XSTATE RESOURCES LIMITED — Investor Presentation 2010

Oct 24, 2010

==> picture [12 x 86] intentionally omitted <==

==> picture [17 x 86] intentionally omitted <==

==> picture [54 x 43] intentionally omitted <==

==> picture [55 x 43] intentionally omitted <==

==> picture [55 x 43] intentionally omitted <==

==> picture [54 x 44] intentionally omitted <==

==> picture [55 x 44] intentionally omitted <==

==> picture [55 x 44] intentionally omitted <==

AB N 96 009 217 154

25 October 2010

ASX Li m ited

El e ctronic lo d gement

Invest or Presentation

Please f ind attach e d the Inve s tor Presen t ation referred to in t h e Boardro o m Radio B roadcast announ c ed on 19 O c tober 2010 .

For and on behalf of the Board.

41 S tirling Hi g hway, Nedlands WA 6 009 Tel + 61 8 9423 3200 Fax + 61 8 9389 8327 ww w .xstate.com.au

==> picture [721 x 50] intentionally omitted <==

==> picture [324 x 127] intentionally omitted <==

==> picture [106 x 8] intentionally omitted <==

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

ABN 96 009 217 154
----- End of picture text -----

==> picture [82 x 81] intentionally omitted <==

ASX Code: XST and XSTO

Emerging Oil & Gas Company

• Drilling Big Prospects in Tunisia and Italy:  Onshore 300 Million Barrel Prospect to spud in 2010

• Seeking to Monetize Existing and New Discoveries

• Extensive prospective permits (6900 Km[2] ) in underexplored, producing basins with multiple target reservoirs

• Convenient access to production infrastructure connected directly to European Gas Markets

==> picture [117 x 40] intentionally omitted <==

1

==> picture [721 x 50] intentionally omitted <==

XState oil and gas permits in Tunisia and Italy

==> picture [381 x 359] intentionally omitted <==

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

Tunisia to Europe gas
pipelines
Oil and gas pipelines
and gas plant and
power station within
Chorbane area
----- End of picture text -----

==> picture [264 x 204] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

2

==> picture [721 x 50] intentionally omitted <==

XST Snapshot

XState is undertaking a pro rata entitlement issue to raise $3 million

Capital Structure	Pre-entitlement Issue	Post Entitlements
Share on issue (undiluted)	37.5 million	67.5 million
Options on Issue:
$0.24 Options exp 30 June 2013	33.4 million	48.4 million
$0.24 Options exp 21 Jan 2013	0.067 million	0.067 million
$1.50 Options exp 30 Apr 2010	0.100 million	0.100 million
$1.95 Options exp 30 Apr 2010	0.117 million	0.117 million
$2.25 Options exp 30 Apr 2010	0.117 million	0.117 million

Board & Management

John Begg Non-Executive Chairman Gary Jeffery Managing Director Brett Micthell Non-Executive Director Ross Kestel Non-Executive Director David McArthur Company Secretary

Source: IRESS and Company Reports

Share Ownership Analysis-pre Entitlement

==> picture [363 x 176] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

3

==> picture [721 x 50] intentionally omitted <==

Entitlements Issue- October 2010*

• Fully sub-underwritten

• Pro rata non-renounceable entitlement issue of four (4) Shares for every five (5) Shares held by Shareholders on 11 October

• Issue price of $0.10 per Share to raise approximately $3,001,626 (before costs)

• Together with one (1) new Option (for no additional consideration) for every two (2) new Shares issued, exercisable at $0.24 on or before 30 June 2013

• Proceeds to be used for :

• Drilling Sidi Daher Prospect in late 2011

• Offshore Permit retention costs, including balance of Lambouka Well

Costs

• Working capital to advance the evaluation of Dougga and Lambouka

discoveries, and permit prospectivity

• For details refer to Prospectus available from www.xstate.com.au

==> picture [117 x 40] intentionally omitted <==

4

==> picture [721 x 50] intentionally omitted <==

An Emerging Oil and Gas Company with Large Projects near pipelines to European Markets

• XState Assets:

• Onshore Acreage covers 2428 square kilometres (XST 10%):

  • Sidi Daher prospect (310 million barrels oil and 42 Bcf gas) to be drilled in late 2010

  • Excellent infrastructure available for early development and cash flow

• Offshore Permits cover 4500 square kilometres (XST 10% with option to add 10%):

  • Only 3 wells drilled in this acreage.

  • Each one a discovery of gas or gas / condensate (light oil)

  • Dougga: Tested Gas Condensate Field

  • First XState well - Lambouka -1 an untested gas and condensate discovery

==> picture [333 x 24] intentionally omitted <==

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

Sidi Daher Prospect Surface location
----- End of picture text -----

==> picture [342 x 189] intentionally omitted <==

 Upcoming Value Changing Activity:

• Drill Sidi Daher Prospect (310 million barrels oil and 42 Bcf gas)

• Follow-up to Dougga and Lambouka Discoveries with over (52 million barrels condensate and 714 Bcf gas) Contingent Resources

==> picture [117 x 40] intentionally omitted <==

5

==> picture [721 x 50] intentionally omitted <==

XState net unrisked oil and gas potential from Dougga and Lambouka discoveries and 2010 drilling program

==> picture [699 x 342] intentionally omitted <==

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

Dougga [1] 81 Bcf gas
(Net Tested 5.6 mmb condensate
Contingent 100
Drilling
Resources)
Soon!
Lambouka 30.9 Bcf gas 90
(Net Untested 2.4 mmb condensate
80
Contingent
Resources)
70
Sidi Daher 4.2 Bcf gas
60
(Net Prospective 31 mmb oil Drill
Drill
resources) Late
50 Appraise Late July 2010
TOTAL (NET) 116.1 Bcf gas 2011 2010
40
39 mmb oil and condensate
30
Note 1. Assumes XST exercises option to increase equity to 20% 20
10
SUCCESS IN ANY OF THESE PROJECTS
COULD ELEVATE XSTATE INTO MID-CAP
0
OIL AND GAS COMPANY RANKS ON
COMPARATIVE RESERVES AND Dougga Lambouka Sidi Daher Total
Unrisked
Net XST (mmboe)
----- End of picture text -----

SUCCESS IN ANY OF THESE PROJECTS COULD ELEVATE XSTATE INTO MID-CAP OIL AND GAS COMPANY RANKS ON COMPARATIVE RESERVES AND RESOURCES BASIS

==> picture [117 x 40] intentionally omitted <==

6

==> picture [721 x 50] intentionally omitted <==

Sidi Daher Prospect ready to drill in late 2010

Sidi Daher Prospect (XST 10%):

• Planned for drilling in late 2010

• Two Primary Targets - Eocene Limestones and Abiod Formation

• Multiple Secondary Targets

• Probability of Success (POS): ~30%[1]

• Mean Unrisked Recoverable Prospective Resource:

310 million barrels of oil and 42 Bcf gas or 317 mmboe[1]

==> picture [296 x 24] intentionally omitted <==

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

Proposed Sid Daher well surface location
----- End of picture text -----

==> picture [296 x 224] intentionally omitted <==

• 1 Volumetrics and Risk from Prospectus- Independent Expert’s Report

==> picture [117 x 40] intentionally omitted <==

7

==> picture [721 x 33] intentionally omitted <==

Chorbane Permit Schematic Location Map

==> picture [682 x 433] intentionally omitted <==

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

Map Legend
Prospects and Leads
Chorbane
Gas Field
Permit Sidi Behara
Sidi Daher
Prospect Sidi El Itayem
Oil Field
Drilled Well Location
BG Gas Processing Plant
Chaal Chorbane Permit
Mahares
Sfax
Oil and gas logistics
centre
Onshore
Note: Oil and Gas pipelines
are shown on Slide 2
Scale:
Offshore
Approx: 30 Km
----- End of picture text -----

8

==> picture [721 x 33] intentionally omitted <==

Portion of dip-oriented seismic line across Sidi Daher Prospect showing “flat spot” anomaly

==> picture [684 x 400] intentionally omitted <==

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

10 km
----- End of picture text -----

9

==> picture [721 x 50] intentionally omitted <==

Map of Sidi Daher with “Prospectivity Indicators”

==> picture [434 x 429] intentionally omitted <==

==> picture [201 x 170] intentionally omitted <==

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

Most likely closure
Flat spot on
seismic
Geochem Anomaly
----- End of picture text -----

==> picture [117 x 40] intentionally omitted <==

10

==> picture [721 x 50] intentionally omitted <==

Offshore Permits – Kerkouane and Pantelleria

==> picture [507 x 382] intentionally omitted <==

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

Gas pipelines
to Europe
Shell Acreage
----- End of picture text -----

==> picture [117 x 40] intentionally omitted <==

11

==> picture [721 x 50] intentionally omitted <==

Lambouka 1 well results

Lambouka Structure (XST 10%):

• Untested Gas and Condensate Discovery from Logs and Shows

• 23 metres net pay in Abiod Limestones

• Additional zones of interest to be evaluated further

• Highest known water and undrilled up-dip structure imply potential for up to 480 metre column of hydrocarbons

• No Carbon Dioxide (CO2) detected

• 309 Bcf gas and 24 million barrels condensate (75 mmboe) Contingent (recoverable) Resource

Requires further analysis as hole conditions precluded sampling, pressure data gathering and flow testing

Well location - Lambouka Prospect

==> picture [275 x 316] intentionally omitted <==

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

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

==> picture [117 x 40] intentionally omitted <==

12

==> picture [721 x 50] intentionally omitted <==

Seismic Cross Section through Lambouka Discovery

==> picture [639 x 343] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

13

==> picture [721 x 33] intentionally omitted <==

==> picture [295 x 15] intentionally omitted <==

Top Abiod Reservoir Structure Map

==> picture [483 x 206] intentionally omitted <==

==> picture [257 x 94] intentionally omitted <==

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

Location
of seismic
line in
previous
slide
----- End of picture text -----

==> picture [36 x 10] intentionally omitted <==

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

5 Km
----- End of picture text -----

==> picture [117 x 40] intentionally omitted <==

14

==> picture [721 x 50] intentionally omitted <==

Lambouka 1 well results

Interpreted Log Curves Hydrocarbon Zones

==> picture [685 x 263] intentionally omitted <==

==> picture [685 x 131] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

After Gulfsands Petroleum

15

==> picture [721 x 50] intentionally omitted <==

Image from 3D Seismic across key wells in Kerkouane

==> picture [653 x 359] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

After Gulfsands Petroleum

16

==> picture [721 x 50] intentionally omitted <==

Dougga discovery- ready to be appraised

1981 Dougga Gas and Condensate (light oil) discovery ready for appraisal in higher oil and gas price environment following 3D Seismic (XST 10%):

• Appraisal Target - Abiod Formation

• Probability of Success (POS): 68%[1]

• XState option to increase equity to 20%

• Mean Unrisked Recoverable Contingent Resource:

405 Bcf gas and 28 million barrels of condensate , or 96 mmboe[1]

• Key risk: managing relatively high CO2 gas content (approximately 30%)

Schematic Offshore Facilities

==> picture [300 x 208] intentionally omitted <==

• 1 Volumetrics and Risk from Prospectus- Independent Expert’s Report

==> picture [117 x 40] intentionally omitted <==

17

==> picture [721 x 33] intentionally omitted <==

Dougga Existing large discovery - ready to be appraised after the 3D Seismic

DOUGGA- 2 up dip appraisal location has potential for a significantly larger gas column, improved porosity and resultant resource upside

18

==> picture [721 x 50] intentionally omitted <==

==> picture [265 x 104] intentionally omitted <==

Offshore Permits- Next Steps:

• Evaluate data obtained from Lambouka-1 well:

• Interpret and map 3D data with the Lambouka well data

• Revise resource estimates for Lambouka & Dougga

• Assess commercial opportunities at Lambouka and Dougga

• Assess the exploration potential of other prospects in the permit:

• Dougga North looks promising

• Other prospects and Leads

• Develop operational plan to re-enter Lambouka-1 to side-track and test the well, in conjunction with other drilling, e.g. Appraise Dougga, Exploration well?

==> picture [117 x 40] intentionally omitted <==

19

==> picture [721 x 50] intentionally omitted <==

==> picture [265 x 104] intentionally omitted <==

XState (XST) Summary

• Large Potential Sidi Daher well to spud in late 2010

• Highly Leveraged Exposure to other Value Creation:

• Evaluating new untested Lambouka Gas / Condensate Discovery in conjunction with tested Dougga discovery

• 3D Seismic and early wells to provide fast track to reserve booking

• Existing Infrastructure connected to European Gas Markets for Earlier Monetization

• Tight Capital Structure

• Multiple drilling opportunities with multiple targets

• Experienced and well credentialed team

Atwood Oceanic Southern Cross Rig at Lambouka-1

==> picture [254 x 240] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

20

==> picture [721 x 50] intentionally omitted <==

==> picture [265 x 104] intentionally omitted <==

Actively Poised for Success

Unexplored amplitude anomaly on flank of Pantelleria Graben

SUCCESS IN ANY OF THESE PROJECTS COULD ELEVATE XSTATE INTO MID-CAP OIL AND GAS COMPANY RANKS ON COMPARATIVE RESERVES AND RESOURCES BASIS

==> picture [361 x 256] intentionally omitted <==

21

==> picture [721 x 50] intentionally omitted <==

Disclaimer, Risks, Competent Person Statement

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 effected by a variety of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency exchange rate fluctuations, drilling rig availability and timing of drilling, drilling and production results, commercialisation and development progress, operating success and results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and accuracy or otherwise of cost estimates. Refer to XST Prospectus for more detail on risks, resources and projects.

The technical information provided has been compiled by Mr Gary Jeffery, Managing Director of Xstate Resources Limited. He is a qualified geophysicist with over 37 years technical, commercial and management experience in exploration for, appraisal and development, and transportation of oil and gas and mineral and energy resources. Mr Jeffery has reviewed the results, procedures and data contained in this presentation. Mr Jeffery consents to the inclusion in this presentations of the matters based on the information in the form and context in which it appears.

==> picture [251 x 204] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

22

==> picture [721 x 50] intentionally omitted <==

==> picture [324 x 127] intentionally omitted <==

Supplemental Information

==> picture [117 x 40] intentionally omitted <==

23

==> picture [721 x 50] intentionally omitted <==

Onshore Permit - Chorbane (Tunisia)

Equity Interests after Farm-in to the Chorbane Permit :

XState	10%
ADX	50% (operator)
Gulfsands (AIM listed)	40%

Sidi Dhaer El Jem Tunis Tunis

==> picture [218 x 158] intentionally omitted <==

==> picture [217 x 160] intentionally omitted <==

==> picture [218 x 160] intentionally omitted <==

==> picture [117 x 40] intentionally omitted <==

24

==> picture [721 x 50] intentionally omitted <==

Offshore Permits: Kerkouane (Tunisia) Pantelleria (Italy)

Equity Interests in the “Lambouka Prospect Area” (~150 Km[2] ) within the Kerkouane (Tunisia) and Pantelleria (Italy) permits:

XState	10%
ADX Energy (ADX)	30% (operator)
Gulfsands	30%
Carnavale	20%
PharmAust	10%

Equity Interests in the remainder (~4,350 Km[2] ) of the Kerkouane and Pantelleria permits outside of the Lambouka Prospect Area:

PGS Atlantic Explorer 3D Seismic Acquisition Vessel

==> picture [302 x 176] intentionally omitted <==

XState	10% (with an option* to increase to 20%)
ADX Energy (ADX)	60% (operator)
Gulfsands	30%

*XST can increase its interest to 20% after reviewing the results of 3D Seismic and Lambouka drilling

THIS OPTION PROVIDES XST WITH UNIQUE LEVERAGE TO UPSIDE VALUE

==> picture [117 x 40] intentionally omitted <==

25

==> picture [721 x 50] intentionally omitted <==

Offshore Prospects and Leads Map

==> picture [546 x 377] intentionally omitted <==

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

3D Seismic
area
----- End of picture text -----

After Gulfsands Petroleum

==> picture [117 x 40] intentionally omitted <==

==> picture [721 x 476] intentionally omitted <==

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

Schematic of Lambouka and Dougga Discovery
Structures
Lambouka 1 Shallower
Dougga 1
Deeper
Depth
Colour Scale
----- End of picture text -----

Mapped at Near Top Abiod Structure Level

==> picture [117 x 40] intentionally omitted <==

27

==> picture [721 x 50] intentionally omitted <==

Kerkouane 3D interpretation showing relationships of key structures

==> picture [569 x 360] intentionally omitted <==

After Gulfsands Petroleum

==> picture [117 x 40] intentionally omitted <==

28

==> picture [721 x 50] intentionally omitted <==

New 3D Seismic has spectacular detail over Dougga and North Dougga to allow improved project definition

==> picture [557 x 345] intentionally omitted <==

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

3D Seismic Time Slice
near Abiod Formation
North
Dougga
Prospect
Dougga Top Abiod Structure Map
Discovery
----- End of picture text -----

29

==> picture [721 x 33] intentionally omitted <==

New 3D Seismic has upgraded North Dougga Lead to a Prospect for follow-up drilling

Dougga North Prospect :

North Dougga Prospect

• Two Targets - Birsa and Abiod Formations

• Probability of Success (POS) : 20%[1]

• XState option to increase equity to 20%

• Mean Unrisked Recoverable Prospective Resource:

• 24 million barrels of oil and 342 Bcf gas, or 81 mmboe[1]

• ADX has also mapped a number of other prospects and leads in the offshore permits with estimated cumulative Prospective Resources in excess of 520 mmboe[1]

1 Volumetrics and Risk from Prospectus- Independent Expert’s Report

==> picture [279 x 307] intentionally omitted <==

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

North Dougga Prospect
----- End of picture text -----

==> picture [117 x 40] intentionally omitted <==

30