DGR GLOBAL LIMITED — Capital/Financing Update 2022

Oct 17, 2022

18 October 2022

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DGR Global

ASX Announcement

DGR Global Ltd (ASX: DGR) Further Strategic Investment In Armour Energy

The Directors of DGR Global Ltd (DGR or the ‘company’) are pleased to announce that DGR has provided an additional $4.0m finance facility to Armour Energy Ltd (ASX Code ‘AJQ’ or ‘Armour’). The funding has been provided through an additional subscription for McArthur Oil & Gas Ltd (a wholly owned subsidiary of Armour) Redeemable Exchangeable Notes[#] .

Armour is currently undertaking a strategic overview and executing several initiatives to restructure its Balance Sheet and maximise the value of its substantial asset base against a broader context of surging domestic gas prices. DGR is currently the major shareholder of Armour with a current holding equating to 374,709,708 shares or 16.59% of the issued capital of Armour (refer Table 1 below).

Investment Rationale

Armour has today released to the ASX an Investor Presentation (please refer to link), together with an Operational and Funding Update (please refer link) highlighting the significant work that is being done to restructure and realise value from their suite of assets.

DGR has long held the view that East Coast Australian Gas markets exhibits compelling long-term fundamentals.

Armour Energy Ltd is well placed over both the short and long term to take advantage of these fundamentals with the company’s fully integrated reservoir to grid infrastructure centred on and around the Kincora gas processing facility.

Armour has a substantial asset base inclusive of the Kincora gas processing facility, a substantial upstream gathering system delivering gas to Kincora, a substantial resource and series of prospective leases in proximity to the Kincora facility to grow both resource inventory and ultimately production.

Additionally, Armour holds the Newstead gas storage facility which ultimately will provide Armour with the capacity to deliver gas into the East Coast market at its discretion and is an asset of significant strategic value.

Beyond its substantial reservoir to grid infrastructure and assets, Armour has a significant suite of assets with considerable value including its substantial acreage

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

position in the highly prospective McArthur and South Nicholson basins with a collective acreage position of 96,000 km. Similar assets support substantial market capitalisations of companies listed on the ASX.

Armour also retains significant acreage positions in the Cooper Basin and the Otway Basin in Victoria where Armour holds a 51% interest in PEP 169 just 3 kms north of Beach Energy Ltd (ASX Code BPT) exciting 160 TJ gas find which recently flow tested at 61 Million Standard Cubic Feet per day (MMCFD).

Table 1

DGR Investment in Armour Energy Limited	DGR Investment in Armour Energy Limited	DGR Investment in Armour Energy Limited	DGR Investment in Armour Energy Limited
Description	Amount Invested $AU		Volume
Armour investment - Shares at cost 10,349,902 374,709,708 - Options 132,438,967 Armour FIIG Bonds inclusive of accrued interest - At Face Value 1,253,639 McArthur Oil & Gas Ltd - Convertible notes - Including latest subscription# 10,500,000 Total 22,103,542 $

Please refer to Appendix A below for terms and conditions of the Convertible Notes

DGR CEO, Mr Nicholas Mather commented,

“Armour Energy presents a very great opportunity for DGR. Although it’s taken a while, Australia’s east coast gas markets have re-rated strongly and look set to go significantly higher. Armour’s strategic advantage lies in that it is already a producer at 4 TJs a day, from its wholly owned Kincora Project south of Roma in the prolific Surat Basin, has approximately 25 TJs per day spare capacity in a plant infrastructure and market access that would have a replacement cost of over $250m. Armour has the reserves to fill that capacity. The opportunity lies in clearing the balance sheet of the $12m pa debt amortisation burden, increasing production through in well bore remediation of existing wells, exploration, new discoveries and field development plans to lift production in an environment of gas prices that are approximately four times higher than Armour the current gas sales agreement. Armour is working on new gas contracts to sell gas over 5 TJs per day and or after 23/11 when the current contract with APLNG terminates. We believe that post covid energy demand and environmental requirements will continue to drive gas demand and prices for some time.

In addition, Armour’s 51% interest in the Enterprise North target in the Otway Basin adjacent to Beach Petroleum’s 160 PJ /61 TJ per day Enterprise discovery and the dominant position in the NT Macarthur Basin presents very exciting potential. For Armour, it’s about reducing debt and amortisation, discover more, produce more and sell it for a lot more and Armour has the resources and reserves, the tenure and production capability to do that. DGR is well positioned to benefit strongly”

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

DGR Global

DGR has utilised existing cash reserves to meet its obligations to Armour pursuant to this agreement.

DGR has a robust balance sheet with over $85m in liquid equity holdings and cash reserves.

DGR is adequately provisioned following this transaction and as has previously announced is preferring to fund the company’s ongoing activities from its balance sheet as opposed to diluting shareholder equity via placement of equity.

For further information please refer to Armour Energy Ltd ASX announcement dated 18[th] October 2022 and Annexures A and B below.

This ASX Announcement was authorised by the Board of Directors Geoff Walker

Company Secretary

Electronic copies and more information are available on the Company website: www.dgrglobal.com.au

Email: info@dgrglobal.com.au

Social Media: @DGRGlobal

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For further information contact:

Mr Nicholas Mather Geoff Walker Managing Director Company Secretary Ph: 07 3303 0679 Ph: 07 3303 0641

Elizabeth Harrison Marketing / PR Ph: 07 3303 0677

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

About DGR Global Limited

DGR Global’s business is the creation of resource exploration development and mining companies. The business uses the skills of a core team of talented geoscientists to identify resource projects capable of yielding world class discoveries of attractive commodities.

This is achieved through:

• The identification of commodities with a favourable 20-year price outlook.

• Geological terranes with:

• A demonstrated strong endowment for that commodity.

• An under‐explored history.

• Opportunity for the application of recently developed exploration techniques.

• ‐

• Jurisdictions with improving socio economic and regulatory frameworks.

• Extensive available tenures.

DGR provides initial seed funding and management support to secure assets in subsidiaries and develop these assets to more advanced funding stages. The Company has a pipeline of projects in daughter companies at various stages of emergence, and in 2015 crystalised a significant return through the sale of its 15% holding in Orbis Gold for $26million. Further development of its holdings in LSE and TSX‐listed SolGold, ASX‐ listed Clara Resources, New Peak Metals and Armour Energy and unlisted Auburn Resources and Armour Energy Uganda, are expected over the coming years.

Get Regular News from DGR Global on social media: As a valued shareholder, you can now stay up to date of forces influencing the value of your investment in DGR Global by following us on Twitter. We regularly post information about the operations of us and the DGR companies as well as what is happening in our sectors around Australia and around the world ‐ with links to documents in the media, brokers, and other authoritative sources so you can stay up to date. As well, our posts on Twitter will alert you to our latest ASX announcements. Join the hundreds who follow us on Twitter @DGRGlobal and LinkedIn - https://www.linkedin.com/company/dgr global

FORWARD LOOKING STATEMENT Statements & material contained in this ASX Release, particularly those regarding possible or assumed future performance, production levels or rates, commodity prices, resources or potential growth of DGR, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events & expectations and, as such, involve known and unknown risks & uncertainties. Although reasonable care has been taken to ensure facts stated in this Release are accurate and/or that the opinions expressed are fair & reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual results & developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors. Nothing in this Release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837

Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

ANNEXURE A

SUMMARY TERMS OF ISSUE OF MOG NOTES

McArthur Oil & Gas Ltd

Redeemable Exchangeable Note Term Sheet

Issuer	McArthur NT Pty Ltd ACN 649 856 315
Parent Company	McArthur Oil & Gas Ltd (MOGorParent Company) (or such other company that holds all the shares issued in the capital of the Issuer) which intends to undertake an IPO raising and apply for quotation on ASX.
Offering	Redeemable Exchangeable Notes (Notes) to be issued by the Issuer pursuant to the Note Trust Deed and which will be exchangeable into shares in the Parent Company (subject to the Condition Precedent for Exchange).
Issue size	Up to 32,000,000 Notes ($32,000,000). The Notes may be issued in two or more tranches.
Purpose	Funds raised by the issue of the Notes will finance a security deposit to Armour Energy Limited (Armour) for the acquisition of all of the Northern Basin Assets of Armour, exploration work programs, costs of progressing the Parent Company towards an IPO, general working capital and costs of the issue.
Issue Price	Face Value of $1.00 per Note
Maturity Date	31 October 2022.
Security / Ranking	Unsecured Subordinated. The Notes will constitute direct and unsecured obligations of the Issuer and will rank subordinated and be junior to the secured amortising notes issued by Armour Energy Limited (Secured Amortising Notes). Subject to the subordination to the Secured Amortizing Notes, each Note otherwise ranks for payment in a winding up of the Issuer: (1) equally and proportionally with each Note; and

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

	(2) ahead of all subordinated debts of the Issuer and ordinary shareholders.
Status	The Notes are direct and unsecured debt obligations of the Issuer.
Coupon Rate	15% per annum coupon rate accrued and capitalised monthly from the Issue Date.
Interest Payment Dates	The coupon on the Notes will be capitalised to Exchange, the Maturity Date or Redemption Date.
Exchange	Each Note (and any accrued and unpaid interest due and capitalized) will, subject to satisfaction of the Condition Precedent below, exchange into fully paid ordinary shares of the Parent Company contemporaneous with the issue of the IPO shares such that the shares received in exchange for the Notes will be shares offered under an ‘Exchange Offer’ pursuant to the IPO prospectus. The Exchange price upon automatic exchange will be a 20% discount to the IPO price per share.
Condition Precedent for Exchange	The Exchange of the Notes for Parent Company Shares is subject to and conditional upon Armour obtaining any necessary shareholder approvals for the purposes of ASX Listing Rule 11.4.1(b).
Noteholder Redemption	Repayment of Face Value and any unpaid interest at the Maturity Date or in the event an Exit Event occurs, or the Issuer commits an Event of Default.
Early Redemption Event	The Company may give a Redemption Notice in the event of an Exit Event. Exit Eventmeans that if at any time on or before the Maturity Date, an off-market bid, a market bid, scheme of arrangement, or offer or invitation is made to all holders of ordinary shares to purchase or otherwise acquire ordinary shares and the bid, scheme or offer becomes unconditional, and the offeror has at least 50% of the voting power (as defined by the Corporations Act) in Armour. Notwithstanding the issue of a Redemption Notice, a Holder may give an Exchange Notice (which may be expressed to be subject to Exit Event completing) in respect of any of its Notes which are the subject of the Redemption Notice up to the before the relevant Redemption Date (or such later time as the Company may agree with the relevant Holder), and only Notes for which Exchange Notices have not been sogiven or are

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

	treated as having not been given will be Redeemed on the specified Redemption Date. In the event of an Exchange Notice being given in relation to an Exit Event, the Exchange Price will be equivalent of a 25% discount to the average price per ordinary share being paid for Ordinary Shares under the Exit Event calculated on a fully diluted basis.
Transaction Documents	The parties have entered into the following definitive agreements to document the Note issuance outlined in this Term Sheet (Transaction Documents): • Redeemable and Exchangeable Note Deed; and • Note Trust Deed.
Events of Default	Customary events of default are to be incorporated in the Transaction Documents for a transaction of this nature, including but not limited to payment, redemption or Exchange breaches, covenant breaches cross defaults, and insolvency events.
Covenants	Customary covenants are to be incorporated in the Transaction Documents applicable to the Issuer and the Parent Company for a transaction of this nature.
No Dividends	No dividends may be declared or paid whilst the Notes are on issue.
ASX Listing	The Parent Company will undertake to use reasonable endeavours to undertake an IPO and ASX listing or other liquidity event for Noteholders and will provide updates to Noteholders on progress in this regard every 6 months.
Escrow	In the event of an IPO and ASX listing, the Noteholder will agree to enter into such ASX restriction agreements or voluntary escrow deeds as ASX or the lead managers to the ASX IPO require, provided the restriction period does not exceed three months following quotation (for voluntary escrow) or as is otherwise required by ASX.

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

Parent Company Interposition	The Issuer and the Parent Company are currently wholly owned direct subsidiaries of Armour. The Issuer has been formed to hold all the Northern Territory and North Queensland assets of Armour outlined in the Armour Energy ASX release of 3 March 2021 and the transfer of these assets has been applied for and is pending approval of this transfer with the Northern Territory and the Queensland Governments. Following the approval and completion of the transfer (and in the case of pending permit applications, the grant of the exploration permit and the Parent Company is interposed) to the Issuer of the assets, Armour will transfer all of the outstanding shares in the Issuer to the Parent Company such that the Issuer becomes a wholly owned subsidiary of the Parent Company. Until such time as these transfers of the currently granted exploration permits in the Northern Territory and interposition is completed, the Parent Company must remain dormant so that no stamp duty is incurred either on the transfer of the assets to the Issuer or upon the IPO of the Parent Company.
Voting Rights	Until Exchange, the Notes do not give a Noteholder voting rights or dividend rights.
Investor Eligibility	The Notes are being offered to ‘sophisticated investors’, ‘professional investors’ (under the Corporations Act) and investors who are exempt to disclosure requirements.
Note Trustee	Centec Securities Pty Ltd

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

ANNEXURE B

PROPOSED TERMS OF ISSUE OF ARMOUR ENERGY LTD CONVERTIBLE NOTES

Subject to receipt of all necessary approvals and consents, it is intended for the MOG Notes (those already on issue and those subscribed for by DGR Global Ltd) to be exchanged for Armour Energy Convertible Notes.

The key proposed terms of the Convertible Notes are:

• Three (3) year maturity

• Initially unsecured but upon completion of the proposed FIIG Bond repayment to have first ranking security (subject to any required tenement level security requirements to support Gas Sale Agreements and prepayments).

• Non-amortising (principal repayable at maturity)

• Convertible at any time by the holders at the higher of 0.9c per share or a 50% premium to the issue price of any equity capital raising undertaken prior to 31 December 2022.

• 10% coupon, payable half yearly in arrears in cash or shares at Armour election, at a 10% discount to the trailing 30-day VWAP

• Terms otherwise customary for this type of instrument.

Further Terms of Issue of the Convertible Notes are set out below:

Further Terms of Issue	of the Convertible Notes are set out below:
Issuer	Armour Energy Limited ACN 141 198 414
Offering	Convertible Notes (Notes) to be issued by the Issuer pursuant to the Note Trust Deed and which will be convertible into shares in the Issuer (subject to the Condition Precedent for Exchange).
Issue size	Up to 50,000,000 Notes ($50,000,000). The Notes may be issued in two or more tranches.
Purpose	Funds raised by the issue of the Notes will be to meet payments due on the secured amortising notes issued by Armour Energy (FIIG Secured Amortising Notes) including their refinance, exploration work programs, payment of outstanding creditors, general working capital and costs of the issue.
Issue Price	Face Value of $1.00 per Note
Term	3 years

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

Maturity Date	31 July 2025
Security / Ranking / Status	Initially the Notes will constitute direct and unsecured obligations of the Issuer and will rank subordinated and be junior to the secured amortising notes issued by Armour Energy. It is the intention for the FIIG Secured Amortising Notes to be repaid and upon repayment, the Notes will be senior secured obligations of the Issuer (subject to any required tenement level security requirements to support Gas Sale Agreements and prepayments). Subject to the initial subordination to the FIIG Secured Amortizing Notes, each Note otherwise ranks for payment in a winding up of the Issuer: (1) equally and proportionally with each Note; and (2) ahead of all subordinated debts of the Issuer and ordinary shareholders.
Coupon Rate	10% per annum coupon rate, accrued from the Issue Date. Interest is payable either in cash or, at Armour’s election, by the issue to the Noteholder of Armour ordinary shares, issued at a 10% discount to the 30-day volume weighted average price (VWAP) of Armour shares traded on the ASX up to the Interest Payment Date.
Interest Payment Dates	The coupon on the Notes will be payable half yearly for the half year periods to 30 April and 31 October on the following dates: - 15 May 2023; - 15 November 2023; - 15 May 2024; - 15 November 2024; - 15 May 2025; - 15 November 2025; and will be payable for the period from the last Interest Payment Date to the Maturity Date or Redemption Date.
Conversion	Each Note (and any accrued and unpaid interest due and capitalized) will, subject to satisfaction of the Condition Precedent below, be convertible at the holder’s election into fully paid ordinary shares of the Issuer at the higher of a price of 0.9 cents per share or a 50% premium to the issue price of any equity capital raising undertaken by the Issuer prior to 31 September 2022.

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

	A Noteholder may exercise conversion rights in relation to some, or all, of their Notes at any time (subject to satisfaction of the Condition Precedent for Conversion).
Conversion Protections	Notes will be subject to standard anti-dilution adjustments including share consolidations, share splits, rights issues, bonus issues and reorganisations.
Condition Precedent for Conversion	The Conversion of the Notes for Armour Energy Shares is subject to and conditional upon Armour obtaining any necessary shareholder approvals for the purposes of ASX Listing Rules.
Noteholder Redemption	Repayment of Face Value and any unpaid interest at the Maturity Date or in the event an Exit Event occurs, or the Issuer commits an Event of Default.
Early Redemption Event	The Company may give a Redemption Notice in the event of an Exit Event. Exit Eventmeans that if at any time on or before the Maturity Date, an off-market bid, a market bid, scheme of arrangement, or offer or invitation is made to all holders of ordinary shares to purchase or otherwise acquire ordinary shares and the bid, scheme or offer becomes unconditional, and the offeror has at least 50% of the voting power (as defined by the Corporations Act) in Armour. Notwithstanding the issue of a Redemption Notice, a Holder may give an Exchange Notice (which may be expressed to be subject to Exit Event completing) in respect of any of its Notes which are the subject of the Redemption Notice up to the before the relevant Redemption Date (or such later time as the Company may agree with the relevant Holder), and only Notes for which Exchange Notices have not been so given or are treated as having not been given will be Redeemed on the specified Redemption Date. In the event of an Exchange Notice being given in relation to an Exit Event, the Exchange Price will be equivalent of a 25% discount to the average price per ordinary share being paid for Ordinary Shares under the Exit Event calculated on a fully diluted basis.
Transaction Documents	The parties have entered into the following definitive agreements to document the Note issuance outlined in this Term Sheet (Transaction Documents): • Convertible Note Deed; and • Security Trust Deed.

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au

Events of Default	Customary events of default are to be incorporated in the Transaction Documents for a transaction of this nature, including but not limited to payment, redemption or Conversion breaches, covenant breaches cross defaults, and insolvency events.
Covenants	Customary covenants are to be incorporated in the Transaction Documents applicable to the Issuer and the Parent Company for a transaction of this nature.
No Dividends	No dividends may be declared or paid whilst the Notes are on issue.
Voting Rights	Until Conversion, the Notes do not give a Noteholder voting rights or dividend rights.
Investor Eligibility	The Notes are being offered to ‘sophisticated investors’, ‘professional investors’ (under the Corporations Act) and investors who are exempt to disclosure requirements.
Note Trustee	Centec Securities Pty Ltd

# Please Refer to Appendix A

DGR Global Limited ACN 052 354 837 Address: Level 27, 111 Eagle Street Post: GPO Box 5261 Brisbane QLD 4001 p +61 7 3303 0680 f +61 7 3303 0681 e info@dgrglobal.com.au w www.dgrglobal.com.au