PEP 52717 Offshore Canterbury Basin, New Zealand

Multi TCF liquids rich Gas Condensate Opportunity

New Zealand Oil & Gas Ltd (Operator, 50%) is offering equity in PEP 52717 on behalf of the Joint Venture. The primary reservoir target is expected to contain 5 TCF of wet gas (mean in place). The preferred development concept has a best estimate, gross, unrisked 460mmbl + 1.4 TCF mean recoverable gas condensate field. Secondary reservoirs give the Barque Prospect a total mean upside potential of ~11 TCF of wet gas in place. Material equity and operatorship are available.

• 3423 km2 permit in water depths ranging from 100 – 1200m

• Large undrilled prospect (Barque) with running room via additional plays/prospects

• Water depth at Barque ~800 m • Primary reservoir target depth ~2950 m • New ~650 km2 PSDM 3D survey • 150 km2 closure with conforming amplitudes

over ~95 km2

• Benign Metocean conditions, averages <2 m wave height and mild wind strengths

• Permit granted in October 2012, 15 year term with partial relinquishment

• Large structure containing prospective in-place resources of ~11TCF of condensate rich gas.

• Drill commitment due April 2018, well to be drilled by June 2020

Prospect and Leads Map Primary Objective Depth

Structure Map

Level 20, 125 The Terrace Wellington, 6143, New Zealand

Proven Petroluem System PEP 52717 (Clipper Block) traverses the modern day shelf and upper slope of the offshore Canterbury Basin. The area has multi-vintage 2D seismic control and six exploration wells drilled between 1970 (BP Shell and Todd: Endeavour-1) and 2014 (Anadarko: Caravel-1). All regional well and seismic data are freely available from the New Zealand government. The most encouraging well results were achieved in Galleon-1, which tested 10.6 mmscf/d and 2240 bcpd from a 20m column in a 66m clean late Cretaceous sandstone. Condensate was also recovered in Clipper-1 by RFT from tighter sands within syn-rift interval in the mid 1980’s. The Canterbury Basin was initiated by mid-Cretaceous extension across the earlier Mesozoic convergent margin of the Gondwana super-continent. The rift system includes the Clipper Graben which runs NE-SW and is filled by the predominantly terrestrial Clipper formation. At the cessation of extension the region was progressively drowned from the east, which was ongoing until the latest Eocene and Oligocene. Development of a compressional tectonic regime has since seen ongoing regressive clastic sedimentation through to recent times.

World Class Basin Prospectivity

• A proven petroleum system. • Six offshore wells have been drilled; two of which

were gas/condensate discoveries. • Galleon-1 tested CGR values of up to 230

bbl/mmscf. • Favorable reservoir characteristics: >95% N:G,

~19% porosity. • Two PSDM 3D surveys and good regional 2D

coverage. • High resolution gravity and magnetic coverage of

the Barque prospect. • Contemporary basin modelling analysis shows

hydrocarbon generation from coally source rocks and a potential Cretaceous marine source rock.

• Type II kerogens proven to generate condensate liquids (typed to Galleon-1 liquids)

• Game changing potential at Barque; a liquids-rich multiple TCF opportunity with running room.

• Unprecedented levels of current exploration in New Zealand frontiers: Shell, Anadarko, Woodside, Chevron, and Statoil all operating projects in the region.

Galleon 1 wireline, which illustrates the key petroleum system elements expected at Barque-1.

DST #1: 10.6mmcfd + 2240bcpd 24.5mm choke 57 degree API oil

Herbert FM: Gross Interval: 65m Net Interval: 57m N:G: 88% VCL: 19% Ave Porosity: 19% Ave Perm: 51 mD

Pukeiwitahi FM: Gross Interval: 85m Net Interval: 34m N:G: 40% VCL: 15% Ave Porosity: 17% Ave Perm: 36 mD

The Clipper Graben regional Basement depth structure. PEP 52717 permit boundary (black) with the Endurance 3D (red) polygon over the Barque structure.

Level 20, 125 The Terrace Wellington, 6143, New Zealand

Stacked Play Potential with Amplitude Conformance The Barque Prospect is a large (150km2), high-relief anticlinal dome situated within the proven Clipper graben source kitchen. Source rocks are predominantly paralic facies associated with coastal plain settings, coal swamps and lacustrine sediments. These terrestrial source facies are closely analogous to those which have generated oil and gas in the Taranaki Basin off the North Island (where P50 ultimate reserves discovered to date are 550 mmbo and 8.2 TCF). Primary reservoir targets are latest Cretaceous transgressive shoreface units, including the Herbert Sandstone, as penetrated at Galleon-1; and a younger transgressive cycle, known as the Barque Formation. Secondary reservoir potential is recognized at the Paleogene level, where there is seismic evidence for the development of a lowstand systems tract. Seal is provided by marine muds and clays of the Katiki Formation, which has entry pressures in the order of 700-900psi. A depth conforming relative low acoustic impedance anomaly is present at the latest Cretaceous (Barque Fm) level at about 2850m. Attribute extractions on AVO attributes and offset stacks at the Barque Fm reservoir level also show good conformance to structure. A further such anomaly occurs over the structure in the Eocene.

Economic Development Pathways The potential Barque discovery offers a good quality reservoir, suitable for developing in a frontier basin. The most likely fluid to be encountered is that of a rich retrograde gas condensate. This fluid type combined with the significant prospective volume of over 11 TCF of wet gas in place present a highly flexible opportunity in terms of development. In a Single Horizon success case using the mid case Condensate Gas Ratio of 142bbl/mmscf; a condensate stripping scheme is the most likely economic development pathway in this frontier basin. This pathway yields a gross, unrisked, best estimate of total recoverable resource of 460mmbbl of condensate and 1.4 TCF of gas. An alternative (single horizon success case) development model is where gas is brought to shore and converted to

liquids and is subsequently exported. Associated gas volumes could also be utilised onshore and there are additional LPG and condensate revenue streams. The ‘gas-to-export’ development option gives a greater total best estimate gross, unrisked resource recovery 871mmboe (~3.5 TCF of which is gas) over a longer period, but at a lower development cost. In the event of a multiple horizon discovery (from the combined Barque, Herbert and IP3 horizons), there is some 11TCF of gas in place and an LNG development scenario becomes more likely, with a total best estimate of gross, unrisked recoverable resources of ~1.5 billion boe.

Barque Prospect, Endurance 3D Inline 1660

Intercept x Gradient

Acoustic Impedance

Level 20, 125 The Terrace Wellington, 6143, New Zealand

Forward Work Program Following the completion of several G&G studies which are currently underway, the next work programme obligation in PEP52717 is a well commitment by 10 April 2018, with the well to be drilled by 10 June 2020.

Key Points on New Zealand • Low sovereign risk and excellent fiscal terms provided by a very supportive Government. • Transparent and easily accessible data. • No obligation to sell on local market. • A profitable methanol industry supports 250 BCF/year gas market in the N Island: could be replicated in S Island. • Good understanding of the regional impact a Barque discovery will provide NZ based on a multi-party study. • Joint venture with a highly qualified New Zealand company with excellent community relationships and exploration

and production skills.

Joint Venture Company Information • New Zealand Oil & Gas, listed on the NZX (code: NZO), is New Zealand’s largest listed E&P company and has been

operating for over 30 years. The company holds exploration and production assets in New Zealand and Indonesia.

• Beach Energy is an oil and gas exploration and production company headquartered in Adelaide, South Australia. Beach has core operations in the resource-rich Cooper and Eromanga basins, one of Australia’s most prolific onshore oil and gas provinces, and produced 9.7 million barrels of oil equivalent in FY16 (53% oil and 47% gas and gas liquids). Beach aims to be Australia’s premier multi-basin upstream oil and gas company, and our purpose is to deliver sustainable growth in shareholder value.

Process The PEP 52717 Joint Venture aims to have a new partner(s) in place by 30 November 2017, to allow time to meet the commitment to Stage 2 of the Work Program (10 April 2018) which includes drilling a well by 10 June 2020. Interested parties will be required to execute a Confidentiality Agreement prior to New Zealand Oil & Gas providing an Information Memorandum and a technical overview presentation. A virtual data room is currently open with selected data available for download. A physical data room will be open at the New Zealand Oil & Gas office in Wellington. A copy of the Kingdom project will be available to qualified companies. The Joint Venture is prepared to consider a range of commercial proposals, which could also include the transfer of operatorship to a suitably qualified party, subject to normal government approvals.

Contact Details Bernice Herd Senior Geophysicist Bernice.Herd@nzog.com D: +64 4 471 8337 M: +64 21 135 7836

Dr Chris McKeown VP Exploration & Production Chris.McKeown@nzog.com D: +64 4 495 2140 M: +64 21 134 4953

DISCLAIMER For the enclosed resources the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. All volumes presented are based on a best estimate, derived from a probabilistic methodology for resources in place and a deterministic methodology for recoverable volumes, which are net of royalties and have not been adjusted for risk. Oil and gas contingent and prospective resources reported in this statement are as at 30 December 2016 and follow the guidelines set out by Chapter 5 of the ASX listing rules (July 2014) and the PRMS Guidelines (2011). Prospective Resources are those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. For the conversion to equivalent units; standard industry factors have been used of 6Bcf:1mmboe and 1Bcf:1.05PJ. Summations are performed arithmetically and may not visually add up due to rounding. Nothing in this document constitutes an offer of financial products or an invitation to treat or submit any offer for any financial products. No money is currently being sought and shares or other financial products of New Zealand Oil & Gas Limited or any other entity referred to in this document cannot currently be applied for. If an offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013 (NZ) (FMC Act) and any other applicable legislation. To the extent that this document is, notwithstanding the above disclaimer, held to comprise an offer or invitation to treat, it does so only on the basis that any such offer or invitation is made only to persons in New Zealand who are wholesale investors as defined in clause 3(2) of Schedule 1 of the FMC Act or persons who receive this document in other circumstances where there is no contravention of the FMC Act and other applicable legislation. Persons who are not such wholesale investors or persons may take no action in response to this document.