RESOURCES & ENERGY GROUP LIMITED — Interim / Quarterly Report 2010

Jul 28, 2010

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28 July 2010

Company Announcements Office ASX Limited

ACTIVITIES REPORT FOR THE QUARTER ENDED 30 JUNE 2010

Deep Energy Limited (which is 51.85% owned by Resources & Energy Group) holds 12 exploration licences over 6,000km[2] of the ‘South Australian Heat Flow Anomaly’. There is a planned 13 hole program over the Company’s ground designed to identify the more prospective acreage. Data gathered from the program will provide an idea of comparative basement temperatures over the whole of the project area.

During the June Quarter, 3 holes on the 3 northern most licences have been drilled and wireline logs for temperature and gamma data were run following which all holes and access tracks were rehabilitated.

The holes were designated Peter1, Mark1A and Stephen1A. Temperatures of greater than 60 C were measured in Peter 1 and Mark 1A and are significant. 30 C at the depths logged is normal. It should be noted that whilst data from shallow holes are subject to multiple explanations the temperature gradients identified justify further interest and review.

Material from the core collected during drilling will be measured for thermal conductivity to assist the building of synthetic strata models and make it possible to predict the temperature at depth.

If the regional picture indicates this type of strata continues to depth, temperatures suitable for geothermal resources could exist at depths of 3km to 4km.

Quarter Ended 30 June 2010

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Figure 1: Deep Energy Tenements (SA)

Expenditure

Exploration and drilling costs incurred for the quarter were $75,000.

Richard Poole Chairman Resources & Energy Group Limited

Level 33, 52 Martin Place, Sydney NSW 2000 GPO Box 2537 Sydney NSW 2001 P: +612 9227 8900 F: +612 9227 8901

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