HY 2013 Results

1

Delivering on a focused strategy. 21 FEBRUARY 2013

Half-year 2013

Results Briefing

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2 2

Growth platform and strategy Brad Lingo Managing Director

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3 Highlights

859% uplift in total production

429% uplift in oil

production

708% uplift in cash flow

448% increase in

total revenue

Successful takeover of Acer

Increase to Western Flank Oil & Wet Gas

footprint

Increasing Reserves, Production and Cash Flow

30 Jun 2009 30 Jun 2010 30 Jun 2011 30 Jun 2012 Half Year 31 Dec 2012

Reserves 2P Net mmboe 1.4 1.3 8.5 11.1 18.7

Production (boe) 182,961 158,880 123,034 389,877 318,315

Net operating cash flow $2.2m ($3.7m) $5.2m $10.0m $10.2m

69% increase in total 2P Reserves

to 18.7 mmboe

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4 Growth Platform and Strategy

Western and Northern Wet Gas Project Areas • Expand development & production from existing discoveries • Prove up Reserves through expanded exploration • Deliver additional growth from multiple production satelites

Central and Western Unconventional Fairways

• Explore, appraise & delineate unconventional potential • Continuing interest from major international petroleum companies

Western Flank and Inland-Cook Oil Fairways

• Develop new oil discoveries

• Accelerate 3D seismic-based exploration

• Expand production capabilities NEA

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5 HY 2013 Overview

• 117% increase in 2P Reserves to 7.8 mmboe

• 7 oil discoveries in the Western Flank Oil Fairway

• 3 oil discoveries in the Eastern Margin Oil Fairway

• Confirmation Bauer is the largest oil discovery on the Western Flank

• Construction of the Bauer-to-Lycium Pipeline commenced in December 2012

• Increase in daily oil production rate from ~90 bopd to over 2,300 bopd net to DLS and growing

• 47% increase in 2P Reserves to 11.0 mmboe

• Expansion of Wet Gas Project with the tie-in of Canunda

• Advanced negotiations with SACBJV with regard to Gas Sales Agreements

• Active exploration program with extensive 3D seismic operations

• Expanded Wet Gas Project base with Acer Energy acquisition forming Northern Wet Gas project

• Completed the largest onshore 3D seismic acquisition in Australia

• Drillsearch/QGC Joint Venture Agreed two well locations , Anakin-1 and Charal-1

• Western Cooper drilling & coring completed with fraccing & testing program pending

2013 a year of delivery - Increasing Reserves, Production and Cash flow

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6 HY 2013 Overview – Reserves Growth

69% uplift in total 2P Reserves for HY 2013 to 18.7 mmboe. Key drivers were;

- Appraisal drilling at Bauer Oil Field in PEL 91

- Pennington-1 oil discovery in PEL 91

- Production results prove increased wet gas Reserves at Brownlow field

- Development of additional high liquids wet gas discoveries – Canunda and Coolawang

*The 31 December 2012 Independent Audit Reserves have been conducted by RISC for PEL 91 and the new Acer assets and DeGolyer and MacNaughton for PEL 106A, 106B and 107 assets

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7 HY 2013 Overview - Production

Total HY2013 production of 318,563 boe an increase of 859% (HY 2012 of 33,217 boe)

Current Drillsearch daily net oil production of over 2,300 bopd increasing to roughly 6,000 bopd FYE

Anticipated raw gas production with potential to increase to 35 mmscf/d (gross) after re-start of Western Wet Gas Project

Revised FY2013 production guidance to a range of 1.1 to 1.3 mmboe from previous range of 1.3 to 1.5 mmboe.

Key drivers of revised guidance are:

- Continuing shut in of PEL 106B Wet Gas production

- Delay in original completion date for the Bauer to Lycium pipeline

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8 8

HY 2013 Results Ian Bucknell Chief Financial Director

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9 HY 2013 Results – Financial Highlights

Successful Acer Acquisition

& associated $100m

debt facility

Significant cash position

bolstered by $100m of Capital Raising

Significant increase of 448% in total

revenue

1113% increase in Gross Profit to

$12.1m

Positive EBITDAX $3.0m

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10 Financial Overview

HY12 HY11 Delta % Sales volume (Mmboe)

0.4mboe 0.1mboe 482%

Sales Revenue ($m)

25.4 4.6 448%

Cash flow from operations ($m)

10.2 0.6 1503%

Gross Profit ($m)

12.1 1.0 1113%

EBITDAX ($m)

3.0 (0.6) n/m

Net profit/(loss) after tax excluding costs related to Acer Energy Limited ($m)*

4.9 (1.3) n/m

Net profit/(loss) after tax

(3.4) (1.4) (143%)

n/m – not meaningful

448% increase in Sales Revenue for the first half driven by increased production

*Included is the cost relating to acquisition of Acer Energy Limited of $3.7 million incurred by Drillsearch, $2.5 million relating to costs incurred by Acer Energy in its takeover defence and $2.1m contributed to the loss of the Group for the period.

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11 HY 2013 Results – Profit Overview

Significant increase of 448% in HY 2013 Sales Revenue HY 2013 Gross Profit margin of 48% compared to 36% in FY 2012

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12 HY 2013 Results – Operating Results

1113% increase to year-on-year gross profit as a result of increased production, steady average realised oil price and successfully control of operating costs

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13 HY 2013 Results – Cash Position and Funding

Cash reserves at 31 December 2013 of $83.3m including Debt Service Reserve of $20m Cash flow generated by operations increased 1,503% to $10.2m from HY 2012 ($0.6m) Successful completion of two $50m capital raisings to: Accelerate Western Flank oil

production; Expand the Wet Gas Pilot Project; and Acquire Acer Energy Limited Effected a $100m debt facility to support the Acer Energy Acquisition

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14 HY 2013 Results – Balance Sheet

December2012

June 2012 Delta

$000 $000 % Cash and bank balances 63,270 45,611 39%

Debt Service Reserve 20,000 - n/m

Trade and other receivables 10,188 3,695 176% Exploration and evaluation assets 149,730 23,131 547% Oil and gas assets 90,364 54,773 65% Deferred tax assets 33,506 11,334 196%

Borrowings 100,000 - n/m Trade and other payables 29,202 12,047 142% Provisions 11,331 3,386 235%

Net assets held for sale 2,488 15,546 n/m Net other assets 8,107 3,335 143%

Net assets 236,120 141,992 67%

n/m – not meaningful

The Acer Acquisition has had the largest impact on the Financials in the half year

Strengthened cash position as a result of capital raising and debt

Continued growth through expansion and investment in Exploration and Evaluation and Oil and Gas assets

Deferred tax asset brought to account in respect of carried forward losses, temporary differences and in response to PRRT relating to the Acer acquisition

Borrowings increased as $100m debt facility was established to finance the Acer Acquisition. This is offset by the Debt service Reserve

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15 Acer Energy Transaction – Impact on Cash Flow

The net cash utilised by Drillsearch in completing the Acer Energy transaction to December 2012 was $12.0m

A further $7.0m was paid in January 2013 in respect of the compulsory acquisition of any outstanding shares

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16 Acer Energy Transaction – Impact on Balance Sheet

Other than cash (already discussed) the main impact on the Drillsearch balance sheet from the Acer transaction was on exploration and evaluation assets

This has seen an increase of $94.1m to the exploration and evaluation assets including fair value adjustments

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17 Acer Energy Transaction – Impact on Profit & Loss

Excluding Acer Energy, Drillsearch would have made an after tax profit of $4.0m Including Acer Energy, Drillsearch has made an after tax loss of $4.3m

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18 18

Outlook and work program FY 2013 Brad Lingo Managing Director

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19 Outlook and Work Program FY 2013

Bring new discoveries into production

Development drilling targeting further upgrades in Reserves

Construct oil pipeline to improve production reliability

Significant growth in production and cash flow generation

Accelerate Western Flank Oil exploration in 3D seismic areas

Inland-Cook 3D seismic acquisition and subsequent drilling

Expand and extend Wet Gas Pilot Project

Complete and test Wet Gas discoveries

Expand Wet Gas exploration and development in Drillsearch 100% owned and operated permit areas

Prove up existing Wet Gas 2C Resources to 2P Reserves

Case and test Western Cooper unconventional targets in Wet Gas drilling program

Central Cooper shale gas 3D seismic program

Drill, core, test and complete first Central Cooper shale and tight gas wells

Commence production testing Book unconventional Resources

and Reserves

Already delivered 69% Reserve growth in FY 2013 and accelerating daily production rate

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20

Appendix 21 FEBRUARY 2013

Half-year 2013

Results Briefing

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21 HY 2013 Results – Financial Highlights

Financial Highlights December 2012

December 2011 Delta Delta %

Sales Revenue ($000) 25,427 4,641 20,786 448%

Gross Profit ($000) 12,098 997 11,101 1113%

Loss after tax ($000) (3,370) (1,257) (3,036) 168%

Production Volumes (boe) 318,563 33,217 285,346 859%

Average Realised Oil Price ($/boe) 108.9 113.6 (4.7) -4%

Production Costs ($/boe) 30.4 52.7 (22.3) -42%

Depreciation & Amortisation ($/boe) 10.7 42.9 (32.2) -75%

Exploration and Development expenditure ($000) 50,662 23,093 27,569 119%

Exploration and evaluation costs expensed ($000) - 195 (195) n/m

Operating Cashflow ($000) 10,181 635 9,546 1503%

Cash and cash equivalents ($000) 63,270 33,664 29,606 88%

n/m – not meaningful

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22 HY 2013 Results – Profit Overview

December 2012

December 2011 Delta Delta

$000 $000 $000 % Sales Revenue 25,427 4,641 20,786 448% EBITDAX 2,966 (554) 3,520 n/m EBIT (430) (2,321) 1,891 81% Finance costs (2,104) (240) (1,864) 777% Loss before tax (1,148) (1,257) 109 9% Income tax expense (3,145) - (3,145) n/m Loss after tax (3,370) (1,257) (2,113) 168%

Exploration and evaluation costs expensed - 195 (195) n/m Impairment of oil and gas assets - 147 (147) n/m

n/m – not meaningful

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23 HY 2013 Results – Operating Results

December 2012

December 2011 Delta Delta

Production Volumes boe boe boe % Eastern Margin Oil (Tintaburra) 24,561 32,108 (7,547) -24% Western Flank Oil 151,293 1,109 150,184 13542% Western Cooper Wet Gas 142,619 - 142,619 n/m

Revenue and Cost Profile $/boe $/boe $/boe % Average Realised Oil Price 108.9 113.6 (4.7) -4%

Operating Costs 30.4 52.7 (22.3) -42% Depreciation & Amortisation Expense 10.7 42.9 (32.2) -75% Gross Margin 38.0 30.0 8.0 27%

Corporate Costs 39.6 89.6 (50.0) -56%

n/m – not meaningful

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24 HY 2013 Results – Cash Position and Funding

December 2012

December 2011 Delta Delta

$000 $000 $000 % Opening Cash 45,695 50,259 (4,564) -9% Cash generated from operations 11,216 769 10,447 1359%

Exploration and evaluation expenditure (36,133) (12,579) (23,554) 187% Development expenditure (22,187) (5,243) (16,944) 323% Business Acquisitions (112,045) - (112,045) n/m

Net proceeds from issues of equity shares 97,538 497 97,041 n/m Proceeds from borrowings 100,000 - 100,000 n/m Interest paid (910) (134) (776) 579% Income taxes paid (125) - (125) n/m Other Net Receipts 213 223 (10) n/m

Closing Cash Position* 83,270 33,664 49,606 147%

*Includes debt service cash reserve of $20 million

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25 Strong management team and board

Brad Lingo Managing Director

Brad has more than 25 years of oil and gas

experience.

John Whaley Chief Operating Officer

John has extensive experience across

upstream and downstream sectors of the oil and gas industry.

David Evans Chief Technical Officer David has over 25 years of upstream oil and gas exploration experience including over 15 years

in Australia.

Ian Bucknell Chief Financial Officer

Ian is a Certified Practicing Accountant

with over 15 years upstream oil and gas

accounting experience.

Jim McKerlie Chairman

Extensive experience as a Director and

Chairman of private and public

companies.

Choo Beng Kai Non-Executive

Director Extensive experience

in developing and implementing

innovative business solutions.

Fiona Robertson Non-Executive

Director More than 30 years experience in the

corporate finance and resources sectors.

Ross Wecker Non-Executive

Director More than 35 years experience in the oil

and gas industry.

Brad Lingo Managing Director More than 25 years

of oil and gas experience.

Through FY 2013 the Company has continued to build a robust technical and operational team capable of delivering on the large work program planned for FY 2013

Jean Moore Company Secretary Extensive experience in corporate law and

corporate governance

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26 Disclaimer and Important Notice

This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

Shareholders should not rely on this presentation. This presentation does not take into account any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

The information set out in this presentation does not purport to be all inclusive or to contain all the information which its recipients may require in order to make an informed assessment of Drillsearch. You should conduct your own investigations and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Drillsearch. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements.

Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Drillsearch does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

The Reserves and Resources assessment follows guidelines set forth by the Society of Petroleum Engineers - Petroleum Resource Management System (SPE-PRMS). The Reserves estimates used in this presentation were compiled by Mr David Evans, Chief Technical Officer of Drillsearch Energy Ltd, who is a qualified person as defined under ASX Listing Rule 5.11 and has consented to the use of the Reserves figures in the form and context in which they appear in this presentation.

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27 Competent Person Statements

RISC Qualifications RISC is independent with respect to DLS as provided in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. RISC has no pecuniary interest, other than to the extent of the professional fees receivable for the preparation of this report, or other interest in the assets evaluated, that could reasonably be regarded as affecting our ability to give an unbiased view of these assets. The assessment of petroleum assets is subject to uncertainty because it involves judgments on many variables that cannot be precisely assessed, including reserves, future oil and gas production rates, the costs associated with producing these volumes, access to product markets, product prices and the potential impact of fiscal or regulatory changes. It should be understood that our above-described audit does not constitute a complete reserve study of the oil and gas properties of DLS. The statements and opinions attributable to RISC are given in good faith and in the belief that such statements are neither false nor misleading. In carrying out its tasks, RISC has considered and relied upon information obtained from DLS as well as information in the public domain. The information included well reports, seismic data, maps, interpretation reports, production and well completion data, budgets and previous analyses. The material was reviewed for its quality, accuracy and validity and was considered to be acceptable. RISC believes that that full disclosure has been made of all relevant material in DLS's possession and that information provided, is to the best of its knowledge, accurate and true. The information provided to RISC has included both hard copy and electronic information supplemented with discussions between RISC and representatives of DLS. Whilst every effort has been made to verify data and resolve apparent inconsistencies, we believe our review and conclusions are sound, but neither RISC nor its servants accept any liability, except any liability which cannot be excluded by law, for its accuracy, nor do we warrant that our enquiries have revealed all of the matters which a more extensive examination may disclose. In particular, we have not independently verified property title, encumbrances, regulations, oil and gas production, product prices, agreements relating to current and future operations and sales of production and historical and future costs that apply to these assets. We have, however, specifically identified to you the information and data upon which we so relied so that you may subject such to those procedures that you consider necessary. Furthermore, if in the course of our examination something came to our attention which brought into question the validity or sufficiency of any of such information or data, we did not rely on such information or data until we had satisfactorily resolved our questions relating thereto or had independently verified such information or data. RISC has not made a physical inspection of the property as this was not considered necessary for our assessment. Our assessment was carried out only for the purpose referred to above and may not have relevance in other contexts. The estimates contained in our assessment may increase or decrease and RISC’s opinions may change as further information becomes available. The evaluation has been carried out by Mr Nick Hall and Mr David Capon under the supervision of Mr Geoffrey J Barker, RISC Partner. Mr Hall is a Principal Geoscience Advisor with RISC. He has a BSc (Hons) Geology, University of Durham, UK and over 30 years of international experience as a geoscientist, gained from operating, consulting and service company environments. He has extensive experience with clastic, carbonate and CBM sequences in the UK, North Sea, South America, Middle East, Africa, India and Australia. Nick has held various technical and leadership positions in multiple disciplines (subsurface, projects, legal and commercial) and project teams involved in development planning, reservoir management plus equity and reserves determination. Nick also has a specialization in tight gas reservoir characterisation and 3D reservoir modelling including CO2 storage site exploration. Mr Capon is a Principal Reservoir Engineer with RISC. He has a BSc (Hons) Geophysics and BSc Applied Mathematics from the University of Adelaide and is a Member of the Society of Petroleum Engineers. He has over twenty-five years of international experience in reservoir engineering the oil and gas industry in operating companies and as a consultant working on conventional petroleum, tight gas and CBM properties. He has prepared numerous reserve evaluations and reports in Australasia and SE Asia. Mr Barker has a B.Sc. from Melbourne University and a M.Eng. (Pet. Eng) from Sydney University. He has over 30 years experience in the oil and gas industry, has been a partner of RISC since 1996, is the Partner in charge of RISC’s unconventional gas practice and served on the SPE’s Oil and Gas Reserves Committee from 2006-2009. He has been responsible for company and property valuations, independent expert reports, reservoir studies, reserve assessments, business and project development plans for oil and gas properties in more than 50 countries

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28 Competent Person Statements

DeGolyer and MacNaughton The information contained in our report entitled “Report as of December 31, 2012 on Reserves and Contingent Resources of Certain Fields in the PEL 106A, 106B, and 107 Permits of the Cooper Basin with interests owned by Drillsearch Energy Limited” has been prepared under the supervision of R. Michael Shuck, Senior Vice President of DeGolyer and MacNaughton. Mr. Shuck holds a Bachelor of Science degree in Chemical Engineering from the University of Houston, has in excess of 35 years of relevant experience in the estimation of reserves and contingent resources, is a member of the Society of Petroleum Engineers, and is a Registered Professional Engineer in the State of Texas. Mr. Shuck is a qualified person as defined in the ASX Listing Rule 5.11.

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