Ann: Quarterly Report December 2015, page-2

The preliminary view is that the condensate from Roc could be extracted and sold with the light oil from Phoenix South, meaning these two discoveries are not necessarily independent in any development consideration.

In terms of the Roc-1 well, the hydrocarbons in the targeted Phoenix South-1 equivalent reservoir section were not significant, but were sufficient to warrant drilling ahead to where condensate rich gas was discovered. The process to quantify the expected range of recoverable gas and condensate volumes has commenced and we expect to announce these to the market in late February or early March 2016 as we advised on 18 January 2016.

Once the joint venture partners have had the opportunity to consider the results of the Roc-1 well, I expect a meeting will be arranged to discuss the timing and location of follow up wells to further explore and appraise this resource.

At the time of writing this report, the joint venture partners were in the process of considering the well data and have not met to consider the results or discuss future actions. As advised on 18 January 2016, the Roc-1 well was drilled safely and on budget. Consequently, approximately A$30m to A$40m of the farm-out carry was not used and is available to be applied to any future drilling and testing activities within the WA-437-P permit (the Roc structure resides within WA-437-P).

Carnarvon remains in a strong financial position with cash of approximately A$100.0 million, with additional cash of up to US$31.3 million coming from future Thailand oil production receipts, approximately A$30m to A$40m carry available for Roc-2 drilling and no debt or significant commitments.