SGC: Dempsey Gas Shows Update - 31-Aug-17

Sacgasco Limited

ABN 83 114 061 433

Unit 14, 210 Bagot Road, Subiaco, WA, 6008.

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Announcement to ASX 31 August 2017 Significant Gas Shows Continue at Dempsey

• Zones of significant gas shows continue to be drilled in Dempsey 1-15 well
• Drilling ahead below 2,440 m (~8,000 feet) to evaluate multiple remaining conventional sandstone reservoir targets in next 750 m (~2,500 feet) of drilling
• Dempsey is testing the largest undrilled structure in northeastern Sacramento Basin

Sacramento Basin-focused natural gas developer and producer, Sacgasco Limited (ASX: SGC) ("Sacgasco" or "the Company") advises that the Dempsey 1-15 well in the Sacramento Basin in California is drilling ahead in 8 1/2" vertical hole.

Since the last update mud logs have indicated additional zones of significant gas shows. These have occurred even though the drilling mud weight has been increased to control the levels of background gas for safe drilling.

Shareholders and investors are advised that the significance of these shows will become more apparent when the next wireline logs are run to more fully evaluate the intersected gas shows and reservoirs. This is planned after reaching the proposed total drilling depth of approximately 3,200 metres.

The Dempsey 1-15 well is currently drilling ahead below 2,440 m (~8,000 feet) to the highly under-explored deeper targeted reservoirs in the approximately 750 m (~2,500 feet) of remaining section to be drilled.

Dempsey is drilling the largest undrilled mapped structural closure in the northeastern part of the prolific Sacramento Gas Basin and is interpreted to be optimally located to trap gas migrating out of gas generating areas located to the west and south.

Working Interests in the Dempsey Gas Project: Sacgasco Limited (ASX: SGC) (Operator)	50%
Empyrean Energy PLC (LON: EME)	30%
Pancontinental Oil and Gas NL (ASX: PCL)	10%
Xstate Resources Limited (ASX: XST)	10%

Gary Jeffery, Managing Director of Sacgasco commented:

"We continue to be very pleased with the execution of the drilling and the continuing gas shows seen in the Dempsey well.

I am aware that there is speculation about which potential reservoir targets have been drilled to date. I remind shareholders and investors that we are drilling potential reservoirs in an area of the Sacramento Basin that is very under-explored, and hence correlations of strata to seismic and other wells is neither definitive, nor material until the well is logged.

More importantly, as previously observed it continues to be encouraging that since drilling out of the 9 5/8" casing, all potential reservoir zones interpreted from mud logs have been associated with significant gas shows. While these extensive gas shows have slowed down the drilling rate as gas from each zone has to be circulated out to provide for safe drilling, I would call that a good problem to have to manage!

Further updates will be provided on meaningful results from the evaluation of the target sandstone reservoirs spread across the interval to be drilled."

For and on behalf of the Board of Sacgasco Limited.

Gary Jeffery Sam Burns Managing Director Six Degrees Investor Relations [phone] [phone]

About Sacgasco Limited (ASX: SGC)

Sacgasco Limited (ASX: SGC) is an Australian-based energy company focused on conventional gas exploration and production in the Sacramento Basin, onshore California. Sacgasco has an extensive portfolio of natural gas producing wells and prospects at both exploration and appraisal stages, including multi-Tcf opportunities. The Company is targeting gas supply to the local Californian gas market and burgeoning LNG market in North America. Sacgasco is of the view that the size of the prospects in California have the potential to supply both the domestic Californian gas market and export LNG markets.

www.sacgasco.com

Twitter: @SacGasCo

This document contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by many variables which could cause actual results or trends to differ materially. The technical information provided has been reviewed by Mr Gary Jeffery, Managing Director of Sacgasco Limited. He is a qualified geophysicist with over 43 years technical, commercial and management experience in exploration for, appraisal and development, and transportation of oil and gas. Mr Jeffery consents to the inclusion of the information in the form and context in which it appears.