XSTATE RESOURCES LIMITED — Capital/Financing Update 2016

Dec 27, 2016

ABN 96 009 217 154

Electronic lodgement

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29 December 2016

ASX Limited

Subscription Agreements deposit funds update

• Xstate has been advised the deposit funds of $1,250,000 under the Subscription Agreements has been delayed due to bank holidays which have impacted international transfers.

• The Company has been advised funds will now be received by January 6, 2017.

• Whilst the delay is disappointing it does not impact on the Company’s ability to close the acquisition of the Los Angeles Basin oil fields acquisition by February 17, 2017

Xstate Resources Limited (ASX:XST) (“Xstate” or “the Company”) provides the following update in relation to the Subscription Agreement funding announced on 19 December 2016.

The Company has agreed to grant the investors an extension for the $1.25 million payment of the deposit proceeds that was due by 29 December 2016 to 6 January 2017.

The investors have advised the Company that they fully expect to complete the payment of the deposit prior to 6 January 2017. The investors have provided the Company with documentation evidencing the money is in the process of being transferred, however has been delayed due to bank holidays, which have impacted international transfers.

As previously advised the capital raising is being placed to clients of Sanston Securities Australia Pty Ltd. Xstate advises the four Asian investors are unrelated parties, no investor will hold more than 15% of the company on a diluted capital basis post raising and no placement is being made to the Directors of Xstate or their associates.

Whilst the Company is disappointed with the delay it does not impact on the Company’s ability to close the acquisition of the Los Angeles Basin oil fields acquisition by February 17, 2017.

The completion of this transaction will facilitate the Company’s transition from a pure explorer to a producer, and deliver the Company’s first transaction in line with its low risk production acquisition strategy onshore California.

For and on behalf of the Board of Xstate Resources Limited

For further details please contact:

Cosimo Damiano David McArthur Managing Director Non Executive Director/Company Secretary Xstate Resources Limited Xstate Resources Limited Tel Office: +61 8 9423 3200 Tel Office: +61 8 9423 3200 Email: cosimodamiano@xstate.com.au Email: david.mcarthur@broadwaymgt.com.au

About Xstate Resources Limited

Xstate Resources (ASX Code: XST) is an ASX listed company focused on the oil and gas sector. The Company has existing gas exploration assets located in the Sacramento Basin, California and minor associated gas production.

Level 2, 55 Carrington Street, Nedlands WA 6009 | Tel + 61 8 9423 3200 | Fax +61 8 9389 8327 www.xstate.com.au