Norwest Energy NL : Quarterly Activities/Appendix 5B Cash Flow Report

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Norwest Energy NL

Level 2, 30 Richardson Street

West Perth, WA 6005

1. [phone]

1. [e-mail]
   www.norwestenergy.com.au

ASX Announcement

29 July 2022

JUNE 2022 QUARTERLY ACTIVITIES REPORT

QUARTERLY HIGHLIGHTS

• Lockyer Deep-1 Absolute Open Flow Rate estimated at 190 MMscf/d
• Best-estimateof potential resource area increased from 92km2 to 100km2
• Post-testanalysis indicates up to 110 Bcf gas-in-place connected to Lockyer Deep-1 within the approximate 3km2 area of test-investigation
• Strongly supported placement and share purchase plan raised $18.3 million
• Norwest Energy fully funded for a comprehensive appraisal program with shareholder register strengthened by institutional participation in placement

LOCKYER DEEP-1 GEOLOGICAL UPDATE

Preliminary analysis of all data gathered during the Lockyer Deep-1 drilling program was completed during the quarter. Consistent with the regional Kingia geological play, the presence of clay-coated grains combined with large grainsize and high sediment maturity has resulted in the retention of significant original porosity and permeability, with average porosities estimated to range between 13% to 21%. Semi- qualitative rock typing of drilling cuttings indicates that additional gas pay may exist, over and above that identified via preliminary petrophysical analysis, with potentially effective reservoir below the perforated interval (4041.5m to 4066.75 metres, MDRT) down to 4085 metres (assuming a 9% porosity cut-off).

Comprehensive analysis of reservoir pressure data from Lockyer Deep-1 and available offset wells supports an increase in the previous best-estimate for the Free Water Line (FWL) from 4500 metres to 4560 metres (refer Figure 1). As a result of the estimated deeper FWL and based on Norwest's post-drill structural interpretation, the potential resource area has increased from 92km2 to 100km2.

Planned Lockyer-2

location

Indicative Lead D

Free Water

Line @ 4,560

Lockyer Deep-1	metres
well intersection

100km2

Planned NED-1

location

Figure 1: Norwest Energy Top Kingia Fm. Depth Map

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LOCKYER DEEP-1 PRODUCTION TEST ANALYSIS

Operator Energy Resources Limited (EnRes) completed production testing operations at Lockyer Deep-1 in late March 2022, with a comprehensive program to determine well deliverability, reservoir quality and gas composition across the 25 metre perforated interval of the Kingia Sandstone. A maximum instantaneous gas flow rate of 117 MMscf/d was achieved - one of the highest rates recorded onshore Australia.

Subsequent analysis has confirmed that the testing objectives were met, with a high quality dataset recorded. The Absolute Open Flow rate for the well (i.e. unconstrained by tubing) was determined to be 190 MMscf/d, with an estimated 70 Bcf to 110 Bcf gas-in-place connected to the Lockyer Deep-1 well within the well test maximum radius-of-investigation (representing an area of approximately 3km2, refer Figure 2).

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	Well test
	maximum area
Lockyer Deep-1	of investigation
well intersection

Zone	of

		Lockyer-2
		location
	fault	compartmentalisation
possible

For

Figure 2: Top Kingia Fm. Depth Map with Well Test Area-of-Investigation and Zone of Possible Faulting

Sand ingress during testing operations occurred only at flow rates greater than 50 MMscf/d, with no sand produced during the extended flow period which was conducted at lower rates. Norwest Energy envisages that future wells will be completed for sustained production at rates below 50 MMscf/d (as at the nearby Waitsia gas field development) and therefore sanding is not regarded as a cause for concern. Laboratory analysis of the gas stream confirms a high quality gas with approximately 87.5% methane, 3.9% CO2, and 3.2 bbls of condensate per MMscf.

APPRAISAL PLANNING

EnRes is preparing for further drilling across the broader Lockyer Deep/North Erregulla Deep structure, targeting commencement of a two well back-to-back program from Q4 CY2022, subject to the necessary land access agreements, regulatory approvals and rig availability. The first well, North Erregulla Deep-1(NED-1, refer Figure 1) will test the structural high located some 8.5km to the southeast of Lockyer Deep- 1.

While NED-1 is designed to confirm the presence of gas across the broader structure, the well is regarded as an exploration well due to some cross-fault seal risk at the North Erregulla culmination (as at Lockyer Deep-1) and the distance from Lockyer Deep-1, with the possibility of fault compartmentalisation between the two well locations (refer Figure 2). Such compartmentalisation may be present, analogous with that seen at the Waitsia gas field; however it is not clearly definable on existing 2D seismic data and this uncertainty will be resolved once the Rococo 3D seismic results are available. NED-1 will also test for oil potential within the Dongara/Wagina Formations, the North Erregulla-1 well (1967) having recovered 38°API oil on test from low poro-perm sandstones. There is the possibility for improved reservoir

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development within an estimated 20km2 structural closure that includes the North Erregulla-1 location, and Prospective Resources/geological risking will be announced once complete.

The Lockyer-2 well location will be situated approximately 3km northeast and down-dip of Lockyer Deep-

1. The purpose of Lockyer-2 is to confirm the downdip presence of gas within the Kingia Formation in order to further support the current estimate of an approximately 800-metre gas column. Lockyer-3 and Lockyer-4 appraisal wells are also in the planning stage, with final locations and timing to be confirmed based on the results of the first two wells.

The 385km2 Rococo 3D seismic survey (refer Figure 3) is targeted to commence in December 2022 and is estimated to take up to four months to complete. The purpose of the survey is to provide a high resolution and high quality subsurface view of the Lockyer Deep discovery, providing valuable insight to the detailed subsurface form of the discovery to guide later appraisal/development drilling, reserves definition, reservoir modelling and development planning.

Greater

Springy Creek

Oil Prospect

Lead C

Lead D	Extent of
Lead B	Rococo 3D
Lead A	Survey

Dongara

Waitsia

Lead E

Lead F

West Erregulla

Beharra

Springs

(Deep)

Figure 3: Rococo 3D Seismic Survey Area

EXPLORATION

The Ringneck 2D seismic program was completed in March 2022 and was designed to provide additional seismic coverage of the area to the southeast of Lockyer Deep/North Erregulla Deep, in the vicinity of a prominent gravity anomaly that may be indicative of basement structuring that sets up suitable hydrocarbon traps at the Upper Permian level. Additionally, 2D seismic data was acquired across the Lockyer Deep/North Erregulla Deep structure to support the pending drilling program prior to the completion of the Rococo 3D survey. The 2D seismic data is presently being processed by Earth Signal Processing Ltd. After initial processing the data will be put through a Pre-Stack Time Migration processing flow with the final processed data now estimated to become available in September 2022.

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CORPORATE

Financial

As announced on 6 April 2022, the Company raised approximately $15 million through a placement of new fully paid ordinary shares (at $0.033 per share), primarily to a range of domestic and international institutional investors. The Company also completed a Share Purchase Plan to eligible shareholders at end April 2022, raising an additional $3.3 million.

Cash and cash equivalents at 30 June 2022 were $22,808,000. With a strengthened balance sheet the Company is fully funded for its net share of a comprehensive appraisal and ongoing exploration program across the Lockyer Deep discovery and adjacent leads/prospects.

Unmarketable Parcel Facility

The Company has established an Unmarketable Parcel Share Sale Facility for shareholders who hold less than $500 worth of shares at close of trading 11 July 2022. Refer to the Company's announcement of 15 July 2022 for further information.

Investor Webinar

Norwest Energy held an investor webinar on 22 July 2022 in order to inform shareholders and potential investors of the Company's recent results and future planned activities. The webinar was well attended with strong investor engagement throughout the Q&A session. The recording can be viewed at the following URL: https://vimeo.com/732332043

NOTES PERTAINING TO QUARTERLY CASHFLOW REPORT (APPENDIX 5B)

Item 2.1(d): Capitalised exploration & evaluation costs of $31,000 are associated with studies pertaining to the Lockyer Deep discovery.

Item 6.1: The aggregate amount of payments to related parties and their associates of $138,000 relates to payments to directors, comprised of remuneration of the Managing Director and fees to the Non- Executive Directors.

ASX Listing Rule 5.3.3: Tenement Details

In accordance with ASX Listing Rule 5.3.3 the following table details Norwest Energy's interests in its oil and gas permits:

Tenement reference and location	Interest at beginning of	Interest at end of
	quarter	quarter
EP368	20%	20%
Western Australia
EP426	22.22%	22.22%
Western Australia
TP/15	25%	25%*
Western Australia
* Pending assignment to Triangle Energy and 3C Group

The EP368 and EP426 Joint Ventures are comprised of the following participants:

EP368
Norwest Energy Limited	20%
Energy Resources Limited	80% (Operator)
EP426
Norwest Energy Limited	22.22%
Energy Resources Limited	77.78% (Operator)

Energy Resources Limited is a wholly-owned subsidiary of Mineral Resources Limited.

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Authorised for release to ASX by the Board of Directors.

For further information please contact/follow Norwest Energy at:

Web: www.norwestenergy.com.au

Phone: [phone]

Email: [e-mail]

Investor Relations: Luke Forrestal, GRA Partners, Mobile [phone]

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