September Quarterly Report

31 October 2012

Wildhorse Energy ('WHE' or 'the Company'), the AIM and ASX listed company focussed on developing underground coal gasification ('UCG') and uranium projects in Central and Eastern Europe, is pleased to announce its Quarterly Report for the three months ended 30 September 2012.

Overview:

·; Solid progress made with regards to refining the UCG project model in order to enhance potential returns through lower initial capital requirements and ability to apply simplified licencing procedures

·; Conducting discussions with a range of parties as part of an evaluation of strategic partners to fund completion of the Bankable Feasibility Study ('BFS') for its flagship Mecsek Hills UCG Project

·; Coal licence applications advancing in Central and Eastern Europe in line with roll-out strategy to become a leading provider of fuel in the region

·; Constructive meetings with Hungarian institutions progressing the establishment of required UCG regulatory development as part of the Company's recent UCG Regulatory Development Cooperation Agreement

·; Company ideally positioned to capitalise on the European UCG opportunity through its technological roll out plan

·; Uranium due diligence study commenced and well underway following grant of Hungarian Cabinet approval for the formation of a joint venture to develop Mecsek Hills Uranium Project

·; Total JORC Inferred Resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 and an Exploration Target1 of an additional 55-90Mlbs of U3O8 with a grade range of 0.075-0.10% U3O8, making it one of the largest uranium deposits in Europe

WHE Managing Director Matt Swinney said, "The UCG opportunity in Europe is highly exciting with huge stranded coal assets offering the perfect energy source to satisfy the increasing energy demands of Europe. We remain at the forefront of UCG in Europe and our team continues to make solid progress towards the application of this established technology. During the last quarter, our team has been working hard to build upon key corporate initiatives and agreements implemented in H1 2012 with respect to both our UCG and uranium portfolio. On the UCG side, in tandem with evaluating ways to optimise our UCG project with the potential adoption of lower capital and simplified permitting requirements, we continue to advance both a range of growth opportunities throughout Central and Eastern Europe and our search for an appropriate strategic partner. With regards to the Mecsek Hills Uranium Project, studies are also well underway following the receipt of Cabinet approval to form a joint venture to develop the Mecsek Hills Uranium project from the Hungarian government. We are very pleased with the results of all work conducted to date and we are confident that the results will enhance our operations as we focus on becoming a leading supplier of fuel in Central and Eastern Europe."

UCG Update

The Company remains in discussion with potential strategic partners to fund the completion of the BFS and once secured, the Company will initiate a drilling programme to upgrade its current JORC compliant Inferred resource to the Indicated and Measured categories.

As we identify a strategic partner, WHE has postponed key costs associated with the BFS including its UCG drilling and above ground engineering programme, in order to maximise the value of our current cash.

Towards the BFS, the Company is conducting works to enhance environmental and resource definition and comprehension of its Project target coal areas. This work includes:

·; Three dimensional seismic re-processing and interpretation, in consultation with the Hungarian Geophysical and Geological Association, MFGI, to develop a three dimensional model of the target Project coal panels including geological displacements and stratigraphical horizons

·; High resolution two dimensional seismic measurements to define project target coal packages and de-risk and define the coal panel selection

·; Historical borehole logging and coal quality sampling to improve the historical Hungarian drilling database

·; Environmental studies with Golders Associates on Project baseline hydro-geological monitoring to upgrade the conceptual water model

The Company is also conducting engineering re-design studies to explore the potential for a commercial demonstration UCG to CCGT facility of approximately 50 MWe Gross (100MWt LHV fuel input), in order to enhance potential returns through lower initial capital requirements and ability to apply simplified licencing procedures. The study is reviewing potential options to reduce upfront capital expenditure for the project through a phased development approach.

As part of the phased approach, the Company is focusing its engineering redesign works on developing the commercial demonstration project in two phases, the first phase being the development of the underground gas production facility and the second phase, the above ground gas processing, gas clean up and gas turbine facilities. This approach will enable the Company to demonstrate critical aspects of UCG, such as gas quality and flow rates, prior to obtaining all the required capital for the complete project, which includes both phases. The Company believes this approach will substantially reduce the capital requirement to successfully demonstrate de-risking of UCG gas production rates and quality and will therefore greatly assist with future capital requirements. The required funding for the above ground facilities and equipment (phase 2) represents the most significant portion of the required project funds.

In July, WHE signed a Cooperation Agreement, with the Hungarian Geological and Geophysical Institute and the Faculty of Earth Science and Engineering of University of Miskolc, to formalise the legislative and regulatory framework required to develop UCG projects in Hungary. Since then, the WHE team has been working closely with these institutions to assess the requirements for a regulatory framework for the UCG industry and the Company is pleased to report that progress has been highly constructive.

In line with the Company's strategy to expand its footprint in Central and Eastern Europe, WHE continues to advance its coal licence applications throughout the region and particularly in Poland where the Company has seven licence applications under consideration.

As part of the Company's commitment to prudent spending and directing the Company resources to core licence areas, the Company has not pursued its required Technical Operating Plan ('TOP') exploration work and drilling at its non-core Amelie licence area. This decision was based upon the fact that the area is not part of the Company's proposed project area and was viewed by the Company as non material to its future developmental aims. Accordingly the Amelie licence has not been renewed.

Mecsek Hills Uranium Project Update

In June, the Hungarian government formally pledged its support for the development of a Joint Venture ('JV') between the Company, Hungarian state owned Mecsek-Öko ('MO') and Mecsekérc ('ME'), and Hungarian Electricity Ltd ('MVM'), the owner of Paks Nuclear Power Plant ('Paks NPP').

This marked a major step in the development of this strategically important uranium deposit, which combines WHE's 42.9 sq km Pécs-Abaliget uranium licence and MO's adjoining 19.6 sq km MML-E uranium licence. The project has a total JORC Inferred Resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 and an Exploration Target1 of an additional 55-90Mlbs of U3O8 with a grade range of 0.075-0.10% U3O8, making it one of the largest uranium deposits in Europe.

On the back of this, WHE has commenced evaluation of the necessary conditions to restart uranium mining in the Mecsek Hills as part of the JV approval process required by the Hungarian government.

APPENDIX 5B

1.1 Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

(a) Consolidated statement of cash flows

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

Non-cash financing and investing activities

Financing facilities available

Add notes as necessary for an understanding of the position.

Estimated cash outflows for next quarter

1.2 Reconciliation of cash

Changes in interests in mining tenements

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

1.3 Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

1.4 Notes

1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

Footnotes

1 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.

**ENDS**

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

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 and Eastern Europe. WHE's project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central and Eastern 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.

Alongside its UCG assets, the Company also has a significant interest in a highly prospective uranium deposit in Hungary, which has a JORC Inferred resource of 48.3Mt at 0.072% uranium U3O8 for 77Mlbs of U3O8.As announced on 27 June 2012, the government has issued a formal decree in support of the formation of a joint venture ('JV') with state-owned organisations, Mecsek-Öko, and Mecsekérc and Hungarian Electricity Ltd ('MVM') (the owner of Paks Nuclear Power Plant). The JV's initial purpose will be to evaluate the necessary conditions to restart uranium mining in the Mecsek Hills with the ultimate aim of recommencing uranium mining at the Mecsek Hills Uranium Project.