Dart’s UK Shale Plays – Developing Unconventional Value

Presentation to Proactive Investor ConferenceLondon, February 2013

Eytan Uliel – Chief Commercial Officer, DEI

Dart Energy Limited 

www.dartenergy.com.au

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UNCONVENTIONAL GAS ‐ TRANSFORMATIONAL AND GLOBAL.

CBM and shale have transformed the energy landscape in North America and AustraliaEurope and Asia have significant untapped unconventional gas resources, rising demand and increased dependence on imported gasThe long‐term sector dynamics are favourable –Dart well placed

Proven natural gas reserves

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CanadaNatural gas reserves: 70 TcfCBM resources: 1,660 TcfShale resources: 385 Tcf

USANatural gas reserves: 300 Tcf

CBM resources: 740 TcfShale resources: 850 Tcf

RussiaNatural gas reserves: 1,575 TcfCBM resources: 1,730 Tcf

ChinaNatural gas reserves: 110 TcfCBM resources: 1,300 TcfShale resources: 1,260 Tcf

AustraliaNatural gas reserves: 135 TcfCBM resources: 350 TcfShale resources: >400 Tcf

IndonesiaNatural gas reserves: 105 Tcf

CBM resources: 450 TcfShale resources: 575 Tcf

IndiaNatural gas reserves: 42 Tcf

CBM resources: 282 TcfShale resources: 60 Tcf

United KingdomNatural gas reserves: 7 TcfCBM resources: 71 TcfShale resources: 21 Tcf

PolandNatural gas reserves: 3.5 TcfCBM resources: 106 TcfShale resources: 180 Tcf

GermanyNatural gas reserves: 3.5 Tcf

CBM resources: 106 TcfShale resources: 7 Tcf

Source: EIA, Datafusion

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Dart summary as at 31/1/13 (independently certified)1

Net CBM OGIP (Tcf) 48Net CBM Prospective (Tcf) 14Net CBM Contingent (Tcf) 5.4Net CBM 3P Reserve (Bcf) 139.9Net shale OGIP (Tcf)2 78

(Europe 76 / Asia 2)

Cash (Dec 2012, est) US$30mHSBC Debt Facility Up to US$100m

CBM resource estimates for India, Indonesia, Europe and Australia (PEL458) are per Netherland, Sewell and Associates Inc, China per MHA Petroleum Consultants and Australia (PEL456, PEL459, PEL460, PEL461, PEL 463, PEL464) per MBA Petroleum Consultants

Shale OGIP potential best estimates based on NSAI’s independent assessment (May 2012)

DART – A GLOBAL UNCONVENTIONAL PLAYER

Airth, PEDL133 

United Kingdom / Europe

Coal Mine Methane

India

Tanjung Enim

Liulin

Sangatta West

Fullerton Cove

China

Indonesia

Australia

Unconventional gas business with a global portfolio approach ‐ CBM and shale gas assetsProjects in each geography progressing to production / monetisation

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DART INTERNATIONAL CBM PORTFOLIO – SCHEMATIC OVERVIEW

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600EXPLORATION CORE DRILLING &TESTING PILOT TESTING INITIALDEVELOPMENT

EARLYPRODUCTION

PEDL 133

Liulin

Sangatta West

Tanjung Enim

PEDL 159

USCBPEDL161 & 163

Satpura

Assam

East Midlands

Staffordshire

Milejow

OGIPProspective2C3P2P

FULLPRODUCTION

6,000 Bcf4,000 Bcf2,000 Bcf1,000 Bcf500 Bcf250 Bcf100 Bcf25 Bcf

Cheshire

Muralim

RISK

Decreasin

gIncreasin

g

Global portfolio of CBM assets – 50 licences; 8 countries; biggest onshore licence holder in UK

Key CBM focus is PEDL133 in Scotland – moving into development / production within 12 months; GSA in place

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DART INTERNATIONAL SHALE PORTFOLIO – SCHEMATIC OVERVIEW

0

50

100

150

200

250

0 50 100 150 200 250EXPLORATION CORE DRILLING &TESTING

PILOT TESTING INITIALDEVELOPMENT

PRODUCTION

Midland Valley

Gainsborough Trough

(East Midlands)

Milejow

Cheshire Basin

Saxon I West & Saxon II

OGIPProspective

40,000 Bcf30,000 Bcf20,000 Bcf10,000 Bcf5,000 Bcf2,000 Bcf1,000 Bcf200 Bcf

Xiushan*

* Dart internal estimates

RISK

Decreasin

gIncreasin

g

17UK / Europe licences are prospective for shale

No specific shale commitments; licences preserved through CBM activity

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DART’S KEY UK SHALE PLAY – THE BOWLAND SHALE, WEST AND EAST

Eastern UK

Western UK

The most exciting shale play outside of North America

Flow‐rate established –sizeable and potentiallycommercial

Dart has one of the largestacreage positions: • 15 licences• Independently assessed shale prospect: 76 ‐143 Tcf

• 100% WI in all but 3 licences

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BOWLAND SHALE PLAY (WEST) ‐MAJOR PLAYERS LICENCE POSITIONS

Cuadrilla IGas DartArea (km²)  1185 1363 1041No. of Licences 4 14 11

Western Bowland Shale play most active, with ongoing exploration activityDart has one of the largest acreage positions

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BOWLAND SHALE PLAY (WEST) – REGIONAL SETTING

Organic‐rich, Lower Carboniferous shales present

Shale generally thicker in basins than on platforms

World‐class source rocks

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BOWLAND SHALE PLAY (EAST) – MAJOR PLAYERS LICENCE POSITIONS

e‐Corp Farm‐inShale core & lateral required to be drilled by Sept 2014

Eastern Bowland Shale – little data within Gainsborough Trough, but indications of hydrocarbon potential, both dry and liquids rich shale gas possibleDart has the largest acreage position

Cuadrilla IGas DartArea (km²)  0 388 1235No. of Licences 0 9 13

e‐Corp Farm‐inShale core & lateral required to be drilled by Sept 2014

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BOWLAND SHALE PLAY (EAST) – REGIONAL SETTING

PEDLs 200 &140

PEDL210

Bowland Shale Deposition

Normanby 1 and Grove 3 drilled as conventional exploration wells

Represent a basinal and platform setting in the Eastern UK areas

Gamma Active shales present in both wells

SW

SW

NE

Scaftworth B2TOC – 2.07-3.63%Maturity – 1.26% @ 2246m

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Licences with shale prospect

Shale OGIP (Tcf)

Gross Participating Interest

Low Best High Low Best High

Bowland Shale ‐West (PEDLs 147, 186, 187, 185, 188, 189) 11.0 30.5 52.5 11.0 30.5 52.9

Bowland Shale ‐ East(EXL288, PEDLs 012, 139, 140, 200, 207, 210)

19.2 47.6 83.4 13.2 32.4 57.1

Total  Shale GIP ‐ NSAI Estimate 30.2 78.1 135.9 24.2 62.9 110.0

BOWLAND SHALE PLAY – DART RESOURCE POTENTIAL

OGIP independently assessed by NSAI , October 2012Substantial Resource potential: up to 110 Tcf, net to DartIndicates substantial prospectivity in both West and East Bowland Shale plays

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DART’S UK SHALE PORTFOLIO ‐ KEY MESSAGES

Unconventional gas is an exciting sector to invest in Gas is a primary fuel of the future ‐ share of energy mix to catch up with oil by 20401,2 Unconventional gas resources are larger than conventional natural gas resources1 Unconventional gas ‐ both shale and CBM ‐ as a business and investment is proven, 

not theory, having changed the energy balance in North America / Australia already

1

2

Notes:1 DataFusion Associates2 ExxonMobil report: 2012 The Outlook for Energy: A View to 2040

3 Dart provides unique exposure to the most exciting UK shale play Large asset base in all the right play‐zones – comparable with other companies Company underpinned by near‐term CBM revenues  and lower work obligations Managed by an experienced team with a demonstrated track record Attractive value proposition

Shale gas in UK (and Europe) is poised to take off Large resource – and will be key bridge fuel in Europe UK Government policy now clear and supportive, and leading Europe in support / 

regulation for unconventional gas Exploration activity / licencing ramping up across UK / Europe

CHINA / INDIA / INDONESIA / UNITED KINGDOM / POLAND / BELGIUM / GERMANY

END. THANK YOU.

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This presentation has been prepared by Dart Energy International Limited (“Dart” or the "Company"). By viewing all or part of this presentation, you agree tomaintain confidentiality regarding the information disclosed in this presentation, unless such information is otherwise publicly available. Any failure tocomply with these restrictions may constitute a violation of applicable securities laws.This presentation is for information purposes only and does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribefor any securities, nor should it or any part of it form the basis of, or be relied in any connection with, any contract or commitment whatsoever.The information contained in this presentation has not been independently verified. No representation or warranty expressed or implied is made as to, andno reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. None ofthe Company, Dart Energy Limited or any of their respective affiliates, advisers or representatives accept any liability whatsoever (in negligence or otherwise)for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising inconnection with this presentation.This presentation includes forward‐looking statements. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect“, “plan”and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, thoseregarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans andobjectives relating to the Company's business and services) are forward‐looking statements. Such forward‐looking statements involve known and unknownrisks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially differentfrom results, performance or achievements expressed or implied by such forward‐looking statements. These forward‐looking statements speak only as at thedate of this presentation. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the futureor likely performance of the Company. Past performance is not necessarily indicative of future performance. The forecast financial performance of theCompany is not guaranteed. You are cautioned not to place undue reliance on these forward‐looking statements, which are based on the current views of theCompany on future events. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions, except as required bylaw, to any forward‐looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events,conditions or circumstances on which any such statement is based.Neither this presentation nor any copy or portion of it may be sent or taken, transmitted or distributed, directly or indirectly, into the United States, Japan,Australia, Canada or any other jurisdiction which prohibits the same. The securities have not been, and will not be, registered under the U.S. Securities Act of1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States or elsewhere, and the securities may notbe offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of theSecurities Act and applicable state or local securities laws. This presentation is not for distribution in, nor does it constitute an offer for sale of securities inthe United States. The Company does not intend to conduct a public offering of its securities in the United States.This presentation may not be forwarded or distributed to any other person and may not be copied or reproduced in any manner. Failure to comply with thisdirective may violate applicable laws.

IMPORTANT NOTICE.

CHINA / INDIA / INDONESIA / UNITED KINGDOM / POLAND / BELGIUM / GERMANY

APPENDIX:UNCONVENTIONAL GAS PRIMER.

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CBM and shale gas is the same end product as conventional natural gasDifference is source rock from which natural gas is producedDrilling techniques and principles of well completions are similar to those used in the conventional oil and gas industryAdvances in horizontal drilling and hydraulic fracturing make CBM and shale gas economically competitive

Coal Bed Methane Shale gas Tight gas

Gas is adsorbed onto thesurface of the coal

Gas is “trapped” withinthe shale rock

Gas trapped in impermeable hard rocks or sands

WHAT ARE “UNCONVENTIONALS”?

Conventional natural gas

Gas exists in a free state in the spaces between the sands

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HOW IS IT EXTRACTED?

CBM EXTRACTION

Water is removed from the coalbeds (“dewatering”), 

lowering the pressure in the coals and the gas is “desorbed”

SHALE GAS EXTRACTION

Water, sand and chemicals are injected into the rock at high pressures (“fraccing”) to crack the rock and liberate the gas

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BASIC CBM WELL TYPES.

Vertical Lateral Multi‐lateral

Lowest cost

Fastest completion time

Effective for thick coal seams

Used when coal seams are thin

Horizontal drilling techniques

High precision required

Minimise surface footprint

Fastest gas drainage

Most ‘hole in coal’

Well design decision to optimise economics

COAL SEAM

COAL SEAM

Cross-Section View

Radius Bend

Vertical Collars

Lateral Collars Typical CBM rig• Conventional mineral rig• Truck mounted• In‐seam steering technology

Typical wellhead• Fully automated pump and 

reservoir control• Optimises production; reduces 

field maintenance

60m

45m to 175m

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Source: Chesapeake Energy

A TYPICAL SHALE WELL.

Deep vertical well with one or more lateralsMain difference is “fraccing” ‐ pumping water and sand (>98%) and additives (<2%) down the wellbore at high pressureThe fluid injected at pressure fractures the shale rock, and the sand (proppant) holds the cracks openProcess is repeated multiple times along the lateral wellbore to cover the maximum areaFluids are carried up the wellbore for disposal or treatment and re‐use ; sand prop open the cracks, allowing gas to flow outHighly regulated, technologically advanced process which was developed in the USA

Source: Baker HughesSource: Canadian Society for Unconventional Gas

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AN UNCONVENTIONAL GAS WELL PRODUCTION PROFILE.

Nature of the source rock results in a fundamentally different production profile

Significant technical and commercial impact

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UNCONVENTIONAL GAS PROJECT LIFE CYCLE.

2 ‐ 3 yrs

1 ‐ 3 yrs1 ‐ 3 yrs

20+ yrs 1 ‐ 2 yrs

Explore

Appraise1

Initial Development1

Full Scale Development1

Identification

Note:1  Once a well has been drilled and is of no further use, it will be abandoned.  The 

process includes safely sealing the well and rehabilitating the surrounding area, in accordance with licence terms and applicable local regulations providing for rehabilitation and industry best practice

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RESPONSIBLE ENVIRONMENTAL MANAGEMENT.

LAND USE

Wells occupy large surface area? Land cannot be used for other uses? Unsightly and disrupts wildlife habitats?

1CONCERNS INDUSTRY FACTS

“Nuisance” / drilling period typically <30 days Horizontal drilling requires up to 10X less space A well in production requires very little space 

allowing land use for other purposes Site restoration / remediation stringently 

regulated

WATER

Drilling “additives” affect groundwater aquifers? Water produced is not fit for other uses? Water produced affects the soil?

2 ~80% initial water recovered to potable 

standards(1); remaining treated for safe disposal Shale formations are typically several thousand 

meters below aquifers No clear examples of ground water contamination 

since 1982(2) Multiple safeguards: steel casings, cementing,  etc

FRACCING

New technology? Chemicals used are dangerous? Gas can migrate to surface? Causes earthquakes?

3 Safe “fraccing” dates back to 1950s, over tens of 

thousands of wells globally >98% water; < 2% “additives” (common in 

household products) Used for shale; limited use in CBM Strictly regulated

Notes1. Marcellus Shale – Water Treatment Options Worth Considering, www.ventureengr.com2.. Department of Energy & Climate Change (U.K.) Report “Shale gas, NW England earthquakes and UK regulation”, 8 May 2012