Xstate Resources : Anshof-3 Discovery Testing Update - Well Equipment Run-In

ABN 96 009 217 154

21 April 2022

Announcement to ASX

Electronic lodgement

ANSHOF-3 DISCOVERY TESTING UPDATE

Xstate Resources Limited (ASX:XST) ("Xstate", "XST" or "the Company") is pleased to advise shareholders that Operator of the Anshof Prospect, ADX Energy Limited (ASX:ADX) has today provided an update advising that well testing equipment, including tubing and perforating guns, have been run in the well in preparation for commencement of flow testing at the Anshof-3 oil and gas discovery. Initial flow results and pressure build-up data are expected to be available early next week.

Xstate holds a 20% working interest in the Anshof Prospect. A copy of the ADX release has been attached to this announcement.

This release was approved by the board of the Company

Andrew Childs

Executive Chairman Xstate Resources Limited Tel Office: [phone]

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 and Europe.

Level 1, 31 Cliff Street, Fremantle WA 6160 | Tel + 61 8 9435 3200 |www.xstateresources.com.au

21 April 2022

Anshof-3 Discovery Testing Update

Well testing equipment has been run in hole in preparation for flow testing of Eocene oil reservoir

Key points:

Following rig mobilisation, rig up, well bore clean-up and a casing integrity survey, well testing equipment including tubing and perforating guns have been run in the well in preparation for flow testing the Eocene oil reservoir Anshof-3 well.

Eocene oils produced in the area typically have a low gas oil ratio and generally require assistance for oil to flow to surface. Prior to perforation and flowing the well compressed natural gas ("CNG") will be circulated in the well to reduce the hydrostatic column in order to assist inflow and well clean-up.

Initial flow results and pressure build-up data are expected to be available early next week.

The testing program is expected to include up to three CNG liftings and subsequent flow periods and three build-up periods designed to determine reservoir flow characteristics as well as reservoir continuity.

Following a successful test of the 6 m gross Eocene oil zone, the well is expected to be placed on production with an early production unit utilising a rod pump. Oil can be delivered for sale by truck to a nearby oil terminal prior to securing a production license for the entire Anshof discovery.

Running 2 7/8 inch tubing into the Anshof- 3 well with the RED W-101 workover rig in preparation for testing operations. Source ADX

Running a cement bond survey to check well integrity of the Anshof- 3 well with the RED W-101 workover rig in preparation for testing operations. Source ADX

ADX Energy Ltd (ASX Code: ADX) advises that the Anshof-3 well in the ADX-AT-II license in Upper Austria has been prepared for the flow testing of the Eocene oil zone. Following the recent mobilisation and rig up of the RED W-101 rig, the well bore has been cleaned up and a casing integrity survey undertaken prior to running tubing and perforating guns in the well; showing good cement across all identified hydrocarbon zones; including the shallow imbricates zone. Initial flow results are expected to be available early next week. The testing program is anticipated to include up to three flow periods and three build up periods designed to determine reservoir flow characteristics as well as reservoir continuity.

Eocene oils produced from surrounding fields in the area typically have a low gas oil ratio and generally require assistance from a down hole pump or artificial lift such as gas lift for oil to flow to surface. Prior to perforation and flowing the well CNG will be circulated in the well to reduce the hydrostatic column which in turn will assist inflow and well clean-up.

Following the successful testing of the 6 m gross Eocene oil zone the well is expected to be placed on production with an early production unit utilising a rod pump and delivering oil for sale by truck to a nearby oil terminal. Interim production of up to 37,000 barrels (approximately 100 barrels per day for a period of one year) is allowed under Austrian legislation prior to finalising a production license for the entire much larger discovery area which ADX has mapped to extend over an area of approximately 24 km².

Further well testing reports

Further well testing reports will be provided as relevant information becomes available.

Note:

ADX announced a farmout to ASX listed Xstate Resources Limited to fund 40% of the Anshof-3 well costs to earn a 20% participating interest in the Anshof Prospect. Refer to ASX release dated 22 November 2021.

For further details please contact:

Paul Fink	Ian Tchacos
Chief Executive Officer	Executive Chairman
[phone]	[phone]
[e-mail]	[e-mail]

Authorised for lodgement by Ian Tchacos, Executive Chairman

Persons compiling information about Hydrocarbons:

Pursuant to the requirements of the ASX Listing Rule 5.31, 5.41 and 5.42 the technical and reserves information relating to Austria contained in this release has been reviewed by Paul Fink as part of the due diligence process on behalf of ADX. Mr. Fink is Technical Director of ADX Energy Ltd is a qualified geophysicist with 23 years of technical, commercial and management experience in exploration for, appraisal and development of oil and gas resources. Mr. Fink has reviewed the results, procedures and data contained in this release and considers the resource estimates to be fairly represented. Mr. Fink has consented to the inclusion of this information in the form and context in which it appears. Mr. Fink is a member of the EAGE (European Association of Geoscientists & Engineers) and FIDIC (Federation of Consulting Engineers).