Pilot Energy Limited provided an update on recently completed studies on the Cliff Head Carbon Capture and Storage project (CCS Project) - Stage 1 of the Mid West Clean Energy Project. The results from the technical studies and projects economics demonstrate the strong fundamentals which support the business case for the development of a near term CCS project in the Mid West. Stage 1 of the Mid West Clean Energy Project involves the conversion of the Cliff Head oil field from oil production to a CCS project.

Recent technical studies and economic analysis has confirmed the commercial viability of providing CCS services to the Mid West. The technical studies also indicate sufficient scale in the offshore permits held by Pilot to provide CCS services in parallel with permanently storing CO2 produced during Stage 2 and Stage 3 of the Mid West Clean Energy Project. Technical studies completed by CO2Tech have confirmed the significant CO 2 storage potential of both the Cliff Head production license (WA 31-L) and the WA-481-P exploration license areas with a total 10.8 million tonnes 2C Contingent resources and best estimate Prospective resources of 80.4 million tonnes.

Assessments completed by Genesis Energies and CO2Tech have considered the existing Cliff Head wells, pipelines and infrastructure and the necessary works required to augment and upgrade the infrastructure to facilitate CO2 injection. These assessments have concluded that the Cliff Head wells, pipelines and infrastructure are suitable for conversion from oil production to CCS with minimal modifications. The conversion of the current Cliff Head oil field production operation into a CCS operation will occur over three basic stages ­ Storage Reservoir Preparation, Facilities Conversion and CO2 Injection Operations.

Additionally, the initial CO 2 Injection Operations can also be expanded to both increase the CO2 injection rate up to 1 mmtpa and overall storage capacity to 16 million tonnes. Miro Capital is assisting Pilot to identify strategic and or industry partners for the Mid West Clean Energy Project and has worked with Pilot's internal team to assess the project economics of Stage 1 Cliff Head CCS. The project economics assume the CCS business provides a CO2 abatement service and have been assessed based on a 550,000 tpa and 1.1 million tpa injection rate scenarios.

In parallel with the commencement of the regulatory approval process for the CCS Project, the Company is also commencing engagement with prospective third-party customers seeking near-term effective, high-quality carbon reduction solutions for their existing businesses. The Company has identified several large, long-term sources of industrial CO2 emissions in very close proximity to the Project which are potential customers for the Project. The Company believes that such industrial customers will seek long-term arrangements to manage their existing and future CO2 emissions thus supporting the long-term commercial utilisation of the Project.

Additionally, the Company believes that these potential customers of the Project may also seek to secure equity participation in the Project as part of putting into place CCS contracts. Concurrently with the commercialisation of the Project, the Company is also advancing plans to secure funding for the Project. The Company believes that the Project can be largely funded through a combination of long-term debt financing as well as direct equity investment in the Project through the introduction of direct project participation by Project customers or Project equity investors.

In this regard, the Company is currently engaged in discussions with multiple Australian diversified industrial companies, energy producers and overseas investor groups to progress possible participation in the Project. Given the low development and operational risk profile of the Project and the likely commercialisation of the Project through long-term contractual arrangements, the Company believes that the Project is likely to be significantly funded through infrastructure-style conventional long-term commercial bank debt financing. The net funding requirement for the CCS Project will be in the order of $70 million (100% project basis, $40M net to Pilot), after taking into account the net cashflow from oil production during the pre-injection phase.

The majority of this funding will not be required until circa 2025. To this end, the Company has also engaged Bridge Street Capital Partners to assist the Company with the development of this funding strategy in conjunction with the commercialisation and partnering engagements being developed with Miro Capital and Reputex Energy.