ASX: NWE

March 2016 Quarterly Report

29 April 2016

Contact

Norwest Energy NL Level 2, 6 Thelma Street West Perth WA 6005

PO Box 1264 West Perth WA 6872

Tel: +61 8 9227 3240

Fax: +61 8 9227 3211

Web: www.norwestenergy.com.au

Media enquiries: [email protected]

Shareholder enquiries: [email protected]

Summary

Norwest continues to retain a large footprint in the northern Perth Basin, with a net acreage position of 3,100km2, containing seven permits with conventional and unconventional oil and gas prospects. Norwest's exploration portfolio is considered to contain a number of highly prospective targets, and the company's focus remains the realisation and

development of these assets.

Norwest has three near-term drill targets identified, all set to be drilled within the next 12-18 months, subject to securing funding and regulatory approvals. The status of each of these drill-ready permits is as follows:

• EP368: The focus of this permit continues to be the drilling of the Lockyer Deep-1 well, with operator Empire Oil and Gas (ASX: EOG) identifying a prospect on trend with AWE's massive Waitsia gas discovery, situated nearby and which flowed 50MMscf/d. During the

  quarter significant upside potential in the high case resource was reported with Lockyer Deep-1 targeting between 25 BCF (low) and 256 BCF (high) of gas, with some oil potential as upside.

• EP413: The Arrowsmith project has 316 BCF gas assigned as contingent gross recoverable resources, and 2.6 TCF of prospective gross recoverable resources. Following the recent 3D seismic acquisition and processing program, interpretation is ongoing, with further work required regarding the planning of the next well on the block, particularly with regard to some additional conventional prospectivity discovered at the southern end of the permit, with similarities to the Woodada Gas Field located further to the south.

• TP/15: Norwest is progressing its discussions with a number of potential joint venture partners interested in the Xanadu prospect which contains an unrisked prospective resource of 160 million barrels of oil. With several companies having signed confidentiality agreements with Norwest in recent weeks, Norwest is encouraged by the renewed interest shown in the permit which the company hopes will result in a farm-out deal being concluded in the near future.

Norwest is seeking partners or strategic investors to participate in its entire portfolio of assets in the Perth Basin. Norwest attended the Singapore SEAPEX Farmout Forum during April, and will also be presenting at two events in London - the London Asia Oil Scout Groups Farmout Forum and Farmout Fair in May 2016. These two events attract large numbers of potential investors that may be interested in the Norwest portfolio. Additionally, the Norwest portfolio of projects will be presented at the PESA Deal Day in Brisbane in early June, preceding the annual APPEA conference. Assisting Norwest with these farmout endeavours is international advisory firm Moyes

& Co, which has offices in Dallas, Houston, London and Singapore.

Figure 1. NWE tenements

Australian Exploration Program

EP368 and EP426

Empire Oil & Gas (Empire) is the Operator of EP368 & EP426.

Reprocessing of the vintage 2D seismic data set and interpretation of the recent Black Swan Airborne geophysical survey were completed in early 2016.

In February 2016, Empire reported significant upside potential for the Lockyer Deep and North Erregulla Deep prospect trend, with its latest interpretation joining these two prospects into one large prospect for the high case prospective resource estimate.

Figure 2. Location of EP368 & EP426 highlighting proximity to the AWE discoveries

Figure 3. High case estimates show Lockyer Deep and North Erregulla Deep as one continuous prospect

Lockyer Deep is a medium risk well, targeting between 25 and 134 BCF, with a best case estimate of 58 BCF1.. North Erregulla Deep has estimated prospective resources of between 15 and 122 BCF, with a best case estimate of 55 BCF2, and represents an immediate follow up prospect should Lockyer Deep-1 be successful. At the high case, these two prospects are joined into one large prospect, resulting in a high case prospective resource of 256 BCF3.

1. Refer Empire Oil and Gas NL (ASX: EGO) Investor Presentation released to ASX on 2nd September 2015

2. Refer Empire Oil and Gas NL (ASX: EGO) Q4 2015 Quarterly Report released to ASX on 27th January 2016

3. Refer Empire Oil and Gas NL (ASX: EGO) ASX release dated 16th February 2016

The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Empire Oil and Gas reports that the Lockyer Deep well is expected to be drilled during the second half of 2016, subject to finalising funding alternatives.

EP426

EP368

TP/15

(Norwest 100%)

Figure 4. TP/15 permit location highlighting Xanadu prospect

As detailed in the ASX Announcement dated 29 October 2014, TP/15 contains a number of conventional oil plays, with primary prospect Xanadu having an un-risked prospective recoverable resource of 160mmbbls (best estimate).

Norwest has commenced planning for the drilling of conventional oil well Xanadu-1, located at the southern end of the permit.

Norwest is currently in discussions with several companies regarding farmout opportunities for TP/15, and is encouraged by the renewed interest shown in the permit which the company hopes will result in a farm- out deal being concluded in the near future.