2016 ANNUAL REPORT

CORPORATE DIRECTORY

NORWEST ENERGY NL REGISTERED OFFICE

ABN 65 078 301 505 Level 2, 6 Thelma Street

ACN 078 301 505 West Perth WA 6005

Tel: + 61 8 9227 3240

DIRECTORS Fax: + 61 8 9227 3211

Mr Michael John Fry

(Non-Executive Chairman) SHARE REGISTER

Computershare Investor Services Pty Ltd

Mr Henry David Kennedy GPO Box D182

(Non-Executive Director) Perth WA 6840

Level 11, 172 St Georges Terrace

Mr Ronald Gordon Currie Perth WA 6000

(Non-Executive Director) Telephone: 1300 850 505

CHIEF EXECUTIVE OFFICER AUDITORS

Shelley Maree Robertson Rothsay Chartered Accountants Level 1, Lincoln House

COMPANY SECRETARY 4 Ventnor Avenue

Emma Jane Curnow West Perth WA 6005

INTERNET ADDRESS AUSTRALIAN SECURITIES EXCHANGE

www.norwestenergy.com.au NWE

EMAIL ENQUIRIES FRANKFURT STOCK EXCHANGE

[email protected] NUX

CONTENTS

CHAIRMAN'S LETTER

Dear Shareholders,

I am pleased to present the Norwest Energy NL Annual Report for the year ended 30 June 2016.

Norwest continued to retain a large footprint in the northern Perth Basin, with the net acreage position only decreasing from 3,100km2 to 2,841km2 due to Empire Oil and Gas relinquishing the less prospective northern graticular blocks within EP426. The net acreage contains seven permits with conventional and unconventional oil and gas prospects.

In July 2016, the Company formed a strategic alliance with Transerv Energy Ltd (Transerv) to facilitate the farmout and drilling of the 160 million barrel Xanadu Prospect located in TP/15, in addition to other onshore permits Norwest has interests in within the Perth Basin.

In September 2016, it was announced that the Company had executed termsheets with Transerv and Triangle Energy (Global) Limited (Triangle). These termsheets form the basis for both parties to farm-in on the drilling of Xanadu-1 located within TP/15. Transerv will contribute 20% of the costs to earn a 15% interest, whilst Triangle will contribute 40% of the costs to earn a 30% interest.

Three wells are planned for drilling in the next 12-18 months, subject to securing funding and regulatory approvals. The status of each of these drill-ready permits are as follows:

• TP/15: In addition to the termsheets signed with Transerv and Triangle, there are numerous other prospective parties interested in participating in the Xanadu drilling program and Norwest anticipates the proposed TP/15 Joint Venture being finalised by December 2016. Norwest is planning to retain operatorship and a relevant percentage interest in the permit.

• EP368: The Lockyer Deep-1 well, where operator Empire Oil and Gas identified a major gas prospect on trend with AWE's massive Waitsia gas discovery, situated nearby. During the year, significant upside potential in the high case resource was reported. Lockyer Deep is a medium risk well.

• EP413: Following completion of the Arrowsmith 3D data processing, interpretation is continuing, with further work required regarding the planning of the next well due to additional conventional prospectivity discovered at the southern end of the permit, with similarities to the Woodada Gas Field located further to the south.

Another pleasing development was the announcement in September 2016 that a Sale and Purchase Agreement, Change of Title and Change of Operator documentation for Production Licence L14 had been submitted to the Department of Mines and Petroleum for formal approval. L14 contains the Jingemia Oil Field, which has been in care and maintenance under operator Origin Energy since December 2012. The Jingemia Oil Field is estimated to have initially contained 12 million barrels of oil in place, with 4.6 million barrels produced to date. Subject to DMP approval, Cyclone Energy and RCMA Australia will acquire equity in L14, with the intention to restart production from Jingemia. Norwest shall retain its 6.278% interest in L14.

During and subsequent to the financial year end, there were a number of changes implemented at the corporate level.

Mr Peter Munachen resigned as CEO and Executive Director, effective 31 March 2016 after taking extended leave due to health issues earlier in the year. Under Peter's leadership and guidance, the Company developed an impressive project portfolio, including the northern Perth Basin discovery of the Arrowsmith Field in 2012, and the exciting Xanadu Prospect in TP/15. On behalf of the Board, management, shareholders and staff, I would like to thank Peter for his enormous commitment and contribution to the Company throughout his tenure.

Mr Ronald (Ron) Currie was appointed to the Board as a Non-Executive Director of the Company effective 31 March 2016. Mr Currie has extensive operational experience in oil and gas operations through his long association with Bonnie Rock Transport (now owned by ASCO Group), a company he co-founded in 1998 and which provides transport and logistics solutions for the oil and gas industry. Mr Currie's hands-on operating experience, including providing drilling services to exploration activity within the Perth Basin where Norwest is primarily focussed, is bringing a new perspective to the Board.

Subsequent to the financial year, Shelley Robertson was appointed CEO. Shelley has served as the Company's Asset Manager since joining Norwest in January 2011, and has over 25 years' experience in the oil and gas industry, with postgraduate qualifications in Petroleum Engineering and Business. Ms Robertson has over time forged excellent relationships with other junior exploration companies, Norwest Joint Venture partners, regulators, service providers, community stakeholders and industry groups, and is a well-respected member of the onshore exploration industry in Western Australia. With Shelley leading the Norwest team, the Company can look forward to an exciting couple of years which will include participation in three drilling opportunities.

Ms Emma Curnow was appointed Company Secretary in July 2016. Ms Curnow joined the Company in March 2015 as Financial Controller.

Fundraising during the financial year raised $1.32m (before costs) from a rights issue and a placement. Subsequent to 30 June 2016, a placement from Transerv, sophisticated and professional investors and Directors was completed which raised $0.83m (before costs). These raisings assist the Company to achieve its objectives, however it is aware that in a tougher market for oil and gas it is important to implement corporate cost savings. Significant cost savings were implemented during July 2016 and included sharing office space, expenses and expertise with Transerv as well as a reduction in personnel expenses. These have resulted in increased efficiencies and thus a better value proposition for shareholders.

I would like to thank my fellow directors for their time and support during the year as well as the management team and staff of Norwest for their dedication and hard work in progressing the Company's initiatives. I would also like to thank the Company's Joint Venture partners.

I would like to thank our shareholders for their continuing support of Norwest. The Company's directors and management are fully committed to participating in the drilling programs for Xanadu-1 in TP/15, Lockyer Deep- 1 in EP368 and Arrowsmith-3 in EP413, and we look forward to an exciting, successful exploration program over the next 12-18 months.

Michael Fry

Non-Executive Chairman