BROOKSIDE ENERGY LIMITED — Capital/Financing Update 2021

Jan 12, 2021

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Orion Project Joint Venture Thelma Well Update – Production, Sales and New Acreage

Perth, Western Australia – 13 January 2021 – Brookside Energy Limited (ASX: BRK) ( Brookside ) and Stonehorse Energy Limited (ASX: SHE) ( Stonehorse ) (the Companies ) are pleased to provide an update on production, sales and additional acreage acquisition for the Thelma 12-1 well (the Thelma Well ), located in the SCOOP Play, northeast of Brookside’s SWISH Area of Interest ( SWISH AOI ).

HIGHLIGHTS

• The Thelma Well was successfully brought on production with an initial production (IP) rate of 130 barrels of oil per day ( BOPD ). Production optimisation is ongoing with daily production expected to stabilise at a long-term optimal volume of approximately 30 BOPD.

• The first load of oil of 313 barrels was sold on 30 December 2020. A second, similar sized load of oil, is expected to be sold in the third week of January 2021.

• Additional behind pipe potential remains in the Thelma 12-1 well with numerous formations, all proven producers in the area, still to be tested.

• An additional 40 “held by production” (HBP) acres contiguous to the Thelma acreage have been acquired by the Orion Project Joint Venture (the Joint Venture ).

• The additional acreage gives the Joint Venture the option to drill a low-cost vertical well with access to 7 known potential reservoirs all of which are proven producers in the area.

• The Joint Venture has now established a new Area of Interest ( AOI ), the Bradbury Prospect , to complement Brookside’s SWISH AOI.

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

“This is a cracking start to 2021 for Brookside, the Joint Venture and the Black Mesa team. To identify this new behind pipe discovery and to bring it into production and then to sales safely and efficiently is a credit to the whole team.

“It is also very pleasing to have some early success in expanding our position in the Bradbury Prospect AOI and we look forward to scaling up this new initiative and adding to our already impressive portfolio of low-risk high return projects across the Anadarko Basin”.

Stonehorse Managing Director, David Deloub said:

“A fantastic result delivered by the Black Mesa team on behalf of Stonehorse. We are particularly excited by the establishment of a potential new pipeline of low-cost vertical oil wells which, in conjunction with a strengthening oil price is expected to deliver significant future cash flows to the Company going forward”

The Thelma Well was successfully brought on to production with an initial daily production rate of 130 barrels with low water cut and minor associated gas. Production optimisation is ongoing by the Black Mesa team who are on location at the Thelma 12-1 well site in Oklahoma. Early analysis indicates that an optimal daily production rate of approximately 30 barrels will be achieved resulting in the best balance between production rate (and associated revenue stream), efficient and safe reservoir performance and maximum oil recovery.

Sales from the Thelma Well commenced on 30 December 2020 with an initial load of 313 barrels of oil. It is estimated that a second similar sized load of oil will be sold in the third week of January 2021. Oil sales commenced in a strengthening oil price market which has continued to appreciate in the new year.

The success of the workover, perforation, clean-up, and production from one of the numerous identified “behind pipe” zones of interest in the Thelma Well has provided the team with confidence in the ability to recover additional volumes from the remaining identified zones.

Capitalising on the success of the Thelma Well the Joint Venture has acquired an additional 40 “held by production” (HBP) acres contiguous to the Thelma acreage. The additional acreage gives the Joint Venture the option to drill a low-cost vertical well with access to 7 known potential reservoirs all of which are proven producers in the area . Furthermore, future analysis has the potential to identify other potential producing formations at depth.

Successful restoration of commercial production in the Thelma Well has established a new Area of Interest in the SCOOP Play, the Bradbury Prospect, complementing Brookside’s existing SWISH AOI.

The Thelma Well, which is located in Murray County, Oklahoma was drilled and completed in 1992 as a vertical well targeting the Simpson Group sands and was spaced on a 40-acre drilling spacing unit ( DSU ). The new zone of production is located at depth of approximately 5,787 feet. The well is located approximately 20 miles east-northeast of Brookside Energy’s Jewell DSU in the SWISH AOI, an area that has exhibited high oil production per unit with multiple discrete high porosity high permeability target zones.

– ENDS –

This announcement has been authorised for release by the Boards of Directors of Brookside Energy Limited and Stonehorse Energy Limited.

For further information, contact:

David Prentice David Deloub Managing Director Executive Director Brookside Energy Limited Stonehorse Energy Limited Tel: (+61 8) 6489 1600 Tel: (+61 8) 6489 1600 david@brookside-energy.com.au David@stonehorseenergy.com Sarah Lenard Omar Taheri Partner Founder Advisir, Investor & Media Relations SparkPlus Tel: (+61 4) 32 332 905 Tel: +65 8111 7634 sarah.lenard@advisir.com.au omar@sparkplus.org

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 and/or Stonehorse Energy Limited (“Brookside Energy”, “Stonehorse 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 and Stonehorse Energy do 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 or Stonehorse 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 Energy is a Perth-based ASX listed company that generates shareholder value by developing oil and gas plays in the United States, specifically the Anadarko Basin in Oklahoma. 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. The Company is now set to scale-up its activities and asset base significantly with its operated- interests in the SWISH AOI. Web http://brookside-energy.com.au

About Stonehorse Energy Limited

Stonehorse Energy is a Perth-based ASX listed oil and gas exploration and production company which currently has working interests in a number of producing oil and gas assets located in Oklahoma and Texas in the United States. The Company’s overall objective is to be cashflow accretive by building a portfolio of working interests in high quality producing assets delivering a return on investment to its shareholders reflecting risk appetite and capital availability. Web http://www.stonehorseenergy.com

About Black Mesa Energy, LLC

Black Mesa Energy LLC, a Brookside Energy Limited controlled subsidiary, 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

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 CorporationCommission.
Mboe	1,000 barrels ofoilequivalent
Mcf	1,000 cubicfeet
MMboe	1,000,000 barrelofoilequivalent
NPV10	Thenet presentvalue of futurenetrevenue, beforeincome taxes and using a discountrate of 10%.
NRI	NetRevenueInterest
PDP	ProvedDevelopedProducingReserves
Pooling Agreements	The pooling agreements facilitate the development of oil and gas wells and drilling units. These binding pooling agreements are betweenthe Company and the operators as specifiedin Appendix 1.
PUD	Proved UndevelopedReserves
Reserve Categories	These reserve categories are totalled up by the measures 1P, 2P, and 3P, which are inclusive of all reserve 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	Sooner Trend Anadarko Basin Canadian and Kingfisher Counties – oil and gas play in the Anadarko BasinOklahoma
SCOOP	SouthCentralOklahoma Oil Province-oiland gas playintheAnadarkoBasinOklahoma
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 ofthe cost of leasing, drilling, producing and operating awellorunit