STRIKE ENERGY LIMITED — AGM Information 2017

Nov 15, 2017

ASX Announcement

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16 November 2017

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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 to be presented at Strike Energy Limited’s Annual General Meeting to be held at 11.00 am today in Adelaide.

• Chairman’s address; and

• Managing Director and Chief Executive Officer’s 2017 Annual General Meeting presentation

Yours faithfully

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Justin Ferravant

Chief Financial Officer & Company Secretary

1/31‐35 George Street, Thebarton SA 5031

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

P: +61 8 7099 7464 E: strike@strikeenergy.com.au

STRIKE ENERGY LIMITED

CHAIRMAN’S ADDRESS ANNUAL GENERAL MEETING

16 NOVEMBER 2017

Ladies and Gentlemen,

Following significant changes to the board and management of Strike during 2017, we believe that the company now has the requisite expertise to commercialise our major resource.

Constrained supply and rising demand in the east coast gas market have created a highly prospective environment for Strike. Federal and State Government concerns around energy security have resulted in the threat of legislative imposts regarding the allocation of exports but ironically the exploration moratoria which could ease the problem, are still in place.

This dynamic highlights the fact that the Southern Cooper Basin Gas Project (SCBGP) is one of only a handful of credible gas opportunities in the east coast energy system that can transform the supply‐side equation. Strike is rapidly progressing its major project to enable gas to be an affordable, abundant and reliable source of energy.

Earlier in the year, Strike simplified its portfolio by selling its United States (US) assets. This has led to a renewed focus on the SCBGP and Strike’s role as an industry leader in deep coal seam gas in Australia.

The SCBGP is a premier upstream project in a gas‐starved landscape. Its value driven by the resource’s location and density. The appeal of the SCBGP is further cemented by the pro‐ development legislative environment in South Australia and its close proximity to major infrastructure for both processing of raw gas and transport to market.

Earlier this year, Strike was awarded $2 million by the South Australian Government under Round 1 of its PACE Program. This funding has enabled us to achieve our Technical Success milestone more rapidly than would have otherwise been the case. We are most grateful for this expression of support We are hoping that the Government will appreciate the strategic importance of our asset when assessing the next round of awardees.

Over the balance of this year, Strike looks forward to achieving our long‐held ambition of commercialising our strategically valuable resource. The Jaws Project will benefit from the reservoir knowledge gained from the wells we have drilled to date as well as implementation of the best US onshore technologies. Our aim is to book a reserve and trigger a Final Investment Decision on an initial 50 TJ/day of production during calendar 2018.

I acknowledge with appreciation, the hard work and dedication of the entire Strike team as well as our contractors during this period of change and renewal.

STRIKE ENERGY LIMITED

To you our loyal shareholders, I extend a particular thanks for your patience and support. Rest assured that my fellow directors and I remain totally focussed on delivering value to you.

John Poynton AO

Chairman – Strike Energy Limited

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STRIKE ENERGY LIMITED 2017 ANNUAL GENERAL MEETING

Adelaide, 16 November 2017

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Adelaide, 16 November 2017 Managing Director’s Presentation

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2
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Strategic Partnerships

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Southern Cooper Basin Gas Project

Strike’s SCBGP is one of the largest accessible undeveloped onshore East Australian gas resources

• The SCBGP is a premium investment in the East Coast gas thematic, which is driven by:

• External validation of the prolific and producible nature of the resource (4+ TCF in PEL96)

• High class resource density (8.55 BCF/ km² in VU Upper alone)

• Favourable long term price environment ($8-12 GJ)

• Top quartile cost of supply of greenfield volumes

• Proximity to major infrastructure (Moomba to Adelaide Pipeline and Moomba Gas Plant)

• Pro-development and supportive legislative environment in S.A.

• Minimal non-technical risk

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Flare at K3 August
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• Resource density is raw

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Key highlights 2017

Technical Success

• Strike declared Technical Success and the producibility of the Vu Upper coal seam in the Klebb area. Gas content of the Vu Upper coal was defined at 6.1 – 6.0m3/t.

Continuous Operations

• Over 150 days of continues operations without major disruption. One of Strike’s longest and sustained periods of gas production.

Orica Gas Sales Agreement

• Strike negotiated a revised gas sales agreement for 64PJ at improved terms subject to its Phase 1 FID.

• Orica agreed to extend the repayment date of the $2.5 million loan from 2018 to 2021.

Jaws Project

• Strike has sited, designed and begun procurement for Jaws-1

• Strike successfully secured $9.1 million following an oversubscribed capital raising event that, together with R&D incentives, underpins the drilling and completion of Jaws 1 Vertical & Horizontal wells.

Corporate & Organisation

• Relocated Strike head office to Adelaide supported by a $0.99 million grant from SA Government Economic Attraction Fund.

• Refreshed Board of Directors & Management team

• US assets divested in Q1/2017

• PACE Round 1 grant of $2 million

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K2 October 2017
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Gas prices 2017

Quarterly Gas Price AU $ per Gigajoule

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$10
$8
$6
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Annual Weather related
price depression
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Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct - 17 LNG Only

Adelaide Brisbane Sydney LNG Japan Spot

This figure shows average daily ex ante gas prices by quarter for each STTM hub Source: AER website, AMEO

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 Recent Australian Domestic Gas Security Mechanism threats have seen LNG producers curtail exports and divert agreed volumes back into domestic market.

 LNG prices have reached 10 month highs of US$9.35 per mmBtu (or AU$11.49 per GJ) and may see liquefaction companies attempt to capture favourable market conditions in the medium term.

 Long term major new supplies are the only lever that can guarantee a sustainable price reduction for East Coast gas prices.

LNG Price: Statistics from the Ministry of Economy, Trade & Industry - Japan

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Supply side

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Net Pay vs Depth for Coal Seam Gas
Projects in Appraisal & Development
500
STX: (PEL96)
A league of its own
400
STX: (Other)
300
STO: Narrabri
200
SXY: Western Surat Gas Project
BLU: Blue Energy
100
GLL: Glenaras Gas Project
COI: Mahalo Gas Project
0
0 300 600 900 1,200 1,500 1,800 2,100
Depth m
Net Pay (Thickness x Gas Content)
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Galilee Basin Cooper Basin Gunnedah Basin Bowen Basin Surat Basin = Size (PJ; Reserve & Resource)

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• Very few Final Investment Decisions on new projects to supply into East Coast during 2017.

• COE: Sole Gas Project (24 PJ’s pa) the most material but still some years away.

• Northern Territory & Victoria continues to uphold hydraulic fracturing bans.

• Victoria also maintains a moratorium on all onshore drilling until 2020 and a ban on CSG.

• Land access and environmental issues continue to impede development of new gas projects in New South Wales.

• Political activism in Queensland to reduce drilling in South West.

Strike’s Southern Cooper Basin Gas Project has unrestricted access to its entire resource

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Strike rimed to influence east coast ener market p gy

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3 world scale To LNG Markets Major infrastructure
Upstream thick coal seams with significant
Moomba
spare capacity
Gas Plant
Vm3 Upside 15m
Moomba
Gas Plant 450 TJ/d
8.55 BCF/ km² [††] To Sydney Moomba to
Vu Upper 35m Adelaide
PEL 95 Pipeline 237 TJ/d
373km² STX 50%
Vu Lower Upside 15m PEL 94
STX 35% Mount Isa
Gladstone
Strike has Moomba
Brisbane
access to 11 PELA 640 PEL 96
Klebb Wells & Facilities
TCF [†] of STX 100% STX 66.67%
Le Chiffre Well Pilot
Prospective
Resource
0 20 Adelaide Sydney
N
Kilometers
To Adelaide
Melbourne
Huge export
Contingent
Deep CSG Participants Resource Prospective Resource † commitments with
Permits (denotes operatorship) (2C net to STX) (net to STX) Major Domestic Market Hobart looming deliverability
PEL96 Strike Energy 66.67% 103 BCF 4,492 BCF crisis Gladstone LNG
Adelaide Plants
PEL94 Strike Energy 35% - 2,417 BCF 1600 PJ/pa
80 PJ/pa
Upstream Feed
PEL95 Strike Energy 50% - 4,538 BCF Gas Shortage
Shortage
CH4
PELA 640 Strike Energy 100% - - 20 - 40 PJ pa 20%
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~~†The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) 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 moveable hydrocarbons. Prospective Resource shows Recoverable sales gas, net to Strike as of 1 February 2014. ††Resource Density of 8.55BCF / km2 is Raw Gas

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Additional in redients for success g

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Geomechanical Studies Affordable Advanced Well Design Commercial Pilot

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Significant Reserve

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PEL96 Seismic
Vu Upper
32m Coal
Vu Lower
1 km 16m Coal
Klebb 2
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Fracture Permeability
Azimuths Measurements
Gas Desorption Methane
Events Isotherms
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Jaws ro ress p g

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Conceptualised
Sited
Designed
Long Leads
Procured
Studied Funded
Modelled
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“Funded for drilling and stimulation of Jaws-1 wills with R&D incentives

Dee CSG Path to Market - Midstream Conce t Studies p p

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Moomba Concept 1: Pipe Gas to Moomba Gas Plant
Considerations
 Infrastructure: How much pre-treatment?
 Route: Daralingie or Moomba (along MAPS)?
Daralingie  Size of pipeline and compression?
Concept 2: Onsite Treatment & MAPS
Considerations
 Size of Processing and Scalability?
 Technology Selection?
 Speed & Schedule? MAPS: Moomba to
Adelaide Pipeline System
PEL95 Moomba to Adelaide Bi-
PEL94
Directional Pipeline
Jaws
PELA640 Jaws
PEL96
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Processing Infrastructure

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Operated License Non-Operated License

Pipeline Route

Building blocks required for FID

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Phase 1 FID – 50TJ /day

Commercial Gas Sales Agreements

Path to Market

Successful renegotiation of Orica contract allows for certainty of a commercial price Major existing infrastructure already in place.

Development Concept

Commercial Reserve

Major Resource

Decision on Concept select, targeted for Q1/2018 Achieved via the Jaws Project and application of advanced well design. Target 2018 Sufficient resource has been delineated in the Klebb to Le Chiffre areas to underpin a Phase 1 50TJ/d concept

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*All timelines are indicative and subject long lead and rig procurement, funding, successful execution of Jaws, and reservoir performance metrics

Project Timeline – All major programs on track

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	2017 2018 2019
Klebb Kleb	Production Test VU Lower Gas Content b
Resource /Reserves	Book Reserves & Associated CR VU lower CR Addition Pilot Well C
Jaws 1 - Horizontal Jaws 1 - Vertical	Gas Dewater Execute Procure Coring Results Execute Procure
Phase 1 50TJ/d	Execute Concept Studies Select FEED Definition

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*All timelines are indicative and subject long lead and rig procurement, funding, successful execution of Jaws, and reservoir performance metrics

Investment in Gas is a Social Imperative

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Natural gas should be the cornerstone to facilitate Australia’s energy transition to a low carbon world.

• Tuesday (14[th] Nov) the East Coast was producing 63% of its electricity from black and brown coal.

• Brown coal has a 72% higher CO2 intensity than that of gas for power generation and black coal is 61% higher.

• The National Energy Guarantee will not be realisable without a significant increase in natural gas exploration and development.

• Strike must succeed to make gas more affordable, abundant and reliable which is in the national interest

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Emissions Intensity of Various Fuel Types for Electricity Generation (CO2e/MWh)

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1.5
1.0
-72%
0.5
0.0
Brown Black Gas Renewable
Coal Coal (CCGT)
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Source: ReNew Economy

Source: Santos

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Important Notice

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Im ortant Notice: continued p

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Competent Persons Statement

Oil and Gas Reserves Estimation Process

The information in this report that relates to oil and gas resource estimates at 01 June 2017 is based on information compiled or reviewed by Mr A.Farley who holds a B.Sc in Geology and is a member of the Society of Petroleum Engineers. Mr A.Farley is Manager Geoscience for the Group and has worked in the petroleum industry as a practicing geologist for over 15 years. Mr A. Farley has consented to the inclusion in this report of matters based on his information in the form and context in which it appears.

Technical validation Review

Igessi Consulting

Tony Cortis (M.Sc. Geology) who brings over 28 years of industry experience with Shell International. He has extensive technical and delivery experience in all three Unconventional Resource play types: tight clastic, shale and coal bed reservoirs. He has actively worked on CBM projects in the Bowser Basin, the Western Canada Sedimentary Basin and in the Ordos Basin of China.

Mr Cortis consents to the inclusion of his findings and information with relation to his evaluation of the activities and estimates at PEL96.

DeGoyler 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 DeGoyler 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 estimate of reserves and contingent resources and is a member of the International Society of Petroleum Engineer and the American Association of Petroleum Geologists. Mr Szatkowski is a qualified petroleum reserves and reservoir 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.