Grand Gulf Energy : June 2022 Quarterly

Market Announcements Platform

ASX Limited

Exchange Centre

20 Bridge Street

Sydney NSW 2000

30 June 2022 ASX Quarterly Report

29 July 2022

Highlights

Gulf Energy Limited (ASX: GGE) (Grand Gulf or the Company) is pleased to provide shareholders with the following summary of its activities during the June 2022 quarter.

• Red Helium Project Updates:
  o Jesse#1A Discovery June 2022
  o Surface samples of up to 0.65% helium concentrations exceeding pre-drill expectation and high

bottomhole pressures of 2300psi in line with virgin pressure modelling at the Doe Canyon analogue.

1. Petrophysical interpretations indicate 203ft gross gas column supporting a structural closure estimated at 4 to 5 times the neighbouring Doe Canyon analogue (estimated helium recovery of 3
   - 5 bcf).

1. Work-overand flow test planned for mid-August

1. The Jesse#1A well is immediately adjacent to unutilised pipeline connected to Helium Offtake

Agreement partner Paradox Resources LLC ("Paradox"), allowing a commercial discovery at Jesse#1A to be monetised with minimal time and Capex.

1. Second Red Helium Project well planned for Q3/Q4 2022

1. Multiple locations on the large contiguous area that the Jesse discovery structure represents, together with other mature independent prospects in the Red Helium project, are being ranked and

prioritised.

1. The Company is funded for a second Red Helium project well scheduled for Q3/Q4 2022, with one

location permit already approved.

1. Strategic Alliance with Paradox
   o sets framework for expansion of Offtake Agreement to accelerate monetisation of future commercial discoveries
   o increase value by collaborative downstream marketing targeting end users, and

1. pursuing commercially advantageous corporate synergistic opportunities and revenue generating potential of residual gas streams.

1. Lease Acreage Position Increased to ~ 29,257 acres

• 1. Extreme price pressure in the helium market with increased demand and supply side shortages estimated to continue into 2023.
     o Wholesale crude helium markets around $600/mcf and reports of US spot markets for high purity helium (>99.995%) exceeding US$2000/mcf.
• Existing US oil production from the Desiree Field (39.6% WI) grossed a total of 5016 bo and averaged 55 bo/d during the quarter, working interest share to GGE was 1553 bo.
• ESG
• 1. Following on from the Global Standard for ESG reporting adopted in Q4 FY22, the first ESG Disclosure Report in line with the World Economic Forum (WEF) Framework planned to be released in Q1 FY23.

1. A gap analysis on Corporate Governance Policies was recently conducted. The following policies have been subsequently been developed and implemented; Sustainability Policy, Environmental Policy, Diversity and Equal Employment Opportunity Policy, Occupational Health and Safety Policy.

Board of Directors	Registered Office
Chairman: Craig Burton	Suite 1G, 56 Kings Park Road, West Perth, WA 6005
Managing Director: Dane Lance	T [phone]
Technical Director: Keith Martens	E [e-mail]
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June 2022 ASX Quarterly Report

RED HELIUM PROJECT UPDATES

Jesse Discovery

The maiden potentially company-making helium exploration well Jesse#1A spud on 24th of April, and the after the well returned helium gas at a grade of up to 0.65% to surface and a bottomhole pressure of 2300psi in line with virgin pressure modelling at the neighbouring Doe Canyon analogue, the Jesse discovery was announced on 29 June 2022. The helium concentrations compare favourably to Doe Canyon which has an average grade of 0.4%.

Petrophysical interpretations indicate a gross gas column of 203ft (ASX announcement 30 May 2022) supporting a structural closure estimated at 4 to 5 times the neighbouring Doe Canyon analogue, which has an estimated helium recovery of 3 - 5 bcf/yr (Air Products market cap US$52b). The annual world-wide helium market, a multi-billion dollar market, is around 6 bcf/yr.

1. work-overand flow test is planned to commence in mid-August and a work-over rig has been sourced. The Jesse#1A well is immediately adjacent to unutilised pipeline connected to Helium Offtake Agreement partner Paradox, allowing a commercial discovery at Jesse#1A to be monetised with minimal time and Capex.

Aztec 980 Drill Rig on Jesse#1A well site in SE Utah

Red Helium Project Working Interest Increased to 70%

Under the terms of the operating agreement the Company has satisfied the earn-in requirements for the first well by contributing the first US$1.5 million in the program and has increased its working interest from 55% to 70% in its majority-owned incorporated JV company Valence Resources LLC ("Valence") which operates the Red Helium project

(ASX announcement 20 July 2022). The Company has the right to increase its working interest in Valence to 85% by contributing the first US$1.5 million to each of two further Red Helium project wells.

Second Red Helium project well planned for Q3/Q4 2022

Multiple locations on the large contiguous area that the Jesse discovery structure represents, together with other mature independent prospects in the Red Helium project, are being ranked and prioritised with the Company funded for a second

Red Helium project well scheduled for Q3/Q4 2022 (ASX announcement 20 July 2022). The Company has already received a permit approval for a second Red Helium project well location (ASX announcement 14 June 2022).

Helium Market - Brief Update

Recent sharp rise in helium prices on the back of US supply disruptions, Russian sanctions and increased demand. Ongoing supply-side issues including the outage at the US government's BLM Cliffside facility (up to 10% global supply) and the Amur facility incident (10 - 20% global supply) have put extreme pressure on the global market, and in particular the US spot market, with the company advised of US spot prices in excess of US$2,000/mcf for research grade helium (160mcf tube trailer). The BLM facility was re-started in June 2022, however significant supply shortages are forecast into 2023. Retail prices have increased more than 200% in the UK, and many suppliers in the US are still in Force Majeure.

About the Red Helium Project

The Red Helium Project provides exposure to the burgeoning helium industry in a prolific proven helium-producing region, the Four Corners Area, that comprises:

• 250,713 acre area of mutual interest (AMI) with over 29,000 acres (private leases/Utah state leases) leased in drill-friendly Utah in the heart of the most prolific helium-producing region in the world

Grand Gulf Energy Ltd - Suite 1G, 56 Kings Park Road, West Perth, WA 6005, T [phone], [e-mail]

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June 2022 ASX Quarterly Report

• Geologically analogous to Doe Canyon Field (refer ASX announcement 8/12/21, pg 4), Doe Canyon is situated 15 miles due east of the Red Helium project, and is currently producing approximately 10,700,000 cubic feet of helium per month, the bulk of which comes from only 7 wells. Air Products is processing the helium, and it is anticipated that Doe Canyon will ultimately produce 3-5 billion cubic feet of helium. With additional drilling, this resource figure could increase
• 315 kms of well-placed 2D seismic has been acquired and reprocessed - identifying multiple drill targets - and confirming a structural trap 4-5 times larger than the Doe Canyon Field

Stylised cross section with Jesse#1A location, Earp and Kit prospects, Doe Canyon helium field / historic gas

samples

• 20 miles south of and connected by pipeline to the operational Lisbon Helium Plant
• Helium Offtake Agreement: Helium Offtake Agreement executed (ASX announcement 16 March 2022) with helium refiner and seller Paradox Resources LLC (Paradox) with industry standard 80/20 revenue sharing allowing a success case Jesse#1A to monetized with minimal time and Capex

Jesse#1A location in the Red Helium project AMI with local pipelines / gas transport route to the Lisbon Helium Plant.

Grand Gulf Energy Ltd - Suite 1G, 56 Kings Park Road, West Perth, WA 6005, T [phone], [e-mail]

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June 2022 ASX Quarterly Report

• Multiple Independent locations: Three mature drill locations independent to the Jesse prospect were identified, significantly de-risking the Red Helium Project (ASX announcement 4 April). Drill-ready Earp prospect permitting advanced for Earp#1. Four follow-on appraisal/development well locations identified on Jesse prospect either immediately adjacent or proximal to pipeline connected to the Lisbon Plant.

Jesse#1A location and additional independent prospect drill locations in the Red Helium project AMI with Doe Canyon

Analog helium field (Air Products market cap US$52B)

• Strategic Alliance: On the back of its recent Helium Offtake agreement Grand Gulf entered into a Strategic Alliance (Alliance) with helium refiner and seller Paradox Resources LLC (Paradox) designed to fast-track and optimise the significant commercial opportunities that exist in the current buoyant helium market (ASX announcement 11th April 2022. The Strategic Alliance is structured to explore mutually commercially advantageous revenue sharing arrangement on such key items as:
  o Optimize and prioritize near-term exposure to the burgeoning helium market
  o Red Helium Project to be a potential priority supplier to re-start the Paradox liquefier capable of producing high purity 99.9995% helium - which attracts premium pricing, currently over US$2,000/mcf
  o Collaborative downstream marketing targeting end users of high-purity helium such as semi- conductor manufacturers and the space industry
  o Expansion of the terms of the recently executed Offtake agreement to include discoveries after Jesse#1A
  o Progress identified CO2 disposal options with revenue generating potential:
• • i) Expansion of existing carbon sequestration activities at Paradox's Lisbon Plant to include CO2 from the Red Helium Project - potentially revenue-generating under Section 45Q of the US Tax Code; and
  • ii) Joint investigation into utilization of Red Helium Project CO2 for enhanced oil

recovery (flooding) from Paradox's Lisbon Oil Field

1. Potential synergistic commercial benefits in assessing corporate opportunities that involve both Paradox assets and the Red Helium Project

Paradox Resources Lisbon Valley Gas Processing Plant.

Grand Gulf Energy Ltd - Suite 1G, 56 Kings Park Road, West Perth, WA 6005, T [phone], [e-mail]

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June 2022 ASX Quarterly Report

Maiden Prospective Helium Resource (pre-Jesse#1A)

On 8 December 2021 the Company announced that Sproule Energy Consulting Ltd. ("Sproule") had completed the maiden Prospective Resource Report for the Red Helium Project located in the Paradox Basin, Utah USA. Sproule is an independent resources and reserves certification specialist with extensive experience in helium and the Paradox Basin.

Sproule has confirmed a P50 10.9 billion cubic feet (BCF) Prospective Resource over gross leased acreage and P50 of

7.4 BCF on a net acre basis to Valence. The Sproule Prospective Resource calculation is based on the current acres held by incorporated joint venture company Valence Resources LLC (Valence) at 8 December 2021.

The Company plans a resource update based on the data gained from Jesse#1A post the flow test result.

Valence Pre-Drill Prospective Resources1

	Recoverable Helium			1U (P90)			2U (P50)			3U (P10)
			(BCF)			(BCF)			(BCF)
Gross to Valence - (28,046 gross acres)	7.6		10.9		12.9
Net to Valence - (18,959 net acres)	5.2		7.4		8.5
Net to GGE - (earning 85% of net Valence)	4.4		6.3		7.2
Red Project Total	7.9		20.8		57.6

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

GGE now has a 70% interest in Valence with a right to secure a further 15% interest (total of 85%) on the following terms:

Earning 85% of Valence Resources	Max Cost		Cumulative Interest
Completion of Leasing Payments			55%
Drilling first well prior to 30/09/2022	US$1.5M	(cost overruns to be split 70/30)	70%
Drilling second well prior to 30/09/2023	US$1.5M	(cost overruns to be split 77.5/22.5)	77.5%
Drilling third well prior to 30/09/2023	US$1.5M	(cost overruns to be split 85/15)	85%

1 Sproule as announced on ASX on 8 December 2021. The Company is not aware of any new information or data that materially affects the information

included in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

Grand Gulf Energy Ltd - Suite 1G, 56 Kings Park Road, West Perth, WA 6005, T [phone], [e-mail]

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