KEY PETROLEUM LIMITED — Capital/Financing Update 2008

Apr 1, 2008

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ACN 120 580 618

Level 1, 14 Outram Street West Perth Western Australia 6005 Tel. + 61 8 9327 3500 Fax: + 61 8 9327 3510 e-mail: info@keypetroleum.com

2 April 2008

The Manager Companies Announcement Office Australian Securities Exchange Limited Level 10, 20 Bridge Street SYDNEY NSW 2000

EXPIRY OF ESCROW PERIOD

In accordance with listing rule 3.10A, Key Petroleum Ltd wishes to advise that the escrow period for 2,000,000 ordinary shares will expire on 17 April 2008.

Consequently, these ordinary shares will cease to be subject to escrow after this date.

The Company confirms the escrow provisions remaining in force from that date are as follows and relate to Promoters, Directors and or Director related parties.

Securities restricted for 24 months from date of quotation

Securities	Restriction Period	Restriction Period Expiring
9,028,333 Fully Paid Ordinary Shares	24 months from date of quotation	26 April 2009
2,000,000 Fully Paid Ordinary Shares	24 months from date of quotation	26 April 2009

If you require any further information please have no hesitation to contact the undersigned.

Yours faithfully

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John Ribbons Company Secretary

Appendix 3B New issue announcement

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 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

Key Petroleum Limited

ABN

50 120 580 618

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 (eg, 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)	Ordinary Shares
	2,000,000

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 4 Do the[+] securities rank equally in all Yes respects from the date of allotment 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 N/A 6 Purpose of the issue Release from escrow (If issued as consideration for the acquisition of assets, clearly identify those assets)

• 7 Dates of entering[+] securities into 17 April 2008 uncertificated holdings or despatch of certificates Number ~~+~~ Class

• 8 Number and +class of all 74,971,672 Ordinary Shares +securities quoted on ASX 44,000,002 35 cent options ( including the securities in clause expiring on 31 March 2 if applicable) 2009

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Number +Class 9 Number and +class of all 11,028,333 Ordinary Shares +securities not quoted on ASX 225,000 35 cent options ( including the securities in clause expiring on 31 March 2 if applicable) 2009 10 Dividend policy (in the case of a N/A trust, distribution policy) on the increased capital (interests)

Part 2 - DELETED – NOT APPLICABLE

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

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

Quotation agreement

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 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.

• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the[+] securities to be quoted, it has been provided 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 not available now, 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.

Sign here: Date: 2 April 2008 (Company secretary)

Print name: John Ribbons

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• See chapter 19 for defined terms.

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