strictly private and confidential 1 mrq seminar 23 may 2012

Strictly private and confidential 1

MRQ Seminar 23 May 2012


Disclaimer

IMPORTANT NOTICE

This presentation and any accompanying management discussion of this presentation (the "Presentation") are confidential and being given by Kea Petroleum Plc (the "Company"). This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 ("FSMA") and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments in the United Kingdom: (i) that the Company reasonably believes are of a kind described in either article 19(5) (investment professionals) or article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; or (ii) to whom it may otherwise be lawfully given, (all such persons together being referred to as "relevant persons"). This Presentation must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Presentation relates is available only to relevant persons and will be engaged in only with relevant persons.

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Disclaimer


• AIM IPO February 2010

• Four exploration permits: three onshore and one offshore in the Taranaki Basin

• Onshore: 100% interest in three petroleum exploration permits, totalling 990 sq km (244,510 acres)

• Offshore: 100% interest in Taranaki exploration permit of 232.5 sq km (57,452 acres)

• Present best estimate prospective resources1 in the Taranaki permit areas exceed 1.92 TCF gas & 126 mmbbl oil/condensate

• Management team have considerable experience in this area and the geotechnical team were involved in a number of discoveries in the region

• Unique joint venture arrangement with Methanex

Overview of Kea Petroleum plc

1. P50 Recoverable


Taranaki Basin: A Proven Hydrocarbon Province

• Taranaki Basin is the main focus for hydrocarbon E&P in New Zealand

• Home to Australia & New Zealand’s largest onshore oil field (McKee -55 MMbbl), two large onshore gas-condensate fields (Kapuni & Mangahewa), and a large nearshore gas-condensate field (Pohokura) adjacent to Kea acreage

• Oil discoveries have been recently developed offshore with the Tui & Maari fields along with development of the Kupe & Pohokura gas-condensate fields

• There are 18 onshore & 6 offshore fields producing from a number of stratigraphic levels

• Total proven producing reserves are in excess of 1 billion barrels oil equivalent


Taranaki Basin

• Kea has four licences, with 9 prospects and P50 of 1.2 TCF of gas and 96 MMB of oil/condensate

Puka

Douglas

Huinga

Tunnel

Tuihu East

Angus

Autawa

McKee

Mangahewa

Pohakura

Tariki

Ngaere/Waihapa

Cheal

Copper Moki

Mangatoa

Mauku

Mercury

PEP 51153: Puka-1 well site


Puka-1: PEP 51153

• Oil strike April 2012 – Awaiting flow testing

• Targeting Mount Messenger sands – shallow and

deemed lower risk than Mauku-1 and Douglas-1

• Significant number of similar discoveries in

Taranaki, e.g.

• Copper Moki discovery (NZEC)

• Cheal field (TAG Oil) both within 5,000m of Puka

• Combined market cap of NZEC and Tag Oil US$833m

• Well costs – c. US$2.4mm including testing

Puka

Composite Plot Puka-1 Mt Messenger Sand Pay

PEP 51153: Douglas-1 well site


• Tikorangi fractured limestone target intersected with full fluid loss. Together with shows of oil and gas. Testing has commenced.

• New seismic acquired in February funded jointly with Methanex assisted targeting of well

• 24 mmbbls of oil have been produced from the adjacent Waihapa/Ngaere field, from a fractured limestone reservoir; with individual wells producing at up to 10,000 bbls/d

• Douglas drilled from Wingrove site which has full production facilities

• Well costs – c. US$6mm including testing

Douglas-1: PEP 51153

Waihapa-4 Douglas-1

Interpretation of KEA 53-12-01 PSDM

No vertical exaggeration

0

1

2

3

4

5

Km SS

Tikorangi Lst

Tikorangi Lst Murihiku

Murihiku

KapuniKapuni Taranaki Fault

OWC

West East

PEP 51153 & 51155: Eastern margin Tikorangi Lmst sub-thrust prospects and leads

Douglas

Tuihu East

Piko

Hickman

Kea controls same 50km of eastern margin on

trend Tikorangi limestone play


PEP 52333 Mercury – offshore North Taranaki

• 3D seismic programme in Q2/2012 now deferred until

2013 awaiting seismic vessell

• Potential to discover up to 300 million barrels of oil

• Oil shows in offset wells

• 7km offshore, and drillable from onshore by EWD well

• Considered one of Company’s main assetsSeismic line


Mercury Fan seismic line (dip direction)

Herangi Unconformity

(Sw on Sl)

Mid Altonian (Pluto 1258m

Sand)

Mercury Sandstone

(Otaian)

Top Murihiku Basement(Jurassic)

Mars Thrust

Prospect Mercury

EW


Strategic Alliance – Highlights Strategic Alliance – Highlights • Methanex to co-fund drilling of Mauku-1, on-

going discussions regarding other projects

• Methanex to receive share of profits from commercial discoveries

• Offtake gas price linked to world price of methanol

• Condensate price linked to world oil price

*Source: Methanex CIBC World Markets presentation January 2010*Source: Methanex CIBC World Markets presentation January 2010

Motunui facility*Motunui facility*

Waitara facility*Waitara facility*

Methanex Alliance Agreement & Mauku Deal

• Kea entered into a strategic alliance with Methanex during 2011

– Farm-in and offtake agreement

• Methanex Corporation (Canada) is the world's largest distributor, and a major manufacturer, of methanol – 15% world market share*

• Methanex New Zealand Limited owns two methanol plants in the province of Taranaki which are working at reduced capacity due to lack of gas. These plants have a maximum potential demand for gas of 90bcf/annum


Mauku-1: PEP 381204

• Possible upside potential recoverable resource > 1 TCF of gas and 50 million barrels of condensate / oil

• Drilling programme

– Test Mangahewa sands

– Deep drill to 3,400m in drill hole late Q4 2012 or early Q1 2013

– Remote coastal location

– Access to national pipeline system 25km south east of prospect. A 70km subsea pipeline direct to Methanex’s Motonui plant also feasible if upside discovery is made.

– Site preparation – challenging location – 20km of public road and 4km of new road access to be prepared

• Well costs – c. US$15mm before testing to be met 50/50 by Methanex


Kea Prospects: Gross Resource Potential

Prospect Permit

P50 Estimate P10 Estimate

POSBcf Mmbbls Bcfe Bcf Mmbbls Bcfe

2012 Drilling Campaign

Puka 51153 0 1 6 0 3 18 1/3

Douglas 51153 6 4 30 12 12 84 1/5

Mauku 381204 380 22 512 2,750 165 3,740 1/6

Total 386 27 548 2,762 180 3,842

Prospects in Development

Huinga-2 51153 160 5 190 650 40 890 1/8

Tuihu East 51155 16 27 178 40 40 280 1/8

Tunnel 51153 0 2 12 0 6 36 1/10

Mangatoa 381204 1,000 60 1,360 4,250 200 5,450 1/12

Autawa 51155 30 2 42 50 4 74 1/12

Total 1,206 96 1,782 4,990 290 6,730

Source: MBA Petroleum Consultants as adapted by Kea inhouse staffSource: MBA Petroleum Consultants as adapted by Kea inhouse staff


Funding

• Kea is fully funded for its 2012 drilling programme

• Alliance with Methanex reduces drilling cost while retaining 100% ownership

Cash at Bank (30 November 2011) US$17.0mm

2012 Net Spend

Puka US$2.4mm (including completion and testing)

Douglas US$6.0mm (including completion and testing)

Mauku US$7.5mm (50% of total cost)

G&A US$0.8mm

2012 Total Spend US$16.7mm


• Oil / gas Reserves within 10 km of permits are similar for all three companies

• KEA & NZEC acreages are much more lightly drilled than TAG acreage

• KEA has no holdings in the non producing East Coast Basin where both TAG and NZEC are active

Conclusions

• KEA has 10 times more net prospective acreage in Taranaki than TAG, and twice that of NZEC

• KEA has 1/7 the Market Cap of TAG and 1/5 that of NZEC

• KEA has bigger prospects in Mauku and Douglas and Huinga than either TAG or NZEC

• Investment in KEA has greater upside potential than either TAG or NZEC

Company Taranaki acreage sq km (net/gross)

Share Price Market Cap

NZEC 615 / 856 C$2.28 US$277m

TAG 615 / 856 C$8.35 US$556m

KEA 1223 / 1223 £0.10 £50 m

All figures as at 22 May 2012

Listed Companies TAG OIL, NZEC & KEA


Capitalisation and Ownership Summary

Shares Outstanding 509,355,000

Market Capitalisation £50m

Current Price 10.12p

52 Week High / Low 13p / 4.125p

IPO 8.0p

Average Volume (30 day)

1,640,942

Top Shareholders Holding %

Thornaby Limited * 69,300,000 13.61%

Ocarina Investments Limited **

67,444,000 13.2%

Hardie Oceanic 29,230,769 5.7%

Rawson Taranaki 27,307,692 5.4%

Nigel Wray 26,875,000 5.3%

Marybourne Limited 22,500,000 4.4%

Management

Institutions

Retail

Other

*Thornaby Limited is a company wholly owned by the trustees of the IR Gowrie-Smith Settlement of which I R Gowrie-Smith is a beneficiary** Ocarina Investments is a company wholly owned by D J Lees Family Settlement of which D J Lees is a beneficiary


Summary

• Exciting 2012 drilling programme already successful

• Puka 1: Oil Strike awaiting flow testing

• Douglas 1: Oil shows completion and testing

• Farm-in and offtake agreed with Methanex

• At a transformational point


Kea Petroleum5-8 the Sanctuary

London, SW1P 3JS, United Kingdom tel +44 (0) 207 340 9970fax +44 (0) 207 222 6684

Kea Petroleum5-8 the Sanctuary

London, SW1P 3JS, United Kingdom tel +44 (0) 207 340 9970fax +44 (0) 207 222 6684

strictly private and confidential 1 mrq seminar 23 may 2012

Documents

sitestrictly private

methanexstrictly private

testing douglas

tag oil us

shows of oil

kea prospects

methanex new zealand

oil strike