AFRICA S LARGEST CBM COMPANY

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1 AFRICA S LARGEST CBM COMPANY Nathan Mitchell, Chairman MARCH 2012

2 DISCLAIMER This document has been prepared by Tlou Energy Limited to provide existing and prospective investors in Tlou Energy Limited with an update on the Company and its operations. Extent of Information This presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the presentation, disclaimer nor anything contained in the forms the basis of any contract or commitment. This presentation does not take into account your individual investment objective, financial situation or particular needs. You must not act on the basis of any matter contained in this presentation, but must make your own assessment of the Company. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation ( forward-looking statements ). Any such forward-looking statement that are contained in this presentation or can be implied by the same are by their nature subject to significant uncertainties and contingencies associated with the gas and energy industry and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Tlou Energy Limited and its directors) which may cause the actual results or performance of Tlou Energy Limited to be materially different from any future results or performance expressed or implied by such forward-looking statements. To the maximum extent permitted by law, none of Tlou Energy Limited s, or related corporations, directors, employees, or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or tis contents or otherwise arising in connection with it. Exclusion of Financial Product Advice This Presentation is for information purposes only and is not a prospectus or other offering under Australian Law or under any other laws in the jurisdictions where the presentation might be made available in. Nothing herein constitutes investment, legal, tax or other advice. This Presentation is not a recommendation to acquire shares and has been prepared without taking into account the investment objectives financial situation or needs of individuals. Independent Advice Before making an investment decision, prospective or existing investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek appropriate advice, including financial legal and taxation advice appropriate to their own jurisdiction. Tlou Energy is not licenced to provide financial advice in respect of its shares.

3 EXECUTIVE SUMMARY TLOU ENERGY Tlou Energy is a coal bed methane ( CBM ) company with operations in one of the most exciting underexplored CBM regions in the world; southern Africa. Tlou Energy has independently certified contingent resources in Botswana and significant exploration acreage throughout the region. The company has the most advanced CBM project in Botswana and is rapidly progressing its project towards development. Tlou has a clear path towards commercialisation via growing mining, industrial and residential energy use. Founders of Tlou Energy have significant experience in operating and commercialising CBM companies in Queensland. Company has additional drilling and operational expertise as part of the Mitchell Energy Group. Tlou Energy is planning an IPO on the ASX in 2012.

4 BACKGROUND COAL BED METHANE SOUTHERN AFRICA Coal Bed Methane ( CBM ) in southern Africa is potentially a critical component in the energy mix for the region. Specifically, CBM allows Botswana; to develop a distributed energy solution to remote large mines and communities that can not be connected to the traditional grid; an alternative income model, providing diversification from diamond mining; alternative source of energy for South Africa to Mozambique gas supplies. Tlou Energy has the most advanced CBM project in the region and is rapidly progressing its Botswana CBM project. Reviewing other profitable commercial opportunities in southern Africa. High quality portfolio of coal and unconventional gas projects where significant upside exists. Electrical network interconnection in southern Africa. Data source:

5 BACKGROUND BOTSWANA OVERVIEW Political & Financial Stability Stable multi-party democracy GDP per capita of US$ 5,995 Average GDP growth of 5% ( ) US$ 9 billion foreign currency & gold reserves Favourable foreign investment culture No exchange rate controls Low tax rate A2 credit rating by Moody. Transparency International Rates Botswana as having one of the lowest corruption indexes in the world, 36 th out of 180 countries (2008) Fraser Institute Botswana rated as being one of the most favourable environments for mineral investment, 14 th out of 78 countries ranked (2011) Data source: AON 2008 Political and Economic Risk Map.

6 BACKGROUND SUPPLY/DEMAND DYNAMICS CONTINUE TO IMPROVE The country s favourable geologic environment, mineral investment climate, low tax rates, and political stability are expected to continue to make Botswana a foreign mineral investment magnet. Several proposed transmission projects have been proposed however the mining industry is dispersed with no easy access to the electrical grid. At present Botswana imports approximately 75% of its energy needs from Eskom in South Africa. Data source: Botswana Government Electric power consumption has grown 528% since Eskom will no longer supply energy in Morupule B has been delayed 18 months and will not come online as shown on Botswana Government chart opposite. Energy supply is reaching a critical point for the country. Data source: Botswana Government 2011.

7 BOTSWANA CBM PERMIT MAP LARGE MULTINATIONALS MOVING IN. Botswana s energy landscape is moving through a rapid transformation with larger companies taking an active role within the country. Tlou Energy has a first mover advantage over the new entrants, in terms of; Political Choice of permits Relationships Technology Geological Partnerships Tlou Energy Permits Exxaro Permits Sasol / Origin Energy Permits Anglo Coal Permits

8 BOTSWANA EXPERIENCE WHY IS CBM IMPORTANT FOR BOTSWANA Botswana s mining industry is heavily reliant on heavy fuel oil / diesel. Diesel cost ~ gas equivalent ranges from AUD 25/GJ to AUD 30/GJ. Strong incentive for companies to convert to gas. Aggreko alliance offers a distributed power model for the commercialisation of gas to industry and mining operations in the region. Gas sales to South Africa. Sasol / Origin Energy are actively seeking to export gas. Recent gas outages on the Mozambique pipeline have highlighted gas shortage issues and lack of redundancy. Orapa Power Station to convert to CBM from diesel ASAP, with expected fuel cost saving of ~ 60%. Early discussions with SUB161 to offer a LNG solution for distributed power solution for mining sector in Botswana. Aggreko to begin discussions with Botswana Power Corporation for development of 50km electrical line back to main network. Aggreko saves Tlou Energy capital expenditure on generation facilities through providing power on a tolling arrangement.

9 CURRENT PROJECTS BOTSWANA Extensive exploration and testing program has allowed Tlou Energy to high grade project areas and move to the next phase of evaluation Wells drilled; Core holes: 30 from which the gas content and its quality were tested Stratigraphic holes: 41 to determine the lateral extent of the coal and the shale Pre- Production wells: Monitoring wells Data Collated; Gas Desorption samples 18 Adsorption isotherm Analysis samples 170 Relative Density and Proximate Analysis samples 255 Chromo Gas Analysis samples 20 Drill Stem Tests (DST s)

10 CURRENT PROJECTS KAROO CENTRAL PROJECT 5 wells completed and tested in last program Karoo Central was primary target for Saber Tlou introducing new testing methods to assess CBM suitability 18 DST s completed delineating fair to good permeability 200+ Coal and shale tests complete Pre-Pilot testing imminent

11 CURRENT PROJECTS MASAMA PROJECT Program began in October wells drilled and tested Low gas content coals intersected Have moved towards relinquishment of non-prospective areas Discovered a prospective coal package in south of permit area Extension of known1.3bt non-jorc compliant coal resource (Asenjo Energy) Currently assessing options as to progression of asset PL 154/2007 Asanjo Energy Dukwe Mine Plan (~1.3bt)

12 CURRENT PROJECTS ZIMBABWE Tlou has recently signed a deal to acquire a controlling share in 3 highly prospective CBM Special Grants in Zimbabwe ~3000km 2 acreage position Geological potential of Zimbabwe superior to Botswana Transaction provides significant option value for the company with minimal work requirements over the next 3 years Allows Tlou to evaluate political situation in the country before investing significant capital and/or resources

13 RESOURCE STATEMENT TLOU CBM GAS RESOURCE Internationally regarded reserves certifiers Netherland, Sewell and Associates Inc. (NSAI) were engaged by Tlou early in 2011 to carry out resource certification of its Botswana Gas Project, in particular the Karoo Central region. Following their review and validation of the project dataset and integration with the recently acquired testing results, a resource statement for the Central Karoo area has been prepared. Tlou Energy is actively working towards expanding upon this resource base

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