MEO Australia : Quarterly Activities Report 30 September 2015

Highlights‌‌‌‌‌‌‌‌‌

MEO Australia Limited

ABN 43 066 447 952

Tel: (+61 3) 8625 6000

Level 20 Fax: (+61 3) 9614 0660

500 Collins Street Email: admin@meoaustralia.com.au Melbourne Victoria 3000 Australia Website: www.meoaustralia.com.au

• Comprehensive review of exploration portfolio completed

• Opportunities prioritised based on potential to deliver significant shareholder value

• Top priority opportunities identified as:

  • Cuba - Block 9

  • New Zealand- PEP51153

  • Australia - WA-488-P, WA-454-P

• Process to unlock significant value in Tassie Shoals Project to continue

  Cuba

• Executed Production Sharing Contract for Block 9 onshore Cuba

• Positions MEO as an early mover into Cuba's highly prospective and expanding hydrocarbon sector‌

  Corporate

• Appointment of two new experienced Non-Executive Directors to MEO Board

• Cash balance at end September is $5.2m, approximately $0.6m higher than forecast in the March quarterly report

  Melbourne, Australia (20th October, 2015)

  MEO Australia Limited (ASX: MEO) provides the following summary in relation to its activities during the quarter ended 30th September 2015.

  Activity Summary

  MEO is focused on growing a material oil and gas business through a three-pronged strategy:

• Risk-managed, high impact exploration

• Low-cost and value accretive acquisitions

• Commercialisation of the Tassie Shoals Projects

The Production Sharing Contract (PSC) for Block 9, onshore Cuba, was executed on 3 September 2015. The Block 9 PSC area is in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. It also contains the Motembo field - the first oil field discovered in Cuba. As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector.

MEO will immediately commence work on the initial activity of evaluating exploration data in the block and reprocessing selected 2D seismic data.

Subsequent to the end of the quarter MEO completed a strategic review of its exploration portfolio that identified and prioritised the projects that MEO considers have the most potential to deliver significant shareholder value.

As a result of this review MEO is focused on the following priority exploration projects:

• Subject to Petro Australis conditional 40% back-in option

  ** Subsequent to MEO reaching commercial settlement for Rex's withdrawal from WA-488-P on 20/10/15

  As a consequence of this exercise MEO has elected to discontinue its involvement in a number of exploration projects including:

  • NT/P68 - Heron (MEO 100%). MEO undertook an assessment of the Heron discovery and concluded that it was too small to be a potential gas supply source for the Tassie Shoals projects.

  • WA-360-P (MEO 62.5%) and WA-361-P (MEO 50%). The remaining prospectivity in these permits is considered too high risk for MEO's exploration strategy, relative to MEO's other assets.

MEO has advised the other Joint Venture participants of these permits of its intention to withdraw, which in all cases is expected to be achieved in good order within 6 months.

MEO appointed Mr Andrew Purcell and Mr Michael Sandy as Non-Executive Directors, effective 31 July 2015. The two appointments are the culmination of a process to refresh the MEO Board and to ensure the Company has strong leadership and governance as it advances its existing projects as well as pursuing new opportunities in the interests of shareholders. As a final step in revitalising MEO's leadership, the current Non-Executive Directors will depart the MEO Board after the 2015 Annual General Meeting with Mr Greg Short retiring and Mr Stephen Hopley not seeking re-election.

Consolidated cash balance at 30th September 2015 was $5.2m, approximately $0.6m higher than forecast in the June quarterly release.

MEO recognises the current business environment is conducive to acquiring assets at an attractive price. Screening for early entry opportunities and projects capable of generating near term operating income continues.

• Initiate activities in the Block 9 PSC, Onshore Cuba

• Advance the Shannon prospect as a preferred drilling candidate for PEP51153 (onshore New Zealand) in 2016

• Continue to market farm-out opportunities, notably WA-488-P and WA-454-P

• Continue screening for corporate options and asset opportunities capable of generating operating income that enhance MEO shareholder value.

Peter Stickland

Managing Director and Chief Executive Officer

Attachments: Activity Summaries by Project Area

On 3rd September 2015 MEO executed a Production Sharing Contract (PSC) with CUPET for Block 9 in Cuba. Block 9 covers approximately 2,380 km2 onshore on the north cost of Cuba in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. It also contains the Motembo field - the first oil field discovered in Cuba.

The exploration period of the Block 9 PSC is split into four sub-periods with withdrawal options at the end of each sub-period. MEO will immediately commence work on the initial activity of evaluating the existing exploration data in the block and reprocessing selected 2D seismic data before determining whether to proceed with a subsequent 24-month exploration sub-period that includes acquisition of new 2D seismic data.

As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector. The geology of the block has analogies to petroleum systems in which MEO's technical personnel have significant experience, and MEO sees substantial potential in Cuba overall and Block 9 in particular. MEO looks forward to working closely with CUPET to explore and develop Cuba's oil and gas resources.