Blue Energy : September 2024 Quarterly Activities and Cash Flow Report

About this update from Blue Energy Limited

NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL 31 October 2024 QUARTERLY ACTIVITIES REPORT to 30 September 2024 Blue Energy Limited (ASX: BLU, 'Blue Energy', 'Blue' or 'the Company') is pleased to report on activities during the quarter ended 30 September 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 with the aggregate gas flow rate for the Sapphire pilot showing an increasing trend to 0.150 TJ/day. The Board has resolved to continue the production testing of the Sapphire Pilot and for the time being has deferred the potential drilling of a twinned Sapphire lateral pilot well. Significant potential gas prospective sedimentary section has been identified in large tracts of Blue's Northern Territory tenements from processed 2D seismic data - confirming the initial thesis of the large westerly extent of the gas prospective McArthur Basin sequence. In the land Court matter relating to the issuance of an Environmental Authority by the Qld Department of Environment Science and Innovation, Blue is working to define the list of issues for its expert witnesses, in conjunction with the Appellant's expert witnesses, to brief the Land Court in the matter, as part of the Court Managed Expert Evidence process set down by the Land Court to be followed in the matter. Sapphire pilot well production test program continues and Independent review of pilot drilling program. The Sapphire 5 and 6 Pilot wells continue to be production tested with the aggregate gas flow rate from the Sapphire pilot reaching 0.150 Tj/day during the period. The lower most coal seams appear to still undergoing depressuring/dewatering (the water level in the pilots is still above the lowest most coals). The Board has resolved to continue the testing and to defer the possible drilling of a twinned lateral pilot well on Sapphire. Blue has completed the processing Geoscience Australia regional 2D seismic data in the Wiso Basin area of the Northern Territory and within Blue's tenement areas. Blue has now completed the processing of the raw 2D regional seismic data which was recently acquired by Geoscience Australia (GA) in the Wiso Basin (overlays the Birrindudu Basin), and which overlaps Blue Energy's tenements in several locations (specifically EP 200 and EP 207). Preliminary correlation with areas to the north of Blue's EP 205 suggest the sedimentary sequence observed on the new seismic is broadly consistent with nearby permits (viz EP 198) and mineral borehole data suggests correlation to the Limbunya Group (Glyde Package seen on the Beetaloo Sub Basin and McArthur Basin) sequence which is the westerly lateral equivalent of the Barney Creek Formation/Reward/Coxco Dolostones. These Formations host gas in the Glyde discovery in the eastern portion of the Northern Territory. This opens up a potentially very large areas for new gas prospective exploration. 1 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Environmental Authority ATP 814 As referenced in the December 2023 Quarterly, 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 and Science (DES) for its proposed Production Licence Application (PL 1034) in ATP 814. The current status of the case is that a list of issues prepared by both Appellant and Respondents are being finalised to brief the respective experts for the Court Managed Expert Evidence (CMEE) process. This process will result in a joint report being submitted to the Land Court for its adjudication on the matters before it. Background of the Appeal : Following the grant of the EA by DES, the Environmental Advocacy in Central Queensland Inc (EACQI) lodged an appeal in the Qld Land Court regarding the decision by the Queensland Government (DES) 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 currently receives part funding for its activities from the Queensland Government. Notwithstanding that proper process and decision making was undertaken by DES and that 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. The aggregate gas and water rates can be seen in Figure 2 and shows an increasing gas rate trend. Various operational maintenance and repair activities have been performed on surface equipment to maintain continued operation of the pilot. 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, 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 the proposed QPM (parent entity to QPME) 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 QPM Townsville plant. Reflecting this alignment, Blue and QPME executed a non-binding MoU to supply pilot gas to the MGP from the Sapphire Pilot via a proposed pipeline from Sapphire Pilot location to the Node 3 compressor station within the Moranbah Gas field (Figures 1). As earlier advised Blue was granted a Site-Specific Environmental Authority (EA) for the PL 1034 application 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 previously reported to the market and as described in the section above, an appeal of the decision by DESI 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. 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 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 continues to work with the Queensland Government to secure grant of these PCAs. Blue has previously 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). Figure 3 : Location of ATP 854 in relation to existing pipeline infrastructure and major gas fields. Source: Blue Energy. see Listing Rule 5.42 Disclosure at page 9. 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 Figure 5) Blue has now completed the processing of the 2D seismic data acquired in the Birrindudu Basin as part of Geoscience Australia's "Exploring for the Future" program Seismic data beyond Blue's EP 200 and 207 areas has also been processed and incorporated into Blue's assessment to gain a better understanding of the regional context of the prospective section that might be identified (Figure 7). 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 (the Limbunya Group - see Figure 4 below), 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 - see Figure 6) and carries Prospective and Contingent Resources category gas resources (Figure 5) Importantly, the seismic processing 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, which has virtually no existing subsurface geological data. 5 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Figure 5: McArthur Basin gas discoveries and volume estimates. Source: Northern Territory Government Of notable interest is the fact that the traditional SEEBASE ( high-resolution sub-surface geospatial model that defines the 3D geometry of basement) mapping used to identify sedimentary basins appears not to discern the western extent of the McArthur sedimentary sequences in the Northern Territory (see inset in Figures 7 & 8), but which is demonstrable from the new seismic data, thus opening up new gas basin potential. 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. Figure 6 : Oil and gas tenements in the Northern Territory, related infrastructure, oil and gas fields and discovery wells Source: Northern Territory Government. 6 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL This new seismic interpretation and correlations made by Blue bring into play the Application areas (EPA's 199, 208, 209, 210 and 211) that Blue holds and which are adjacent to EP's 200, 205 & 207 (see Figure 9 for Blue's full acreage extent of the NT) Figure 7 - Location of processed new Seismic lines, in Blue's EP 200, 205 and 207 and northern line tying into the Beetaloo Sub-Basin (Source: Blue Energy Ltd) Figure 8: Uninterpreted Blue processed Line 23GA NT1-B showing continuous Proterozoic aged sedimentary reflectors from the north to south through EP 205 and 207 and Blue's application area EP 211. Insert shows SEEBASE regional depth to Basement mapping. Source: Blue Energy. 7 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Figure 9: 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 $0.657 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 30 September 2024) was A$3.2million. The Company has zero debt position. Blue is planning to lodge an R&D tax claim covering 2024 activities on Sapphire Pilot with the expectation that it can be reviewed and processed by the end of the year. 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 June 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). 8 NATURAL GAS - Reliable, Dispatchable, Sustainable, … ESSENTIAL Table 1 Blue Energy gas reserves and resources (net) as at 30 September 2024 + 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 + 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% 9 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 10

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