Byron Energy Limited provided an update of the SM69 E2 production rates and project payout status for the Company's SM58/69 project area in the shallow waters of the Gulf of Mexico. SM 69 E2 Production & Payout: As announced on 27 October 2021, the Byron operated E2 well was successfully completed with a high-rate gravel pack with sliding sleeves in the primary K4 Sand and with the L2 zone perforated and isolated as a future low-cost downhole zone change. Oil and gas production from the E2 well was initiated on 21 October 2021 (USCDT). The E2 has produced approximately 302,000 barrels of oil and 166 mmcfg and no water from the K4 (B65) Sand through December 31, 2022. Also the high quality K4 Sand was completed with a high-rate water gravel pack allowing for production at a significant rate with necessary sand control over the life of the completion. The E2 well is currently producing at an average gross daily rate of 725 bopd and 0.60 mmcfgpd (423 bopd and 0.35 mmcfgpd net to Byron's interest). Byron continues to manage well production rates to achieve optimal oil and gas recovery. The well has consistently
averaged between 700-740 bopd with minimal rate variation, good indications of a moderately strong water drive mechanism, and no water production since coming online. The E2 well paid out the total well drilling and completion cost in less than a year, consistent with Byron's expectations as stated in the ASX release dated 27 October, 2021 and reached the Total Project Payout of over $22 million in less than 15 months. Under the Total Project Payout Byron recovered all costs associated with the drilling and completion of approximately $17.5 million, production costs of approximately $1.6 mm, as well as the "SM69 E to SM58 G" flowline installation and well hookup costs of approximately
$3.0 million. The E2 reached project payout upon production of approximately 20% of the originally booked gross proved reserves attributable to the well by Collarini & Associates, Byron's third party reserve assessor. As shown in Table 1, 302,000 gross barrels of oil were produced of the 1,397,000 barrels of gross proved oil reserves. With approximately 1.1 MMBO gross remaining proved reserves, the E2 well production is expected to produce for several years to come. For comparison, the cornerstone SM71 Project paid out in 18 months, at approximately $45mm for the 3 wells drilling and completion (D&C) costs plus platform, pipeline andoperating costs with the individual F1 and F3 wells paying out their D&C costs in an impressive 3- and 4-month period respectively. The SM58 G1 well also reached well pay out in February 2022 (28 months), at approximately $22 million. Like the E2, all wells mentioned above are
currently completed in and producing from their initial zones with significant producing and behind pipe reserves remaining in all. Non-operating Partner Election: Byron earned a 100% Working Interest (WI) in the E2 well under the
Joint Exploration Agreement (JEA) with the ANKOR group, subsequently acquired by W&T Offshore Inc. (W&T Offshore). The JEA provided for the drilling of the E2 exploration well operated by Byron. By funding 100% of the E2 well Byron earned a 100% WI and 80.33% Net Revenue Interest (NRI) until E2 Project Payout, at which time and at W&T Offshore's election, Byron's NRI would either adjust to 77.33% or W&T Offshore could convert it's 6% overriding
royalty interest (ORRI) to a 30% WI and Byron's interest in the project would adjust to 70% WI with an unburdened 58.33% NRI. Having achieved E2 payout in December 2022, WT Offshore has now formally exercised its
option to convert its ORRI into a working interest in the E2 effective 1 January, 2023 as detailed above. Production Handling: Although the surface location is on the SM69 E platform, production from E2 well flows through
Byron's previously laid E-to-G flowline to the Byron operated SM58 G facilities. As a result of the conversion to working interest by W&T Offshore, non-operating partner, going forward the well will be operated under an existing Joint Exploration Agreement with shared costs and production processed under a mutually agreed Production Handling Agreement with Byron receiving per unit compensation for oil, gas and water processed on behalf of the non-
operator. Ongoing/Future SM 69E Area Activity: Byron is currently seeking approval of a revised Development Operations Coordination Document (DOCD) permit for the SM69 E structure to allow for the drilling of a third well off
the SM69 E Platform. A SM69 E3 well that would jointly develop reservoirs shared along the respective SM58 and SM69 lease lines, under consideration by Byron and W& T Offshore. Byron's companywide production since inception with significant well and platform additions noted. The stacked components of the Total Production curve serve to illustrate both the timing of rate and reserve additions as well as the diversification over time
of Byron's assets. During these past 5 years, Byron has sought to manage the drilling and development activity while operating within rig availability, cash flow and funding constraints to provide stable reserve growth, production replacement, and diversification of asset base. The stability of production and confidence in reserve additions during this period has allowed Byron to plan and commit to drilling and development activities while efficiently utilizing cash
flow and minimizing debt exposure. Current average daily rates as of 25 February 2023 were approximately 1,600bopd and 4.3 mmcfgpd net to Byron.