Papua New Guinea onshore Portfolio - Production &

Significant Discovered Resources

Cue Energy is proposing to divest its PNG portfolio which includes an interest in the South East Gobe
oil and gas field (SEG Unit in PDL3) and discovered resources held in retention licences PRL9 and
PRL14, located onshore Papua New Guinea. This opportunity provides immediate production and
future large scale development potential.

PDL3 link to flyer

PRL14 link to flyer

Includes an interest in SE Gobe Unit (part of the SE Gobe Oil and

Gas Field)
Cue Interest:
PDL3 5.57%
SEG Unit 3.29% oil (2.61% gas)
Gross oil production ~1,500 Bopd
Gross proved & probable reserves (2P) 31.6 MMboe (as at
December 2012 excl. 660 Mbbl subsequent production)
Gas production expected to supply the PNG LNG project from H2
2014
SE Gobe field operated by Oil Search

PRL9 link to flyer

Retention licence being renewed
Barikewa gas discovery with gross contingent resource (2C) of 299
BCF
Upside gross contingent resources (3C) of 823 BCF
Cue interest 14.89%
Adjacent to the PNG LNG project pipeline
Appraisal drilling in retention licence renewal work program
Operated by Oil Search
BCF - Billion cubic feet
MMbbl Million barrels
TCF Trillion cubic feet

Bopd Barrels of oil per day

MMboe Million barrels of oil equivalent

Mbbl Thousand barrels

MMscf Million standard cubic feet

Cobra, Iehi and Bilip discoveries with gross aggregate

contingent resource (2C) of 595 BCF and multiple TCF
upside
Cue Interest 10.95%
Identified oil leg in Bilip and possible oil upside at Iehi
Adjacent to SE Gobe field and PNG LNG project pipeline
Operated by Oil Search

Process and Timing

Cue Energy is proposing to offer for sale, directly or
indirectly, all its PNG interests as one package, although
interest in a single licence will be considered. A
confidentiality agreement (CA) will be made available to
interested parties to access the virtual data room.
Expressions of interest and CA by 4 July 2014
Offers to be received by 1 August 2014
Sean Hanrahan, PNG Project Manager
+61 3 8610 4000
Sean.Hanrahan@cuenrg.com.au
www.cuenrg.com.au

PDL3 - SOUTH EAST GOBE OIL & GAS

PRODUCING FIELD
Cue Energy is proposing to divest its PNG portfolio which includes an interest in the South East
Gobe oil and gas field (SEG Unit in PDL3 and associated Pipeline Licence No. 3) and discovered
resources held in retention licences PRL9 (Barikewa) and PRL14 (Cobra, Iehi & Bilip).
Joint Venture Partner

PDL3
Interest

SEG Unit
Interest1

Cue PNG Oil Company Pty Ltd

5.57%

3.286%

Southern Highlands Petroleum

Company Ltd

40.15%

23.688%

36.36%

25.552%

Barracuda Limited (Santos)*

15.92%

9.394%

Petroleum Resources Gobe Limited

2.00%

2.000%

Ampolex (Highlands) Limited (Esso)

5.952%

Merlin Petroleum Company

30.128%

100.00%

100.000%

Oil Search (PNG) Limited

TOTAL
#

Operator SE Gobe Field & SEG Unit * Operator PDL3 excluding SE Gobe
1 SEG Unit interests for oil production only

100% Terms

PDL3 SE Gobe

1P Proved Reserves

2P Proved & Probable

Liquids
1
MMBBL

Gas
2
BCF

MMBOE

Liquids
1
MMBBL

Gas
2
BCF

MMBOE

1.6*

144

25.6

2.3*

176

31.6

*Reserves as at 31 December 2012 excluding 660 Mbbl subsequent production to 31 March, 2014
1 Cue has a 3.286% interest in the SEG Unit oil production
2 Cue has a 2.606% interest in the SEG Unit future gas production

PDL3 contains a portion of the SE Gobe oil and gas field (operated by Oil Search). PDL3 was granted
in December 1996 (expiry December, 2021 and extendable). The SE Gobe field includes the South
East Gobe Unit (SEG Unit refer below). Cues interest in PDL3 is 5.57%, and in the SEG Unit is
3.286% for oil and 2.606% for future gas production.

South East Gobe Unit (SEG Unit) and Unit Operating Agreement (SEGUOA)
The SE Gobe field straddles a portion of PDL3 and PDL4. Together participants in PDL3 and PDL4
make up the SEG Unit. Oil from the SE Gobe field is processed via the Gobe Processing Facility, which
also processes oil from the Gobe Main field.

Production
First production from SE Gobe commenced in 1998 and cumulative life-of-field production is 44
MMbbl through Q1, 2014 from the Iagifu Sandstone. SE Gobe is currently producing approximately

1,500 Bopd (gross) with gas being reinjected. Production is processed at the nearby Gobe Processing
Facility and exported via the Kutubu pipeline.
As oil production naturally declines, the field will transition to gas production and is expected to
supply the PNG LNG project from H2 2014 at up to 35 MMscf per day.

Product Transportation and Marketing

Cue has a 1.64% interest in Pipeline Licence No. 3 that links the Gobe Processing facility to the
Kutubu pipeline. The other interests are held by members of the SEG Unit.
Oil Search, the operator of the SE Gobe field, markets the oil on behalf of Cue through a marketing
agency agreement. Gas is expected to supply the Exxon operated PNG LNG pipeline and facility from
H2 2014.

BCF - Billion cubic feet

MMbbl Million barrels
TCF Trillion cubic feet

Bopd Barrels of oil per day

MMboe Million barrels of oil equivalent

Mbbl Thousand barrels

MMscf Million standard cubic feet

LINK TO COVER

Process and Timing

Cue Energy is proposing to offer for sale, directly or indirectly, all its PNG interests as one package, although interest in a single licence will be
considered. A confidentiality agreement (CA) will be made available to interested parties to access the virtual data room.
Expressions of interest and CA by 4 July 2014
Offers to be received by 1 August 2014
Sean Hanrahan, PNG Project Manager
+61 3 8610 4000
Sean.Hanrahan@cuenrg.com.au
www.cuenrg.com.au

RETENTION LICENCE PRL9 BARIKEWA

GAS DISCOVERY
Cue Energy is proposing to divest its PNG portfolio which includes interests in the Barikewa
discovered resource in retention licence PRL9, the South East Gobe oil and gas field (SEG Unit in
PDL3 and associated Pipeline Licence No. 3) and discovered resources held in retention licence
PRL14 (Cobra, Iehi & Bilip).
PRL9 is located approximately 20km south east of the SE Gobe oil and gas field and covers an area of
567 km2. The retention licence was initially issued on 18 December, 2002 and extended on 18
December, 2007. An application for further extension has been lodged with the PNG government
with a proposed extension through to 2017. The application for extension includes a work program
that provides for a Barikewa appraisal well.
PRL9 contains the Barikewa Gas Discovery and has a gross contingent resource (2C) of 299 BCF with
upside to 823 BCF (gross 3C).
Joint Venture Partner

PRL9
Interest

Cue PNG Oil Company Pty Ltd

14.89%

Oil Search (PNG) Limited*

Barracuda Limited (Santos)
Total

45.11%
40.00%
100.00%

* Operator

Contingent Resource Estimate (Toro and

Hedinia Reservoirs) BCF - 100% terms
1C
2C
3C
71

299

823

Barikewa Gas Discovery

The Barikewa-1 well was drilled in 1957 and proved separate gas on rock accumulations in 15-20m
thick sands of the Toro and Hedinia formations. The Barikewa-2 appraisal well was drilled in 1982 on
the northern flank of the anticline and was found to be dry. Subsequent 2-D seismic showed that
Barikewa-2 is modestly down dip on the structure. Barikewa-2 is separated physically and
hydraulically from Barikewa-1 by faulting. Pressure data indicates potentially long gas columns of up
to 170m. The deeper Magobu Formation was not penetrated and provides additional upside
potential in the form of prospective gas resources.

Further 2D seismic was acquired in 2009, the analysis of which provided a more reliable structural
interpretation of the gas bearing Toro-C Sandstone and Hedinia Sandstone levels that significantly
reduced the remaining uncertainty in the reserves attributed to these reservoirs.

Top Toro C Depth

SPILL POINT
P50 52km2 -1540mss
ML 164km2 -1591mss
MAX 240km2 -1640mss

TopTop
Hedinia
Depth
148_Hedinia
Depth

SPILL POINT ~-1700mss

55km2 max

-1673mss

Seismic Interpretation SP98-01

Work Commitments
The application for extension of PRL9 includes the following work program:
Barikewa-3 appraisal well (to evaluate the Toro and Hedinia reservoirs)
Technical and G&G studies
Contingent acquisition and processing of 60km 2D seismic

Commercial Development
There are currently a number of domestic and export focussed gas development studies occurring in
PNG including the potential expansion of the Exxon operated PNG LNG project. This provides
significant opportunity for the potential development of the Barikewa resource.
The Barikewa resource, located just 5km from the PNG LNG pipeline, is positioned well to supply any
of the gas study development options.

BCF - Billion cubic feet

MMbbl Million barrels
TCF Trillion cubic feet

Bopd Barrels of oil per day

MMboe Million barrels of oil equivalent

Mbbl Thousand barrels

MMscf Million standard cubic feet

LINK TO COVER

Process and Timing

Cue Energy is proposing to offer for sale, directly or indirectly, all its PNG interests as one package, although interest in a single licence will be
considered. A confidentiality agreement (CA) will be made available to interested parties to access the virtual data room.
Expressions of interest and CA by 4 July 2014
Offers to be received by 1 August 2014
Sean Hanrahan, PNG Project Manager
+61 3 8610 4000
Sean.Hanrahan@cuenrg.com.au
www.cuenrg.com.au

RETENTION LICENCE PRL14 COBRA, IEHI

& BILIP DISCOVERIES
Cue Energy is proposing to divest its PNG portfolio which includes interests in the Cobra, Iehi and
Bilip discovered resources in retention licence PRL14, the South East Gobe oil and gas field (SEG
Unit in PDL3 and associated Pipeline Licence No. 3) and Barikewa discovered resource in retention
licence PRL9.
PRL14 is located to the south and east of PDL3 and the SE Gobe field. The licence covers an area of
425 km2 and was issued on 22 November, 2010 for a 5 year term (expiry 23 November, 2015) with
the possibility to apply for several extensions. PRL14 contains three discoveries with an aggregate
gross contingent resource (2C) of 595 BCF gas and 1 MMbbl oil. There is possible further oil upside at
Iehi and potential for multiple TCF upside.
Joint Venture Partner

PRL14
Interest

Cue PNG Oil Company Pty Ltd

10.95%

Oil Search (PNG) Limited*

Murray Petroleum Company Ltd
Total

62.56%
26.49%
100.00%

* Operator

Contingent Resources (2C) 100% terms

Cobra
Iehi
Bilip

Gas BCF
309
250
36

Oil MMbbl
1

Cobra Gas Discovery

Cobra is located 15km to the east of the SE Gobe field. Cobra-1A ST3 was drilled in 2008 and
discovered gas and condensate. A 34m gas (on rock) column was intersected in the Upper Hedinia
Sandstone (1715-1749 mss), the proven Lowest Known Gas (LKG) is 1,749 mss (base of the reservoir
section) and most likely Gas Water Contact (GWC) is interpreted at 1,784 mss from pressure data.
The crest of the Cobra structure (Top Upper Hedinia surface) is estimated at 1466 mss and the
intersection of the GWC and Top Upper Hedinia establishes a field area of 32.7 km2 with a potential
gas column of 318m.

Iehi Discovery
Iehi is located 15km south east of the SE Gobe field. Iehi-1 was drilled in 1960 and intersected a 35m
gross gas (on rock) column within the early Cretaceous aged Toro Sandstone. A production test was

undertaken at a maximum rate of 32.6 MMscf/d. The Lowest Known Gas (LKG) is 1,283 mss (base of
the reservoir section), and using regional aquifer data the most likely Gas Water Contact (GWC) is
1,320mss indicating a gas column height of approximately 90m.
The well logs showed an anomalous resistivity response in the 52m thick Iagifu Sandstone suggesting
there could be bypassed oil.
Oil shows were also present in Hedinia Sandstone cores, and resistivity anomalies (untested) are
present in the Koi-Iange Formation.
Iehi-1 Petrophysics of the Toro, Hedinia, Iagifu and Koi-Iange reservoir sections

Bilip Discovery
Bilip is located 10km east of the SE Gobe field. Bilip-1 was drilled in 2002 to test a hanging wall
anticline and intersected a gross gas column of 18.2m and underlying 15.8m oil column in the Iagifu
Sandstone (late Jurassic Imburu Formation). Pressure data defines a GOC at 1720 mss (2,437.6 mRT)
and an OWC at 1735.8 mss (2,453.4 mRT). A closed chamber DST captured approximately 60 bbls oil
(42-46 o API) and gas during reverse circulation.
The Bilip hydrocarbon accumulation straddles the PRL14 and PDL4 boundary and is mapped to cover
an area of 7.5 km2 with a maximum relief of 240m (1480-1720 mss). The gas cap is mostly in PDL4
but 30-50% of the oil leg volume, approximately 1 MMbbls, is in PRL14. The overall structure has a
potential recoverable oil volume of 2-3 MMbbls oil.

Bilip-1 Pre-drill Structural Model

Work Commitments
The approved minimum work program for the duration of the licence includes geological mapping,
G&G studies, gas market analysis and review of development options. The minimum work program
has been largely completed.

Commercial Development
There are currently a number of domestic and export focussed gas development studies occurring in
PNG including the potential expansion of the Exxon operated PNG LNG project. PRL14 is in very close
proximity to existing production and infrastructure and there are a number of potential options for
the future development of the Cobra, Iehi and Bilip resource discoveries. Several oil development
options may be available for Bilip including a flowline and separator connecting to Gobe Facilities,
flowline connecting to existing SE Gobe Facilities, and separation at Bilip and trucking to Gobe
Facilities.

BCF - Billion cubic feet

MMbbl Million barrels
TCF Trillion cubic feet

Bopd Barrels of oil per day

MMboe Million barrels of oil equivalent

Mbbl Thousand barrels

MMscf Million standard cubic feet

LINK TO COVER

Process and Timing

Cue Energy is proposing to offer for sale, directly or indirectly, all its PNG interests as one package, although interest in a single licence will be
considered. A confidentiality agreement (CA) will be made available to interested parties to access the virtual data room.
Expressions of Interest and CA by 4 July 2014
Offers to be received by 1 August 2014
Sean Hanrahan, PNG Project Manager
+61 3 8610 4000
Sean.Hanrahan@cuenrg.com.au
www.cuenrg.com.au

DISCLAIMER
This document has been prepared by Cue Energy Resources Limited (Cue Energy) using publically available information and Cue
Energys own information. It has been prepared for illustration purposes only and should not be relied upon for investment
decisions. Except as required by law, Cue Energy, and its respective affiliates, officers, employees, agents and consultants, make
no representation or warranty, nor give any assurances in relation to the accuracy or completeness of the contents of this
document and take no responsibility for any loss or damage suffered as a result of any omission, inadequacy or inaccuracy
herein. Each recipient should conduct its own independent investigation and assessment of the contents of this document and
make such additional enquiries as it deems necessary or appropriate. Statements or assumptions in this document as to future
matters may prove to be incorrect. Cue Energy makes no representation or warranty as to the accuracy of any statements or
assumptions contained herein. The only information upon which a recipient may rely in any manner will be that information, if
any, specifically warranted by Cue Energy in a final executed agreement with the interested party, subject to the terms and
conditions of that agreement. Any sale process will be subject to typical regulatory approvals.
This document is not an offer, recommendation, solicitation or invitation of any offer or invitation to sell or purchase shares in
Cue Energy or any of its affiliates or any assets of Cue Energy or any of its affiliates. This document has not been filed, lodged,
registered or approved in any jurisdiction and recipients of this document should keep themselves informed of and comply with
and observe all applicable legal and regulatory requirements. This document is provided to the recipients on the basis that each
recipient warrants that it/he is a person to whom an offer or invitation to sell or purchase shares or assets may be made without
any requirement for filings, lodgements, registrations or approvals in the jurisdiction in which this document is received by such
recipient.

FOR FURTHER INFORMATION

Sean Hanrahan, PNG Project Manager
+61 3 8610 4000
Sean.Hanrahan@cuenrg.com.au
www.cuenrg.com.au