FIN RESOURCES LIMITED — AGM Information 2013

Oct 24, 2013

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Orca Energy Limited ABN 25 009 121 644

Notice of Annual General Meeting

TIME: 9:30am (WST) DATE: 28 November 2013 PLACE: 35 Richardson Street, West Perth, Western Australia

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 9488 5220.

Contents Page

Business of the Meeting (setting out proposed resolutions)	1
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	16
Schedule A – Option Terms and Conditions	17
Schedule B – Valuation of Related Party Options	19
Proxy Form

Important Information

Time and Place of Meeting

Notice is given that the Annual General Meeting of Shareholders of Orca Energy Limited which this Notice of Meeting relates to will be held on 28 November 2013 at 9:30am (WST) at:

35 Richardson Street

West Perth Western Australia

Your Vote Is Important

The business of the Annual General Meeting affects your shareholding and your vote is important.

Voting Eligibility

The Directors have determined pursuant to Regulation 7.11.37 of Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders at 5:00pm (WST) on 26 November 2013.

Voting in Person

To vote in person, attend the Annual General Meeting on the date and at the place set out above. The meeting will commence at 9:30am (WST).

Voting by Proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by 9:30am (WST) on 26 November 2013 and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company; and

• a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one‐half of the votes.

Members and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Notice of Meeting

Page 1

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non‐chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

Notice of Meeting

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Orca Energy Limited ABN 25 009 121 644

Business of the Meeting

Notice is given that the Annual General Meeting of Shareholders of Orca Energy Limited will be held at 35 Richardson Street, West Perth, Western Australia at 9:30am (WST) on 28 November 2013 ( General Meeting ).

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company as at 5:00pm on 26 November 2013.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the glossary or in the Explanatory Statement.

Agenda

The Explanatory Statement to this Notice of Meeting describes the matters to be considered at the Annual General Meeting.

Financial Statements and Reports

To receive and consider the Annual Financial Report of the Company for the financial year ended 30 June 2013 together with the declaration of the directors, the director’s report, the Remuneration Report and the auditor’s report.

Non‐Binding Business

Resolution 1 – Adoption of Remuneration Report (Non‐Binding)

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non‐binding resolution :

“That for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given to the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2013.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Short Explanation: The Corporations Act provides that a resolution in respect of the adoption of the remuneration report must be put to vote at a listed company’s annual general meeting. The vote on this resolution is advisory only and does not bind the Directors or the Company. Shareholders are encouraged to read the Explanatory Memorandum for further details on the consequences of voting on this Resolution.

Short Explanation:The Corporations Act provides that a resolution in respect of the adoption of the remuneration report must be put to vote at a listed company’s annual general meeting. The vote on this resolution is advisory only and does not bind the Directors or the Company. Shareholders are encouraged to read the Explanatory Memorandum for further details on the consequences of voting on this Resolution.	Short Explanation:The Corporations Act provides that a resolution in respect of the adoption of the remuneration report must be put to vote at a listed company’s annual general meeting. The vote on this resolution is advisory only and does not bind the Directors or the Company. Shareholders are encouraged to read the Explanatory Memorandum for further details on the consequences of voting on this Resolution.
Voting Exclusion: A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons:
(a)	a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
(b)	a Closely Related Party of such a member.
However, a person (the voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person
described above and either:
(a)	the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or
(b)	the voter is the Chair and the appointment of the Chair as proxy:
	(i) does not specify the way the proxy is to vote on this Resolution; and
	(ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or
	indirectlywith the remuneration of a member of the KeyManagement Personnel.

Notice of Meeting

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Ordinary Business

Resolution 2 – Re‐Election of Mr Jason Bontempo

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“To elect Mr Bontempo as a director of the Company who retires by rotation pursuant to the Constitution of the Company and being eligible offers himself for re‐election.”

Short Explanation: In accordance with ASX Listing Rule 14.4 (rotation of directors) and the Company’s Constitution, one third of the Directors must retire by rotation at every Annual General Meeting. Accordingly, Mr Bontempo retires by rotation and being eligible for re‐election, offers himself for re‐election at the Meeting.

Resolution 3 – Issue of Corporate Advisory Options

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

• “That for the purposes of Listing Rule 7.1 of the ASX Listing Rules and for all other purposes, approval is given for the Company to issue 10,500,000 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Max Capital Pty Ltd (or its nominee) and of their associates. However, the Company need not disregard a vote if:

• (a) it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directors on the proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 4 – Issue of Options to Related Parties

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

• “That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules, section 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 10,000,000 Options to Mr Greg Bandy (or his nominees) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who participated in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed and any associates of those persons. However, the Company need not disregard a vote if:

• (a) it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directors on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

• Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member.

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (a) the proxy is the Chair; and

• (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Notice of Meeting

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Resolution 5 – Issue of Options to Related Parties

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules, section 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 5,000,000 Options to Mr Jason Bontempo (or his nominees) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who participated in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed and any associates of those persons. However, the Company need not disregard a vote if:

(a) it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directors on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member.

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

• However, the above prohibition does not apply if: (a) the proxy is the Chair; and

• (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Resolution 6– Issue of Options to Related Parties

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules, section 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 2,500,000 Options to Mr Jeremy King (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who participated in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed and any associates of those persons. However, the Company need not disregard a vote if:

• (c) it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directors on the proxy form; or (d) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

• Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member.

• (b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:

• (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Notice of Meeting

Page 5

Special Business

Resolution 7 – Approval of 10% Placement Capacity

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution :

“That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Dated this 17[th] day of October 2013

By order of the Board

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Greg Bandy Executive Director

Notes:

A shareholder of the Company entitled to attend and vote is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the shareholder’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes. A proxy need not be a shareholder of the Company.

For the purposes of the Corporations Regulations, the Directors have set a snapshot date to determine the identity of those entitled to attend and vote at the Meeting. The snapshot date is 5:00pm (WST) on 26 November 2013. Accordingly, transactions registered after this time will be disregarded in determining entitlements to attend and vote at the meeting.

Enquiries:

Shareholders are invited to contact the Company on +61 8 9488 5220 if they have any queries in respect of the matters set out in these documents.

Notice of Meeting

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Explanatory Statement

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the Annual General Meeting to be held at 9:30am (WST) on 28 November 2013 at 35 Richardson Street, West Perth, Western Australia.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

This Explanatory Statement is an important document and should be read carefully in full by all Shareholders. If you have any questions regarding the matters set out in this Explanatory Statement or the preceding Notice, please contact the Company, your stockbroker or other professional adviser.

1. Financial Statements and Reports

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2013 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at www.orcaenergy.com.au

2. Resolution 1 – Adoption of Remuneration Report (Non‐Binding Resolution)

2.1 General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the company for a financial year.

The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

2.2 Voting consequences

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re‐election at the Spill Meeting.

Following the Spill Meeting those persons whose election or re‐election as directors of the company is approved will be the directors of the company.

Notice of Meeting

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2.3 Previous voting results

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.

2.4 Proxy Restrictions

Shareholders appointing a proxy for this Resolution should note the following:

If you appoint a member of the Key Management Personnel (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member as your proxy

You must direct your proxy how to vote on this Resolution. Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.

If you appoint the Chair as your proxy (where he/she is also a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member).

You do not need to direct your proxy how to vote on this Resolution. However, if you do not direct the Chair how to vote, you must mark the acknowledgement on the Proxy Form to expressly authorise the Chair to exercise his/her discretion in exercising your proxy even though this Resolution is connected directly or indirectly with the remuneration of Key Management Personnel.

If you appoint any other person as your proxy

You do not need to direct your proxy how to vote on this Resolution, and you do not need to mark any further acknowledgement on the Proxy Form.

3. Resolution 2 – Re‐Election of Mr Jason Bontempo

In accordance with ASX Listing Rule 14.4, no director of the Company may hold office (without re‐election) past the longer of 3 years and the third Annual General Meeting following their appointment. Further, in accordance with the Company’s Constitution, at every Annual General Meeting, one third of the Directors for the time being must retire from office and are eligible for re‐election. Accordingly, Mr Bontempo retires and being eligible for re‐election, offers himself for re‐election at the Meeting.

Mr Bontempo has worked in investment banking and corporate advisory since qualifying as a chartered accountant with Ernst & Young in 1997. Mr Bontempo has worked for investment banks in Australia and the UK and has been closely involved with the advising and financing of companies in the resources industry specialising in asset sales and AIM / ASX listings.

4. Resolution 3 – Issue of Corporate Advisory Options

4.1 Background

Resolution 3 seeks Shareholder approval for the issue of 10,500,000 Options to the Company’s corporate advisors.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 3 will be to allow the Company to issue the Options during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

For the purposes of ASX Listing Rule 7.3, the following information is provided in relation to Resolution 3:

• (a) the maximum number of Options to be issued is 10,500,000;

Notice of Meeting

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• (b) the Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Options will occur on the same date;

• (c) the Options will be issued for nil cash consideration;

• (d) the Options will be issued to:

• 7,500,000 options to Max Capital Pty Ltd or its nominees;

• 1,000,000 options to Rebecca Sandford or her nominee;

• 1,000,000 options to Shannon Robinson or her nominee; and

• 1,000,000 options to Sara Kelly or her nominee.

The above parties act as corporate advisors to the Company and joint company secretaries but are not considered to be a related party;

• (e) the Options will be issued on the terms and conditions set out in Schedule A; and

• (f) no funds will be raised by the issue of the Options (although funds will be raised to the extent that the Options are eventually exercised, with any such funds to be used for working capital purposes of the Company).

A voting exclusion statement is included in the Notice.

5. Resolutions 4, 5 and 6 – Issue of Options to Related Parties

5.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue a total of 17,500,000 Options ( Related Party Options ) to Messrs Bandy, Bontempo and King ( Related Parties ) on the terms and conditions set out below.

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of the Related Party Options constitutes giving a financial benefit and Messrs Bandy, Bontempo and King are related parties of the Company by virtue of being Directors.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Related Party Options to the Related Parties.

5.2 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of section 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Related Party Options:

• (a) the related parties are Messrs Bandy, Bontempo and King and they are related parties by virtue of being directors of the Company;

• (b) the maximum number of Related Party Options (being the nature of the financial benefit being provided) to be granted to the Related Parties is:

Notice of Meeting

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• (i) 10,000,000 Related Party Options to Mr Greg Bandy or his nominee;

• (ii) 5,000,000 Related Party Options to Mr Jason Bontempo or his nominee; and

• (iii) 2,500,000 Related Party Options to Mr Jeremy King or his nominee;

• (c) the Related Party Options will be granted to the Related Parties no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Related Party Options will be issued on one date;

• (d) the Related Party Options will be granted for nil cash consideration, accordingly no funds will be raised;

• (e) the terms and conditions of the Related Party Options are set out in Schedule A;

• (f) the value of the Related Party Options and the pricing methodology is set out in Schedule B;

• (g) the relevant interests of the Related Parties in securities of the Company are set out below:

Related Party	Shares	Options
Mr GregBandy	‐	‐
Mr Jason Bontempo	‐	‐
Mr JeremyKing	50,000	‐

• (h) the remuneration and emoluments from the Company to the Related Parties for the previous financial year and the proposed remuneration and emoluments for the current financial year are set out below:

Related Party	Current Financial Year(2014)	Previous Financial Year(2013)
Mr GregBandy	$130,800	$138,838
Mr Jason Bontempo	$39,240	$50,485
Mr JeremyKing	$39,240	$40,705

• (i) if the Related Party Options granted to the Related Parties are exercised, a total of 17,500,000 Shares would be issued. This will increase the number of Shares on issue from 460,033,775 to 477,533,775 (assuming that no other Options are exercised, no other Shares are issued and that the 115,000,000 shares held by Senex Energy Limited are cancelled pursuant to the sale agreement as announced to the ASX on 13 June 2013 and details of which were included in the Notice of Meeting dated 8 July 2013) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 5.74%, comprising 3.28% by Mr Bandy, 1.64% by Mr Bontempo and 0.82% by Mr King.

The market price for Shares during the term of the Related Party Options would normally determine whether or not the Related Party Options are exercised. If, at any time any of the Related Party Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Related Party Options, there may be a perceived cost to the Company.

• (j) the trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

	Price	Date
Highest	$0.037 cents	18 October 2012
Lowest	$0.014 cents	8, 9, 30 & 31 July 2013, 1, 2, 5 & 6 August 2013
Last	$0.019 cents	16 October 2013

(k) the Board acknowledges the grant of Related Party Options to Messrs Bandy, Bontempo and King is contrary to Recommendation 8.3 of The Corporate Governance Principles and Recommendations with 2010 Amendments (2nd Edition) as published by The ASX Corporate Governance Council. However, the Board considers the grant of Related Party Options to Messrs Bandy, Bontempo and King reasonable in the circumstances for the reason set out in paragraph (m);

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• (l) the primary purpose of the grant of the Related Party Options to the Related Parties is to provide a performance linked incentive component in the remuneration package for the Related Parties to motivate and reward the performance of the Related Parties in their respective roles as Directors;

• (m) Mr Bandy declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Party Options in the Company should Resolution 4 be passed. However, in respect of Resolutions 5 and 6, Mr Bandy recommends that Shareholders vote in favour of those Resolutions for the following reasons:

• (i) the grant of Related Party Options to the Related Parties, in particular, the vesting conditions of the Related Party Options, will align the interests of the Related Parties with those of Shareholders;

• (ii) the grant of the Related Party Options is a reasonable and appropriate method to provide cost effective remuneration as the non‐cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Related Parties; and

• (iii) it is not considered that there are any significant opportunity costs to the Company or foregone by the Company in granting the Related Party Options upon the terms proposed;

• (n) Mr Bontempo declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Party Options in the Company should Resolution 5 be passed. However, in respect of Resolutions 4 and 6, Mr Bontempo recommends that Shareholders vote in favour of those Resolutions for the reasons set out in paragraph (m);

• (o) Mr King declines to make a recommendation to Shareholders in relation to Resolution 6 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Party Options in the Company should Resolution 6 be passed. However, in respect of Resolutions 4 and 5, Mr King recommends that Shareholders vote in favour of those Resolutions for the reasons set out in paragraph (m);

• (p) in forming their recommendations, each Director considered the experience of each other Related Party, the current market price of Shares, the current market practices when determining the number of Related Party Options to be granted as well as the exercise price ($0.03) and expiry date of those Related Party Options; and

• (q) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolutions 4 to 6.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Related Party Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Related Party Options to the Related Parties will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

6. Resolution 7 – Approval of 10% Placement Capacity

6.1 General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital ( 10% Placement Capacity ).

The Company is an Eligible Entity.

If Shareholders approve Resolution 7, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out below).

The effect of Resolution 7 will be to allow the Company to issue Equity Securities up to 10% of the Company’s fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company’s 15% annual placement capacity granted under Listing Rule 7.1.

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Resolution 7 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 7 for it to be passed.

6.2 ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity’s 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant annual general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of approximately $9.8 million.

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of listed Equity Securities on issue, being the Shares (ASX Code: OGY).

The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula:

(A x D) – E

Where:

• A is the number of Shares on issue 12 months before the date of issue or agreement:

• (i) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

• (ii) plus the number of partly paid shares that became fully paid in the previous 12 months;

• (iii) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rules 7.1 and 7.4; and

• (iv) less the number of Shares cancelled in the previous 12 months.

• D is 10%.

• E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.

6.3 Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 5:

• (a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

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• (ii) if the Equity Securities are not issued within 5 ASX trading days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting; and

• (ii) the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking) (after which date, an approval under Listing Rule 7.1A ceases to be valid).

• (c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 7 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

		Dilution
Number of Shares on Issue	Issue Price (per Share)	0.95c (50% decrease in Issue Price)	1.9 (Issue Price)	3.8c (100% increase in Issue Price)
460,033,775 (Current)	Shares issued	46,003,378 Shares	46,003,378 Shares	46,003,378 Shares
	Funds raised	$437,032	$874,064	$1,748,128
690,050,663 (50% increase)	Shares issued	69,005,066 Shares	69,005,066 Shares	69,005,066 Shares
	Funds raised	$655,548	$1,311,096	$2,622,192
920,067,550 (100% increase)	Shares issued	92,006,755 Shares	92,006,755 Shares	92,006,755 Shares
	Funds raised	$874,064	$1,748,128	$3,496,257

• The number of Shares on issue could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro‐rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

1. There are currently 460,033,775 Shares on issue (assuming that no other Options are exercised, and no other Shares are issued and that the 115,000,000 shares held by Senex Energy Limited are cancelled pursuant to the sale agreement as announced to the ASX on 13 June 2013 and details of which were included in the Notice of Meeting dated 8 July 2013) .

2. The issue price set out above is the closing price of the Shares on the ASX on 16 October 2013.

3. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.

4. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

5. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

6. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

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Shareholders should note that there is a risk that:

• (i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

• (d) Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:

• (i) as cash consideration in which case the Company intends to use funds raised for working capital, for existing projects, for business development opportunities or potential acquisitions; or

• (ii) as non‐cash consideration for business development opportunities or potential acquisitions, in such circumstances the Company will provide a valuation of the non‐cash consideration as required by listing Rule 7.1A.3.

• (e) Allocation under the 10% Placement Capacity

The Company’s allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).

The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

• (i) the purpose of the issue;

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

Further if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.

• (f) Previous Approval under ASX Listing Rule 7.1A

The Company has previously obtained approval from its Shareholders pursuant to ASX Listing Rule 7.1A at its annual general meeting held on 15 November 2012 ( Previous Approval ).

The Company has not issued any Equity Securities pursuant to the Previous Approval. During the 12 month period preceding the date of the Meeting, being on and from 15 November 2012, the Company has not issued any Equity Securities.

• (g) Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A

When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it will give to ASX:

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• (i) a list of the recipients of the Equity Securities and the number of Equity Securities issued to each (not for release to the market), in accordance with Listing Rule 7.1A.4; and

• (ii) the information required by Listing Rule 3.10.5A for release to the market.

6.4 Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 7.

Responsibility for Information

The information concerning the Company contained in this Explanatory Statement, including information as to the views and recommendations of the Directors has been prepared by the Company and is the responsibility of the Company.

The Explanatory Statement does not take into account the individual investment objectives, financial situation and particular needs of individual Shareholders. If you are in doubt as to what you should do, you should consult your legal, financial or professional advisor prior to voting.

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Glossary

In this Explanatory Statement, the following terms have the following unless the context otherwise requires:

10% Placement Capacity has the meaning given in section 6.1 of the Explanatory Statement.

ASIC means Australian Securities Investment Commission.

ASX means ASX Limited ABN 98 008 624 691.

ASX Listing Rules or Listing Rules means the listing rules of ASX.

Board means the board of Directors of the company.

Chairman means the Chairman of the Company.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company means Orca Energy Limited ABN 25 009 121 644.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Eligible Entity means an entity that, at the date of the relevant general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Ordinary Securities has the meaning set out in the ASX Listing Rules.

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2013.

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

Shareholder means a shareholder of the Company.

Variable A means “A” as set out in the calculation in section 6.1 of the Explanatory Statement.

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Schedule A – Option Terms and Conditions

The full details of the terms and conditions of the Options are set out below.

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

• (b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.03 ( Exercise Price ).

(c) Expiry Date

Each Option will expire at 5.00pm (WST) on 31 December 2015 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

• (g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

• (i) the Exercise Date; and

• (ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

• (iii) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (iv) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(iv) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

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(i) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(l) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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Schedule B – Valuation of Related Party Options

The Related Party Options to be issued to the Related Parties pursuant to Resolutions 4, 5 and 6 have been valued by internal management.

Using the Black & Scholes option model and based on the assumptions set out below, the Related Party Options were ascribed the following value:

ascribed the following value:
Assumptions:
Valuation date	15 October 2013
Market price of Shares	2 cents
Exercise price	3 cents
Expiry date (length of time from issue)	25 months
Risk free interest rate	2.69%
Volatility (discount)	106.2%
Indicative value per Related Party Option	1 cents
Total Value of Related Party Options	$167,408
‐ Mr Greg Bandy	$95,662
‐ Mr Jason Bontempo	$47,831
‐ Mr Jeremy King	$23,915

Note: The valuation noted above is not necessarily the market price that the Related Party Options could be traded at and is not automatically the market price for taxation purposes.

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