Galilee Energy : SPP closing date extension and drilling update

ASX/MEDIA ANNOUNCEMENT _____________________________________________________________

SPP closing date ex_t_e_n_d__e_d__,_d__r_il_l_in__g__i_m__m__i_n_e_n__t ____________________________

4 April 2022

Highlights

• • All wells online with average gas production ~60 Mscfd and water production relatively stable ~17,000 BWPD

• • Drilling of five new vertical production wells to commence 19 April to accelerate pressure drawdown as a prelude to an anticipated maiden reserve booking

• • Civil works, access roads and lease pads for 5 wells nearing completion

• • Silver City Drilling Rig 23 mobilising to site this week, drilling and construction camp onsite

• • SPP Offer closing date extended by one week to Monday, 11 April 2022

Share Purchase Plan Offer Closing Date Extended

Galilee Energy Ltd ("Galilee") (ASX: GLL) advises that the Closing Date of the Share Purchase Plan ("SPP") announced on 4 March 2022 ("SPP Offer") has been extended from Monday, 4 April 2022, until 5.00pm (AEDT) on Monday, 11 April 2022.

The extension will ensure that all Eligible Shareholders have additional time to participate in the SPP Offer.

Capitalised terms in this announcement have the same meaning as set out in the SPP Booklet.

The SPP provides Eligible Shareholders with the opportunity to acquire up to A$30,000 worth of Galilee Energy ordinary shares ("Shares") at the same price ($0.32) as the recently completed Placement without paying any brokerage costs, commission or other transaction costs.

The Company also intends to offer successful applicants in the SPP (Participants) the ability to subscribe for one (1) option to acquire Shares on the basis of every one (1) Share issued to the Participant under the SPP, with an exercise price of $0.48 per Share and expiry of 4 September 2023 (Options), for nil additional consideration.

Any shareholder who was an Eligible Shareholder 7.00pm (AEDT) on the Record Date of 23 February 2022 and who wish to participate in the SPP, can review the terms of the Offer contained in the SPP announcement released to the ASX on 4 March 2022 which can be found at the Galilee website:https://galilee-energy.com.au.

The full terms and conditions of the SPP Offer were included in the SPP Offer Booklet opened on 4 March 2022. All other terms of the SPP Offer remain the same as set out in the SPP Booklet.

Any shareholders with enquiries in relation to the SPP can contact the Galilee Company Secretary on 07 3177 9970 (from within Australia) or [phone] (from outside Australia).

The revised timetable for the SPP Offer is summarised below:

Event	Date
Record Date	7.00pm (AEDT) 23 February 2022
SPP Opening Date	4 March 2022
Revised SPP Closing Date	5.00pm (AEDT) 11 April 2022
SPP Results Announcement	14 April 2022
Issue Date	21 April 2022
Quotation of new Shares on ASX	21 April 2022
Dispatch of SPP holding statements	30 April 2022

Table 1: Revised SPP timetable

The SPP follows the recent completion of a well-supported and oversubscribed placement to institutional and sophisticated investors that raised approximately A$11.8 million (before costs).

Funding to unlock a large, uncontracted gas resource

The combined placement and SPP funding will allow Galilee to better exploit the large contingent gas resource at the Glenaras Project. Glenaras has one of the largest certified, uncontracted contingent resource positions on the east coast of Australia (Table 2).

Category	Contingent Resource (PJ)	Area (km2)
1C	308	~36
2C	2,508	~1,200
3C	5,314	~2,500

Table 2: Contingent Resource Estimates *

The Company is seeking to facilitate transformational value uplift at Glenaras and progress Galilee towards becoming a multi-TCF gas development company. More specifically, proceeds from the Placement and SPP will be applied to a new 5-well drilling programme at Glenaras to accelerate pressure drawdown and initiate gas desorption at Glenaras to achieve commercial gas production in support of a maiden reserve booking.

Key pressure desorption for reserve booking

Figure 1 - new vertical production wells

Galilee is now set to capitalise on over $100m of previous exploration and appraisal expenditure at Glenaras. Pressure depletion witnessed to date is very significant and confirms a material volume of coal is close to being desorbed.

As previously reported, however, new modelling undertaken by Schlumberger has confirmed that the significant pressure sink already created at Glenaras can be sufficiently enhanced within 6 to 12 months if five new vertical wells are drilled around the southwestern flank of the pilot (Figure 1). Regional depletion proves the pilot is effectively dewatering all Betts Creek coals, leading to a potential material reserves booking in early 2023.

Operations Update

All wells are currently online and pumping. The pilot is currently producing ~60 mscfd of gas and ~17,000 BWPD (barrels of water per day). Encouragingly, it has been over 4 months since any downhole pump failures have been encountered, re-inforcing the Company's view that the downhole design modifications made in the last workover campaign have delivered a more robust production system.

Drilling at Glenaras to commence imminently

Activities for the preparation of the Glenaras drilling programme have progressed well over the last week. The 2022 programme consists of drilling, completing, connecting and powering an additional 5 vertical wells (Figure 1).

The civil works, access roads and lease pad preparation for the Glenaras drilling programme are nearing completion. The well site lease pads and access roads have been completed. Construction of the sumps for the drilling activities is well underway (Figure 2).

The drilling and construction camp has arrived at site (Figure 3). The camp has 30 rooms and will be used by the drilling and construction workforce during this campaign.

The Silver City Rig 23 is mobilising to location this week.

Figure 2 - drilling lease constructionFigure 3 - Drilling & construction camp setup

Decarbonisation pathway to managing and offsetting emissions

Whilst Glenaras is well endowed with gas, this is only part of the opportunity, in our view. Increasingly, in order to secure ongoing support from investors and customers, energy companies are being required to demonstrate the capacity to supply hydrocarbons with minimal environmental impact. Galilee is currently reviewing commercially viable investments to transition our operations to a low carbon operation. Some of the key aspects of our decarbonisation pathway our outlined below:

• • Low CO2 content - The early gas composition data collected from the Glenaras pilot indicates that it will be a low CO2 gas development, with CO2 levels below 2%. This attribute alone reduces the carbon footprint of Glenaras versus other gas producers and sets our hurdle for carbon neutrality lower.

• • Solar Power - The use of solar power onsite is currently being assessed. The existing 17 MW Longreach Solar Farm is strong evidence of the commercial viability of solar farms in this region which is renowned as being one of the best locations in Australia for solar energy. Solar and an abundance of essentially fresh water provides Galilee with yet further optionality when low to zero emission hydrogen and urea production are considered.

• • Carbon Sequestration - Coal Seam Gas projects can yield saline water which creates a disposal issue for the Operator. A key advantage of the Glenaras Gas Project is the high volumes of essentially fresh water that is produced. Galilee is currently undertaking a comprehensive review of the potential cropping and farming options and the scope for additional direct and indirect revenue streams to Galilee in the future. These include evaluating the carbon sequestration/credit benefits related to timber crops and specific crops that provide higher carbon storage within the soil. Early investigations have shown that certain crops can provide both carbon benefits and potential for a bio-fuel product. The Company is already irrigating ~70 ha, growing a combination of sorghum, barley, and oats to handle the 17,000 BWPD currently being produced.