EDEN INNOVATIONS LTD - Capital/Financing Update 2011

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ACN 109 200 900
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NON RENOUNCEABLE RIGHTS ISSUE TRANSACTION-SPECIFIC PROSPECTUS

For a non-renounceable pro-rata Rights Issue of approximately 70,615,000 Shares on the basis of two (2) new Shares for every seven (7) Shares held by Qualifying Shareholders as at 5:00pm WST on the Record Date, at an issue price of $0.05 per Share together with 1 Option for every Share acquired free of charge (each to acquire 1 Share at an exercise price of $0.20 per Share, exercisable at any time up to and including 30 June 2014). This Rights Issue, if fully subscribed, will raise up to approximately $3,530,750 (before expenses of the Offer).

IMPORTANT INFORMATION

This Prospectus is a transaction-specific prospectus issued under section 713 of the Corporations Act. This Prospectus is not required to, and does 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. This Prospectus generally only contains information in relation to the effect of the Rights Issue on the Company and the rights and liabilities attaching to the New Shares and New Options offered to Qualifying Shareholders under this Prospectus.

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers.

This Offer is partially Underwritten.

THE SHARES AND OPTIONS OFFERED UNDER THIS PROSPECTUS ARE OF A SPECULATIVE NATURE.

IMPORTANT STATEMENT

This Prospectus is dated 14 November 2011.

A copy of this Prospectus was lodged with ASIC on 14 November 2011. Neither ASIC nor ASX take any responsibility for the contents of this Prospectus.

This Prospectus contains an offer to Qualifying Shareholders whose registered addresses are in Australia and New Zealand, and has been prepared to comply with the requirements of the securities laws of Australia and New Zealand. Distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make an offer. No action has been taken to register this Prospectus, the New Shares or New Options or the Rights, or otherwise permit an offering of the New Shares or New Options or the Rights, in any jurisdiction outside of Australia or New Zealand.

No New Shares or New Options will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Application has been made for permission for the New Shares and New Options offered by this Prospectus to be admitted to Quotation on the ASX.

The New Shares and New Options offered under this Prospectus are of a speculative nature. Qualifying Shareholders should read this Prospectus in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for New Shares and accompanying New Options. In particular, it is important that Qualifying Shareholders consider the risk factors set out in section 5 of this Prospectus. The New Shares and New Options offered under this Prospectus carry no guarantee in respect of return of capital, return on capital investment, payment of dividends or the future value of the Shares or Options.

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with the Rights Issue which is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by Eden (or its Directors or advisers) in connection with this Rights Issue.

PROSPECTUS AVAILABILITY

This Prospectus is only available in a paper version. Qualifying Shareholders with registered addresses in Australia and New Zealand will be sent a copy of this Prospectus on 24 November 2011. In addition, Qualifying Shareholders can obtain a copy of this Prospectus during the Rights Issue on the Eden website at www.edenenergy.com.au or by calling Mr Greg Solomon, Executive Chairman by telephone on (+618) 9282 5889. A personalised Acceptance Form will accompany the paper copy of the Prospectus which will be mailed to Qualifying Shareholders on 24 November 2011.

Neither this Prospectus nor the accompanying Acceptance Form may be sent to Qualifying Shareholders outside of Australia and New Zealand or otherwise distributed outside of Australia and New Zealand.

TRANSACTION-SPECIFIC PROSPECTUS

This Prospectus is a transaction-specific prospectus issued in accordance with section 713 of the Corporations Act. This Prospectus is not required to, and does not, contain all 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. This Prospectus generally only contains information in relation to the effect of the Rights Issue on the Company and the rights and liabilities attaching to the New Shares and New Options offered to Qualifying Shareholders under this Prospectus.

Section 7 of this Prospectus sets out further information in relation to the nature and contents of this Prospectus.

DEFINITIONS AND ABBREVIATIONS

Throughout this Prospectus abbreviations and defined terms are used. Defined terms are generally identified by the use of an uppercase first letter. Details of the definitions and abbreviations used are set out in section 8 of this Prospectus.

SUMMARY OF OFFER

This information is intended as a summary only and should be read in conjunction with the more detailed information appearing elsewhere in this Prospectus. Applicants should read this entire Prospectus, including the risks in section 5, in order to make an informed decision about acquiring New Shares and New Options.

1. KEYPOINTS

New Share Issue Price $0.05 per New Share Qualifying Shareholder Entitlement 2 New Shares for every 7 Existing Shares held on the Record Date (together with 1 free accompanying New Option for every New Share acquired under this Prospectus) Approximate number of New Shares to be issued under this Up to 70,615,000 Rights Issue Approximate number of New Options to be issued under this Up to 70,615,000 Rights Issue Approximate amount to be raised under this Rights Issue Up to $3,530,750 (assuming this Rights Issue is fully subscribed and before expenses of the Offer)

*These figures assume that none of the existing Options are, and no portion of the Initial Note Payment under the First Note is, converted to Shares prior to the Record Date. If this occurs, the number of New Shares and New Options, and the amount raised, under this Rights Issue may increase.

2. SUMMARY OF IMPORTANT DATES

Offer announcement	31 October 2011
Lodgement of Prospectus 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
Securities 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

This timetable is indicative only and subject to change. The Company reserves the right, subject to the Corporations Act and the Listing Rules, to vary the above dates (including, without limitation, to extend the Closing Date or to close this Rights Issue early), or to withdraw this Rights Issue and Prospectus at any time, without prior notice. Any extension of the Closing Date will have a consequential effect on subsequent milestones set out above.

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IMPORTANT STATEMENT..........................................................................................................................................1	IMPORTANT STATEMENT..........................................................................................................................................1
SUMMARY OF OFFER ..................................................................................................................................................2
1.	CHAIRMAN’S LETTER........................................................................................................................................4
2.	DETAILS OF THE OFFER ...................................................................................................................................5
3.	ACTION REQUIRED BY QUALIFYING SHAREHOLDERS........................................................................10
4.	COMPANY OVERVIEW.....................................................................................................................................12
5.	RISK FACTORS ...................................................................................................................................................18
6.	EFFECT OF THE ISSUE.....................................................................................................................................21
7.	ADDITIONAL INFORMATION.........................................................................................................................25
8.	GLOSSARY NAMES AND TERMS ...................................................................................................................39
9.	CONSENT BY DIRECTORS...............................................................................................................................41
10.	CORPORATE DIRECTORY ..............................................................................................................................42
ACCEPTANCE FORM..................................................................................................................................................43

1. CHAIRMAN’S LETTER

Dear Shareholders

The past three years have been a volatile and difficult period, not only for global financial markets generally but also for smaller companies. During this period, in order to adapt to these conditions, Eden Energy has re-structured and focused on a narrower range of projects, with its primary emphasis now being on its carbon nanomaterials/hydrogen production, Optiblend® dual fuel technology, Hythane® technology and its UK coal seam and shale gas project. It has made great progress with all of these projects, which are all now at a far more mature stage, and with the carbon and the dual fuel projects starting to generate sales. More details of these projects are set out in this Prospectus.

Eden has at the same time endeavoured to contain its expenditure levels, and move towards financial self- sufficiency as quickly as possible. However, for a number of reasons, including the upheaval in the markets generally, our sales have been slower than had been hoped for, although our various technology products have been developed largely on time and on budget. In consequence our cash reserves have been progressively depleted, resulting in the need to raise further funds in difficult market conditions.

Eden’s cash position was further compounded by the potentially huge legal fees that were arising in the litigation in which Eden was engaged in the UK resulting from permeability testing in 2008 which Eden contended was negligently carried out. Notwithstanding Eden's belief that it had a good case and reasonable chances of success, the risk that, if Eden were unsuccessful, the legal fees that Eden would have to pay could be potentially four or five times the amount of the claim, led the Directors to resolve to settle this litigation. This in large part brought on the need for Eden to immediately undertake this capital raising.

Obviously, the Directors would have liked to raise additional capital at higher prices than we are doing so, but in view of the very unstable and difficult global financial markets, it was decided to price the Issue attractively in order to try and encourage shareholders to take up as much of the Issue as possible.

Based upon the limited take-up by shareholders of the last rights issue undertaken by Eden and the fact that this current Issue is only partially underwritten, the Directors were also of the view that Eden needs a backstop funding arrangement in the event that there is not a strong take-up of this Issue, and for this reason Eden has put in place the Funding Agreement (further details of which are contained in section 7.8 of this Prospectus) to provide, in addition to the funds raised under this Rights Issue, up to US$3million in three successive equal tranches of $US1million, each tranche to be paid in four instalments of $250,000 each over a maximum 6 month period. Eden must take up the first tranche of US$1million, but has the right to elect whether or not to take up the second and third tranches. Eden has reserved the right for the Directors to place the shortfall in the Right Issue during the three months after it closes, and should sufficient funds be raised under the Rights Issue and any subsequent placements, it is quite likely that only the first tranche of US $1million would be taken up under the Funding Agreement.

These arrangements are anticipated to be sufficient to see Eden progress its various projects to the point where they start to realise some of the significant potential that we consider that they have.

I urge Shareholders to read this Prospectus carefully, and I commend this Rights Issue to you.

Yours sincerely

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Gregory H Solomon Chairman

2. DETAILS OF THE OFFER

2.1 Shares and Options offered for subscription

A non-renounceable pro rata rights issue to Qualifying Shareholders of approximately 70,615,000 New Shares and 70,615,000 New Options (assuming that none of the existing Options of the Company are, and no portion of the Initial Note Payment under the First Note is, converted to Shares prior to the Record Date) on the basis of 2 New Shares for every 7 Existing Shares held as at the Record Date at an issue price of $0.05 each, together with 1 New Option free of charge for every New Share acquired (each New Option to acquire 1 Share at an exercise price of $0.20 exercisable at any time up to and including 30 June 2014), to raise up to approximately $3,530,750 before expenses of the Offer (and assuming the Offer is fully subscribed).

All New Shares issued pursuant to this Prospectus will be issued as fully paid ordinary shares and will rank equally in all respects with the Existing Shares (see section 7.4 of this Prospectus).

The New Options to be issued under this Prospectus will be issued on the terms and conditions set out in section 7.5 of this Prospectus, and will rank equally in all respects with all of the Company's existing listed Options.

As this Rights Issue is non-renounceable, Qualifying Shareholders who do not wish to exercise their Rights to subscribe for some or all of the New Shares (and accompanying New Options) being offered to them under this Prospectus may not sell or otherwise transfer those Rights, and those Rights will lapse upon the expiry of the Offer Period.

2.2 Entitlement to participate in the Rights Issue

Shareholders who are registered on the Company's Share Register and whose registered addresses are in Australia or New Zealand (Qualifying Shareholders) at the close of business on the Record Date, being 5.00 pm WST on 23 November 2011, are eligible to participate in the Offer. An Acceptance Form setting out Qualifying Shareholders’ Entitlements to New Shares and New Options accompanies this Prospectus.

Fractional Entitlements will be rounded up to the nearest whole number of New Shares and accompanying New Options. For this purpose, holdings in the same name are aggregated for calculation of Entitlements. If Eden considers that holdings have been split to take advantage of rounding, the Company reserves the right to aggregate holdings held by associated Qualifying Shareholders for the purpose of calculating Entitlements.

2.3 Applications

This Offer may be accepted by Qualifying Shareholders in whole or in part prior to the Closing Date, subject to the right of the Company to extend the Offer Period or close the Offer early.

Instructions for accepting an Entitlement are set out in section 3 of this Prospectus and on the Acceptance Form which accompanies this Prospectus.

2.4 Application money

All Qualifying Shareholders who accept the Offer made to them in its entirety will receive their Entitlement in full.

New Shares and accompanying New Options will be issued to a Qualifying Shareholders only after all of their Application Money has been received and ASX has granted permission for the New Shares and New Options to be quoted.

All Application Money received before the New Shares and accompanying New Options are issued will be held in a special purpose trust account. After the New Shares and New Options are issued to Qualifying Shareholders, the funds in the account, plus accrued interest, will be received by the Company. All Application Moneys will be returned (without interest) if this Rights Issue is withdrawn or otherwise does not proceed.

If the New Shares and New Options are not admitted to Quotation by ASX within 3 months after the date of this Prospectus (or any longer period permitted by ASIC), the Company will refund all Application Money in full.

2.5 Issue outside Australia and New Zealand

This Prospectus does not constitute an offer of Securities in any place outside Australia and New Zealand in which, or to any person to whom, it would not be lawful to make such an offer or to issue the Prospectus. The distribution of this Prospectus and the accompanying Acceptance Form in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus and the accompanying Acceptance Form (including nominees, trustees or custodians) should seek advice on and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws.

No action has been taken to register the Rights, the New Shares or New Options or this Prospectus or otherwise permit an offering of the New Shares or New Options or the Rights in any jurisdiction outside of Australia or New Zealand. Without limitation, the Rights and the New Shares and New Options have not been, and will not be, registered under the US Securities Act 1933 (as amended) or the securities laws of any State of the United States of America and may not be offered in the United States of America or to, or for the account of or benefit of, US persons.

2.6 Treatment of Non-Qualifying Foreign Shareholders

The Offer in this Prospectus is not being extended to any Shareholder, as at the Record Date, whose registered address is not situated in Australia or New Zealand (Non-Qualifying Foreign Shareholders) because of the small number of such Shareholders, the small number and value of the Securities which would be offered to NonQualifying Foreign Shareholders and the cost of complying with applicable regulations in jurisdictions outside Australia and New Zealand. The Prospectus is sent to those Shareholders for their information only.

The Offer contained in this Prospectus to Qualifying Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand) (as amended). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any New Shares or accompanying New Options.

Recipients may not send or otherwise distribute this Prospectus or the accompanying Acceptance Form to any person outside Australia or New Zealand (other than to Qualifying Shareholders).

2.7 ASX Quotation of New Shares and New Options

The Company has applied to the ASX for the New Shares and New Options offered under this Prospectus to be granted Quotation.

If approval for Quotation of the New Shares and New Options is not granted within 3 months after the date of this Prospectus (or any longer period permitted by ASIC), the Company will not allot or issue any New Shares or New Options pursuant to this Rights Issue and will repay all Application Moneys without interest as soon as practicable.

Subject to approval being granted by ASX, it is expected that the New Shares and accompanying New Options will be issued on 15 December 2011 and that Quotation of the New Shares and New Options will commence on ASX on a normal basis on 16 December 2011. It is the responsibility of all Qualifying Shareholders to determine their allocation prior to trading in New Shares or New Options. Qualifying Shareholders who trade or otherwise deal with New Shares or New Options before they receive holding statements will do so at their own risk. The Company disclaims all liability in tort (including negligence), statute or otherwise to persons who trade or otherwise deal with New Shares or New Options before receiving holding statements.

ASX takes no responsibility for the contents of this Prospectus. The fact that the ASX may approve Quotation of the New Shares or New Options is not to be taken in any way as an indication of the merits of the Company or the New Shares or New Options offered under this Prospectus.

2.8 Allotment of New Shares and New Options

Subject to ASX granting approval for Quotation of the New Shares and New Options, the allotment of the New Shares and New Options to Qualifying Shareholders will occur as soon as possible after this Rights Issue is closed, following which holding statements setting out the number of New Shares and New Options allotted to Qualifying Shareholders under this Prospectus will be despatched.

2.9 Minimum subscriptions and oversubscriptions

There is no minimum subscription to this Rights Issue, and no oversubscriptions will be accepted.

2.10 Underwriting

This Rights Issue is partially underwritten. A summary of the terms and conditions of the underwriting agreements are set out in section 7.7 of this Prospectus.

2.11 Shortfall

The Directors of the Company reserve the power of placement of any New Shares and New Options not subscribed for by Qualifying Shareholders under this Offer ( Shortfall ). Any Shortfall may be issued by the Directors at their discretion within three months after the Closing Date at a price which is not less than the price at which the New Shares are being offered under this Prospectus.

2.12 Purpose of the Issue

The purpose of this Rights Issue is to raise up to approximately $3,530,750 (before expenses of the Offer). The funds raised under this Rights Issue will be utilised in the manner set out in section 6.4 of this Prospectus.

2.13 Market prices of Existing Shares and Options on ASX

The highest and lowest market sale price of the Existing Shares and listed Options during the 3 months immediately preceding the lodgement of this Prospectus with ASIC, and the last market sale price on the date before the lodgement date of this Prospectus, are set out below.

	3-Month High	3-Month Low	Last Market Price
	(on 24 August 2011)	(on 4 November 2011)	(on 11 November
			2011)
Existing Shares	$0.09	$0.049	$0.051
	3-Month High	3-Month Low	Last Market Price
	(on 16 August 2011)	(on 7 September	(on 11 November
		2011)	2011)
Listed Options	$0.031	$0.012	$0.013

The above information was sourced from Etrade Australia. Etrade Australia has not consented to the use of the above trading data reference in this Prospectus.

2.14 Opening and Closing Dates

Subscription lists will open on 24 November 2011 and will remain open until 5.00pm WST on 8 December 2011. Subject to the requirements of the Corporations Act and the Listing Rules, the Company may either close this Rights Issue at an earlier time and date or extend the closing time and date without prior notice. Qualifying Shareholders are encouraged to submit their Applications as early as possible.

No New Shares or New Options will be issued under this Prospectus later than 13 months after the date of this Prospectus.

2.15 Indicative timetable

Refer to the "Summary of Offer" at the beginning of this Prospectus for an indicative Offer timetable.

2.16 Existing Shares

There are currently 247,153,019 Shares on issue in the Company. If this Rights Issue is fully subscribed, and assuming that none of the existing Options are, and no portion of the Initial Note Payment under the First Note is, converted to Shares before the Record Date, a total of approximately 317,768,019 Shares will be on issue in the Company at the conclusion of this Rights Issue.

In addition, upon completion of this Rights Issue, the following additional Shares may also be on issue (subject to the First Note being issued to La Jolla under the Funding Agreement upon satisfaction of all of the conditions precedent in the Funding Agreement):

(a) $US 60,000 worth of Shares (at an issue price per Share which is the VWAP for the 5 trading days prior to 11 November 2011) will be issued to La Jolla on the date of issue by the Company of the First Note;

(b) any Shares into which La Jolla has converted the Initial Note Payment advanced under the First Note (at the conversion price per Share determined in accordance with the Funding Agreement).

For further information in relation to the Funding Agreement, see section 7.8 of this Prospectus.

2.17 Existing Options

There are currently 36,343,365 listed Options, and 11,688,014 unlisted Options, on issue in the Company. Each Option entitles the holder to acquire 1 Share. The terms and conditions of the listed and unlisted Options currently on issue in the Company are set out in sections 7.5 and 7.6 of this Prospectus.

If this Rights Issue is fully subscribed, and assuming that none of the existing Options are, and no portion of the Initial Note Payment under the First Note is, converted to Shares before the Record Date, a further 70,615,000 listed Options will be on issue in the Company at the conclusion of this Rights Issue.

2.18 Existing Optionholders

Holders of existing Options (listed and unlisted) may participate in this Rights Issue by exercising any or all of their Options prior to the Record Date.

All of the existing Options on issue in the Company (except 100,000) are capable of being exercised. If all of the Options capable of exercise (47,931,379) were exercised before the Record Date, an additional 47,931,379 Shares would then be issued. In addition, in the event that all of the Rights in respect of these additional Shares were subscribed for, an additional 13,694,680 New Shares (together with 13,694,680 accompanying New Options) would be issued under this Rights Issue, and a further $684,734 would be raised under this Rights Issue. However, given the current price of the Company's Shares and the prices at which the Options are exercisable, the Company does not expect any of the Optionholders to exercise their Options prior to the Record Date.

2.19 Effect on existing Shareholders and Optionholders

For the effect this Rights Issue will have on Shareholders’ and Optionholders’ existing interests, please see section 6.3 of this Prospectus.

2.20 No commission payable on New Shares and New Options

Except for the fees payable under the underwriting agreements referred to in sections 2.10 and 7.7 of this Prospectus,

no commission will be payable by the Company in connection with any New Shares and New Options which are issued under this Prospectus. Please see section 7.7 of this Prospectus for details of the fees payable under the underwriting agreements.

2.21 No valuation

No formal valuation has been completed of any of the assets, or the New Shares or New Options, of the Company.

2.22 Risk factors

In addition to the general risks applicable to all investments in listed companies, there are specific risks associated with an investment in the Company. Please see section 5 of this Prospectus for further information.

2.23 Acknowledgment and Privacy Statement

By accepting their Rights (either in whole or in part), each Qualifying Shareholder acknowledges that they have received and read this Prospectus.

As Qualifying Shareholders are already shareholders of the Company, the Company and its share registry (Advanced Share Registry Services) have already collected certain personal information from Qualifying Shareholders. However, if Qualifying Shareholders apply for New Shares and New Options pursuant to this Prospectus, they may be supplying new, additional, or updated personal information (by its inclusion on the Acceptance Form) to the Company.

The information included on an Acceptance Form is used for the purposes of processing the Acceptance Form and to administer the Qualifying Shareholder’s holding of Shares and Options. By submitting an Acceptance Form, each Qualifying Shareholder agrees that the Company may use the information provided by a Qualifying Shareholder on the Acceptance Form for the purposes set out in this privacy statement and may disclose it for those purposes to Advanced Share Registry Services and the Company’s related bodies corporate, agents and contractors and third party service providers, including mailing houses, professional advisers (eg auditors, lawyers and accountants), technology support providers and to ASX and other regulatory authorities.

The Corporations Act requires the Company to include information about each Shareholder (including name, address and details of the Shares and Options held) in its public register. The information contained in the Company’s public register must remain there even if that person ceases to be a Shareholder. Information contained in the Company’s register is also used to facilitate payments and corporate communications (including the Company’s financial results, annual reports and other information that the Company wishes to communicate to its Shareholders) and compliance by the Company with legal and regulatory requirements.

Under the Privacy Act 1998 (Cth), Shareholders have a right to gain access to personal information that the Company holds about that person, subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company’s registered office.

If you are paying by cheque or money order and you do not provide the information required on the Acceptance Form, the Company may not be able to accept or process your Acceptance Form.

2.24 Enquiries In Relation to this Issue

This Prospectus provides information for Qualifying Shareholders and should be read in its entirety. Enquiries concerning the Acceptance Form or about subscribing for New Shares and accompanying New Options under this Rights Issue should be directed to the Company by telephone on (+618) 9282 5889 or facsimile on (+618) 9282 5866.

If after reading this Prospectus or contacting the Company you have any questions about any aspect of an investment in the Company, please consult your stockbroker, accountant or independent financial advisor.

3. ACTION REQUIRED BY QUALIFYING SHAREHOLDERS

3.1 What you may do - choices available

If you are a Qualifying Shareholder, you may take any of the following actions:

take up all of your Rights;
take up part of your Rights and allow the balance to lapse; or
do nothing.

However, you may not sell or otherwise transfer all or part of your Rights to another person.

3.2 Taking up all or part of your Rights

If you are a Qualifying Shareholder and you wish to take up all or part of your Rights, you may either:

Pay the Application Moneys for the Rights you are taking up by BPay by no later than 5.00 pm WST on 8 December 2011. Qualifying Shareholders who pay electronically (by BPay), do not need to return the Acceptance Form, and they will be taken to have accepted the Offer upon making payment by BPay. This acceptance cannot be withdrawn. Instructions on how to make a payment by B-Pay are set out on the Acceptance Form.
Complete the personalised Acceptance Form accompanying this Prospectus in accordance with the instructions set out on that form and forward it, together with your cheque or money order for the Application Moneys for the Rights you are taking up, to reach one of the following addresses by no later than 5.00 pm WST on 8 December 2011:

By mail : Eden Energy Limited c/- Advanced Share Registry Services PO Box 1156 Nedlands, Western Australia, 6909 By delivery: Eden Energy Limited c/- Advanced Share Registry Services 150 Stirling Highway Nedlands, Western Australia, 6009

Cheques (drawn on and payable at any Australian bank) should be made payable to “Eden Energy Ltd – Rights Issue” and crossed “Not Negotiable”.

If you are paying by cheque or money order, New Shares and accompanying New Options will only be issued on receipt of an Acceptance Form which was issued together with this Prospectus. A completed and lodged Acceptance Form, together with payment for the number of New Shares and accompanying New Options accepted, cannot be withdrawn and constitutes a binding application for, and acceptance of, the number of New Shares and New Options specified in the Acceptance Form on the terms set out in this Prospectus. The Acceptance Form does not need to be signed to be binding.

Acceptance Forms which do not specify an Australian or New Zealand address for service (or which are accompanied by payment drawn on a foreign bank account) will be rejected and returned unless Qualifying Shareholders provide evidence which satisfies the Company that the issue of the New Shares and accompanying New Options will not contravene the laws of any other jurisdiction.

If the Acceptance Form is not completed correctly the Company may reject it or treat it as valid. The Company’s decision as to whether to reject the Acceptance Form or treat it as valid and how to construe, amend or complete it is final.

If the amount a Qualifying Shareholders pays by cheque, money order or BPay is insufficient to pay for their full

Entitlement, they will be taken to have applied for such lower number of New Shares (and accompanying New Options) as that amount will pay for. If Qualifying Shareholders apply for more New Shares than their Entitlement, they will be deemed to have applied for their Entitlement and the payment tendered for the additional number of New Shares will be refunded to Qualifying Shareholders, without interest.

No brokerage or duty is payable by Qualifying Shareholders on the issue of New Shares and accompanying New Options.

If you are a Qualifying Shareholder and you take up part of your Rights only, the balance of your Rights will lapse.

3.3 Consequences of doing nothing – rights not taken up

Qualifying Shareholders who do not wish to take up any of their Entitlement do not need to take any action. Any Rights not taken up by Qualifying Shareholders will lapse at the expiration of the Offer Period.

3.4 Overseas Shareholders (Non-Qualifying Foreign Shareholders)

Shareholders with registered addresses outside Australia and New Zealand should refer to sections 2.5 and 2.6 of this Prospectus.

4. COMPANY OVERVIEW

4.1 Background

Eden was incorporated in Australia in May 2004 as a wholly owned subsidiary of Tasman Resources. Eden undertook an initial public offering pursuant to a prospectus in March 2006 and was admitted to Quotation on the Official List of the ASX on 6 June 2006.

4.2 Directors

The current Directors of the Company are:

Gregory Howard Solomon, LLB (Executive Chairman)
Douglas Howard Solomon, B. Juris (Hons), LLB (Non-Executive Director)
Guy Touzeau Le Page, B.A., B.Sc. (Hons), M.B.A., ASIA, MAusIMM (Non-Executive Director)
Richard Jonathan Beresford FAICD FAIE (Non-Executive Director)

4.3 Pyrolysis Project

Through this technology, which is owned 100% by Eden’s US subsidiary, Hythane Company, methane (natural gas) is broken down into its atomic constituents of hydrogen gas and solid carbon, without the production of carbon dioxide. The solid carbon is produced as either carbon nano-fibres ("CNF") or carbon nanotubes ("CNT"), depending upon the particular catalyst that is used, and each has both high strength and electrical and thermal capabilities.

Initial sales have occurred of these ultra-strong and highly conductive forms of carbon that can be used in various electrical applications including batteries, and as an additive to various materials such as concrete, rubber and plastics. Further a number of companies and universities are now trialing Eden’s nano-carbon products in various application.

In addition to producing carbon, the process also produces hydrogen as a by-product which has the potential to enable the low cost production of hydrogen.

4.3.1 Scale-up in USA

Hythane Company has built and successfully operated several scaled up versions of the production equipment for this technology. It has also built a catalyst production laboratory to enable production of carbon specifically in the form of multi-walled carbon nanotubes (MWCNT) and carbon nanofibres (CNF).

The first scaled-up unit was approximately 25 times larger than the original laboratory scale unit that was used in the development of this technology. This was successfully trialed and produced hydrogen and either MWCNT or CNF on a batch basis, with stable, production levels for both forms of carbon being achieved. The quality and quantity of the MWCNT and CNF were measured and tested using high technology techniques including TEM (Transmission Electron Microscope) photography and Raman Spectroscopy and the results to date of both the quality and the quantity of all carbon products, are very encouraging. This was then followed in late 2010 by the successful development and trialing of a larger prototype production unit with a capacity to produce up to 10 tonnes of carbon fibre per annum or up to 3 tonnes per annum of MWCNT.

In 2011 a further up-scaling programme was then undertaken and two reactors (a 24” diameter reactor and a 36” diameter reactor) were built and are now operational . These reactors can be remotely monitored, and incorporate a range of monitors including a pressure monitor and a flammable gas detector. The units are modular and several reactors will be integrated to produce large-scale future production models. The present units are anticipated together to be capable of producing up to 100 tonnes of carbon nanofibres and 33 tonnes of hydrogen per year. The actual production capability of each unit is currently being determined in trials which are producing carbon that can be

stockpiled, used for research or sold.

To supply these units with the required catalyst, the pilot-scale catalyst production system was updated with automated controls and other improvements for collecting the product, and a scaled-up catalyst production system to meet expected future carbon production requirements is nearing completion.

Eden has also continued optimization of the carbon nanomaterial production process. Current carbon catalyst yields being achieved are 35:1 for carbon nanotubes and approximately 300:1 for carbon nanofibres, both of which will deliver the purity of carbon required by the marketplace.

Further, to satisfy health and safety standards, a fully self-contained carbon clean room with an industrial air handling system has been constructed in Denver to ensure a safe working environment in which all carbon production can be carried out.

Subject to Eden being able to develop a market capable of absorbing the quantity of carbon that it will be able to produce, a full scale commercial production unit, which will be a scaled up version of the current prototypes, will be built for trialing. The actual size of this unit has not yet been determined. Hythane Company plans to be able to complete the manufacture of this unit by approximately mid-2012, after which time it is planned to commence commercial deployment provided a suitable market for the carbon that will be produced is available.

4.3.2 Market progress

Initial progress has been made in establishing markets for the carbon products. Eden’s objective is to develop bulk scale markets that can utilise the large quantities of the nano-carbon products that the Company anticipates that it will be able to produce. Eden’s efforts are presently primarily focused on exploring and developing uses of the carbon as additives in concrete, plastics and composite materials and in rubber. The major challenge with all of these applications is to develop methods to evenly disperse the carbon in the particular matrix.

Concrete

The Company recently achieved encouraging initial results in trials in the US in relation to tensile strength. Preliminary concrete test results in certain concrete formulations are showing a very encouraging increase in flexural strength ranging from 15-30% at 7 days of age. Preliminary 28 day test results will be completed during the next few weeks. The mixtures showing favourable results are currently being batched again for proof of repeatability and verification.

Further, tests have also shown that the addition of CNF equal to 0.1% (by weight) of the amount of the cement in concrete can increase compressive strength by up to 19% without affecting the flexural strength of the concrete. This potential improvement in compressive strength would be relevant to all grades of concrete.

Several leading Indian concrete manufacturers have expressed interest in testing the Company’s CNF as an additive to concrete to increase its performance. This is hoped to open up a significant opportunity for CNF in the substantial Indian concrete market.

The Company is now conducting a wide range of further tests of the CNF-enhanced concrete to further endeavour to achieve repeatable results and to optimise the benefits as well as to also test the effect on a number of other properties of the concrete, such as:

High strength concrete used in the construction of bridges, flyovers and high rise buildings, and
Ultra-hard concrete for use in high impact applications.

A major international concrete company and an Australian university are also testing Eden's CNF and MWCNT in concrete applications.

If suitable, and repeatable results can be achieved with concrete to produce a commercial advantage, after suitable testing, a very large quantity of carbon nano-materials is anticipated to be able to be marketed in many countries for this use.

Plastics and Epoxies

Hythane Company has also tested the effects of compounding CNT and CNF with various forms of plastics and epoxy materials (for example epoxy resin, polyester resin) with a view to testing the effect of the addition of CNT and CNF to plastic on the strength, electrical and thermal conductivity of plastic. This work has produced very encouraging results.

Hythane Company is currently able to achieve a volume resistivity in these materials of approximately 10^5 to 10^7 Ohm*m, which puts these materials well within the range of use for electrostatic discharge (ESD) applications. This opens up growing markets for the compound such as for use as a coating on a range of electrical products and components.

Hythane Company has worked to optimise the compounding process, as well as the carbon loading amount, to maximise electrical conductivity of these normally insulating materials while maintaining the physical properties as closely as possible to that of the neat resins.

Currently several companies are trialing Eden's carbon products in plastics, epoxies and coatings for various applications.

Rubber

Hythane Company arranged for the external testing of the effect that the substitution of CNT and CNF for carbon black in rubber, will have on the tensile strength and strain density of the rubber (and its potential to result in lighter, longer life tyres). Carbon black, or amorphous carbon, comprises up to 33% of the weight of rubber tyres and adds strength and aids in the dissipation of heat. CNT and CNF were anticipated by Hythane Company to increase the durability of the rubber, increase the heat dissipation and at the same time significantly reduce the weight of the tyres. As at the date of this Prospectus, Eden is still awaiting the results from these trials, but there is no certainty that anything other than limited benefits will be derived.

Batteries and Electrical Applications

Eden has made several sales of its carbon nanomaterial into a range of markets related to electrical applications including repeat sales for testing in various battery applications where the nanomaterials provide increased capacity for charge and increased power output for the batteries. Eden also has sold its carbon nanomaterial for testing in conductive applications, such as conductive paper.

As with the concrete applications, Eden is working with companies to demonstrate the advantages of the nanomaterials in plastics and is also developing similar relationships with a number of battery companies, which will provide the same unbiased feedback of the benefit of the nanomaterials in various types of batteries

Timetable

The commercial scale prototype development is now planned to be completed by early 2012, after which Eden projects that, subject to satisfactory resolution of any technical difficulties that may arise, it will have both a catalyst production capability and a fully developed pyrolysis production technology that together will enable Eden to produce and market commercial quantities of high quality, low cost hydrogen and carbon nanotubes and/or carbon fibres.

Summary

Eden is well on the way to developing an efficient, commercially competitive process that will enable Eden to produce and market the carbon itself, or else licence others to use its technology. Additionally, the only other major by-product from Eden’s pyrolysis process is hydrogen, the real cost of which will be dependent upon the value of the carbon produced. The quantity of hydrogen produced will be 33.33% (by weight) of the quantity of carbon produced and this hydrogen can be either captured and fed into the various hydrogen/Hythane® applications that Eden has been developing around the world, with the intention of accelerating the commercial rollout of these downstream hydrogen applications based on the prospect of relatively low cost hydrogen, or alternatively it can be used to help fuel the pyrolysis reactor.

The current cost of hydrogen is one of the major factors holding back a broader rollout of hydrogen technology. Of further interest, the hydrogen produced using the Eden pyrolysis process will generate relatively only a very small

amount of greenhouse gas as a by-product of the production process compared with most other currently available methods of hydrogen production, and in consequence it is projected that the hydrogen will be both commercially competitive and environmentally preferable.

4.4 Optiblend® Dual Fuel Kit (Eden 100%)

Eden has completed the development of an efficient dual fuel kit that is capable of operating on diesel engines and displacing up to 70% of the diesel fuel with natural gas. If Hythane® is used in place of natural gas, the displacement of diesel fuel could be as high as 80%. The use of the natural gas will greatly reduce greenhouse gas emissions and, in places where natural gas is cheaper than diesel, will also reduce fuel costs. In various parts of India, natural gas, where available, has historically been significantly cheaper than diesel, and accordingly Eden has been targeting a diversified market for this technology, starting with stationary power generators and then locomotives.

Many millions of diesel generators are installed throughout India in industrial, commercial, and residential applications, to provide either base load power or backup power generation, largely due to the unreliability of the Indian power grid in many parts of the country. As natural gas, which is both much cleaner and cheaper than diesel, becomes more widely available, a large market is emerging for the conversion of these diesel engines to operate on a dual-fuel system of both natural gas and diesel. Depending upon the size of the engine and the number of hours per day that it operates, payback times for the conversions are often less than 12 months, so the cost is minimal compared to the replacement cost of a natural gas generator.

Indian Optiblend® Sales

Eden has sold and installed a number of Optiblend® kits in India, including repeat sales to a number of customers. Quotes have been provided to many other potential customers in various cities across northern and western India. The sales price of an installed OptiBlend® kit varies according to the configuration of the engine, but is often in the range of US$25,000 - $40,000. Eden Energy India has now found suitable Indian manufacturers for many of the dual fuel kit components, which will help reduce the cost of the production of future units.

The major limiting factors in India for OptiBlend® are the limited availability of natural gas in many parts of India due to both a limited gas grid and also limited supply, and also the increasing price of natural gas, compared to the price of diesel fuel that is heavily subsidised in the Indian market. However, as the natural gas production from existing fields and future fields grows and the rapidly expanding gas grid spreads across the country, these problems are expected to progressively reduce, opening up a potentially very significant market throughout much of India.

US Optiblend® Sales

Hythane Company has sold and installed a number of kits in the US. Representatives supporting various engine manufacturers have quoted numerous Optiblend® kits and have received a growing number of encouraging enquiries for the kit. Sales representatives have been appointed in most US states, and also in several South American countries.

4.5 Hythane®

Indian Hythane® Project

In 2006, India adopted a Hydrogen Roadmap that proposes to have 20% of all vehicles running on a hydrogen based fuel by 2020, and plans to use hydrogen enriched natural gas (Hythane®) as the transitional fuel. At present, there are approximately 12 Indian cities that have established natural gas distribution networks, in which expanding numbers of natural gas fuelled vehicles, particularly buses, are operating. The Indian Government has announced a new target to expand such networks to 200 cities by 2015 – opening up a potentially huge Hythane® market across the country.

During the past two years, various vehicle manufacturers, with funding from the Ministry of New and Renewable Energy (MNRE) and assistance from the Society of Indian Automobile Manufacturers ("SIAM") and IOC, have developed the following seven types of vehicles to run on hydrogen and compressed natural gas ("HCNG") fuel:

two models of three-wheel autorickshaws;
one SUV;

one passenger car; and
three models of mini-buses.

The MNRE is now funding an extended field trial of these seven HCNG vehicles in Delhi, with refuelling at either the Dwarka public Hythane station or at IOC’s research and design facility near Delhi. SIAM will also participate by testing at regular intervals, the vehicles’ emissions and efficiency. This field trial will add significant national momentum to the overall Indian HCNG programme and Eden is encouraged that its considerable efforts to date to develop Hythane® fuelled buses and to build HCNG refuelling stations may be rewarded in due course as a significant Hythane® vehicle market develops in India.

Mumbai Hythane® Bus Demonstration Project

In July 2011, discussions took place in relation to the re-activation of this delayed project (with GAIL, MGL and BEST, the Mumbai government bus operator) which the Company now hopes will be approved and commence in 2012. GAIL (Gas Authority of India) is a large distributor of Natural Gas in India. MGL operates pipelines and markets natural gas in the greater Mumbai area to a broad commercial, domestic and industrial customer base. BEST is the state owned Mumbai bus operator that operates many buses in Mumbai, a large number of which are already using natural gas. MGL supplies BEST with natural gas.

The demonstration project in Mumbai will involve Eden establishing a Hythane® refuelling station at a suitable bus depot to fuel buses. The project, provided it proceeds, is now planned to involve firstly a two bus trial of Hythane® fuel, with the initial hydrogen planned to be supplied from bottled hydrogen, followed by a second stage, of up to 35 buses, with the hydrogen planned to be supplied by the Company from one of its new pyrolysis reformers. This reformer is planned to be installed on site, and will produce both the required hydrogen, and also carbon products that the Company hopes to be able to sell into the Indian market.

If the project proceeds, then upon successful completion of the demonstration project, the parties will endeavour to negotiate a commercial agreement for the ongoing promotion and marketing of Hythane® by MGL in its area of operation.

If commercial scale hydrogen production, using Eden’s new pyrolysis process is available by that time, it may well increase the chances of developing a very large Hythane® market in India if the hydrogen is effectively produced as a by-product to the production of higher value carbon fibres and nanotubes, underpinned by a very low carbon footprint.

Gujurat Hythane® Bus Demonstration Project

Discussions with GSPC Gas in relation to this project (and which is similar in scale and timetable to the Mumbai demonstration) during the second half of 2011 have also re-started this project. While it had slowed down considerably, it is hoped to be operational during the first half of 2012.

Whilst the Indian Hythane® projects remain very slow, there are definite signs of increased interest from the Indian Government to proceed with its proposed HCNG programme, and Eden remains hopeful that these projects will proceed during the next 6-12 months.

4.6 UK coal bed methane, conventional natural gas and shale gas project

The Company holds, in joint venture, a 50% interest in 17 UK Petroleum Exploration and Development Licences ("PEDLs") and a 100% interest in 3 PEDLs in South Wales, Bristol/Somerset and Kent. These 20 PEDLs, comprising an area of almost 2,100 km2, represent a large proportion of the total area of each of the South Wales, Bristol and Kent coalfields, and are prospective for gas deposits hosted in coal beds, conventional natural gas reservoirs and shale gas formations.

The Company funded the drilling and testing of 3 coal bed methane wells in 2007/2008 on one PEDL in South Wales, as part of its farm-in obligations under the joint venture, and in December 2008 sold to a major UK gas utility 45% of its 50% interest in the gas contained in the Westphalean coal measures in 4 PEDLs, but has now re-purchased this interest and again holds a 50% interest.

These 20 PEDLs have the potential to host significant quantities of gas. The Company proposes (subject to, among other things, market conditions) a listing of its entire interest in these PEDLs (which are held in a UK subsidiary company and in which the Company will retain its interest as a significant shareholder) and for this company to raise funds in an initial public offering ("IPO") to fund the ongoing exploration of these PEDLs. This company may, if agreed with its joint venture partner, also acquire by purchase or farm-in agreement, all or part of the interests of its UK joint venture partner in these PEDLs. The value of the proposed retained shareholding interest of the Company in this subsidiary company will be a matter to be determined at the time of the preparation of the IPO (if it proceeds), and will depend upon the gas resource that is identified, but in any case, the entire retained shareholding interest will, at least initially, be retained by the Company after the IPO (if it proceeds) as an asset of the Company.

5. RISK FACTORS

There are a number of risk factors, both specific to the Company and of a general nature, which may affect the financial position, financial performance, cash flows, ability to pay dividends and growth prospects of the Company and the outcome of an investment in the Company. These risks are both specific to the Company and generally relate to an investment in the stock market. There can be no guarantee that the Company will achieve its stated objectives, or that forward looking statements will be realised.

5.1 Working capital

Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses. In addition to those funds which are raised by the Company pursuant to this Rights Issue, the Company has entered into the Funding Agreement (further details of which are contained in section 7.8 of this Prospectus) pursuant to which La Jolla will advance to the Company up to an additional US$3million under three convertible notes, each being for the principal amount of $US 1million (to be paid in four equal instalments of $250,000 each over a maximum 6 month period). The Company must issue the first convertible note for US$1million, but has the right to elect whether or not to issue the second and third convertible notes. La Jolla has the right, at any time, to terminate its outstanding obligations under the Funding Agreement by making a payment to the Company of US$200,000. Accordingly, there is no guarantee that all of this $3million will ultimately be made available to the Company. Assuming this Rights Issue is fully subscribed and the Company issues all three convertible notes under the Funding Agreement, the Company anticipates that the funds raised will cover at least two years of working capital requirements. However, subject to the amount of emerging revenue that the Company derives from the sale of its OptiBlend® kits and the hydrogen and carbon that it produces from its pyrolysis projects in US and India, and the terms of any sale, or joint venture which may be entered into, the Company may not be able to achieve financial self sufficiency prior to this capital being exhausted and it may therefore have to raise further capital or borrow funds prior to this capital being exhausted. There is no guarantee that such additional funds will be available to the Company, and the Company may be adversely affected in a material way if, for any reason, access to such funds is not available.

5.2 Risks associated with the commercialisation of new technologies

There is no guarantee that the Company's commercialisation of Hythane®, OptiBlend® or its pyrolysis technology or proposed commercialisation of any other new technologies will be successful. Commercialisation may be impeded by, for example, adverse market conditions, unforeseen technical or environmental issues or the failure of patent applications to be granted. In addition, commercialisation may be impeded due to competition from competing technologies or products. Further, the Company may not be able to establish a market for the sale of its products (eg, carbon and hydrogen) which is of a sufficient size for it to achieve financial self-sufficiency.

5.3 Commodity price volatility and exchange rate risks

The revenue the Company will derive through the sale of commodities, including hydrogen, carbon and, if the Company achieves success in its exploration activities which results in a commercially viable deposit being discovered, methane or gas from its tenements, exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company, including supply and demand fluctuations for those commodities, technological advancements, forward selling activities and other micro and macro economic factors. International prices of various commodities are largely denominated in United States dollars. As the Company is based in Australia, it will therefore be exposed to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar.

5.4 Exploration success

The gas projects in which the Company has an interest summarised in this Prospectus are at various stages of exploration (for the most part they are largely unexplored). Gas exploration and development are high risk undertakings. There can be no assurance that exploration of the project areas described in this Prospectus, or any other licences or projects that may be acquired by the Company in the future, will result in the discovery of an

economic methane or gas deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be commercially exploited.

5.5 Title risks

The interests which the Company holds in exploration projects are governed by legislation. Each interest is for a specific term and carries with it annual expenditure or work and/or reporting conditions as well as other conditions requiring compliance. These conditions include the requirement for compulsory reduction in the area held under the interest from time to time. The Company could also lose an interest it holds if it, or any of its joint venture parties, does not meet attaching conditions or if insufficient funds are available to meet expenditure or work commitments. The loss of interests or the inability to obtain new interests may have a material adverse effect on the Company’s financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price.

5.6 Environmental risks

There are risks associated with the Company's ability to obtain planning approvals to conduct gas exploration of its UK gas projects. A level of public concern has arisen over possible environmental problems that could be caused by the recovery of either coal seam gas or shale gas, and whilst the UK Government reported in May 2011 that it believed that exploration could proceed and that the risks can be properly managed, this is a risk that presently exists in relation to the UK gas project. Although the Company is not aware of any endangered species of fauna or flora within its gas and petroleum exploration areas, no definitive study has been carried out over the area, and if any were discovered this could prevent exploration occurring.

In relation to the carbon production project, whilst the Company has endeavoured to comply with all present and proposed laws and standards, Environmental Protection Authority approval in the US will be required before commercial sales of more than 10 tons of carbon can occur. Whilst it is anticipated that the Company will be able to comply with the necessary standards, there is no certainty that such approval will be obtained.

5.7 Operating risks

The operations of the Company may be affected by various factors including failure to locate or identify methane or gas deposits, failure to achieve predicted resources in exploration and production, operational and technical difficulties encountered in exploration and production and commercialisation of its technologies, difficulties in obtaining planning and environmental approvals, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, inadequate water supplies, unanticipated problems which may affect extraction costs, inability to obtain satisfactory joint venture partners, adverse weather conditions, industrial and environmental accidents, industrial disputes, unexpected shortages and increases in the cost of consumables, spare parts, plant and equipment. No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its tenement interests and/or commercialisation of its technologies. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

5.8 Joint Ventures

The Company (or its subsidiaries) are a party to a number of joint ventures. It is also possible that the Company may in the future enter into joint ventures with other third parties. Any future disputes or potential conflict with any such joint venture parties could have a material adverse effect on the Company’s financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price.

5.9 Litigation risks

The Company is engaged in litigation in the Supreme Court of Western Australia against Engenco Ltd in which the Company is seeking recovery of an amount of $911,602.00 inclusive of interest, being the unpaid portion of the sale price for which the Company and Eden Innovations Ltd sold certain US assets to a subsidiary of Engenco Ltd in 2008. Engenco Ltd has made assertions to the effect that its board did not authorise its execution of the sale

agreement or a subsequent variation to the agreement The Company has applied for summary judgement of its claim and is currently waiting for that application to be determined. If unsuccessful, the Company will have to pay not only its own costs but also the costs of Engenco Ltd.

Because of the risk of very large legal fees being incurred if the proposed trial went ahead, and notwithstanding that it believed that the Company had a good chance of success, the Company has recently settled the litigation it was involved in with Omni Laboratories Inc ("Omni") in the Queens Bench Division of the High Court of Justice of England and Wales on terms that the Company pay to Omni US $1.2 million (of which US $0.5 million has been paid, with the balance due by 20 December 2011). A portion of the funds being raised under this Offer will be utilised to pay the second instalment of this settlement sum.

The Company is not involved in any other litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

5.10 No formal valuation of Shares, Options or tenements

No formal valuations of any of the Shares or Options, or any of the assets in which the Company has an interest, have been carried out.

5.11 Share market conditions

The price of the Shares and Options will be influenced by international and domestic factors affecting market conditions in equity, financial and commodity markets. These factors may affect the share price for all listed companies, and the price of the New Shares and New Options may fall or rise, and the price of the New Shares may trade below or above the issue price of $0.05. In addition, these market conditions (particularly those affecting the market for both small capital companies and also initial public offerings) may adversely impact upon, or prevent, a possible listing of the Company's UK gas assets.

5.12 General investment risks

In addition, there is a risk that the price of the Shares and returns to Shareholders may be affected by changes in many general factors including local and world economic conditions and outlook, general movements in local and international stock markets, investor sentiment, interest rates, the rate of inflation, exchange rates, levels of tax, taxation law and accounting practice, government legislation or intervention, inflation or inflationary expectations, natural disasters, social disorder or war in Australia or overseas, international hostilities and acts of terrorism, as well as many other factors which are beyond the control of the Company.

5.13 Other risks

The above list of risk factors is not exhaustive of the risks faced by the Company and its Shareholders and investors. The above risks, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the New Shares and New Options offered under this Prospectus. Therefore, no assurances or guarantees of future profitability, distributions, payment of dividends, return of capital or performance of the Company or its Securities can be, or is, provided by the Company.

Before deciding to invest in the Company, potential investors should read this Prospectus in its entirety and, in particular, should consider the risk factors that could affect the financial performance of the Company. Qualifying Shareholders should carefully consider these factors in light of their personal circumstances and should consult their professional advisers (for example, their accountant, stockbroker, lawyer or other professional adviser) before deciding whether to invest.

Neither the Company nor its officers, employees, agents and advisers guarantee that any specific objectives of the Company will be achieved or that any particular performance of the Shares and Options, including the New Shares and New Options offered under this Prospectus, will be achieved.

6. EFFECT OF THE ISSUE

6.1 Introduction

Assuming this Rights Issue is fully subscribed, the gross proceeds that will be raised by the Company under this Rights Issue (before expenses of the Offer) will amount to approximately $3,530,750 (on the assumption that none of the current Options are, and no portion of the Initial Note Payment under the First Note is, converted to Shares prior to the Record Date).

6.2 Pro-forma capital structure on completion of the Rights Issue

The pro-forma capital structure of the Company is set out below and reflects the issued and paid up capital structure of the Company assuming this Rights Issue is fully subscribed (and assuming that none of the existing Options are converted to Shares prior to the Record Date or before completion of this Rights Issue and the Initial Note Payment under the First Note, or any portion thereof, is not converted to Shares prior to the Record Date)

Capital Structure

	Shares	Percentage	Options	Percentage
Existing Shares and Options (listed and unlisted)	247,153,019	77.78%	48,031,379	40.48%
Maximum number of New Shares and New Options(estimated)	70,615,000	22.22%	70,615,000	59.52%
Total Shares and Options (listed and unlisted) upon completion of the Issue (estimated)*	317,768,019	100.00%	118,646,379	100.00%

On the assumptions set out above, a total of up to approximately 70,615,000 New Shares and up to approximately 70,615,000 New Options will be issued by the Company upon the successful completion of this Rights Issue. The maximum number of New Shares and New Options which may be issued under this Rights Issue cannot be calculated precisely until Rights have been determined following the Record Date because of the rounding up of fractional Entitlements.

In addition, upon completion of this Rights Issue, the following additional Shares may then be on issue (subject to the First Note being issued to La Jolla under the Funding Agreement upon satisfaction of all of the conditions precedent in the Funding Agreement):

(b) Any Shares into which La Jolla has converted the Initial Note Payment advanced under the First Note (at the conversion price per Share determined in accordance with the Funding Agreement).

For further information in relation to the Funding Agreement, see section 7.8 of this Prospectus.

6.3 Effect on Existing Shareholders and Optionholders

Qualifying Shareholders who hold Shares and who take up their Rights in full will not have their interest in the Company diluted by this Rights Issue.

Qualifying Shareholders who do not exercise their Rights will have their interest in the Company diluted.

Non-Qualifying Foreign Shareholders will have their interest in the Company diluted.

Existing Optionholders who do not exercise all or any of their Options before the Record Date will not be entitled to participate in this Rights Issue with respect to those Options (and, if those Options are subsequently exercised, the interest which the Shares issued consequent upon the exercise of the Options will confer in the Company will have been diluted by this Rights Issue).

6.4 Purpose of this Rights Issue and use of funds raised under this Rights Issue

The gross proceeds to be raised by the Company under this Offer (ie before expenses of the Offer) will be up to approximately $3,530,750 (on the assumption that none of the existing Options are converted to Shares prior to the Record Date, the Initial Note Payment under the First Note, or any portion thereof, is not converted to Shares prior to the Record Date and this Offer is fully subscribed).

The funds raised under this Rights Issue are to be used to:

(a) Firstly, fund the costs of the Offer;
(b) Secondly, pay the second tranche of the settlement sum (in the amount of US $700,000) due by the Company to Omni Laboratories Inc ("Omni") consequent upon the settlement of the proceedings in the Queens Bench Division of the High Court of Justice of England and Wales (see section 5.9 of this Prospectus for further information);
(c) Thirdly, repay outstanding financial indebtedness of the Company;
(d) Fourthly, in addition to any funds drawn down under the Funding Agreement, for general working capital purposes to fund the on-going operations of the Company.

Noble Energy Pty Ltd (Noble), the largest shareholder in the Company, recently advanced to the Company the sum of $850,000 (to enable the Company to, inter alia, pay the first tranche of the settlement sum, in the amount of US $500,000, to Omni Laboratories Inc). Noble has agreed to partially underwrite this Rights Issue for the amount of $925,000. The Company and Noble have agreed that, to the extent of any shortfall that Noble is required to pay under its Underwriting Agreement, the amount which is owed by the Company to Noble will to that extent be repaid by being off-set against Noble's obligations under its Underwriting Agreement (up to the amount of $850,000).

If this Offer is not fully subscribed, the Company will (subject to the satisfaction of the conditions in the Funding Agreement and on the terms and conditions therein specified) have access to additional funds under the Funding Agreement (see section 7.8 of this Prospectus for further information) which can be applied against the above objectives.

Given the speculative nature of the Company’s business, the intended allocation of funds as set out above may change depending upon market conditions and the outcome of litigation in which the Company is involved.

Based on the information available to it, the Funding Agreement, and its current plans and budgets, the Directors believe that the Company will be able to pay its debts as and when they fall due, and assuming the Issue is fully subscribed and La Jolla does not terminate its obligations under the Funding Agreement (for further information in relation to the Funding Agreement, please see section 7.8 of this Prospectus), fund ongoing working capital

requirements for at least two years, during which time the Company is budgeting a significant increase in incoming cashflow from sales of its various products.

6.5 Effect on the Company's financial position

Upon the successful completion of this Rights Issue and assuming this Rights Issue is fully subscribed, the Company's cash reserves will initially increase by approximately $3,530,750, minus Offer expenses.

Set out below for illustrative purposes are the historical consolidated balance sheet as at 30 June 2011 and an unaudited pro forma consolidated balance sheet as at 30 June 2011 after the Rights Issue. The pro forma consolidated balance sheet has been prepared on the basis of the accounting policies normally adopted by the Company and having regard to basis and assumptions set out below.

	30 June 2011	Adjustments	Pro-forma
	$		$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	2,024,427	3,667,750	5,692,177
Trade and other receivables	793,470	750,000	1,543,470
Inventories	348,259		348,259
Other current assets	60,334		60,334
TOTAL CURRENT ASSETS	3,226,490	4,417,750	7,644,240
NON-CURRENT ASSETS
Trade and other receivables	100,500		100,500
Financial assets	1,278,562		1,278,562
Property, plant and equipment	90,967		90,967
Intangible assets	5,441,027		5,441,027
Exploration and evaluation	101,818		101,818
TOTAL NON-CURRENT ASSETS	7,012,874		7,012,874
TOTAL ASSETS	10,239,364	4,417,750	14,657,114
CURRENT LIABILITIES
Trade and other payables	618,672	93,000	711,672
Interest bearing liabilities	-	1,000,000	1,000,000
Provisions	1,575,173	(493,000)	1,082,173
TOTAL CURRENT LIABILITIES	2,193,845	600,000	2,793,845
TOTAL LIABILITIES	2,193,845	600,000	2,793,845
NET ASSETS	8,045,519	3,817,750	11,863,269
EQUITY
Issued capital	46,635,488	3,877,750	50,513,238
Reserves	1,729,434		1,729,434
Retained earnings	(40,319,403)	(60,000)	(40,379,403)
TOTAL EQUITY	8,045,519	3,817,750	11,863,269

The unaudited pro forma consolidated balance sheet set out above has been prepared on the basis and assumption that there has been and will be no material movements in the assets and liabilities of the consolidated entity between 1 July 2011 and the Closing Date other than:

the issue of 6,250,000 Shares through a placement completed on 16 September 2011 to raise a total of $380,000 after issue expenses (Placement). The placements were made to sophisticated and professional investors, at a price of $0.064 per Share;
the payment of the first instalment of the settlement funds to Omni Laboratories Inc of US$500,000 made on 18 October 2011;
the issue of the First Note to La Jolla (and on the assumption that, at the conclusion of this Rights Issue, the Initial Note Payment of US $250,000 has been received in cash, with the balance of the principal sum of the First Note (in the sum of US $750,000) being treated as a receivable), and the issue of US $60,000 worth of Shares to La Jolla in payment of their facility fee under the Funding Agreement (in each case, based on an exchange rate of US$1:AUD$1);
the issue of approximately 70,615,000 New Shares and 70,615,000 New Options under this Prospectus raising $3,530,750 before expenses of the Offer and on the assumption that this Rights Issue is fully subscribed; and
payment of estimated expenses of the Offer of $93,000.00 is included in "Trade and Other Payables" and to be paid, net of GST.

7. ADDITIONAL INFORMATION

7.1 Nature of this Prospectus

This Prospectus is issued under the special prospectus content rules for continuously quoted securities in section 713 of the Corporations Act. That section enables listed disclosing entities to issue a prospectus with less rigorous disclosure requirements if:

the securities offered by the prospectus are in a class of securities that have been quoted enhanced disclosure securities at all times in the 3 months before the date of the prospectus or are options to acquire such securities; and
the company is not subject to certain exemptions or declarations prescribed by the Corporations Act during the period during which the securities have been quoted or the 12 months before the date of the prospectus (whichever is the shorter period).

Securities are quoted enhanced disclosure securities if:

the company is included in the official list of ASX; and
the Listing Rules apply to those securities.

The information in this Prospectus principally concerns the terms and conditions of this Rights Issue and the information necessary to make an informed assessment of:

the effect of this Rights Issue on the Company; and
the rights and liabilities attaching to the New Shares and New Options offered under this Prospectus.

The Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX. This Prospectus does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that was not already listed on a stock exchange. Qualifying Shareholders should therefore also have regard to the other publicly available information in relation to the Company before making a decision whether or not to subscribe for New Shares and accompanying New Options.

7.2 Regular reporting and disclosure obligations

The Company is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules.

These obligations require the Company to notify ASX of information about specified events and matters as they arise for the purposes of ASX making that information available to the stock market conducted by ASX. In particular, the Company has an obligation under the Listing Rules (subject to certain limited exceptions) to notify ASX immediately of any information of which it becomes aware concerning the Company which a reasonable person would expect to have a material effect on the price or value of securities in the Company. The Company is required to lodge with ASX quarterly reports which include details about its production, development and exploration activities.

As the Company has been listed on ASX since 6 June 2006, a large amount of information concerning the Company has previously been notified to ASX and is therefore publicly available. All announcements made by the Company are available from ASX.

The Company is also required to prepare and lodge with ASIC both yearly and half yearly financial statements accompanied by a Directors’ statement and report and an auditors report. Copies of documents lodged with ASIC in relation to the Company may be obtained from, or inspected at, an ASIC office.

A summary of the Company’s current and recent activities, transactions and projects and the financial performance and position of the Company is set out in the quarterly activities statement lodged with ASX on 31 October 2011 and subsequent ASX releases.

7.3 Right to obtain copies of Company documents

Under section 713(4) of the Corporations Act, any person has the right to obtain from the Company, free of charge, a copy of any of the following documents during the Offer Period:

the Company's annual financial report for the year ended 30 June 2011 as lodged with ASIC;
any continuous disclosure notices given by the Company after lodgement of the annual financial report for the year ended 30 June 2011 (ie on 21 September 2011) and before lodgement of this Prospectus with ASIC (ie on 14 November 2011). Headlines for such notices are as follows:

Date	Headline
11/11/2011	US$3 million Convertible Note Facility
11/11/2011	Non-Renounceable Rights Issue Updated Timetable
09/11/2011	Eden Continues Carbon Nanotube Advancement
08/11/2011	Pro-Rata Non-Renounceable Rights Issue Updated Timetable
07/11/2011	Appendix 3B
03/11/2011	Option Issue
02/11/2011	Encouraging Results on Eden's Nano-Carbon in Concrete
31/10/2011	First Quarter Activities and Cashflow Report
31/10/2011	Letter to Optionholders
31/10/2011	Results of Meeting
31/10/2011	Pro-Rata Non-Renounceable Rights Issue
31/10/2011	AGM Presentation
28/09/2011	Pyrolysis Project Progress Report
27/09/2011	Release of Next Generation OptiBlend Kits
26/09/2011	Alteration to Notice of Meeting – Date Change
23/09/2011	Notice of Annual General Meeting / Proxy Form
22/09/2011	Appendix 3B

These documents can also be viewed and downloaded from ASX's website www.asx.com.au under ASX Code: EDE.

7.4 Constitution and rights and liabilities attaching to Shares

Full details of the rights and liabilities attaching to Shares are set out in the Company’s constitution, a copy of which can be inspected, free of charge, at the Company’s registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

All Shares issued pursuant to this Prospectus will, from the time they are issued, rank equally with all of the Company’s Existing Shares.

Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there are none), at meetings of Shareholders of the Company:

(a) each Shareholder entitled to attend and vote may vote in person or by proxy, attorney or representative; (b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote (save that where a Shareholder has appointed more than one person as proxy, attorney or representative, none of the proxies, attorneys or representatives, is entitled to vote, and where a Shareholder is present in more than one capacity, that Shareholder is entitled only to one vote); and
(c) on a poll, every person present who is a Shareholder shall, in respect of each Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid shares, shall have such number of votes as bears the same proportion of the amount paid up or agreed to be considered as paid up on the total issue price of that Share at the time the poll is taken bears to the total issue price of the Share.

Rights on winding up

Subject to the rights of holders of shares with special rights in a winding up (at present there are none) and the constitution of the Company, on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of Shares held by them (and a partly paid share is counted as a fraction of a Share equal to the amount paid on it, divided by the total issue price of the Share).

Transfer of shares

Subject to the constitution of the Company, the Corporations Act, the Listing Rules and any other laws, Shares are freely transferable.

Future increases in capital

The allotment and issue of any Shares is under the control of the Board. Subject to the requirements of the Listing Rules, the constitution of the Company and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

Variation of rights

Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders, vary or abrogate the rights attaching to shares. If at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the sanction of a special resolution of the Company and with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

Dividend rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of the Company that the Directors determine to distribute by way of dividend are divisible among the holders of Shares and is payable on each Share on the basis of the proportion which the amount paid is of the total amounts paid, agreed to be considered to be paid or payable on the Share. A dividend may be declared at a rate per annum in respect of a specified period but no amount paid on a Share in advance of calls is to be treated as paid on that Share.

7.5 Rights and liabilities attaching to New Options and listed Options

The New Options will be issued on the same terms and conditions as all of the Company's existing listed Options (ASX Code: EDEO).

The terms and conditions applying to the existing listed Options and New Options are as follows:

(1) The Options are exercisable at any time prior to 5.00pm WST 30 June 2014 ("the Time of Expiry"). Options not exercised on or before the Time of Expiry will automatically lapse.
(2) The Options may be exercised wholly or in part by completing a notice of exercise of options substantially in the form attached to the option certificate ("Notice of Exercise") to be delivered to the Company's registered office and received by it any time prior to the Time of Expiry.
(3) The Options entitle the holder to subscribe (in respect of each Option held) for one Share at an exercise price per Option of $0.20.
(4) Upon the exercise of the Options and receipt of all relevant documents and payment, Shares will be issued ranking equally with the then issued Shares. If at the date of exercise of the Options the Shares of the Company are quoted on the ASX, the Company will apply to ASX to have the Shares so issued granted Quotation.
(5) A summary of the terms and conditions of the Options including the Notice of Exercise will be sent to all holders of Options when they are issued.
(6) Any Notice of Exercise received by the Company prior to the Time of Expiry will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received.
(7) There are no participating entitlements inherent in the Options to participate in new issues of capital, which may be offered to Shareholders during the currency of the Options. Prior to any new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be afforded 10 business days before the Record Date (as defined in the Listing Rules) (to determine entitlements to the issue), to exercise Options.
(8) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Time of Expiry, the number of Options or the exercise price of the Options or both shall be reconstructed (as appropriate) in a manner which will not result in any benefits being conferred on holders of Options which are not being conferred on Shareholders and (subject to the provisions with respect to rounding of entitlements as sanctioned by the meeting of Shareholders approving the reconstruction of capital), in all respects, the terms for the exercise of Options shall remain unchanged. For these purposes the rights of the Option holder may be changed from time to time to comply with the Listing Rules applying to a reorganisation of capital at the time of reorganisation.
(9) The Options may be transferred at any time prior to the Time of Expiry.
(10) Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the Notice of Exercise.

7.6 Unlisted Options

There are currently 11,688,014 unlisted Options on issue in the Company.

7.6.1 ESOP Options

2,688,014 of the existing unlisted Options were issued under the Company’s ESOP. The Company has adopted

the ESOP as an incentive to employees of the Company or its associated bodies corporate.

7.6.2 Non-ESOP Options

All existing non-ESOP unlisted Options have been issued on the same terms and conditions as the listed Options, except for their exercise prices and expiry dates. A summary of the existing non-ESOP unlisted Options, and their respective exercise prices and expiry dates is set out below.

Existing Options

Number	Exercise Price Per Option	Expiry Date
5,000,000	$0.10	31 December 2011
4,000,000	$0.10625	20 November 2012

7.7 Underwriting agreement

The Company has entered into underwriting agreements with Noble Energy Pty Ltd (a wholly owned subsidiary of Tasman Resources) and Andrew Leibovitch and Karen Leibovitch as trustee for the Katss Investment Trust (collectively, "the Underwriters"), each dated 10 November 2011 (“the Underwriting Agreements”). Pursuant to the Underwriting Agreements, the Underwriters will underwrite, in aggregate, up to 18,660,000 of New Shares (together with the accompanying New Options) ("the underwritten securities") which are being offered under this Rights Issue, for a total amount of $ 933,000 (“the underwritten amount"). Noble Energy Pty Ltd has agreed to underwrite the lion's share of the underwritten amount, namely up to 18,500,000 New Shares and accompanying New Options. In consideration of their obligations under the Underwriting Agreements, the Underwriters will be paid a lodgement fee of 5% of the amount they are underwriting (in total, being $46,650 plus GST).

Noble Energy Pty Ltd ("Noble") is an existing member of the Company, who currently holds 42,855,727 (17.34%) of the Existing Shares, and 6,927,106 (19.06%) of the listed Options, of the Company. The Underwriting Agreement which the Company has entered into with Noble will have an effect on Noble's voting power in the Company as follows:

If this Rights Issue is fully subscribed, there will be no appreciable change in Noble's voting power in the Company.
If this Rights Issue is not fully subscribed, Noble's voting power in the Company will increase. Assuming no Qualifying Shareholders take up any of their Entitlements under this Offer, Noble would, pursuant to its Underwriting Agreement, be issued with 18,500,000 New Shares (and 18,500,000 New Options) (and the number of Existing Shares and existing listed Options on issue by the Company would increase by the number of the underwritten securities, being 18,660,000 New Shares and 18,660,000 New Options). This would increase the number of Shares held by Noble to 61,355,727 and the number of listed Options held by Noble to 25,427,106. This would result in Noble's voting power in the Company increasing from 17.34% to 23.08% (the percentage of the listed Options held by Noble would also increase from 19.06% to 46.23%). If some, but not all, of the Qualifying Shareholders take up their Entitlement, Noble's voting power in the Company will increase from its current percentage to an amount not exceeding 23.08%, depending on the extent to which Qualifying Shareholders take up their rights).

If the Company has complied with its obligations under the Underwriting Agreements and has not breached any of the representations, warranties and undertakings made by it therein, the Underwriting Agreements have not been terminated and valid Applications have not been received by the Company by the Closing Date for all of the Securities being offered under this Issue, the Underwriters must lodge or cause to be lodged with the Company applications for those underwritten securities which it has agreed to underwrite, accompanied by payment of the Application Monies for those underwritten securities.

Each Underwriter may terminate their obligations under their Underwriting Agreements if (in the reasonable

opinion of the Underwriter reached in good faith) any of the following events ("Events of Termination") has or is likely to have, or together have, or could reasonably be expected to have, a material adverse effect on this Offer, the subsequent market for the New Shares and New Options or on the condition, trading or financial position and performance, profits and losses, results, prospects, business or operations of the Company (or its subsidiaries) taken as a whole or could give rise to a liability of the Underwriters under the Corporations Act:

(1) Prospectus : any of the following occurs in relation to this Prospectus:
(a) the Underwriter reasonably forms the view that there is a material omission, it contains a material statement which is misleading or deceptive, or a material statement has become misleading or deceptive;
(b) the Underwriter reasonably forms the view that any projection or forecast in this Prospectus becomes, to a material extent, incapable of being met or unlikely to be met in the projected time;
(c) ASIC gives notice of intention to hold a hearing under section 739(2) of the Corporations Act or makes an interim order under section 739(3) of the Corporations Act; or
(d) any person other than the Underwriter who consented to being named in this Prospectus withdraws that consent;
(2) Supplementary prospectus : the Underwriter reasonably forms the view that a supplementary or replacement document (as appropriate) must be lodged with ASIC under section 719 or section 724 of the Corporations Act and the Company does not lodge a supplementary or replacement document (as the case may be) in the form and content and within the time reasonably required by the Underwriter;
(3) ASX listing : ASX does not give approval for the Securities the subject of the Offer to be listed for official Quotation, or if approval is granted, the approval is subsequently withdrawn, qualified or withheld;
(4) Index change: the ASX All Ordinaries Index or the Dow Jones Industrial Average Index as determined at close of trading falls at least 10% below their respective levels at the close of trading on the date of the Underwriting Agreement for a total of three consecutive trading days during the underwriting period;
(5) indictable offence: a director of the Company or any related corporation is charged with an indictable offence;
(6) return of capital or financial assistance : the Company or a related corporation takes any steps to undertake a proposal contemplated under section 257A or passes or takes any steps to pass a resolution under section 260B of the Corporations Act, without the prior written consent of the Underwriter;
(7) banking facilities: the Company’s bankers terminate or issue any demand or penalty notice or amend the terms of any existing facility or claim repayment or accelerated repayment of any facility or require additional security for any existing facility;
(8) change in laws: any of the following changes of law occurs:
(a) the introduction of legislation into the Parliament of the Commonwealth of Australia or of any State or Territory of Australia; or
(b) the public announcement of prospective legislation or policy by the Federal Government, or the Government of any State or Territory; or
(c) the adoption by the ASIC, its delegates, ASX, the Reserve Bank of Australia or any other regulatory authority of any regulations or policy,

which does or is likely to prohibit, restrict or regulate the principal business of the Company, the Offer or the operation of stock markets generally;

(9) failure to comply: the Company or any related corporation fails to comply with any of the following:
(a) a provision of its constitution;
(b) any statute;
(c) a requirement, order or request, made by or on behalf of the ASIC or any governmental agency; or
(d) any material agreement entered into by it,

which is likely to prohibit or materially restrict the business of the Company or the Offer;

(10) alteration of capital structure or constitution: the Company alters its capital structure or its constitution without the prior written consent of the Underwriter;
(11) extended force majeure: a force majeure, which prevents or delays an obligation under the Underwriting Agreement, lasting in excess of 2 weeks occurs;
(12) default: the Company is in default of any of the terms and conditions of the Underwriting Agreement or breaches any warranty or covenant given or made by it under the Underwriting Agreement;
(13) adverse change: any adverse change occurs which materially impacts or is likely to materially impact the assets, operational or financial position of the Company or a related corporation (including but not limited to an administrator, receiver, receiver and manager, trustee or similar official being appointed over any of the assets or undertaking of the Company or a related corporation);
(14) investigation: any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or a related corporation;
(15) due diligence: there is a material omission from the results of the due diligence investigation performed in respect of the Offer or the results of the investigation or the verification material are false or misleading in a material respect;
(16) prescribed occurrence : a prescribed occurrence occurs;
(17) suspension of debt payments: the Company suspends payment of its debts generally;
(18) event of insolvency: an event of insolvency occurs in respect of the Company or a related corporation;
(19) judgment against a related corporation: a judgment in an amount exceeding $100,000 is obtained against the Company or a related corporation and is not set aside or satisfied within 7 days;
(20) market conditions: any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or the international financial markets or any material adverse change occurs in national or international political, financial, economic conditions, in each case the effect of which is that, in the reasonable opinion of the Underwriter, reached in good faith, it is impracticable to market the Offer or to enforce contracts to issue and allot or sub-underwrite the securities pursuant to this Prospectus or that the success of the Offer is likely to be adversely affected.

The Underwriting Agreement contains all representations, warranties, undertakings and indemnities on the part of the Company as are usually contained in agreements of this type.

7.8 Funding Agreement

The Company has agreed to issue, and La Jolla has agreed to acquire, upon and subject to the terms and conditions set out in the Funding Agreement, up to 3 convertible notes ( Notes ), each with an issue price (or face value) of US $1,000,000.00 ( Purchase Price ). Interest is payable on the principal amount actually advanced by La Jolla under a Note (to the extent not converted into Shares) at the rate of 4.75% per annum.

Under the Funding Agreement, the Notes will be issued sequentially. In each case, the obligation of La Jolla to subscribe for, and the Company to issue, a Note will only arise following the satisfaction of certain conditions precedent (including, without limitation, the Company obtaining any shareholder approvals it requires to issue the Notes, it not being in default under the Funding Agreement, all of the representation and warranties given by the Company in the Funding Agreement being accurate and no material adverse effect having occurred to the business, properties, prospects, condition or results of operation of the Company or its subsidiaries or on the consummation of any of the transactions contemplated by the Funding Agreement). Subject to the due satisfaction of each of these conditions, the First Note will be issued on or around 15 November 2011 ( Initial Closing Date ) and the Company will receive the first instalment of the Purchase Price under the First Note, in the sum of US $250,000.00. The payment of the balance of the Purchase Price for the First Note is to be made by La Jolla by three further instalments of US $250,000.00 (each, a Monthly Payment ). The obligation of La Jolla to make each Monthly Payment is conditional on the satisfaction of certain conditions at the time payment of that Monthly Payment is required to be made under the Funding Agreement.

The Company must issue the First Note, but has the right to elect whether or not to issue the second and third Notes. The second and third Notes are able to be issued in the period commencing on the date that the Company has fully drawn down all of the Purchase Price under the Note most recently issued or has obtained all necessary approvals required for the issue of that Note (whichever occurs last) and ending two (2) months thereafter. If the Company does not issue the second and/or third Note, either party may terminate the Funding Agreement and La Jolla may redeem the principal amount actually advanced by La Jolla (and which has not then been converted into Shares) ( Principal Amount ), and any accrued but unpaid interest, on any Note then on issue at a cash price of 120% of the Principal Amount or to convert the said amount into Shares (or do a combination of both of those things).

In consideration of La Jolla agreeing to enter into the Funding Agreement, the Company will pay to La Jolla a facility fee equal to US $60,000.00, to be payable by the issue of Shares at an issue price per Share being the VWAP for the five trading days prior to the execution of the Funding Agreement ( Issue Price ). In addition, the Company has agreed to pay La Jolla a further facility fee of $60,000.00 (which is also to be satisfied by the issue of Shares at the Issue Price) on the closing date for the issue of the second Note.

The Company will issue the First Note and the Shares in satisfaction of the first facility fee by utilising its placement capacity under Listing Rule 7.1. The Company intends to seek shareholder approval for the issue of the second and third Notes.

Subject to the due satisfaction of all conditions, the First Note issued by the Company will raise US $1,000,000.00 (less the expenses associated with the issue of the First Note). The funds raised from the issue of the First Note will supplement the amount raised by the Company under this Rights Issue.

If La Jolla elects to convert any Note, the number of new Shares to be issued to La Jolla will depend on whether that Note is converted in whole or in part, the applicable conversion price and the prevailing US$/AU$ exchange rate at the time of conversion.

The terms of issue of the First Note (and any subsequent Notes which may be issued by the Company to La Jolla) are governed by the Funding Agreement. The key terms of the Note facility are as follows:

The Purchase Price of each Note is US $1,000,000.00 (being US $3,000,000 in aggregate), in each case payable by four instalments of US $250,000.
Interest is payable on each Note on the Principal Amount at the rate of 4.75% per annum, and is payable monthly in arrears in cash or, at the option of the Company, in Shares issued at the then applicable conversion price.
The maturity date of each Note is the date which is three (3) years from the date of issue of that Note ( Maturity Date ).
The Note is unsecured and the Principal Amount ranks equally with all other unsecured debts owed by the Company.
La Jolla may convert each Note, either in whole or in part, by the delivery to the Company of a conversion notice.
If on the day La Jolla issues a conversion notice the VWAP is below $0.07 per Share, the Company will have the right, by no later than 3:00pm Sydney time on the date that is seven (7) Business Days after its receipt of such conversion notice, to prepay that portion of the Principal Amount of the Note that La Jolla has sought to convert pursuant to the conversion notice, plus any accrued and unpaid interest, at 105% of such amount. The Funding Agreement provides for the downward adjustment of the Floor Price in certain circumstances.
The number of new Shares into which the Note may be converted is equal to the Principal Amount that is to be converted (as specified in the conversion notice) divided by the conversion price. The conversion price is equal to the lesser of:
7.1. $0.50 (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalisations or the like); or
7.2. 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert (the Funding Agreement provides for this percentage figure to be adjusted downwards in certain circumstances).
In the event the Company is prohibited from issuing Shares for any reason, or fails to timely deliver Shares within 2 business days of receipt by the Company of a conversion notice ( Delivery Date ), or upon the occurrence of an event of default under the Funding Agreement, then at La Jolla's election, the Company must pay to La Jolla ten (10) Business Days after request by La Jolla or on the Delivery Date (if requested by La Jolla) a sum of money determined by multiplying the Principal Amount of the Note designated by La Jolla (but not exceeding the Principal Amount the subject of the conversion notice or the portion of the Principal Amount which cannot be converted into Shares, as required) by 120%, together with accrued but unpaid interest thereon in redemption of such portion of the Note.
Further to the above paragraph, if the Company commits any of the events of default specified in the Funding Agreement (including without limitation, it defaults in paying any amount due and payable by it under the Funding Agreement, it breaches any term of the Funding Agreement and fails to rectify such breach within the time specified in the Funding Agreement, an insolvency event happens to the Company, any of the representations and warranties the Company has given become false or misleading or the price of the Shares falls below $0.01) La Jolla may in its sole and absolute discretion rescind any conversion notice it has issued and require the immediate repayment of all amounts owing or otherwise outstanding under the Note(s) it has purchased. In these circumstances, the Company must pay 120% of the outstanding Principal Amount, together with all accrued and unpaid interest.
In each of the five months prior to the Maturity Date, the Company may elect to force La Jolla to convert onefifth of the then remaining Principal Amount (calculated at the beginning of the first of the five months prior to the Maturity Date, so that the effect of the forced conversion over the last five successive months would be

to convert the entire remaining Principal Amount) of a Note due to mature into Shares, provided however there is not currently occurring an event of default on behalf of the Company under the Funding Agreement.

Unless converted, the Principal Amount must be paid to La Jolla on the Maturity Date. The Company may not make any prepayments on the Note without the consent of La Jolla.
If a "Fundamental Corporate Change" occurs, then La Jolla will have the right to:
12.1. require the Company to prepay a Note for cash at 120% of the Principal Amount, together with all accrued and unpaid interest payable to the date of prepayment; or
12.2. receive upon conversion of the Principal Amount of the Note which was outstanding immediately prior to such Fundamental Corporate Change (or any portion thereof) the number of securities of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and certain other property as is receivable upon or as a result of such Fundamental Corporate Change by a holder of the number of Shares into which the outstanding portion of the Note so converted would have been able to be converted at the Conversion Price applicable immediately prior to such Fundamental Corporate Change.

A Fundamental Corporate Change includes a reorganisation or reclassification of capital, consolidation or merger of the Company with a third party, the sale, transfer or disposal of substantially all of the assets and business of the Company, or any transaction or series of transactions whereby more than 50% of the voting power of the Company is disposed of.

The Notes shall not be transferable by La Jolla unless La Jolla first obtains the written consent of the Company.
If during the term of the Funding Agreement, La Jolla fails to fund any amount within ten (10) business says of the date that the delivery of funds relevant to such purchase would otherwise be due, La Jolla shall be liable for and immediately pay $200,000 to the Company by way of liquidated damages ( Liquidated Damages Amount ). If the Investor pays the Liquidated Damages Amount to the Company, the Investor shall have no further obligations under the Funding Agreement and the Notes, including with respect to (i) any unpaid portion of a Note already issued by the Company, or (ii) the Purchase Price for any Subsequent Note that has not been issued by the Company
Conversion of the Notes will not be permitted if that would cause La Jolla’s (together with any affiliates) voting power in the Company to increase to more than 19.99%.
The Note will not be quoted on ASX or any other securities exchange.

The Company has given all usual representations and warranties to, and indemnities in favour of, La Jolla which one would ordinarily expect to find in a funding agreement similar to the Funding Agreement.

7.9 Interests of Directors

Other than as set out below or as set out elsewhere in this Prospectus, no Director has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:

(a) the promotion or formation of the Company;
(b) property acquired or proposed to be acquired by the Company in connection with its promotion or formation or the offer of New Shares and New Options under this Prospectus; or
(c) the offer of New Shares and New Options under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director other than as set out below:

(a) to induce them to become, or to qualify them, as a Director; or
(b) for services rendered by them in connection with the formation or promotion of the Company or the offer of New Shares and New Options under this Prospectus.

7.9.1 Shareholdings of Directors

As at the date of this Prospectus all of the directors (either personally, or through associated companies or trusts) hold Shares and Options in the Company. The Directors are all Qualifying Shareholders and will therefore receive Rights to subscribe for New Shares (and accompanying New Options) pursuant to this Rights Issue.

The relevant interest of each of the Directors in the Shares and Options of the Company as at the date of this Prospectus, and assuming they take up their Rights in full by applying for all of the New Shares (and accompanying New Options) to which they are entitled under this Rights Issue, is as follows:

		Directors	Directors
	Gregory Solomon	Douglas Solomon	Guy Le Page	Richard Beresford
Shares held New Shares offered under this Rights Issue (estimated)	4,434,433 1,266,981	3,686,433 1,053,267	2,507,290 716,369	1,000,000 285,714
Maximum Shares held on completion of this Rights Issue (estimated)	5,701,414	4,739,700	3,223,659	1,285,714
Existing Options held	1,383,131	1,335,131	1,000,000	1,000,000
New Options offered under this Rights Issue (estimated)	1,266,981	1,053,267	716,369	285,714
Maximum Options held on Issue on completion of this Rights Issue (estimated)	2,650,112	2,388,398	1,716,369	1,285,714

Some of the Directors also hold a relevant interest in shares of Tasman Resources (which, as at the date of this Prospectus, holds, through its wholly-owned subsidiary Noble Energy Pty Ltd, 42,855,727 (17.34%) of the Shares of the Company), as follows:

Director	Shares Held	Options Held
Gregory Solomon	31,115,475	7,231,673
DouglasSolomon	30,659,960	7,159,918
GuyLe Page	1,784,821	1,000,000
Richard Beresford	Nil	Nil

Whilst Tasman Resources, through its subsidiary Noble Energy Pty Ltd, will not be taking up its Entitlement (of 12,244,494 Shares and 12,244,494 accompanying Options) under this Offer it has agreed to underwrite this Rights Issue for an amount of $ 925,000 (being 18,500,000 New Shares and 18,500,000 accompanying New Options).

Nothing in this Prospectus will be taken to preclude any of the Directors, officers or employees of the Company or Tasman Resources or any of their subsidiary companies from applying for New Shares and accompanying New Options on the terms which are offered pursuant to this Prospectus.

7.9.2 Directors' remuneration

Non-executive directors’ fees not exceeding an aggregate of $120,000.00 per annum have been approved by the Company in general meeting. Levels of these fees may be varied by the Company in general meeting according to its constitution at any time. The Company is currently paying non-executive directors' fees of $36,000.00 per annum plus superannuation for each non-executive director.

The remuneration of any executive director will be fixed by the Directors and may be paid by way of fixed salary or based on agreed hourly rates according to time spent, up to an agreed maximum amount. At the date of this Prospectus, the Company has resolved to pay to Gregory Solomon an annual fee of $172,500 plus superannuation for acting as executive chairman.

7.9.3 Directors’ and officers’ indemnity

In accordance with the Company's constitution and to the extent permitted by law, the Company must indemnify each Director and other officers of the Company out of the assets of the Company against any liability incurred by them in or arising out of the conduct of the business of the Company or in or arising out of the discharge of the duties of the officer, unless the liability was incurred by the officer through his or her own dishonesty, negligence, lack of good faith or breach of duty.

7.9.4 Other Interests of Directors

Gregory Solomon and Douglas Solomon are partners in the legal firm Solomon Brothers that will receive legal fees of approximately $20,000.00 (plus disbursements, plus GST) for services performed in relation to the preparation of this Prospectus. Please see section 7.10 of this Prospectus for further details of the legal fees which have been paid to Solomon Brothers in the 2 year period prior to the date of this Prospectus.

Further, the Company has engaged the services of Princebrook Pty Ltd, a company of which Gregory Solomon and Douglas Solomon are shareholders and directors, to provide all office, accommodation, use of office equipment, accounting, secretarial and management services to the Company at a current cost of $15,450.00 per month plus GST plus an administration fee of 5% plus GST. The term of the contract is for 5 years commencing on 1 August 2009 but is terminable if, among other things, either party gives notice of termination to the other at any time.

Guy Le Page is also a director of and beneficial shareholder in RM Capital Pty Ltd, an Australian Financial Services Licensee, which has and will continue to receive normal professional fees for services provided to the Company.

7.10 Interests of named persons

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, promoter or stockbroker to the Company has, or had within two years before lodgement of this Prospectus with ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the offer of New Shares and New Options under this Prospectus; or
(c)
the offer of New Shares and New Options under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by them in connection with the formation or promotion of the Company or the offer of New Shares and New Options under this Prospectus.

Solomon Brothers, a legal firm of which Gregory Solomon and Douglas Solomon are partners, will receive professional fees of approximately $20,000.00(plus disbursements, plus GST) for legal work undertaken by them in connection with this Prospectus and for work performed in relation to the due diligence process. In addition, Solomon Brothers have received legal fees on account of professional services rendered to the Company of approximately $ 110,000 (excluding disbursements, GST and the legal fees associated with the preparation of this Prospectus) for the current financial year to date, approximately $260,000.00 (excluding disbursements and GST) for the financial year ended 30 June 2011, and approximately $32,000 (excluding disbursements and GST) for the financial year ended 30 June 2010, primarily for acting as legal advisers in connection with the preparation of the necessary documentation for various capital raisings during this period and in connection with the litigation in which the Company is involved (as to which, see section 7.15 of this Prospectus).

7.11 Consents

The following persons have consented to being named in the Prospectus but have not made any statements that are included in the Prospectus or statements identified in this Prospectus as being based on any statements made by those persons and take no responsibility for any part of the Prospectus other than their consent to be named in the Prospectus, and have not withdrawn their consent before the lodgement of this Prospectus with ASIC:

(1) Solomon Brothers as solicitors to the Company;
(2) Advanced Share Registry Services as Share Registry; and
(3) Noble Energy Pty Ltd and Andrew Leibovitch and Karen Leibovitch as trustee for the Katss Investment Trust as (partial) underwriters to the Issue.

7.12 Expenses of the Issue

It is estimated that approximately $93,000 will be payable by the Company in respect of legal, printing, postage and other costs arising from this Prospectus and this Rights Issue if the Offer is fully subscribed (excluding GST), as follows:

ASIC prospectus lodgement fee	$ 2,137.00
ASX quotation fee	$ 9,540.00
Legal fees and expenses	$20,000
Underwriting fees	$46,650
Other expenses (including printing)	$14,673
Total	$93,000

7.13 Dividends

The Board is not able to indicate when and if dividends will be paid in the future, as payment of any dividend will depend on the future profitability, financial position and cash requirements of the Company.

7.14 Australian and New Zealand taxation implications

The acquisition and disposal of New Shares and New Options in the Company will have tax consequences in both Australia and New Zealand that will differ depending upon the individual financial affairs of each Qualifying Shareholder. The Directors consider that it is not appropriate to give Qualifying Shareholders advice regarding the taxation consequences of subscribing for New Shares and New Options under this Prospectus. All Qualifying Shareholders applying for New Shares and New Options are therefore first urged to obtain independent financial advice about the consequences of acquiring the New Shares and New Options from a taxation viewpoint and generally. Qualifying Shareholders should consult their own professional tax advisers in connection with subscribing for New Shares and New Options under this Prospectus.

7.15 Litigation

The Company is currently engaged in litigation with Engenco Ltd in the Supreme Court of Western Australia. The Company has also recently agreed to settle litigation it was engaged in with Omni Laboratories Inc in the Queens Bench Division of the High Court of Justice of England and Wales. Further information in relation to this litigation is set out in section 5.9 of this Prospectus.

Otherwise, the Company is not involved in any litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

8. GLOSSARY NAMES AND TERMS

Applicant means a person who submits an Application;

Application means a valid application to subscribe for New Shares and accompanying New Options;

Acceptance Form means the personalised entitlement and acceptance form attached to and forming part of this Prospectus.

Application Moneys means the sum of $0.05 per New Share payable on submission of an Application pursuant to this Prospectus;

ASIC means Australian Securities and Investments Commission;

ASX means ASX Limited (A.C.N 008 624 691) or the Australian Securities Exchange, as the context requires;

Board means the board of Directors unless the context indicates otherwise;

Business Day means a day other than a Saturday or Sunday on which banks are open for business in Perth, Western Australia;

Closing Date means the date on which the Offer closes;

Company means Eden;

Corporations Act and Act means the Corporations Act 2001 (Cth);

Directors means the directors of the Company from time to time;

Dollars or $ means Australian dollars unless otherwise stated;

Eden or Eden Energy means Eden Energy Ltd A.C.N. 109 200 900;

Entitlement means a Qualifying Shareholder’s entitlement to subscribe for New Shares (and accompanying New Options) under the Offer;

ESOP means the Eden Energy Employee Share Option Scheme;

Existing Shares means Shares held by Qualifying Shareholders as at the Record Date;

First Note means the first convertible note to be issued by the Company to La Jolla on or around 15 November 2011 under and in accordance with the terms and conditions of the Funding Agreement;

Funding Agreement means the Eden Energy Funding Agreement entered into between Eden Energy and La Jolla Cove Investors, Inc, dated 11 November 2011;

Glossary means this glossary;

Initial Note Payment means the initial payment, of US $250,000, to be paid by La Jolla to the Company upon the issue of the First Note, subject to satisfaction of all of the conditions precedent in the Funding Agreement.

Issue means the issue of New Shares and New Options pursuant to this Prospectus;

La Jolla means La Jolla Cove Investors, Inc

Listing Rules means the Listing Rules of ASX;

New Option means an Option to subscribe for 1 Share in the Company at $0.20 on or before 30 June 2014 and otherwise on the terms and conditions set out in section 7.5 of this Prospectus to be issued under this Prospectus;

New Share means a Share to be issued under this Prospectus;

Non-Qualifying Foreign Shareholder means a Shareholder whose registered address at the Record Date is not in Australia or New Zealand;

Offer means the offer contained in this Prospectus of 2 New Shares for every 7 Existing Shares held by a Qualifying Shareholder at the Record Date at an issue price of $0.05 per New Share, together with 1 free attaching New Option for every New Share issued under this Prospectus;

Offer Period means the period commencing on the Opening Date and ending on the Closing Date;

Official List means the Official List of the ASX;

Opening Date means the date on which the Offer opens;

Option means a right to acquire a Share in the Company;

Optionholder means a holder of Options;

Prospectus means this Prospectus dated 14 November 2011 for the issue of up to approximately 70,615,000 New Shares and up to approximately 70,615,000 New Options;

Qualifying Shareholder means a holder of Shares registered at 5:00pm WST on the Record Date and whose registered address is in Australia or New Zealand;

Quotation means quotation of the New Shares or New Options on ASX (as the case may be);

Record Date means 5.00pm WST on 23 November 2011;

Rights means the right to subscribe for New Shares (with attaching New Options) under this Prospectus;

Rights Issue has the same meaning as Offer;

Securities means the New Shares and New Options to be issued under this Prospectus;

Share means one fully paid ordinary share in the Company;

Shareholder means the holder of Shares;

Tasman and Tasman Resources means Tasman Resources Limited A.C.N 009 253 187;

WST means Western Standard Time, Perth, Western Australia.

VWAP means the daily volume weighted average sale price of the Shares for such date (or the nearest preceding date) on the ASX where trading is not halted or suspended (excluding special crossings, crossings include the open sessions state (each as defined in the ASX Market Rules) and any overseas trades or trades pursuant to the exercise of options over Shares) as reported by Bloomberg Financial L.P. (based on a Trading Day from 10.00am to 4.02pm (Sydney time) using the VAP function)

9. CONSENT BY DIRECTORS

Each of the Directors of Eden Energy Ltd has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act.

Dated the 14[th] day of November 2011

==> picture [138 x 32] intentionally omitted <==

_________ Signed for and on behalf of Eden Energy Ltd By Gregory Howard Solomon (Director)

10. CORPORATE DIRECTORY

Directors:	Gregory H. Solomon, LLB (Executive Chairman)
	Douglas H. Solomon, B.Juris LLB (Hons) (Non-executive)
	Guy T. LePage, B.A, B.Sc. (Hons), M.B.A, ASIA, MAusIMM (Non-
	executive)
	Richard J. Beresford FAICD FAIE (Non-Executive)
Company Secretary:	Aaron Gates
Registered Office:	Level 40
	Exchange Plaza
	2 The Esplanade
	Perth
	Western Australia
	Tel: (+618) 9282 5889
	Fax: (+618) 9282 5966
	e-mail:[email protected]
	website:www.edenenergy.com.au
Share Registry:	Advanced Share Registry Services
	150 Stirling Highway
	Nedlands
	Western Australia
	Tel: (+618) 9389 8033
	Fax: (+618) 9389 7871
Solicitors to the Company:	Solomon Brothers
	Level 40
	Exchange Plaza
	2 The Esplanade
	Perth
	Western Australia
	Tel: (+618) 9282 5888
	Fax: (+618) 9282 5855

ACCEPTANCE FORM

ENTITLEMENT AND ACCEPTANCE FORM

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

EDEN ENERGY LTD ACN 109 200 900 REGISTERED OFFICE Level 40 Exchange Plaza 2 The Esplanade Perth, Western Australia

HIN/SRN: <<_>> Entitlement No: <<_>> <>

Shareholding at 5.00 pm. on the Record Date	Entitlement to Shares on 2 for 7 basis
		Amount Payable at $0.05 per Share
<< ___>>	<< ___>>	<< ___>>

A non-renounceable pro-rata rights issue of two (2) new Shares for every seven (7) Shares held as at 5.00pm WST on the Record Date, at an issue price of $0.05 per Share.

To the Directors:

I/We, the above mentioned, being registered on the Record Date as the holder(s) of Shares in your Company hereby accept the below mentioned Shares (and accompanying Options) issued in accordance with the Prospectus dated 14 November 2011; and
I/We hereby authorise you to place my/our name(s) on the registers of shareholders in respect of the number of Shares (and accompanying Options) allotted to me/us.

Entitlement to Shares (or part thereof)applied for	Total amount payable at $0.05 per Share

Payment can be made by cheque, money order or by B-Pay for the amount shown, being payment at the rate of $0.05 per Share. Cheques should be made payable to "Eden Energy Ltd – Rights Issue". If paying by cheque or money order, please return this form and your cheque or money order for the required amount to “Eden Energy Ltd – Rights Issue”, crossed “NOT NEGOTIABLE” and forwarded to Eden Energy Ltd, C/- Advanced Share Registry Services, PO Box 1156, Nedlands WA 6909 or C/- Advanced Share Registry Services, 150 Stirling Highway Nedlands WA 6009 to arrive no later than 5.00pm WST on 8 December 2011 .

CHEQUE DETAILS THANK YOU		Drawer	Bank	Branch or BSB	Amount
<< ___>>		You can pay by BPAY. If you choose to pay by BPAY, you do not need to return this form. If the amount you pay is insufficient to pay for the number of New Shares you apply for, you will be taken to have applied for such lower number of New Shares as that amount will pay for, or your application will be rejected. If the amount you pay is more than the amount payable for your full Entitlement, you will be taken to have applied for the maximum number of New Shares you are entitled to apply on this form. The excess money will be returned to you.

My/Our contact details in the case of inquiry are:

Telephone ( ) . . . . . . . . . . . . . . . . .. . . Fax ( ) ... . . . . . . . . . . . . . . . . . . Contact Name . . . . . . . . . . . . . . . . . . . . . . .

Complete this panel and sign below only if a change of address is to be registered with the Company. New Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signature(s): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date: . . . . . . . . . . . . . . . . Please indicate your correct title: Director / Secretary / .................................

THE DIRECTORS RESERVE THE RIGHT TO MAKE AMENDMENTS TO THIS FORM WHERE APPROPRIATE

EXPLANATION OF ENTITLEMENT

The front of this form sets out the number of New Shares which you are entitled to apply for.
Your Entitlement may be accepted either in full or in part. There is no minimum acceptance.
You may not apply for New Shares in excess of your maximum Entitlement.
The price payable on acceptance of each Share is $0.05.

APPLICATION INSTRUCTIONS

The issue price of $0.05 per Share is payable in full upon application.
Payments must be made in Australian currency by cheque or money order drawn on and payable at a bank within Australia (accompanied by this Acceptance Form). Cheques drawn on banks outside Australia in either Australian currency or in foreign currency will not be accepted. Payment can also be made by B-Pay.
If paying by cheque or money order, this form together with the appropriate payment in Australian currency should be forwarded to Eden Energy Ltd, at the address specified on the front page of this Acceptance Form. This Acceptance Form does not need to be returned if payment is being made by B-Pay.
Acceptances (or payment by B-Pay) must be received by Eden Energy Ltd no later than 5.00pm WST on 8 December 2011 .

ENQUIRIES

Any enquiries should be directed to:

Eden Energy Ltd (attention Greg Solomon) by telephone on (+618) 9282 5889 or facsimile on (+618) 9282 5866