EDEN INNOVATIONS LTD — Capital/Financing Update 2012

Aug 29, 2012

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ACN 109 200 900
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A non-renounceable pro-rata rights issue of one (1) new Share for every one (1) Share held by Qualifying Shareholders as at 5.00pm WST on 10 September 2012 at an issue price of $0.009 (0.9 cents) per Share to raise approximately $2,956,571.95 (before expenses of the Offer).

The Issue is partially underwritten by RM Corporate Finance Pty Ltd ("the Underwriter") to the extent of $1,500,000 and sub-underwritten to the extent of $1,500,000 by Noble Energy Pty Ltd ("the Sub Underwriter"). The Underwriting Agreement and Sub-Underwriting Agreement contain terms and conditions which may affect the obligations of the Underwriter and Sub-Underwriter, details of which are summarised in section 2.6 of this Offer Document.

OFFER DOCUMENT

THE SECURITIES OFFERED BY THIS OFFER DOCUMENT ARE OF A SPECULATIVE NATURE.

IMPORTANT NOTICE

This Offer is being made without disclosure to investors under Part 6D.2 of the Corporations Act. This Offer is being made in accordance with section 708AA of the Corporations Act and does not require disclosure under a disclosure document.

The purpose of this Offer Document is to summarise the details of the Offer. This Offer Document is not a disclosure document for the purposes of the Corporations Act.

This Offer Document should be read carefully. If you are in any doubt as to the contents of this Offer Document you should consult your stockbroker or other professional adviser without delay.

This Offer opens on 12 September 2012 and closes at 5:00pm WST on 28 September 2012.

DISCLAIMER

No person is authorised to give any information or make any representation in connection with the Offer that is not contained in this Offer Document. Any information or representation not contained in this Offer Document may not be relied upon as having been authorised by the Company in connection with the Offer. Neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Offer Document except as required by law, and then only to the extent so required.

Any forecast or any forward-looking statement contained in this Offer Document may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct, and there are usually differences between forecasts and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material. Nothing contained in this Offer Document is, or may be relied on as, a promise or representation as to the future.

The information contained in this Offer Document does not purport to constitute all the information that you may require to enable you to evaluate effectively and completely whether to take up additional Shares under the Offer. The information in this Offer Document is general only and has been prepared without any actual or implied knowledge or consideration of the investment objectives, financial situation, taxation position or other particular needs or requirements of any particular person. Accordingly, before acting on this Offer Document, you should assess whether a further investment in the Company would be appropriate in light of your own financial circumstances. The information contained in this Offer Document is not, and should not be considered to be, financial product advice.

The information contained in this Offer Document is not a recommendation by the Company (or its officers, employees, agents or advisors) to any person that they should subscribe for new Shares pursuant to the Offer.

Except to the extent prohibited by law, the Company, its officers, employees and advisers disclaim all liability that may otherwise arise due to any of the information in this Offer Document being inaccurate or incomplete.

IMPORTANT NOTICE

This Offer Document is dated 30 August 2012.

The ASIC and ASX take no responsibility for the contents of this Offer Document.

This Offer Document contains an offer to Shareholders of the Company as at 5.00pm WST on the Record Date whose registered addresses are in Australia and New Zealand ("Qualifying Shareholders"). Distribution of this Offer Document in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Offer Document should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Offer Document does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make the Offer. No action has been taken to register this Offer Document or the Shares, or to otherwise permit an offering of the Shares, in any jurisdiction outside of Australia or New Zealand.

A personalised Entitlement and Acceptance Form will accompany the copy of the Offer Document which will be mailed to all Qualifying Shareholders.

Qualifying Shareholders should read this Offer Document in its entirety and, if in any doubt, consult with their professional advisers before deciding whether to apply for Shares. There are risks associated with an investment in the Company and the Shares offered under this Offer Document must be regarded as a speculative investment. It is important that Qualifying Shareholders consider the risk factors set out in section 2.24 of this Offer Document, as well as any other risks which could adversely affect the financial performance of the Company or the value of an investment in Shares of the Company. The Shares offered under this Offer Document carry no guarantee with respect to return on capital investment or the future value of the Shares.

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DISCLOSURE

This Offer Document is not a disclosure document for the purposes of the Corporations Act. The Offer contained in this Offer Document is being made without disclosure to investors under Part 6D.2 of the Corporations Act. The Offer is being made in accordance with section 708AA of the Corporations Act, which exempts the need for disclosure under a disclosure document.

As at the date of this Offer Document, the Company has complied with the provisions of Chapter 2M of the Corporations Act as they apply to the Company, and section 674 of the Corporations Act.

As at the date of this Offer Document, there is no excluded information as described in section 708AA(8) and (9) of the Corporations Act.

DEFINITIONS AND ABBREVIATIONS

Certain abbreviations and other defined terms are used throughout this Offer Document. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in section 3 of this Offer Document.

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1. CHAIRMAN’S LETTER

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ACN 109 200 900
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30 August 2012

Dear Shareholder

NON-RENOUNCEABLE RIGHTS ISSUE

In November 2011, Eden undertook its last capital raising, by way of a partially underwritten pro-rata nonrenouncible rights issue at five cents per Share, to raise funds to settle litigation in the UK related to the permeability testing of its coal seam gas and to cover on-going working capital requirements. In light of the ongoing global financial difficulties and the weakness in the Australian financial markets at the time, the Directors put in place a back-stop funding facility with La Jolla Cove Investors Inc (“La Jolla”) for the issue of convertible notes for up to three million dollars to enable the Company to continue to operate if insufficient funds were raised by the November 2011 rights issue.

As it transpired, due to only a very limited uptake by Eden’s shareholders, the Company was forced to utilise the La Jolla funding facility, and since then has drawn down US$1,500,000 under that facility, almost sixty five percent of which has been converted by La Jolla into Shares in Eden, and sold. In the weak market conditions that have prevailed, the Eden Share price tumbled, and in consequence the Directors elected to terminate the funding agreement with La Jolla after repudiation by La Jolla, and therefore never drew down the last US$1,500,000 under the La Jolla facility.

During this period, Eden’s operations have been progressing well, with an increasing level of sales of Optiblend dual fuel kits, particularly in USA, coupled with some encouraging preliminary work by third parties looking for ways to disperse in various materials the nano-carbon products that Eden can produce through its proprietary method of cracking methane into its constituent elements of carbon (in the form of carbon nanotubes and carbon nanofibres) and hydrogen. At the same time, the Company has been exploring ways to capitalise on its significant interest in a joint venture over a large UK coal seam gas and shale gas licence holding, with a view to progressing that project. However, despite discussions having occurred with a number of parties, in the current market conditions no satisfactory terms have been able to be reached to date, although these discussions are ongoing.

Accordingly, the Directors of Eden have decided to again undertake a further non-renounceable, pro-rata rights issue. All of the Directors have indicated that they currently intend to take up at least a majority of their entitlements under this Offer. Additionally, Noble Energy Pty Ltd (a wholly owned subsidiary of Tasman Resources Ltd), which holds more than 20% of the issued Share capital in Eden, has agreed to take up its entire entitlement and to additionally sub-underwrite the first $1,500,000 of any shortfall under this Offer.

This will finally provide a firm basis upon which Eden can proceed and firstly repay debts and obligations owed by the Company and at the same time provide additional working capital for the continued funding of its on-going operations whilst it endeavours to resolve its position on the UK gas project and continues to push for financial self-sufficiency from sales of both its Optiblend kits and nano-carbon products.

I invite all shareholders to consider this opportunity carefully and hopefully support the Offer.

Yours sincerely,

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Gregory H. Solomon Chairman

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2. DETAILS OF THE OFFER

2.1. KEY POINTS

A non-renounceable pro-rata rights issue of one (1) new Share for every one (1) Share held by Qualifying Shareholders as at 5.00pm WST on 10 September 2012 at an issue price of $0.009 per Share to raise approximately $2,956,571.95 (before expenses of the Offer).

Share Issue Price	$0.009 (0.9 cents) per new Share
	One (1) new Share for
Qualifying Shareholder Entitlement	every one (1) Share held as at 5.00 pm WST on the
	Record Date
Number of Shares to be issued pursuant to this Offer (est)	328,507,995*
Approximate amount to be raised pursuant to this Offer (before expenses of the Offerand assumingthe Offer isfully subscribed)	$2,956,571.95

• Assuming the Offer is fully subscribed and none of the Options currently on issue in the Company are exercised before the Record Date.

2.2. TIMETABLE

Shares quoted ex rights	4 September 2012
Record Date for determining Entitlements to participate in Offer (at 5.00 pm WST)	10 September 2012
Dispatch of Offer Document to Qualifying Shareholders	12 September 2012
Closing Date for acceptance of Offer and payment in full (at5.00pm WST)	28 September 2012
Shares quoted on a deferred settlement basis	1 October 2012
Company notifies ASX of under subscriptions	3 October 2012
Dispatch of holding statements	8 October 2012

These dates are subject to change and are indicative only. The Company reserves the right to amend this indicative timetable. In particular, the Company reserves the right, subject to the Corporations Act and the Listing Rules, to extend the Closing Date, to accept late Entitlement and Acceptance Forms either generally or in particular cases, or to withdraw or reduce the size of the Offer without prior notice. Any extension of the Closing Date will have a consequential effect on the date for the issue of new Shares.

2.3. PURPOSE OF THE OFFER

Funds raised from the Offer will be used :

• to meet the expenses of the Offer; and

• to repay debts and obligations owed by the Company as at the Closing Date, including without limitation any amounts claimed by La Jolla Cove Investors Inc ("La Jolla") under the funding agreement which the Company entered into with La Jolla on 11 November 2011 ("the Funding Agreement"), even though any claim under the Funding Agreement is disputed because it was terminated after repudiation by La Jolla; and

• to provide additional working capital to fund the ongoing sales of the Optiblend dual fuel kits and the finalisation of developments aimed at enabling the use of the Company's nano-carbon materials and general operating matters.

Under the Funding Agreement, the Company agreed to issue, and La Jolla 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. The Company elected to issue two Notes to La

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Jolla only. Of the US$1,500,000 advanced by La Jolla to the Company pursuant to these two Notes before the Funding Agreement was terminated after repudiation by La Jolla, La Jolla has converted all of the debt (except US$536,039) into Shares in the Company, all of which have been sold by La Jolla.

2.4. EFFECT ON CAPITAL STRUCTURE

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

Shares
Shares currently on issue	328,507,995
Shares offered under the Offer (est)	328,507,995
Total Shares on issue on completion of the Offer (est)	657,015,990

• Assuming the Offer is fully subscribed and none of the Options currently on issue by the Company** are exercised before the Record Date.

** In addition to the Shares currently on issue, there are:

• 69,640,963 listed Options (ASX Code: EDEO) on issue by the Company; and

• 4,966,250 Unlisted Options on issue by the Company to directors of the Company and under the Company’s Employee Share Option Plan.

The Directors have also resolved to issue, after the Closing Date, up to 3,700,000 new options to a number of employees of the Company (and its subsidiaries) under, and on the terms and conditions set out in, the Company’s Employee Share Option Plan.

Further information about these listed and unlisted Options is set out in Sections 2.17, 2.18 and 2.19 of this Offer Document.

As this Offer is being made on a 1:1 basis, the number of new Shares being offered under this Offer Document represents 100% of the Share capital of the Company currently on issue and will represent 50% of the Share capital of the Company on issue on completion of the Offer (assuming the Offer is fully subscribed).

2.5. NON-RENOUNCEABLE

This Offer is made on a non-renounceable basis. Accordingly, Qualifying Shareholders may not sell or transfer all or any part of their Entitlement to the Shares.

2.6. OFFER PARTIALLY UNDERWRITTEN

This Offer is partially underwritten.

The Company has entered into an Underwriting Agreement with RM Corporate Finance Pty Ltd A.C.N. 108 084 386 ("Underwriter"). Pursuant to the Underwriting Agreement, the Underwriter will underwrite up to 166,666,667 of the new Shares which are being offered under this Offer ("the underwritten securities"), for a total amount of $1,500,000 (“the underwritten amount"). In consideration of its obligations under the Underwriting Agreement, the Underwriter will be paid a fee of 6% of the underwritten amount (being a fee of $90,000 plus GST). Contemporaneously, Noble Energy Pty Ltd (a wholly owned subsidiary of Tasman Resources Ltd), the largest shareholder in the Company, has committed to take up its full entitlement under the Offer, and also has entered into a Sub-Underwriting Agreement with the Underwriter to sub-underwrite all of the underwritten securities, for a total amount of $1,500,000. In consideration of its obligations under the Sub-Underwriting Agreement, the Sub-Underwriter will be paid a fee by the Underwriter of 5% of the sub-underwritten amount (being a fee of $75,000 plus GST).

If the Company has complied with its obligations under the Underwriting Agreement and has not breached any of the representations, warranties and undertakings made by it therein, the Sub-

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Underwriting Agreement has not been terminated and valid applications have not been received by the Company by the Closing Date for all of the Shares being offered under this Offer, the Underwriter is required to lodge or cause to be lodged with the Company applications for the underwritten securities (up to a maximum aggregate amount of $1,500,000), accompanied by payment of the application monies for those underwritten securities.

The Sub-Underwriter may terminate its obligations under the Sub-Underwriting Agreement if (in the reasonable opinion of the Sub-Underwriter reached in good faith) any of the following events occurs which 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 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 Sub-Underwriter under the Corporations Act:

1. any of the following occurs in relation to this Offer Document:

2. 1.1 the Sub-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;

1.2 the Sub-Underwriter reasonably forms the view that any projection or forecast in this Offer Document becomes, to a material extent, incapable of being met or unlikely to be met in the projected time; or

• 1.3 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;

• 2 ASX does not give approval for the Shares under this Offer to be listed for official quotation, or if approval is granted, the approval is subsequently withdrawn, qualified or withheld;

• 3 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 SubUnderwriting Agreement for a total of three consecutive trading days during the period commencing on the date of the Sub-Underwriting Agreement and expiring on the day prior to the issue of the Shares under the Offer Document;

• 4 a director of the Company or any related corporation is charged with an indictable offence;

• 5 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 Sub-Underwriter;

• 6 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;

• 7 any of the following changes of law occurs:

• 7.1 the introduction of legislation into the Parliament of the Commonwealth of Australia or of any State or Territory of Australia; or

• 7.2 the public announcement of prospective legislation or policy by the Federal Government, or the Government of any State or Territory; or

• 7.3 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;

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• 8 the Company or any related corporation fails to comply with any of the following:

• 8.1 a provision of its Constitution;

• 8.2 any statute;

• 8.3 a requirement, order or request, made by or on behalf of ASIC or any governmental agency; or

• 8.4 any material agreement entered into by it,

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

• 9 the Company alters its capital structure or its Constitution without the prior written consent of the Sub-Underwriter;

• 10 a force majeure, which prevents or delays an obligation under the Sub-Underwriting Agreement, lasting in excess of 2 weeks occurs;

• 11 the Company is in default of any of the terms and conditions of the Sub-Underwriting Agreement or breaches any warranty or covenant given or made by it under the Sub Underwriting Agreement or the Underwriting Agreement;

• 12 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);

• 13 any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or a related corporation;

• 14 a prescribed occurrence occurs (as that term is defined in the Underwriting Agreement);

• 15 the Company suspends payment of its debts generally;

• 16 an event of insolvency occurs in respect of the Company or a related corporation;

• 17 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; and

• 18 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 Sub-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 Offer Document or that the success of the Offer is likely to be adversely affected.

The Underwriter may terminate the Underwriting Agreement if the Sub-Underwriter terminates the SubUnderwriting Agreement.

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.

The Sub-Underwriter is an existing member of the Company, and currently holds 66,375,727 (20.205%) of the existing Shares, and 25,839,106 (37.103%) of the listed Options, of the Company. The Sub-Underwriting Agreement will have an effect on the Sub-Underwriter's voting power in the Company as follows:

1. If all Qualifying Shareholders take up their entitlement under this Offer (i.e. this Offer is fully subscribed), there will be no appreciable change in the Sub-Underwriter's voting power in the Company.

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1. If not all Qualifying Shareholders take up their entitlement under this Offer (i.e. this Offer is not fully subscribed), the Sub-Underwriter's voting power in the Company will increase. Assuming the SubUnderwriter is the only Qualifying Shareholder who takes up its Entitlements under this Offer (and it does so in full), the Sub-Underwriter would:

2. (a) acquire a further 66,375,727 new Shares by taking up its Entitlement in full; and

3. (b) pursuant to the Sub-Underwriting Agreement, be issued with 166,666,667 new Shares for the sub-underwritten amount of $1,500,000.

This would increase the number of Shares held by the Sub-Underwriter to 299,418,121 Shares (there would be no change in the number of listed Options held by the Sub-Underwriter). The number of Shares on issue by the Company, at the completion of this Offer and subscription of Shares under the Underwriting Agreement, if no other Shares were taken up other than those taken up by the SubUnderwriter, would be 561,550,389 Shares. As a result, the Sub-Underwriter's voting power in the Company would increase from 20.205% to 53.32% (the percentage of the listed Options held by the Sub-Underwriter would not change). If some, but not all, of the Qualifying Shareholders (other than the Sub-Underwriter) take up their Entitlement or apply for Shares comprising part of the Shortfall, the Underwriter's voting power in the Company will increase from its current percentage to an amount not exceeding 53.32%, depending on the extent to which Qualifying Shareholders take up their rights.

The important dates under the Underwriting Agreement are as follows*:.

• (a) Notification of Shortfall – No later than 4 October 2012;

• (b) Lodgment by Underwriter of application to subscribe, and application moneys, for the underwritten securities – No later than 11 October 2012;

• (c) Issue of the underwritten securities – No later than 15 October 2012.

*Any extension of the Closing Date will have a consequential effect on the above dates:-

2.7. ENTITLEMENT

Only Qualifying Shareholders are eligible to participate in the Offer.

The number of Shares to which each Qualifying Shareholder is entitled is shown on the personalised Entitlement and Acceptance Form which accompanies this Offer Document.

The Company has determined, in accordance with the Corporations Act and Listing Rule 7.7, that it would be unreasonable to make the Offer to Foreign Shareholders having regard to the number of Foreign Shareholders in each country other than Australia and New Zealand, the number and value of the Shares which would be offered to them and the cost of complying with the legal requirements in other countries. Foreign Shareholders should contact the Company Secretary should they have any queries.

2.8. SHORTFALL

If not all Qualifying Shareholders take up their Entitlements under this Offer in full, the portion not taken up will form part of the Shortfall.

Qualifying Shareholders may, in addition to their Entitlement, apply for additional Shares forming part of the Shortfall, regardless of the size of their present holding.

The offer of the Shortfall is a separate offer pursuant to this Offer Document. The issue price of any Shares comprising part of the Shortfall shall be $0.009, being the price at which the Entitlement has been offered to Qualifying Shareholders pursuant to this Offer Document.

Qualifying Shareholders who wish to participate in the offer of the Shortfall by applying for Shares above their Entitlement, should insert the number of additional Shares they wish to apply for in that section of the table in the Entitlement and Acceptance Form headed " Number of Shortfall Shares (if any) applied for in excess of the Entitlement shown above". Any additional Shares applied must be paid for in the same manner as the Entitlement Shares are paid for. A single payment should be made for the application monies for any Shares

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you have applied for as part of your Entitlement and any additional Shares applied for as part of the Shortfall. It is an express term of the offer of the Shortfall that applicants for Shares comprised in the Shortfall will be bound to accept a lesser number of additional Shares than applied for.

The Shortfall will be placed at the discretion of the Sub-Underwriter, and the Sub-Underwriter reserves the right to allot to an applicant a lesser number of the Shares comprising the Shortfall than the number for which the applicant applies or to reject an application. Qualifying Shareholders who apply for additional Shares in excess of their Entitlement receive no guarantee that they shall receive all or any of those additional Shares for which they apply. If a Qualifying Shareholder does not receive all or any of the additional Shares they apply for, any excess application monies will be returned to them (without interest).

The Directors reserve the right to place the balance of the Shortfall which is not placed to Qualifying Shareholders under the offer of the Shortfall made pursuant to this Offer Document and which is not taken up by the Underwriter and Sub-Underwriter within 3 months of the Closing Date at an issue price of not less than the issue price under this Offer, being $0.009 (0.9 cents) per Share.

2.9. EFFECT ON CONTROL

The potential effect that the issue of the new Shares under the Offer will have on the control of the Company is as follows:-

• (a) if all Qualifying Shareholders take up their Entitlement under the Offer in full, there will be no appreciable change in each Qualifying Shareholder’s voting power in the Company;

• (b) if some or all of the Qualifying Shareholders do not take up their Entitlements under the Offer:-

• (i) Qualifying Shareholders who have taken up their Entitlement in full, may apply for Shares forming part of the Shortfall (thus increasing their proportionate shareholding interest in the Company); and

• (ii) the Sub-Underwriter will be required to subscribe for Shares which make up the Shortfall up to a maximum of 166,666,667 Shares. The effect which the sub-underwriting may have on the Sub-Underwriter’s voting power in the Company is set out in section 2.6 of this Offer Document. As set out in that section 2.6, as a result of the sub-underwriting, the Offer may have a material affect on the control of the Company.

• (c) As the Offer is not being extended to Foreign Shareholders, Foreign Shareholders will have their voting power in the Company reduced.

2.10. WHAT QUALIFYING SHAREHOLDERS MAY DO

Qualifying Shareholders who wish to take up all or part of their Entitlement should:

• read this Offer Document in full and decide whether to participate;

• consider the risks associated with this Offer, as summarised in section 2.24, in light of the Qualifying Shareholders' personal circumstances;

• complete the enclosed Entitlement and Acceptance Form in accordance with the instructions set out in this section 2.10 and on the back of the form and deliver the Entitlement and Acceptance Form, with the appropriate payment, by no later than 5.00 pm WST on the Closing Date, to:

Eden Energy Ltd

c/- Advanced Share Registry Services

PO Box 1156, Nedlands WA 6909

OR

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Eden Energy Ltd

c/- Advanced Share Registry Services

Unit 2, 150 Stirling Highway

Nedlands WA 6009

Payment can be made by cheque, money order or BPay. Qualifying Shareholders who pay by cheque or money order must complete and return to the Company the Entitlement and Acceptance Form which was issued together with this Offer Document. A completed and lodged Entitlement and Acceptance Form, together with payment by cheque or money order for the number of Shares applied for, cannot be withdrawn and constitutes a binding application for the number of Shares specified in the Entitlement and Acceptance Form on the terms set out in this Offer Document. The Entitlement and Acceptance Form does not need to be signed to be binding. An Entitlement and Acceptance Form which does not specify an Australian or New Zealand address for service (or which is accompanied by payment drawn on a foreign bank account) may be rejected and returned unless Qualifying Shareholders provide evidence which satisfies the Company that the issue of the Shares will not contravene the laws of any other jurisdiction. If an Entitlement and Acceptance Form is not completed correctly the Company can reject it or treat it as valid. The Company’s decision as to whether to reject the Entitlement and Acceptance Form or treat it as valid and how to construe, amend or complete it is final.

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

Qualifying Shareholders who pay electronically (by BPay), do not need to return the Entitlement and Acceptance Form, as 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 Entitlement and Acceptance Form. If paying via BPay, Qualifying Shareholders should note that their own financial institution may implement earlier cut off times with regard to electronic payments. Qualifying Shareholders should take this into consideration to ensure payment is received before the Closing Date.

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 as that amount will pay for.

If Qualifying Shareholders tender an amount by cheque, money order or BPay which will pay for more Shares than their Entitlement, they will be deemed to have applied for additional Shares under the offer of the Shortfall to the extent of that excess.

Qualifying Shareholders who do not wish to take up any of their Entitlement do not need to take any action. If Qualifying Shareholders take no action, their Entitlement to the Shares will lapse at 5.00 pm on the Closing Date.

Qualifying Shares who wish to apply for additional Shares over their Entitlement, should there be a Shortfall, should refer to section 2.8.

No brokerage or stamp duty is payable by Qualifying Shareholders on the issue of the Shares.

2.11. CLOSING DATE

The Closing Date for the Offer is 5.00 pm WST on 28 September 2012. Subject to the Corporations Act and Listing Rules, the Directors may extend the Closing Date at any time prior to the Closing Date. The dates the Shares are expected to commence trading on ASX may vary with any change to the Closing Date.

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2.12. APPLICATION MONEY

Application money received for new Shares will be held in a separate account until those Shares are issued. Any interest earned on application money will be applied against the costs of the Offer, with any balance being retained by the Company. If the Offer does not proceed (for whatever reason), the application moneys will be returned without interest.

2.13. MINIMUM SUBSCRIPTION

There is no minimum subscription.

2.14. OVERSUBSCRIPTIONS

Oversubscriptions will not be accepted.

2.15. ISSUE OF NEW SHARES

The new Shares will be issued, and holding statements for the new Shares will be despatched, as soon as practicable after the Closing Date.

2.16. TERMS AND CONDITIONS OF NEW SHARES

On issue, the new Shares will rank equally with all other quoted Shares (ASX Code: EDE) then on issue. The rights and liabilities attaching to the new Shares are set out in the Constitution of the Company and in the Corporations Act.

2.17. TERMS AND CONDITIONS OF EXISTING LISTED OPTIONS

The existing listed Options (ASX Code: EDEO) have been issued on the following terms and conditions:

• Each Option may be exercised by the holder at any time prior to 5.00pm WST on 30 June 2014 (the Time of Expiry ). Any Options not exercised before the Time of Expiry will automatically lapse.

• The Options may be exercised wholly or in part by the optionholder completing a notice of exercise of Options in a form approved by the Company (a Notice of Exercise ) and delivering it, together with the appropriate payment, to the Company’s registered office at any time prior to the Time of Expiry.

• The Options entitle the holder to subscribe (in respect of each Option held) for one (1) Share at an exercise price per Option of $0.20.

• 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, and the Company will apply to ASX to have the Shares so issued granted official quotation.

• 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 it is received.

• 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 ten (10) Business Days before the record date (as defined in the Listing Rules to determine entitlements to the issue), to exercise Options.

• 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

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from time to time to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganization.

• The Options may be transferred at any time prior to the Time of Expiry.

• Shares issued pursuant to the exercise of an Option will be issued not more than fourteen (14) days after the Notice of Exercise and payment is received by the Company.

2.18. TERMS AND CONDITIONS OF EXISTING UNLISTED OPTIONS

In addition to the existing listed Options (ASX Code: EDEO), there are a further 4,966,250 Unlisted Options on issue to the directors of the Company and under the Company's ESOP. These Unlisted Options are exercisable at the following prices at any time on or before the following dates:

Number of Unlisted Options	Exercise Price	Exercise Date
281,250	$0.20	14 May 2014
500,000	$0.385	26 May 2013
185,000	$0.20	14 May 2013
4,000,000	$0.10625	20 November 2012

The Directors have also resolved to issue, after the Closing Date, up to 3,700,000 new options to a number of employees of the Company (and its subsidiaries) under, and on the terms and conditions set out in, the Company’s Employee Share Option Plan, which new options will be exercisable at a price of $0.025 at any time on or before 3 years after the date of their issue.

2.19. EXISTING OPTIONS

Holders of the existing listed Options and Unlisted Options may participate in this Offer by exercising any or all of their Options prior to the Record Date. As at the date of this Offer Document, there are a total of 74,607,213 Options (listed and unlisted) currently on issue (each entitling the holder to acquire 1 Share), of which 74,607,213 Options are currently capable of being exercised. If all of these Options were exercised before the Record Date, an additional 74,607,213 new Shares would be issued upon the exercise of these Options. In addition, in the event that all of the Entitlements in respect of these additional Shares were taken up, an additional 74,607,213 new Shares would be issued under this Offer, and a further $671,464.92 raised. However, in view of the current Share price of the Company's Shares, the Directors do no expect any of the existing Options (listed or unlisted) to be exercised prior to the Record Date.

2.20. ASX QUOTATION

The Company will apply to ASX to have the Shares to be issued under this Offer granted official quotation.

2.21. FOREIGN SHAREHOLDERS

The Company is of the view that it is unreasonable to extend this Offer to Foreign Shareholders having regard to the number of Foreign Shareholders, the number of Shares that would be offered to them and the costs of complying with the legal requirements, and requirements of regulatory authorities, of the foreign jurisdictions.

Accordingly this Offer is not extended to, and no Shares will be issued to, Foreign Shareholders and no Entitlement and Acceptance Form will be sent to Foreign Shareholders. However, in compliance with Listing Rule 7.7, the Company will send each Foreign Shareholder details of this Offer and advise them that the Company will not offer Shares to them.

2.22. DIRECTORS INTERESTS AND PARTICIPATION

Each Director's interest in the Shares of the Company at the date of this Offer Document and their Entitlement are set out in Table 1 below. Each Director has indicated that it is his present intention to subscribe for at least a majority of their Entitlement under this Offer.

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TABLE 1

		Directors	Directors
	Gregory Solomon	Douglas Solomon	Guy Le Page	Richard Beresford
Shares held New Shares offered under this Rights Issue (estimated) Maximum Shares held on completion of this Rights Issue (estimated)	5,701,415	4,739,700	-	1,000,000
	5,701,415	4,739,700	-	1,000,000
	11,402,830	9,479,400	-	2,000,000

*This assumes that the relevant Director does not exercise any Options held by that Director prior to the Record Date.

In addition, each Director also has an interest in the following listed Options and Unlisted Options on issue at the date of this Offer Document.

TABLE 2

		Directors	Directors
	Gregory Solomon	Douglas Solomon	Guy Le Page	Richard Beresford
Unlisted Options held Listed Options held	1,000,000	1,000,000	1,000,000	1,000,000
	1,587,255	1,388,398	-	-

As set out in section 2.6 above, this Offer has been partially sub-underwritten by Noble Energy Pty Ltd, a wholly owned subsidiary of Tasman Resources Ltd. Each Director's interest in the shares, and options, of Tasman Resources Ltd (whose interest in the Company may increase as a consequence of its wholly owned subsidiary partially underwriting this Offer) at the date of this Offer Document are set out in Table 3 below.

TABLE 3

Director	Shares Held	Percentage Held	Options Held	Percentage Held
Gregory Solomon	31,165,475	13.79%	1,000,000	15.62%
Douglas Solomon	30,659,960	13.57%	1,000,000	15.62%
Guy Le Page	1,784,821	0.79%	1,000,000	15.62%
Richard Beresford	-	-	-	-

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2.23. PRIVACY STATEMENT

By returning an Entitlement and Acceptance Form or making payment by BPay, you acknowledge that you have received and read this Offer Document.

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

The information included on the Entitlement and Acceptance Form is used for the purposes of processing the Entitlement and Acceptance Form and to administer the Qualifying Shareholder’s holdings of Shares. By submitting an Entitlement and Acceptance Form, Qualifying Shareholders agree that the Company may use the information provided by Qualifying Shareholders on the Entitlement and Acceptance Form for the purposes set out in this privacy statement and may disclose it for those purposes to the Company’s share registry and to the Company’s related bodies corporate, agents and contractors and third party service providers, including mailing houses, professional advisers (e.g. auditors, lawyers and accountants), intellectual technology support providers and to other regulatory authorities.

The Corporations Act requires the Company to include information about each Shareholder and optionholder (including name, address and details of the Shares 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 optionholders) and compliance by the Company with legal and regulatory requirements.

Under the Privacy Act 1988 (Cth) , Shareholders and optionholders 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 Qualifying Shareholders do not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process their Entitlement and Acceptance Form.

2.24. RISKS

Investing in additional Shares in the Company involves risk.

Until the Company is able to realise value from its projects or produce sufficient sales of its products to cover its full operating costs, will incur ongoing operating losses. The Company has limited working capital. The Company has secured the agreement of the Underwriter and Sub-Underwriter to partially underwrite this Offer to the extent of $1,500,000 which amount (when aggregated with the application monies which will be paid by Noble Energy Pty Ltd when it takes up its Entitlement in full) is the minimum amount the Company considers it requires to repay its existing indebtedness and have sufficient working capital for the next 6 months. Thus, 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 is unlikely to be able to achieve financial self sufficiency prior to this capital being exhausted and it anticipates that it will 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.

In addition to risks associated with the adequacy of the Company's working capital requirements, there are a number of risk factors, both specific to the Company and of a general nature, which may affect the future operating and financial performance of the Company and the value of an investment in the Company.

Risks specific to the Company include the Company's ability to successfully commercialise its technologies including Hythane®, OptiBlend® or the Company's pyrolysis technology which produces nano-carbon and

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hydrogen by-products from methane, its ability to secure and maintain appropriate patent protection, risks of breach of its existing patents or other intellectual property rights, competition it faces from competing technologies or products, the success of its exploration and development of the UK Petroleum licences in which the Company holds an interest, its title to, and conditions imposed on the exploration of such tenements including environmental conditions associated with hydraulic fracturing of the host rocks to extract the shale gas, commodity price volatility for hydrogen, carbon, methane or gas and exchange rate fluctuations, environmental protection and contamination, and fluctuations in its share price.

Risks of a general nature which affect the Company include the domestic and international factors affecting market conditions in equity, financial and commodity markets, economic conditions, interest rates, levels of tax, taxation law and accounting practice, governmental legislation or intervention, inflation, natural disasters or war. Some of these factors can be mitigated by appropriate commercial action. However, many are outside the control of the Company, are dependent on the policies adopted and approaches taken by regulatory authorities, or cannot otherwise be mitigated.

If you are unsure about subscribing for new Shares in the Company, you should first seek advice from your stockbroker, accountant, financial or other professional adviser.

The new Shares offered under this Offer Document carry no guarantee in respect of profitability, dividends, return of capital or the price at which they may trade on ASX. The past performance of the Company should not necessarily be considered a guide to the future performance of the Company.

As with any equity investment, substantial fluctuations in the value of your investment may occur. This Offer Document does not set out all the risks you may face in applying for, and holding, additional Shares in the Company.

2.25. DIVIDEND POLICY

The Company will not be in a position to declare any dividend until the Company makes a profit from its operations. There is no guarantee that this will occur. The Directors are not able to say when and if dividends will be paid in the future, as the payment of any dividends will depend upon the future profitability, financial position and cash requirements of the Company.

2.26. EXPENSES OF THE ISSUE

The total expenses of the Offer are estimated to be $130,000 (exclusive of any GST) comprising underwriting fees, legal fees, printing, postage, share registry costs and ASX quotation fees.

2.27. TAXATION

It is the responsibility of all Qualifying Shareholders to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the Shares. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers or advisers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in the Shares of the Company.

2.28. GOVERNING LAW

This Offer Document, the Offer and the contracts formed on the acceptance of applications are governed by the laws applicable in Western Australia. Each applicant submits to the exclusive jurisdiction of the Courts of Western Australia.

2.29. ENQUIRIES

If you have any questions concerning your Entitlement, please contact the Company (attention Aaron Gates) by telephone on (+618) 9282 5889 or facsimile on (+618) 9282 5866, or your professional adviser.

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3. DEFINITIONS

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as required by the context. ASX Listing Rules or Listing Rules means the Listing Rules of ASX .

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

Business Day has the meaning given to that term in the ASX Listing Rules.

Closing Date means 5.00 pm WST on 28 September 2012.

Company or Eden means Eden Energy Ltd (ACN 109 200 900).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company.

Dollars or $ means Australian dollars unless otherwise stated.

Entitlement means the maximum number of Shares you are entitled to apply for under the Offer as noted on the Entitlement and Acceptance Form.

Entitlement and Acceptance Form means the entitlement and acceptance form enclosed with this Offer Document.

ESOP means the Company's Employee Share Option Plan.

Foreign Shareholder means a person registered as a Shareholder as at the Record Date whose registered address is outside Australia or New Zealand.

Offer means the offer of Shares pursuant to this Offer Document .

Offer Document means this document for the issue of approximately 328,507,995 Shares.

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

Official List means the Official List of ASX.

Official Quotation means official quotation by ASX in accordance with the Listing Rules.

Opening Date means 12 September 2012.

Option means a (listed or unlisted) option to subscribe for a Share in the Company.

Qualifying Shareholders means all Shareholders as at 5.00pm WST on the Record Date and whose registered addresses are in Australia or New Zealand.

Record Date means the record date for determining entitlements to Shares offered under this Offer Document, which is 5.00 pm WST on 10 September 2012.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Shortfall means, if all Eligible Shareholders do not accept their Entitlement in full, those Shares under the Offer not accepted by Eligible Shareholders as part of their Entitlement by the Closing Date.

Sub Underwriter means Noble Energy Pty Ltd A.C.N. 115 057 586.

Sub- Underwriting Agreement has the meaning given to that term in section 2.6 of this Offer Document.

Underwriter means RM Corporate Finance Pty Ltd A.C.N.108 084 386.

Underwriting Agreement has the meaning given to that term in section 2.6 of this Offer Document.

Unlisted Options means the Options of the Company which are not admitted to Official Quotation by ASX as at the date of this Offer Document.

WST means Western Standard Time, Perth, Western Australia.

4. CORPORATE DIRECTORY

Directors:	Gregory H Solomon, LLB (Executive Chairman)
	Douglas H Solomon, B. Juris (Hons), LLB (Non-Executive Director)
	Guy T Le Page, B.A., B.Sc. (Hons), M.B.A., ASIA, MAusIMM (Non-Executive
	Director)
	Richard J Beresford FAICD FAIE (Non-Executive Director)
Company Secretary:	Aaron P Gates B.Com., CA, ACSA
Registered Office:	Level 15
	197 St Georges Terrace
	Perth
	Western Australia
	Tel: (+618) 9282 5889
	Fax: (+618) 9282 5866
	e-mail: mailroom@edenenergy.com.au
	website: www.edenenergy.com.au
Share Registry:	Advanced Share Registry Services
	Unit 2, 150 Stirling Highway
	Nedlands
	Western Australia
	Tel: (+618) 9389 8033
	Fax: (+618) 9389 7871
Solicitors to the Company:	Solomon Brothers
	Level 15
	197 St Georges Terrace
	Perth
	Western Australia
	Tel: (+618) 9282 5888
	Fax: (+618) 9282 5855