HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2019

May 23, 2019

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24 May 2019

Indago Undertakes Rights Issue

Rights Issue

Indago Energy announces that it will undertake a 1 for 3 Rights Issue at 3.5 cents per share to raise up to $2.47m. This price represents an 8.6% discount to the 30day VWAP and a 5.7% discount to the 5day VWAP.

Peloton Capital Pty Ltd has been appointed to manage the non-underwritten Rights Issue and to assist the Directors to place any shortfall. The directors reserve the right to place any shortfall at their discretion for a period of three months following the close of the issue. Shareholders will be invited to apply for additional shares on top of their entitlement.

All Directors intend to participate in the rights issue.

The Record Date for shareholder participation is Friday, 31 May 2018 and the closing date for subscriptions is 24 June 2019 at 5pm AEST.

Indago Energy plans to use the funds raised from the Rights Issue to allow the Company to accelerate its sales and marketing efforts for its key product, HCD Multi-Flow®, 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.

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

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Timetable

The indicative timetable for the Rights Issue offer is set out below:

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Description Business Day
Announcement of the Entitlement Offer Thursday 23, May 2019
Shares traded on an “ex” entitlement basis Thursday, 30 May 2019
Record Date for eligibility to participate in the Entitlement Offer Friday, 31 May 2019
Despatch of Entitlement Offer Booklet and Entitlement and
Monday, 3 June 2019
Acceptance Form to Eligible Shareholders
Entitlement Offer opens Monday, 3 June 2019
Entitlement Offer closes Monday, 24 June 2019
Securities quoted on a deferred settlement basis Tuesday, 25 June 2019
Shortfall (if any) announced to ASX Thursday, 27 June 2019
Settlement of New Shares under the Entitlement Offer Friday, 28 June 2019
Issue of New Shares under Entitlement Offer Friday, 28 June 2019
Despatch of Holding Statements and New Shares commence
Monday, 1 July 2019
trading on a normal settlement basis
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Note: The above timetable is indicative only. The Directors of the Company reserve the right to amend the record date and timetable for the issue of the shares, subject to the requirements of the Corporations Act 2001 and ASX Listing Rules.

For further information please contact:

Stephen Mitchell Julie Edwards Chairman Company Secretary

Telephone: +61 3 9642 2899 Website: www.indagoenergy.com

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

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Indago Energy Limited

ABN

75 117 387 354

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Rights Issue
	Up to 2,468,176 fully paid ordinary shares
	Fully paid ordinary shares

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	Yes – equal with existing ordinary fully paid shares
	$0.035 per share
	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.
	Yes
	28 May 2018
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 2

04/03/2013

6e Number of[+] securities issued N/A with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of[+] securities issued Up to 2,468,176 fully paid ordinary shares under an exception in rule 7.2 6g If[+] securities issued under rule N/A 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If[+] securities were issued under N/A rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining N/A issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 28 June 2019 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all 214,026,121 Fully paid ordinary +securities quoted on ASX shares ( including the +securities in section 2 if applicable)

Number +Class 9 Number and +class of all 2,500,000 Unlisted +securities not quoted on ASX management ( including the +securities in incentive options section 2 if applicable) with an exercise price of $.14 expiring 1 March 2020 10 Dividend policy (in the case of a Dividend policy to remain the same trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	Non-renounceable
	One new share for every three shares held
	Ordinary fully paid shares
	31 May 2019
	No
	Fractional entitlements will be rounded to the nearest whole number (0.5 or more rounded up).
	Canada, Germany, Malaysia, Panama, Singapore, South Africa, Sweden, United Arab Emirates, United States.
	24 June 2019

• See chapter 19 for defined terms.

Appendix 3B Page 4

04/03/2013

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose	N/A
	N/A
	Peloton Capital Pty Ltd
	Up to 6% of funds raised.
	N/A
	N/A
	3 June 2019
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

of their entitlements (except by sale through a broker)?

33

+Issue date

28 June 2019

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

Appendix 3B Page 6

04/03/2013

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of+securities for which +quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security) 42 Number and +class of all +securities quoted on ASX (_including_the+securities in clause 38)	N/A
	N/A
	N/A
	N/A
	Number	+Class
	N/A	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 8

04/03/2013

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 24 May 2019 Company secretary

Print name: Julie Edwards

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24 May 2019

Cleansing Notice for Entitlement Offer

Cleansing Notice under section 708AA(2)(f) of the Corporations Act 2001 (Cth)

This notice is given by Indago Energy Limited (ASX: INK) (ABN 75 117 387 354) ( Indago ) under section 708AA(2)(f) of the Corporations Act 2001 (Cth) (the Act ) as notionally modified by the Australian Securities and Investments Commission Instrument 16/84.

Indago announced on 24 May 2019 that it intends to raise approximately $2.47 million (before costs) through a 1 for 3 pro-rata non-renounceable entitlement offer of fully paid ordinary shares to existing eligible shareholders ( Entitlement Offer ).

The Entitlement Offer consists of an offer of 1 fully paid Indago ordinary share ( New Shares ) for every 3 Indago fully paid ordinary shares held as at 7.00pm (Melbourne time) on 31 May 2019 ( Record Date ) by eligible shareholders with a registered address in Australia or New Zealand ( Eligible Shareholders ) at an issue price of 3.5 cents per New Share. The Entitlement Offer will be made pursuant to an Entitlement Offer booklet ( Offer Document ).

Eligible Shareholders may, in addition to taking up their entitlements in full, apply for additional shares ( Additional Shares ) in excess of their entitlements at the same price as under the Entitlement Offer ( Top-Up Facility ). Additional Shares will only be available where there is a shortfall between applications received from Eligible Shareholders and the number of New Shares ( Shortfall ), and subject to the allocation policy described below and set out in the Offer Document.

Indago proposes to adopt the following allocation policy for allocating Shortfall:

• (a) If there is a Shortfall, each Eligible Shareholder who has applied for Additional Shares through the Top-Up Facility will be entitled to be allocated their pro-rata share of the Shortfall having regard to their holdings at the Record Date (if an Eligible Shareholder has made an application for Additional Shares for an amount less than the amount of Additional Shares that the Eligible Shareholder would otherwise be allocated under this process, the Eligible Shareholder will be allocated the amount applied for).

• (b) The allocation process described above will be repeated in relation to any remaining Shortfall and any subsequent Shortfall, until either all New Shares proposed to be issued have been allocated or all Shortfall applications have been satisfied in full.

• (c) If, following the above allocation, there remains a Shortfall, it will then be at the discretion of the Directors of Indago to place the shortfall with Peloton Capital as Indago’s corporate advisor.

For avoidance of doubt, the Corporations Act 20% relevant interest level applies to limit the acquisition of Additional Shares through the Top-Up Facility.

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

Indago advises that:

• (a) the New Shares will be offered for issue without disclosure under Part 6D.2 of the Act;

• (b) the notice is being given under section 708AA(2)(f) of the Act;

• (c) as at the date of this notice, Indago has complied with:

• (i) the provisions of Chapter 2M of the Act as they apply to Indago; and

• (ii) section 674 of the Act;

• (d) as at the date of this notice, there is no excluded information of the type referred to in sections 708AA(8) and 708AA(9) of the Act; and

• (e) the potential affect the Entitlement Offer will have on the control of Indago is as follows:

• (i) if all Eligible Shareholders take up their entitlements under the Entitlement Offer, then the Entitlement Offer will have no effect on the control of Indago;

• (ii) if some Eligible Shareholders do not take up all of their entitlements under the Entitlement Offer, then the interests of those Eligible Shareholders will be diluted;

• (iii) the proportional interests of shareholders who are not Eligible Shareholders will be diluted because such shareholders are not entitled to participate in the Entitlement Offer,

• having regard to:

• (iv) the composition of Indago's share register; and

• (v) the terms of the Entitlement Offer.

Indago does not believe that any person will increase their voting power in Indago pursuant to the Entitlement Offer in a way that will have any material impact on the control of Indago.

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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