EDEN INNOVATIONS LTD — AGM Information 2014

Oct 2, 2014

EDEN ENERGY LTD ACN 109 200 900

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

EXPLANATORY STATEMENT

AND

PROXY FORM

TO BE HELD ON

4 NOVEMBER 2014 COMMENCING AT 10.00AM

AT

Level 15, 197 St Georges Terrace, Perth WESTERN AUSTRALIA

EDEN ENERGY LTD (ACN 109 200 900)

NOTICE OF GENERAL MEETING

Notice is given that an Annual General Meeting of the members of Eden Energy Limited ACN 109 200 900 (“the Company”) will be held at Level 15, 197 St George’s Terrace, Perth, Western Australia on Tuesday, the 4[th] day of November 2014 at 10.00am.

AGENDA

1. Annual Reports

To table the Annual Financial Report for the financial year ended 30 June 2014 and the Director’s Report and Auditor’s Report for that financial year.

2. Resolution 1 – Adoption of Remuneration Report

To consider, and if thought fit pass, with or without amendment, the following Resolution as a non-binding resolution:

“That for the purposes of section 250R(2) of the Act and for all other purposes, the Company be authorised to adopt the Remuneration Report contained in the Annual Financial Report”.

Short Explanation: In accordance with section 249L(2) of the Act, a resolution that the Remuneration Report be adopted must be put to the vote. The effect of section 250R(3) of the Act is that the vote on this Resolution is advisory only and does not bind the Directors or the Company.

3. Resolution 2 – Election of Director

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

“That Mr Richard Beresford being a Director of the Company who retires by rotation pursuant to the Company’s Constitution, and being eligible offers himself for re-election is hereby re-elected as a Director of the Company.”

4. Resolution 3 – Election of Director

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

“That Mr Douglas H Solomon being a Director of the Company who retires by rotation pursuant to the Company’s Constitution, and being eligible offers himself for re-election is hereby re-elected as a Director of the Company.”

5. Resolution 4 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.1

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

“That, for the purpose of ASX Listing Rule 11.1 and for all other purposes, members approve the change in the nature and scale of the Company’s activities which will occur consequent upon the disposition and sale by the Company of its entire UK coal seam methane and shale gas portfolio, comprising its 50% interest in 13 Petroleum Exploration and Development Licences (PEDLs) in South Wales, Bristol/Somerset and Kent (which are prospective for coal bed methane, shale gas and/or natural gas) (“the UK Gas Assets”), to be effected by the Company’s wholly owned subsidiary, Adamo Energy Ltd (“Adamo AU”) selling all of the shares in Adamo Energy (UK) Ltd (“Adamo UK”) to UK Onshore Gas Limited (“UKOG”) on the terms and subject to the conditions set out in the explanatory statement which accompanies this Notice.”

Note: The Company will disregard any votes cast on this Resolution by a person who might obtain a benefit, except a benefit solely in the capacity of a security holder, if this Resolution is passed.

However, the Company will not disregard the vote if:

• (a) 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

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

6. Resolution 5 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.2

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

“That, for the purpose of ASX Listing Rule 11.2 and for all other purposes, members approve the disposition and sale by the Company of its main undertaking, namely the UK Gas Assets, to be effected by the Company’s wholly owned subsidiary, Adamo AU, selling all of the shares in Adamo UK to UKOG on the terms and subject to the conditions set out in the explanatory statement which accompanies this Notice.”

Note: The Company will disregard any votes cast on this Resolution by a person who might obtain a benefit, except a benefit solely in the capacity of a security holder, if this Resolution is passed.

However, the Company will not disregard the vote if:

• (a) 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

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

7. Resolution 6 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.4

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

“That, for the purpose of ASX Listing Rule 11.4 and for all other purposes, members approve the disposition and sale by the Company of the UK Gas Assets, to be effected by the Company’s wholly owned subsidiary, Adamo AU, selling all of the shares in Adamo UK to UKOG on the terms and subject to the conditions set out in the explanatory statement which accompanies this Notice, on terms which do not require UKOG, as part of any public fundraising which it undertakes as a pre-condition to a possible future listing of UKOG (or of another company of which it will become a wholly owned subsidiary) on a recognised stock exchange, to offer the shares under that capital raising (or any of them) pro-rata to the Company’s members.

• Note: The Company will disregard any votes cast on this Resolution by UKOG (being the person who will acquire all of the shares in Adamo UK).

However, the Company will not disregard the vote if:

• (a) 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

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

8. General

To transact any business which may be brought before the meeting in accordance with the Constitution of the Company, the Act, or otherwise.

NOTES RELATING TO PROXIES

In accordance with section 249L of the Act, shareholders are advised each shareholder has a right to appoint a proxy, the proxy need not be a shareholder of the Company and a shareholder who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

In accordance with Section 250BA of the Corporations Act the Company specifies the following for the purposes of receipt of proxy appointments:

By post or hand delivery to the Registered Office:

Level 15, 197 St Georges Terrace, Perth, Western Australia 6000

By Post to PO Box 7055, Cloisters Square, Perth, Western Australia 6850

By facsimile to: (08) 9282 5866

Each shareholder entitled to vote at the General Meeting has the right to appoint a proxy to vote on each particular resolution. The shareholder may specify the way in which the appointed proxy is to vote on a particular resolution or may allow the appointed proxy to vote at its discretion. The instrument appointing the proxy must be received by the Company as provided in its Constitution no later than 48 hours prior to the time of the commencement of the General Meeting. This proxy form may be sent by facsimile transmission to the number identified on the proxy form.

A corporation may elect to appoint a representative in accordance with the Act in which case the Company will require written proof of the representative's appointment which must be lodged with, or presented to the Company before the Meeting.

For the purposes of Regulation 7.11.37 of the Corporations Regulations 2001 the Company determines that shareholders holding ordinary shares at 5.00pm WST on 2 November 2014 will be entitled to attend and vote at the Annual General Meeting.

Please note all defined terms used in this Notice of Meeting have the meanings set out in the glossary of the Explanatory Memorandum accompanying this Notice.

By Order of the Board of Directors

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A P Gates Secretary Dated this 2[nd] day of October 2014

EDEN ENERGY LTD (ACN 109 200 900)

(“the Company”)

EXPLANATORY STATEMENT ACCOMPANYING NOTICE OF GENERAL MEETING

This Explanatory Statement is an important document and you should read it carefully. If you have any queries regarding the matters set out in this Explanatory Statement or the Notice to which it is attached please contact the Company or your professional advisor.

The Directors recommend that shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions. The following information should be noted in respect of the various matters contained in the accompanying Notice of Meeting.

1 – Receive and consider the Annual Report

The first agenda item is to receive and consider the Annual Financial Report, Director’s Report and Auditor’s Report for the Company for the financial year ended 30 June 2014. No Resolution is required in respect of this agenda item. However, it provides shareholders with the opportunity to ask questions of the Company’s Directors and auditors in relation to the Company’s results and operations for the financial year.

2 – Resolution 1 – Remuneration Report

The Annual Financial Report for the financial year ended 30 June 2014 contains a Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors.

In accordance with section 249L(2) of the Act, a resolution that a Remuneration Report be adopted must be put to the vote. However, pursuant to section 250R(3) of the Act, the vote on the Resolution is advisory only and will not require the Directors or the Company to alter any arrangements detailed in the Remuneration Report, should the Resolution not be passed.

3 – Resolution 2 – Re-Election of Director

In accordance with the Company’s Constitution, Mr Richard Beresford retires by rotation and, being eligible, offers himself for re-election as a Director of the Company.

Mr Beresford began his career in engineering and has since gained 25 years experience in the international energy business spanning research, technology commercialisation, strategic planning, operations, business development, capital raising, acquisitions, marketing and general management. He is currently Managing Director of ASX-listed geothermal developer Green Rock Energy Limited. He has led or played a key role in the development and commercialisation of energy technologies including fuel cells, natural gas vehicles and cryogenic natural gas sweetening processes and in several renewable energy businesses.

The Board recommends that shareholders vote in favour of this Resolution.

4 – Resolution 3 – Re-Election of Director

In accordance with the Company’s Constitution, Mr Douglas H Solomon retires by rotation and, being eligible, offers himself for re-election as a Director of the Company.

Mr Douglas H Solomon has been a Board member since May 2004. He is a barrister and solicitor with more than 20 years’ experience in the areas of mining, corporate, commercial and property law. Mr Douglas H Solomon is a partner in the law firm, Solomon Brothers. He is also a non-executive director of Tasman Resources Ltd and Fission Energy Ltd.

The Board recommends that shareholders vote in favour of this Resolution.

BACKGROUND – RESOLUTION 4, 5 & 6 – SALE OF UK GAS ASSETS

Resolutions 4, 5 and 6 seek member approval for the purposes of Chapter 11 of the ASX Listing Rules (the Rules), and for all other purposes, to the disposition by the Company of its entire UK coal seam methane and UK gas portfolio, comprising its 50% interest in 13 Petroleum Exploration and Development Licences (PEDLs) in South Wales, Bristol/Somerset and Kent (which are prospective for coal bed methane, shale gas and/or natural gas) (together “the UK Gas Assets”), to be effected by the Company’s wholly owned subsidiary, Adamo Energy Ltd (“Adamo AU”) selling all of the shares in Adamo Energy (UK) Ltd (“Adamo UK”) (the “Sale”).

The UK Gas Assets are the only assets held by Adamo UK. The UK Gas Assets cover an area of more than 1,181 square kilometres and cover a very large portion of the coal fields and surrounding basins in Wales, Bristol / Somerset and Kent. The UK Gas Assets which are referred to in the first paragraph of this Explanatory Statement are jointly held by:

• (i) the Company's subsidiary, Adamo UK; and

• (ii) UK Methane Limited (“UKM”) and Coastal Oil and Gas Limited (“Coastal”), subsidiaries of UK Onshore Gas Limited (“UKOG”).

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The Company and UKOG have identified that there are potential benefits to Adamo UK and each of the UKOG subsidiaries coming under common ownership.

Accordingly, on 25 March 2014, the Company and Adamo UK entered into a non-binding heads of terms (“Terms Sheet”) with UKOG and Gerwyn Williams (“GW”), UKOG’s major shareholder (for himself and on behalf of all of the other shareholders of UKOG as at the date of the Terms Sheet (“Original Shareholders”)), to effect a merger of Adamo UK and UKOG (“Merger”). By the Terms Sheet, the Merger is to be effected by the Sale by Adamo AU to UKOG of all of the shares in Adamo UK.

On 30 September 2014, UKOG, the Company, Adamo UK, Adamo (Aust), GW, the Original Shareholders and Acuity Legal Limited entered into a formal merger agreement and UKOG, the Company and Adamo (Aust) entered into a formal share transfer agreement (on and subject to the terms and conditions set out in the Terms Sheet). The parties have also negotiated and agreed the terms and conditions of a formal loan note agreement and shareholders’ agreement, which are to be entered into at Merger completion. The merger agreement, share transfer agreement, loan note agreement and shareholders’ agreement are hereinafter referred to the “Transaction Documentation”.

UKOG is an unlisted UK private company. UKOG is not a related party of, or a substantial holder of shares in, the Company. Following the Merger, UKOG will be the holding company of, amongst others, Adamo UK, UKM and Coastal.

The business of UKOG (and its subsidiaries) following completion of the Merger shall be the onshore exploration and development in the UK of hydrocarbons including, but not limited to oil, shale gas, coal seam gas and conventional natural gas (but expressly excluding coal, coal mining and underground coal gasification) under those powers granted and governed by the PEDLs which are from time to time held by any company in the UKOG group and any downstream activities utilising or exploiting any hydrocarbons so produced including but not limited to power generation (and such other activities as may be approved by the board of directors of UKOG from time to time).

Certain assets of UKOG are being excluded from the Merger (and will therefore be transferred/assigned from UKOG to GW or his nominee prior to or following completion of the Merger) ("Excluded Assets"), to the intent that the assets of UKOG following the transfer/assignment of the Excluded Assets will comprise UKOG’s 50% interest in the PEDLs referred to in the first paragraph of this Explanatory Statement (save and expressly excepting the right to any abandoned mine methane (“AMM Rights”) in the workings of the abandoned St John’s Colliery (covering an area of approximately 65 acres and situated on land owned by GW) under PEDL 149, provided that this right shall only continue so long as any electrical generation that is installed using gas produced under the AMM Rights is limited in aggregate to 2 Megawatts electrical (that is, the AMM Rights in the abandoned mine are an asset which is being excluded from the Merger).

Following the Merger, UKOG intends to use reasonable endeavours to:-

• (a) list on the Alternative Investment Market (operated by the London Stock Exchange) (either itself or alternatively by way of reversal into an existing listed company (“NewCo”)) after UKOG or NewCo (as applicable) has completed or contemporaneously with it completing a public fundraising to raise not less than £10,000,000 on an arm’s length commercial basis to independent shareholders not related to the Original Shareholders or their associates, or such lower level of funds as Adamo AU may approve (such approval not to be unreasonably withheld or delayed); or

• (b) complete one or more off-market rounds of investment raising a minimum aggregate amount of £10,000,000 on an arm’s length commercial basis to independent shareholders not related to the Original Shareholders or their associates or such lower level of funds as Adamo AU may approve (such approval not to be unreasonably withheld or delayed),

(each a “Liquidity Event”) prior to 31 March 2015 (the “Target Liquidity Date”) or such later date as the shareholders of UKOG post Merger may agree.

The following is a summary of the material commercial terms of the Terms Sheet and the formal Transaction Documentation:

1. The consideration for all of the shares in Adamo UK is:

2. a. the issue of new shares in UKOG credited as fully paid and representing 33.33% of the total issued share capital of UKOG at the completion of the Merger on a fully diluted basis (the “Consideration Shares”); and

3. b. the deferred payment of £1,000,000 to be documented by way of loan notes issued by UKOG to Adamo AU (the “Share Consideration Loan Notes”).

4. In addition, UKOG has agreed to issue Adamo AU with a further £75,000 Loan Notes (to compensate Adamo AU for a pre-existing liability of UKOG which will continue post Merger Completion) (“the Uplift Loan Notes”) and a further £69,210 Loan Notes (to compensate Adamo AU for a PEDL licence payment made by it on account of a period predominately post Merger) (“the Licence Fee Loan Notes).

5. All of the Share Consideration Loan Notes, Uplift Loan Notes and Licence Fee Loan Notes (collectively, the “Loan Notes”) (which will be issued in favour of the Company’s wholly owned subsidiary, Adamo AU) will be:-

6. a. unsecured;

7. b. interest free;

8. c. repayable as follows (to the extent the Loan Notes have not been converted into shares in UKOG (or NewCo) in accordance with paragraph 3(d) below):

   • i. on a Liquidity Event (to the extent that this is possible given the financial dynamics of the Liquidity Event and the willingness of any investor to fund such repayment);

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  - ii. upon a change of control of UKOG;

  - iii. upon an insolvency event happening to UKOG;

  - iv. if one or more PEDLs are sold in one or more transactions and the net proceeds from such sale are in excess of agreed amounts;

  - v. upon UKOG, based on its latest accounts and budgets, having sufficient funds to be able to pay the Loan Notes after having provided fully to meet all of its other reasonable and foreseeable costs and expenses for the following 12 month period and taking into account all revenues that it is reasonable to expect UKOG to receive in that said period.

• d. convertible into shares in UKOG (or NewCo) at the election of Adamo AU:

  • i. if a Liquidity Event occurs prior to the Target Liquidity Date, the Loan Notes (or any of them) are convertible at the applicable share price (admission or investment share price) for the Liquidity Event;

  • ii. if a Liquidity Event has not occurred on or before the Target Liquidity Date:

    1. the Share Consideration Loan Notes and the Uplift Loan Notes are convertible on the basis that, if Adamo AU converts the entirety of the said Loan Notes into shares, the shareholding of Adamo AU in UKOG as at the date of the Merger would increase by 7.17% (on a fully diluted basis) to 40.50%. The number of additional shares to be issued to Adamo AU on conversion shall be calculated by reference to the number of shares in issue by UKOG as at the date of the Merger such that if the number of shares on issue as at the date of conversion is the same as the number of Shares on issue as at the date of the Merger, being 15,480 Shares, and if Adamo AU converted the entirety of the said Loan Notes into shares, Adamo AU would receive an additional 1,865 Shares increasing its shareholding in UKOG from 5,160 Shares to 7,025 Shares). In the event of any variation of the ordinary share capital of UKOG by way of capitalisation or by consolidation, sub-division or reduction of capital or the occurrence of any bonus or pro-rata issue(s) prior to conversion in the circumstances herein referred to, the number of additional shares to be issued on conversion of the said Loan Notes in accordance with this paragraph shall be adjusted in such manner as the auditors for the time being of UKOG, acting reasonably, shall in writing advise UKOG to be in their opinion, fair and reasonable; and

    2. the Licence Fee Loan Notes are only convertible upon the occurrence of a Liquidity Event at the applicable share price (admission or investment share price) for the Liquidity Event.

• Adamo AU will be entitled to appoint from time to time one non-executive director of UKOG.

• The shareholders’ agreement will regulate the rights and responsibilities of all of the shareholders of UKOG (post Merger) in their capacity as shareholders of UKOG. It will impose pre-emptive rights on transfer, tag along rights (in general terms, requiring that, if a majority of the shareholders of UKOG (post Merger), a majority of the Original Shareholders or Adamo (UK) (in each case, “Selling Shareholders”) receives an offer for all or any of their shares from a third party which they wish to accept, those shareholders (if the shares they wish to sell are not taken up by the other shareholders under the pre-emptive rights procedure) procure from such third party an equivalent offer in favour of the other shareholders to acquire an equivalent proportion of their shares on the same terms and conditions), drag along rights (in general terms, giving the Selling Shareholders a right to require, in certain circumstances, all of the other shareholders to sell their shares to a third party purchaser who has agreed to acquire all of the shares on issue in UKOG) and requiring UKOG to obtain the prior consent of Adamo AU and of the majority of the Original Shareholders if it wishes to undertake certain “reserved” matters at any time before the occurrence of a Liquidity Event (including, without limitation, the disposal, transfer or assignment of any PEDLs, the declaration or payment of any dividends, the variation of any of the rights or obligations which are attached to any of UKOG’s shares, certain new share issues by UKOG and the amendment of UKOG’s constitutional documents etc). Further, all of the shareholders will be required to agree not to pursue applications under the 14th UK onshore licensing round on their own account or in conjunction with any third parties and that all such applications in which all such persons or companies may have any direct or indirect interest will be pursued solely through UKOG

The formal Transaction Documentation will also incorporate normal and appropriate warranties to be given by Adamo AU, in relation to Adamo UK, and by UKOG, in relation to UKOG. The sole remedy for a breach of a warranty will be an adjustment to the number of shares held in UKOG by Adamo AU (to be effected by the issue of new shares to Adamo AU or the cancellation of existing shares held by Adamo AU, as the case requires) (or, in the case of Adamo AU, should the value of the shares it holds be insufficient to fully satisfy its liability for a breach of warranty, the downward adjustment of the principal amount (if any) then owing to it under its Loan Notes and, thereafter (if its liability for a breach of warranty has still not been fully satisfied) payment by Adamo AU of the remaining shortfall up to the amount (if any) paid or payable to Adamo AU in connection with the earlier disposal by it of any of its shares in UKOG or under the Loan Notes) to compensate the party that has suffered loss as a result of that breach. Certain of the obligations of Adamo AU under the merger agreement, share transfer agreement and shareholders agreement will be guaranteed by the Company.

The formal Transaction Documentation will also include a loan and contingent bonus agreement between UKOG and GW, who has agreed to lend to UKOG from 1 July 2014 an initial amount of £300,000 plus any amount advanced by GW to UKOG on or after 1 July 2014 to fund (i) licence costs which are due and payable to DECC in connection with the above mentioned PEDLs (ii) an amount to fund the stamp duty payable on the acquisition of the shares in Adamo UK (iii) an amount to cover the VAT payable to Acuity Legal Limited ("Acuity") in respect of legal fees satisfied by the issue to Acuity (prior to entering into the merger agreement), of shares in the capital of UKOG (iv) the amount of any application fees relating to the 14th UK onshore licensing round (v) the repayment by UKOG of the Loan Notes and (vi) the repayment by

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UKOG of the sum of £150,000 borrowed by UKOG from Gas Exploration Finance Ltd ("GW Loan"). The GW Loan shall be used to fund all of UKOG’s operating expenses, transactional expenses and listing expenses (should there be any) in the period to the Target Liquidity Date. In addition, this loan and contingent bonus agreement will govern:

1. the repayment of an outstanding amount of £171,431 claimed to be due to GW from UKM and Coastal in relation to certain existing joint venture costs ("Shareholder Loan"), which amount the parties have agreed by way of compromise for the purposes of this transaction as amounts which will be owed by UKOG, however such agreement is without prejudice to the Company’s (or any other party’s) right to dispute the quantum of these debts should the Merger not proceed but there shall be no right to challenge such amounts once the Merger has completed); and

2. payment to GW, by way of bonus, of £421,000 subject to and conditional upon either:

3. (i) a Liquidity Event occurring (to the extent that this payment is possible given the financial dynamics of the Liquidity Event and the willingness of any investor to fund such payment); or

4. (ii) a change of control of UKOG;

5. (iii) a sale of all or substantially all of the undertaking and assets of UKOG;

6. (iv) UKOG, based on its latest accounts and budgets, having sufficient funds to be able to pay the Liquidity Bonus after having provided fully to meet all of its other reasonable and foreseeable costs and expenses for the following 12 month period and taking into account all revenues that it is reasonable to expect UKOG to receive in that said period,

(the “Liquidity Bonus”).

The GW Loan and the Shareholders Loan will be on the same terms as the Loan Notes, save that the right to convert the loan into additional shares as per paragraph 3(d)(ii) above shall not apply. Up to £61,069 of the Liquidity Bonus may also be converted into additional shares (on the same terms as the GW Loan and the Shareholders Loan) and (to the extent not so converted) shall be payable promptly after satisfaction of the conditions referred to above.

Repayment of the Share Consideration Loan Notes and Uplift Loan Notes shall rank in priority to the repayment of the GW Loan and the Shareholders Loan and the payment of the Liquidity Bonus in accordance with the terms of the loan documentation.

The Sale is subject to:-

• (i) approval of the Company's shareholders;

• (ii) receipt of a comfort letter from the Department of Energy and Climate Change confirming that it does not intend to use its powers to revoke any of the PEDLs held by Adamo (either solely or jointly) as a result of the sale by Adamo AU of the Adamo UK shares to UKOG; and

• (iii) the finalisation of unaudited consolidated accounts for UKOG and all of the UKOG Subsidiaries for the financial year ended 31 December 2013 and unaudited management accounts for UKOG and the UKOG Subsidiaries for the period 1 January 2014 to 30 June 2014 which are in a form reasonably satisfactory to Adamo AU;

• (iv) in respect of those bore holes drilled by Centrica at Bryn Caws and Abernant which have not been filled:-

• a. a test of the quality of the water and soil in and around such bore holes and in appropriate downstream locations and, should such test indicate that any contaminants are present in the water or soil at above acceptable background concentrations, a report as to any environmental damage (which is above the levels permitted by any applicable environmental laws or regulations) at those sites or which has been directly caused by any water which has leaked from such bore holes or or by any contaminants discharged during drilling works carried out at such sites (which shall be commissioned by Adamo AU at its own cost) from a reputable environmental consultant approved by UKOG (such approval not to be unreasonably withheld or delayed), the contents of such tests and (if required) report being satisfactory to UKOG (acting reasonably); and

• b. if required by UKOG, completion to a standard satisfactory to UKOG (acting reasonably) of any and all works that may be required to repair the seals and permanently close the boreholes at such sites (at the sole cost of Adamo AU),

(the " Conditions ").

Subject to the Conditions being satisfied (or waived where permitted) and there being no default under the formal Transaction Documentation, completion of the formal Transaction Documentation (and the Sale and Merger) is scheduled to take place on or around 17 November 2014.

A pro-forma consolidated balance sheet for the Company is attached to this explanatory statement and marked “A” and shows the impact on the financial position of the Company of the completion of the Sale and Merger (on the assumptions set out in the attached pro-forma balance sheet) as if they had occurred on 30 June 2014.

The Company considers that, after the completion of the Sale and Merger and as required by ASX Listing Rules 12.1 and 12.2, the level of its ongoing operations and its financial position will be adequate to warrant the continued quotation of the Company’s shares on the ASX and its continued listing on the ASX.

If after the date of the Notice the directors of the Company were to resolve to acquire a new undertaking (to replace the UK Gas Assets), depending on the nature of this acquisition, ASX may require the Company to re-meet the requirements in chapters 1 and 2 of the Listing Rules as if the Company were applying for admission to the official list of the ASX. As at the date of this Notice, the directors of the Company do not presently have any intention to acquire any new undertaking. Rather, the directors intend for the Company to focus all of its efforts on its remaining projects, namely the marketing of its

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Hythane™ and hydrogen technologies, namely its nano-carbon / hydrogen pyrolysis project and Optiblend™ dual fuel technology.

Four of the shareholders of the Company, Noble Energy Limited (who holds approximately 46% of the shares in the Company), Gregory Solomon, a director of the Company, and Arkenstone Pty Ltd (which is controlled by Gregory Solomon, and who together hold approximately 1.755% of the shares in the Company) and March Bells Pty Ltd (which is controlled by Douglas Solomon, a director of the Company, and which holds approximately 1.45% of the shares in the Company) have given separate undertakings to UKOG to vote in favour of the resolutions the subject of this Notice and Explanatory Statement.

5. Resolution 4 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.1

Listing Rule 11.1 provides that if an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX before making the change. Rule 11.1.2 further provides that ASX may require the entity to obtain the approval of the holders of its ordinary securities.

ASX Guidance Note 12 indicates that ASX treats:

• (a) a major change in the character of the entity’s business activities as a “significant change” to the nature of the entity’s activities; and

• (b) a 25% change (upwards or downwards) to the size of the entity’s business operations as a “significant change” to the scale of the entity’s activities.

Further to paragraph (b) above, ASX have also indicated in that Guidance Note that the disposition of a business that accounts for 25% or more of consolidated total assets, consolidated total equity interests, consolidated annual revenue (or, in the case of a mining exploration company or other entity that is not earning material revenue from operations, consolidated annual expenditure) or consolidated annual profit before tax and extraordinary items, might give rise to a “significant change” to the scale of an entity’s activities.

The Company is a diversified energy company and holds interests in carbon nano-tube / fibre production, hydrogen fuels and the UK Gas Assets. Following completion of the Sale, the Company will focus all of its efforts on the marketing of its Hythane™ and hydrogen technologies, namely its nano-carbon / hydrogen pyrolysis project and Optiblend™ dual fuel technology.

The UK Gas Assets (being the only assets of Adamo UK) are valued in the Company’s latest financial statements (being the Company’s yearly accounts for the year ended 30 June 2014 (“Last Accounts”)) at $3,854,309.

The Company’s consolidated total assets and consolidated total equity interests as per the Company’s Last Accounts are $6,374,610 and $5,383,740 respectively. Accordingly, the UK Gas Assets (based on their valuation in the Company’s Last Accounts) represents more than 25% of each of these amounts.

As such, the Company seeks approval of its members to effect the Sale and to the consequential change in the nature and/or scale of its activities which will occur upon completion of that Sale.

6. Resolution 5 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.2

Listing Rule 11.2 applies if the significant change involves an entity disposing of its main undertaking. If Listing Rule 11.2 applies the entity must get the approval of holders of its ordinary securities.

Listing Rule 19.12 defines the expression “undertaking” to include both assets and businesses. ASX have indicated in Guidance Note 12 that it considers “main undertaking” to be essentially synonymous with “main business activity”. Further, in that Guidance Note, ASX indicates that they generally apply a 50% “rule of thumb” in assessing whether a business constitutes the main undertaking of an entity. ASX have also indicated that, if a business accounts for less than 50% of an entity’s consolidated total assets, consolidated annual revenue (or, in the case of a mining exploration company or other entity that is not earning material revenue from operations, consolidated annual expenditure) and consolidated annual profit before tax and extraordinary items, there will be reasonably compelling evidence that the business is not the entity’s main undertaking.

The UK Gas Assets (being the only assets of Adamo UK) are valued in the Company’s Last Accounts at $3,854,309.

The Company’s consolidated total assets and consolidated total equity interests as per the Company’s Last Accounts are $6,374,610 and $5,383,740 respectively. Accordingly, the UK Gas Assets (based on their valuation in the Company’s Last Accounts) represents more than 50% of each of these amounts. The UK Gas Assets will therefore be the Company’s main undertaking for the purposes of the Listing Rules.

As such, the Company seeks approval of its members to effect the Sale and to dispose of the UK Gas Assets by Adamo AU selling all of the shares in Adamo UK to UKOG.

7. Resolution 6 – Approval of disposition of UK Gas Assets for the purposes of ASX Listing Rule 11.4

Listing Rule 11.4 provides that an entity must not dispose of a major asset if at the time of the disposal it is aware that the person acquiring the asset intends to issue or offer securities with a view to becoming listed. This rule does not apply if the holders of ordinary securities in the entity approve of the disposal without this offer being made.

Guidance Note 13 indicates that ASX treats an asset as a major asset if:

• (a) the value of, or the value of the consideration for, the asset represents 20% or more of consolidated equity interests;

• (b) the value of, or the value of the consideration for, the asset represents 15% or more of consolidated assets;

• (c) the revenue attributable to the asset represents 15% or more of consolidated operating revenue;

• (d) the market capitalisation of the acquiring entity is 20% or more of the market capitalisation of the entity.

5

As noted above in the section headed “Background”, UKOG intends to use reasonable commercial endeavours to achieve a Liquidity Event prior to Target Liquidity Date (or such later date as the shareholders of UKOG post-Merger may agree) (however, there is no guarantee that this will occur). The Company and Adamo AU will be required under the Transaction Documentation to give such approvals and execute such documents as are reasonably required to give effect to any Liquidity Event that places a value on UKOG (pre any new money raised by UKOG or NewCo after the completion of the Merger) at the time of completion of the Liquidity Event of at least £36 million, including any orderly marketing restrictions on the sale of shares if an AIM listing occurs, provided that:-

• (a) the terms applicable to the Company are no more restrictive nor less advantageous than apply to the Original Shareholders;

• (b) any investment is made by a bona fide arm’s length third party on commercial terms; and

• (c) if the Company requires the approval of its shareholders in order to give the said approvals and to execute the said documents, it will promptly convene a shareholders’ meeting to seek such approval (and it will only be required to give the said approvals and execute the said documents if it obtains the approval of its shareholders at such meeting).

Any proposed Liquidity Event that places a value on UKOG (pre any new money raised by UKOG or NewCo after the completion of the Merger) at the time of completion of the Liquidity Event of less than £36 million or which does not require the Loan Notes to be repaid in full in cash out of the proceeds raised by the proposed Liquidity Event or (where a NewCo is to become the entity which seeks a listing) when determining the proportionate shareholding which all of the shareholders of UKOG (post Merger) will obtain in NewCo, does not value NewCo in accordance with agreed principles, shall require the approval of Adamo AU. Under the terms of the Transaction Documents, Adamo AU will provide its consent to UKOG raising £3,000,000 of new finance by the issue of new shares in UKOG on an arms length commercial basis and to independent shareholders not related to the Original Shareholders or their associates, provided that the new shares represent (for the full £3,000,000) not more than 15% of the enlarged share capital of UKOG (or, if a lesser amount is raised, an equivalent proportion of the enlarged issued share capital of UKOG having regard to the proportion which the amount actually raised bears to £3,000,000).

To the extent that there is an opportunity to realise value from the sale of shares in UKOG (or NewCo) on any Liquidity Event, then this opportunity is to be afforded to Adamo AU and the Original Shareholders on a pro rata basis so that each has the opportunity to realise the same value from the same percentage of shares held.

As set out above, the UK Gas Assets comprise the Company’s entire UK coal seam methane and UKOG gas portfolio.

The UK Gas Assets (being the only assets of Adamo UK) are valued in the Company’s Last Accounts at $3,854,309. The Company does not have a current independent valuation of the UK Gas Assets. The directors of the Company consider the consideration which will be received by Adamo AU for its shares in Adamo UK (and thus the UK Gas Assets) under the Sale represents fair market value. Adamo UK and the UK Gas Assets have not made any contribution to the Company’s recent past and current earnings.

As set out above, the consideration which is payable by UKOG for the shares in Adamo UK is the Consideration Shares and the deferred payment of £1,000,000 under the Share Consideration Loan Notes.

The Company’s consolidated total assets and consolidated total equity interests as per the Company’s Last Accounts are $6,374,610 and $5,383,740 respectively. Accordingly, the value of the UK Gas Assets (based on their valuation in the Company’s Last Accounts, of $3,854,309) represents more than 20%, and 15%, respectively of these amounts. As a result, the Company seeks the approval of its members to effect the Sale of all of the shares in Adamo UK to UKOG without any shares which are to be issued by UKOG or NewCo (as applicable) as part of any public capital raising (whether as a pre-introduction to a listing on AIM or otherwise) having to be offered pro-rata to them. The Company’s members will have no right to participate in UKOG’s capital raising (or in any capital raising of NewCo).

The material terms and conditions on which Adamo AU will sell all of the shares in Adamo UK to UKOG are set out above in the section headed “Background”.

The directors of the Company consider the disposal by Adamo AU of all of the shares in Adamo UK is in the best interests of the Company’s members as they do not consider that the value of those shares and the UK Gas Assets is being reflected in the Company’s share price, primarily because the Company is viewed in the market as being a clean energy company. As such to raise the funds necessary to progress this project would result in a substantial dilution of shareholders’ interests in all of the Company’s projects, not just the UK Gas Assets.

Following completion of the Sale, the Company will focus all of its efforts on the marketing of its Hythane™ and hydrogen technologies, namely its nano-carbon / hydrogen pyrolysis project and Optiblend™ dual fuel technology.

6

“A”

Pro-Forma Balance Sheet

ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other current assets Assets held for sale TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Property, plant and equipment Intangible assets Investment in associate TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	30 June 2014 Adjustments Pro-forma 30 June 2014 $ $ 164,891 164,891 400,836 (70,219) 330,617 428,448 428,448 5,148 5,148 3,854,309 (3,854,309) - 4,853,632 929,104 - 2,080,382 2,080,382 170,386 170,386 1,350,592 1,350,592 - 1,320,494 1,320,494 1,520,978 4,921,854 6,374,610 5,850,958 891,148 (523,652) 367,496 99,722 99,722 990,870 467,218 990,870 467,218 5,383,740 5,383,740 53,584,609 53,584,609 2,205,004 2,205,004 (50,405,873) (50,405,873) 5,383,740 5,383,740	30 June 2014 Adjustments Pro-forma 30 June 2014 $ $ 164,891 164,891 400,836 (70,219) 330,617 428,448 428,448 5,148 5,148 3,854,309 (3,854,309) - 4,853,632 929,104 - 2,080,382 2,080,382 170,386 170,386 1,350,592 1,350,592 - 1,320,494 1,320,494 1,520,978 4,921,854 6,374,610 5,850,958 891,148 (523,652) 367,496 99,722 99,722 990,870 467,218 990,870 467,218 5,383,740 5,383,740 53,584,609 53,584,609 2,205,004 2,205,004 (50,405,873) (50,405,873) 5,383,740 5,383,740
		467,218
		467,218
		5,383,740
		53,584,609 2,205,004 (50,405,873)
		5,383,740

Assumptions:

1. Exchange rate used for GBP to AUD of 0.55

2. The loan notes totalling £1,144,210 (AU $2,080,382) recorded as a non-current other receivable.

3. Interest in UKOG is equity accounted as per current accounting standards and is prior to UKOG completing a capital raising.

7

EDEN ENERGY LTD (ACN 109 200 900)

PROXY FORM GENERAL MEETING

The Company Secretary Eden Energy Ltd Level 15 197 St Georges Terrace Perth WA 6000 Fax +(618) 9282 5866

Shareholder Name Shareholder Address

Share Registry Website: www.advancedshare.com.au

I/We being a member/members of Eden Energy Ltd entitled to attend and vote at the meeting, hereby Appoint Name of proxy

or failing the person so named or, if no person is named, the Chairman of the meeting or the Chairman’s nominee, to vote in respect of ____% of my/our voting rights 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 on Tuesday the 4[th] of November 2014 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

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FOR AGAINST ABSTAIN
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Ordinary Resolutions:

1. Adoption of Remuneration Report

2. Re-election of Mr R Beresford as a Director of the Company

3. Re-election of Mr D Solomon as a Director of the Company

4. Approval of disposition of UK Gas Assets for ASX Listing Rule 11.1

5. Approval of disposition of UK Gas Assets for ASX Listing Rule 11.2

6. Approval of disposition of UK Gas Assets for ASX Listing Rule 11.4

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not intended to be counted in computing the required majority on a poll.

Signed this day of 2014

Individuals and joint holders Companies (affix common seal if appropriate) Signature Director Signature Director/Company Secretary Signature Sole Director and Sole Company Secretary

The Chairman intends to vote undirected proxies in favour of each item of business. If you do not wish to direct your proxy how to vote please place a mark in the box.

By marking this box you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

Notes:

1. To be effective, this proxy and the power of attorney (if any) under which it is signed must be received at the Registered Office of the Company, Level 15, 197 St Georges Terrace, Perth, WA 6000 not less than 48 hours before the time for holding the meeting, or any adjournment thereof.

2. If the member is a corporation, the form of proxy should be signed under seal if appropriate.

INSTRUCTIONS FOR APPOINTMENT OF PROXY

1. A shareholder entitled to attend and vote is entitled to appoint no more than two proxies to attend and vote at this General Meeting as the shareholder’s proxy. A proxy need not be a shareholder of the Company.

2. Where more than one proxy is appointed, each proxy must be appointed to represent a specific proportion of the shareholder’s voting rights. If such appointment is not made then each proxy may exercise half of the shareholder’s voting rights. Fractions shall be disregarded.

3. The proxy form must be signed personally by the shareholder or his attorney, duly authorised in writing. If a proxy is given by a corporation, the proxy must be executed either in accordance with the Constitution of the company or under the hand of an officer of the company or its duly authorised attorney. In the case of joint shareholders, this proxy must be signed by all of the joint shareholders, personally or by a duly authorised attorney.

4. If a proxy is executed by an attorney of a shareholder, then the original of the relevant power of attorney or a certified copy of the relevant power of attorney, if it has not already been noted by the Company, must accompany the proxy form.

5. To be effective, forms to appoint proxies must be received by the Company no later than 48 hours before the time appointed for the holding of this General Meeting, that is by 10.00am WST on 2 November 2014, by post or facsimile to the respective addresses stipulated in this proxy form.

6. If the proxy form specifies a way in which the proxy is to vote on any of the resolutions stated above, then the following applies:

7. (a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and

8. (b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and

9. (c) if the proxy is Chairman, the proxy must vote on a poll and must vote that way, and

10. (d) if the proxy is not the Chairman, the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way.

If a proxy is also a shareholder, or acts as proxy for any other shareholder, the proxy can cast any votes the proxy holds as a shareholder or as proxy for any other shareholder in any way that the proxy, or that other shareholder, sees fit.

1. The Chairman intends to vote in favour of all resolutions set out in the Notice of General Meeting.