ENEGEX LIMITED — Interim / Quarterly Report 2016

Oct 27, 2016

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 September 2016

Enegex Limited (ASX Code: ENX) holds a working interest in petroleum Retention Lease WA-54-R located in the Browse Basin. Details of activities undertaken during the quarter are provided below.

Enegex remains open to new opportunities that may present in the current economic climate.

Interest in WA-54-R Greater Cornea Fields

The company holds a 14.875% interest in the Cornea Joint Venture. The Cornea Joint Venture ownership is the following:

Enegex Limited 14.875% Octanex Group (ASX Code: OXX) 18.750% Cornea Resources Pty Ltd (Operator) 13.100% Others 53.275%

The assets of the Cornea Joint Venture being, The Greater Cornea Fields, comprising the Cornea (Central and South), Focus and Sparkle Oil Fields and the Cornea North (Tear) Gas Field, are located in the Browse Basin, offshore from Western Australia and held via a Retention Lease (WA-54-R) over 6 graticular blocks, amounting to an area of 497km2.

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Figure 1 Greater Cornea Field Retention Lease Location Map

The oil volumes in the Greater Cornea Fields are such that, if threshold production flow rates can be demonstrated, but dependent on oil price, the economics may provide a reasonable expectation of commercial development. (Refer Table 1).

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-54-R.

Table 1 Probabilistic In-place and Contingent Oil Resources for Cornea Central and South Fields (no development risk applied)

Work Program

The WA-54-R work program is aimed at overcoming the various challenges likely to be faced in bringing the Greater Cornea Fields into commercial production.

At the time the Retention Lease was granted, production uncertainty was considered to be the greatest barrier to the development of the Greater Cornea Fields. Given the potential size of the oil resource, and the oil price then prevailing (in the order of US$110/bbl), it was understood that resolving the production uncertainty could provide a reasonable expectation for future development.

Accordingly, the Retention Lease work program substantially addressed the technical challenges of the Fields; with the first three years of the Lease designed to support the quantification of drilling challenges, culminating in a Year-4 production test, with the Year-5 work programme involving review of the Year-4 outcomes. The work programme was thus designed on the premise that Cornea’s challenge was whether it would produce, rather than whether production would be economic.

Recent economic modelling demonstrates the fundamental shift in the field’s commerciality in the current sustained low oil price environment, as well as demonstrating that the Greater Cornea Fields are not presently economic (even were the production uncertainties resolved). “Oil price” was identified as the input to which the field is now most sensitive, rather than “production”, which was the case in 2013.

Recent technical work has included drilling studies, particularly focusing on the use of technology to address key uncertainties. Additional field development concept work has focussed on an appropriate production system. The presently preferred configuration being a Mobile Drilling and Production Unit (MODPU) and tanker.

Quarterly Activities Report for the quarter ended 30 September 2016

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Figure 2 Preferred Field Development Concept using MODPU and FSO

Our studies indicate that the material and sustained fall in the price of oil since the grant of the Retention Lease has resulted in an assessment that a development of the Greater Cornea Fields would not be presently commercial, even were the production uncertainties to be resolved.

Given the ~60% decline in oil price, the most significant hurdle to commerciality of the Greater Cornea Fields is no longer producibility, but is “oil price”. As such, the WA-54-R work program no longer appropriately addresses the Greater Cornea Fields’ most significant barrier to development. Accordingly, the Cornea Joint Venture intends to apply to vary the conditions of WA-54-R in order that the work programme is focussed on the “oil price” barrier to development now faced by the Greater Cornea Fields.

Potential Alliances

In addition to maintaining fiscal discipline and progressing the Retention Lease work program, Enegex remains interested in developing potential alliances for the development of Cornea.

By Order of the Board

R J Wright

Company Secretary Melbourne, Australia 28 October 2016

Quarterly Activities Report for the quarter ended 30 September 2016

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

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

ENEGEX LIMITED ABN Quarter ended (“current quarter”) 28 160 818 986 30 September 2016

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (3
		$A’000	months)
			$A’000
1.	Cash flows from operating activities
1.1	Receipts from customers
1.2	Payments for
	(a) exploration & evaluation
	(b) development
	(c) production
	(d) staff costs
	(e) administration and corporate costs	(52)	(52)
1.3	Dividends received (see note 3)
1.4	Interest received	4	4
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Research and development refunds
1.8	Other (provide details if material)
1.9	Net cash used in operating activities	(48)	(48)
2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a) property, plant and equipment
	(b) tenements (see item 10)
	(c) investments
	(d) other non-current assets

• See chapter 19 for defined terms

1 September 2016

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (3
		$A’000	months)
			$A’000
2.2	Proceeds from the disposal of:
	(a) property, plant and equipment
	(b) tenements (see item 10)
	(c) investments
	(d) other non-current assets
2.3	Cash flows from loans to other entities
2.4	Dividends received (see note 3)
2.5	Other (provide details if material)
2.6	Net cash from / (used in) investing
	activities
3.	Cash flows from financing activities
3.1	Proceeds from issues of shares
3.2	Proceeds from issue of convertible notes
3.3	Proceeds from exercise of share options
3.4	Transaction costs related to issues of	(22)	(22)
	shares, convertible notes or options
3.5	Proceeds from borrowings
3.6	Repayment of borrowings
3.7	Transaction costs related to loans and
	borrowings
3.8	Dividends paid
3.9	Other (provide details if material)
3.10	Net cash used in financing activities	(22)	(22)
4.	Net increase / (decrease) in cash and
	cash equivalents for the period
4.1	Cash and cash equivalents at beginning of
	period	609	609
4.2	Net cash used in operating activities	(48)	(48)
	(item 1.9 above)
4.3	Net cash from / (used in) investing activities
	(item 2.6 above)
4.4	Net cash used in financing activities	(22)	(22)
	(item 3.10 above)
4.5	Effect of movement in exchange rates on
	cash held
4.6	Cash and cash equivalents at end of	539	539
	period

• See chapter 19 for defined terms 1 September 2016

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

5.	Reconciliation of cash and cash	Current quarter	Current quarter	Previous quarter
	equivalents	$A’000		$A’000
	at the end of the quarter (as shown in the
	consolidated statement of cash flows) to the
	related items in the accounts
5.1	Bank balances		42	76
5.2	Call deposits		497	553
5.3	Bank overdrafts
5.4	Other (provide details)
5.5	Cash and cash equivalents at end of		539	609
	quarter (should equal item 4.6 above)
6.	Payments to directors of the entity and	their associates		Current quarter
				$A'000
6.1	Aggregate amount of payments to these parties included in item		1.2
6.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions			included in
	items 6.1 and 6.2

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		33
7.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions	included in
	items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

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

8.	Financing facilities available	Total facility amount	Amount drawn at
	Add notes as necessary for an	at quarter end	quarter end
	understanding of the position	$A’000	$A’000
8.1	Loan facilities
8.2	Credit standby arrangements
8.3	Other (please specify)
8.4	Include below a description of each facility above, including the lender,		interest rate and
	whether it is secured or unsecured. If any additional facilities have been entered into or are
	proposed to be entered into after quarter	end, include details of those facilities as well.

9.	Estimated cash outflows for next quarter	Estimated cash outflows for next quarter	Estimated cash outflows for next quarter	$A’000
9.1	Exploration and evaluation				10
9.2	Development
9.3	Production
9.4	Staff costs
9.5	Administration and corporate costs				20
9.6	Other (provide details if material)
9.7	Total estimated cash	outflows			30
10.	Changes in	Tenement	Nature of interest	Interest at	Interest
	tenements	reference		beginning	at end of
	(items 2.1(b) and	and		of quarter	quarter
	2.2(b) above)	location
10.1	Interests in mining		See Activity Report
	tenements and
	petroleum tenements
	lapsed, relinquished
	or reduced
10.2	Interests in mining		See Activity Report
	tenements and
	petroleum tenements
	acquired or increased

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

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

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Sign here: ........................................................... Date: 28 October 2016 (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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, 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. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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