XSTATE RESOURCES LIMITED — Capital/Financing Update 2011

Jun 8, 2011

==> picture [189 x 85] intentionally omitted <==

ABN 96 009 217 154

9 June 2011

ASX Limited

Electronic lodgement

Sidi Dhaher Rig Mobilisation Scheduled

• Tunisian authorities confirm supervision arrangements for Sidi Dhaher Drilling

• Drilling Rig move expected to commence in late June 2011

• Drilling of the 300+ million barrel potential Sidi Dhaher Prospect expected to commence in early July

Xstate Resources Limited (ASX: XST) advises that the Tunisian authorities have agreed a schedule of supervision designed to ensure safe rig mobilization and efficient drilling operations for the Sidi Dhaher exploration well.

XST has been advised by the Operator that it anticipates road clearance, traffic control and road safety measures to be provided by the Tunisian authorities, which would allow rig mobilization to commence on 20 June 2011.

Once mobilization is completed, rig up and equipment testing will commence immediately in order to enable drilling operations to commence as soon as possible. The Operator expects that drilling could start in early July.

==> picture [237 x 169] intentionally omitted <==

==> picture [229 x 171] intentionally omitted <==

Figure 1: Sidi Dhaher – Surface Location

Figure 2: Sidi Dhaher – Surface Location after preparations for Drilling Rig

“Drilling of the Sidi Dhaher prospect is an exciting and important event for Xstate and it is heartening to get the government’s assistance for the rig to be moved and for the Sidi Dhaher well to be drilled soon.” according to Gary Jeffery Managing Director of Xstate Resources Limited .

208 Bagot Road, Subiaco WA 6008 Tel + 61 8 9381 4215 Fax +61 8 9381 9386 www.xstate.com.au

ABN 96 009 217 154

==> picture [189 x 85] intentionally omitted <==

Sidi Dhaher Project Summary

==> picture [347 x 226] intentionally omitted <==

Figure 3: Sidi Dhaher Prospect Geological Section showing six targets for oil and gas

The key attributes of the Sidi Dhaher prospect are:

• Potential for over 300 Million barrels of recoverable prospective oil resource in just the two primary reservoir zones[1] .

• The well is anticipated to intersect 6 prospective reservoir zones; all of which produce oil and gas from fields within 50 kilometres of Sidi Dhaher.

• The estimated cost to drill the well is approximately $6 million and the well is planned to take around 30 days to drill.

• 1 in 3 chance of Geologic Success[1] .

• The prospectivity of Sidi Dhaher is also supported by the presence of coincident hydrocarbon indicator anomalies, namely:

• Seismic Flat Spots, on all 2D seismic lines crossing the prospect at the shallowest

• reservoir level; these are interpreted to be potential Direct Hydrocarbon Indicators (“DHI”). Seismic flat spots are often the seismic expression of the interface between hydrocarbons and underlying water zones in good reservoir rocks; and

• Surface Petroleum Geochemical “Microseepage” Anomalies across the prospect

• area. Such anomalies are often present above oil and gas accumulations.

1 Isis Petroleum Consultants Report May 2010

For further information visit www.xstate.com.au or contact:

Xstate Resources Limited

Gary Jeffery (Managing Director)

T: +61 8 9381 4215

208 Bagot Road, Subiaco WA 6008 Tel + 61 8 9381 4215 Fax +61 8 9381 9386 www.xstate.com.au