CENTRAL PETROLEUM LIMITED — Capital/Financing Update 2016

Mar 7, 2016

ASX ANNOUNCEMENT AN ASX COD E : CTP MEDIA RELEASE

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8 March 2016

D evelo p ment Update

The N o rthern Gas Pipeline ( “ NGP” – fo r merly call e d “NEGI”) h as been a warded to Jemena and th e Final Inve s tment De c ision (“FID ” ) has occurred. The N GP will b e either a 1 2 " or 14" line wit h an initial capacity of approxim a tely 100 T J /day (36.5 PJ p.a.) or 150 TJ/da y (55 PJ p.a.). T he NGP is expected t o be able t o flow gas i n calendar y ear 2018.

The N o rthern Ter r itory Pow e r and Wat e r Corporation has c o ntracted t o supply 3 0 TJ/day (11.4 PJ p.a.) for transporta t ion through the NG P , leaving a minimum spare ca p acity of around 70 TJ/day (25 PJ p.a. ) to be con t racted prio r to commi s sioning in 2 018.

This allows the A m adeus B a sin gas pr o ducers nearly two y e ars in whi c h to prove up and contra c t reserves w ith certainty in advan c e of the NGP completion. This m eans our p athway to mar k et will b e built ind e pendent o f any acti o ns by th e Amadeu s Basin pr o ducers, includi n g Central P etroleum L imited ( ASX:CTP ) (“ Company ” o r “ Central ” ) .

Originally Central budgeted f or a reser v e upgrade programme which w o uld have p rovided sufficie n t results b y mid this y ear to en a ble NEGI t o go FID. This targe t required relatively expensive extern a l resource s with the possibility of apprais a l drilling a t Mereenie by that time. T he contin u ed softeni n g of the c r ude oil pri c e over su m mer has h ad two im p acts on this co m pany:

1. 30% of our revenues a re attribut a ble to crude oil sales f rom Mere e nie; and 2. the market sentiment t owards ev e n domesti c gas prod u cers remai n weak.

With the NGP FI D now take n Central i n tends to r e organise i t s develop m ent progr a mme to more efficiently fund any ap p raisal drilling on the Stairway a n d P4 For m ation at M ereenie and to w ait until th e Compan y has secur e d an economic path w ay to mark e t.

As a result the re s erve upgrade progra m me will no w be in thr e e stages. S tage 1, w h ich has been c o mpleted a nd awaitin g certificati o n, is the review of all existing d ata from M ereenie includi n g nearly 6 0 wells alr e ady drilled and selec t ed wire-lin e pressure and flow t e sting at Meree n ie and the building a n d history m atching o f a static and dynami c model of the gas reserv o ir at Mereenie.

This h a s been co m pleted at a cost of $ 4 million an d has allo w ed us to g o to market for long term g a s supply c ontracts in t o the NT o r the east coast. As new sale s are secured, new funding capacity i s made ava i lable for fu t ure reserv e program m e activity.

Subjec t to Meree n ie JV approval, Sta g e 2 consis t s of refini n g and opt i mising of S tage 1, includi n g possibly production testing. T h is should i n crease fu r ther the re s erves available for contra c ting. In ad d ition, prod u ction resul t s at Dingo will be incorporated.

8 MARCH 2016 – DEVELOPMENT UPDATE ASX ANNOUNCEMENT AND MEDIA RELEASE – CENTRAL PETROLEUM LIMITED

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Stage 3 (again subject to JV approval) will consist of appraisal drilling and production testing on the Stairway Formation generally with a target of doubling the Stage 2 reserves at Mereenie. Successful completion of the Stage 3 reserves plus reserve upgrades at Palm Valley and Dingo would result in future sales to Central (including deliveries under existing contracts) of around 250 PJ.

By advancing our reserve upgrade programme in stages, to take advantage of the optionality resulting from the now committed NGP, we can substantially reduce the overall costs of the programme by utilising internal resources (as opposed to external). We can better tailor the timing of the programme to our financial advantage without affecting the timing of the actual cash flow from sales from 2018.

As a result of the above (combined with the fact that we are in advance of our permit obligations) the Company has decided to reallocate the resources of the exploration department to the reserve growth and development of Mereenie, Palm Valley and Dingo. This decision has the consequence that the General Manager Exploration, Mr Mike Bucknill, has left the company.

The company wishes to acknowledge Mr Bucknill’s contributions over the last two years.

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