HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2018

Jul 12, 2018

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13 July 2018

Dear Shareholder,

Entitlement Offer – Information for Shareholders

Indago Energy Limited ( Indago ) announced on 12 July 2018 that it intends to raise approximately $2.6 million (before costs) through a 1 for 5 pro-rata non-renounceable entitlement offer of fully paid ordinary shares to existing eligible shareholders ( Entitlement Offe r).

Under the Entitlement Offer, eligible shareholders will have the opportunity to subscribe for new fully paid ordinary shares in Indago ( New Shares ) on the basis of 1 New Share for every 5 shares held at an issue price of 7.4 cents per New Share.

The Entitlement Offer will be made pursuant to an Entitlement Offer booklet ( Offer Document ) and if you are eligible and wish to participate in the Entitlement Offer, you will need to complete your personalised Entitlement and Acceptance Form that will accompany that Offer Document.

Shareholders will also be invited to apply for additional New Shares ( Additional Shares ) in excess of their entitlement ( Top-Up Facility ) if there is a shortfall between applications received from Eligible Shareholders and the number of New Shares proposed to be issued under the Entitlement Offer.

The Entitlement Offer is not underwritten.

A copy of the Offer Document is expected to be lodged with ASX and sent to eligible shareholders on or about 19 July 2018. The Offer Document will be dispatched to shareholders with registered addresses in Australia and New Zealand and who hold Shares as at the record date of 7.00 pm (Melbourne time) on 18 July 2018 ( Record Date ).

Pursuant to the ASX Listing Rules, Indago is required to provide you with certain information before proceeding with the Entitlement Offer. This letter contains all the information required by Appendix 3B of the Listing Rules.

1. A maximum of 34,863,524 New Shares will be issued pursuant to the Entitlement Offer (subject to the rounding of fractional entitlements to New Shares).

2. The New Shares will rank equally in all respects from the date of allotment with the existing class of quoted Shares.

3. The issue price of the New Shares will be 7.4 cents each.

4. Indago will apply for quotation of the New Shares issued pursuant to the Entitlement Offer on the official list of the ASX.

ABN: 75 117 387 354 Tel: +61 3 9642 2899 | Fax: +61 3 9642 5177 Level 6, 412 Collins Street, Melbourne VIC 3000 Australia

1. The funds raised will allow the Company to accelerate its sales and marketing efforts for it key product, HCD MultiFlow, to support its upstream activities including the appraisal of its oil and gas projects in Kentucky and Utah as well as for general working capital purposes.

2. It is anticipated that the New Shares subscribed for will be entered into uncertificated holdings on or before 8 August 2018.

3. The total number and class of all securities quoted on ASX (including the maximum number of Shares to be issued under the Entitlement Offer) is as follows:

Shares	Number
Shares on issue at the Announcement Date	174,317,619
Shares offered under the Entitlement Offer	34,863,524*
Total Shares on issue on completion of the Placement and	209,181,143*
Entitlement Offer

*The number of New Shares to be issued under the Entitlement Offer is subject to the rounding of fractional entitlements to New Shares.

1. Indago has 40,700,000 options on issue with various expiry dates with exercise prices ranging from 10 cents to 25 cents, all unquoted.

2. All New Shares issued pursuant to the Entitlement Offer will have the same dividend entitlements as existing Indago shares on issue.

3. No shareholder approval for the Entitlement Offer is required.

4. The Entitlement Offer is non-renounceable. This means that eligible shareholders who do not take up their entitlements to participate in the Entitlement Offer will not be able to transfer or receive any value for those entitlements and their equity interest in Indago will be diluted.

5. The New Shares in the Entitlement Offer will be offered on the basis of 1 new share for every 5 shares held by the shareholder as at the Record Date. Fractional entitlements will be rounded to the nearest whole number.

6. The offer under the Entitlement Offer relates to fully paid ordinary shares in the capital of Indago.

7. The record date to determine entitlements is 7.00pm (Melbourne time) on 18 July 2018.

8. Shareholders will be invited to apply for additional New Shares in excess of their entitlement. If there are excess applications for additional New Shares, an appropriate allocation policy will be applied as set out in the Offer Document. The Entitlement and Acceptance Form will contain instructions on how to apply for additional shares.

9. Only shareholders with registered addresses in Australia and New Zealand will be sent the Offer Document. In compliance with Listing Rule 7.7.1, Indago has decided that it is unreasonable to make the Entitlement Offer to shareholders with registered addresses outside of a limited number of jurisdictions (non-eligible shareholders) having regard to each of the following:

10. the number of those security holders registered;

ABN: 75 117 387 354 Tel: +61 3 9642 2899 | Fax: +61 3 9642 5177 Level 6, 412 Collins Street, Melbourne VIC 3000 Australia

• the number and value of the securities that would have been offered to those security holders; and

• the cost of complying with the legal requirements and requirements of regulatory authorities in some overseas jurisdictions.

• The closing date for receipt of acceptances is 5.00pm (Melbourne time) on 1 August 2018.

• The broker of the Entitlement Offer is Peloton Capital Pty Ltd.

• The Offer Document for the Entitlement Offer and the Entitlement and Acceptance Form are expected to be dispatched to eligible shareholders on or about 19 July 2018.

• The latest date for dispatch of certificates or entry of the New Shares subscribed for into your security holdings is 9 August 2018.

If you have any queries regarding your entitlement or participation in the upcoming Entitlement Offer, please contact Automic Pty Ltd as Share Registry on +61 1300 288 664.

Yours faithfully

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Julie Edwards Company Secretary Indago Energy Limited

ABN: 75 117 387 354 Tel: +61 3 9642 2899 | Fax: +61 3 9642 5177 Level 6, 412 Collins Street, Melbourne VIC 3000 Australia