ECHELON RESOURCES LIMITED — Capital/Financing Update 2023

Jan 16, 2023

17 January 2023

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NEW ZEALAND OIL & GAS EXECUTES PERTH BASIN FARM IN AGREEMENT WITH TRIANGLE ENERGY

• New Zealand Oil & Gas executes binding Term Sheet with Triangle Energy

• Acquiring a 25% interest in Triangle’s L7 and EP 437 northern Perth Basin permits

• Low upfront entry cost, with 3 exploration wells aimed to be drilled in 2024

• Recently acquired 3D seismic survey covers highly prospective Early Permian gas trend

• Agreement subject to conditions, including final due diligence and regulatory approvals

New Zealand Oil & Gas Limited (NZO or the Company) is pleased to announce that it has executed a binding Term Sheet with ASX listed energy company, Triangle Energy (Global) Ltd (Triangle) (ASX: TEG), to farm into a 25% participating interest in Western Australian onshore Production License L7 (L7) and Exploration Permit EP 437 (EP 437) (together, the Permits).

After completion the Permits’ joint ventures will comprise Triangle (50% and Operator); NZO (25%) and, subject to completion of their own farm in agreement, Talon Energy Ltd (Talon, ASX: TPD: 25%).

As consideration for its 25% interest in L7 and EP 437, NZO will contribute A$1.9 million towards past expenditure on the recently acquired Bookara 3D seismic data, upon satisfaction of a number of conditions precedent customary for transactions of this type, including final due diligence and the execution of formal farm in and joint operating agreements. The payment is to be made prior to 17[th] March 2023 (upfront costs) .

In addition to the upfront costs, NZO will fund the following exploration activities as part of its farm in obligations:

In respect of the 1st well on L7 (forecast to be drilled in 2024, at an estimated cost of A $7.5 million):

• 50% of well costs, up to A$3.75 million; and

• Should total well costs exceed A$7.5 million, NZO to fund 25% of the excess (being NZO’s working interest)

In respect of the 2nd well drilled on L7 (forecast to be drilled in 2024, at an estimated cost of A$7.50 million):

• 37.5% of well costs, up to A$2.81 million; and

• Should total well costs exceed A$7.50 million, NZO to fund 25% of the excess (being NZO’s working interest)

In respect of the well to be drilled on EP 437 (forecast to be drilled in 2024, at an estimated cost of A$3.0 million)

• 50% of well costs, up to A$1.5 million; and

• Should total well costs exceed A$3 million, NZO to fund 25% of the excess (being NZO’s working interest)

The exploration wells will target the highly prospective Early Permian-aged reservoirs identified by the Bookara 3D seismic survey, which are analogous to recent discoveries in adjacent permits, including Lockyer Deep, Waitsia, West Erregulla and South Erregulla.

The cost of all existing rehabilitation and restoration obligations for L7 and EP 437 are to be borne exclusively by Triangle.

Chief Executive Andrew Jefferies says entry to the Perth Basin via farm in to L7 and EP 437 provides low-cost exposure to onshore prospects in an exciting area with joint venture partners the Company knows well.

"We have been looking to make an entry to the Perth Basin for some time. It is a an exciting province with many large gas discoveries and new production coming on into a growing market. Our technical team identified L7 and EP 437 as high-potential areas for hosting significant gas fields and the new 3D seismic is the right tool to de-risk the deeper Early Permian gas reservoirs. We look forward to working closely with the joint venture to unlock the potential of these two permits which have the potential to drive meaningful shareholder value.”

“The exploration opportunities are in Australia, where we have production from our Mereenie, Palm Valley and Dingo fields, supplying gas into the East Coast gas market where prices are strong. Triangle are Perth Basin experts whose scale, culture, values, and technical skillsets are an ideal fit with ours. Like New Zealand Oil & Gas, Triangle values clean burning locally produced natural gas as a key part of the transition to a low carbon future in Western Australia; providing energy to the mining operations that will power the worlds e-future as well as cooking those West Australian lobsters on the barby.”

New Zealand Oil & Gas Chief Executive Andrew Jefferies says the farm in fits the company’s strategy.

’ “With this farm in we are continuing to execute our Board s strategy. It utilises our cash and balance sheet strength, in one of our target geographies areas and in acreage with an excellent technical risk reward balance. With exploration success, there would be multiple development and production pathways to growth.”

NZO will fund the upfront costs and future farm in costs from current cashflows. Triangle will be appointed Operator of the joint venture once established.

Details of the farm in terms and prospectivity of the permits are provided in the attached investor presentation.

This announcement was authorised for release by the Managing Director. For further information, please contact:

New Zealand Oil & Gas Limited Andrew Jefferies Managing Director and CEO +64 4 495 2424 info@nzog.com

* About Triangle Energy (Global) Ltd

Triangle Energy (Global) Ltd is an ASX listed (ASX:TEG) oil producer and explorer based in Perth, Western Australia. The Company has a 78.75% interest in, and is Operator of, the producing Cliff Head Oil Field, which includes the Arrowsmith Stabilisation Plant. Triangle also has a 100% share of the Mt Horner L7 production licence and a 100% interest in EP 437. Triangle also has an interest in State Gas Ltd (ASX:GAS), which has a 100% operating interest in the Reids Dome production licence (PL 231) in Queensland.

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Investor Update L7 & EP 437 Farm in Andrew Jefferies– Managing Director & CEO

Mount Horner (223 metres) on the L7 block Western Australia

JANUARY 2023

WWW.NZOG.COM

Disclaimer

This presentation contains summary information about New Zealand Oil & Gas Limited ( NZO or Company ) and its activities which is current as at the date of this presentation and remains subject to change without notice. The information in this presentation is of a general nature and does not purport to be complete, nor does it contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a product disclosure statement under the FMCA or a product disclosure statement or prospectus under the Corporations Act (Australia). No information set out in this presentation will form the basis of any contract (with the exception of the paragraph labelled “Acceptance” in this Disclaimer). The historical information in this presentation is, or is based upon, information that has been released to NZX Limited (NZX) and ASX Limited (ASX). This presentation should be read in conjunction with the Company’s annual report, market releases, and other periodic and continuous disclosure announcements, which are available at www.nzx.com/companies/NZO or www.nzog.com/investor-information/.

• Not an offer: This presentation is not a prospectus or product disclosure statement or other offering document under New Zealand or Australian law or any other law. This presentation is for information purposes only and is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction.

• Not financial product advice: This presentation is for information purposes only and is not financial product advice or a recommendation. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives and situation and consult a financial adviser, solicitor, accountant, or other professional adviser, if necessary.

here or New Zealand Oil & Gas here .

• Distribution of presentation: This presentation must not be distributed in any jurisdiction to the extent that its distribution is restricted or prohibited by law or would constitute a breach by the Company of any law. This presentation is not for distribution or release in the United States. None of the company, any person named in this presentation or any of their affiliates accept or will have any liability to any person in relation to the distribution or possession of this presentation from or in any jurisdiction.

• Currency: All currency amounts in this presentation are in Australian dollars unless stated otherwise.

• Past or future performance: Information given in this presentation is based on information currently available and is for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. No representations or warranties are made as to the accuracy or completeness of such information and under no circumstances should you regard the inclusion of forward-looking statements in this document as a guarantee of future performance. Forward-looking information is inherently uncertain and subject to contingencies, known and unknown risks and uncertainties and other factors, many of which are outside of the Company’s control, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct.

• Non-GAAP/IFRS financial information: Certain financial information included in this presentation is unaudited nonGAAP/non-IFRS financial information. The Company’s financial statements have been prepared in accordance with Generally Accepted Accounting Practice, comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS) and are available via the NZX

• Disclaimer: To the maximum extent permitted by law, each of the Company, and its respective affiliates, related bodies corporate, directors, officers, partners, employees, agents and advisers disclaim all liability and responsibility (whether in tort (including negligence) or otherwise) for any direct or indirect loss or damage which may be suffered by any person through use of or reliance on anything contained in, or omitted from, this presentation.

• Acceptance: By attending or reading this presentation, you agree to be bound by the foregoing limitations and restrictions and, in particular, will be deemed to have represented, warranted, undertaken and agreed that: (i) you have read and agree to comply with the contents of this Disclaimer and Important Notice; (ii) you are permitted under applicable laws and regulations to receive the information contained in this presentation; (iii) you will base any investment decision solely on information released by the Company via NZX and the ASX; and (iv) you agree that this presentation may not be reproduced in any form or further distributed to any other person, passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.

JANUARY 2023

WWW.NZOG.COM

Farm in terms agreed - Perth basin onshore exploration block

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• Binding agreement to farm in to 25% non-operated interest EP437 and L7

• Strategic location 865 km2 northern Perth Basin, 160km2 3D Seismic acquired 2022

• Prior work by Triangle * best-case Prospective Resource (2U) of 617 Bcf (gross, unrisked) for five features in the L7 permit alone

* Refer TEG Investor Presentation to ASX: 24 October 2022

WWW.NZOG.COM

JANUARY 2023

What’s to like? A whole lot.

Potential in large structures with stacked pay Material value uplift from discoveries

Perth Basin is gas prone deeper We prefer gas

New 3D seismic De-risks prospects Working petroleum systems and excellent Permian reservoir

Surrounded by recent discoveries (Lockyer/Waitsia/West Erregulla)

Low-cost entry at $1.9 million and Funded by cash from our existing operations reasonable well costs (onshore relatively shallow in active basin)

JV Partners Triangle (ASX:TEG) and Talon On the ground experience drilling, developing (ASX:TPD) active in the Perth Basin and operating

L7 Production License Provides the JV control of the drilling schedule

Recent takeover activity on blocks next door Premiums offered (33%/260%) confirm area (MinRes-Norwest/ Hancock-Warrego) potential

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3D visualisation of northern Perth Basin showing potential gas charge into L7 area (source: Talon Energy press release 19th December 2022)

JANUARY 2023

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Fits with strategy? Why yes it does.

Focus Areas: ”We will look to grow regionally. Our focus remains oil and gas assets in geographies where we have a clear advantage, primarily Australia and New Zealand”

ü Western Australia – well developed, growing, gas market.

Actively Pursuing Investments: We will look to acquire high quality assets using our well-developed expertise in oil and gas and leveraging the capabilities of the wider group, as we consider opportunities to acquire producing assets and development projects, as well as exploration prospects”

ü Material and technically highly attractive in terms of risk reward.

Prudent Financial Management: ”While we work to identify compelling investment opportunities and have access to a significant cash balance, we realise accessing additional capital is a challenge in today’s market. While we cannot tell what the future might bring, acquisitions of a transformative scale cannot be our sole focus. Instead working within our means, we will pursue investment opportunities of a size and scale that the company ’s current balance sheet can support, without having to raise significant additional capital”

ü Fits with our cash flow.

NZX release "New Zealand Oil Gas Strategic Review" dated 4th June 2020

JANUARY 2023

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Farm in terms

NZO pays:

• 2:1 promote on 3D seismic acquisition (back costs) of $3.8 million – NZO cost $1.9 million (by 17[th] March 2023 * )

• 2:1 promote on the 1[st ] L7 exploration well (est. $7.5 million) – NZO cost est. $3.75 million (NZO to fund 25% of costs > $7.5 million)

• 1.5:1 promote on the 2[nd ] L7 exploration well (est. $7.5 million) – NZO cost est. $2.81 million (NZO to fund 25% of costs > $7.5 million)

• 2:1 on one exploration well in EP437 (est. $3.0 million) – NZO cost A$1.5 million

Estimated NZO cost of A$9.96 million for 25% interest in L7 and EP 437

• Ground floor cost equivalent is A$5.45 million

• Farm-in uplift cost of A$4.51 million

			Base Cost	NZO Farm in
			(A$ Million,	(A$ Million,
			@ 100% equity)	@ 25% equity)
		Seismic	$3.8	$1.9 (2:1)
		L7 Well #1	$7.5	$3.75 (2:1)
		L7 Well #2	$7.5	$2.81 (1.5:1)
		EP 437 Well	$3	$1.50 (2:1)
		Total	$21.8 for 100%	$9.96 for 25% (1.8 : 1 ratio)

* Subject to satisfaction of conditions precedent customary for transactions of this type, including final due diligence and the execution of formal farm in and joint operating agreements.

JANUARY 2023

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Complementary Portfolio Fit

Low-cost entry with NZO’s exploration programme funded from operational cashflows

• Farm in payment of A$1.9 million payment in 2023

• Some drilling planning costs in 2023, majority of spend in 2024

• Provides NZO with diverse exploration over the next three years in addition to development work in Kupe, Mereenie & Dingo

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Notional Activities Timeline M&A Development Exploration
Asset 2023 2024 2025
Kupe Development: well
Development: 6 recompletes & 2
Existing Permits Mereenie infill wells Potential Stairway Exploration
Development:
Palm Valley & Dingo Dingo Compressor
L7 2 Exploration wells
Seismic
New Permits
interpretation
EP 437 1 Exploration well
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JANUARY 2023