Carbon Energy : ASIC Relief Granted for Financial Reporting Obligations

29 May 2017

Level 9, 301 Coronation Drive, Milton QLD 4064 Australia

PO Box 2118, Toowong DC QLD 4066 Australia

phone + 61 (0) 7 3156 7777

fax + 61 (0) 7 3156 7776

www.carbonenergy.com.au

Carbon Energy Limited ABN 56 057 552 137

Carbon Energy (Operations) Pty Ltd ABN 61 105 176 967

• Financial reporting obligations deferred until 22 October 2017

Carbon Energy (Deed of Company Arrangement) ("Carbon Energy" or "Company") has been granted relief by the Australian Securities and Investment Commission (ASIC) from the requirements to comply with the following obligations of the Corporations Act 2001 (Cth):

• annual financial reporting to members under section 314 within the time required by section 315;

• send reports to a member of Carbon Energy in accordance with a request under subsection 316(1) within the time required by subsection 316(2);

• lodge annual reports with ASIC under subsection 319(1) within the time period required by subsection 319(3);

• lodge half-year reports with ASIC under subsection 320(1) within the time required by that subsection;

  in relation to the half-year of Carbon Energy ended 31 December 2016 and a financial year or half-year of Carbon Energy ending during the period from 22 May 2017 to 22 October 2017 ("Deferral Period").

  It is the Board's view that the preparation of the half-yearly reports by 22 May 2017 (the original deferred date after Carbon Energy was placed in voluntary administration) would impose unreasonable burdens on the company due to:

• the Company's routine for complying with the financial reporting obligations being disrupted due to the events surrounding entering into voluntary administration, the original Deed of Company Arrangement, and subsequent negotiations between the relevant parties to prepare the amended Deed of Company Arrangement ("DOCA") announced to the market on 15 May 2017;

• the uncertainty surrounding the approval of the DOCA;

• the costs of compliance impacting on the assets available to creditors should the DOCA not be approved; and

• compliance with the obligations not providing any additional benefit to shareholders.

The ASIC relief instrument, which was granted on 22 May 2017, ("ASIC Relief Instrument") allows the Company to focus on seeking the approval and subsequent implementation of the amended Deed of Company Arrangement ("DOCA") announced to the market on 15 May 2017.

The effect of the ASIC Relief Instrument is that Carbon Energy's half-yearly financial report for the period ending 31 December 2016, and Carbon Energy's annual financial report for the period ending 30 June 2017, will be due for lodgment with ASX by no later than 22 October 2017.

The Company is also required to seek relief from the ASX and is awaiting their response.

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www.carbonenergy.com.au