Warrego Energy : Quarterly Report and Appendix 5B

ASX/MEDIA RELEASE 28 April 2022

WARREGO ENERGY LIMITED (ASX: WGO) ACTIVITY REPORT FOR THE QUARTER ENDED 31 MARCH 2022

HIGHLIGHTS

EP469 Exploration and Appraisal

• • WE-3 re-entry confirmed for June/July 2022

• • WE-3 drilling and completion is expected to take 50 days and a successful outcome may lead to a Reserves upgrade.

• • Warrego is currently evaluating a number of very promising leads and prospects in the north-eastern extent of EP469, including the Erregulla structure.

EP469 West Erregulla Gas Project Development

• • The Operator has advised that it anticipates EPA approvals will be delivered later than originally expected and has rephased the Project's procurement and financing processes.

• • The Operator now expects that first gas will be achieved in late 2024.

STP-EPA-0127 Northern Perth Basin Exploration

• • Native Title negotiations are ongoing and the farm-out agreement with Mitsui is subject to granting of the exploration permit and approval of the work program by DMIRS.

• • Warrego and Mitsui are commencing negotiating a Joint Operating Agreement (JOA).

Mid West Blue Hydrogen and CCS Project

• • The feasibility study, which is being progressed in a consortium with Pilot Energy and APA, is expected to be completed in Q2 of CY 2022

Spain - Tesorillo and El Romeral Projects

• • Warrego has completed a strategic review of its Spanish assets and intends to maximise the potential of its gas and electricity projects in line with increased demand in Europe and changes to energy policy

• • Drilling and permit application outcomes are anticipated in the current financial year

• • El Romeral continued to generate strong revenue and cash flow. Revenue for the March quarter was €1,082,137.

• • At the end of the quarter, Tarba Energia, S.L. had cash in hand of more than €360,000.

Corporate and Financial

• • Consolidated cash at 31 March was $36,150,000.

WESTERN AUSTRALIA

EP469 (50%) West Erregulla Gas Fields

Exploration Permit located onshore northern Perth Basin, WA, targeting conventional gas reservoirs

West Erregulla Gas Field Appraisal

The Ensign 970 drilling rig will return to West Erregulla at the conclusion of current activities and re-entry to West Erregulla-3 is likely to occur in the June/July period. The well is designed to confirm the northern extent of West Erregulla field and drilling and completion are expected to take 50 days. A successful outcome may lead to an upgrade in Reserves1.

The JV is continuing to evaluate technical options for WE-5 and recompletion and retesting are likely to be undertaken in 2023 in conjunction with workovers of WE-2 and WE-4. Design work for WE-6 has commenced in anticipation of drilling in 2023.

West Erregulla Gas Project Development

The West Erregulla Gas Project is currently progressing through the environmental permitting process with the Environmental Protection Authority of Western Australia ("EPA"). Both the mid and upstream submissions are expected to be released for public comment in late Q2 2022, which would then be followed by a preliminary EPA decision in the following quarter enabling Ministerial endorsement thereafter. These approvals are on the Project's critical path and are required before financing and construction agreements can be finalised.

The Operator's view is that these critical pre-construction approvals will be delivered later than originally expected and has rephased the Project's procurement and financing processes. The Operator now expects that first gas will be achieved in late 2024 and the JV is working with AGIG on a revised project schedule. Warrego and Alcoa remain committed to the long term 155 PJ Gas Sales Agreement and are working together on a revised gas supply start date in line with the revised project schedule.

Warrego is in discussions with the Operator to better understand the extent of any delays to the EPA approval process, and the potential to mitigate the impact on financing, construction and the development timeline.

Further Exploration Potential

The EP469 JV will undertake a 3D seismic survey over the remaining permit areas of interest that are unmapped to provide better definition and enhanced subsurface data over a number of undrilled conventional leads and prospects. Only 1/3 of the block has been currently covered by 3D seismic.

The West Erregulla Natta 3D seismic campaign remains subject to feedback from the EPA and is still pending a determination on the level of assessment.

Warrego continues to progress its subsurface analysis of EP469, primarily in the area between West Erregulla and Lockyer Deep (EP426). In September 2021, Warrego released preliminary findings from its analysis of the data relating to West Erregulla, Lockyer Deep, Beharra Springs (EP320), and Waitsia (L1/L2) noting that gas generated from the mature north Dandaragan Trough (kitchen) has migrated through the EP469 permit area and likely filled structures in EP469 (West Erregulla, Erregulla) before spilling to the north and west and towards Lockyer Deep and Waitsia.

1 The WE-3 appraisal well is located in the northern area of the West Erregulla field and is currently classified as Undeveloped Reserves. The drilling of a successful well will result in the Reserves becoming Developed. Warrego's view of West Erregulla Reserves was detailed in an announcement made to the ASX on 11 October 2021, "West Erregulla Independent Reserves Certification".

Warrego is currently evaluating a number of very promising leads and prospects in EP469, including the Erregulla structure which is unexplored at Kingia depth.

STP-EPA-0127 (100%, Operator) North Perth Basin

A 2.2 million acre permit application located onshore Coolcalalaya Perth Basin, Western Australia, targeting conventional gas reservoirs.

Exploration Potential

At 2.2 million acres (8,700km2), EPA-0127 is the largest exploration permit located onshore Western Australia. The permit area is 130 km north of the Waitsia and West Erregulla fields and is in the Coolcalalaya Sub-basin. Extensive analysis of available sub-surface data suggests that extensive Permian ("Waitsia" sequence and equivalent) may extend over 900 km from the Merlineigh Sub-basin to the North Perth Basin with an early Permian sequence that extends across the eastern portion of the permit area.

Surface geology and potential field modelling point to a deep, asymmetric structured basin with excellent exploration potential. Multiple West Erregulla-sized prospects and leads with potential for the conventional extraction of gas and liquid hydrocarbons have been identified.

Permit Grant

Negotiations with Native Title groups are ongoing and an updated conventional work program is being assessed by the Department of Mines, Industry Regulation and Safety ("DMIRS") and is awaiting approval. The farm-out agreement with Mitsui remains subject to granting of the exploration permit and approval of the work program by DMIRS. Warrego and Mitsui are commencing negotiating a Joint Operating Agreement (JOA) and considering front-ending some activity (including an airborne survey) in the early years once title is granted.

CARBON MANAGEMENT AND HYDROGEN

Warrego is committed to achieving net zero carbon emissions by 2050 within the framework of the Paris Agreement and Australian government policy. The increased emphasis on carbon management and decarbonisation from investors and regulators is a high priority issue for Warrego as we evolve from explorer to gas producer. Natural gas has a critical role to play, both locally and globally as developed economies transition energy supply from traditional sources to renewables and, although our current emissions are negligible, we are conscious of the need to identify and implement carbon solutions that will help Warrego minimise and offset emissions from any future developments.

Mid West Blue Hydrogen and Carbon Capture & Storage Project

On 4 November 20212, the Company announced it has joined a consortium with APA Group and Pilot Energy to undertake and jointly fund a feasibility study for the Mid West Blue Hydrogen and Carbon Capture & Storage (CCS) project.

The feasibility study is designed to assess potential Blue Hydrogen and CCS projects that can integrate with existing upstream, midstream and downstream assets to deliver competitive clean energy. It will identify and select potential development projects and will form the basis for future FEED studies, partnering and other corporate initiatives.

Figure 3. Mid West Blue Hydrogen + CCS project location and key elements

The consortium lead, Pilot Energy, has advised that the feasibility study is nearing completion. The study, which is centred on the Cliff Head Oil Field, is expected to be completed in Q2 of CY 2022.

2 Announced by Warrego via the ASX on 4 November 2021 "Warrego joins innovative Mid West Blue Hydrogen and CCS consortium and accelerates carbon management initiatives"

To date the study has confirmed that:

• • The Cliff Head Oil Field production license (WA 31L) area has CCS potential of 6.4 million tonnes of CO2 (2C Contingent Resource) at a CO2 injection rate of 500,000 tonnes of CO2 per annum;

• • The Cliff Head Oil Field production license area has an upside CO2 storage capacity of approximately 15.9 million tonnes of CO2 (3C Contingent Resource); and

• • The existing Cliff Head Oil Field offshore facilities, existing wells and pipelines are suitable for implementing a CCS operation.

A detailed review of the offshore and onshore production facilities, existing production and injection wells and the oil production and water injection pipeline is also being conducted. Warrego will update the market further once the study is completed.

SPAIN

Warrego's Spanish assets comprise an 85% working interest in the Tesorillo gas project in the Cadiz region, estimated to contain 830 Bcf of gross unrisked Prospective Resources3, and a 50.1% working interest in the El Romeral gas to power facility in the Seville region. Both assets have excellent proximity to infrastructure and markets and are held in Joint Venture with Prospex Energy Plc and administered through the Joint Venture vehicle, Tarba Energia S.L. ("Tarba").

In 2021 Warrego commenced a strategic review of its Spanish assets, focusing on the possible divestment of all or part of its portfolio to maximise shareholder value. Subsequently, European energy prices increased substantially due to sustained high demand over the northern hemisphere winter, followed more recently by the conflict in the Ukraine. EU gas prices rose by more than 550% over the year to March 20224 and wholesale electricity prices in Spain increased by more than 600% to the end of February 20225. This has prompted many European countries to re-evaluate their energy policy and supply chains including recognising gas as a key baseload fuel in the transition to renewable energy and the potential easing of restrictions for domestic resource development.

These changes have stimulated renewed interest in the development potential of Warrego's onshore gas and electricity generation assets in Spain. As a result, the range of strategic options available to Warrego has expanded to include:

• • Develop the Tesorillo gas project and supply the domestic gas market in Spain

• • Partner with key technology providers to enable Blue Hydrogen production from its gas resources

• • Investigate the potential for gas storage, CCS and other carbon management technologies

• • Maximise opportunities for the El Romeral gas to power project, including the development of near field gas prospects for the expansion of supply to the domestic electricity market in Spain, and the potential for complementary renewable energy technologies

Recognising the enhanced value potential of Tesorillo and El Romeral, Warrego has made a strategic decision to retain these assets with a view to further unlocking their value and cash generation potential.

Subject to permitting and regulatory conditions, Warrego anticipates being in a position to select and advance the best development options for each asset by the end of the current financial year.

3 The Contingent and Prospective Resource estimates for the Tesorillo asset referred to were first released to the ASX by the Company on 7 May 2015.

4 Source: Trading Economics. Dutch TTF Gas prices are based on the over-the-counter (OTC) and contract-for-difference (CFD) financial instruments and reflect the 12 month period to 15 March 2022.

5 Source: Statista - Average monthly electricity wholesale price in Spain from January 2019 to February 2022. Period from February 2021 to February 2022.