Strategic Review of Assets and Board Changes

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Lion Energy Limited (“Lion” or “Company”; ASX: LIO) advises it is undertaking a Strategic Review of its oil and gas assets, and the following changes to the board of directors, effective immediately.

Strategic Review of Assets
The board of directors is undertaking a strategic review of the Company’s assets, with a view to rationalising any non-core assets and focussing on a production orientated portfolio of projects. The results of this work are expected in early March, 2018. In addition, the Company continues to review production opportunities in the region with a view to bolstering the company’s oil production in the mediumterm.

Resignation of Mr Kim Morrison:
Mr Morrison has resigned as CEO and Executive Director of the Company. The board would like to thank Mr Morrison for his leadership and significant contribution to the development of the Company’s portfolio of exploration assets over the past four and half years.

Resignation of Mr Stuart Smith:
Mr Smith has resigned as Executive Director & CFO of the Company. The board would like to thank Mr Smith for his contributions to the board since his appointment in 2014.

Change in Executive Chairman:
Mr Russell Brimage has taken up a new role as a Non-Executive Director. The Board would like to thank Mr Brimage for his stewardship of the Company for the four years in his role as Chairman.

Mr Tom Soulsby has been appointed as Executive Chairman. Mr Soulsby has been the Chief Executive Officer of Risco Energy and has over 25 years of experience in the oil and gas and resources sector spanning investment banking, corporate business development and management/leadership roles. Mr Soulsby has been instrumental in securing backing for Risco prior to its incorporation in 2010, as well as growing the company and its capabilities in his role of Chief Executive Officer. Under Mr Soulsby’s leadership, Risco has participated in and funded over US$500m of transactions since 2010. He led the significant valuation creation, and subsequent monetisation, of Risco’s first South East Asian oil and gas conventional and unconventional portfolio in 2013. Mr Soulsby brings savvy capital raising skills as well as some 15 of years of deal making and value creation in Lion’s core market, Indonesia.

Appointment of Directors
Mr Zane Lewis and Mr Damien Servant have been appointed as Non-Executive and Executive Director, respectively.

Mr Lewis is the Company Secretary of Lion Energy and has over 20 of years corporate advisory experience with various ASX and AIM listed companies. Mr Lewis is a fellow of Chartered Secretaries Australia and is a Non-Executive Director and Company Secretary for a number of ASX Listed companies.

Mr Servant was the Chief Financial Officer of Risco Energy and has more than 15 years of experience in M&A and capital markets with various financial institutions in the region. The appointments of Mr Lewis and Mr Servant as Directors are effective from 13 February 2018.

Quarterly Activities Report Q4 2017

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Solid production in strong oil price environment

Highlights

  • Gross production from the Seram PSC for the quarter was 210,206 barrels (average 2,285 bopd)
  • Crude oil lifting of 250,039 bbl (5,899 bbl net to Lion) completed on 24 December 2017 with Lion share of sales revenue of US$300,584 expected first week February 2018
  • Amanah Timur-2 (AMT-2) appraisal well in South Block A PSC now planned for Q2 2018

Quarterly Activities Report Q3 2017

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Lion continues growth strategy in improving investment climate

Highlights

  • New business focus continues with improved contract terms announced by the Indonesian Government
  • Gross production from the Seram PSC for the quarter was 233,081 barrels (average 2533 bopd)
  • Crude oil lifting of 350,186 bbl (8755 bbl net to Lion) completed on 9 September 2017
  • Exciting Amanah Timur-2 well set for 1Q-2018, avoiding wet season

Lion Energy Limited (“Lion” or “Company”) is pleased to report continued good progress on advancing new business activities, spurred on by the attractive new Production Sharing Contract terms announced by the Indonesian Government. Production continued from the Oseil oilfield in the Seram PSC, with revenue received in the quarter from the crude oil lifting in early May of US$464,400 prior to First Tranche Petroleum payment.

In a major positive development for the Indonesian oil and gas industry, the government announced material improvements to its new “Gross Split Production Sharing Contract (PSC)” regime. For new contracts and certain PSC renewals, this essentially replaces the existing traditional PSC with a more attractive system carrying improved fiscal terms. This is effectively a royalty/tax system which should significantly reduce the compliance burden on operators.

Production from the Seram PSC averaged 2533bopd for the quarter (63 bopd net to Lion prior to deducting government take). Gross crude oil production for the quarter was 233,081 bbl (5499bbl net to Lion). A lifting of 350,186bbl was completed on 9 September 2017.
In the South Block A PSC (Lion 40.7%), the Joint venture advanced appraisal drilling plans, building on results and lessons from the Amanah Timur-1 discovery well. The appraisal well spud is planned for 1Q-2018 following the wet season.

At the end of the quarter, the Company had cash of US$0.864mil, this excludes the lifting receipts of US$362,952 received post quarter end on 17 October 2017.
Lion’s CEO, Kim Morrison, noted “Lion continues to make good progress on building our position in Indonesia. We are pleased with the South Block A PSC appraisal plans now set for the first quarter of 2018, as this avoids the wet season in the North Sumatra area. Improvement to the new PSC terms signed by the Indonesian Government during the quarter are welcome and are a positive step for renewed interest in the oil and gas sector.”

Lion Energy

Suite 7, 295 Rokeby Road
Subiaco, WA 6008, Australia
Telephone: +61 8 9211 1500

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