HYDROCARBON DYNAMICS LIMITED — AGM Information 2016

May 17, 2016

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ASX: PYM OTCQX:POGLY

Annual General Meeting Presentation 18 May 2016

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Disclaimer, Forward Looking Statements and Competent Person Statement

This presentation has been prepared by Pryme Energy Limited (the “Company” or “Pryme”). This presentation is being provided to investors for the sole purpose of providing preliminary background corporate, financial and other information to enable recipients to review the business activities of the Company. It is not intended as an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities in the Company.

The information presented in this presentation may contain predictions, estimates and other forward-looking statements. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the company to meet its stated business goals. Prospective investors should make their own independent evaluation of an investment in the Company or seek advice from their financial adviser, accountant, lawyer, stockbroker or other professional adviser. Nothing in this presentation should be construed as financial product advice, whether personal or general, for the purposes of Section 766B of the Corporations Act, or otherwise. This presentation does not amount to, involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold a financial product.

The Reserves were determined by Pinnacle Energy Services LLC (Pinnacle), Registered Engineers in the state of Oklahoma for the Newkirk Project in accordance with the Society of Petroleum Engineers, 2007 Petroleum Resources Management System.

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Corporate Summary

ASX listed Energy focused

Board & Management

	Stephen Mitchell Chairman
	Don Beard Non-Executive Director
	Ray ShorrocksNon-Executive Director
	Glenn WormaldGeoscience Advisor
	Capital Structure Cash: $5.0m (31 March 15) Share Price: $0.006 Issued Cap: 1,007.4m Shares Market Cap: $6M (at $0.006) Debt: $0 ASX Code: PYM

Shareholder Summary – Top Geoff Barnes 8.6% Lowell Resources Fund 6.6% Wheelbarrow Investments 4.9% Buderim Panorama 3.9% Stephen Mitchell 3.6% Total 27.6% Top 20 Holders 49.8% Number of Shareholders 1,413

2015 Summary Loss of $10.6m Acquisition of additional Newkirk acreage Reserve Certification at Newkirk Third and fourth Capitola wells brought online Board and management changes

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Share Price Performance

Poor share price price performance reflects poor project selection & challenging market conditions

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PYM vs ASX Energy 300 ‐ 5 year
120
100
ASX Energy 300
80
60
Pryme share price
40
20
0
May‐11 Jul‐11 Sep‐11 Nov‐11 Jan‐12 Mar‐12 May‐12 Jul‐12 Sep‐12 Nov‐12 Jan‐13 Mar‐13 May‐13 Jul‐13 Sep‐13 Nov‐13 Jan‐14 Mar‐14 May‐14 Jul‐14 Sep‐14 Nov‐14 Jan‐15 Mar‐15 May‐15 Jul‐15 Sep‐15 Nov‐15 Jan‐16 Mar‐16
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New Direction Required

Initiatives to Recover Value

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Proposed Changes New board and management Sale of projects with no material Current Proposed* upside Cash – A$5M Shares on issue 1,007,380,397 100,738,040 Change of name Change of capital structure Options on issue 494,635,732 49,463,573 Emphasis on assets with material upside Name Pryme Energy Limited Indago Energy Limited Significant board and management cost cuts from previous years of up to Logo 50% Focus on shareholder wealth creation

• Subject to shareholder approval at AGM May 18 2016

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Capitola Project Texas

Sold for US$2.14m

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• Discovered 1955 and water flooded in 1960s Capitola book value was ~$8M

• Originally targeted Cline Shale (not commercial)

• Subsequently targeted Canyon Sands with 4 Well Programme 2014/15

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• Only 1 of 4 wells economic

• Estimated ultimate recovery – 137 Mstb

• No meaningful upside for listed company

• Significant acreage due to expire

• Project sold March 2016 for US$2.14M

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Four Rivers Project Louisiana

Sold for US$0.12m

Project information

Location	Louisiana and Mississippi
	Middle-Wilcox formation
Operator	Various
Interest	8 - 25% WI
Net Production ( 2015)	7,350 Bbls

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• Mature project with many uneconomic wells

• Board review demonstrated project had no ability to add value

• Project sold effective Jan 1 2016 for US$120,000

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FOUR RIVERS
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Newkirk Project Oklahoma

Low cost, repeatable, stacked pay environment

Project information

Primary Target Mississippi Lime Location Kay County , OK Operator Empire Energy Interest 50/50 venture with Empire Acreage 4,049 net acres 2P Reserve Potential 5.1 million BOE (net)

Well locations ~100 (based on 40 acre spacing)

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• AMI & JV allows for both parties to contribute 50% of costs to each earn 50% WI and 40.6 % NRI in each well drilled

• 80 foot of vertical variation in ½ mile – difficult to stay in zone horizontally – preference for lower risk vertical wells

• Extensive infrastructure in place plus numerous secondary targets

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Newkirk Project Oklahoma

Key Attributes

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• Complex geology with chats, cherts, dolomites & limestones Developed with fracced horizontal & vertical wells

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• Mixed success - wide range of initial production rates and EUR’s

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Wells produce significant water and low oil cuts – typically 10:1

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Salt water disposal wells required – linked to seismic activity

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Newkirk Project Oklahoma

Reserves and Indicative Economics

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• 5.1 million BOE (probable) reserves net to Pryme

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• Estimates apply to Pryme’s net acres of 4,049 based on 40 acre well spacing

• Project has potential to provide excellent returns above $60

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• Project needs several wells to demonstrate commerciality

• Operator unlikely to suggest wells until oil price recovers

• Lease primary terms start to expire late 2017

• Estimated cost of vertical well completion ~US$500k

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Newkirk Project
Reserve Net Remaining Reserves
Category 1 November, 2015
# Oil Natural Oil
Wells (MBBL) Gas Equivalent
(MMCF) (MBOE)
Probable 101 2,500 15,967 5,118
(2P)
Total 101 2,500 15,967 5,118
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Oil price (Year 2 onwards)	Oil price (Year 2 onwards)	Oil price (Year 2 onwards)	Oil price (Year 2 onwards)	Oil price (Year 2 onwards)	Oil price (Year 2 onwards)	Oil price (Year 2 onwards)
US$	$30	$40	$50	$60	$70	$80
NPV (A$M)	(10.8)	2.9	16.7	28.2	38.8	49.2
IRR	(0.9%)	13%	28%	44%	62%	83%
NPV/ boe	(2.9)	0.8	4.5	7.6	10.5	13.3

• Natural gas is converted to BOE on the basis of 6.1 Mcf of natural gas is equivalent to 1 BOE.

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Next Steps

Pryme is able to invest in its own asset and/or make new acquisitions to create shareholder value

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• Pryme is well placed in the current environment to utilise its cash, ASX listing and experienced board

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• Board and management focused on disciplined capital management while preserving flexibility to pursue growth opportunities where they will create value for shareholders

Newkirk

Acquisition Review

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Good acreage position in Oklahoma 2P reserves of 5.1mmboe is meaningful if commercial

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• Continue to review acquisition opportunities Primary driver is shareholder wealth creation

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Project needs several wells to determine commerciality but needs oil price to recover

Look at adding local infrastructure if available that would enhance value of project

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• Looking at both upstream and downstream opportunities as well as new energy technologies and forms

• Will consider non energy related opportunities only if compelling

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Contacts

Australia Stephen Mitchell Chairman Telephone : +61 3 9642 2899

USA John Zetzman Country Manager Telephone : +1 214 417 7931

Website : www.pryme-energy.com

ASX Code: PYM OTCQX Code: POGLY

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