The Energy Report

Molopo Energy Ltd. TICKER: MPO:ASX Visit Company Website Molopo Energy Ltd. is an oil and gas company with a portfolio of unconventional exploration and development projects in Australia, Canada, South Africa and the U.S. The company has five major projects: Tight oil exploration plays in the Bakken Shale in Western Canada and the Permian Basin in West Texas; a coal-bed methane project in Queensland, Australia; shale-gas exploration acreage in Quebec, Canada, and two gas projects in South Africa. Molopo is following a strategy of focused growth—building a core of producing assets, monetizing non-core assets and accelerating the pace of new business development.

The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Analysis

Ivor Ries, Baillieu Research (2/13/12) "Molopo Energy Ltd.'s campaign to sell its Queensland coal seam gas assets appears to have been given a boost, following a report from Molopo neighbor Westside Corporation that it had received an unsolicited $165M takeover bid. . .Molopo Energy offers investors exposure to high impact unconventional oil and gas exploration campaigns in North America; drilling over the next six to nine months will have a crucial bearing on how the company is perceived in the market. As the stock trades at a discount of more than 15% to our central valuation of $1.09/share, which assumes modest drilling success, we retain a Buy recommendation (High Risk)."

Kirit Hira, Macquarie Capital Markets (2/1/12) "Molopo Energy Ltd. reported December quarter production and revenue and provided an updated capital budget and production guidance for CY12. . .an average 2012 production rate of 680 bbl/d and 2012 exit rate of 730bbl/d appear conservative given ~200 bbl/d initial production rates targeted in the company's Bakken holdings and the attractive flow rates. With the current 7–10 well program expected to be completed in coming months and initial signs proving encouraging, we expect upside to both capital and production guidance in March 2012. . .we maintain an Outperform rating."

Sandra McCullagh, Credit Suisse (1/31/12) "Molopo Energy Ltd.'s 2Q12 production of 21k boe is up 23% quarter-over-quarter, with sales revenue of $1,073k up 182%; the early Bakken drilling results are encouraging: the Roche Percee 16-34 well peaked at over 600 bbl/d once it was put on pump, and the Rochee 16-26 well had a 30-day initial production rate of 363 bbl/d. The Oungre East 02/9-21 should be online shortly and is a key well for the company. . .the company has a $110M cash balance thanks to the sale of its shareholding in Legacy Oil + Gas Inc. . . Molopo's Outperform rating is retained."

Ivor Reis, Baillieu Research (1/31/12) "Molopo Energy Ltd. cashed up for aggressive 2012 drilling campaigns in Canada and Texas, announcing the sale of the company's minority interest in Legacy Oil and Gas Inc for CA$71.7M. . .the sale follows a surge in Legacy shares over the past few months thanks to strong production results and a bullish forecast for 2012; Molopo also reported its first meaningful oil production from the Bakken Formation. . .assuming modest exploration success and using comparable asset value yardsticks, the company trades at a considerable discount to its net asset value."

The Energy Report Interview with Josh Young (12/8/11) "Molopo Energy Ltd. is an Australia-based oil and gas company with assets around the world, including in Canada and the U.S. . .it has a new CEO from Compton Petroleum Corporation who had been brought in to restructure Compton. Prior to that he recapitalized, repositioned and ran PrimeWest Energy for nine years before selling it to TAQA, a national oil company. I think that is a real positive. Bringing him in as CEO indicates the company is likely to list its stock on the Toronto Stock Exchange, and that the new CEO sees potential in Molopo's assets. . .I think it is also an indication that Molopo will be selling its Australian coal bed methane asset in the near-term. The company had previously talked about selling by the end of the year, which should generate a substantial amount of cash.

Molopo has been involved in one of the highest-producing Canadian Bakken wells in southeast Saskatchewan. . .Typically these wells decline rapidly rather than incline. The company installed a pump to enhance the production from the well and it's working spectacularly well. Molopo has 50,000 net acres in the southeast Saskatchewan Bakken. . .As Molopo drills additional wells there, it should be able to ramp its oil production from that area to potentially over 500 bpd by the end of 2012. Molopo is also active in the Wolfcamp Shale play in the Permian Basin of West Texas, where it has just under 20,000 net acres. . .the well results in the area continue to improve, which is very exciting for Molopo. The stock is trading as if it is still a very speculative early stage shale play. Yet, there are results from nearby wells that are indicative of a play working better than people expected and being among the more economic shale plays in the U.S. . . I think stocks like Molopo have the potential to generate a substantial excess return in a market recovery." More >

• Corporate Presentation (2/1/12)

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