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12 May 2010

 AGM Presentation

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 Agenda

• 2009 review

 –  Site survey results

 – 

Environmental impact statement (EIS) –  Contracting the Ocean Guardian

• 2010 outlook

 – 

Drilling Toroa –  Contracting a deepwater rig

• Funding

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2009: Site surveys

• Why?

 –  Safety

 –  Risk mitigation and cost control

 – Well design

 –  Government requirements

 –  Insurance

• 3 survey elements –  Deployment of wave and current meters

 –  Digital site survey & benthic sampling

 –  Geotechnical boring

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2009: Site survey results

• Benign ocean currents confirmed by long term current meter data

• Multibeam & grab surveys indicate:

 –  Smooth/soft seabed at Toroa

 – Hard/eroded seabed at Loligo

• Geotechnical boring confirmed very

different substrate at Toroa and Loligo,

 which influenced well design

• No shallow hazards from high resolutionseismic data

• Site survey data had a key influence on

decision to contract Ocean Guardian

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2009: Environmental impact statement

• A comprehensive EIS submitted in October 2009

• Major document appropriate for first drilling in the East Falklands Basin• Initial well design

• Physical environment: sea bed, oceanography, meteorology

• Marine life, sea birds, habitats• Waste management, pollution, risks

• The EIS addendum is specific to Toroa, the Ocean Guardian andassociated support vessels

• Refined well design

• Detailed anchor plans• Environmental management plan

• Oil spill contingency planning

• EIS approved by FIG in March 2010

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2009: Contracting the Ocean Guardian

• BHPB developed concept of using the Ocean

Guardian during Q3 2009

• Rig upgraded to drill in 600 metres of water

 – Additional BOP control systems, anchoring and riser

• Mobilisation costs shared with Desire &

Rockhopper

• Third slot in the drilling programme• Long lead drilling equipment ordered

• Shorebase established in the Falklands

 –  BHPB team in Stanley

• Estimated well cost ~$20 million net FOGL

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Why a two rig programme?

• Due to its location, the Toroa prospect is best drilled by an anchoredrig, such as the Ocean Guardian. Whereas, Loligo and the otherdeepwater prospects (>1000m water depth) are best suited to

being drilled by a dynamically positioned (DP) drillship or semi-submersible

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Prospects

Hersilia

Loligo

Endeavour

Nimrod

Toroa

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Toroa: The first well to be drilled in East Falkland Basin

• Toroa is a prospect within the Springhill Sandstone Play, which is the

proven play in the Argentine Magallanes basin to the west

• The Toroa prospect is supported by a seismic amplitude anomaly and a

positive CSEM response

• Oil shows were encountered in the site survey core over the prospect

• If Toroa is successful this would significantly reduce the risk on similar

‘follow-on’ prospects such as Lutra, Endeavour, Thulla & Inflexible• Toroa has potential mean reserves of: 1.7 billion barrels (un-risked)

 –  P90: 380milion bbls, P10: 2.9 billion bbls

• Expected to spud in late May

• Drilled to a total depth of ~2,700m below sea level

• Duration of well ~ 35days

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Contracting a deepwater rig

• BHPB actively looking for a deepwater rig

 –  BHPB continues to seek a suitable drilling rig in order to

commence drilling in late 2010

• Deepwater rig market improving, but still tight

• Possible rig share will be considered

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Funding

• Successful equity fund raisings in May & November 2009

• Current cash position c.$93 million

• Sufficient funds for a 3 well programme

• Farm-out on hold

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Summary

• Successful site survey programme

• EIS submitted & approved by Falkland Island Government

• 2 successful equity fund raisings• Sufficient funds for a 3 well programme

• Ocean Guardian contracted

• Toroa well to commence shortly withresults in June/July

• BHPB will contract a suitable rig to

undertake deepwater drilling campaign

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