Xstate is potentially on the verge of a major re-rate following the reinterpretation of its Diona-1 discovery, confirming a Basin-Centred Gas (BCG) play with an estimated 100 Bscfe net prospective resource. Wireline and drilling data indicate a large, continuous gas zone consistent with regional BCG systems being advanced by Shell, Santos, Omega Energy and Elixir Energy in the Taroom Trough.

Capital Raising to raise a minimum $1.5m (the Offer), comprising:

• Two-Tranche placement:
  • Tranche 1 to raise ~$0.83m (Tranche 1) utilising existing placement capacity under ASX Listing Rule 7.1; and
  • Tranche 2 to raise ~$0.67m (Tranche 2) subject to shareholder approval to be sought at an Extraordinary General Meeting (EGM).

The Company reserves the right to take over subscriptions and is considering adding a Share Purchase Plan.

Options

1:2 Free Options @ $0.04 exp. 3 years

Xstate Resources Limited is an Australian oil and gas explorer and developer focused on advancing its Diona Project within ATP 2077 in Queensland’s Bowen–Surat Basin, a proven hydrocarbon province hosting discoveries by Shell, Santos, and Omega Energy. Following a successful re-listing on the ASX in September 2025, Xstate rapidly executed its exploration plan, drilling the Diona-1 well within weeks and confirming 23 metres of net gas pay across multiple Permian formations, results that are comparable to significantly larger ASX listed peers operating in the same region.

• Strong reservoir metrics: Diona-1 intersected 23 metres of net gas pay, matching Omega Energy’s Canyon-2 (23.4m) – yet Omega’s A$168m valuation dwarfs Xstate’s ~A$7m, presenting a clear re-rating opportunity as flow testing begins.
• Over-pressured, gas-saturated formations across the Bandanna, Tinowon and Wallabella sequences confirm strong reservoir drive and high deliverability potential.
• Shallow depth (~2,500m) vs the regional BCG trend (~4,000m) translates into lower drilling and completion costs and superior development economics.
• No formation water encountered – indicating excellent reservoir quality and lower testing risk.
• Infrastructure advantage: Less than 1 km from the Waggamba gas pipeline and 15 km from the Silver Springs plant, enabling rapid monetisation and potential early cashflow.

• Reinterpretation of Diona-1 confirms a Basin-Centred Gas (BCG) play with a mean prospective resource of 100 Bscfe net unrisked.
• Wireline and drilling data indicate a large, continuous gas zone rather than a small, trapped reservoir.
• BCG systems can extend over wide areas with significant, continuous gas saturation.
• Diona-1 results show similar characteristics to major BCG projects by Shell, Santos, Omega Energy, and Elixir Energy in the Taroom Trough.
• Findings pave the way for flow testing before year-end.

• Diona-1 intersected over-pressured, gas-saturated formations across the Bandanna, Tinowon, and Wallabella sequences, indicating strong reservoir drive and high deliverability potential.
• The Diona structure sits at ~2,500m, well above the regional BCG trend (~4,000m), allowing for lower drilling and completion costs, simpler well design, and better development economics.
• No formation water was encountered, supporting excellent reservoir quality and a lower risk profile for production testing.

• Diona-1 is strategically located less than 1 km from the Waggamba gas pipeline tie-in, ~15 km from the Silver Springs processing facility, and surrounded by established producing fields (Waggamba, Taylor, Silver Springs, Alton).
• This proximity to existing infrastructure enables rapid monetisation, allowing even modest test flows to be quickly tied in and generate early cashflow with minimal development lag.

• Diona-1 recorded 23 metres of net gas pay, comparable to Omega Energy’s Canyon-2 result (23.4 metres) within the same regional gas trend.
• Despite similar reservoir quality, Omega Energy (A$168m) is valued over 20× higher than Xstate (~A$7m), indicating a significant re-rating potential if commercial flow rates are confirmed.

1. XST's Share of Diona-1 Completion