KEY PETROLEUM LIMITED — Capital/Financing Update 2012

Mar 25, 2012

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ACN 120 580 618

Suite 7 154 Hampden Road NEDLANDS Western Australia 6009 Tel. +61 8 6389 0322 Fax: +61 8 9389 0697 info@keypetroleum.com www.keypetroleum.com

26 March 2012

The Manager The Australian Securities Exchange The Company Announcements Office Level 4 20 Bridge Street SYDNEY NSW 2000

Dear Sir

RE: KEY PETROLEUM LIMITED APPENDIX 3B – MARCH 2012 PLACEMENT

Please find enclosed the Key Petroleum Limited Appendix 3B Notice with details of the Placement for 40,000,000 New Shares at an issue price of $0.025 (Two and a half cents) per New Share raising a total of $1,000,000 before the Placement expenses.

The New Shares will be allotted as follows:

Allotment today, 26 March 2012 100,000,000

The March 2012 is now closed and no other announcements will be made in this regard.

Yours faithfully

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J L CRAIG MARSHALL CHAIRMAN KEY PETROLEUM LIMITED

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, 24/10/2005.

Name of entity

KEY PETROLEUM LIMITED

ABN

58 137 176 393

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	Shares.
	issued
2	Number of+securities issued or to	40,000,000 Fully Paid Ordinary Shares.
	be issued (if known) or maximum
	number which may be issued
3	Principal terms of the+securities (eg,	The Ordinary Shares issued will rank equally to
	if options, exercise price and expiry	the existing and quoted fully paid Ordinary
	date; if partly paid+securities, the	Shares.
	amount outstanding and due dates
	forpayment;if+convertible
	securities, the conversion price and
	dates for conversion)

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 1

Appendix 3B New issue announcement

4Do the+securities rank equally in allrespects from the date of allotmentwith an existing+class of quoted+securities?If the additional securities do notrank equally, please state: the date from which they do theextenttowhichtheyparticipate for the next dividend,(inthecaseofatrust,distribution) or interest payment the extent to which they do notrank equally, other than inrelation to the next dividend,distribution or interest payment5Issue price or consideration6Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)7Dates of entering+securities intouncertificated holdings or despatchof certificates8Numberand+classofall+securitiesquotedonASX(_including_the securities in clause 2if applicable)9Numberand+classofall+securities not quoted on ASX(_including_the securities in clause 2if applicable)	Yes.	Yes.
	$0.025 (Two and a half cents) per new Share.
	To provide the Company with additional workingcapital including exploration expenditure in theCanning Basin, Western Australia.
	26 March 2012.
	Number	+Class
	308,072,707	Fully paid ordinary shares.
	Number	+Class

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 2

Appendix 3B New issue announcement

10 Dividend policy (in the case of a Not Applicable trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

Questions 11 to 33 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

Questions 35 to 37 - Not Applicable

Entities that have ticked box 34(b)

Questions 38 to 42 - Not Applicable

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 3

Appendix 3B New issue announcement

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 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.

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Sign here: .......................................................... Date: 26 March 2012

(Managing Director)

Print name: J L Craig Marshall

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• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 4