Challenger Energy’s strategy is to identify, acquire and appraise material upstream oil and gas exploration opportunities 􀁠 Mercury Stetson Prospect in North Texas, US 􀁠 Two proven shale formations – Barnett and Woodford 􀁠 Massive potential gas in place with OGIP estimated at 360 BCF/sq mile 􀁠 Large prospect area – potentially up to 55,000 acres (86 sq miles) 􀁠 Prospect is close to existing infrastructure 􀁠 Contiguous land position of ~ 26,000 acres with a short term target of 35,000 acres. 􀁠 Triple Crown Prospect in Texas, US 􀁠 Significant acreage – 45,000 acres with options over a further 6,500 acres. 􀁠 Large gas charged zones, Ellenburger (dolomite) and an unconventional Hybrid play which is geologically analogous to Montney Hybrid Play in Western Canada with an estimated OGIP of 9 TCF. 􀁠 Testing to commence shortly on both the Ellenburger and Hyprid Play 􀁠 Karoo Basin in South Africa 􀁠 Shale gas in Karoo Basin now a major focus for international E&P companies (eg Shell, Cheasapeake, Statoil and Sasol) 􀁠 Challenger Energy’s permit of approx. 800,000 acres centred on only well within basin to flow significant gas to surface to date, awaiting approval. 􀁠 Independent US Energy Information Agency report suggests Risked Recoverable Resource of more than 7 TCF in application area. 􀁠 Attractive assets have exciting potential to grow significant shareholder value

1. Investor Presentation
August 2011
1

2. Disclaimer
This announcement contains “forward-looking statements”. Such forward-looking statements include, without
limitation: estimates of future earnings, the sensitivity of earnings to oil & gas prices and foreign exchange rate
movements; estimates of future oil & gas production and sales; estimates of future cash flows, the sensitivity of cash
flows to oil & gas prices and foreign exchange rate movements; statements regarding future debt repayments;
estimates of future capital expenditures; estimates of reserves and statements regarding future exploration results
and the replacement of reserves; and where the Company expresses or implies an expectation or belief as to future
events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis.
However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed, projected or implied by such forward-looking statements.
Such risks include, but are not limited to oil and gas price volatility, currency fluctuations, increased production costs
and variances in reserves or recovery rates from those assumed in the company’s plans, as well as political and
operational risks in the countries and states in which we operate or sell product to, and governmental regulation and
judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Reports,
as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any
revisions to any “forward looking statement” to reflect events or circumstances after the date of this release, or to
reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
2

3. Corporate Overview
Shares on Issue: 214,021,000
Non Executive Chairman - Michael Fry
Michael holds a Bachelor of Commerce degree from the University of Western Listed Options 105,222,171 1
Australia, is a Fellow of Financial Services Institute of Australasia, and is a past
member of the ASX. Michael has extensive experience in capital markets and
corporate treasury management specialising in the identification of commodity, Unlisted Options: 11,500,000
currency and interest rate risk and the implementation of risk management
strategies.
Share Price: 0.12 as of 25/08/2011
Market Cap: $25.68M
Managing Director - Paul Bilston Shareholders: 796
Paul Bilston has a Bachelor of Mechanical engineering and a PhD in Structural
engineering, with 15 yrs experience in all aspects of the oil & gas sector. He
Top 20 Holding: 50.11%
has worked in a number of senior technical, commercial and management Cash ~$5.9M
roles for companies including Worley, GHD, AGL Energy and AJ Lucas. In
recent years his focus has been on the unconventional hydrocarbon space in
Australia and overseas, and most recently managed the Gloucester Gas project Note 11: 20c Options - 30 June 2012
in NSW which was sold in December 2008 for $370M by AJL & MPO.
Executive Director - David Prentice
David Prentice’s career includes 21 years experience in commercial
management and business development within the natural resources sector,
working for some of Australia’s leading resource companies. This has included
high-level commercial and operational roles with a number of listed and
unlisted resource companies.
Chief Operating Officer – David Woodley
David Woodley holds a Bachelor of Chemical Engineering degree, with over 22
years experience in the oil and gas sector gained in Australia, North America,
UK and Europe. He has considerable experience in drilling and completion,
field development planning and asset management and evaluation.
Company Secretary – Adrien Wing
Mr Adrien Wing is CPA qualified. He practised in the audit and corporate
divisions of a chartered accounting firm before working with a number of public
companies listed on the Australian Stock Exchange as a corporate/accounting
consultant and company secretary.
3

4. Strategy
Identify, acquire and appraise material upstream oil and gas exploration opportunities:
Utilising network of global contacts
Primarily unconventional hydrocarbons, CBM, Shale Gas, Shale Oil.
Low cost of entry, with primary expenditure on the drill bit
High materiality (> 1 TCF Gas, or >10 Million bbl Oil)
Projects where Challenger will act as operator
Evaluate and high grade exploration projects to ensure efficient expenditure of shareholders
funds
Implement staged and cost effect exploration and appraisal programs to evaluate projects
with an eye on the best development or exit strategy
4

5. Why Unconventional Gas?
Can test large play concepts cheaply
Attractive acquisition targets for major Oil & Gas Companies
Deal Location Date Net Acres Value
BHP - Petrohawk Eagleford (SA) July 11 1,000,000 US$12.0b
Historical transactions for
BHP-Chesapeake Fayettteville (USA) Feb 11 487,000 US$4.75b unconventional fields indicate
PetroChina - Encana Cut Ridge (Canada) Feb 11 317,500 C$5.4 b
LAND:
Talisman-Sasol Montney (Canada) Dec 10 25,500 C$1.05 b Typical range is $9,500 to
Ev EP/Enervest Barnett (USA) Nov 10 20,200 Gross US$967M $15,000 per acre, though
some much higher.
Chevron–Atlas Marcellus (USA) Nov 10 1,209,000 US$3.2 b
Mitsui-Anardarko Marcellus (USA) Feb 10 100,000 US$1.4 b
RESOURCE:
$0.4/mcf to $0.6/mcf
Total-Chesapeake Barnett (USA) Jan 10 270,000 US$2.5 b
ExxonMobil-XTO Energy Various (USA) Dec 09 US $41 b
5

6. Asset Portfolio
Mercury Stetson Shale Gas Prospect
Barnett Shale
Woodford Shale
Triple Crown
Hybrid Gas Play
Ellenburger
South Africa
Fort Brown Shales
6

7. Mercury Stetson
Two proven shale formations – Barnett and Oklahoma Woodford
Woodford
Anadarko Arkoma
Large prospect area – Basin Basin
potentially up to 55,000 acres (86 sq miles) Hollis
Basin
Properties consistent with core areas of current Newark Field
Core Barnett
shale plays.
Significant contiguous lease position
Ft. Worth Basin
~ 26,000 acres
Prospect
target ~ 35,000 acres (55 sq miles)
Massive OGIP estimated at 360 BCF/sq mile
Republic
of Mexico
Potentially > 1.5 TCF net resource to CEL GoM
Close to existing infrastructure & services
Recent Barnett (only) transaction (EV Energy
Partners) paid $47,700/acre for Core area
Prospect offers an entry position into proven shales with
HUGE UPSIDE POTENTIAL
7

8. Expected Stratigraphy & Thickness
Note: TOC results are from cuttings – Actual TOC expected to be ~ 100% higher
based on experience with analysis of results in the Barnett shale.
8

9. Elements of successful shale play
Element Mercury Stetson Prospect
Kerogen Type - Target: Amorphous Kerogen Amorphous Kerogen
Organic Richness (TOC) - Target: 2% to 6% Range: 2% to 5%
Avg: Barnett 3.2%, Woodford 3.1%
Gas in Place - Target: >100 BCF/Section (sq Mile) 360 BCF+ estimate
Thermal Maturity - Target: 1.0 – 1.8% Ro 1.5% Barnett (dry gas window)
1.5% Woodford (dry gas window)
Uplift = Free Gas - Target 5,000’ to 10,000’ 5,000’ to 7,000’ of uplift
Silica (Quartz) Content - Target 30% to 80% 43% Barnett
50% Woodford
Thickness - Target: >150’ 415’ Barnett - 185’ Woodford
Could thicken significantly off structure
Fracturing Evidence of fractured Sycamore between shales
(“considerable LCM”)
9

10. Proven Shales
Barnett Shale
First recognised shale gas project in US with more
than 14,000 wells now drilled
Wells in core area recovering ~ 3 BCF
Producing 1.8 TCF/yr
Woodford Shale
More recently developed
Wells in core area recovering ~ 4 BCF
Over 1,000 wells drilled
Producing 240 BCF/yr
Much lower risk than shale plays in
frontier areas.
10

11. Mercury Stetson - Go Forward Plan
2011 2012 2013 and beyond
First BOOK BOOK
vertical GAS Drill
Well
BOOK ndCore
2 Vertical Drill 2 GAS
GAS Analysis
Well RESERVES additional RESERVES
HZ wells
RESOURCE & Vertical or
PROOF Delineation
Seismic Target HZ Target
OF Wells
Program 600 BCF 3P Delineation 3 TCF 3P
CONCEPT (100%) Wells (100%)
Land Acquisition & Lease Management
11

12. Triple Crown Prospect
Existing Ellenburger Fields
Existing Canyon Sands Fields
De
ve
lop
me
n t
HP Pipeline
Dallas
Triple Crown Houston
San Antonio
Edwards County
50 km
12

13. Triple Crown Prospect- Texas
45,000 Acres in Edwards County Texas Well
Options over ~ 6,500 acres acquired
Challenger has 80% WI (100% before payout)
Two Targets
Ellenburger
Hybrid (Sand/Unconventional)
First appraisal well successfully drilled Dec/Jan
2011.
Strong gas shows whilst drilling over a number
of zones. A total of 2,300 ft of gas charged
zones were intersected
13

14. Ellenburger
Fracture and
high porosity
zone
Drilling results confirmed a significant gas charged structure
– potentially multi TCF gas in place
Fractures and high porosity intersected at the top of the
Ellenburger, however zone cemented during setting of
casing, which likely limited gas production
Upper zone at the top of formation is the initial target for
horizontal well
Original Gas in Place (OGIP) 1.6 TCF
14

15. Triple Crown – Canyon Hybrid Play
Very strong gas shows over an 1150 ft
Sand
Challenger believe this to be a hybrid play that
Sand
consists of a number of sands interbedded within
a large unconventional gas zone 1,150 FT
Gas Column
Strong Gas
Preliminary analysis suggests this play has a very
Shows
large gas in place, with analysis of known wells Unconventional
Zone with 2.5 - 10%
suggesting Original Gas in place (OGIP)
interbedded
equivalent to 7.4 TCF over existing acreage sand stringers
As expected by the depositional environment,
analysis of logs of previously drilled wells in the Sand/Siltstone
area suggest the potential for this play improves
moving down dip off structure
15

16. Triple Crown - Go Forward Plan
2011 2012 2013
Core & Stimulate
Petro- & BOOK BOOK
Drill
Core Pilot
physical production
test
GAS Delineation
Analysis production
GAS GAS
Analysis RESOURCE Wells RESERVES
as well as testing SALES
regional PROOF
mapping OF
CONCEPT
Land Acquisition
Drilling expected to commence shortly to side track into the Ellenburger with a short
(500 ft) Horizontal well. Unless the Ellenburger is completed as a producer, a fracture
stimulation of the Hybrid will be completed as a “Proof of Concept”
16

17. Karoo Basin – International gas focus
Shale Gas within the Karoo Basin is now a major focus for international E&P companies seeking to put
their foot on new resources
Following initial 12 month Technical Co-Operation permits, both Shell and Falcon have moved to the next
step of formally applying for Exploration Permits
Challenger permit of ~
800,000 acres centred on only
well (CR 1/68) within the
basin to flow significant gas
to surface
Very well positioned having
already reached agreement Sasol/Statoil/Cheasapeake
with Black Empowerment
Partners (BEE), and first
company to submit its
application
EMP submitted in September Shell
2010 – awaiting approval.
Currently a fraccing
moratorium in place until
March 2012. Falcon
Challenger(Bundu)
17

18. Cranemere Well (CR 1/68)
Located in the centre of the Application Area
Drilled 1968
Well blowout at around 8,300 ft
Peak flow of 16 mmcfd during DST
Fort Brown Shales
dark grey to black and carbonaceous with occasional
siltstone stringers.
Strong gas shows in a number of intervals across the
5,000 ft section.
US Energy Information Administration Report on
Shale gas potential around the world identified the
following:
Karoo Basin large potential
“Risked Recoverable Resource” averaged across basin ~
6.8 BCF / square mile.
Equivalent to more than 7 TCF of Risked
Recoverable Resource within Challengers
Application Area
18

19. Summary
Challenger Energy’s strategy is to identify, acquire and appraise material upstream oil and gas
exploration opportunities
Mercury Stetson Prospect in North Texas, US
Two proven shale formations – Barnett and Woodford
Massive potential gas in place with OGIP estimated at 360 BCF/sq mile
Large prospect area – potentially up to 55,000 acres (86 sq miles)
Prospect is close to existing infrastructure
Contiguous land position of ~ 26,000 acres with a short term target of 35,000 acres.
Triple Crown Prospect in Texas, US
Significant acreage – 45,000 acres with options over a further 6,500 acres.
Large gas charged zones, Ellenburger (dolomite) and an unconventional Hybrid play which is geologically analogous to
Montney Hybrid Play in Western Canada with an estimated OGIP of 9 TCF.
Testing to commence shortly on both the Ellenburger and Hyprid Play
Karoo Basin in South Africa
Shale gas in Karoo Basin now a major focus for international E&P companies (eg Shell, Cheasapeake, Statoil and Sasol)
Challenger Energy’s permit of approx. 800,000 acres centred on only well within basin to flow significant gas to surface to
date, awaiting approval.
Independent US Energy Information Agency report suggests Risked Recoverable Resource of more than 7 TCF in
application area.
Attractive assets have exciting potential to grow significant shareholder value
19

20. Appendices
Supporting Mercury Stetson Slides
August 2011
20

21. Prospect Scope
Property Range Average Risks
OGIP / Section (Square Mile) (BCF) 280 – 420 360 Based on analog data and comparison
of shale properties to existing plays
Estimated Recovery Factor (%) 10 – 40% 15% Barnett Dependent on well spacing
30% Woodford
Prospect area (Acres) 20 – 55,000 35,000 Further seismic required to fully define
(55 sq miles) prospect area.
Initial Production (IP) MMSCFD 2–6 3.0 HZ Barnett Dependent on well type and frac
5.0 HZ Woodford stages, based on equivalent areas,
vertical may be an effective option in
this area.
Reserves per well (BCF) 2.5 – 6 3.0 HZ Barnett Based on equivalent areas
4.0 HZ Woodford
Cost per well (BCF) $2.5 – $5.0 $3.5 M HZ Drilling through the Oauchita Thrust
may increase Costs
Drilling Locations ~ 875 each Barnett & Based on 80 acre spacing
Woodford
21

22. Joint Venture Agreement
Governs relationship between the parties until no leases held by any party.
Provides for Challenger to earn 50% interest in Phase 1, by the following:
Payment of up to $2.2 million as and when required for the renewal and extension of existing leases plus the acquisition of
additional leases
Drill, fracture stimulate, complete and test TWO vertical wells. The parties anticipate that the first well will incorporated the
re-entry and completion of the existing well on the property, however in the event that is unsuccessful, a new well will be
drilled and the value of the seismic program adjusted to keep Challenger whole.
Conduct a seismic program funded partially by revenue from first well to fully define the extend of the shales in the
prospect area
Connect the two wells to the nearby sales pipeline
Challenger is required to pay the balance of the $2.2 M if it does not drill and complete the first well.
Phase 2
Subject to the terms of the agreement, provides for the parties to enter into a Phase 2 program including two horizontal
wells in each of the Barnett and Woodford shales.
Parties to fund their share, or in the absence of all parties agreeing to fund their share, a mechanism exists for the funding
parties to earn additional interest

23. Scoping Economics
Single Well
Case Well IP Capex EUR NPV(10)
@ US$/mscf Flat
MMSCFD US$M BCF $4.5 $6 $7.5
1 2.0 2.6 2.5 1.8 2.4 3.4
2 3.0 2.6 3.0 2.1 3.4 4.8
3 4.0 4.0 4.0 2.1 3.8 5.5
4 5.0 4.0 5.0 3.0 5.2 7.2
Notes
Based on current operators in the sector,
the Expected Ultimate recovery (EUR) Barnett Core ~ 3 BCF/well with well costs ~ $2.6 M/well
Expected Ultimate recovery (EUR) Woodford Core ~ 4 – 5 BCF/well with well costs ~ $ 4M
These Economics are conceptual and unrisked, and are calculated are based on a set of assumptions derived by comparison with
existing Barnett and Woodford production
23

24. Barnett / Woodford drilling activity
Oklahoma Map showing Barnett and
Woodford remnant basins
(purple) with 2000-2011 shale
Arnansas
Anadarko Arkoma
Basin Basin gas drilling areas (yellow
Ar
A circles)
bu
B
c
kl e
Ar
d
M Ba mo
Mt
Hollis ar si re
.U
Basin ie n
pli
M tta
ue
ft
B
ns as
te i
rU n
pl
ift
B A Prospect
lt
Fau
Louisiana
New Mexico
rust
Texas Ft. Worth Basin
a Th
chit
Exploration for Barnett Shale
Oau (called Caney Shale in OK) and
Woodford targets under the
Quachita Thrust Sheet is now
Republic
underway in Oklahoma
of Mexico
GoM
Source: adapted from Gale, J.F. , et.al., 2010, AAPG Search & Discovery Article # 10226
24

25. NW-SE Ardmore Basin X-Section A-A
NW SE
Stetson
Oklahoma Red River Texas /Mercury Area
Cretaceous
Pennsylvanian
Ouachita
Caney Barnett Shale Thrust Sheet
Shale
Devonian
Ordovician Woodford Shale
100 miles
25

26. NE-SW Texas/Oklahoma X-section B-B
Stetson / Mercury Area
10 miles east of section
S N
Muenster Arch Arbuckle Mtns.
Ft. Worth Basin Ardmore Basin Arkoma Basin
Cretaceous
Woodford Shale
Pennsylvanian
Barnett Shale
Devonian
Ordovician
120 miles
26