Molopo Energy Limited: September 2012 Operational Update

Molopo Energy Limited (ASX:MPO) is pleased to announce its monthly operational
update on our activities and progress achieved over the prior month. 


Operational Highlights - Texas



--  36-2H Linthicum Washington (Barnhart) - As announced on 30 August,
    results from Molopo's first Barnhart well (36-2H) targeting Bench B were
    encouraging. The well was put on gas lift immediately, and a minor
    operational issue was addressed in mid-September. Since that time, the
    well has continued to flow back, and we are optimistic that as the well
    cleans up, rates will increase from current test rates of approximately
    300 boepd (barrels of oil equivalent per day). We will provide further
    updates as rates stabilize. 

--  Baggett 16-1H (Fiesta) - The first of Molopo's long lateral wells
    drilled at 8,800 feet in Bench A in Fiesta (16-1H) was put on gas lift
    25 days ago, and commenced flow back. Flow back rates for the past few
    weeks have averaged over 1,300 bbl/d of fluid with approximately 18% of
    the total load fluid utilized in fraccing being recovered to date. Given
    the length of this well and the high volume of fluid used to frac it, it
    is not uncommon for the well to require extended flow back time to
    commence oil recovery. On 30 September 2012 (North America), the well
    showed oil staining, which combined with the high daily fluid volumes,
    is very encouraging and indicates effective fraccing and system
    permeability. Once the well stabilizes, further information about rates
    will be provided.

--  36-1H Linthicum Washington (Barnhart) - Molopo's second Barnhart well
    (36-1H) was drilled with a lateral of approximately 7,500 feet, and was
    successfully completed. Flow back of the load fluid commenced 28
    September 2012 (North America), and consistent with the Baggett 16-1H
    well described above, the very large volumes of fluid that were utilized
    in the completion of this well are expected to require several weeks to
    extract. Due to this, well results with hydrocarbon indications are
    anticipated in November. 

--  Baggett 40-2H (Fiesta) - The second Fiesta well (40-2H) was drilled in
    Bench A for an approximate lateral length of 8,000 feet. Completion
    (fraccing) of this well commenced 24 September, with initial fluid flow
    back expected in mid-October and well results anticipated in late
    November. 

--  Baggett 54-1H (Fiesta) - Molopo's third new well in the Fiesta area (54-
    1H) is drilling and is the first of Molopo's Fiesta wells to target
    Bench B. The decision to add a Bench B target to the current drilling
    program was based on encouraging core work. It is anticipated that
    drilling of this well will conclude in mid-October with completion
    (fraccing) expected to commence in early November. As drilling and
    completion progresses, updates regarding estimated timing for flow back
    and results will be provided. 



Operational Highlights - Saskatchewan



--  No new wells were drilled or completed in Saskatchewan during September,
    and Molopo's technical team continues to evaluate the potential of the
    Midale interval across the Company's acreage. 



Company Production



--  Corporate sales in August 2012 were 395 boepd, comprised of 272 boepd
    from Texas, and 124 bopd (barrels of oil per day) from Saskatchewan.
    Given that the 36-2H Linthicum Washington well in Barnhart did not come
    on stream until late in August, Molopo's August production rate is not
    indicative of the Company's go forward expected production rate. Molopo
    has 5 wells in Texas at various stages of drilling or completion, each
    of which are expected to produce hydrocarbon results before the end of
    calendar year 2012, and contribute to the year-end target exit rate of
    2,300 boepd. As stable well results become available, the Company will
    continue to provide updates, as well as monthly operational updates as
    required by ASX.  
--  Sales for August by product were as follows: light, sweet crude oil:
    70%; natural gas liquids: 19%; and natural gas: 11%.



Corporate Highlights:



--  On 11 September 2012, Molopo received confirmation from the purchaser of
    its Queensland asset that Australia's Foreign Investment Review Board
    ("FIRB") has no objections to the sale. The only remaining condition is
    the receipt of China's National Development and Reform Commission
    ("NDRC") approval. As announced 1 October 2012, Molopo agreed to a three
    week extension such that the condition must be satisfied on or before 23
    October 2012. The purchaser has confirmed that the reason for the delay
    is administrative and they are not aware of any circumstances that would
    result in PetroChina not receiving NDRC approval. In light of the
    extension, settlement of the transaction will take place by November 7,
    2012. Upon closing, Molopo will receive A$41MM in cash plus a capital
    adjustment of A$2.4MM. 
--  On 21 September 2012, Molopo confirmed it had been granted the first
    onshore production right in South Africa. Molopo's overall net interest
    in the project is 80% after Black Economic Empowerment ("BEE") and
    government participation. Capital requirements under the work plan are
    modest at A$2.4MM in the first year, A$3.5MM in the second year, and
    $8.5MM in the third year for a total of A$14.9MM. 



Outlook



--  Molopo continues to be well capitalized, and expects to exit calendar
    year 2012 with approximately $65 million in cash (including proceeds
    from the Queensland sale), while still investing in its capital
    expenditure program focused in Texas.  
--  With 5 out of 6 budgeted wells drilled or in progress, Molopo is
    executing on its plan to drill one well per month. The technical team
    continues to evaluate each well and will move forward accordingly to
    ensure that opportunities are high-graded and capital is allocated to
    the region or Bench offering the highest prospectivity. 
--  Molopo is on target to meet its 2012 calendar year capital development
    plans for drilling 6 wells in Texas and 2 wells in Saskatchewan. Given
    the potential of the Wolfcamp, the Company may re-allocate capital from
    Saskatchewan to Texas and drill an additional well in its Wolfcamp
    acreage before the end of 2012.  
--  In Texas, Molopo is seeking to license an additional 2 wells in
    Barnhart, targeting Bench B. Three additional wells have been licensed
    in Fiesta, with one well targeting Bench A and two wells targeting Bench
    B. These wells are expected to be drilled as part of Molopo's 2013
    capital program, details of which will be communicated in late November.



This press release contains certain forward-looking statements. These statements
relate to future events or future performance of the Company. When used in this
press release, the words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "predict", "seek", "propose", "expect",
"potential", "continue", and similar expressions, are intended to identify
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements.
Such statements reflect the Company's current views with respect to certain
events, and are subject to a number of risks, uncertainties and assumptions.
Many factors could cause Molopo's actual results, performance, or achievements
to materially differ from those described in this press release. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual results may vary
materially from those described in other public disclosures made by the Company
or this press release as intended, planned, anticipated, believed, estimated, or
expected. Furthermore, statements relating to "reserves" or "resources" are
deemed to be forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions that the resources and reserves
described can be produced profitably in the future. The forward-looking
statements contained in this press release are expressly qualified in their
entirety by this cautionary declaration. These statements speak only as of the
date of this press release. The Company does not intend and does not assume any
obligation, to update these forward-looking statements to reflect new
information, subsequent events or otherwise, except as required by law.


Molopo Energy Limited is an ASX-listed oil and gas exploration and production
company. The company is focussed on the development of its shale oil resource
play in the Permian Basin, Texas, USA. The company also has unconventional oil
assets in the Williston Basin, Saskatchewan, Canada, shale gas assets in Quebec,
Canada, a CBM project in Australia (under divestment) and onshore gas projects
in South Africa.


ABN 79 003 152 154