Pilot Energy announces that the Australian Government National Offshore Petroleum Titles Administrator (NOPTA) on behalf of the Delegates of the Commonwealth-Western Australia Offshore Petroleum Joint Authority has advised the Company that Petroleum Exploration Permit WA-481-P has been renewed for a term of five years.

Block WA-481-P Location Map (based on WA- 481-P area prior to the renewal)

Pilot Energy is the majority owner (60%) and operator of WA-481-P covers 130 graticular blocks and is the largest offshore exploration permit covering most of the offshore portion of the North Perth Basin extending from North of Oakajee, Western Australia to south of Cervantes, Western Australia covering approximately 200 km of the offshore Western Australian coast.

Renewal of WA-481-P comes with a moderate 5-year work program as set out in Attachment 1 with geological and geophysical studies, 2D seismic reprocessing and 2D and 3D seismic acquisition in Permit Years 1 through 3 for a total expenditure of $5.75 million (Pilot Energy share $3.45 million) and one exploration well in Permit Year 5.

WA-481-P covers a very large area over the offshore extension of the Northern Perth Basin, on trend with numerous oil and gas discoveries. The primary petroleum plays are for oil and/or gas within the Dongara Sandstone and the Irwin River Coal Measures. Both oil and gas are proven within the permit, with the Frankland gas and the Dunsborough oil discoveries representing 2C contingent resources of 41.6 Bcf gas and 6.0 MMBbls oil respectively.

WA-481-P is well covered by both 3D and 2D seismic data, which confirms the presence of fourteen structural prospects across a variety of geological plays, three of which have been identified as priority targets for future exploration.

The Frankland gas play lies on trend with the Frankland-1 gas discovery, which has estimated 2C contingent resources of 41.6 Bcf gas. Three further structures are located to the northeast of Frankland-1, offering the potential to increase the resource base. Importantly this play has been largely de-risked by the Frankland-1 well, and the Company will review the recently completed seismic inversion study of the Diana 3D data in order to further de-risk the prospects. In the event of future exploration success, commercialisation of two or more fields could occur as a hub, tied back to the onshore Dongara gas facility, located some 20km to the east.

The Cliff Head South play incorporates two structural prospects, both of which lie to the south and west of the Cliff Head oil field. These prospects are of a comparable size to Cliff Head itself and are situated between Cliff Head and the hydrocarbon source kitchen to the west. The oil within Cliff Head would have migrated directly through this area, resulting in a high probability for oil charge into the prospects. While the prospects are large, even a small discovery could likely be developed, by tying back to the Cliff Head offshore facility approximately 10km to the northeast.

Finally, the Leander Reef area offers potential for very large accumulations of oil. Three large structures exist to the west of Cliff Head, with a total Best estimate Prospective Resource across the 3 structures of 98 MMBbls oil. These estimated quantities of petroleum that may potentially be recovered by the application of future development projects(s), relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration and appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

While the Leander Reef-1 well was drilled in the area in 1983, the structures remain untested. This is due to the fact that the well intersected a fault at a location where the Dongara reservoir target has been "faulted out" - i.e. reservoir was absent due to movement on the fault. However, oil and gas shows were encountered by the well, and while currently higher risk than the Frankland and Cliff Head plays, the Leander Reef area warrants further study as a possible future drilling target due to the huge upside potential.

Business Update

Pilot, consistent with its earlier announced strategy, is considering a number of corporate transactions and organic growth opportunities leveraging existing asset positions. These transactions and organic growth opportunities represent incomplete and non-binding proposals and are not in form that can either be accepted by the Pilot board or put to Pilot shareholders (if required). Pilot will continue to keep the market apprised of any developments as and when required.

KeyFacts Energy: Pilot Energy Australia country profile