For personal use only. Leverage exposure to conventional, shale and tight oil and gas exploration April 2012

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1 Leverage exposure to conventional, shale and tight oil and gas exploration April 2012

2 Disclaimer This presentation contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to AUD currency, unless otherwise stated. 2

3 Closing Price (A$) Million Shares Corporate Snapshot Shares on issue: 3,026m Market Cap: $54m (1.8c) Daily Volume Traded On-Market Daily Close Price Group Cash: $4.6m (at 31 March, $2.4m net to TSV) Debt: $7 million facility; drawn down $2 million Board of Directors Role - Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar Bill Bloking Stephen Keenihan Brett Mitchell Will Barker Non Executive Chairman Managing Director Executive Director Non Executive Director 40% 8% 13.50% 10.50% 10% 10% 8% Craig Burton Stephen Keenihan Argonaut Investments Charles Morgan Brent Villemarette Russell Stephenson Andrew Leibovitch Non Executive Director Others 3

4 The Assets Four Key Projects in Unconventional Plays Warro Gas Project in Western Australia: 35-55% of ~40,000 gross acres Duvernay Shale and Rock Creek Project in Alberta, Canada: 34% of 84,500 acres Genesee tight oil project Alberta: 50% of 39,000 acres Carnaby Conventional and unconventional Oil and Gas Projects in British Columbia: 55% of 70,000 acres Land Acquisition Completed- Aggressive Drilling Program across all Projects in

5 Management Team Transerv Stephen Keenihan Brett Mitchell Brent Villemarette Jo-ann Long Carnaby Bil Matheson Garth Nicolson Grant Oh Gord Oliver Woma Stephen Keenihan Terry Meek Marcel Zowtuk Genesee Terry Meek John Thorton Al Pickering Marcel Zowtuk AJV Mako Terry Meek Al Pickering 5

6 Transerv Drilling Program & Outcome Warro Location TSV interest Drilling Commencement Well type Target Depth Reserve expectation per well Gross Resource Opportunity Cost to TSV A$000 Current Status Warro-5 35% 1 st qrt 2013 vertical 4200mRT N/A Nil proposed Warro-6 35% 2 nd qrt 2013 vertical 4250mRT N/A To confirm approx 3.2 TCF 1.1 TCF net Nil proposed Warro-7 35% 2 nd qrt 2013 vertical 4300mRT N/A Nil proposed Carnaby Energy Belloy-1 25% 3rd qrt 2012 horizontal Conventional-1 Gething Conventional-2 tba Conventional-3 tba Alberta JV 1800mRT +1000m hor 200k bbl oil 800k bbl oil 475 identiffied 25% 3rd qrt 2012 vertical 1000mRT 75k boe 600k boe oil and gas 275 identified 25% 4th qrt 2012 vertical 1300mRT 500k bbl oil % 5th qrt 2012 vertical 1500mRT 500k bbl oil 275 Montney 55% 4th qrt 2012 horizontal 1900mRT +1000m hor N/A 36,000k bbl oil 2420 Nordegg 55% 4th qrt 2012 core well 1000mRT N/A 4,000k bbl oil 550 Duvernay % 2/3 rd qrt 2012 vertical 3500Mrt N/A cored well Nil proposed Duvernay % ~4 th Qrt 2012 horizontal Rock Creek 1 34% 3 rd qrt 2012 horizontal Rock Creek-2 25% of 34% 4 th qrt 2012 horizontal Genesee JV Mannville-1 50% 3 rd qrt 2012 horizontal Mannville-2 50% 4 th qrt 2012 horizontal 3500mRt +1500m hor 2500mRT +1500m hor 2500mRT +1500m hor 1500mRT +1000m hor 1500m m hor 450k boe oil and gas 80,000k boe Nil 200k boe oil and gas 33,000k boe k boe oil and gas under review under review under review under review pending vretical under review under review 200k bbl oil 1100 proposed 200k bbl oil 23,000k bbl oil 1100 identified 6

7 The Warro Gas Project Warro located 200km north of Perth in the Perth Basin Onshore gas field discovered by WAPET in 1977 One of the largest undeveloped onshore gas fields in Australia total gas in place of 8-10TCF confirmed by recent studies Only 35km from key gas pipelines Transerv is operator with a 35% stake (post Alcoa farm in) Alcoa earning up to 65% stake by spending up to $100m (half spent to date) on exploration and development Alcoa are likely buyer of gas

8 Warro The Story So Far Four wells drilled to date the last in October, 2011 First two wells (1977) confirmed presence of substantial gas but tight sands inhibited flow rates significantly Fraccing successfully employed at Warro 3 and 4 (2009 & 2011), resulting in significant gas flows Warro 3 and 4 produced associated water which limited gas flows Expert study has confirmed that wells should produce commercial flow rates even with water production experienced 8

9 Warro The Independent Expert s View Shanley Review concluded : Warro contains significant gas accumulation with potential to flow at high rates o o 8-10 TCF in place ~3.2 TCF recoverable Wells capable of 4-10 BCF each (50 acre spacing) with existing water results and more (7 12 BCF) if it can be reduced or avoided Water is not the issue - similar to other tight gas fields in USA where water management is routine Water came from deep seated faults intercepted by wells 3D clearly shows these faults are localised and that there large parts of the field where they can be avoided to enhance production More drilling and testing is needed 9

10 Fault Identification NW SE Top Gas Sand Top Gas Sand Transverse Arbitrary Line Warro-4, Warro-1 Wells Transverse Arbitrary Line Warro-3 Well

11 3D clearly shows the location of faulting Warro-3 and Warro- 4 Wells lie in area with strongest faulting Large areas without faulting

12 Warro The Next Chapter Transerv believes review shows Warro is economic to develop Water is a manageable operational issue, as seen in analogous US fields Planning underway for Program of Work to drill, frac and test further wells in late 2012 or early 2013 Discussions underway with Alcoa on details of drilling, scope, timing of work etc Depending on rig availability looking at single and/or 3 well back-to-back programme commencing late 2012/early

13 Business in Canada Why Canada? Huge oil and gas area Very open system with plenty of opportunities (oil) and unconventionals at early stage Lots of information, low costs, extensive infrastructure and good terms Transerv in Canada After 2 years, land acquisition strategy complete Concentrating on oily unconventional resource plays Built a large, low cost acreage position >180,000 gross acres and 72,600 net acres at <$50/acre Leverage: a few wells will prove up substantial resource plays similar in size to Warro 3 mmbbl/d 15 BCF/d Drilling each play this year Strong Calgary based team 13

14 Unconventional Successes in Canada Viking Bakken Cardium? Duvernay, Mannville Montney, Nordegg 14

15 Location of Canadian assets Approx 30km Alberta British Columbia Approx 250km Interests in over 290 sections across 2 provinces. Sask. 15

16 Duvernay and Rock Creek Alberta (TSV 34%) Rock Creek and Duvernay Shale Assets (34%) 2012 Duvernay Drilling activity Original 132 gross sections (~83,500 acres). JV Average Cost $80/ha ($32/acre). Major emerging trend in shale and tight gas Partial divestment: Rock Creek drilling SIRIUS 38 sections sold for $24 million Retained 20% (gross) in 30 sections with carry through 2 wells (approx gross $20million cost). Antelope Retained Rock Creek 132 sections and 121 Duvernay sections (~80,000 gross acres) Bellatrix Encana Conoco Est. 80+ bbl/mmcf from test Potential: 30 mmboe net to TSV (TSV estimate using Macquarie Tristone resource assessment) Drilling activity in 2012 Future Well Locations Duvernay Divestments Black Swan Proposed loc 16

17 Carnaby British Columbia (TSV 55%) Carnaby holds interests in over 103 sections (65,300 acres) 240 boe/d production, 1.14 mmboe 2P reserves, Operator on most project interests. Strong land position in proven oil and gas area 8+ pay zones in conventional plays On trend with recent discoveries in unconventional oil plays Well activity in 2012 Unconventional Resource Plays (Montney and Nordegg) Field extension - Belloy. Bypassed pay. Potential: 23 mmboe net to TSV (TSV estimate using Discovery Group resource assessment) 17

18 Montney Potential Chinook W6 40bopd Carnaby recomplete W6 West Energy Vert W6 (40bopd) ARC res W6 300 bopd, 1.8mmcfd 7 wells planned in 2012 Crew W6 342 bopd, 1.7 mmcfd 18

19 Genesee - Mannville in Alberta (TSV 50%) Built resource play in Alberta on local knowledge and experience. Created large land position (50% of 39,000 acres) in areas of shallow, low-cost oil. Technology initiative as many wells with by-passed pay. Plenty of roll-out potential : 12mmbbl net Drilling in Identified Well Locations Mannville Offsets Ravenwood HZ W5 190 bopd, 1750mcfd, 70 bwpd W5 98 bopd, 724 mcfd, 41 bwpd 3 more wells licensed 19

20 Asset Potential Net Relative Risked Value of Each Asset (A$m) Net Unrisked Reserve Potential of Each Asset (mmboe) 470 Warro Carnaby Duvernay Farmout Divernay residual Rock Creek Genesee All figures are TSV estimates 20

21 Value Proposition Aggressive drilling programs across all four assets in second half of 2012 Western Australia Warro decision to drill mid 2012 Canada Proving the Resource Plays Land acquisition completed Duvernay drilling underway mid 2012 Allocation of 2012 drilling funds Unconventional Resource Plays Conventional Rock Creek Drilling mid 2012 Genesee tight oil drilling second half of 2012 Carnaby Montney drilling in second half of 2012 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Carnaby Carnaby and Genesee well prep Siphon & Gething Dev Wells Belloy and Montney Wells Genesee Tight Oil Seismic Tight Oil Mako Rock Creek well Duvernay well

22 Appendices 22

23 Drilling Target- multi-zone area Sparky W5M Glauconite is best looking permeability Net Pay = 8m Porosity = 13% Sw = 45% Area = 259Ha OOIP = 7 MMstb/sec Ellerslie W5 well has 3 potential oil targets Area production from all 3 zones Good log character, identify pool sizes with 3D Option to drill strat test all 3 zones for data (1MM)

24 Nordegg Play Figures from Discovery Group Inc Nordegg review 24

25 Montney Play Figures from Discovery Group Inc Montney review Map of Montney Sw 25

26 Glauconite Well Performance Example case 1 md perm HZ 10 fracs 1 yr Cum = 72mstb IP (3mo) = 300 bopd Rate after 1 yr = 90 bopd Vertical wells unsuccessful or rarely successful at this permeability 26

27 Warro The Independent Expert s View Is there still a multi Tcf, commercial gas reserve? Can we explain the results of Warro- 3 and 4 and presence of water? Are there any analogues we can use as a guide? What are the expected flow rates from future wells? Can we avoid/minimise/manage the water? Led by Keith Shanley 27

28 Registered Office Ground Floor 1292 Hay Street West Perth WA 6005 Telephone Facsimile Website Stephen Keenihan Managing Director Brett Mitchell Executive Director This presentation contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to AUD currency, unless otherwise stated.