Cue Energy Resources : FY2022 First Half Results

ABN 45 066 383 971

23 February 2022

FY2022 First Half Results

Highlights

• 91% increase in revenue to $18.0 million
• 700% improvement in EBITDAX1 to $12.3 million
• $8.2 million Net Profit after Tax
• 41% increase in daily oil production from the Mahato PSC
• Acquisition of Amadeus Basin onshore gas and oil production completed
• $2.3 million in deferred tax assets recognised

Cue has reported a strong performance for the first half of FY2022, posting an $8.2 million Net Profit after Tax (NPAT) and 91% increase in revenue from ordinary activities to $18.0 million.

The significant increase in revenue is a result of continued increasing oil production in the Mahato PSC, with daily gross production of 4800 barrels of oil per day at the end of the period, 41% higher than the start of the half, and three months of revenue from Cue's Amadeus Basin assets, onshore Australia, which were acquired on 1 October 2021.

Sustained revenue growth has been reported over the last eighteen months.

Production revenues by geographical location

A$m

20

15

10

5

0

HY1 FY21		HY2 FY21		HY1 FY22
		Australia		New Zealand		Indonesia

1EBITDAX is a financial measure which is not prescribed by Australian Accounting Standard ('AAS') and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax and excludes business development costs, exploration and evaluation expenses, share based payments and one-off legal expenses.

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EBITDAX1 for the half was $12.3 million, a 700% increase on H1 FY2021.

A net profit after tax of $8.2 million was reported for the period ended 31 December 2021. This was mainly attributable to a $3.4 million profit on $6.5 million in revenue generated from the Mahato PSC, and improved performance of Maari, with results improving by $2.1 million to a profit of $1.9 million for the six months to 31 December 2021.

Net Profit after Tax

EBITDAX1

A$m

15

10

5

0

-5

-10

-15

-20

H1 FY21 H1 FY22

A $2.3 million deferred tax asset was recognised as a result of actual and expected benefits of the acquisition of the Amadeus Basin assets during the half. Carried forward tax losses of $37.9 million remain unrecognised at 31 December 2021.

Further details of the results can be reviewed in the Appendix 4D and Interim Financial report to 31 Dec 2021 released today.

Business Outlook

Cue expects to continue its growth activities in existing projects, with participation in seven wells and Final Investment Decision (FID) on the Paus Biru gas development expected during the 2022 calendar year.

In the Mahato PSC, Indonesia, after the success of the development wells drilled during 2021, the operator has brought forward plans to continue with development drilling in the PB oilfield and five wells are planned within the next six months. The first of these, PB-09, commenced in early February.

Two exploration wells with significant gas targets in the Amadeus Basin; Palm Valley Deep and Dingo Deep, will be drilled starting late March. Each of these wells also has a development objective within producing reservoirs.

The Paus Biru gas development in the Sampang PSC, Indonesia, is expected to reach Final Investment Decision (FID) in the September quarter after current commercial discussions and are finalised.

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Level 3, 10 Queen Street, Melbourne Victoria 3000, Australia

Cue Energy CY2022 expected activities

Q1

Q2

Q3

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

PB-09 Development well

PB-10 Development well

Mahato PSC

PB-11 Development well

PB-12 Development well

PB-13 Development well

Amadeus Basin

Palm Valley Deep Exploration well

Dingo Deep Exploration well

Sampang PSC

Paus Biru FID (Expected)

Timing and activities noted are expected only and subject to change. Actual timing of activities will depend on operational activities and outcomes.

Due to the significant amount of activity planned and the pending Paus Biru FID, the company is reviewing its near term capital requirements.

Cue CEO Matthew Boyall commented on the results and Cue's business outlook.

"These strong results display Cue's transformational growth during the half. The 91% revenue increase is a result of the PB field in the Mahato PSC continuing to increase production through successful development drilling, and the incorporation of three months of revenue from our newly acquired Amadeus Basin assets.

Revenue from both these projects is expected to continue increasing through to and after the end of FY2022 as five more production wells are drilled in Mahato and a full half of revenue from the Amadeus Basin is reported.

Production and revenue from both the Sampang PSC and Maari also remained strong during the period.

Drilling of the Palm Valley Deep exploration well is expected to start in late March, followed by the Dingo Deep exploration well. Both these wells have a significant exploration target and the option to be completed in shallower, producing formations as production wells.

Cue is on an exciting growth path with near term value drivers at Mahato, Palm Valley and Dingo and sustainable revenue from a diversified portfolio of production assets which are all benefiting from current strong oil and gas prices."

For and on behalf of the Board

Matthew Boyall

CEO

Any queries regarding this announcement should be directed to the Company on [phone] or email [e-mail].

All references to dollars, cents or $ in this announcement are to Australian currency, unless otherwise stated.

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Level 3, 10 Queen Street, Melbourne Victoria 3000, Australia

About Cue Energy

Cue Energy Resources Limited is an Australian Securities Exchange (ASX:CUE) listed oil and gas production and exploration company based in Melbourne. Cue's H1 FY2022 revenue was A$18.0 million from gas and oil production in Indonesia and onshore Australia and oil production offshore New Zealand. Cue has an operated exploration permit in the Carnarvon Basin, offshore Western Australia.

General Legal Disclaimer

Various statements in this document may constitute statements relating to intentions, opinion, expectations, present and future operations, possible future events and future financial prospects. Such statements are not statements of fact, and are generally classified as forward looking statements that involve unknown risks, expectations, uncertainties, variables, changes and other important factors that could cause those future matters to differ from the way or manner in which they are expressly or impliedly portrayed in this document. Some of the more important of these risks, expectations, uncertainties, variables, changes and other factors are pricing and production levels from the properties in which the Company has interests, or will acquire interests, and the extent of the recoverable reserves at those properties. In addition, the Company has a number of exploration permits. Exploration for oil and gas is expensive, speculative and subject to a wide range of risks.

Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their accountant, lawyer or other professional adviser as to the suitability for them of an investment in the Company.

Except as required by applicable law or the ASX Listing Rules, the Company does not make any representation or warranty, express or implied, as to the fairness, accuracy, completeness, correctness, likelihood of achievement or reasonableness of the information contained in this document, and disclaims any obligation or undertaking to publicly update any forward-looking statement or future financial prospects resulting from future events or new information. To the maximum extent permitted by law, none of the Company or its agents, directors, officers, employees, advisors and consultants, nor any other person, accepts any liability, including, without limitation, any liability arising out of fault or negligence for any loss arising from the use of the information contained in this document.

Reference to "CUE" or "the Company" may be references to Cue Energy Resources Limited or its applicable subsidiaries.

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Level 3, 10 Queen Street, Melbourne Victoria 3000, Australia