EXPLORATION PERMIT (MINERALS) 7721 NAGOORIN OIL SHALE DEPOSIT ANNUAL REPORT FOR THE PERIOD 22 MARCH 2014 – 21 MARCH 2015 Site Nagoorin EPM 7721 Date April 2015 Department Mine & Resource Development Author / Coordinator Graham Pope Distribution DNRM, Greenvale Mining N.L. , QER Pty Ltd TRIM location D15/00745 Revision 1.0 QER Pty Ltd CONTENTS SUMMARY ........................................................................................................................ iv 1. INTRODUCTION ....................................................................................................... 1 2. TENURE ...................................................................................................................... 1 Exploration Permit (Minerals) 7721 ......................................................................................................................... 1 Mineral Development Licence 234 .......................................................................................................................... 1 Environmental Authority .......................................................................................................................................... 3 Land Tenure History ................................................................................................................................................ 3 NATIVE TITLE CLAIMS .............................................................................................. 3 Overlapping Authority to Prospect for Petroleum .................................................................................................... 5 Overlapping Exploration Permit (Coal) .................................................................................................................... 5 3. GEOLOGY .................................................................................................................. 5 4. EXPLORATION FOR THE 12 MONTHS TO 21 MARCH 2015. ............................ 7 Program for the 12 Months to 21 March 2015 ......................................................................................................... 7 Geological Interpretation ......................................................................................................................................... 7 Geological Data Evaluation ................................................................................................................................... 10 2D SEISMIC INTERPRETATION ................................................................................. 10 Resource Review .................................................................................................................................................. 14 JORC 2012 RESOURCE ESTIMATE .......................................................................... 14 JORC 2012 GUIDELINE PARAMETERS .................................................................... 15 SPE-PRMS PETROLEUM RESOURCE ESTIMATION .................................................. 16 Groundwater Monitoring Program ......................................................................................................................... 17 6. ACTIVITY IN EPM 7721 22 march 2015 – 21 march 2016 .................................... 19 7. REFERENCES & BIBLIOGRAPHY ........................................................................ 20 FIGURES: Figure 1: Tenement Locality Diagram ................................................................................ 2 Figure 2: Plan Showing Land Tenure Status ...................................................................... 4 Figure 3: Nagoorin Graben Composite Section. ................................................................. 8 Figure 4: Nagoorin Oil Shale Deposit – sub-crop geology, drill holes and seismic line locations ............................................................................................................................... 9 Figure 5: Seismic line 08-BRS-02 with interpretation. .................................................... 12 Figure 6: Seismic line 08-BRS-03 with interpretation ..................................................... 13 Figure 6: Groundwater Level Monitoring Survey, drillhole locations. ............................ 18 TABLES: Table 1: Tenure Details for EPM 7721 ............................................................................... 1 Table 2: Petroleum and Gas Wells within MDL 234 and EPM7721. ................................ 5 Table 3: Nagoorin Resource Estimation JORC 2004 Summary ....................................... 14 Table 4: Nagoorin Resource Estimation JORC 2012 Summary ....................................... 15 Table 5: SPE-PRMS Petroleum Resource Estimate. ........................................................ 16 APPENDICES: 1. Acknowledgement and Warranty Nagoorin EPM7721 Annual Report 2015 ii QER Pty Ltd PROJECT LOCATION 1:250,000 sheet: Monto SG 56-1 1:100,000 sheet: Calliope 9149 Locality feature names: 65km S of Gladstone Nagoorin, Ubobo Boyne River, Boyne Valley LOCAL GOVERNMENT Gladstone Regional Council KEYWORDS Nagoorin Graben, Nagoorin beds, Tertiary, oil shale, ground water survey, resource estimate, seismic interpretation, stratigraphy Nagoorin EPM7721 Annual Report 2015 iii QER Pty Ltd SUMMARY 1. This statutory report to the Queensland Department of Mines and Energy is the annual activity report for Exploration Permit (Minerals) (EPM) 7721, the Nagoorin Oil Shale Deposit, Central Queensland, for the twelve-month period ending 21 March 2015. Holders of the EPM are Greenvale Mining NL, and Queensland Energy Resources Limited. 2. EPM 7721, granted in 1991, has most recently been renewed for a two-year term expiring on 21 March 2015. EPM 7721 provided the necessary underlying tenure to support the application dated 21st March 1996 for Mineral Development Licence 234 which was granted on 31 October 2012. 3. 2D seismic and CSG well data for the Nagoorin Graben has become available following the surrender of the Arrow Energy ATP 679. Preliminary interpretation of the data shows more detailed seismic reprocessing and reinterpretation together with CSG well interpretation is required within EPM 7721 for ongoing resource evaluation. 4. The annual review of parameters and assumptions underlying resource estimate for the oil shale resource discovered and delineated within the EPM and MDL was undertaken during the period. The figures for the estimate of the oil shale resources of the Nagoorin Deposit have been updated from those established in 2001 as a consequence of the evaluation of both seismic and CSG well information now publicly available. Based on grade cutoff limits of 50 litres per tonne at zero moisture (LT0M), and four-metre minimum thickness to a maximum depth of 502 metres below surface, the resource has been estimated as follows: Resource Tonnes Grade Moisture Shale Oil Category (millions) LT0M Wt% Mbarrels in-situ Measured 815 91 28.8 332 Indicated 1,585 92 27.4 665 Inferred 3,019 95 24.5 1,355 Total 5,419 93 26.0 2,351 Nagoorin EPM7721 Annual Report 2015 iv QER Pty Ltd 1. INTRODUCTION Exploration Permit Minerals (EPM) 7721 contains the Nagoorin Oil Shale Deposit. The deposit is located in the Boyne Valley, about 65 kilometres south of Gladstone (Figure 1). Investigations are conducted under a Joint Venture consisting of Greenvale Mining NL (GVL, 67%), and Queensland Energy Resources Limited (QER, 33%). Investigations in the tenement area led to the discovery and definition of the Nagoorin oil shale deposit. Subsequently an application for Mineral Development Licence 234 (MDL 234) was lodged to cover this deposit in 1996 and granted in 2012. While assessment by the Department of the MDL application was in progress, the underlying EPM tenure was maintained to support the application. This report is a summary of activities associated with the exploration and evaluation of the Nagoorin oil shale deposit, submitted as required under the terms of the EPM, in relation to the year ending 21 March 2015. During the period, the annual report for the previous term of EPM 7721 was submitted to the Department (Pope, 2014). 2. TENURE Exploration Permit (Minerals) 7721 EPM 7721 was granted on 22nd March 1991 over an area of 27 sub-blocks. The permit is a consolidation of former EPMs 4991 and 5889. The permit was renewed for three years commencing 22nd March 1993. The EPM was extended by subsequent renewals to 2015. The most recent application for renewal for 12 months (to 21 March 2017) was lodged on 22nd December 2014. As a consequence of grant of MDL 234, EPM 7721 was reduced to 14 sub-locks. Details of the tenement are listed below. Table 1: Tenure Details for EPM 7721 Exploration Permit (Minerals) 7721 Granted 22nd March 1991 Expiry 21st March 2015 Sub-blocks 14 Area 45.8 km2 Mineral Development Licence 234 An application for a Mineral Development Licence over the oil shale resource of the Nagoorin Oil Shale Deposit was lodged with the Department of Minerals and Energy on 21st March 1996. The application covers an area of 6,773 hectares. The outline of the area (MDL 234) relative to the EPM is shown in Figure 1. Nagoorin EPM7721 Annual Report 2015 1 QER Pty Ltd Figure 1: Tenement Locality Diagram Nagoorin EPM7721 Annual Report 2015 2 QER Pty Ltd The application was progressed during 2009 with the finalisation and signing of an Ancillary Agreement under Section 31 of the NTA and Section 31 Deed by the Port Curtis Coral Coast Claimant Group and the tenement holders.