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Onshore Natural Gas Exploration in Gippsland

Ignite Energy Resources LimitedLevel 9, 267 Collins Street Melbourne VIC 3000 Australia Phone: +61 (3) 8600 7000

Esso Ventures Pty Ltd 12 Riverside Quay Southbank Melbourne VIC 3006 Australia Phone: +61 (3) 9270 3000

The terms ExxonMobil, Esso, our, we and its as used in this material may refer to Esso Ventures Pty Ltd, ExxonMobil Australia Pty Ltd, Exxon Mobil Corporation, or to its affiliates or to any one or more of the foregoing. The shorter terms are used merely for convenience and simplicity.

June 2012.

About usIgnite Energy Resources Limited (IER)IER is a public unlisted company with offices in Melbourne and Sydney, Australia, with an onshore resource portfolio and a lignite and biomass upgrading technology being demonstrated at its Somersby facility near Sydney. The onshore resource portfolio is focused on the development of its flagship EL4416, which covers more than 3,800 km2 in the Gippsland Basin in southeast Victoria. In relation to this agreement IER will be the operator for the preliminary assessment work.

www.igniteer.com

Exxon Mobil CorporationExxon Mobil Corporation, the largest publicly-traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil Australia and its affiliates have operated in Australia since 1895, including operating the Gippsland Basin Joint Venture for more than 40 years. Research has shown that Bass Strait has been a critical building block underpinning the economic growth of this nation – producing almost two-thirds of Australia’s cumulative oil production to date and 30 percent of Australia’s gas production.

ExxonMobil Australia’s Gippsland operations have also had an important and positive impact on employment and living standards. Approximately 50,000 permanent additional jobs have been created in Victoria, with 14,000 of these in regional Gippsland alone.

www.exxonmobil.com.au

fold fold

fold fold

0 50 10025

Km

Melbourne

V I C T O R I A

Exploration Licence Area (EL4416)

Longford

Sale

The coal seams we are exploring in Gippsland are between 35 and 45 million years old, whereas the seams in New South Wales and Queensland ranges from 200 to 280 million years old.

-100 m

-1000 m

0 m

Shallow aquifer

Intermediate aquifer

Deeper aquifer

Coal

Limestone and mudstone

Sand, shale& coal

Coal

Layers of steel and cement casing protect the aquifers.

Cement

Steel PipeCasing

Core Sample

10 cm

Diagram for illustrative purposes.

What is Coal Seam Gas (CSG)?CSG is natural gas trapped in underground coal seams. Wells are drilled down to the coal seam and pressures are lowered in the seam by the removal of water. Reducing the pressure in the seam allows the gas to be released from the coal and flow through the well.

Will hydraulic fracturing be used?There will be no hydraulic fracturing, “fraccing” or use of hydraulic fracturing fluid during the initial exploration phase. Hydraulic fracturing may not be necessary to produce gas from Gippsland’s coal seams. Part of our evaluation activities over the next 12 to 18 months will be to determine the best way to produce the gas and whether hydraulic fracturing will be needed, should we proceed to gas production. Hydraulic fracturing is only used in about half of the CSG wells in Australia. That is because many coal seams already have natural fractures.

How is this onshore natural gas exploration in Gippsland different from what is happening in Queensland and New South Wales?The natural gas in the onshore Gippsland Basin’s deeper coal seams has been created by naturally occurring organisms that have biologically decomposed organic matter over time. It is known as Biogenic Natural Gas and differs from the coalseam gas (CSG) operations in Queensland and New South Wales, which are a mixture of Biogenic and Thermogenic Natural Gas, created in part from the much older black coal by the heating of organic matter during the process of forming coal from the concentrated organic matter deposits. Because of the process through which the gas was formed in Gippsland, toxicity and salinity are not expected to be an issue from any water produced.

Also, we are in the very early days of resource assessment and appraisal. By comparison, we are many years behind the Queensland Coal Seam Gas industry which has been a significant source of gas production in Queensland for more than 10 years.

Will landowners be paid for core sampling on their land?Yes. Any payment would be agreed in advance by the landowner, IER and ExxonMobil.

What happens if you find commercial quantities of gas?This project is in the very early stage of understanding if there is any gas present in the coal seams that can be safely and commercially produced. Any further activities will be subject to the successful conclusion of this initial phase of characterising the seams and their gas content.

ExxonMobil and IER are committed to working cooperatively and openly with the community. We have a history of establishing open, mutually beneficial relationships with landowners and we will continue to do so should this project ultimately progress beyond preliminary investigations.

Esso Ventures Pty Ltd (ExxonMobil), an affiliate of ExxonMobil Australia Pty Ltd has signed an agreement to take an initial 10 percent interest in an onshore minerals Exploration Licence (EL4416) to explore for natural gas in the deeper coal seams of the Gippsland Basin; the remaining 90 percent is held by Ignite Energy Resources Limited (IER).

During 2012 and 2013, the operator IER will be working closely with ExxonMobil to evaluate and assess the natural gas potential in the Licence area. This will require a small scale, low impact exploration and investigation program to identify whether any gas resources exist within the licence area, and assess whether they can be safely and commercially produced.

This is the very early phase to understand if there is gas present in the coal seams to warrant further investigation. We understand however, that you may have questions about potential futuredevelopments, in the event that the initial activities

are positive. Both ExxonMobil Australia and IER have a history of establishing open, mutually beneficial relationships with landowners and we are committed to working in partnership with individual landholders and the community at every stage, to ensure there is a clear understanding of what we are proposing.

What will the initial exploration activities involve?The initial assessment of the gas resources within the licence is expected to take a few months and will be completed using existing geological data.

We will then work with landholders and the community to identify a small number of potential sites from which we can take core samples for further evaluation.

In the following 12-18 months we will work to gather five to seven core samples and test the characteristics of the coal. We will need to extensively evaluate and assess these results before deciding whether to proceed with any

further exploration or field activity.

How is the industry regulated?The Licence and exploration activity is

regulated under the Mineral Resources (Sustainable Development) Act 1990

administered by the Victorian Department of Primary

Industries.

Exploration Licence 4416 was

first issued in 2001 and hasbeen managed by IER and

its predecessors since that time.

During the 12 to 18 months of sampling and testing, there will not be any significant water production associated with our activities. Water that is produced will be from the deeper coal seams only and not from the aquifers.

In addition, properly designed wells protect groundwater aquifers by isolating the wells either by steel and/or cement.

Protecting water is important to everyone, and we believe we have an important role to play in communicating our efforts and actions in regard to groundwater protection, water consumption and water disposal.

ExxonMobil and IER are committed to achieving and maintaining excellence in environmental care throughout our operations.

Protecting the aquifersIn any oil and gas exploration activity, well design is a critical factor in protecting groundwater. Cement and steel casing are used to provide an impermeable barrier between the well and the aquifer.

The process for drilling a core sample or a natural gas well is the same. This process has been successfully used by ExxonMobil Australia for over 40 years of drilling offshore wells in the Bass Strait.

Water extraction and coastal subsidenceExxonMobil Australia has not observed subsidence near its operations in more than 40 years of offshore oil and gas production in Victoria/Bass Strait. This is supported by the findings of a CSIRO report released in late 2007 on coastal subsidence in Gippsland. A key finding of the report was that there has been no measurable subsidence of the Gippsland coastline observed during the three year period of monitoring conducted by the Victorian Department of Primary Industries.

fold fold

fold fold

0 50 10025

Km

Melbourne

V I C T O R I A

Exploration Licence Area (EL4416)

Longford

Sale

The coal seams we are exploring in Gippsland are between 35 and 45 million years old, whereas the seams in New South Wales and Queensland ranges from 200 to 280 million years old.

-100 m

-1000 m

0 m

Shallow aquifer

Intermediate aquifer

Deeper aquifer

Coal

Limestone and mudstone

Sand, shale& coal

Coal

Layers of steel and cement casing protect the aquifers.

Cement

Steel PipeCasing

Core Sample

10 cm

Diagram for illustrative purposes.

What is Coal Seam Gas (CSG)?CSG is natural gas trapped in underground coal seams. Wells are drilled down to the coal seam and pressures are lowered in the seam by the removal of water. Reducing the pressure in the seam allows the gas to be released from the coal and flow through the well.

Will hydraulic fracturing be used?There will be no hydraulic fracturing, “fraccing” or use of hydraulic fracturing fluid during the initial exploration phase. Hydraulic fracturing may not be necessary to produce gas from Gippsland’s coal seams. Part of our evaluation activities over the next 12 to 18 months will be to determine the best way to produce the gas and whether hydraulic fracturing will be needed, should we proceed to gas production. Hydraulic fracturing is only used in about half of the CSG wells in Australia. That is because many coal seams already have natural fractures.

How is this onshore natural gas exploration in Gippsland different from what is happening in Queensland and New South Wales?The natural gas in the onshore Gippsland Basin’s deeper coal seams has been created by naturally occurring organisms that have biologically decomposed organic matter over time. It is known as Biogenic Natural Gas and differs from the coalseam gas (CSG) operations in Queensland and New South Wales, which are a mixture of Biogenic and Thermogenic Natural Gas, created in part from the much older black coal by the heating of organic matter during the process of forming coal from the concentrated organic matter deposits. Because of the process through which the gas was formed in Gippsland, toxicity and salinity are not expected to be an issue from any water produced.

Also, we are in the very early days of resource assessment and appraisal. By comparison, we are many years behind the Queensland Coal Seam Gas industry which has been a significant source of gas production in Queensland for more than 10 years.

Will landowners be paid for core sampling on their land?Yes. Any payment would be agreed in advance by the landowner, IER and ExxonMobil.

What happens if you find commercial quantities of gas?This project is in the very early stage of understanding if there is any gas present in the coal seams that can be safely and commercially produced. Any further activities will be subject to the successful conclusion of this initial phase of characterising the seams and their gas content.

ExxonMobil and IER are committed to working cooperatively and openly with the community. We have a history of establishing open, mutually beneficial relationships with landowners and we will continue to do so should this project ultimately progress beyond preliminary investigations.

Esso Ventures Pty Ltd (ExxonMobil), an affiliate of ExxonMobil Australia Pty Ltd has signed an agreement to take an initial 10 percent interest in an onshore minerals Exploration Licence (EL4416) to explore for natural gas in the deeper coal seams of the Gippsland Basin; the remaining 90 percent is held by Ignite Energy Resources Limited (IER).

During 2012 and 2013, the operator IER will be working closely with ExxonMobil to evaluate and assess the natural gas potential in the Licence area. This will require a small scale, low impact exploration and investigation program to identify whether any gas resources exist within the licence area, and assess whether they can be safely and commercially produced.

This is the very early phase to understand if there is gas present in the coal seams to warrant further investigation. We understand however, that you may have questions about potential futuredevelopments, in the event that the initial activities

are positive. Both ExxonMobil Australia and IER have a history of establishing open, mutually beneficial relationships with landowners and we are committed to working in partnership with individual landholders and the community at every stage, to ensure there is a clear understanding of what we are proposing.

What will the initial exploration activities involve?The initial assessment of the gas resources within the licence is expected to take a few months and will be completed using existing geological data.

We will then work with landholders and the community to identify a small number of potential sites from which we can take core samples for further evaluation.

In the following 12-18 months we will work to gather five to seven core samples and test the characteristics of the coal. We will need to extensively evaluate and assess these results before deciding whether to proceed with any

further exploration or field activity.

How is the industry regulated?The Licence and exploration activity is

regulated under the Mineral Resources (Sustainable Development) Act 1990

administered by the Victorian Department of Primary

Industries.

Exploration Licence 4416 was

first issued in 2001 and hasbeen managed by IER and

its predecessors since that time.

During the 12 to 18 months of sampling and testing, there will not be any significant water production associated with our activities. Water that is produced will be from the deeper coal seams only and not from the aquifers.

In addition, properly designed wells protect groundwater aquifers by isolating the wells either by steel and/or cement.

Protecting water is important to everyone, and we believe we have an important role to play in communicating our efforts and actions in regard to groundwater protection, water consumption and water disposal.

ExxonMobil and IER are committed to achieving and maintaining excellence in environmental care throughout our operations.

Protecting the aquifersIn any oil and gas exploration activity, well design is a critical factor in protecting groundwater. Cement and steel casing are used to provide an impermeable barrier between the well and the aquifer.

The process for drilling a core sample or a natural gas well is the same. This process has been successfully used by ExxonMobil Australia for over 40 years of drilling offshore wells in the Bass Strait.

Water extraction and coastal subsidenceExxonMobil Australia has not observed subsidence near its operations in more than 40 years of offshore oil and gas production in Victoria/Bass Strait. This is supported by the findings of a CSIRO report released in late 2007 on coastal subsidence in Gippsland. A key finding of the report was that there has been no measurable subsidence of the Gippsland coastline observed during the three year period of monitoring conducted by the Victorian Department of Primary Industries.

fold fold

fold fold

0 50 10025

Km

Melbourne

V I C T O R I A

Exploration Licence Area (EL4416)

Longford

Sale

The coal seams we are exploring in Gippsland are between 35 and 45 million years old, whereas the seams in New South Wales and Queensland ranges from 200 to 280 million years old.

-100 m

-1000 m

0 m

Shallow aquifer

Intermediate aquifer

Deeper aquifer

Coal

Limestone and mudstone

Sand, shale& coal

Coal

Layers of steel and cement casing protect the aquifers.

Cement

Steel PipeCasing

Core Sample

10 cm

Diagram for illustrative purposes.

What is Coal Seam Gas (CSG)?CSG is natural gas trapped in underground coal seams. Wells are drilled down to the coal seam and pressures are lowered in the seam by the removal of water. Reducing the pressure in the seam allows the gas to be released from the coal and flow through the well.

Will hydraulic fracturing be used?There will be no hydraulic fracturing, “fraccing” or use of hydraulic fracturing fluid during the initial exploration phase. Hydraulic fracturing may not be necessary to produce gas from Gippsland’s coal seams. Part of our evaluation activities over the next 12 to 18 months will be to determine the best way to produce the gas and whether hydraulic fracturing will be needed, should we proceed to gas production. Hydraulic fracturing is only used in about half of the CSG wells in Australia. That is because many coal seams already have natural fractures.

How is this onshore natural gas exploration in Gippsland different from what is happening in Queensland and New South Wales?The natural gas in the onshore Gippsland Basin’s deeper coal seams has been created by naturally occurring organisms that have biologically decomposed organic matter over time. It is known as Biogenic Natural Gas and differs from the coalseam gas (CSG) operations in Queensland and New South Wales, which are a mixture of Biogenic and Thermogenic Natural Gas, created in part from the much older black coal by the heating of organic matter during the process of forming coal from the concentrated organic matter deposits. Because of the process through which the gas was formed in Gippsland, toxicity and salinity are not expected to be an issue from any water produced.

Also, we are in the very early days of resource assessment and appraisal. By comparison, we are many years behind the Queensland Coal Seam Gas industry which has been a significant source of gas production in Queensland for more than 10 years.

Will landowners be paid for core sampling on their land?Yes. Any payment would be agreed in advance by the landowner, IER and ExxonMobil.

What happens if you find commercial quantities of gas?This project is in the very early stage of understanding if there is any gas present in the coal seams that can be safely and commercially produced. Any further activities will be subject to the successful conclusion of this initial phase of characterising the seams and their gas content.

ExxonMobil and IER are committed to working cooperatively and openly with the community. We have a history of establishing open, mutually beneficial relationships with landowners and we will continue to do so should this project ultimately progress beyond preliminary investigations.

Esso Ventures Pty Ltd (ExxonMobil), an affiliate of ExxonMobil Australia Pty Ltd has signed an agreement to take an initial 10 percent interest in an onshore minerals Exploration Licence (EL4416) to explore for natural gas in the deeper coal seams of the Gippsland Basin; the remaining 90 percent is held by Ignite Energy Resources Limited (IER).

During 2012 and 2013, the operator IER will be working closely with ExxonMobil to evaluate and assess the natural gas potential in the Licence area. This will require a small scale, low impact exploration and investigation program to identify whether any gas resources exist within the licence area, and assess whether they can be safely and commercially produced.

This is the very early phase to understand if there is gas present in the coal seams to warrant further investigation. We understand however, that you may have questions about potential futuredevelopments, in the event that the initial activities

are positive. Both ExxonMobil Australia and IER have a history of establishing open, mutually beneficial relationships with landowners and we are committed to working in partnership with individual landholders and the community at every stage, to ensure there is a clear understanding of what we are proposing.

What will the initial exploration activities involve?The initial assessment of the gas resources within the licence is expected to take a few months and will be completed using existing geological data.

We will then work with landholders and the community to identify a small number of potential sites from which we can take core samples for further evaluation.

In the following 12-18 months we will work to gather five to seven core samples and test the characteristics of the coal. We will need to extensively evaluate and assess these results before deciding whether to proceed with any

further exploration or field activity.

How is the industry regulated?The Licence and exploration activity is

regulated under the Mineral Resources (Sustainable Development) Act 1990

administered by the Victorian Department of Primary

Industries.

Exploration Licence 4416 was

first issued in 2001 and hasbeen managed by IER and

its predecessors since that time.

During the 12 to 18 months of sampling and testing, there will not be any significant water production associated with our activities. Water that is produced will be from the deeper coal seams only and not from the aquifers.

In addition, properly designed wells protect groundwater aquifers by isolating the wells either by steel and/or cement.

Protecting water is important to everyone, and we believe we have an important role to play in communicating our efforts and actions in regard to groundwater protection, water consumption and water disposal.

ExxonMobil and IER are committed to achieving and maintaining excellence in environmental care throughout our operations.

Protecting the aquifersIn any oil and gas exploration activity, well design is a critical factor in protecting groundwater. Cement and steel casing are used to provide an impermeable barrier between the well and the aquifer.

The process for drilling a core sample or a natural gas well is the same. This process has been successfully used by ExxonMobil Australia for over 40 years of drilling offshore wells in the Bass Strait.

Water extraction and coastal subsidenceExxonMobil Australia has not observed subsidence near its operations in more than 40 years of offshore oil and gas production in Victoria/Bass Strait. This is supported by the findings of a CSIRO report released in late 2007 on coastal subsidence in Gippsland. A key finding of the report was that there has been no measurable subsidence of the Gippsland coastline observed during the three year period of monitoring conducted by the Victorian Department of Primary Industries.

fold fold

fold fold

Onshore Natural Gas Exploration in Gippsland

Ignite Energy Resources LimitedLevel 9, 267 Collins Street Melbourne VIC 3000 Australia Phone: +61 (3) 8600 7000

Esso Ventures Pty Ltd 12 Riverside Quay Southbank Melbourne VIC 3006 Australia Phone: +61 (3) 9270 3000

The terms ExxonMobil, Esso, our, we and its as used in this material may refer to Esso Ventures Pty Ltd, ExxonMobil Australia Pty Ltd, Exxon Mobil Corporation, or to its affiliates or to any one or more of the foregoing. The shorter terms are used merely for convenience and simplicity.

June 2012.

About usIgnite Energy Resources Limited (IER)IER is a public unlisted company with offices in Melbourne and Sydney, Australia, with an onshore resource portfolio and a lignite and biomass upgrading technology being demonstrated at its Somersby facility near Sydney. The onshore resource portfolio is focused on the development of its flagship EL4416, which covers more than 3,800 km2 in the Gippsland Basin in southeast Victoria. In relation to this agreement IER will be the operator for the preliminary assessment work.

www.igniteer.com

Exxon Mobil CorporationExxon Mobil Corporation, the largest publicly-traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil Australia and its affiliates have operated in Australia since 1895, including operating the Gippsland Basin Joint Venture for more than 40 years. Research has shown that Bass Strait has been a critical building block underpinning the economic growth of this nation – producing almost two-thirds of Australia’s cumulative oil production to date and 30 percent of Australia’s gas production.

ExxonMobil Australia’s Gippsland operations have also had an important and positive impact on employment and living standards. Approximately 50,000 permanent additional jobs have been created in Victoria, with 14,000 of these in regional Gippsland alone.

www.exxonmobil.com.au

fold fold

fold fold

Onshore Natural Gas Exploration in Gippsland

Ignite Energy Resources LimitedLevel 9, 267 Collins Street Melbourne VIC 3000 Australia Phone: +61 (3) 8600 7000

Esso Ventures Pty Ltd 12 Riverside Quay Southbank Melbourne VIC 3006 Australia Phone: +61 (3) 9270 3000

The terms ExxonMobil, Esso, our, we and its as used in this material may refer to Esso Ventures Pty Ltd, ExxonMobil Australia Pty Ltd, Exxon Mobil Corporation, or to its affiliates or to any one or more of the foregoing. The shorter terms are used merely for convenience and simplicity.

June 2012.

About usIgnite Energy Resources Limited (IER)IER is a public unlisted company with offices in Melbourne and Sydney, Australia, with an onshore resource portfolio and a lignite and biomass upgrading technology being demonstrated at its Somersby facility near Sydney. The onshore resource portfolio is focused on the development of its flagship EL4416, which covers more than 3,800 km2 in the Gippsland Basin in southeast Victoria. In relation to this agreement IER will be the operator for the preliminary assessment work.

www.igniteer.com

Exxon Mobil CorporationExxon Mobil Corporation, the largest publicly-traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil Australia and its affiliates have operated in Australia since 1895, including operating the Gippsland Basin Joint Venture for more than 40 years. Research has shown that Bass Strait has been a critical building block underpinning the economic growth of this nation – producing almost two-thirds of Australia’s cumulative oil production to date and 30 percent of Australia’s gas production.

ExxonMobil Australia’s Gippsland operations have also had an important and positive impact on employment and living standards. Approximately 50,000 permanent additional jobs have been created in Victoria, with 14,000 of these in regional Gippsland alone.

www.exxonmobil.com.au