Nuenergy Gas : Renounceable Pro-Rata Entitlement Offer

ABN 50 009 126 238

ASX ANNOUNCEMENT

13 April 2017

RENOUNCEABLE PRO‐RATA ENTITLEMENT OFFER TO RAISE $20 MILLION FOR PLAN OF DEVELOPMENT PREPARATION AND EXPLORATION AND APPRAISAL ACTIVITIES Key Highlights:

• Renounceable Pro‐Rata Entitlement Offer to raise $20 million.
• Funding raised for Plan of Development preparation and exploration and appraisal activities
• Offer Document lodged with ASX today. Entitlement Offer opens from 13 April 2017 until 5 May 2017 for Eligible Shareholders

The Board of NuEnergy Gas Limited (ASX: NGY) ("NGY" or "the Company") is pleased to announce a renounceable pro‐rata Entitlement Offer of one (1) new share for every two (2) shares held on the Record Date of 20 April 2017 will be made to Eligible Shareholders of NGY at the issue price of $0.035 (3.5 cents) per share, to raise $20 million before transaction costs.

This Entitlement Offer includes a Shortfall Share Offer that enables Eligible Shareholders (other than Related Parties of the Company) who take up their full Entitlement to apply for shares in‐excess of their pro‐rata entitlement. The directors of NGY reserve the right to issue New Shares under the Shortfall Share Offer to eligible applicants at their discretion.

The Company has today released an Offer Document for the Entitlement Offer outlining the full details of the Entitlement Offer. The closing date for acceptance of entitlements is intended to be 5.00 pm Sydney time on 5 May 2017.

As previously announced, NGY achieved a significant milestone in February 2017 when it received the first independent certification of Reserves for its Tanjung Enim PSC Pilot Production Program ("TEPPP"), which supports the Company's belief in the future potential of its Tanjung Enim PSC asset. It is the first step to unlocking substantial value to move the asset towards commercialisation.

With the results of the TEPPP 2016 work program and Reserves Certification, NGY is ready for discussion with the Government of Indonesia on the Plan of Development ("POD"). Our main focus in the next twelve months is to prepare and secure the POD that will enable the Tanjung Enim PSC to proceed to full scale development and move NGY one step closer to commercialisation.

While the Company works to complete the POD submission, further exploration activities to upgrade resources and reserves will be carried out in 2017 in the other South Sumatra PSCs to prepare these PSCs for POD. With the large resource size of NGY's PSC portfolio in South Sumatra, the Company has the potential to develop its South Sumatra PSCs to provide the scale of operations and synergies for a large scale CBM gas supply.

This Entitlement Offer provides an opportunity for existing Eligible Shareholders to continue participating in the growth of the Company.

Corporate Office

Suite 2.06, 55 Miller Street

Pyrmont, NSW 2009 AUSTRALIA

T: ([phone]

E: [e-mail] www.nuenergygas.com

Sources and Uses of funds

Funds raised by the Entitlement Offer will be used as follows assuming the offer is fully subscribed:

Source of Funds $m

Cash on hand 0.5

Total funds raised from Entitlement Offer 20.0

Total funds budgeted to be available 20.5

Use of Funds

POD preparation	2.0
Exploration, appraisal activities and incidental costs	14.1
Working capital	4.3
Estimated costs of the Entitlement Offer	0.1
Total budgeted use of funds	20.5

Indicative Entitlement Offer Timetable

The key dates are indicative only and the Company reserves the right to vary them subject to the requirements of the ASX Listing Rules.

Event Date (2017)

Lodgement of Offer Document with ASX 13 April 2017

Letter of entitlements to Shareholders 18 April 2017

"Ex" date for securities trading 19 April 2017

Rights trading commences 19 April 2017

Record date 20 April 2017

Complete despatch of Offer Document with Entitlement and Acceptance Form and ASX announcement

26 April 2017

Rights trading ends 28 April 2017

Last day to extend the Offer closing date 2 May 2017

Close of Entitlement Offer (5pm) 5 May 2017

Notify ASX of under/over subscriptions 10 May 2017

Issue of New Shares 12 May 2017

Trading of New Share commences 15 May 2017

Last day of Shortfall Share Offer (on or before) 5 June 2017

Further Information

The Offer Document outlining the details of the Entitlement Offer will be mailed to each Eligible Shareholder on 26 April 2017. The Entitlement Offer is made in reliance on section 708AA of the Corporations Act 2001 (Cth) as modified by ASIC Class Order [CO 08/35]. The Offer Document was lodged with Australian Securities

Exchange (ASX) on 13 April 2017. Under the Entitlement Offer, only Eligible Shareholders with a registered address in Australia or New Zealand are eligible to participate

Each Eligible Shareholder's entitlement will be set out in a personalised Entitlement and Acceptance Form that will accompany the Offer Document. Eligible Shareholders are encouraged to read and consider the documentation sent to them carefully, and seek independent and professional financial advice. As the Entitlement Offer is renounceable, Eligible Shareholders will be able to sell or otherwise transfer their entitlements.

An Appendix 3B for the Entitlement Offer is attached.

The Board of NGY encourages all Eligible Shareholders to participate in the Entitlement Offer. Sincerely,

Kong Kok Keong

Chairman

For further information please contact:

Shareholder Enquiries NuEnergy Gas Limited Tel: [phone]

Email: [e-mail] www.nuenergygas.com

U.S. Persons Disclaimer

The shares to be offered under the Entitlement Offer ("Shares") have not been, and will not be, registered under the United States Securities Act of 1933, as amended ("Securities Act") or the securities laws of any state or other jurisdiction of the United States. This ASX release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States, or to any person that is or is acting for the account or benefit of any U.S. person as defined in Regulation S under the Securities Act ("U.S. Person"). The Shares may not be taken up by a U.S. Person, and may not be offered, sold or resold in the United States or to, or for the account or benefit of, a U.S. Person, except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and applicable securities laws of any state or other jurisdiction in the United States.

[NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS]

About NGY

NGY is an emerging ASX listed gas and ancillary power generation development company with an immediate focus on establishing unconventional gas production in Indonesia. NGY has a strategy to acquire, explore, appraise and develop Coal Bed Methane ("CBM") acreage in this region. It is listed on the Australian Securities Exchange (ASX: NGY) with offices in Sydney (Australia) and Jakarta (Indonesia).

The Company's overall strategy is to explore and establish commercial resources/reserves over its CBM projects, construct production facilities and commence production as soon as possible.

The Company is led by a team of experienced executives with a track record of successfully identifying and developing projects around the world. This team is complemented by the skills of our Indonesian partners to maximise the value of the Company's coal bed methane opportunities.