BROOKSIDE ENERGY LIMITED — Capital/Financing Update 2016

Aug 3, 2016

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4 August 2016

Australian Securities Exchange Ltd Level 40, Central Park 152-158 St Georges Terrace PERTH WA 6000

Threefold Increase in Brookside STACK Leasehold

• Brookside’s STACK leasehold acreage count more than triples to ~160 acres (up from the previously announced 50 acres)

• Securing Non-Operated Working Interests in six (6) soon to be drilled (extended lateral) horizontal wells in the core of the STACK Play

• Potential for exposure to between 48 and 60 (extended lateral) horizontal wells in a full field development scenario

• Unprecedented level of permitting and pooling by operators across Brookside’s area of interest points to rapid increase in drilling and completion activity over the next 12 months

• Leasehold acres have been secured in the core of the play and will be developed by experienced and well funded tier one operators

• Previously announced Drilling Joint Venture to provide off balance sheet funding for initial development

• Leasing campaign is continuing, targeting non-operated opportunities within Brookside’s area of interest within the core of the STACK Play

Brookside Energy Limited ( Brookside or the Company ) is pleased to provide an update on progress as it’s wholly owned subsidiary BRK Oklahoma Holdings, LLC ( BRK Oklahoma ) continues to build a position in the core of the STACK Meramec Play ( STACK Play ) in Oklahoma.

As previously announced the team at Black Mesa Production, LLC ( Black Mesa ) are pursuing a leasing program (on behalf of BRK Oklahoma) aimed at identifying and securing working interest acreage within the core of the STACK Play.

The Company is very pleased to report that these ongoing efforts (in a highly competitive environment) have secured an additional ~110 acres in the core of the Stack Play. This takes the Company’s total non-operated working interest leasehold interests to ~160 acres spread across six (6) soon to be drilled 1,280 acre spacing units.

Several operators in this play are already testing increased drilling density with eleven (11) successful pilots being conducted in and around Brookside’s core focus area. Of particular note is Devon Energy Corp’s (NYSE:DVN) recently announced Alma spacing pilot which tested five wells per section across a single interval in the upper Meramec, delivering 30-day production rates averaging 1,400 oil-equivalent barrels (Boe) per day per well, of which 60 percent was light oil.

Suite 9, 330 Churchill Avenue, Subiaco WA 6008 Ι PO Box 866, Subiaco WA 6904 P + 61 8 6489 1600 Ι F + 61 8 6489 1601 Ι W www.brookside-energy.com.au

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In addition to the strong initial-production rates, early flow-back results from the Alma pilot indicate minimal interference between wells, suggesting potential for tighter spacing in the over-pressured oil window. The Alma wells were drilled with 5,000-foot laterals and were conservatively brought online with a 12/64-inch choke and gradually increased to a 20/64-inch choke.

These results (together with information from pilots conducted by other operators) point to potential for Brookside’s current acreage to provide exposure to between 48 and 60 (extended lateral) horizontal wells in a full field development scenario.

Activity within the general STACK Play is at unprecedented levels with permitting and pooling by operators across Brookside’s area of interest pointing to a rapid increase in drilling and completion activity over the next 12 months (see Figure 1.). There are currently in excess of 180 pooling applications and orders (a pre-curser to the spudding of an individual well) active within Brookside’s area of interest in the core of the play, with Continental Resources, Inc. (NYSE:CLR) and Marathon Oil Corp. (NYSE:MRO) leading the development. Continental Resources and Marathon Oil combined account for ~75% of this activity.

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Figure 1.

Importantly, the non-operated working interest leasehold acres being secured by BRK Oklahoma will be developed by experienced and well funded tier one operators, including Continental Resources, Inc. and Marathon Oil Corp and this initial development can be funded via the recently announced Drilling Joint venture to be established between BRK Oklahoma and Merchant Funds Management Pty Ltd.

Suite 9, 330 Churchill Avenue, Subiaco WA 6008 Ι PO Box 866, Subiaco WA 6904 P + 61 8 6489 1600 Ι F + 61 8 6489 1601 Ι W www.brookside-energy.com.au

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As previously announced, the unique structure of the proposed joint venture enables Brookside to capture value and deliver growth through the addition of cash flow, oil and gas reserves and importantly very substantial future development potential from proven undeveloped locations without dilution that would come from equity capital at this point in the Company’s life.

Finally, the current leasing campaign is ongoing and as the location of the acreage and the contractual terms of the leases are commercially sensitive at present, the Company will make a more fulsome disclosure when the current campaign is finalised and the final acreage acquisition opportunities have been identified and secured.

- ENDS -

For further information, contact:

Loren Jones

Non-Executive Director and Secretary

Brookside Energy Limited Tel: (+61 8) 6489 1600 loren@brookside-energy.com.au

Suite 9, 330 Churchill Avenue, Subiaco WA 6008 Ι PO Box 866, Subiaco WA 6904 P + 61 8 6489 1600 Ι F + 61 8 6489 1601 Ι W www.brookside-energy.com.au

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FORWARD-LOOKING STATEMENTS AND OTHER DISCLAIMERS

This announcement may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions, which are outside the control of Brookside Energy Limited (“Brookside Energy” or “the Company”). These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, readers are cautioned not to place reliance on forward-looking statements. Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Brookside Energy does not undertake any obligation to update or revise any information or any of the forward looking statements in this announcement or any changes in events, conditions or circumstances on which any such forward looking statement is based.

This announcement does not constitute investment advice. Neither this announcement nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. Shareholders should not rely on this announcement. This announcement does not take into account any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this announcement are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

The information set out in this announcement does not purport to be all-inclusive or to contain all the information, which its recipients may require in order to make an informed assessment of Brookside Energy. You should conduct your own investigations and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this announcement.

To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this announcement. No responsibility for any errors or omissions from this announcement arising out of negligence or otherwise is accepted.

ABOUT BROOKSIDE ENERGY LIMITED

Brookside is an Australian publicly held company listed on the Australian Securities Exchange (ASX:BRK). The Company was established in 2004 and first listed via an Initial Public Offering in October 2005. The Company has established deep and valued relationships in the oil and gas sector over the last 10 years through its successful activities in the oil and gas sector focused on the mid-continent region of the United States. Brookside’s goal is to build value per share through a disciplined portfolio approach to the acquisition and development of producing oil and gas assets and the leasing and development of acreage opportunities.

ABOUT BLACK MESA PRODUCTION LLC

Black Mesa is an Oklahoma domiciled limited liability company established for the purpose of identifying and exploiting opportunities in the upstream oil and gas sector on-shore in the United States. Black Mesa was capitalized via an agreement between the Tulsa Equity Group, BRK Oklahoma (a wholly owned subsidiary of Brookside Energy Limited) and the Incentive Members of Black Mesa. Black Mesa is executing a returns-based, disciplined strategy directed at the acquisition of producing properties, lower-risk development drilling opportunities and larger scale entry level acreage plays/concepts. Black Mesa’s is leveraging the extensive experience of its executive team and its Board with the latest technology and data sets that are available to identfy and evaluate opportunities.

Suite 9, 330 Churchill Avenue, Subiaco WA 6008 Ι PO Box 866, Subiaco WA 6904 P + 61 8 6489 1600 Ι F + 61 8 6489 1601 Ι W www.brookside-energy.com.au