Australis Oil & Gas Limited provided progress update in relation to its TMS project in the USA, where it is currently conducting its Initial Drilling Program to demonstrate the productivity and value of its core asset. The Program results to date have been highly encouraging, having delivered consistent Tier 1 well productivity whilst resolving issues such as well bore stability - the key factor leading to consistent drilling operations and lower well costs in the full development phase. Oil Production performance Wells #3 and #4 in the Initial Drilling Program have now generated IP30 results that continue to confirm the consistent Tier 1 productivity of the Company's core TMS acreage. The normalised cumulative data for these and the Stewart 30H-1 well is shown below and is compared to the TMS Type Curve which is based on the average performance of all 15 wells drilled in the play during 2014 by the previous Operator. All 15 wells have been on production for over 4 years and so provide a high degree of confidence in the decline profile of the TMS Type Curve. The Taylor 27H­1 well has now been on production for over 60 days. The IP30 for this well was 1,024 bbl/d which is 17% above the TMS Type Curve. The well has a completed lateral length of 6,555 ft which is 91% of the average length of wells included in the TMS Type Curve population. When normalized to this length, which allows a direct comparison, the well produced at 1,125 bbl/d which would be 29% above the TMS Type Curve. The Williams 26H-2 has also been on production for a similar period of time. The IP30 for this well was 361 bbl/d. The well has a completed lateral length of 2,566 ft, which is 36% of the average length of wells included in the TMS Type Curve population. When normalized for this length the well produced at 1,013 bbl/d which is 16% above the TMS Type Curve. These results, together with the continued strong performance of the Stewart 30H-1 clearly show the reservoir productivity. These new wells and the 15 used to generate the TMS Type Curve, demonstrate Tier 1 oil productivity and compares favourably with other more established unconventional US plays and generates compelling economics. To provide context to the Tier 1 performance. When comparing 2017 data from these basins, which benefited from 3 years additional industry knowledge, the 2014 TMS Type Curve has the second highest oil productivity. When considering the oil price, the TMS region enjoys a premium to WTI, with most of the other plays subject to a discount to WTI. Drilling Operations: The drilling of the Quin 41-30 3H (Well #5) well incorporated a number of design changes that addressed certain wellbore instability problems that have been encountered on prior TMS wells, including the earlier Australis operated wells. The primary innovation was the use of a High Performance Water Based Mud (HPWBM) system. Australis has been developing this change to the design since the commencement of the Initial Drilling Program and Well #5 was always designated for initial testing. The well was drilled as planned to the intermediate casing shoe, at a depth of 11,930 ft and casing was set and cemented in place. Austin Chalk hydrocarbon shows were again observed at the base of this hole section, as with wells #1 - #4. The mud system was then changed out to the new HPWBM and lateral drilling commenced. The drilling of the lateral section was compromised on multiple occasions by failures of third party supplied mechanical equipment which led to delays and operational difficulties. These included: A drilling motor parted downhole whilst operating within designated parameters. Debris remaining in the lateral section proved impossible to recover. A drill pipe connection that failed whilst being used within operating parameters, this led to significant delays and operational difficulties in the recovery. A second drilling motor failed which prevented full string circulation at a critical point in the program and led to aborted drilling efforts. These difficulties encountered on the Quin 41-30 3H were not TMS specific. They were due to mechanical issues and three separate equipment failure events that occurred whilst operating within specified parameters. Australis does not intend to use these equipment providers for subsequent operations, including the Saxby 03-10 2H (Well #6). These delays and subsequent fishing and drilling operations generated lengthy durations for the open hole, creating a robust and ultimately successful test for the new HPWBM. Whilst frustrating to have the delays the wellbore has remained stable throughout. Eventually the decision was made to complete the well rather than continue due to the compound effect of delays and associated open hole time. On the last trip out of hole the rig was able to pull the string without rotating or pumping and with very limited overpull, all indications of a stable clean wellbore. Completion operations will be undertaken on approximately 2,500ft of lateral length. Australis continues to refine the engineered design of drilling operations in the TMS but can now demonstrate a solution to most of the issues encountered. The expectation is the Quin 41-30 3H will demonstrate TMS Type Curve productivity once completions operations have finished and will also meet the lease obligations in the production unit, converting acreage to HBP status. As a result of the operational delays on the Quin 41-30 3H, the Initial Drilling Program is approximately 4 weeks behind schedule but remains within budget for the activities to date.