CENTRAL PETROLEUM LIMITED — Capital/Financing Update 2016

Dec 12, 2016

ASX ANNOUNCEMENT AND MEDIA RELEASE

ASX CODE: CTP

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13 December 2016

CENTRAL SEEKING DEVELOPMENT OPTIONS FOR SHAREHOLDERS

Fellow shareholders

The Board wishes to update shareholders on the Central Petroleum’s (“Central” or “Company”) corporate and commercial position.

As previously announced, the Company recently received an indicative non-binding takeover proposal from Macquarie SCT Pty Ltd, an entity of Macquarie Bank (“Macquarie”), which the Board rejected as being not in the interests of shareholders. Macquarie is now conducting Due Diligence, with a view to considering another proposal.

This engagement with Macquarie comes at a time when the Australian energy markets are facing potentially significant change that would advantage Central in future years.

There is now a widespread public recognition of a looming gas shortage facing the Australian east-coast demand centres from 2018. Expectations of significant increases in consumer gas prices, and particularly cost increases to the manufacturing sector are placing at risk hundreds of thousands of jobs.

Federal and state governments are considering changes to gas pipeline regulation, recommended by the ACCC, which could significantly reduce the cost of transporting gas from the Northern Territory. These changes, if adopted, would also advance the development of a more effective domestic gas market.

In parallel, the Northern Territory Government commissioned the construction by Jemena of the Northern Gas Pipeline (“NGP”) to be completed by mid-2018. This will provide a direct link between Central’s gas fields near Alice Springs and the east-coast gas network which will allow us to negotiate commercial sales for the delivery of gas from the time the pipeline is completed.

Central has three producing gas fields at Mereenie, Dingo and Palm Valley with 207 PJ of 2P reserves and production capacity of ~65 TJ/d. In addition, the Company has one of the largest greenfield acreages in Australia including five identified reserve opportunities in proven oil and gas provinces. Our joint venture partner Santos is presently undertaking seismic as part of the Stage 2 Farm-in in the Southern Amadeus Basin as it believes the geological potential offers “multi-tcf [trillion cubic feet] scale”[1] .

1 Australian Financial Review, 12 December 2016, page 15

ASX ANNOUNCEMENT AND MEDIA RELEASE – CENTRAL PETROLEUM LIMITED

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Over the last three years Central has moved from being a substantially unfunded petroleum explorer, to an early stage gas producer with great potential to participate in the undersupplied domestic gas market that is currently developing. However, while Central has a pathway to positive cash-flow it remains unfunded for the capital it requires to be able to benefit from the expected opportunities of the post-2018 domestic gas market for which the company is well positioned.

With most of Australia’s existing gas reserves committed to LNG-exports, Central’s proven reserves, its production capacity and the market potential created by a looming domestic gas shortfall together make Central a highly attractive target to a forward-looking investor. At the same time the Company’s funding challenges and its recent share price performance could make it difficult for the Board to resist an Offer that provides shareholders with a liquidity opportunity at a significant value premium, in the absence of an equity injection alternative.

The Board is actively pursuing options that could maximise value for shareholders. These include alternative proposals and equity capital structures and arrangements with the potential to fund future development of Central’s assets ahead of the NGP.

There are no proposals capable of acceptance before the Board at this time. However, Central shareholders approaching the Christmas holiday season should remain alert to regulatory and market changes that could significantly impact the value of your shares at any time.

Yours faithfully

Robert Hubbard

Chairman

Richard Cottee Managing Director and Chief Executive

To view a Market Update video from Richard Cottee, Managing Director and Chief Executive Officer, click here

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 may be outside the control of the Company and could cause actual results to differ materially from these statements. These risks, uncertainties and assumptions include (but are not limited to) funding, exploration, 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, cost estimates and other risk factors described from time to time in the Company's reports filed with the ASX. 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, the Company, its agents, directors, officers, employees, advisors and consultants do not undertake any obligation to publicly 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," "understand", "estimate," "anticipate," "plan," "predict," "may," "hope," "can," "will," "should," "expect," "intend," “projects”, "is designed to," "with the intent," "potential," the negative of these words or such other variations thereon or comparable terminology or similar expressions or future may indicate a forward looking statement or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts.

Central Petroleum Limited T: +61 (0)7 3181 3800 ABN 72 083 254 308. F: +61 (0)7 3181 3855 Level 7, 369 Ann Street, Brisbane, QLD 4000, Australia info@centralpetroleum.com.au GPO Box 292, Brisbane, QLD 4001, Australia www.centralpetroleum.com.au

Media Enquiries Martin Debelle at Citadel-MAGNUS T: +61 (0)2 8234 0100 M: +61 (0)409 911 189