HARTSHEAD RESOURCES NL — Interim / Quarterly Report 2020

Oct 29, 2020

Ansila Energy NL (ACN 150 624 169) T +61(8) 9226 2011 E info@ansilaenergy.com.au Level 1, 89 St Georges Terrace, Perth WA 6000 PO Box Z5187, Perth WA 6831 www.ansilaenergy.com.au

==> picture [243 x 67] intentionally omitted <==

Quarterly Report

For the period ended 30 September 2020

GORA CONCESSION, ONSHORE POLAND (ANSILA 35% AND NON-OPERATOR)

The Gora concession (693 km[2] ) ( Figure 1 ) covers a Carboniferous unconventional gas play, discovered with the Siciny-2 well drilled in 2012 and estimated to contain 2C contingent resources of 1.6 trillion cubic feet (Tcf) of gas according to Netherland Sewell & Associates, Inc ( NSAI )[1] . The licence also hosts a conventional Rotliegendes gas play, containing multiple exploration prospects, yet to be drilled.

==> picture [259 x 234] intentionally omitted <==

==> picture [217 x 230] intentionally omitted <==

Figure 1 – Location of the Gora gas assets in Poland

During the quarterly period the Operator, Gemini Resources Limited ( Gemini, GRL ), held a virtual Operating Committee Meeting ( OCM ) for Gora Energy Sp. zo.o ( Gora ) in which Ansila holds a 35% earned interest. The OCM focussed on the following technical and operational workstreams of the Gora concession.

Finalised Review of the Siciny-2 Carboniferous Operation

The Siciny-2 appraisal operations, completed in Q1 2020, demonstrated that a two-stage fracture stimulation of the Carboniferous interval could be successfully performed. However, data from a transient pressure build-up test, following the fracture stimulation, indicated that a combination of lower than expected reservoir permeability and the presence of mobile water prevented a natural flow of gas from the reservoir from being established, despite the detection of free gas (methane) at the surface during the well clean-up operation. This relative permeability effect, specific to a tight gas reservoir, means neither gas nor formation water could flow from the reservoir without assistance from nitrogen lift.

1 Volume estimates are from Netherland, Sewell & Associates, Inc, report entitled “Estimates of Reserves and Future Revenue and Contingent Resources and Cash Flow to the Gemini Resources Ltd Interest and Gross (100%) Prospective Resources in Certain Oil & Gas Properties located in the Nowa Sol and Gora Concessions Permian Basin, Onshore Poland as of May 1, 2019” (Report or CPR).

The Operator outlined several potential technical routes to mitigate the relative permeability issue and aid the flow of free gas including:

• The continuation of pumping to create a larger pressure differential to overcome reservoir capillary pressures;

• The drilling of complex multi-frac horizontal wells with up to 20 fracs each to optimise production rates;

• Drilling a new well at an optimised location, where a higher gas saturation may be encountered, with the potential to combine with a conventional Rotliegendes target to reduce the overall risk of the well.

The costs associated with any of the above options would be material and the risk of failing to establish natural gas flow would likely be considered significant. In addition, the economics of this unconventional gas play would have to be revisited as the much lower than expected permeability will have an impact on any development economics. Therefore, the near-term focus of the Gora concession will be on the conventional prospectivity where a number of lower cost and lower risk options have been identified within the Rotliegendes formation.

Siciny-2 Rotliegendes Test

Ansila appreciates that re-entering the Siciny-2 well and perforating the Rotliegendes interval may offer a low cost, low risk opportunity to access near-term gas as part of a wider conventional gas strategy across the Gora license. However, a minimum economic recoverable volume would need to be encountered for the Rotliegendes interval at Siciny-2 to be commercially viable.

Gemini presented a review of the conventional potential of the Siciny-2 well, which is estimated to contain a 21 metre[2] section of conventional gas pay in the shallower Rotliegendes interval. Based on an initial review of the 3D seismic survey acquired across the Siciny area during 2012-13 and petrophysical data, the Operator estimates that the Rotliegendes section of the Sinicy-2 well could contain a larger volume of gas compared to independently verified estimates of 13 Bcf[1] by NSAI. To refine the Siciny-2 Rotliegendes volumetrics further the existing 3D seismic dataset would require modern reprocessing and interpretation.

Gora License Conventional Exploration Prospects

A reprocessed 3D seismic dataset which covers part of the Gora licence and specifically covers part of the Rawicz North prospect has been reviewed by the Operator. The quality of this dataset has markedly improved the structural imaging of the conventional Rotliegendes prospects and is being used to generate a new inventory of drill-ready prospects across this part of the licence. Four new prospects have been identified in this part of the Gora license, but require further technical work to progress to the drill-ready stage.

The remaining conventional gas prospects identified on the Gora license total c.210 Bcf[1] (best case estimate) with an average chance of success of 28%. The largest of these prospects is Rawicz North with a best case estimate of 110 Bcf of gas and 24% chance of success. These prospects are covered by a combination of 2D seismic and poorer quality 3D seismic, the latter of which would benefit from reprocessing, or potentially, the acquisition of a new 3D seismic dataset.

2 Gas pay estimate is from Netherland, Sewell & Associates, Inc. report entitled “Estimates of Reserves and Future Revenue and Contingent Resources to the Gemini Resources Ltd. Interest and Gross (100 Percent) Prospective Resources in Certain Oil and Gas Properties located in the Nowa Sol and Gora Concessions Permian Basin, Onshore Poland as of May 1, 2019” ( Report ).

Work Program and Financial Review

A firm and contingent work program and budget for 2020 was presented by the Operator. This focuses on the planning and subsurface workstreams necessary to progress the Siciny-2 Rotliegendes interval test and the conventional prospect inventory across the Gora license and remains to be formally proposed to the Operating Committee for approval.

It was noted that additional, unapproved (non-AFE) expenditure relating to the completed Siciny-2 appraisal operations of c.£200K (net to Ansila) was incurred by the Operator in excess of the Gora funding cap of A$3.91 million[3] thereby implying a gross cost of £2.7 million vs an AFE budgeted cost of £2.16 million. All approved costs and expenditure in excess of the Siciny-2 appraisal funding cap would be apportioned according to the respective equity interests of Gemini (65%) and Ansila (35%) in Gora. Ansila currently reserve their rights with respect to any liability relating to unapproved costs incurred by the Operator. Ansila has requested further information from the Operator relating to the non-AFE expenditure and will a financial audit of Gora Energy for the period October 2019 to date.

POLAND PROJECT PORTFOLIO:

Gora Concession:

• Siciny-2 Appraisal Well : Targeting 2C contingent resources of 1.6 Tcf[1] (circa 270 MMboe[4] ) of unconventional gas in an extensive Carboniferous structure with operations undertaken in December 2019 – February 2020;

• Conventional Prospects: At Gora, Ansila has the option to drill several conventional prospects, targeting the Rotliegendes reservoir, with aggregate prospective (P50) resources of 210 Bcf[1,5] . These prospects are located adjacent to the proven Rawicz (c.94 Bcf – 2P reserves) and Zalecze-Wiewierz (900 Bcf) gas fields and offer Ansila additional upside on the Gora Concession. The prospect inventory is partially covered by 3D seismic coverage and lies within a proven petroleum system demonstrated by information from surrounding well control from the adjacent Rotliegendes gas fields. Estimated completed well costs attributable are US$0.85 million net to Ansila.

3 Based on an exchange rate of 1AUD: 0.55GBP or 1AUD: 0.71USD

4 The conversion factor used to convert gas (Tcf) to oil (MMboe) is 5.8:1 – this conversion ratio is based on an energy equivalency conversion method and does not represent value equivalency.

5 Prospective resources are estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) and relate to undiscovered accumulations. These prospective resources estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

NKEMBE BLOCK, OFFSHORE GABON (ANSILA 100%[6] AND OPERATOR)

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 ( Figure 2 ).

==> picture [477 x 285] intentionally omitted <==

Figure 2 – Shallow water area of the Nkembe block and prospects

During the quarter the Company maintained its claim of force majeure on the Nkembe Production Sharing Contract ( PSC ), suspending all obligations. In accordance with Ansila’s legal advice, Ansila has asserted that the PSC start date is the date of the issue of the Presidential Decree (4 December 2014) and that, based on this start date, no funds contributions are outstanding as at the date of the force majeure. Ansila has committed substantial investment over a number of years in Gabon, including a US$9,000,000 signing bonus paid in January 2013 and accordingly has reserved all its rights in relation to the PSC, including the right to seek recovery of the signing bonus.

In the circumstances Ansila does not intend to commit any further resources to the Nkembe Project unless and until Ansila reaches a resolution with the Directorate General for Hydrocarbons, that enables Ansila to obtain third party funding to conduct further exploration under the PSC.

6 Ansila’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 Nkembe PSC

AMBILOBE BLOCK, OFFSHORE MADAGASCAR (ANSILA 100% AND OPERATOR)

The Ambilobe block is located in the Ambilobe Basin, offshore north-west Madagascar covering an area of 17,650 km² ( Figure 3 ).

==> picture [359 x 241] intentionally omitted <==

Figure 3 – The Ambilobe block (yellow boundary) showing area of 3D seismic survey (red boundary)[7]

An independent Ambilobe block evaluation report highlighted the potential, interpreted from the 3D seismic data acquired during 2015/16, for significant prospectivity within the block and recommended that Ansila undertake a systematic phased work program to further process and interpret the 3D seismic data for the purposes of improving the definition of and then ranking three previously identified leads. In addition, under the production sharing contract, the Company’s subsidiary that holds the block is required to relinquish a portion of the Ambilobe block.

As stated previously, the Company has applied for the 2nd special two (2) year extension of the Ambilobe PSC. Discussions with OMNIS are ongoing and at the date of this report. The Company has not reached agreement with OMNIS on the terms of the 2nd special two (2) year extension of the Ambilobe PSC.

7 Subject to relinquishment and extension of term for a further 2 years as per the terms of the Ambilobe PSC

CORPORATE & FINANCIAL

On 7 September 2020 Ansila announced that Hartshead Resources Limited ( Hartshead or HRL ), in which ANA holds a 21.6% equity interest, had provisionally been award five blocks in the Southern North Sea ( SNS ), offshore United Kingdom, by the UK Oil & Gas authority ( OGA ), as part of the recent 32[nd] Offshore Licensing Round. The blocks under provisional award to HRL are 48/15c, 49/6c, 49/11c, 49/12d and 49/17b and contain multiple fields and undeveloped gas resources, together with a number of drill-ready exploration prospects. A comprehensive update will be provided upon HRL taking up the offer for the blocks in the near future.

On 3 September 2020 the Ansila requested a trading halt in the Company’s securities on the ASX following an announcement by the OGA with respect to the UK 32[nd] Offshore Licensing Round. This trading halt was followed on 7 September 2020 by a requested for a voluntary suspension in the trading of the Company’s shares pending an announcement regarding a material investment by ANA and associated capital raise. Further extensions to the ASX suspension were requested on 14 and 21 September 2020 and the Company’s shares currently remain suspended pending a further announcement. Ansila will provide further updates to the market once permitted to do so by ASX.

Ansila holds 69,637 shares in the capital of GRL (carrying value of A$459,533), equating to 2.1% ownership in GRL as a result of the automatic conversion of the exclusivity fee payment (£250,000) at completion of the transaction.

Ansila holds 102,387,595 ordinary shares and has an option on 10,611,411 shares for 14.7% of the total voting power in Jacka Resources Limited, therefore making Ansila the largest shareholder of JKA. Jacka was removed from the ASX Official List on 21 September 2020 following a period of suspension from September 2018, but continues to assess new project opportunities.

Ansila’s closing cash at the end of the quarter was A$1.6 million with the Company holding an additional ~A$0.5k in financial investments as at 30 September 2020.

Payments to related parties and their associates during the quarter as outlined in Section 6 of the accompanying Appendix 5B to this quarterly activities report were A$201k. These payments are related to salaries, superannuation and directors’ fees paid to directors and related entities during the September 2020 quarter.

PETROLEUM TENEMENTS HELD AS AT 31 MARCH 2020

	% Interest	Tenement	Location
Held at end of the quarter	100%8	Nkembe Block	Offshore Gabon
	100%9	Ambilobe Block	Offshore Madagascar
	35%	Gora Concession	Onshore Poland

8 Ansila’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 Nkembe PSC

9 Subject to relinquishment as per the terms of the Ambilobe PSC

CORPORATE DIRECTORY

Directors

Bevan Tarratt Chairman Nathan Lude Executive Director Andrew Matharu Executive Director Christopher Lewis Technical Director

Registered Office and Principal Place of Business

Level 1, 89 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9226 2011 Facsimile: +61 8 9226 2099 Web: www.ansilaenergy.com.au Email: info@ansilaenergy.com.au

Company Secretary

Ben Secrett

Share Registry

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

The Board of Directors of Ansila Energy NL authorised this announcement dated 30 October 2020 to be given to ASX.

PETROLEUM REPORTING STATEMENTS

Please refer to the qualified person’s statement relating to the reporting of contingent and prospective resources on the Gora concession in Ansila’s ASX Announcement dated 4 July 2019 (see Schedule 2). The Company is not aware of any new information or data that materially affects the information about the contingent resource and prospective resource estimates included in this announcement and all the material assumptions and technical parameters underpinning those estimates in this announcement continue to apply and have not materially changed.

Contingent resources reported herein have been estimated and prepared using the probabilistic method.

Contingent Resources 1C 2C 3C	Contingent Resources 1C 2C 3C	Contingent Resources 1C 2C 3C	Contingent Resources 1C 2C 3C
Siciny-2 Tcf Ansila 35% Interest	0.7 0.25	1.6 0.56	3.2 1.1
Prospective Resources10 Low Case Best Case High Case
Bronow Bcf Rawicz North Bcf Rawicz South Bcf Siciny Bcf Zuchlow West Bcf TOTAL Bcf Ansila 35% Interest	16.0 80.1 37.8 9.5 10.0 153.4 53.7	21.4 109.7 51.8 13.3 13.3 209.3 73.3	28.1 148.8 70.4 17.8 17.6 282.7 98.9

10 See cautionary statement detailed above in footnote 5.

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

Name of entity	Name of entity
ANSILA ENERGY NL
ABN 11 150 624 169	Quarter ended (“current quarter”)
11 150 624 169	30 SEPTEMBER 2020

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 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 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (152) - - (43) (141) - - - - 38 -	- (152) - - (43) (141) - 12 - - 38 -
	(298)	(298)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation * (e) investments (f) other non-current assets	- - - - - -	- - - - - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 1

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) 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 equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 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 from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	1,890 (298) - -	1,890 (298) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 2

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	8	8
	1,600	1,600

• Prior quarter amounts have been re-positioned for consistency with current quarter disclosures.

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,560 40 - -	1,850 40 - -
	1,600	1,890
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 201 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.		201
		-
Payments of Directors fees and salaries

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 3

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities - - Credit standby arrangements - - Other (please specify) - - Total financing facilities - - Unused financing facilities available at quarter end - Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (298) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) - Total relevant outgoings (item 8.1 + item 8.2) (298) Cash and cash equivalents at quarter end (item 4.6) 1,600 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 1,600 Estimated quarters of funding available (item 8.6 divided by item 8.3) 5 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(298) - (298) 1,600 -
		1,600
	Answer:
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer:

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 4

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer:

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

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.

Date: 29 October 2020

Authorised by: Nathan Lude, Executive Director of Ansila Energy NL (Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow 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 cash flow 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. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 5