ENEGEX LIMITED — Interim / Quarterly Report 2014

Jul 29, 2014

Level 21 500 Collins Street Melbourne Victoria 3000

Australia

Tel: (+61 3) 8610 4700 Fax: (+61 3) 8610 4799 Email: admin@enegex.com.au

QUARTERLY ACTIVITY REPORT

30 JUNE 2014

Enegex NL (ASX Code: ENX) holds working interests in two petroleum exploration permits and a petroleum retention lease in the offshore basins of Australia. One of the exploration permits is located in the Carnarvon Basin (WA-409-P) and the other in the Gippsland Basin (Vic/P47). The petroleum retention lease is located in the Browse Basin (WA-54-R). Details of these permits and the work activities undertaken in each one during the quarter are provided below.

OPERATIONAL MATTERS

WA-409-P – Carnarvon Basin

The WA-409-P Joint Venture consists of the following parties:

Apache Northwest Pty Ltd 40.00% and Operator Rankin Trend Pty Ltd 13.50% (subsidiary of Moby Oil & Gas Limited) Enegex NL * 16.50% Cue Exploration Pty Ltd 30.00%

• subject to approval and registration by the National Offshore Petroleum Titles Administrator (NOPTA)

On 20 October 2010, Rankin Trend Pty and Cue Exploration Pty Ltd entered into the Apache Farmin Agreement under which Apache earned a 40% Participating Interest in and operatorship of WA-409-P by acquiring, processing, mapping and interpreting the Zeebries 3D seismic survey at its cost.

Apache has the right to earn an additional 30% equity interest in WA-409-P by funding up to 100% of the costs of the first well to be drilled in the Permit.

Enegex has acquired its current 16.5% Participating Interest in WA-409-P subject to the operation of the Apache Farmin Agreement.

If Apache elects to drill a well in WA-409-P, Enegex’s interest, which is presently 16.5%, will reduce to 8.25%, but Enegex would be free carried through the well.

Under the Apache Farmin Agreement, Rankin Trend has the right to retain a further 5% Participating Interest by funding that interest through the well Apache might drill. That right to retain a further 5% interest will accrue to Enegex, if not exercised by Rankin Trend. Given Enegex’s limited financial capacity it is unlikely that it would exercise that right, unless it was able to raise equity funds on sufficiently attractive terms to fund that additional cost.

Under the terms of the Apache Farmin all work commitments under the WA-409-P Permit are presently being met by Apache.

The WA-409-P permit is displayed in the Carnarvon Basin Permit Location Map below.

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Figure 1: Carnarvon Basin Permit Location and Zeebries 3D Seismic Survey Map

In Permit Year 5, Apache carried out an extensive subsurface evaluation work programme comprising the interpretation of ca. 566 km² of Zeebries 3D seismic data, geological studies to establish the Mesozoic stratigraphic framework within the permit, and hydrocarbon charge modelling to assess the timing, nature and likelihood of hydrocarbon charge into the closures identified. The subsurface technical studies resulted in the identification of two leads, “Brigadier Updip” and “Python”. The Lower Jurassic Python lead is assessed to be small and economically unviable, while the Middle Jurassic Brigadier Updip lead, although larger, is currently considered to be poorly-defined and high-risk.

The additional subsurface technical studies allowed the leads to be better defined and de-risked, and to enable the joint venturers to make an informed decision as to whether to enter into a drilling commitment in the permit. Accordingly, a decision was made during Permit Year 5 not to undertake a well but to seek a variation of the permit as referred to below.

On 24 April 2013 NOPTA approved an application to vary the Permit Year 6 work program to a program comprising PSDM Reprocessing of 566 km[3] 3D seismic data, QI Study (rock physics modelling/simultaneous inversion/fluid & lithology prediction) and Geotechnical Studies. In the letter of approval of the varied work program for Permit Year 6, NOPTA stated that because there is now no drilling commitment in the present term of the Permit, it is reasonable to expect that an exploration well will be included in the primary work program, should the permittees elect to renew the permit and that, in this regard, the Joint Authority noted Apache’s commitment to drill an exploration well in Permit Year 1, should the Permit be renewed. If Apache elects to renew, the drilling of that well will be Apache’s obligation under the Apache Farmin Agreement.

On 18 March 2014 the operator was granted a nine month suspension and extension to the permit. WA409-P is currently in Permit Year 6 which now ends on 29 January 2015 with Apache carrying out the varied work program.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014 Page 2

WA-54-R – Cornea Retention Lease

The Operator of WA-342-P is Cornea Resources Pty Ltd and the permit is held by the Cornea Joint Venture which consists of the following interests:

Moby Oil & Gas Limited	7.500%
Enegex NL	14.875%
Cornea Oil & Gas Pty Ltd	17.000%
Cornea Petroleum Pty Ltd	14.875%
Cornea Resources Pty Ltd	13.100%
Octanex Group. (ASX Code: OXX)	18.750%
Coldron Pty Ltd	7.500%
Auralandia Pty Ltd	6.400%

On 24 April 2014, the Cornea Joint Venture received an offer from the Commonwealth – Western Australia Joint Authority to grant a retention lease over the Cornea Location Area. The Joint Venture accepted that offer and the WA-54-R Retention Lease ( Lease ) was formally granted for an initial 5-year term on 6 May 2014.

The Lease is located in the Caswell Sub-basin of the Browse Basin, offshore from Western Australia, and covers an area of approximately 497 km². WA-54-R covers six graticular blocks located within the WA-342-P permit and it incorporates the Cornea oil and gas accumulations ( Greater Cornea Fields ). The Greater Cornea Fields include the Cornea (Central and South), Focus and Sparkle Oil Fields and the Cornea North (Tear) Gas Field – see the Figure 2 Cornea Retention Lease Location Map.

Work Programme designed to achieve early commercial production

The Cornea Joint Venture is of the belief that, from a resource size and oil price perspectives, the Greater Cornea Fields are an economic value opportunity. The path to early development is to, as quickly as possible, overcome the technical challenges to unlocking that value. To that end, the work programme to be carried out during the first four years of the Lease calls for extensive engineering and complementary studies to be completed in relation to the Greater Cornea Fields. Those studies focus on:

• reservoir characteristics;

• potential production performance;

• well design and related drilling challenges;

• investigation of the available and relevant technology, hardware and infrastructure;

• an assessment of environmental impacts; and

• identification of the economic risks.

In the main, the studies are a lead up to the first and fundamentally important operational activity of drilling a production test well in Year 4. The production test will be followed in Year 5 by a review of the outcomes from that well.

The design and required technologies for drilling and producing from what will likely be a horizontal test well are complex. The studies have therefore been structured to overcome the technical challenges faced by the Joint Venture in bringing the Greater Cornea Fields into early commercial production. The oil and gas volumes in the Greater Cornea Fields are such that demonstrating threshold production flow rates make the economics immediately attractive and provide a reasonable expectation of commercial development.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014 Page 3

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Figure 2: Cornea Retention Lease and WA-342-P Location Map

Development scenario

In order to assess commercial feasibility, preliminary economic analysis of a full development of the Greater Cornea Fields was undertaken and formed an important aspect of the retention lease application. The actual development programme remains subject to optimisation analysis (number of platforms, wells and related production facilities). However, for the purposes of undertaking a preliminary economic analysis, a full development of the southern portion of the Cornea South and Central Oil Fields was chosen for that analysis.

A self-sufficient solution, based on 32 producing wells around 3 hubs, was the subject of the economic analysis – see the schematic diagram at Figure 3.

Due to its smaller gas cap, the Cornea South Oil Field was chosen for the preliminary stage of the economic analysis. The results of the preliminary analysis indicated a commercial development of the Cornea South Oil Field could reasonably be expected to result in the subsequent development of the Cornea Central Oil Field as the next development step.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014

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Figure 3: Greater Cornea Fields Preliminary Conceptual Development Schematic

Details of Contingent Oil Resources

Table 1 below presents the probabilistically derived In-place and Contingent Oil Resources for the Cornea Central and South Oil Fields , with no development risk having been applied in deriving these volumes.

Middle Albian B & C Sands	Low Estimate (P90)	Best Estimate (P50)	High Estimate (P10)	Units
Total Oil In-place	298.0	411.7	567.2	mmbbl
RecoveryFactor(RF)	2	7	25	%
Contingent Oil Resources	7.9	28.8	101.9	mmbbl
Prospective Enegex Economic Interest*	1.16	4.28	15.16	mmbbl

• Based on Enegex’s 14.875% Participating Interest in WA-342-P.

Table 1: In-place and Contingent Oil Resources for Cornea Central and South Fields

WA-342-P – Cornea Exploration Permit

As noted in the previous section, the WA-54-R Retention Lease covers six graticular blocks located within the WA-342-P petroleum exploration permit – see the Figure 2 Cornea WA-342-P Location Map . The Cornea Joint Venture participants hold the same interests in WA-342-P as they hold in the WA-54-R Retention Lease.

WA-342-P is in Year 3 of its first 5-year renewed term, where the committed work programme calls for studies and an exploration well. During the quarter, the Joint Venture sought an exemption from the well commitment – this exemption was granted at the conclusion of Year 3 on 3 July 2014.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014

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Prior to the end of Year 3, the Joint Venture completed its assessment of the prospectivity in WA-342P within the 15 graticular blocks that exclude the area of the Lease. This work indicated a lack of prospectivity and the decision was made to surrender the permit at the end of Year 3. The surrender is currently in the process of being formalised by the Regulatory Authorities.

Vic/P47 – Gippsland Basin

The Vic/P47 Joint Venture consisted of the following parties:

Seaquest Petroleum Pty Ltd	40.00% and Operator
Moby Oil & Gas Limited	15.75%
Enegex NL*	19.25%
Oil Basins Limited (“OBL”)	25.00%

• subject to approval and registration by NOPTA

Moby originally held a 35% undivided Participating Interest in Vic/P47 from which Enegex’s 19.25% participating Interest is derived.

The Vic/P47 permit is located in the offshore Gippsland Basin, 14 km from the coast and south of the Victorian town of Orbost with water depths ranging up to 80 metres – refer to the Vic/P47 Location Map (Figure 4).

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Figure 4: Vic/P47 Permit Location Map

The permit is in Year 4 of the first 5-year renewed term, where the work commitments are to carry out a reappraisal of the Judith gas resource and conceptual field development and well design studies. This follows the gas marketing studies and conceptual appraisal planning completed during Year 3. A further six month suspension and extension of the permit was granted on 26 June 2014. Year 4 of the permit now ends on 15 November 2014. The Year 4 program continues to be progressed.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014

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By Order of the Board

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R J Wright Company Secretary

Melbourne, Australia

30 July 2014

Risk Factors

Various statements in this release constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve known and unknown risks, expectations, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or impliedly portrayed in this report.

Furthermore, exploration for oil and gas is speculative, expensive and subject to a wide range of risks. Summaries of some of the risks inherent in an investment in Enegex NL are set out in the Company’s latest information document (being the Information Memorandum dated 28 August 2013) provided to Shareholders and lodged with the Australian Securities and Investment Commission. Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their accountant, lawyer or other professional adviser as to the suitability for them of an investment in the Company.

Enegex NL Quarterly Activities Report for the quarter ended 30 June 2014

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10, 17/12/1, 01/05/2013.

Name of entity

ENEGEX NL

	ABN 28 160 818 986 Consolidated statement of cash flows		Quarter ended (“current quarter”) 30 June 2014	Quarter ended (“current quarter”) 30 June 2014
			30 June 2014
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other Net Operating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		(48) (31) 1		(66) (275) 1
		(78)		(340)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) – Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)
		(78)		(340)

• See chapter 19 for defined terms.

01/05/2013

Appendix 5B Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(78)	(340)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Share issue costs Net financing cash flows		1,097
	-	1,097
Net (decrease) /increase in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(78) 835	757 -
	757	757

Payments to directors of the entity and associates of the directors, related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		19
1.25	Explanation necessaryfor an understandingof the transactions

Non-cash financing and investing activities

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available Amount used $A’000 $A’000

3.1 Loan facilities 3.2 Credit standby arrangements

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	40
	30
Total	70

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	757	835
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	757	835

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed	Tenement reference and location	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
		See Activity Report Section

• See chapter 19 for defined terms.

01/05/2013

Appendix 5B Page 3

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

6.2 Interests in mining tenements and petroleum acquired or increased See Activity Report Section Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.	6.2 Interests in mining tenements and petroleum acquired or increased See Activity Report Section Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.	6.2 Interests in mining tenements and petroleum acquired or increased See Activity Report Section Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.	6.2 Interests in mining tenements and petroleum acquired or increased See Activity Report Section Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.	6.2 Interests in mining tenements and petroleum acquired or increased See Activity Report Section Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.
	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	53,666,491	53,666,491
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter	7,357,105	7,357,105	Exercise price 10 cents	Expiry date 30/06/2015

• See chapter 19 for defined terms.

Appendix 5B Page 4

01/05/2013

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

7.10 Expired during quarter	-	-
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 30/07/2014 (Company Secretary)

Print name: R .J. WRIGHT

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

01/05/2013

Appendix 5B Page 5