EDEN INNOVATIONS LTD — Capital/Financing Update 2011

Nov 15, 2011

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ACN 109 200 900
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16 November 2011

Address1 Address2 Address 3 Address 4

Dear Shareholder

NON-RENOUNCEABLE PRO-RATA RIGHTS ISSUE

Eden Energy Ltd (the Company ) has announced to ASX Limited ( ASX ) a non-renounceable pro-rata rights offer to the Company's shareholders (the Offer ).

Overview

Under the Offer the Company will issue to each eligible shareholder, at a price of $0.05 per share, two (2) new fully paid ordinary Company shares for every seven (7) fully paid ordinary Company shares held by the eligible shareholder as at 5.00pm WST on 23 November 2011 (the Record Date ). In addition, one (1) free Company option will attach to every one (1) new fully paid ordinary Company share issued under the Offer, exercisable at $0.20 at any time on or before 5.00pm WST on 30 June 2014 (the Options ). In calculating entitlements under the Offer, fractions will be rounded up to the nearest whole number.

If fully subscribed (and assuming none of the Company options currently on issue are exercised before the Record Date and no portion of the initial payment of US $250,000 under the first convertible note issued to La Jolla Cove Investors, Inc on 15 November 2011 is converted into Shares before the Record Date), the Offer will result in the issue of approximately 70,615,000 ordinary shares in the Company and 70,615,000 Options. All of the shares issued under the Offer will rank equally with the Company’s existing quoted shares (ASX Code: EDE) and all of the Options will rank equally with the Company's existing listed options (ASX Code: EDEO).

Funds raised from the Offer will be used:

1. firstly, to meet the expenses of the Offer;

2. secondly, to pay the second tranche of the settlement sum due by the Company to Omni Laboratories Inc consequent upon the settlement of the proceedings in the Queens Bench Division of the High Court of Justice of England and Wales;

3. thirdly, to repay outstanding financial obligations of the Company; and

4. fourthly, to provide additional working capital to fund the ongoing operations of the Company.

The Offer is conditionally partially underwritten as to 18,660,000 Shares (and accompanying Options) in the sum of $933,000 by Noble Energy Pty Ltd (the largest shareholder of the Company) (as to 18,500,000 Shares and accompanying Options) and A & K Leibovitch as trustee of the Katss Investment Trust (as to 160,000 Shares and accompanying Options).

Eligibility

Only shareholders whose registered addresses are in Australia or New Zealand as at the Record Date are eligible to participate in the Offer ( Eligible Shareholders ). The Company has determined, in accordance with the Corporations Act 2001 (the Act ) and ASX Listing Rule 7.7, that it would be unreasonable to make the Offer to

Level 40, Exchange Plaza 2 The Esplanade, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866

Email: mailroom@tasmanresources.com.au

shareholders whose registered addresses are outside of Australia and New Zealand ( Non-Resident Shareholders ) having regard to the number of Non-Resident Shareholders in each country other than Australia or New Zealand, the number and value of Company shares (and accompanying Options) that would be offered to them and the cost of complying with the legal requirements in other countries.

Non-Resident Shareholders will therefore not be entitled to participate in the Offer. Non-Resident Shareholders should contact the Company Secretary should they have any queries.

Details of the Offer will be contained in a prospectus, which will be mailed to all Eligible Shareholders. Eligible Shareholders should read the prospectus carefully.

A copy of the prospectus has been lodged with the ASX and is available on the ASX website, www.asx.com.au, and on the Company's website at www.edenenergy.com.au.

Disclosure

The Offer is being made in accordance with section 713 of the Act. This means that the prospectus that will be mailed to Eligible Shareholders will not be required to, and will not, contain all of the information that is generally required to be set out in a prospectus, including general information in relation to the assets and liabilities, financial position, profits and losses or prospects of the Company. The prospectus will generally only contain information in relation to the effect of the Offer on the Company and the rights and liabilities attaching to the shares and Options offered to Eligible Shareholders under the Offer.

Effect on capital structure

The capital structure of the Company on completion of the Offer will be as follows*:

Shares (ASX Code: EDE)
Shares currently on issue **	248,328,037
Shares offered under the Offer (est)	70,615,000
Total shares on issue on completion of the Offer (est) ***	318,943,037
Options (ASX Code: EDEO)****
Options currently on issue	36,343,365
Options offered under the Offer (est)	70,615,000
Total Options on issue on completion of the Offer (est)	106,958,365

* Assuming the Offer is fully subscribed, none of the Company options currently on issue are exercised before the Record Date and no portion of the initial payment of US $250,000 under the first convertible note issued to La Jolla Cove Investors, Inc on 15 November 2011 is converted into Shares before the Record Date.

** This includes 1,175,018 shares which were issued to La Jolla Cove Investors, Inc today in satisfaction of the facility fee payable to them under the Eden Energy Funding Agreement dated 11 November 2011.

*** In addition, upon completion of this Offer, additional Shares will be on issue if La Jolla has converted the initial payment of US $250,000 made by it under the first convertible note (or any portion thereof) into shares (at the conversion price per share determined in accordance with the Eden Energy Funding Agreement).

**** In addition to the Options currently on issue, there are 11,688,014 unlisted Company options on issue by the Company to, inter alia, directors of the Company and under the Company’s Employee Share Option Plan.

The Directors of the Company reserve the power of placement of any under subscriptions.

Level 40, Exchange Plaza 2 The Esplanade, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866 Email: mailroom@tasmanresources.com.au

Offer timetable

The timetable and important dates of the Offer are set out below:

Offer announcement	31 October 2011
Lodgement of prospectus, cleansing notice and Appendix 3B with ASX	15 November 2011
Notice sent to shareholders	16 November 2011
Ex date	17 November 2011
Record Date for determining entitlements	23 November 2011
Offer document despatched to eligible shareholders	24 November 2011
Closing date of the Offer	8 December 2011
Shares quoted on a deferred settlement basis	9 December 2011
Company notifies ASX of under subscriptions	13 December 2011
Despatch of holding statements	15 December 2011

Further information

If you require further information about the Offer, you should contact the Company Secretary.

Yours faithfully

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Gregory Howard Solomon Chairman

Level 40, Exchange Plaza 2 The Esplanade, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866 Email: mailroom@tasmanresources.com.au