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DUXTON WATER QUARTERLY ACTIVITIES REPORT Appendix 4C ⚫ September 2021 Duxton Water Limited ( ASX : D2O ) ( " Duxton Water " or " the Company " ) is pleased to provide the Quarterly Activities Report for the period ended 30 September 2021. The purpose of this report is to provide an update on key areas of business activity during the quarter ended 30 September 2021. This report should be read in conjunction with the Company's respective Quarterly Cash Flow Report ( Appendix 4C ) . WATER PORTFOLIO UPDATE ENTITLEMENTS The Company is engaged in building a targeted portfolio of Australian water entitlements primarily located in the southern Murray Darling Basin ( ' SMDB ' ) . Duxton Water utilises this portfolio to provide water supply solutions that offer visibility and flexibility to it's Australian farming partners . At 30 September 2021 , the Company held approximately 80GL of permanent water entitlements across 18 different asset types and classes . During the quarter , the Company settled a number of permanent water transactions which has enabled the Company to strategically re - deploy capital into regions where the Company sees intrinsic value or future strategic benefits . There are several transactions in the Company's acquisition pipeline . Entitlement pricing across the SMDB has continued to strengthen throughout the year , with a weighted average increase of 7.8 % since the start of 2021 . Increased demand has come from an array of larger permanent crop producers entering the market with the view to improve their long - term water security . Small to medium - sized irrigators have also been active in the market to prepare for future water years . Australian irrigators continue to be the greatest beneficiaries from water entitlement price increases , as they collectively own the majority of water entitlements on issue . Duxton Water has continued to work alongside its farming partners throughout the September quarter . With improved storages and increased in - valley rainfall , the Company has continued to provide its range of water supply products to the market . Duxton Water is committed to supporting irrigators through these conditions by offering long - term water leases , spot allocation sales , forward contracts and carry over products . ALLOCATION MARKET Very few allocation trades went through in the first two weeks of the 21/22 water season . This slow start to the season was influenced by the significant amount of water that was carried forward from the 20/21 water year and the above average rainfall that was experienced in June / July . Initial trades in the Lower Murry started at $ 170- $ 200 / ML , with the Goulburn at $ 90- $ 110 / ML and the Murrumbidgee at $ 120- $ 150 / ML . Allocation prices have continued to soften throughout the quarter due to improved dam storages , improved rainfall and improved allocations relative to the preceding 2-3 years . The Lower Murray is currently trading at $ 110- $ 120 / ML in the Lower Murray , $ 95- $ 105 / ML in the Goulburn and $ 90- $ 100 / ML in the Murrumbidgee . Inter Valley Trade has been limited this season as each of the respective Natural Resource Managers deal with the increased streamflows , dam storages and risk of spill . On 15 October , the Resource Manager for northern Victoria announced that allocations for all Victorian High Reliability entitlements ( Murray , Broken , Goulburn , Campaspe , Loddon and Bullarook Creek ) are now at 100 % . The announcement also advised that due to further spill , a further 61 % of spillable account balances will be deducted from accounts . LEASES The leased portion of the portfolio increased from 66 % ( June ) to 68 % ( September ) . The Board maintains its view to have 70-80 % of the Company's permanent water portfolio under lease . This approach delivers a visible and stable revenue stream across both wet and dry years . The Company is in discussions with a number of existing lessees to renew their current leases as well as engaging with new potential lessees looking for long - term water security for their businesses . FINANCIAL UPDATE NAV During the September 2021 quarter , the Company's Net Asset Value ( " NAV " ) increased from $ 1.63 per share in June to $ 1.72 per share in September . The portfolio has seen both high and general security asset values continue to appreciate over the last 6-9 months . High security values have been supported as permanent irrigators look for long term water security ahead of the next dry period . Demand for general security assets has returned as these assets will attract a material yield this year as we return to a wetter part of the climatic cycle . Total water assets increased by 1 % between June 2021 ( $ 310 million ) and September 2021 ( $ 326 million ) due to purchasing more permanent water entitlements , as well as increases in permanent water prices . Surplus cash continues to be deployment into both high and general security assets in areas where the Duxton Water currently sees strong demand for long - term leases moving forward . DEBT At 30 September 2021 , the Company had drawn debt of $ 103 million . The Company increased it's interest rate swap position locking in a further $ 5 million of debt for 10 years . Management will continue to monitor long - term interest rates and may continue to use interest rate swaps as a tool to hedge against future interest rate changes . At 30 September 2021 , the Company's LVR ( Debt to Water Assets ) is 28 % . DUXTON WATER LTD DUXTON HOUSE . 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [ +61 ] 8 8130 9500 page 1 of 2