 258

-

Main Pass 18

-

Main Pass 19

-

Mobile Bay (from 4th

quarter)(*Assumes 2006 operating margin of US$5.50/Mcfe)

Vermilion 258 Main Pass 19 Mobile Bay 952A

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Mobile Bay 952A Platform

•

May 2007 acquisition:–

Mobile Bay 952A platform & pipelines

–

Mobile Bay 955 lease, pipelines & 1 producing well

–

Mobile Bay 953 lease & 2 producing wells

–

Net remaining reserves of 1.2 Bcfe

•

Host facility for production of discoveries at Mobile Bay 993, 994, 950, 951 & Viosca Knoll 26 -

net capital savings of

$2.0M

•

Consideration is assumption of abandonment liabilities -

net cost of $1.8M

12

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

13

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 with complimentary strengths

–

Petsec’s offshore operating expertise

–

Focus’s dedicated full-time prospect generation

–

Continued participation in 2007 and 2008

•

50% interest in 33 OCS lease blocks acquired mid-2006

–

Continually being high graded

–

No mandatory commitment to drill

–

3D seismic in house

•

7 wells drilled to date

–

6 completed, 1 dry hole–

16.2 Bcfe net reserves, F & D costs of $2.13/Mcfe

•

29 undrilled prospects

–

3

to 4 year drilling inventory–

Risked target reserves of 165 Bcfe, projected F & D costs of $2.00/Mcfe

15

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 -

Potential Production Profile Existing Reserves + Risked 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% NRI Operator

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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

Quarter of 2007

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Moonshine –

Stearman/Dickel/Mooney

•

Drilling to start 4th

Quarter 2007?

•

Test target 5-6 Bcfe net

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Gulf Coast -

Terrebonne Parish

•

Acquisition of 20% interest & participation in 3 well program -

Terrebonne Parish Louisiana

•

First well CL&F #28-1 -

Plugged and abandoned on August 29, 2007

•

Two remaining wells Triple Play & Greywolf to test:

►

Targeted gross reserves -

52.7 Bcfe & 1.6 MMbbl

►

Net reserve target -

7.9 Bcfe net to Petsec

•

Risk capital -

US$ 5.8m -

3 wells

•

Total risk capital plus development for 3 wells -

US$ 7.5m

•

Finding & Development costs < $1.00/Mcfe

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Terrebonne Parish –Hollywood AVO Prospects

A

A’

21

LAGCOE –

OCTOBER 23–25, 2007

•

Louisiana Gulf Coast Oil Exposition –

Exhibits and technical sessions

•

Second largest oil and gas industry exposition in U.S.•

Over 330 exhibiting companies displaying state of the art technology for onshore and offshore drilling, exploration, production and environmental protection

•

Held in Lafayette, Louisiana -

Free admission with over 16,000 attendees from all over the world

•

Opportunity to learn about the U. S. oil and gas industry, visit with Petsec in the U.S., and go offshore in the Gulf of Mexico

•

Brochures are available at the Petsec booth

22

China –

Beibu Gulf Block 22/12

• Six oil field discoveries

OIP of 300-400 MMbbl

• Recoverable oil 32.5-65 MMbbl

Petsec net 4-8 MMbbl

• Development

6.12/6.12 South

19-27 MMbbl oilPetsec net 2.3-3.3 MMbbl

• Exploration 4-6 wells test 40-60

MMbbl (5-7MMbbl net to

Petsec) Nov/Dec 2007 25% working interest (12.25% NRI, if CNOOC backs in for 51%)

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6.12 South West Prospect

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China 6-12 South Oil Discovery

•

320 feet net hydrocarbon pay, including 270 feet net oil

•

Updip side-track -

cores

•

Downdip side-track -

downdip potential

•

Oil extends downdip beyond structural closure

•

Appraisal flow-test achieved 5,750 boe/day

•

Estimated reserves in the 6.12/6.12.S fields Gross: 19-27 MMbbl Net: 2.3-3.3 MMbbl

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China 6.12/6.12 South Oil Development

Development Options•

WHPP -

FSO

•

WHP -

FPSO

•

Production capacity 25,000 -

30,000 bopd

•

Estimated capex US$100 -

120 million gross

•

Capacity to tie 12.8W/E & 12.2/12.3 into 6.12S facility

Development Timing•

Feasibility Study 1st

Quarter 2007•

Overall Development Plan 4th

Quarter 2007•

Final Investment Decision 4th

Quarter 2007•

Development commencing 1st

Half 2008•

Production 1st

Half 2009

26

Consistent Growth of Reserves 2002 -

2006

•

US 22 successes from 26

drilled -

85% success

•

China 3 (+2 sidetracks)

successes from 5 wells drilled -

60% success

•

Consistent Reserves Growth –

CAGR 38%

•

Net additions 85 Bcfe

Wells Drilled/Successful

0

2

4

6

8

10

12

2002 2003 2004 2005 2006

Successful Unsuccessful

Number of Wells

59.7 Bcfe

27

Financial Performance 2004 -

2006

0

2

4

6

8

10

2004 2005 2006 2007 1H

ProductionBcfe

27.2

0

15

30

45

60

75

2004 2005 2006 2007 1H

Net RevenueUS$ Million

18.8

0

10

20

30

40

50

2004 2005 2006 2007 1H

EBITDAXUS$ Million

3 yr CAGR 22%

3 yr CAGR 33%

3 yr CAGR 41%

3.3

12 month estimate3 year Compound Average Growth Rate

• Production 22%

• Revenue 33%

• EBITDAX 41%

28

Operating Margins 2002 –

2006

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

Underlying Earnings

010203040

2002 2003 2004 2005 2006

US$/Mcfe

• Strong Operating Margins

• Competitive Finding and Development Costs

• Strong Underlying Earnings

$5.54

$2.52

$3.02

29

3 Year F&D Cost ($/Mcfe)

$0.00

$2.50

$5.00

$7.50

$10.00

2006 LOE and G&A ($/Mcfe)

$0.00

$1.00

$2.00

$3.00

$4.00

2006 Gross Margin %

0%

25%

50%

75%

100%

Source: Enercom PSA F&D cost excludes exploration costs in China & is based on 1P reserves for 3 yrs to December 2006.

Gulf of Mexico peers include ATP Oil & Gas, Bois’d Arc Energy, Energy Partners, McMoran Energy, Petroquest, Stone Energy and W&T Offshore.

PSA 77%

PSA$4.20

PSA$1.68

Performance relative to US Peers

• Low Lease Operating Expense's and Geological, Geophysical & Administration $1.68/Mcfe

• Competitive Finding & Development Costs $4.20/Mcfe (SEC 1P) US assets $2.52/Mcfe (SPE 2P) US + China

• High Gross Margins 77%

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Market Capitalisation

A$ 203 million Share Price

A$1.32 (30/08/07)

M ay-05 Aug-05 Nov-05 Feb-06 M ay-06 Aug-06 Nov-06 Feb-07 M ay-07 Aug-07

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

A$

Main Pass 19 #1success

Main Pass 19 #2&3wells success

1st Half Production

HurricanesKatrina & Rita

Vermilionproduction resumes

6.12 South Oil Discovery

Main Pass 19commences

Main Pass 19 G-7,G-4, G-5 success

Main Pass 18 G-6success

Vermilion 257 Dry Hole

Placement 15 million shares @ $2

Mobile Bay6 Successes

Placement 11.5 million shares @ $2.40

ASX Symbol: PSAOTC Symbol: PSJEY.PK1 ADR: 5 Ordinary Shares

Issued shares: 154,059,341 Options unlisted: 6.1 million

52 week High $2.74 Low $1.11

31

Value relative to Australian Peers

•

Petsec Enterprise Value/Reserves multiple trading at 44% discount to peer average reflecting effective oil/gas prices received.

0

15

30

45

60

PSA AED BPT AZA ROC TAP ARQ AWE NXS

A$/BOE

EV/ Reserves MultiplePrice Equivalent Basis

Source: Wilson HTM ( based on market capitalisation at 28 August 2007, cash & debt implicit in EV estimates at 30 June 2007. 2P reserves per company data , generally as of 31 Dec 2006 or 30 June 2007}

Average A$36/boe

32

Broker Valuations

Current Share Price $1.32 (30/08/07)

Broker Valuations:

•

Austock -

BUY

core valuation $1.80-$2.36,

high case $2.88 (Jul 07)

•

BBY -

BUY valuation $3.04 per share

(May 07)

•

Tolhurst -

BUY valuation $2.90 per share

(May07)

•

Patersons -

BUY valuation $2.37 per share

(Mar 07)

•

Opportunity to buy at deep discount to valuation

Share Price vs Broker Values

$0.00

$1.00

$2.00

$3.00

$4.00

$1.32

33

Exploration and Development July -

December 2007

USA

(Bcfe)

Mobile Bay Fields

Production

6 15Gulf of Mexico

Exploration

1 3-5Moonshine Project

Exploration

1-2?

3-5Hollywood Project

Exploration

2 5-10

China

(MMbbl)

6-12 / 6-12 South

FID/Development

1

2.3-3.36-12 / 6-12 South

Exploration

4-6

5-7

Wells

Net Potential Reserves 2007 2008

PRODUCTION

PRODUCTION

FEASIBILITY / FID

DRILLING

DRILLING

DEVELOPMENT

DEVELOPMENTDRILLING

PRODUCTION

DRILLING PRODUCTION

DRILLING

Key value drivers in the next 3-6 months:

• China 6.12 South Development decision Drilling 4-6 wells to test 5-7 Mmbbl net, Nov/Dec 2007

• US Mobile Bay onstream Sept/Oct 2007 (10+ Mmcf/d production net to PSA) Drilling 3-5 wells to test 8-20 Bcfe net

34

Conclusion

•

Experienced management team with successful track record

•

Consistent growth in reserves/production/cashflow

•

High profit margin reserves

•

Strong cash flow, zero debt

•

Large prospect inventory provides basis for continuing growth in the USA & China

•

Significant near term value creation in both the U.S. and China

•

Opportunity to buy Petsec Energy shares at current deep discount to valuation