INVICTUS ENERGY LTD — Capital/Financing Update 2014

Jan 22, 2014

ASX Announcement 23 January 2014

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Ibhubesi Activity Update 2014

• MoU with Eskom for gas supply a catalyst for very active 2014

• Strong focus on path to Ibhubesi commercialisation

• Commencement of key Ibhubesi development studies

• Advancement of project financing and partnering options

• Advancement of gas sales options

• Continued definition of exploration and appraisal upside

Southern African gas explorer and developer, Sunbird Energy Ltd (ASX: SNY ) is pleased to provide an update on its planned 2014 activities associated with the Ibhubesi Gas Project (IGP or the Project), offshore South Africa.

Since announcing the acquisition of Ibhubesi in December 2012, Sunbird has rapidly progressed the development of the IGP delivering a series of major milestones, including:

• Completed Feasibility Studies confirming technical and commercial viability of the Project;

• Received Independent certification of the maiden reserves for the field, 540 Bcf (2P);

• o Successfully completed Concept Select engineering studies;

• Secured funding from the US Trade and Development Agency for completion of the Field Development Plan;

• Secured approval from the South African Government Regulators for the Section 11 transfer of title for Block 2A providing Sunbird with 76% operating interest in the Project; and

• Secured MoU with Eskom for the joint investigation into potential gas sales from the Ibhubesi Gas Project to Eskom’s Ankerlig Power Station on the west coast of South Africa.

On the back of last month’s Memorandum of Understanding (MoU) reached between Sunbird and Eskom to jointly investigate the sale of indigenous gas from the Ibhubesi Gas Project to Eskom’s Ankerlig Power Station on the west coast of South Africa, Sunbird is pleased to report that a major program of activities focused on fast-tracking the commercialisation of Ibhubesi is underway.

Key activities scheduled to be undertaken during the first half of 2014 include:

• Completion of preliminary Field Development Plan (FDP) and Basis of Design (BoD) studies;

• Commencement of Front End Engineering and Design (FEED) studies;

• Continued progressing of regulatory approvals, including the Environmental Impact Assessment (EIA);

• Advancement of gas sales negotiations with Eskom for Ankerlig Power Plant;

Sunbird Energy Ltd – ACN 150 956 773 Level 1, 50 Ord Street, West Perth, WA 6005 www.sunbirdenergy.com.au T: +61 (0) 8 9463 3260 F: +61 (0) 8 9462 6630

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• Participation in Department of Energy’s tender process for a new build 500 MW gas fired Independent Power Plant, Requests for Proposals expected early in 2014

• Advancement of Project Partnering / farm out and / project financing opportunities; and

• Undertaking of independent certification of exploration upside of Block 2A.

Field Development Plan and FEED

The FDP and BoD studies, which are already at an advanced stage, will define the final well designs, locations and scheduling, the engineering designs of the gas processing facilities and the optimal sales pipeline size and route. These studies will form the basis for subsequent Front End Engineering and Design (“FEED”) studies. The FDP is on target to be completed in Q2 2014. Based on the current schedule, this will enable FEED to commence in mid 2014 and a Final Investment Decision (“FID”) to be taken in early 2015.

In August 2013 Sunbird received welcomed support for its FDP work program with the United States Trade and Development Agency (USTDA) contributing 80% of the estimated A$1 million field development study budget.

Environmental Assessment and Approvals

A range of Environmental Impact Approvals (EIA’s) covering the upstream development were granted as part of the licensing process for the Block 2A Production Right in October 2009.

A program to obtain the additional approvals required for Sunbird’s development concept, namely the offshore pipeline and onshore gas processing facility is currently underway and expected to be completed in early 2015. During H1 2014, Sunbird expects to undertake specialist scientific studies and submit the Final Scoping Report to the Department of Environmental Affairs (DEA). Upon approval of this report by the DEA, Sunbird will then be in a position to complete and submit the Final Environmental Assessment Report (EIR) to the DEA before the end of the year.

Eskom MoU

In December 2013 Sunbird announced that Africa’s largest electricity producer, Eskom, had signed an MoU with Sunbird for a joint investigation of indigenous gas sales from the Ibhubesi Gas Project to Eskom’s Ankerlig Power Station on the west coast of South Africa.

A number of activities related to that investigation are now underway or set to begin in the very near future, including:

• a) Eskom to complete studies into the replacement of the existing diesel feed stock with indigenous natural gas, along with a conversion from an Open Cycle Gas Turbine (OCGT) to Close Cycle Gas Turbine (CCGT) facility;

• b) Eskom to determine the procurement process necessary for a formal gas sales agreement with the Ibhubesi Gas Project;

• c) Sunbird to complete the FDP for the Ibhubesi Gas Project; and

• d) Sunbird to begin FEED for the Ibhubesi Gas Project.

Sunbird Energy Ltd – ACN 150 956 773 Level 1, 50 Ord Street, West Perth, WA 6005 www.sunbirdenergy.com.au T: +61 (0) 8 9463 3260 F: +61 (0) 8 9462 6630

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The Ankerlig Power Station is a 1,350 MW open cycle gas turbine facility located in Atlantis Industrial, approximately 40 km north of Cape Town and was one of the key gas market targets identified by Sunbird when it entered in to the agreement to purchase a 76% interest in Ibhubesi. The plant was originally constructed in 2007 to cope with the increasing power demands of the Western Cape during periods of peak power demands. The facility has nine turbines and was designed to be powered by either natural gas or liquid fuel, kerosene or diesel. To date the facility has been fuelled on diesel.

Marketing and Financing Opportunities

Alongside the Eskom Ankerlig project, Sunbird will continue to develop other potential gas market opportunities including the South African Department of Energy’s (DoE) tender for the procurement gas-fired IPPs as part of its initiative to increase supply, with the Request for Proposals on an initial 474MW gas-to-power IPP expected early in 2014.

With Ibhubesi’s FEED scheduled to begin this year, Sunbird will also accelerate its focus on assessing potential project financing options identified in an independent review of gas marketing opportunities, energy pricing structures and project economics completed by South Africa's Standard Bank in 2013.

The Standard Bank review identified a number financing options such as Reserves-based Lending and bringing in a strategic investor and or farm out partners. The Company is encouraged by the level of interest it is receiving from various funding sources including major financing houses and banks in Africa and Australia.

Upside opportunities

A major focus for Sunbird in 2014 will be further defining the upside opportunities already identified in Block 2A which contains Ibhubesi.

The area has a strong record of exploration success with 7 discoveries from 11 wells drilled to date, well above the industry average.

To quantify this upside, Sunbird has commissioned an independent review of the prospectivity of Block 2A which will identify a portfolio of prospects to be considered for future drilling.

Way Forward 2014

Sunbird Energy Managing Director, Mr Will Barker, said: “Since we acquired the right to a 76% interest in Ibhubesi just over 12 months ago, Sunbird has achieved a series of major project milestones to unlock the huge value of our proven reserves base.

“In 2013 we booked the maiden reserves for Ibhubesi at 540 Bcf 2P, completed a full technical and commercial feasibility study, received approval for the transfer of title and operatorship to Sunbird, received development funding from the US Trade and Development Agency and entered a gas supply MOU with Africa’s largest power generator, Eskom.

Sunbird Energy Ltd – ACN 150 956 773 Level 1, 50 Ord Street, West Perth, WA 6005 www.sunbirdenergy.com.au T: +61 (0) 8 9463 3260 F: +61 (0) 8 9462 6630

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“2014 will see us accelerate Ibhubesi toward commercialisation. We will undertake a detailed technical program covering Field Development Planning, FEED study and regulatory approvals while focusing on meeting our commercial goals of establishing project funding and partnering opportunities.

“We look forward to continuing to report the completion of key project milestones during 2014, as we advance this South African gas project of national interest and importance to commercialisation.”

About the Ibhubesi Gas Project

The Ibhubesi Gas Project is South Africa’s largest undeveloped gas field, with 1P reserves of 210 Bcf (Billion Cubic Feet) and 2P reserves of 540 Bcf. The Project is located 380km north of Cape Town in Block 2A, which is a Production Right that covers 5,000 km[2] .

The IGP is situated in the offshore Orange Basin, approximately 70 km off the coast in water depths of 250 metres.

The Project is covered by 1,770 km2 of 3D seismic and many thousands of km of 2D seismic. Over US$125 million (R1.2 billion) has been spent on exploration and appraisal of the project since 2000.

The successful development of Ibhubesi could see the replacement of diesel as the current feed stock at the Ankerlig Power Station and/or the development of a ~500MW IPP thereby assisting in meeting the Country’s growing energy needs, improving its energy security, creating a new industry and local jobs. The Ibhubesi Gas Project provides numerous additional benefits including:

• The Project is a Strategic Infrastructure Project (SIP5) under the Presidential Infrastructure Coordination Commission

• The Project will establish the first critical pipeline infrastructure in the Orange Basin providing a route to market and encourage further exploration and development

• Will provide significant revenue to the government in the form of royalties, corporate and payroll taxes and state participation

• Substantial direct and indirect job creation during construction and production phases leading to the development of local skills and enterprise

• Significant Black Economic Empowerment (BEE) and state participation in the Project with a BEE group holding (indirectly) 27% and a state holding (PetroSA) of 24%

• Balance of Trade benefits from the replacement of imported diesel, which is indexed to $US and the oil price, with a domestic gas source

• Reduction in greenhouse gas and CO2 emissions via the utilisation of gas

Competent Person Statement

The reserves and resource estimates used in this announcement were compiled by Tim Hower (Registered Professional Engineer (Colorado #9597), and member of the Society of Petroleum Engineers) of MHA Petroleum Consultants LLC and are consistent with the definitions of proved, probable, and possible hydrocarbon reserves and resources that appear in the ASX Listing Rules with effect from 1 December 2013. Mr Hower is qualified in accordance with the requirements of ASX listing rule 5.42 and has consented to the use of the reserves and resource figures in the form and context in which they appear in this announcement.

Sunbird Energy Ltd – ACN 150 956 773 Level 1, 50 Ord Street, West Perth, WA 6005 www.sunbirdenergy.com.au T: +61 (0) 8 9463 3260 F: +61 (0) 8 9462 6630

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ASX Listing Rule 5.43 Statement

Sunbird Energy Ltd declares that the reserves and resource estimates used in this announcement were announced by Sunbird Energy Ltd to the Australian Securities Exchange (ASX) on 4 June 2013 (Original Announcement) and is not aware of any new information or data that materially affects the information provided in the Original Announcement and confirms that all the material assumptions and technical parameters underpinning the estimates in the Original Announcement continue to apply and have not materially changed.

* ENDS *

For further information please visit www.sunbirdenergy.com.au or contact:

Will Barker Managing Director, Sunbird Energy Ltd Colin Hay Media Contact, PPR

Tel: +61 8 9463 3260 Tel: +61 8 9388 0944

About Sunbird Energy Ltd

Sunbird Energy Ltd is an ASX-listed (ASX :SNY ) gas explorer and developer focused on southern Africa where limited domestic gas supply and growing energy needs have created significant opportunity for the development of large scale energy projects.

Sunbird has received government approval for its acquisition of a 76% stake in the Ibhubesi Gas Project offshore of the west coast of South Africa. The transaction gives Sunbird the right to operate and develop the Ibhubesi Gas Project, South Africa’s largest undeveloped gas field.

The Ibhubesi Gas Project has multiple development opportunities including gas fired power projects to supply the high value South African energy market.

Sunbird also has a portfolio of five Coal Bed Methane (CBM) projects covering an extensive area (10,070 km[2] ) of prospective coal basins across in South Africa and Botswana. Sunbird is conducting a phased exploration program that will define the resource base and demonstrate the commercial potential of its portfolio of CBM assets, which contain a Best Estimate Gas in Place of 5.3 Tcf (trillion cubic feet).

Sunbird Energy Ltd – ACN 150 956 773 Level 1, 50 Ord Street, West Perth, WA 6005 www.sunbirdenergy.com.au T: +61 (0) 8 9463 3260 F: +61 (0) 8 9462 6630