ABN 45 066 383 971

22 April 2016 PAGES (including this page): 16

ASX Market Announcements ASX Limited

Exchange Centre

Level 4, 20 Bridge Street

Sydney NSW 2000

Quarterly Report for Period Ended 31 March 2016

Attached please find Cue Energy Resources Limited's release with respect to the above mentioned.

Yours faithfully

Andrew M Knox

Chief Financial Officer

CUE ENERGY OVERVIEW

Cue is an Australian based oil & gas company with activities in Australia, New Zealand, Indonesia and the USA.

THE COMPANY HAS:

• Long life production

• A strong balance sheet

• An active exploration programme

  CUE ENERGY DIRECTORS

• Grant Worner (Executive Chairman)

• Koh Ban Heng

• Andrew Knight

• Brian Smith

  CUE ENERGY MANAGEMENT

• Andrew Knox (CFO)

• Jeffrey Schrull (Exp Man)

OFFICE

Level 19

357 Collins Street

Melbourne Vic 3000

CONTACT DETAILS

Tel: +613 8610 4000

Fax: +613 9614 2142

EMAIL

[email protected]

WEBSITE

www.cuenrg.com.au

LISTINGS

ASX: CUE

ADR/OTC: CUEYY

Quarterly Report

Q03 FY16 | March 2016

SUMMARY OF ACTIVITIES

Production

• Total net production in the quarter of 190,140 boe comprised of 69,220 bbls and 725.52 mmcf.

• Maari (PMP 38160, New Zealand) field production varied between ~9000-13000 bopd (gross) during the quarter due to planned shut-ins, well work-overs and the FPSO mooring upgrade and water injection line repair program, which is underway and on schedule for completion mid May.

• Maari Field production stabilisation and optimisation is expected during Q4 FY 2016, once the benefits from the work-overs and reinstatement of the water injection have been realised.

• Oyong and Wortel fields (Sampang PSC, Indonesia) continued strong production, with total combined average gross rates of 970 bopd and 71 mmcfcd during the quarter.

  Exploration

• Australia: Suspension of the well commitment in WA-359-P until April 2018 has been granted. These permits contain the 15Tcf prospective Ironbark gas prospect for which Cue is currently seeking partners. Cue has also been granted a three month extension on WA- 409-P until 20 July 2016 which will allow for the preparation of a renewal application for the permit.

• Reprocessed seismic data over the WA-389-P permit was received in the quarter and a full evaluation of the prospectivity of the block is underway.

• Indonesia: The Cue operated Naga Selatan-2 well in the Mahakam Hilir PSC was safely drilled and suspended at a depth of 1170 feet during the quarter. The well recovered oil and gas from shallow depths and validated the play concept. Studies are underway to determine an optimal appraisal program which could include further drilling in 2017 and a potential production test.

• Indonesia: Planning is underway by the operator to drill one well and acquire 2D seismic in 2016-2017 in the Mahato PSC.

• New Zealand: The Te Kiri North-1 well in PEP 51149, was drilled during the quarter, fulfilling the remaining work commitments. The well encountered no commercial hydrocarbon shows and was plugged and abandoned.

  Financial

• Quarterly revenue receipts from hydrocarbon production for the quarter were $11.04 million on sales of 77,039 barrels of oil at an average price of US$36 per barrel and 801.75 million cubic feet (mmcf) of gas at an average price of $9.03 per Mcf.

• Approximately two-thirds of revenue receipts are derived from non-oil linked gas sales which are not affected by current low oil prices.

• Cue has no hedging in place.

• Cue has no debt.

• $22.40 million cash on hand at the end of the quarter.

Production & Financial Summary

PRODUCTION - NEW ZEALAND

PMP 38160

Cue Interest: 5%

Operator: OMV New Zealand Limited

Maari and Manaia Fields

Cue's net share of oil sales in the quarter from the Maari and Manaia fields was 38,200 barrels which generated $1.60 million in

revenue received.

The average oil production rate in the quarter was approximately 11,659 gross bopd (Cue net: 583 bopd).

The Maari FPSO mooring line upgrade is now well underway and proceeding as planned at a net cost of approximately $3 million.

Concurrently, an extensive multi-well work-over campaign is also proceeding as planned. While production during the mooring intervention is continuing, some wells

experienced short term shut-ins for operational reasons, resulting in a daily gross production range of ~9000 to 13,000 bopd during the quarter.

The water injection line repair is planned to follow the mooring upgrade and is scheduled to be completed in May, 2016. Once water injection is reinstated, daily production should be enhanced due to resumed pressure support for key producers. Once the field projects are completed and benefits from the well work-over campaign and water injection are realized the production from the field should be optimized and stable, which is expected to be circa 12,000 bopd average for the remainder of calendar 2016.

PRODUCTION - INDONESIA

Sampang PSC- Madura Strait Cue Interest: 15%

Operator: Santos (Sampang) Pty Ltd

The gross combined average production from Oyong and Wortel for the quarter was 984 bopd and 66.3 mmcf/day. Facility studies are currently underway to optimize recovery and extend field gas production from Oyong and Wortel.

Oyong Field

During the quarter Cue's share of gas sales receipts was $3.06 million from the sale of 333.3 mmcf.

Cue's share of oil sales receipts was $2.02 million from the sale of 34,343 barrels and condensate sales receipts was $302 from the sale of 12 barrels.

The Oyong average oil production rate for the

quarter was 984 bopd (gross) and the daily gas average rate was 25.9 mmcfd (gross) (Cue net: 128 bopd and 3 mmcfd - both net of government take under the PSC).

During March a planned shut-down for routine maintenance was successfully completed, with the field now ramping back up to full production. Oyong maintains an average gross gas rate of 30-35 mmcfd produced as associated gas from the oil producing wells and also non-associated gas from the Oyong 6 and Oyong-10 wells. These wells are completed above the oil column in the gas cap.

Wortel Field

During the quarter Cue's share of gas sales receipts was $4.19 million from the sale of 468.4 mmcf. Cue's share of condensate sales from the Wortel field was 39 barrels which generated $1,017 in revenue.

Wortel-3 and Wortel-4 flowed gas at a combined average daily rate of 40.4 mmcfd (gross) during the quarter (Cue net 5 mmcfd net of government take under the PSC.)

Installation of onshore gas compression at the Grati gas plant has now been completed and all three compressors are fully functional. Compression capacity has resulted in increased deliverability from Wortel to 45 mmcfg/d. This will also help maintain gas production from Oyong and Wortel and facility studies are underway to extend the combined fields' gas production from Oyong and Wortel.