Key Petroleum provides update on Tanbar Gas Project in ATP 924

Key Cooper Basin, a wholly owned subsidiary of Key Petroleum, has provided an update on its 100% owned Tanbar Gas Project in ATP 924:

After requesting tenders for drilling services at the Taj and Alfajour prospects, 3 tenders have been received from drilling contractors with availability for early Q3 and during Q4 of 2019;

Four-year renewals applications for each of ATP 920 and ATP 924 have been submitted to the Queensland State Regulator, Department of Natural Resources, Mines and Energy;

The extensive flooding during the Queensland wet season has prevented Key from undertaking on ground preparatory works however discussions around access have progressed with regard to Tanbar Station and on ground works are expected to commence in May in conjunction with field work at the Canaway Ridge Project;

Reprocessing of the Hurron and Taj 3D seismic data has de-risked the prospectivity of both the Alfajour and Taj Prospects together with additional prospects located in the immediate area;

The Gross Prospective Resource Range for Alfajour is:

For gas, 20.1 Bcf (1U) –71 Bcf (2U) -142.9 Bcf (3U) with an associated Geological Chance of Successof 15% (“GCoS”); and

For oil, 0.73 mmbbl (1U) –2.76 mmbbl (2U) –6.26 (3U) with a GCoS of 14%.

•The Gross Prospective Resource Range for Taj is:

For gas, 20.2 Bcf (1U) –63.9 Bcf (2U) -124.5 Bcf (3U) with a GCoSof 25%; and

For oil, 2.67 mmbbl (1U) –13.25 mmbbl (2U) –24.48 (3U) with a GCoS of 12%.

As previously releasedin the ASX announcement of 24 January 2019, the current gross un-risked Prospective Resources for ATP 924 are 150 Bcf (1U) -500 Bcf (2U) –950 Bcf (3U) with the Tanbar Gas Project being the Triassic and Permian gas fairway component of the Permit. Prospective Resource estimates to date have been based on mapped structural closures from recent 3D seismic and 2D seismic surveys as well as current reprocessing to further define these Permian Toolachee canyons. These canyons are analogous to producing Toolachee intervals in the nearby Barrolka Gas Field;

Prospective Resources comprisethe estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) and relate to undiscovered accumulations. These estimates have both an associated risk of discovery and development component. The Tanbar Gas Project includes a range of ‘moderate chance of success’risked prospects, being on average a Geological Chance of Success of 17% currently and largely defined on 3D seismic data coverage. These prospects will ber re-risked after incorporatingofall recently reprocessed seismic data;

A long structural trend from the Ace Lead in ATP 924, has now been identified as the Meeba Trend and extends from Ace in ATP 924 into ATP 920. Prospective Resource estimates are currently being finalised for the Meeba Trend and will be disclosed to market upon completion;

Proposed gas pipeline routes within Tanbar, and associated data, have been submitted to the Queensland Department of State Development as part of the primary term for ATP 924. The Department has provided feedback in the form of potential water courses around proposed pipeline routes and the impacts these water courses may have on regional planning; and

Further commercial discussions are underway for future gas offtake from the Taj and Alfajour areas.

Managing Director, Kane Marshall, said,

'Work at Tanbar is progressing. The rig market has tightened in the Cooper Eromanga Basin as industry activity has increasedbut there are slots available in Q3 and Q4. We are working through the tendersand are now looking at the timing of access, civil earthworks and heritage clearance with a view to locking in a rig for our Tanbar campaign. The reprocessing work, particularly the 3D seismic volumes,supports our geological model and provides a good level of confidence in our discussions with potential drilling partners. It is pleasing that after having executed the MoU with Beach and Santos for future gas processing that additional opportunities around the potential for future gas offtake and other commercial arrangements have presented. The Ace Lead and the associated Meeba Trend that continues into ATP 920, demonstrate that the portfolio is rich in blue sky upside. Key will provide the market with updates as new developments emergeand we will continue to keep the market fully informed as matters progress.'