Orpheus Energy : Quarterly Activities and Cashflow Report March 2016

3f8b8c26-14b9-4d29-8385-490d46576541.pdf Quarterly Report

Activities Report for the Quarter ended 31 March 2016

Reverse take-over update

On 12 February 2016, Orpheus announced it had formally entered into a Share Purchase Agreement with the vendors to acquire 100% of the issued share capital of M/s. Wavetronic Solutions Private Ltd ("Wavetronic") in consideration for the issue of shares and options in Orpheus (Acquisition).

The Acquisition will constitute a backdoor listing of Wavetronic into Orpheus. Consequently, the Acquisition is subject to a number of conditions precedent and Completion in accordance with the terms of the Share Purchase Agreement. Conditions precedent include the approval of Orpheus Shareholders at a General Meeting for the proposed change to the nature of its activities under Listing Rule 11.1.2 and compliance with a number of regulatory approvals, such as re-complying with Chapters 1 and 2 of the Listing Rules.

Wavetronic, to be renamed Mis. Prognos Solutions Private Ltd ("Prognos"), provides highest quality, versatile, one-stop technology solutions to a global client base. Business verticals include software development, mobile application development, geographical information systems, and professional services. Wavetronic has approximately 40 international clients, with most revenues currently generated in the US from repeat customers in the focus

sectors of education, health care, media & entertainment, and telecommunications.

Wavetronic has achieved strong, recurring and growing gross revenues for 2015 (March year-end) of US$35.9M (-AUD$47.1M) and for the nine months to December 2015 of US$30.0M (-AUD$41.05M). EBITDA for 2015 (March year-end) was US$5.0M

(-AUD$6.58M) and for the nine months to December 2015 was US$3.9 (-AUD$5.34M).

Wavetronic is well-positioned to exploit Australian market growth and opportunities, particularly with the current industry consolidation in the IT services sector. This proposed ASX backdoor listing will provide Wavefronic both the platform and access to capital markets to rapidly further develop the company through both acquisitions and organic growth.

As part of the transaction, Orpheus shareholders will be invited to participate in a Share Purchase Plan (SPP) to raise AUD$4.0M to facilitate the minimum spread requirements of the ASX Listing Rules.

On 7 March 2016, Orpheus announced that there had been some slippage in the indicative timetable for the Transaction. Since that time, there hasve been some further delays experienced in the process.

Work is ongoing on the Notice of Meeting to Shareholders and the Prospectus for the proposed $4M Share Purchase Plan. Orpheus will keep shareholders updated of progress.

Orpheus Energy Limited • ABN 67 121 257 412 • Suite 9, Level 3, 3 Spring Street, Sydney NSW 2000 Australia

T: +61 2 8281 8200 • info@orpheusenergy.com.au • www.orpheusenergy.com.au

Quarterly Report Debt Recovery Update

As previously updated in the December 2015 Quarterly Activities Report, Suksmanto remains in breach of the Settlement Agreement. Orpheus has additional security from Suksmanto's family in the form of a pledge agreement over 1,073 shares (equivalent to 7%) owned by Noegroho Pranoto in Indonesian property development company, PT Abadi Guna Papan ("AGP") and a pledge agreement over 578 shares (equivalent to 3.5%) owned by Yohana Kumiastuti in AGP ("Shares Pledge Agreements").

Suksmanto is still to pay any of the outstanding funds owed to Orpheus. According to the Settlement Agreement, as at 31 March 2016, IDR 45.6 billion Rupiah, plus interest of IDR 3.605 billion Rupiah (total 49.205 billion Rupiah or -AUD$4.9M) remains due.

Given Suksmanto's continuing breach of the Settlement Agreement, Orpheus, as the pledgee under the Shares Pledge Agreements is entitled to sell the pledged shares, on behalf of the pledgors based on powers of attorney to sell shares and consents to transfer issued by the pledgors, to recover the outstanding funds owed to Orpheus. Over the last three months, Orpheus has continued to directly, and through its lawyers, conduct discussions with numerous potential acquirers of the AGP shares.

Additionally, Suksmanto continues to confirm that he is in advanced negotiations to sell one of his other properties (separate to the properties owned by AGP), and if this sale eventuates, Orpheus will be paid a large portion of the outstanding amount owed.

Notwithstanding this activity, Orpheus has now obtained a final piece of documentation required for the lodgement of a formal Police Report under Indonesian law, and if the Company does not receive the funds it is owed in the near future, Orpheus will instruct its lawyers to lodge the formal Police Report.

Disclaimer - Forward looking statements

This release may contain forward-looking statements .These statements are based upon management's current expectations, estimates, projections and beliefs in regards to future events in respect to Orpheus's business, the Industry In which It operates. These forward looking statements are provided as a general guide and should not be relied upon as an indication or guarantee of future performance.The bases for these statements are subjected to risk and uncertaintles that might be out of control of Orpheus Energy Limited and may cause actual resutts to differ from the release. Orpheus Energy Limited takes no responslbBily to make changes to these statements to reflect change of events or circumstances after the release.

Quarterly Report for the Quarter ended 31 Marcil 2016 Page 2

Appendix SB Mining exploration entity quarterly report

Appendix SB

Mining exploration entity quarterly report

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

Rule 5.3

Name of entity

I ORPHEUS ENERGYLIMITED

ABN

67 121 257 412

Quarter ended ("current quarter")

f arch 2016

Consolidated statement of cash flows

Cash flows related to operating activities Receipts/(credits) from product sales and related debtors Payments for exploration and evaluation development production administration Dividends received Interest and other items of a similar nature received Interest and other costs of finance paid Income taxes paid Other (provide details if material) GST refund Other Net Operating Cash Flows +	Current quarter $A'OOO	Year to date (9 months) $A'OOO
	- (84) - - - -	14 (275) 5 (5) - -
	(84)	(261)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets Proceeds/(refunds) from sale of:(a)prospects Loans/advances to other entities (b)equity investments (c)other fixed assets 1.11 Loans repaid by other entities including working capital advances Other (provide details if material) Deposits recouped Total operating and investing cash flows (carried forward) Advance received Net investing cash flows	- - - - - - - - 39	- - - - - 5 - 74 39
	39	118
	(45)	(143)

+ See chapter 19 for defined terms.

30/9/2001 Appendix SB Page I

Appendix SB

Mining exploration entity quarterly report

Current quarter

$A'OOO

Year to date

(3 months)

$A'OOO

1.13 Total operating and investing cash flows (brought forward) (45) I (t43) I

Cash flows related to financing activities	- - 40 - - -	- - 142 - - -
1.14 Proceeds from issues of shares, options, etc.
Net of brokerage
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other -Loans to related party
Netimancine cash flows	40	142
Net increase (decrease) in cash held Cash at beginning of quarter/year to date Cash acquired on acquisition of subsidiaries Exchange rate adjustments to item 1.20 Cash at end of auarter	(5) 10 - -	(1) 6 - -
	s	5

NOTE:

Fundsfrom signed agreementsfor sale of assets to Nugroho Suksmanto approved by shareholders at the EGM on 14 August 2014, yet JQ be received - -$7.6mi/lion. Orpheus subsequently executed a settlement agreement with Nugroho Suksmanto with payments in monthly instalments commencing with approx $2.08 million to bepaid by 31 August 2015. Thispayment was not met and Suksmanto is in breach of the settlement agreement.

As part of the settlement agreement Orpheus has been provided with additional security in theform of apledge over shares in a real estate company in which Nugroho Suksmanto has a controlling interest.

Suksmanto is still topay any of the outstanding funds owed to Orpheus. According to the Settlement Agreement, as at 31 March 2016, /DR 45.6 billion Rupiah, plus interest of /DR 3.605 billion Rupiah (total 49.205 billion Rupiah or

-AUD$4.9M) remains due.

Given Suksmanto's continuing breach of the Settlement Agreement, Orpheus, as the pledgee under the Shares Pledge Agreements is entitled to sell the pledged shares, on behalf of the pledgors based on powers of attorney to sell shares and consents ro transfer issued by the pledgors , JQ recover the outstanding funds owed to Orpheus. Over the last three

months, Orpheus has continued to directly, and through its lawyers, conduct discussions with numerous potential acquirers of the AGP shares.

Additionally, Suksmanto continues to confirm that he is in advanced negotiations to sell one of his other properties (separate to the properties owned by AGP), and if this sale eventuates, Orpheus will be paid a large portion of the outstanding amount owed.

In the event that additional funds are needed for working capital the Directors of Orpheus have indicated their willingness to contributefurther short term loanfunds .

Payments to directors of the entity and associates of the directors

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

Current quarter

$A'OOO

1.2 Aggregate amount of payments to the parties included in item 1.2 -

1.2 Aggregate amount of loans to the parties included in item 1.10 -

+ See chapter 19 for defined terms.

Appendix SB Page 2 30/9/2001