HYTERRA LTD — Investor Presentation 2012

Oct 7, 2012

Ltd Triple Energy

Proposed CBM Asset Acquisition

8 OCTOBER 2012

Disclaimer

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All statements, other than statements of historical fact, contained in this presentation constitute “forward -looking statements ” and are based on the reasonable expectations, estimates and projections of the Company as of the date of this presentation. Forward-looking statements include, without limitation, possible events, trends and opportunities and statements with respect to possible events, trends and opportunities, including with respect to, among other things, global market trends, expected industry demands, the Company’s business strategy and investment crite ria, the nature of potential business acquisitions, costs and timing of business acquisitions, capital expenditures, successful development of potential acquisitions, currency fluctuations, government regulation and environmental regulation. The words “potential,” “possible”, “probable,” “pl ans ,” “expects,” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be ta ken,”“occur” or “be achieved” and similar expressions identify forward -looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions contained in this presentation, which may prove to be incorrect, include, but are not limited to, the various assumptions of the company set forth herein. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to fluctuations in global supply and demand, changes in competitive pressures, including pricing pressures, timing and amount of capital expenditures, changes in capital markets and corresponding effects on the company’s investments, changes in currency and exchange rates, unexpected geological or environmental conditions, changes in and the effects of, government legislation, taxation, controls and regulations and political or economic developments in jurisdictions in which the Company carries on its business or expects to do business, success in retaining or recruiting officers and directors for the future success of the Company’s business, officers and directors allocating their time to other ventures; success in obtainin g any required additional financing to make target acquisition or develop an acquired business; employee relations, and risks associated with obtaining any necessary licenses or permits. Many of these uncertainties and contingencies can affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. These factors are not intended to represent a complete list of the factors that could affect the Company. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. The forward-looking statements set forth herein are for the purposes of providing potential investors with information concerning the Company’s future business plans in order to assist potential investors in determining whether or not to invest in subscription receipts of the Company and may not be appropriate for other purposes. The reader is cautioned not to place undue reliance on forward-looking statements.

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Triple Energy Overview

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• Listed ASX company (“TNP”)

• Shares on issue (pre transaction) = 287.5 million

• Market capitalisation last 3 months ~ A$3-5

• Cash at bank ~$1m

• Options on issue

• Management options

  • 60 million @ ex average price = $0.035, 4 year term (exercise proceeds due = $2,100,000)

• Top 50% shareholders

• Management , Forrest Capital, high net worth investors

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Current Board and Management

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Mr Paul Underwood (Executive Chairman)

Mr Underwood has almost 30 years experience in the upstream oil and gas sector.

He was the founding Managing Director and Chief Executive Officer of Tap Oil Limited, a position held for 11 years. Mr Underwood grew Tap Oil from an unlisted junior start up company into a significant participant in the oil and gas sector in Australia and SE Asia, listed on the ASX.

Mr Underwood is also a Non-Executive Director of Western Power, a Western Australian Government owned electricity utility.

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Mr Garry Ralston - (Non-Executive Director)

Mr Garry Ralston serves as a Non-Executive Director of the Company and is based in Perth, Western Australia. Mr Ralston has been directly involved in the banking and finance industry for over 35 years.

Mr Ralston was a co-founder and until recently a director of Finance and Systems Technology (FAST) which is one of Australia's premier mortgage aggregators. Mr Ralston is also a director and co-founder of Select Mortgage Services.

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Mr Richard Hayward (Non Executive Technical Director)

Mr Hayward is an oil and gas industry professional with 24 years of experience, spanning the UK, Africa, SE Asia, Australia and North America. Mr Hayward’s career to date has been focused on oil and gas field development and production operations with major oil and gas companies, having previously worked for Hess Corp, Woodside and Premier Oil plc. He has had wide experience in asset management, exploration and new ventures and brings a strong understanding of both the commercial and technical aspects of the upstream industry.

Mr Hayward has an honours degree in Geology from Imperial College, London and a Master’s Degree in Basin Evolution and Dynamics from Royal Holloway College, London. He is a fellow of the Geological Society of London and a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers

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Board and Management (proposed new Director)

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– Mr Rod Bresnehen (when Triple completes transaction subject to shareholder approval)

Mr Bresnehen has over 36 years experience in the oil and gas/CBM industry. For the past 12 years he has provided key technical, strategic analysis and management of CBM projects in Australia and Internationally. His recent focus has been on CBM projects in Indonesia and Indonesia.

He is a member of ACID and holds directorships in Australia and Europe.

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ALTERNATE DIRECTOR

Mr Robert Pertich (when Triple completes transaction subject to shareholder approval)

Mr Pertich is a founding member of the CFT Group. Since 2007, his frequent visits to China as part of the CFT Board have equipped him with a thorough understanding of CBM business in China and CFT patented technology platform

ADVISORS (when Triple completes transaction subject to shareholder approval)

– Mr David Dong Foreign Advisor

Mr Dong is currently CFT’s China advisor and it is proposed that he continue in that role should Triple complete on this tran saction. His role will be to maintain the strong relationships with the Heilongjiang Provincial Government and develop other new growth opportunities.

Kelly Shen

– Mrs Kelly Shen is the China liaison consultant based in Beijing. She is responsible for the day to day management of CFT Heilongjiang fluent Mandarin, educated in Melbourne.

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Acquisition Overview

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• Triple will acquire an 80% interest in a coal bed methane project in northern China

• Cooperative Joint Venture with Longmay Coal Mining Company (Govt owned)

• –

• Consideration is up to 350m shares only vesting on “milestones” - as value is added

• Triple will initially raise ~$2m in new capital to fund three near term test wells

• Estimated that 2-7 Tcf of gas is in place in the greater JV area (2,700 km2)

• The project is via 45 year Corporate JV with Government owned coal miner

• New US purpose built CBM drilling unit on site and ready to use

• Deal comes with proven Australian CBM management expertise – will join Triple board and expand management team

• Near term production potential

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– Deal Metrics Subject to Final DD

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• Triple acquires 100% of CFT Heilongjiang (HK) Ltd (“CFT”) for 380m shares

• CFT owns 80% of Heilongjiang Aolong Energy Co CJV (“Aolong”) o Stage 1 - $500,000 cash loan (conditional on signing Agreement and raising $2m “firm”) – o Settlement 30m shares and $150,000 in cash

– o Milestone 2 50m shares on positive results of DST well planned for September ’12 – – o Milestone 3 50m shares on positive results of pressurised core hole results March/April 13 – o Milestone 4 125m shares in Triple when 10 development wells have been drilled/completed – o Milestone 5 125m shares in Triple when 20 development wells have been drilled/completed

• Expanded capital after $2m is raised and milestone’s 2 and 3 fulfilled;

• ~ 500 million - @ (for example) $0.04/share ~ notional mkt cap ~ $20m

• Value comparison to other companies in sector = potential for share price growth

• –

• Board representation Rod Bresnehen, CBM expert will join Triple Board

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Resultant Corporate Structure

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Triple Energy Limited ASX “TNP” 100%

CFT Heilongjiang (HK) Ltd (Hong Kong registered holding company)

80%

Aolong Energy Co. Ltd (JV coy) JV that has rights to extract coal gas from its mining areas/leases (Other 20% held by Longmay Coal Mining Co)

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Overview of Acreage and Resource

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• Potentially 2 -7 TCF of CBM (in place) in methane rich coal mining region

• Initial area covers 5 mines in the methane rich Sanjing-Mulinghe Basin

• Initial drilling targeting to prove up ~ 540 Bcf gas

• Expanded area covers up to 42 mining sites over 2,700km²

• Direct market for gas with over 3.5 million people within 60km

• 118km of existing domgas pipeline infrastructure - 2km from first planned well

• Gas bearing coals suggest good potential for commercial production

• Gas produced can be sold into local existing network, power generation, LNG

• Gas is estimated to be 95% methane - indicated from mine air (safety) sampling

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Location of Initial De-gassing Area in CJV

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City of Hegang
~700k population
Bird Mountain Mine
Area
Yixing Mine Area
(DST well location)
Xingan and
Junde Mines
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Other Areas in Joint Venture (42 in total)

• Airport ex Beijing

• Shuang Ya Shan mines CJV Mine Areas = - Hegang mines - Shuan Ya Shan mines - Qi Tai He mines - Ji Xi mines

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Ji Xi mines
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Current Gas Storage and Domgas Production

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Already using mine gas locally

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Gas storage for gas extracted from shut in mine
–
drives spiked with LNG for domestic consumption
via existing pipeline network
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Gas extractor system for shut-in mine drives
Gas is stored and sold via local pipeline network
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Some coal mines were abandoned and sealed in mid 90‘s due to major methane influx – these mines are still producing gas via air extraction systems to sell into the local domestic market = evidence that coals are gas charged and the gas is relatively clean

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Drilling Terrain and CBM Rig

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CBM Rig - 2 kms from drilling site
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Drilling pad
for DST well
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About the Coal and Coal Seams

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• Carboniferous-Permian sediments

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• –

• Coal seams at depths of 400 - 1,700 metres optimum for coal gas

• 5 cored coal seams average 3.5m in thickness

• 20 lower known coal seams …yet to be tested

• Gas in the coals is reported to average around 95% methane

• Coal rank is high / medium volatile bituminous

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Natural fractures
evident
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• gas content estimated at 7-12 m3 per tonne

• Vitrinite reflectance ranges from 0.85 to 1.81

• Permeability is estimated at between 2 md and 5 md with well structured cleats and butts

• –

• Proximate wells (40kms) are producing ~ 300- 500m3/day vertical well

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– Resources Approx. Volumes /Value Metrics

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Coal Mine Area	Gas in Place (Bcf)*	50%+ recoverable (Bcf)	Valued @ say $0.45/mmscf (Grant Samuel transaction metric-3P)
Junde	150	75	$34m
Xingan	198	99	$44m
Yixin & Xiang Xiang	122	61	$27m
Bird Mountain	64	32	$14m
TOTAL	534	267	$120m
* Source: CFT Prospectus, May 2012

The table above comprises only a portion of the coal seams potentially available for CBM development in the Hegang mines.

The CJV covers 42 mines across four mining areas which it is estimated could contain 2-7 TCF of gas in place

An extensive data base of electric logs (100’s of wells) and core is available, not yet in expert report

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– Production Model Based on GIIP of 540 Bcf

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– Preliminary estimates for illustrative purposes subject to drilling results

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• Assumes 75 wells required across 5 mine areas

• –

• Average CAPEX of US$1.1 million/well preliminary planning estimate only

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Anticipated Timing of Activity

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• Now

• CBM rig at site and available exclusively to Triple/CFT

• Drill well in a proven coal seam area - run a drill stem test and get core (“DST”)

• Objective will be to establish characteristics of coal reservoirs, gas content and pressure

• 6 Months - March/April ‘13

• Drill 2 core holes (pressurised core)

  • Objective to establish gas recovery factor and gas flow rates

  • Potential to book some reserves, sign gas contracts on positive data outcome?

• 9 Months - June 13

• Establish pilot gas production from 2 or more wells, book reserves

• Plan up to 75-80 development wells over 5 years

• 12 Months - Q4 13 - Q1 14

• Start drilling development wells in prioritised areas

• 18 Months (or earlier)

• Explore adjacent mine areas for additional reserves and production

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Summary of Project Attributes

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• Experienced oil and gas (CBM) board and CBM expert management 

• Excellent fiscal terms and equity position (80%)

• Material acreage position 

• Potential for material reserves 

• Ready gas market for any/all produced gas - large proximate customer base 

• Good gas price – A$7-8 

• Near term news-flow – drilling next month- considered low/moderate risk 

• Time to development is very short – could be as early as mid next year 

• Strong Chinese partner – motivated for project to succeed (mine safety) 

– Longmay is a very large State Owned Enterprise - #17 out of top 100 coal companies in China

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