24  June  2013      

 NORTH  SUMATRA  “SOUTH  BLOCK  A”  (SBA)  

OIL  &  GAS  LEADS  DEFINED    SEISMIC  OPERATIONS  COMMENCED    

   

• New  mapping  and  prospect iv ity  review  identif ies  h igh  potentia l   leads  with  aggregate  unrisked  mean  Prospect ive  Resource  of  738.5  BCF  gas  and  63.8  MMBBLS  oi l  and  condensate      

• Seismic  operat ions  commenced  to  mature  s ix  o i l  and  gas   leads  to  dr i l lable  status  pr ior  to  dr i l l ing  of   f i rst  explorat ion  wel l  ear ly  next  year    

• Block   located   in  prol i f ic  North  Sumatra  Basin  and  contains  proven  hydrocarbons  with  gas  and  oi l   f lows  from  old  wel ls  

• Previous  explorat ion  focussed  on  shal low  oi l  with   l i t t le   interest   in  gas    

• Excit ing  new  explorat ion  phase  underway  target ing   large  scale  wet  gas  reserves  to  meet  expanding  gas  market  and  overlooked  high  qual ity  o i l      

• Signif icant  new  gas  d iscovery  (Matang-­‐1)  across  b lock  boundary  f lowed  25  MMCFD    

   North  Sumatra  South  Block  A  (SBA)  Explorat ion  Project    Peak  Oil  &  Gas  Limited  (“Peak”  or  “Company”)   (ASX:  PKO]   is  pleased  to  announce  that  the  SBA   joint   venture   has   completed   mapping   and   a   prospectivity   review,   identifying   high  potential  leads  for  further  seismic  and  analysis  in  preparation  for  drilling  of  one  exploration  well  around  Q2  next  year.    These  leads  are  located  in  the  prolific  North  Sumatra  Basin  in  close  proximity  to  established  pipelines  and  facilities.      SBA   contains   proven   hydrocarbons   with   gas   and   oil   flows   from   old   wells.   Previous  exploration  in  SBA  focused  on  shallow  oil  targets.  The  new  phase  of  exploration  is  targeting  large  scale  wet  gas  driven  by  significant  energy  shortages  and  high  gas  prices  in  the  rapidly  expanding   economy   of   the   region,   while   overlooked   high   quality   shallow   oil   remains   an  attractive  target.      

2  

 South  Block  A  (SBA)  Leads  –  2 ,105  sq  km  onshore  North  Sumatra        Existing   infrastructure   in   the   area   will   be   beneficial   to   any   drilling   success   in   SBA   and   a  significant  new  gas  discovery  (Matang  1),  recently  drilled  just  across  the  SBA  block  boundary,  has  flowed  gas  at  25  MMCFD.  This  discovery  has  been  reported  by  the  Operator  (Medco)  to  contain   between   100   –   400   BCF.   The   new   discovery   adds   to   three   other   discoveries,  including   the   400   BCF   Alur   Siwah   gas   field   shown   on   the   above  map.   These   fields   in   this  adjacent   block   A   are   currently   undergoing   engineering   design   and   the   downstream  infrastructure  developed  has  the  potential  to  improve  the  commerciality  of  any  discoveries  in  SBA.      Seismic   field   operations   in   SBA   have   commenced   to  mature   and   prioritise   six   oil   and   gas  leads  (shown  on  the  above  map)  to  prospect  status,  one  of  which  will  be  selected  for  drilling  early  next  year.  Seismic  acquisition  is  expected  to  be  completed  in  Q3  2013.  Together  these  six  oil  and  gas  leads  provide  an  Unrisked  Mean  Prospective  Resource  of  738.5  BCF  of  gas  and  63.8  MMBBLS  of  oil  and  condensate.  The  largest  of  the  gas  leads  has  been  mapped  to  have  the   potential   to   contain   an   Unrisked  Mean   Prospective   Resource   of   324   BCF   Recoverable  Gas  and  18  MMBBLS  Condensate.      The   seismic  operation   currently   underway  will   acquire  over   170   survey   line   km   located   to  mature  the  oil  and  gas  leads  prioritized  by  the  new  mapping  and  prospectivity  review.    

Gas Discovery

3  

 South  Block  A  (SBA)  Seismic  Program  over  Leads  

 

 The  main  leads  identified  for  additional  seismic  are  listed  below  with  their  calculated  Prospective  Resources:    

PROSPECTIVE  RESOURCES  Prospect   Low  

Estimate  (P90)    

Best  Estimate  (P50)    

High  Estimate  (P10)    

Unrisked  Mean    

Units  

 Gas  Leads  

         

Simpang  Deep   138  (7.0)   285  (16.0)   568  (33.0)   324  (18.0)   BCF  (+MMBBLS  Condensate)  Djerneh   61  (1.0)   144      (3.0)   332    (9.0)   173      (4.0)   BCF  (+MMBBLS  Condensate)  Pinueng   103  (2.4)   208    (5.2)   401    (9.2)   232    (5.6)   BCF  (+MMBBLS  Condensate)  Total  Mean  Gas   -­‐   -­‐   -­‐   729  (27.6)   BCF  (+MMBBLS  Condensate)  

               Oil  Leads  

         

Amanah  Crest   1.3  (0.6)   3.4  (1.5)   8.4  (3.8)   4.2  (1.8)   MMBBLS  (+BCF  Gas)  Amanah  Flank   3.2(1.5)   8.0  (3.6)   19.5  (8.7)   9.9  (4.3)   MMBBLS  (+BCF  Gas)  Paya  Bili   1.7  (1.0)   4.1  (2.4)   9.2  (4.9)   4.8  (2.8)   MMBBLS  (+BCF  Gas)  Sungai  Iyu   2.3      (0)   6.5        (0)   17.6    (0)   8.4      (0)   MMBBLS  (+BCF  Gas)  Sungai  Iyu  -­‐  Updip   1.6      (0)   5.9        (0)   21.1    (0)   8.9      (0)   MMBBLS  (+BCF  Gas)  Total  Mean  Oil   -­‐   -­‐   -­‐   36.2  (9.5)   MMBBLS  (+BCF  Gas)    

South Block A

Seismic Program 170 km

Djerneh Simpang  Deep

Amanah

Pineueng

Sungai  Iyu  Up-­‐dip

Paya  Bili

4  

These  leads,  one  of  which  will  be  drilled  in  the  first  half  of  next  year,  as  selected  and  to  be  located  on  the  basis  of  the  results  of  the  current  seismic  acquisition,  are  described  in  more  detail  below.    Peak  Managing  Director,  Jeff  Steketee,  said  "The  commencement  of  our  seismic  program  on  SBA  progresses   the  work   program   for   this   important   project.     The   PSC   is   located  within   a  petroleum   system   containing   an   abundance   of   oil   and   gas   near   existing   downstream  infrastructure.    Indonesia’s  growing  demand  for  oil  and  gas  in  the  face  of  an  undersupplied  market   will   create   significant   possibilities   for   the   SBA   joint   venture   in   the   event   of   the  discovery  of  commercial  hydrocarbon  accumulations  within  SBA.”      Peak’s  partners  in  SBA  are:    

REE  (Operator)   51%   Peaks  controls  REE,  the  Operator  and  51%  interest  holder  in  SBA  (net  to  Peak  38.25%,  earning  via  farm-­‐in)  

KRX  Energy   35%   Earning  through  farm-­‐in  to  PT  Prosys  Oil  &  Gas  who  are  carried  through  the  first  3  years  work  program  (up  to  expenditure  cap).  KRX   Energy   has   been   funded   by   Lion   Energy,   an   ASX   listed  company.  

PT  Prosys  Oil  &  Gas   14%   Carried  through  the  first  3  years  work  program  

     

5  

Belumai  sandstone  potential  shown.    Additional  potential  with  Baong.    Sandstone  targets  not  included.  

SIMPANG  DEEP    

• 28km2  +  closure,  one  of  largest  untested  features  in  the  prolific  North  Sumatra  Basin  • Early  Miocene  Belumai  sandstone  objective  (key  reservoir  in  basin)  at  1800-­‐2000mss  • Anticipated  pay  -­‐  Liquid  rich  gas  or  oil  • Unrisked  Mean  Prospective  Resource:  324  BCF  Gas  or  96  MMBBL  Oil  

 

   

   

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Gas  (BCF)   138   285   324   568  Condensate  (MMBBLS)   7   16   18   33  

or          Oil  (MMBBLS)   29   77   96   196  

Solution  Gas  (BCF)   15   43   55   113      

NW SE

Top Baong

Untested  Belumai section  (~1800mss)  has  an  attractive  seismic  character  

analogous  to  existing  fieldsLINE 1104

Simpang -1 Offset

1981  Simpang-­‐1  reached  TD  of  1191m  in  high  gas  interval

Intra Baong events

1km

TWT

Simpang Deep Lead

28  km2

Prospective  Resources  

LEAD  

6  

Belumai  sandstone  potential  shown.    Additional  potential  with  Baong.    Sandstone  targets  not  included.  

DJERNEH    

• 7km2  4-­‐way  dip  with  up  to  33km2  sub  thrust  closure  (~1400  mss  depth)  • Mid  Miocene  Baong  sandstone  and  Early  Miocene  Peutu/Belumai  

carbonate/sandstone  objective  • Anticipated  pay  -­‐  Liquid  rich  gas  or  oil  • Unrisked  Mean  Prospective  Resource  (Peutu/Belumai  objective  only):  173  BCF  Gas  

or  69  MMBBL  oil    

 

   

 

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Gas  (BCF)   61   144   173   332  Condensate  (MMBBLS)   1   3   4   9  

or          Oil  (MMBBLS)   22   56   69   139  

Solution  Gas  (BCF)   13   31   40   84  

Line 305C 1km

Peutu/Belumaimajor  fields  on  

trend

Well  developed  Middle  Baong  sandstones  occur  in  area

Djerneh Lead

TWT

33  km2

7  km2

Prospective  Resources    

LEAD  

SE NW

7  

PINEUENG  ANTICLINE    

• Combined  stratigraphic/structural  trap  on  well-­‐defined  anticlinal  trend  • Lower  Keutapang  /Upper  Baong  sands  • Anticipated  pay  –  gas  with  condensate  • Sth  Pineueng  A1  well  tested  gas  to  surface  • Additional  potential  in  Baong  and  Bampo  Fm  • Unrisked  Mean  Prospective  Resource:  232  BCF  Gas  and  5.6  MMBBL  Condensate  

   

 

   

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Gas  (BCF)   103   208   232   401  Condensate  (MMBBLS)   2.4   5.2   5.6   9.2  

Line 308

South Pineueng 2

South Pineueng 1

1km

SW

Pineueng Lead

Baong Fm

Pineueng  Lead

4km

Prospective  Resources

Top Peutu/Belumai objective

NE

8  

AMANAH  CREST  &  FLANK  • Fault  closure  related  to  wrench  related  flower  trap  • Lower  Keutapang  /Upper  Baong  sands  • Anticipated  pay  -­‐  oil  • Unrisked  Mean  Prospective  Resource:  14.1  MMBBL  Oil  &  Condensate  &  6.1  BCF  Gas  

 

 

 

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Amanah  Crest          Oil  (MMBBLS)   1.3   3.4   4.2   8.4  

Gas  (BCF)   0.6   1.5   1.8   3.8            

Amanah  Flank          Oil  (MMBBLS)   3.2   8   9.9   19.5  

Gas  (BCF)   1.5   3.6   4.3   8.7  

Line 1131

SW NEAmanah Lead

TWT

1km

Updip KreungTuan

Base  KeutapangTime  Structure  

(CI  40msec)

2km

Prospective  Resources

9  

PAYA  BILI    

• Wrench  related  flower  trap  • Lower  Keutapang  /Upper  Baong  sands  • Anticipated  pay  –  oil  &  gas  • Paya  Bili  A1  tested  oil  &  gas  with  main  part  of  pay  zone  not  tested  • Unrisked  Mean  Prospective  Resource:  4.8  MMBBL  Oil  and  4.9  BCF  Gas  

   

   

 

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Oil  (MMBBLS)   1.7   4.1   4.8   9.2  Gas  (BCF)   1.0   2.4   4.9   2.8  

 

Line 446B

EWPaya Bili

LeadTWT

Paya Bili A1  (on  trend  to  south)  tested  gas  and  oil  from  ~700mMD

1km

2kmBase  KeutapangTime  Structure  

(CI  40msec)

Prospective  Resources

10  

SUNGAI  IYU    Combined  stratigraphic/structural  on  well  defined  anticlinal  trend  Reservoir  -­‐  Lower  Keutapang  /Upper  Baong  sands  Anticipated  pay  –  oil  &  gas  Sungai  Iyu  1  recovered  oil  Unrisked  Mean  Prospective  Resource:  8.4  MMBBL  Oil  and  8.9  BCF  Gas        

     

 Target   Low  

Estimate  (P90)  

Best  Estimate  (P50)  

Unrisked  Mean  

High  Estimate  (P10)  

Sungai  Iyu          Oil  (MMBBLS)   2.3   6.5   8.4   17.6  

         Sungai  Iyu  Up-­‐dip          

Oil  (MMBBLS)   1.6   5.9   8.9   21.1            

Proven  oil  sand  2338-­‐2345  mMD

1km

Top Baong Fm

Top Keutapang

Sungai Iyu 1NW SESungai Iyu lead

TWT

GR

Sungai Iyu 1

Line 863

Prospective  Resources

11  

Competent  Persons  Statement    Information  in  this  announcement  that  relates  to  Hydrocarbon  Resources  is  based  on  information  reviewed  by  Mr  Jim  Durrant,  Director  of  Peak.  Mr  Durrant  is  a  full-­‐time  employee  of  Peak  who  has  consented  to  the  inclusion  of  that  information  in  the  form  and  context  in  which  it  appears.    Mr  Durrant  has  over  30  years  experience  in  the  oil  and  gas  industry  and  is  a  member  of  the  American  Association  of  Petroleum  Geologists  (AAPG);  Australian  Petroleum  Production  and  Exploration  Association  (APPEA  Honorary  Life  Member),  the  Society  Petroleum  Engineers  (SPE)  and  Petroleum  Exploration  Society  of  Australia  (PESA).      Petroleum  Resources  Classifications    The  definitions  for  oil  and  gas  resources  used  in  this  announcement  are  in  accordance  with  the  guidelines  of  the  Society  of  Petroleum  Engineers  (“SPE”)  for  application  of  the  Petroleum  Management  Resource  System  (PRMS).  The  SPE  PRMS  can  be  found  on  the  SPE  website  at  www.spe.org.    The   term   “resources”   as   used   in   the   SPE   PRMS   is   stated   therein   by   SPE   to   encompass   all  quantities   of   petroleum  naturally   occurring   on   or  within   the   Earth’s   crust,   discovered   and  undiscovered   (recoverable   and   unrecoverable),   plus   those   quantities   already   produced.    Further,   it   includes  all   types  of  petroleum  whether   currently   considered  “conventional”  or  “unconventional.”    

The   PRMS   system   defines   the  major   recoverable   resources  classes:   Production,   Reserves,  Contingent   Resources,   and  Prospective  Resources,  as  well  as  Unrecoverable  petroleum.    The   “Range   of   Uncertainty”  reflects   a   range   of   estimated  quantities   potentially  recoverable   from   an  accumulation  by  a  project,  while  the   vertical   axis   represents   the  “Chance   of   Commerciality,   that  is,   the   chance   that   the   project  will   be   developed   and   reach  commercial  producing  status.    

Prospective  Resources    “Prospective  Resources”  are  “those  quantities  of  petroleum  which  are  estimated,  on  a  given  date,  to  be  potentially  recoverable  from  undiscovered  accumulations.”      Estimates  of  resources  or  reserves  of  any  category  rely  on  the  integrity,  skill,  and  judgment  of   the   evaluator   and   are   affected   by   the   geological   complexity,   stage   of   exploration   or  development  and  amount  of  available  data  from  which  they  are  derived.        Any  estimate  of   a   resource   is  ultimately  a  matter  of  opinion  and   is   subject   to  an   inherent  level  of  uncertainty  and  in  the  case  of  Prospective  Resources,   it  should  be  recognised  that,  

12  

whilst   PRMS   provide   for   assessment   on   the   basis   of   “Low   Estimate”,   “Best   Estimate”   and  “High   Estimate”   there   must   always   be   the   prospect   that,   as   the   definition   refers   to  “undiscovered  accumulations”,   the  “accumulation”  might  not  exist,  with   the  result   that  no  actual  resources  are  discovered.        Prospective  Resources   represent   a   higher   risk   than  Contingent   Resources   since   the   risk   of  discovery   is   also   added.   For   Prospective   Resources   to   become   classified   as   contingent  resources,  hydrocarbons  must  be  discovered,  the  accumulations  must  be  further  evaluated  and   an   estimate   of   quantities   that  would   be   recoverable   under   appropriate   development  projects  prepared.      The  PRMS  state  that  the  term  “Best  Estimate”  is  considered  the  most  realistic  assessment  of  recoverable   quantities.   If   probabilistic   methods   are   used,   this   term   would   generally   be   a  measure   of   central   tendency   of   the   uncertainty   distribution   (most   likely,   median,   P50   or  mean).      The  “Mean”  is  derived  from  the  distribution  of  recoverable  quantities  for  the  “success  case.”  It   is   not   risked   for   probability   of   success.   The   mean   enables   aggregate   values   to   be  determined   without   a   distorting   “portfolio   effect”   which   may   occur   when   probability  distribution  derived  low  estimate,  best  estimate  or  high  estimate  are  aggregated.      Project  Maturity  Subclasses  

Under   PRMS,   Reserves,   Contingent  Resources  and  Prospective  Resources  can   be   further   subdivided   and   three  subdivision  classification  systems  are  provided.   For   Prospective   Resources  Play,  Lead  and  Prospect  are  adopted,  with   an   increasing   chance   of  commerciality  as  shown  in  the  figure  on  the  left.                        

  For  further  information  please  contact:    www.peakoil-­‐gas.com       info@peakoil-­‐gas.com      Jeff  Steketee,  Managing  Director   +61  8  6143  1800    

Guidelines for Application of the Petroleum Resources Management System 18

2.7 Project Maturity Subclasses Under PRMS, identified projects must always be assigned to one of the three classes: Reserves, Contingent Resources, or Prospective Resources. Further subdivision is optional, and three subclassification systems are provided in PRMS that can be used together or separately to identify particular characteristics of the project and its associated recoverable quantities. The subclassification options are project maturity subclasses, reserves status, and economic status.

As illustrated in Fig. 2.2, development projects (and their associated recoverable quantities) may be subclassified according to project maturity levels and the associated actions (business decisions) required to move a project toward commercial production. This approach supports managing portfolios of opportunities at various stages of exploration and development and may be supplemented by associated quantitative estimates of chance of commerciality, as discussed in Sec. 2.6. The boundaries between different levels of project maturity may align with internal (corporate) project “decision gates,” thus providing a direct link between the decision-making process within a company and characterization of its portfolio through resource classification. This link can also act to facilitate the consistent assignment of appropriate quantified risk factors for the chance of commerciality.

Not to scale

RESERVES

PRODUCTION

PROSPECTIVERESOURCES

UNRECOVERABLE

UNRECOVERABLE

Range of Uncertainty

TOTA

L P

ETR

OLE

UM

INIT

IALL

Y-IN

-PLA

CE

(PIIP

)

DIS

CO

VER

ED

PIIP

UN

DIS

CO

VE

RE

D P

IIP

CONTINGENTRESOURCES

Incr

easi

ng C

hanc

e of

Com

mer

cial

ity

Project MaturitySub-classes

On Production

Approved for Development

Justified forDevelopment

Development Pending

Development Unclarified or On Hold

Developmentnot Viable

Prospect

Lead

Play

CO

MM

ER

CIA

LSU

B-C

OM

ME

RC

IAL

Fig. 2.2—Subclasses based on project maturity.

Evaluators may adopt alternative subclasses and project maturity modifiers to align with their own decision-making process, but the concept of increasing chance of commerciality should be a key enabler in applying the overall classification system and supporting portfolio management. Note that, in quantitative terms, the “chance of commerciality” axis shown in Figs. 2.1 and 2.2 is not intended to represent a linear scale, nor is it necessarily wholly sequential in the sense that a Contingent Resource project that is classified as “Development not Viable” could have a lower