FITZROY RIVER CORPORATION LTD — AGM Information 2010

Oct 26, 2010

European Gas Limited

ACN 075 760 655

NOTICE OF ANNUAL GENERAL MEETING EXPLANATORY MEMORANDUM

PROXY FORM

Date of Meeting: 26 November 2010 Time of Meeting: 11.00am WST Place of Meeting: Duxton Hotel 1 St Georges Terrace PERTH, WESTERN AUSTRALIA

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European Gas Limited

ACN 075 760 655

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of shareholders of European Gas Limited ACN 075 760 655 ( Company ) will be held in the Duxton Hotel, 1 St Georges Terrace, Perth Western Australia, on 26 November 2010 at 11.00am WST.

The Explanatory Memorandum which accompanies and forms part of this Notice of Meeting ( Notice ):

• provides additional information concerning matters to be considered at the annual general meeting; and

• contains a glossary of defined terms used in this Notice and in the Explanatory Memorandum.

AGENDA

ANNUAL REPORT

To receive and consider the Financial Report together with the Directors' Report (including the Remuneration Report) and Auditor's Report for the financial year ended 30 June 2010.

RESOLUTIONS

To consider, and if thought fit, to pass, the following resolutions:

1. Adoption of Remuneration Report for the year ended 30 June 2010

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

"That for the purpose of section 250R(2) of the Corporations Act and for all other purposes, the Remuneration Report for the financial year ended 30 June 2010 be adopted."

2.

Re‐election of Mr Julien Moulin as a director of the Company

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

"That Mr Julien Moulin, retiring in accordance with Rule 7.3(a) of the Constitution and, being eligible, offers himself for re‐election, be re‐elected as a director of the Company."

3. Ratification of prior issue of equity securities to refresh the Company's Placement Capacity

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, the issue of 25,000,000 options over Shares, details of which are outlined in the explanatory memorandum, is ratified.”

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Voting exclusion statement

The Company will disregard any votes cast on resolution three by any person who participated in the issue and any associate of that person (or those persons).

However, the Company will not disregard a vote if:

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

4. Approval of shares to be issued

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

"That pursuant to Listing rule 7.1, approval be given to issue a maximum of 100,000,000 shares in the capital of the Company, by way of one or more placements at such price and terms as outlined in the explanatory memorandum."

Voting exclusion statement

The Company will disregard any votes cast on resolution four by any person who may participate in the proposed issue and any 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 of their associates.

However, the Company will not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions 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.

5.

Approval of the Chief Executive Officer's options

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

" That, for the purposes of Listing Rule 10.11 and for all other purposes, approval be given to the grant of up to 14,500,000 options to Mr Peter Cockcroft (or his nominee) on the terms outlined in the explanatory memorandum ."

Voting Exclusion

The Company will disregard any votes cast on resolution five by or on behalf of Mr Cockcroft (or any of his associates).

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However, the Company will not disregard a vote if:

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

BY ORDER OF THE BOARD

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Mark Pitts Company Secretary 27 October 2010

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PROXY INSTRUCTIONS

A proxy form is attached to this Notice. Shareholders are advised that:

• each shareholder has a right to appoint a proxy to attend and vote for them;

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

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

The shareholder may specify the manner in which the proxy is to vote on each resolution or may allow the proxy to vote at his or her discretion.

In accordance with section 250BA of the Corporations Act, the Company specifies that the proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be:

• posted or delivered to the Company’s Share Registry:

• Computershare Investor Services Pty Limited

• GPO Box 242 Melbourne, Victoria 3001 Australia.

• sent by facsimile to:

• (within Australia) 1800 783 447

• (outside Australia) +61 3 9473 2555

Those documents must be received by the Company at least 48 hours before the time for holding the annual general meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the shareholder or his/her attorney duly authorised in writing or, if the shareholder is a body corporate, in a manner permitted by the Corporations Act. In the case of Shares jointly held by two or more persons, at least one joint holder must sign the proxy form.

VOTING ENTITLEMENT

For the purposes of determining voting entitlements at the annual general meeting, Shares will be taken to be held by the persons who are registered as holding the Shares at 5.00pm (Perth time) on 24 November 2010 . Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the annual general meeting.

GLOSSARY

Words which are defined in the Explanatory Memorandum have the same meaning when used in this Notice unless the context requires otherwise. For assistance in considering the Notice, the following words are defined here:

Board means the board of directors of the Company.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Rule means a rule of the Constitution.

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European Gas Limited

ACN 075 760 655

EXPLANATORY MEMORANDUM

This explanatory memorandum is intended to provide shareholders with sufficient information to assess the merits of the resolutions contained in the accompanying Notice.

The directors recommend that shareholders read this explanatory memorandum in full before deciding how to vote on the resolutions.

The following information should be noted in respect of the various matters contained in the accompanying notice of annual general meeting:

Annual Report

Section 317 of the Corporations Act requires the directors to lay before the annual general meeting the financial report, the directors' report (including the remuneration report) and the auditor's report for the last financial year that ended before the annual general meeting.

The Company's 2010 annual report is available at www.europeangas.fr. Those holders that elected to receive a printed copy of the annual report will have received a copy with this Notice.

In accordance with sections 250S and 250SA of the Corporations Act, shareholders will be provided with a reasonable opportunity to ask questions or make statements in relation to the management of the Company and the remuneration report but no formal resolution to adopt the reports will be put to shareholders at the annual general meeting.

In accordance with section 250T of the Corporations Act, the chairman of the annual general meeting will allow a reasonable opportunity for the shareholders as a whole to ask the auditor questions at the annual general meeting about:

(a) the conduct of the audit;

(b) the preparation and content of the auditor's report;

(c) the accounting policies adopted by the Company in relation to the preparation of the financial statements; and

(d) the independence of the auditor in relation to the conduct of the audit.

Resolution 1 ‐ Adoption of Remuneration Report for the year ended 30 June 2010

Section 300A of the Corporations Act specifies certain information be included in the remuneration report of the Company's annual report. Section 250R(2) of the Corporations Act requires that a resolution that the remuneration report be adopted be put to a vote of shareholders at the Company's annual general meeting. The vote on this resolution is advisory to the Company only and does not bind the directors.

The remuneration report is set out in the directors’ report within the financial report of the Company for the year ended 30 June 2010.

Under section 250SA of the Corporations Act, shareholders will be given a reasonable opportunity to ask questions about, or make comments on, the remuneration report. This is in addition to any questions or comments that shareholders may have in relation to the management of the Company.

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Re‐election of Mr Julien Moulin as a director of the Company

In accordance with Rule 7.3(a) of the Constitution, Mr Julien Moulin retires as a director and, being eligible, offers himself for re‐election as a director.

Though each of Mr Moulin, Mr Sebastien Hempel and Mr Rod Bresnehan were all appointed on the same day and were eligible to retire under the constitution, only one director was required to retire and Mr Moulin volunteered.

Details of director standing for election

Mr Julien Moulin (independent non‐executive director)

Mr Moulin is co‐founder of Maoming Investment Manager Ltd ( Maoming ), an investment management company investing globally in listed and unlisted companies with a significant focus on China. He has served as managing partner of Maoming since February 2006. Maoming is a substantial holder in the Company that, on 31 August 2010, gave notice to the Company that it held 21.31% of the voting power in the Company.

Prior appointments include:

• (a) investment adviser at the Global China Fund, a European‐based investment fund;

• (b) an investment manager at SKI Capital, a London‐based market neutral fund; and

• (c) investment analyst at UBS Global Asset Management in charge of the European telecommunications sector.

Mr Moulin holds a BA in Economics and Business Sciences (Hons) from Sorbonne University and a Masters Degree in Asset Management and Financial Markets (Hons) from the University of Paris‐ Dauphine.

Mr Moulin has served on the boards of several listed and unlisted companies and is currently on the board of Envision Energy, a leading Chinese wind turbine manufacturer and Legend Media Inc, a Chinese media company listed in the United States.

The directors (with Mr Moulin abstaining) recommend that you vote in favour of this resolution.

Resolution 3 – Ratification of prior issue of equity securities to refresh the Company's Placement Capacity

On 31 March 2010, the Company announced to ASX that it had entered into an agreement to borrow A$2.5 million interest free from a high net worth private investor (a client of a European private bank) ( Loan ) in order to assist the Company with working capital requirements.

As consideration for making the Loan, the Company agreed to grant the lender 25,000,000 short‐ dated options to acquire ordinary shares in the Company ( Options ). The Options had an expiry date of 31 March 2011 and an exercise price of A$0.18, or A$0.12 if exercised on or before 30 September 2010.

All Options were exercised before 30 September 2010 at A$0.12 per Option.

The Option grant was within the Company’s 15% existing placing facility provided in ASX Listing Rule 7.1 ( Placement Capacity ).

Listing Rule 7.1 provides that without Shareholder approval, a company must not issue or agree to issue new equity securities constituting more than 15% of its total issued capital within a 12 month period (excluding any issue of equity securities approved by Shareholders and other various permitted exceptions which are not relevant for current purposes).

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Listing Rule 7.4 allows an issue of securities made without the approval of shareholders to be ratified by shareholders, in order to refresh the Placement Capacity, provided that, at the time the issue was made, the issue was made within the Company’s existing Placement Capacity.

Shareholder approval is now sought in accordance with Listing Rule 7.4 to ratify the grant of the Options so that the Company refreshes its Placement Capacity to issue up to 15% of its issued ordinary capital, if required, in the next 12 months without first requiring shareholder approval for those future issues.

Listing Rule 7.5 requires that the following information be provided to shareholders for the purpose of obtaining shareholder approval pursuant to Listing Rule 7.4:

• (a) the total number of equity securities granted was 25,000,000 Options;

• (b) the Options were granted with an exercise price of A$0.18, or A$0.12 if exercised before 30 September 2010;

• (c) the Shares issued on the exercise of the Options rank equally with existing shares on issue;

• (d) the shares were issued to Ocean Dome Corporation; and

• (e) the funds raised were used for additional working capital purposes including administration and interest expenses and for exploration, drilling and capital works at the Company’s hydrocarbon exploration and production operations in France and elsewhere in Europe.

The Directors recommend that you vote in favour of this resolution.

Resolution 4 ‐ Approval of shares to be issued

Background

Listing Rule 7.1 provides that (subject to certain exceptions) prior approval of shareholders is required for the issue of securities if the securities will, when aggregated with the securities issued by the Company during the previous 12 months, exceed the Placement Capacity.

Resolution 4 proposes approval for the issue of Shares on the terms set out below, for the purpose of satisfying Listing Rule 7.1.

ASX Listing Rules

In accordance with Listing Rule 7.3, the following information is provided in relation to resolution 4.

If approval is obtained:

• (a) up to 100,000,000 shares may be issued;

• (b) the shares will be issued no later than three months after the date of the annual general meeting relating to the financial year ended 30 June 2010;

• (c) the shares will be issued for a minimum price that is at least 80% of the volume weighted average market price for the shares, calculated over the last 5 days on which sales in the shares were recorded before the date on which the issue is to be made;

• (d) the shares will be issued to 'sophisticated' and 'professional' investors (as defined in the Corporations Act) or on a prospectus‐exempt basis to persons outside Australia;

• (e) the shares will rank equally in all respects with the Company’s existing ordinary shares on issue;

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• (f) funds raised by the issue of shares will be used to fund the Company’s exploration and development projects in the next year or for working capital purposes or to satisfy existing company liabilities; and

• (g) allotment of the shares may occur progressively over the three month period after the date of the annual general meeting relating to the financial year ended 30 June 2010.

It is the directors' intention that shares issued subject to this approval (if any) will be issued at the highest price that the market allows.

Resolution 5 ‐ Approval of the Chief Executive Officer's options

Background

On 9 July 2010, the Company announced to ASX the key terms of the CEO executive remuneration package of Mr Peter Cockcroft. The key terms of the agreement were as follows:

• (a) the engagement is for a two year term commencing 15[th] July 2010;

• (b) remuneration comprises an annual base salary of USD $200,000 until the end of December 2010 and a minimum annual base salary of USD $300,000 starting 1 January 2011;

• (c) the annual base salary is inclusive of statutory superannuation (in accordance with Australian law);

• (d) normal statutory employee entitlements will accrue; and

• (e) the engagement may be terminated on three months' notice by either the Company or Mr Cockcroft, for other than termination due to misconduct.

In addition to the above terms, the directors resolved to grant Options to Mr Cockcroft as an equity participation incentive.

Listing Rules requirements

ASX Listing Rule 10.11 requires a company to obtain shareholder approval by ordinary resolution prior to the issue of securities to a director of the Company.

Shareholder approval is now sought in accordance with Listing Rule 10.11 for the grant of Options to Mr Cockcroft.

Listing Rule 10.13 requires that the following information be provided to shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 10.11:

• (a) Mr Peter Cockcroft is being granted the Options.

• (b) The maximum number of Options to be granted is 14,500,000. This is broken into three tranches.

• (c) The Options will be granted no later than one month after the date of the annual general meeting relating to the year ended 30 June 2010.

• (d) The option fee is nil and the Options vest as follows:

Tranche one is comprised of 1,500,000 Options with an expiry date of 31 December 2011 and an exercise price of A$0.35.

Tranche two is comprised of 3,000,000 Options with an expiry date of 31 December 2011 and an exercise price of A$0.50.

Tranche three is comprised of 10,000,000 Options with an expiry date of 31 December 2012 and an exercise price of A$0.70.

The shares issued on the exercise of the Options will rank equally with all other shares. The full terms applying to the Options are contained in Schedule 1.

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• (e) No funds will be raised by the grant of the Options. Any funds raised from the exercise of the Options will be used for working capital purposes.

Corporations Act requirements

Under Chapter 2E of the Corporations Act, a public company cannot give a 'financial benefit' to a 'related party' unless an exception applies or shareholders approve the giving of that financial benefit to the related party in a general meeting.

As a director the Company, Mr Cockcroft is a related party of the Company. The grant of Options to Mr Cockcroft constitutes a 'financial benefit' as defined in the Corporations Act. Accordingly, the proposed grant of Options to Mr Cockcroft will constitute the provision of a financial benefit to a related party of the Company.

It is the view of the directors (with Mr Cockcroft abstaining) that the exception under section 211(1) of the Corporations Act (reasonable remuneration benefits) applies to the grant of the Options to Mr Cockcroft. Accordingly, the directors (with Mr Cockcroft abstaining) have determined not to seek shareholder approval under section 208 of the Corporations Act.

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European Gas Limited

ACN 075 760 655

SCHEDULE 1 ‐ OPTIONS TERMS

• Each Option entitles the holder to acquire one fully paid ordinary share ("Share") in the capital of the Company on the following terms and conditions:

• The Options vest on grant and are comprised of three tranches, tranches 1 and 2 expire on 31 December 2011 ("Expiry Date A") and tranche 3 expire on 31 December 2012 ("Expiry Date B") .

• The exercise price for each tranche of Options is as follows:

• Tranche 1: 1,500,000 options to acquire ordinary shares, exercisable at AUD$0.35;

• Tranche 2: 3,000,000 options to acquire ordinary shares exercisable at AUD$0.50; and

• Tranche 3: 10,000,000 options to acquire ordinary shares exercisable at AUD$0.70.

• Options may be exercised into such number of Shares in the Company as determined in accordance with these Terms and Conditions by giving Notice of the Exercise to the Company (in a form reasonably acceptable to the Company) which must be received by the Expiry Date or other deadline, accompanied by payment of the relevant amount due on exercise, and the Option Certificate issued with the Option.

• The Company will allot and issue the Shares promptly upon the exercise of the Options.

• Upon allotment of the Shares, the Company shall cancel the Option Certificate if all outstanding Options have been exercised. Where an Option has been exercised as to part only of the Options the subject of an Option Certificate, a new Option Certificate for the unexercised part of the Options shall be issued.

• There is no inherent right arising from the Options to participate in any new issue of securities which may be offered to shareholders of the Company from time to time prior to the exercise of Options, without exercising the Options. The rights of the Option holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital of the Company (eg consolidation or subdivision) at the time of the reorganisation.

• Options will not entitle an Option holder to receive payment of dividends other than with respect to dividends that may be declared or determined on Shares issued after an Option is exercised. Any Shares allotted on exercise of an Option will rank pari passu in all respects with other Shares.

• Subject always to the prior exercise of an Option, the Option holder may participate in issues of ordinary Shares or other securities of the Company, or any other Company in which shares or other securities are offered to shareholders of the Company. The Company will use reasonable endeavours to give the holder at least 5 business days notice before the relevant record date to determine entitlements to the issue so as to give the holder an opportunity to exercise the Option.

• Options shall not participate in any bonus issues of Shares unless and until the Options are exercised, in which case the number of Shares issued will be increased by the number of Shares the Option holder would have received if the Option had been exercised before the applicable record date. The Option holder has no other rights to a change in the exercise price, or the number of underlying Shares over which the Option can be exercised.

• An Option holder may not sell or transfer any Option without the prior written consent of the board of the Company which may be given or refused in its absolute discretion.

• An Option shall lapse if it is not been exercised on or before the Expiry Date.

• It is not intended for the Options to be listed or quoted for trading on the Australian Stock Exchange Limited (ASX), however the Company will apply to the ASX for Official Quotation of Shares to be allotted and issued upon the exercise of Options in accordance with the Listing Rules, and the holder will provide reasonable assistance to the Company in that regard.

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