A OIL PRODUCER, page-54

Dear Shareholder,
I am pleased to present the 2023 Annual Report for Xstate Resources Limited.
With production from Red Earth and Anshof assets, and gains made on the divestment of the Alberta Plains assets,
the Company booked a maiden net profit for the financial year ended 31 December 2023 (after income tax) of
$1,400,766.
In the first quarter of 2023 the Company acquired a 25% working interest in 10,240 gross acres (16 sections) in a
ground floor deal from Blue Sky Resources, Operator of our Canadian Assets. This acquisition also included 2 oil
discoveries and 10 Keg River Formation prospects mapped on 3D seismic. Both wells have been completed with
one subsequently shut in and the other generating around C$20,000 per month on a gross basis.
The Austrian Ministry of Finance awarded a production licence to the Company’s Anshof Oil Project (XST 20% WI)
in March 2023 after less than 12 months from initial testing. Test production from the Anshof-3 well commenced
in October 2022 utilising a rented early production system and achieved an average stable rate of 113 gross barrels
per day of light crude oil (33degrees API) This production rate was constrained by storage facilities at site and is
currently being upgrade to hold 3,000 barrels.
The disposal of our Alberta Plains assets in the September 2023 quarter for C$1,007,731 added valuable cash to
the Company. Part proceeds of this asset sale have been deployed to prosecute the global search for the acquisition
and advancement of high impact exploration and appraisal opportunities.
The Company continues to review its existing producing assets with a view to optimizing shareholder return.
Post year end the Company announced the sale of its Northern Albertan Red Earth production assets for US$2.73m
(approximately A$4.2m). This timely disposal will enable the recapitalisation of the Company without incurring any
additional shareholder dilution.
On behalf of the Board of Xstate, I would like to thank shareholders for their continued support and look forward
to meeting as many of you as possible in person at the Annual General meeting in April 2024