Transerv Energy : Appendix 5B & Quarterly Activity Statement June 2016

28 July 2016

June 2016 Quarter Activity Report

Warro Gas Project

Warro‐4 retesting operations have been completed. Gas flows from the "C" sand were maintained at rates between 0.7 and 0.95 mmcfd with associated water rates ranging from 950 to 1500 bwpd. In‐well pressure and temperature logging was successfully carried out while the well was flowing to determine the nature and source of the reservoir fluids. These data will now be analysed along with data from Warro‐5 & 6 to determine the appropriate next steps for the Warro Project.

The flow rates achieved during the retest of Warro‐4 were 2 to 3 time greater than those observed when the well was tested immediately after drilling in 2011. Future field work at Warro could involve fracture stimulation of the untapped, upper "C" sand at Warro‐6 or potentially horizontal drilling.

Transerv Expands In Perth Basin

On 11th July 2016, Transerv announced that it has formed a strategic alliance with Norwest Energy Ltd (NWE) to facilitate the farmout and drilling of the 160 million barrel Xanadu Prospect in TP‐15. As part of this alliance, TSV will acquire, via a share placement, 100m shares for $200,000 in NWE and have the right to participate in farmout wells and earn a material interest in all the Perth Basin areas in which NWE is a participant (TP/15, EP368, EP426, EP413, L14, EP492) on the successful completion of appropriate farmout arrangements.

Corporate

During May the company responded to media speculation and confirmed that is was participating in the sale process being conducted by UBS of Origin's Perth Basin, WA assets.

Warro Gas Project Update

During the quarter the Warro Joint Venture (WJV) completed the testing of Warro‐5 and 6 and commenced the re‐testing of Warro‐4.

Environmental Monitoring and Community Consultation continued throughout the quarter.

Water and soil sampling is ongoing during operations and as part of the agreement to participate in a water and soil/atmospheric gas project with CSIRO and other Perth Basin Operators and in line with our environmental commitments.

Figure 1: The Warro Gas Field is located close to key pipelines and is approximately 200km North of Perth

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Warro Project Background

The Warro field lies 200km north of Perth in the Perth Basin and is one of the largest undeveloped onshore gas fields in Australia.

Transerv currently has a 57 per cent stake in Warro and is the project operator. Alcoa is earning up to 65 per cent under a farm‐ in agreement, by funding $100 million of exploration and development work at Warro. Warro 5 and 6 have been drilled and tested as part of the Alcoa farmin arrangement. Based on expenditure to date, Alcoa have the right to an interest of approximately 63.5%.

Warro is located 31km east of both the Dampier‐to‐Bunbury Natural Gas Pipeline and the Dongara‐to‐Perth Parmelia Pipeline. Alcoa has substantial capacity reserved in the Dampier line.

Cash position as at 30 June 2016

At the end of the June 2016 quarter, the Transerv Energy consolidated group had a closing balance of $3.322m as set out in the Appendix 5B.

For and on behalf of the Board

Figure 2: Seismic Fault Attributes. The location of faulting (the blue linear features near Warro-3 and 4) is believed to be the source of the water previously encountered.

As at 30 June 2016, Transerv Energy Limited has an interest in the following tenements:

Rule 5.5

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

TRANSERV ENERGY LIMITED

ABN Quarter ended ("current quarter")

68 079 432 796

30 June 2016