BLACK ROCK MINING LIMITED — Capital/Financing Update 2013

Jul 28, 2013

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29 July 2013

ASX Markets Announcements Australian Stock Exchange Limited 10[th] Floor, 20 Bond Street Sydney NSW 2000

Dear Sirs

UPDATE ON BACKREEF AREA OWNERSHIP & NEW DEEP OIL CASE ASSESSMENT COMPLETE

The Directors of Oil Basins Limited ( OBL , ASX codes OBL and OBLOB, or the Company ) are pleased to make the following ASX announcement.

1. Completion of Transaction with Green Rock Energy

OBL wishes to advise that it has completed the transaction previously announced to the ASX on 17 June 2013 with Green Rock Energy Limited (ASX code GRK ) for the acquisition of 100% of the equity of GRK’s wholly owned subsidiary Green Rock Canning Basin Pty Ltd, formerly called OBL Backreef No.5 Pty Ltd, holding a 20% beneficial interest in the Backreef Area, Canning Basin (refer to Figures 1 & 2).

Consequently OBL is pleased to advise that the OBL Group now holds ownership of 100% of the beneficial rights to the Backreef Area, and Green Rock Canning Basin Pty Ltd is to be renamed Backreef Energy Pty Ltd.

2. Beneficial Ownership

The present beneficial owners of the Backreef Area are presently:

Oil Basins Limited (OBL) (Operator)	ABN 56 006 024 764 35%
& wholly owned OBL Group subsidiaries
Canning Basin Oil Limited (100% owned OBL)	ABN 14 119 477 280 15%
OBL Backreef No.10 Pty Ltd (100% owned OBL)	ABN 19 120 603 974 30%
Green Rock Canning Basin Pty Ltd (100% owned OBL)	ABN 57 119 477 084 20%

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Backreef Oil Pty Limited (previous interest holder) ABN 72 116 221 286 0% Buru Energy Limited (petroleum licence/permit titleholder) ABN 71 130 651 437 0%

3. New Deep Oil Case Assessment

(a) New Geological/Geotechnical Study assessing Deep Oil Potential

As previously mentioned in the OBL March 2013 Quarterly Activities Report dated 30 April 2013, while there are presently no work program obligations for the Company during 2013 within the Backreef Area, the Company remains committed to the Backreef Area and is endeavouring to accelerate a meaningful operational program by way of farmout during 2013 to test the deep oil prognosed to possibly occur at depth of circa 3000m within the Kimberley Downs Embayment.

Subsequent to the consolidation of OBL interests in the Backreef Area, as part of a new ‘non-obligation’ geological and geotechnical study, OBL commissioned independent expert geophysical consultant 3D-Geo Pty Ltd ( 3D-Geo ) to assess the potential for a Deep Oil Case (Tight Oil and Unconventional Shale Oil, USO) within both the Virgin Hills sandstone and prognosed deeper Gogo Shale formation underlying the Kimberley Downs Embayment region of the Backreef Area (refer to Figures 3 and 4).

(b) New Deep Oil Case Study – Significant Deep Oil Potential within Backreef Area

Rather than using the Paradise/Valhalla analogue (OBL ASX Release dated 4 March 2013), which upon further review is now considered inadequate as it was entirely based upon the Laurel formation analogue, the New Deep Oil Case study has focused on the US Bakken analogue to the Virgin Hills sandstone and the prognosed deeper Gogo Shale formation.

Modelling and Monte Carlo risked assessment of prospective potential resources has been completed by 3D-Geo using Petrel TM, Trinity 3D TM and Lithotect TM software with resources risk assessed in accordance with SPE PRMS (3D-Geo also noted that oil assays were obtained in the sidewall cores of the deep open ended 247m thick Virgin Hills section of Blina-1 (1981) – below the carbonate reef) and they further noted that the oil assay characteristics evident in the Blina-1 deep Virgin Hills sandstone (tight oil reservoir) formation were similar to the crude oil assayed by OBL sourced from the much shallower basal Yellow Drum dolomite reservoir during the Backreef-1 Production Test (May 2012) some 9km due East of Blina-1.

It was further noted that whilst new 2D seismic will be required to better define and derisk the new shallow dolomite oil play Figure 4 (first observed in the Backreef-1 Production Test); no new seismic is needed to define this Deep Oil Case Assessment of the Kimberley Downs Embayment of the Backreef Area as the deeper Virgin Hills and prognosed Gogo formations are both adequately mapped using the reprocessed suite of vintage 2D seismic lines (first completed by OBL in 2011 and further re-mapped by OBL after the drilling of East Blina-1 during 4Q2013).

The Company recently updated and re-interpreted seismic mapping was used by 3D-Geo as the basis for estimating the gross rock volumes and Oil in Place ( OIP ) volumes for the independent risked assessment of PRMS prospective resources for the Deep Oil Case using a specialised USG / USO assessment module developed in Petrel software.

Using the Bakken analogue, the assessed deep tight oil potential of the Kimberley Downs Embayment within the Backreef Area is significant and has been risk assessed by 3D-Geo Pty Ltd as:

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The P90 / P50 estimates above only consider prospective Frasnian - Giventian Virgin Hills sequence at depths below 2,000m MD to 3,000m MD; the P10 estimate assumes additional prospective section with an extra 30% of total thickness below 3,000m MD.

This P10 assumption remains deliberately conservative until the prognosed Gogo shale section “source rock” has been drilled.

Recovery Factors ( RF’s ) are based on Bakken Formation field, drilling, completion and production analogues. Values vary widely related to the use of vertical or horizontal wells and the application of hydraulic fracturing completion techniques.

In 3G-Geo’s opinion, the Bakken is very similar to the Virgin Hills in the Canning. Both formations have tight reservoirs are with average porosities of 4 - 8% and permeability in the microdarcy range (K = 0.01 - 0.001 md).

RF’s are assessed as follows:

•  P90 - 3% RF vertical wells plus fraccing (or sometimes referred to as fracking)

•  P50 - 6% RF vertical well (closely spaced) plus fraccing of vertical wells

•  P10 - 12% RF horizontal wells + multiple staged fraccing of horizontal wells

The conservative RF’s adopted above are similar to what have been reported in the literature for the Bakken tight oil / USO production wells.

The Company believes that the ‘sheer size potential’ of the newly mapped and assessed Deep Oil Case and the ability to use conventional petroleum rigs (circa 3000m depth capacity) will be highly attractive for future farmins.

Yours faithfully

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Neil F. Doyle SPE Director & CEO

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Figure 1 Backreef Area Location & Regional Infrastructure

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Figure 2 Backreef Area OBL Group – 100% beneficial rights

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Figure 3 Backreef Area OBL Mapping of Kimberley Downs Embayment Depth Map Top Windjana Limestone overlying Virgin Hills & deeper prognosed Gogo Shale

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Figure 4

Kimberley Downs Embayment – Backreef Area portion of production licence L6 Cross Section “A” – “A” seismic line BV93-17 OBL New Geological Assessment of Tight Oil / USO (Deep Oil Case) Within the Virgin Hills Sandstone and prognosed underlying Gogo Shale Formation

GLOSSARY & PETROLEUM UNITS

M	Thousand
MM	Million
B	Billion
bbl	Barrel of crude oil (ie 159 litres)
PJ	Peta Joule (1,000 Tera Joules (TJ))
Bcf	Billion cubic feet
Tcf	Trillion cubic feet (ie 1,000 Bcf)
BOE6	Barrel of crude oil equivalent – commonly defined as 1 TJ equates to circa 158 BOE – approximately equivalent to
	1 barrel of crude equating to 6,000 Bcf dry methane on an energy equivalent basis
PSTM	Pre-stack time migration – reprocessing method used with seismic.
PSDM	Pre-stack depth migration – reprocessing method used with seismic converting time into depth.
AVO	Amplitude versus Offset, enhancing statistical processing method used with 3D seismic.
TWT	Two-way time
FMT	Formation testing (pressure & sampling) tool
TD	Total depth
K	Permeability
d	Darcy – measure of permeability flow rate within reservoir
GIP	Gas in Place
USO	Unconventional shale oil
USG	Unconventional shale gas
STOIIP	Stock tank oil in place (stabilized crude at atmospheric conditions) – also commonly referred to as Oil in Place
	(OIP)

DISCLAIMER

Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations. Investors should not infer that because “prospective resources” are referred to that oil and gas necessarily exist within the prospects. An equally valid outcome in relation to each of the Company’s prospects is that no oil or gas will be discovered.

Technical Reserves in this preliminary assessment are considered similar to the definition of Contingent Resources (ie Low Estimate and High Estimate) with the following important caveat - it must be appreciated that the risked volumes as reported in terms of undeveloped Contingent Resources and Prospective Resources are risk assessed only in the context of applying ‘Geological Chance of Success’. This degree of risk assessment does not incorporate the considerations of economic uncertainty and commerciality and consequently no future development as such can be assured.

The technical information quoted has been complied and/or assessed by Company Director Mr Neil Doyle (from a number of sources) who is a professional engineer (BEng, MEngSc - Geomechanics) with over 31 years standing and a continuous Member of the Society of Petroleum Engineers since 1981 (SPE 30 Year Club Member) and by Mr Geoff Geary who is a professional geologist (BSc – Geology) with over 28 years standing and who is also a Member of the Petroleum Exploration Society of Australia. Both Mr Doyle and Mr Geary have consented to the inclusion in this announcement of the matters based on the information in the form and context in which they appear.

Investors should review the ASX materials and independent expert reports previously quoted and the important definitions and disclaimers attached.

ABOUT 3D-GEO PTY LTD

3D-GEO Pty Ltd is a seismic and structural modeling consultancy based in Melbourne, Australia. With a collaborative mixture of petroleum industry experience and academic rigour, 3D-GEO provides innovative solutions to a broad range of clients across the Australasia region and the Middle East. 3D-GEO has extensive exploration experience in fold and thrust belt structural analysis, as well as demonstrated expertise in the extensional basins of Austral-Asia and the Sub-continent.

COMPETENT PERSON STATEMENT

Information on the Reserves and Resources in this release is based on an independent evaluation conducted by 3D-Geo Pty Ltd (3D-Geo). 3D-Geo is a private consultancy. The work was undertaken by a team of petroleum engineers, reservoir engineers, geoscientists and petrophysicists and is based on data supplied by OBL. The technical assessment was performed primarily by Mr Hadi Nourollah, Director 3D-Geo. Mr Nourollah holds the qualification MSc (Petroleum Geosience) from Imperial College London, has over 10 years of experience as a geophysicist and is a Member of Society of Exploration Geophysicists (SEG). 3D-Geo’s approach has been to review the data supplied by OBL for reasonableness and then independently estimate ranges of in-place and recoverable volumes. We have estimated the degree of uncertainty inherent in the measurements and interpretation of the data and have calculated a range of recoverable volumes, based on predicted field performance for the property. 3D-Geo and Mr Nourollah have given their consent at the date of the release to the inclusion of this statement and the information in the form and context in which they appear in this release.

APPLICABLE RESERVES & RESOURCES REPORTING GUIDELINES & DEFINED TERMS

In the determination and classification of Reserves and Resources, Oil Basins Limited applies the Society of Petroleum Engineers Petroleum Resources Management System ( PRMS Guidelines ). The terms “Contingent Resources” and “Prospective Resources” used in this release are as defined by the PRMS Guidelines (relevant extracts as provided below):

PROVED RESERVES

Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.

If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. The area of the reservoir considered as Proved includes:

• the area delineated by drilling and defined by fluid contacts, if any, and

• adjacent undrilled portions of the reservoir that can reasonably be judged as continuous with it and commercially productive on the basis of available geoscience and engineering data.

Often referred to a P1, sometime referred to as “proven”.

PROBABLE RESERVES

Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.

It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate. Probable Reserves may be assigned to areas of a reservoir adjacent to Proved where data control or interpretations of available data are less certain. The interpreted reservoir continuity may not meet the reasonable certainty criteria. Probable estimates also include incremental recoveries associated with project recovery efficiencies beyond that assumed for Proved.

POSSIBLE RESOURCES

Possible Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves

The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P), which is equivalent to the high estimate scenario. When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will equal or exceed the 3P estimate. Possible Reserves may be assigned to areas of a reservoir adjacent to Probable where data control and interpretations of available data are progressively less certain. Frequently, this may be in areas where geoscience and engineering data are unable to clearly define the area and vertical reservoir limits of commercial production from the reservoir by a defined project. Possible estimates also include incremental quantities associated with project recovery efficiencies beyond that assumed for Probable.

CONTINGENT RESOURCES

Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources are a class of discovered recoverable resources.

Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status.

PROSPECTIVE RESOURCES

Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations.

Potential accumulations are evaluated according to their chance of discovery and, assuming a discovery, the estimated quantities that would be recoverable under defined development projects. It is recognized that the development programs will be of significantly less detail and depend more heavily on analogue developments in the earlier phases of exploration.

Prospect – A project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target. Project activities are focused on assessing the chance of discovery and, assuming discovery, the range of potential recoverable quantities under a commercial development program.

Lead – A project associated with a potential accumulation that is currently poorly defined and requires more data acquisition and/or evaluation in order to be classified as a prospect. Project activities are focused on acquiring additional data and/or undertaking further evaluation designed to confirm whether or not the lead can be matured into a prospect. Such evaluation includes the assessment of the chance of discovery and, assuming discovery, the range of potential recovery under feasible development scenarios.

Play – A project associated with a prospective trend of potential prospects, but which requires more data acquisition and/or evaluation in order to define specific leads or prospects. Project activities are focused on acquiring additional data and/or undertaking further evaluation designed to define specific leads or prospects for more detailed analysis of their chance of discovery and, assuming discovery, the range of potential recovery under hypothetical development scenarios.