Xstate Resources : Well Site Construction Complete & Rig Mobilisation Commences

For personal use only

14 December 2021

Announcement to ASX

Electronic lodgement

WELL SITE CONSTRUCTION COMPLETED AND RIG MOBILISATION

COMMENCES FOR THE ANSHOF EXPLORATION WELL

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 regarding completion of the well site construction and commencement of mobilisation of drill rig for the Anshof-3 exploration well.

Xstate is currently earning 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

David McArthur

Director

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.

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

ADX Energy Ltd (ASX:ADX)

ASX RELEASE

14 December 2021

For personal use only

Well Site Construction Completed and Rig

Mobilisation Commences for the Anshof

Exploration Well

Key points:

The construction of the Anshof well site has been completed in preparation for the drilling of the Anshof Prospect in the ADX-AT-II license in Upper Austria. (refer to figure 1)

The RED Drilling & Services GmbH (RED) E-220 rig commenced mobilisation to the Anshof well site on the 13th of December 2021.

The first well that will be drilled from the Anshof well site will be from the Anshof-3surface location.

An overview of the Anshof Prospect is available in Appendix 1 at the end of this release. It includes the results of an independent prospect review undertaken by RISC Advisory Pty Ltd ("RISC").

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.

The Anshof-3surface location is outside an area which requires additional approval by the Forestry Authority. Drilling from this location has enabled the commencement of well site construction to meet a rig slot available in December 2021. ADX expects approval by the Forestry Authority in about 2 weeks from today.

ADX Energy Ltd (ASX Code: ADX) is pleased to advise that the construction of the Anshof well site has been completed in preparation for the drilling of the Anshof prospect in the ADX-AT-II license in Upper Austria. The completion of the Anshof well site has enabled the commencement of mobilisation of RED Drilling & Services GmbH (RED) E-220 rig on the 13th of December 2021. The first Anshof Prospect exploration well will be drilled from the Anshof-3 Well surface location. The Anshof-3 Well surface location is outside an area requiring approval by the Austrian Forestry Authority. Drilling from this location has enabled the commencement of well site construction to meet the drilling rig availability during December 2021. ADX expects approval by the Forestry Authority for the two additional surface locations for drilling by year end allowing follow up appraisal and development drilling.

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ADX Energy Ltd (ASX:ADX)

ASX RELEASE

For personal use only

Figure 1: Map showing the Anshof prospect (star symbol) in relation to existing producing oil fields (green),

follow up prospects (yellow) in the ADX AT-II license as well as nearby processing facilities and pipelines in ADX-

AT-II exploration license

Further Operational Updates

ADX will commence providing regular updates to shareholders in relation to preparations for drilling the up-comingAnshof-3 Well.

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).

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ADX Energy Ltd (ASX:ADX)

ASX RELEASE

Appendix 1: Anshof Prospect Overview

For personal use only

Anshof is a well defined modern 3D seismic covered Eocene - Cenomanian prospect located up-dip and on trend from existing oil production from adjacent fields (Figure A1). The ADX in house team has developed a new structural model constraining the nearby producing Voitsdorf, Bad Hall and Pfarrkirchen oil fields which has resulted in identification of a number of on trend prospects and appraisal opportunities. Success at Anshof-3 will validate the new structural model and de-risk multiple follow up prospects. Anshof-3 has a best technical case prospective resource potential of 6.6 MMBOE with significant upside potential in the primary Eocene sandstone reservoir objective. The well plan includes a deeper Cenomanian secondary target with a best technical resource potential of 2.1 MMBOE.

Original Resources Reporting Date: Upper Austria Exploration was on 30/11/2020, estimates were further revised on 30/3/21.

Figure A1: Anshof prospect Eocene depth map, seismic X section and schematic interpretation (mentioned anti

clock wise)

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ADX Energy Ltd (ASX:ADX)

ASX RELEASE

For personal use only

ADX commissioned RISC to provide an independent review of the prospectivity of the Austrian ADX- AT-I & II exploration licenses. RISC has reviewed the resources in accordance with the Society of Petroleum Engineers internationally recognised Petroleum Resources Management System 2018 ('PRMS'). RISC's methodology was to review the evaluation, probabilistic resource evaluation and geologic risking carried out by ADX. Details of the findings of their review were presented in a report. RISC have not conducted a site visit.

RISC has reviewed the Anshof Prospect and found the following Prospective Resource and Geological Risk assessment to be reasonable. A summary of RISC's findings for the Anshof prospect is shown in the Table 1 below.

Table 1: Anshof Prospective Resource and Geological Risk Asssessment

(100% Equity Interest)

Unrisked Prospective	P(90)	2	(MMBOE)	P(50)	3	(MMBOE)	P(10)	4	(MMBOE)	Mean	5	(MMBOE)	6 Probability of
Resource 1						Success
Oil Case			0.50			3.30		16.20			6.60		43%

Notes to Table 1:

1. Prospective Resources are those estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further explorations appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
2. At least a 90% probability that the quantities actually recovered will equal or exceed the estimate.
3. At least a 50% probability that the quantities actually recovered will equal or exceed the estimate.
4. At least a 10% probability that the quantities actually recovered will equal or exceed the estimate.
5. The arithmetic average of the probability distribution.
6. BOE means barrels of oil equivalent

In RISC opinion, the method of utilising a mapping based net-rock-volume ('NRV') in the prospective resource assessment in the Anshof Prospect may result in a conservative volumetric assessment. RISC was not provided with an assessment of the deeper Cenomanian secondary objective for Anshof.

Access to Production Infrastructure

Figure A2: Aerial image prior to commencement of well site preparation showing the three Anshof surface locations and the distance to an existing oil and gas pipeline bundle that can be used to access oil and gas processing and export infrastructure

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