Chairman's Statement & Review of Operations

31 October 2011

Wildhorse Energy Ltd ('WHE' or 'the Company'), the AIM and ASX listed company focussed on developing underground coal gasification ('UCG') and uranium projects in Central Europe, has posted its Report and Accounts for the year ended 30 June 2011 to shareholders following the announcement of its full year audited financials on 30 September 2011. The full Report & Accounts document can also be viewed at www.wildhorse.com.au.

The Company also announces that its Annual General Meeting will be held at 10:00 am (WST) on Thursday 24 November 2011 at Level 21, Allendale Square 77 St George's Terrace Perth, Western Australia.

Highlights from the Report and Accounts

·; Strong progress in rapidly developing prospective UCG and uranium assets, utilising first mover advantage to become a leading supplier of energy in Central Europe

·; Ongoing development of primary Mecsek Hills Gas UCG Project towards construction phase - confirmatory drilling as part of the Preliminary Feasibility Study ('PFS') is being undertaken

·; Initial results of the confirmation drilling programme have improved confidence in the historic data and potential suitability of the project area for UCG

·; Encouraging preliminary key findings in relation to the PFS - initial analysis indicates the highly attractive economics of the project - due for completion in Q1 2012

·; Continued focus on expanding Central European UCG portfolio to take advantage of favourable energy pricing fundamentals - unconventional gas production expected to grow significantly in the coming decades

·; Interest in the Mecsek Hills Uranium Project in Hungary, which has a total JORC Inferred Resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8, provides an immediate valuation for WHE and additional value uplift potential

·; Further value upside potential through Mecsek Hills Uranium Project Exploration Target of 55 to 90 Mlbs of U3O8 with a grade range of 0.075-0.10% U3O8

·; Extension to the Co-operation Agreement for the exclusive partnership with Hungarian State owned Mecsek-Öko and Mecsekérc with the aim to restart uranium mining at the Mecsek Hills Uranium Project in Hungary

·; Bolstered technical and corporate team through key appointments from within the gasification, energy and corporate arenas

·; A full version of the Report and Accounts has been sent to shareholders and will be available to view on the Company's website

·; The Company's AGM will be held at 10:00 am (WST) on Thursday 24 November 2011 at Level 21, Allendale Square 77 St George's Terrace Perth, Western Australia

CHAIRMANS STATEMENT

This has been a highly active year for WHE as we continue to make progress towards achieving our objective of becoming a leading supplier of energy in Central Europe, primarily through the development of UCG projects. With a portfolio of quality assets, a world class specialist team, together with positive European energy market dynamics, I believe WHE has an excellent opportunity to deliver on its strategy. Importantly, UCG is now a recognised unconventional gas production technology which is at a tipping point in terms of commercialisation and market understanding; this should translate into a re-valuation of participant companies. I am therefore confident that the strong foundation that we have established will prove to be the basis for considerable value accretion.

Our focus on Central Europe remains a key aspect of our growth strategy, specifically driven by the favourable energy market fundamentals, including the overreliance on Russian natural gas and a positive pricing environment. This provides exceptional economics and in tandem with roll-out opportunities across the region, we are pioneering the implementation of UCG technology, utilising Central Europe's numerous and widespread stranded coal assets to produce syngas, a feedstock for power stations. Unconventional gas production is set to grow significantly in the coming decades and we believe UCG will play an important role in securing supplies with the added benefit of having less of an environmental impact than conventional hydrocarbons as well as lower geological risk.

The potential for UCG as a new form of unconventional gas generation is demonstrated when viewed in conjunction with the rise of unconventional gas in the US. In the US, domestic conventional gas production began declining after 1990 and in turn, to offset this and ensure the nation's security of supply, unconventional gas production has expanded. Unconventional gas has a current market share of 53% of the US domestic gas supply and is expected to reach 74% by 2035. Although the impact of unconventional gas in the European market is expected to be less than that experienced in the US market, these statistics clearly show the potential for unconventional gas to fill the void left by falling conventional gas production, highlighting its potential to revolutionise the Central European energy market. Indeed, a study by the World Energy Council suggests that the use of UCG could potentially increase world reserves from 900 billion tonnes to 1.5 trillion tonnes.

Amidst the overall Central European energy market backdrop, and the prospect of UCG becoming a significant new contributor to domestic fuel production, WHE remains committed to developing and building its portfolio of UCG projects. WHE has already developed a portfolio of three strategic coal assets totalling 489.1 sq km in Hungary which demonstrate potential suitability for UCG application, have excellent infrastructure and are in close proximity to established power stations. The board of WHE is actively evaluating additional assets to build our strategic acreage across Central Europe, with Poland, the Czech Republic and Germany of particular interest, as the coal quality and the geology of the coal formations in these countries are well understood.

In addition to its UCG assets, WHE has a major interest in one of Europe's largest uranium projects in southern Hungary, which importantly provides an immediate and clearly visible valuation basis for the Company. WHE owns the 42.9 sq km Pécs uranium licence, which combined with state-owned Mecsek-Öko's neighbouring estimated 19.6 sq km MML-E licence, comprises the Mecsek Hills Uranium Project. Jointly, this has a JORC compliant Inferred Resource of 48.3Mt at 0.072% uranium ('U3O8) or 77Mlbs of U3O8 and a total JORC Exploration Target2 of a further 55-90Mlbs of U3O8 with a grade range of 0.075- 0.10% U3O8.

Nuclear power remains a primary source of energy generation in Central Europe, with approximately 40% of Hungary's total energy requirement being fulfilled through nuclear energy. Despite some governments such as Germany slowing or diverting investment away from nuclear power, the vast majority of Central European governments have reasserted their commitment to nuclear energy. In line with this, the Co-operation Agreement between WHE and the Government entities Mecsek-Öko and Mecsekérc remains strong as we continue to focus on the recommencement of uranium mining at the Mecsek Hills Uranium Project and undertake further negotiations towards the creation of a joint venture company to commercialise our common economic interests.

In order to successfully implement our development strategy across our UCG and uranium assets, it is essential to build a team of corporate and operational specialists. This has been at the forefront of WHE's mission over the past year, and I am pleased to say that we have created a board and management team with considerable business and technical acumen. Our team has been bolstered through appointments from major gasification and energy companies including Eskom, Sasol and KPMG which have extensive experience in developing and commercialising UCG and resource projects. We have also engaged a number of key practised individuals with an exceptionally strong understanding of, and network within, the regional energy arena which is an integral part of our proposition.

Looking ahead, the coming months will undoubtedly be very busy for us. Amongst other things, we look forward to the completion of the independent engineer's (Worley Parsons) review and our potential expansion into our new target market areas of the Czech Republic, Poland and Germany. We also anticipate announcing further JORC Inferred Resource statements on our coal assets in addition to the completion of our UCG site selections for drilling and seismic programmes and as a result finalising the UCG Pre-Feasibility Study in Q1 2012.

With this pipeline of news flow marking our continued progress, I believe that WHE is well positioned to achieve its aim of becoming a leading fuel supplier in Central Europe. WHE has all the required attributes, including quality assets, a strong team and a lucrative geographic focus, enabling us to capitalise on the increasing commercialisation of UCG in Europe. With this in mind, along with our significant uranium interests, which provide WHE with an immediate valuation, I believe the market will now understand our exceptional growth potential, leading to a re-valuation of WHE moving forward.

Mark Hohnen

Chairman

REVIEW OF OPERATIONS

WHE has made considerable progress from an operational standpoint over the past twelve months, as we remain centred on the rapid development of our UCG and uranium assets in Hungary. In tandem with this, the WHE team is committed to utilising our first mover advantage in the wider Central European region to facilitate our onward growth and ultimate fulfilment of our strategy to become a leading fuel supplier in Central Europe.

The development of UCG assets remain paramount to our growth strategy, and in line with this, WHE has built a portfolio of three key UCG sites. These sites all benefit from close proximity to power stations as well as indicating potential suitability for a UCG project, which includes the necessary geology of the area, the depth and thickness of the coal seams and local infrastructure.

Coal gasification has been a recognised method of extracting the energy value of coal for many years, having been successfully demonstrated in countries such as South Africa since the 1950s. The gasification process, which has historically taken place above ground, can be further improved through the use of underground gasification. As a comparison, conventional mining techniques (open cast and underground mining) are able to extract less than 35% of the total available coal resource. UCG, on the other hand, can convert inaccessible coal resources into national coal reserves by capturing up to 80% of the coal resource. With this in mind, the potential for UCG to play an important role in the future fuel generation of Central Europe is clearly evident.

The main difference between the well established coal gasification method and UCG is that WHE will gasify the coal in-situ, rather than extract and gasify it at the surface. This method utilises directional drilling techniques proven in the oil and gas industry, has numerous environmental, safety and financial benefits, and requires very little of the infrastructure associated with large scale energy projects. In addition, compared with shale gas extraction, UCG does not use "hydraulic fracking", a method which creates fractures in the shale formation to increase gas flow rates. Concerns regarding perceived risks associated with water contamination, subsidence and uncontrollable fire are also being allayed as the market increasingly understands the depths of operation, technology and process associated UCG.

Our primary focus remains the Mecsek Hills Gas (UCG) Project, which is the most advanced project within our portfolio. We have been conducting confirmatory drilling in order to improve our confidence in the historic data, to evaluate the resource potential of parts of the Mecsek Exploration Target and to facilitate potential UCG site selection. The entire project area has a current Exploration Target3 of 1-1.25 billion tonnes with coal quality in the range 18-29MJ/kg of which 81Mt has been delineated as a JORC Inferred Resource.

The next stage of development at the Mecsek Hills Gas Project is tied-in closely with the completion of a Preliminary Feasibility Study ('PFS'), which is anticipated for release in Q1 2012. The Company has already received encouraging preliminary key findings in relation to the PFS, with initial analysis indicating the highly attractive potential economics of the project.

The PFS focuses on utilising UCG technology and process for a >400 MWt UCG project consisting of two distinct development phases (see Figure 1 for more detailed megawatt (MW) production profiles and project timeline):

·; Phase IA: Commercial Demonstration - approximately 130 MWt of syngas being supplied to a Combined Cycle Gas Turbine ('CCGT') to generate approximately 60 MWe (megawatt electrical) of which around 8 MWe shall be used internally and approximately 50 MWe shall be available for electricity sales.

·; Phase IB: Following the successful demonstration of reliable syngas production and operation of the related CCGT power plant for a period of 6 to 12 months, it is assumed that the CCGT business unit (to be held by a special purpose vehicle) is sold to a strategic partner. From this point on (Phase IB) the Company will supply the strategic partner with syngas delivered in accordance with a long term gas sales agreement.

·; Phase II: Commercial Scale - approximately 280 MWt of additionally generated syngas sales to a strategic partner supplied in accordance with a long term gas sales agreement.

Figure 1: Project production profiles and timeline (to view Figure 1, visit  www.wildhorse.com.au)

The PFS's financial modelling has been performed by KPMG and indicates that the project potentially produces positive financial returns, and as the gas production capacity increases, so does the projected rate of return, i.e. Phase II produces a significantly greater projected rate of return that Phase I. Because site selection and confirmation of the relating UCG design are yet to be completed, WHE is not currently in a position to release the full results of its project financial modelling.

With regards to coal quantity, the PFS assumes maximum coal consumption of approximately 780,000 tonnes per annum for both phases combined. Over a 25 year project life this equates to approximately 20 million tonnes of coal. Sampling data from the initial confirmatory borehole provided a coal energy content of 23.3MJ/kg to 29.9 MJ/kg which exceeds the assumed coal energy content of 22 MJ/kg used in the UCG design parameters within the PFS.

Figure 2: Mecsek Hills Project energy flow (to view Figure 2, visit  www.wildhorse.com.au)

For further information regarding detailed megawatt production profiles, please see the Technical Assumptions section of the Australian Stock Exchange ('ASX') release dated 1 June 2011.

For risks associated with the PFS please see the PFS risks listed at page 10 of the ASX release dated 1 June 2011 and in particular note:

·; The Company has defined a maiden JORC-reportable Inferred Coal Resource of 81 Mt (80.6 Mt) for the Komló Target Area, which forms part of the 1-1.25 Bt Exploration Target4 for the whole Mecsek Hills Gas Project. Further resource evaluation drilling is being implemented to determine if a JORC-classified Indicated and Measured resource, with sufficient coal suitable for UCG exploitation, exists within the Mecsek Hills Gas Project area. This work is expected to be completed later in 2011 and early 2012 as part of the ongoing feasibility studies.

·; The economic modelling and product option evaluations conducted were based upon a generic theoretical site within WHE's Mecsek Hills Gas Project Area and are not site specific. However, the PFS does take into consideration the substantial geological and analytical database as well as factors relevant to UCG, Hungary, the region, local energy markets and the licence area. No claim or production forecasts are made for specific sites.

·; The Company intends to evaluate drilling data on both its coal and CBM licences in order to fully understand the distribution of coal within the Mecsek Hills Gas Project area. Final UCG plant site selection will be determined after completion of the drilling programme and assessment of factors including geological structure, coal suitability, environmental permitting, hydrogeology as well as regulatory confirmation as to what mining licence(s) shall be required to permit conversion of coal into syngas utilising UCG technology.

The completion of the PFS on the Mecsek Hills UCG Project will be a defining step in the Company's overall development, and as our maiden UCG project moves into its construction and production phase, the Board will be concentrating on the continued advancement of its additional UCG portfolio. In addition, the Board will remain focussed on expanding our UCG portfolio through the identification and evaluation of additional UCG sites, in order to maximise our first mover advantage in Central Europe. Countries of particular interest to WHE include Germany, Poland and the Czech Republic, due to their overreliance on gas imports from Russia, creating a favourable pricing environment for domestic fuel suppliers, in addition to all three countries' large stranded coal resources.

An important dimension to our business model is our interest in the Mecsek Hills Uranium Project, one of Europe's largest uranium projects, which provides an immediate and clearly visible valuation basis for the Company. Progress at the Mecsek Hills Uranium Project continues to advance in conjunction with state-owned Mecsek-Öko, with whom WHE has a Cooperation Agreement. Mecsek-Öko owns the 19.6 sq km MML-E licence which is contiguous to WHE's 42.9 sq km Pécs uranium licence, and together form the Mecsek Hills Uranium Project.

The Co-operation Agreement between WHE, Mecsek-Öko and state owned Mecsekérc has been designed with the express aim to restart uranium mining in the Mecsek Hills vicinity. In line with this, progress to date has focussed on attaining further information regarding the Resource potential of the project. Following the completion of further analysis, an updated total JORC compliant Inferred resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 was published on 31 January 2011, followed by a new Exploration Target5 for of 55 to 90 Mlbs of U3O8 with a grade range of 0.075 - 0.10% U3O8. This Resource update, in addition to the upgraded Exploration Target, which is in addition to the Inferred Resource, underpins the high prospectivity of the Mecsek Hills Project and the significant value which it brings to the WHE stable of projects. In addition, the Co-operation Agreement with Mecsek-Öko provides further options for mine design through the provision of potential access to the down dip uranium bearing sandstone on the WHE's Pécs licence through the shallower uranium mineralisation on the contiguous MML-E licence.

With our dual focus on UCG and uranium project development, set against a backdrop of heightening concern regarding energy security and the overreliance on gas imports in Central Europe, WHE is perfectly positioned to capitalise on its first mover advantage. We have built a team of unrivalled technical and corporate experts with whom to achieve this, ensuring the onward development and growth of WHE into the next financial year and beyond as we build a leading supplier of fuel in Central Europe.

Matt Swinney

Managing Director

For further information please visit www.wildhorse.com.au or contact:

Competent Persons Statement

The geological modelling and estimation of the Exploration Target of 1-1.25 billion tonnes of coal at 18.8 to 29.3GJ/t for Wildhorse Energy Limited's Mecsek UCG Project was completed under the overall supervision and direction of Mr Alan Millar BSc. MSc. MAusIMM, who was a full time employee of CSA Global Pty Ltd and is a Competent Person as defined by the Australasian Code for the Reporting of Mineral Resources and Ore Reserves (JORC Code) 2004 Edition. Alan Millar consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in the report to which this statement is attached that relates to the Mecsek Hills Uranium Project Mineral Resource is based on information compiled by Mr Lauritz Barnes and Mr Neil Inwood. The geological modelling and estimation of the Exploration Target for the Mecsek Hills Uranium Project of 55 to 90 Mlbs of U3O8 with a grade range of 0.075 to 0.10% U3O8 was also compiled by Mr Barnes and Mr Inwood. Messrs Barnes and Inwood are both Members of The Australasian Institute of Mining and Metallurgy. Mr Barnes is an independent consultant and Mr Inwood is employed by Coffey Mining. Mr Barnes is the Competent Person responsible for the database, modelling, estimation methodology and Classification. Mr Inwood has reviewed the resource estimate and consents to take dual responsibility for the estimation methodology and Classification.

Both Messrs Barnes and Inwood and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Barnes and Mr Inwood consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Endnotes

1,2,5 The size and grade of the Exploration Target is conceptual in nature and it is uncertain if further exploration will result in the determination of a mineral resource. There is currently insufficient data to define a JORC compliant Mineral Resource for the Exploration Target. Mr Barnes and Mr Inwood (Competent Persons) have reviewed the historical data available for the Mecsek Hills Uranium Project and both made site visits to the area. They consider the Exploration Target to be reasonable based on the data available.

3,4 The potential quantity and grade is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Further Information on Wildhorse:

Wildhorse Business Model

The WHE business model is focussed upon applying UCG technology to convert coal into syngas and then selling the syngas to power stations as a gas feedstock. The development and expansion of the UCG portfolio is underpinned by a potentially world class uranium project which the Company is advancing with its Hungarian uranium development partners Mecsek-Öko and Mecsekérc, with the support of the Hungarian Government.

Business Strategy

The Company's business strategy is to become a major supplier of gas feedstock to power stations in Central Europe. WHE's project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central Europe where gas markets are dominated by Russian gas imports, energy security is a major factor for governments and large scale industrial consumers of gas and gas prices are correspondingly high. The expansion is underpinned by the development of the Mecsek Hills Uranium Project.