STRIKE ENERGY LIMITED — AGM Information 2016

Nov 10, 2016

ASX Announcement

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11 November 2016

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The Company Announcement Officer ASX Ltd via electronic lodgement

CHAIRMAN’S ADDRESS AND AGM PRESENTATION

Please find attached the following items which will be presented and discussed as part of the Annual General Meeting of the Company to be held at 9.00 am today (EST) in Sydney.

• Chairman’s address; and

• Managing Director’s presentation

Yours faithfully

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SEAN MCGUINNESS

Chief Financial Officer & Company Secretary

Strike Energy Limited ABN 59 078 012 745 www.strikeenergy.com.au

120B Underwood Street, Paddington NSW 2021

P: +61 2 9195 5600 E: strike@strikeenergy.com.au

STRIKE ENERGY LIMITED

CHAIRMAN’S ADDRESS ANNUAL GENERAL MEETING

11 NOVEMBER 2016

Ladies and Gentlemen,

The 2016 financial year has been another year of significant progress for our Company, with the near term commercialisation of our world scale gas resource in the Southern Cooper Basin proceeding with steady resolution.

We are confident that our production testing is on track to unlock the potential of this significant resource to supply the gas starved east coast energy and manufacturing markets. We are extremely fortunate that our gas project has the best address in the most prospective gas market globally.

The Southern Cooper Basin Gas Project is ideally positioned under the newly upgraded, bi‐directional Moomba to Adelaide Pipeline System to deliver competitively priced gas into all high demand sectors of the east coast gas market. As predicted, the successful commissioning and outperformance of the LNG export trains at Curtis Island has had a seismic impact on gas pricing dynamics and our shareholders will have noted the daily media commentary on South Australia’s surging gas and electricity prices. There is a desperate need to find new sources of gas for existing gas fired base load power generators to stabilise an energy market that is suffering from the progressive withdrawal of old and inefficient generation assets in that State. It is extremely rare to have a globally significant resource that is close to markets in a supportive jurisdiction. The fact that we are also enjoying a price environment that has had a massive structural shift in our favour both as to the cost of doing business and the price that we can expect to receive for our product, further promote the auspicious outlook for our company.

During the year we successfully increased gas flow rates at our test wells and confirmed the process required to deliver commercial success: reduce reservoir pressure  produce gas; reduce reservoir pressure further  produce more gas.

We know the gas is there, we can produce it and that the reservoir has excellent productivity. Our focus is therefore on building and maintaining water production capacity, to deliver increased gas flows.

The construction, commissioning and efficient operation of wells and pump equipment in a remote environment and development of production management skills all within a constrained budget have been a real challenge over the past twelve months. Our progress has been slower than I expected but we have a development pathway that is very clearly defined.

As announced today my fellow Directors and I are pleased to offer Shareholders the opportunity to participate in a fully underwritten 1 for 14 non‐renounceable rights issue to raise $4.5m before costs. Directors, Simon Ashton, Brendan Ostwald and Jody Rowe have committed to take up all or part of their respective entitlements. In addition, David Baker and certain investment funds connected to myself have entered into sub‐underwriting agreements with the Underwriter to partially sub‐underwrite the Rights Issue. The combined sub‐underwriting commitment is up to $1,524,375 or approximately 34% of the Rights Issue, and may be partially satisfied by subscribing to the respective entitlements under the Rights Issue.

If our efforts are successful, and I believe they will be, our Southern Cooper Basin Gas Project can deliver substantial rewards to our shareholders.

I am grateful for the contributions of my fellow Directors, the executive team, staff and contractors and their efforts over the past year.

I would finally like to acknowledge the Company’s shareholders and to thank you for your continued support.

Mark Carnegie

Chairman – Strike Energy Limited

STRIKE ENERGY LIMITED

2016 ANNUAL GENERAL MEETING Sydney, 11 November 2016 Managing Director’s Presentation

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2016 AGM: Strike Energy Limited

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2016 Review

Eastern Australian Gas Market

Southern Cooper Basin Gas Project Update Forward Plan - Funding and Objectives

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Strike Energy Limited - 2016 AGM Presentation

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2016 Ke Hi hli hts and Achievements y g g

Cooper Basin

• Multiple desorption events observed during FY2016

• Major facility and pumping upgrade successfully completed

• Four wells now contributing to de-watering at Klebb pilot

• Demonstration facility concept advanced

• On track to provide proof of concept for development

Finance and Commercial

• $6.7m placement completed in April 2016 to fund ongoing PEL 96 exploration and appraisal program

• Completed the year with $7.2 million in cash with a post balance date receipt of $6.3 million from the ATO under its R&D eligible rebate scheme

United States

• Divestment of US assets proceeding

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Strike Energy Limited - 2016 AGM Presentation

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EASTERN AUSTRALIAN GAS MARKET

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Eastern Australian Gas Market: Gas prices trending higher

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Market gas pricing

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Adelaide STTM Gas price
30
Gas price spike a
contributing factor
to high SA electricity
spot prices
25
June to August
2016, three
month average
20 $10.59
Compare with
2015 av. $4.58
15
10
5
June 2016 August 2016
Gas price A$/GJ
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Industry response

Collective industry intent to facilitate new gas supply into the Eastern Australian gas market.

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Government response

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Energy market changes to increase competition and drive down costs

Jay Weatherill September 8, 2016

“…The Government will also commit $24million towards a program to incentivise companies to extract more gas and supply it to the local market.

This will increase the supply of gas into the energy market, with South Australian energy generators, industry and households having first offering…”

Increasing gas prices have created the impetus for policy and industry initiatives to promote affordable new sources of gas supply

Strike Energy Limited - 2016 AGM Presentation

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Eastern Australian Gas Market: Summary

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Gas demand ~40 Tcf over twenty years; LNG the dominant gas buyer Supply tightening Supply tightness emerging and likely to worsen by 2020

Gas prices Domestic gas prices already reflecting changing market dynamics Cost Curve Eastern States gas market cost curve is very steep Stakeholder response SA Government and industry promoting new affordable supply options

New gas supply is urgently needed to avoid further demand destruction that could result in long-term economic damage

Strike Energy Limited - 2016 AGM Presentation

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SOUTHERN COOPER BASIN GAS PROJECT

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Eastern Australian Gas Market: Substantial Opportunity

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Prospective Resource [+] Contingent 2C Moomba
Resource
PEL 94 2,702 Bcf^
PEL 95 3,817 Bcf^ Marsden 1
PEL 96 4,492 Bcf
Total 11,011 Bcf
PEL 94 PEL 95
PEL 96 Phase One Area 1,123 Bcf 104 Bcf Davenport 1 STX 35% STX 50% Mount Isa
Le Chiffre 1 Gladstone
Klebb production
testing area
Moomba
Brisbane
PELA 640 PEL 96
STX 100% STX 66.67%
0 20 Adelaide Sydney
Kilometers
Melbourne
PEL 96 Phase One Area Strike Phase One Area wells drilled
Gas Pipeline Strike Wells Drilled
Oil Pipeline PEL 96 Offset Wells
Hobart
Strzelecki Track PEL 96 and PELA – STX Operated
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• Mean estimate (net to Strike determined on a probalistic basis) per ASX announcement dated 19 Feb 2014 and adjusted for announced

contingent resource estimate per ASX announcement dated 27 April 2015.

^ Mean estimate (net to Strike determined on a probalistic basis) per ASX announcement dated 19 September 2012.

• The estimated quantities of petroleum that may potentially be recovered by the application of a future development project relate to

undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially movable hydrocarbons.

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PEL Net STX Acres
PEL 94 77,925
PEL 95 160,248
PEL 96 443,880
PELA 640 850,786
Total 1,532,839
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Strike Energy Limited - 2016 AGM Presentation

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Southern Cooper Basin Gas Project: Status

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Resource scale Reservoir

World class onshore gas resource – ideally located.

Favourable reservoir characteristics provide high confidence in future project scale and productivity.

Field operations Gas offtake Team Strategy

Pilot Production Project in PEL96 (STX 66.67% and operator) with 5 test wells in thick extensive coals at the Le Chiffre and Klebb locations. Highly competent and experienced operations team. Continuing to increase productivity, efficiency and on-line field performance.

Gas offtake agreements in place with Orica, Orora and Brickworks.

Building organisational capability to deliver on key objectives.

Well defined commercial development strategy.

Project positioned to deliver on near-term objectives

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Proof of Conce t p

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Proof of concept will be demonstration of sustained gas flows somewhat above what we have achieved already.

Klebb production testing has repeatedly shown the ability to initiate gas flows:

• 1 Continuous de-watering periods are required to sufficiently reduce the reservoir pressure and initiate gas flows from the area being drained.

• 2 Historically, Strike has achieved gas flows, but this has been compromised by mechanical issues and horsepower limitations.

• 3 An extended shut-in for upgrades stalled the gas desorption process. However the upgrades address these limitations.

• 4 The well’s drainage area expands and the dewatering effort is somewhat increased after the extended shut-in.

• 5 Increasing rates and consistency, with full redundancy, minimises the expected period to re-establish gas desorption.

Operational reliability improved to ensure that 3 & 4 above are not repeated.

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1 4
5
3
2
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Success comes from continuous dewatering

Strike Energy Limited - 2016 AGM Presentation

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Southern Cooper Basin Gas Project: Planned activities

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2016 2017 H1

Objectives

Pre-development planning and engineering Grant of Production Retention Licence SA Government $24 million Pace Gas Grant Program

Position project in 2017 H1 for initial development FID Achieve first sales gas in 2018

Create additional project funding options that support ‘non-dilutive’ commercialisation

Government initiative to award up to $6 million for those projects targeting first gas prior to year ending 2019

Re-frac K1 (Vu Upper) Add Vu Lower zone Procurement of additional rod pumps xxx Klebb pilot dewatering Building gas flows

Increase reservoir volume that can be booked as reserves

Provide optional deployment capability, post-commercial flows, to continue building gas rates

Demonstrate project commerciality

Strike Energy Limited - 2016 AGM Presentation

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Southern Cooper Basin Gas Project: Near-term value opportunity

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Moving to commerciality and booking first project reserves are the key catalysts that will drive near-term value. Initial development activities within the proposed new Petroleum Retention Licence (PRL) has the potential to position the project to capture significant value by providing critical new gas supply to domestic markets.

Data sharing discussions with industry participants being progressed by Strike to stimulate appraisal of additional multi-Tcf acreage in Patchawarra coals.

PRL – focus of development activities

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PRL
~10% of PEL96
acreage.
Includes Klebb
pilot area
PEL 96
PELA 640
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New source of affordable gas supply for east coast domestic customers

Provides funding options for initial development

Critical new gas supply source in a market negatively affected by material reserve downgrades and scarcity of new supply options

Significant gas supply opportunity from within PRL area

New PRL the focus of initial development activities to supply domestic gas customers

Strike Energy Limited - 2016 AGM Presentation

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Southern Cooper Basin Gas Project: Medium-term option value

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Grant of the proposed new PRL, together with continued gas market tightness, will highlight the considerable option value available from the underdeveloped acreage across the SCBGP. This acreage can be progressively delineated and developed.

This is a low cost value catalyst that will facilitate large scale commercialisation.

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LNG JV’s
third party supply
opportunity
Increasing tightness in
domestic gas market
Successful development
of new PRL
PELA 640 PEL 96 Minimise shareholder dilution
Time +2020
Option value
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Strike Energy Limited - 2016 AGM Presentation

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FORWARD PLAN - FUNDING & OBJECTIVES

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Raising $4.5m to Fund Operations

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Strike is conducting a $4.5 m Pro-Rata Non-Renounceable Rights Offer (“Offer”)

• 1 New share for every fourteen (14) Strike shares held.

• $0.07 per New Strike Share.

• Total raising up to $ 4.5 m (before transaction costs).

Equity funds raised to be used to fund in part the following activities

• Continue field operations including flow testing of the Klebb pilot wells to achieve commercial flows.

• Conduct development planning activities including well planning and demonstration gas processing facility.

• Engage with industry partners to fund initial development within a proposed Petroleum Retention Licence (PRL), to be carved out of PEL 96.

• The costs associated with the Offer.

The Offer is fully underwritten

• Taylor Collison underwriting the offer in full.

• Sub-underwriting support from largest shareholder (MH Carnegie & Co) and Managing Director.

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Southern Cooper Basin Gas Project: Strike’s Strategic Timeline

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Strategic objectives Timing
Beyond 2020
Expanded resource delineation across
STX acreage
Cost competitive third
party gas supply for
LNG exporters
2020
2018
Increasing Production
FID
New source of
affordable gas supply Initial Development - PRL Full PRL Development
for east coast domestic
customers
PRL Development
Funding
Current
PEL 96
Appraisal/Development
Planning
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Strike is positioning the Southern Cooper Gas Project to be a key resource in rebalancing the South Australian electricity market and the East Australian gas market

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Important Notice

This presentation does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment.

Reliance should not be placed on the information or opinions contained in this presentation. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any decision to purchase or subscribe for any shares in Strike Energy Limited should only be made after making independent enquiries and seeking appropriate financial advice.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, Strike Energy Limited and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim liability (including without limitation, any liability arising from fault or negligence) for any loss arising from any use of or reliance on this presentation or its contents or otherwise arising in connection with it.

Statements contained in this presentation, including but not limited to those regarding the possible or assumed future costs, performance, dividends, returns, production levels or rates, oil and gas prices, reserves, potential growth of Strike Energy Limited, industry growth or other projections and any estimated company earnings are or may be forward looking statements.

Such statements relate to future events and expectations and as such involve known and unknown risk and uncertainties, many of which are outside the control of Strike Energy Limited. Actual results, actions and developments may differ materially from those expressed or implied by the statements in this presentation.

Subject to any continuing obligations under applicable law and the Listing Rules of ASX Limited, Strike Energy Limited does not undertake any obligation to publicly update or revise any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such statement is based.

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DeGolyer and MacNaughton was engaged by Strike to undertake an Independent Review of the gas resource in PEL 96 based on the data and information acquired to date by Strike from the drilling and flow testing programs carried out at the Le Chiffre 1 and Klebb 1, Klebb 2 and Klebb 3 wells.

DeGolyer and MacNaughton has estimated a contingent gas resource on a probalistic basis for the initial zones that have been flow tested within the Le Chiffre 1 and Klebb 1 wells. As these zones only represent a portion of the net coal encountered at these locations, successful flow testing of additional zones will enable an increased contingent resource to be booked.

The table below summarises the Contingent Resource Estimates.

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Contingent Gas Resource Estimates – PEL 96 [1]
Well 1C [2] 2C [2] 3C [2]
Productive area (acres) 2,171 2,938 3,931
Le Chiffre 1 – Patchawarra Vu 62.9 93.2 132.4
Upper and Vu Lower zones (bcf)
Klebb 1 – Patchawarra Vu Upper 42.1 62.2 93.3
zone 9 (bcf)
Total Gross Contingent Resource 105.00 155.4 225.7
(bcf)
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1. Contingent Resource Estimates have been prepared in accordance with the Petroleum Resources Management System “PRMS”. Contingent Resource Estimates are those quantities of gas (produced gas less carbon dioxide and fuel gas) that are recoverable from known accumulations but which are not yet considered commercially recoverable.

2. 1C, 2C and 3C estimates in this table are P90, P50 and P10 respectively for each well and have been summed arithmetically

3. Net to Strike’s 66.7% interest in PEL 96

Contingent Resource Estimate

Strike Energy Limited - 2016 AGM Presentation

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Important Notice: continued

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Competent Persons Statement

The information in this presentation that relates to the PEL 96, PEL 95 and PEL 94 contingent resources estimate has been taken from the independent reports as prepared by DeGolyer and MacNaughton, a leading independent international petroleum industry consultancy firm, and has been reviewed by Mr Chris Thompson (Chief Operating Officer of the Company). All other reported resource and or reserves information in this presentation is based on, and fairly represents, information prepared by, or under the supervision of Mr Thompson.

Mr Thompson holds a Graduate Diploma in Reservoir Evaluation and Management and Bachelor of Science Degree in Geology. He is a member of the Society of Petroleum Engineers and has worked in the petroleum industry as a practicing reservoir engineer for over 20 years. Mr Thompson is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion in this release of the resource and or reserves information in the form and context in which that information is presented.

About DeGolyer and MacNaughton

The information contained in this release pertaining to the PEL 96 contingent resources estimate is based on, and fairly represents, information prepared under the supervision of Mr Paul Szatkowski, Senior Vice President of DeGolyer and MacNaughton. Mr Szatkowski holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M, has in excess of 40 years of relevant experience in the estimation of reserves and contingent resources, and is a member of the International Society of Petroleum Engineers and the American Association of Petroleum Geologists. Mr Szatkowski is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion of the contingent resource estimate related information in the form and context in which that information is presented.

While not yet commercial, these results confirm that the coals will be capable of substantial gas production rates and highly economic per well recoveries as the reservoir pressure is reduced at increasing distances from the wells.

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Strike Energy Limited - 2016 AGM Presentation

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