ALL,From Sept 2010 presentation.September Quarter Update
Pateke...

ALL,

From Sept 2010 presentation.


September Quarter Update

Pateke workover completed

Adelphi: takeover completed with strong reserves
reported

Board renewal process completed

Yemen drilling continued, with encouragement

Shale gas upside now understood

AWE net production of 1.56 million boe

Sales revenue of $63 million

$75 million cash, no debt



Perth Basin connected by under utilised pipeline
to Perth gas market

Strong predicted demand growth in WA gas
market

Key Australian gas market Price will support
shale gas development

Predicted WA gas demand and supply capacity
the chart shows 2009 950 Mill scf/d
by 2025 gas demand expected to be 1,800 Million scf/d



AWE Forward Strategy

slide 43
In the long term, the conventional oil & gas E&P company is under
pressure on several fronts:
(a) Profitability
Fewer discoveries
Smaller fields
Increased development costs
Offset by increasing oil and gas prices
(b) Environmental performance
Montara & Gulf of Mexico oil spills are unacceptable
(c) Emerging technologies eroding our markets
CSG, shale gas
Electrification of transport, particularly motor vehicles
Renewable technologies (geothermal, solar, wind, tidal, etc) replacing gas in
homes and in power generation facilities
To grow, AWE needs to strategically reposition itself as an upstream
energy company

slide 44
1. Grow our conventional upstream activities
Oil & gas E&P (eg BassGas, Tui, Casino, Cliff Head, etc)
Will continue as our core activity for at least the next decade
Currently 80-90% of company value, but may reduce over time as we
2. Move selectively into unconventional energy
Primarily shale gas & liquids (but not excluding CSG, geothermal, etc where
we can use our core competencies)
Currently 10-20% of company value, but potential to increase significantly
over time
AWE already positioned as Australias pre-eminent shale gas & liquids co.
3. Monitor emerging energy technologies for opportunities
Emerging transportation fuels, renewable power generation, CO2
sequestration, etc
Currently no company value, with only small steps in the future to
understand the threats & be in a position to exploit any opportunities






Conclusion;
The outlook is steady as she goes. Not hugely bullish like a junior explorer.
Pluses They are established in the WA gas market
Exploring for shale gas
$75 million cash, no debt
Market Cap ($M): 903
Equiv. Shares (M): 522

AWE has competition from other emerging energy sources..

Emerging technologies eroding our markets
CSG, shale gas
Electrification of transport, particularly motor vehicles
Renewable technologies (geothermal, solar, wind, tidal, etc) replacing gas in
homes and in power generation facilities

Dividend: No Divi paid at present

" so need price growth instead to repay patient shareholders"
Share price $1.70 "could be 17% upside in 6 months i hope"
"So not a 10 bagger at this point"

Share price returns
....... 3Months...6M....12M
AWE ...12.3400 3.2800 -33.9700 %
Sector 6.2167 10.8852 1.1211
Market 2.9938 9.6336 -0.4213

Broker concensus below
Recommendation : Hold
Recommendation Date : 15th Dec 2010
12 Month Target Price (average) : $2.156
Brokers Surveyed : 8