Talon Energy : Annual Report For The Year Ended 31 December 2022

ANNUAL2022 REPORT

ABN 88 153 229 086

CORPORATE DIRECTORY

DIRECTORS

Douglas Jendry

Non-Executive Chairman

Colby Hauser

Managing Director/CEO

Matthew Worner

Non-Executive Director

David Casey

Non-Executive Director

COMPANY SECRETARY

Jo-Ann Long

PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE

1202 Hay Street

West Perth WA 6005

Telephone: [phone]

SOLICITORS

Steinepreis Paganin

Level 4, The Read Buildings

16 Milligan Street

Perth WA 6000

AUDITORS

BDO Audit (WA) Pty Ltd

Level 9, Mia Yellagonga Tower 2

5 Spring Street

Perth WA 6000

Telephone: [phone]

SHARE REGISTRY

Computershare Investor Services Pty Ltd

Level 11, 172 St Georges Terrace

Perth WA 6000

Australian Telephone: [phone]

International Telephone: [phone]

www.computershare.com.au

STOCK EXCHANGE LISTING

Australian Securities Exchange

ASX Code: TPD

www.talonenergy.com.au

			02	04
			Corporate	Chairman's
			Directory	Letter
CONTENTS
06		09
		Managing		Review of
		Director's Report		Operations
	20	48	49	50
	Directors' Report	Auditor's	Consolidated	Consolidated
		Independence	Statement of Profit	Statement of
		or Loss and Other
		Declaration	Financial Position
		Comprehensive Income
	51			52
	Consolidated			Consolidated
	Statement of			Statement of Cash
	Changes In Equity			Flows
		53	90
		Notes to the	Directors'
		Consolidated	Declaration
		Financial Statements
		91		96
		Independent		Shareholder
		Auditor's Report		Information
	98
	Glossary

TALON ENERGY

3 ANNUAL REPORT 2022

NON-EXECUTIVE

CHAIRMAN'S LETTER

Dear Shareholder,

It is a pleasure to deliver the results reporting on the achievements of the Talon Energy team during 2022. As anticipated last year, the Company continues to evolve and is on the cusp of becoming the latest oil and gas producer on the ASX, a rare achievement and particularly remarkable considering the short time it has taken to reach this milestone.

In the Perth Basin, Talon, with JV partner and Operator Strike Energy, drilled and tested the Walyering No. 5 and 6 wells. Subsequent to testing, the JV took a Final Investment Decision to develop the Walyering field with first production expected in the first half of 2023. This is a significant achievement for Talon for which the team and shareholders should be very proud of. Considering the looming gas shortage in Western Australia's gas market, the Walyering Gas Project will provide a timely source of gas supply and provide significant revenue for Talon to allocate towards our portfolio of assets that we hope will drive significant returns for shareholders in the years ahead.

In Mongolia, the Gurvantes XXXV Coal Seam Gas Project (Operator TMK Energy) also reached a significant milestone during the year. Highly successful corehole drilling and testing at four planned locations and two further locations have been assessed and independently verified by Netherland, Sewell and Associates. The certification of a maiden gross unrisked 2C (best estimate) Contingent Gas Resource

of ~1.2 Tcf for the Nariin Sukhait area of the exploration permit is a result that far exceeded early forecasts. As a result of this success, Talon formally exercised the option to acquire a 33% economic interest in the Gurvantes Project,

attributing ~400 Bcf of this Resource directly to Talon and setting the Joint Venture on the path to develop the first pilot wells and progress further exploration in 2023.

Beyond these development and production opportunities, the team continues to generate opportunities for the future. Within the Perth Basin, the Condor Project remains a highly prospective exploration target and Talon, subject to DMIRS transfer, will own 100% of this project which will be further developed in 2024 and potentially drilled in 2025. In December, Talon announced a binding Term Sheet to acquire a 25% interest in Triangle's L7 and EP437 northern Perth Basin permits. These permits feature numerous prospects that are in a coveted location, and with 3D seismic shot across both permits, Talon has a high degree of confidence in the three well exploration campaign scheduled for 2024. Both of these opportunities are consistent with our strategy of targeting high quality conventional gas resources that will provide the company with additional near-term exploration opportunities funded from production cashflow to further drive shareholder value.

March marks the first twelve months of tenure of our Managing Director and CEO, Colby

TALON ENERGY 4 ANNUAL REPORT 2022

Hauser. Colby has been instrumental in the company's success during the past year, and I am grateful for the energy, drive and leadership that he brings to the role. With multiple market catalysts expected in coming months and busy forward program in the years to come, I am confident that the exceptional work that Colby and the team have done will continue to be recognised by the market.

I would like to thank shareholders for their support during 2022 and I look forward to sharing the continued progress of the company as we transition into an oil and gas producer

in 2023.

Douglas Jendry

Non-Executive Chairman

Beyond the development and production opportunities, the team continues to generate opportunities for the future.

TALON ENERGY

5 ANNUAL REPORT 2022