EDEN INNOVATIONS LTD — Share Issue/Capital Change 2006

Jun 1, 2006

EDEN ENERGY LTD

ACN 109 200 900

(INCORPORATED IN WESTERN AUSTRALIA) REGISTERED OFFICE: LEVEL 40, EXCHANGE PLAZA, 2 THE ESPLANADE, PERTH

Option Terms and Conditions

• $i)$ The Options are exercisable at any time prior to 5.00pm WST 30 September 2009 ("the Expiry Date"). Options not exercised on or before the Expiry Date will automatically lapse.
• The Options may be exercised wholly or in part by completing a notice of exercise of options substantially ii) in the form attached ("Notice of Exercise") to be delivered to the Company's Registered Office and received by it any time prior to the Expiry Date.
• The Options entitle the holder to subscribe (in respect of each Option held) for a share ("Share") at an iii) exercise price per Option of 20 cents.
• Upon the exercise of the Options and receipt of all relevant documents and payment, shares will be issued $iv)$ ranking pari passu with the then issued shares. If at the date of exercise of the Options the shares of the Company are quoted on the Australian Stock Exchange ("ASX") the Company will apply to ASX to have the Shares granted Official Ouotation.
• A summary of the terms and conditions of the Options including the Notice of Exercise is sent to all $V)$ holders of Options when the Options are issued.
• vil Any Notice of Exercise received by the Company on or prior to the Expiry Date will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received.
• There are no participating entitlements inherent in the Options to participate in new issues of capital, vii) 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 (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 viii) capital of the Company prior to the Expiry Date 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 as required by Listing Rule 6.16.
• The Options may be transferred at any time prior to the Expiry Date. $ix)$
• Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the Notice x) of Exercise.