H3 ENERGY LIMITED — Investor Presentation 2011

Mar 14, 2011

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Emerging Onshore Oil & Gas Development Company March 2011

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• World class, high impact projects, with known hydrocarbon resource potential:

• Warro Project - 2.1 Tcf of gas in 3C recoverable resource Transerv’s share 735 bcf (10,000 net acres)

• Alberta Project - 30 million boe of target recoverable resource Transerv’s share 10 million boe (20,000 net acres)

• Highly leveraged Successful wells will unlock large value as the play type replicates over extensive acreage

• –

• Brownfields plays Data from prior drilling indicates modern drilling and fraccing techniques are likely to generate economic flow rates

• Significant drilling activity planned for next 6 months, next Warro well in April and Alberta well in May

• “Bonus” Amazon well currently being drilled

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Capital Structure	Directors and Management
Existing ordinary shares Converting shares Total issued shares Options exercisable at 1.6c Management options ex 3.2c Implied Market Cap at 2.3c (undiluted) Current Cash	William Bloking Chairman Stephen Keenihan Managing Director Brett Mitchell Executive Director Brent Villemarette Chief Technical Officer Will Barker Non-Exec Director Andrew Leibovitch Non-Exec Director Tim Wise Non-Exec Director 1,262m 1,764m 3,026m 336m 145m $70m $7m

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Managing Director: Stephen Keenihan

37 in the in technical and roles years experience energy industry globally management with Apache, WMC and LASMO; with a focus upon oil and gas exploration and development activities.

Executive Director: Brett Mitchell

18 as a finance executive for both and listed years experience corporate private publicly entities, past 10 years in natural resources. An executive director of Transerv Energy since July 2006.

Chief Technical Officer: Brent Villemarette

26 with and Sun in reservoir and years experience Apache analysis performance optimization, project feasibility studies, reserve replacement strategies, field development . plans, commercial viability of exploration prospects and new field developments

Non-Executive Director: Will Barker

Extensive experience in the exploration and development of unconventional gas projects in Australia. His most recent executive role was with Arrow Energy as General Manager leading their coal seam gas to LNG development.

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• Warro is located 200km north of Perth, 30km east of the main N-S pipelines

• Large tight gas field with 2.1 TCF 3C recoverable (Gaffney Cline)

• Alcoa spending $100 million to earn 65% Warro interest

• Transerv retains a 35% interest

• Transerv is Operator

• Transerv retains the unrestricted right to sell its share of gas production

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Warro-3 well:

• 250m of estimated net pay across 8 zones

• Flow rate of >5mmcfd achieved prior to water entering well bore

• Provided important information for future well design

• Commercial potential established

• Alcoa now funding both Warro-4 and a full 3D seismic survey

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----- Start of picture text -----

Slick water fracs - achieve deeper penetration 500t proppant
8 4000kl gel fluid
250t proppant
7 9000 kl FR water
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• Warro-4 to spud April 2011

• Well and frac design to manage any water:

– Drill away from major faults/fractures

– Well design and equipment to enable water removal (siphon string)

• Design fracs to use high volume slick-water (as per Granite Wash)

• Drill and complete well quickly

• Frac through 7” casing

• 24,000+ HP frac fleet

• 100 sq km of 3D acquisition underway (completion end March)

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• Strong demand outlook for domestic gas in WA – ongoing high price environment likely

• JV partner Alcoa of Australia, has strong imperatives to commercialise the project

• US Granite Wash projects provide analogue on how to optimise drill and frac techniques

• Gaffney Cline certified recoverable resources for Warro:

GCA Report	1C	2C	3C
Recoverable Resource	610 Bcf	1,144 Bcf	2,105 Bcf

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• Current long term WA gas contract prices A$8-10 GJ, with short term contracts higher

• WA is highly dependant on gas for power generation (circa 50%)

• No incentive to supply domestic gas from North West shelf due to large premium paid for LNG exports and existing pipeline at capacity

• Recent WA Alliance concludes that “there is a Domgas study clearly

• large gap of up to 600 TJ/day between known new production and potential demand in the next decade”

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• Alcoa is the largest gas consumer in Western Australia

• Renewing gas supply contracts at domestic prices higher than when contracts were previously struck

• Interested in stimulating the development of new gas supplies in WA

• Large expansion of the Wagerup smelter being studied

• Strong imperatives to prove up and commercialise Warro quickly

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• US tight gas experts, The Discovery Group and Ely & Associates, reviewed the Warro-3 results

• Concluded that Warro is highly analogous to the Granite Wash play, located in Texas and Oklahoma, USA. Key points being:

• similar depths and reservoir characteristics

• Warro has larger net pay zones and higher permeabilities, but less condensate

• The Granite Wash play is now a highly successful US tight gas play

• Evolution of Granite Wash

	1960‐2000	2000‐2008	Now
Well type	Vertical	Vertical and Horizontal	Horizontal
Frac type	Gel ‐ half dollar	Gel & small slick water	Large slick water
Typical IPs	0.5 – 2 mmcfd	2 – 10 mmcfd	5 – 25+ mmcfd

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----- Start of picture text -----

Stein 1‐3H
Black 50‐1H 37.2 Mmcfe/d
60.2 Mmcfe/d
Tom Peryear 5‐28H
18.5Mmcfe/d
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• Alberta Project covers a substantial land position of +58,000 acres (net 20,000 acres to TSV) in Canada

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• Trend has produced more than 20 mmbbl and 1 TCF from target zone, but at low flow rates

• Key is application of modern horizontal frac technology to a proven but under exploited reservoir section

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Independent Expert Review- Sproule and Associates

• Analogue wells by other operators reviewed

• 12 well locations studied

• Estimated Ultimate Recovery per well of 168,000 boe (average)

• Gross initially in place undiscovered resource of 95 to 143 million boe (58,000 acres), assuming half oil/condensate and half gas

• Transerv’s share is 32 to 49 million boe (20,000 net acres)

Transerv Project Summary

• Initial 3 well drilling program to commence in May, horizontal wells with multi stage fracs

• Expected drilling and completion cost of C$3.7 million per well

• Targeting 180 viable drill locations (2 per 640 acre section)

• Target recoverable resource is 10 million boe (net TSV share)

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• TSV paying 9% to earn 5% WI

• Amazon – Large conventional onshore prospect in Louisiana

• Potentially recoverable resource - 450 to 600bcf and 45 to 60mmbbls associated condensate

• Marian Baker #1 currently drilling ahead towards target Miogyp reservoirs,14,000ft to 16,000ft

• AFE ~US$10m dry hole cost, TSV cost ~US$900,000

• Independent Review - Isis Petroleum, 35% probability of success

• TSV ordinary shares leveraged to success (Converting Shares do not participate in Amazon)

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• Amazon well – drilling to TD in March

• 3D seismic over Warro- completed end March

• Warro-4 well spudding in April

• Alberta Project-1 well spudding in May

• Perth Basin geophysical survey- 2Q 2011

• Alberta Project-2 well – 3Q 2011

• Alberta Project-3 well– 3Q 2011

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• Industry experienced management

• Two high quality, high impact projects

• Large, known hydrocarbon resources

• Highly leveraged to success on next wells

• Brownfields, not greenfields plays

• Applying latest drilling and fraccing techniques from the USA

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• Amazon is a potential “bonus”

• Story has only just come together, under promoted

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Year	Event
1972/1974	Warro‐1 and Warro‐2 wells drilled by WAPET targeting deeper conventional targets, intersect thick tight sands containing gas
2000‐2006	Breakthroughs in US drilling and fraccing techniques for tight gas
Mid 2007	Latent acquires the Warro Gas Project
Late 2007	WA gas price increases from <$3/mcf to >$8/mcf
1H 2008	TSV farms into Warro for 10% and Alcoa farms in for 65%
1H 2009	Warro‐3 drilled and flow tested
2H 2009‐1H 2010	Financial crisis delays further work programs
2H 2010	Alcoa commits to Warro‐4 and 3D seismic
2H 2010	TSV commits to Amazon well
1Q 2011	TSV merges with Latent – Warro interest increased to 35% and interest in Alberta project acquired
March 2011	TSV undertakes first roadshow in 2 years (and first as merged entity)

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• Transerv merger with Latent Petroleum increases its interest in Warro from 10% to 35%, and acquires a 34% interest in the Alberta Project

• Share dilution to Transerv (2 to 1) will be less than the increased interest in Warro (2.5 to 1)

• Under the merger Transerv will issue 1.764 billion Converting Shares and 336 million 4 year Options

• The Options have performance based vesting hurdles relating to the Alberta Project

• The Converting Shares and Options do not participate in economic benefits from the Amazon well

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Registered Office

Level 21, Allendale Square 77 St Georges Terrace Perth Western Australia

Telephone

+61 8 9324 1177

Facsimile

+61 8 9324 2171

Website

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transerv.com.au

Stephen Keenihan Brett Mitchell Managing Director 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.