ASX ANNOUNCEMENT December 16, 2004 100 DAY WRAP UP REPORT Dear Shareholders, It is my great pleasure to report on the progress made over the “First 100 Days” at Nido Petroleum. I adopted the 100 Day plan to focus our efforts towards developing a growth strategy for the Company, taking a hard look at the strengths and weaknesses of our Company and our assets in order to capitalize on our strengths, identifying the risks facing us and to develop plans to mitigate those risks. From my perspective and that of my team, it has been a great experience albeit an exhausting one. 100 Day Milestones We have achieved a number of key milestones for the Company since Day 1 (24 August). The award of the UK acreage on Day 23 gave Nido a second core area. Our blocks have gas discoveries on them, in the midst of major gas fields with substantial infrastructure at a time when the UK demand is outstripping supply. A good time to be in the gas business in the UK. On Day 31, the Philippines Joint Venture Partners (JVP) farmed down their interest in the Galoc field for a carry of their development costs. The farminees have a 90 day window, ending on 22 December to propose a funding plan acceptable to the joint venture. I feel it is unfair to comment on the status of this farm-in initiative and other potential development options Nido is considering until the 90 day exclusive period expires. On Day 64, the Philippine JVP adopted a new operating philosophy based, which has resulted in a substantial increase in the liftings of oil from the Nido and Matinloc producing fields. On Day 87, we announced a share placement raising $3.4 million. This gave Nido the resources to complete the technical work on all of our assets and equally as important welcomed two large institutional investors, one in London and the other in Hong Kong to our share registry. On Day 93, Nido’s share price reached a 6 year high of $0.073 with turnover in the stock showing a 7 fold increase. These key events have given us a solid foundation for 2005. I am pleased that we have been successful in increasing the profile of your Company both in the local and international investment community as well as in the Philippines. The number of calls and emails from shareholders, which I have personally answered, has been a great education for me. This increased level of investor communication has indicated a heightened level of awareness about and interest in the Company’s future and confidence in the management team. We are pleased with the success to date however are committed to continue to work diligently to grow the positive relationships we have built, to deliver the value we see in the assets in the Philippines and the North Sea and perhaps come up with some interesting Value Creation initiatives in 2005. The attached presentation can be downloaded from either the ASX website or if you would prefer the technicolor version from our website at www.nido.com.au. The website is under review and is updated regularly to reflect the Company’s activities. Respectfully submitted Dave Whitby 1 “The First 100 Days” Day 100 Status Report “The 100-day plan was successful in focusing our efforts, developing our strategy, identifying the strengths and capitalising on them, and understanding the risks and mitigating them.“ David Whitby Managing Director December 2004 2 100 Day Milestones 3 100 Day Milestones �� Day 9: 1 Sept Board strategic workshop �� Day 11: 3 Sept Extraordinary General Meeting approves appointment of new MD �� Day 23: 15 Sept Awarded North Sea licences: Blocks 47/9c, 48/1a & 2b (part) �� Day 31: 23 Sept Philippine Joint Venture Participants farm-out working interest in Galoc for carried cost �� Day 44: 6 Oct Norwest Energy farm-in to North Sea blocks 48/1a & 2b & sign area of mutual interest �� Day 64: 26 Oct New operational philosophy for Nido/Matinloc – increased liftings �� Day 84: 15 Nov Exercised option on North Sea blocks 48/1a & 48/2b �� Day 87: 18 Nov Share placement raised $3.4million, 88% to major international institutional investors �� Day 88: 19 Nov JV approval of Nido/Matinloc optimisation plan �� Day 92: 23 Nov Palawan Basin prospects & leads work commenced �� Day 93: 24 Nov Share price reached 6-year high of $0.073 �� Day 100: 1 Dec Galoc geological modelling completed 4 Impact on the Share Price 5 Nido Share Price �� Share price peaked at $0.073 on 24 November �� Turnover increased over seven fold �� New international institutional investors as major shareholders �� Market capitalisation increased four times from $7.9 million to $31.6 million Source: investorweb.com.au; asx.com.au (7 Dec 2004) Moving average excludes volumes traded on 15 & 16 Sept 2004 – anomalous high turnover days $0.00 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07 $0.08 1-Jan-04 15-Jan-04 29-Jan-04 12-Feb-04 26-Feb-04 11-Mar-04 25-Mar-04 8-Apr-04 22-Apr-04 6-May-04 20-May-04 3-Jun-04 17-Jun-04 1-Jul-04 15-Jul-04 29-Jul-04 12-Aug-04 26-Aug-04 9-Sep-04 23-Sep-04 7-Oct-04 21-Oct-04 4-Nov-04 18-Nov-04 2-Dec-04 16-Dec-04 30-Dec-04 Share Price (AUD) 0 5 10 15 20 25 30 Shares Traded (millions) - 90-day moving avg Day 1: 24 Aug 04 Share Price: $0.02 Volume: 1,596,737 6 July 2004 Announcement of new management team. Day 100: 1 Dec 04 Share Price: $0.056 Volume: 3,777,816 6 Value Proposition At Nido 7 Nido’s Value Proposition VALUE I. Optimisation II. Realisation III. Creation What? More oil in the tank from Nido & Matinloc Develop existing reserves in Galoc Exploration in Philippines & North Sea Impact • Increase short-term cashflow • Stretch target of 4 liftings per month in 2005 • Cashflow/share price impact in the medium-term • Significant cash flow • Medium/long-term growth • ‘Big hit’ potential Vital Few Actions �� JV adopts new operating philosophy – liftings increased �� Improve commercial terms of offtake agreement �� Test wells & determine optimum production cycle times �� Master lifting plan �� Install artificial lift, as required �� Reinterpret seismic; remap fields �� Develop optimum field depletion plans �� Philippines partner farm-out �� Geological modelling �� Reservoir simulation �� Certify reserves/project financing �� POD approval �� Drill development wells �� Regional seismic interpretation �� Successfully tied seismic to well data �� Generate prospect maps �� Prospects & leads inventory �� Grade opportunities �� Prepare drilling programme �� Complete �� Ongoing 8 Nido’s Core Areas Scotland Ireland IRISH SEA NORTH SEA England Shetland Faroe Islands Nido Matinloc Galoc Nido’s Working Interests 47/9c: 50% 48/1a: 50% 48/2b: 50% Nido’s Working Interests Nido: 22.486% Matinloc: 28.283% Galoc: 22.279% Philippines North Sea 9 I. Value Optimisation Nido& Matinloc �� Work programme �� Change operating philosophy - completed �� IPR* test on Nido A - completed �� IPR test on Nido B/Matinloc - ongoing �� Derive field IPRs - ongoing �� Determine optimum production cycle times for each field - ongoing �� Maximise liftings through a well coordinated lifting schedule - ongoing �� Install artificial lift (jet pumps), as required �� Identify bypassed reserves by revisiting seismic interpretation and remapping fields �� Develop optimum field depletion plans �� Identify infill & near field opportunities �� Nido 1X1 Nido’s Working Interests Nido: 22.486% Matinloc: 28.283% * IPR = Inflow Performance Relationship 10 I. Value Optimisation Liftings �� JV adopts new Nido/Matinloc operating philosophy �� Liftings have increased: �� January - June 2004 �� 3 liftings �� 32,714 bbl (gross JV) �� July - November 2004 �� 7 Liftings �� 90,099 bbl (gross JV) �� New oil sales contract finalised with Shell �� Transportation contract review - ongoing �� Stretch Target: Increase liftings to 4 per month 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Oil Volume (bbl) Cumulative Lifted Oil Volume Nido Cumulative Share Lifting Forecast Nido’s Working Interests Nido: 22.486% Matinloc: 28.283% (approx 14,000 bbl) 11 II. Value Realisation Galoc Development �� Key features: �� 3 wells in the structure; drilled off crest �� Damaged well produced 4,400 bbl/d �� Oil Gravity: 35º API �� Column height: 45 m �� Porosity: 16% �� Philippine JVP farm-out �� Work programme: �� Geological modelling - complete �� Reservoir simulation – ongoing �� Project financing - ongoing �� Optimise plan of development �� Reserves certification �� POD submission & approval �� Contract rig & services to drill wells �� First production ?? Nido’s working interest: 22.279 % 12 III. Value Creation Palawan Exploration - Philippines �� Regional seismic interpretation -complete �� Tie seismic to well data - complete �� Map potential prospects & leads - ongoing �� Prepare prospects & lead inventory �� Select high grade opportunities & prepare basin strategy - complete by Q2 2005 �� Develop drilling programme 13 III. Value Creation North Sea – Block 47/9c �� Awarded block 15 September 2004 �� Nido UK subsidiary formed; Corsair to operate �� UK gas market & infrastructure study commenced �� Work programme: �� DTI issue licence - Dec 2004 �� JOA/work programme - ongoing �� Acquire 3D seismic - ongoing �� Well analysis - complete by Q2 2005 �� Structural mapping - complete by Q3 2005 �� Well design & planning - complete Q3 2005 �� Develop drilling programme �� Drilling window Q4 2005 Nido’s working interest: 50% 14 III. Value Creation North Sea – Blocks 48/1a & 2b �� Awarded block 15 September 2004 �� Farmed out to Norwest Energy 6 October 2004 �� UK subsidiary formed: Nido Petroleum UK to operate �� Work programme: �� DTI issue licence - Dec 2004 �� Acquire 3D seismic - ongoing �� Seismic processing - complete by Q2 2005 �� Structural mapping - complete Q3 2005 �� Well analysis - complete by Q3 2005 �� Well design & planning – commence Q4 2005 �� Develop drilling programme �� Drilling window Q1 2006 Nido’s working interest: 50% 15 III. Value Creation UK Prospect Fair 2004, London, 14 December 2004 Paul manning Nido’s booth Nido’s Head of Exploration, Paul Quaife, presenting Nido’s UK Strategy 16 Corporate 17 Corporate �� Share placement �� Major international institutions �� $3.4 million raised �� Company Secretary appointed �� Mr. Andrew Chapman �� Corporate governance �� Policy development & implementation underway �� New accounting system in place �� Board activity �� Strategy workshop �� Two board meetings �� A programme of hiring the brightest & best �� 2 Reservoir engineers �� 1 Reservoir technologist �� 1 Geologist �� UK based Ambrian Partners Ltd appointed as financial advisors Bryce Martin (Head of Operations), David Whitby (Managing Director) & Paul Quaife (Head of Exploration) 18 Summary 19 Summary Major Achievements in our First 100-days �� Nido’s strategy based on value optimisation, realisation & creation in place �� Elevated Nido’s corporate profile �� Raised $3.4 million; attracted institutional investors �� Significant share price appreciation �� Developed ‘in-country’ expertise in Philippines through relationship management �� Increased production through optimisation �� Initiated technical & commercial activities on all assets Go Forward Priorities �� Opportunistically acquire acreage in the North Sea �� Government approval to proceed for Galoc development �� Further optimisation of production from Nido/Matinloc �� Open Nido office in Manila to increase local presence �� Identify prospects & leads in the Palawan Basin �� Geological modelling of UK blocks 20 Backup Slides 21 About Nido �� Fully paid shares: 433,115,438 �� An additional 30 million shares awaiting shareholder approval at EGM on 17 January 2005 �� Options on issue: �� 144,131,052 options exercisable at $0.02 on or before 30 June 2005 �� 3,000,000 options exercisable at $0.03 on or before 30 June 2005 �� 5,000,000 options exercisable at $0.02 on or before 30 December 2004 �� 18,500,000 options exercisable at $0.03 on or before 30 June 2005 �� 10,000,000 options exercisable at $0.05 on or before 30 December 2006 �� Office: �� 3rd Floor, 41-43 Ord Street West Perth, Western Australia �� Phone: +61 8 9321 2844 �� Fax: +61 8 9321 2544 �� Website: �� www.nido.com.au 22 Top 10 Shareholders 31 December 2003 30 November 2004 Shareholder % Held Seaspin Pty Ltd 9.03 Nefco Nominees Pty Ltd 5.22 Toltec Holdings Pty Ltd 4.28 Mr. C I Burton 2.74 Mr. N Botica 2.16 Mr. B Byass 1.73 Nordana Pty Ltd 1.71 Walthamstow Pty Ltd 1.61 T Lamada 1.61 Mr. J Boyton 1.52 Shareholder % Held Westpac Custodian Nominees Ltd 10.063 Nefco Nominees Pty Ltd 7.702 Seaspin Pty Ltd 6.476 Yandal Investments Pty Ltd 4.617 Petroleum Ventures Pty Ltd 4.086 Toltec Holdings Pty Ltd 2.373 ANZ Nominees Ltd 1.732 Westpac Custodian Nominees Ltd 1.443 Samson Exploration NL 1.154 Bremerton Pty Ltd 1.154 23 Why the Palawan Basin? �� Underexplored basin �� Strong source rock �� Covered by 3-D seismic �� Major gas discovery �� World class fiscal terms �� Cost pool: increases contractor share �� Basin historical success rate: Malampaya 3.2 Tcf 118 MMbbl Nido Matinloc Galoc Potential 18% Developed 22% Dry 14% Shows 34% Non-Comm 12% Total: 50 Wells 24 Jet Pump Schematic Venturi Reservoir Fluid Power Fluid Locating Nipple �� No moving parts �� High volume capability �� Suitable for deviated wells �� Multi-well production from single surface package �� Low pump maintenance Operating Depth 1,500 – 3,000 m Operating Volume 300 – 4,000 bbl/d Operating Temp. 38º – 120º C Fluid Gravity >8º API Wellbore Deviation 0º - 90º hole angle Surface Facilities
NDO Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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