BROOKSIDE ENERGY LIMITED — Capital/Financing Update 2019

Sep 11, 2019

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NEWS RELEASE

September 12, 2019

Jewell Unit Development Set to Commence

First Operated DSU in Brookside’s SWISH AOI in the SCOOP Play

Perth, Western Australia – September 12, 2019 - Brookside Energy Limited ( ASX: BRK ) ( Brookside or the Company ) is pleased to provide an update on activities within the Company’s SWISH Area of Interest ( SWISH AOI ) in the world-class Anadarko Basin, Oklahoma.

Highlights

• Brookside achieves another milestone as it sets out to commence development of its first operated Drilling Spacing Unit ( DSU ) within the SWISH AOI in the SCOOP Play

• ASX listed Stonehorse Energy Limited (ASX:SHE) ( Stonehorse ) has agreed to participate (as a well-bore only Working Interest owner) in the high impact Jewell 1-13-12SXH well ( Jewell Well )

• The Jewell Well will be operated by Brookside’s US partner and manager of operations, Black Mesa Energy, LLC ( Black Mesa ), and will be the first well to be drilled by Brookside within one of a number of operated DSU’s that the Company will control within the SWISH AOI

• The majority of the elections required to be made under the previously announced Pooling Order have been received and the Company now expects to acquire a ~90% Working Interest in the Jewell DSU (~80%NRI)

• Stonehorse has further agreed to fund 100% of the costs associated with site works to build an all-weather location and set the conductor casing ahead of the commencement of drilling operations

Commenting on the announcement, Brookside Managing Director, David Prentice said:

“It is very pleasing to be able to provide this update for our shareholders. A successful production test of our first operated well in the SWISH AOI will be transformational for Brookside, unlocking very significant value in terms of proved undeveloped reserves and in providing proof of concept for the larger acreage position.

“We are delighted that Stonehorse has agreed to participate in the drilling of this highly anticipated well and look forward to continuing our association with their Board and shareholders as we expand our activities in this highly sort after part of the SCOOP Play.

“Drilling and completion activity within the SWISH AOI and in close proximity to the Jewell DSU in particular continues to ramp-up with operators reporting results that are very supportive of our pre-drill estimates for the area.

“The last quarter of calendar 2019 promises to be a very exciting period for our shareholders and we look forward to providing regular updates as drilling operations get underway and when production testing commences.”

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The Board of Stonehorse has agreed (pursuant to the terms of the Step-In Agreement between LS Operating, LLC (a wholly owned subsidiary of Stonehorse) and BRK Oklahoma Holdings, LLC (a wholly owned subsidiary of Brookside) to participate as a well-bore only Working Interest owner in the Jewell Well within Brookside’s SWISH AOI in the SCOOP Play.

The Jewell Well will be operated by Brookside’s US partner and manager of operations, Black Mesa. The Black Mesa team have a long and very successful history, having worked together for over 30 years at companies including Medallion Petroleum, InterCoast Energy and Brighton Energy. Over the course of their careers, the Black Mesa team has drilled hundreds of horizontal wells and thousands of vertical wells in numerous mid-continent oil and gas basins.

As previously announced, the Oklahoma Corporation Commission has confirmed the establishment of an 880-acre DSU for the Jewell Unit ( Pooling Order ). The majority of the elections required to be made under the Pooling Order have been received and the Company now expects to acquire a ~90% Working Interest in the Jewell DSU (~80%NRI).

With the DSU established and a path to funding for the first well identified, the Company is now moving forward with preparations for the commencement of drilling operations. In this regard, Stonehorse has agreed to fund 100% of the costs associated with site works to build an all-weather location and set the conductor casing ahead of the commencement of drilling operations. These costs will ultimately be borne by the final Working Interest participants, pro-rata based on their interest in the Jewell Well.

Background

Brookside Energy is an Perth-based ASX listed company that generates shareholder value by developing oil and gas plays in the world-class Anadarko Basin.

The Anadarko Basin is a proven Tier One oil and gas development province with significant existing oil and gas gathering and transportation infrastructure, a competitive and highly experienced oil and gas service sector, and a favourable regulatory environment.

Brookside is executing a “Real Estate Development” approach to acquiring prospective acreage in the Anadarko Basin and adding value to it by consolidating leases and proving up oil and gas reserves. The Company then has the option of selling the revalued acreage or maintaining a producing interest.

This model is commonly used by private equity investors in the sector, and has been successfully piloted by Brookside in the northern Anadarko Basin’s STACK Play.

Brookside’s US partner and manager of operations, Black Mesa is an experienced midcontinent operator, which identifies opportunities and executes development under a commercial agreement with Brookside. The business model effectively assigns risk and provides commercial incentives to maximise value for both parties.

The Company is now set to scale-up its activities and asset base significantly with its operatedinterests in the SWISH AOI.

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Pre-Drill Estimates

The following table sets out some of the key technical parameters used to describe the development potential of the Jewell Well DSU.

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- ENDS -

For further information, contact:

David Prentice Media: Paul Ryan Managing Director Director Brookside Energy Limited Citadel-MAGNUS Tel: (+61 8) 6489 1600 Tel: ( +61 8) 6160 4900 david@brookside-energy.com.au pryan@citadelmagnus.com

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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. Web http://www.brookside-energy.com.au

ABOUT BLACK MESA PRODUCTION LLC

Black Mesa Energy, LLC is a Tulsa-based oil & gas exploration and production company focused on profitable development of petroleum properties located in the Mid-Continent oil province of the United States. Our lean and highly specialized technical and operations team is committed to providing attractive returns for our investors and shareholders by generating and drilling high quality oil and gas prospects. The founders of Black Mesa have worked together for over 30 years at companies they previously founded, including Medallion Petroleum, InterCoast Energy and Brighton Energy. Over the course of their careers, the Black Mesa team has drilled hundreds of horizontal wells and thousands of vertical wells in numerous mid-continent oil and gas basins. In addition to the financial backing from the Black Mesa shareholders, Black Mesa partners with outside investors on larger-scale projects by offering non-operated direct working interest participation.

Web http://www.blkmesa.com

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GLOSSARY

GLOSSARY
APO WI	Afterpayout workinginterest
AFIT	After Federal Income Tax
AOI	Area of Interest
BFIT	Before Federal Income Tax
BOE	Barrels of Oil Equivalent
COPAS	Council of Petroleum Accountants Societies
Development Unit or DSU	Development Unit or drilling spacing unit is the geographical area in which an initial oil and/or gas well is drilled and produced from the geological formation listed in a spacing order. The spacing unit communitizes all interest owners for the purpose of sharing in production from oil and/or gas wells in the unit. A spacing order establishes the size of the unit; names the formations included in the unit; divides the ownership of the unit for the formations into the “royalty interest” and the “working interest”; Only one well can be drilled and completed in each common source of supply. Additional wells may be drilled in a Development Unit, but only after an Increased Density Order is issued by the Oklahoma Corporation Commission.
Mboe	1,000 barrels of oil equivalent
Mcf	1,000 cubic feet
MMboe	1,000,000 barrel of oil equivalent
NPV10	The netpresent value of future net revenue,before income taxes and usinga discount rate of 10%.
NRI	Net Revenue Interest
PDP	Proved Developed ProducingReserves
Pooling Agreements	The pooling agreements facilitate the development of oil and gas wells and drilling units. These binding poolingagreements are between the Companyand the operators as specified in Appendix 1.
PUD	Proved Undeveloped Reserves
Reserve Categories	These reserve categories are totalled up by the measures 1P, 2P, and 3P, which are inclusive of all reserves types: • "1P reserves" = proven reserves (both proved developed reserves + proved undeveloped reserves). • "2P reserves" = 1P (proven reserves) + probable reserves, hence "proved AND probable." • "3P reserves" = the sum of 2P (proven reserves + probable reserves) + possible reserves, all 3Ps "proven ANDprobable ANDpossible.
STACK	SoonerTrendAnadarko BasinCanadian andKingfisher Counties – oil and gas play in the Anadarko Basin Oklahoma
SCOOP	SouthCentralOklahomaOilProvince - oil andgasplayin the Anadarko Basin Oklahoma
SWISH AOI	Description of Brookside’s Area of Interest in the SCOOP Play
Working Interest	Percentage of ownership in a lease granting its owner the right to explore, drill and produce oil and gas from a tract of property. Working interest owners are obligated to pay a corresponding percentage of the cost of leasing,drilling, producingand operatinga well or unit