Quarterly Activity Report Quarter Ending 31 December 2023

Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) is pleased to provide its quarterly activity report for the quarter ending 31 December 2023.

HIGHLIGHTS

• Frontier completed the acquisition of Waroona Energy Inc. (Waroona) to create a large-scale Australian renewable energy company.
  • Frontier now can access two grid connections capable of exporting >1GW to the grid via the electricity terminal located less than 1km from the Project, and holds 868ha of freehold land ideal for renewable energy opportunities
  • 147 million Frontier shares issued to Waroona shareholders
• Key changes in government policies enhance investment case for solar / battery
  • Energy Policy WA’s Coordinator of Energy adopted a 4-hour battery as the reference technology for Benchmark Reserve Capacity (BRCP)
  • Reserve Capacity Payments (RCP) for an 80MW 4-hour battery are forecast to generate ~$24 million in revenue in 2026/27 (excluding RCPs from solar)
• The Company progressed its Definitive Feasibility Study (DFS) for a 120MWdc Solar Facility (Stage One) due for completion in early 2024, and included an 80MW battery
  • Integrating battery enhances the Project’s returns (compared to solar alone) through increased revenue from RCP, shifting of energy sales from the midday low to early evening peak prices, and reducing curtailment
• WA’s electricity grid constraints highlighted by Independent Assessment of the South West Interconnected System (SWIS)
  • Independent consultant ResourcesWA completed a review of the SWIS
  • The Report concluded “there are no other opportunities that exist on the SWIS for the development of a connected generator to the scale of the Project in the short or medium term”.
• Dec quarter electricity prices increased ~15% YoY driven by higher peak prices
  • 2023 year average was $87/MWh, up 32% YoY – with solar period prices at $68/MWh (up 19% YoY) and peak period prices $143/MWh (up 47% YoY)
• Frontier continued to advance its dual fuel green hydrogen peaking power plant Study due in 2Q2024
  • Following discussions with suppliers, the Company is also assessing a leasing option which could minimise upfront capital costs
  • In addition, Frontier Energy and the City of Perth plan to develop WA’s first publicly available green hydrogen refuelling station in West Perth
• Management team restructured to deliver project execution
  • Adam Kiley, experienced equity and debt capital markets executive, appointed Chief Executive Officer (CEO)
  • Warren King, experienced project development and construction engineer, appointed Chief Operating Officer (COO)
• As at 31 December 2023, Frontier had cash of $11.6m (unaudited)
  • Cash outflows in the quarter included land acquisition cost of ~$4.4m

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