Blue Energy : December 2024 Quarterly Activities & Cash Flow Report

About this update from Blue Energy Limited

NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL 31 January 2025 QUARTERLY ACTIVITIES REPORT to 31 December 2024 Blue Energy Limited (ASX: BLU, 'Blue Energy', 'Blue' or 'the Company') is pleased to report on activities during the quarter ended 31 December 2024 across its acreage in Queensland and the Northern Territory, in which the Company's key gas and oil projects are located. KEY HIGHLIGHTS During the quarter the Sapphire 5 and 6 lateral pilot wells continued on production testing but with interruptions in production caused by surface facility maintenance issues (generators). Both Pilots are again running and continue to produce gas at a rate which is building as the dewatering process recommences. The Research and Development tax rebate for the 2024 expenditure on the Sapphire Pilot project has been completed and lodged to cover the continuing Sapphire Pilot production project. It is expected that this cash will be forthcoming from the ATO in the current quarter. Blue Management is working with the new Queensland Government to secure the outstanding PCA application tenures in its Surat and Bowen Basin acreage. The status of the Queensland Land Court matter relating to the grant by the Qld Government of an Environmental Authority for PL 1034 is that Blue is working with the Department of Environment, Tourism, Science and Innovation (DETSI) to finalise all outstanding issues required to finalise the matter. Technical work on the Northern Territory acreage continued during the quarter and focussed on identifying potential drillable locations (stratigraphic), Land Access activities and tenure management issues. Sapphire pilot well production test program continues. The Sapphire 5 and 6 Pilot wells continue to be production tested and are flowing gas. The testing program was interrupted by consecutive surface equipment maintenance issues in the generation equipment, which have subsequently been resolved. The gas rate is building as the dewatering process recommences. Blue has completed the interpretation of Geoscience Australia regional 2D seismic data in the Wiso Basin area of the Northern Territory. Interpretation of the newly obtained and processed 2D regional seismic data across EP 200 and EP 207 has yielded promising stratigraphic correlations with areas further to the north and east. The sedimentary sequence observed on the new seismic suggests correlation with the Glyde Package seen in the McArthur Basin to the east where gas discoveries have been made. Blue's technical team is now assessing locations for potential stratigraphic drill holes to further confirm the stratigraphy and sample this sequence for oil and gas potential. 1 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Environmental Authority ATP 814 Blue continues to execute its defence of the Land Court Appeal against the grant of the Environmental Authority (EA) by the Queensland Department of Environment, Tourism, Science and innovation (DETSI) for its proposed Production Licence Application (PL 1034) in ATP 814. The current status of the case is that a list of issues between the Appellant and Respondents have largely been resolved through the Court Managed Expert Evidence (CMEE) process. As such Blue is hopeful of an outcome of the matter in the near term. Background of the Appeal : Following the grant of the EA by DETSI, the Environmental Advocacy in Central Queensland Inc (EACQI) lodged an appeal in the Qld Land Court regarding the decision by the Queensland Government (DETSI) to award the EA to Blue Energy. The Environmental Defenders Office (EDO) is acting on behalf of the EACQI in the Appeal proceedings. The EDO has previously received part funding for its activities from the Queensland Government. Notwithstanding that proper process and decision making was undertaken by DETSI and that the extensive supporting materials that Blue submitted for that process were sufficient to grant a standard condition EA, Blue has been joined as a party to the appeal by the EACQI as Blue is an interested party being the beneficiary of the EA granted to it. ACTIVITY IN PROVEN BASINS Bowen Basin, Queensland: ATP 814 (Blue Energy 100% and Operator) Pilot production testing of the Sapphire 5 and 6 wells continued during the quarter. Consecutive surface equipment maintenance issues on each of the vertical water producing wells (5V & 6V - generator sets) have resulted in an interruption to the production testing process. The aggregate gas and water rates of the pilot wells can be seen in Figure 2 and shows gas rate trends over time. Field staff are now dewatering the wells after these interruptions to testing, and the gas rate continues to trend upwards. Figure 1: Sapphire block of ATP 814 in relation to the Moranbah Gas Project and the related gas producing wells. Also shown is the proposed pipeline connection from Sapphire to the MGP Node 3 connection and initial proposed Sapphire development. 2 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Figure 2: Sapphire Pilot production aggregate rates for gas and water. The Sapphire Pilot is situated within the PL 1034 production licence application area, (part of ATP which is located immediately adjacent to the Moranbah Gas Project (MGP) - See Figure 1. The MGP is a producing gas field which was recently acquired by Queensland Pacific Minerals Energy (QPME). Blue Energy has an existing non-binding MoU to supply gas to QPME's proposed Nickel refinery in Townsville. With the acquisition of the MGP by QPME, there is alignment between QPME and Blue Energy for the Company to utilise MGP infrastructure to fulfil the supply agreement to the proposed QPME Townsville plant. Reflecting this alignment, Blue and QPME executed a non-binding MoU to supply pilot gas to the MGP from the Sapphire Pilot 1 via a proposed pipeline from Sapphire Pilot location to the Node 3 compressor station within the Moranbah Gas field (Figure 1). As previously advised Blue was granted in 2023 a Site-Specific Environmental Authority (EA) for the PL 1034 application area by the Queensland Department of Environment, Science and Innovation (DESI) after submitting the appropriate environmental investigative studies required. The EA covers the proposed development of the PL 1034 gas resource and is a requirement for grant of the Production Licence, by the State. As also previously reported to the market and as described in the section above, an appeal of the decision by DESI (now Department of Environment, Tourism, Science and Innovation - DETSI) to grant the EA was lodged against DESI in the Land Court by the Environmental Advocacy in Central Queensland Inc (EACQI). The EACQI is being represented by the Environmental Defenders Office in the Appeal. The Appeal is lodged against the Queensland State Government as the First Respondent with Blue Energy and its subsidiary Eureka Petroleum Pty Ltd, named as the Second and Third Respondents respectively. 1. Refer ASX:BLU announcement 8 June 2023 3 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Surat Basin, Queensland: ATP 854 (Blue Energy 100% and Operator) As noted in previous Quarterly reports Blue has lodged Potential Commercial Area (PCA) applications over this permit area to allow this tenure to progress toward assessing and developing the potential economic gas resources identified by Blue's exploration drilling work in the permit to date. Blue is focussed on working with the new Queensland Government to secure the grants of these PCA's and bring new gas supply to the market in a timely manner. Blue has in earlier announcements reported 398 PJ + of Contingent Resources (recoverable gas) in ATP 854 as assessed by Netherland, Sewell and Associates Inc (NSAI). The gas resource is located near the heart of the CSG-LNG Surat Basin gas supply precinct and has gas pipeline infrastructure linking Wallumbilla to Gladstone running directly through the permit (Figure 3 below). see Listing Rule 5.42 Disclosure at page 9. Figure 3: Location of ATP 854 in relation to existing pipeline infrastructure and major gas fields. Source: Blue Energy. 4 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL ACTIVITY IN EMERGING BASINS Greater McArthur Basin, Northern Territory: (Various permits and equity levels, Blue Energy Operator: see Table 2) During the Quarter, Blue completed the interpretation of the 2D seismic data acquired in the Birrindudu Basin as part of Geoscience Australia's "Exploring for the Future" program. Seismic data outside of Blue's EP 200 and 207 permit areas(from the same survey) was also acquired, processed and incorporated into Blue's assessment to gain a better understanding of the regional context of the prospective section that might be identified. In addition, pre-existing mineral exploration data (borehole data) has been utilised to understand the likely stratigraphy of the sedimentary section identified by the new seismic data, and to that end, there is evidence that the lateral equivalent of the McArthur Group (and specifically the lateral equivalent of the gas bearing Barney Creek Formation, has been identified in those mineral borehole intersections within EP 200. The Barney Creek Formation has previously flowed gas in the McArthur Basin in the eastern parts of the Northern Territory (Glyde discovery) and which carries Prospective and Contingent Resources category gas resources as presented in various Northern Territory Government public presentations. Importantly, the seismic processing and interpretation undertaken by Blue has shown, (in conjunction with Lines PB 13-13 and PB 13-20 acquired by Pangaea in 2013 in the adjacent EP 198) that sedimentary sequences of the McArthur Group and potentially younger are likely to be present within Blue Energy's EP 208, 209, 210 and 211 Application areas. This therefore identifies a (to date unknown but) vast area of potentially gas prospective sedimentary basin, and which has very little subsurface geological data. Blue has been granted a Suspension and Extension of the EP 200, 205 and 207 tenures and their associated work programs to reflect the delays in the EMP approval process for the 2D seismic acquisition proposed for these tenures. These extensions will be valid until February 2025. Blue has lodged further requests for Suspensions and Extensions for EP's 200, 205 and 207 due to the protracted land access negotiations with property owners undertaken under the relevant protocols in place in the Northern Territory following the implementation of regulatory changes from the Pepper inquiry recommendations. 5 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Figure 4: The Blue Energy exploration asset portfolio Source: Blue Energy. June Quarter Exploration Expenditure Summary During the Quarter, and as noted in Section 2.1 (d) of the Appendix 5B Form (appended to this Quarterly Activity report), the company expended $0.796 million on exploration and evaluation activities. This total is comprised of general exploration expenditure (Tenement access, Tenure administration and Tenure management) together with Sapphire Pilot well activities (equipment hire, fuel, consumables, labour hire), resource assessment costs, legal defence costs plus labour and overhead costs charged to the Sapphire Project CORPORATE Cash position Cash on hand (at 31 December 2024) was A$1.99 million. The Company has zero debt. Blue lodged an R&D tax claim covering 2024 activities on the Sapphire Pilot with the expectation that it will be processed by the ATO in the current quarter. Blue's accompanying Appendix 5B (Quarterly Cashflow Report) includes an amount in Item 6.1 which constitutes Non-executive Directors' fees for the quarter. The aggregate amount of payments to related parties and their associates for the December quarter (shown in Items 6.1 and 6.2 of the attached Quarterly Cashflow Report) relates to cash fees paid to all Directors (including fees paid to the Chairman and Managing Director). 6 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Permit Block Date Method Certifier 1P (PJ) 1C (PJ) 2P (PJ) 2C (PJ) 3P (PJ) 3C (PJ) ATP854P 25/01/2022 SPE/PRMS Det NSAI - 90 - 194 - 398 ATP814P Sapphire 9/10/2023 SPE/PRMS Det NSAI - 171.2 90.7 251.7 287.0 256.0 ATP814P Central 31/07/2023 SPE/PRMS Det NSAI - 39 111 469 ATP814P Monslatt 8/12/2015 SPE/PRMS Det NSAI - - - 619 - 2,054 ATP814P Lancewood 31/07/2023 SPE/PRMS Det NSAI - 203 - 232 573 ATP814P Hillalong 27/02/2020 SPE/PRMS Det NSAI - - - 182 - 237 ATP814P South 29/07/2013 SPE/PRMS Det NSAI - 15 - 27 6 30 Total (PJ) - 518 91 1,617 293 4,017 Table 1 Blue Energy gas reserves and resources (net) as at 31 December 2024 + + Listing Rule 5.42 Disclosure The estimates of Reserves and Contingent Resources noted throughout this Quarterly Activities Report have been provided by Mr John Hattner of Netherland, Sewell and Associates Inc (NSAI) and were originally reported in the Company's market announcements of 25 January 2012, 26 February 2013, 19 March 2013, 8 December 2015, 28 February 2019, 22 January 2022, 14 July 2022, 11 July 2023 and 11 October 2023. NSAI independently regularly reviews the Company's Reserves and Contingent Resources. Mr Hattner is a full-time employee of NSAI, has over 30 years of industry experience and 20 years of experience in reserve estimation, is a licensed geologist and a member of the Society of Petroleum Engineers (SPE), and has consented to the use of the information presented herein. The estimates in the reports by Mr Hattner have been prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum and Resource Management System (PRMS) approved by the SPE, utilising a deterministic methodology. Blue Energy confirms that it is not aware of any new information or data that materially affects the information included in any of the announcements relating to ATP 814 or 854 referred to in this report and that all of the material assumptions and technical parameters underpinning the estimates in this Quarterly Activities Report continue to apply and have not materially changed. Listing Rule 5.28.2: The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. Table 2: Queensland petroleum tenements Permit Location Interest Held Previous Interest Held Quarter Current Quarter ATP814 Bowen Basin (Qld) 100% 100% ATP854 Surat Basin (Qld) 100% 100% 7 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Table 3: Northern Territory tenements *Permit Location Interest Held Interest Held Comment Previous Quarter Current Quarter EP199A* Wiso Basin (NT) 10% 10% See Note 1 EP200* Wiso Basin (NT) 10% 10% See Note 1 EP205* Wiso Basin (NT) 10% 10% See Note 1 EP206A* Wiso Basin (NT) 10% 10% See Note 1 EP207* Wiso Basin (NT) 10% 10% See Note 1 EP208A* Wiso Basin (NT) 10% 10% See Note 1 EP209A* Wiso Basin (NT) 10% 10% See Note 1 EP210A* Wiso Basin (NT) 10% 10% See Note 1 EP211A* Wiso Basin (NT) 10% 10% See Note 1 *Exploration blocks where Blue is Operator and farming into. Note 1: Subject to Farm-in Agreement which, upon completion of the seismic work program, will result in Blue becoming a 50% equity participant. Released by Authority of the Board per: John Phillips Managing Director Blue Energy Limited 8 Rule 5.5 Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report Name of entity Blue Energy Limited ABN Quarter ended ("current quarter") 14 054 800 378 31 December 2024 Consolidated statement of cash flows Current quarter Year to date $A'000 ( 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 (43) (299) (e) administration and corporate costs (405) (782) 1.3 Dividends received (see note 3) - - 1.4 Interest received 35 94 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Government grants and tax incentives - - 1.8 Other (provide details if material) - - 1.9 Net cash from / (used in) operating activities (413) (987) 2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities - - (b) tenements - - (c) property, plant and equipment - - (d) exploration & evaluation (796) (1,453) (e) investments - - (f) other non-current assets - - ASX Listing Rules Appendix 5B (17/07/20) Page 1 + See chapter 19 of the ASX Listing Rules for defined terms. Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report Consolidated statement of cash flows Current quarter Year to date $A'000 ( 6 months) $A'000 2.2 Proceeds from the disposal of: (a) entities - - (b) tenements - - (c) property, plant and equipment - - (d) investments - - (e) 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 (796) (1,453) 3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities - - (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities - - 3.3 Proceeds from exercise of options - - 3.4 Transaction costs related to issues of equity securities or convertible debt securities - - 3.5 Proceeds from borrowings - - 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings - - 3.8 Dividends paid - - 3.9 Other (provide details if material) - - 3.10 Net cash from / (used in) financing activities - - 4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 3,200 4,431 4.2 Net cash from / (used in) operating activities (item 1.9 above) (413) (987) 4.3 Net cash from / (used in) investing activities (item 2.6 above) (796) (1,453) 4.4 Net cash from / (used in) financing activities (item 3.10 above) - - ASX Listing Rules Appendix 5B (17/07/20) Page 2 + See chapter 19 of the ASX Listing Rules for defined terms.

View stock analysis, news, and events for Blue Energy Limited