Ann: Annual General Meeting Presentation , page-5

I was asked by a friend that was unable to get to the meeting to take some notes, so I?ll also share them with you. I have been reluctant to post them on HC as there is a bit of disenchantment of late, and I am not interested in getting into a slinging match with anyone about my observations. I do think that the time to become bullish about this stock is rapidly approaching.

It was a very interesting morning, and as you would have seen from the share price appreciation Friday and today, the market reacted positively to the presentation notes.

The Chairman opened the meeting, and wanted to express some comments before handing over to the MD. He started off stating how 2010 has been such a pivotal year for MPO, and nearly gloating about how successful that they had been making early acquisitions. He then went on to talk about how the industry had changed over the last year, to add shale to CSG. Don stated that they expected to make the same return from Wolfgang as has been expected from Spearfish. He even went on to state that it is ?exciting? to see how well the company?s assets are performing. But then in the next breath spoke of delays from Mungi! ?Africa is going swimmingly? he said. ?Quebec has become a millstone with problems about processing and from the greenies? and will now not be drilled until the first half of 2011. He also said that he was proud to report that operational income has increased from $750k to $6m.

At this stage, a question/comment came from the floor, to the effect that it was all very well for the Board to be happy about the development of the assets, but the reality was, that the market is the adjudicator by share price performance and that had been abysmal. Don acknowledged this and stated that they were amazed how ignored the company was, and made particular reference to the announcement of the initial oil reserves which should have added a minimum of 40c per share. Another person asked whether they had done any research as to why they were being ignored. The response was along the line of Australians don?t value overseas assets, and Canadians/North Americans don?t look to invest on the ASX.

As has been announced by the company, all the resolutions were carried, and without any drama or objection. Very few questions were raised, however regarding the Constitution, a question was asked as to why the MD was exempt from facing election! The answer was that it was in accordance with normal practice and the ASX rules.

Then came the vote for the increase in the maximum $ for the Director Fee Pool. I was expecting this resolution to cause discussion, and I was not disappointed, as a question about the possible TSX listing arose. The Chairman stated that he could only offer a personal view, and that was that he hoped that it would be completed by the end of this calendar year. That is not the decision, but the actual listing! And that the TSX listing would require more independent directors to be appointed. A further question was asked as to whether it was the intention to appoint directors for the Canadian listing or for the local Board (or from Australia). Don replied both.

The Employee Incentive Scheme was approved with no questions being asked. I thought sure that someone would raise a question about that, purely because I believe that it is misunderstood.

Stephen then got his opportunity to speak. I think that he was fearing an assault from the floor, so came out punching from the start, about how he was so disappointed with the poor share price performance. He also thought that the Australian market overlooks the shale/tight oil or gas market. He added that the shale market should be no less spectacular than the CSG market. He thought that perhaps the market had taken an incorrect message from the Anglo sale. Mention was also made of the collapse of the gas prices in North America. Stephen then went onto say that MPO had a package of 1st class assets and a 1st class team working for it, and that they intend to crystalize the full value of the assets over the next year. I felt that he really meant what he was saying. He emphasized that no onshore energy company in Australia has the potential to build 100Pj of gas. Their short term focus is oil and the longer term is gas.

Quebec has been divided into 4 prospective areas.
Stephen stressed the point that MPO has adopted the forward plan as created/derived by Monty Bowers, and that MPO was not trying to impose a plan created by a bunch of Aussies.

Spearfish was originally drilled about 30 years ago and EOG started in that area in 2007. The technology now applied by MPO and the timing of its introduction could not have been better. They felt that it was a major achievement to get the initial reserve classification within such a short time and with such limited drilling.
Spearfish/Bakken is now running at over 1000bbls/d. This was news to me, but they referred to a recent announcement (but I cannot find it) and they are still focusing on 2000bbls/d by Xmas.

They want to emulate EOG results, but achieve it by drilling half the number of wells but twice the length.

p.12 of the presentation refers to the cost of each well. When they commenced it was close to $1.8m and now they have got that down to $1.5m and they are looking to drive that down further. Also note the estimated oil recovery rates on that page.

p.13 points out that they expect to make $40 per barrel.
Re Bakken, Monty is still hopeful of achieving the targeted 110blpd (but may take time).

Re Wolfcamp, in USA the landowner has the mineral rights to the land, so MPO have got someone going around offering farmers a price to acquire a lease to their mineral rights. Apparently this was going very well until El Paso came onto the scene and snapped up 120k acres @ $175 per acre. El Paso is only 10 miles from the boundary of MPO. The potential for the results from Wolfgang to be several times higher than Spearfish and many times higher than the Bakken. The acquisition of Wolfgang has caused a change of focus for MPO and has caused the board to look at the portfolio in a different light. We can expect a change of priority.

Re Qld., Stephen believes that they have made great strides in commerciality, but admits to being behind target and over budget. Mungi 21 & 23 are still in a dewatering phase but they are hopeful of having production rates prior to the end of 2010. I think that he also said that 2 rigs are currently drilling at Harcourt and Mungi.

Re Quebec, MPO will retain the sweetest spot but will look to farm out other areas. MPO is letting Talisman take the lead in the fight so that there is no opportunity for the Canadians to make leverage out of the company wanting to exploit the area being a foreigner, being an Aussie co.

The concluding remarks from Stephen was that the Board had a plan to unlock the true value of the company very soon. They will look to finance the development of the assets from a combination of:
A growing cash flow
Asset sales
Debt
Equity (from a TSX listing)

I have to state that the presentation was extremely good and Stephen was particularly convincing.