Cue Announces Production & Financial Updates for Quarter ending 31 March 2021

HIGHLIGHTS
- Mahato gross oil production 1500 barrels per day (bopd) from 2 wells at the end of the quarter. PB-5 drilled subsequent to quarter end and tested at 1000 bopd. PB-4 waiting completion

- 35% increase in net oil production for the quarter, totalling 78% increase over the last 2 quarters

- Maari MR6a well repairs currently being undertaken with production expected to resume during May

PRODUCTION AND FINANCE SUMMARY
Oil production was 35% higher during the quarter due to strong production from Maari and the inclusion of Mahato oil production in reporting. $4 million in revenue was received during the quarter from Sampang PSC and one Maari oil lifting. A second Maari lifting was completed during the quarter with revenue expected to be received during the current quarter. Revenue from Sampang was down from the previous quarter due to lower production and the timing of Wortel receipts.

First oil sales were recorded from Mahato PSC during the quarter with revenue expected to be received by Cue during the current period. Closing cash was $17.4 million, a reduction from previous quarter due to payments related to the Ironbark-1 well and timing of cash calls and revenue receipts. The remaining Ironbark-1 costs, approximately $1.2 million, are expected to be incurred during the current quarter.

PRODUCTION AND DEVELOPMENT
NEW ZEALAND
PMP 38160
Cue Interest: 5% (Cue Taranaki Pty Ltd)
Operator: OMV New Zealand Limited

Oil production from Maari and Manaia fields was consistent with the previous quarter with all wells, other than MR6a, in production.

The repairs to the MR6a well were started post the end of the quarter and are expected to be completed and prodution restarted in May.

Jadestone Energy and OMV have amended the longstop date for Jadestone’s acquisiton of 69% operated working interest in Maari until June 30, 2021 to allow time for New Zealand regulatory approvals.

INDONESIA
SAMPANG PSC
Cue Interest: 15% (Cue Sampang Pty Ltd)
Operator: Medco Energi Sampang Pty Ltd

Gas production from the Sampang PSC continued to perform well although was lower than the previous quarter due to variations in demand.

Paus Biru gas commercialization and preliminary FEED and permitting activities are ongoing. COVID 19 related market demand challenges have impacted finalising the gas sales agreement which is on the critical path to a Final Investment Decision (FID). The joint venture is targeting FID for early 2022.

MAHATO PSC
Cue Interest: 12.5% (Cue Mahato Pty Ltd)
Operator: Texcal Mahato EP Ltd

Production and development progressed well during and subsequent to the quarter with first oil sales achieved, PB-2 well production workover completed, PB-5 drilled and production tested at approximately 1000 barrels of oil per day and PB-4 drilled and ready for completion.

At the end of the quarter, PB1 and PB-2 wells were in production with a gross rate of approximately 1500 barrels of oil per day.

During April, the PB-5 development well was drilled to a depth of 5873 ftMD. Wireline logging results showed that the same oil bearing Bekasap A, B and C reservoirs were encountered in the well that are present in the PB-1 and PB-2 production wells. A production test of the Bekasap C reservoir produced approximately 1000 barrels of oil per day. The well is currently on production.

During the quarter, production from PB-2 was successfully started after a workover to perforate reservoirs zones and convert the well from an exploration well to a production well.

PB-4 development well was drilled to a depth of 6178 ftMD. Wireline logging results indicate that the same oil bearing Bekasap A, B and C reservoirs are present in the well that are present in other wells in the PB field. Due to operational issues, the PB-4 well could not be completed at the time of drilling and the operator made the decision to move to the next well, PB-5, while extra equipment was mobilized. The rig will now return to PB-4 to undertake testing and completion activities, which are expected to be completed during the first half of May.

The final well in this program will be the PB-3 development well, which will be started after PB-4. All wells are being drilled from the same well pad, with limited rig movement required between wells.

An independent reserves assessment of the PB field is expected to be released by Cue shortly, after approvals are received from the Indonesian regulator.

Cue is expecting to receive first revenue from the field during the current quarter.

EXPLORATION
AUSTRALIA
WA-359-P
Cue Interest: 21.5% (Cue Exploration Pty Ltd)
Operator: BP Developments Australia Pty Ltd

As previously announced, the Ironbark-1 Exploration well was plugged and abandoned, and the Ocean Apex rig departed the well location on 11 Jan 2021.

Based on the well results a decision has been made not to renew the permit after expiry on 25 April 2021.

WA-409-P
Cue Interest: 20% (Cue Exploration Pty Ltd)
Operator: BP Developments Australia Pty Ltd

The joint venture is assessing the prospectivity of the permit following the Ironbark-1 well results.

WA-389-P
Cue Interest: 100% (Cue Exploration Pty Ltd)
Operator: Cue Exploration Pty Ltd

An application for a 12 month suspension and extension to the permit term of WA-389-P was submitted to the National Offshore Petroleum Titles Administrator (NOPTA) during the quarter. A decision on the application is pending.

INDONESIA
Mahakam Hilir PSC
Cue Interest: 100% (Cue Mahakam Hilir Pty Ltd and Cue Kalimantan Pte Ltd)
Operator: Cue Kalimantan Pte Ltd

Cue has informed the Indonesian regulator that it intends to relinquish the Mahakam Hilir PSC when the permit expires during April 2021.

CORPORATE
In line with government COVID regulations, staff in Melbourne office have returned to working in the Cue office. Staff in Jakarta remain working remotely.

Cue Energy Resources FY21 Half Yearly results were released on 24 February 2021.