cooper basin pel 570 farm-out approved

AMBASSADOR OIL AND GAS LIMITED

21 January 2014
Cooper Basin PEL 570 farm-out approved by New
Standard Energy shareholders
Magnum Hunter expertise to help explore Cooper Basin

? Shareholders in farm-in partner overwhelmingly approve Cooper Basin deal.
? World leading unconventional explorer to guide Cooper Basin shale oil/gas hunt
? $42.5m farm-in of a 52.5% interest in PEL 570 - Implied value of 27c per AQO share
? Ambassador highly leveraged to exploration success in PEL 570
Ambassador Oil and Gas Ltd’s (ASX:AQO) farm-out of a 52.5% working interest in its highly prospective
PEL 570 exploration permit in the Cooper Basin (South Australia) to New Standard Energy Ltd (ASX:NSE)
for $42.5 million in direct exploration expenditure has moved a major step closer to completion.

The deal, representing an implied value of 27 cents per Ambassador share (not including cash reserves
and USA acreage), also brings the expertise of US shale industry pioneer, Magnum Hunter Resources
Corp (NYSE:MHR), to bear in the hunt for the high liquids content/low CO2 gas targets known to exist in
Cooper Basin permit PEL 570.

New Standard Energy shareholders have overwhelmingly approved the farm-in leaving just a final
regulatory step of South Australian Government approval to be completed.

The entry of Magnum Hunter as technical adviser to the exploration of the unconventional targets in PEL
570 has also been assured. Last week Magnum Hunter Resources subsidiary, Shale Hunter LLC (an MHR
company) provided written assurance of technical advice and support for the proposed work program in
PEL 570.

The PEL 570 farm-out deal, announced on December 10, 2013, supersedes an earlier Heads of
Agreement between Ambassador and Outback Energy Hunter Pty Ltd, announced in August 2013, which
carried an implied value of around 16 cents per Ambassador share. Outback Energy Hunter is being
acquired by New Standard Energy as part a broader corporate transaction which is due to complete in
January 2014.


Ambassador Oil and Gas CEO, Tino Guglielmo, said, “This latest step finalises the entry of one of the
world’s leading shale gas and oil explorers into the Cooper Basin while Ambassador retains a very large
stake in PEL 570. The final government and regulatory approvals are expected shortly.”

“Ambassador Oil and Gas shareholders can be very pleased that one of the world’s most experienced
shale oil and gas explorers, in Magnum Hunter Resources, alongside New Standard Energy Ltd, will be
applying their vast knowledge to assisting us unlock the value of the Patchawarra Trough region of the
Cooper Basin.”

“This week Kip Ferguson, executive vice president of exploration at Magnum Hunter said the company’s
entry to the Cooper basin though the deal with New Standard Energy, ‘allows access to “the premier
basin” in Australia. Within 12 months, you’re not going to have the ability to find a deal, or find
acreage, in the Cooper.’ “

“Ambassador remains very highly leveraged to any exploration success which may flow from the $42.5
million which New Standard will now spend on exploration in our PEL 570 block.”

“New Standard Energy is acquiring Magnum Hunter Resources’ Eagle Ford shale assets in the US in
exchange for cash and shares making MHR the largest shareholder in NSE. As part of that deal NSE is
also acquiring a 52.5% interest in PEL 570. The consideration for that acquisition is that NSE must spend
up to $42.5 million on exploration in permit PEL 570, including drilling three wells over the life of the
permit.”

“The first step is to complete a large 3D seismic survey in 2014 followed by three subsequent wells which
we hope will begin to unlock the massive potential of this part of the Cooper basin.”



Tino Guglielmo