investor presentation - june 2012

I n v e s t o r P r e s e n t a t i o n

June 2012

Forward Looking Statements

In the interest of providing potential investors with information regarding Shona Energy Company, Inc. (“Shona"), including management's assessment of the future plans and operations of Shona, certainstatements contained in this corporate presentation constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation.

Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook","potential" "target" and similar words suggesting future events or future performance In addition statements relating to "reserves" are deemed to be forward looking statements as they involve the impliedpotential , target and similar words suggesting future events or future performance. In addition, statements relating to reserves are deemed to be forward-looking statements as they involve the impliedassessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. Forward looking statementsor information in this presentation include, but are not limited to, statements or information with respect to: the expected closing date and use of proceeds from the financing; potential reserves and futureproduction with respect to current assets business strategy and objectives; development plans; exploration and drilling plans; reserve quantities and the discounted present value of future net cash flows fromsuch reserves; future production levels; wells drilled (gross and net); capital expenditures; cash flow; debt levels; operating and other costs; royalty rates and taxes.

With respect to forward-looking statements contained in this corporate presentation, Shona has made assumptions regarding, among other things: future capital expenditure levels; future oil and natural gasprices; future oil and natural gas production levels; future exchange rates and interest rates; ability to obtain equipment in a timely manner to carry out development activities; ability to market oil and naturalgas successfully to current and new customers; the impact of increasing competition; the ability to obtain financing on acceptable terms; and ability to add production and reserves through development and

l it ti ti iti Alth h Sh b li th t th t ti fl t d i th f d l ki t t t t i d i thi t t ti d th ti hi h h f d l kiexploitation activities. Although Shona believes that the expectations reflected in the forward looking statements contained in this corporate presentation, and the assumptions on which such forward-lookingstatements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included inthis corporate presentation, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-lookingstatements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements willnot occur, which may cause Shona's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied bysuch forward-looking statements. These risks and uncertainties include, among other things, the ability of management to execute its business plan; general economic and business conditions; the risk ofinstability affecting the jurisdictions in which Shona operates; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas andmarket demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits;the uncertainty of reserves estimates and reserves life; the ability of Shona to add production and reserves through acquisition, development and exploration activities; Shona's ability to enter into or renewleases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including declineleases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including declinerates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency exchange rates and interest rates; risks inherent in Shona's marketing operations, including credit risk; uncertainty inamounts and timing of royalty payments; health, safety and environmental risks; risks associated with existing and potential future law suits and regulatory actions against Shona; uncertainties as to theavailability and cost of financing; and financial risks affecting the value of Shona’s investments. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

Any financial outlook or future oriented financial information in this corporate presentation, as defined by applicable securities legislation, has been approved by management of Shona. Such financial outlookor future oriented financial information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance onsuch information may not be appropriate for other purposes.

The forward-looking statements contained in this corporate presentation speak only as of the date of this corporate presentation. Except as expressly required by applicable securities laws, Shona does notundertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in thiscorporate presentation are expressly qualified by this cautionary statement.

The information contained in this corporate presentation does not purport to be all-inclusive or to contain all information that a prospective investor may require. Prospective investors are encouraged toconduct their own analysis and reviews of Shona, and of the information contained in this corporate presentation. Without limitation, prospective investors should consider the advice of their financial, legal,accounting, tax and other advisors and such other factors they consider appropriate in investigating and analyzing Shona.

Forward Looking Statements

For the purposes of the following, “Misrepresentation” means an untrue statement of a material fact, or an omission to state a material fact that is required to be stated, or that is necessary to make astatement not misleading in light of the circumstances in which it was made. If this presentation contains a Misrepresentation, a purchaser in Ontario who purchases securities of Shona has, without regardto whether the purchaser relied on the Misrepresentation, a statutory right of action for rescission or, alternatively, for damages against Shona, provided that no action shall be commenced to enforce a rightof action more than (a) in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or (b) in the case of any action, other than an action forrescission, the earlier of (i) 180 days after the purchaser first had knowledge of the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause ofactionaction.

Shona will not be liable if it proves that the purchaser purchased the securities with knowledge of the Misrepresentation. In an action for damages, Shona will not be liable for all or any portion of thosedamages that it proves do not represent the depreciation in value of the securities as a result of the Misrepresentation. In no case will the amount recoverable exceed the price at which the securities weresold to the purchaser. Investors should refer to the applicable provisions of the securities legislation of their respective provinces or territories for the particulars of these rights or consult with a legal advisor.Forecast capital expenditures are based on Shona’s current budgets and development plans which are subject to change based on commodity prices, market conditions, drilling success, potential timingdelays and access to cash, cash flow, available credit and third party participation. Shona’s capital budget has been prepared based upon anticipated costs for equipment and services which are subject tofluctuation based upon market conditions, availability and potential changes or delays in capital expenditures.

Additionally, forecast capital expenditures do not include capital required to pursue future acquisitions. Anticipated production growth has been estimated based on (i) the proposed drilling program with asuccess rate based upon historical drilling success and an evaluation of the particular wells to be drilled and has been risked, and (ii) current production and anticipated decline rates. Although the forward-looking information contained herein is based upon assumptions which Management believes to be reasonable, Shona cannot assure investors that actual results will be consistent with this forward-lookinginformation.

“Best Estimate” is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the bestestimate. If probabilistic methods are used, there should be at least a 50 Percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.“High Estimate” is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. Ifprobabilistic methods are used there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimateprobabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.“Low Estimate” is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilisticmethods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.“Mean Estimate” is the statistical mean resource value for each exploration prospect. The statistical mean is dependent on the estimated probabilistic distribution of recoverable resources and is not thesame as the “best estimate” or P50 resource volume. These values can be arithmetically summed to obtain a total mean estimate for a group of prospects.“Management Estimates” means the evaluation conducted by qualified reserves evaluators of the Shona technical team, effective 01 January 2012.“Prospective Resources” are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated withrecoverable estimates assuming their discovery and development and may be subclassified based on project maturity. Unless otherwise indicated herein, the Prospective Resources set out in thispresentation are unrisked, meaning that they are not risked for chance of development or chance of discovery.Estimates of unrisked Prospective Resources are pursuant to Management Estimates. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it willbe commercially viable to produce any portion of the resources. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of suchdevelopment.

Barrels of Oil EquivalentBarrels of oil equivalent (boe) is calculated using the conversion factor of 6 Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used inisolation. A boe conversion ratio of 6 Mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at thewellheadwellhead.Analogous InformationCertain noted drilling and completion data provided in this document may constitute "analogous information", such as mapping information obtained in geographical proximity to prospective exploratory landsto be held by Shona. Such information has been obtained from government sources, regulatory agencies or other industry participants. Management of Shona believes the information is relevant as it helpsto define the reservoir characteristics in which Shona may hold an interest. Shona is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor or inaccordance with the COGE Handbook and therefore, the reader is cautioned that the data relied upon by Shona may be in error and/or may not be analogous to such lands to be held by Shona.

Corporate History & Overview

• Shona Energy Company, Inc. (“Shona”) – based in Houston, founded in January 2005, focused on oil & gas exploration and development in Colombia and Peru

Esperanza development and exploration block in Colombia with production, reserves and resource potential to support expanded gas marketing efforts in Colombia

3 exploration blocks in Colombia located in the country’s prolific heavy oil belt

1 exploration block in Peru located in the prolific Maranon Basin

• Shona is a registered British Columbia company listed on the TSX Venture Exchange under the symbol “SHO” and on the OTCQX International under the symbol “SHOAF”

• We have an experienced management team that has produced significant shareholder value throughout their careers d i d d t B d f Di t ith i t t di tl li d ith h h ldand an independent Board of Directors with interests directly aligned with shareholders

• Our shareholder base is reasonably concentrated with several large shareholders

J 1 2012 N t R * EBITDAJanuary 1, 2012 Net Reserves*P1 64 BCF

P2 31 BCF

P3 78 BCF

Total 173 BCF

EBITDA2011 ($10.8 million)

2012 (proj.) $16 million

Total 173 BCF

*Per Collarini Associates January 01, 2012 Reserves Report

Capitalization Structure & Financial Highlights

Common Shares 232,675,283

Preferred Shares 190,796

Warrants 40,145,993

Stock Options 7,880,000

As of June 01, 2012:

Share Price (CAD) $0.31

52 Week Range (CAD) $0.20 - $0.75

Market Capitalization (CAD) $72.1 million

Cash at March 31 2012 (USD) $16 9 millionCash at March 31, 2012 (USD) $16.9 million

Value Creation & Growth Strategy

Esperanza Block – ColombiaExisting firm gas sales of 14 mmcfd going to 15.5 mmcfd on January 01, 2014Expanded marketing opportunities under evaluation supported by reserves and resource baseExpanded marketing opportunities under evaluation supported by reserves and resource base

− Additional 30 mmcfd available from existing wells, development and low-risk exploration projects− Supplementary reserves and deliverability from prospects identified in 3-D seismic programs

Strategic Financial PlanningPrudent and conservative expenditure programCommon stock buyback programPotential restructuring of debt

Serrania Los Picachos and Macaya Blocks ColombiaSerrania, Los Picachos and Macaya Blocks – ColombiaFault trap look-alike prospect to offsetting Capella Field (2.2 billion barrels OOIP)Very large, four-way closureAnticipated drilling in 2013

Block 102 – PeruFocus exploration activity on trends having larger reserve potential

Corporate DevelopmentMerger and acquisitionsNew projects

Overview of Assets

VENEZUELA

Esperanza Block

Esperanza Block

PROPERTY OPERATOR SHONA W.I.

GROSS ACRES

NET ACRES COLOMBIA

VENEZUELA

Serrania Block

Serrania Block

L Pi hL Pi hEsperanza Block

(Colombia)Shona

(Geoproduction) 100% 60,002 60,002

Serrania Block(Colombia) Hupecol 37.5% 110,769 41,538

PERU

ECUADORECUADOR

Los Picachos Block

Los Picachos Block

Macaya Block

Macaya Block

Los Picachos Block(Colombia) Hupecol 37.5% 52,771 19,789

Macaya Block(Colombia) Hupecol 37.5% 195,254 73,220

Block 102

PERU

BRAZILBlock 102Block 102

Block 102(Peru) Pluspetrol 36.5% 313,023 114,253

TOTAL 731,819 308,803

BOLIVIA

Esperanza Block - Overview

Proven exploration concept with 3D seismic and AVO anomalies

January 1, 2012 Net Reserves*P1 64 BCF

P2 31 BCFP2 31 BCF

P3 78 BCF

Total 173 BCF

Potential 100 BCF (unrisked) on existing prospects that have AVO anomalies

Currently evaluating five areas identified y gin the 2012 seismic program which have AVO anomalies

Will make a gas marketing decision inWill make a gas marketing decision in Q3 2012 based on updated reserve potential

*Gross reserves as per Collarini Associates NI 51-101 compliant reserves report effective January 1, 2012

Esperanza Block – Time Structure Map

3D seismic indicates that the Nelson structure has an aerial extent of 1 600Kite or Palmer Extension aerial extent of 1,600 acres

Three wells capable of 25 MMCFPD for five years

Kite or Palmer Extension(7 BCF)**

Nelson-4Development Well


y

Five wells should allow for full field development of 40 MMCFPD, depending

dditi l

Nelson-2Discovery Well

Nelson-3Confirmation Well

on additional gas sales contracting

Palmer prospects show similar seismic characteristics asAVO Outline

Palmer Prospect(30 BCF)**

Nelson Field


characteristics as Nelson field

Nelson Field(163 BCF)*

*Gross reserves as per Collarini Associates NI 51-101 compliant reserves report effective January 1, 2012**Management estimates based upon area of AVO (seismic ) anomaly

Esperanza Block – Technical Details

Nelson-2 Seismic, Log, and Pressure Plot

Nelson-2 Discovery well • Tested 8 5 MMCFPD from two upper intervals (48 ft of pay) 36/64” choke FTP 2 520 psi• Tested 8.5 MMCFPD from two upper intervals (48 ft. of pay), 36/64 choke, FTP 2,520 psi• Calculated potential flow (“CAOF”) of 77 MMCFPD• 135’ net pay in 470’ gas column• 22-26% porosity, 600-700 millidarcies• Confirmed 3D seismic Type III gas AVO and flat spot, confirmed height of the gas column

Esperanza Block – Reserve Potential(Post 2012 Seismic Program)

Esperanza Block – Infrastructure & Marketing Alternatives

Project Potential Sales TimelineProject Increase Timeline

Additional Sales to Current Customers 5 mmcfd July 2012

Micro LNG Plant 17 mmcfd 18-24 thmonths

Proposed Promigas Pipeline Loop 20 mmcfd 18-24

months

Co-Gen or Power Generation 26 mmcfd 18-24

monthsGeneration months

End-User Pipeline TBD 18-24 months

Export ?? 18-24 months

Large End-Users ?? 18-24 months

Esperanza Block – Monetization

RESERVES, BCF ECONOMIC IMPACTPROJECT

E i ti C t tProducing Fields

70 BCF

Existing Contracts14 mmcfd (52 BCF)

Add’l Contracts5 mmcfd (18 BCF)

$16 MM/year CF

$6 MM/year CF

Producing Fields

120 BCF or 30 mmcfd

Micro LNG Plant (17 mmcfd)and/or

Pipeline Loop (20 mmcfd)and/or

End-User Pipeline (TBD mmcfd)

$32 MM/year CF

Prospect InventoryPalmer

N. Tablon-11Others

Co-Gen (26 mmcfd)and/or

Power Plant (TBD mmcfd)and/or

Export (?? mmcfd)and/or

$22 MM/year CF

100 BCF or 20 mmcfd

2012 Seismic Program

and/orLarge End-User (?? mmcfd)

TBD TBD(TBD) BCF

*Assumes future gas sales at $5.00/mmcf and 10 year contracts

Esperanza Block – Growth Profile

100

Cumulative Capital Expenses

405060708090

100

MM

$U

SD 14mmcfd

5mmcfd

35 fd

0102030M 35mmcfd

25mmcfd

A f t l t800.0

1000.0

Cumulative Cash Flow*

Assumes future gas sales at $5.00/mmcf and 10 year contracts

0 0

200.0

400.0

600.0

MM

$U

SD 14mmcfd

5mmcfd

30mmcfd

20mmcfd

TBD

*After Tax, Before Financing and Capital

0.0

Prolific Andean Foreland Basin

Shona’s oil prospects are located within the Andean Foreland Basin – a region of significant oil discovery

COLOMBIA

VENEZUELA

SerraniaSerrania− Efficient oil generation and migration

systems− Excellent quality reservoirs

L li f t t t il

COLOMBIASerrania,Los Picachos,

& Macaya Blocks

Serrania,Los Picachos,

& Macaya Blocks

Putumayo Basin

Putumayo Basin

Llanos BasinLlanos Basin

− Low relief structures trap oil− Over 3 billion barrels of recoverable oil

have been found in these basins− All these basins continue to be

ECUADORECUADOR

Oriente BasinOriente Basin

BasinBasin

− All these basins continue to be actively explored

PERUBRAZIL

Maranon Basin

Maranon Basin

Existing Oilfields

Southern Colombian Heavy Oil Belt

Macaya Macaya

LlanosBasin

Serrania Block

Serrania Block

Heavy Oil Belt

Heavy Oil Belt

Los PicachosLos Picachos

BlockBlockRubiales FieldRubiales Field

Los Picachos Block

Los Picachos Block

Caguan Basin

Orito Field > 230 MMBO

Orito Field > 230 MMBO Capella Field Capella Field > 230 MMBO

produced> 230 MMBO

produced 2.2 BBO OOIP2.2 BBO OOIP

Exploration BlocksProduction AreaSerrania BlockHeavy Oil Belt

Putumayo Basin

Natural Reserves

Caguan Basin Assets – OverviewSerrania, Los Picachos & Macaya Blocks

• Working Interests: Shona 37.5%, Hupecol (Operator) 50.0%, Houston American Energy 12.5%

• Large acreage position on trend with Capella Field

358,794 gross acres

134,547 net acres

• Serrania Licensed in 2008 and Los Picachos and MacayaSerrania Licensed in 2008 and Los Picachos and Macaya Licensed in 2011: 6 years exploration, 24 years production

8% royalty up to 5,000 BOPD up to 20% at 125,000 BOPD

• Application pending for suspension of License terms due to security concerns

• Exploratory well planned 2013

• Significant potential

In management’s opinion acreage contains one of largestIn management s opinion, acreage contains one of largest undrilled 4-way closure structures in northern South America with 150 MMBO potential

Serrania targets Mirador formation; production potential should be similar to the Capella Field which has potential recoverable reserves of 200 MMBLS of 10°- 12°API oil

Two fault trap prospects with 50 MMBO potential (each) on Serrania and Los Picachos Blocks

Caguan Basin Assets – SeismicSerrania Fault Trap Prospect

Line Y-1973-08 Line S-2009-08

Capella Field Serrania Fault Trap Prospect

Mirador SS

Caguan Basin Assets – SeismicSerrania Four-Way Closure Prospect

Line S-2009-02

Serrania Four-way Closure Prospect

Caguan Basin Assets - Summary

If Successful, It Has Major Upside PotentialIn management’s opinion, more than 250 MMBO gross recoverable potential

Additional 300,000 gross acres with significant upside

Low royalty with no X-factor

Low “Ante”Approximately $5MM total (net to Shona) for two exploration wells

Synergy with Capella Field DevelopmentLarger reserve base helps justify construction of a pipeline to the area

Reduced CapEx and OpEx through sharing of service companies

Major Value Creator for ShonaSignificant long-life reserves

Constant cash flow

Prolific Andean Foreland Basin

Shona’s oil prospects are located within the Andean Foreland Basin – a region of significant oil discovery

COLOMBIA

VENEZUELA

− Efficient oil generation and migration systems

− Excellent quality reservoirsL li f t t t il

COLOMBIA

Putumayo Basin

Putumayo Basin

Llanos BasinLlanos Basin

− Low relief structures trap oil− Over 3 billion barrels of recoverable oil

have been found in these basins− All these basins continue to be

ECUADORECUADOR

Block 102Block 102

Oriente BasinOriente Basin

BasinBasin

− All these basins continue to be actively explored

PERUBRAZIL

Maranon Basin

Maranon Basin

Block 102Block 102

Existing Oilfields

Block 102 - Overview and Targets

Working Interests: Shona 36.5%, Pluspetrol g , p(Operator) 51%, Andean Oil & Gas 12.5%

Located in prolific Peruvian Maranon Basin313,023 gross acres114 253 net acres114,253 net acres

Licensed in 2006: 7 year exploration term and 30 year oil production term

Royalties:0 to 5,000 BOPD 5%5,001 to 100,000 BOPD 5-20%

Reevaluating potential for long-term test on Boa Oeste-1X well drilled in Dec 2011

Future explorationFocus activity on Capahuari and MacusariFocus activity on Capahuari and Macusaritrends with higher reserve potential

Shona Energy Company Summary of Current Situation

Producing gas asset in Colombian Lower Magdalena BasinOpEx is low and will decrease dramatically on a unit basis with any new production

Solid 7-10 year contracts for 14 mmcfd increasing to 15.5 mmcfd in two years

Initiating aggressive gas marketing solution by the end of July

Three blocks with oil potential in the Colombian Caguan Basin Minimal capital requirements to get to development phases

If successful, development capital should be easily financed

One block with oil potential in the Peruvian Maranon BasinExploration focus on geological trends with larger reserve potential

Synergy with offsetting block having large infrastructure and oil pipeline

Why Invest?

Why Invest?

Value CreationValue Creation

Why Invest?

Value Creation Through Exploration

D t t d t EDemonstrated success at Esperanza

Significant exploration potential following 2012 3-D seismic on Esperanza

Exposure to a potential major oil discovery at minimal capital cost

Maranon Basin in Peru provides modest to large reserve potential

Why Invest?






Value Creation Through Marketing

Current asset base capable of supporting 3x production levels with minimum capital investment

Current asset base and prospect inventory capable of supporting 5x production levels with additional capital investment

2012 seismic survey can provide possible upside

Capital used for increased gas sales are high ROR projects

Why Invest?






Value Creation Through Marketing

Current asset base capable of supporting 3x production levels with minimum capital investment

Current asset base and prospect inventory capable of supporting 5x production levels with additional capital investment

2012 seismic survey can provide possible upside

Capital used for increased gas sales are high ROR projects

Value Creation Through Investment

Consolidation of South American E&P companies

With existing Cash Flow and Balance Sheet, able to do smaller M&A activity and/or new projects

Reduce equity base through Corporate Buyback of Stock

Potential for restructuring debtPotential for restructuring debt

Questions?

Business

investor presentation - june 2012