ASX / Media Announcement‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

21 March 2016

Not for release in the United States

Level 9, 301 Coronation Drive, Milton QLD 4064 Australia

PO Box 2118, Toowong DC QLD 4066 Australia

phone + 61 (0) 7 3156 7777

fax + 61 (0) 7 3156 7776

www.carbonenergy.com.au

Carbon Energy Limited ABN 56 057 552 137

Carbon Energy (Operations) Pty Ltd ABN 61 105 176 967

Shareholder Information Session

Carbon Energy (ASX: CNX, OTCQX: CNXAY) provides the following presentation that Managing Director and CEO, Mr Morne Engelbrecht, will deliver to shareholders during domestic shareholder information sessions this week.

ENDS

For and on behalf of the Board

Catherine Costello

Chief Financial Officer & Company Secretary

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CARBON ENERGY LIMITED‌

OFFER

PRO-RATA

ENTITLEMENT

MARCH 2016

DISCLAIMER AND IMPORTANT NOTICE

To the maximum extent permitted by law, the information contained in this presentation is given without any liability whatsoever being accepted by Carbon Energy Ltd (Carbon Energy) or any of its related entities or their respective directors or officers, employees, advisors and agents (Relevant Parties), and is not intended to constitute legal, tax or accounting advice or opinion. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or thoroughness of the content of the information. The information in this presentation is not an offer or recommendation to purchase or subscribe for securities in Carbon Energy or to retain or sell any securities that are currently held. The presentation does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in Carbon Energy nor does it contain all the information which would be required in a disclosure document prepared in accordance with the requirements of the Corporations Act and should not be used in isolation as a basis to invest in Carbon Energy. In providing this presentation, Carbon Energy has not considered the objectives, financial position or needs of the recipient and the recipient should consult with its own legal, tax or accounting advisers as to the accuracy and application of the information contained herein and should conduct its own due diligence and other enquiries in relation to such information and any investment in Carbon Energy and the recipient's objectives, financial position or needs.

To the maximum extent permitted by law, Carbon Energy and the Relevant Parties disclaim any responsibility to inform any recipient of this presentation on any matter that subsequently comes to their notice which may affect any of the information contained in this presentation and undertake no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

The information in this presentation has not been independently verified by Carbon Energy. To the maximum extent permitted by law, Carbon Energy and the Relevant Parties disclaim any responsibility for any errors or omissions in such information, including the financial calculations, projections and forecasts and indications of, and guidance on, future earnings and performance and financial position set forth herein. This presentation contains certain "forward-looking statements". Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors and are subject to significant business, economic and competitive uncertainties and contingencies associated with exploration and/or production, many of which are beyond the control of Carbon Energy, that may cause actual results to differ materially from those predicted or implied by any forward-looking statements. No representation or warranty is made by or on behalf of Carbon Energy or the Relevant Parties that any projection, forecast, calculation, forward-looking statement, assumption or estimate contained in this presentation should or will be achieved or that actual outcomes will not differ materially from any forward-looking statements.

This presentation does not carry any right of publication. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Carbon Energy. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of Carbon Energy.

All Reserve and Resource estimates (Estimates) in this document are reported in accordance with the requirements of ASX Listing Rules 5.25 to 5.28. It is noted in particular that:

• This document refers to Estimates reported on 19 September 2014 and released to the market on 22 September 2014 (Updated Reserves Statement);

• All Estimates are based on the deterministic method for estimation of petroleum resources at the field and project levels and are attributable to the gross (100 percent) ownership interest of Carbon Energy in certain coal properties located in MDL374, EPC867, EPC869 and EPC1132 located in the Surat Basin of Queensland, Australia;

• All Estimates are reported using the following conversion factors as relevant:

  • UCG Energy conversion factor is 16.73 GJ of syngas per tonne of coal gasified;

  • UCG syngas to Synthetic Natural Gas (SNG) conversion factor is 38.5 to 25;

  • 1,055 Petajoule (PJ) = 1 Trillion cubic feet (Tcf); and

  • 1 barrel of oil equivalent (boe) = 6,000 cubic feet.

Further, Carbon Energy confirms that it is not aware of any new information or data that materially affects the information included in the Updated Reserves Statement and that all material assumptions and technical parameters underpinning the estimates in the Updated Reserves Statement continue to apply and have not materially changed.

keyseam® is a registered trademark of Carbon Energy.

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RIGHTS ISSUE DETAILS & STRUCTURE

• 3 for 11 pro-rata renounceable entitlement issue at 1.3¢ per share to raise up to

  approximately $5.3 million.

• Underwritten to $1.8 million

• The Offer price represents a 19.1% discount to the 5 day VWAP of 1.607¢ (being the

  last day before lodgment of the Prospectus).

• The Offer price represents a 13.3% discount to the close price of 1.5¢ (being the last day before lodgment of the Prospectus).

• Shareholders will have the ability to apply for additional shares in excess of their entitlement.

• Based on the issue price of 1.3¢ per share, assuming the full amount is raised the indicative capital structure of the Company will be:

* Unlisted options total 51.6 million

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