BROOKSIDE ENERGY LIMITED — Interim / Quarterly Report 2017

Jan 30, 2018

Brookside Energy Limited ACN 108 787 720

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QUARTERLY REPORT 31 January 2018

December Quarter Results Continue to Provide Catalysts for Increasing Per Acre Values

Quarterly Report for the period ending December 31, 2017

Highlights

• ✓ Brookside value proposition centred on building an inventory of high quality oil and gas reserves and ultimately increasing value per leasehold acre

• ✓ Strong, sustained production rates drive larger reserves per well which in turn drives higher leasehold acreage values

• ✓ Excellent initial production rates (including Company record IP24 3,500 BOE/day) continue to provide the catalyst for more reserves per well and higher per acre valuations

• ✓ Company’s well count increased to twenty seven, spread across the non-operated Working Interest and Mineral Royalty acreage

• ✓ Brookside’s total holdings in the world-class Anadarko Basin plays now stands at ~1,800[ii] acres

• ✓ Anadarko Leasing Facility expanded to US$3.0 million, providing additional asset level funding for continuing leasing and acquisition activities

• ✓ At the end of the quarter, the Company had ~A$1.0 million available to fund its ongoing leasing campaign and for general working capital purposes and a further ~US$1.1 million available under the Drilling Joint Venture.

The Directors of Brookside Energy Limited ( ASX:BRK ) ( Brookside or the Company ) are pleased to present the Company’s quarterly activities report for the period ending December 31, 2017.

During the December quarter the Company’s wholly owned subsidiary BRK Oklahoma Holdings, LLC ( BRK Oklahoma ) continued to pursue a strategy aimed at building value per share by leveraging the expertise, experience and contacts of the Board and its partner and manager of US operations Black Mesa Production LLC ( Black Mesa ). As previously announced, the Black Mesa team has identified an opportunity to secure a position in the world-class Anadarko Basin Plays (STACK and SCOOP) in Oklahoma. The Company is continuing to capitalise on a short window in which to build a material premier asset position in this highmargin repeatable play.

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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Figure1. Brookside Energy Leasehold Focus Areas

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

- Anadarko Basin Plays Drilling & Completion Activity

The level of activity within the Company’s Anadarko Basin play holdings in Oklahoma continued to increase during the quarter. The Company is now participating in twenty-seven wells (twenty-five non-operated Working Interest wells and two Mineral Royalty wells). These wells are at various stages of development (see table below).

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Note: Working Interest percentages may increase subject the issue of final pooling orders.

During the quarter excellent initial production rates continued to flow from the Company’s nonoperated Working Interest and Mineral Royalty wells. These results further confirmed the quality of the acreage that Brookside has been able to secure within the Anadarko Basin plays in Oklahoma. Two of the Company’s recently completed non-operated Working Interest wells, the Marathon Oil, Co. (NYSE: MRO) operated Landreth BIA and HR Potter wells have delivered 30-day average production rates (IP30) above the Marathon 1,525,000 BOE Type Curve for this part of the STACK Play.

Additional highly encouraging production results were recorded on the next two non-operated Working Interest wells, with these two wells achieving rates in excess of 2,100 BOE/day during flow back. Importantly, these were higher impact wells for Brookside with the Company holding a 13.6% and 3.1% Working Interest respectively.

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

Post the end of the December Quarter, the Company announced results from the three most recent non-operated Working Interest wells. These wells are located within the Company’s Blaine County focus area. All three wells achieved IP24’s above 2,000 BOE/day (~33% oil), with one well achieving a Company record ~3,500 BOE/day. Pleasingly, the Company’s average Working Interest in these wells is ~5.7%, at the upper end of the Company average Working Interest secured to date. All three of these well support (subject to continued performance inline with the Company’s type curve) EUR’s well above the Company’s 1,039Mboe estimate for this part of the basin.

- Anadarko Basin Plays Leasing and Acquisition Program

During the quarter, our continuing efforts delivered further success with the Company’s Working Interest leasehold acreage count reaching 1,700 acres[i] , a 30% increase on the previously announced initial target of 1,280 leasehold acres. This increase in holdings is all located within Brookside’s leasing focus areas. The increase was achieved in a highly competitive environment and importantly our team has maintained its disciplined approach, exclusively targeting acreage in the up-dip liquids rich ‘core’ along the Anadarko Basin margin.

At the end of the quarter, the Company’s total Anadarko Basin holdings stood at approximately 1,800 acres[ii] (inclusive of the previously announced RA Minerals Royalty Acreage which is currently being developed by NYSE listed independent, Continental Resources, Inc.).

Undeveloped acreage values continued to rise during the quarter as these world-class plays continue to mature. Analysis of the estimated US$8.0 billion in merger and acquisition activity that occurred in the Anadarko Basin Plays over the last two years showed undeveloped acreage trading at a weighted average of >US$16,000 per acre.

In addition, the Company announced during the quarter that its wholly owned subsidiary, Anadarko Leasing, LLC (Anadarko Leasing) had reached agreement with Tulsa based Oklahoma Energy Consultants, Inc. (OEC) to increase the Anadarko Leasing Facility (Facility) limit to US$3.0 million. All other terms of the Facility (outlined in our ASX release dated 21 June 2017) remained unchanged.

This additional asset level funding will enable Brookside, together with its partner and manager of US operations Black Mesa Production, LLC (Black Mesa), to continue to aggressively pursue its leasing and acquisition activities across the liquids-rich fairways of the Anadarko Basin in Oklahoma. Specifically in the SCOOP and STACK Plays.

Non Anadarko Basin Exploration & Production Activities

No exploration was conducted during the quarter on the Company’s leasehold interests in Payne County, Oklahoma.

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

CORPORATE

At the end of the quarter, the Company had ~$1.0 million available to fund its ongoing leasing campaign and for general working capital purposes.

The Company had a further ~US$1.1 million available via the US$3.5 million Drilling Joint Venture to fund drilling and completion costs related to as yet undrilled non-operated Working Interest leasehold wells.

See Appendix 1. for details of the Company’s oil and gas interests.

- ENDS -

For further information, contact:

Loren King 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

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 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.

Web http://www.blkmesa.com

GLOSSARY

BOE	Barrels of Oil	Equivalent
MBoe	One Thousand Barrels of Oil Equivalents, i.e. one thousand BOE
EUR	Estimated Ultimate Recovery
IP24	Initial production rate measured over 24 hours
Mineral Royalty	Ownership of a percentage of production or production revenues, produced from leased		acreage. The owner of
	this share of production does not bear any of the cost of exploration, drilling, producing, operating, marketing or any
	other expense associated with drilling and producing an oil and gas well.
PDP	Proved Developing Producing Reserves
PUD	Proved Undeveloped Reserves
Type Curve	Representative production profile of a well for a specific 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,
	producing and operating a well or unit

Notes:

i. Includes Working Interest acreage that is subject to final title clearance and closing; acreage acquired pursuant to the Drilling Program Agreement between BRK Oklahoma and Black Mesa.

ii. Includes Working Interest acreage that is subject to final title clearance and closing; acreage acquired pursuant to the Drilling Program Agreement between BRK Oklahoma and Black Mesa; and the RA Minerals Royalty Acreage acquired pursuant to the Acquisition Program Agreement between BRK Oklahoma and Black Mesa.

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

APPENDIX 1 – SCHEDULE OF OIL AND GAS INTERESTS

COUNTRY	INTEREST ACQUIRED OR DISPOSED OF DURING THE QUARTER	TOTAL ACRES	NATURE OF INTEREST
Payne County, Oklahoma	Nil	465 gross (282 net)	100%
Blaine County, Oklahoma	Nil	~100 acres	Royalty Interest
Blaine County, Oklahoma	Nil	~400 acres	Working Interest
Garvin County, Oklahoma	Nil	~600 acres	Working Interest
Stephens County, Oklahoma	~700 acres	~700 acres	Working Interest

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

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Brookside Energy Limited ( Brookside , the Company )

ABN

Quarter ended (“current quarter”)

15 108 787 720 31 December 2017

Consolidated statement of cash flows	Current quarter (Dec 2017) $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (ATO GST refunds) 1.9 Net cash from / (used in) operating activities	- (921) - - (182) - - (1) - - 10	- (4,093) - - - (794) - (10) (3) - - 87
	(1,094)	(4,813)

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - - - - -	- - - - - - - - - - -
	-	-

3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - 3201 - - - -	1,980 - - (104) 2,9071 (200) - - -
	3201	4,583

1. Proceeds drawn during the quarter under the US$3.0 Million Anadarko Leasing Facility.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	808 (1,094) - 320 18	257 (4,813) - 4,583 25
	52	52

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter (Dec 2017) $A’000	Previous quarter (Sept 2017) $A’000
5.1 Bank balances 52 808 5.2 Call deposits - - 5.3 Bank overdrafts - - 5.4 Other (provide details) - - 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 521 808 1In addition to Cash and Cash Equivalents, Brookside has A$933,140 of the US$3.0m Anadarko Leasing Facility remaining and available for draw down at the Company’s discretion.	52 - - -	808 - - -

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2	71
6.2	Aggregate amount of cash flow from loans to these parties included	-
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2
	- Payment of director’s fees, rent and corporate administration expense.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2
	-

8. Financing facilities available Add notes as necessary for an understanding~~o~~f the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities 3,840 2,9071 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well: - US$3.0 million Anadarko Leasing Facility (24-month maturity) (Leasing Facility) with interest payable quarterly in arrears at the rate of 12% per annum on draw down amounts. The Leasing Facility is secured by Anadarko Leasing, LLC’s interest in working leasehold acreage acquired during the term of the Facility. Anadarko Leasing, LLC is a wholly owned subsidiary of Brookside. - As at 31 December 2017 the USD value of the Leasing Facility was $2,270,792.43, which, using an AUD/USD exchange rate of 0.78125, equates to A$2,907,614.31. Brookside has A$933,140 available for draw down in the Leasing Facility.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	3,840	2,9071
	-	-
	-	-

9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	Next Quarter $A’000	Next Quarter $A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material) 9.7 Total estimated cash outflows				(415) - - - (90) -
				(505)
10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter		Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	-	-	-		-
10.2 Interests in mining tenements and petroleum tenements acquired or increased	-	-	-		-

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31 January 2018 Director and Company Secretary

Print name: Loren King

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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