Merger with Petrel EnergyNew direction…Proven plays…Wise heads

November 2011

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Proposed Transaction

Scrip takeover of private Petrel Energy Pty Ltd

First project in proven Barnett Shale underway

Range of new conventional & unconventional opportunities already identified

Petrel team bring extensive US experience plus first class technical contacts

Issue ca 115m new shares, subject to shareholder approval

Orion retains ASX listing, renamed ….Petrel Energy LtdFor

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Overview of Petrel Energy

Established mid 2011 to pursue international opportunities

Initial focus onshore USA leveraging off principals’ successful track record in North America

First project in Erath County TX located in emerging play in proven Barnett Shale project area

6,600 acres leased in JV with proven local operator

4 well development drilling program underway

Several followup projects (conventional & unconventional) under negotiation and/or assessment

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The Shale Gale – “a Gamechanger”

The attraction of shale gas:

• Limited-no finding risk• Onshore long-life assets• Repeatable drilling opportunities• Stable regimes

Driven by technology:

• Horizontal wells• Multi-stage fracs• Pad drilling

“Resource Plays”

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The US Shale Basins

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Why the Barnett Shale

Most advanced proven shale gas province in the USA

Only recently overtaken by Haynesville as biggest gas producing area

Over 15,300 development wells drilled to date, another 3,200 permitted

Produced in excess of 10 Tcf gas plus 27 MMbbl condensate/oil

Producing area expanded from 3 counties initially to now 25 counties across North Texas

Issues such as land access, fraccing and water successfully managed for more than 30 years

Much lower risk than frontier shale gas plays

Petrel’s US associates provide unequalled experience in the areaFor

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Full-Cycle Shale Gas Economics

It’s about being at the right end of the cost curve

Many plays uneconomic at current gas pricesSource: Wood Mackenzie, August 2011F

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New technology drives activity growth

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Fort Worth Basin – Barnett Shale Isopach Map

Productive area has expanded from thicker shales in basin centre westwards to shallower more oil-prone counties

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Erath County – Gas tending to Oil

From Dan Steward, Republic Energy, Dallas TX

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Cross Section of Fort Worth Basin

Barnett Shale typically 150-200’ thick in single unit in Erath County

versus 400-450’ thick in two units further east

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Shale Gas Development in Urban Areas

Producing wells overlapping the

greater Dallas-Forth Worth area

Petrel Energy JV focussed in Erath

County

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Erath County Barnett Shale Project

Rationale:

• Footprint of prime Barnett Shale area expanding westwards

• Newer areas host more liquids plus high energy gas (ca 1,300 MMBtu/Mcf)

• Thinner shallower BS offset by much lower well costs ($750k-$1.2m)

• Operator The Cumming Co Inc. has successful record in county

Status:

• 4 well program commenced on leased 6,600 acres (Petrel 25% WI)

• Rapid commercialisation through existing pipeline network

• AMI to pursue additional 10,000 acresFor

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Barnett Shale Well Completions

Vertical fracced wells have been preferred in Erath Co due to thinner shale and proximity to Ellenberger water

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Drilling a horizontal fracced well

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Other Opportunities

Petrel’s principals and advisers have identified number of high potential projects in conventional and unconventional oil & gas

Most advanced is multi-objective onshore play in Louisiana under negotiation

Key to all Petrel’s focus and activities:

Access to experienced technical expertise provided by project originators combined with inhouse expertise

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Details of Merger

Orion to make share and option offer for all Petrel shares and options

Issue 115.1m new OIP shares at price of 4 cps plus 9.3m replacement options valuing Petrel at $4.6m

Requires OIP shareholder approval under LR 7.1(issue shares > 15%)

OIP shareholders to represent 57% of enlarged entity

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New Board & Management

Proposed Board:

Stephen Mitchell (Non-executive Chairman) (former Molopo MD)

Russell Langusch (Managing Director) (current Orion CEO)

David Hobday (Non-executive Director) (former Molopo NED)

Alex Sundich (Non-executive Director)

Andrew Bursill (Non-executive Director)

Shareholder Meeting (expected January 2012) to approve:

1. Issue of shares

2. Name change to Petrel Energy LtdFor

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Concluding Summary

Petrel merger represents exciting new venture for Orion shareholders

Provides ideal risk and geographical diversification pursued for more than two years

Critical feature is technical expertise, experience and success record of board, management and advisory team

Initial activity fundable from existing cash of ca $7.8m in enlarged group

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