HELIOS ENERGY LTD — Management Reports 2019

Apr 25, 2019

Helios Energy Ltd

26 April 2019

Third Well Progress Report

ASX Code: HE8

Highlights

Directors

• Wireline logs and drilling cuttings indicate that the primary target zone within the lower bench of the Ojinaga Formation is 220 feet thick and is highly naturally fractured.

• Excellent and continuous oil shows were observed throughout the drilling of this 220 feet thick zone.

Presidio 141#2 well

Helios Energy Ltd (ASX Codes: HE8, HE8OA) ( Helios or Company ) is pleased to report the vertical portion of the Presidio 141#2 well has been drilled to a total depth of 5,074 feet ending at the base of the Eagle Ford Shale Formation. The well has been logged and in addition 50 rotary cores have been successfully extracted. The well has been plugged back and the 1,400 feet horizontal portion of the well is now being drilled into the primary target zone within the lower bench of the Ojinaga Formation. Excellent and continuous oil shows along with a high density of natural fractures were observed while drilling throughout the 220 feet thick primary target zone within the lower bench of the Ojinaga Formation.

The Presidio 141#2 well is located 2,300 feet to the east of the existing Quinn Creek 141 discovery well. The total measured depth of the well is anticipated to be 5,850 feet and this includes a 1,400 feet horizontal portion drilled into the primary target zone within the lower bench of the Ojinaga Formation.

The well is located structurally updip of the existing Quinn Creek 141 discovery well and the vertical portion was drilled through the entire San Carlos, Ojinaga and Eagle Ford Shale Formations. The vertical portion of the well ceased at the bottom of the Eagle Ford Shale Formation.

Hui Ye Non-Executive Chairman Richard He Managing Director Robert Bearden Non-Executive Director Nicholas Ong Non-Executive Director John Palermo 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

www.heliosenergyltd.com

San Carlos Formation

Wireline logs and drilling cuttings indicate that the San Carlos Formation is approximately 671 feet thick. Very good oil and gas shows were observed in an upper sand unit of the San Carlos Formation which contained 55 feet of net sand with 18% to 23% porosity. A lower interval of the San Carlos Formation had 65 feet of net sand with 10% to 15% porosity with fair oil shows.

Helios Energy Ltd 26 April 2019

Ojinaga Formation

Wireline logs and drilling cuttings indicate that the Ojinaga Formation is approximately 1,941 feet thick, with a thickened upper Ojinaga interval of approximately 1,018 feet. The upper Ojinaga Formation contained a sandstone interval of approximately 60 feet with 18% to 20% porosity with fair to moderate oil shows.

The middle bench of the Ojinaga Formation is approximately 564 feet thick. During drilling oil and gas shows increased from fair to moderate to good and then to excellent with accompanying oil fluorescence, oil cut and residual fluorescence. Analysis of wet gas ratios indicate light oil.

Wireline logs and drilling cuttings indicate that the lower bench of the Ojinaga Formation is 359 feet thick and is highly naturally fractured. Good to excellent, continuous oil shows were observed throughout the entire drilling of this 359 feet thick interval.

Eagle Ford Shale Formation

Wireline logs and drilling cuttings indicate that the Eagle Ford Shale Formation is approximately 590 feet thick. Fair to good oil shows were observed whilst drilling through two intervals of 190 feet and 70 feet.

220 Feet Thick Primary Target Zone within the Lower Bench of the Ojinaga Formation

Wireline logs and drilling cuttings indicate that the primary target zone within the lower bench of the Ojinaga Formation is approximately 220 feet thick. Excellent and continuous oil and gas shows were observed throughout the entire drilling of this 220 feet primary target zone.

This primary target zone of 220 feet has uniform rock characteristics. It is predominantly black shale with micro laminations of siltstone and fine carbonates and is highly naturally fractured.

Multi-Stage Fracking of the 1,400 Feet Horizontal Portion of the Presidio 141#2 well

The vertical section of the Presidio 141#2 well has now been plugged back and a 1,400 feet lateral leg is being drilled to the west towards the Quinn Creek 141 discovery well entirely within the 220 feet zone of the best oil shows and highest natural fracturing that occurs within this 359 feet lower bench of the Ojinaga Formation.

The horizontal portion of the well was steered based on 2D and 3D seismic data and the data from the 2 existing wells (Quinn Creek 141 and Quinn Mesa 113) drilled by Helios.

After the Presidio 141#2 well has been cased (including the 1,400 feet lateral portion of the well), the Presidio 141#2 well will await a multi-stage fracking of the 1,400 feet lateral portion of the well.

The final design of the multi-stage fracking program will be selected once the logs and rotary cores have been fully analyzed in conjunction with hydraulic fracturing stimulation experts over the next few weeks.

Helios Energy Ltd 26 April 2019

Oil Discovery in the Ojinaga Shale Formation

Helios successfully completed a one stage frack in the vertical Quinn Creek 141 well to test oil shows and log indications between 4,744 and 4,880 feet in the lower Ojinaga Formation. The Company has previously reported to ASX that the Quinn Creek 141 well flowed 260 barrels of oil and 1,345 barrels of completion fluid in 168 hours (7 days).

The oil produced is good quality, mature, 39 degrees API gravity light oil similar in composition to Eagle Ford oils.

Gas was also produced at 456 mcf per day on a 34/64ths of one-inch choke. As the well cleaned up and the percentage of completion fluid recovery rose, a steadily increasing oil cut was observed. Total load recovery (until the lower interval was shut in) was approximately 35% (3,509 barrels of completion fluid out of 10,187 barrels of completion fluid injected).

Easily Mapped with 2D & 3D Seismic

The lower bench of the Ojinaga Formation shows well on both 2D & 3D seismic and is easily mapped.

Presidio Oil Project – Infrastructure

Access to the Presidio 141#2 well location is provided by a 25 mile unsealed, formed road constructed by Helios that branches off the sealed US-90 highway which carries heavy truck and passenger vehicle traffic.

The Presidio 141#2 well location has access to ample supplies of fresh water provided by local water wells drilled into shallow water aquifers.

The El Paso Oil Refinery located in El Paso, Texas has a processing capacity of 135,000 barrels of oil per day and is located 170 miles from the Presidio Oil Project. Crude oil is sold there by truck delivery. The Presidio Oil Project is located 250 miles (or 5 hours by truck) from Midland, Texas which is the epicenter of the Permian Basin oil industry.

All rigs, supplies and services required for the Presidio Oil Project are sourced from Midland, Texas. Oil production in the Permian Basin is approximately 3,800,000 bopd.

Helios Energy Ltd 26 April 2019

Stratigraphy of the Presidio Oil Project located in Presidio County, Texas, USA

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Presidio Oil Project – 70%WI

Helios must drill 3 wells to earn a 70% WI in the initial 6,400 acres (4,480 net acres) which comprise the Presidio Oil Project and a 70% WI in each of these 3 wells. Helios to date has drilled 2 of those 3 wells, being the Quinn Creek 141 vertical well and the Quinn Mesa 113 vertical well. Helios has been granted an until 30 June 2019 to drill the third well. Once the Presidio 141#2 well has been completed, Helios will have earned a 70%WI in the 3 wells and the initial 6,400 acres (4,480 net acres) which comprise the Presidio Oil Project.

Helios Energy Ltd 26 April 2019

For further information, please contact:

Richard He Managing Director

Competent Person's Statement

The information in this ASX announcement is based on information compiled or reviewed by Eldar Hasanov. Mr Hasanov is a qualified petroleum geologist with over 21 years of experience in the USA, Russia, Azerbaijan, Kazakhstan, the Middle East, Turkey, Indonesia and other international areas involving technical, operational and executive aspects of petroleum exploration and production, in both onshore and offshore environments. He has extensive experience in petroleum exploration, appraisal and reserve and resource estimation, as well as in identifying and evaluating new oil and gas ventures. Mr Hasanov has a Masters degree in Petroleum Geology. He is a member of the American Association of Petroleum Geologists.