HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2011

Jul 11, 2011

12 July 2011

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Deshotels 13H No.1 Drilling Update Turner Bayou Chalk Project

Pryme Energy Limited (Pryme) provides the following update on operations at its Turner Bayou project in Louisiana, USA.

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 the Austin Chalk formation at 15,300 feet and the Eagle Ford formation at 16,000 feet.

Deshotels 13H No.1 (40% Working Interest / 30% NRI)

The Deshotels 13H No.1 well in North Bayou Jack Field has reached a total vertical depth of 15,000 feet (4,572 metres) in the upper portion of the Austin Chalk formation. The vertical section of the well should be logged and the intermediate string of casing cemented in place this week, which will then be followed by the drilling of the 4,000 foot (1,220 metres) horizontal section.

“We begin drilling the horizontal leg later this week and are confident of intersecting a similar oil bearing fracture network to that encountered in the Deshotels 20H No.1 well,” said Justin Pettett, Pryme’s Managing Director. “At least twelve oil and gas bearing fracture zones were intersected in the horizontal leg of the Deshotels 20H No.1; they were accompanied by significant oil and gas shows which were produced to the surface during drilling and confirmed the prospectivity of the Austin Chalk formation within the project area.”

The Deshotels 13H No.1 well will be drilled to a total measured depth of approximately 19,000 feet (5,790 metres.)

For further information please contact:

Justin Pettett Managing Director Pryme Energy Limited Telephone: +61 7 3371 1103

Ryan Messer Chief Operating Officer Pryme Energy Limited Telephone: +1 713 401 9806

Website: www.prymeenergy.com

ASX Code: PYM

OTCQX Code: POGLY

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