Blue Energy Limited reported on certain corporate matters and operations at its Sapphire Pilot Well production testing project in the Sapphire Block in ATP 814 (PLA 1034). Research and Development Claim: As forecast in the June 30 Quarterly report (released to the market 31 July 2023) an initial R&D claim representing Sapphire Pilot drilling planning phase expenditure incurred in the 2021-2022 financial year was accepted by the ATO. Subsequent to the quarterly report Blue has received the sum of $275,425 from the ATO as a rebate for Research and Development eligible activity expenditure.

The second (and more substantive) R&D claim covering the larger quantum of drilling activity is being readied for lodgement with the ATO, as it requires the 2023 audited accounts to accompany the application. Sapphire Pilot Testing: As announced on 31 July 2023, the Sapphire Pilot would be shut in to conduct a pressure build up and interference test. The pressure build up test commenced on 9 August 2023.

Build up data has been acquired. Dewatering recommenced on 26 August 2023 with all lateral gas production wells shut in. The plan is to continue the dewatering and open the laterals for resumption of gas production on or about 20th September.

Qld Government Bowen Basin Gas Pipeline Study - Phase 2 completed. Phase two of the ongoing Bowen Basin Gas Pipeline Study funded by Government and managed by KPMG (with input from NSAI and GHD) was recently released by the Qld Department of Resources. The key findings of this phase of the study are: Bowen Basin gas strengthens the resilience of the East Coast Gas Market.

Development of Bowen Basin gas could address forecast East Coast gas shortfalls. Capture of mine methane, whilst currently challenging, would reduce the Basin's fugitive coal mine emissions. Development of Bowen Basin Gas would benefit the local Queensland economy and the national domestic and industrial gas supply as well as playing an important role in transitioning to a future low emissions energy network.

That there is an opportunity for Government to support industry to enable the development of a pipeline that unlocks the Bowen Basin.