ALLIGATOR ENERGY LIMITED — Proxy Solicitation & Information Statement 2011

Jul 10, 2011

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Notice of General Meeting and Explanatory Statement

Alligator Energy Limited ABN 79 140 575 604 Date of Meeting: 10 August 2011 Time of Meeting: 2:00 pm (Brisbane time) Place of Meeting: Endeavour 1 Room, Level 1, Christie Centre, 320 Adelaide St Brisbane QLD 4000

Notice of General Meeting

Notice is given that a General Meeting of shareholders of Alligator Energy Limited ABN 79 140 575 604 ( Company ) will be held at the Endeavour 1 Room, Level 1, Christie Centre, 320 Adelaide St Brisbane QLD 4000 on 10 August 2011 at 2:00 pm (Brisbane time).

Agenda

Ordinary business

1. Adoption of Employee Share Option Plan

To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution, with or without amendment:

“That, for the purposes of Listing Rule 7.1, as an exception 9 under Listing Rule 7.2, and for all other purposes, the Company is authorised to adopt the Employee Share and Option Plan (ESOP) in the form annexed to this Notice of Meeting, with effect from the date of this Resolution.”

2. Grant of options to Gregory Duncan

To consider and, if thought fit, pass the following resolution, as an Ordinary Resolution of the Company:

“That in accordance with section 208(1) of the Corporations Act and Listing Rule 10.11 and for all other purposes, the Company be authorised to issue:

• (a) 1,000,000 Options exercisable at a price of $0.25 and expiring on 17 August 2012 ( First Tranche Options ); and

• (b) 1,000,000 Options exercisable at a price of $0.40 and expiring on 17 August 2013 ( Second Tranche Options );

to Gregory Duncan, being the Alternate Director of Andrew Vigar, or his nominee ( Mr Duncan ) and otherwise on terms set out in the Explanatory Statement”.

Terms used in this Notice of Meeting are defined in Section 5 of the Explanatory Statement which accompanies this Notice of Meeting.

VOTING EXCLUSION STATEMENT

The Company will disregard any votes cast on this Resolution by:

• Mr Duncan; and

• any associate of Mr Duncan.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

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Notice of General Meeting

3. Grant of options to Robert Sowerby

To consider and, if thought fit, pass the following resolution, as an Ordinary Resolution of the Company:

“That in accordance with section 208(1) of the Corporations Act and Listing Rule 10.11 and for all other purposes, the Company be authorised to issue:

• (a) 1,000,000 Options exercisable at a price of $0.25 and expiring on 17 August 2012 ( First Tranche Options ); and

• (b) 1,000,000 Options exercisable at a price of $0.40 and expiring on 17 August 2013 ( Second Tranche Options );

to Robert Sowerby, being a Director and the Chief Executive Officer of the Company, or his nominee ( Mr Sowerby ) and otherwise on terms set out in the Explanatory Statement”.

Terms used in this Notice of Meeting are defined in Section 5 of the Explanatory Statement which accompanies this Notice of Meeting.

VOTING EXCLUSION STATEMENT

The Company will disregard any votes cast on this Resolution by:

• Mr Sowerby; and

• any associate of Mr Sowerby.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

General business

To consider any other business as may be lawfully put forward in accordance with the Constitution of the Company.

By order of the board

Evan Hughes Company Secretary 24 June 2011

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Explanatory Statement

1. Introduction

This Explanatory Statement is provided to Shareholders of Alligator Energy Limited ABN 79 140 575 604 ( Company ) to explain the resolutions to be put to Shareholders at the General Meeting to be held at the the Endeavour 1 Room, Level 1, Christie Centre, 320 Adelaide St Brisbane QLD 4000 on 10 August 2011 commencing at 2:00 pm (Brisbane time).

The Directors recommend Shareholders read the accompanying Notice of Meeting and this Explanatory Statement in full before making any decision in relation to the Resolutions.

Terms used in this Explanatory Statement are defined in Section 4.

2. Adoption of Employee Share Option Plan

2.1 Introduction

The Company is seeking to adopt an employee share and option plan ( ESOP ) pursuant to which issued capital of the Company may be made available to senior management and staff as a form of longer term equity incentive. Directors are not classed as eligible employee under the employee share and option plan.

2.2 Listing Rule 7.1 - Issues exceeding 15% of capital

Listing Rule 7.1, known as the "15% rule" ( 15% Rule ), limits the capacity of a company to issue securities without the prior approval of its shareholders. In broad terms, Listing Rule 7.1 provides that a company may not, in a twelve month period, issue securities equal to more than 15% of the total number of ordinary securities on issue at the beginning of the twelve month period unless the issue is first approved by a majority of disinterested shareholders or the issue otherwise comes within one of the exceptions to Listing Rule 7.1.

For employee incentive schemes such as the ESOP, an exception to Listing Rule 7.1 exists. For the exception to apply, shareholder approval must be given in respect of any issues under the ESOP every 3 years.

There have been no securities issued under the ESOP or any other employee incentive scheme of the Company in the past 3 years. Approval of the ESOP is therefore sought under exception 9 to Listing Rule 7.2 so that any issue of securities under the ESOP over the next 3 years is disregarded when determining the 15% threshold of the Company.

A summary of the ESOP is set out in Appendix A to this Notice of Meeting.

2.3 Directors’ Recommendation

The Directors recommend that you vote in favour of this Ordinary Resolution.

3. Resolutions 2 and 3 – Issue of Options

Introduction

A contract of service was entered into with a company associated with Robert Sowerby and also a company associated with Gregory Duncan during August 2010 ( Service Contracts ). The respective Service Contracts provided for the issue of Options to each of Robert Sowerby and Gregory Duncan and this was disclosed in Alligator’s prospectus dated 26 November 2010 ( Prospectus ). It was also noted in the Prospectus that the Options would not be issued without Shareholder approval. Shareholder approval for the issue of the Options is now being sought.

The Directors have resolved to refer to Shareholders for approval the proposed grant of:

• (a) 1,000,000 Options exercisable at a price of $0.25 and expiring on 17 August 2012 ( First Tranche Options ); and

• (b) 1,000,000 Options exercisable at a price of $0.40 and expiring on 17 August 2013 ( Second Tranche Options );

Explanatory Statement

to Robert Sowerby, a director of the Company, and Gregory Duncan, being the Alternate Director of Andrew Vigar (or their respective nominees)(each a Recipient ) ( the Options ). The terms of the Options are set out in more detail below.

Approval for the issue of the Options is sought in accordance with the Listing Rule 10.11 and Part 2E of the Corporations Act. As approval is being sought under Listing Rule 10.11, approval will not be required under Listing Rule 7.1.

In order for the Options to be granted to a Director, the requirements of Chapter 2E of the Corporations Act need to be observed.

Options Terms

A summary of the terms of the Options are set out in Annexure “B”.

Regulatory Requirements

Chapter 2E of the Corporations Act

Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of a public company unless the benefit falls within one of various exceptions to the general prohibition (including where shareholder approval is obtained).

Resolutions 2 and 3 if passed, will confer financial benefits on the Recipients (being related parties of the Company) and the Company seeks to obtain shareholder approval in accordance with the requirements of Chapter 2E of the Corporations Act and for this reason, and for all other purposes, the following information is provided to Shareholders.

• (a) The related parties to whom Resolutions 2 and 3 would permit the financial benefit to be given

Each of Robert Sowerby and Gregory Duncan, a Director and Alternate Director of the Company respectively.

• (b) The nature of the financial benefit

The nature of the proposed financial benefit to be given is:

• (1) the grant of the First Tranche Options to Gregory Duncan, as referred to in Resolution 2;

• (2) the grant of the Second Tranche Options to Gregory Duncan, as referred to in Resolution 2;

• (3) the grant of the First Tranche Options to Robert Sowerby, as referred to in Resolution 3;

• (4) the grant of the Second Tranche Options to Robert Sowerby, as referred to in Resolution 3.

• (5) the Options shall be granted for nil consideration;

• (6) the Options shall vest and be capable of exercise into fully paid ordinary Shares on the Vesting Date;

• (7) upon vesting, the Options shall be exercisable into fully paid ordinary Shares on or before the Expiry Date;

• (8) the exercise price for the First Tranche Options shall be $0.25 for each Option;

• (9) the exercise price for the Second Tranche Options shall be $0.40 for each Option.

• (c) Directors’ Recommendation

Resolution 2

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Explanatory Statement

With respect to Resolution 2, Denis Joseph Gately, Robert Sowerby, Leigh Curyer, Paul Dickson and Andrew James Vigar recommend that Shareholders vote in favour of this resolution. The reasons for their recommendation include:

• (1) the grant of the Options as proposed to Gregory Duncan will provide him with reward and incentive for future services he will provide to the Company to further the progress of the Company;

• (2) the number of Options has been determined on the basis that the value ascribed to those Options is commensurate with the intended reward and incentive to Gregory Duncan;

• (3) the Options are not intended as a substitute for salary or wages or as a means for compensation for past services rendered; and

• (4) in the Company’s circumstances as they existed as at the date of this Explanatory Statement, Denis Joseph Gately, Robert Sowerby, Leigh Curyer, Paul Dickson and Andrew James Vigar considered that the incentive provided a cost-effective and efficient incentive as opposed to alternative forms of incentives (eg cash bonuses, increased remuneration). However, it must be recognised that there will be an opportunity cost to the Company, being the price at which the Company could grant the Options to a third party.

As Mr Duncan is interested in the outcome of Resolution 2, he accordingly makes no recommendation to Shareholders in respect of this resolution.

Resolution 3

With respect to Resolution 3 Denis Joseph Gately, Leigh Curyer, Paul Dickson and Andrew James Vigar recommend that Shareholders vote in favour of this resolution. The reasons for their recommendation include:

• (1) the grant of the Options as proposed to Robert Sowerby will provide him with reward and incentive for future services he will provide to the Company to further the progress of the Company;

• (2) the number of Options has been determined on the basis that the value ascribed to those Options is commensurate with the intended reward and incentive to Robert Sowerby;

• (3) the Options are not intended as a substitute for salary or wages or as a means for compensation for past services rendered; and

• (4) in the Company’s circumstances as they existed as at the date of this Explanatory Statement, Denis Joseph Gately, Leigh Curyer, Paul Dickson and Andrew James Vigar considered that the incentive provided a cost-effective and efficient incentive as opposed to alternative forms of incentives (eg cash bonuses, increased remuneration). However, it must be recognised that there will be an opportunity cost to the Company, being the price at which the Company could grant the Options to a third party.

As Robert Sowerby is interested in the outcome of Resolution 3, he accordingly makes no recommendation to Shareholders in respect of this resolution.

• (d) Directors’ Interest and other remuneration

Gregory Duncan

Gregory Duncan has a material personal interest in the outcome of Resolution 2, as it is proposed that Options be granted to him (or his nominee).

Excluding the Options, Gregory Duncan (and entities associated with him) hold 4,047,000 Shares and no options in the Company. Please refer to the table below which indicates the holdings of Gregory Duncan (and entities associated with him).

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Explanatory Statement

Other than the Options to be issued to Gregory Duncan pursuant to Resolution 2, Pacific Consulting Services Pty Ltd, a company associated with Greg Duncan, has been paid or is entitled to receive consideration described below for providing the services of Greg Duncan in relation to the day-to-day management of the development of the Tin Camp Creek Project and other exploration services at commercial rates to Alligator:

• (a) a consultancy fee of $220,000 per annum plus GST payable by the Company in equal monthly instalments;

• (b) if Mr Duncan performs services of more than 13 days per month during the term, subject to the accrual of days provided for in the agreement, he will be entitled to be paid a daily rate of $1,600 for services rendered in excess of 13 days;

Robert Sowerby

Robert Sowerby has a material personal interest in the outcome of Resolution 3, as it is proposed that Options be granted to him (or his nominee).

Excluding the Options, Robert Sowerby (and entities associated with him) holds 5,075,000 Shares and no options in the Company. Please refer to the table below which indicates the holdings of Robert Sowerby (and entities associated with him).

Other than the Options to be issued to Robert Sowerby pursuant to Resolution 3, MinEarth Pty Ltd, a company associated with Robert Sowerby, has been paid or is entitled to receive consideration described below for providing the services of Robert Sowerby in relation to the day-to-day management of the development of the Tin Camp Creek Project to Alligator:

• (a) a consultancy fee of $220,000 per annum plus GST payable by the Company in equal monthly instalments;

• (b) if Mr Sowerby performs services of more than 13 days per month during the term, subject to the accrual of days provided for in the agreement, he will be entitled to be paid a daily rate of $1,600 for services rendered in excess of 13 days;

If all of the Options granted are exercised by Gregory Duncan and Robert Sowerby (or their nominees as the case may be), the following will be the effect on their holdings in the Company:

Director	Current Share Holding1	% of Total Share Capital	Share Capital Upon Exercise of Options1	% of Total Share Capital2
Gregory Duncan and associated entities	4,047,000	2.60 %	6,047,000	3.80 %
Robert Sowerby	5,575,000	3.59%	7,575,000	4.75%
**Total **	9,622,000	6.19%	13,622,000	8.55%
Total Shares on Issue	155,335,000	100%	159,335,000	100%

Notes:

1. This assumes that none of the current options on issue in the Company are exercised and no further securities are issued.

2. This assumes that there will be 159 335 000 Shares on issue upon the exercise of all of the Options.

3. (e) Valuation

The Options are not currently quoted on the ASX and as such have no market value. The Options each grant the holder a right of grant of one ordinary Share in the Company upon exercise of the Options and payment of the exercise price of the Options described above. Accordingly, the Options may have a present value at the date of their grant.

The Options may acquire future value dependent upon the extent to which the Shares exceed the exercise price of the Options during the term of the Options.

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Explanatory Statement

As a general proposition, options to subscribe for ordinary fully paid shares in a company have a value. Various factors impact upon the value of options including:

• (1) the period outstanding before the expiry date of the options;

• (2) the exercise price of the options relative to the underlying price or value of the securities into which they may be converted;

• (3) the proportion of the issued capital as expanded consequent upon exercise represented by the shares issued upon exercise (ie whether or not the shares that might be acquired upon exercise of the options represent a controlling or other significant interest);

• (4) the value of the shares into which the options may be converted; and

• (5) whether the options are listed (ie readily capable of being liquidated).

There are various formulae which can be applied to determining the theoretical value of options (including the formula known as the Black-Scholes Model option valuation formula).

The Company has commissioned an independent valuation of the options, for the purposes of disclosing to Shareholders such information required to decide whether or not it is in the Company’s interest to pass Resolutions 2 and 3 and disclosing expenses in the Company’s Financial Statements in accordance with AASB 2 Share Based Payments, using the Black-Scholes Model , which is the most widely used and recognised model for pricing options. The value of an option calculated by the Black-Scholes Model is a function of the relationship between a number of variables, being the price of the underlying Share at the time of issue, the exercise price, the time to expiry, the risk-free interest rate, the volatility of the Company’s underlying Share price and expected dividends.

Inherent in the application of the Black-Scholes Model are a number of inputs, some of which must be assumed. The data relied upon in applying the Black-Scholes Model was:

• (1) the exercise price of the Options being

• i. in respect of the First Tranche Options, $0.25 each; and

• ii. in respect of the Second Tranche Options, $0.40 each.

• (2) a market price of Shares of $ 0.088;

• (3) expiry date of:

• i. in respect of the First Tranche Options, 17 August 2012; and

• ii. in respect of the Second Tranche Options, 17 August 2013.

• (4) a volatility measure of 92.276 %;

• (5) a risk-free interest rate of 4.80% for the options proposed to be issued to the Directors; and

• (6) a dividend yield of nil .

Some relatively minor variables were included in the calculation to estimate the value of Option as “American style” options (being exercisable at any time prior to the stated expiry date). Theoretically, the Black-Scholes Model prices “European style” options (being exercisable only on this exercise date).

Based on the independent valuation of the Options, the Company agrees that the respective value of the Options to be issued pursuant to Resolutions 2 and 3 are as follows:

• Gregory Duncan – $ 23,567;

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Explanatory Statement

• Robert Sowerby – $ 23,567.

(f) Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its Directors

There is no other information known to the Company or any of its Directors save and except as follows:

Market Price movements:

The option valuation noted above is based on a market price per Share of $0.088 based upon the volume weighted share price for a twenty day period ending 22 June 2011 when this explanatory statement was prepared.

There is a possibility that the market price of the Shares will change up to the date of the General Meeting.

Trading History

The Company does not intend to apply for listing of the Options on the ASX. However, the Company shall apply for listing of the resultant shares of the Company issued upon exercise of any Option.

The trading history of the Shares since the company was listed on the ASX on 3[rd] February 2011 is set out below.

	Market Price at 23 June 2011	Market Price from 3~~rd~~ Feb 2011 to date of Notice of Meeting
High	$0.086	$0.24
Low	$0.086	$0.08
VWAP	N/A	$0.18

Opportunity Costs

The opportunity costs and benefits foregone by the Company issuing the Options is the potentially diluted impact on the issued Share capital of the Company (in the event that the options are exercised). Until exercised, the issue of the Options will not impact upon the number of Shares on issue in the Company. To the extent that upon their exercise the dilutionary impact caused by the issue of the Shares will be detrimental to the Company, this is more than offset by the advantages accruing from the Company securing the services of experienced and skilled executives on appropriate incentive terms.

It is also considered that the potential increase of value in the Options is dependent upon a concomitant increase in the value of the Company generally.

Taxation Consequences

No stamp duty will be payable in respect of the grant of the Options. No GST will be payable by the Company in respect of the grant of the Options (or if it is then it will be recoverable as an input credit).

AASB 2 “Share Based Payments” requires that these payments shall be measured at the more readily determinable fair value of the equity instrument. Under the accounting standards this amount will be expensed in the statement of financial performance. Where the grant date and the vesting date are different, the total expenditure calculated will be allocated between the two dates taking into account the terms and conditions attached to the instruments and the counterparties as well as management’s assumptions about probabilities of payments and compliance with and attainment of the set out terms and conditions.

Dilutionary Effect

If all of the Options granted are exercised, the following will be the effect on the current issued capital of the Company:

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Explanatory Statement

Shareholder	Current shareholding1	% of total Shares	No. of Shares issued on exercise of Options	No. of Shares on exercise of Options	% of total Shares
Directors
Gregory Duncan	4,047,000	2.60	2,000,000	6,047,000	3.80
Robert Sowerby	5,575,000	3.59	2,000,000	7,575,000	4.75
Denis Gately	53,825	0.035	Nil	53,825	0.035
Leigh Cuyer	Nil		Nil	Nil
Paul Dickson	1,650,000	1.06	Nil	1,650,000	1.04
Andrew Vigar	100,000	0.06	Nil	100,000	0.06
Top 3 Shareholders
Macquarie Bank Ltd	17,500,000	11.265	Nil	17,500,000	10.98
Lagoon Creek Res PtyLtd	7,000,000	4.506	Nil	7,000,000	4.39
MO U Investments Company	4,000,000	2.58	Nil	4,000,000	2.51
Other Shareholders	115,409,175	74.3	Nil	115,409,175	72.43
Total	155,335,000	100.00%		159,335,000	100.00%

Notes:

1. This assumes that none of the current options on issue in the Company are exercised and no further securities are issued.

2. This assumes that there are currently 155 335 000 Shares on issue.

3. This assumes that there will be 159 335 000 Shares on issue upon the exercise of all of the Options.

Listing Rule 10.11

Listing Rule 10.11 requires an entity to obtain the approval of shareholders to an issue of securities to a related party. Each of Gregory Duncan and Robert Sowerby, being and alternate Director and Director of the Company respectively, are related parties. Accordingly, because the issue of the Options will result in the Company issuing securities to a related party, approval under Listing Rule 10.11 is required.

For the purposes of Listing Rule 10.13, the Company advises as follows:

• The maximum number of Options to be issued are:

• 1,000,000 First Tranche Options; and

• 1,000,000 Second Tranche Options,

to each of Gregory Duncan and Robert Sowerby.

• The Options are intended to be granted as soon as possible following the General Meeting, but in any event, within one (1) month of the date of the General Meeting;

• The Options are being issued for nil consideration; and

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Explanatory Statement

• No funds are being raised by the grant of the Options.

In accordance with Listing Rule 7.2, as approval is being sought under Listing Rule 10.11, approval is not required to be obtained under Listing Rule 7.1.

Save as set out in this Explanatory Statement, the Directors are not aware of any other information that will be reasonably required by Shareholders to make a decision in relation to benefits contemplated by Resolutions 2 and 3.

4. Voting Entitlement

For the purposes of determining voting entitlements at the Meeting, shares will be taken to be held by the persons who are registered as holding the shares at 2:00pm on Monday 8 August 2011. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

5. Definitions

The following terms used in the Notice of Meeting and the Explanatory Notes are defined as follows:

ASIC means the Australian Securities & Investments Commission;

ASX means the ASX Limited;

Business Day means a day on which all banks are open for business generally in Brisbane;

Company means Alligator Energy Limited ABN 79 140 575 604 (ASX: AGE);

Constitution means the constitution of the Company from time to time;

Corporations Act means the Corporations Act 2001 (Cth);

Directors means the board of directors of the Company as at the date of the Notice of Meeting being Denis Joseph Gately, Robert Sowerby, Leigh Curyer, Paul Dickson, Andrew James Vigar and Gregory Duncan (Alternate Director for Andrew Vigar);

Options means the First Tranche Options and the Second Tranche Options;

Expiry Date means:

• (a) in respect of the First Tranche Options, 17 August 2012; and

• (b) in respect of the Second Tranche Options, 17 August 2013.

Explanatory Statement means the explanatory statement accompanying this Notice;

First Tranche Options means has the meaning given in Section 2 of the Explanatory Statement

Issue Date means the date on which the Shareholders approve the issue of the Options in Resolutions 2 and 3;

Listing Rules means the official listing rules of the ASX as amended from time to time;

Meeting means the General Meeting to be held on 10 August 2011 as convened by the attached Notice of Meeting;

Notice of Meeting or Notice means the notice of meeting giving notice to shareholders of the General Meeting, accompanying this Explanatory Statement;

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Explanatory Statement

Ordinary Resolution means a resolution passed by more than 50% of the votes at a general meeting of shareholders;

Resolutions means the resolutions set out in the Notice of Meeting;

Second Tranche Options has the meaning given in Section 2 of the Explanatory Statement

Shares means fully paid ordinary shares in the Company from time to time;

Shareholder means a shareholder of the Company;

Special Resolution means a resolution passed by at least 75% of the votes at a general meeting of shareholders; and

Vesting Date means the Issue Date.

Any inquiries in relation to the Resolutions or the Explanatory Statement should be directed to Evan Hughes (Company Secretary) at:

Suite 1, 36 Agnes Street, Fortitude Valley QLD 4006 Phone: +617 3852 4712 Email: ehh@alligatorenergy.com.au

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Explanatory Statement

APPENDIX “A” ESOP Summary

1. The ESOP is to extend to Eligible Employees of the Company or an associated body corporate of the Company as the Board may in its discretion determine. Eligible employees specifically excludes Directors.

2. The total number of Shares to be issued by the Company to Eligible Employees in respect of which either Shares or Options have been issued under the ESOP or any other employee share option plan shall not at any time exceed 5% of the Company’s total issued ordinary Share capital in that class at that time when aggregated with:

3. (a) the number of Shares in the same class which would be issued with each outstanding offer with respect to Shares or Options under any employee share or option scheme of the Company accepted and exercised; and

4. (b) the number of Shares issued during the previous 5 years pursuant to:

   • (1) the ESOP to an Eligible Employee; or

   • (2) any employee share or option scheme of the Company,

but excluding for the purposes of the calculation, any offer made or Option or Share issued by way of or as a result of:

• (3) any offer to a person situated at the time of receipt of the offer referred to in the paragraph 2(a) and paragraph 2(b) outside of this jurisdiction; or

• (4) an offer that did not require disclosure to investors because of Section 708 of the Corporations Act; or

• (5) an offer that did not require the giving of a product disclosure statement because of Section 1012D of the Corporations Act; or

• (6) an offer made under a disclosure document or product disclosure statement within the meaning of those terms in the Corporations Act.

• The Issue Price of Shares and Options are to be determined by the Board.

• The exercise price of an Option is to be determined by the Board at its sole discretion.

• The Vesting Date will be any such date or dates with respect to the Options or tranches of Options (as the case may be) as may be determined by the Board from time to time and specified in the Offer.

• The Option Period commences on the Issue Date and ends on the earlier of:

• (a) The Expiration Date, which is the earlier of 5 years from the grant of an Option or such other date determined by the Board;

• (b) 30 days after a Cessation Event; or

• (c) 12 months after a Cessation Event which happens as a result of the death of a Participant.

• Eligibility to participate is determined by the Board. Eligibility is restricted to Eligible Employees of the Company or an associated body corporate of the Company. The Board is entitled to determine:

• (a) subject to paragraph 2, the total number of Options to be offered to Eligible Employees;

• (b) the Eligible Employees to whom offers will be made; and

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Explanatory Statement

• (c) the terms and conditions of any Options offered subject to the ESOP.

• The Board may issue Restricted Options under the ESOP upon the terms and conditions that it considers appropriate, and will not apply for quotation of those Restricted Options on the ASX.

• If there is a Bonus Issue to holders of Shares, subject to the Listing Rules, the number of Shares over which an Option is exercisable will be increased by the number of Shares which a Participant would have received if the Option had been exercised before the Record Date for the Bonus Issue.

• Option holders do not have any right to participate in new issues of securities in the Company made to shareholders generally. The Company will, where required pursuant to the Listing Rules, provide Option holders with notice prior to the books record date (to determine entitlements to any new issue of securities made to shareholders generally) to exercise the Options, in accordance with the requirements of the Listing Rules.

• In the event of a pro rata issue (except a bonus issue) made by the Company during the term of the Options, the Company may adjust the exercise price for the Options in accordance with a specified formula.

• In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company the rights of the Option holder will be reconstructed (as appropriate) in a manner consistent with the Listing Rules as applicable at the time of reconstruction, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of the Options which are not conferred on Shareholders.

• The Board may, subject to the Corporations Act and Listing Rules (including approval of the Company’s shareholders), at any time amend any of the ESOP Rules or waive or modify the application of any of the ESOP Rules in relation to any Participant provided that any amendment does not adversely affect existing rights of any Options previously granted or Shares previously issued under the plan.

• The Board may impose restrictions on the Options being offered or impose any other conditions as the Board may determine in its absolute discretion from time to time.

• The ESOP is separate to and does not in any way form part of, vary or otherwise affect the rights and obligations of an Option holder’s under the terms of the Option holder’s employment or arrangement.

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Explanatory Statement

APPENDIX “B” Option Terms and Conditions Summary

1. The Options ( Options ) shall be issued for no consideration;

2. The exercise price of each Option is

3. a) for the First Tranche Options, $0.25 for each Option;

4. b) for the Second Tranche Options, $0.40 for each Option.

( Exercise Price );

1. The Options will expire on:

2. a) in respect of the First Tranche Options, 17 August 2012; and

3. b) in respect of the Second Tranche Options, 17 August 2013

( Expiry Date ) unless earlier exercised;

1. The Options will not be transferable in whole or in part and may not be exercised by any other person (except, in the case of the Option holder’s death, by his or her legal personal representative);

2. The Options may be exercised at any time wholly or in part by delivering a duly completed form of notice of exercise together with a cheque for the Exercise Price per Option to the Company at any time on or after the date of issue of the Options and on or before the Expiry Date;

3. The number of Options that may be exercised at one time must be not less than to allow the allotment of a marketable parcel (as defined in the Listing Rules);

4. Upon the valid exercise of the Options and payment of the Exercise Price, the Company will issue fully paid ordinary shares ranking pari passu with the then issued ordinary shares;

5. Option holders do not have any right to participate in new issues of securities in the Company made to shareholders generally. The Company will, where required pursuant to the ASX Listing Rules, provide Option holders with notice prior to the books record date (to determine entitlements to any new issue of securities made to shareholders generally) to exercise the Options, in accordance with the requirements of the Listing Rules.

6. Option holders do not participate in any dividends unless the Options are exercised and the resultant shares of the Company are issued prior to the record date to determine entitlements to the dividend;

7. In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company:

8. a) the number of Options, the Exercise Price of the Options, or both will be reconstructed (as appropriate) in a manner consistent with the ASX Listing Rules as applicable at the time of reconstruction, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of the Options which are not conferred on shareholders; and

9. b) subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the Options will remain unchanged;

10. If there is a pro rata issue (except a bonus issue), the Exercise Price of an Option may be reduced according to the following formula:

O[n] = O – E [P-(S + D)] N + 1

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Explanatory Statement

Where:

• O[n] = the new exercise price of the Option;

• O

• E

• = the old exercise price of the Option;

• = the number of underlying securities into which one Option is exercisable;

• P = the average market price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex right date or the ex entitlements date;

• S

• = the subscription price for a security under the pro rata issue;

• D = dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue);

• N

• = the number of securities with rights or entitlements that must be held to receive a right to one new security.

• If there is a bonus issue to the holders of shares in the Company, the number of shares over which the Option is exercisable may be increased by the number of shares which the Option holder would have received if the Option had been exercised before the record date for the bonus issue;

• The terms of the Options shall only be changed if holders (whose votes are not to be disregarded) of ordinary shares in the Company approve of such a change. However, the terms of the Options shall not be changed to reduce the Exercise Price, increase the number of Options or change any period for exercise of the Options;

• The Company does not intend to apply for listing of the Options on the ASX; and

• The Company shall apply for listing of the resultant shares of the Company issued upon exercise of any Option.

Page 13 of 13

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

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PROXY FORM

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ALLIGATOR ENERGY LTD

REGISTERED OFFICE:

ABN:79 140 575 604

Level 1 36 Agnes Street FORTITUDE VALLEY QLD 4006 AUSTRALIA

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SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

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Code: AGE Holder Number:

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

OR

The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting).

or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the General Meeting of the Company to be held at 2:00pm EST on Wednesday 10 August 2011 at Endeavour 1 Room, Level 1, Christie Centre, 320 Adelaide Street, Brisbane QLD 4000 and at any adjournment of that meeting.

SECTION B: Voting Directions to your Proxy

Please mark "X" in the box to indicate your voting directions to your Proxy.

Resolution

For Against Abstain*

1. Adoption of Employee Share Option Plan

2. Grant of options to Gregory Duncan

3. Grant of options to Robert Sowerby

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If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

• If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If you wish to appoint the Chairperson as your proxy and you do not wish to direct the Chairperson how to vote, please mark "X" in the box.

By marking this box, you acknowledge that the Chairperson may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him/her other than as a proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution. The Chairperson of the Meeting intends to vote undirected proxies in favour of the resolution.

SECTION C: Please Sign Below

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Security Holder Security Holder 2 Security Holder 3 Sole Director and Sole Company Secretary Director Director / Company Secretary

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Reference Number:

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6848350734

AGE

1

1

My/Our contact details in case of enquiries are:

NAME

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TELEPHONE NUMBER ( )

NOTES

1. Name and Address

This is the name and address on the Share Register of ALLIGATOR ENERGY LTD. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. Appointment of a Proxy

If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of ALLIGATOR ENERGY LTD.

3. Directing your Proxy how to vote

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. Appointment of a Second Proxy

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by telephoning the Company's share registry +61 8 9315 2333 or you may photocopy this form.

To appoint a second Proxy you must:

• (a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and

• (b) Return both forms in the same envelope.

5. Signing Instructions

Individual: where the holding is in one name, the Shareholder must sign.

Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. Lodgement of Proxy

Proxy forms (and any Power of Attorney under which it is signed) must be received by ALLIGATOR ENERGY LTD no later than 2.00pm EST on Monday 8 August 2011, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.

ALLIGATOR ENERGY LTD PO BOX 338 SPRING HILL QLD 4004

Street Address: Level 1 36 Agnes Street FORTITUDE VALLEY QLD 4006

Telephone (07) 3852 4712 Facsimile (07) 3852 5684

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

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