XSTATE RESOURCES LIMITED

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AB N 96 009 217 154
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7 Febru a ry 2011

ASX Li m ited El e ctronic lo d gement

SIDI DHAHER SPU DDING IN LATE FEBRUARY

Please f ind attach e d a copy o f an updat e d investor presentati o n for XStat e Resources.

Prepar a tions are continuing apace for the drilling o f the 300+ m illion barr e l Sidi Dha h er Prospe c t well whi c h is expected to spud in Februar y .

For the Board of XState Resources Limited

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

Investor Update

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February 2011

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XState- An Emerging Oil and Gas Company

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ASX: XST

Active: Drilling Big Prospects in Tunisia and Italy:
▫Onshore 300+ Million Barrel Prospect to spud in February 2011
Strategic: Seeking to Monetize Existing and New Discoveries ▫Pre-FEED evaluation of offshore Dougga and Lambouka gas and condensate discoveries underway
Asset Base: Extensive prospective permits (6150 Km[2] ) in underexplored, producing basins with multiple target reservoirs ▫Sandwiched between Super-Major’s permits, and existing oil and gas fields and discoveries, including 640 Km[2] of 3D seismic
• Markets: Convenient access to production infrastructure with direct connections to European Gas Markets

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XST (ASX) Snap Shot

Challenger Rig 37 to drill in Feb 2011

Capital Structure

Shares on issue 67.5 million (undiluted) Options on Issue: $0.24 Listed Options 48.4 million exp 30 June 2013

Market A$10 million Capitalization

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

Share Ownership

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XState Underlying Value Net mean un-risked oil and gas resources from only Dougga and Lambouka discoveries; and upcoming Sidi Dhaher Prospect

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Dougga [1] 41 Bcf gas
100
(Net Tested Contingent 2.8 million barrels condensate
90
Resources)
80
Lambouka 31 Bcf gas
70
(Net Untested 2.4 million barrels condensate
Contingent Resources)
60
Sidi Dhaher 4 Bcf gas Option
Drilling
50
Soon
(Net Prospective 31 million barrels oil
resources) 40
Appraise
Late
Appraise
TOTAL (NET) 76 Bcf gas 30 Late 2011
2011
36 mmb oil and condensate
20
Note 1. Currently 10%, but XST has an option to double equity to 20% Option
10
“Success in any of these projects could 0
elevate XState into ASX mid-cap oil and Lambouka Dougga Sidi Daher XST Total
(Un-risked)
gas company ranks on comparative
reserves and resources basis”
Net XST (mmboe)
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XState’s Permits in Tunisia and Italy: Excellent Oil & Gas Infrastructure; Gas Pipelines to European Gas Market; Tunisia settling after recent political unrest;

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Tunisia to Europe gas
pipelines
Oil and gas pipelines and gas
plant and power station within
Chorbane area
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Chorbane Permit- Surrounded by Oil and Gas (XST – 10%)
Sidi El Kilani Map Legend
(45 mmbo)
Prospects and Leads
Gas Field
Sidi Dhaher
Chorbane
Prospect on
regional high trend Permit Sidi Behara Oil Field
Sidi El Itayem
Drilled Well Location
BG Gas Processing Plant
Chaal Gas Field Chorbane Permit
Chaal
Oil Pipelines
Mahares
Gas Pipelines
La Skhria Oil
Export Terminal Sfax Oil and
gas logistics centre
Scale:
Offshore
Approx: 30 Km
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Portion of dip-oriented seismic line across Sidi Dhaher Prospect showing “flat spot” anomaly

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Sidi Daher
Prospect at Top
Metlaouie
~ 10 km
Sidi Daher
Prospect
Flat Event- possible
Interpreted
Direct Hydrocarbon
higher porosity
Indicator (DHI)
reservoir trend
(yellow)
7
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Map of Sidi Daher with “Prospectivity Indicators”

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Sidi Dhaher prospect (Structural
Closure over 70 km [2 ] on a
regional high with encouraging
coincident prospectivity
indicators; and 6 potential
stacked reservoirs)
Most likely closure
at HCI level
Flat spot (HCI) on
seismic
Surface Geochem
Anomalies
8
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XST preparing to drill 300 million barrel Sidi Dhaher Prospect onshore Tunisia

Key Attributes:

Over 300 Million barrels of oil mean Recoverable Prospective Resource[1 ] potential in just the Primary Reservoir Zones
• Probability of Geologic Success[1] ~30%

Location of Flat Event -interpreted Direct Hydrocarbon Indicator (DHI)

Drill Well for ~US$ 6 million in February – March 2011
• 6 Potential Reservoir Zones
Coincident Hydrocarbon Anomalies:
Seismic Flat Spotinterpreted Direct Hydrocarbon Indicator (DHI)
▫ Surface Petroleum Geochemical Anomalies

Schematic Cross Section

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Note 1. ISIS Petroleum Consultants Estimate

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Offshore Permits - Kerkouane and Pantelleria:

Three (3) discovery wells (no dry holes) in 3,725 km[2] , renewed for 3 years;
Strategic Acreage sandwiched between Super-Majors; and Oil and Gas fields

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Gas pipelines to
Europe
Shell Acreage-
acquired 2010 (after
XState's entry to area)
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3D Seismic line across key discovery wells in the Kerkouane Permit

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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%):  Up-dip Appraisal Target (200m + higher) in Abiod Formation  Probability of Success (POS): ~70%[1]  XState has option to increase equity from 10% to 20%  Mean Unrisked Recoverable Contingent Resource: or 405 Bcf gas and 28 million barrels of condensate , 96 mmboe[1]

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

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

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Dougga Top Reservoir Structure Map

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‘Gas plume’ on 3D
Seismic near leak
point of structure
Dougga 1
3D defined 36 km [2 ]
structuralclosure
Dougga appraisal
well to be drilled on
crest of structure
~6 km
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Seismic Cross Section - Lambouka Discovery Well (XST 10%)

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Discovery well plugged and suspended to allow re-entry for side-track and further testing as hole conditions precluded sampling, pressure data gathering and flow testing; -Upside from up-dip potential and attractive Italian contract terms

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Lambouka Discovery- Top Abiod Reservoir Structure Map

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Over 30 km [2]
structural closure
Lambouka 1
discovery well
Location of seismic Mean Recoverable
line in previous slide Contingent Resources:
309 Bcf Gas, and
24 Million Bbl condensate
(75 mmboe)
5 Km
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Upside Potential from Pliocene Gas anomalies analogous to reservoirs with multi-TCF dry gas discoveries in the Mediterranean Sea

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Note: Varying Scales

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Upcoming Value Changing Activity

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

 Pre FEED studies and follow-up drilling on Dougga and Lambouka Discoveries with mean recoverable Contingent Resources of over 50 million barrels of condensate and 700 Bcf gas

Reviewing other opportunities

Sidi Dhaher Conductor Made Up (late January 2011)

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XState Resources (ASX:XST)

Highly Leveraged Exposure to Increased Value:

300+ million barrel prospect at Sidi Daher-well to spud Feb 2011;
Pre-FEED on new untested Lambouka Gas / Condensate Discovery in conjunction with tested Dougga discovery;
3D Seismic and early wells (2011) to provide fast track to reserve booking;
Multiple drilling opportunities with multiple targets;
Existing Tunisian Infrastructure connected to European Gas Markets for Earlier Monetization;
Tight Capital Structure
Led by experienced oil and gas finders, who have a record of delivering shareholder value

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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 website: www.xstate.com.au 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.

Sidi Dhaher 1 well- Surface Conductor being cemented in late January, ready for February 2011 spud

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Onshore Permit - Chorbane (Tunisia)

• Equity Interests after Farm-in to the Chorbane Permit (2,428 km[2] ) :

XState	10%
ADX	40% (operator)
Gulfsands (AIM listed)	40%
Verus Investments	10%

Sidi Dhaer El Jem Tunis

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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 (~3,725 Km[2] ) of the Kerkouane and Pantelleria permits outside of the Lambouka Prospect Area:

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

PGS Atlantic Explorer 3D Seismic Acquisition Vessel

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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

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Experienced, Successful Oil and Gas Team lead XState

BOARD AND MANAGMENT

John Begg

30 years Oil and Gas Experience Non Executive Chairman- John Begg (BSc) Founder of Voyager Energy

38 years Oil and Gas, Energy, and Mineral Resources experience Extensive experience in Finding, Developing, Operating and Marketing Oil and Gas Worldwide

Managing Director – Gary Jeffery (BSc FAICD)

Non-Executive Director - Ross Kestel (CA CPA)

Working with experienced •• Operating and Joint Venture Non-Executive Director – Brett Mitchell Teams in Project Areas (BEc MAICD)

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Gary Jeffery

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AI assistant

XSTATE RESOURCES LIMITED Investor Presentation 2011

66107_rns_2011-02-06_270e16c4-47f8-4c4b-8218-40f6401d10fa.pdf

SIDI DHAHER SPU DDING IN LATE FEBRUARY

For the Board of XState Resources Limited