Pancontinental Energy NL (PCOGF)

[DrillaHill]

Completion of Bombora Acquisition & $2m Capital Raising

pancon.com.au/investor-centre/asx-releases/
Completion of Bombora Acquisition & Capital Raising (07/12/17)

? > Pancontinental shareholders approve Bombora acquisition and changes to the Pancontinental Board
? > Settlement of $2 million capital raising due on 17 July 2017
? > First fully funded well Dempsey-1 to commence within weeks

Mr Begg, Pancontinental’s new Executive Director and CEO, commented:
“First and foremost, I would like to thank the Board, both past and present, for
their hard work and commitment to the Company. The recently announced farmin
by ONGC to the flagship Namibia PEL 37 where Pancontinental is carried at 30%
through the next well to be drilled confirms the potential of their original vision for
the Company. By acquiring Bombora Pancontinental brings into the portfolio
funded, near term drilling that could deliver early production.
Although in the new assets Pancontinental will mostly be targeting existing
discovered gas resources requiring appraisal drilling to prove commerciality, there
are many common elements to the expanded portfolio. The Company continues to
focus on conventional plays with high resource volume potential and where it can
add value via the drill bit.
We expect to be one of the most active junior companies in the sector over the
coming 12 months, with our drilling program commencing in just a few weeks”.

Planned Drilling Activity
Pancontinental has previously published details of the potential net Prospective
Resources for recoverable oil and gas for each of the high graded drilling projects
listed below and the following Cautionary Statement about oil and gas resource
estimation applies:

Namibia PEL 37
Pancontinental holds a 30% free carried interest in Petroleum Exploration Permit
37, offshore Namibia. On 4 July 2017, the Company was informed by project
operator Tullow Namibia Limited (“Tullow”), that a Farmout Agreement with ONGC
Videsh Limited (“ONGC Videsh”) had been signed. Pursuant to the Farmout
Agreement, Tullow has agreed to transfer to ONGC Videsh a 30% non-operated
participating interest in PEL 37, subject to the satisfaction of certain conditions.
Tullow will remain the Operator with a 35% interest. This latest development with
ONGC Videsh gives the Company confidence that it will enter into a firm drilling
program in 2018.
Pancontinental’s unrisked net Best Estimate resource potential for the four leading
oil prospects identified by 3D seismic in PEL 37 calculated on a deterministic basis
totals some 275 MMbbl (refer to release 28 September 2015) .

USA Dempsey Gas Project
Under a farmin agreement with Sacgasco Limited (ASX:SGC), the Company is
earning a 10% interest by funding 20% of a planned 3,200m well, up to an agreed
cost “cap”. The well is fully funded and due to spud within weeks in late July. The
Company is also a participant in an AMI area where several follow up prospects
have been mapped and over which leasing is advanced.
Pancontinental estimates on a deterministic basis, unrisked, Best Estimate
recoverable Prospective Resources net to its 10% interest in the Dempsey project
to be 77 Bcf (refer to ASX announcement 5 July 2017).

USA Tulainyo
The Company via Bombora is earning up to a 33.33% interest via a staged up to
three well farmin to this potentially giant scale, untested high pressure gas
discovery on the flank of the Sacaramento Gas Basin. The Tulainyo-2 gas discovery
appraisal well is estimated to cost approximately A$4 million and is due to
commence 1 September 2017. Gas Fields LLC (a subsidiary of Bombora that holds
the rights to the asset) has entered into an agreement for another company to
provide most of the funding for drilling the initial well in the farmin program that
is expected to reduce Pancontinental’s beneficial interest in Gas Fields to 40%.
Pancontinental estimates unrisked recoverable P50 Prospective Resources net to
its interest to be 233 Bcf (refer to ASX Announcement 23 June 2017). These
estimates have been made on a probabilistic basis. These resources have been
calculated on a probabilistic basis for Pancontinental’s expected net interest in the
Tulainyo Project, assuming completion of the FIA three well earning program.