HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2010

Sep 27, 2010

==> picture [588 x 112] intentionally omitted <==

28 September 2010

Deshotels 20-H No.1 Drilling Update Turner Bayou Chalk Project

Directional drilling to intersect the Austin Chalk formation at the target depth of approximately 15,330 feet (4,672 metres), and establish the 4,500 feet (1,372 metres) long horizontal leg of the well, is underway. As a result of delays in commencing directional drilling it is now expected that the drilling of the horizontal leg will be completed towards the end of October.

The wireline logs run in the vertical hole of the Deshotels 20H No.1 provided valuable data used to allow the operator to interpret more precisely the principal fracture orientation in the area and has been used to optimise the orientation of the horizontal leg.

Pryme has a 40% working interest (30% net revenue interest (NRI)) in this well.

Project Description

The Deshotels 20-H No.1 well in the North Bayou Jack Field is the first deep well to be drilled within the Turner Bayou 3D seismic survey. The well is targeting the Austin Chalk formation which is predominantly oil bearing in this region.

Turner Bayou is one of Pryme’s high value projects. It is located in Avoyelles Parish, Louisiana. Pryme has a 40% interest in the Turner Bayou Chalk project area, which is contained within the Turner Bayou 3D seismic survey, and a 52% interest in the balance of Turner Bayou. The Turner Bayou project comprises approximately 80 square miles (50,000 acres) which have been imaged by a proprietary 3D seismic survey. Primary targets are contained within six prospective formations ranging in depth from the Frio formation at 3,000 feet, to the Tuscaloosa formation at 18,000 feet.

For further information please contact:

Justin Pettett Managing Director Pryme Oil and Gas Limited Telephone: +61 7 3371 1103 Website: www.prymeoilandgas.com

Ryan Messer Chief Operating Officer Pryme Oil and Gas Limited Telephone: +1 713 401 9806

ASX Code: PYM OTCQX Code: POGLY

Pryme Oil and Gas Limited is an Australian oil and natural gas producer and explorer with interests in the Gulf States of the U.S. The company has oil and gas exploration projects focused on Louisiana, the fifth-largest oilproducing state in the U.S. These projects are funded in part by existing cash flow. Pryme’s board of directors and management team has over 100 years of energy industry experience and has uniquely focused local knowledge, underscored by the proven track records of its managers and directors. Directors of the company are George Lloyd (Non Executive Chairman), Justin Pettett (Managing Director) and Ryan Messer (Executive Director) and Greg Short (Non Executive Director).

==> picture [403 x 58] intentionally omitted <==