EDEN INNOVATIONS LTD — Capital/Financing Update 2011

May 11, 2011

==> picture [188 x 53] intentionally omitted <==

==> picture [75 x 8] intentionally omitted <==

----- Start of picture text -----

ACN 109 200 900
----- End of picture text -----

AUSTRALIAN SECURITIES EXCHANGE ANNOUNCEMENT

12 May 2011

BPAY FACILITY FOR THE NON-RENOUNCEABLE PRO-RATA RIGHTS ISSUE

Following requests from some shareholders it has been decided to add the option for shareholders to take up their entitlement by using BPay to pay for their shares and options electronically, as an alternative to paying by cheque or money order.

To facilitate this, the attached letter, together with a copy of the necessary Supplementary Prospectus (attached), will be dispatched by post on Thursday May 12 to all eligible shareholders, which will include personalised details for the payment to be made by BPay.

If you require further information you should contact me, on 08 9282 5889.

==> picture [66 x 40] intentionally omitted <==

Aaron P Gates Company Secretary

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

==> picture [188 x 54] intentionally omitted <==

ACN 109 200 900

12 May 2011

SUB-REGISTER HIN/SRN

Address1 Address2 Address 3 Address 4

Dear Shareholder

NON-RENOUNCEABLE PRO-RATA RIGHTS ISSUE

I refer to the prospectus dated 14 April 2011 ( Prospectus ) issued by Eden Energy Ltd ( the Company ) for a non-renounceable pro-rata rights issue. By now you should have received a copy of this Prospectus, which was despatched to you on 6 May 2011, together with a personalised entitlement and acceptance form ( Acceptance Form ).

Following requests from some shareholders it has been decided to add the option of Qualifying Shareholders being able to take up their entitlement under the non-renounceable pro-rata rights issue by using BPay to pay for their shares and options electronically, as an alternative to paying by cheque, and to facilitate this, we attach a supplementary prospectus dated 12 May 2011 ( Supplementary Prospectus ).

Should you wish to take up your entitlement and pay electronically, your personalised BPay payment details are as follows:

==> picture [30 x 40] intentionally omitted <==

Biller Code: Reference Number:

Instructions on how to pay by BPay are set out in the Supplementary Prospectus.

Should you not wish to pay electronically but wish to accept the Offer please complete the Acceptance Form and attend to payment in accordance with the instructions set out in the Acceptance Form.

The Supplementary Prospectus also corrects a non material error in the number of Options stated to be on issue as at the date of the Prospectus.

Yours faithfully

==> picture [174 x 33] intentionally omitted <==

Gregory H Solomon Chairman

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

==> picture [188 x 53] intentionally omitted <==

==> picture [78 x 7] intentionally omitted <==

----- Start of picture text -----

ACN 109 200 900
----- End of picture text -----

SUPPLEMENTARY PROSPECTUS

Important: This is an important document that should be read in its entirety together with the Prospectus. If you do not understand it you should consult your professional advisers.

1. IMPORTANT INFORMATION

This document is a supplementary prospectus to the prospectus dated 14 April 2011 issued by Eden Energy Ltd A.C.N. 109 200 900 (“the Company”) (“the Prospectus”) for a non-renounceable pro-rata rights issue of approximately 21,900,274 ordinary fully paid shares in the Company ("Share") on the basis of one (1) new Share for every ten (10) Shares held by Qualifying Shareholders as at 5:00pm WST on 5 May 2011, at an issue price of $0.11 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). The Prospectus is fully underwritten.

This supplementary prospectus is dated 12 May 2011 and a copy of this supplementary prospectus was lodged with the Australian Securities and Investments Commission (“ASIC”) on 12 May 2011. Neither the ASIC nor the Australian Securities Exchange Ltd (“ASX”) take any responsibility for the content of this supplementary prospectus.

This supplementary prospectus must be read together with the Prospectus. Words and phrases which are defined in the Prospectus have a corresponding meaning in this supplementary prospectus. To the extent of any inconsistency between this supplementary prospectus and the Prospectus, the provisions of this supplementary prospectus will prevail.

2. TIMETABLE

The timetable of important dates on page 4 of the Prospectus remain the same. The dates specified in the Prospectus are indicative only and, as stated in the Prospectus, the Company reserves the right, subject to the Corporations Act 2001 and the ASX 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.

3. PURPOSE FOR THE ISSUE OF THIS SUPPLEMENTARY PROSPECTUS

3.1 PAYMENT BY B-PAY

In addition to the payment methods specified in the Prospectus (in particular, in sections 3.2, 3.3 and 3.6), Qualifying Shareholders who wish to take up all or part of their Entitlements may use BPay to pay for their New Shares electronically. Should you wish to take up your Entitlement in response to the Offer contained in the Prospectus (when read in conjunction with this supplementary prospectus) and the personalised entitlement and acceptance form attached to or accompanying the Prospectus and to pay electronically (by BPay), you do not need to return the Acceptance Form. You will be taken to have accepted the Offer upon making payment by BPay. If the amount you pay by BPay is insufficient to pay for your full Entitlement, you will be taken to have applied for such lower number of New Shares (and accompanying New Options) as that amount will pay for. If the amount

This supplementary prospectus must be read in conjunction with the Prospectus dated 14 April 2011 relating to shares of Eden Energy Ltd

you pay by BPay is more than the amount payable for your full Entitlement, you will be taken to have applied for maximum number of New Shares (and accompanying New Options) you are entitled to apply for as set out on your Acceptance Form. The excess money will be returned to you.

As stated in the Prospectus, payment will also be accepted by cheque, bank draft or money order drawn on an Australian bank.

3.2 EXISTING OPTIONS ON ISSUE

In addition to the 18,671,854 Options which were stated in the Prospectus as being on issue by the Company as at the date of the Prospectus, a further 500,000 Options (each having an exercise price of 58.5 cents and being exercisable at any time on or before 5 April 2012) were on issue under the Company’s ESOP (none of these additional 500,000 Options were exercised prior to the Record Date). Thus, sections 2.16, 2.18, 2.19 and 7.6 of the Prospectus should refer (and are hereby amended to refer) to there having been 19,171,854 unlisted Options on issue as at the date of the Prospectus. Further, section 7.6.1 of the Prospectus should refer (and is hereby amended to refer) to there having been 3,931,764 Options on issue under the Company's ESOP as at the date of the Prospectus (not 3,431,764 Options). The pro-forma capital structure table set out in section 6.2 is also replaced with the following table, which includes these further 500,000 Options.

	Shares	Percentage	Options	Percentage
Existing Shares and Options	219,002,744	90.91%	19,171,854	46.68%
Maximum number of New Shares and New Options (estimated)	21,900,274	9.09%	21,900,274	53.32%
Total Shares and Options upon Issue (estimated)	240,903,018	100.00%	41,072,128	100.00%

3.3 APPLICATIONS

Save as set out above, the Prospectus remains unaltered. The Directors do not consider the above changes to be materially adverse from the point of view of Qualifying Shareholders. Accordingly, no action needs to be taken by Qualifying Shareholders who have already accepted their Entitlement in whole or in part.

4. CONSENT BY DIRECTORS

Each of the directors of the Company has consented to the lodgment of this supplementary prospectus in accordance with section 720 of the Corporations Act.

Dated the 12th day of May 2011

Signed for and on behalf of Eden Energy Ltd by Gregory H Solomon (Executive Chairman)

This supplementary prospectus must be read in conjunction with the Prospectus dated 14 April 2011 relating to shares of Eden Energy Ltd