Investr Update Nvember 2011
Cmpany Strategy Prject Style Cnventinal High Impact Prjects (ie big prspects: high IP s and large well reserves). Strng 3D prspects with gd analgues prspects are selected based n the quality f the generatrs 3D, interpretatin and analgue data. Engineering drilling risk is well understd and minimised and turnkey prjects are secured when pssible (ie Lyns Pint / Grizzly). Prject Opprtunities: As a result f large US Oil cmpanies fcussing n resurce plays, GGE has the pprtunity t take WI psitins in high impact, high quality prspects with reasnable prmtes. GGE s prject assessment team is highly experienced with many years f lcal knwledge and cntacts enabling cntinuus flw-thrugh f gd quality pprtunities. Prject Reviews: Thrugh G&G review frm highly experienced gelgists, reservir and drilling engineers in Hustn ffice with secnd tier review undertaken with experienced G&G Australian based management. Detailed NPV analysis is cmpleted n each prject prir t investment decisin; the higher the risk the higher the return required. ASX Cde l GGE 2
Prject Highlights New Discveries: Abita (20%WI) f 350,000-700,000 BO and 8 BCFG, ETA prductin mid Dec La Psada (4.75%WI) sld fr US$7.5m. Develpment: Dugas & Leblanc #3 (39.5%WI) n prductin in M sand at 217 bpd and 1.7 mmcfgd. Very Active High Impact Explratin Drilling Prgram: Lyns Pint (5%WI) at 15,255ft, 1 st target at 15,500ft targeting 3MMBC/60BCFG Grizzly (5.25% WI) at 9,700ft, 1 st target at 11,100ft targeting upt 100 BCFG / 2 MMBC Vermillin River (7.83% WI) t spud Dec/Jan targeting 110 185 BCF / 1-2MMBC West Klndike (10.5% WI) t spud Dec - targeting 2MMBO/6BCFG Leduc Reef (10.5% WI) t spud Dec/Jan targeting 1-12 mmb Naplenville leasing finalised, drilling permit in prgress ASX Cde l GGE 3
Crprate Snapsht Directrs & Management Key Data Charles Mrgan Mark Freeman Executive Chairman Executive Directr Share Price 0.5c Majr Sharehlders Market Cap $18m Charles Mrgan 19.95% Stephen Keenihan Alan Bss Jim Trimble Directr Directr Directr Shares n Issue Listed Optins 3.74m Craig Burtn 10.21% 1.46m @ 1.5c ASX Cdes GGE GGEO KC Whittemre Senir Gelgist Kevin Kenning Resevir Engineer Strng Balance Sheet Current Cash f $6.8m Psitive cash flw frm D&L#3 ASX Cde l GGE 4
000 BOE Explratin Resurce Grwth Ptential 3,500 Resurces numbers are based n mid case f estimates f ptential 3,000 2,500 2,000 1,500 1,000 500 Desiree Leduc Reef West Klndike Vermillin Grizzly Lyns Pint D&L#3 Abita - Expected Explratin and Develpment Prgram ver next 4 mnths ASX Cde l GGE 5
Analysis f Resurce Ptential Develpment Wrking Interest Oil Gas Net Oil Net Gas (mmb) (BCF) ( mb) ( bcf) Abita 20%* 0.35-0.7 8 70-140 1.6 D&L#3 39.50% 0.4 1.2 160 0.5 Ttal Develpment 230-300 2.1 Explratin Lyns Pint 5% 3-4 60-80 150-200 3-4 Grizzly 5.25% 1-2 45-100 50-110 2.4-5.3 Vermillin 7.8% 3.3-5.5 110-185 260-430 8.6-14.5 West Klndike 10.50% 2-4.8 6-17 210-500 0.6-1.8 Leduc Reef 10.50% 1.2-12 - 130-1,260 Desiree 52% 0.6-0.8-312-416 - Ttal Explratin 1,110-2,920 14.6-25.5 Ttal 1,340-3,220 16.7-27.8 * Reverts t a 15% WI APPO ASX Cde l GGE 6
Prductin Grwth - Ptential BOE/day Net t Grand Gulf D&L#3 M Sand Abita BOE/Day 150 115 BOE 100 50 0 Estimated flw rates are quted net t GGE pst ryalties ASX Cde l GGE 7
Drilling & Develpment Activity Nv/Dec 2011 Jan/Feb 2012 March/April 2012 July 2012 Aug - Dec 2012 Lyns Pint West Klndike Abita Desiree Grizzly Vermillin River Leduc Reef Facilities Cmpletin Explratin Wells Develpment Wells First Prductin ASX Cde l GGE 8
Area f Operatins LOUISIANA ASX Cde l GGE 9
Prductin Dugas & Leblanc #3 Dugas & Leblanc #3 D&L Well #3 D&L Well #1 D&L Well #2 6,900 Msd D&L DISCOVERY -6,900 Recently cmpleted in M sand with prductin at 210 bpd and 1.7 mmcfd 7,000 200 GROSS 7,000 Generating ~ US$180,000 per mnth net t GGE 7,100-7,071-7,093-7,135 22 GROSS 42 GROSS -7,081 400 000 BBLS 1.2 BCFG RESERVE -7,105 7,100 500 Lgged 40 ft net il pay and 28ft f net gas pay in M sand 7,200 279 100 7,200 7,300 7,300 Estimating recverable reserves f 400 MBO and 1.2 BCF TOTAL DEPTH 7,844 Ptential fr a further 10-15 BCFG updip 39.5% WI 75% NRI ASX Cde l GGE 10
Develpment - Abita Abita Flw tests 3 lwest intervals with rates f 29-67 bd and 1.3 t 2.25 mcfgd Well is due t cmmence prductin in December qtr Lgged 171 ft net pay ver 9 pay sands Estimating sme 8 Bcf / 350-700 MBO 20% WI (15% after prject payut) 75% NRI Ptential fr an additinal lwer sand f 400,000 bbls il Ptential fr field extensin int nrtheast fault blck ASX Cde l GGE 11
Explratin - Lyns Pint Pruitt et al #1 well - (5% WI) Well is presently at 15,255ft and targeting first bjective at 15,500ft in 10 days Recverable resurce ptential f 3-4 MMBC / 60-80 BCFG Operatr, Claytn Williams Energy, Inc Defined by 3D seismic, upthrwn fault bunded structural clsure On trend frm Leleux Field (5 MMC/300 BCFG) Main bjective is Mar Tex 1, 2 & 3 50-66% chance f success US$430,000 dry hle csts ASX Cde l GGE 12
Explratin Grizzly (High Impact) SL 19965#1 well - (5.25% WI) Well is presently at 9,700ft and targeting first bjective at 11,100ft Recverable resurce ptential f 1-2 MMBC / 45-100 BCFG Operatr, Petrdme Operating, LLC Defined by 3D seismic, upthrwn fault bunded structural clsure On trend frm Manti Discvery (IP 15mmcgd & 384 BCPD) Main bjective is Alliance and Aberville US$550,000 dry hle & entry csts ASX Cde l GGE 13
Explratin Vermillin River La Psada Style- (7.83% WI) Recverable resurce ptential f 3.3-5.5 MMBC / 110-185 BCFG Well is due t spud mid in 1 t 2 mnths, Operatr, Walter Oil & Gas Crpratin (La Psada partner) Defined by 3D seismic, in a 3 way dip clsure High quality reservir rck with thicknesses in excess f 200ft nt uncmmn On trend frm Grsse Isle Field 8 miles t NNE (70 BCF+ 4.2 MMBC) Main bjective is Het 1A & Het 1, further upside in Het 2A & Het 2 US$1,050,000 dry hle & entry csts ASX Cde l GGE 14
Explratin - West Klndike 10.5% WI Well is due t spud mid December 2011 Recverable resurce ptential f 2-4.8 MMBC / 6-17 BCFG Prlific prductive sands, targeting 5 separate bjectives US$370,000 dry hle csts Defined by 3D Seismic Alng trend frm prducing fields and clse prx. t analgus prductin Deeper prspect with significant resurce ptential ASX Cde l GGE 15
Explratin Leduc Reef 10.5% WI Well is due t spud this year r early next quarter with 21 days t drill. Recverable resurce ptential f 1-12 MMBO, IP s estimated at 100-300 BBLS/D Defined by 3D Seismic, munded feature and prbably bi-carbnate Analgues fr this prspect are the Appletn and Little Creek Fields (Alabama) This is a new field wildcat, with success pening up further reef pprtunities Secndary bjectives in the lwer Smackver US$180,000 dry hle csts ASX Cde l GGE 16
Explratin/Develpment Well Naplenville Desiree # 1 (52% WI) Targeting an accumulatin f il in a well defined updip blck frm an interval that prduced 2.3 millin barrels equivalent. Accumulatin likely t be 600,000 t 800,000 bbls. 300,000 t 400,000 Bbbls net t GGE Lw risk bth in drilling ps and G&G. ASX Cde l GGE 17
High Level Summary 100% successful drilling prgramme during 2011 GGE has successfully participated in 2 majr nshre Gulf f Mexic discveries in the last 6 mnths and put an additinal develpment well n prductin. Strng balance sheet with Cash f $6.8m (after payment fr develpment csts at D&L#3 and Abita and Lyns drilling csts). Presently cash flw psitive with D&L#3 and expecting Abita prductin in Dec qtr t increase daily net prductin t 115 bed. Active 6 well High Impact Explratin Prgram Lyns Pint, Grizzly, Vermillin River, Leduc Reef, West Klndike and Desiree targeting 1.1-2.9 mmbls and 15-25 BCF net t GGE. Aggressive and fcussed explratin acquisitin prgramme with 3 new high impact prspects recently acquired. Experienced management & directrs hlding 25% f issued capital. ASX Cde l GGE 18
Disclaimer Imprtant Ntice This dcument has been prepared by Grand Gulf Energy Ltd ABN 22 073 653 175 ( Grand Gulf"). This presentatin cntains certain statements which may cnstitute "frward-lking statements". It is believed that the expectatins reflected in these statements are reasnable but they may be affected by a variety f variables and changes in underlying assumptins which culd cause actual results r trends t differ materially, including, but nt limited t: price fluctuatins, actual demand, currency fluctuatins, drilling and prductin results, reserve and resurce estimates, lss f market, industry cmpetitin, envirnmental risks, physical risks, legislative, fiscal and regulatry develpments, ecnmic and financial market cnditins in varius cuntries and regins, plitical risks, prject delays r advancements, apprvals and cst estimates. All f Grand Gulf s peratins and activities are subject t jint venture, regulatry and ther apprvals and their timing and rder may als be affected by weather, availability f equipment and materials and land access arrangements, including native title arrangements. Althugh Grand Gulf believes that the expectatins raised in this presentatin are reasnable there can be n certainty that the events r peratins described in this presentatin will ccur in the timeframe r rder presented r at all. N representatin r warranty, expressed r implied, is made by Grand Gulf r any ther persn that the material cntained in this presentatin will be achieved r prve t be crrect. Except fr statutry liability which cannt be excluded, each f Grand Gulf, its fficers, emplyees and advisers expressly disclaims any respnsibility fr the accuracy r cmpleteness f the material cntained in this presentatin and excludes all liability whatsever (including in negligence) fr any lss r damage which may be suffered by any persn as a cnsequence if any infrmatin in this presentatin r any errr r missin there frm. Neither Grand Gulf nr any ther persn accepts any respnsibility t update any persn regarding any inaccuracy, missin r change in infrmatin in this presentatin r any ther infrmatin made available t a persn nr any bligatin t furnish the persn with any further infrmatin. All dates in this presentatin are fr calendar years unless stated FY fr financial year. All references t $ are in US currency, unless stated therwise. ASX Cde l GGE 19
Investr Update Nvember 2011 COMPETENT PERSONS STATEMENT: The infrmatin in this reprt has been reviewed and signed ff by Mr KC Whittemre (Registered Gelgist, Texas USA), and Kevin Kenning (Registered Resevir Engineer) with ver 36 and 30 years relevant experience respectively within il and gas sectr.