ASX Announcement

25 February 2015

AWE delivers solid operating performance and remains focused on delivering growth

FIRST HALF FY 2014-15 RESULTS SUMMARY

Statutory net loss after tax of $61.7 million includes $50.1 million non-cash impairments

Underlying net loss after tax of $13.9 million reflects lower oil prices

Half year production of 2.6 mmboe in line with full year guidance

2P Reserves plus 2C Resources up 14% to 191.6 mmboe

Reserves to production ratio 16 years (based on nominal annual production of 5 mmboe) Sales Revenue of $161.3 million; production costs and royalties of $73.2 million

Field EBITDAX of $88.1 million; exploration expense of $27.8 million

Net cash of $15 million comprising cash of $75 million and drawn debt of $60 million Waitsia gas discovery onshore Western Australia adds 24 mmboe to 2C Resources Lengo Plan of Development approved by Indonesian government

No Lost Time Injuries or Reportable Environmental Incidents

AWE Limited (ASX: AWE) today announced its results for the first half of the 2014-15 financial year. The company reported a statutory net loss after tax of $61.7 million which included $50.1 million of non-cash impairments. After adjusting for non-recurring items, AWE's underlying net loss after tax was $13.9 million.
Managing Director, Mr Bruce Clement, said that AWE delivered a solid operating and production performance and the company is well positioned to deliver on its growth strategy despite the current low oil price environment.
"The first half of the 2014-15 financial year was positive for AWE, despite lower oil prices. We achieved a number of major development milestones and made an exciting gas discovery in Western Australia that has the potential to add substantially to revenue and production in the coming years.
"The Senecio/Waitsia discovery in Western Australia and the Lengo gas field in Indonesia provide AWE with the opportunity to focus on the development of high value gas projects in strong domestic gas markets.
"At the same time, we also completed the sale of an 11.25% interest in BassGas, reducing future expenditure commitments, and production from our oil and gas assets is on track to meet full year guidance," he said.
"Around 25% of sales revenue comes from long-term, CPI linked gas contracts which helped sustain sales revenue in the lower oil price environment. A $50.1 million after tax non-cash impairment was recognised for the Tui and Cliff Head assets, both mature oil producing assets. There was no impairment of the carrying values for AWE's other oil and gas assets.
"We have four cornerstone assets in various stages of development, a diverse asset portfolio with healthy reserves and resources, a clear growth strategy, and a sound balance sheet. AWE is in a good position and will remain focused and disciplined as we continue to grow the business," Clement said.

AW E LIMITED LEVEL 16, 40 MOUNT STREET NORTH SYDNEY NSW 2060 AUSTRALIA P +61 2 8912 8000 F +61 2 9460 0176 E [email protected] ABN 70 077 897 440 www.awexplore.com

Production and Operations

Half year production of 2.6 mmboe is in line with full year production guidance of 4.6 to 5.1 mmboe. Sugarloaf volumes increased by 38% and partially offset lower output from BassGas, largely due to planned facility shut downs for maintenance and MLE development activity.
The total number of wells drilled at Sugarloaf increased to 223 by 31 December 2014 and 187 of these were producing. The Sugarloaf AMI is located in one the of liquids-rich sweet spots in the Eagle Ford play and continues to provide good returns at current oil prices.
The heavy lift phase of the BassGas MLE project was completed successfully and under budget. Tie-in and commissioning of the gas compression and condensate pumping modules will commence mid-2015. The next phase of the MLE project, the drilling of two development wells, is planned to commence in late February.
AWE's 2C Contingent Resources increased by 44% to 110.1 mmboe following the discovery of the Waitsia gas field in Western Australia's Perth Basin and positive results from drilling in the Austin Chalk at Sugarloaf. The company's combined 2P Reserves and 2C Contingent Resources increased by 14% to 191.6 mmboe.
Health, Safety and Environment performance was maintained at a high standard with no Lost Time Injuries or reportable environmental incidents. AWE continued to engage with communities and stakeholders in areas where it operates, most notably in the Mid West of Western Australia, the Taranaki region of New Zealand, and in Indonesia.

Prioritising gas projects

AWE has built a diverse portfolio of oil, high value gas and unconventional oil and gas assets which provides the company with a range of development options. In the current low oil price environment, AWE has prioritised two significant gas projects for fast track development. These have the potential to significantly increase production and revenue in the coming years.
The Waitsia and Senecio gas fields in the onshore Perth Basin, Western Australia, are estimated to hold a combined gross 360 Bcf in 2C Contingent Resources with significant upside potential of 1.3 Tcf in 3C Contingent Resources. Over the coming months, AWE will undertake conventional flow testing and appraisal drilling of the Waitsia gas field. Flow testing of the Senecio-3 discovery well has commenced and good progress is being made on preparations for the Waitsia-1 and 2 appraisal wells. AWE is targeting early production through existing facilities and gas marketing work has commenced.
The Plan of Development for the Lengo gas field, located offshore East Java, was approved by the Indonesia government. The Operator is preparing to start formal negotiations for gas sales agreements and the project is rapidly gaining momentum. The Lengo field is estimated to contain gross 2C Contingent Resources of 200
Bcf of gas.
Development activity continues on the AAL oil project in Indonesia, with government approval received for the wellhead platform and FPSO tender processes. Prequalification and contracting activity is planned for 2015. The Operator has advised it will not proceed with drilling an appraisal well on the underlying G-sand reservoir in 2015 and has proposed moving FID for the project to the second half of calendar 2016 with first oil in 2018.

Disciplined financial management

In the current low oil price environment, AWE is focused on maintaining a disciplined approach to financial management. The company is committed to reducing costs and prioritising capital expenditure. We are also planning to reduce discretionary spending and have the potential to farm out or sell assets to optimise portfolio returns. Ensuring AWE's balance sheet remains robust and flexible is fundamental to the company's growth strategy.

For a detailed review of AWE's operating and financial performance, investors should refer to AWE's Appendix 4D, Directors Report, Half Year Consolidated Financial Report and Investor Presentation released to the Australian Securities Exchange today.

Financial Summary

The following table provides an overview of production and the financial performance of AWE for the half year ended 31

December 2014 as detailed in the half-year Financial Report.

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6 months to 6 months to

31-Dec-14 31-Dec-13 Variance Production mmboe (1) mmboe (1) % Gas 1.39 1.76 (21%) LPG production 0.20 0.26 (23%) Condensate production 0.44 0.40 10%

Oil 0.53 0.57 (7%)

Total production 2.56 2.99 (14%)

Financial performance $million $million % Sales revenue 161.3 175.4 (8%) Production costs and royalties (73.2) (58.5) 25% Field EBITDAX (2) 88.1 116.8 (25%) Exploration and evaluation expense (27.8) (17.6) 58% Amortisation (60.3) (65.3) (8%) Net financing expense (5.8) (7.1) (18%) Impairment (92.6) - >100% Other income / (expense) (3.6) 84.5 >100% Statutory net (loss) / profit before tax (102.0) 111.4 >100% Tax benefit / (expense) 40.3 (29.7) >100%

Statutory net (loss) / profit after tax (NPAT) (61.7) 81.7 >100%

To assist users reconcile underlying performance, the following table provides a reconciliation of NPAT and the impact of non-recurring items.

6 months to 6 months to

31-Dec-14 31-Dec-13

Reconciliation of underlying NPAT $million $million

Statutory NPAT (61.7) 81.7

Non-recurring items after tax:

Impairment of oil and gas assets 50.1 - Gain on completion of sale of interest in BassGas (2.3) - Gain on sale of 50% interest in Northwest Natuna PSC - (75.5) Restructuring costs in relation to Jakarta office - 3.5

Write off of capitalised borrowing costs due to refinancing - 1.1

Total non-recurring items (after tax) 47.8 (70.9)

Underlying NPA (3) (13.9) 10.8

1. mmboe refers to million barrels of oil equivalent

2. Sales revenue less production costs and royalties. Refer note 10 of the Half Year Consolidated Financial Report for information by segment.

3. AWE's Financial Report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS). The underlying (non-IFRS) profit is unaudited but is derived from the audited accounts by removing the impact of non-recurring items from the reported (IFRS) audited profit. AWE believes the non-IFRS profit reflects a more meaningful measure of the consolidated entity's underlying performance.

4. The level of non-cash impairment was determined after a review of asset carrying values in the current lower oil price environment. AWE has used Brent oil price estimates of US$59/bbl in 2015, US$65/bbl in 2016, US$82/bbl in 2017 and US$96/bbl in 2018, and an independent long term oil price forecast thereafter. An exchange rate of AUD/USD 0.81 was applied in 2015, and AUD/USD 0.80 thereafter.

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Guidance

There is no change to the company's guidance for financial year 2014-15. Production and Development Expenditure are expected to be within the guidance range. Sales Revenue is likely to be at the bottom end of range due to the significantly lower oil price. Exploration Expenditure is expected to be at the upper end of the range due to fast tracking Waitsia appraisal activity.

Note: Guidance was prepared using a Brent Oil price of USD100 per barrel and AUD/USD of 90 cents.

Reserves and Resources.

The reserve and resource information contained in this report is based on information compiled by Neil Tupper (General Manager, Exploration and Geoscience). Mr Tupper is a Geologist with a Masters Degree in Sedimentology and has over 32 years' experience in petroleum exploration. He has consented in writing to the inclusion of this information in the format and context in which it appears.

About AWE Limited.

AWE Limited is an Australian based energy company focused on upstream oil and gas and related energy opportunities. Established in 1997 and listed on the ASX, the Company is headquartered in Sydney, Australia, with international operating offices in New Zealand and Indonesia. AWE has built a substantial portfolio of production, development and exploration assets in Australia, New Zealand, USA, Indonesia and China. With its strong technical base and disciplined financial management, AWE will continue to pursue exploration, appraisal and development growth opportunities in Australasia and Asia.

Summary of Abbreviations

AAL Ande Ande Lumut oil project, Indonesia
Bcf Billion Cubic Feet
BOE Barrels of Oil Equivalent
EBITDAX Earnings Before Interest, Tax, Depreciation and Exploration expenses
FPSO Floating Production, Storage and Offloading vessel
MLE Mid-Life Enhancement
mmboe millions of barrels of oil equivalent
NPAT Net Profit After Tax
POD Plan of Development
Except where otherwise noted, all references to "$" are to Australian dollars

Conversion Tables

For information please see our website www.awexplore.com or contact:

Investor Relations Media Enquiries

Matthew Sullivan Ian Howarth
AWE Limited Collins St Media
02 8912 8022 03 9600 1979 [email protected][email protected] ENDS
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