Drillsearch Energy : 4 Feb 2016January Drilling Report

15e06d36-e2ae-4e15-9913-275a105ff85b.pdf 4 February 2016

January Drilling Report

• Wet Gas Business
  • Middleton East-1 cased and suspended; new pay zone identified in the Basal Patchawarra and extension of the Middleton field indicated
  • Jute-1 exploration well spudded in Northern Cooper

Wet Gas Business

Western Wet Gas Fairway

The Western Wet Gas joint venture with Beach (Drillsearch 50%, Beach 50% and Operator) spudded the Middleton East-1 well in mid-January to appraise the Middleton field in PPL 239 (formerly PEL 106, see map).

The well was drilled 1,338 metres east of the producing Middleton-1 well and mapped using the Irus 3D seismic survey. Middleton East-1 reached a total depth of 2,876 meters on 27 January 2016.

Drillsearch's preliminary evaluation of well logs indicates a gross interval in the Patchawarra Formation between 2,656 metres and 2,798 metres, with net pay of 16 metres.

One of the pay zones encountered in the Patchawarra Formation correlates to the

Middleton-1 well which was discovered in 2006, indicating an eastward extension of the Middleton field. In addition a new pay zone was identified in the Basal Patchawarra Formation. As a result, Middleton East-1 has been cased and suspended and a cased-hole test will be undertaken at a later date.

The Ensign 930 Rig has been released and moved to the Depps-1 well which is being drilled to appraise the producing Brownlow field. The well is expected to spud in early February.

Northern Cooper Gas and Liquids

Following the success of Willow-1 in early January, the Ensign 932 Rig moved to the second and final well in the Northern Cooper campaign, Jute-1, in PRL 174, spudding on 24 January 2016. As of 2 February 2016, the well was at a depth of 1,316 metres. It is expected to reach total depth of 3,704 metres by mid-February.

The well's key objectives include evaluation of the gas potential of tight sandstones of the Toolachee, Epsilon, and Patchawarra Formations, and the appraisal of the permit's unconventional Basin Centred Gas prospectivity.

Level 18, 321 Kent Street Sydney, NSW 2000 Australia

T +61 2 9249 9600

F +61 2 9249 9630

ABN 73 006 474 844

www.drillsearch.com.au

Monthly Drilling Summary

As at 2 February 2016

Well	Participants		Progress & Summary		Primary Target	Secondary Targets
Oil Wells
Bauer - 25**	DLS BPT*	60% 40%	Spud Date: Rig Release: Depth: Operation: Progress:	Monday, 28 December 2015 Wednesday, 13 January 2016 1,743 m (TD) Cased and Suspended 1,743 m (TD)	McKinlay Member Namur Sandstone	Birkhead Formation
PPL 253 Oil Business Western Flank Oil C/E Basin, SA
Wet Gas Wells
Willow - 1	DLS* Midcontinent	80% 20%	Spud Date: Rig Release: Depth: Operation: Progress:	Thursday, 17 December 2015 Wednesday, 13 January 2016 3,402 m (TD) Cased and Suspended 3,402 m (TD)	Toolachee Formation Epsilon Formation	Patchawarra Sandstone
PRL 173 Wet Gas Business Northern Gas & Liquids C/E Basin, SA
Middleton East - 1	DLS BPT*	50% 50%	Spud Date: Rig Release: Depth: Operation: Progress:	Monday, 18 January 2016 Monday, 1 February 2016 2,876 m (TD) Cased and Suspended 2,876 m (TD)	Patchawarra Sandstone	Tirrawarra Sandstone
PPL 239 Wet Gas Business Western Cooper Wet Gas C/E Basin, SA
Jute - 1	DLS* Midcontinent	80% 20%	Spud Date: Rig Release: Depth: Operation: Progress:	Sunday, 24 January 2016 Friday, 19 Feburary 2016 (Projected) 3,704 m (Proposed) Drilling ahead 1,316 m	Patchawarra Sandstone	Toolachee Formation Epsilon Formation
PRL 174 Wet Gas Business Northern Gas & Liquids C/E Basin, SA

* Indicates operator.

** For further information on this w ell please refer to the December 2015 Drilling Report released on 13 January 2016 and the December 2015 Quarterly Report released on 28 January 2016.

For further information please contact:

Dudley White

General Manager - Corporate Communications Phone: +61 2 9249 9669

Email: ir@drillsearch.com.au