CENTRAL PETROLEUM LIMITED — Board/Management Information 2012

Jun 17, 2012

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ASX ANNOUNCEMENT & MEDIA RELEASE

ASX CODE: CTP

15 June 2012

Statements from John Heugh

Central Petroleum Ltd (ASX:CTP) (“ Company ”) refers to the resolutions to consider the removal of Mr John Heugh as a director at the general meetings to be held at 12.00 noon (WST) and 2.00pm (WST) on 22 June 2012 at Duxton Hotel Perth, No. 1 St George's Terrace, Perth, Western Australia.

Pursuant to s. 203D of the Corporations Act 2001 (Cth) Mr Heugh is entitled to put his case to members by, amongst other things, giving the Company a written statement for circulation to members, subject to certain requirements.

As there are two general meetings at which each has a resolution to consider the removal of Mr John Heugh as a director, Mr Heugh is entitled to provide two written statements which the Company attaches to this document. These statements were provided by Mr Heugh as part of his rights pursuant to s. 203D and the content of the statements have not been verified by the Company and the Company does not adopt or endorse the statements. As a result of Mr Heugh’s legal action against the Company the Company advises that it reserves all of its rights arising out of or in connection with the matters referred in Mr Heugh’s statements attached.

The Company has been informed that each of Dr Henry Askin (Non-Executive Chairman), Mr Richard Cottee (Chief Executive Officer) and Mr Trevor Shortt (Exploration Manager) who are mentioned in the statements reject and deny any allegations from Mr Heugh which are adverse to their interests.

Ends

Company enquiries, please contact:

Richard Cottee, Chief Executive Officer +61 8 9474 1444

Media enquiries, please contact:

Ron Cameron, Director, Mercury Consulting +61 2 8256 3308

General Disclaimer and explanation of terms:

This document may contain forward-looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Central. These risks, uncertainties and assumptions include (but are not limited to) 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 document. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking statement in this document is valid only at the date of issue of this document. Subject to any continuing obligations under applicable law and the ASX Listing Rules, or any other Listing Rules or Financial Regulators’ rules, Central, its agents, directors, officers, employees, advisors and consultants do not undertake any obligation to update or revise any information or any of the forward looking statements in this document if events, conditions or circumstances change or that unexpected occurrences happen to affect such a statement. Sentences and phrases are forward looking statements when they include any tense from present to future or similar inflection words, such as (but not limited to) "believe," "estimate," "anticipate," "plan," "predict," "may," "hope," "can," "will," "should," "expect," "intend," "is designed to," "with the intent," "potential," the negative of these words or such other variations thereon or comparable terminology, may indicate forward looking statements.

CTP-General Meetin 22 June 2012 g

Background :

I co-founded Central Petroleum in 1997 with the vision of building a major resources company.

We are now within reach of that original vision. My record over the years shows the dedication and determination responsible for:

1. listing on 7 March 2006

2. Surprise, (100 million barrels of P50 OIP assessed in the greater structure), the first successfully flowing horizontal oilwell onshore Australia and the first successful oil discovery in central Australia for almost five decades

3. CTP growing to nett ownership of a geographically focussed cohesive package of prospective petroleum, helium and coal acreage probably unsurpassed in the developed world

4. the discovery of vast tonnages of coal;

5. the promotion of unconventional exploration from (2007)

6. the recruitment of unconventional resource expertise

Surprise and cash flow :

Despite the strong convictions of myself, the COO, and exCTP’s technical team and external consultancies, the Board refused to sanction a mandate to raise capital solely for expedited drilling at Surprise. The rig was released, and further seismic anticipated to be processed late 2012, almost certainly curtailing any further drilling of the discovery until 2013.

Farmouts :

Additional drilling at Surprise, with probable increased oil/cash flow, should have been used as a salient to conduct a farmout “process”, from a position of strength, rather than a position of weakness.

I recommended a globally competitive best practice farmout “process” to submit best bids in a strict time frame; managed by an experienced external consultancy. The Chairman refused to consider this, informed the Board on 12.02.02 that he had already been in discussion with a party interested in the Surprise area and that we could farm it out “overnight”. The Chairman refused to name the party and, immediately prior to my purported termination as MD, also vetoed a carefully prepared potential hostile takeover defence I had planned.

The allegations of Mr Shortt and the Board are largely invalid, baseless or irrelevant, and will be dealt with in my Supreme Court action in which I seek reinstatement and/or damages.

Despite independent advice, and my conviction that one individual could not effectively maximise shareholder value, the Board vetoed the recommended global search “process”, sidelined me (12.02.02) and gave sole responsibility for the conduct of farmouts to Mr Shortt.

At no time did I say I “had a plan” regarding subverting the Board’s resolution for the farmout arrangements.

I had concerns regarding Mr Shortt, but, whilst promoting a better global “process”, I co-operated fully as directed.

The references on the background, previous performance and experience of several senior managers provided by recruitment agencies were in my opinion were inadequate. Several senior managers would be thrust into positions of global prominence by plans to have Mr Shortt take on farmout negotiatons and the Company to list on the TSXV. Routine checking of this and IT security by a corporate agency, confirmed Mr Shortt has never managed a international farmout campaign of the tenor required by CTP, ie to farm out successively parcels of land the size of which rarely become available on the world market and never before attempted by Mr Shortt, viz. million acre plus deals in grassroots exploration acreage containing both conventional and unconventional potential as well as coal, helium, salt related structures and very old Pre-Cambrian lithologies in frontier basins with an average well density of one well per 1.2 million acres.

The agency used, “Introspec” was not a private detective agency and was not ASIS International as referred to in the Board’s spiel.

CTP in Disarray :

• Until 12.04.10, I had no knowledge of placement/farmin discussions with PNPL and still have not been briefed.

• Until 12.05.13, there was no Board Meeting to approve the attached penalty of up to $650,000 or the exercise price of the option issue announced on 12.04.04. I approved neither.

• Seismic/EPT have slipped way behind in schedule.

• The prospect of cash flow from additional drilling has faded away probably at least until 2013.

• Litigation is rampant and escalating.

• GMs are increasingly complex and bizarre.

• I have not attended CTP’s offices since 22 March as locks have been changed, my office is occupied and I have no access to the server.

• Financial, shareholder & GM voting information has been refused me.

• If PNPL succeed in unwinding the recent capital placement the Company could be at or close to insolvency.

• After 15 years of faithful service, only 1 unfounded caution resulted in purported termination with 3 months pay and attempted removal as a Director.

Board Relations :

From 2006 :

• my expenditure limit was $150,000; expenditure in excess required Board approval.

• CAs with standstill provisions were constructed by counsel and resolved for issue by the Board.

• the Chairman repeatedly directed that Operatorship and majority equity were to be retained in any farmouts.

• the Chairman was negative about any potential keystone investor proposals involving a seat at Board level.

Maximising Shareholder Value :

I champion :

• bringing more commercial talent to the Board

• reduction of Shareholder dilution via partnerships, monetisation of discoveries and keystone investment

• a best practice global “process” to canvass best farmin bids

• coal acreage value adding via limited drilling to demonstrate the presence of shallow coal prior to major farmouts

• the cessation of expensive litigation

• not farming out ungranted acreage as land values are changing so rapidly

Directors :

The current Board apparently now considers that 3 different Directors and a very expensive CEO are required. Shareholders have been voting on the appointment of Mr Cottee without being provided with the full details of his contract via Frestone and his performance with Nexus and Austin.

Sincerely,

Mr John Heugh

BSc (Hons), MAICD, MPESA, MAAPG, Certs. 1-IV Drilling Engineering (PETEX), Cert. Advanced Management AIM.

CTP-General Meetin 22 June 2012 g

WA News Report 12 June (Quotes attributed to Mr Cottee)

Parts of this news article, are, in my opinion, grossly misleading and inaccurate.

• It has never been the intention of myself or the Company to retain 100% ownership of any of our assets.

• The previous leadership indeed presented on numerous occasions very precisely what it was trying to do.

• It would seem that Mr Cottee himself may betrying to get control of the “candy bar”.

I have enunciated my vision for CTP on numerous occasions and it includes :

1. Crude oil/condensate discovery and sales for early cash flow.

2. Gas/helium/condensate discovery for intermediate term cash flow from cryogenic heliumexport and local “mini” LNG (liquefied natural gas) production for the transport and local mining industry.

3. Longer term value adding to gas via GTL (gas to liquids) and/or LNG for domestic and export markets.

4. Long term monetisation of coal via mining, beneficiation and export, UCG (underground coal gasification) and value adding via GTL or other processes and possible mining and conversion to GTL products via CTL (coal to liquids).

It is planned to explore and develop the Group’s coal assets in a joint venture structure with incoming joint venture partners managing and funding 100% of exploration and bankable feasibility studies to earn an interest. It is the Company’s intention to maximise shareholder value by the sequential farm out of parcels of land.

The Company’s short term focus remains crude oil and condensate discovery and monetisation for potential early cash flow.

John Heugh Salary and Option Packages

I carried CTP for virtually no pay for 9 years since its inception in 1997, for this I was awarded some 5.7 million shares and I currently hold 2,500,000 options exercisable at 22c/25c/28c/32c/37c on or before 31 March 2014.

Mr Cottee and Frestone collectively, subject to Shareholder approval, will hold approximately 173 million options representing a number equivalent to some 12% of the Company’s issued shares. The Cottee/Frestone package are all exerciseable at 9c.

Mr Cottee/Freestone pays for the options based on the independent valuation of $4.2 million in today’s money but he does not pay until the options are vested and he may choose to exercise them. This could be 3 years or 30 years.

• What is the expiry date of the options package?

• What are Mr Cottee’s obligations in regard to the options after vesting?

• Can he on-sell the options to a would be takeover suitor?

• Mr Cottee has been already appointed as CEO according to the Company, so does he get his $250,000 sign on fee now and his first quarterly instalment of his base salary now? (This would equate to $375,000).

• What happens if Mr Cottee is not appointed by the Shareholders? Does he retain the $375,000?

• What happens if Mr Cottee is appointed by Shareholder approval at GM(2) on 22 June 2012, but at the subsequent GM(3) his option package is not approved? Does retain the initial $375,000 payment?

• Are there any other costs, penalties, payments or other perquisites in the Frestone/Cottee agreement that the Shareholders are unaware of ?

Mr Cottee/Freestone and elements of the current Board are attempting to take over management of a company already primed for success based on the hard work, dedication, perseverance and success of the previous Managing Director.

PNPL Farmin Proposals

Mr Palmer has stated publically that any significant deals he proposes will be presented to Shareholders to vote on. What could be fairer than that? The Corporations Act covering related corporations dealings may provide additional comfort.

Industry Joint Operating Agreements, (JOAs) allow a major oilco to rapidly dilute a junior partner by outspending it and then once the junior is diluted to a position of 5% then the other partner or partners have the right to buy the remaining 5%.

PNPL wish to provide farmin funding for additional value adding before major farmouts are done so the Company can deal from a position of strength rather than from a position of desperation.

Exploration Expenditure

Drilling plans in the past were a statement of intent, always subject to funding, availability of rigs, crew and equipment.

The PNPL group are very keen on funding and sourcing an appropriate drilling rig or rigs for both petroleum and coal exploration and development.

A New Board= New Momentum for Central Petroleum Limited !

The move by PNPL to remove all five directors other than myself and add three new directors already working for the Palmer stable to work with me can deliver :

Firstly, financial muscle to provide protection from opportunistic predatory takeovers.

Secondly, share register stability. PNPL’s keystone stake or expanded keystone stake could stabilise the share register and attract more institutional long term investors which is what the Company needs.

Thirdly, dealmaking; the three new directors proposed by Palmer and PNPL to work with me reinstated as MD bring a wealth of financial, commercial and corporate acumen and experience. They possibly represent one of the world’s best groups of deal making directors in this regard.

Raymond Tam is a veteran fund raiser and business development expert backed by impeccable credentials. While with JP Morgan he was the main facilitator of the $3

billion financing for the Tata Motors acquisition of Jaguar and Landrover, the $800 million KKR acquisition of Oriental Brewing in South Korea and other stellar deals.

Baljeet Singh has been admitted as a solicitor and barrister of the High Court of Australia. Ms. Singh is experienced in oil and gas operations in PNG and throughout Australia.

Bill Schoch has extensive experience in the commercialisation of oil, gas, iron ore and coal.

PNPL intends to provide technical project skills to operate the coal assets of the Company while Central’s established team of staff and consultants will continue to operate the oil, gas, condensate and helium resources.

Mr John Heugh, BSc (Hons), MAICD, MPESA, MAAPG, Certs. 1-IV Drilling Engineering (PETEX), Cert. Advanced Management AIM.