CHALLENGER GOLD LIMITED — Call Transcript 2012

Mar 26, 2012

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27 March 2012

ASX ANNOUNCEMENT

FINANCE NEWS NETWORK INTERVIEW WITH MANAGING DIRECTOR

Challenger Energy Limited is pleased to advise that the Company’s Managing Director, Mr Paul Bilston, has participated in an interview with Finance News Network.

In the interview, Mr Paul Bilston provides an update on all of Challenger Energy Limited’s international projects. The transcript follows or you can listen over the internet through the following link: http://www.finnewsnetwork.com.au/Display.aspx?Site=FNN270

Transcription of Finance News Network Interview with Challenger Energy Limited (ASX:SEY) Managing Director, Paul Bilston

Lelde Smits : Hello I’m Lelde Smits for the Finance News Network and joining me today from gas explorer and developer Challenger Energy is Managing Director, Paul Bilston. Paul welcome to FNN.

Paul Bilston : Thank you.

Lelde Smits : Could you start by introducing Challenger Energy and the Company’s strategy?

Paul Bilston : Challenger Energy is an Australian company; we’re listed here on the Australian Stock Exchange. And our focus is to look for projects in places where we think we can acquire a majority and an operated interest in a project, and where the project has significant size to it. So that if we’re doing an exploration project, we’re not trying to take a million dollars and turn it into one and a half, we’re trying to take a few million dollars and turn it into hundreds.

So we’ve got projects in South Africa, we’re waiting on an application there and we’ve got a project that we’re currently drilling on in the US, both of which fit into that criteria.

Lelde Smits : So what is your experience and that of the Board’s?

Paul Bilston : I’m an engineer by training and I’ve been involved in most aspects of the oil and gas industry here in Australia. The last seven or eight years, I’ve been

Address Level 17, 500 Collins Street, Melbourne, VIC, 3000 Tel + 61 3 9614 0600 Fax +61 3 9614 0550 Email admin@challengerenergy.com.au Web www.challengerenergy.com.au ACN 123 591 382

very focused on the unconventional space, being the coal seam gas space here and the shale gas space we’re working in overseas.

On the Board I have an Operations Director who’s got 30 years’ experience in all aspects of oil and gas in the US. And he looks after our US operations and acts as the operator there. David Woodley who’s my COO (Chief Operating Officer), again 15 years of experience across operations both here, internationally - both operationally and also commercially.

Lelde Smits : Let’s look at your US projects in more detail, starting with the Mercury Stetson prospect in Texas. What does it contain?

Paul Bilston : Okay the Mercury Stetson prospect that we talk about is a prospect that’s about 55,000 acres in size. We currently have a joint venture; we’re earning 50 per cent in that joint venture and the joint venture controls 26,000 acres. So our net interest currently is about 13,000 acres. We’re currently leasing and looking to expand our position, and the target of the joint venture is to control 35,000 acres across the prospect area.

Lelde Smits : What has the latest drilling revealed?

Paul Bilston : The latest drilling has confirmed for us one of the core unknowns, which is the presence of gas in the system. We’ve had fantastic gas shows during drilling. The thickness of the Barnett section was 200 feet thicker than what we thought in the prospect area, and we’re very pleased with the properties of the shales that we can see on the logs.

Lelde Smits : And what is planned for the rest of the year?

Paul Bilston : We’re continuing drilling at the moment; we’re deepening the well to drill down through into the Woodford shale. Once we’ve finished that we’ll be running new log suite, casing the well and setting it aside ahead of a fracture stimulation program, probably in the next couple of months.

Lelde Smits : You mentioned the Barnett and Woodford shale formations, how much drilling has occurred?

Paul Bilston : These formations have been extensively drilled regionally in both Texas and Oklahoma. In the immediate area adjacent to our prospect, there’s only been one well that was drilled through the two shales, and that’s the one that we’ve sidetracked from in this formation. We see these shales having about 360 BCF (billion cubic feet) per square mile, which potentially gives a gross 100 per cent interest of three TCF (trillion cubic feet) within the prospect area that we’re targeting. And we’re looking to earn 50 per cent of that.

Lelde Smits : Now Challenger also has other projects including one in the Karroo Basin of South Africa. What is your footprint?

Paul Bilston : We have 800,000 acres in the Karoo. Our acreage surrounds the only well in the Basin that’s actually produced gas to surface. The US Energy Information Agency did a report that suggests that there’s 485 TCF of technically recoverable resource in the Karroo. And if we look at our share of that, it’s around seven TCF.

Lelde Smits : And what’s planned for 2012?

Paul Bilston : At the moment the government in South Africa has a moratorium against any applications because of a technical study they’re doing, looking at fracking in South Africa. That’s due to report to the minister at the end of March and we hope that that will lead to the award of that licence. And following that, we can begin our work program.

Lelde Smits : Now to your financials. Are you funded for the remainder of the year?

Paul Bilston : Currently we’ve just completed a raising, earlier this week. And that’ll see us funded through to do the completion of the drilling and that fracture

stimulation program, and production testing at Mercury Stetson that we’re currently working on.

Lelde Smits : To your stock. What is the price now and what’s your market cap?

Paul Bilston : Currently it’s trading at about 7.5 cents that gives a market capitalisation of about $20 million.

Lelde Smits : Last question Paul. Where would you like to see Challenger Energy by year’s end?

Paul Bilston : That’s always a big question. I’d like to see Challenger Energy successfully complete the testing program we’ve got at Mercury Stetson and have drilled another well there, to step out from where we are. And I’d like to see us awarded our South African permit and begun some of our early stage field work there.

Lelde Smits : Paul Bilston, thanks for the introduction to Challenger Energy and all the best in 2012.

Paul Bilston : Thank you.

END OF TRANSCRIPT.

For further information please contact Paul Bilston on (03) 9614 0600 or visit www.challengerenergy.com.au

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Paul Bilston

Managing Director

This announcement contains “forward-looking statements”. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to oil & gas prices and foreign exchange rate movements; estimates of future oil & gas production and sales; estimates of future cash flows, the sensitivity of cash flows to oil & gas prices and foreign exchange rate movements; statements regarding future debt repayments; estimates of future capital expenditures; estimates of reserves and statements regarding future exploration results and the replacement of reserves; and where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to oil and gas price volatility, currency fluctuations, increased production costs and variances in reserves or recovery rates from those assumed in the company’s plans, as well as political and operational risks in the countries and states in which we operate or sell product to, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Reports, as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.