METGASCO LTD — AGM Information 2017

Nov 8, 2017

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Annual General Meeting Thursday, 9 November 2017 Chairman’s Address to Shareholders

Disclaimer

This presentation is being provided for the sole purpose of providing the recipients with background information about Metgasco Limited (Metgasco). No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation (“forward-looking statements”). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Metgasco, its Directors and Officers) which may cause the actual results or performance of Metgasco to be materially different from any future results or performance expressed or implied by such forward-looking statements.

This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.

Due care and consideration should be undertaken when considering and analysing Metgasco’s financial performance. All references to dollars are to Australian Dollars unless otherwise stated.

To the maximum extent permitted by law, neither Metgasco nor its related corporations, Directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of Metgasco is available on our website, www.metgasco.com.au.

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Content

1. Organisational Structure & Administration

1. Capital Management

2. Share Price Performance

3. Current Business

4. New Business Opportunities & Strategy

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Organisational Structure & Administration

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Organisational Structure & Administration

 The Team

• Alexander Lang , Executive Chairman, joined Feb 2016;

• Philip Amery , Non-Executive Director, joined Dec 2015;

• John Patton , Non-Executive Director, nominated by Keybridge Capital, joined Sep 2016;

• Andrew Purcell , Non-Executive Director, nominated by M&A Advisory, joined Sep 2016;

• Terry White , Non-Executive Director, retired July 2017;

• Maximilian Milz , Geophysicist, joined 2011;

• Carolina Samuel , Executive Assistant, joined 2014.

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- continued Organisational Structure & Administration

 Cost Management

• Cost management efforts over the past two years led to significant savings on overhead and admin expenses;

• Overhead and admin costs reduced by 50% while level of activity increased;

• Overhead and admin costs running at an average monthly cost of $105k, in line with budget;

• Cost reductions have been pushed as far as possible while retaining the ability to pursue business opportunities.

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'000
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Overhead & Admin
700
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300
200
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Qtr Dec 15 Qtr Mar 16 Qtr Jun 16 Qtr Sep 16 Qtr Dec 16 Qtr Mar 17 Qtr Jun 17 Qtr Sep 17
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Capital Management

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Capital Management

 Capital Return

• Following the approval by shareholders on 12 September 2016 and the subsequent ATO class ruling, the capital return to shareholders of $0.025 per share was completed on 16 November 2016;

• A total of $9,961,649 was returned to shareholders.

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Capital Management

 Cash and Investments

As of 30 September 2017 the company held:

• A cash balance of $6.9m

• 37,897,000 shares in BYE (acquired at $0.07) with a market value of $3,638,112 (as at 29 Sep market value $0.096 per share);

• Secured receivable from BYE of $8m.

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Share Price Performance

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Share Price Performance

 In FY 2016/17 our shares have appreciated by ~18%;

 Since 30 June our share price has improved by another ~30%;

 A total increase of ~53% in the past 16 months. (all numbers to 6[th] November this year)

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$A
0.055
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Share price
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0.045 0.045
0.041 0.041 0.041
0.040 0.04
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0.030
0.025
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30-Jun-16 30-Sep-16 30-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 06 Nov 2017
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Share Price Performance

 Shareholder Returns

• Total shareholder return for period 1 July 2016 to 6[th] November this year, adjusted for the capital return in November 2016, has been ~43% (source: Bloomberg)

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Share Price Performance

• Shareholder Returns since disposal of prior assets

• Total shareholder return since receipt of settlement with the NSW Government in December 2015 to 6[th] November this year, adjusted for the capital return in November 2016, has been ~52% (source: Bloomberg)

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Current Business

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Current Business

• Multi-Level Engagement in Byron Energy (BYE)

• Convertible Note

• Loan facility was fully drawn ($8m) by BYE in January 2017;

• BYE making all interest and repayment instalments as and when they are due;

• First repayment instalment of $1m was received in October 2017;

• To date the facility has earned Metgasco $1,155,658 in fees and interest.

• Farm-in Bivouac Peak

• Exercised farm-in for a 10% working interest into BYE Bivouac Peak (Louisiana, USA)

  • Currently working through required permits

  • Expected to be drilled in second half of 2018.

• Farm-in Option

• We hold an additional farm-in option into another BYE project in the Gulf of Mexico.

• Share Options

• We have been issued 10 million unlisted options in BYE ($0.25 on 3 year term)

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Current Business (continued)

• Multi-Level Engagement in Byron Energy (BYE)

• Equity Investment

• MEL exercised its priority right and subscribed to 37,897,000 BYE shares on 14 August 2017 at a price of $0.07 for a total investment of $2,652,790;

• MEL is now a substantial shareholder in BYE with a 5.77% interest;

• Value of equity in BYE as at 6 November $5,495,065 ($0.145/share), a gain of $2,842,275 or 107%.

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Current Business (continued)

 Senex Frey-1 Well Farm-In

• In late September Metgasco joined Senex Energy and Cooper Energy via a farm-in investment into the Frey-1 area in South Australia;

• Metgasco was responsible for paying 30% of the drilling cost in exchange for a 20% working interest;

• Target depth was reached but a lack of significant hydrocarbons shows resulted in the plugging and abandonment of the well;

• Other farm in opportunities with Senex Energy in the Cooper basin are being evaluated.

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Current Business (continued)

 Cooper Basin Blocks

• In December 2016 Metgasco succeeded in its bid for tender areas PLR 2015-5-16 (370km[2] ) and PLR 2015-5-19 (530km[2] ) in the Cooper-Eromanga Basin;

• High quality exploration opportunities proximal to delivery infrastructure in mature producing basins;

• Primary targets:

• Conventional Toolachee Permian gas reservoir; and

• Jurassic oil reservoirs.

• Potential for unconventional gas.

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Current Business (continued)

 Cooper Basin Blocks

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Current Business (continued)

• Cooper Basin Blocks – Development Status

• Environmental Authorities were granted by the Queensland Department of Environment and Heritage Protection;

• Native Title negotiation with traditional land owners (Wongkumarra People) are well advanced. Expect to close agreement in the very near future;

• Authorities to Prospect will be granted after Native Title agreements are finalised;

• Metgasco technical team has completed detailed analysis of available seismic data and identified key areas;

• Next steps involve geological reviews to mature leads, including reprocessing of seismic data followed by the design of a 3D seismic acquisition program.

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New Business Opportunities

& Strategy

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New Business Opportunities & Strategy

• Ongoing Review of New Opportunities

• Intense focus on search for opportunities in oil & gas sector

• Opportunities undergo a structured process of:

  • Identification;

  • Initial assessment;

  • Development of commercial model;

  • Due diligence; and

  • Negotiation.

• Over the past 12 months a select number of opportunities have made it to the final stages of due diligence and negotiations.

• A favourable outcome for Metgasco couldn’t always be reached.

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New Business Opportunities & Strategy (continued)

• We remain flexible in the nature of opportunities we consider

• Regional spread

  • Australia;

  • Overseas (US, SEA, Europe).

• Potential opportunities include:

  • Transactions on a corporate level;

  • Transactions on an asset/project level;

  • Financial instruments.

    • Financial instruments are predominantly seen as entry point to long term partnerships with a view to gaining exposure to partner’s business, projects or assets.

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New Business Opportunities & Strategy (continued)

 Strategy

Metgasco will continue to pursue its strategy to:

• build a diversified portfolio within the Oil & Gas sector;

• seek short and medium term healthy cash flows;

and

• long term exploration upside;

in order to grow sustainable shareholder value.

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Thank You

Questions?

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