Annual report
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ANNUAL REPORT 20 26
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DIRECTORS R Black (Chair) R Delroy (Non-Executive Director) W Barker (Non-Executive Director) S Jones (Non-Executive Director) COMPANY SECRETARY A Doering AUDITORS Ernst & Y oung BANKERS Australia and New Zealand Banking Group Limited Commonwealth Bank of Australia National Australia Bank Limited Macquarie Bank Limited Deutsche Bank REGISTERED OFFICE 2nd Floor 76 Kings Park Road West Perth WA 6005 Telephone: +61 8 9321 2665 Facsimile: +61 8 9321 8867 Email: admin@cvn.com.au Website: carnarvon.com.au Corporate Governance statement: carnarvon.com.au/about-us/corporate-governance/ SHARE REGISTRY MUFG Pension & Market Services Level 12, QV1 Building 250 St Georges Terrace Perth, WA 6000 Australia Investor Enquiries: 1300 554 474 (within Australia) Investor Enquiries: +61 1300 554 474 (outside Australia) Facsimile: +61 2 9287 0303 STOCK EXCHANGE LISTING Carnarvon Energy Limited’s shares are quoted on the Australian Securities Exchange. ASX Code: CVN - ordinary shares Corporate Directory
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Contents CHAIR’S REVIEW 1 CEO'S REVIEW 3 OPERATING AND FINANCIAL REVIEW 5 ESG REPORT 29 DIRECTORS’ REPORT 46 AUDITORS INDEPENDENCE DECLARATION 65 CORPORATE GOVERNANCE STATEMENT 66 CONSOLIDATED INCOME STATEMENT AND 67 OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION 68 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 69 STATEMENT OF CASH FLOWS 70 NOTES TO THE FINANCIAL STATEMENTS 71 CONSOLIDATED ENTITY DISCLOSURE STATEMENT 112 DIRECTORS’ DECLARATION 113 INDEPENDENT AUDIT REPORT 114 ADDITIONAL SHAREHOLDER INFORMATION 120 CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | iii
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Chair’s Review Recent global events have highlighted the importance of energy security and, more importantly oil security. Carnarvon Energy Limited (“Carnarvon” Or “Company”) With a heavy reliance on imported fuels, Australia’s oil supply is extremely vulnerable to global events. This has emphasised the importance of large- scale domestic oil developments, such as Dorado. The Dorado field is one of Australia’s largest undeveloped oil resources, which is fully appraised and estimated to contain 162 million barrels of oil (2C, gross). In addition, the nearby Pavo discovery is estimated to hold a further 43 million barrels of oil (2C, gross). These are world class resources which can contribute to Australia’s oil security and provide a valuable new supply to the region. Despite the unfortunate deferral of the project in early 2025, substantial concept design work has been completed, and we continue to work with the Joint Venture to advance the project towards Front-End Engineering and Design (FEED) to an eventual Final Investment Decision (FID). The broader Bedout Sub-basin, which contains Dorado, is one the most prospective and liquids- rich hydrocarbon exploration regions in the country. The Bedout Joint Venture’s permits cover a vast area of over 11,000km2 and despite achieving a 67% exploration drilling success rate to date, we’ve barely scratched the surface of what has become a proven hydrocarbon basin. We recently secured the Transocean Equinox semi- submersible drilling rig to drill one firm well and a potential contingent well in our Bedout permits. We’re incredibly excited to be returning to drilling next year and potentially adding material resources to those discovered to date. Any additional discovery has the potential to significantly derisk other high value prospects in the region, which would further confirm the scale of the resources within the basin. At the beginning of the period, we were pleased to announce a strategic $86 million investment in Strike Energy Limited (Strike), for a shareholding of 19.9%. The Strike investment provides Carnarvon with exposure to Western Australia’s fast-growing gas and electricity markets, which complements our oil weighted Bedout basin interests. We’ve appointed Mr William Barker to the Strike Board as a nominee director and we’re working collaboratively with Strike as they deliver their high-quality Perth basin assets. The upcoming period is an exciting phase for Strike, and we look forward to their achievement of important milestones for the South and West Erregulla projects. Importantly, we’ve retained our robust balance sheet, with $98m in cash, a US$90 million capital expenditure carry towards the Dorado development and no debt. During the year, the administrative corporate and staff costs of the Company were funded by the interest earned on the Company’s cash holdings. As a result, we remain well placed to fund the next phase Bedout exploration and our share of the Dorado development. 1 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Carnarvon also maintained the ability to conduct an On-market Buyback for up to 10% of shares. Whilst the Company did not buy back any shares during the period, this option remains available to the Company to actively manage its capital when it represents value to do so for shareholders. I would like to thank our shareholders for their continued support and patience through what has been a frustrating period for the Company as we wait to develop the Dorado field. I’m confident in the deep value of the Company and am looking forward to continuing our efforts to unlock that value, including our exploration campaign in 2027. Finally, I would like to thank our CEO, Phil Huizenga, my fellow directors and our staff for their continued dedication and hard work. We have a small team who are strongly aligned and focused on delivering value for shareholders. Robert Black Chair I’m confident in the deep value of the Company and am looking forward to continuing our efforts to unlock that value " CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 2
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CEO’s Review We continued our focus during the year on progressin our core Bedout Sub-basin assets, culminating in the signing of a drill rig to allow our return to exploration drilling. While we are on a longer timeline than we had hoped, the underlying value of our portfolio, and the case for developing it, has continued to strengthen. Our core strategic direction has remained unchanged: maximise the value of Dorado and the wider Bedout Sub-basin, preserve the Company's balance sheet strength, leverage our shareholding in Strike Energy and maintain a lean corporate cost base funded by interest on our cash holdings. Finalisation for plans on Dorado has again taken longer to reach than we anticipated at the start of the year, and I recognise the frustration that this continued delay causes our shareholders. That said, the case for the project has, if anything, become more compelling. Global energy security has been very much back in focus over the past six months, and Dorado’s light, sweet crude is well suited to meeting robust demand across Asia and here in Australia. We continue to work closely with Santos and the rest of the Joint Venture towards FID, and remain confident in the underlying quality of this world-class resource. On exploration, the results of the Bedout 3D Seismic Mega Merge Project (Mega-Merge 3D) completed over the year have continued to illuminate the basin, giving the Joint Venture high-resolution coverage across the majority of our permits and sharpening our view of the basin's substantial prospective resources, which we estimate at 3 billion barrels of oil and condensate and 17.5 trillion cubic feet of gas across our prospects (Unrisked Pmean, Gross – refer to pages 18-21). I was extremely excited to announce that we will be returning to drilling in the first half of 2027, which will allow us to test the existing prospectivity we’ve been assessing for a number of years. The scale and quality of the prospects the Mega-Merge 3D data has defined, prospects comparable in size to Dorado itself, mean this remains one of the most exciting exploration opportunities in Australia. Preparatory work towards the exploration drilling campaign, including the Environmental Plan approval process, which has continued to progress through public consultation and regulatory assessment during the year. We look forward to updating shareholders as we achieve the necessary steps towards the drilling campaign. Following the deferral of FEED and FID that we flagged this time last year, we again reviewed the options available to Carnarvon to maximise shareholder value. Having assessed various alternatives, we completed our strategic investment in Strike Energy Limited (Strike), subscribing for approximately $86 million of Strike shares at $0.12 per share for a 19.9% shareholding. 3 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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This investment gives Carnarvon exposure to Strike's high-quality gas production, development and exploration portfolio and to Western Australia's growing domestic gas and electricity markets, while importantly preserving our full exposure to the Bedout Sub-basin. In closing, I would like to thank our Chair, Rob Black, and the rest of the Carnarvon board for their continued guidance through a year that has again asked us to adapt our approach in the face of delays outside our control, while staying disciplined on the fundamentals that matter. I would also like to thank our CFO, Alex Doering, and the whole Carnarvon team for their commitment over the past twelve months, particularly in progressing the Strike investment and our ongoing exploration efforts. Finally, thank you to our shareholders for your patience and continued support as we work through these timelines to unlock the substantial value we believe remains in Dorado, in Strike, and across our Bedout Sub- basin exploration portfolio. Philip Huizenga Chief Executive Officer We look forward to updating shareholders as we achieve the necessary steps towards the drilling campaign. " CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 4
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Overview of Operations HIGHLIGHTS FOR THE COMPANY DURING THE 2026 FINANCIAL YEAR WERE: Operating and Financial Review Onslow Karratha Port Hedland Broome Derby Wyndham Truscott Kununurra Timor-Leste Darwin > Transocean Equinox semi-submersible rig contracted for 2027 Bedout drilling campaign, expected to commence in the first half of 2027. > 2027 Bedout exploration campaign to consist of one firm well and one optional well in Carnarvon’s exploration permits, with Ara-1 likely to be the firm well. > Completion of the Bedout Mega-Merge 3D seismic dataset which has delivered one of the most advanced seismic datasets ever developed in the region. > 92% increase in Bedout Sub-basin prospect inventory upgraded post Bedout Megamerge 3D interpretation to include over 6.2 billion barrels of oil equivalent (boe) (gross, unrisked Pmean) (refer to pages 18-21). > $86 million Strategic investment in Strike Energy Limited (Strike), securing a 19.9% shareholding. > Strike investment provides exposure to Western Australia’s fast-growing gas and electricity markets. Figure 1: Carnarvon Interests as of 30 June 2026. Phoenix, Phoenix South, Roc, Dorado & Pavo WA-435-P 10% WA-436-P 20% WA-437-P 10% WA-438-P 20% WA-64-L 10% 5 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Onslow Karratha Port Hedland Broome Derby Wyndham Truscott Kununurra Timor-Leste Darwin Dorado Project Background Carnarvon secured its interests in the Bedout Sub-Basin exploration permits (WA-435-P, WA-436-P, WA-437-P and WA-438-P) in 2009. The offshore permits initially covered an expansive area of 21,652km2, with the permits located approximately 110km from the coast, offshore of Port Hedland in Western Australia. The Bedout Sub-Basin had historically been largely underexplored compared to the prolific Carnarvon Basin to the south-west and the Bonaparte Basin to the north-east. Exploration activity was previously limited to a handful of wells drilled in the 1970’s and early 1980’s, which included the Pheonix discovery which was considered to be gas at the time. The unexplored potential across this vast area and the presence of hydrocarbons within the region, led to Carnarvon’s interest in the basin. Carnarvon and the initial joint venture undertook an extensive geological study, acquiring modern 3D seismic which was a substantial upgrade to the existing legacy 2D Seismic. The 3D seismic illuminated the basin and was instrumental in the identification and subsequent discoveries of Phoenix South within WA-435-P, and Roc in WA-437-P. The Phoenix South-1 well was drilled in 2014, discovering light oil within an effective reservoir. This was followed by the discovery and appraisal of a condensate rich gas in the Roc field. The Roc-2 appraisal well included a historic flow test, confirming the ability of the hydrocarbons to flow from the high-quality Caley Member reservoir. These results proved to be the catalyst for this region. The Company’s landmark discovery came in 2018 with the Dorado-1 exploration well, which encountered a significant light oil column in the primary Caley Member, and condensate rich gas in four additional reservoirs. This was followed by a successful appraisal with well test results exceeding pre-test expectations and confirming the high- quality nature of the reservoirs in Dorado. Dorado was subsequently recognised as a world class discovery and a production license (WA-64-L) was awarded in 2022. Further success in the basin was also realised in 2022, when the Pavo-1 exploration well discovered a 60m gross, undersaturated light oil column in excellent Caley Member reservoir. Importantly, the discovery, which is located 46km east of Dorado, validated the effectiveness of the Caley Member play extent to the East and provides a valuable back-fill option to the proposed Dorado facilities. Greatly assisted by the application of modern 3D seismic, the Joint Venture has achieved an outstanding exploration success rate of 67%. Carnarvon estimates that Dorado and surrounding fields contain gross 2C resources of 249 million barrels of light oil and condensate (MMbl) and 1.1 trillion cubic feet of gas (T cf) (refer to page 17). With the next phase of exploration drilling planned in the upcoming year, the Company is looking to continue to grow the discovered resources. Figure 2: Image of Noble’s Tom Prosser rig on site during the Dorado Appraisal campaign. OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 6
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OPERATING AND FINANCIAL REVIEW Dorado Development (WA-64-L) (Carnarvon 10%), Santos is the Operator) Figure 3: Schematic of potential Dorado FPSO and WHP Bedout exploration permits in 2023 to CPC Corporation, Taiwan, Carnarvon retains a US$90 million cost carry for CAPEX payments on Carnarvon’s future expenditure on the Dorado development and Bedout permits, once a Final Investment Decision (FID) has been sanctioned for the Dorado development. In late 2024, the Joint Venture finalised pre-Front End Engineering & Design (FEED) for an optimised Dorado development concept. The optimisation revolved around right-sizing the oil production rate to 60,000 bopd, which provided the Joint Venture an opportunity to reduce upfront capital expenditure through using the potential redeployment of an FPSO, conventional piled WHP, and lower number of development wells upfront. The optimisation also resulted in a development period which could see first oil three years after FID. Drilling activity in the region is expected to resume in the first half of 2027. The Operator has indicated that project development activities will recommence in parallel with ongoing evaluation of additional exploration prospectivity in the Basin. The Company continues to work with the operator to advance the Dorado and Pavo projects toward a FID in a capital efficient manner. The Dorado Field is located approximately 150km north of Port Hedland in the Bedout Sub-basin with water depths of approximately 90m. It is located within the WA-64-L production license. Dorado is Australia’s largest undeveloped offshore liquids field containing an estimated 162 million barrels of liquid hydrocarbons (2C,gross) (refer to page 17) across five separate light oil and rich gas condensate accumulations, with high quality hydrocarbon fluids intersected within excellent quality reservoirs. The selected concept for the Dorado Phase 1 liquids development is based on production from a fixed wellhead platform (WHP) connected to a Floating Production, Storage and Offtake (FPSO) vessel, which handles oil and condensate stabilisation, storage and offloading, water treatment for disposal, gas dehydration, gas compression and reinjection (Figure 3). During the Phase 1 development, gas is injected back into the reservoir to enhance oil and condensate production, with the remaining gas stored for later extraction as part of a future Phase 2 gas export development. Following the completion of a partial divestment of the Company’s interests the Dorado production license and 7 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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OPERATING AND FINANCIAL REVIEW Pavo Oil Discovery (WA-438-P) (Carnarvon 20% - Santos is the Operator) The Pavo South resource (once drilled and confirmed) could also be tied-back with additional wells potentially being connected to the Pavo facilities (Figure 4). During the year, the Joint Venture continued to progress the Pavo Project concurrently with the Dorado Project. However, based on the optimised Dorado development concept, production from Pavo is not expected to be required until 4 to 5 years after first oil from Dorado. The Joint Venture is also progressing the Keraudren Extension Phase 3 3D seismic acquisition, which is targeted in 2028. The proposed 3D acquisition area will cover an area of 2,315km², encompassing the Pavo North and South providing a contiguous seismic acquisition over the Pavo fields. It will also cover a number of exciting exploration prospects located on the South-Eastern Archer play fairway in WA-438-P. These prospects have previously been identified on sparse 2D seismic lines. Dorado WHP DORADO PAVO NORTH SOUTH Dorado FPSO Pavo Figure 4: Proposed Dorado Field Development Layout and potential tie-backs of Pavo North and Pavo South. The 2022 Pavo-1 exploration well encountered a 60-meter gross oil column within the Caley Member. The oil column is wholly contained within the northern culmination of the Pavo structure (Pavo North) and is assessed to contain a 2C contingent resource of 43 million barrels of oil (gross) (see page 17). Importantly, Pavo North is located 46 kilometres east of Dorado and could provide high-margin back-fill for the proposed Dorado facilities (Figure 4). The Pavo North discovery further de-risked numerous prospects within the Company’s considerable Bedout Sub-basin acreage such as the Pavo South prospect. Given its close proximity to Pavo North, and near identical prospect elements demonstrated by seismic, the Pavo South structure is interpreted to have an excellent geological chance of success. Indications of a deeper, residual or paleo-oil-water contact in the Pavo-1 well at around 3,045 metres MD, may indicate that the two Pavo culminations were connected at a previous point in time. If this was the case, a common deeper contact supports the charging of both structures with the same oil that was discovered in the Pavo North structure. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 8
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Exploration – Greater Bedout Area (WA-435-P, WA-436-P, WA-437-P and WA-438-P) (Carnarvon 10%-20% - Santos is the Operator) Well-related sub surface studies were also completed during the period, and the Bedout Joint Venture has continued to procure drilling long-lead items and progress the relevant environmental plan approvals in preparation for drilling. The shortlisted prospects targeted in the 2027 exploration campaign have all been defined on the Bedout Mega-Merge 3D seismic dataset (Mega-Merge 3D). Processing of the Mega-Merge 3D was completed during the period, which has delivered one of the most advanced seismic datasets ever developed in the region. The project integrates 10 seismic surveys, covering 15,240km², and provides more than 80% seamless coverage of the Bedout Joint Venture acreage (Figure 5). The enhanced seismic dataset features significantly improved resolution, reduced noise and greater clarity, offering a more detailed and accurate picture of the subsurface than ever before. This advancement has enabled the identification of previously undetected structural features and stratigraphic trends, enriching the Bedout Joint Venture’s understanding of the region’s geological potential and high-grading the potential drilling candidates for the 2027 exploration drilling campaign. Interpretation of the Mega-Merge 3D during the period has also delivered a 92% increase in the Company’s prospect resource inventory. The Company now estimates gross prospective resources of 6,256 million barrels of oil equivalent (mmboe) (gross, unrisked Pmean) across 130 prospects, a significant increase from the 3,263 mmboe (gross, unrisked Pmean) reported in June 2025 (refer to pages 18-21). The net prospective resource to the Company is now 1,021 mmboe (unrisked Pmean) (refer to pages 18-21). OPERATING AND FINANCIAL REVIEW The Bedout Sub-basin, offshore Western Australia, is one of Australia’s most exciting exploration regions. The Joint Venture’s exploration strategy has the potential to unlock substantial resources in addition to the already discovered hydrocarbons with an updated gross, unrisked mean prospective resource estimate of 6.25 Billion Barrels of Oil Equivalent (Bboe) (refer to pages 18-21). The Joint Venture has successfully contracted the Transocean Equinox semi-submersible drilling rig as part of a proposed 2027 multi-well exploration drilling campaign. The rig was selected after a comprehensive bid evaluation process which commenced in early 2025. The rig is currently engaged in a multi-well exploration drilling campaign offshore Victoria, which is expected to be completed by early 2027. The Bedout exploration campaign is scheduled to commence from April 2027, subject to environmental plan approval, with one firm well, and one contingent well to be drilled in Carnarvon’s permits. If the firm and contingent wells are both drilled, the total expected cost to Carnarvon will be approximately A$20 million, which would be funded from Carnarvon’s current cash balance. The objective of the 2027 Bedout exploration campaign is to define the scale of the Bedout Sub-basin’s resource potential and will target some of the largest prospects in the exploration portfolio. The prospects which have been shortlisted for Carnarvon’s drilling campaign include Ara, as the likely firm well candidate, with either the Yuma, Hutton, Goats Eye or Pavo South prospects shortlisted as the potential contingent well target. These leading prospects account for approximately 14% of the total risked portfolio (Pmean) and contain prospective resources of approximately 851 mmboe (gross, unrisked Pmean) (refer to pages 18-21). Drilling success at any of these targets could significantly derisk numerous analogous prospects, further enhancing the quality of the basin’s prospectivity. Further details on these prospects are included later in the report. 9 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Figure 5: Bedout Prospect and Lead Map with drilling EP areas, Bedout Mega-Merge 3D coverage, proposed 3D acquisition area and potential 2027 drill targets highlighted OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 10
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Ara (WA-435-P, CVN 10%) The most likely firm well for the 2027 campaign would target Ara, which will be testing a new basin play fairway some 80km north of the Dorado field. The Ara prospect is analogous in size to the Dorado field and is estimated to contain 191 million barrels of oil equivalent of recoverable hydrocarbons (unrisked Pmean, gross) (refer to pages 18-21), with a 37% chance of geological success. The Ara-1 well is designed to test two independent and complementary play systems. The primary objective is a stratigraphic pinch-out trap against the Bedout High within the Middle Triassic Archer Fm. comparable to the high-quality reservoir developed at Dorado (Figures 6-7). The reservoir depth is at approximately 3500m. Figure 6: Ara prospect 3D visualisation. Seismic provided courtesy of TGS Figure 7: Ara prospect 3D seismic arbitrary line. Seismic provided courtesy of TGS OPERATING AND FINANCIAL REVIEW The well will also evaluate a secondary target in the Late Triassic Cuvier Member, comprising a fluvial channel- belt system coeval in age to the established Mungaroo Fm. in the Carnarvon Basin. Established fields in the Mungaroo in the Carnarvon Basin include Goodwyn, Wheatstone and Gorgon. This dual-target approach provides exposure to multiple reservoir intervals and play concepts within a single well, enhancing the overall geological chance of success while delivering a robust test of the basin’s northern prospectivity. A positive outcome would not only validate these play concepts but also materially expand the prospective fairway, supporting a broader pipeline of follow-up opportunities across the basin. 11 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Figure 8: Yuma prospect 3D visualisation. Seismic provided courtesy of TGS Figure 9: Yuma prospect 3D seismic arbitrary line. Seismic provided courtesy of TGS OPERATING AND FINANCIAL REVIEW Yuma (WA-436-P, CVN 20%) One such prospect that would be significantly derisked by a successful outcome at Ara is the Yuma prospect. Yuma is estimated to contain 189 million barrels of oil equivalent of recoverable hydrocarbons (unrisked Pmean, gross) (refer to pages 18-21) within the Archer Formation, with an associated 15% chance of geological success, although the results from Ara-1 are likely to materially impact this estimate. Yuma would be designed to test the same stratigraphic pinch-out trapping mechanism if proven at Ara-1, targeting the Archer Formation within the same structural and depositional setting. However, a Yuma well would target an older and deeper sand of the Archer deltaic sequence, providing an additional test of reservoir distribution and quality across the play fairway. Success at Ara-1 would not only support progression to Yuma-1, but also demonstrate the broader scalability of the Archer stratigraphic play, underpinning a portfolio of follow-up opportunities across the Basin. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 12
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Figure 10: Hutton prospect 3D visualisation. Figure 11: Hutton prospect 3D seismic arbitrary line. OPERATING AND FINANCIAL REVIEW Hutton (WA-436-P, CVN 20%) While this target carries higher geological risk due to the absence of direct well control, analogous carbonate plays globally have demonstrated the capacity to host material hydrocarbon accumulations, providing significant upside potential for the Joint Venture. Success at Hutton-1 would not only establish a new play fairway but would also extend the basin’s prospectivity beyond the current clasticfocused portfolio, opening a potentially material new exploration theme for the Joint Venture. The Hutton prospect is estimated to contain 347 million barrels of oil equivalent of recoverable hydrocarbons (unrisked Pmean, gross) (refer to pages 18-21) within the Late Permian carbonate play system, with an associated chance of geological success of 20%. Hutton represents an alternative pathway to test a distinct and independent play concept, the Late Permian carbonate play system, which remains untested within the basin (Figures 10-11). A Hutton-1 exploration well would be designed to test a new carbonate play type, focussing on reservoir presence and quality, hydrocarbon charge and trapping geometry of carbonate buildups. 13 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Figure 12: Pavo structure 3D visualisation OPERATING AND FINANCIAL REVIEW Pavo South (WA-438-P, CVN 20%) The Pavo South prospect (Figures 12) is estimated to contain 74 million barrels of oil equivalent of recoverable hydrocarbons (unrisked Pmean, gross) within the Archer play system (refer to pages 18–21). It is a high-quality near- field opportunity with an estimated geological chance of success of 64%. The prospect is supported by its proximity to the Pavo discovery, where Pavo-1 encountered hydrocarbons in the adjacent field, providing important evidence for the presence and effectiveness of the Archer play system. This nearby discovery helps de-risk key elements of the petroleum system, including hydrocarbon charge, trap integrity, reservoir presence and reservoir quality. A successful Pavo South well would enhance the scale of the Pavo cluster and, subject to appraisal and development planning, could potentially be tied back to Dorado and Pavo facilities (Figure 4 – Page 8) or, if the well results support sufficient recoverable resources, pave the way for a future standalone development. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 14
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Investment in Strike Energy Ltd (ASX:STX) (19.9%) OPERATING AND FINANCIAL REVIEW The invested funds, coupled with Strike’s other funding arrangements, will enable Strike to unlock significant value from its portfolio, including: • Delivery of the South Erregulla 85 MW gas-fired peaking power station; • The planned life extension of the Walyering domestic gas project; • Progressing toward FID on the West Erregulla gas project; and • Maturation of an attractive portfolio of Perth Basin exploration opportunities. Carnarvon has appointed its non-executive director, Mr William Barker, to the Strike Board ensuring Carnarvon’s active involvement in overseeing the delivery of key projects. The shares were held in voluntary escrow for a 12-month period which ended in July 2026. In July 2025, Carnarvon entered into a subscription agreement with ASX-listed Strike Energy Limited (Strike), whereby Carnarvon was issued A$86 million of fully paid ordinary shares in Strike at an issue price of $0.12 per Strike Share, for a shareholding in Strike of 19.9%. This investment followed a comprehensive company strategic review which was completed in mid-2025, where the Carnarvon Board assessed numerous value accretive opportunities. Strike Energy is a compelling investment opportunity given its strategic acreage in the Perth Basin, proximity to existing infrastructure, and portfolio of quality discovered and prospective gas resources. The investment provides Carnarvon with exposure to the Western Australian domestic gas and electricity markets and complements the Company’s oil weighted portfolio. It also provides financial exposure to near- term production and market upside while preserving the Company’s capacity to progress its own projects within the Bedout Sub-basin. This represents a prudent and strategically balanced deployment of capital consistent with Carnarvon’s disciplined approach to financial management and long-term value creation. 15 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Production Commercial Discovered, but not currently commercial Exploration prospectivity Reserves Proved & ProbableProved Proved, Probable & Possible Contingent Resources Prospective Resources Reserve Assessment Petroleum Resource Classification, Categorisation and Definitions Carnarvon calculates reserves and resources according to the Society of Petroleum Engineers’ Petroleum Resource Management System (“SPE-PRMS”) definition of petroleum resources. Carnarvon reports reserves and resources in line with ASX Listing Rules. RESERVES Reserves represent that part of resources which are commercially recoverable and have been justified for development, while contingent and prospective resources are less certain because some commercial or technical hurdle must be overcome prior to there being confidence in the eventual production of the volumes. Carnarvon does not yet have any reported reserves. CONTINGENT RESOURCES Contingent resources are less certain than reserves. These are resources that are potentially recoverable but not yet considered mature enough for commercial development due to technological or business hurdles. For contingent resources to move into the reserves category, the key conditions, or contingencies, that prevented commercial development must be clarified and removed. As an example, all required internal and external approvals should be in place or determined to be forthcoming, including environmental and governmental approvals. There also must be evidence of firm intention by a company’s management to proceed with development within a reasonable time frame (typically 5 years, though it could be longer). Based on the results of drilling and testing to date, the following Contingent Resource estimates are provided. OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 16
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Contingent Resources (Gross and Net) 30TH JUNE 2025 Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% 86 9 162 16 285 29 367 37 748 75 1,358 136 176 18 334 33 614 61 Pavo WA-438-P 20% 26 5 43 9 62 12 6 1 11 2 17 3 27 5 45 9 65 13 Roc WA-437-P 10% 12 1 20 2 35 4 204 20 332 33 580 58 48 5 78 8 137 14 Phoenix South WA-435-P 10% 7 1 17 2 30 3 - - - - - - 7 1 17 2 30 3 Phoenix WA-435-P 10% 2 0 7 1 16 2 - - - - - - 2 0 7 1 16 2 Gross Arithmetic Sum 133 249 428 577 1,091 1,955 260 481 862 Net Arithmetic Sum 16 29 49 58 110 197 29 53 93 TECHNICAL REVISION Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% - - - - - - - - - - - - - - - - - - Pavo WA-438-P 20% - - - - - - - - - - - - - - - - - - Roc WA-437-P 10% - - - - - - - - - - - - - - - - - - Phoenix South WA-435-P 10% - - - - - - - - - - - - - - - - - - Phoenix WA-435-P 10% - - - - - - - - - - - - - - - - - - Gross Arithmetic Sum - - - - - - - - - Net Arithmetic Sum - - - - - - - - - 30TH JUNE 2026 Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% 86 9 162 16 285 29 367 37 748 75 1,358 136 176 18 334 33 614 61 Pavo WA-438-P 20% 26 5 43 9 62 12 6 1 11 2 17 3 27 5 45 9 65 13 Roc WA-437-P 10% 12 1 20 2 35 4 204 20 332 33 580 58 48 5 78 8 137 14 Phoenix South WA-435-P 10% 7 1 17 2 30 3 - - - - - - 7 1 17 2 30 3 Phoenix WA-435-P 10% 2 0 7 1 16 2 - - - - - - 2 0 7 1 16 2 Gross Arithmetic Sum 133 249 428 577 1,091 1,955 260 481 862 Net Arithmetic Sum 16 29 49 58 110 197 29 53 93 OPERATING AND FINANCIAL REVIEW 17 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Contingent Resources (Gross and Net) 30TH JUNE 2025 Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% 86 9 162 16 285 29 367 37 748 75 1,358 136 176 18 334 33 614 61 Pavo WA-438-P 20% 26 5 43 9 62 12 6 1 11 2 17 3 27 5 45 9 65 13 Roc WA-437-P 10% 12 1 20 2 35 4 204 20 332 33 580 58 48 5 78 8 137 14 Phoenix South WA-435-P 10% 7 1 17 2 30 3 - - - - - - 7 1 17 2 30 3 Phoenix WA-435-P 10% 2 0 7 1 16 2 - - - - - - 2 0 7 1 16 2 Gross Arithmetic Sum 133 249 428 577 1,091 1,955 260 481 862 Net Arithmetic Sum 16 29 49 58 110 197 29 53 93 TECHNICAL REVISION Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% - - - - - - - - - - - - - - - - - - Pavo WA-438-P 20% - - - - - - - - - - - - - - - - - - Roc WA-437-P 10% - - - - - - - - - - - - - - - - - - Phoenix South WA-435-P 10% - - - - - - - - - - - - - - - - - - Phoenix WA-435-P 10% - - - - - - - - - - - - - - - - - - Gross Arithmetic Sum - - - - - - - - - Net Arithmetic Sum - - - - - - - - - 30TH JUNE 2026 Light Oil & Condensate (MMSTB) Free & Associated Gas (BCF) Barrels of Oil Equilvalent (MMBOE) Resource Permit WI (%) 1C 2C 3C 1C 2C 3C 1C 2C 3C Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Dorado WA-64-L 10% 86 9 162 16 285 29 367 37 748 75 1,358 136 176 18 334 33 614 61 Pavo WA-438-P 20% 26 5 43 9 62 12 6 1 11 2 17 3 27 5 45 9 65 13 Roc WA-437-P 10% 12 1 20 2 35 4 204 20 332 33 580 58 48 5 78 8 137 14 Phoenix South WA-435-P 10% 7 1 17 2 30 3 - - - - - - 7 1 17 2 30 3 Phoenix WA-435-P 10% 2 0 7 1 16 2 - - - - - - 2 0 7 1 16 2 Gross Arithmetic Sum 133 249 428 577 1,091 1,955 260 481 862 Net Arithmetic Sum 16 29 49 58 110 197 29 53 93 Prospective Resources (Gross and Net) Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development project(s) prepared. WA-435-P GROSS AND NET PROSPECTIVE RESOURCES (10%) No Prospect Permit CVN equity Pg (%) Liquids (MMbbls) Gas (Bscf) BOE (MMBOE) Risked Mean (MMBOE)P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net 1 Bandy WA-435-P 10% 40% 4.9 0.5 52 5.2 132 13.2 358 35.8 39 3.9 378 37.8 802 80.2 2,100 210.0 13 1.3 124 12.4 274 27.4 720 72.0 109 10.9 2 Wendolene WA-435-P 10% 38% 6.0 0.6 57 5.7 96 9.6 244 24.4 46 4.6 413 41.3 616 61.6 1,490 149.0 15 1.5 136 13.6 205 20.5 495 49.5 77 7.7 3 Ara WA-435-P 10% 37% 2.6 0.3 39 3.9 92 9.2 244 24.4 20 2.0 298 29.8 553 55.3 1,411 141.1 7 0.7 98 9.8 191 19.1 491 49.1 71 7.1 4 Wallace WA-435-P 10% 43% 1.3 0.1 8 0.8 11 1.1 25 2.5 35 3.5 190 19.0 238 23.8 503 50.3 8 0.8 43 4.3 54 5.4 114 11.4 23 2.3 5 Mensa Barret WA-435-P 10% 58% 1.9 0.2 12 1.2 23 2.3 55 5.5 3 0.3 21 2.1 44 4.4 105 10.5 3 0.3 16 1.6 30 3.0 73 7.3 18 1.8 6 Bara WA-435-P 10% 13% 1.6 0.2 14 1.4 34 3.4 88 8.8 12 1.2 99 9.9 208 20.8 533 53.3 4 0.4 34 3.4 71 7.1 182 18.2 9 0.9 7 Mensa Caley WA-435-P 10% 39% 1.3 0.1 5 0.5 6 0.6 13 1.3 20 2.0 75 7.5 91 9.1 182 18.2 5 0.5 18 1.8 22 2.2 45 4.5 9 0.9 8 Mensa_Permian WA-435-P 10% 35% 1.4 0.1 5 0.5 6 0.6 13 1.3 25 2.5 82 8.2 109 10.9 231 23.1 6 0.6 18 1.8 24 2.4 52 5.2 8 0.8 9 Lupi WA-435-P 10% 28% 0.7 0.1 4 0.4 6 0.6 14 1.4 16 1.6 97 9.7 130 13.0 290 29.0 4 0.4 21 2.1 29 2.9 64 6.4 8 0.8 10 Gromit WA-435-P 10% 15% 0.1 0.0 5 0.5 10 1.0 26 2.6 3 0.3 123 12.3 205 20.5 524 52.4 1 0.1 28 2.8 46 4.6 118 11.8 7 0.7 11 Wallace East WA-435-P 10% 10% 2.2 0.2 10 1.0 13 1.3 28 2.8 55 5.5 224 22.4 278 27.8 574 57.4 12 1.2 50 5.0 62 6.2 128 12.8 6 0.6 12 Dragons Back WA-435-P 10% 15% 1.9 0.2 6 0.6 8 0.8 16 1.6 55 5.5 142 14.2 164 16.4 304 30.4 12 1.2 32 3.2 37 3.7 69 6.9 6 0.6 13 Jatayu North WA-435-P 10% 38% 1.9 0.2 10 1.0 13 1.3 26 2.6 1 0.1 7 0.7 9 0.9 19 1.9 2 0.2 11 1.1 14 1.4 30 3.0 5 0.5 14 Badwater WA-435-P 10% 16% 1.6 0.2 5 0.5 7 0.7 14 1.4 45 4.5 118 11.8 140 14.0 263 26.3 10 1.0 26 2.6 31 3.1 59 5.9 5 0.5 15 Preston WA-435-P 10% 15% 1.6 0.2 5 0.5 7 0.7 14 1.4 47 4.7 124 12.4 145 14.5 270 27.0 11 1.1 28 2.8 33 3.3 61 6.1 5 0.5 16 Grindstone WA-435-P 10% 15% 1.3 0.1 4 0.4 5 0.5 11 1.1 39 3.9 99 9.9 114 11.4 210 21.0 9 0.9 22 2.2 26 2.6 47 4.7 4 0.4 17 Big Horn WA-435-P 10% 16% 1.1 0.1 4 0.4 5 0.5 9 0.9 33 3.3 84 8.4 97 9.7 180 18.0 7 0.7 19 1.9 22 2.2 40 4.0 4 0.4 18 Indus WA-435-P 10% 25% 0.3 0.0 2 0.2 3 0.3 6 0.6 8 0.8 45 4.5 56 5.6 122 12.2 2 0.2 10 1.0 13 1.3 27 2.7 3 0.3 19 Grus WA-435-P 10% 35% 0.3 0.0 1 0.1 2 0.2 4 0.4 9 0.9 26 2.6 34 3.4 71 7.1 2 0.2 6 0.6 8 0.8 16 1.6 3 0.3 20 Strasimerno WA-435-P 10% 15% 0.8 0.1 2 0.2 3 0.3 6 0.6 23 2.3 54 5.4 61 6.1 109 10.9 5 0.5 12 1.2 14 1.4 25 2.5 2 0.2 21 Karuru WA-435-P 10% 32% 0.3 0.0 1 0.1 1 0.1 3 0.3 8 0.8 25 2.5 29 2.9 58 5.8 2 0.2 6 0.6 7 0.7 13 1.3 2 0.2 22 Transcendence WA-435-P 10% 16% 0.6 0.1 2 0.2 2 0.2 5 0.5 17 1.7 43 4.3 50 5.0 93 9.3 4 0.4 10 1.0 11 1.1 21 2.1 2 0.2 23 Kosciuszko WA-435-P 10% 15% 0.6 0.1 2 0.2 2 0.2 5 0.5 17 1.7 44 4.4 51 5.1 94 9.4 4 0.4 10 1.0 11 1.1 21 2.1 2 0.2 24 Karura WA-435-P 10% 32% 0.4 0.0 2 0.2 5 0.5 13 1.3 0 0.0 1 0.1 2 0.2 5 0.5 0 0.0 3 0.3 5 0.5 14 1.4 2 0.2 25 Sparta WA-435-P 10% 15% 0.5 0.1 2 0.2 2 0.2 4 0.4 15 1.5 39 3.9 45 4.5 83 8.3 3 0.3 9 0.9 10 1.0 19 1.9 2 0.2 26 Munga WA-435-P 10% 15% 0.5 0.0 2 0.2 2 0.2 4 0.4 14 1.4 35 3.5 41 4.1 75 7.5 3 0.3 8 0.8 9 0.9 17 1.7 1 0.1 27 Barkley WA-435-P 10% 16% 0.4 0.0 1 0.1 2 0.2 3 0.3 11 1.1 29 2.9 34 3.4 64 6.4 3 0.3 7 0.7 8 0.8 14 1.4 1 0.1 28 Jatayu South WA-435-P 10% 37% 0.4 0.0 2 0.2 3 0.3 6 0.6 0 0.0 2 0.2 2 0.2 4 0.4 0 0.0 2 0.2 3 0.3 7 0.7 1 0.1 29 Everest WA-435-P 10% 15% 0.3 0.0 1 0.1 1 0.1 3 0.3 10 1.0 25 2.5 29 2.9 52 5.2 2 0.2 6 0.6 6 0.6 12 1.2 1 0.1 30 Ankaa WA-435-P 10% 11% 1.7 0.2 5 0.5 6 0.6 12 1.2 2 0.2 8 0.8 11 1.1 22 2.2 2 0.2 7 0.7 8 0.8 15 1.5 1 0.1 31 Jatayu WA-435-P 10% 25% 0.1 0.0 0 0.0 1 0.1 1 0.1 2 0.2 10 1.0 13 1.3 28 2.8 1 0.1 2 0.2 3 0.3 6 0.6 1 0.1 Gross Arithmetic Sum 41 272 507 1,271 632 2,960 4,402 10,067 160 821 1,287 3,012 397 Net Arithmetic Sum 4 27 51 127 63 296 440 1007 16 82 129 301 40 OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 18
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OPERATING AND FINANCIAL REVIEW WA-436-P GROSS AND NET PROSPECTIVE RESOURCES (20% NET) No Prospect Permit CVN equity Pg (%) Liquids (MMbbls) Gas (Bscf) BOE (MMBOE) Risked Mean (MMBOE)P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net 1 Hutton WA-436-P 20% 20% 6.0 1.2 34 6.8 57 11.5 136 27.2 261 52.2 1,165 233.0 1628 325.6 3,597 719.3 56 11.2 247 49.5 347 69.4 763 152.5 68 13.6 2 Starbuck WA-436-P 20% 56% 1.1 0.2 9 1.8 38 7.7 116 23.2 2 0.4 25 5.0 182 36.4 565 112.9 2 0.4 17 3.5 71 14.2 210 42.1 40 7.9 3 Y elis WA-436-P 20% 26% 17.5 3.5 78 15.7 102 20.4 219 43.8 24 4.8 111 22.3 147 29.3 318 63.6 23 4.6 101 20.1 128 25.6 270 54.1 33 6.6 4 Fall Line WA-436-P 20% 72% 1.2 0.2 20 4.0 31 6.2 75 15.1 8 1.6 43 8.6 61 12.1 134 26.7 4 0.8 28 5.6 42 8.4 97 19.5 30 6.0 5 Jamul North WA-436-P 20% 33% 6.4 1.3 33 6.7 68 13.6 161 32.2 11 2.2 56 11.3 114 22.7 274 54.9 9 1.8 44 8.8 88 17.7 212 42.5 29 5.8 6 Goats Eye WA-436-P 20% 23% 2.9 0.6 24 4.8 41 8.2 102 20.4 4 0.7 60 12.1 467 93.5 1,471 294.1 9 1.8 54 10.7 124 24.8 324 64.8 29 5.7 7 Yuma WA-436-P 20% 15% 4.5 0.9 54 10.8 91 18.1 223 44.7 35 7.1 391 78.1 552 110.3 1,256 251.3 12 2.3 130 26.1 189 37.8 436 87.3 29 5.7 8 Tyro WA-436-P 20% 11% 33.8 6.8 124 24.7 174 34.7 379 75.8 46 9.3 174 34.8 250 50.1 562 112.4 44 8.9 160 32.0 218 43.6 470 93.9 25 5.0 9 Headwall WA-436-P 20% 64% 1.2 0.2 11 2.1 25 5.0 62 12.4 3 0.7 34 6.9 72 14.5 187 37.5 3 0.5 19 3.9 38 7.6 90 18.1 24 4.9 10 Tacoma WA-436-P 20% 59% 0.5 0.1 16 3.1 26 5.2 63 12.6 5 1.1 29 5.8 47 9.5 110 22.0 2 0.5 22 4.3 34 6.9 82 16.5 20 4.0 11 Halley WA-436-P 20% 17% 0.9 0.2 10 2.1 19 3.8 46 9.3 38 7.5 366 73.1 540 108.0 1,237 247.3 8 1.6 78 15.6 115 23.1 264 52.8 20 4.0 12 Revelstoke WA-436-P 20% 14% 4.4 0.9 37 7.4 67 13.4 171 34.3 38 7.6 261 52.1 406 81.3 968 193.6 12 2.4 88 17.5 139 27.9 338 67.6 19 3.8 13 McKean WA-436-P 20% 10% 4.7 0.9 40 8.0 88 17.5 220 44.0 38 7.7 283 56.6 524 104.9 1,262 252.4 13 2.5 94 18.9 181 36.2 442 88.4 18 3.6 14 Stampeders WA-436-P 20% 53% 3.6 0.7 17 3.3 23 4.5 50 9.9 6 1.2 28 5.6 38 7.7 84 16.9 5 1.0 22 4.5 30 5.9 64 12.8 16 3.1 15 Whiskey Jack WA-436-P 20% 13% 2.0 0.4 26 5.2 55 11.1 144 28.8 16 3.1 191 38.2 338 67.6 858 171.7 5 1.0 63 12.7 116 23.1 296 59.2 16 3.1 16 Murray WA-436-P 20% 22% 2.0 0.4 20 3.9 32 6.3 79 15.8 16 3.1 144 28.8 196 39.2 457 91.4 5 1.0 48 9.5 67 13.3 154 30.8 15 3.0 17 Escalante WA-436-P 20% 60% 1.6 0.3 6 1.2 10 2.0 23 4.6 3 0.7 20 4.0 78 15.6 232 46.5 3 0.6 13 2.5 24 4.7 58 11.6 14 2.8 18 Jamul WA-436-P 20% 11% 10.9 2.2 64 12.8 100 20.0 234 46.8 15 3.0 92 18.4 144 28.7 339 67.8 14 2.9 83 16.5 126 25.1 292 58.3 14 2.8 19 Wiwaxy WA-436-P 20% 30% 1.7 0.3 12 2.3 22 4.3 53 10.5 14 2.7 82 16.3 131 26.2 305 61.0 4 0.9 27 5.4 45 9.0 106 21.2 13 2.7 20 Standish Right WA-436-P 20% 12% 1.4 0.3 10 2.0 18 3.5 43 8.6 60 12.0 349 69.8 488 97.6 1,103 220.5 13 2.6 74 14.9 104 20.9 238 47.6 13 2.6 21 Cottontail WA-436-P 20% 43% 2.3 0.5 11 2.1 22 4.4 53 10.6 4 0.8 18 3.6 37 7.3 89 17.8 3 0.6 14 2.8 29 5.7 70 14.1 12 2.5 22 Mighty Moose WA-436-P 20% 23% 3.6 0.7 22 4.4 41 8.2 101 20.2 6 1.2 37 7.3 69 13.9 173 34.6 5 1.0 29 5.9 53 10.6 130 26.1 12 2.4 23 Lookout WA-436-P 20% 12% 0.8 0.2 8 1.6 16 3.1 41 8.1 31 6.3 272 54.4 431 86.2 1,064 212.8 7 1.4 58 11.6 92 18.5 229 45.7 11 2.3 24 Manetoa WA-436-P 20% 11% 4.6 0.9 31 6.3 48 9.6 113 22.5 39 7.8 229 45.8 294 58.8 629 125.8 13 2.5 76 15.2 100 20.1 218 43.5 11 2.2 25 Mazama WA-436-P 20% 17% 0.9 0.2 5 1.1 10 1.9 23 4.7 37 7.4 189 37.9 275 54.9 629 125.8 8 1.6 41 8.1 59 11.7 135 27.0 10 2.0 26 Springhill WA-436-P 20% 12% 5.8 1.2 43 8.6 60 12.0 135 27.0 8 1.6 62 12.3 88 17.5 200 40.0 8 1.5 56 11.2 76 15.2 170 34.0 9 1.8 27 Snowsnake WA-436-P 20% 27% 0.2 0.0 12 2.4 24 4.8 65 13.0 4 0.8 30 5.9 48 9.5 117 23.4 1 0.2 18 3.5 33 6.5 85 17.1 9 1.8 28 Standish WA-436-P 20% 12% 1.4 0.3 7 1.4 12 2.3 27 5.4 62 12.4 239 47.8 322 64.5 692 138.5 13 2.6 51 10.1 69 13.8 150 30.0 9 1.7 29 Goulburn WA-436-P 20% 20% 2.7 0.5 13 2.7 20 3.9 46 9.1 22 4.5 98 19.6 120 24.0 243 48.6 7 1.5 32 6.5 41 8.2 87 17.4 8 1.7 30 Jackalope WA-436-P 20% 15% 0.5 0.1 5 0.9 9 1.8 23 4.6 20 3.9 157 31.5 257 51.4 629 125.7 4 0.8 34 6.7 55 11.0 133 26.6 8 1.7 31 Avoca WA-436-P 20% 12% 3.6 0.7 14 2.8 32 6.5 86 17.2 29 5.8 86 17.2 186 37.2 548 109.5 10 1.9 30 6.0 65 13.1 188 37.7 8 1.6 32 Selkirk WA-436-P 20% 15% 2.9 0.6 19 3.9 38 7.5 95 19.0 5 0.9 33 6.6 64 12.8 164 32.9 4 0.8 26 5.3 49 9.8 125 25.1 7 1.5 33 Windigo WA-436-P 20% 19% 2.9 0.6 15 3.0 22 4.5 51 10.2 5 1.0 25 5.1 38 7.6 88 17.7 4 0.8 20 4.0 29 5.8 66 13.2 6 1.1 34 Darling WA-436-P 20% 13% 2.0 0.4 11 2.2 17 3.4 41 8.1 15 3.0 76 15.1 97 19.4 209 41.8 5 1.0 26 5.2 34 6.8 76 15.1 5 0.9 35 Standout WA-436-P 20% 11% 0.3 0.1 3 0.7 7 1.3 17 3.4 11 2.3 122 24.3 184 36.8 441 88.1 2 0.5 26 5.2 39 7.9 95 19.0 4 0.9 36 Chirich WA-436-P 20% 15% 0.4 0.1 3 0.5 4 0.9 10 2.1 18 3.6 86 17.1 123 24.6 271 54.3 4 0.8 18 3.7 26 5.3 58 11.6 4 0.8 37 Cherub WA-436-P 20% 13% 3.9 0.8 15 2.9 18 3.6 37 7.4 5 1.0 21 4.2 26 5.3 55 10.9 5 1.0 19 3.8 23 4.6 46 9.2 3 0.6 38 Chum WA-436-P 20% 20% 0.4 0.1 1 0.3 2 0.5 5 1.0 17 3.3 49 9.7 66 13.1 134 26.7 4 0.7 10 2.1 14 2.8 28 5.7 3 0.5 39 Sidedoor WA-436-P 20% 27% 2.1 0.4 5 1.1 6 1.3 12 2.4 3 0.7 9 1.8 11 2.2 21 4.2 3 0.6 7 1.4 8 1.7 15 3.1 2 0.5 40 Gara WA-436-P 20% 6% 3.2 0.6 13 2.6 18 3.7 40 8.1 26 5.1 82 16.5 105 21.0 217 43.4 9 1.7 29 5.8 37 7.4 76 15.3 2 0.4 41 Kalang WA-436-P 20% 4% 2.2 0.4 14 2.8 22 4.4 55 10.9 15 3.1 97 19.3 128 25.6 285 56.9 5 1.1 33 6.6 45 9.0 101 20.2 2 0.4 42 Barcoo WA-436-P 20% 6% 2.3 0.5 10 1.9 13 2.5 27 5.4 19 3.7 62 12.5 72 14.5 138 27.7 6 1.2 22 4.3 25 5.1 50 10.0 2 0.3 43 Ancelin WA-436-P 20% 18% 0.0 0.0 0 0.1 1 0.1 2 0.3 2 0.4 10 2.0 18 3.6 43 8.7 0 0.1 2 0.4 4 0.8 9 1.9 1 0.1 Gross Arithmetic Sum 157 925 1,548 3,705 1,046 5,992 9,460 22,397 376 2,090 3,233 7,549 632 Net Arithmetic Sum 31 185 310 741 209 1,198 1,892 4479 75 418 647 1510 126 19 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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OPERATING AND FINANCIAL REVIEW WA-436-P GROSS AND NET PROSPECTIVE RESOURCES (20% NET) No Prospect Permit CVN equity Pg (%) Liquids (MMbbls) Gas (Bscf) BOE (MMBOE) Risked Mean (MMBOE)P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net 1 Hutton WA-436-P 20% 20% 6.0 1.2 34 6.8 57 11.5 136 27.2 261 52.2 1,165 233.0 1628 325.6 3,597 719.3 56 11.2 247 49.5 347 69.4 763 152.5 68 13.6 2 Starbuck WA-436-P 20% 56% 1.1 0.2 9 1.8 38 7.7 116 23.2 2 0.4 25 5.0 182 36.4 565 112.9 2 0.4 17 3.5 71 14.2 210 42.1 40 7.9 3 Y elis WA-436-P 20% 26% 17.5 3.5 78 15.7 102 20.4 219 43.8 24 4.8 111 22.3 147 29.3 318 63.6 23 4.6 101 20.1 128 25.6 270 54.1 33 6.6 4 Fall Line WA-436-P 20% 72% 1.2 0.2 20 4.0 31 6.2 75 15.1 8 1.6 43 8.6 61 12.1 134 26.7 4 0.8 28 5.6 42 8.4 97 19.5 30 6.0 5 Jamul North WA-436-P 20% 33% 6.4 1.3 33 6.7 68 13.6 161 32.2 11 2.2 56 11.3 114 22.7 274 54.9 9 1.8 44 8.8 88 17.7 212 42.5 29 5.8 6 Goats Eye WA-436-P 20% 23% 2.9 0.6 24 4.8 41 8.2 102 20.4 4 0.7 60 12.1 467 93.5 1,471 294.1 9 1.8 54 10.7 124 24.8 324 64.8 29 5.7 7 Yuma WA-436-P 20% 15% 4.5 0.9 54 10.8 91 18.1 223 44.7 35 7.1 391 78.1 552 110.3 1,256 251.3 12 2.3 130 26.1 189 37.8 436 87.3 29 5.7 8 Tyro WA-436-P 20% 11% 33.8 6.8 124 24.7 174 34.7 379 75.8 46 9.3 174 34.8 250 50.1 562 112.4 44 8.9 160 32.0 218 43.6 470 93.9 25 5.0 9 Headwall WA-436-P 20% 64% 1.2 0.2 11 2.1 25 5.0 62 12.4 3 0.7 34 6.9 72 14.5 187 37.5 3 0.5 19 3.9 38 7.6 90 18.1 24 4.9 10 Tacoma WA-436-P 20% 59% 0.5 0.1 16 3.1 26 5.2 63 12.6 5 1.1 29 5.8 47 9.5 110 22.0 2 0.5 22 4.3 34 6.9 82 16.5 20 4.0 11 Halley WA-436-P 20% 17% 0.9 0.2 10 2.1 19 3.8 46 9.3 38 7.5 366 73.1 540 108.0 1,237 247.3 8 1.6 78 15.6 115 23.1 264 52.8 20 4.0 12 Revelstoke WA-436-P 20% 14% 4.4 0.9 37 7.4 67 13.4 171 34.3 38 7.6 261 52.1 406 81.3 968 193.6 12 2.4 88 17.5 139 27.9 338 67.6 19 3.8 13 McKean WA-436-P 20% 10% 4.7 0.9 40 8.0 88 17.5 220 44.0 38 7.7 283 56.6 524 104.9 1,262 252.4 13 2.5 94 18.9 181 36.2 442 88.4 18 3.6 14 Stampeders WA-436-P 20% 53% 3.6 0.7 17 3.3 23 4.5 50 9.9 6 1.2 28 5.6 38 7.7 84 16.9 5 1.0 22 4.5 30 5.9 64 12.8 16 3.1 15 Whiskey Jack WA-436-P 20% 13% 2.0 0.4 26 5.2 55 11.1 144 28.8 16 3.1 191 38.2 338 67.6 858 171.7 5 1.0 63 12.7 116 23.1 296 59.2 16 3.1 16 Murray WA-436-P 20% 22% 2.0 0.4 20 3.9 32 6.3 79 15.8 16 3.1 144 28.8 196 39.2 457 91.4 5 1.0 48 9.5 67 13.3 154 30.8 15 3.0 17 Escalante WA-436-P 20% 60% 1.6 0.3 6 1.2 10 2.0 23 4.6 3 0.7 20 4.0 78 15.6 232 46.5 3 0.6 13 2.5 24 4.7 58 11.6 14 2.8 18 Jamul WA-436-P 20% 11% 10.9 2.2 64 12.8 100 20.0 234 46.8 15 3.0 92 18.4 144 28.7 339 67.8 14 2.9 83 16.5 126 25.1 292 58.3 14 2.8 19 Wiwaxy WA-436-P 20% 30% 1.7 0.3 12 2.3 22 4.3 53 10.5 14 2.7 82 16.3 131 26.2 305 61.0 4 0.9 27 5.4 45 9.0 106 21.2 13 2.7 20 Standish Right WA-436-P 20% 12% 1.4 0.3 10 2.0 18 3.5 43 8.6 60 12.0 349 69.8 488 97.6 1,103 220.5 13 2.6 74 14.9 104 20.9 238 47.6 13 2.6 21 Cottontail WA-436-P 20% 43% 2.3 0.5 11 2.1 22 4.4 53 10.6 4 0.8 18 3.6 37 7.3 89 17.8 3 0.6 14 2.8 29 5.7 70 14.1 12 2.5 22 Mighty Moose WA-436-P 20% 23% 3.6 0.7 22 4.4 41 8.2 101 20.2 6 1.2 37 7.3 69 13.9 173 34.6 5 1.0 29 5.9 53 10.6 130 26.1 12 2.4 23 Lookout WA-436-P 20% 12% 0.8 0.2 8 1.6 16 3.1 41 8.1 31 6.3 272 54.4 431 86.2 1,064 212.8 7 1.4 58 11.6 92 18.5 229 45.7 11 2.3 24 Manetoa WA-436-P 20% 11% 4.6 0.9 31 6.3 48 9.6 113 22.5 39 7.8 229 45.8 294 58.8 629 125.8 13 2.5 76 15.2 100 20.1 218 43.5 11 2.2 25 Mazama WA-436-P 20% 17% 0.9 0.2 5 1.1 10 1.9 23 4.7 37 7.4 189 37.9 275 54.9 629 125.8 8 1.6 41 8.1 59 11.7 135 27.0 10 2.0 26 Springhill WA-436-P 20% 12% 5.8 1.2 43 8.6 60 12.0 135 27.0 8 1.6 62 12.3 88 17.5 200 40.0 8 1.5 56 11.2 76 15.2 170 34.0 9 1.8 27 Snowsnake WA-436-P 20% 27% 0.2 0.0 12 2.4 24 4.8 65 13.0 4 0.8 30 5.9 48 9.5 117 23.4 1 0.2 18 3.5 33 6.5 85 17.1 9 1.8 28 Standish WA-436-P 20% 12% 1.4 0.3 7 1.4 12 2.3 27 5.4 62 12.4 239 47.8 322 64.5 692 138.5 13 2.6 51 10.1 69 13.8 150 30.0 9 1.7 29 Goulburn WA-436-P 20% 20% 2.7 0.5 13 2.7 20 3.9 46 9.1 22 4.5 98 19.6 120 24.0 243 48.6 7 1.5 32 6.5 41 8.2 87 17.4 8 1.7 30 Jackalope WA-436-P 20% 15% 0.5 0.1 5 0.9 9 1.8 23 4.6 20 3.9 157 31.5 257 51.4 629 125.7 4 0.8 34 6.7 55 11.0 133 26.6 8 1.7 31 Avoca WA-436-P 20% 12% 3.6 0.7 14 2.8 32 6.5 86 17.2 29 5.8 86 17.2 186 37.2 548 109.5 10 1.9 30 6.0 65 13.1 188 37.7 8 1.6 32 Selkirk WA-436-P 20% 15% 2.9 0.6 19 3.9 38 7.5 95 19.0 5 0.9 33 6.6 64 12.8 164 32.9 4 0.8 26 5.3 49 9.8 125 25.1 7 1.5 33 Windigo WA-436-P 20% 19% 2.9 0.6 15 3.0 22 4.5 51 10.2 5 1.0 25 5.1 38 7.6 88 17.7 4 0.8 20 4.0 29 5.8 66 13.2 6 1.1 34 Darling WA-436-P 20% 13% 2.0 0.4 11 2.2 17 3.4 41 8.1 15 3.0 76 15.1 97 19.4 209 41.8 5 1.0 26 5.2 34 6.8 76 15.1 5 0.9 35 Standout WA-436-P 20% 11% 0.3 0.1 3 0.7 7 1.3 17 3.4 11 2.3 122 24.3 184 36.8 441 88.1 2 0.5 26 5.2 39 7.9 95 19.0 4 0.9 36 Chirich WA-436-P 20% 15% 0.4 0.1 3 0.5 4 0.9 10 2.1 18 3.6 86 17.1 123 24.6 271 54.3 4 0.8 18 3.7 26 5.3 58 11.6 4 0.8 37 Cherub WA-436-P 20% 13% 3.9 0.8 15 2.9 18 3.6 37 7.4 5 1.0 21 4.2 26 5.3 55 10.9 5 1.0 19 3.8 23 4.6 46 9.2 3 0.6 38 Chum WA-436-P 20% 20% 0.4 0.1 1 0.3 2 0.5 5 1.0 17 3.3 49 9.7 66 13.1 134 26.7 4 0.7 10 2.1 14 2.8 28 5.7 3 0.5 39 Sidedoor WA-436-P 20% 27% 2.1 0.4 5 1.1 6 1.3 12 2.4 3 0.7 9 1.8 11 2.2 21 4.2 3 0.6 7 1.4 8 1.7 15 3.1 2 0.5 40 Gara WA-436-P 20% 6% 3.2 0.6 13 2.6 18 3.7 40 8.1 26 5.1 82 16.5 105 21.0 217 43.4 9 1.7 29 5.8 37 7.4 76 15.3 2 0.4 41 Kalang WA-436-P 20% 4% 2.2 0.4 14 2.8 22 4.4 55 10.9 15 3.1 97 19.3 128 25.6 285 56.9 5 1.1 33 6.6 45 9.0 101 20.2 2 0.4 42 Barcoo WA-436-P 20% 6% 2.3 0.5 10 1.9 13 2.5 27 5.4 19 3.7 62 12.5 72 14.5 138 27.7 6 1.2 22 4.3 25 5.1 50 10.0 2 0.3 43 Ancelin WA-436-P 20% 18% 0.0 0.0 0 0.1 1 0.1 2 0.3 2 0.4 10 2.0 18 3.6 43 8.7 0 0.1 2 0.4 4 0.8 9 1.9 1 0.1 Gross Arithmetic Sum 157 925 1,548 3,705 1,046 5,992 9,460 22,397 376 2,090 3,233 7,549 632 Net Arithmetic Sum 31 185 310 741 209 1,198 1,892 4479 75 418 647 1510 126 WA-437-P GROSS AND NET PROSPECTIVE RESOURCES (10% NET) No Prospect Permit CVN equity Pg (%) Liquids (MMbbls) Gas (Bscf) BOE (MMBOE) Risked Mean (MMBOE)P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net 1 Vela WA-437-P 10% 17% 4.1 0.4 44 4.4 94 9.4 243 24.3 3 0.3 28 2.8 61 6.1 157 15.7 5 0.5 49 4.9 105 10.5 269 26.9 18 1.8 2 Bohlin WA-437-P 10% 27% 6.7 0.7 29 2.9 44 4.4 99 9.9 9 0.9 42 4.2 63 6.3 145 14.5 9 0.9 38 3.8 55 5.5 125 12.5 15 1.5 3 Petrus WA-437-P 10% 25% 5.9 0.6 25 2.5 46 4.6 108 10.8 9 0.9 38 3.8 67 6.7 160 16.0 8 0.8 32 3.2 57 5.7 137 13.7 14 1.4 4 Bottlebrush South WA-437-P 10% 16% 3.0 0.3 11 1.1 14 1.4 28 2.8 83 8.3 242 24.2 286 28.6 546 54.6 19 1.9 54 5.4 64 6.4 123 12.3 10 1.0 5 Calendula North WA-437-P 10% 16% 0.9 0.1 8 0.8 13 1.3 30 3.0 24 2.4 195 19.5 267 26.7 601 60.1 5 0.5 44 4.4 60 6.0 137 13.7 10 1.0 6 Sampati WA-437-P 10% 36% 0.8 0.1 4 0.4 5 0.5 12 1.2 20 2.0 84 8.4 110 11.0 237 23.7 4 0.4 19 1.9 25 2.5 54 5.4 9 0.9 7 Taurus WA-437-P 10% 48% 2.1 0.2 4 0.4 5 0.5 9 0.9 32 3.2 67 6.7 76 7.6 130 13.0 8 0.8 16 1.6 19 1.9 32 3.2 9 0.9 8 Columba WA-437-P 10% 44% 2.1 0.2 12 1.2 15 1.5 33 3.3 3 0.3 20 2.0 27 2.7 58 5.8 3 0.3 16 1.6 20 2.0 43 4.3 9 0.9 9 Horus WA-437-P 10% 22% 0.7 0.1 4 0.4 7 0.7 17 1.7 17 1.7 96 9.6 145 14.5 344 34.4 4 0.4 21 2.1 32 3.2 77 7.7 7 0.7 10 Roc East WA-437-P 10% 64% 1.2 0.1 2 0.2 3 0.3 5 0.5 23 2.3 43 4.3 48 4.8 78 7.8 5 0.5 10 1.0 11 1.1 18 1.8 7 0.7 11 Diplock WA-437-P 10% 19% 4.5 0.4 20 2.0 24 2.4 50 5.0 6 0.6 28 2.8 35 3.5 72 7.2 6 0.6 26 2.6 30 3.0 61 6.1 6 0.6 12 Indigo WA-437-P 10% 16% 1.8 0.2 6 0.6 8 0.8 16 1.6 49 4.9 135 13.5 160 16.0 303 30.3 11 1.1 30 3.0 36 3.6 68 6.8 6 0.6 13 Lund WA-437-P 10% 8% 1.7 0.2 10 1.0 15 1.5 34 3.4 42 4.2 213 21.3 300 30.0 669 66.9 9 0.9 48 4.8 67 6.7 149 14.9 5 0.5 14 Cool Moon WA-437-P 10% 15% 1.8 0.2 6 0.6 7 0.7 14 1.4 51 5.1 131 13.1 151 15.1 277 27.7 11 1.1 29 2.9 34 3.4 63 6.3 5 0.5 15 Gurbani WA-437-P 10% 10% 1.6 0.2 19 1.9 42 4.2 107 10.7 3 0.3 33 3.3 73 7.3 185 18.5 2 0.2 26 2.6 55 5.5 140 14.0 5 0.5 16 Musca WA-437-P 10% 14% 1.5 0.2 16 1.6 26 2.6 61 6.1 3 0.3 26 2.6 44 4.4 105 10.5 2 0.2 21 2.1 33 3.3 79 7.9 5 0.5 17 Bottlebrush North WA-437-P 10% 16% 0.9 0.1 4 0.4 6 0.6 14 1.4 24 2.4 95 9.5 129 12.9 280 28.0 5 0.5 21 2.1 29 2.9 63 6.3 5 0.5 18 Calendula South WA-437-P 10% 16% 1.4 0.1 5 0.5 6 0.6 12 1.2 39 3.9 105 10.5 123 12.3 232 23.2 9 0.9 23 2.3 28 2.8 52 5.2 5 0.5 19 Nanny Goat WA-437-P 10% 16% 1.4 0.1 4 0.4 6 0.6 11 1.1 41 4.1 102 10.2 118 11.8 217 21.7 9 0.9 23 2.3 26 2.6 48 4.8 4 0.4 20 Hellbender WA-437-P 10% 16% 1.3 0.1 4 0.4 5 0.5 10 1.0 38 3.8 95 9.5 110 11.0 201 20.1 8 0.8 21 2.1 24 2.4 45 4.5 4 0.4 21 Bottler WA-437-P 10% 24% 2.3 0.2 11 1.1 15 1.5 34 3.4 1 0.1 3 0.3 5 0.5 13 1.3 2 0.2 12 1.2 16 1.6 36 3.6 4 0.4 22 Bewdy WA-437-P 10% 40% 0.2 0.0 2 0.2 7 0.7 19 1.9 1 0.1 8 0.8 17 1.7 45 4.5 1 0.1 5 0.5 10 1.0 25 2.5 4 0.4 23 Kepler WA-437-P 10% 25% 0.9 0.1 8 0.8 12 1.2 28 2.8 1 0.1 13 1.3 19 1.9 46 4.6 1 0.1 10 1.0 15 1.5 36 3.6 4 0.4 24 Skynet WA-437-P 10% 36% 1.9 0.2 6 0.6 8 0.8 17 1.7 3 0.3 10 1.0 14 1.4 29 2.9 3 0.3 8 0.8 10 1.0 21 2.1 4 0.4 25 Double Buckle WA-437-P 10% 15% 1.4 0.1 4 0.4 5 0.5 11 1.1 39 3.9 99 9.9 113 11.3 205 20.5 9 0.9 22 2.2 25 2.5 46 4.6 4 0.4 26 Adler WA-437-P 10% 19% 3.9 0.4 12 1.2 15 1.5 30 3.0 5 0.5 17 1.7 21 2.1 44 4.4 5 0.5 15 1.5 19 1.9 36 3.6 4 0.4 27 Phact WA-437-P 10% 49% 1.2 0.1 4 0.4 5 0.5 11 1.1 2 0.2 7 0.7 9 0.9 20 2.0 2 0.2 5 0.5 7 0.7 15 1.5 3 0.3 28 Draco WA-437-P 10% 53% 0.6 0.1 3 0.3 4 0.4 10 1.0 1 0.1 6 0.6 9 0.9 21 2.1 1 0.1 4 0.4 6 0.6 13 1.3 3 0.3 29 Arrowhead WA-437-P 10% 14% 1.1 0.1 4 0.4 4 0.4 9 0.9 32 3.2 81 8.1 93 9.3 169 16.9 7 0.7 18 1.8 21 2.1 38 3.8 3 0.3 30 Silverheels WA-437-P 10% 16% 0.8 0.1 3 0.3 3 0.3 7 0.7 23 2.3 60 6.0 71 7.1 131 13.1 5 0.5 13 1.3 16 1.6 29 2.9 3 0.3 31 Thunderbird WA-437-P 10% 28% 0.3 0.0 1 0.1 1 0.1 3 0.3 8 0.8 24 2.4 31 3.1 62 6.2 2 0.2 6 0.6 7 0.7 14 1.4 2 0.2 32 Banks WA-437-P 10% 7% 0.3 0.0 2 0.2 4 0.4 10 1.0 7 0.7 52 5.2 88 8.8 212 21.2 2 0.2 12 1.2 20 2.0 47 4.7 1 0.1 33 Bhatt WA-437-P 10% 12% 1.1 0.1 5 0.5 8 0.8 18 1.8 1 0.1 8 0.8 11 1.1 26 2.6 1 0.1 7 0.7 10 1.0 22 2.2 1 0.1 34 Bennu WA-437-P 10% 16% 0.6 0.1 3 0.3 5 0.5 12 1.2 0 0.0 1 0.1 2 0.2 4 0.4 1 0.1 4 0.4 5 0.5 13 1.3 1 0.1 35 Aruna WA-437-P 10% 25% 0.2 0.0 1 0.1 1 0.1 1 0.1 4 0.4 14 1.4 15 1.5 28 2.8 1 0.1 3 0.3 3 0.3 6 0.6 1 0.1 36 Umstead WA-437-P 10% 16% 0.3 0.0 1 0.1 1 0.1 2 0.2 8 0.8 20 2.0 24 2.4 44 4.4 2 0.2 4 0.4 5 0.5 10 1.0 1 0.1 37 Quicksilver WA-437-P 10% 16% 0.2 0.0 1 0.1 1 0.1 1 0.1 5 0.5 13 1.3 16 1.6 29 2.9 1 0.1 3 0.3 3 0.3 7 0.7 1 0.1 38 Treadstone WA-437-P 10% 15% 0.7 0.1 2 0.2 3 0.3 6 0.6 1 0.1 4 0.4 5 0.5 11 1.1 1 0.1 3 0.3 4 0.4 8 0.8 1 0.1 39 Flying Fish WA-437-P 10% 32% 0.2 0.0 1 0.1 1 0.1 3 0.3 0 0.0 1 0.1 2 0.2 5 0.5 0 0.0 1 0.1 2 0.2 4 0.4 1 0.1 40 Roll WA-437-P 10% 17% 0.2 0.0 1 0.1 1 0.1 2 0.2 0 0.0 0 0.0 0 0.0 1 0.1 0 0.0 1 0.1 1 0.1 2 0.2 0 0.0 Gross Arithmetic Sum 63 310 494 1,145 664 2,262 2,958 6,140 189 726 1,018 2,212 201 Net Arithmetic Sum 6 31 49 115 66 226 296 614 19 73 102 221 20 CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 20
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OPERATING AND FINANCIAL REVIEW WA-438-P GROSS AND NET PROSPECTIVE RESOURCES (20% NET) No Prospect Permit CVN equity Pg (%) Liquids (MMbbls) Gas (Bscf) BOE (MMBOE) Risked Mean (MMBOE)P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net 1 Pavo South WA-438-P 20% 64% 4.4 0.9 42 8.5 69 13.7 168 33.7 2 0.4 19 3.7 31 6.2 77 15.4 5 1.0 46 9.1 74 14.8 181 36.3 48 9.5 2 Torin WA-438-P 20% 38% 6.5 1.3 39 7.8 58 11.6 136 27.1 2 0.3 10 2.0 15 3.0 35 7.0 7 1.4 41 8.1 61 12.1 142 28.4 23 4.7 3 Orona WA-438-P 20% 10% 24.7 4.9 82 16.4 105 21.0 216 43.2 40 8.0 138 27.5 181 36.2 374 74.7 34 6.8 109 21.8 137 27.4 275 54.9 14 2.7 4 Arkali WA-438-P 20% 24% 8.6 1.7 32 6.4 42 8.4 89 17.7 2 0.4 8 1.6 11 2.2 23 4.6 9 1.8 33 6.7 44 8.8 92 18.5 11 2.2 5 Diachi WA-438-P 20% 54% 1.7 0.3 10 2.0 15 3.0 33 6.7 0 0.1 3 0.5 4 0.8 9 1.8 2 0.3 11 2.1 15 3.1 35 7.0 8 1.7 6 Jarvis East WA-438-P 20% 10% 9.6 1.9 40 8.0 57 11.5 125 25.0 15 3.1 68 13.6 98 19.5 216 43.3 13 2.6 54 10.7 75 14.9 161 32.1 7 1.4 7 Kaha WA-438-P 20% 24% 5.6 1.1 21 4.3 27 5.5 57 11.3 1 0.3 5 1.1 7 1.4 15 3.0 6 1.2 22 4.5 29 5.7 59 11.8 7 1.4 8 Roav WA-438-P 20% 22% 5.9 1.2 21 4.2 29 5.8 62 12.5 1 0.3 5 1.1 7 1.5 16 3.2 6 1.2 22 4.4 30 6.1 65 13.0 7 1.3 9 Solvi WA-438-P 20% 13% 6.3 1.3 30 6.1 46 9.3 106 21.3 2 0.3 8 1.5 12 2.4 28 5.6 7 1.3 32 6.4 49 9.7 111 22.3 6 1.3 10 Peregrine WA-438-P 20% 24% 5.5 1.1 20 4.1 25 5.1 51 10.2 1 0.3 5 1.0 7 1.3 13 2.7 6 1.2 22 4.3 26 5.3 53 10.6 6 1.3 11 Tucana WA-438-P 20% 22% 1.3 0.3 11 2.2 18 3.7 43 8.6 2 0.4 18 3.6 31 6.2 73 14.6 2 0.4 15 3.0 24 4.8 56 11.3 5 1.1 12 Heirro WA-438-P 20% 54% 1.6 0.3 7 1.4 8 1.7 17 3.5 0 0.1 2 0.3 2 0.4 5 0.9 2 0.3 7 1.4 9 1.8 18 3.6 5 1.0 13 Norma WA-438-P 20% 10% 3.5 0.7 21 4.2 37 7.5 92 18.5 6 1.2 35 6.9 65 12.9 157 31.5 5 1.0 28 5.5 49 9.8 118 23.6 5 0.9 14 Jarvis West WA-438-P 20% 10% 4.3 0.9 17 3.5 26 5.3 58 11.7 7 1.4 29 5.9 45 8.9 100 20.1 6 1.2 23 4.6 34 6.8 75 15.1 3 0.7 15 Moonraker WA-438-P 20% 10% 3.0 0.6 11 2.1 15 2.9 31 6.2 5 1.0 18 3.6 25 5.0 54 10.8 4 0.8 14 2.8 19 3.8 40 7.9 2 0.4 16 Inman WA-438-P 20% 4% 1.4 0.3 13 2.6 22 4.4 55 11.0 11 2.1 86 17.3 127 25.3 304 60.7 4 0.7 30 6.0 45 8.9 106 21.1 2 0.4 Gross Arithmetic Sum 94 418 601 1,340 99 457 667 1,500 116 508 719 1,588 159 Net Arithmetic Sum 19 84 120 268 20 91 133 300 23 102 144 318 32 The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) and relate to undiscovered accumulations. These estimates have both a 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 recoverable hydrocarbons. 21 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Notes on Petroleum Resource Estimates and Competent Persons Statement Unless otherwise stated, all petroleum resource estimates are quoted as at 30 June 2026 at standard oilfield conditions of 14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 deg Celsius). Carnarvon is not aware of any new information or data that materially affects the information included in the Reserves Statement. All the material assumptions and technical parameters underpinning the estimates in the Reserves Statement continue to apply and have not materially changed. Carnarvon uses both deterministic and probabilistic methods for estimation of petroleum resources at the field and project levels. Unless otherwise stated, all petroleum estimates reported at the company level are aggregated by arithmetic summation by category. Conversion from gas to barrels of oil equivalent is based on Gross Heating Value. The conversion is based on composition of gas in each reservoir and is 4.07 Bscf/MMboe, 3.85 Bscf/MMboe, 4.16 Bscf/MMboe, 4.45 Bscf/MMboe, and 3.87 Bscf/MMboe for the Upper Caley, Caley associated gas, Crespin, Baxter and Milne reservoirs, respectively, that make up the Dorado Contingent Resource. For all other gas resources the Company uses a constant conversion factor of 5.7 Bscf/ MMboe. Volumes of oil and condensate, defined as ‘C5 plus’ petroleum components, are converted from MMbbl to MMboe on a 1:1 ratio. OPERATING AND FINANCIAL REVIEW The estimates of petroleum resources are based on and fairly represent information and supporting documentation prepared by qualified petroleum reserves and resources evaluators. The estimates have been approved by the Company’s Chief Executive Officer, Mr Philip Huizenga, who is a full-time employee of Carnarvon. Mr Huizenga has over 30 years’ experience in petroleum exploration and engineering. Mr Huizenga holds a Bachelor’s Degree in Engineering and a Master’s Degree in Petroleum Engineering and is a member of the Society of Petroleum Engineers. Mr Huizenga is a Competent Person in accordance with ASX Listing Rules and has consented to the form and context in which this statement appears. There are numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures, operating expenses and cash flows. Oil and gas reserve engineering and resource assessment must be recognised as a subjective process of estimating subsurface accumulations of oil and gas that cannot be measured in an exact way. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 22
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Financial Review The Group reports an after-tax loss of $4,234,000 for the financial year ending 30 June 2026 (2025: profit of $3,649,000). Carnarvon’s balance sheet remains strong with cash and cash equivalents of $97,678,000 as at 30 June 2026 (2025: $186,144,000), with no debt, a 19.9% interest in Strike Energy, and a US$90 million development carry for the Dorado project. The Group recognised an Investment in Associate of $81,842,000 during the year, following the completion of a strategic investment in Strike Energy Limited on 25 September 2025. The Group also recognised its share of loss in associate for the period of $5,040,000 (refer to note 16). During the year, the Group capitalised $2,234,000 (2025: $2,853,000) in exploration and appraisal expenditure, which primarily related to exploration Environmental Plan preparation for 2027 exploration drilling, long lead items, and ongoing administrative expenses to keep the permits in good standing. The Group earned $4,447,000 (2025: $8,549,000) in interest income for the year by taking advantage of the higher interest rates received on call deposits and the Company’s cash position. Importantly, the interest earned for the year was more than the ongoing corporate and administrative costs which further preserves the Company’s balance sheet.In comparison, OPERATING AND FINANCIAL REVIEW The Group’s administrative and head office costs during the year were $1,318,000 (2025: $1,462,000). Employee benefits expenditure was $951,000 (2025: $2,528,000), and new venture and advisory costs for the year were $1,020,000 (2025: $707,000). The reduction in expenditure for the year is a result of the Company’s ongoing strategic efforts to reduce administrative and corporate cash costs. The Group also recognised a deferred tax liability of $3,523,000 (2025: $3,701,000) for the year. Refer to note 6 for further details regarding the deferred tax liability. A loss on foreign exchange movements of $268,000 (2025: gain of $3,785,000) was recognised due to the appreciation of the AUD against the Group’s USD cash and financial assets. Following the Dorado project deferral in early 2025 (ASX announcement on 21 January 2025), the Group reviewed its cash management strategy and determined that there was less requirement to hold its funds in USD. As a result, majority of the Group’s USD funds were converted to AUD during the year ending 30 June 2025, therefore reducing its exposure to fluctuations in AUD to USD during the current year. 23 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Risk Management Carnarvon recognises the importance of risk management in order to deliver the Company’s strategies and to provide sustainable growth to shareholders. Carnarvon manages its risks in accordance with its risk management policy to ensure critical risks are identified, managed and monitored. Carnarvon’s risk management framework is overseen by the Risk, Governance and Sustainability Committee. Oversight of the effectiveness of the risk management process provides assurance to the Board and shareholders and supports the Company’s commitment to continuous business improvement. OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 24
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OPERATING AND FINANCIAL REVIEW Material Business Risks SAFETY, ENVIRONMENT AND SUSTAINABILITY Health, Safety and Environment Oil and gas exploration, development and production activities involve a variety of risks which may impact the health and safety of Carnarvon’s people, communities, and the environment. These impacts could also damage Carnarvon’s reputation or lead to fines and other penalties. Carnarvon’s projects are subject to various laws and regulations regarding the environment. Oil and gas exploration, development and production can be potentially environmentally hazardous giving rise to substantial costs for environmental clean-up and rehabilitation. Carnarvon maintains high standards for health, safety, and environmental (“HSE”) management. HSE risks are embedded in Carnarvon’s operations and risk management framework and actively managed. Appropriate insurance is also maintained, and regularly reviewed to ensure adequate coverage. Where Carnarvon does not directly manage exploration and development activities, Carnarvon ensures its partner acting as operator maintains equally high standards in respect of HSE management. Climate Change Climate change and the management of carbon emissions may affect Carnarvon’s operations, markets for oil and gas and the funding and insuring of projects. Potential risks arising from physical changes caused by climate change include increased severe weather events and rising sea levels which may impact Carnarvon’s operations. There are also risks arising from policy changes by government which may result in increased regulation and costs which could have a material adverse impact on Carnarvon’s operations. Carnarvon recognises climate-related risks and the need for these to be managed effectively. As a result, the Company actively monitors current and potential areas of climate change risk. Further information about Carnarvon’s emissions management, and the potential impact of climate change on Carnarvon’s business, can be found in the company’s ESG Report. In terms of future developments, like Dorado, Carnarvon is committed to working with its Joint Venture partners to reduce emissions from the project facilities. Carnarvon has also developed its ‘carbon bank’ via the acquisition of ACCUs on-market (Note 15). These ACCUs are intended to offset future emissions from the Dorado production facilities in accordance with the relevant regulatory requirements under the Safeguard Mechanism. 25 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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ECONOMIC AND FINANCIAL RISKS Additional information on financial risks is contained in Note 25 to the Financial Statements. Oil Price The financial performance, future value and growth of Carnarvon is dependent upon the prevailing oil price. The price of oil is subject to fluctuations and is affected by numerous factors beyond the control of Carnarvon. A sustained period of low or declining oil prices could adversely affect the carrying value of Carnarvon’s assets and the commercial viability of future developments. Carnarvon monitors and analyses oil markets and seeks to reduce the price risk where reasonable and practical. Carnarvon will develop a hedging strategy upon sanction of future projects. Due to the early stage of Carnarvon’s projects, Carnarvon does not currently have any active hedges against the price of oil. Once Carnarvon’s projects develop further, the Company may enter hedging contracts to mitigate against fluctuations in the price of oil. Foreign Currency Exchange Carnarvon’s financial report is presented in Australian dollars; however, Carnarvon holds funds in both AUD and USD. The retention of US dollars influences Carnarvon’s reported cash holdings due to AUD / USD exchange rates at the end of each relevant reporting period, which may result in foreign exchange gains or losses in a period. Carnarvon also incurs some costs in foreign currencies, typically US dollars, which means Carnarvon is subject to fluctuations in the rates of currency exchanges. To mitigate against these foreign currency exchange fluctuations, Carnarvon holds a balance of funds between AUD and USD to ensure the Company maintains a natural hedge for future expected expenditures in each currency. Additional information on currency risks is contained in Note 25 of the Financial Statements. Funding The nature of Carnarvon’s business involves significant capital expenditure on exploration, appraisal, and potential development activities. Carnarvon’s business and the development of projects which Carnarvon pursues relies on access to debt and equity funding. Limitations on Carnarvon’s ability to access funding could result in the postponement or reduction of capital expenditures, the relinquishment of rights in relation to assets, adversely affect Carnarvon’s ability to take advantage of new opportunities and restrict the expansion of the business. These could result in a material adverse effect on Carnarvon’s business, financial condition, and operations. Carnarvon establishes funding plans for its material projects to ensure that the optimal funding is obtained to maximise shareholder value. This includes an economic and commercial analysis of projects and funding and ensuring that potential funding complies with Carnarvon’s risk management framework. Carnarvon also prepares short and long-term budgets and financial models which are monitored monthly in order to identify and manage any potential risks. Investment Carnarvon holds a material strategic investment in Strike Energy Limited (Strike) and therefore has exposure to Strike’s business and risks. As with any investment, there is a risk that the Company incurs a material loss on the investment. Poor investment performance could impact the Company’s financial position and its ability to pursue further investment opportunities. It can also require greater personnel focus on the investment, which can reduce focus on the Company’s core business. Carnarvon mitigates this risk by having non-executive director, Mr Barker, representing the Company on Strike’s board. Through this nominee board position, Carnarvon is able to influence the strategy of Strike to ensure value creation for shareholders. Carnarvon regularly engages with Strike to ensure progress is made on the business’s strategy and operations. OPERATING AND FINANCIAL REVIEW CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 26
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OPERATIONAL RISKS Exploration Exploration is a speculative activity with an associated risk of discovery to find oil and gas in commercial quantities. The future profitability of Carnarvon directly relates to the results of exploration, development, and production activities. If Carnarvon is unsuccessful in locating and developing new resources that are commercially viable, this may have a material adverse effect on Carnarvon’s future business, operations, and financial conditions. Carnarvon utilises well-established prospect evaluation and experienced personnel to identify and evaluate prospects in order to manage exploration risks. Carnarvon also has a process to ensure major decisions are subject to assurance reviews which include external experts and contractors where appropriate. Joint Venture Operations Carnarvon participates in a number of joint ventures. This is a common commercial arrangement in the oil and gas industry to share the benefits, costs and risks associated with projects between participants. Subject to any sole risk rights which may exist in joint venture agreements, Carnarvon may require the agreement of other joint venturers to proceed with its activities, including a development project. Failure to agree on these matters may have a material adverse effect on Carnarvon’s business. To the extent that Carnarvon is not the operator of a joint venture, it is reliant on the efficient and effective management of its partner acting as operator. The objectives and strategies of the operator may not always be consistent with the objectives and strategies of Carnarvon. However, operators must act in accordance with the directions of the operating committee, whose decisions are subject to the voting principles in the joint operating agreement (“JOA”). Carnarvon must also pay its percentage interest share of all costs and liabilities incurred by the joint venture as required under the relevant JOA. If Carnarvon fails to meet these obligations it may experience a dilution or loss (via a buy-out) of its interest in the joint venture or may not gain the benefit of joint venture activities, except at a significant cost penalty later in time. Carnarvon manages joint venture risks through careful joint venture partner selection, stakeholder engagement and relationship management. Commercial and legal agreements, including industry standard JOAs, are in place across all joint ventures to define the responsibilities and obligations of the joint venture. Resource Estimates Oil and gas resource estimates are expressions of judgement based on knowledge, experience, and industry practice. Estimates which are valid when originally calculated may alter significantly or become uncertain when new information becomes available. Material changes to resource estimates may result in Carnarvon altering its plans which could have a positive or negative effect on its operations. Carnarvon prepares its reserves and contingent resources estimates in accordance with the definitions and guidelines in the Society of Petroleum Engineers 2018 Petroleum Resources Management System. Carnarvon engages personnel with an appropriate level of skill and experience to prepare and review its resource estimates. The assessment of Reserves and Contingent Resources may also undergo independent audit and review. Development The development of Carnarvon’s projects is subject to a range of risks and uncertainties. Oil and gas developments are exposed to the risk of low side reserve outcomes, cost overruns, timing delays, technical issues and potential production decreases. A poor development outcome could result in material adverse impacts to reserve and production forecasts, future revenues, and operating costs. Carnarvon mitigates these risks through the careful selection of joint venture partners, ensuring the utilisation of high quality and experienced contractors throughout the development process, conducting assurance and other reviews during development, as well as comprehensively assessing all developments prior to making any commitment to participate. Regulatory Carnarvon operates in highly regulated industries and jurisdictions. Changes in regulations or enforcement actions could have material adverse impacts on Carnarvon. Changes in government, monetary, taxation, operational and other laws in the country(s) in which Carnarvon operates may also impact Carnarvon’s operations. Carnarvon holds interests in permits which are governed by the granting of contracts, licences, permits, or leases by the appropriate government authorities. Carnarvon may lose title to or its interest in a permit if licence conditions are not met, or insufficient funds are available to meet expenditure commitments. Carnarvon monitors changes in relevant regulations and engages with regulators and industry bodies to ensure the impact of policy changes are understood, and the Company continues to comply with all regulatory requirements. OPERATING AND FINANCIAL REVIEW 27 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Key Personnel Skilled employees and consultants are essential to the successful delivery of Carnarvon’s business strategy. Carnarvon relies on the services of certain key personnel, including Executive Management, other key employees, and consultants. The loss of any of these key personnel could have a material adverse effect on Carnarvon’s business. Carnarvon ensures it maintains competitive remuneration practices relative to its industry, including short and long incentive schemes, to ensure it maintains the services of key personnel and has the ability to attract additional staff, as required. Carnarvon maintains clear and regular updates on strategy and business planning to provide clarity on the company’s future plans. Guidance and opportunities are provided for staff to further their careers, and staff training and development seeks to ensure individual development goals align with Carnarvon’s strategy. Succession planning for key personnel and other key employees is also undertaken on a periodic basis. Cyber Security The integrity, availability and reliability of data within the Group’s information technology systems may be subject to intentional or unintentional disruption. Given the increasing level of sophistication and scope for potential cyberattacks, these attacks may lead to significant breaches of security that could jeopardise the sensitive information and financial transactions of the Group (from a cyber perspective) and property and environmental damage (from a physical perspective). Carnarvon has cyber security controls in place in addition to ensuring the Company’s data is backed up. Carnarvon also tests these controls through penetration testing and phishing simulations. The Company reviews its cyber risks regularly to reflect the evolving nature of these risks. OPERATING AND FINANCIAL REVIEW Permit Interests Permit Basin Equity Joint Venture Partner(s) Partner Interest Indicative Forward ProgramSantos OPIC Australia WA-435-P Roebuck 10% Santos Limitedi, and OPIC Australia 80% 10% G&G Studies, well planning WA-436-P Roebuck 20% Santos Limitedi, and OPIC Australia 70% 10% G&G Studies, well planning WA-437-P Roebuck 10% Santos Limitedi, and OPIC Australia 80% 10% G & G studies WA-438-P Roebuck 20% Santos Limitedi, and OPIC Australia 70% 10% G&G Studies, well planning WA-64-L Roebuck 10% Santos Limitedi, and OPIC Australia 80% 10% Development and production Notes: (i) Denotes operator where Carnarvon is non-operator partner. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 28
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Carnarvon’s approach to ESG reporting and materiality ESG Report Carnarvon is committed to transparency in its Environmental, Sustainability & Governance (ESG) disclosures across material areas of impact. This section outlines Carnarvon’s performance in their material ESG topics for the year from 1 July 2025 to 30 June 2026. It marks their seventh year of annual ESG reporting and their second year of integrated reporting within the Annual Report. This section was prepared by MCC Sustainable Futures in collaboration with Carnarvon and has been reviewed and approved by Carnarvon’s Board. FRAMEWORKS AND STANDARDS The ESG performance reporting presented in this section has been prepared with reference to the Global Reporting Initiative (GRI), specifically the GRI 11: Oil and Gas Sector Standard (GRI 11) published in 2021, along with the updated GRI Universal Standards (2021). REPORTING SCOPE AND BOUNDARIES The data reported in this section relates directly to business activities and operations where Carnarvon holds ‘operational control’. See Carnarvon’s portfolio table on page 28 for further information on asset ownership boundaries. The scope of this report considers all activities undertaken by Carnarvon for the duration of the reporting period, rather than as at the end of the reporting period. The exception to this is people- related data, which refers to all direct employees at the end of the reporting period. During the reporting period, two contractors were engaged under consulting agreements that were short term and intermittent, as needed for specific scopes. Contracted staff data is excluded from people-related data as these staff are engaged under consultancy arrangements and are not employees of Carnarvon. A summary of the available data and disclosures made against each material topic is provided in the GRI Content Index on page 43. MEMBERSHIPS During the reporting period, Carnarvon was a member of the following associations: • South East Asia Petroleum Exploration Society (SEAPEX) • Energy Club of Western Australia • Society of Petroleum Engineers • Petroleum Exploration Society of Australia MATERIALITY Carnarvon reviewed the material topics identified in the previous reporting period and confirm that they remain material to the Company and its stakeholders. As there were no significant changes to operations, strategy, or the operating environment during FY26, Carnarvon determined that the previously identified material topics continue to represent the areas where the Company has the most significant impacts and risks (both positive and negative) from business activities. The topics considered reflect industry specific topics in GRI 11: Oil and Gas Sector Standard 2021 and build on previously reported topics. 29 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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ESG REPORT MATERIAL TOPICS Carnarvon’s FY26 material topics are outlined below. Greenhouse Gas (GHG) Emissions Non-Discrimination & Equal Opportunity Economic Impacts ENVIRONMENT SOCIAL GOVERNANCE Climate Adaptation, Resilience & Transition ENVIRONMENT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 30
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ESG REPORT FY26 ESG HIGHLIGHTS 0 All Scope 2 of procurement budget spent locally Zero anti-bribery & corruption violations 0 Zero incidents of discrimination reported emissions offset 81.3% 31 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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FY25 Material Topic FY26 Goal FY26 Performance Summary Status FY27 Goal ENVIRONMENT GHG Emissions Continue to work within the Dorado joint venture to ensure that emissions reduction and abatement opportunities are identified and assessed as the development progresses. Dorado field development was deferred. Work will be undertaken once the project resumes. ON HOLD Continue to work within the Dorado joint venture to ensure that emissions reduction and abatement opportunities are identified and assessed as the development progresses. Continue Scope 2 GHG reporting and offsetting. All Scope 2 emissions reported in this ESG Report for FY26 were offset through accredited carbon offset programs. Refer to page 33. ACHIEVED Continue Scope 2 GHG reporting and offsetting. Climate Adaptation, Resilience and Transition Continue to monitor developments related to reporting under the Australian mandatory climate-related financial disclosure legislation. Carnarvon is not yet captured within existing disclosure requirements, however the Company continued to monitor regulatory changes relating to mandatory reporting requirements during the period. ACHIEVED Review and update climate-related risks and opportunities in line with Carnarvon’s enterprise risk register updates. Review the internal carbon pricing assumptions, with updated market insights. Board-level review performed during the reporting period. Low, base and high cases were maintained. ACHIEVED SOCIAL Non- Discrimination and Equal Opportunity Continue to develop staff by maintaining training levels. All staff were retained during the reporting period and supported with 335 hours of training and upskilling. Refer to page 38. ACHIEVED Continue to develop staff by maintaining training levels. GOVERNANCE Economic Impacts Continue to have a positive economic impact through wages and supply chain. Paid $2,131,000 in employee wages and benefits during the reporting period. Refer to note 20(a). ACHIEVED Expand reporting of economic contributions, including wages, tax contributions and royalty payments, to better describe Carnarvon’s positive economic impact. ESG Goals Overview The table below provides a summary of Carnarvon’s performance against its goals set for the material topics identified during the FY25 reporting period for progression in FY26. The following sections of the report provide further detail of Carnarvon’s business during the FY26 reporting period and of its performance and disclosures on each material topic. Goals identified for the coming FY27 reporting period are also included. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 32
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ESG REPORT Climate change is a key global challenge requiring transition to a lower carbon environment. GHG emissions generated through Carnarvon’s office locations, supply chain and its interests in non-operated Joint Venture developments contribute to driving global warming that threaten ecosystems, communities and economies. Carnarvon’s FY26 GHG emissions profile is solely comprised of Scope 2 emissions generated from electricity consumption at its Perth office. Consistent with the prior year, no Scope 1 emissions were produced as the Company did not have assets in operation or any exploration activities during the reporting period. Carnarvon includes reporting of Scope 2 emissions in this report on a voluntary basis. All emissions generated during the reporting period were fully offset through the voluntary retirement of an equivalent amount of ACCUs from Carnarvon’s Carbon Bank, reflecting Carnarvon’s commitment to proactive emissions management. Environment Key disclosures within this material topic include: Energy consumption Scope 2 GHG emissions CARNARVON’S CARBON BANK Following the reporting period, Carnarvon retired 13 ACCUs from its existing Carbon Bank to fully offset all Scope 2 emissions generated throughout the FY26 reporting period. These ACCUs are from avoided deforestation projects in NSW that protect land already approved for clearing for 100 years and avoided clearing of native regrowth in Queensland that protects land from clearing for 25 years. These ACCUs were listed by T erra Carbon Pty Ltd and purchased directly from Origin Energy in 2024. GREENHOUSE GAS (GHG) EMISSIONS Joint Venture Partnerships and Other Strategic Investments Where Carnarvon does not have operational control in its portfolio, the Company works proactively with the asset operator and key contractors to ensure emissions reduction opportunities are identified and evaluated for implementation, where possible. Carnarvon is a 10% Joint Venture Partner in the Dorado development, with Santos Limited (Santos) designated as operator. Dorado is expected to produce a significant amount of emissions over the course of its field life, and the GHG emissions will be reported under the NGERS Act by Santos. Carbon offsets from bulk offsets purchased by Carnarvon in 2024 are planned to be used to meet Carnarvon’s equity share of Safeguard Mechanism emissions reduction obligations for the first five years of the development. During the reporting period, Carnarvon announced that it has entered a subscription agreement with Strike Energy Limited, with Carnarvon to make a strategic investment of to A$86 million to acquire up to a 19.9% interest in Strike. The agreement will help to facilitate the development of Strike’s core assets, provide funding certainty, and support the delivery of its strategic growth and energy transition objectives. The reporting of GHG emissions attributable to Carnarvon’s equity interest in Strike Energy is not disclosed in the current reporting period. 33 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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FY26 Performance SCOPE 2 EMISSIONS Carnarvon’s Scope 2 emissions are calculated using the location-based method under the methodologies prescribed by the 2025 National Greenhouse Accounts Factors workbook. During the reporting period, electricity consumption from its corporate office was 94.6 GJ and Scope 2 emissions were 13.1 tCO2-e. Carnarvon’s Scope 2 emissions trend since the Company’s first reporting year in FY20 are provided in Figure 1, and shows that FY26 Scope 2 emissions remained broadly consistent with previous reporting years, reflecting the Company’s limited operational activities and lack of major changes to its operations. These emissions were offset entirely by the voluntary retirement of an equivalent number of ACCUs purchased by Carnarvon. FY26 GOAL PERFORMANCE Continue to work within the Dorado joint venture to ensure that emissions reduction and abatement opportunities are identified and assessed as the development progresses. During FY26, development activities for the Dorado field continued to be suspended, placing this goal on hold. As a result, planned actions to identify and assess emissions reduction and abatement opportunities were not progressed during the reporting period. Carnarvon intends to revisit this initiative once the project resumes. Continue Scope 2 GHG reporting and offsetting. Scope 2 GHG emissions continued to be calculated and disclosed in this FY26 ESG Report, with all emissions generated during the reporting period fully offset through the retirement of ACCUs from Carnarvon’s Carbon Bank. Figure 1: Scope 2 Emissions SCOPE 2 EMISSIONStC02e (tonnes of carbon dioxide equivalent) Financial Y ear 50 40 30 20 10 0 2020 2021 2022 2023 2024 2025 2026 FY27 GOALS Continue to work within the Dorado joint venture to ensure that emissions reduction and abatement opportunities are identified and assessed as the development progresses. Continue Scope 2 GHG reporting and offsetting. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 34
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Key disclosures within this material topic include: Climate-related risks and opportunities CLIMATE ADAPTATION, RESILIENCE & TRANSITION The oil and gas industry plays a critical role in Australia’s energy transition, through providing affordable and cleaner forms of reliable energy. Whilst the Dorado project will be a large emitter of GHG emissions and covered under the requirements of the National Safeguard Mechanism, it is considered a low carbon field, at approximately 2% CO2. Governance and Risk Management The Board’s Risk, Governance and Sustainability (RGS) Committee is responsible for Carnarvon’s climate and ESG performance. The RGS Committee meets twice a year and has ultimate oversight to ensure that climate considerations are integrated into Carnarvon’s business planning and processes. For further information, refer to the Risk, Governance and Sustainability Committee section on page 49. Carnarvon’s operations may be exposed to physical risks associated with climate change impacts, as well as transition risks arising from the global transition towards a lower-carbon economy. These risks are considered from a strategic, operational, financial and reputation perspective, together with potential likelihood for impacts to occur. FY26 Performance Climate change is considered in Carnarvon’s corporate risk and opportunity assessment process and is recorded in the corporate risk register. Carnarvon’s key risks include: TRANSITION RISKS STRATEGIC Stranded assets that cannot be developed or only developed with costly abatement and other emissions reduction requirements. OPERATIONAL Operating assets shut-in early due to regulatory action, with decommissioning costs brought forward. Third party service companies may leave the industry and pivot businesses towards renewables, resulting in limited contractors with the necessary operating spares and capabilities. FINANCIAL • Loss of revenue (e.g. stranded assets) or significantly less revenue (e.g. long-term depressed oil and gas prices). • Potential high environmental compliance costs (e.g. emissions abatement or new CAPEX to reduce operational emissions) and insurance costs. • Overall value destruction via low share price. • Inability to raise further equity on-market, or via debt. REPUTATIONAL • Likely to be unattractive from partnering perspective. • Increased regulatory focus from ASIC and ASX. • Lack of interest from institutional investors and retail investors with expectation of climate / energy transition plans. • Possible activists pressure from environmental nongovernmental organisations (eNGOs). PHYSICAL RISKS Increased severe weather events and rising sea levels may impact Carnarvon’s future operations. ESG REPORT 35 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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FY26 GOAL PERFORMANCE Continue to monitor developments related to reporting under the Australian mandatory climate-related financial disclosure legislation. Although Carnarvon is not currently captured by existing mandatory climate-related financial disclosure requirements, the Company’s Risk, Governance and Sustainability Committee continued to monitor regulatory developments and reporting requirements throughout FY26 to remain informed of potential future obligations. Review the internal carbon pricing assumptions, with updated market insights. Carnarvon reviewed its internal carbon pricing assumptions used at the Board level during FY26, taking into account updated market insights. Following this review, the Company determined that it remained appropriate to maintain its existing low, base, and high carbon price scenarios. Carnarvon’s approach to climate- related risks and opportunities is fully integrated into its overall business risk management. Further detail on Carnarvon’s whole-of-business approach to risk management and material business risks is provided in the Risk Management section on pages 24-28. FY27 GOALS Undertake preparatory activities for the implementation of AASB S2 Climate-related Disclosures The continued maintenance of Carnarvon’s Carbon Bank of high-quality offsets helps to mitigate transition risk by supporting the Company’s resilience to evolving climate-related regulations and market expectations, managing future carbon-related costs, facilitating project development, and strengthening the Company’s social license and reputation. Due to its lack of operating or producing assets, Carnarvon currently has limited direct exposure to physical climate risks such as more frequent and severe extreme weather events and long- term changes in climate patterns. Physical climate risk considerations will continue to be monitored as part of project planning and risk management processes. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 36
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Carnarvon recognises that freedom from discrimination is a human right and a fundamental right at work. A workplace free from discrimination with practices that support diversity, inclusion and equal opportunities enables employees to perform to their full potential and furthers Carnarvon’s reputation as a responsible and inclusive employer. Carnarvon’s Diversity Policy outlines the meaning and benefits of diversity, how it is measured and achieved within the business, as well as how it is reported and communicated both with Carnarvon’s internal and external stakeholders. Responsibility for the promotion of diversity and inclusion measures within the Company is delegated to the Remuneration & Nomination Committee. The company is committed to investigating any reported cases of discrimination, harassment, or unequal treatment promptly and impartially, and take the appropriate corrective and disciplinary action where violations are substantiated. Fostering a fair and inclusive workplace involves a range of initiatives that support equal opportunity, diversity and employee development, including: • Providing opportunities for individuals from local communities to participate in Carnarvon’s workforce, including in senior management roles, to enable the creation of shared economic value and strengthened relationships with host community members • Supporting staff who are new parents by providing access to the appropriate workplace support and flexibility, ensuring they can balance family responsibilities without adversely affecting their career progression • Promoting age and gender diversity across all levels of the organisation, to support inclusivity and innovation Table 1: Carnarvon’s Workforce Location Unit Employees Full Time Part Time Perth Office Number 7 6 1 Female Number 2 1 1 Male Number 5 5 0 ESG REPORT Society Key disclosures within this material topic include: Proportion of senior management hired from the local community Parental leave NON-DISCRIMINATION & EQUAL OPPORTUNITY Diversity of governance bodies and employees Incidents of discrimination and corrective actions taken Employee training hours • Providing training and development opportunities to support personal and professional development, to ensure Carnarvon’s staff have the necessary skills and knowledge to adapt to a dynamic operating environment FY26 Performance CARNARVON’S WORKFORCE Carnarvon’s FY26 employee numbers is consistent with FY25, with the headcount for the corporate headquarters in Perth remaining at a total of seven staff. Disclosure of employees by location, employment type and gender below refers to the total headcount at the end of the reporting period (i.e. 30 June 2026). No consultant or contractor staff data has been included in these numbers, as outlined in the Reporting Scope and Boundaries section. All employees are employed on permanent contracts. As reported in previous ESG Reports, the percentage of senior management at significant locations of operation that are hired from the local community was 100% for Western Australia. Carnarvon’s senior management are defined as the Chief Executive Officer (CEO) and Chief Financial Officer (CFO). Significant locations of operations represent the primary sites where Carnarvon’s business activities occur, whereas “local” refers to communities located within Western Australia. 37 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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PARENTAL LEAVE Carnarvon acknowledges that employees who are new parents may require additional support and workplace flexibility to effectively balance professional and personal responsibilities. Carnarvon strives to uphold the parental leave policy to ensure new parents can care for their families while maintaining their careers. Carnarvon provide parental leave entitlements, as covered in the Parental Leave Policy. During the reporting period, one male employee took parental leave and returned to work and remained employed by Carnarvon 12 months after their return. DIVERSITY AT CARNARVON Carnarvon is committed to attracting and retaining a diverse range of talented people to work in all levels of its business. The following graphs show the diversity of their governance bodies and employees, both by age and gender. Age diversity within the Board and senior management was evenly distributed between the age ranges of 30-50 years and those over 50 years of age. The remainder of the workforce were within the 30-50 years age bracket. Male employees represented 100% of senior management roles and 75% of the Board during the reporting period, while female employees comprised the remaining 25% of Board positions. Across the wider workforce, men accounted for 60% of employees and women 40%. Age Diversity Figure 2: Age Diversity 25% 50% 75% 100% Other EmployeesBoard Senior Management 30 - 50 yrs >50 yrs <30 yrs 0% Gender Diversity Figure 3: Gender Diversity 25% 50% 75% 100% Other EmployeesBoard Senior Management Female Male 0% DISCRIMINATION During the reporting period, there were zero incidents of discrimination reported. TRAINING AND DEVELOPMENT Continued investment in Carnarvon’s staff strengthens workforce capability, supports operational excellence, and ensures its employees remain equipped to respond to evolving industry, regulatory and technical requirements. The graph below shows the hours of training that Carnarvon supported during the reporting period, by employee group. In comparison to FY25, the average hours of training decreased across all groups, with the largest declines recorded for Male employees and Senior Management (both 47%), followed by Other Employees (38%), while Female employees experienced a smaller decrease of 7%. Training participation varies year to year depending on training opportunities, operational requirements and employee availability. As well as core internal team training and development, Carnarvon also funds post graduate study for some employees. Average Hours of Training Per Employee Group Figure 4: Average training hours 60 Hours 80 100 120 Other Employees 40 20 0 Male Female Senior Management FY25 FY26 FY26 GOAL PERFORMANCE Continue to develop staff by maintaining training levels. Carnarvon continued to support the professional development and ongoing knowledge sharing of its staff through a range of technical, professional and industry- focused training opportunities, including participation in various industry conferences, workshops, forums and webinars. Carnarvon staff completed a total of 335 hours of training and professional development during FY26. FY27 GOAL Continue to develop staff by maintaining training levels. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 38
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commitment to support regional economic development. This percentage excludes payments to Carnarvon’s joint venture partners. Other Australian suppliers and international suppliers accounted for 9.8% and 8.9% respectively of total procurement expenditure (Figure 5). The oil and gas industry contributes to Australia’s economy through payment of taxes and royalties to governments and the procurement of goods and services from local and regional suppliers, while also creating employment opportunities and income across the value chain, including for workers in local communities. As Carnarvon did not have any operating facilities during the reporting period, its positive economic impacts were primarily realised through employee wages and benefits, and local supplier expenditure. Economic impacts may arise where exploration or development activities are delayed, reduced, or discontinued, which directly affects employees, contractors, and suppliers through loss of income. Commodity price volatility, changing market conditions, and regulatory developments may also negatively influence investment decisions and economic outcomes. Carnarvon mitigates any potential negative economic impacts through working closely with joint venture partners to ensure efficient project delivery and monitoring changing market conditions on an ongoing basis. FY26 Performance The Operating and Financial Review section of this Annual Report, supported by information and data in other sections, contains a detailed Financial Review for the reporting period (see page 23). LOCAL SPEND Where possible, Carnarvon prioritises local procurement to maximise opportunities for businesses in its areas of operation to participate in its supply chain and contribute to regional economies. ‘Local’ is defined as Western Australia, where Carnarvon’s corporate headquarters are located. The Perth office was Carnarvon’s only significant location of operation in FY26. In FY26, 81.3% of Carnarvon’s total expenditure was attributed to Western Australia, remaining broadly consistent with FY25 (85%) reflecting the continued ESG REPORT Governance Key disclosures within this material topic include: Direct economic value generated and distributed Significant indirect economic impacts ECONOMIC IMPACTS Proportion of spending on local suppliers International Western Australia Other Australia 9.8% 8.9% 81.3% Supplier Spend By Region FY26 GOAL PERFORMANCE Continue to have a positive economic impact through wages and supply chain. During FY26, Carnarvon paid $2,131,000 in employee wages and benefits during the reporting period, supporting local employment and economic activity. For further details, see note 20(a) of this report. Maintain a high proportion of local (WA) supply chain. During the reporting period, 81.3% of the total procurement spend was allocated to Western Australian suppliers. FY27 GOAL Figure 5: Local Spend by Region Expand reporting of economic contributions, including wages, tax contributions and royalty payments, to better describe Carnarvon’s positive economic impact. 39 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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ESG REPORT Stakeholder Engagement Maintaining open channels of communication with internal stakeholders such as employees, and external stakeholder including contractors, suppliers, and local communities, helps Carnarvon to understand stakeholder expectations, deliver positive outcomes for those which may be affected by its operations and foster strong relationships which support its social licence to operate. Ongoing engagement enables Carnarvon to incorporate feedback and concerns into its decision-making. During the reporting period, Carnarvon worked closely with a range of stakeholders, including its joint venture partners, industry peers, regulatory bodies, financiers and shareholders. Carnarvon focuses on maintaining communication with its joint venture operator partners to remain informed of project developments and key operational matters. CARNARVON’S STAKEHOLDERS Employees Performance reviews, presentations including development plans and training, 1:1 coaching, team development sessions, regular management meetings and social functions. Contractors And Suppliers Regular meetings and ongoing negotiations and information sharing. Investment Community Carnarvon website, AGM, periodic reporting, investor presentations, regular meetings and email alert service. Media Relationships maintained through media releases and timely responses to enquiries. NGO Opportunity for input through approvals processes and industry associations. Joint Venture Participant Regular T echnical Committee and Operating Committee meetings. Industry Peers Industry conferences and presentations, representation on industry associations. Regulators Carnarvon’s Joint Venture Partner Santos has engaged with the environmental regulator in relation to the submission of Environment Plans. Communities Conducted by Carnarvon’s Joint Venture Partner Santos, community engagement associated with Environment Plans has occurred. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 40
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Senior Executives and Working Groups Corporate Governance Policies ESG Governance GOVERNANCE STRUCTURE Oversight of Carnarvon’s impacts on the economy, environment, and people sits with the Board. The Board delegates responsibility for management of Carnarvon’s business activities to the CEO, who remains accountable to the Board. This responsibility is then carried out through a group of committees and corporate governance policies and procedures, which are reviewed annually against ASX corporate governance guidance, as can be seen in the latest Corporate Governance Statement. The Directors Report section of this annual report describes the governance structure that was in place during the reporting period – in the context of the critical role that it plays to provide stability, transparency and accountability to the way that Carnarvon does business. The section also introduces the Board of Carnarvon’s Board of Directors The Board is collectively responsible for promoting the success of the company. This includes oversight of Carnarvon’s governance, strategic direction, and objectives, including managing ESG impacts. The Board is currently comprised of the Chair (who is a Non-Executive Director) and three other Non-Executive Directors. Committees of the Board REMUNERATION & NOMINATION COMMITTEE Responsible for reviewing and recommending appropriate remuneration policies which are designed to meet the needs of the company and enhance corporate and individual performance. AUDIT COMMITTEE Assists in fulfilling oversight responsibilities for the financial reporting process, the system of internal controls, the management of financial risks, and the audit process. RISK, GOVERNANCE, & SUSTAINABILITY COMMITTEE Assists in fulfilling oversight responsibilities for risk management, corporate governance, sustainability policies and practices, their process for monitoring compliance with laws and regulations, and their Corporate Code of Conduct. Anti-Bribery and Anti-Corruption Policy > Climate Change Policy > Corporate Code of Conduct > Corporate Governance Statement > Diversity Policy > Executive Code of Conduct > Information Disclosure Policy > Performance Evaluation Policy > Risk Management Policy > Security Trading Policy > Shareholder Communication Strategy > Whistleblower Policy > The following policies, strategies, and codes assist in governing Carnarvon’s business conduct The role of the senior management team is to support the CEO in overseeing the operations and financial affairs of Carnarvon, in accordance with the delegated authority of the Board. directors and the broad, diverse experience that each member contributes to the organisation. The Board Chairperson is not a Senior Executive at Carnarvon. The below diagram summarises Carnarvon’s governance structure and provides links to the key governance documents that are maintained and implemented. This diagram complements the details provided in the Directors Report section of the governance structure. It also serves to provide an overview of how responsibilities are assigned for managing the Company’s ESG impacts. A number of sections within this Annual Report provide further detail about the governance that was maintained during the reporting period, as well as information and data about performance. Targeted references and additional comments that relate to their ESG disclosures are provided in the next section. ESG REPORT 41 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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RISK, GOVERNANCE AND SUSTAINABILITY COMMITTEE The Board delegates governance over ESG and climate- related risk management to the RGS Committee, with its remit detailed in the RGS Committee Charter and supplemented by the corporate risk management framework and register. A key remit of the RGS Committee is to provide strategic guidance, direction and performance monitoring of Carnarvon’s key ESG aspects. The Committee reviews and approves Carnarvon’s materiality assessment, ESG goals and annual ESG reporting. In accordance with the Charter, the Committee monitors the Company’s policies and performance in relation to health, safety, environment, community, climate change and other ESG impacts. The Committee also provides the highest level of risk review for the business, in addition to fulfilling its overall responsibilities for corporate governance and sustainability. Specifically, the RGS Committee assists the Board in fulfilling its risk management responsibilities. The RGS Committee ensures that Carnarvon has an appropriate risk management framework in place that considers business, financial, regulatory and operational risks. Specifically, the Committee monitors the effectiveness of how Carnarvon is managing health, safety, environmental, community, reputational, legal, and financial risks. The highest-level risks are identified as ‘material’ and are managed across Carnarvon’s business activities, functions and processes. Day-to-day oversight over material risks is provided by senior management, supported by suitably qualified and experienced personnel, with overall oversight retained by the Board. REMUNERATION A strong remuneration framework supports Carnarvon to attract and retain top talent. Transparency in the Company’s approach to remuneration is important to Carnarvon and its external shareholders and stakeholders. Detailed remuneration reporting is included within the Directors Report section, from pages 46-64 of this annual report. Carnarvon’s shareholders can also provide feedback and vote on the Company’s Remuneration Report contained within this Annual Report, at each Annual General Meeting. At the Company’s 2025 Annual General Meeting, less than 25% of the votes cast were against the adoption of the Remuneration Report (8.08%) published in the Carnarvon FY25 Annual Report. The only change to remuneration during the period was a 4% CPI increase for executives and other staff. In this reporting period, the ratio of the CEO’s total compensation to the median annual total compensation for all employees (excluding the CEO) was 2.33:1, an increase from a ratio of 2.13:1 in the previous reporting period. RESPONSIBLE BUSINESS CONDUCT Corporate governance at Carnarvon is underpinned by the Corporate Code of Conduct, which sets out the minimum standards to which the Board, management and employees of Carnarvon are required to comply with when dealing with each other, shareholders and the broader community. The purpose of this policy is to provide a framework for decisions and actions in relation to ethical conduct in employment. The policy underpins Carnarvon’s unwavering commitment to integrity and fair dealing in its business affairs, as well as their duty of care to all employees, clients and stakeholders. Carnarvon’s Statement of Values is an accompanying document to the Corporate Code of Conduct. The Code of Conduct is supplemented by the Executive Corporate Code of Conduct and the Anti-Bribery and Anti- Corruption Policy, which are signed off by the Board. All of these policies apply across Carnarvon’s business activities and have a senior level of responsibility assigned (Board, Chair or CEO). This is appropriate given the size of the company. No instances of legal non-compliance were recorded during the reporting period. CONFLICTS OF INTEREST Actual or potential conflicts of interest are managed in accordance with procedures outlined in the Code of Conduct to ensure compliance with relevant laws and responsible business practices. Carnarvon’s Code of Conduct requires the Board, management and employees to not involve themselves in situations where there is a real or apparent conflict of interest between them as individuals and the interest of the Company. Carnarvon’s Board of Directors is accountable for identifying and responding to any conflicts of interest. Each Director must consider and disclose any potential or actual conflicts. No conflicts of interest arose during the reporting period. ANTI-BRIBERY, CORRUPTION & CRITICAL CONCERNS In the reporting period, Carnarvon’s business activities were undertaken and completed with zero anti-bribery and corruption violations. No critical concerns were received and communicated to the Board during the reporting period. Carnarvon aims to foster a culture where whistleblower concerns can be raised confidentially, addressed ethically, and without reprisal. This commitment, in addition to protections and support available to whistleblowers, is outlined in the Company’s Whistleblower Policy. The policy and associated reporting and handling process is guided by the Corporate Code of Conduct. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 42
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GRI CONTENT INDEX Statement of Use Carnarvon has reported with reference to the GRI Standards for the period 1 July 2025 to 30 June 2026 GRI 1 Used GRI 1: Foundation 2021 Applicable GRI Sector Standard(s) GRI 11: Oil and Gas Sector 2021 Disclosure Location/Reason for Omission GRI 2: General Disclosures (2021) 2-1 Organisational details • Carnarvon Energy Ltd website: Home - Carnarvon Energy. • Corporate Directory section of this report, page ii. 2-2 Entities included in the organisation’s sustainability reporting Overview of Operations section of this report, pages 5-28. 2-3 Reporting period, frequency and contact point • Corporate Directory section of this report, page ii. • Carnarvon’s Approach to ESG Reporting and Materiality section of this report, page 29. 2-4 Restatements of information None. 2-5 External assurance No dedicated assurance has been undertaken for this FY26 ESG Report. 2-6 Activities, value chain and other business relationships • Overview of Operations section of this report, pages 5-28. • Permit Interests are also listed on page 28 of this report. 2-7 Employees Non-discrimination & Equal Opportunity section of this report, page 37. 2-8 Workers who are not employees Not applicable. Carnarvon’s Approach to ESG Reporting and Materiality section of this report, page 29. 2-9 Governance structure and composition Governance Structure section of this report, page 41. 2-10 Nomination and selection of the highest governance body Director’s Report section of this report, from pages 46-64. Corporate Governance Statement. 2-11 Chair of the highest governance body Director’s Report section of this report, from pages 46-64. 2-12 Role of the highest governance body in overseeing the management of impacts Risk, Governance and Sustainability Committee section of this report, page 49. Director’s Report section of this report, from pages 46-64. Climate Adaptation, Resilience and Transition section of this report, page 35. 2-13 Delegation of responsibility for managing impacts Risk, Governance and Sustainability Committee section of this report, page 49. Operating and Financial Review, Risk Management section of this report, pages 5-28. Director’s Report section of this report, from pages 46-64. 2-14 Role of the highest governance body in sustainability reporting Carnarvon’s Approach to ESG Reporting and Materiality section of this report, page 29. Risk, Governance and Sustainability Committee section of this report, page 49. 2-15 Conflicts of interest Conflicts of interest section of this report, page 42. 2-16 Communication of critical concerns Anti-bribery, Corruption & Critical Concerns section of this report, page 42. 2-17 Collective knowledge of the highest governance body No updates occurred in the reporting period. 2-18 Evaluation of the performance of the highest governance body Performance Evaluation Policy. Director’s Report section of this report, from pages 46-64. 2-19 Remuneration policies Remuneration and Nomination Committee Charter. Director’s Report section of this report, from pages 46-64. 2-20 Process to determine remuneration Remuneration and Nomination Committee Charter. Remuneration section of this report, page 50. Director’s Report section of this report, from pages 46-64. 2-21 Annual total compensation ratio Remuneration section of this report, page 50. 2-22 Statement on sustainable development strategy Not reported. 2-23 Policy commitments ESG Governance section of this report, page 41. Carnarvon’s suite of Corporate Governance policies. 2-24 Embedding policy commitments ESG Governance section of this report, page 41. Carnarvon’s suite of Corporate Governance policies. ESG REPORT 43 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Disclosure Location/Reason for Omission 2-25 Processes to remediate negative impacts ESG Governance section of this report, page 41. Risk, Governance and Sustainability Committee Charter. 2-26 Mechanisms for seeking advice and raising concerns Whistle-blower Policy. 2-27 Compliance with laws and regulations Responsible Business Conduct section of this report, page 42. 2-28 Membership associations Membership section of this report, page 29. 2-29 Approach to stakeholder engagement Stakeholder Engagement section of this report, page 40. 2-30 Collective bargaining agreements Not applicable. All Carnarvon employees are employed under individual permanent contracts, hence no collective bargaining agreements are in place. GRI 3: Material Topics (2021) 3-1 Process to determine material topics Carnarvon’s Approach to ESG Reporting and Materiality section of this report, page 29. 3-2 List of material topics Material T opics section of this report, page 30. GRI 11.1: GHG Emissions (2021) 3-3 Management of material topic Greenhouse Gas (GHG) Emissions section of this report, page 33. 302-1 Energy consumption within the organisation Greenhouse Gas (GHG) Emissions section of this report, page 33. 302-2 Energy consumption outside of the organisation Not reported – information unavailable. Carnarvon intends to work on this disclosure in future. 302-3 Energy intensity Not reported – information unavailable. Carnarvon intends to work on this disclosure in future. 305-1 Direct (Scope 1) GHG emissions Not applicable. The Greenhouse Gas (GHG) Emissions section of this report outlines that Carnarvon did not have any operating assets during the reporting period and generated no Scope 1 emissions. 305-2 Energy indirect (Scope 2) GHG emissions Greenhouse Gas (GHG) Emissions section of this report, page 33. 305-3 Other indirect (Scope 3) GHG emissions Not reported – information unavailable. Carnarvon intends to work on this disclosure in future. 305-4 GHG emissions intensity Not applicable. Carnarvon had no operating assets during the reporting period. GRI 11.2: Climate Adaptation, Resilience, and Transition (2021) 3-3 Management of material topic Climate Adaptation, Resilience and Transition section of this report, page 35. 201-2 Financial implications and other risks and opportunities due to climate change Description of climate-related risks and opportunities are described in the Climate Adaptation, Resilience and Transition section of this report, page 35. However, financial quantification of risks is not reported – Carnarvon intends to work on this disclosure in future. 305-5 Reduction of GHG emissions Not applicable. Carnarvon had no operating assets during the reporting period. 11.2.4 Additional Sector Disclosure: Approach to public policy development and lobbying on climate change Not applicable. Carnarvon did not participate in public policy development and lobbying on climate change during the reporting period. GRI 11.11: Non-discrimination and Equal Opportunity (2021) 3-3 Management of material topic Non-discrimination and Equal Opportunity section of this report, page 37. 202-2 Proportion of senior management hired from the local community Non-discrimination and Equal Opportunity section of this report, page 37. 401-3 Parental leave Non-discrimination and Equal Opportunity, Parental Leave section of this report, page 37. 405-1 Diversity of governance bodies and employees Non-discrimination and Equal Opportunity, Diversity at Carnarvon section of this report, page 37. 405-2 Ratio of basic salary and remuneration Not reported – related to confidentiality. Information not included for the reporting period due to the small quantity of associated data and confidentiality considerations. 406-1 Incidents of discrimination and corrective actions taken Non-discrimination and Equal Opportunity section of this report, page 37. 404-1 Average hours of training per year per employee Non-discrimination and Equal Opportunity, Training and Development section of this report, page 37. ESG REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 44
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Disclosure Location/Reason for Omission GRI 11.14: Economic Impacts (2021) 3-3 Management of material topic Economic Impacts section of this report, page 39. 201-1 Direct economic value generated and distributed The following information is disclosed in Carnarvon’s FY26 Annual report: Employee wages and benefits. 202-2 Proportion of senior management hired from the local community Non-discrimination and Equal Opportunity section of this report, page 37. 203-1 Infrastructure investments and services supported Not applicable. No contribution during the reporting period. 203-2 Significant indirect economic impacts Economic Impacts section of this report, page 39. 204-1 Proportion of spending on local suppliers Economic Impacts section of this report, page 39. Topics in the applicable GRI Sector Standard determined as not material for the reporting period. Topic Explanation GRI 11: Oil and Gas Sector (2021) 11.3 Air Emissions Due to Carnarvon not operating any assets and were not the operator of planned ventures during the reporting period, these topics were assessed as not material. 11.4 Biodiversity 11.5 Waste 11.6 Water and Effluents 11.7 Closure and Rehabilitation 11.8 Asset Integrity and Critical Incident Management 11.9 Occupational Health & Safety No significant incidents health and safety incidents were raised during the reporting period. As business activities were undertaken from the Carnarvon Perth offices, assessed as not material. 11.10 Employment Practices This topic was assessed as not material, during the reporting period Carnarvon’s employee headcount related to their corporate headquarters in Perth and remained low at a total of seven staff. The number of contractors engaged to complete dedicated scopes of work is considered low, due to no assets being operated. 11.12 Forced Labour and Modern Slavery This topic was assessed as not material due to the current nature of Carnarvon’s business activities focussing on administration from the Perth corporate head office, and the relatively low spend on procuring goods and services. Personnel employed at the head office and the consultant/contractors working on ad-hoc scopes of work are employed under the requirements of the Australian Fair Work legislation. 11.13 Freedom of Association and Collective Bargaining This topic was assessed as not material because all Carnarvon employees are employed under individual permanent contracts. No collective bargaining agreements are in place. 11.15 Local Communities Due to Carnarvon not operating any assets and were not the operator of planned ventures during the reporting period, these topics were assessed as not material. 11.16 Land and Resource Rights 11.18 Conflict and Security 11.17 Rights of Indigenous Peoples 11.19 Anti-competitive Behaviour Assessed as not material due to no incidents during the reporting period, the detailed corporate governance framework and processes that Carnarvon has in place, the limited nature of business activities undertaken during the reporting period and the Australian legislative requirements to be complied with. 11.20 Anti-corruption 11.21 Payments to Governments 11.22 Public Policy Not reported – not identified as material to Carnarvon. ESG REPORT 45 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Statutory Information Directors' Report The directors present their report together with the financial report of the Group, being the Company, its controlled entities, and the Group’s interest in jointly controlled assets, for the financial year ended 30 June 2026, and the auditor’s report thereon. Carnarvon Energy Limited is a listed public company incorporated and domiciled in Australia. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 46
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ROBERT (ROB) BLACK Chair BBus, GAICD Appointed as a Non-Executive Director on 2 April 2024, appointed as Chair on 1 July 2024. Mr Black has three decades experience in stockbroking and ECM, primarily with Euroz Hartleys (Euroz), which he joined in 2002. In 2014 Mr Black was appointed Managing Director of Euroz, having previously run the Institutional Sales Desk where he was responsible for servicing domestic and international institutions. In 2017 Mr Black was appointed to the Board of the listed parent company, Euroz Limited. In 2022, Mr Black relinquished his role as Managing Director of Euroz following his appointment as Head of ECM syndication. He subsequently retired from Euroz in May 2023 after 21 years. During Mr Black’s tenure as Managing Director of Euroz, he oversaw significant growth of the business, with the acquisition of Blackswan Equities in 2014, Entrust Private Wealth Management in 2015, and the merger with Hartleys Limited in 2020. Mr Black was instrumental in supporting and driving the growth strategy of Euroz and advised on, and led, numerous transactions raising significant capital for Euroz’s clients. Rob holds a Bachelor of Business (majors in Finance and Accounting) and is a Graduate of the Australian Institute of Company Directors. During the past three years Mr Black has served as a non- executive director for Argenic Therapeutics (commenced 2024 and ceased 2025). Mr Black is Chair of the Carnarvon Energy Board. He is also a member of the Remuneration & Nominations Committee, the Audit Committee and the Risk, Governance & Sustainability Committee. Directors The names and details of the Company’s directors in office at any time during or since the end of the financial year are as follows. Directors were in office for this entire period unless otherwise stated. RUSSELL DELROY Non-Executive Director Bcom Appointed as director on 15 December 2023. Mr Delroy is Founder and Portfolio Manager of Nero Resource Fund (Nero). He has over 20 years’ experience in funds management, corporate finance and executive management. Mr Delroy has a proven track record in unlocking shareholder value through active company engagement. He held previous roles with Morgan Stanley UK, Patersons Securities and Marford Group. Mr Delroy is a nominee director of Nero, a substantial holder of Carnarvon. Due to his association with Nero, he is not considered independent. During the past three years Mr Delroy has not served as a director of any other listed company. Mr Delroy is Chair of the Audit Committee. DIRECTORS' REPORT 47 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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SUSAN JONES Non-Executive Director B Law (Hons), GAICD Appointed as a director on 20 September 2024. Ms Jones is an experienced executive with over 25 years’ experience in the energy sector gained in Australia, USA, UK and northern Africa in legal and non-legal roles. She is a lawyer by training but has undertaken a wide variety of roles including legal, commercial, asset management, sustainability, risk and governance. Her most recent role was Executive Vice President Legal & ESG and Joint Company Secretary at Beach Energy. Reporting to the CEO/MD, she was responsible for risk, sustainability, legal, corporate & government affairs, internal audit and ESG. Previous employers include T otal, Woodside, BHP and Ophir. In addition to her in-house experience, Ms Jones has worked at Sidleys (New Y ork) and King Wood Mallesons (Australia). Ms Jones holds a first-class honours LLB and is admitted to practice law in Australia and in New Y ork. During the past three years Ms Jones has not served as a director of any other listed company. Susan is Chair of the Risk, Governance and Sustainability Committee and a member of the Audit Committee and the Remuneration and Nominations Committee. WILLIAM (WILL) BARKER Non-Executive Director BSc (Geology) Appointed as director on 15 December 2023. Mr Barker is a geologist with more than 20 years’ experience in exploration and development of large-scale resource projects in Australia and internationally. He is founder and Managing Director of Equus Energy Limited (previously known as Western Gas), the developer of the proposed Equus Gas Project in Western Australia. Mr Barker was previously General Manager LNG at Arrow Energy before Shell and PetroChina completed a takeover of Arrow for A$3.5 billion. Mr Barker currently serves as Managing Director of Equus Energy Ltd and as a non-executive director on the board of Strike Energy Limited (appointed on 5 August 2025 as Carnarvon’s Nominee Director). Mr Barker is Chair of the Remuneration & Nominations Committee and a member of the Risk, Governance & Sustainability Committee. COMPANY SECRETARY Mr Alex Doering was appointed as company secretary in August 2019. Mr Doering is a qualified Chartered Accountant, an Associate of the Governance Institute of Australia and the Chief Financial Officer at Carnarvon Energy. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 48
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Directors’ meetings The number of directors’ meetings held and attended by each of the directors during the reporting period was as follows: (a) (b) R Black 10 10 W Barker 10 10 R Delroy 10 10 S Jones 10 10 (a) Number of meetings held and eligible to attend during period of office (b) Number of meetings attended Audit Committee NAMES AND QUALIFICATIONS OF AUDIT AND RISK COMMITTEE MEMBERS The Committee is to include at least 3 members. Current members of the committee are Mr Delroy (Chair of the Committee), Mr Black, and Ms Jones. Qualifications of Audit and Risk Committee members are provided in the Directors section of this directors’ report. Audit Committee meetings The number of Audit and Risk Committee meetings held and attended by the members during the reporting period was as follows: (a) (b) R Delroy 2 2 R Black 2 2 S Jones 2 2 (a) Number of meetings held during period of office (b) Number of meetings attended Risk, Governance and Sustainability Committee NAMES AND QUALIFICATIONS OF RISK, GOVERNANCE AND SUSTAINABILITY (“RGS”) COMMITTEE MEMBERS The RGS Committee is to include at least 3 members. Current members of the committee are Mrs Jones (Chair of the Committee), Mr Black, and Mr Barker. Qualifications of RGS Committee members are provided in the Directors section of this directors’ report. RGS Committee meetings The number of RGS Committee meetings held and attended by the members during the reporting period was as follows: (a) (b) S Jones 2 2 R Black 2 2 W Barker 2 2 (a) Number of meetings held during period of office (b) Number of meetings attended DIRECTORS' REPORT 49 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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2026 Remuneration in Brief For the financial year ended 30 June 2026 (“FY26”) DIRECTORS' REPORT FY26 REMUNERATION OUTCOMES AT A GLANCE Key Management Personnel (KMP) Fixed Remuneration CPI increases for senior executives Minor Increase of total fixed remuneration (TFR) from previous year in line with increases in inflation. Non-executive Directors Fees remained unchanged from FY25. Current Non-Executive Director fees, and Committee Chair fees remained unchanged form FY25 levels. Short Term Incentive (STI) STI plan in place during the year, however no STI awarded. There was an STI plan in place for KMP during the year, however no STI was awarded due to the required conditions not being met. Long Term Incentive (LTI) No LTI granted during the year. Previously granted LTI’s vested, lapsed, and exercised. There has not been an award under the LTI plan since 2023. The Board reviewed the LTI remuneration structure for KMPs during the period, which resulted in an award of Performance Rights in July 2026. 1,575,648 LTI performance rights lapsed on 1 July 2025 due to the required conditions not being met. These rights were granted to KMP in July 2022 and were issued as part of the 2022 LTI award. The rights were cancelled on 1 July 2025. There were an additional 847,250 LTI performance rights, that vested and became exercisable on 30 June 2026 due to the required conditions being met. The LTI performance rights were exercised and settled in cash subsequent to year end in accordance with the terms of the Employee Share Incentive Plan. These rights were granted to KMP on 1 July 2023 and were issued as part of the 2023 LTI award. The remaining 2,299,680 LTI performance rights from the 2023 award lapsed and became un-exercisable due to the required conditions not being met. The lapsed rights were cancelled subsequent to year end. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 50
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Remuneration Report (Audited) For the financial year ended 30 June 2026 This report has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act) for the consolidated entity for the financial year ended 30 June 2026. It has been audited as required by section 308(3C) of the Corporations Act and forms part of the Directors’ Report. KEY MANAGEMENT PERSONNEL (“KMP”) The Company’s KMP are listed in Table 2. They are the Company’s non-executive directors (NED) and executive KMP who have authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Table 2: Key management personnel during FY26 Name Position Period as KMP during the year Executive KMP P Huizenga Chief Operating Officer & Chief Executive Officer All of FY26 A Doering Chief Financial Officer All of FY26 Non-executive Directors R Black Independent Chair All of FY26 R Delroy Non-executive Director All of FY26 W Barker Non-executive Director All of FY26 S Jones Non-executive Director All of FY26 SUMMARY OF CARNARVON’S REMUNERATION POLICY FRAMEWORK Carnarvon’s vision is to become a major Australian energy provider with expertise and capability that enables the generation of material returns for shareholders over any given medium-term time horizon. Carnarvon’s remuneration framework seeks to focus executives on delivering that purpose: • Fixed remuneration aligns to market practice and prevailing economic conditions. It seeks to attract, motivate and retain executives focused on delivering Carnarvon’s purpose. • ‘At risk’ performance-based incentives link to short-term and longer-term Company goals. The goals contribute to the achievement of Carnarvon’s purpose. • Long term ‘at risk’ 2024 Performance Rights incentives are designed to align executive remuneration with shareholder interests and incentivise management to drive higher returns. These incentives target the 20-day volume weighted average price (VWAP) of Carnarvon shares exceeding $0.30 per share. • Previously awarded ‘at risk’ LTIs were also designed to directly align with shareholder objectives and interests. Half of longer-term incentives are based on the Company’s share price performance against peers considered to be alternative investments to Carnarvon. The other half is based on the Company’s absolute share price appreciation. Both measures are assessed over a three-year period and are entirely share based rewards to executives. HOW CARNARVON MAKES DECISIONS ABOUT REMUNERATION The Board determines Carnarvon’s KMP remuneration based on recommendations made to the Board by its Remuneration and Nominations Committee. The Committee is to include at least 3 members who are all non-executive directors. Members of the Committee during the 30 June 2026 financial year were Mr Barker (Chair of the Committee), Mr Black and Mrs Jones. Qualifications of Remuneration & Nomination Committee members are provided in the Directors section of this directors’ report. The Remuneration and Nomination Committee Charter is available at Carnarvon’s website: www.carnarvon.com. au/corporate-governance/. Carnarvon’s CEO and CFO may attend Committee meetings by invitation in an advisory capacity. The Committee excludes executives from any discussion about their own remuneration. DIRECTORS' REPORT 51 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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REMUNERATION & NOMINATION COMMITTEE MEETINGS The number of Remuneration & Nominations Committee meetings and the number attended by each of the members during the reporting period were as follows: (a) (b) W Barker 2 2 R Black 2 2 S Jones 2 2 (a) Number of meetings held during period of office. (b) Number of meetings attended. EXTERNAL ADVISERS AND REMUNERATION ADVICE Where an adviser is engaged by the company in relation to remuneration matters, the adviser is engaged by and reports to the Board or chair of the Remuneration and Nominations Committee. This protocol ensures any recommendations are free from undue influence by management. The Board or Committee Chair deals with the adviser on all material matters. Management involvement is only to the extent necessary to coordinate the work. No external advisors were engaged during FY26. The Board and Committee seek recommendations from the CEO about executive remuneration. The CEO does not make any recommendation about their own remuneration. The Board and Committee have regard to industry benchmarking information. HOW CARNARVON LINKS PERFORMANCE TO INCENTIVES Carnarvon’s remuneration policy includes short-term (STI) and long-term (LTI) incentive plans. These plans seek to align management performance with shareholder interests. The STI is linked to the company completing a material transaction that is considered value accretive, having regard to the company’s share price performance from the date of the investment to the end of the financial year. The LTI and 2024 Performance Rights are linked to an increase in total shareholder return over 3 and 5 year periods respectively and are share-based incentives. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 52
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SENIOR EXECUTIVE REMUNERATION STRUCTURE This section details the remuneration structure for senior executives (Key Management Personnel, or KMP). Service contracts The contract duration, period of notice and termination conditions for key management personnel are as follows: (i) Philip Huizenga, Chief Executive Officer, is engaged as a full time employee. Termination by the Company is with 9 months notice or payment in lieu thereof. Termination by Mr Huizenga is with 9 months’ notice. (ii) Alex Doering, Chief Financial Officer, is engaged as a full time employee. Termination by the Company is with 3 months notice or payment in lieu thereof and an additional payment of 3 months’ remuneration. Termination by Mr Doering is with 3 months’ notice. Remuneration mix Remuneration for KMP is a mix of a fixed cash salary component and an ‘at risk’ component. The ‘at risk’ component means that specific targets or conditions must be met before there is any entitlement to receive that component. What is the balance between fixed and ‘at risk’ remuneration? The remuneration structure and packages offered to KMP for the period were: • Fixed remuneration; and • ‘At risk’ remuneration comprising: - Short term incentive (STI) – cash payment with a 12-month vesting period, which was offered at the discretion of the Board, linked to the Company completing a material transaction that is considered value accretive, having regard to the company’s share price performance from the date of the investment to the end of the financial year. - Long term incentive (LTI) – performance rights-based incentive, which were granted annually at the discretion of the Board up until 2023, linked to the absolute and relative share price performance conditions measured over three years. There were no LTI’s awarded during the current year. - 2024 Performance Rights - performance rights-based incentive, which were granted in 2024 at the discretion of the Board, which vest if the 20-day volume weighted average price (VWAP) of Carnarvon shares exceeding $0.30 per share. There were no 2024 Performance Rights awarded during the current year. The balance between fixed and ‘at risk’ remuneration depends on the senior executive’s role. The CEO has the highest level of ‘at risk’ remuneration reflecting the greater level of responsibility of this role. Table 3: Shareholder wealth indicators FY22 – FY26: FY22 FY23 FY24 FY25 FY26 Share price at year-end $0.195 $0.13 $0.195 $0.105 $0.105 Basic earnings/(loss) per share $(3.31) $(0.23) $(0.04) $0.20 $(0.24) Table 4: sets out the relative proportions of the three elements of the executives KMP’s total remuneration packages from 1 July 2025. Table 4: Remuneration mix1 Position Performance Based Remuneration Fixed Remuneration % STI % LTI % Total ‘at risk’ % CEO 71 29 - 29 Other KMP 71 29 - 29 1 The remuneration mix assumes maximum ‘at risk’ awards. Percentages shown later in this report reflect the actual incentives paid as a percentage of total fixed remuneration, movements in leave balances and other benefits and share based payments calculated using the relevant accounting standards. DIRECTORS' REPORT 53 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Fixed remuneration What is fixed remuneration? Senior executives are entitled to a fixed cash remuneration amount inclusive of the guaranteed superannuation contribution. The amount is not based upon performance. Senior executives may decide to salary sacrifice part of their fixed remuneration for additional superannuation contributions and other benefits. How is fixed remuneration reviewed? Fixed remuneration is determined by the Board based on external review and advice that takes account of the role and responsibility of each senior executive. It is reviewed annually against industry benchmarking information. Fixed remuneration for the year Total fixed remuneration (TFR) of KMP is provided in the table on page 58 which reports on the remuneration for KMP as required under the Corporations Act. SHORT TERM INCENTIVE (STI) What is the STI? The STI is part of ‘at risk’ remuneration offered to senior executives. It measures individual and Company performance over a 12-month period. The STI is offered to senior executives at the discretion of the Board based on company performance and performance against objectives. It is paid in cash if the relevant conditions are met. How does the STI link to Carnarvon’s key purpose? The STI is an at-risk opportunity for senior executives and is subject to the achievement of the performance condition (see below), it rewards senior executives for meeting the required vesting conditions. The key performance indicators link to Carnarvon’s key purpose and goals set for KMP during the reporting period. The STI aims to motivate senior executives to meet Company expectations for success. Carnarvon can only achieve its purpose if it attracts and retains high performing senior executives. What are the performance conditions or KPIs? Carnarvon’s key performance conditions are set by the Board for the 12-month period beginning at the start of a financial year. They reflect Carnarvon’s goals that are essential to it achieving its purpose. The performance condition for the reporting period was linked to the Company completing a material transaction that is considered value accretive, having regard to the company’s share price performance from the date of the investment to the end of the financial year. The value of the STI awards to individual KMPs Incentive payments are based on a percentage of a senior executive’s fixed remuneration. The CEO and CFO can earn up to a maximum of 40% (between 15 and 40%) of their fixed remuneration. Assessment of performance conditions The Board assesses the extent to which KPIs were met for the period after the close of the relevant financial year. The Board assesses the achievement of the KPIs for the CEO. The Board assesses the performance of other KMPs on the CEOs recommendation. What happens if an STI is awarded On achievement of the relevant KPIs Carnarvon will pay STI awards in cash provided the participants are employed by the company over the vesting period and as at the vesting date. The value of the award (between 15% and 40%) is at the Board’s discretion. Carnarvon includes the cash STI awards in its financial statements for the relevant financial year. STI performance for the year The Board tested each senior executive’s performance against the STI performance conditions set for the year. On this basis, no STI was awarded because the required conditions were not met. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 54
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2024 Performance Rights What are the 2024 Performance Rights? The 2024 Performance Rights are an additional equity based ‘at risk’ incentive that aims to align Key Management Personnel remuneration with shareholder interests and incentivise them to drive higher returns. These were awarded in FY24 and FY25 in relation to a reduction of KMP fixed remuneration. How do the 2024 Performance Rights link to Carnarvon’s key purpose? The 2024 Performance Rights link to Carnarvon’s objective of aligning the longer term ‘at risk’ incentive rewards with outcomes that match shareholder objectives and interests by giving share based rather than cash-based rewards. This links their own rewards to shareholder expectations of company performance and share price growth. How are the number of rights issued calculated? The award of performance rights is at the absolute discretion of the Board. The Market Value is the market value of a fully paid ordinary share in the Company, calculated using the Company’s closing share price on the grant date. What equity based grants are given and are there plan limits? Carnarvon grant the performance rights at the absolute discretion of the Board. If the performance conditions are met, Key Management Personnel have the opportunity to acquire one Carnarvon share for every vested performance right. There are no plan limits. What are the performance conditions? The performance rights will vest and become exercisable on the earlier to occur of: • the 20-day volume weighted average price (VWAP) of Carnarvon shares exceeding $0.30 per share; or • a ‘Change in Control’ event, such as where: - Carnarvon announces that its shareholders, at a Court convened meeting of shareholders voted in favour of a scheme of arrangement and the Court, by order, approves the scheme of arrangement; - a takeover bid is announced, has become unconditional and the person making the takeover bid holds more than 50% of Carnarvon shares; - any person acquires a relevant interest in 50.1% or more Carnarvon shares by any other means; or - Carnarvon announces that a sale or transfer of the whole or substantially the whole of the undertaking and business of Carnarvon has been completed Performance rights granted to executive Key Management Personnel are subject to progressive cancellation of all, or some, of any unvested portion of the performance rights where they resign from their respective role in the first year following grant of the performance rights, as follows: • resignation within first three months of the date of grant of the performance rights (Grant Date) – all unvested performance rights forfeited and cancelled; • resignation in period three – six months after Grant Date – 75% of unvested performance rights forfeited and cancelled; • resignation in period six – nine months after Grant Date – 50% of unvested performance rights forfeited and cancelled; • resignation in period nine months – twelve months after Grant Date – 25% of unvested performance rights forfeited and cancelled; and • resignation in period following one year anniversary of Grant Date – nil unvested performance rights forfeited and cancelled. None of the performance rights held by executive Key Management Personnel: • which have vested prior to resigning from their respective role will be forfeited and cancelled; and • will be forfeited and cancelled (whether vested or unvested) if they are made redundant from their respective role at any time prior to the one year anniversary of the Grant Date. All vested and unvested performance rights will be forfeited and cancelled where Key Management Personnel employment is terminated for cause in accordance with the relevant provision of their respective employment contract. The performance rights held by non-executive directors will not be forfeited and cancelled if they resign from their position with the Company. Why choose these Performance conditions? The performance conditions better align the interest of the Key Management Personnel with shareholder interests, and incentivise them to drive higher returns. 2024 Performance Right equity awards issued or in operation during the year. There were no 2024 Performance Rights awarded to executive KMP or non-executive directors during the year. DIRECTORS' REPORT 55 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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LONG TERM INCENTIVE (LTI) What is the LTI? The LTI was a previously used equity based ‘at risk’ incentive plan which operates through a performance rights scheme approved by Carnarvon shareholders. The LTI aimed to reward results that promote long term growth in shareholder value or total shareholder return (TSR). No awards have been made under the LTI since FY2023, however there are some remaining performance rights which are still subject to the below vesting conditions. The Board is currently reviewing KMP’s LTI remuneration structure. How does the LTI link to Carnarvon’s key purpose? The LTI links to Carnarvon’s key purpose by aligning the longer term ‘at risk’ incentive rewards with outcomes that match shareholder objectives and interests by: • benchmarking shareholder returns against a group of companies considered alternative investments to Carnarvon and against absolute target returns • giving share based rather than cash-based rewards to executives. This links their own rewards to shareholder expectations of company performance, especially share price growth. How are the number of rights issued to senior executives calculated? The award of performance rights is at the absolute discretion of the Board. However, the Board is currently reviewing KMP’s LTI remuneration structure. What equity based grants are given and are there plan limits? If the performance conditions are met, senior executives have the opportunity to acquire one Carnarvon share for every vested performance right. There are no plan limits as a whole for the LTI due to the style of the plan. What are the performance conditions? The two performance conditions used by Carnarvon are based on T otal Shareholder Return (TSR) (1) in absolute terms and (2) relative to the returns of a group of companies considered alternative investments to Carnarvon, calculated using the closing share prices at a testing date of 30 June. The participants must also be employed by the Company over the vesting period and as at the vesting date. The vesting schedule of 50% of the performance rights is subject to relative TSR testing is as follows: Relative TSR Performance Level of vesting Less than 50th percentile Zero Between 50th and 75th percentile Pro rata between 50% and 100% 75th percentile or better 100% Peer Group: 88 Energy, Buru Energy, Central Petroleum, Amplitude Energy, Elixir Energy, Empire Energy, Galilee Energy, Helios Energy, Horizon Oil, Karoon Energy, Strike Energy, Tamboran Resources. The vesting schedule of 50% of the performance rights is subject to absolute TSR testing is as follows: Absolute TSR Performance % of performance rights that will vest 10% per annum return 33% Between 10% and 20% per annum Pro rata between 33% and 100% Above 20% per annum 100% Why choose these Performance conditions? Relative TSR is an appropriate performance hurdle because it ensures a proportion of each participants remuneration is linked to the return received by shareholders from holding shares in a company in the peer group for the same period. Absolute TSR is an appropriate performance hurdle because it ensures KMP performance is rewarded when a year-on-year improvement in shareholder value is achieved. What happens to LTI performance rights on a change of control? The Board reserves the discretion for early vesting in the event of a change of control of the Company. Adjustments to a participant’s entitlements may also occur in the event of a company reconstruction and certain share issues. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 56
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LTI equity awards issued or in operation during the year. There was no LTI awarded to KMP during the year in relation to FY26. There were 1,575,648 LTI performance rights that lapsed on 1 July 2025 due to the required conditions not being met. These rights were granted to KMP in 2023 and were issued as part of the 2022 LTI award. The rights were also cancelled on 1 July 2025. There were 847,250 LTI performance rights that vested and became exercisable on 30 June 2026 due to the required conditions being met. The LTI performance rights were exercised and settled in cash subsequent to year end in accordance with the terms of the Employee Share Incentive Plan. These rights were granted to KMP on 1 July 2023 and were issued as part of the 2023 LTI award. There were also 2,299,680 LTI performance rights from 2023 that lapsed and became un-exercisable due to the required conditions not being met. The lapsed rights were cancelled subsequent to year end. REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS: The fees paid to non-executive directors are determined using the following principles. Fees are: • determined by reference to the nature of the role, responsibility and time commitment required for the performance of the role including membership of Board Committees; • are benchmarked against industry peers on an annual basis; and • driven by a need to attract and retain a diverse and well-balanced group of individuals with relevant experience and knowledge • 2024 Performance Rights were issued to align non-executive directors with shareholder interests There were no changes to the Board’s fee structure in the current year. The base fees payable to the Chair of the Board and the non-executive directors remained unchanged from FY25 levels. No additional fees are payable to any director for serving as a committee chair or member of a Board Committee. The Director’s fees are inclusive of superannuation contributions, which are paid by the Company. Non-executive directors are entitled to be reimbursed at cost for their reasonable expenses incurred in the performance of their directors’ duties. The aggregate remuneration of Carnarvon non-executive directors remains below the annual limit of $600,000 approved by shareholders at the 2018 Annual General Meeting. Details of the fees payable to non-executive directors for Board and committee membership for FY26 are set out in Table 5. Table 5: FY26 non-executive directors’ fees and Board Committee fees per annum: Board Board Committees Chair $ Member $ Chair Audit $ Member Audit $ Chair Remuneration and Nomination $ Member Remuneration and Nomination $ Chair RGS $ Member RGS $ 120,000 60,000 - - - - - - DIRECTORS' REPORT 57 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Name Short term benefits Post- employment Share-based payments Long term benefits Other benefits Total ($) Total at risk % Total issued in equity % Salary and fees ($) Short term cash bonus ($) Annual leave ($)2 Superannuation contributions ($) Performance Rights ($) Long service leave ($) Termination payments ($) Directors Non-Executive Mr R Black (Chairman) 2026 107,143 - - 12,857 - - - 120,000 - - 2025 107,623 - - 12,377 - - - 120,000 - - Mr R Delroy 2026 53,571 - - 6,429 - - - 60,000 - - 2025 53,812 - - 6,188 - - - 60,000 - - Mr W Barker 2026 53,571 - - 6,429 - - - 60,000 - - 2025 53,812 - - 6,188 - - - 60,000 - - Ms S Jones 2026 53,571 - - 6,429 - - - 60,000 - - 2025 41,853 - - 4,813 80,000 - - 126,666 63.2% - Mr WA Foster1 2026 - - - - - - - - - - 2025 35,399 - - 9,338 - - - 44,737 - - Key Management Personnel Mr PP Huizenga (Chief Executive Officer) 2026 547,995 - 39,520 16,789 63,114 14,199 - 681,617 9.3% - 2025 510,043 - 38,074 30,174 493,675 13,638 - 1,085,604 45.5% - Mr A Doering (Chief Financial Officer) 2026 317,928 - 31,200 38,151 36,538 5,911 - 429,728 8.5% - 2025 311,095 - 30,058 30,095 235,121 5,520 - 611,889 38.4% - Total compensation: key management personnel (Company and consolidated) 2026 1,133,779 - 70,720 87,084 99,652 20,110 - 1,411,345 7.1% - 2025 1,113,637 - 68,132 99,173 808,796 19,158 - 2,108,896 38.4% - Directors’ fees are paid or payable to the director or a director-related entity. 1 Mr Foster retired from the Board on 30 September 2024. 2 These amounts represent the leave entitlement accruals for the year. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 58
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Ordinary shares held by key management personnel The movement during the reporting period in the number of ordinary shares in Carnarvon Energy Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows: 2026 Balance at 1 July 2025 Net acquired/ (sold) on market Award under Employee Share Plan Held at date of cessation Balance at 30 June 2026 Directors R Black 2,500,000 2,500,000 - - 5,000,000 R Delroy1 92,684,650 - - - 92,684,650 W Barker - - - - - S Jones - - - - - Other Executives PP Huizenga 12,676,469 - - - 12,676,469 A Doering 1,537,001 100,000 - - 1,637,001 1 Mr Delroy is the founder and investment manager of Nero Resource Fund which holds 92,128,968 of the shares. 2025 Balance at 1 July 2024 / on appointment Net acquired/ (sold) on market Award under Employee Share Plan Held at date of cessation Balance at 30 June 2025 Directors R Black 1,000,000 1,500,000 - - 2,500,000 R Delroy1 91,128,968 1,555,682 - - 92,684,650 W Barker - - - - - S Jones2 - - - - - WA Foster3 1,425,938 - - 1,425,938 - Other Executives PP Huizenga4 12,326,196 - 350,273 - 12,676,469 A Doering 1,437,001 55,000 45,000 - 1,537,001 1 Mr Delroy is the founder and investment manager of Nero Resource Fund which holds 91,128,968 of the shares. 2 Ms Jones was appointed to the Board on 20 September 2024. 3 Mr Foster retired from the Board on 30 September 2024. 4 Mr Huizenga acquired 350,273 shares during the 2025 financial year. This was incorrectly disclosed as 250,273 in the Annual Report at 30 June 2025 and has been correctly in the table above. DIRECTORS' REPORT 59 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Performance rights - held by key management personnel 2026 Held at 1 July 2025 Granted Exercised Lapsed Held at 30 June 2026 Vested and exercisable at 30 June 20261 Vested and un-exercisable at 30 June 20262 Directors R Black 1,500,000 - - - 1,500,000 - - R Delroy 1,000,000 - - - 1,000,000 - - W Barker 1,000,000 - - - 1,000,000 - - S Jones 1,000,000 - - - 1,000,000 - - WA Foster - - - - - - - Other Executives PP Huizenga 8,321,808 - - (1,328,724) 6,993,084 536,599 1,456,485 A Doering 3,900,770 - - (246,924) 3,653,846 310,651 843,195 Total 16,722,578 - - (1,575,648) 15,146,930 847,250 2,299,680 1 On 1 July 2026, 847,250 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 vested and became exercisable upon the required vesting conditions being met. The performance rights were exercised and settled in cash subsequent to year end. 2 On 1 July 2026, 2,299,680 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 lapsed and became un-exercisable upon the required vesting conditions not being met. The un-exercisable performance rights were cancelled subsequent to year end. 2025 Held at 1 July 2024 Granted Exercised Lapsed Held at 30 June 2025 Vested and exercisable at 30 June 2025 Vested and un-exercisable at 30 June 20252 Directors R Black 1,500,000 - - - 1,500,000 - - R Delroy 1,000,000 - - - 1,000,000 - - W Barker 1,000,000 - - - 1,000,000 - - S Jones1 - 1,000,000 - - 1,000,000 - - WA Foster - - - - - - - Other Executives PP Huizenga 9,322,900 - (250,273) (750,819) 8,321,808 - 1,328,724 A Doering 4,080,770 - (45,000) (135,000) 3,900,770 - 246,924 Total 16,903,670 1,000,000 (295,273) (885,819) 16,722,578 - 1,575,648 1 Ms Jones was appointed to the Board on 20 September 2024. 2 On 1 July 2025, 1,575,648 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2022 lapsed and became un-exercisable upon the required vesting conditions not being met. The un-exercisable performance rights were cancelled subsequent to year end. DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 60
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Details of performance rights granted to Executive and Non-Executive KMP in previous years that are still vesting are: KMP Instrument Grant date Expiry date Vesting date Fair value per right $ Exercise price Number of performance rights granted Number of performance rights lapsed2 Number of performance rights vested1 Maximum value to be recognised in future periods $ Executive KMP P Huizenga PR’s - LTIP 01-Jul-23 01-Jul-33 30-Jun-26 0.10 - 1,993,084 (1,456,485) (536,599) - P Huizenga 2024 PR’s 26-Apr-24 26-Apr-29 When conditions are met 0.12 - 5,000,000 - - - A Doering PR’s - LTIP 01-Jul-23 01-Jul-33 30-Jun-26 0.10 - 1,153,846 (843,195) (310,651) - A Doering 2024 PR’s 26-Apr-24 26-Apr-29 When conditions are met 0.12 - 2,500,000 - - - Non-Executive Directors R Black 2024 PR’s 02-Apr-24 02-Apr-29 When conditions are met 0.12 - 1,500,000 - - - W Barker 2024 PR’s 15-Dec-23 15-Dec-28 When conditions are met 0.12 - 1,000,000 - - - R Delroy 2024 PR’s 15-Dec-23 15-Dec-28 When conditions are met 0.12 - 1,000,000 - - - S Jones 2024 PR’s 20-Sep-24 20-Sep-29 When conditions are met 0.08 - 1,000,000 - - - Total 15,146,930 (2,299,680) (847,250) - 1 On 1 July 2026, 847,250 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 vested and became exercisable upon the required vesting conditions being met. The performance rights were exercised and settled in cash subsequent to year end. 2 On 1 July 2026, 2,299,680 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 lapsed and became un-exercisable upon the required vesting conditions not being met. The un-exercisable performance rights were cancelled subsequent to year end. DIRECTORS' REPORT 61 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Plan shares held by key management personnel Included in the above table are plan shares held by key management personnel held under the previous ESP loan scheme which are accounted for as in substance options (refer to page 88 for further terms). The balance and movement during the reporting period in the number of plan shares directly, indirectly or beneficially, by each key management person, including their related parties, is as follows: 2026 Held at 1 July 2025 Granted as compensation Employee Share Plan cancellations Exercised Held at date of cessation Held at 30 June 2026 Directors R Black - - - - - - R Delroy - - - - - - W Barker - - - - - - S Jones - - - - - - Other Executives PP Huizenga 11,976,196 - - - - 11,976,196 A Doering 1,237,001 - - - - 1,237,001 2025 Held at 1 July 2024 Granted as compensation Employee Share Plan cancellations Exercised Held at date of cessation Held at 30 June 2025 Directors R Black - - - - - - R Delroy - - - - - - W Barker - - - - - - S Jones1 - - - - - - WA Foster - - - - - - Other Executives PP Huizenga 11,976,196 - - - - 11,976,196 A Doering 1,237,001 - - - - 1,237,001 1 Ms Jones was appointed to the Board on 20 September 2024. End of Remuneration Report DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 62
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Non-audit services The auditors have not performed any non-audit services over and above their statutory duties during the current reporting period. Directors’ interests At the date of this report, the relevant interests of the directors in securities of the Company are as follows: Name Ordinary Shares Performance Rights R Black 5,000,000 1,500,000 R Delroy 92,684,650 1,000,000 W Barker - 1,000,000 S Jones - 1,000,000 Diversity The Board has set the following measurable diversity objectives for the 2026 financial year: 2026 Measurable objectives Progress Aim to have not less than 25% of the directors of each gender (male, female) Female Board representation in 2026 remained at 25% (2025:25%) Dedicated mentoring programs for all employees of the Company The Company provided ongoing training, mentoring and professional support in the development of all employees’ careers. Maintain flexible work practices The Company continued to maintain its flexible work practices which includes a parental leave policy and provides employees the ability to maintain flexible hours and to work from home where required. Likely developments The likely developments for the 2027 financial year are contained in the operating and financial review as set out on pages 5-28. Environmental regulation and performance The Group’s oil and gas exploration and development activities are concentrated in offshore Western Australia. Environmental obligations are regulated under both State and Commonwealth law in Western Australia, depending on whether a permit sits in State or Commonwealth waters. The Group is not aware of any significant environmental breaches during the year ended 30 June 2026. Dividends No dividends were paid during the year and the directors do not recommend payment of a dividend in respect of the current financial year (2025: Nil). Auditor’s independence declaration The auditor’s Independence Declaration under Section 307C of the Corporations Act is set out on page 65 and forms part of the directors’ report for the financial year ended 30 June 2026. Principal activities During the course of the 2026 financial year the Group’s principal activities continued to be directed towards oil and gas exploration, development and production. Identification of independent directors The independent directors are identified in the Company’s Corporate Governance Statement. The Corporate Governance Statement is available on Carnarvon Energy’s website at: carnarvon.com.au/about-us/corporate-governance/. DIRECTORS' REPORT 63 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Significant changes in state of affairs In the opinion of the directors no significant changes in the state of affairs of the Group occurred during the current financial year other than as outlined in the operating and financial review as set out on pages 5-28. Indemnification and insurance of directors and officers During the period the Company paid a premium to insure the directors and officers of the Company and its controlled entities. The policy prohibits the disclosure of the nature of the liabilities covered and the amount of the premium paid. Deeds of Access and Indemnity have been executed by the Company with each of the directors and Company Secretary. The deeds require the Company to indemnify each director and Company Secretary against any legal proceedings, to the extent permitted by law, made against, suffered, paid or incurred by the directors or Company Secretary pursuant to, or arising from or in any way connected with the director or Company Secretary being an officer of the Company. Proceedings on behalf of the Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of the proceedings. The Company was not a party to any such proceedings during the year. Operating and financial review An operating and financial review of the Group for the financial year ended 30 June 2026 is set out on pages 5-28 and forms part of this report. Indemnity of auditors To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Y oung Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Y oung during or since the financial year. Events subsequent to reporting date On 1 July 2026, 1,183,790 LTI performance rights from 2023 vested and became exercisable due to the required conditions being met (847,250 related to key management personnel). The rights were exercised and settled in cash subsequent to year end in accordance with the terms of the Employee Share Incentive Plan. An accrual has been raised in the financial statements at 30 June 2026. The remaining 3,213,140 LTI performance rights from 2023 lapsed and became un-exercisable due to the required conditions not being met (2,299,680 related to key management personnel). Other than above, there is no other matters or circumstance has arisen since 30 June 2026 that in the opinion of the directors has significantly affected, or may significantly affect in future financial years: (i) The Group ’s operations; or (ii) The results of those operations; or (iii) The Group ’s state of affairs Rounding off The Company is an entity of the kind referred to in the Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183, dated 24 March 2026. As a result, amounts in the financial report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the directors. Robert Black Chair Perth, 29 September 2026 DIRECTORS' REPORT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 64
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AUDITORS INDEPENDENCE DECLARATION 65 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, Carnarvon Energy Limited and its Controlled Entities (‘the Group’) have adopted the fourth edition of the Corporate Governance Principles and Recommendations which was released by the ASX Corporate Governance Council in February 2019 and became effective for financial years commencing on or after 1 January 2020. The Group’s Corporate Governance Statement for the financial year ending 30 June 2026 is dated as at 30 June 2026 and was approved by the Board on 29 September 2026. The Corporate Governance Statement is available on Carnarvon Energy’s website at carnarvon.com.au/about-us/corporate-governance/. CORPORATE GOVERNANCE STATEMENT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 66
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For the year ended 30 June 2026 CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME Consolidated Notes 2026 $000 2025 $000 Other income 2 4,485 8,588 Administrative expenses (1,318) (1,462) Directors’ fees (300) (326) Employee benefits expense 20(a) (951) (2,528) New venture and advisory costs (1,020) (707) Share of loss of associate 16 (5,040) - Foreign exchange (loss) / gain (268) 3,785 (Loss) / Profit before income tax (4,412) 7,350 Taxes Current income tax expense 6(a) 178 (3,701) (Loss) / Profit for the year (4,234) 3,649 Other comprehensive income / (expense) Items may be reclassified to income or loss in subsequent periods (net of tax): Exchange differences arising on translation of foreign operations - (130) Total comprehensive (loss) / income for the year (4,234) 3,519 Total comprehensive (loss) / income for the year attributable to members of the entity (4,234) 3,519 (Loss) / Earnings per share: Basic (loss) / earnings per share (cents per share) 5 (0.24) 0.20 Diluted (loss) / earnings per share (cents per share) 5 (0.24) 0.20 The above consolidated income statement and other comprehensive income should be read in conjunction with the accompanying notes to the financial statements. 67 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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As at 30 June 2026 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated Notes 2026 $000 2025 $000 Current assets Cash and cash equivalents 17(b) 97,678 186,144 Other receivables 7 766 657 Other assets 9 217 113 Total current assets 98,661 186,914 Non-current assets Property, plant and equipment 8 8 12 Exploration and evaluation expenditure 11 90,639 88,405 Investment in Associate 16 81,842 - Right-of-use assets 10 179 375 Intangible Assets 15 616 616 Total non-current assets 173,284 89,408 Total assets 271,945 276,322 Current liabilities Trade and other payables 13 465 262 Employee benefits 20(b) 366 373 Lease liabilities 10 193 195 Total current liabilities 1,024 830 Non-current liabilities Employee benefits 20(b) 87 68 Lease liabilities 10 - 193 Deferred tax liability 6(c) 3,523 3,701 Total non-current liabilities 3,610 3,962 Total liabilities 4,634 4,792 Net assets 267,311 271,530 Equity Contributed equity 14 311,135 311,135 Reserves 14 6,642 6,627 (Accumulated losses)/retained profit (50,466) (46,232) Total equity 267,311 271,530 The above consolidated statement of financial position should be read in conjunction with the accompanying notes to the financial statements. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 68
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For the year ended 30 June 2026 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Issued capital $000 Reserve shares $000 (Accumulated losses) / retained profit $000 Translation reserve $000 Share based payments reserve $000 Total $000 Balance at 1 July 2024 311,135 (3,029) (49,881) 130 7,979 266,334 Comprehensive Income Profit for the year - - 3,649 (130) - 3,519 Total comprehensive profit for the year - - 3,649 (130) - 3,519 Transactions with owners and other transfers Share based payments - - - - 1,677 1,677 Total transactions with owners and other transfers - - - - 1,677 1,677 Balance at 30 June 2025 311,135 (3,029) (46,232) - 9,656 271,530 Balance at 1 July 2025 311,135 (3,029) (46,232) - 9,656 271,530 Comprehensive Income Loss for the year - - (4,234) - - (4,234) Total comprehensive loss for the year - - (4,234) - - (4,234) Transactions with owners and other transfers Share based payments - - - - 140 140 Cash settlement of LTI performance rights - - - - (125) (125) Total transactions with owners and other transfers - - - - 15 15 Balance at 30 June 2026 311,135 (3,029) (50,466) - 9,671 267,311 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements. 69 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2026 Consolidated Notes 2026 $000 2025 $000 Cash flows from operating activities Payments to suppliers and employees (3,255) (2,877) Interest received 4,361 8,851 R&D refund 38 39 Net cash provided by operating activities 17(a) 1,144 6,013 Cash flows from investing activities Exploration and development expenditure (2,209) (2,861) Acquisition of property, plant and equipment (3) (11) Investment in Associate 16 (86,882) - Net cash used in investing activities (89,094) (2,872) Cash flows from financing activities Payment of principal portion of lease 10 (206) (202) Net cash used in financing activities (206) (202) Net (decrease) / increase in cash and cash equivalents held (88,156) 2,939 Cash and cash equivalents at the beginning of the financial year 186,144 179,551 Effect of exchange rate fluctuations on cash and cash equivalents (310) 3,654 Cash and cash equivalents at the end of the financial year 17(b) 97,678 186,144 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes to the financial statements. CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 70
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1. REPORTING ENTITY The consolidated financial report of Carnarvon Energy Limited (‘Company’) for the financial year ended 30 June 2026 comprises the Company and its controlled entities (the “Group”). Carnarvon Energy Limited is a for profit oil, gas and energy exploration and production company limited by shares incorporated in Australia at the registered office of Level 2, 76 Kings Park Road, West Perth, Western Australia, whose shares are publicly traded on the Australian Stock Exchange. The financial report was authorised for issue by the directors on 29 September 2026. The basis for the preparation of the following notes can be found in note 28 and the material accounting policies used in the preparation can be found in note 29. 2. OTHER INCOME Consolidated 2026 $000 2025 $000 Interest revenue1 4,447 8,549 R&D refund 38 39 4,485 8,588 1 Interest revenue is calculated using the effective interest rate method. 3. OTHER EXPENSES Consolidated 2026 $000 2025 $000 The following expenses are included in administrative and employee benefit expenses in the consolidated income statement: Depreciation – property, plant and equipment (6) (8) Depreciation – right-of-use assets (196) (199) Defined contribution – superannuation expense (162) (157) NOTES TO THE FINANCIAL STATEMENTS 71 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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4. AUDITORS’ REMUNERATION As a result of work in relation to and required for the 30 June 2026 period, the auditor of the Group, Ernst & Y oung, has charged the following fees: 2026 $ 2025 $ Fees to Ernst & Y oung Australia: Fees for auditing statutory financial report of the parent covering the group and auditing the statutory financial report of any controlled entities (104,200) (78,500) 5. (LOSS)/ EARNINGS PER SHARE The calculation of basic and diluted earnings per share was based on a weighted average number of shares calculated as follows: 2026 2025 Number of shares Issued ordinary shares at 1 July 1,789,086,882 1,788,746,609 Effect of shares issued/cancelled - 340,273 Weighted average number of ordinary shares 30 June (basic) 1,789,086,882 1,789,086,882 Effect of share options on issue1 - 2,391,250 Weighted average number of ordinary shares 30 June (diluted) 1,789,086,882 1,791,478,132 2026 $ 2025 $ (Loss)/Profit used in calculating basic and diluted loss per share (4,234,000) 3,519,000 1 As the Group incurred a loss for the year ended 30 June 2026, the effect of 17,396,930 performance rights on issue and 21,900,777 reserve shares on issue under the employee share plan (refer Note 14) are considered to be antidilutive and have therefore not been factored in determining the diluted earnings per share for that year. For the year ended 30 June 2025, there were 2,391,250 reserve shares under the employee share plan that were considered to be dilutive and were therefore factored in determining the diluted earnings per share for that year. The performance rights on issue for the year ending 30 June 2025 were considered antidilutive. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 72
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6. TAXES Consolidated 2026 $000 2025 $000 (a) Income tax expense Current Income tax expense Current Income tax (benefit) / expense - - Adjustment for prior period - - - - Deferred tax (income) Origination and Reversal of temporary differences – current 222 2,782 Adjustment for prior period (400) 919 (178) 3,701 Total income tax expense (178) 3,701 Numerical reconciliation between pre-tax profit and income tax expense: (Loss)/Profit for the period (4,412) 7,350 Income tax using the statutory rate of 30% (2025: 30%) (1,324) 2,205 Share based payment expense 42 503 Share of loss of associate 1,512 - Revaluation/impairment of financial assets - 549 Other permanent adjustments (8) 124 Benefit of Tax losses brought to account - (599) 222 2,782 (Over) / Under provision in prior years (400) 919 Income tax (benefit) / expense (178) 3,701 (b) Current tax liability The current tax liability of nil (2025: nil) represents the amount of income tax payable in respect of current and prior financial periods. NOTES TO THE FINANCIAL STATEMENTS 73 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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TAX CONSOLIDATION Effective 1 July 2003, for the purposes of Australian income taxation, Carnarvon and its 100%-owned Australian controlled entities formed a tax consolidated group. The head entity of the tax consolidated group is Carnarvon. The impact of consolidating for tax purposes is that Carnarvon’s Australian controlled entities are treated as divisions of Carnarvon rather than as separate entities for tax purposes. At the date of this report, the members of the group have not entered into a tax sharing arrangement. (c) Deferred tax assets and liabilities Consolidated 2026 $000 2025 $000 Deferred tax liabilities Capitalised exploration deducted immediately 26,373 25,496 Prepayments 3 - Unrealised foreign exchange gains - 1,585 Gross deferred tax liabilities 26,376 27,081 2026 $000 2025 $000 Deferred tax assets Carry forward revenue tax losses 22,546 22,884 Unrealised foreign exchange loss 67 - Property, plant and equipment - 77 Business capital expenditure 46 266 Provisions 136 132 Accruals 54 17 Lease liability and right-of-use-assets 4 4 Gross deferred tax assets 22,853 23,380 Set-off of deferred tax liabilities pursuant to set-off provisions (22,853) (23,380) Unrecognised deferred tax asset - - Net deferred tax assets /(Liability) (3,523) (3,701) (d) Partially unrecognised tax losses and PRRT credits (not tax effected) 2026 $000 2025 $000 Total Australian tax losses 17,568 17,568 Unaugmented PRRT losses 128,412 126,177 NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 74
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7. OTHER RECEIVABLES Consolidated 2026 $000 2025 $000 Current Other receivables 574 465 Cash held as security 192 192 766 657 The Group’s exposure to credit and currency risks is disclosed in Note 25. 8. PROPERTY, PLANT AND EQUIPMENT Consolidated 2026 $000 2025 $000 Fixtures and fittings Gross carrying amount at cost: Balance at beginning of financial year 767 756 Additions 3 11 Balance at end of financial year 770 767 Depreciation and impairment losses: Balance at beginning of financial year 756 748 Depreciation charge for year 6 8 Balance at end of financial year 762 756 Carrying amount opening 11 9 Carrying amount closing 8 11 NOTES TO THE FINANCIAL STATEMENTS 75 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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9. OTHER ASSETS Consolidated 2026 $000 2025 $000 Current Prepayments 217 113 10. RIGHTS-OF-USE ASSETS AND LEASE LIABILITIES The Group has leases which predominantly relate to office premise and office car bays. Amounts recognised in the statement of financial position and the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movement during the period are as follows: Rights-of-use asset Consolidated 2026 $000 2025 $000 Balance at beginning of financial year 375 599 Reduction in lease commitments - (25) Depreciation expense (196) (199) Balance at end of financial year 179 375 Lease liabilities Consolidated 2026 $000 2025 $000 Balance at beginning of financial year 388 601 Reduction in lease commitments - (26) Interest expense 11 15 Lease payments (206) (202) Balance at end of financial year 193 388 Current lease 193 195 Non-current lease - 193 Balance at end of financial year 193 388 The following are the amounts recognised in profit or loss: Consolidated 2026 $000 2025 $000 Depreciation – right-of-use assets (196) (199) Interest expense – lease liabilities (11) (15) NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 76
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11. EXPLORATION AND EVALUATION EXPENDITURE Consolidated 2026 $000 2025 $000 Cost: Balance at beginning of financial year 88,405 85,552 Additions 2,234 2,853 Balance at end of financial year 90,639 88,405 Recoverability The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. The Company performed an assessment on the carry value of the exploration and evaluation expenditure at 30 June 2026 and did not identify any impairment indicators. 12. JOINT OPERATIONS The Group has the following interests in joint operations: Joint operation Principal activities Ownership interest % Western Australia 2026 2025 WA-435-P, WA-437-P, Roebuck Basin Exploration for hydrocarbons 10% 10% WA-436-P, WA-438-P, Roebuck Basin Exploration for hydrocarbons 20% 20% WA-64-L, Roebuck Basin Exploration for hydrocarbons 10% 10% Carnarvon has accounted for its interest in the above Concessions as Joint Operations as the company has joint control. Joint control is derived from the voting rights assigned by the Joint Operating Agreements for each permit. NOTES TO THE FINANCIAL STATEMENTS 77 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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13. TRADE AND OTHER PAYABLES Consolidated 2026 $000 2025 $000 Current Trade payables 286 196 Director fees payable - 8 Non-trade payables and accrued expenses 179 58 465 262 The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 25. 14. CAPITAL AND RESERVES Consolidated 2026 2025 Number of shares Contributed equity Balance at beginning of financial year 1,789,086,882 1,788,746,609 Performance rights vested and exercised - 340,273 Balance at end of financial year 1,789,086,882 1,789,086,882 Consolidated 2026 $000 2025 $000 Issued capital Balance at beginning of financial year 311,135 311,135 Exercise of employee shares - - Minimum holding buy-back - - Employee share plan shares cancelled - - Balance at end of financial year 311,135 311,135 NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 78
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Ordinary shares have the right to one vote per share at meetings of Carnarvon, to receive dividends as declared and, in the event of a winding-up of Carnarvon, to participate in the proceeds from the sale of all surplus assets in proportion to the number of, and amounts paid up on, shares held. 2026 2025 Number of shares Reserve shares (plan shares) Number of reserve shares on issue at end of the year1 21,900,777 21,900,777 Consolidated 2026 $000 2025 $000 Reserve share balance at the end of the year (3,029) (3,029) Translation reserve Movements in the translation reserve are set out in the Statement of Changes in Equity on page 69. The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity. There were no foreign operations within the Group during the current reporting period. Share based payments reserve Movements in the share-based payments reserve are set out in the Statements of Changes in Equity on page 69. This reserve represents the fair value of shares and rights issued under the previous Employee Share Plan, the current Employee Share Incentive Plan and the additional 2024 Performance Rights issued in financial years ended 30 June 2024 and 30 June 2025. 15. INTANGIBLE ASSETS During the period, the Company continued to hold 20,179 Australian Carbon Credit Units (ACCUs), which will be utilised to offset the company’s head office and future Dorado facilities emissions. The ACCUs have been accounted for as an intangible asset under AASB 138: Intangible Assets. Refer to note 29(q) for the groups accounting policy on Intangible Assets. Consolidated 2026 $000 2025 $000 Intangible Assets 616 616 NOTES TO THE FINANCIAL STATEMENTS 79 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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16. INVESTMENT IN ASSOCIATE – STRIKE ENERGY LIMITED On 22 July 2025, Carnarvon Energy Limited (Carnarvon or the Group) entered into a subscription agreement with Strike Energy Limited (Strike) whereby Carnarvon was issued A$85.95 million of fully paid ordinary shares in Strike at an issue price of $0.12 per Strike share, for a total shareholding in Strike of 19.9%. The transaction was completed in two tranches with the first tranche (13.04%) completed on 25 July 2025, and the second tranche (6.86%) completed on 25 September 2025. Following completion of the first tranche Carnarvon also had a right to appoint a Director on the Strike board, which was exercised during the period with Will Barker joining the Strike board on 4 August 2025. Strike Energy Limited is a publicly listed Australian energy company focused on exploring, developing and producing conventional gas resources in the Perth Basin, with substantial acreage and multiple gas projects including Walyering and the Greater Erregulla fields. Strike is advancing domestic gas supply, gas-to-power infrastructure and new energy opportunities to support Western Australia’s energy needs. Accounting Policy The Group’s interest in Strike is accounted for as an Investment in Associate under AASB 128: Investments in Associates and Joint Ventures. The Group uses the equity method to account for its investment in Associates, where it has significant influence but not control. The investment is initially recorded at cost and then adjusted to reflect the Group's share of the Associate's profit, loss, and other comprehensive income (OCI). Dividends received from the Associate reduce the investment's carrying value. The Group's share of the Associate's results is reported separately in the consolidated profit or loss statement. The most recent available financial statements of the Associate are used, with adjustments made for significant events if necessary. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss within ‘Share of profit of an associate’ in the statement of profit or loss. The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies of the associate in line with those of the Group. Significant Judgements and Estimates SIGNIFICANT INFLUENCE ASSESSMENT OF STRIKE Following the Group’s investment in Strike during the period, the Directors have concluded that the Group has significant influence but not control over Strike as per the accounting standards. On 25 September 2025, the Group completed its investment of 19.9% in Strike. Notwithstanding it holds just under 20 per cent, the composition of Strike’s share register and the fact that Carnarvon has representation on the board of Strike has led the Company to conclude that it has significant influence and accordingly will apply equity accounting for its investment. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 80
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Fair value of identifiable assets at acquisition date The table below shows the fair value of identifiable assets and liabilities of Strike Energy Limited as at 22 July 2025: 22 July 2025 $000 Current assets 127,977 Non-current assets 386,806 Total Assets 514,783 Non-current liabilities (88,792) Total Liabilities (88,792) Equity 425,991 Group’s share in equity (19.9%) 84,772 Carrying Amount of Investment in Associate The table below shows the movement in the carrying amount of the Investment in the Associate for the year ending 30 June 2026: 30 June 2026 $000 Investment in Associate - at cost¹ 86,882 Share of associate’s loss for the period (5,040) Carrying amount of Investment in Associate 81,842 Market value of shareholding 71,628 1 Includes transaction cost of $0.93 million. NOTES TO THE FINANCIAL STATEMENTS 81 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Summarised Financial Information The summarised statement of financial position of Strike Energy Limited as at 30 June 2026 is presented as follows: 30 June 2026 $000 Current assets 60,323 Non-current assets 531,422 Total assets 591,745 Current liabilities (55,496) Non-current liabilities (180,672) Total liabilities (236,168) Equity 355,577 Group’s share in equity (19.9%) 70,760 Group’s share of fair value adjustments at acquisition date 11,082 Group’s carrying amount of the investment 81,842 Summarised statement of profit or loss of Strike Energy Limited for the period to 30 June 2026: 30 June 2026 $000 Revenue 62,777 Cost of Sales (59,898) Gross profit 2,879 Other Income 1,376 Other operating and administration expenses (21,727) Loss from operating activities (17,472) Finance income 1,470 Finance expenses (8,470) Impairment expense (2,715) Loss before income tax (27,187) Income tax (expense) / benefit - Loss from continuing operations (27,187) Group’s share of loss for the period (19.9%)¹ (5,040) ¹ The Group’s share of loss for the period reflects the portion of the year that the Company was deemed to have significant influence. Commitments and Contingencies The associate had $120.8m of expenditure commitments as at 30 June 2026. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 82
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17. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Consolidated 2026 $000 2025 $000 (a) Cash flows from operating activities (Loss) / Profit before tax (4,412) 7,350 Adjustments for: Depreciation on property, plant and equipment 6 8 Depreciation on right-of-use assets 196 199 Reduction to right-of-use asset and liability 15 Share based payment 15 1,677 Share of loss of associate 5,040 - Foreign exchange movement 277 (3,655) Interest accrued (525) (439) Employee benefit accrual adjustments (51) 39 Operating profit before changes in working capital and provisions: 546 5,194 Changes in assets and liabilities: Decrease in other receivables 313 933 Increase / (Decrease) in trade and other payables 221 (17) Increase/(Decrease) in provisions and employee benefits 64 33 Decrease in reserves - (130) Net cash provided by operating activities 1,144 6,013 (b) Reconciliation of cash and cash equivalents Cash at bank and at call 7,671 17,234 Cash on deposit 90,007 168,910 97,678 186,144 The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in Note 25. Restricted cash of $192,000 relating to security deposits for corporate credit cards and rental of the Company’s head office is included under other receivables (2025: $192,000 consolidated), see Note 7. NOTES TO THE FINANCIAL STATEMENTS 83 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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18. CAPITAL AND OTHER COMMITMENTS (a) Exploration expenditure commitments Due to the nature of the Group’s operations in exploring and evaluating areas of interest it is necessary to incur expenditure in order to retain the Group’s present permit interests. Expenditure commitments on exploration permits can be reduced by selective relinquishment of exploration tenure, by the renegotiation of expenditure commitments, or by farming out portions of the Group’s equity. Failure to meet Joint Operation cash requirements may result in a reduction in equity in that particular Joint Operation. Exploration expenditure commitments forecast but not provided for in the financial statements are as follows: Consolidated 2026 $000 2025 $000 Less than one year 262 262 Between one and five years 131 394 393 656 (b) Capital expenditure commitments Data licence commitments 434 - (c) Leases Lease information for the current reporting period is outlined in Note 10. 19. CONTINGENCIES In accordance with normal petroleum industry practice, the Group has entered into joint operations and farm-in agreements with other parties for the purpose of exploring and developing its petroleum permit interests. If a party to a joint operation defaults and does not contribute its share of joint operation obligations, then the other joint operators are liable to meet those obligations. In this event, the interest in the permit held by the defaulting party may be redistributed to the remaining joint operators. As at 30 June 2026, there are no liabilities owing by the Group as a result of a joint operating party defaulting on their contributions to the joint operation. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 84
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20. EMPLOYEE BENEFITS Consolidated 2026 $000 2025 $000 (a) Employee benefits charged to P&L Salary and wages (including super) 1,991 1,907 Staff costs allocated to projects (1,180) (1,056) Share based payment expense1 140 1,677 Total Employee benefits 951 2,528 1 During the 30 June 2025 financial year, an error in the accounting treatment was identified in relation to the 2024 Performance Rights. The 2024 Performance Rights were being expensed over a five-year term, rather than within 12 months in line with the service conditions. The impact of the error was an understatement of $687,026 in KMP performance rights expense for the 2024 financial year, which was accounted for in the 2025 financial year. Consolidated 2026 $000 2025 $000 (b) Employee benefits liabilities Current: Liability for annual leave and long service leave 366 373 Non-Current: Provision for long service leave 87 68 Total Employee benefits 453 441 NOTES TO THE FINANCIAL STATEMENTS 85 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(c) Employee Performance Rights The following table illustrates the balance and valuation of performance rights using Monte Carlo Simulation model as at 30 June 2026: Instrument Held at 1 July 2025 Share price at grant date Date granted Vesting period (years) Exercise price Share price volatility Risk free rate Dividend yield Rights Lapsed Weighted Fair value at grant date Held at 30 June 2026 Vested and exercisable at 30 June 20262 Vested and un- exercisable at 30 June 20262 PR - LTIP1 2,086,252 0.19 01/07/ 2022 3 - 64% 0.85% - (2,086,252) 0.12 - - - PR - LTIP1 53,106 0.16 05/10/ 2022 3 - 64% 2.6% - (53,106) 0.10 - - - PR - LTIP 4,396,930 0.13 01/07/ 2023 3 - 63% 4.1% - - 0.10 4,396,930 1,183,790 3,213,140 2024 PR'S - KMP 7,500,000 0.19 26/04/ 2024 5 - 54% 4.35% - - 0.12 7,500,000 - - 2024 PR'S - Employees 1,000,000 0.19 01/07/ 2024 5 - 51% 4.35% - - 0.12 1,000,000 - - 15,036,288 2,139,358 12,896,930 1 On 1 July 2025, 2,139,358 LTI performance rights from 2022 lapsed and became un-exercisable due to the required conditions not being met (1,575,648 related to key management personnel). The lapsed rights were also cancelled on 1 July 2025. 2 On 1 July 2026, 1,183,790 LTI performance rights from 2023 vested and became exercisable due to the required conditions being met (847,250 related to key management personnel). The rights were exercised and settled in cash subsequent to year end in accordance with the terms of the Employee Share Incentive Plan. An accrual has been raised in the financial statements at 30 June 2026. The remaining 3,213,140 LTI performance rights from 2023 lapsed and became un-exercisable due to the required conditions not being met (2,299,680 related to key management personnel). 2024 Performance Rights The 2024 Performance Rights were granted for a 5-year period and will vest and become exercisable on the earlier to occur of: • the 20-day volume weighted average price (VWAP) of Carnarvon shares exceeding $0.30 per share; or • a ‘Change in Control’ event, such as where: - Carnarvon announces that its shareholders at a Court convened meeting of shareholders voted in favour of a scheme of arrangement and the Court, by order, approves the scheme of arrangement; - a takeover bid is announced, has become unconditional and the person making the takeover bid holds more than 50% of Carnarvon shares; - any person acquires a relevant interest in 50.1% or more Carnarvon shares by any other means; or - Carnarvon announces that a sale or transfer of the whole or substantially the whole of the undertaking and business of Carnarvon has been completed 2024 Performance Rights granted to executive Key Management Personnel are subject to progressive cancellation of all, or some, of any unvested portion of the performance rights where they resign from their respective role in the first year following grant of the performance rights, as follows: • resignation within first three months of the date of grant of the performance rights (Grant Date) – all unvested performance rights forfeited and cancelled; • resignation in period three – six months after Grant Date – 75% of unvested performance rights forfeited and cancelled; • resignation in period six – nine months after Grant Date – 50% of unvested performance rights forfeited and cancelled; • resignation in period nine months – twelve months after Grant Date – 25% of unvested performance rights forfeited and cancelled; and • resignation in period following one year anniversary of Grant Date – nil unvested performance rights forfeited and cancelled. None of the performance rights held by executive Key Management Personnel: • which have vested prior to resigning from their respective role will be forfeited and cancelled ; and NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 86
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• will be forfeited and cancelled (whether vested or unvested) if they are made redundant from their respective role at any time prior to the one-year anniversary of the Grant Date. All vested and unvested performance rights will be forfeited and cancelled where Key Management Personnel employment is terminated for cause in accordance with the relevant provision of their respective employment contract. The performance rights held by non-executive directors will not be forfeited and cancelled if they resign from their position with the Company. Employee Share Incentive Plan Under the terms of the Employee Share Incentive Plan (Plan) which was last approved by shareholders of the Company on 11 November 2020, performance rights can be granted to eligible employees for no consideration. Entitlements under these awards vest as soon as the associated vesting conditions have been met. Awards can be settled in cash at the absolute discretion of the Company. Awards under the Plan carry dividends and voting rights. Performance rights awarded under the STIP are granted for a 12-month period. The vesting condition requires the employee to remain employed by the Company over the vesting period and as at the vesting date. Performance rights awarded under the LTIP are granted for a 3-year period. The vesting conditions are based on Carnarvon’s Total Shareholder Return (TSR) (1) in absolute terms and (2) relative to the returns of a group of companies considered alternative investments to Carnarvon. The participants must also be employed by the Company over the vesting period and as at the vesting date. The vesting schedule of 50% of the LTIP performance rights will be subject to relative TSR testing is as follows: Relative TSR Performance Level of vesting Less than 50th percentile Zero Between 50th and 75th percentile Pro rata between 50% and 100% 75th percentile or better 100% Peer Group: 88 Energy, Buru Energy, Central Petroleum, Amplitude Energy Limited (previously Cooper Energy), Elixir Energy, Empire Energy, Galilee Energy, Helios Energy, Horizon Oil, Karoon Energy, Strike Energy, Tamboran Resources. The vesting schedule of 50% of the LTIP performance rights will be subject to absolute TSR testing is as follows: Absolute TSR Performance % of performance rights that will vest 10% per annum return 33% Between 10% and 20% per annum Pro rata between 33% and 100% Above 20% per annum 100% There is an expiration date of 10 years and an exercise period of 90 days from the vesting dates for both STIP and LTIP performance rights. NOTES TO THE FINANCIAL STATEMENTS 87 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(d) Employee Share Plan Under the terms of the Carnarvon’s previous Employee Share Plan (“ESP”), as approved by shareholders, Carnarvon may, in its absolute discretion, make an offer of ordinary fully paid shares in Carnarvon to any Eligible Person, to be funded by a limited recourse interest free loan granted by the Company. The issue price is determined by the directors and is not to be less than the weighted average market price of the Carnarvon’s shares on the five trading days prior to the date of offer. Eligible Persons use the above-mentioned loan to acquire plan shares. The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in plan shares during the year: Number 2026 WAEP 2026 Number 2025 WAEP 2025 Outstanding at beginning of year 21,900,777 0.28 21,900,777 0.28 Forfeited during the year - - - - Exercised during the year - - - - Outstanding at end of year 21,900,777 0.28 21,900,777 0.28 Exercisable at end of year 21,900,777 0.28 21,900,777 0.28 Shares previously granted under the ESP are accounted for as “in-substance” options due to the limited recourse nature of the loan between the employees and Carnarvon to finance the purchase of ordinary shares. There were no ESP shares issued during the period. 21. RELATED PARTY DISCLOSURES Related party balances and transactions At 30 June 2026, there were no outstanding director fees and/or expenses (2025: $8,000 – see Note 13). NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 88
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22. KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Key management personnel compensation Key management personnel compensation included in employee benefits expense, directors’ emoluments, share based payments and administration expenses are as follows: Consolidated 2026 $000 2025 $000 Short term benefits 1,204 1,182 Post employment benefits 87 99 Share based payments 100 809 Long term benefits 20 19 Other benefits - - 1,411 2,109 Information regarding individual directors and executives’ compensation and some equity instruments disclosures, as permitted by Corporations Regulation 2M.3.03, are provided in the Remuneration Report section of the directors’ report as set out on pages 46-64. Apart from the details disclosed in this note, no director has entered into a material contract with the Company or the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end. (b) Other key management personnel transactions Amounts payable to key management personnel or their related parties at reporting date in respect of outstanding director fees and expenses are as follows: Consolidated 2026 $000 2025 $000 Current Director’s fee payable - 8 NOTES TO THE FINANCIAL STATEMENTS 89 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(c) Ordinary shares held by key management personnel The movement during the reporting period in the number of ordinary shares in Carnarvon Energy Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows: 2026 Balance at 1 July 2025 Net acquired/ (sold) on market Award under Employee Share Plan Held at date of cessation Balance at 30 June 2026 Directors R Black 2,500,000 2,500,000 - - 5,000,000 R Delroy1 92,684,650 - - - 92,684,650 W Barker - - - - - S Jones - - - - - Other Executives PP Huizenga 12,676,469 - - - 12,676,469 A Doering 1,537,001 100,000 - - 1,637,001 1 Mr Delroy is the founder and investment manager of Nero Resource Fund which holds 92,128,968 of the shares. 2025 Balance at 1 July 2024 / on appointment Net acquired/ (sold) on market Award under Employee Share Plan Held at date of cessation Balance at 30 June 2025 Directors R Black 1,000,000 1,500,000 - - 2,500,000 R Delroy1 91,128,968 1,555,682 - - 92,684,650 W Barker - - - - - S Jones2 - - - - - WA Foster3 1,425,938 - - 1,425,938 - Other Executives PP Huizenga4 12,326,196 - 350,273 - 12,676,469 A Doering 1,437,001 55,000 45,000 - 1,537,001 1 Mr Delroy is the founder and investment manager of Nero Resource Fund which holds 91,128,968 of the shares. 2 Ms Jones was appointed to the Board on 20 September 2024. 3 Mr Foster retired from the Board on 30 September 2024. 4 Mr Huizenga acquired 350,273 shares during the 2025 financial year. This was incorrectly disclosed as 250,273 in the Annual Report at 30 June 2025 and has been correctly in the table above. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 90
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(d) Performance rights - held by key management personnel 2026 Held at 1 July 2025 Granted Exercised Lapsed Held at 30 June 2026 Vested and exercisable at 30 June 20261 Vested and un-exercisable at 30 June 20262 Directors R Black 1,500,000 - - - 1,500,000 - - R Delroy 1,000,000 - - - 1,000,000 - - W Barker 1,000,000 - - - 1,000,000 - - S Jones 1,000,000 - - - 1,000,000 - - WA Foster - - - - - - - Other Executives PP Huizenga 8,321,808 - - (1,328,724) 6,993,084 536,599 1,456,485 A Doering 3,900,770 - - (246,924) 3,653,846 310,651 843,195 Total 16,722,578 - - (1,575,648) 15,146,930 847,250 2,299,680 1 On 1 July 2026, 847,250 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 vested and became exercisable upon the required vesting conditions being met. The performance rights were exercised and settled in cash subsequent to year end. 2 On 1 July 2026, 2,299,680 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2023 lapsed and became un-exercisable upon the required vesting conditions not being met. The un-exercisable performance rights were cancelled subsequent to year end. 2025 Held at 1 July 2024 Granted Exercised Lapsed Held at 30 June 2025 Vested and exercisable at 30 June 2025 Vested and un-exercisable at 30 June 20252 Directors R Black 1,500,000 - - - 1,500,000 - - R Delroy 1,000,000 - - - 1,000,000 - - W Barker 1,000,000 - - - 1,000,000 - - S Jones1 - 1,000,000 - - 1,000,000 - - WA Foster - - - - - - - Other Executives PP Huizenga 9,322,900 - (250,273) (750,819) 8,321,808 - 1,328,724 A Doering 4,080,770 - (45,000) (135,000) 3,900,770 - 246,924 Total 16,903,670 1,000,000 (295,273) (885,819) 16,722,578 - 1,575,648 1 Ms Jones was appointed to the Board on 20 September 2024. 2 On 1 July 2025, 1,575,648 performance rights issued to Mr Huizenga and Mr Doering on 1 July 2022 lapsed and became un-exercisable upon the required vesting conditions not being met. The un-exercisable performance rights were cancelled subsequent to year end. NOTES TO THE FINANCIAL STATEMENTS 91 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(e) Plan shares held by key management personnel Included in the above table are plan shares held by key management personnel held under the previous ESP loan scheme which are accounted for as in substance options (refer to page 88 for further terms). The balance and movement during the reporting period in the number of plan shares directly, indirectly or beneficially, by each key management person, including their related parties, is as follows: 2026 Held at 1 July 2025 Granted as compensation Employee Share Plan cancellations Exercised Held at date of cessation Held at 30 June 2026 Directors R Black - - - - - - R Delroy - - - - - - W Barker - - - - - - S Jones - - - - - - WA Foster - - - - - - Other Executives PP Huizenga 11,976,196 - - - - 11,976,196 A Doering 1,237,001 - - - - 1,237,001 2025 Held at 1 July 2024 Granted as compensation Employee Share Plan cancellations Exercised Held at date of cessation Held at 30 June 2025 Directors R Black - - - - - - R Delroy - - - - - - W Barker - - - - - - S Jones1 - - - - - - WA Foster - - - - - - Other Executives PP Huizenga 11,976,196 - - - - 11,976,196 A Doering 1,237,001 - - - - 1,237,001 1 Ms Jones was appointed to the Board on 20 September 2024. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 92
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23. CONSOLIDATED ENTITIES Ownership interest Name Country of Incorporation 2026 2025 Company Carnarvon Energy Ltd Australia Controlled entities Dorado Petroleum Pty Ltd Australia 100% 100% Carnarvon Bedout 1 Pty Ltd Australia 100% 100% Associate The Group has a 19.9% interest in Strike Energy Limited (2025: Nil). For more details, refer to Note 16. 24. SUBSEQUENT EVENTS On 1 July 2026, 1,183,790 LTI performance rights from 2023 vested and became exercisable due to the required conditions being met (847,250 related to key management personnel). The rights were exercised and settled in cash subsequent to year end in accordance with the terms of the Employee Share Incentive Plan. An accrual has been raised in the financial statements at 30 June 2026. The remaining 3,213,140 LTI performance rights from 2023 lapsed and became un-exercisable due to the required conditions not being met (2,299,680 related to key management personnel). Other than above, there is no other matters or circumstance has arisen since 30 June 2026 that in the opinion of the directors has significantly affected, or may significantly affect in future financial years: (i) The Group’s operations; or (ii) The results of those operations; or (iii) The Group’s state of affairs NOTES TO THE FINANCIAL STATEMENTS 93 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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25. FINANCIAL RISK MANAGEMENT The Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity risk. This note presents qualitative and quantitative information about the Group’s exposure to each of the above risks, their objectives, policies and procedures for managing risk, and the management of capital. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Group’s overall risk management approach focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects on the financial performance of the Group. The Group does not currently use derivative financial instruments to hedge financial risk exposures and therefore it is exposed to daily movements in the international oil prices, exchange rates, and interest rates. The Group uses various methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange, and commodity price risk and ageing analysis for credit risk. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor, and market confidence and to sustain future development of the business. Given the stage of the Group’s development there are no formal targets set for return on capital. There were no changes to the Group’s approach to capital management during the year. Neither the Company nor any of its controlled entities are subject to externally imposed capital requirements. (a) Interest rate risk The significance and management of the risks to the Group is dependent on a number of factors including: • Interest rates (current and forward) and the currencies that are held; • Level of cash and liquid investments and their term; • Maturity dates of investments; • Proportion of investments that are fixed rate or floating rate. The Group manages the risk by maintaining an appropriate mix between fixed and floating rate investments. At the reporting date, the effective interest rates of variable rate interest bearing financial instruments of the Group were as follows. Consolidated 2026 2025 Carrying amount (A$000) Financial assets – cash and cash equivalents 97,678 186,144 Weighted average interest rate (%) Financial assets – cash and cash equivalents 4.80% 4.09% All other financial assets and liabilities are non-interest bearing. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 94
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SENSITIVITY ANAL YSIS An increase in 100 basis points from the weighted average year-end interest rates at 30 June 2026 would have increased equity and profit and loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis was performed on 100 basis points for 2025: Consolidated Equity $000 Profit and loss $000 30 June 2026 979 979 30 June 2025 1,863 1,863 A decrease in 100 basis points from the weighted average year-end interest rates at 30 June 2026 would have decreased equity and profit and loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis was performed on 100 basis points for 2025: Consolidated Equity $000 Profit and loss $000 30 June 2026 (979) (979) 30 June 2025 (1,863) (1,863) (b) Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a financial loss to the Group and arises principally from the Group’s receivables from customers and cash deposits. The Group’s receivables are deposits. There were no receivables at 30 June 2026 or 30 June 2025 that were past due. Cash transactions are limited to financial institutions considered to have a suitable credit rating. Exposure to credit risk is monitored on an ongoing basis. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was: Consolidated 2026 $000 2025 $000 Carrying amount: Cash and cash equivalents 97,678 186,144 Other receivables 766 657 98,444 186,801 All cash held by the Group is deposited with investment grade banks and any expected credit loss is immaterial. The aging of the Group’s other receivables at reporting date was: Gross 2026 $000 Impairment 2026 $000 Gross 2025 $000 Impairment 2025 $000 Not past due 766 - 657 - 766 - 657 The Group trades only with recognised creditworthy third parties and the exposure to credit risk as at balance date is not significant. The Group believes that no impairment allowance is necessary in respect of other receivables. NOTES TO THE FINANCIAL STATEMENTS 95 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(c) Currency risk Currency risk arises from assets and liabilities that are denominated in a currency other than the functional currencies of the entities within the Group, being the A$ and US$. The Group does not currently use derivative financial instruments to hedge foreign currency risk and therefore is exposed to daily movements in exchange rates. However, the Group intends to maintain sufficient USD cash balances to meet its USD obligations. The Group’s exposure to foreign currency risk at balance date was as follows, based on carrying amounts. USD$000 30 June 2026 Cash and cash equivalents 4,530 Trade payables and accruals - Gross balance sheet exposure 4,530 30 June 2025 Cash and cash equivalents 10,107 Trade payables and accruals - Gross balance sheet exposure 10,107 The following significant exchange rates applied during the year: Average rate Reporting date spot rate AUD to: 2026 2025 2026 2025 1 USD 1.474 1.543 1.456 1.527 SENSITIVITY ANAL YSIS A 5% strengthening of the AUD against the USD for the 12 months to 30 June 2026 and 30 June 2025 would have decreased equity and pre-tax profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant: Consolidated Equity $000 Profit and loss $000 30 June 2026 USD (314) (314) 30 June 2025 USD (735) (735) A 5% weakening of the AUD against the USD for the 12 months to 30 June 2026 and 30 June 2025 would have increased equity and pre-tax profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant: Consolidated Equity $000 Profit and loss $000 30 June 2026 USD 347 347 30 June 2025 USD 812 812 NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 96
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(e) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group’s approach to managing this risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under a range of financial conditions. The Group’s significant balance of cash and cash equivalents are considered to be adequately address this risk. The Group currently does not have any available lines of credit. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements: Carrying amount $000 Contractual cash flows $000 6 months or less $000 6 to 12 months $000 30 June 2026 Non-derivative financial liabilities Trade and other payables 286 286 286 - 30 June 2025 Non-derivative financial liabilities Trade and other payables 196 196 196 - NOTES TO THE FINANCIAL STATEMENTS 97 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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26. PARENT INFORMATION The following information has been extracted from the books and records of the parent and has been prepared in accordance with the Australian accounting standards: 2026 $000 2025 $000 Statement of financial position Current Assets 98,661 186,915 Non-current assets 173,284 89,407 Total assets 271,945 276,322 Current liabilities 1,024 830 Non-current liabilities 3,610 3,962 Total liabilities 4,634 4,792 Equity Issued Capital 311,135 311,135 Accumulated loss (50,466) (46,232) Reserves 6,642 6,627 Total equity 267,311 271,530 Statement of comprehensive income Total (loss) / gain (4,234) 1,851 Total comprehensive (loss) / gain (4,234) 1,851 Parent Contingencies In accordance with normal petroleum industry practice, Carnarvon has entered into joint arrangements and farming agreements with other parties for the purpose of exploring and developing its petroleum permit interests. If a party to a joint operation defaults and does not contribute its share of joint operation’s obligations, then the other joint operators may be liable to meet those obligations. In this event, the interest in the permit held by the defaulting party may be redistributed to the remaining joint operators. (A) EXPLORATION EXPENDITURE COMMITMENTS Due to the nature of Carnarvon’s operations in exploring and evaluating areas of interest it is necessary to incur expenditure in order to retain Carnarvon’s present permit interests. Expenditure commitments on exploration permits can be reduced by selective relinquishment of exploration tenure, by the renegotiation of expenditure commitments, or by farming out portions of Carnarvon’s equity. Failure to meet Joint Operation cash requirements may result in a reduction in equity in that particular Joint Operation. Exploration expenditure commitments forecast but not provided for in the financial statements are as follows: 2026 $000 2025 $000 Less than one year 262 262 Between one and five years 131 394 393 656 (B) CAPITAL EXPENDITURE COMMITMENTS Data licence commitments 434 - NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 98
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27. CONTINGENT ASSETS AND LIABILITIES There were no contingent assets and liabilities as at 30 June 2026 (2025: nil). 28 BASIS OF PREPARATION OF THE FINANCIAL REPORT (a) Statement of compliance The financial report is a general purpose financial report prepared in accordance with Australian Accounting Standards (“AASBs”), including Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”), and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards (“IFRSs”). Material accounting policies adopted in the preparation of this financial report are presented below. (b) Adoption of new and amended Accounting Standards The accounting policies adopted are consistent with those of the previous financial year. The consolidated entity has adopted all the new, revised or amended Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. (c) Basis of measurement The financial report is prepared on a historical cost basis, except for financial assets which are measured at fair value. (d) Functional currency The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates (the “functional” currency). The consolidated financial statements are presented in Australian dollars which is the Company’s functional and presentation currency. NOTES TO THE FINANCIAL STATEMENTS 99 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(e) Use of estimates and judgements The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. EXPLORATION AND EVALUATION EXPENDITURES The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgement to determine whether it is likely that future economic benefits are likely, from future either exploitation or sale, or whether activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This requires management to make certain estimates and assumptions as to future events and circumstances, in particular, whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant capitalised amount is written off in profit or loss in the period when the new information becomes available. KEY JUDGEMENT – FUNCTIONAL CURRENCY The determination of the functional currency of the Company’s controlled entities requires consideration of a number of factors. These factors include the currencies that primarily influence their costs and the economic environment in which the entities operate. KEY JUDGEMENT – JOINT CONTROL The determination of whether the Company has joint control, in relation to a joint arrangement, requires consideration of contractual arrangements. The Company must determine if there is a contractually agreed sharing of control, which only exists when decisions about the relevant activities require the unanimous consent of the parties sharing control. KEY JUDGEMENT – SIGNIFICANT INFLUENCE Associates are all entities over which the Company has significant influence but not control. The determination of whether the Company has significant influence, in relation to an investment in associate, requires consideration of several factors including the Company’s ownership interest, it’s power to participate in the financial and operating decisions of the investee, and whether the Group has representation on the Board of the investee. (f) Rounding Off The Company is an entity of the kind referred to in the Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183, dated 24 March 2026. As a result, amounts in the financial report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 100
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29. MATERIAL ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in the consolidated financial report. The accounting policies have been applied consistently by all entities in the Group. (a) Basis of consolidation CONTROLLED ENTITIES The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June 2026. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: • Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee) • Exposure, or rights, to variable returns from its involvement with the investee • The ability to use its power over the investee to affect its returns Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • The contractual arrangement(s) with the other vote holders of the investee • Rights arising from other contractual arrangements • The Group’s voting rights and potential voting rights The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. JOINT OPERATIONS The Group’s share of the assets including its share of any assets held jointly, liabilities including its share of any liabilities incurred jointly, revenue from the sale of its share of the output arising from the joint operation and share of revenue from the sale of output by the joint operation and expenses, including its share of any expenses incurred jointly, have been included in the appropriate line items of the consolidated financial statements. Details of the Group’s interests are provided in Note 12. NOTES TO THE FINANCIAL STATEMENTS 101 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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IMPAIRMENT OF JOINT VENTURES AND ASSOCIATES At each reporting date, the Group assesses whether there is any indication that an investment in joint venture or associate may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an investment in joint venture or associate exceeds its recoverable amount the investment is considered impaired and is written down to its recoverable amount. (b) Income tax CURRENT INCOME TAX Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Income Statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. DEFERRED TAX Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except: • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences • In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences • In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 102
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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss. TAX CONSOLIDATION Carnarvon Energy Limited and its wholly-owned Australian-resident controlled entities formed a tax- consolidated group with effect from 1 July 2003 and are therefore taxed as a single entity from that date. Carnarvon Energy Limited is the head entity of the tax-consolidated group. (c) Property, plant and equipment RECOGNITION AND MEASUREMENT All property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. The cost of an item also includes the initial estimate of the costs of dismantling and removing an item and restoring the site on which it is located. Such amounts are determined based on current costs. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. IMPAIRMENT The carrying amount of property, plant and equipment is reviewed at each balance date to determine whether there are any objective indicators of impairment that may indicate the carrying values may not be recoverable in whole or in part. Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit and the recoverable amount test applied to the cash generating unit as a whole. If the carrying value of the asset is determined to be in excess of its recoverable amount, the asset or cash generating unit is written down to its recoverable amount. DEPRECIATION Depreciation on property, plant and equipment is calculated on a straight-line basis over expected useful life to the economic entity commencing from the time the asset is held ready for use. The major depreciation rates used for all classes of depreciable assets are: Property, plant and equipment: 10% to 33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at least annually. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. NOTES TO THE FINANCIAL STATEMENTS 103 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(d) Exploration and evaluation Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that the Group’s rights of tenure to the area are current and that the costs are expected to be recouped through the successful development of the area, or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Each area of interest is assessed for impairment to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Impairment testing is carried out in accordance with Note 29(e). Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation costs attributable to that area of interest are first tested for impairment and then reclassified from exploration and evaluation to oil and gas assets. The Company does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out arrangements but redesignates any costs previously capitalised in relation to the whole interest as relating to the partial interest retained. Any cash consideration received directly from the farmee is credited against costs previously capitalised in relation to the whole interest with any excess accounted for by the farmer as a gain on disposal. DIVESTMENTS Where an ownership interest in an exploration and evaluation asset is disposed of, the transaction is recognised by reference to the carrying value of the original interest. Any cash consideration paid, including transaction costs, is accounted for as an acquisition of exploration and evaluation assets. Any cash consideration received, net of transaction costs, is treated as a recoupment of costs previously capitalised with any excess accounted for as a gain on disposal of non-current assets. Deferred consideration is accounted for if it is probable that future economic benefits will flow to the entity. (e) Recoverable amount of non-financial assets and impairment testing Assets that are subject to depreciation are reviewed annually to determine whether there is any indication of impairment. Where such an indicator exists, a formal assessment of recoverable amount is then made. Where this is less than carrying amount, the asset is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects the current market assessments of the time value of money and the risks specific to the asset. Any resulting impairment loss is recognised immediately in the income statement. For the purposes of impairment testing assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. (f) Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are determined by discounting the expected future cash flows at a pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 104
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(g) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. (I) FINANCIAL ASSETS Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortised cost (debt instruments) • Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments) This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes other receivables. NOTES TO THE FINANCIAL STATEMENTS 105 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the Income Statement. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when: • The rights to receive cash flows from the asset have expired or • The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 106
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Impairment of financial assets Expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss will be recognised through an allowance. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. (II) FINANCIAL LIABILITIES Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group’s financial liabilities include trade and other payables. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Income Statement. (III) OFFSETTING OF FINANCIAL INSTRUMENTS Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. NOTES TO THE FINANCIAL STATEMENTS 107 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(h) Segment reporting The Group reports one segment, oil and gas exploration, development and production, to the chief operating decision maker, being the Board of Carnarvon Energy Limited, in assessing performance and determining the allocation of resources. The segment operations and results are the same as those reported in the Group financial statements. Unless otherwise stated, all amounts reported to the chief operating decision maker are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. From management purposes, the Group has identified only one reportable segment, being offshore exploration activities undertaken in Australia. This segment includes activities associated with the determination and assessment of the existence of commercial resources, from the Group’s permits in this geographic location. (i) Foreign currency FUNCTIONAL AND PRESENTATION CURRENCY The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates (the “functional” currency). The consolidated financial statements are presented in Australian dollars which is the Company’s functional and presentation currency. TRANSACTIONS AND BALANCES Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate at balance date. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge. FOREIGN OPERATIONS The financial performance and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows: • assets and liabilities are translated at exchange rates prevailing at balance date • income and expenses are translated at average exchange rates for the period Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve as a separate component of equity. These differences are recognised in the income statement upon disposal of the foreign operation. (j) Share capital Incremental costs directly attributable to an equity transaction are shown as a deduction from equity, net of any recognised income tax benefit. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 108
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(k) Employee benefits Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year are determined using the projected unit credit method. SHARE BASED PAYMENTS Share based compensation has been provided to eligible persons via the Carnarvon current Employee Share Plan (“ESIP”), by the award of performance rights. Share based compensation has also been provided under the former Employee Share Plan (“ESP”), financed by means of interest-free limited recourse loans. Under AASB 2 “Share-based Payments”, the both ESIP and ESP shares are deemed to be equity settled, share-based remuneration. The fair values of the performance rights granted under the ESIP are recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at the grant date and recognised over the period during which the employee becomes unconditionally entitled to the performance rights. Under the ESP, for limited recourse loans and share options issued to eligible persons, the Group is required to recognise within the income statement a remuneration expense measured at the fair value of the shares inherent in the issue to the eligible person, with a corresponding increase to a share-based payments reserve in equity. The fair value is measured at grant date and recognised when the eligible person become unconditionally entitled to the shares, effectively on grant. A loan receivable is not recognised in respect of plan shares issued. Upon cancellation or forfeiture of the shares issued under ESPs, transfer is made from issued capital to reserve shares. The fair value at grant date under the Former and Current ESP is determined using pricing models that factors in the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield, and the risk free rate for the assumed term of the plan. With respect to plan shares under the Former ESP, upon repayment of the ESP loans, the balance of the share-based payments reserve relating to the loan repaid is transferred to issued capital. (l) Earnings per share The Group presents basic and diluted earnings per share (“EPS”) for its ordinary shares. Basic EPS is calculated by dividing the profit attributable to equity holders of the Company by the weighted number of shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all potential ordinary shares, which comprise share options issued. NOTES TO THE FINANCIAL STATEMENTS 109 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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(m) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and deposits held at call with banks. The deposits held at call are generally held for a period of 1-3 months and classified as cash and cash equivalents at period end. Where deposits are held for more than 3 months they are classified as other receivables. (n) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (o) Finance income and expenses Interest revenue on funds invested is recognised as it accrues, using the effective interest rate method. Finance expenses comprise interest expense on borrowings and the unwinding of the discount on provisions. (p) Investment in joint ventures A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Group’s investment in its joint venture is accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. (q) Intangible assets – ACCU’s The Group only recognises intangible assets if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity, and if the cost can be reliably measured. Intangible assets of the Group are initially measured at cost and subsequently measured at cost less any accumulated impairment losses, in line with AASB 138 “Intangible Assets”. The intangible assets are not amortised but will be assessed at least annually for impairment and more frequently if events or changes in circumstances indicate that it might be impaired. NOTES TO THE FINANCIAL STATEMENTS CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 110
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(r) New Accounting Standards for Application in Future Periods Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory and have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2026. The consolidated entity’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below: Reference Title Summary Impact on the Company Application date of standard Application date for Group AASB 18 Amendments to Australian Accounting Standards Presentation and Disclosure in Financial Statements AASB 18 has been issued to improve how entities communicate in their financial statements, with a particular focus on information about financial performance in the statement of profit or loss. The key presentation and disclosure requirements established by AASB 18 are: • The presentation of newly defined subtotals in the statement of profit or loss • The disclosure of management-defined performance measures (MPM) • Enhanced requirements for grouping information (i.e. aggregation and disaggregation) AASB 18 is accompanied with limited consequential amendments to the requirements in other accounting standards, including AASB 107 Statement of Cash Flows. AASB 18 introduces three new categories for classification of all income and expenses in the statement of profit or loss: operating, investing and financing. Additionally, entities will be required to present subtotals for ‘operating profit or loss’, ‘profit or loss before financing and income taxes’ and ‘profit or loss’. For the purposes of classifying income and expenses into one of the three new categories, entities will need to assess their main business activity, which will require judgement. There may be more than one main business activity. AASB 18 also requires several disclosures in relation to MPMs, such as how the measure is calculated, how it provides useful information and a reconciliation to the most comparable subtotal specified by AASB 18 or another standard. AASB 18 will replace AASB 101 Presentation of Financial Statements. The Company is still assessing the impact. 1 January 2027 1 July 2027 NOTES TO THE FINANCIAL STATEMENTS 111 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Entity Name Entity Type Body corporate country of incorporation Body corporate % share of capital held Country of tax residence Carnarvon Energy Ltd Body corporate Australia Australia Dorado Petroleum Pty Ltd Body corporate Australia 100% Australia Carnarvon Bedout 1 Pty Ltd Body corporate Australia 100% Australia CONSOLIDATED ENTITY DISCLOSURE STATEMENT CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 112
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(1) In the opinion of the directors of Carnarvon Energy Limited: (a) the financial statements and notes of the Group set out on pages 67-111 are in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group ’s financial position as at 30 June 2026 and of its performance for the year ended on that date; and (ii) Complying with Accounting S tandards and the Corporations Regulations 2001; and (b) The financial statements and notes comply with Internation al Financial Reporting Standards as set out in Note 29; (c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable (d) The consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct. (2) This declaration has been made after receiving the declarations required to be made to the directors by the chief executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2026. Signed in accordance with a resolution of the directors. Robert Black Chair Perth, 29 September 2026 DIRECTORS’ DECLARATION 113 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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Additional information required by the ASX Limited (“ASX”) Listing Rules and not disclosed elsewhere in this report is set out below. a) Shareholdings as at 25 September 2026 SUBSTANTIAL SHAREHOLDERS Name of Shareholder Number of Shares Date of last Notice Collins St Asset Management ATF Collins St Value Fund 188,143,638 30 August 2024 J P Morgan Nominees Australia Pty Limited 99,650,063 N/A Nero Resources Fund Pty Ltd 91,128,968 18 December 2023 Citicorp Nominees Pty Limited 90,542,385 N/A UNMARKETABLE PARCELS Minimum Parcel Size Holders Units Minimum $500.00 parcel at $0.105 per unit 4,762 884 2,533,244 VOTING RIGHTS The voting rights attaching to Ordinary Shares are governed by the Constitution. On a show of hands every person present who is a member or representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. Options do not have any voting rights. TWENTY LARGEST SHAREHOLDERS Name of Shareholder Number of Shares % held Sandhurst Trustees Ltd 188,143,638 10.52 J P Morgan Nominees Australia Pty Limited 99,650,063 5.57 Treasury Services Group Pty Ltd 91,128,968 5.09 Citicorp Nominees Pty Limited 90,542,385 5.06 BNP Paribas Nominees Pty Ltd 41,562,212 2.32 NGE Capital Limited 38,991,263 2.18 HSBC Custody Nominees (Australia) Limited 25,072,684 1.40 Havannah Investments Pty Ltd 16,710,037 0.93 Brixia Investments Ltd 15,649,750 0.87 Mr David Stuart Pierce & Mrs Nelly Filomena Pierce 14,300,000 0.80 Netwealth Investments Limited 14,240,665 0.80 Prettejohn Projects Pty Ltd 13,600,000 0.76 Dr Oscar Savio D'Souza 13,201,887 0.74 Kinabalu Australia Pty Ltd 12,969,842 0.72 Pullington Investments Pty Ltd 12,645,423 0.71 Mr Philip Paul Huizenga 12,126,469 0.68 PA and RE Gibson Pty Ltd 11,800,000 0.66 P J Enterprises Pty Limited 10,000,000 0.56 Charles & Cornelia Goode Foundation Pty Ltd 10,000,000 0.56 Chabar Pty Ltd 10,000,000 0.56 Mrs Rosemary Pauline Jacobson 9,789,897 0.55 Perpetual Corporate Trust Ltd 9,448,291 0.53 761,573,474 42.57 ADDITIONAL SHAREHOLDER INFORMATION 120 | ANNUAL REPORT 2026 CARNARVON ENERGY LIMITED
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DISTRIBUTION OF EQUITY SECURITY HOLDERS Size of Holding Number of shareholders Number of fully paid shares 1 To 1,000 158 38,358 1,001 To 5,000 1,049 4,103,735 5,001 To 10,000 1,503 12,258,759 10,001 To 100,000 4,104 165,506,840 100,001 and over 1,696 1,607,179,190 8,510 1,789,086,882 b) Option holdings as at 25 September 2026 There are no current option holdings. c) On-mark et buyback An on-market buyback was announced on 30 January 2025 and was extended for a further 12-month period commencing on 20 February 2026. There were no shares bought back during the period. d) Schedule of permits Permit Basin Equity Joint Venture Partner(s) Partner Interest Indicative Forward ProgramSantos OPIC Australia WA-435-P Roebuck 10% Santos Limited, and OPIC Australia 80% 10% G&G Studies, well planning WA-436-P Roebuck 20% Santos Limited, and OPIC Australia 70% 10% G&G Studies, well planning WA-437-P Roebuck 10% Santos Limited, and OPIC Australia 80% 10% G & G studies WA-438-P Roebuck 20% Santos Limited, and OPIC Australia 70% 10% G&G Studies, well planning WA-64-L Roebuck 10% Santos Limited, and OPIC Australia 80% 10% Development and production ADDITIONAL SHAREHOLDER INFORMATION CARNARVON ENERGY LIMITED ANNUAL REPORT 2026 | 121
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www.carnarvon.com.au CARNARVON ENERGY LIMITED ANNUAL REPORT 2026