Orpheus Energy : Quarterly Activities and Cashflow Report December 2016

Activities Report for the Quarter ended 31 December 2016 Alternative asset acquisition strategy

As previously advised, Orpheus Energy Limited (Orpheus) has received a number of approaches regarding new potential reverse take-over (RTO) opportunities, following the cessation of the previously proposed RTO process with Wavetronics Solutions Pvt Limited.

Detailed discussions and financial due diligence regarding a preferred opportunity in regards to an Australian entity in the technology sector have significantly progressed, and the Board expects to be in a position in the near future to present this exciting company to shareholders for Orpheus to acquire in an RTO process.

As the nature of Orpheus' business will change if the RTO is carried out, Orpheus is consulting with the ASX on the proposed RTO and its implementation, including the nature and extent of the member approvals that will be required to carry out the proposed RTO including (without limitation) consulting with the ASX on compliance with ASX Listing Rule 11.1. Orpheus anticipates it will be required to re- comply with Chapters 1 and 2 of the ASX Listing Rules and seek member approval to carry out the RTO.

Debt Recovery Update

Nugroho Suksmanto is still to pay any of the outstanding funds owed to Orpheus and he remains in breach of the Settlement Agreement. As at 31 December 2016, IDR 70 billion Rupiah, plus interest of IDR 6.65billion Rupiah (total 76.65 billion Rupiah or ~AUD$7.6M) remains due.

As Orpheus shareholders are aware, as part of the Settlement Agreement, Orpheus (under the terms of a Shares Pledge Agreement) was provided with additional security in the form of a pledge over 10.5% of the shares equity in a real estate company, PT Abadi Guna Papan (AGP), in which Suksmanto has a controlling interest. Given Suksmanto's continuing breach of the Settlement Agreement, Orpheus, as the pledgee under the Shares Pledge Agreement is entitled to sell the pledged shares, on behalf of the pledgors based on powers of attorney to sell shares and consents to transfer issued by the pledgors, to recover the outstanding funds owed to Orpheus.

As previously advised, Orpheus has been in advanced negotiations with a potential acquirer of the shares. A formal offer to acquire the shares has been submitted to Orpheus and been agreed to by the Board, subject to cash funds actually being received. As part of the legal documentary process to complete the proposed transaction, and AGP's Constitution, all shareholders of AGP are required to formally approve any new, incoming shareholder. Orpheus is advised that all major shareholders

Orpheus Energy Limited • ABN 67 121 257 412 • Suite 9, Level 3, 3 Spring Street, Sydney NSW 2000 Australia

T: [phone] • [e-mail] • www.orpheusenergy.com.au

including Suksmanto, have approved the proposed transaction and only two minor AGP shareholders are yet to provide their formal agreement, which is expected, after the conclusion of Chinese New Year celebrations in Indonesia.

Orpheus will keep shareholders updated on this process.

Disclaimer - Forward looking statements

This release may contain forward-looking statements. These statements are based upon management's current expectations, estimates, projections and beliefs in regards to future events in respect to Orpheus's business, the industry in which it operates. These forward looking statements are provided as a general guide and should not be relied upon as an indication or guarantee of future performance. The bases for these statements are subjected to risk and uncertainties that might be out of control of Orpheus Energy Limited and may cause actual results to differ from the release. Orpheus Energy Limited takes no responsibility to make changes to these statements to reflect change of events or circumstances after the release.

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

a+Rule 5.5

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

ORPHEUS ENERGY LIMITED

ABN Quarter ended ("current quarter")

December 2016

67 121 257 412

Consolidated statement of cash flows	Current quarter $A'000	Year to date (6 months) $A'000
1. Cash flows from operating activities	-	-
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation	-	-
(b) development	-	-
(c) production	-	-
(d) staff costs	-	-
(e) administration and corporate costs	(111)	(188)
1.3 Dividends received (see note 3)	-	-
1.4 Interest received	2	2
1.5 Interest and other costs of finance paid	(1)	(1)
1.6 Income taxes paid	-	-
1.7 Research and development refunds	-	-
1.8 Other (ATO PAYG/GST refunds)	58	207
1.9 Net cash from / (used in) operating	52	20
activities

Consolidated statement of cash flows	Current quarter $A'000	Year to date (6 months) $A'000
2. Cash flows from investing activities	-	-
2.1 Payments to acquire:
(a) property, plant and equipment
(b) tenements (see item 10)	-	-
(c) investments	-	-
(d) other non-current assets	-	-
2.2 Proceeds from the disposal of:
(a) property, plant and equipment	-	-
(b) tenements (see item 10)	-	-
(c) investments	-	-
(d) other non-current assets	-	-
2.3 Cash flows from loans to other entities	-	-
2.4 Dividends received (see note 3)	-	-
2.5 Other (provide details if material)	-	-
2.6 Net cash from / (used in) investing	-	-
activities

Cash flows from financing activities Proceeds from issues of shares Proceeds from issue of convertible notes Proceeds from exercise of share options Transaction costs related to issues of shares, convertible notes or options Proceeds from borrowings Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-