Ann: June 2016 Quarterly & Appendix 5B-STX.AX, page-2

All progressing to plan IMO .   Good to see another off take agreement is well advanced and its steady as she goes. Rex, HC and PSI over to you for what is now a well tuned SME insight

We have seen a substantial improvement in productivity at Klebb 3 following the
pump upgrade indicating the potential for a higher peak gas flow rate and EUR to
be achieved from this well. We intend to replicate this upgrade at Klebb 2 during
August.
The commissioning and operation of the electric submersible pump (ESP) at Klebb 4,
completed post quarter end, has been successful. The pump is operating stably and
we are in the process of working to achieve a gradual reduction in reservoir pressure.
Consistent with the early performance of the other Klebb wells, gas flows at surface
have been observed.
The real time down hole pressure and rate data we obtain from the ESP has been a
revelation that has allowed more precise operating control as the well approaches
critical pressure transition points.
The demonstrated combination of stable production performance, improved data
flow and operating control at Klebb 4 has validated the fracture stimulation / ESP
completion as a feasible and effective development pathway for the project