Outtrim East-1 well update 16 May 2016

Highlights

• The Outtrim East-1 well is expected to commence drilling mid-June 2016.

• Noble Tom Prosser rig will drill the well under contract with operator Quadrant Energy.

• The well will test a proven oil play in the area with upside potential.

  Carnarvon Petroleum Limited ("Carnarvon") (ASX: CVN) is pleased to advise that, as announced in January 2016, the Outtrim East-1 well is on schedule to commence drilling in June 2016.

  Carnarvon Managing Director and CEO, Adrian Cook said:

  "The Outtrim East-1 well will test the extent of the Outtrim-1 oil discovery and upside potential in new oil charged sands to the north and east of the Outtrim-1 well.

  We are looking forward to completing this well, determining its potential for development, and considering further exploration and appraisal drilling possibilities to enhance the project's value proposition.

  We are in a very exciting period of time for the company with this well and the Roc-2 appraisal well expected to commence in July 2016 providing significant opportunity for and interest in Carnarvon. Positive drilling results from either or both wells have the potential to materially deliver on Carnarvon's strategic objectives, namely 'to find and commercialize major oil and gas resources on the North West Shelf ("NWS")'."

  The objectives of the Outtrim East-1 well are to:

• Test for the presence of hydrocarbons in the Lower Cretaceous Barrow Group sandstones Pyrenees Formation, similar to Outtrim-1 sequence;

• To drill below the oil water contact to Total Depth with log coverage over the zone of interest;

• To evaluate the objective interval for the presence of reservoir and hydrocarbons using quantitative gamma-ray, resistivity, neutron, density, CMR and sonic logs;

• To obtain formation pressures and fluid samples over the hydro-carbon bearing interval; and

• To obtain conventional core over the Pyrenees Formation objective.

The well is located approximately 970 metres east of the Outtrim-1 well in 95 metres of water with a target interval around 1,400 metres below the sea bed.

The Outtrim East-1 well is expected to take 25 days to complete on a trouble free basis. The net cost to Carnarvon is expected to be around A$7 million based on its 28.5% interest.

Carnarvon acquired a 28.5% interest in the permit (WA-155-P(1)) from Inpex in January 2016.

A second dealing with Quadrant Energy covering WA-155-P(1), WA-486-P and TR/3 was recently terminated by mutual agreement due to a number of factors including balancing work plans in the Roc and Phoenix acreage where Quadrant Energy and Carnarvon are also joint venture partners.

Yours faithfully

Adrian Cook Managing Director Carnarvon Petroleum

Shareholder enquiries: Media enquires:

Mr Thomson Naude Mr Tony Dawe

Company Secretary Professional Public Relations

Phone: (08) 9321 2665 (08) 9388 0944 / 0405 989 743

Email: [email protected] [email protected]