Announcement PDF STRIKE ENERGY LIMITED QUARTERLY REPORT For the period ending 31 March 2015 Strike Energy Limited - Quarterly Report: September 2014 March Quarter Performance Summary Key Achievements Australia Increasing gas flows measured from both Klebb 1 and Le Chiffre 1. Commencement of multi-well flow testing at Klebb. Southern Cooper Basin Gas Project Pressure reduction at Klebb and Le Chiffre locations confirmed. First contingent resource estimate independently certified by leading international petroleum consultants DeGolyer and MacNaughton as announced on 27 April 2015. Oil price weakness and reduced exploration activity contributing to improving cost environment. Cash of $5.8 million on hand at the end of the quarter – fully funded to meet current flow testing program commitments. Strong Funding Position Notifications under the respective Orica and Orora GSA’s and Orica Option Deed dispatched on 27 April 2015. R&D funding facility limit increased to $5.9 million with $5.1 million drawn as at the end of the quarter. The repayment of this facility will be made from 2015 ATO R&D refund. Continued interest in additional gas offtake. USA Operations US asset portfolio continues to generate positive net operating cash flows even in current energy price environment. No further US investment planned in the near term. Strike Energy Limited - Quarterly Report: March 2015 1 Managing Director’s Comments I am pleased to report on another successful quarter, which has built on the achievements of the previous periods, with continued flow testing achieving increasing gas flows at the Southern Cooper Basin Gas Project (SCBGP), accelerating the commercialisation of the project. RESOURCE • Presence of extensive, very thick coals hosting a multi-Tcf gas resource. • The bulk of the resource is situated at depths between 1,400m and 2,000m and the Company has demonstrated low drilling costs with costs falling further. Extended flow testing at the Klebb and Le Chiffre well locations within the SCBGP continued with the objectives of building gas flow rates, improving our understanding of the key reservoir parameters and refining our well and field operating procedures. • Flow testing has demonstrated permeability and high productivity from both unstimulated and fracture stimulated zones. • The coals exhibit low stress and fracture stimulation has been highly effective. The results of this testing program have been extremely encouraging. We have established sustained gas flows from the wells, confirmed high gas saturations and analysis of reservoir pressure data indicates that sustained reservoir pressure reduction has been achieved, with no evidence of aquifer recharge. Gas flow increases as reservoir pressure reduces and our goal is to continue flow testing to achieve reservoir pressures sufficient for commercial gas flows. • Gas flows from the wells have been observed and measured from the commencement of flow testing with rates increasing with reduction in reservoir pressure. • No evidence of aquifer recharge has been observed to date. • The independent review of the project by DeGolyer and MacNaughton has confirmed that the project has 2C contingent resources in excess of the threshold economic field size – once commercial gas flow rates from the existing wells are achieved there is sufficient gas to support a commercial development. Subsequent to the end of the quarter, the Company announced the certification of its first Contingent Gas Resource by leading international petroleum consultants DeGolyer and MacNaughton. Planning and conceptual design work has commenced for a demonstration gas processing facility that will be designed to produce sales gas. The deployment of a modular, demonstration processing and compression facility will provide invaluable information to support the development of a commercial scale project within PEL 96 that will deliver gas through existing pipeline networks into the innovative offtake agreements already in place with Orica, Orora and Brickworks. At quarter end, the Company reported cash on hand of $5.8 million. During the period our R&D funding facility limit was increased to $5.9 million which will be repaid in full with the proceeds to be received from our 2015 ATO R&D refund in November 2015. At this stage, it is worth reflecting on the progress which has been made to date on the SCBGP across the key resource, infrastructure and market areas which underpin a commercial project. Strike Energy Limited - Quarterly Report: March 2015 INFRASTRUCTURE AND MARKET • The project is located with direct access to the Moomba to Adelaide Pipeline. This pipeline is currently being modified to facilitate northerly gas flow. • Preliminary work on a demonstration, modular gas processing and compression facility indicates that a commercial development is feasible for anticipated pilot production volumes. • The Company has entered into innovative gas offtake agreements which are designed to support rapid commercial development. The reservoir and flow data we have obtained to date clearly shows that we are making steady progress towards commercial gas rates. Our forward program is specifically designed to achieve this result from our portfolio of wells. We are confident that this final hurdle will be achieved in the near term. 2 Southern Cooper Basin Gas Project: Strike’s Strategic Objective Strategic objectives Timing Supply targets 2020/21 Production FID Cost competitive third party gas supply for LNG exporters Development ~5 Tcf over 20 years Equivalent to gas supply for one LNG train Expanded resource delineation across STX acreage 2017/18 Production New source of affordable gas supply for east coast domestic customers ~1 Tcf over 20 years FID Initial development Equivalent to 35% of NSW gas supply Current PEL 96 Appraisal/ Commercialisation Strike is positioning the Southern Cooper Gas Project as a long-life resource for domestic and export gas supply Strike Energy Limited - Quarterly Report: March 2015 3 Southern Cooper Basin Gas Project: Quarterly Achievements Field operations at PEL 96 (STX 66.667%, EWC 33.333%) during the quarter were focused on consistent flow testing and building on the early results observed in the prior quarter. Flooding in the Cooper Basin interrupted flow testing operations for much of January, however, the resulting pressure build-up data has provided valuable information both on the progress of reducing reservoir pressure and the potential drainage volume of each of the Le Chiffre 1 and Klebb 1 wells. Importantly, no indication of aquifer recharge has been observed to date. Commissioning of the Klebb 3 surface equipment was completed during the quarter and testing of the well commenced. Cost reduction has been a parallel focus during this phase of testing. Through the period, we have achieved a managed reduction in manning and rental equipment on-site without impeding the acquisition of quality data or impacting on our HSE quality standards. At the end of the quarter, all four PEL 96 wells had been under test. The PEL 94 Davenport 1 well (STX 35%, BPT 50% and Operator, SXY 15%) was awaiting final regulatory approvals and workover to commence extended flow testing. During the quarter, Strike engaged DeGolyer and MacNaughton to independently review the PEL 96 project focusing on the flow test data acquired. Following the end of the quarter, an initial Contingent Resource assessment was completed for areas around the Le Chiffre 1 and Klebb 1 wells. Le Chiffre Flow Testing Pumping operations at Le Chiffre 1 were commenced on 8 November 2014. Gas to surface was recorded almost immediately at Le Chiffre 1, with gas measured and flared consistently throughout the quarter. Reservoir pressure build-up data gathered as a result of the weather related shut-in during January 2015 indicates that the well is connected to relatively large reservoir volume. This larger drainage area means that fewer wells will be required to develop the resource leading to higher per well ultimate gas recovery - a positive indication for development. However, offset pilot wells will be required to reduce the period to establish commercial flow rates from the well. Klebb Flow Testing Pumping operations at Klebb 1 commenced on 31 October 2014 and a cumulative four months of flow test data and 26,000 bbls of water had been produced from the well at the end of the quarter. Gas has continued to be measured and flared from Klebb 1 during the quarter. Bottom-hole pressure data confirms that modifications to well start-up and rampup procedures is realising significant performance improvements. Productivity of the well has continued to increase during April with daily rates consistently above previous peak rates. Pressure build-up data acquired during the period also confirms that sustained average reservoir pressure reduction has been achieved. The unstimulated Klebb 2 well was flow tested intermittently during the period due to surface pump limitations. Pressure data gathered at quarter end indicated that pressure communication with Klebb 1 had not yet been established. Klebb 3 productivity has been pleasing, with maximum water flow in excess of 180 bbls/d being achieved during the quarter with further improvement observed during April. Results from Klebb 3 confirm that while unstimulated wells are productive, fracture stimulation will be very effective in accelerating production towards commercial flow rates in the Klebb area. Performance of the Le Chiffre 1 well has continued strongly and step rate testing during February suggests that the large fracture stimulation has resulted in a well which is less sensitive to increases in pump rate. At the end of the current quarter a cumulative 72,000 bbls of water had been produced since testing began in November. Strike Energy Limited - Quarterly Report: March 2015 4 Southern Cooper Basin Gas Project: Planned Future Activities June Quarter Planned Activities The PEL 96 flow test continues to progress toward achieving commercial gas flow rates from the field and these activities will be focused on the Klebb location, where the Company has three active wells. Diagnostic injection tests will be carried out on the Klebb 2 and Klebb 3 wells. These tests will provide information for future fracture stimulation design. The tests themselves may also provide a near term performance benefit, particularly for Klebb 2. It is planned to workover Klebb 1 to install a conventional beam-pump. This is expected to allow lower flowing pressures to be realised from the well and allow greater independent control of Klebb 2 and Klebb 3 with the existing surface equipment. The Le Chiffre 1 well will be shut-in for an extended pressure build-up test to refine our estimate of the reservoir volume connected to the well. Strike Energy Limited - Quarterly Report: March 2015 5 Southern Cooper Basin Gas Project: PEL 96 Commercialisation Strategy Objective Infill wells Increased reserves and resources Funding (2) (3) Commence Q4 2015 Objective Phase 4 Le Chiffre pilot wells + testing Continue Klebb pilot production Pre-development activities Commence Q3 2015 Funding (2) Klebb pilot test Phase 3 Frac Klebb 2 & 3 Install new pumps at Klebb 2 & 3 Commence Q1 2015 Funded (1) Continue testing Le Chiffre 1 and Klebb 1-3 Install new pump at Klebb 1 Understand multi-well pressure drawdown effects Phase 2 Funded (1) Phase 1 Dec 2014 Single well tests Le Chiffre 1 and Klebb 1 Drill & complete Klebb 2&3 Demonstration project Objective Commercial gas flows Initial reserves Objective Build gas flows (in progress) Objective Sustained gas flows Technical feasibility Commercial feasibility (1) Funded from existing cash resources (2) Funding from gas off-take prepayments and Company’s existing R&D rebate / funding program (3) Activities will be refined based on outcomes of Phase 2 planned activity A disciplined, capital efficient and funded appraisal program is being followed to establish commerciality Strike Energy Limited - Quarterly Report: March 2015 6 Southern Cooper Basin Gas Project: PEL 96 Production Testing Program ~8km Klebb 3 Klebb 1 ~200m SW PEL 96 Weena trough • Klebb 2 ~200m NE Le Chiffre 1 Depth 1,930m Depth 1,830m Vm3 Vm3 Vm3 Vm3 Vu Upper Vu Upper Vu Upper Perf. No frac net 35m Vu Upper Perf. No frac net 35m 460 bbl frac net 35m Net 50m Vu Lower Vu Lower Vu Lower 5,000 bbl frac 1,400 bbl frac Vu Lower Completed drilling Strike Energy Limited - Quarterly Report: March 2015 7 Southern Cooper Basin Gas Project: Contingent Resource Estimate During the period, DeGolyer and MacNaughton, a leading international petroleum industry consulting firm, commenced an Independent Review of the Southern Cooper Basin Gas Project. The Independent Review, released on 27 April 2015, confirmed that the Project is progressing towards commercialisation based on analysis of the results of the Company’s work program including recent flow test data. In addition, the review achieved gas prepayment milestones under the Company’s Gas Sales Agreements with Orica and Orora. As outlined in the Company’s ASX announcement of 27 April 2015, for the contingent resources to be classified as reserves, establishment of sustained commercial gas flow rates from the Patchawarra Vu coals will be required to better define gas and water production rates and volumes, the drainage pattern and well spacing. Additional drilling will also be required to confirm the reservoir quality and gas content of the coals outside the existing contingent resource areas in order to grow and upgrade the resource to reserves. Contingent Resources were assessed in limited areas around the Le Chiffre and Klebb wells only for the zones flow tested to date, the 35m thick Patchawarra Vu Upper in Klebb 1 well and the 35m Vu Upper and 15m Vu Lower in Le Chiffre 1. These intervals represent only a portion of the net coal intersected by each well. The assessment also provides a reduction in the geologic risk associated with areas of the existing multi-Tcf Prospective Resource which have not yet been drilled or flow tested. The Company’s existing conditional gas off-take arrangements, demonstrated low well costs and proximity to the Moomba to Adelaide Gas Pipeline already satisfy a range of other typical contingencies. Contingent Gas Resource Estimates - PEL 961 Well 1C2 (Bcf) 2C2 (Bcf) 3C2 (Bcf) Productive area (acres) 2,171 2,938 3,931 Le Chiffre 1 - Patchawarra Vu Upper and Vu Lower zones 62.9 93.2 132.4 Klebb 1 - Patchawarra Vu Upper zone 42.1 62.2 93.3 Total Gross Contingent Resource 105.0 155.4 225.7 Total Net Contingent Resource 70.0 103.6 150.5 1 Contingent Resource Estimates have been prepared in accordance with the Petroleum Resources Management System “PRMS”. Contingent Resource Estimates are those quantities of gas (produced gas less carbon dioxide and fuel gas) that are recoverable from known accumulations but which are not yet considered commercially recoverable. 2 1C, 2C and 3C estimates in this table are P90, P50 and P10 respectively for each well and have been summed arithmetically. 3 Net to Strike’s 66.7% interest in PEL 96. Strike Energy Limited - Quarterly Report: March 2015 8 US Operations: Production and Operations Update US Exploration and Evaluation Activities The Company continues to hold its interest in the Permian Basin (STX Interest 25%) and the Eagle Ford Shale and Eagle Landing Joint Ventures (STX Interest 27.5%) with minimum exploration and development activity occurring during the quarter. The Company has no planned new investments planned in these projects in the near term. US Production Strike currently produces oil and gas from three independent assets. Total oil production for the quarter was 4,666 bbls up 4% on the prior quarter and gas production was 75,144 Mcf down 8% on the prior quarter. The Eaglewood Joint Venture (Strike 40% WI) produced 71,736 Mcf of gas and 1,306 bbls of oil net to Strike during the quarter, down 8% for gas and down 14% for oil on the previous quarter. The MB Clearfork Project (Strike 25% WI) produces oil from 20 conventional Permian Basin wells in Martin County, Texas. During the quarter, the MB Clearfork Project produced 2,392 Mcf of gas and 2,669 bbls of oil net to Strike, down 14% for gas and up 23% for oil from the previous quarter. The Eagle Ford shale project (Strike 27.5% WI) produces oil and gas from the Bigham 1H well in Fayette County, Texas. The well produced 1,016 Mcf of gas and 691 bbls of oil net to Strike during the quarter, down 28% for gas and down 15% for oil on the previous quarter. The decrease in production for the quarter is as a result of the well’s normal expected decline. MAR QTR 2015 DEC QTR 2014 QUARTERLY CHANGE EAGLEWOOD JV – CYPRESS RAVEN (WILCOX) Gas (Mcf) 71,736 77,749 -8% Oil (Bbl) 1,306 1,522 -14% Total Revenue (USD’000) 264 426 -38% PERMIAN BASIN – MB CLEARFORK PROJECT Gas (Mcf) 2,392 2,787 -14% Oil (Bbl) 2,669 2,170 23% Total Revenue (USD’000) 138 173 -20% Gas (Mcf) 1,016 1,404 -28% Oil (Bbl) 691 812 -15% Total Revenue (USD’000) 34 62 -45% Gas (Mcf) 75,144 81,940 -8% Oil (Bbl) 4,666 4,504 4% Total Revenue (USD’000) 436 661 -34% Total Revenue (AUD’000) 571 774 -26% EAGLE FORD SHALE – BIGHAM 1H TOTAL Based on industry convention energy equivalence 6 Mcf of gas = 1 Bbl of oil Average realised prices during the quarter were US$46.72/Bbl, down 35% from US$72.38/Bbl in the previous quarter for oil and US$2.90/Mcf, down 29% from US$4.09/Mcf for gas in the previous quarter. Strike Energy Limited - Quarterly Report: March 2015 9 Finance, Commercial and Corporate Update Corporate Office 120B Underwood Street Paddington NSW 2021 T: +61 2 9397 1420 E: strike@strikeenergy.com.au W: www.strikeenergy.com.au Key highlights include: • Registered Office 120B Underwood Street Paddington NSW 2021 T: +61 2 9397 1420 Securities Exchange ASX : STX • Securities on Issue Shares: 833,330,946 Options: 11,700,001 Performance Rights: 28,800,000 Analyst Coverage Firm Euroz Ord Minnett Bell Potter RBC Capital modular gas processing facility that will be designed to process, compress and deliver sales gas produced from the multi well testing program into the Moomba to Adelaide pipeline. Discussions to date continue to yield significant interest and support from engineering groups and a number of equipment suppliers. During the March quarter the Company continued to advance a number of its financial and commercial initiatives in support of the appraisal and accelerated development and commercialisation of the SCBGP. Analyst Michael Skinner John Young Peter Arden Andrew Williams • As outlined in the Company’s ASX announcement dated 27 April 2015, following the completion of the Independent Review by DeGolyer and MacNaughton, the notice for the final tranche of prepayment funding under the terms of the 45PJ Orora Gas Sales Agreement was issued. Separately, following completion of this review, the notification that marks the commencement of the 30 day period for Orica to elect to make its first gas prepayment under their 250PJ Gas Sales Agreement was issued. Following the completion of the Independent Review, the Company also issued the required notification under the terms of the Orica Option. Under the terms of the Orica Option (as approved by Shareholders at a General Meeting of the Company on 28 May 2014) Orica is able to subscribe to new shares in the Company for a payment of $2.5million. The number of new shares to be issued by the Company is to be no more 20,833,333 shares and will be determined with reference to a price that is the higher of the 10% discount to the 10 day VWAP prior to the exercise date or 12 cents per share. If Orica does not exercise this Option within 30 days, the Option will lapse. The Company continues to advance its planning for surface infrastructure to support an initial development project within PEL 96. During the quarter work has continued to scope and assess the feasibility of a demonstration scale Strike Energy Limited - Quarterly Report: March 2015 • Discussions with commercial and industrial gas users regarding further offtake are on-going. These discussions continue as part of the Company’s strategic planning initiatives and in response to the successful achievement of all of the key objectives for the current appraisal program at the Klebb and Le Chiffre well locations. • The Company entered into an amendment to the previously announced R&D Financing facility with Macquarie Bank (the Macquarie Facility). Under the terms of the revised Macquarie Facility, the facility limit has been increased to $5.9M, with the other facility terms remaining unchanged. The Macquarie Facility is collateralised by the proceeds of the Company’s 2015 ATO R&D refund which is expected to be received by November 2015 at which time the facility will be repaid in full. An initial draw down of $4.0 million was made on 29 January 2015 with a second draw down of $1.1 million being made on 20 March 2015. • The Company completed the quarter with $5.8 million cash on hand and together with the additional proceeds from the various arrangements with the Company’s off takers and funding available under the Macquarie Facility, the Company is well placed to continue its’ field operations towards the commercialisation of its’ Southern Cooper Basin Gas Project. 10 Important Notice This presentation does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. Competent Persons Statement Reliance should not be placed on the information or opinions contained in this presentation. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any decision to purchase or subscribe for any shares in Strike Energy Limited should only be made after making independent enquiries and seeking appropriate financial advice. The information in this presentation that relates to the PEL 96 contingent resources estimate has been taken from the independent reports as prepared by DeGolyer and MacNaughton, a leading independent international petroleum industry consultancy firm, and has been reviewed by Mr Chris Thompson (Chief Operating Officer of the Company). All other reported resource and or reserves information in this presentation is based on, and fairly represents, information prepared by, or under the supervision of Mr Thompson. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, Strike Energy Limited and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim liability (including without limitation, any liability arising from fault or negligence) for any loss arising from any use of or reliance on this presentation or its contents or otherwise arising in connection with it. Mr Thompson holds a Graduate Diploma in Reservoir Evaluation and Management and Bachelor of Science Degree in Geology. He is a member of the Society of Petroleum Engineers and has worked in the petroleum industry as a practicing reservoir engineer for over 20 years. Mr Thompson is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion in this release of the resource and or reserves information in the form and context in which that information is presented. Statements contained in this presentation, including but not limited to those regarding the possible or assumed future costs, performance, dividends, returns, production levels or rates, oil and gas prices, reserves, potential growth of Strike Energy Limited, industry growth or other projections and any estimated company earnings are or may be forward looking statements. About DeGolyer and MacNaughton Such statements relate to future events and expectations and as such involve known and unknown risk and uncertainties, many of which are outside the control of Strike Energy Limited. Actual results, actions and developments may differ materially from those expressed or implied by the statements in this presentation. Subject to any continuing obligations under applicable law and the Listing Rules of ASX Limited, Strike Energy Limited does not undertake any obligation to publicly update or revise any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such statement is based. Strike Energy Limited - Quarterly Report: March 2015 The information contained in this release pertaining to the PEL 96 contingent resources estimate is based on, and fairly represents, information prepared under the supervision of Mr Paul Szatkowski, Senior Vice President of DeGolyer and MacNaughton. Mr Szatkowski holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M, has in excess of 40 years of relevant experience in the estimation of reserves and contingent resources, and is a member of the International Society of Petroleum Engineers and the American Association of Petroleum Geologists. Mr Szatkowski is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion of the contingent resource estimate related information in the form and context in which that information is presented. 11 Southern Cooper Basin Gas Project: Project Overview Prospective Resource PEL 96 4,492 Bcf* PEL 96 Phase One Area 1,123Bcf* 2C Contingent Resource* Moomba 104 Bcf Marsden 1 Davenport 1 PEL 94 STX 35% PEL 95 STX 50% Mount Isa Le Chiffre 1 Klebb production testing area Gladstone Moomba PELA 640 STX 100% Brisbane PEL 96 STX 66.67% 0 20 Sydney Adelaide Kilometers Melbourne PEL 96 Phase One Area Strike Phase One Area wells drilled Gas Pipeline Strike Wells Drilled Oil Pipeline Strzelecki Track PEL 96 Offset Wells PEL 96 and PELA 640 – STX operated Hobart PEL Net STX Acres PEL 94 77,925 PEL 95 160,248 PEL 96 443,880 PELA 640 850,786 Total 1,532,839 * Mean estimate (net to Strike) per ASX announcement dated 19 Feb 2014 and adjusted for announced contingent resource estimate per ASX announcement dated 27 April 2015. Strike has ideally positioned multi-Tcf resource to supply into Eastern Australian gas demand Strike Energy Limited - Quarterly Report: March 2015 12 Appendix 5B Mining exploration entity quarterly report Rule 5.3 Appendix 5B Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10 Name of entity STRIKE ENERGY LIMITED ABN Quarter ended (“current quarter”) 59 078 012 745 31 March 2015 Consolidated statement of cash flows Current quarter $A’000 Year to date (9 months) $A’000 Receipts from product sales and related debtors Payments for (a) exploration & evaluation (b) development (c) production (1) (d) administration Dividends received Interest and other items of a similar nature received Interest and other costs of finance paid Income taxes paid Other (2) 691 (6,638) (11) (541) (885) ‐ ‐ ‐ ‐ ‐ 476 3,046 (18,241) (71) (2,099) (2,824) ‐ ‐ ‐ ‐ ‐ 6,506 Net operating cash flows (6,908) (13,683) ‐ ‐ ‐ ‐ ‐ (4) ‐ ‐ ‐ ‐ ‐ ‐ 5,032 ‐ ‐ ‐ ‐ ‐ ‐ 5,028 (6,908) (8,655) Cash flows related to operating activities 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Cash flows related to investing activities 1.8 1.9 1.10 1.11 1.12 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets Proceeds from sale of: (a) prospects (3) (b) equity investments (c) other fixed assets Loans to other entities Loans repaid by other entities Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward) (1) Production payments include prepayments made for gas transmission rights for the Groups US assets. (2) Other for YTD includes the receipt of $ 5.8 million from the ATO relating to the FY14 R&D return. (3) As announced on 11 July 2014 the Group entered into a Purchase and Sale Agreement with Penn Virginia Oil & Gas to sell 1,617 of its net acres in Lavaca County Texas (USA). Proceeds of US$ 4.6 million were initially received on 29 August 2014 with a second completion payment being received on 7 November 2014. + See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1 Appendix 5B Mining exploration entity quarterly report 1.13 Total operating and investing cash flows (brought forward) (6,908) (8,655) Proceeds from issues of shares, options (net of costs) Proceeds from sale of forfeited shares Proceeds from borrowings (2) Repayment of borrowings Dividends paid Other: a. Interest and other cost of financing paid b. Interest & other items of a similar nature received ‐ ‐ 5,072 (172) ‐ ‐ ‐ 5,072 (788) ‐ (382) 48 (723) 176 Net financing cash flows 4,566 3,737 Cash flows related to financing activities 1.14 1.15 1.16 1.17 1.18 1.19 Net decrease in cash held (2,342) (4,918) 1.20 1.21 Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20 8,141 10 10,624 103 1.22 Cash at end of quarter 5,809 5,809 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 (a) 1.24 Aggregate amount of loans to the parties