Peter Clutterbuck

CEO 3Legs Resources

CERA Week March 7 2012

Shale Gas in Europe

Gathering momentum after a slow start?

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This document has been prepared by 3Legs Resources plc (the “Company”) and is the sole responsibility of the Company. For the purposes of this

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be relied on in connection with, any contract or investment decision in relation thereto. The information and opinions contained in the Presentation are

provided as at the date of the Presentation and are subject to change.

To the extent available, the industry, market and competitive position data contained in the Presentation comes from official or third party sources.

Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be

reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company reasonably believes that each of these

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addition, certain of the industry, market and competitive position data contained in the Presentation comes from the Company’s own internal research

and estimates based on the knowledge and experience of the Company’s management in the markets in which the Company operates. While the

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such forward-looking statement.

Disclaimer

European shale resources compared with US

Environment

Communities

Economy

Energy security

Europe’s potential shale

gas resources are 639 tcf

compared with USA’s 862

tcf (EIA)

But Europe is different in its priorities

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The case for shale gas in Europe

• Natural gas for fuel

— Uses

Industrial, commercial, domestic, CNG

— Alternatives

Mainly oil products: gas is cheaper, cleaner

• Natural gas for power

— Alternatives for a balanced energy mix:

Coal. Gas is cleaner, lower capex, faster lead time

Wind. Gas has less surface impact

Nuclear. Gas has lower capex, faster lead time, is safer

Hydro. Gas has lower capex, faster lead time, lower environmental footprint

• Domestic gas vs imported gas

— Domestic gas generates Government revenue, employment, security of supply, improved trade balance

— Domestic gas can be priced competitively with imported piped gas or LNG

• Shale gas vs conventional gas

— Shale gas has all of the advantages of conventional natural gas

— The resource potential can be much larger than conventional gas

— The environmental risks are broadly similar to conventional gas, and can be managed

Drilling Lebien LE-1

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Shale players in Europe in 2011

Shale exploration regions

Existing LNG terminals

Planned LNG terminals

NabuccoG

ALSI

Major Gas Fields

Germany

France

United Kingdom

Romania

Poland

HungaryAustria

Sweden

Shale exploration regions

Existing LNG terminals

Planned LNG terminals

Nabucco

GA

LSI

Major Gas Fields

Germany

France

United Kingdom

Romania

Poland

HungaryAustria

Sweden• Independents usually first movers

• Majors in earlier than in US

• Poland Baltic Basin is the most active region

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Gas import pipelines and LNG

Shale exploration regions

Existing LNG terminals

Planned LNG terminals

Nabucco

GA

LSI

Major Gas Fields

Germany

France

United Kingdom

Romania

Poland

HungaryAustria

Sweden

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Pipelines from

Russia, Norway,

North Africa

LNG from Africa,

Middle East

Europe’s reliance on gas imports

7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Poland Europe France Germany Italy

Russia Norw ay Algeria Netherlands Others

Gas Consumption by Source

European gas price generally 3 - 4 times Henry Hub

Primary energy supply: dependence on coal and nuclear

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Poland Czech

Republic

France Germany Hungary Italy Romania Slovakia Spain

Nuclear Hydroelectric Coal Oil Gas

Hard coal and lignite

currently account for

60% of Poland’s energy

mix and 90% of

electricity production

Natural gas has about

30% less carbon

emissions than oil per

unit of energy, and 40-

50% less than coal

Baltic Basin Fairway: EIA report

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Shale Gas Basins of Poland

= Non-Prospective area

= Prospective area

European Conventional and

Shale Gas Resources

Country

Proved

Natural

Gas

Reserves,

tcf

Technically

Recoverable Shale

Gas Resources, tcf

Poland 6 187

France 0 180

Norway 72 83

Ukraine 39 42

Sweden 0 41

Denmark 2 23

UK 9 20

Netherlands 49 17

Turkey 0 15

Germany 6 8

Lithuania 0 4

Others 3 19

EIA assessment of gas resources

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3Legs Resources – a first mover in European shale

• IPO on the AIM market of the London Stock Exchange

(ticker: 3LEG) in June 2011, raising £62.5 million

• 3Legs Resources is operating for co-venture partner

ConocoPhillips, leveraging its experience at Eagle

Ford, Bakken and Barnett shales in the US, producing

40,000 boepd from these shales (oil and gas)

Vertical shale wells in 2010

Łebień LE-1 Fracced with natural gas produced to surface

Łęgowo LE-1 Natural gas recovered

Horizontal shale wells in 2011

Łebień LE-2H horizontal well Horizontal 13 stage frac

Production tested with sustained gas flow

First sustained shale gas production in Poland

Warblino LE-1H horizontal well Horizontal 7 stage frac

Production tested shale gas

Gas pipeline

Depth to Top Ordovician & Thermal Maturity

Typical

North

Sea

Block

Łebień LE1,

Łebień LE-2H

Łęgowo LE1

10 km Oil

Wet Gas / Condensate

“Over-Mature”

Gas

Forties Field

for size comparison

Warblino LE-1H

An evolution rather than revolution

• Early days in Europe

— 20+ year history in US shale gas, and over a million hydraulic frac operations

Limited experience of shale gas in Europe

Less well data, and smaller, more complex basins

US experience indicates many wells over several years are needed to understand new basin plays, and

optimise frac and completion design

— Landowner incentives in US: no local ownership of revenue benefits in Europe

— The lack of oilfield service sector capacity, suitable equipment and a skilled labour force are potential bottlenecks

However, service sector (rigs, frac fleets) have anticipated demand and built supply

• Europe is densely populated and has more stringent environmental regulations

— Developing shale gas can have a potentially more disruptive effect

— Looks to the US for evidence of environmental impact of fraccing

• Appetite for shale gas varies across the continent

— Eastern Europe is motivated by the need for energy security and economic growth

Poland positive as a result of potential reserves combined with energy diversification and energy security

— Western Europe is more heavily influenced by environmental aspects and community acceptance

France, and then Bulgaria, have imposed a moratorium on fraccing, initiated largely by anti-fraccing activism

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Oil and gas industry's role in making progress

Why collaborate?

— Acting independently may preserve competitive advantage, but slows progress and increases costs

— Acting collaboratively reduces risk and accelerates solutions

— Companies may share ideas:

Publicly, or confidentially

In groups, or bilaterally

Types of information sharing

— Data exchange: mainly subsurface

— Best practice sharing: completion / frac design, environmental, public relations

— Contractors’ role in sharing best practice whilst preserving confidentiality

— Industry groups: OGP, country associations (viz OPPPW in Poland), SPE

— Joint lobbying with Governments, EU

Outcomes from sharing

— Any early success upgrades the value for regional players

— Regional exploration and appraisal costs are shared, reducing the net cost of a discovery

— Government and public relations are enhanced: they will also benefit

— Standardised, practical regulatory and fiscal environment

Slower build-up than in conventional oil and gas

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Year 1 2 3 4 5 6 7 8

Seismic Exploration

wells

Appraisal

wells

Build

pilot

Pilot

production

Plan full

development

Construct Production

Typical timeline

Optimise frac and

completion design

Develop gas markets and

regional infrastructure

Government approvals

Raise finance

Critical processes

Engage communities

Locate “sweet spots”

Development

decision

Our approach to the environment and community

• Ensuring operations are properly managed and sustainable

— For the environment

Protecting air quality, reducing greenhouse gas emissions

Independent monitoring of seismic activity during frac operations

Protecting ground water though multiple casings and cement

Water use efficiency: pumped from well pad and recycled

Minimum additive use in fraccing fluid; no harmful additives

— For the local community

Minimising surface footprint: (multi-well pads)

The rig is moved after 1-2 months of drilling, leaving low profile wells

Low noise impacts: modern, automated drilling rig

• Regular, transparent communication with all stakeholders

• Local community; media; regulators (local, national and EU)

• A high quality framework exists within existing EU Member State

regulation and EU Directives, applicable to shale operations

14 Government and community will not support unless this is done

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Managing subsurface environmental aspects

Ground water protection through

multiple casing strings

Frac operations at

Łebień LE-2H

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2011 Shale drilling operations in Poland

Gas bubbling in core Seismic acquisition

Top drive

Frac operations

Thank you

Peter Clutterbuck CEO, 3Legs Resources

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Shale gas flare at Łebień