MITCHELL SERVICES LIMITED — Capital/Financing Update 2017

Sep 14, 2017

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 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Mitchell Services Limited (" Company ")

ABN

31 149 206 333

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	Fully paid ordinary shares
	Approximately 184,551,759 fully paid ordinary shares ("New Shares") pursuant to a non-renounceable entitlement offer ("Entitlement Offer"), as described in the announcement and investor presentation lodged with ASX on 15 September 2017. However, the exact number of the New Shares to be issued pursuant to the Entitlement Offer is not known at the date of this Appendix 3B as it remains subject to reconciliation of shareholder entitlements and the effect of rounding.

• See chapter 19 for defined terms.

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3 Principal terms of the The New Shares will have the same terms as +securities (e.g. if options, existing fully paid ordinary shares in the exercise price and expiry Company. date; if partly paid +securities, the amount outstanding and due dates for payment; if[+] convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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4 Do the +securities rank Yes equally in all respects from the +issue date 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

A$0.034 per share

6 Purpose of the issue The net proceeds from the Entitlement (If issued as consideration for Offer will be used to fund preparation and the acquisition of assets, mobilisation of unutilised rigs and clearly identify those assets) associated equipment, procurement of consumables and recruitment of personnel to fulfil current and expected contract pipeline requirements and additional working capital.

Please refer to the investor presentation lodged by the Company with the ASX on 15 September 2017.

6a Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B , and comply with section 6i

Yes

• See chapter 19 for defined terms.

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6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements	26 October 2016
	Nil
	Nil
	Nil
	Approximately 184,551,759 New Shares will be issued pursuant to the Entitlement Offer.
	N/A
	N/A
	Capacity remaining under Listing Rule 7.1 is 221,462,110. Capacity remaining under Listing Rule 7.1A is 147,641,407.

• See chapter 19 for defined terms.

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• 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.

16 October 2017.

• 8 Number and +class of all +securities quoted on ASX ( including the[+] securities in section 2 if applicable)

Number

+Class

After completion of the Entitlement Offer there will be approximately 1,734,965,831 fully paid ordinary shares on issue in the Company. This is based on the 1,476,414,072 fully paid ordinary shares currently on issue in the Company as at the date of the Appendix 3B, the issue of new shares pursuant to the placement as announced on 15 September 2017 and to be issued on or around 21 September 2017 and approximately 184,551,759 New Shares proposed to be issued under the Entitlement Offer, subject to the reconciliation of shareholder entitlements and rounding.

Fully paid ordinary shares.

• See chapter 19 for defined terms.

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9 Number and+class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	16,362,395 11,353,565 3,410,515	Unquoted management options with an exercise price of $0.0395 per option, subject to vesting conditions Unquoted management options with an exercise price of $0.0539 per option, subject to vesting conditions Unquoted rights to receive ordinary shares subject to vestingconditions
	The Company's dividend policy will apply to the New Shares in the same way it applies to existing fully paid ordinary shares in the Company.

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non-renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates	No
	Non-renounceable
	1 New Share for every 8 shares held as at the record date
	Fully paid ordinary shares

• See chapter 19 for defined terms.

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15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	7.00pm (Brisbane time), 20 September 2017
	No
	Where fractions arise in the calculation of shareholder entitlements under the Entitlement Offer, they will be rounded up to the next number of New Shares.
	All countries other than Australia and New Zealand.
	The closing date for acceptances under the Entitlement Offer is 9 October 2017.

• See chapter 19 for defined terms.

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20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled	Morgans Corporate Limited ("Morgans")
	A management fee of 1.5% of the amount equal to the issue price for each New Share multiplied by the number of New Shares (the "Proceeds"). An underwriting fee equal to 3.50% of the Proceeds.
	N/A
	N/A
	A handling fee of 1.5% of the application amount (plus GST) of New Shares (subject to a maximum handling fee of $200) ("Broker Handling Fee") under the Entitlement Offer will be paid by Morgans to stockbrokers (being those entities being recognised as full service brokers or non- advisory brokers by ASX) who submit a valid claim for a Broker Handling Fee on successful applications under the Entitlement Offer.
	N/A
	No prospectus is being prepared in relation to the Entitlement Offer. An Offer Booklet with a personalised entitlement and acceptance form is to be dispatched to eligible shareholders on or before 25 September 2017.

• See chapter 19 for defined terms.

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27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_ through a broker? 31 How do security holders sell _part_of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date

N/A Please see the response to item 7 above.

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

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of+securities for which+quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date 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 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security)	N/A
	N/A
	N/A
	N/A
	Number	+Class

• See chapter 19 for defined terms.

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42 Number and[+] class of all N/A +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

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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 is not available now, we 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: 15 September 2017 (Company secretary)

Print name: Greg Switala

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

• Insert number of fully paid[+] ordinary 1,476,414,072 securities on issue 12 months before the +issue date or date of agreement to issue Add the following: Nil • Number of fully paid[+] ordinary securities issued in that 12 month period under an exception in rule 7.2

• • Number of fully paid[+] ordinary securities issued in that 12 month period with shareholder approval

• • Number of partly paid[+] ordinary securities that became fully paid in that 12 month period

• Note: • Include only ordinary securities here – other classes of equity securities cannot be added

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• Subtract the number of fully paid[+] ordinary Nil securities cancelled during that 12 month period “A” 1,476,414,072

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

• “B” 0.15 [Note: this value cannot be changed]

• Multiply “A” by 0.15 221,462,110 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of[+] equity securities issued or agreed to be issued in that 12 month period not counting those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4

• Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C” Nil

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

placement capacity under rule 7.1
“A” x 0.15	221,462,110
Note: number must be same as shown in
Step 2
Subtract“C”	Nil
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	221,462,110
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 1,476,414,072 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 147,641,407

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A

Nil

Notes:

• This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• It may be useful to set out issues of securities on different dates as separate line items

• “E” Nil

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	147,641,407
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	147,641,407 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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