XSTATE RESOURCES LIMITED — AGM Information 2015

May 19, 2015

==> picture [189 x 86] intentionally omitted <==

ABN 96 009 217 154

20 May 2015

ASX Limited Electronic lodgement ASX Code: XST

ANNUAL GENERAL MEETING PRESENTATION

Attached is a copy of a presentation to be given by the Company's Managing Director, Mr Chris Hodge, at today's Annual General Meeting.

The presentation will also be available on our website www.xstate.com.au.

On behalf of the Board of Directors

Level 2, 55 Carrington Street, Nedlands WA 6009 PO Box 985, Nedlands, WA 6909 Tel + 61 8 9423 3200 Fax +61 8 9389 8327 www.xstate.com.au

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

XST

Xstate Resources Limited Annual General Meeting

Positioned for Success in a low oil price environment Portfolio of TCF–scale Prospects Onshore California

20 May 2015

==> picture [842 x 475] intentionally omitted <==

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

||||
|---|---|---|
|Corporate Information|
|Shares on Issue|~180 million|
|Unlisted Options|17.0 million at 6-10 cents expire 31/12/15|
|19.5 million at 4-8 cents expire 31/05/16|
|2.5 million at 5 cents expire 31/12/16|
|Top 10 shareholders|35%|
|Top 20 shareholders|48%|
|Directors|>5%|
|Directors|Chris Hodge:|Managing Director|
|Ian Tchacos:|Independent NED|
|David McArthur:|NED & Company|
|Secretary|
|Cash|$220,000|
|1 year price chart for XST (red) versus the Energy Index (blue)|

----- End of picture text -----

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

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

California Strategy – prolific old basins, new ideas
----- End of picture text -----

Why California?

• Proven and prolific conventional petroleum systems and production history

• Well information, seismic data and drilling services readily available

• With good people and our history and operating experience we have the ability to find overlooked opportunities

Strategy

• Innovative geological and geophysical interpretation to identify prospects

• over

• Take up ground floor land positions prospects and prospective trends

• Build a prospect portfolio with materiality, diversity and follow-up potential

• Secure funding for drilling via farmout

• Position company to maximise value from success

• Inexpensive lease and drilling costs

• Strong gas market and infrastructure

In the current low oil price environment XST continues to seek a suitable farminee – at the same time prudently managing its cash.

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

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

Tehama Early Cretaceous Basin – our technical edge
----- End of picture text -----

==> picture [685 x 307] intentionally omitted <==

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

Historical Sacramento Gas
Basin and Production
Depth of current drilling
= the Deeper Tehama sub-basin
----- End of picture text -----

The deeper Tehama-sub Basin contains the play types that XST is chasing – older but not deeper and under-explored.

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

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

Sacramento Basin - high potential prospects
----- End of picture text -----

	Prospect Size	100% Value	Value net to XST	Chance of Technical Success	Estimated Total Depth (metres)	Cost to Drill
	Best estimate – recoverable	US$ millions	US$ millions	To recover measureable quantities of gas		US$ millions
Alvares	2.4 TCF	$2,400mm	$600mm	>60%	~3,000m	4 – 8**
Dempsey	1.0 TCF	$1,000mm	$100mm	~50%	3,200m	4.5
Arnaudo	20 BCF x2	$50mm	$5mm	~40%	2,500m	2
Totals	3.4TCF	3.4 Billion	$705mm

Total net risked resource to XST = ~400BCF with a value of ~US$400m (at US$1 in the ground)

** depending on whether a redrill or a side-track of the existing well

Note: Prospect sizes and POS previously referenced in 2014 XST Annual Report and in Oct 2014 Corporate Presentation

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

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

Gas Market in California
----- End of picture text -----

• Gas Prices in California remain at attractive levels for the development of large conventional sandstone reservoirs - gas trades at a premium to southern states

• Current gas market in California is 2.5 TCF per year – 90% of which is imported

• Existing pipeline network provides access to growing North American export LNG markets

• XST participation in Cal LNG joint venture provides optionality and upside for monetising exploration success

==> picture [183 x 63] intentionally omitted <==

==> picture [842 x 35] intentionally omitted <==

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

2015 Activity
----- End of picture text -----

• Secure farmin partner for Dempsey and Alvares prospects

• Potentially exercise option to secure additional interests over Dempsey and other 3D prospects

• Continue to generate new prospects and lease land

• Drill Dempsey (~1 TCF gas – via farmout)

• Drill Alvares (>2 TCF gas – via farmout)

• Drill Arnaudo (~40BCF gas – via farmout or at equity)

A diverse portfolio of prospects

• Drill Porter Ranch (~10mmbbls oil – via farmout or drill at equity)

This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a many variables which could cause actual results or trends to differ materially. The technical information provided has been reviewed by Mr Chris Hodge, Managing Director of Xstate Resources Limited. He is a qualified geologist with over 30 years technical, commercial and management experience in exploration for, appraisal and development of oil and gas. Mr Hodge consents to the inclusion of the information in the form and context in which it appears.

In accordance with ASX Listing Rules, any new hydrocarbon resource information in this document has been reviewed by Australian Oil Company’s Technical Director, Mr Keith Martens, who has over 35 years of experience in the sector, with 15 years of experience in working in North America. Mr Martens is a qualified resources evaluator and consents to that information being included in the form and context in which it appears. Before investing it is recommended that you conduct your own due diligence and consult financial and technical advisors.