Petratherm Annual General Meeting

Company and projects update

Managing Director Terry Kallis

Exploration Manager Peter Reid

25 November 2011

Disclaimer and competent persons statement

Disclaimer

This presentation has been prepared by Petratherm Limited (Petratherm). The information contained in this presentation is a professional opinion only and is given in good faith.

Certain information in this document has been derived from third parties and though Petratherm has no reason to believe that it is not accurate, reliable or complete, it may not have been independently audited or verified by Petratherm.

Any forward-looking statements included in this document involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies, many of which are outside the control of, and maybe unknown to, Petratherm.

In particular, they speak only as of the date of this document, they assume the success of Petratherm's strategies and they are subject to significant regulatory, business, competitive and economic uncertainties and risks. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Recipients of this document ("Recipients") are cautioned not to place undue reliance on such forward-looking statements.

Petratherm makes no representation or warranty as to the accuracy, reliability or completeness of information in this document and does not take responsibility for updating any information or correcting any error or omission which may become apparent after this document has been issued.

To the extent permitted by law, Petratherm and its officers, employees, related bodies corporate and agents ("Agents") disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Petratherm and/or any of its Agents) for any loss or damage suffered by a Recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.

All amounts in Australian dollars (AUD) unless stated otherwise.

The information in this report that relates to Exploration Results, is based on information compiled by Peter Reid, who appears on the Register of Practicing Geothermal Professionals maintained by the Australian Geothermal Energy Group Incorporated at the time of the publication of this report. Peter Reid is a full time employee of the Company. Peter Reid has sufficient experience which is relevant to the style and type of geothermal play under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the Second Edition (2010) of the Australian Code for Reporting Exploration Results, Geothermal Resources and Geothermal Reserves. Peter Reid has consented in writing to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Presentation Outline

› Corporate and financial overview (TK)
› Paralana JV Project overview JV, economics and resource (TK)
› Project latest update: fracture stimulation and flow test (PR)
› Video "The Paralana story so far"
› Paralana & market/regulatory framework (TK)
› Looking forward to 2012 and beyond (TK)

Petratherm overview – leading explorer/developer

Listed ASX : PTR

› Shares on Issue: 148.8 million
› Share Price: \$0.086
› Market Cap: \$12.79 million
› Cash Position:\$3.274 million (30 Sept)
› Shareholders: 3,864 shareholders
› Minotaur Exploration 13.78%
› Australian Ethical Investments 7.13%

Paralana JV Funding and Grants

› JV Funding: up to \$85 million plus equity share of project costs
› Government grants of \$69.8 million toward drilling and commercial demonstration

PTR share price – and other Australian listed geothermals

	Share Price 24 Nov	Market Cap 24 Nov	Cash as at 30 Sept
PTR	8.6 cents	\$12.79 m	\$3.274 m
GDY	19.5 cents	\$65.90 m	\$22.08 m
PAX	1.4 cents	\$6.24 m	\$2.586 m

Challenging year in the equity markets

Even more so for geothermal companies

There continues to be little differentiation between geothermal company offerings

Despite challenging markets/ weather delays, able to navigate through the volatile markets and to successfully complete its Milestone 1 Paralana work program – stimulation/flow

Challenge going forward is about securing the funding needed to develop our quality project portfolio in Australia and Spain

" 2012 presents an excellent opportunity to grow and differentiate Petratherm"

Our business model – consistent and robust

"To explore for and develop emission free geothermal energy projects that are commercially sustainable"

› To develop a portfolio of quality geothermal energy projects
› Explore both conventional and engineered geothermal systems – for power and heat
› Find a favorable combination of geology and market conditions - "shallow hot rocks close to market"
› Introduce joint venture partners with common interests, the right skills/knowledge, risk appetite & funding ability

"Right projects, right partners, right people"

Our board – track record of success

Derek Carter Chairman

Simon O'Loughlin Director

Richard Hillis Director

Terry Kallis Managing Director

Board Skills and capabilities to achieve our objectives

› Financial Management
› Legal
› Marketing
› Project Management
› Corporate Governance
› Exploration and Development
› Geology and Geophysics
› Resources and Energy
› Government and Stakeholder relations

Richard Bonython Director

Lewis Owens Director

Paralana Project – commercial / market overview

› Potentially commercially viable at all stages of development
› Close (10kms) off grid local customer (5-30MW) – then expand to on grid development (300 MW)
› Transmission options for connection to market – potential growth areas
› Long term price to NEM of 300 MW lower cost than with wind – inclusive of transmission cost
› Independent energy/economic consultants* estimate power price at less than \$100/MWh delivered to Olympic Dam (*SKM/MMA)

Paralana Independent Resources Statement – Nov 2011

Depth Interval (metres)	Inferred (PJ ) th	Indicated (PJ ) th	Measured (PJ ) th	Total (PJ ) th
<3,500	2,400	1,100		3,500
3,500 - 4,000	4,900	4,400	41	9,300
4,000 - 4,500	5,900	5,700		12,000
4,500 - 5,000	6,900	6,700		14,000
Total (PJ ) th	20,000	18,000	41	38,000

Paralana Joint Venture: Petratherm 79%, Beach Energy 21%. If remaining staged equity investments are met, Beach Energy may earn up to 36% and TRUenergy 30% , leaving Petratherm with 34% .

Initial stimulated rock volume = 5.4 MWe power potential for 30 years
Paralana Resource at the 3500–4000 metre depth interval is estimated a 9,300 PJth which is sufficient to generate 1,300 MWe of electrical power for 30 years

The information on this slide that relates to Geothermal Resources is an extract from a report compiled by Dr Graeme Beardsmore, who appears on the Register of Practicing Geothermal Professionals maintained by the Australian Geothermal Energy Group Incorporated at the time of the publication of this Slide. Dr Beardsmore is employed by Hot Dry Rocks Pty Ltd, an independent consulting group that provides professional services to Petratherm Ltd. Dr Beardsmore has sufficient experience which is relevant to the style and type of geothermal play under consideration and to the activity which he/she is undertaking to qualify as a Competent Person as defined in the Second Edition (2010) of the 'Australian Code for Reporting Exploration Results, Geothermal Resources and Geothermal Reserves'. Dr Beardsmore has consented in writing to the inclusion on the slide of the matters based on his information in the form and context in which they appear.

Fracture Stimulation – Key Statistics

› 3.1 million litres injected
› Injection rates: 3.2 27litres/sec
› Equilibrium WHP prior and post operation 3940 psi
› Various treatments allow higher pumping rates
› Sand proppant successfully placed at end of the treatment Photo: courtesy Advertiser, July 2011

Fracture Stimulation – Pressure and flow rate

Passive seismic array

MEQ Array Managed by IESE
1 deep borehole sonde at 1800m in Paralana 1b
6 borehole sondes ^~ 200m
10 surface seismometers
4 accelerometers

Micro-seismic events – main fracture

› MEQ array successfully recorded micro-seismicity:
› 11,000 events triggered and located by MIMO
› 4,351 events handpicked
› Ground motion acceleration and velocity – always within the safe limits established in the risk management plan.
› Good correlation between pumping rates and microseismic events

The first micro-seismic events appear on the screens at the micro-seismic monitoring centre at Paralana

Paralana Flow Test, Oct 2011

1.28 million litres produced
Flow rate 1 6 litres/sec

• Bottom 200 metres - well fluid temperature 171^oC

The Paralana Geothermal Energy Project story to date - video

Impact of Carbon pricing – Australian emissions (source SKM/MMA)

Impact of Carbon pricing – Australian power generation mix (source SKM/MMA)

Impact of Carbon pricing – Australian wholesale electricity price (source SKM/MMA)

Paralana project – target revenues with electricity and RECs

Off grid market – next five years

› Aim to match current off-grid pricing in local market over the next 5 years
› Bundled price for sale of output black and RECs expected to be > \$140/MWh due to current high off grid price at Beverley mine – assumes mid price RECs of \$53/MWh
› JV retains the full value of black and RECs no predetermined price retain full upside
› Potential for commercial viability at small scale 3.75 MW, 7.5 MW and 30 MW

NEM connected – beyond 2016

› Aim for long term price of \$100/MWh delivered to National Electricity Market (NEM)
› Assuming mid price RECs of \$53/MWh and current wholesale price of electricity in the NEM (refer previous slide) of around \$45/MWh – current opportunity is for \$98/MWh
› With a carbon price of \$23/tonne of CO² the wholesale price of electricity is expected to increase to \$60/MWh by 2016 – making bundled price of over \$110/MWh
› The actual pricing will be dependent on market trading in Carbon and RECs but provides a strong revenue opportunity for the Paralana geothermal project

"Project is capable of short term & long term viability and this is further strengthened by new carbon policy"

Market and Regulatory framework looking forward

In the long term Australia needs clear and stable policy and regulatory framework for renewable & geothermal energy

›Price on carbon
›Capital funding of projects ›Investment in network connection

Federal Government's new "Securing a Clean Energy Future" – Climate Change Plan is expected to drive investment in geothermal companies and projects

SKM/MMA carbon policy modeling shows geothermal with a major role in Australia's future energy mix, in particular in SA

Paralana project looking forward into 2012

› enter with better understanding/characterization of the Paralana resource
› next milestone: drill production well into the enhanced fractured reservoir
› then, develop 3.75 MW plant and connect to nearby Beverley Uranium Mine
› excellent leverage in terms of JV and government grants
› nearby off-grid customer/existing RET* enables viability at small scale
› new carbon price and new grant sources provide significant upside potential
› clear path for commercial demonstration and large scale deployment

"Paralana is uniquely placed in the market

in terms of commercialization path"

(*RET – renewable energy target framework provides for market based mechanism that underpins current larger scale renewable energy projects – such as wind – out to 2030)

Petratherm into 2012 and beyond

› Paralana project has a clear plan and strategy for development from small scale through demonstration and beyond to large scale development
› Renewable regulatory and market environment in Australia expected to be robust provide an excellent long term framework for investment
› Heliotherm project integration of solar, gas and geothermal to provide lower cost base load power - attracted significant interest here and from overseas
› New Spanish Renewable Plan provides excellent opportunities for geothermal in particular for our Tenerife conventional volcanic project

"Despite the continued uncertainty and volatility present in the financial markets, Petratherm remains cautiously optimistic about its prospects as it heads into 2012"

www.petratherm.com.au

Key Economic Assumptions:

› Temperature of 190˚C modeled at depth of 4,000m
› Flow rate of 75 litres per sec considered most conservative in sector
› Net output per production well of 3.75 MW based on flow, inclusive of parasitic loads
› 20 year project life, includes all costs with 12 wells for a 30 MW development and connection to customer and results in a LRMC* of \$107/MWh (delivered), comparable with independently assessed industry LRMC ranges
› Bundled price for sale of output black and RECs expected to be > \$140/MWh due to current high off grid price at Beverley mine
› JV retains the full value of black and RECs no predetermined price retain full upside
› Potential for commercial viability at small scale 3.75 MW, 7.5 MW and 30 MW

(*Long Run Marginal Cost calculation over 20 years, includes all costs, consistent with energy industry comparisons made by the Electricity Supply Association of Australia, McLennan, Magasanik and Associates and the AGEA Economics Committee)

Paralana joint venture arrangements

› Beach Energy Farm-in (Jan 2007) for up to \$28m for 36% plus equity share of project costs at every stage
› First \$5m for first well and \$2.7m for stimulation earns 21%
› Contributes at 21% for second well and stimulation
› After demonstrated geothermal flows Option to earn a further 15% for \$20M
› TRUenergy Farm-in (Aug 2008) for up to \$57m for 30% plus equity share of project costs at every stage
› \$3m first well and stimulation
› \$2.5m second well and stimulation earns 10%
› After demonstrated geothermal flows Option to earn a further 5% for \$7m
› After 7.5 MW pilot plant Option to earn a further 15% for \$44m

Under the Paralana Joint Venture post demonstration of flows and with REDP grant of \$62.8m, for a \$200m, 30 MW demonstration project with JV options taken up, Petratherm would require minimal investment and would retain 34% of resource

Project joint venture – cost estimates (assumes JV earn-in options exercised)

›	Demonstrate flows (stages)	Project JV costs	PTR cost
	› Fracture stimulate – Paralana 2  (completed)	\$ 1.0m	1 \$ 0.4m
	› Drill producer well – Paralana 3*	\$18.0m	\$ 8.5m 2
	› Fracture stimulate/circulate	\$ 1.5m	\$ 1.0m 3
		\$20.5m	\$9.9m
	Potential 45% R & D rebate*	\$9.2m	\$4.4m
	Net Cost (after rebate)	\$11.3m	\$5.5m
›	Produce power – up to 7.5 MW**	\$45.0 m	\$0.4m
	› 3.75 MW plant
	› Substation & transmission line
	› 2nd producer well & 3.75 MW plant
›	Upscale to 30 MW demonstration**	\$162m	\$0.0m
	› additional wells and generation plant
	(* \$2.8 million in funds available from GDP grant for Paralana 3 well)		(1 – Q3 2011)
	(* \$62.8 million REDP grant provides one third payment of capital costs) ( potential for 45% R & D rebate of expenditures in 2011/12, excludes grant)		(2 – First half 2012) (3 - Second half 2012)