HELIOS ENERGY LTD — Capital/Financing Update 2018

Feb 26, 2018

Helios Energy Ltd 27 February 2018

Completion of Tranche 2 of Placement

Issue and Allotment of Tranche 2

On 27 December 2017, Helios Energy Ltd (ASX Codes: HE8, HE8OA) ( Helios or Company or Issuer ) advised that it has conducted a capital raising of $8,500,000 by way of the issue of 132,812,500 shares at a price of 6.4 cents per share ( Placement ). The Placement was made to sophisticated and professional investors under the provisions of section 708 of the Corporations Act 2001 (Cth).

On 5 January 2018, the Company announced that it had completed Tranche 1 of the Placement by way of the issue of 36,018,672 shares at 6.4 cents per share to raise $2,305,195.

The Company’s fourth largest shareholder Mr Zhiqiang Shan has now completed his investment of a further $1,000,000 by way of completing his subscription of a further 15,625,000 shares at 6.4 cents. He has now become the Company’s second largest shareholder.

As advised on 27 December 2017, Notable Pioneer Limited (a company associated with Helios’ Chairman, Mr Ye) has agreed to subscribe for a further 81,168,828 shares at 6.4 cents per share for a further investment of $5,194,805. Due to Notable Pioneer Limited owning more than 20% of Helios and Mr Ye being a director of Helios, this investment of $5,194,805 is subject to and conditional upon the attainment of all necessary regulatory, shareholder and third-party approvals to issue these 81,168,828 shares (including Helios’ shareholders approving the issue of these 81,168,828 shares at a shareholders meeting to held in March 2018) for the purposes of:

ASX Code: HE8

Directors

Hui Ye Non-Executive Chairman Richard He Managing Director

Robert Bearden Non-Executive Director Nicholas Ong Non-Executive Director

Gary Steinepreis Non-Executive Director and Company Secretary

Contact Details

Australian Office

Level 3, 18 Richardson Street West Perth WA 6005 Australia PO Box 1485 West Perth WA Australia 6872

Tel +61 1300 291 195 Fax +61 8 6298 6191

USA Office

2 Riverway, 17[th] Floor Suite 1710, Houston Texas USA 77056 Tel +1 713 333 3613 Fax +1 713 583 0965

• (a) section 611, item 7 of the Corporations Act;

www.heliosenergyltd.com

(b) ASX Listing Rule 10.11; and

(c) for all other purposes.

An Appendix 3B in respect of the issue and allotment of these 15,625,000 shares at 6.4 cents per share to raise $1,000,000 is attached.

Helios Energy Ltd 27 February 2018

SECTION 708A (5)(e) NOTICE

Helios hereby notifies ASX (as the operator of the prescribed financial market on which the securities identified below are or are to be quoted) under section 708A(5)(e) that:

• (a) the securities identified below were issued without disclosure under Part 6D.2 of the Corporations Act;

• (b) as at the date of this notice the Issuer has complied with the provisions of Chapter 2M as they apply to the Issuer and with section 674 of the Corporations Act; and

• (c) as at the date of this notice there is no information which is excluded information as contained in sections 708A(7) and 708A(8) of the Corporations Act.

DETAILS OF THE ISSUE OF SECURITIES

DETAILS OF THE ISSUE OF SECURITIES	DETAILS OF THE ISSUE OF SECURITIES
Class of Securities:	Ordinary Shares
ASX Code of the Securities:	HE8
Date of the issue of Securities:	27 February 2018
Total number of Securities issued:	15,625,000Ordinary Shares

For further information, please contact:

Gary Steinepreis Company Secretary

==> picture [596 x 168] intentionally omitted <==

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

HELIOS ENERGY LTD

ABN 61 143 932 110

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if+convertible securities, the conversion price and dates for conversion)	Ordinary
	15,625,000
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in_ relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1	Yes
	$0.064
	Placement will be used to continue the Company’s leasing of additional acres of oil and gas mineral rights in Presidio County, Texas, USA in close proximity to the Company’s Presidio Oil Project and for working capital.
	Yes
	30 November 2017
	15,625,000

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the+securities in section 2 if applicable)	-
	-
	-
	-
	-
	Listing Rule 7.1 – Listing Rule 7.1A –	140,907,272 128,367,296 269,274,568
	27 February 2018
	Number		+Class
	1,090,710,308 300,117,877		Ordinary (HE8) Options (expiry 31 December 2021) (HE8OA)

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) art 2 - Pro rata issue 11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	Number	+Class
	265,000,000 240,000,000 655,000,000	Ordinary shares Performance rights Options (expiry 31 December 2021)
	N/A
	-
	-
	-
	-
	-
	-
	-
	-
	-

Part 2 - Pro rata issue

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance?	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 32 How do security holders dispose of - their entitlements (except by sale through a broker)?

• 33 +Issue date -

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a)  +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing +class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the +securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Gary Steinepreis

Director and Company Secretary 27 February 2018

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the+issue date or date of agreement to issue	118,000,025 (post consolidation)
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	80,001 (exercise of options – Sept 2017) 240,000,000 – Consideration securities 25,000,000 – Broker offer 900,592,938 – Entitlement and shortfall offer
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	-
“A”	1,283,672,964

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”
“B”	0.15
	[Note: this value cannot be changed]
Multiply“A” by 0.15	192,550,944
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has
already been used
Insertnumber of+equity securities issued or	36,018,672 (5 January 2018)
agreed to be issued in that 12 month period
_not counting_those issued:	15,625,000 (27 February 2018)
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule
7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the securities the
subject of the Appendix 3B to which this
form is annexed
• It may be useful to set out issues of
securities on different dates as separate line
items

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	192,550,944
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	36,018,672 (5 January 2018) 15,625,000 (27 February 2018)
“C”	51,643,672
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	192,550,944
Subtract“C” Note: number must be same as shown in Step 3	51,643,672
Total[“A” x 0.15] – “C”	140,907,272 [Note: this is the remaining placement capacity under rule 7.1]

under rule 7.1
“A” x 0.15	192,550,944
Note: number must be same as shown in Step 2
Subtract“C”	51,643,672
Note: number must be same as shown in Step 3
Total[“A” x 0.15] – “C”	140,907,272
	[Note: this is the remaining placement capacity
	under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 10

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 1,283,672,964 Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 128,367,296

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or - agreed to be issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” -

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	128,367,296
Subtract“E” Note: number must be same as shown in Step 3	-
Total[“A” x 0.10] – “E”	128,367,296 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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