HYTERRA LTD — Interim / Quarterly Report 2013

Oct 25, 2012

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ASX ANNOUNCEMENT

26 October 2012 by E-lodgement

SEPTEMBER QUARTER ACTIVITIES REPORT

The Directors of Triple Energy Limited (“Triple” or the “Company”) are pleased to report the following update on activities during and the since the quarter ended 30 September 2012:

PROJECT EVALUATION

The Company continued to evaluate a number of potential new oil & gas projects during the quarter and on 5 October 2012, announced that it had executed a share purchase agreement ( Agreement ) with CFT Holdings (HK) Ltd ( CFT ) to acquire CFT's coal seam gas project and interests in Northern China. The Agreement remains subject to a number of conditions precedent, including shareholder approval.

On 26 October 2012, the Company announced that acquisition due diligence had been completed and that it had agreed to place 150,000,000 new fully paid ordinary shares at $0.015 per share to sophisticated investors to raise up to $2.25m before costs (subject to shareholder approval).

PROPOSED ACQUISITION OF CFT

The Board considers that this project provides a medium to low risk opportunity for the shareholders to be exposed to a significant increase in the value of its shares.

The project comes with expert Coal Bed Methane ( CBM ) management in a an area with proven coal seams and evidence of coal seam gas flow from coal mining operations. It is an excellent opportunity for the company to be exposed to the possibility of a meaningful gas production business in the near term.

The project has the following attributes;

• Experienced oil and gas board and CBM expert management 

• Excellent fiscal terms and equity position (80%)

• Material acreage position 

• Potential for material reserves 

• Ready gas market for any/all produced gas - huge proximate potential customer base

• • Good gas price – A$7.00 to A$8.00 / mmscf 

• Near term news-flow – drilling DST well this month – considered low/moderate risk 

• • If successful, time to development is very short – could be as early as mid 2013 

• Strong Chinese partner – motivated for project to succeed (mine safety) 

EQUITY POSITION AND TENURE

Under the Agreement, Triple will acquire an 80% Joint Venture interest in a CBM project in China. The project is conducted via a 45 year registered Cooperative Joint Venture (“CJV”) with Longmay Coal Mining Company ( Longmay ), one of China’s largest coal miners.

The equity in the CJV with Longmay will be as follows;

• " Triple Energy Ltd - 80%

• " Longmay Coal Mining Company – 20%

Triple Energy Ltd Suite 9, 1200 Hay Street West Perth WA 6005 Mobile +61 408557821 Office +61 864604960 Email underwoodpw@tripleenergy.net Web www.tripleenergy.net

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BACKGROUND TO THE PROJECT

The CJV operates under the coal mining leases held by Longmay with a Joint Venture Agreement registered with the relevant Chinese Government authorities. The CJV is staged, initially covering five mine areas, with exclusive access that can ultimately extend the CJV area to cover a total of 42 mine areas. It was formed such that Longmay can de-gas its coal mining leasehold areas to facilitate safer mining operations into the future. This is required as the coals in the respective lease areas have a history of explosions whilst mining, due to high gas content. This CJV has been two years in the making.

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Location of CBM Project in China – initial mine areas for degassing

Triple Energy Ltd Suite 9, 1200 Hay Street West Perth WA 6005 Mobile +61 408557821 Office +61 864604960 Email underwoodpw@tripleenergy.net Web www.tripleenergy.net

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FUNDING

Following completion of acquisition due diligence, Triple will make available to CFT a loan facility of $500,000 to fund drilling of the initial test well.

As announced on 26 October Triple has completed a placement of 150,000,000 new fully paid ordinary shares at an issue price of A$0.015 (one point five cents) per share to sophisticated investor clients of Forrest Capital and EL & C Baillieu to raise A$2.25m before costs ( Placement ). Proceeds of the Placement (which is subject to approval by Triple shareholders) will be applied towards the CFT project and general working capital.

TRANSACTION STRUCTURE

Under the Agreement, Triple will acquire 100% of CFT Heilongjiang (HK) Ltd which in turn owns 80% of Heilongjiang Aolong Energy Co CJV (“Aolong”), the CJV with Longmay. As consideration for the Acquisition, Triple intends to issue 380,000,000 Shares of which 350,000,000 Performance Shares will vest in accordance with “milestones” as value is added at each.

Triple will also pay a cash amount of $150,000 which together with 30,000,000 shares to be issued at Settlement is consideration for expenses incurred in the Cooperative Joint Venture since 1 January 2012.

The Performance Shares will vest with the vendors as follows;

Milestone #1	50m shares vest on positive results of DST well planned for October 2012
Milestone #2	50m shares vest on positive results of pressurised core hole results - planned for next March/April 13
Milestone #3	125m shares in Triple when 10 development wells have been drilled/completed
Milestone #4	125m shares in Triple when 20 development wells have been drilled/completed

Thus, the project consideration is linked to the achievement of measurable value adding events.

RESOURCE POTENTIAL AND DATA ON THE PROJECT

Estimates provided by CFT indicate that the greater CJV area has multi-Tcf potential. There is already a significant amount of data over the areas as Longmay has mapped the coal seams by drilling ~200 boreholes. These boreholes have been electrically logged and this data will in due course be incorporated into the database to assist with the planning of any development.

Gas in place on just the initial five mine areas to be drilled has been estimated at around 540 Bcf by an independent petroleum consultant, hence there is potential for meaningful scale gas production in the near term, should the upcoming drilling campaign be successful, with significant upside potential.

The specific location and approvals etc for the upcoming DST (drill stem test) well are established and construction of the drilling pad has been completed in readiness for the rig mobilisation this month. A further two wells are planned for Q2 2013 with the specific objectives of acquiring pressurised core for detailed gas analysis.

Triple expects the 2012/13 drilling campaign to facilitate a maiden reserves booking for the assets as well as significantly de-risk the entire CJV area and acquisition strategy.

Triple Energy Ltd Suite 9, 1200 Hay Street West Perth WA 6005 Mobile +61 408557821 Office +61 864604960 Email underwoodpw@tripleenergy.net Web www.tripleenergy.net

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AVALABILITY OF RIGS AND CBM EXPERTISE

A near new US purpose built CBM drilling unit owned by Longmay is on site and ready to use. Hence the drilling campaign will not require expensive and time consuming rig mob/demob costs as is often the case. Further, the transaction will come with proven Australian CBM management expertise under the executive management of Mr Rod Bresnehen, an acknowledged CBM expert in Australia and Internationally.

MARKET FOR THE GAS

There is understood to be an immediate market for any gas that may be produced at an attractive price, regulated by the Chinese Government which is currently around A$7.00 to A$8.00/mmscf.

An existing gas reticulation network of 118kms is believed to be available for the domestic market, covering a city of around ¾ million people. Within 60kms, there is an additional 3 million people.

OTHER PROJECTS

The Company is continuing to evaluate other oil and gas ventures, with the potential to add to Shareholder value.

GENERAL MEETING

As noted, the proposed acquisition is subject to shareholder approval. Triple expects to despatch a Notice of Meeting to shareholders in early November 2012.

FINANCIAL POSITION

During the quarter Triple completed a placement of 37,500,000 shares at $0.015 per share to fund ongoing new project evaluation and general working capital. As at 30 September 2012 cash at bank was $1.03m.

As noted elsewhere in this report, since the end of the quarter the Company has agreed a placement of 150,000,000 new fully paid ordinary shares at an issue price of A$0.015 (one point five cents) per share to raise a further A$2.25m before costs.

An ASX Appendix 5B for the quarter to 30 September 2012 accompanies this activities report.

Technical Information contained in this release is based on information reviewed by Richard Hayward (Technical Non Executive Director). Mr Hayward has an Honours Degree in Geology from Imperial College, London and a Master’s Degree in Basin Evolution and Dynamics from Royal Holloway College, London. He is a fellow of the Geological Society of London and a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers. Mr Hayward has in excess of 24 years experience in petroleum geology and has consented to the inclusion of the information in the form and context in which it appears.

CONTACT DETAILS FOR FURTHER INFORMATION;

Paul Underwood T: + 61 (0) 408 557 821 E: underwoodpw@tripleenergy.net

Triple Energy Ltd Suite 9, 1200 Hay Street West Perth WA 6005 Mobile +61 408557821 Office +61 864604960 Email underwoodpw@tripleenergy.net Web www.tripleenergy.net

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
Triple Energy Limited
ABN 68 116 829 675	Quarter ended (“current quarter”)
68 116 829 675	30 September 2012

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 Net OperatingCash 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 Net OperatingCash Flows	Current quarter $A’000	Year to date (6 months) $A’000
		(17) (120) 7	(21) (208) 13
		(131)	(216)
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)
		-	-
		(131)	(216)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(131)	(216)
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	563 (41)	563 (41)
	522	522
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	391 640	307 724
	1,031	1,021

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
		17
		-
1.25	Explanation necessaryfor an understandingof the transactions
	Director’s fees 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.

17/12/2010

Appendix 5B Page 2

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

	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
		-	-
		-	-

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
	600
	-
	-
	150
Total	750

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,031	640
Total: cash at end of quarter(item 1.22)	1,031	640

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.

17/12/2010 Appendix 5B Page 3

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	287,500,000	287,500,000
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	37,500,000	37,500,000	1.5 cents	Fully paid
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)	15,000,000 15,000,000 15,000,000 15,000,000*		Exercise price $0.03 $0.03 $0.04 $0.04	Expiry date 14/02/2016 14/02/2016 14/02/2016 14/02/2016
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter	99,000,000	99,000,000	Exercise price $0.06	Expiry date 30/06/2012
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• Subject to vesting conditions

• See chapter 19 for defined terms.

17/12/2010

Appendix 5B Page 4

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: Date: 26 October 2012 Executive Chairman Print name: Paul Underwood

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.

17/12/2010 Appendix 5B Page 5