XSTATE RESOURCES LIMITED — Capital/Financing Update 2021

Feb 22, 2021

ABN 96 009 217 154

23 February 2021

Announcement to ASX

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Borba 1-7 Well Spudded

• Borba 1-7 well drilled out of 20” Surface-Conductor on Monday 22 February 2021.

• Drilling ahead in 17 ½” hole at a Measured Depth of 262 feet (80 metres).

• Plan to Drill ahead to around 1,800 feet and set 13 3/8” casing.

Xstate Resources Limited (ASX: XST) (“Xstate” or “the Company”) is pleased to announce that Graham Drilling Rig 5 spudded the Borba 1-7 Well in the Northern Sacramento Basin onshore California on Sunday. The rig is now drilling ahead in 17 ½” hole to a planned depth of some 1,800 feet where 13 3/8” casing will be set.

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Graham Drilling Rig 5 at Borba 1-7

The Borba 1-7 well will be drilled to test multiple stacked 3D seismic anomalies in the interval from 3,200 feet (975 metres) to 9,500 feet (2,800 metres) depth and finish in Basement rocks. The prospective interval covers around 6,300 feet (1,920 metres).

The well is expected to take some 25 - 35 days to drill.

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Xstate Resources Limited

The Working Interests (“WI”) in the Borba 1-7 well and Borba AMI are:

	Drilling Costs	After Drilling WI
Sacgasco Limited (Operator) (ASX: SGC)	62.5%	66.67%
Xstate Resources Limited (ASX: XST)	37.5%	33.33%

Authorised for release by the Board of Xstate Resources Limited

David McArthur Managing Director +61 8 9435 3200

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 associated gas production interests together with production interests in Alberta, Canada. Xstate is presently pursuing new opportunities in the oil and gas sector onshore North America.

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