Quarterly Activities Report for the Period Ended 31 March 2024

HIGHLIGHTS

• Daydream-2 successfully flowed from the Lorelle Sandstone without stimulation
• Very material increase in prospective resources in deep coals
• Analysis undertaken post end of quarter indicates the Lorelle alone could produce a commercial flow rate
• Daydream-2 program remains fully funded with current cash equivalent held of $11.9M

MANGAGING DIRECTOR’S REPORT TO SHAREHOLDERS FOR THE QUARTER

Following the drilling of the Daydream-2 well at the end of the December quarter, the March quarter has been one of intense analysis and preparation for the next phase of the Grandis appraisal program.

Just after the end of the quarter, that phase kicked off with the successful flowing of gas from the Lorelle Sandstone at ~4,200 metres – critically, without stimulation, which is a first for the Taroom Trough.¹

This activity is occurring at a time of now widespread recognition that the East Coast Australian gas market faces imminent supply shortfalls, prices are high and expected to stay high, and growing international geo-political tensions put a premium on LNG supplies from stable countries like Australia.

Daydream-2 Lease during 2nd flow period of Lorelle Sandstone

The drilling of the Daydream-2 well late in 2023 finished up with a unexpected but very pleasant surprise – gas free flowing from a formation at a depth of 4,200 metres (called the Lorelle sandstone) – something not encountered in the Taroom Trough before.

The primary targets of Daydream-2 are tight gas and coal formations that require stimulation to flow – a free-flowing zone adds a lot to these in terms of economics (lower costs, possibly lower decline rates, energy in the well-bore, etc).

In January we undertook laboratory analysis of samples obtained from the sands captured at the wellsite from the Lorelle sandstone. This work identified clay rims on the sands that preserved porosity in this highly pressured deep zone. These results are analogous with the high productivity deep Permian section of the Perth Basin which has been a source of enormous success in recent years.²

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