CHALLENGER GOLD LIMITED — Capital/Financing Update 2011

Nov 23, 2011

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24th November 2011

ASX release

Operations Update – Mercury Stetson

• Well re-entry operations progressing very well

• Surface casing cement plug successfully drilled out

• Tagged plug above reservoir zones at 10,022 ft

24 November 2011: Challenger Energy Ltd (“Challenger”) is pleased to announce that whilst there are still a few steps remaining, it expects that the re-entry of the existing well will be a success based on the results to date. This will allow it to complete and test the Barnett and Woodford shales in the prospect area.

As of Thursday 24th of November, the following operations have been completed:

• Re-entered the surface casing and drilled out the cement plug at 2,500’

• Successfully cleaned out the open hole section, from 2,500’– 5,400’

• Re-entered the existing 9 5/8” casing at 5,400’

• Washed down through that to 10,022’

• Tagged the cast iron bridge plug (CIBP) which isolates the intermediate casing from the underlying reservoir zones.

Completing the above steps successfully were key in achieving a successful re-entry of the old well. The rig is currently pulling out of the hole, and will suspend operations for the Thanksgiving Holiday.

The next phase of operations will involve running and cementing new 7” casing inside the existing casing and setting it above the reservoir zones at approximately 10,000’. Following this, the plan is to drill through the CIBP and circulate and clean out the open hole section down to 12,300’and then log the two shale intervals. The final step is to cement a 4 ½” casing over this section ahead of the planned stimulation program. These activities are expected to be completed within the next 10 – 14 days. The stimulation program will not be scheduled until all of the current phase of activities has been completed.

Challenger Energy has agreed to farm in to earn 50% of the Mercury Stetson Prospect which includes the Barnett and Woodford shales - both proven shale formations. The prospect which is potentially up to 55,000 acres (86 sq miles) has a massive potential gas in place with OGIP estimated at 360 BCF/sq mile. The JV area initially includes 26,000 acres contiguous land position with three pipelines across prospect with an initial target of 35,000 acres across the prospect.

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

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Further updates will be provided in due course.

Mr Paul Bilston Managing Director P: 0402 060 405

About Challenger

Challenger Energy Limited is a public company listed on the Australian Stock Exchange (ASX:CEL) with a growing portfolio of exciting Oil and Gas exploration opportunities in South Africa and the USA.

Challenger’s strategy is to utilise its network of global contacts to identify and acquire material upstream oil and gas exploration opportunities at a low entry cost which enables it to focus its exploration expenditure on drilling wells and other direct expenditure.

Challenger is targeting opportunities where it can act as operator, and which have significant scale and materiality (more than 1 TCF of gas or 10 Million bbl of Oil). The scale of these opportunities provides potentially significant upside for the company.

Forward Looking Statements

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.