Hardy Oil and Gas plc

2009 Preliminary Results

03/10

Presentation TeamHardy Oil and Gas plc

• Sastry Karra Chief Executive

• Yogeshwar Sharma Chief Operating OfficerYogeshwar Sharma Chief Operating Officer and CEO (Designate)

• Dinesh Dattani Finance Director

March 20102

ObjectivesHardy Oil and Gas plc

• Create significant shareholder value through an India focused exploration and development strategy

• Capture significant hydrocarbon potential of India’s basins

• Access India’s robust energy demand growth outlook for theAccess India s robust energy demand growth outlook for the region

• Maintain key relationships and enhance our regional a a ey e a o s ps a d e a ce ou eg o atechnical and operational expertise

• Acquire further assets in India that offer material value qcreation opportunities and complement our core competencies

March 20103

Operational HighlightsHardy Oil and Gas plc

D3 • Drilled the third consecutive gas discovery on the D3 block

• Appraisal programme for Dhirubhai 39 and 41 discoveries was submitted to DGH for reviewsubmitted to DGH for review

• Completed the acquisition of 1,150 km2 of 3D seismic data (3D seismic data has now been gathered across the entire block)

D9

Assam

• Drilled the first of 4 exploration wells on the D9 block (P&A)

• Completed the acquisition of 390 line km of 2D seismic data

PY-3

p q

• Net entitlement average daily production for 2009 - 276 stbd ( 2008: 397 stbd) . The field was suspended in July 2009 and re-commenced in January 2010 at an initial stabilised rate of 3,336 ystbd

• The PY3-PD4-RL well was suspended with a gas lift valve in position for future reactivation with artificial lift

March 20104

Financial HighlightsHardy Oil and Gas plc

2009

• Revenue decreased by 55% to $7.7 million (2008 - $17.3 million) resulting from lower volumes and lower oil pricesfrom lower volumes and lower oil prices

• Loss before taxation of $7.9 million (2008: Profit before taxation $12.4 million*)

• Cash deficiency from operations $4.1 million† (2008: Surplus - $1.6 million†)

• Capital expenditure of $13.5 million (2008: $31.6 million)

• Equity issue in April 2009 raising proceeds of $15.2 million

• Cash and short term investments at 31 December 2009 of $30.5 million (2008: $30 1 million); no long term debt(2008: $30.1 million); no long term debt

† Before changes in non-cash working capital* Including gain of $13 million from sale of investment

March 20105

Consolidated Income StatementFor the year ended 31 December 2009

Hardy Oil and Gas plc

US$ million2009 2008

Average oil sales (stbd) 398 491

Average price realised($/stb) 52.96 104.44

Revenue 7.7 17.3

Cost of sales 5.7 9.2

Gross profit 0.8 8.1

Pre-tax gain on investment - 13.0

(Loss) profit before taxation (7.9) 12.4(Loss) profit before taxation (7.9) 12.4

Net (loss) profit (6.5) 7.5

EPS (f ll dil t d) $ (0 10) 0 11

March 2010

EPS (fully diluted) $ (0.10) 0.11

6

Consolidated Statement of Financial PositionAs at 31 December 2009

Hardy Oil and Gas plc

US$ million 2009 2008

A tAssets

Non-current assets 148.4 135.8

Current assets 36 8 37 9Current assets 36.8 37.9

Liabilities

Current liabilities 15.4 13.8

Non-current liabilities 14.4 15.8

Net assets 155.5 144.2

March 20107

Consolidated Cash Flow StatementFor the year ended 31 December 2009

Hardy Oil and Gas plc

y

US$ million 2009 2008

O ti ti iti (1 0) 0 7Operating activities (1.0) 0.7

Investing activitiesCapex and site restoration (14 0) (31 6)Capex and site restoration (14.0) (31.6)HOEC (net) - 28.2

Financing activities 15.4 1.6

Net change in cash and short-term investment 0.4 (1.1)

Beginning of year 30.1 31.2

End of year 30.5 30.1

March 20108

India AppealHardy Oil and Gas plc

• World’s largest democracy

• Legal system based onLegal system based on Common Law

• Robust economic growthASSAM BASIN

AS-ONN-2000/1gGDP growth expected to remain above 7.2% for 2009/10 and 9% for 2010/11

• Asia's third-largest oil GS-OSN-2001/1

SAURASHTRA BASIN

INDIA

Asia s third largest oil consuming nation

Imports over 70% of crude demandRobust demand growth for natural gas

KRISHNA - GODAVARI BASIN

KG-DWN-2001/1

KG-DWN-2003/1

• Attractive Fiscal PlatformPSC’s provide for fiscal stability, Full cost recovery of investmentSeven year tax holiday on industrial undertakings

CAUVERY BASIN

CY-OS-90/1

CY-OS/2

March 2010

Seven year tax holiday on industrial undertakingsProfit sharing a biddable item with NELP rounds

9

National Gas Grid EnvisionedHardy Oil and Gas plc

• Total pipeline length 10,000 km next 2-4 yrs

• East to West pipeline completed connecting KG resources with substantial westresources with substantial west coast markets

• Growth of gas grid will• Growth of gas grid will increase reach and provide access to a large number of consumption centres (bulk and p (retail)

March 201010

Source: Reliance Industries

India Focused High Potential PortfolioHardy Oil and Gas plc

Asset PI Operator 2009 Operations 2010/11 Programme

D3 (NELP V)

10% Reliance3D seismic (1,150 km2)

R1 gas discoveryDrill 3 exploration wells

1 appraisal well

D9(NELP III)

10% Reliance Commenced exploration drilling programme (A1 - P&A) Drill 3 exploration wells

GS-01 10% R li A i l (G&G t di ) A i l (G&G t di )GS-01(NELP II)

10% Reliance Appraisal (G&G studies) Appraisal (G&G studies)

Assam(NELP II)

10% Reliance 2D Seismic (390 line km)G&G studies

1 exploration well

PY-3(Pre NELP)

18% Hardy PD4 re-entryOngoing production2 development wells

CY-OS/2(Pre NELP)

75% Hardy Appraisal (G&G studies) Pending Ministry extension confirmation

Oza( Nigeria)

20% Millenium Received pipe & initiated FEED study Pipeline construction

Atala 20% Bayelsa Sourcing tbd

March 2010

(Nigeria)20% Bayelsa

suitable equipment tbd

11

KG Basin – Emerging World Class Petroleum Province Hardy Oil and Gas plc

KakinadaKakinada

D6

D6

March 201012

Hardy Oil and Gas plc

KRISHNA-GODAVARI OFFSHORE BASINKG-OSN-

2005/1ONGC +

KG DWN 98/4

KG-OSN-2001/3GSPC

DHIRUBHAIANDHRA PRADESH

KAKINADA

MAProven Biogenic Corridor

N

ONGC + BG

KG-DWN-98/4ONGC

D1&3

KG-III-6

A-1A-1

A-2

NARSAPUR

MACHILIPATNAM

Possible Extension of Biogenic Corridor

D9RIL &HEPI

D6RIL &NIKO

D5ONGC &CAIRN

D3RIL &

KG-III-5ONGC + BG

A-1

B-1

P-1

A-1B-1

F-1J-1

NIZAMPATNAM

RIL &HEPIKG-OSN-

2009/3

KG-O8

G-1

R-1

KG-DWN-2004/5ONGC

KG-DWN-2004/4RIL

PR-DWN-2001/1

KG-DWN-98/1RIL

March 201013

2001/1RIL KG-DWN-

2005/1ONGC, IOC,GSPC

Base map source: DGH, India

0 50km

Block D3 (NELP V)Hardy Oil and Gas plc

Highlights:• KGV-D3-R1 discovery (Dhirubhai 44) confirmed working petroleum

system within the Mioceney• Acquired 1,150 km2 of 3D Seismic data (to date ~3,950 km2 acquired)

• Appraisal programme presented to DGH for reviewP bli h d t h i l l ti t D3• Published a technical evaluation report on D3 (undertaken by GCA)

Background:• Three encouraging gas discoveries (Dhirubhai 39, 41 and 44)

• Hardy (10%) and Reliance (90%)• The block comprises 3,288 km2 entirely covered by 3D seismic (equivalent

to 14 North Sea blocks)

• Phase I work commitment of 6 exploration wells (3 wells drilled to date )

• Total gross risked Prospective Resources 9.5 TCF – May 2009

March 201014

D3 Prospect MapHardy Oil and Gas plc

A1B1

KG-D13

Q1AG1

KGV-D3-W1

Q1B

OLD 3D (210 Sq.KmPhase1 3D (2811 Sq.Km)Phase2 3D (1150 Sq.Km)

R1

KGV-D3-R1

T1ase 3 ( 50 Sq )

Appraisal Area (750 Sq.Km)

March 201015

D3 (PI 10%) – GCA Play Summary – May 2009Hardy Oil and Gas plc

PlayGross Risked Resources (TCF)

Low Estimate Best Estimate High Estimate

Pleistocene 0 3 3 2 8 1Pleistocene 0.3 3.2 8.1

Pliocene 0.4 1.9 4.1

Miocene† 0.6 3.6 9.4

Oligocene 0.1 0.4 0.9

Eocene 0.03 0.1 0.2

Palaeocene 0.1 0.3 0.8

Total Gross Aggregate Risked Best Estimate Resources = 9.5 TCF

GCA summary report available at www.hardyoil.com † Pre R1 well

March 201016

† Pre-R1 well

Block D9 (NELP III)Hardy Oil and Gas plc

Highlights:• The first exploration well, KG-D9-A1, was plugged and abandoned• The A1 well is the first of a four well commitment on the D9 blockThe A1 well is the first of a four well commitment on the D9 block • Currently incorporating the data gathered from the first well into the

geological model

Background:• ~3,440 km2 of 3D seismic acquired and processed• Important oil and gas discoveries in adjacent D6 block (Gas productionImportant oil and gas discoveries in adjacent D6 block (Gas production

commenced in April 2009)

• The block comprises 11,605 km2 (equivalent to 48 North Sea blocks)

• Hardy holds a 10% interest with Reliance holding 90%

March 201017

D9 – Prospect MapHardy Oil and Gas plc

KG-D9-A1

March 201018

Block GS-01 (NELP II)Hardy Oil and Gas plc

Highlights:

• Ongoing G&G studies to establish i litcommerciality

Background:• Located in Gujarat-Saurashtra

M‐1

B‐1

B‐2ONGC

B‐3ONGCj

basin the block covers 8,841 km2

(equivalent to 37 North Sea blocks)

• Reliance (90%) and Hardy (10%)

S‐1

A‐1

BM‐16ONGC

B‐1CONGC BM‐2

ONGC

BM‐17ONGC

• Ongoing appraisal programme for Dhirubhai 33 discovery, through May 2010 covering 5,890 km2

BM‐6

BM‐12ONGC

B‐1BONGC

May 2010 covering 5,890 km

SOURCE: DGH, India

March 201019

Assam block (NELP II)Hardy Oil and Gas plc

Highlights• Completed acquisition of 390 line km of new 2D data

Background• The block comprises

5,754 km2 (equivalent5,754 km (equivalent to 24 North Sea blocks)

• Located in the Assam basin

• Hardy Interest 10% • Operated by Reliance• Proven oil province• Proven oil province

March 201020

Producing Asset – PY3Hardy Oil and Gas plc

Highlights• Executed a one year contract extension to the

PY-3 production facilities to January 2011.p y• PY3-PD4RL well was completed but will

require gas lift to flow• The PY-3 field re-commenced production in p

January 2010 at a rate of 3,336 stbd• The Company forecasts an average gross

rate of 3,000 stbd in 2010,• The joint venture is working towards finalising

and approving further drilling to increase production and enhance ultimate recoveryy

Background• Hardy operated, the field is located 80 km

south of Pondicherry, Hardy’s participating

March 2010

sout o o d c e y, a dy s pa t c pat ginterest is 18 %

21

Block CY-OS/2Hardy Oil and Gas plc

Highlights:• Ongoing G&G studies undertaken to evaluate

the Fan A discoverythe Fan-A discovery

• The Company has presented a case to the Directorate General of Hydrocarbons that supports our claim of entitlement to a licencesupports our claim of entitlement to a licence extension to January 2012

• In the absence of a resolution in our favour, in the near future we intend to refer the disputethe near future, we intend to refer the dispute for sole expert or conciliation and arbitration

Background:• Hardy is operator holding a 75 % participating

interest (GAIL – 25 %)

March 201022

Nigeria

Hardy Oil and Gas plc

OZA Block (OML 11)Highlights

ATALA Block (OML 46)Highlights

• 34 km of pipe for pipeline received• FEED study underway• Field operations to install pipeline

t d t i Q210

• Securing swamp-barge drilling rig ongoing

• Timing of re-entry will be dependent on securing equipmentexpected to commence in Q210

Background• Located onshore in NW part of OML

securing equipment

BackgroundL d h D d Ri NW B l• Located onshore in NW part of OML-

11, Abia State, Nigeria, Area 20 km2

• Field produced ~1MMstb (API 37◦), part of SPDC’s OML 11 block, 3

• Located on the Dodo River; NW Bayelsa State covering 34 km2

• Operated by Bayelsa Oil Company Limitedp

suspended wells• Hardy is technical partner holding a

20% interest

Limited

• Hardy is technical partner holding 20% working interest

March 201023

Exploration & Development TimetableHardy Oil and Gas plc

2010 2011

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Drilling

Exploration

D3 1 well 1 well 1 wellD3 1 well 1 well 1 well

D9 1 well 1 well 1 well

Assam 1 well

Appraisal

D3 1 well

De elopmentDevelopment

PY-3 1 well 1 well

Production PY-3

March 201024

Summary & OutlookHardy Oil and Gas plc

• Forecast 2010 PY-3 gross daily production to average 3,000 stbd

• Focused capital programme for 2010 targeting high impact exploration activity on our KG Basin assets

o Further drilling on the D3 and D9 blocks expected in 2010

o Modifying geological model with data from the first of four exploration wells on our D9 block in the KG Basin

• Provide an updated third party technical review on the Company’sProvide an updated third party technical review on the Company s assets in Q2 2010

• Existing working capital adequate to meet near term capital i trequirements

“The Company is planning the drilling of five exploration wells by the end of the first half of 2011 and we look forward to executing this programme.”

March 201025

Hardy Oil and Gas plc

APPENDIX

March 201026

Capital StructureHardy Oil and Gas plc

Trading symbol HDY.L

Shares outstanding 68.5 million

Options outstanding 4.8 million

Fully diluted 73.3 million

Average daily volume 0 1 millionAverage daily volume 0.1 million

Current market capitalisation ~ £170 million

Directors and senior managers 20%

March 201027

Experienced BoardHardy Oil and Gas plc

1 Paul MortimerNon-Executive Chairman

Diverse board level experience. Senior Executive with Exxon, Newmont Mining, Peabody. Extensiveexperience as a consultant on mining, energy and venture capital projects to Placer Dome, Atlas Corp.,Morgan Stanley & Hoegh Invest A/S.

2 Sastry Karra Co-founded Hardy with 40+ years in the oil industry with senior management roles at Occidental andPetronas as well as earlier experience with Gulf Canada Husky and Ashland and as a university lecturerChief Executive Petronas as well as earlier experience with Gulf Canada, Husky and Ashland and as a university lecturer.

3 Yogeshwar SharmaChief Operating Officer

Co-founded Hardy with 30+ years international oil industry experience. Held senior technical positions atSchlumberger and Elf International helping found the ‘Elf Geoscience Research’ centre in London. Hewas an external examiner at Heriot Watt University for 3 years.

4 Dinesh Dattani 30 years of industry and corporate experience principally with upstream oil and gas companies. HasFinance Director served in senior finance capacities with publicly listed companies including Canoro Resources Ltd., Bow

Valley Energy Ltd., Sherritt International Corporation, and Home Oil Company Ltd.

5 Dr. Carol BellSenior Non-Executive Director

20+ years experience in the oil and gas sector. Formerly Managing Director of Chase Manhattan'sInvestment Bank with responsibility for oil and gas and Global Head of J.P. Morgan's Energy team inEquity Research. She was awarded a PhD in the archaeology of ancient trade in May 2005.

6 Pradip ShahNon-Executive Director

Founder and Chairman of IndAsia Fund Advisors Private Limited. Established Indocean Fund withaffiliates of Soros Fund Management and Chemical Venture Partners. Founded and managed CRISIL,India’s first and largest credit rating agency. Consulted for USAID, World Bank and the AsianDevelopment Bank.

7 Ian Bruce 30 + years financial sector experience. Currently Chief Executive Officer of Peters & Co. Limited, fullyintegrated investment dealer in the Canadian energy sector Held senior roles with RBC Dominion

March 201028

Non-Executive Director integrated investment dealer in the Canadian energy sector. Held senior roles with RBC DominionSecurities, Scotia Capital Markets. Currently Vice Chair and Director of the Investment IndustryAssociation of Canada .