HARTSHEAD RESOURCES NL — Interim / Quarterly Report 2016

Apr 28, 2016

==> picture [520 x 140] intentionally omitted <==

Quarterly Report

For the period ended 31 March 2016

==> picture [118 x 53] intentionally omitted <==

HIGHLIGHTS

• Current cash position of $6.35 million (as at 29 April 2016)

• Successful completion of $2.7 million capital raising

• Final processed 3D seismic data over the Ambilobe block, offshore Madagascar was received this quarter and interpretation is now underway to define prospects

• Revived industry interest in Morocco, with Eni and Qatar Petroleum announcing significant farmin deals offshore Morocco during the quarter

EXPLORATION

MAZAGAN PERMIT, OFFSHORE MOROCCO

(PURA VIDA 23%, SUBSIDIARY OF FREEPORT-MCMORAN OIL & GAS LLC OPERATOR)

The Mazagan permit covers an area of 8,717 km[2 ] and is located off the Atlantic coast of Morocco, in water depths of 1,370-3,000 metres. The Mazagan permit contains significant potential, including Miocene, Cretaceous and Jurassic targets.

Post-well evaluation of the collected data and samples from MZ-1 is complete, the results from which are currently being integrated into the technical evaluation which includes the recently completed reprocessed pre-stack depth migrated seismic data. The technical focus is currently on maturation of prospects for the second well in the Mazagan permit.

During the quarter the Company, via its subsidiary, PVD Exploration Morocco SARL AU, wrote to a subsidiary of Freeport-McMoRan Oil & Gas, PXP Morocco B.V. ( PXP ) reserving its rights in relation to the second well obligation under the farmin agreement and joint operating agreement. These agreements require PXP to drill two wells, the first of which was drilled last year. The joint venture parties remain in discussions as to how this matter may be progressed or resolved. A timely resolution of this matter is an important priority for the Company.

==> picture [463 x 384] intentionally omitted <==

----- Start of picture text -----

Eni farmin
Qatar Petroleum farmin
----- End of picture text -----

Figure 1 - Location map of Mazagan permit showing recent farmin activity

During the quarter, significant farmin deals were announced over nearby acreage offshore Morocco which demonstrates the industry’s continued belief in the exploration potential of the region (refer Figure 1). Qatar Petroleum farmed into Chevron’s Cap Rhir Deep, Cap Cantin Deep and Cap Walidia Deep blocks These three blocks lie adjacent to the Mazagan permit. In addition, Eni (Italian Oil Major) farmed into the Rabat Deep block held by Chariot and Woodside that lies to the north of Mazagan. Eni has been one of the most successful explorers in North Africa in recent years and will carry Chariot for a deep water well planned for 2017.

NKEMBE BLOCK, OFFSHORE GABON

(PURA VIDA 100%* AND OPERATOR)

• Pura Vida’s interest is subject to the right of the State of Gabon to participate in any development for up to a 20% interest under the Production Sharing Contract

The Nkembe block covers an area of 1,210 km² in water depths of 50-1,100 metres approximately 30 km off the coast of Gabon in the prolific oil prone Gabon Basin. The block is adjacent to producing oil fields and infrastructure, including several fields operated by Total, the largest producer in Gabon.

Pura Vida continued to seek a farmin partner to fund future exploration on the Nkembe block, including drilling. Sustained low oil prices continue to affect the industry with investment in exploration activity greatly impacted which has also impacted the farmout process. The current phase of the permit is scheduled to expire in January 2017, however, an extension is currently under consideration. Pura Vida’s ability to perform the work commitments in the current phase, which includes acquisition of new 3D seismic data and a well, remains dependent on securing a farmin partner.

2

Pura Vida selected the Nkembe block after recognising the diversity of play types, multiple petroleum systems offering oil as well as gas potential. More recently, large gas/condensate discoveries offshore Gabon have de-risked the pre-salt play. Appraisal of gas/condensate discoveries is currently underway by the industry to confirm the scale and commerciality of gas/LNG development. Whilst these developments are encouraging it will take many years for the commercialisation of gas, which depends on the establishment of an export LNG industry in Gabon.

Pura Vida’s focus is on the shallow water oil prospects which offer near term development options that benefit from close proximity to existing infrastructure. Lepidote Deep (refer map below and ASX announcement 23 June 2014 for resource estimates) lies within 10 km of the nearest platform at Barbier. The Palomite Cluster (refer map below and ASX announcement 23 June 2014 for resource estimates) offers significant potential that offers development options, either stand-alone or via a tie-back. Recent drill cost estimates indicate that low cost exploration drilling is possible given the falling rig market and the number of available rigs in the West Africa region and Pura Vida continues to investigate this potential whilst it seeks to secure a farmin partner.

==> picture [483 x 265] intentionally omitted <==

Figure 2 – Shallow water prospectivity offers near term oil potential in close proximity to existing infrastructure

3

AMBILOBE BLOCK, OFFSHORE MADAGASCAR

(PURA VIDA 50%, STERLING ENERGY (UK) LIMITED OPERATOR)

The Ambilobe block is located in the Ambilobe Basin, offshore north-west Madagascar covering an area of 17,650 km².

==> picture [357 x 253] intentionally omitted <==

Figure 3 – Approximate location of completed 3D seismic survey area

The 2015 3D seismic final pre-stack depth migration data was received this quarter and is now being interpreted and integrated with the existing 2D seismic data and regional interpretations. The evaluation going forward will be focused on defining leads and prospects and building a portfolio with the aim to mature prospects to drill ready candidates ahead of a farmout campaign.

With Phase 2 of the Ambilobe PSC due to expire in July 2016, the Company is currently seeking an extension in order to complete the subsurface technical evaluation, prior to a decision whether to enter into Phase 3.

Since the end of the quarter, the Company received a notice of withdrawal from Sterling Energy (UK) Limited ( Sterling ). Sterling announced that it has decided to exit the Ambilobe block due to the challenging commercial landscape, shifting its focus to shorter cycle revenue generating assets. Pura Vida has the option to assume, at no cost, a 100% ownership interest and Operatorship of the Ambilobe block or to withdraw without penalty.

Initial interpretation of the newly acquired 3D seismic data has generated encouraging leads (refer Figures 4 and 5).

4

==> picture [304 x 407] intentionally omitted <==

Figure 4 – Cretaceous aged leads mapped on 3D seismic

Figure 4 above highlights the Cretaceous aged leads that are structural traps with four way dip closure. Trap definition is considered robust with good vertical relief at this level ranging from 400 metres to over 600 metres with independent closure.

Figure 5 below contains seismic images, demonstrating the trapping styles and faulted nature of the anticlines, but also the stratigraphy within these culminations. Ongoing work entails mapping of additional structures as well as re-correlation of the stratigraphy to the regional evaluation conducted in order to define reservoir, seal and source rock prone intervals. Detailed evaluation of these principal elements can then be carried out to ultimately mature these leads to prospects and promote those drill candidates prior to farmout.

5

==> picture [385 x 404] intentionally omitted <==

Figure 5 – Seismic images demonstrating the trapping styles and faulted nature of the anticlinal traps

There has been limited exploration in the Ambilobe Basin, where the offshore area remains undrilled. There are several onshore heavy oil discoveries in the Morondava Basin, southern Madagascar that are currently being developed. Pura Vida made the strategic entry into the block based on compelling regional geology and 2D seismic data where oil seeps prove a working petroleum system and where effective source rocks, reservoirs and seals in combination with salt in the basin form large structural trends that provide the potential for a significant hydrocarbon province. These fundamental elements have been correlated from the onshore part of the basin, where a recent coring program in the neighbouring block undertaken in late 2014, revealed Cretaceous and Jurassic oil bearing reservoirs. These reservoirs and identical stratigraphic intervals correlate offshore directly into the structural fairway that was the site of the 3D seismic program. Mapping of the new data has reaffirmed the presence of multiple leads within each of the extensive play fairways where there is significant running room, in the event that a discovery is made.

CORPORATE & FINANCIAL

Closing cash at the end of the quarter was approximately $5 million. The Company’s current cash position has increased to $6.35 million (as at 29 April 2016) following completion of the rights issue.

The Company has no debt.

Cost Reduction Program

Following the disappointing results of the first well in the Mazagan permit, offshore Morocco and the sustained low oil prices, the Company implemented a significant cost reduction program this financial year

6

to ensure the Company remains well funded to pursue its future strategic objectives. This program has primarily been focused on non-technical corporate expenses in order to ensure expenditure is focused on operational activities. The full effect of these initiatives can now been seen with the Company on track to deliver meaningful cost savings this year.

The cost reduction initiatives include the following:

• reduction in employee levels (decrease in head count by 50%) and associated cost savings;

• cost sharing arrangements to reduce financial and administrative employee costs;

• downsizing the Perth office allowing office space to be sub-let;

• closure of Melbourne office and relocation of remaining employees to Perth office; and

• minimisation of external service providers, travel, compliance and other costs.

The cost reduction measures outlined above, as well as initiatives undertaken earlier in 2015, are targeting to significantly reduce non-operational expenditure and achieve a cost saving of $1.2 to $1.5 million during the current financial year.

Capital Raising

During the period, the Company completed a placement to professional and sophisticated investors of $986,640 (before fees and costs) through the issue 36,542,208 shares at $0.027 per share. The funds raised will be used for general working capital.

On 22 February 2016, the Company announced a pro-rata non-renounceable rights issue of one (1) New Share for every three (3) existing Shares of the Company at $0.027 per Share (the same price as the placement) to raise up to approximately $1.7 million (before fees and costs). The rights issue and shortfa l l closed fully subscribed.

ISSUED CAPITAL AS AT 31 MARCH 2016

Security	Number
Ordinary Shares	189,232,393
Unlisted Partly Paid Shares	10,428,550
Unlisted Performance Rights	5,461,007
Unlisted Retention Rights	4,800,000
Unlisted Options	11,007,693

PETROLEUM TENEMENTS HELD AS AT 31 MARCH 2016

	% Interest	Tenement	Location
Held at end of quarter	23%	Mazagan Permit	Offshore Morocco
	100%*	Nkembe Block	Offshore Gabon
	50%	Ambilobe Block	Offshore Madagascar
Acquired during the quarter	-	-	-
Disposed during the quarter	-	-	-

• Pura Vida’s interest is subject to the right of the State of Gabon to participate in any development for up to a 20% interest under the Production Sharing Contract

7

INTERESTS IN FARM-IN OR FARM-OUT AGREEMENTS AS AT 31 MARCH 2016

	Farm-in / Farm-out	% Change in Interest	Project
Held at end of quarter	-	-	-
Acquired during the quarter	-	-	-
Disposed during the quarter	-	-	-

CORPORATE DIRECTORY

Directors

Company Secretary

Jeff Dowling Non-Executive Chairman Dennae Lont Damon Neaves Managing Director Ric Malcolm Non-Executive Director Share Registry

Registered Office and Principal Place of Business

Level 3, 89 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9226 2011 Facsimile: +61 8 9226 2099 Web: www.puravidaenergy.com.au

Computershare Level 11, 172 St Georges Terrace PERTH WA 6000 Telephone: 1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia)

8

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining 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

Name of entity

PURA VIDA ENERGY NL

ABN 11 150 624 169

Quarter ended (“current quarter”) 31 March 2016

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & 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 (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (9 months) $A’000
	18 (222) - - (568) - 2 - - -	60 (1,545) - - (1,973) - 14 - - -
	(770)	(3,444)
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)	- - - - - - - - -	- - (2) - - - - - -
	-	(2)
	(770)	(3,446)

• See chapter 19 for defined terms.

Appendix 5B Page 1

31/03/16

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(770)	(3,446)
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 Other (costs associated with issue of shares and other financing costs) Net financing cash flows	986 - - - - (24)	1,034 - - - - (24)
	962	1,010
Net increase (decrease) 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 ofquarter1	192 4,987 (177)	(2,436) 7,329 109
	5,002	5,002

Note 1 – Excluding unspent cash deposited by the Company in Joint Venture accounts

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

• 1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10 1.25 Explanation necessary for an understanding of the transactions Payments of Directors fees and salaries $160,144.

Current quarter $A'000 160 -

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

N/A

Financing facilities available

Add notes as necessary for an understanding of the position.

• 3.1 Loan facilities

n.
Amount available $A’000	Amount used $A’000
-	-

• See chapter 19 for defined terms.

Appendix 5B Page 2

31/03/16

Appendix 5B Mining exploration entity quarterly report

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
	400
	-
	-
	500
Total	900

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. 5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other	Current quarter $A’000	Previous quarter $A’000
	4,902	4,851
	100	136
	-	-
	-	-
Total: cash at end of quarter(item 1.22)2	5,002	4,987

Note 2 - Excluding unspent cash deposited by the Company in Joint Venture accounts

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	-	-	-	-
	-	-	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 3

31/03/16

Appendix 5B Mining exploration entity quarterly report

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 note3) (cents)		Amount paid up per security (see note3) (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	189,232,393	189,232,393		-		-
	- 36,542,208 -	- 36,542,208 -		- $0.027 -		- $0.027 -
7.5 +Convertible securities Unquoted partly Paid Securities 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured,converted	10,428,550 - -	- - -		- - -		- - -
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	300,000 2,000,193 3,750,000 775,000 32,500 250,000 1,500,000 2,400,000	- - - - - - - -		Exercise price $0.70 $0.60 $0.40 $1.03 $1.08 $0.82 $0.91 $0.35		Expiry date 3 June 2016 20 June 2016 6 September 2016 2 October 2016 4 November 2016 16 December 2016 13 January 2017 20 August 2017
	-	-		-		-
	-	-		-		-
	-	-		-		-

• See chapter 19 for defined terms.

Appendix 5B Page 4

31/03/16

Appendix 5B Mining exploration entity quarterly report

7.11 Debentures (totals only)	-	-
7.12 Unsecured notes (totals only)	-	-
7.13 Performance Rights	5,461,007	-
7.14 Retention Rights	4,800,000

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.

Sign here:

…………………………….. Date: 29/04/16 (Company Secretary)

Print name: Dennae Lont

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 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.

Appendix 5B Page 5

31/03/16