CENTRAL PETROLEUM LIMITED — Capital/Financing Update 2016

May 25, 2016

ASX ANNOUNCEMENT AND ASX COD E : CTP MEDIA RELEASE

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26 May 2016

Central signs 5.2 PJ pre-paid gas sale agreement

• Gas Sales Agreemen t signed fo r 5.2PJs of pre-paid g a s supplie d over 3 ye a rs, with up to an a d ditional 3. 5 PJ of additional gas s a les possible over 2 s u bsequent y ears

• Central re c eives imm e diate pay m ent for the pre-paid g a s under th e Agreeme n t

• Proceeds f rom the Agreement e nable Ce n tral to full y fund the deferred purchase price of $ 1 0M for th e Mereeni e oil and g a s field as well as n e w reserv e growth activities.

• Central’s e x posure to the Meree n ie Production Bonus removed gi v ing future p otential savings of $ 2.5 to $8. 7 5 million

Central Petroleu m Limited (“ Central ” ) today signed a “ G as Sales and Pre p ayment Agree m ent” (“ GSPA ”) with Macquarie B ank Limite d (“ MBL ”). Under this agreement Central has ag r eed to su p ply MBL w ith 5.2 PJ o f gas to b e delivere d to either B allera or M oomba over th r ee years. T he gas ca n be delive r ed from a n y of the th r ee fields i n which Ce n tral has an inte r est, Dingo , Palm Vall e y or Mere e nie, and i s priced as an ex-field $A fixed p r ice prepaid g a s supply c o ntract. The start date f or gas supply is the e a rlier of the commenc e ment of the No r thern Gas Pipeline (s c heduled f o r some time in 2018) or 1 Janua r y 2019. T h ere is a mecha n ism to al t er the D e livery Poi n t with M B L paying for any e x -field tran s port or proces s ing costs.

Central receives a n immedia t e payment from MBL for the gas supply un d er the GS P A, with the pr o ceeds enabling Cent r al to fully fund the deferred pu r chase pri c e of $10 M for the Meree n ie oil and g as field a s well as n e w reserve growth activities. Out of the pro c eeds of the GS P A pre-pa y ment, we w ill remove Central’s 50% exposure to the Mereenie Pr o duction Bonus o bligation ( a Mereeni e productio n -dependa n t bonus of up to $17.5M payabl e by the Meree n ie JV). Th e GSPA pr o vides the a bility not t o physicall y deliver g a s to MBL, i n which case C e ntral woul d pay a fin a ncial settl e ment for t h at portion o f prepaid g as over a n agreed repay m ent sched u le. The G S PA grant s an option to MBL to purchase up to two y ears of

ASX ANNOUNCEMENT AND MEDIA RELEASE – CENTRAL PETROLEUM LIMITED

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further gas sales at an agreed future price amounting to approximately 3.5 PJ of additional sales with the consideration being paid on delivery.

“Selling the presently uncontracted reserves would vest Central’s 50% exposure to the Mereenie Production Bonus. Removing that exposure could save the company between $2.5 to $8.75 million in cash payments depending on Mereenie’s average per day boe production. Given Central’s market for gas will include the East Coast from 2018, and the potential for an increase in Mereenie’s gas reserves, the Company sees value in removing the Mereenie Production Bonus exposure at a discounted price now. Ultimately, it eliminates another economic impediment to the efficient commercialisation of our producing gas fields,” said Richard Cottee, Managing Director of Central Petroleum Limited.

“The ability to repay the pre-purchase gas sale through a financial settlement over a number of years after 2018, gives the parties the flexibility to avoid having to conclude a Gas Transportation Agreement by any particular time. This is important given the enormous challenges that are just now starting to develop in the East Coast gas market and the future opportunity for more commercially viable pipeline tariffs. The amount of gas sold under the GSPA is a small portion of available reserves and will not affect the volume of gas Central is presently marketing to the East Coast.”

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

ABN 72 083 254 308. Level 32, 400 George Street, Brisbane, QLD 4000, Australia PO Box 12214, George Street, QLD 4003, Australia

T: +61 (0)7 3181 3800 F: +61 (0)7 3181 3855 info@centralpetroleum.com.au www.centralpetroleum.com.au

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