ELK Petroleum : Quarterly Activities and Cashflow Report

Quarter 1 2019 Report

Contents ____________________________________

Corporate Summary 02

Production 03

Sales Revenue 04

Projects 06

Data Tables 07

Corporate Summary

1Q19 focuses on financial management and production growth

• • A series of material adverse financial events led to serious financial challenges:

  • • Breaches of funds control led to increasing restraints and loan burdens along with the cancellation of a planned equity raise

  • • Republic proposal agreed to provide interim funding and Elk's focus has moved to engage alternative longer term funding arrangements

  • • Intended use of advisers under the Republic Proposal not continued after first round of engagement with lenders

  • • Company currently engaged on two alternatives

• • Aneth oil production post-quarter end increased to above 10,000 boepd gross

• • Grieve oil production continues build-up; approximately 250 bopd gross at end of the quarter

• • Madden insurance offset reimbursements expected in 2Q CY19

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Production

Madden fire effects quarterly production

Sales Revenue

Revenue(1) continues to stay strong despite Madden

• • Production Revenue down ~20% over previous quarter mainly due to Madden fire

• • Aneth Revenue decrease driven by lower production from severe winter weather and lower average WTI price

• • Grieve's first revenue recorded

Corporate Activity Review

Alternative corporate outcomes and support from existing lenders being sought

• • Elk completed refinancing of the Aneth Oil Field and CO2 EOR Project acquisition. AB EOG agreed with the Company to exchange and cancel all its existing Series A and Series B preferred equity in exchange for US$53.9 million in unsecured term loan notes due May 2022.

• • Ankura Consulting Group engaged as restructuring advisor, with Mr. Scott Pinsonnault appointed as the Company's Chief Restructuring Officer.

• • Mr James Piccone resigned as a director of Elk Petroleum Limited (EPL) and its subsidiaries and from his executive employment with Elk Petroleum, Inc (EPI). Mr Brad Lingo became the President & Chief Executive Officer of EPI as well as retaining his roles as MD and CEO of EPL.

• • The Company secured up to A$4 million in funding from its major shareholder, Republic Investment Management (Republic), via an unsecured short term loan and a proposed partially underwritten Rights Issue, totalling up to approximately A$15 million. The underwriting obligations under the rights issue were subject to a number of conditions, principally relating to concessions and waivers being obtained from the Company's lenders in order to provide breathing space to affect an orderly restructuring and recapitalisation of the business.

• • Interim advisors retained by the Company to support refinancing activities were utilised for a limited time, going forward none are currently retained on an active basis.

• • At Elk's request its securities were suspended from quotation (Listing Rule 17.2), to allow the Company to maximise the prospects of implementing a successful recapitalisation and business transformation plan, to re-position Elk's financial position for further development of the upside potential of its existing assets.

• • Mr Brad Lingo Elk's MD & CEO employment agreement expired on 31 March 2019. Mr David Evans Elk's COO for the past 3 years was appointed interim Chief Executive Officer, commencing 1 April 2019.

• • Organisational and other cost reduction measures have been implemented in Australia and the USA.

• • Completion and filing of the Company's accounts for the 6 months period ending 31 December 2019 have been deferred pending resolution of the Company's refinancing activities, with timing for the Company's AGM also under review.

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