ABN 38 112 566 499

25 May 2016

Elk raises $1.9 million in private placement

• Elk completes private placement for $1.9 million

• Elk now in a position to make first payments associated with Grieve JV restructure

• Placement executed in advance of completing closing of US$55 million JV restructure and associated debt and equity financing to complete the Grieve Project

Elk Petroleum Ltd (ASX: ELK) ("Elk" or the "Company") is pleased to advise it has completed a private placement ("Placement") to sophisticated investors to raise approximately $1.9 million. Following the placement the Company is in a position to provide initial funding of capital costsassociated with the Grieve CO2 EnhancedOil Recovery (EOR) Project ("Grieve Project") and the restructuring of the Grieve Joint Venture ("Grieve JV") as outlined in the ASX announcements of 21 December 2015 and 24 February 2016.

The placement was made to several sophisticated investors new to the Elk register. Under the placement, Elk will issue approximately 25.3 million shares priced at $0.075 per share.

As originally released in the ASX announcement of 21 December 2015, Elk and its joint venture partner, Denbury Resources Inc. ("Denbury"), entered into a letter of intent to restructure the Grieve JV. Under this letter of intent, Elk agreed to provide US$55 million of funding for the final capital expenditures required to complete the Grieve Project.

As further outlined in the ASX announcement of 24 February 2016, upon Elk and Denbury reaching agreement on the principal definitive agreements implementing the restructure of the Grieve JV, the Company committed to making initial progress payments as part of the overall funding arrangements.

Based on the current progress of settling the definitive agreements, Elk anticipates making an initial progress payment of US$1.5 million in the next few days. Once made, the initial US$1.5 million progress payment will reduce the JV restructure funding amount to US$53.5 million.

Elk's commitment to provide the full US$55 million of funding remains subject to execution of the definitive agreements and completing funding arrangements. As previously announced, the Company intends to source this funding through a combination of debt and equity. The Company is currently discussing debt financing options with prospective debt providers, and negotiations are at an advanced stage. The balance of funding will come from equity capital, which is likely to be raised by the Company via a pro rata entitlement offer.

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For further information, please contact:

Investor:

Brad Lingo

Managing Director/CEO P: +61 2 9093 5400

E: [email protected]

Media:

Rebecca Lawson

Media and Capital Partners P: +61 433 216 269

E: [email protected]

ABOUT ELK PETROLEUM

Elk Petroleum Limited (ASX: ELK) is an oil and gas company specialising in Enhanced Oil Recovery (EOR), with assets located in one of the richest onshore oil regions of the USA, the Rocky Mountains. Listed on the ASX in 2005, Elk's strategy is focused on applying proven EOR technologies to mature oil fields, which significantly de-risks the Company's strategy of finding and exploiting oil field reserves. Leveraging proven EOR technology and Company expertise and experience, Elk is currentlydeveloping the Grieve oil field in Wyoming (Elk - 35% WI) and is planning for a CO2-basedEOR project at the Singleton oil field in Nebraska (Elk - 100% WI & operator).

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Elk Petroleum LtdABN 38 112 566 499

ABN 38 112 566 499

25 May 2016

ASX LISTING RULE 3.10.5A AND 7.1A.4(b)

- SHARE ISSUE

Elk Petroleum Limited (ASX Code: ELK) Company hereby provides notice to the ASX for the purposes of ASX Listing Rule 3.10.5A and 7.1A.4(b) and section 708A(5)(e) of the Corporations Act 2001 (Cth) (Corporations Act) that on 24 May 2016 it issued 25,332,171 ordinary shares in the Company at an issue price of $0.075 per share to Professional and Sophisticated Investors and exempt investors.

Of these shares:

1. 10,714,575 were issued in accordance with ASX Listing Rule 7.1A; and

2. 14,617,596 were issued in accordance with ASX Listing Rule 7.1.

In relation item (i) above, the shares were issued for cash consideration, to be used for the purpose as approved by shareholders at the 2015 Annual General Meeting, being for the continued exploration and feasibility study expenditure on the Company's current assets and general working capital.

The Company states pursuant to the provisions of ASX Listing Rule 3.10.5A that:

• The placement under ASX Listing Rule 7.1A represented 2.71% of the expanded ordinary shares on issue of the Company, resulting in a dilution to the existing holders of ordinary securities by that amount. For clarity, this is the dilution factor solely on the issue of 10,714,575 shares on the pre allotment share capital (excluding the shares issued under Listing Rule 7.1);

• The equity raising has been completed as a cash placement in order to bring new institutional and sophisticated investors onto the Elk register which will assist in future fund raising activities;

• The placement was not underwritten; and

• A fee of 4.5% (excluding GST) of funds raised is intended to be paid in connection with arranging the placement.

For and on behalf of the Board Mr Brad Lingo

Managing Director

For further information please contact:

Investor:

Brad Lingo

Managing Director/CEO P: +61 2 9299 9690

E: [email protected]

ABOUT ELK PETROLEUM

Media:

Rebecca Lawson

Media and Capital Partners P: +61 433 216 269

E: [email protected]

Elk Petroleum Limited (ASX: ELK) is an oil and gas company specialising in Enhanced Oil Recovery (EOR), with assets located in one of the richest onshore oil regions of the USA, the Rocky Mountains. Listed on the ASX in 2005, Elk's strategy is focused on applying proven EOR technologies to mature oil fields, which significantly de-risks the Company's strategy of finding and exploiting oil field reserves.

Leveraging proven EOR technology and Company expertise and experience, Elk is currently developing the Grieve oil field in Wyoming (Elk - 35% WI) and is planning for a CO2-based EOR project at the Singleton oil field in Nebraska (Elk - 100% WI & operator).