HYTERRA LTD — Interim / Quarterly Report 2011

Oct 24, 2011

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25 October 2011

The Manager Company Announcements Office Australian Securities Exchange Ltd 4th Floor, 20 Bridge Street SYDNEY NSW 2000

SEPTEMBER QUARTER ACTIVITIES REPORT

The Directors of Tango Petroleum Limited (“Tango” or the “Company”) are pleased to report the following activities:

LYONS POINT PROSPECT

During the quarter, the Company advised that the Lyons Point Prospect, operated by Clayton Williams Energy Inc (NASDAQ: CWEI) in Acadia Parish, Louisiana had commenced drilling operations.

As at the date of this report the operator was drilling ahead at approximately 14,250 feet.

The prospect is planned to be drilled to a total depth of 16,300 feet with the first reservoir target expected to be encountered at 15,500 feet. The Lyons Point Prospect has a closure of circa 400 acres with a most likely resource potential is 3 MMBC (Million Barrels Condensate) and 60 BCFG (Billion Cubic Feet Gas) with upside potential of 4 MMBC and 80 BCFG. This estimate is conceptual in nature and insufficient activity has been conducted to determine a hydrocarbon reserve. The well is expected to take 45 days to drill.

The Lyons Point Prospect is a seismically defined upthrown three-way structural closure that is bounded by faults on all four sides. The objective is the prolific Oligocene Marginulina Texana (MT) 1, 2, and 3 Sands, which are projected to be 700 feet thick.

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Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675

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The objective MT sands are productive in several fields in the immediate surrounding area. The main field fault is the same trapping fault that sets up Leleux Field, which has cumulative historical production of 5 MMBC and 300 BCFG from the MT interval.

Production rates are estimated to be significant given adjacent analog wells are producing at rates of 750 BBLCD (Barrels Condensate Per Day) and 15,000 MMCFD (Million Cubic Feet Gas Per Day). It is likely only four wells will be required to drain the structure.

The Company’s share of the initial dry hole well costs are estimated at US$1,450,000 (includes entry costs). In a success case the Company’s share of completion and facilities costs are estimated to be a further US$520,000.

The participation terms are favorable with the Company paying 23% to earn a 17.25% working interest. The net revenue interest is 75%.

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This prospect is best classified as a “develo-cat” well (between a development well and a wildcat well) based on the proximity of producing wells and full support of the prospect by modern, high quality 3D seismic data. Clayton Williams have addressed the four principle geologic risk factors; generation and migration of hydrocarbons from source to reservoir, reservoir quality, reservoir seal, and structure in a very complete manner, again mostly with the support of the 3D seismic data.

This prospect was chosen over numerous others due to the work done and the risk mitigation.

CORPORATE

During the quarter, the Company finalised an Entitlement Issue of up to 86,000,000 options (exercisable at $0.06, expiring 30 June 2012) at $0.005. Initial acceptances as well as subsequent shortfall placements resulted in the issue of 65,000,000 options to raise $325,000 before costs of the offer.

The Company also finalised a placement of 34,000,000 shares at $0.035 with a free attaching option (exercisable at $0.06, expiring 30 June 2012) to raise $1,190,000 before costs.

Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675

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All funds raised were applied to the Company’s commitments with regard to the Lyons Point prospect and working capital.

Yours faithfully,

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Mathew Walker Executive Chairman

For further information please contact:

James Robinson, Company Secretary, Tango Petroleum Limited, Tel: + 61 (8) 6460 4960

COMPETENT PERSONS STATEMENT : The information in this report has been reviewed by Mark Kramer (Registered Geologist, Texas USA), who has over 36 years experience within oil and gas sector. Mark Kramer consents to the inclusion in this report of the information in the form and context in which it appears. Mark Kramer is not a full time employee of the Company.

This report contains forward looking statements that are subject to risk factors associated with resources businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.

Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

	Name of entity	Name of entity
	Tango Petroleum Limited
	ABN 68 116 829 675 Consolidated statement of cash flows
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (GST Refund) Net OperatingCash Flows			Current quarter $A’000		Year to date (6 months) $A’000
			(1,350) (160) 3 15		(1,350) (334) 3 26
			(1,495)		(1,654)
1.8 1.9 1.10 1.11 1.12 1.13		Cash flows related to investing activities Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets Loans to other entities Loans repaid by other entities Other (provide details if material) Net investing cash flows Total operating and investing cash flows (carried forward)			(120)
					(120)
			(1,495)		(1,775)

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B

Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(1,495)	(1,775)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (capital raising costs) Net financingcash flows	1,515 (82)	1,515 (82)
	1,433	1,433
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter *	(62) 61	(342) 341
	(1)	(1)

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		90
		-
1.25	Explanation necessaryfor an understandingof the transactions
	Director’s fees, rent, administration services and reimbursements.

Non-cash financing and investing activities

2.1	Details of financing and investing transactions which have had a material effect on
	consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	100	-
	-	-

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	-
	-
	-
	50
Total	50

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows)	$A’000	$A’000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank	(1)	61
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22)	(1)	61

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter

• See chapter 19 for defined terms.

Appendix 5B Page 3

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

7.1 Preference +securities (description)	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities	120,000,000	120,000,000
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	34,000,000	34,000,000
7.5 +Convertible debt securities (description)
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor)			Exercise price	Expiry date
7.8 Issued during quarter	99,000,000	99,000,000	$0.06	30/06/2012
7.9 Exercised during quarter
7.10 Expired during quarter
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here:

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Date: 25 October 2011

Company secretary

Print name: James Robinson

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

Appendix 5B Page 5

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