Update on SM 6 #2 Well

Byron Energy Ltd (ASX: BYE) (“Byron” or the “Company”) advises that the contracted jack-up drilling rig, Hercules 205, has been released by the previous operator and is expected to commence mobilisation to the SM 6 #2 well in the South Marsh Island Block 6 (“SM 6”) when weather conditions allow. The current weather forecast indicates a possible weather window later this week. The day rate contract for the rig begins when the Hercules 205 is on location and ready to work. In anticipation of this move, Byron has opened a shore-base in Intracoastal City, Louisiana and has begun to mobilize equipment and supplies for load out to the rig once it is on location. The SM 6 #2 well is the first well to be drilled as part of Byron’s farm-out to Otto Energy Limited (“Otto”) (ASX:OEL), announced on 11 December 2015. The well will be drilled in the south west corner of a major salt dome in SM 6, located offshore Louisiana, 216 km southwest of New Orleans, Louisiana, USA. Byron, through its wholly owned subsidiary Byron Energy Inc. (the operator), currently has a 100% working interest and an 81.25% net revenue interest in SM 6. Otto will earn a 50% working interest in SM 6 by paying a disproportionate 66.67% share of drilling costs of the SM 6 #2 well, plus reimbursing a portion of Byron’s past costs. If Otto earns an interest in the SM 6 block, Byron’s working and net revenue interests will be reduced by 50% at the earn-in point, to 50% and 40.625% respectively. Byron will provide further information when the Hercules 205 rig commences mobilisation.

Rig Mobilised for SM 6 #2 Well

Byron Energy Ltd (ASX: BYE) (“Byron” or the “Company”) is pleased to advise that the Hercules 205 drilling rig has been mobilised to the SM 6 #2 well location. The well is expected to spud about 6 days after rig mobilisation. Once on location, the rig will install new 30” conductor guides on the existing 72” caisson, drive 30” conductor pipe and then commence drilling the SM 6 #2 well. The SM6 #2 well is the first well to be drilled as part of Byron’s farm-out to Otto Energy Limited (“Otto”) (ASX:OEL), announced on 11 December 2015. In order to earn a 50% working interest (equal to a 40.625% net revenue interest) in the South Marsh Island block (“SM 6”), Otto will contribute 66.67% of the total estimated costs of the SM 6 #2 well of $US 8.0 million ($US5.3 million Otto and $US2.7 million Byron). Any costs above $US 8.0 million in respect of the SM 6 #2 well and all future expenditure in SM 6 will be in accordance with Byron’s and Otto’s respective working interest (Byron 50%/Otto 50%). SM 6 #2 will be drilled in water depth of approximately 65 feet (20 metres), with a planned total measured depth of approximately 9,516 feet (2,900 metres) and total vertical depth of 9,138 feet (2,785 metres). It is anticipated that the well will take approximately 40 days to drill and evaluate. The well will be drilled on a prospect in the south west corner of a major salt dome in SM 6, located offshore Louisiana, 216 km southwest of New Orleans, Louisiana, USA. The SM 6 #2 well will be drilled to only test the un-pressured (shallow) section of the South West Prospect. The primary target is the G 20 Sand, not penetrated by the SM 6 #1 BP 02 well drilled in mid-2014.

Drilling commences at first well in the Gulf of Mexico

Otto Energy Ltd (ASX: OEL) (“Otto” or the “Company”) is pleased to announce that it has been advised by Operator, Byron Energy Inc., a subsidiary of Byron Energy Limited (ASX:BYE) (“Byron”), that the Hercules 205 drilling rig has commenced drilling (spud) the SM-6 #2 well located at the South Marsh Island Block 6 on 15 February 2016 at approximately 6pm (1800 hours) USA Central Time. Current operations at the SM-6 #2 well are drilling ahead at 146 metres/479 feet measured depth (146 metres/479 feet vertical depth). SM-6 #2 is being drilled in water depth of approximately 20 metres/65 feet, with a planned total measured depth of approximately 2,900 metres/9,516 feet and total vertical depth of 2,785 metres/9,138 feet. It is anticipated that the well will take approximately 40 days to drill and evaluate. The SM-6 #2 well is the first well to be drilled as part of Otto’s farm-in transaction with Byron announced in December 2015. The SMI-6 lease is part of a portfolio of low cost, high chance of success, conventional oil and gas opportunities located both onshore and offshore the Gulf of Mexico, which Otto has the option to participate in as part of the transaction. In order to earn a 50% working interest (equal to a 40.625% revenue interest) in the SMI-6 Lease, Otto will contribute 66.67% of the costs of the well (estimated at US$5.3 million net to Otto)). Any costs above this amount in respect of the SM-6 #2 well and all future expenditure on the license will be in accordance with Otto and Byron’s participating interest (Otto 50%).

SM 71 #1 Well Spuds in Gulf of Mexico

Further to the release of 30 March 2016, Byron Energy Limited (“Byron”) advises that the contracted jack-up drilling rig, Hercules 205, spudded the Byron Energy South Marsh Island 71 #1 (“SM 71 #1) well located in South Marsh Island Block 71 (“SM 71”) on 3 April 2016, at approximately 11:30 AM (USA Central Time). Current operations at the SM 71 #1 well are drilling ahead at 671 feet measured depth. 20-inch conductor casing will be set at 800 feet measured depth. The SM 71 #1 well is being drilled to test two objective sands in the southwest corner of a major salt dome in a water depth of 131 feet (40 metres) and has a planned total measured depth of approximately 7.451 feet (2,272 metres) and total vertical depth of 6,900 feet (2,104 metres). It is anticipated that the well will take approximately 20 days to drill and evaluate. The SM 71 #1 well is the second well to be drilled as part of Byron’s farm-out to Otto Energy Limited (“Otto”) (ASX: OEL), announced on 11 December 2015. In order to earn a 50% working interest (equal to a 40.625% net revenue interest) in the South Marsh Island block (“SM 71”), Otto will contribute 66.67% of the total estimated costs of the SM 71 #1 well of $US 4.5 million ($US2.99 million Otto and $US 1.51 million Byron). Any costs above $US 4.5 million in respect of the SM 71 #1 well and all future expenditure in SM 71 will be in accordance with Byron’s and Otto’s respective working interest (Byron 50%/Otto 50%). Otto has also paid Byron $903,610 for past cost reimbursement in the SM 71 project. Byron, through its wholly owned subsidiary Byron Energy Inc. (the operator), currently has a 100% working interest and an 81.25% net revenue interest in SM 71. If Otto earns an interest in the SM 71 block, Byron’s working and net revenue interests will be reduced by 50% at the earn-in point, to 50% and 40.625% respectively.

SM 71 #1 Well Drilling Ahead

Further to the release of 4 April 2016, Byron Energy Limited (“Byron”) (ASX:BYE) advises that the Byron Energy South Marsh Island 71 #1 (“SM 71 #1”), located in South Marsh Island Block 71 (“SM 71”), was drilled to a depth of 3,462 feet measured depth on 8 April 2016 where 10 3/4" casing was set and cemented in place the following day. The well is currently (at 7 PM USA Central Time, 12 April 2016) drilling ahead at 3,976 feet measured depth in 9 7/8” hole. The SM 71 #1 well is being drilled to test two objective sands on the southwest flank of a major salt dome in a water depth of 131 feet (40 metres) and has a planned total measured depth of approximately 7,451 feet (2,272 metres) and total vertical depth of 6,900 feet (2,104 metres). It is anticipated that the well will take 7 - 10 days, from today, to drill to total depth and evaluate. The SM 71 #1 well is the second well to be drilled as part of Byron’s farm-out to Otto Energy Limited (“Otto”) (ASX: OEL), announced on 11 December 2015. Byron, through its wholly owned subsidiary Byron Energy Inc. (the operator), currently has a 100% working interest and an 81.25% net revenue interest in SM 71. Pursuant to the farm-out agreement, Otto has paid 50% of the sunk costs and will pay 66.67% of the drilling cost to total depth in order to earn 50% WI in the SM 71 and SM 70 blocks. If Otto earns an interest in the SM 71 and SM 70 blocks, Byron’s working and net revenue interests will be reduced by 50% at the earn-in point, to 50% and 40.625% respectively.

Byron SM 71 #1 Oil and Gas Discovery

Byron Energy Ltd (ASX: BYE) (“Byron” or the “Company”) is pleased to announce that the Byron Energy SM 71 #1 (“SM-71 #1”) well located in the Gulf of Mexico in South Marsh Island Block 71 (“SM 71”) has reached a final total depth at 6,843 feet (2,086 metres) Measured Depth or 6,477 feet (1,974 metres) True Vertical Depth. During drilling of the SM 71 #1 well three discrete hydrocarbon bearing sands were intersected. Preliminary evaluation has been completed using Gamma Ray/ Resistivity Logging While Drilling (LWD) tools. Indications of oil were seen on cuttings from the D5 sand interval and all hydrocarbon bearing zones demonstrate elevated wet gas readings. Based on preliminary interpretation of these results it appears that a significant proportion of these hydrocarbon bearing sands will result in net hydrocarbon pay, however net pay counts cannot be determined until a porosity log is run and may be determined to be less than the gross sand amounts reported here. Currently, Byron is running in to the hole with a bit to address excess wall-cake build up and verify the hole's condition prior to running porosity logs. Whilst drilling to TD below the D5 Sand, a pressure transition was intersected which required an increase in mud weight to control the well. The higher mudweights suppressed gas ingress, but will require additional conditioning of the wellbore. The D5 Sand, which was the primary target of this well exhibits excellent quality, is within the range of predrill expectations, and confirms the RTM technology used to delineate the prospect. The J Sand, which was a secondary target, was found within predrill expectations and was intersected 220 feet (67 metres) up-dip of the highest productive well in the J Sand interval. The I3 Sand, which was not included in the predrill estimates, will enhance the project economics. The I3 sand interval does not appear to have been produced in offset wells on SM 71. The preliminary results from these three discrete hydrocarbon intervals are considered of commercial value to warrant the completion and ultimate production of the well. This will be done by the running the 7 ?” production liner and suspension of the well for future production. Byron will now move forward with development planning and has already initiated discussions with an offset operator to cost effectively produce the hydrocarbons from this well. The SM 71 #1 well is the second well to be drilled as part of Byron’s farm-out to Otto Energy Limited (“Otto”) (ASX: OEL), announced on 11 December 2015. The SM 71 #1 well targeted two objective sands. The first target was the J Sand, which has been assigned by Collarini and Associates gross proved and probable undeveloped reserves of 0.8 million barrels of oil and 0.5 Bcf of gas, equivalent to 0.7 million barrels of oil and 0.4 Bcf of gas net to Byron’s existing 81.25% Working Interest (“WI”). The primary target was the D5 sand, which has been assigned, by Collarini and Associates, gross prospective resources of 5.6 million barrels of oil and 4.1 Bcf of gas, equivalent to 4.6 million barrels of oil and 3.4 bcf of gas net to Byron’s existing 100% WI and 81.25% Net Revenue Interest (“NRI”)*. Byron, through its wholly owned subsidiary Byron Energy Inc. (the operator), currently has a 100% working interest and an 81.25% net revenue interest in SM 71, located offshore Louisiana, 250 km southwest of New Orleans, Louisiana, USA, in water depth of approximately 131 feet (40 metres). Pursuant to the farm-out agreement, Otto will pay 66.67% of the SM 71 #1 estimated dry hole costs ($US 4.5 million) to earn a 50% working interest in the SM 71 and SM 70 leases. Otto’s promoted drilling exposure will be capped at $US 3.0 million net to Otto, after which both companies will bear their own proportionate share. The well has been drilled in line with the pre-drill cost estimate of $US 4.5m gross. Otto has also reimbursed Byron $US 0.9 million for past costs incurred at SM 71. If Otto earns an interest in the SM 71 and SM 70 blocks, Byron’s working and net revenue interests will be reduced by 50% at the earn-in point, to 50% and 40.625% respectively.

Byron SM 71 #1 Oil and Gas Discovery

Byron Energy Ltd (ASX: BYE) (“Byron” or the “Company”) is pleased to provide an update on the Byron Energy SM71 #1 (“SM71 #1”) oil and gas discovery well located in the Gulf of Mexico in South Marsh Island Block 71 (“SM71”). Since the last report, on 27 April 2016, the well has been deepened, to the predrill planned total depth of 7,477 feet measured depth/6,915 feet true vertical depth and wireline logs have been run over the deeper portion of the well. The processed open hole porosity logs from this deepened section of the well indicate the presence of a very high porosity gas or gas condensate reservoir from 7,212 feet to 7,226 feet measured depth. A 5” liner will now be run and cemented in place over the deeper portion of the SM71 #1 well. As previously reported, the SM71 #1 well encountered 132 feet of TVT net oil pay in the I3 Sand, J Sand and D5 Sands. The final, processed version of the logs run over these three sands has now been received and confirm the previously reported net TVT pay count. Additionally, Isotube sample analysis indicates the likely presence of light, sweet crude oil from all three sand intervals. Current operations are preparing to run 5" liner over the deeper portion of the well before suspending the well for future production. It is expected that the rig will be demobilised within 10 days after mud line suspension operations are completed.