H3 ENERGY LIMITED - AGM Information 2012

ABN 68 079 432 796

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Notice Of Annual General Meeting

1:00 pm (WST) Thursday, 29 November 2012

Ground Floor 1292 Hay Street West Perth, Western Australia

This Notice of Annual General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on +61 8 6313 5790

Ground Floor 1292 Hay Street West Perth WA 6005

Tel: +61 8 6313 5790 www.transerv.com.au Fax: +61 8 6313 5799

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that an annual general meeting of Shareholders of Transerv Energy Limited (Company) will be held at Ground Floor, 1292 Hay Street, West Perth, Western Australia on Thursday, 29 November 2012 at 1.00 pm (WST) (Meeting).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on 27 November 2012 at 5.00pm (WST).

Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Schedule 1.

AGENDA

1. ANNUAL REpORT

To table and consider the Annual Report of the Company and its controlled entities for the year ended 30 June 2012, which includes the Financial Report, the Directors’ Report and the Auditor’s Report.

2. REsOLUTION 1 – REMUNERATION REpORT

To consider, and if thought fit, to pass the following resolution as an ordinary resolution:

“That, the Remuneration Report be adopted by the Shareholders on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion

In accordance with section 250R of the Corporations Act, a vote on this Resolution must not be cast by, or on behalf of, a member of the Key Management Personnel whose remuneration details are included in the remuneration report, or a Closely Related Party of such member. However, a vote may be cast by such person if:

(a) the person is acting as proxy and the proxy form specifies how the proxy is to vote, and the vote is not cast on behalf of a person who is otherwise excluded from voting on this Resolution as described above; or
(b) the person is the Chair voting an undirected proxy which expressly authorises the Chair to vote the proxy on a resolution connected with the remuneration of a member of the Key Management Personnel.

3. REsOLUTION 2 – RE-ELECTION OF DIRECTOR – MR BRETT MITChELL

To consider, and if thought fit, to pass the following resolution as an ordinary resolution:

“That, Mr Brett Mitchell who retires in accordance with article 13.2 of the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director.”

4. REsOLUTION 3 – RATIFICATION OF pRIOR IssUE OF OpTIONs

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

“That in accordance with Listing Rule 7.4 and for all other purposes, Shareholders approve the issue of 15,000,000 Options to Hartleys (and/or its nominee) on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Hartleys and any associate of Hartleys.

However, the Company will not disregard a vote if:

(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
(b) it is cast by the Chairman 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.

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

NOTICE OF ANNUAL GENERAL MEETING

5. REsOLUTION 4 – AppROvAL OF 10% pLACEMENT FACILITy

To consider, and if thought fit, to pass the following resolution as a special resolution:

“That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person (and any associate of such a person) who may participate in the 10% Placement Facility and a person (and any associate of such a person) who might obtain a benefit, except a benefit solely in their capacity as holder of Shares, if the Resolution is passed.

However, the Company will not disregard a vote if:

(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
(b) it is cast by the Chairman 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.

6. REsOLUTION 5 – ADOpTION OF pERFORMANCE RIGhTs pLAN

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

“That, in accordance with Exception 9(b) of Listing Rule 7.2 and for all other purposes, Shareholders approve the issue of securities under the performance rights plan to be called the “Transerv Energy Performance Rights Plan” on the terms and conditions in the Explanatory Memorandum”.

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a Director, except one who is ineligible to participate in the Transerv Energy Performance Rights Plan.

However, the Company will not disregard a vote if:

(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
(b) it is cast by the Chairman 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 26 October 2012

BY ORDER OF THE BOARD

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Sophie Raven

Company Secretary

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

EXpLANATORy MEMORANDUM

1. INTRODUCTION

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Meeting to be held at Ground Floor, 1292 Hay Street, West Perth, Western Australia on Thursday, 29 November 2012 at 1:00 pm (WST).

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions in the Notice.

A Proxy Form is located at the end of the Explanatory Memorandum.

2. ACTION TO BE TAkEN By shAREhOLDERs

Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

2.1 proxies

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a ‘proxy’) to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Please note that:

(a) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company; and
(c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

2.2 voting prohibition by proxy holders

In accordance with section 250R of the Corporations Act, a vote on Resolution 1 must not be cast (in any capacity) by, or on behalf of:

(a) a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report; or

(b) a Closely Related Party of such member.

However, a person described above may cast a vote on Resolution 1 as proxy if the vote is not cast on behalf of a person described in subparagraphs (a) or (b) above and either:

(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 1; or
(b) the person is the Chairman and the appointment of the Chairman as proxy:
(i) does not specify the way the proxy is to vote on Resolution 1; and
(ii) expressly authorises the Chairman to exercise the proxy even if Resolution 1 is connected directly or indirectly with the remuneration of the Key Management Personnel.

3. ANNUAL REpORT

There is no requirement for Shareholders to approve the Annual Report.

Shareholders will be offered the following opportunities:

(a) discuss the Annual Report which is online at www.transerv.com.au by clicking on the direct link;

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

EXpLANATORy MEMORANDUM

(b) ask questions or make comment on the management of the Company;
(c) ask the auditor questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

In addition to taking questions at the Meeting, written questions to the Chairman about the management of the Company, or to the Company’s auditor about:

(a) the preparation and the content of the Auditor’s Report;
(b) the conduct of the audit;
(c) 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,

may be submitted no later than 5 business days before the Meeting to the Company Secretary at the Company’s registered office.

4. REsOLUTION 1 – REMUNERATION REpORT

Section 250R(2) of the Corporations Act provides that the Company is required to put the Remuneration Report to the vote of Shareholders. The Directors’ Report contains the Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors.

Section 250R(3) of the Corporations Act provides that Resolution 1 is advisory only and does not bind the Directors. Failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report.

However, the Corporations Act has been amended by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Director and Executive Remuneration Act) which received Royal Assent on 27 June 2011 and came into effect on 1 July 2011.

The Director and Executive Remuneration Act introduced new sections 250U and 250Y, amongst others, into the Corporations Act, giving Shareholders the opportunity to remove the Board if the Remuneration Report receives a ‘no’ vote of 25% or more at two consecutive annual general meetings (Two Strikes Rule).

Under the Two Strikes Rule, where a resolution on the Remuneration Report receives a ‘no’ vote of 25% or more at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting a resolution on whether another meeting should be held (within 90 days) at which all Directors (other than the managing director) who were in office at the date of approval of the applicable Directors’ Report must stand for re-election.

In summary, if the Remuneration Report receives a ‘no’ vote of 25% or more at this Meeting, Shareholders should be aware that if there is a ‘no’ vote of 25% or more at the next annual general meeting the consequences are that it may result in the re-election of the Board.

The Chairman will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on the Remuneration Report.

The Chairman intends to exercise all undirected proxies in favour of Resolution 1. If the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 1, by signing and returning the Proxy Form, the Shareholder is considered to have provided the Chairman with an express authorization for the Chairman to vote the proxy in accordance with the Chairman’s intention.

5. REsOLUTION 2 – RE-ELECTION OF DIRECTOR – MR BRETT MITChELL

Article 13.2 of the Constitution requires that one third of all Directors, or if their number is not a multiple of three, then the number nearest one-third (rounded upwards in case of doubt) must retire at each annual general meeting.

Article 13.2 of the Constitution states that a Director who retires under article 13.2 is eligible for re-election.

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

EXpLANATORy MEMORANDUM

In accordance with the Constitution, Mr. Brett Mitchell will retire by rotation and seek re-election.

Details of the qualifications and experience of Mr. Mitchell are set out in the Financial Report.

The Board believes that Mr. Mitchell has performed the duties and responsibilities of an Executive Director diligently and professionally, in the best interests of all Shareholders.

The Board unanimously supports the re-election of Mr. Mitchell.

6. REsOLUTION 3 – RATIFICATION OF pRIOR IssUE OF OpTIONs

6.1 General

On 13 September 2012 the Company issued 15,000,000 Options to Hartleys (and/or its nominee) (Hartleys Options) as advisory facilitation fee pursuant to a letter of engagement dated 28 June 2011 between the Company and Hartleys, as extended by letter of extension dated 10 July 2012 (Facilitation Agreement).

The Facilitation Agreement was entered into by the Company for the purpose of engaging Hartleys to provide strategic, corporate and financial advice to the Company.

In accordance with Listing Rule 7.1, the Company must not, subject to specified exceptions, issue or agree to issue more 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.

Listing Rule 7.4 provides that where a company in general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1) those securities will be deemed to have been made with Shareholder approval for the purpose of Listing Rule 7.1.

The effect of passing Resolution 3 will be to allow the Company to issue securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1, without obtaining prior Shareholder approval. Resolution 3 is an ordinary resolution.

The Chairman intends to exercise all available proxies in favour of Resolution 3.

6.2 specific information required by Listing Rule 7.5

In accordance with Listing Rule 7.5, information is provided in relation to the Placement as follows:

(a) 15,000,000 Options were issued on 13 September 2012.
(b) The Hartleys Options were issued at $0.00001 each and as consideration for the services provided by Hartleys pursuant to the Facilitation Agreement.
(c) Each Hartleys Option entitles the holder to subscribe for one Share at an exercise price of $0.015 and has an expiry date of 22 March 2015. The Shares issued on exercise of the Hartleys Options will rank pari passu with the Company’s existing Shares on issue.
(d) The Hartleys Options were issued to Hartleys (and/or its nominee).
(e) The nominal funds raised from the issue of Hartleys Options will be used for general working capital purposes.
(f) A voting exclusion statement is included in the Notice.

7. REsOLUTION 4 – AppROvAL OF 10% pLACEMENT FACILITy

7.1 General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting (10% Placement Facility). The 10% Placement Facility is in addition to the Company’s 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.

The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility.

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

EXpLANATORy MEMORANDUM

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to section 7.2(c) below).

As disclosed in the Company’s announcements to the ASX, the Company continues actively seeking to acquire new resources assets and investments. The Company may use the 10% Placement Facility to acquire new resource assets or investments.

The Directors of the Company believe that Resolution 4 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

7.2 Description of Listing Rule 7.1 A

(a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.

(b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company.

The Company, as at the date of the Notice, has on issue one class of quoted Equity Securities, being Shares.

Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) - E

A is the number of fully paid ordinary securities on issue 12 months before the date of issue or agreement:

(a) plus the number of fully paid ordinary securities issued in the 12 months under an exception in Listing Rule 7.2;
(b) plus the number of partly paid ordinary securities that became fully paid in the 12 months;
(c) plus the number of fully paid ordinary securities issued in the 12 months with approval of holders of ordinary securities under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid ordinary securities under the entity’s 15% placement capacity without shareholder approval;
(d) less the number of fully paid ordinary securities cancelled in the 12 months.
Note that A has the same meaning in Listing Rule 7.1 when calculating an entity’s 15% placement capacity.

D is 10%.

E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under Listing Rule 7.1 or 7.4.
(d) Listing Rule 7.1 and Listing Rule 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity’s 15% placement capacity under Listing Rule 7.1.

At the date of this Notice, the Company has on issue 3,444,349,218 Shares and therefore has a capacity to issue:

(i) subject to Shareholder approval being sought under Resolution 3, 516,652,382 Equity Securities under Listing Rule 7.1; and
(ii) subject to Shareholder approval being sought under Resolutions 3 and 4, 344,434,921 Equity Securities under Listing Rule 7.1A.

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

EXpLANATORy MEMORANDUM

The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 7.2(c) above).

(e) Minimum Issue Price

The issue price of the Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP for Equity Securities in the same class calculated over the 15 Trading Days on which trade 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
(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.
(f) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

(i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or
(ii) the date of the approval by shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking).
or such longer period is allowed by ASX ( 10% Placement Period).

7.3 Listing Rule 7.1A

The effect of Resolution 4 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under Listing Rule 7.1.

Resolution 4 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

7.4 specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

(a) The Equity Securities will be issued at an issue price not less than 75% of the VWAP for Equity Securities in the same class calculated over the 15 Trading Days on which trade 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
(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.
(b) If Resolution 4 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders’ voting power in the Company will be diluted as shown in the below table. There is a risk that:
(i) the market price for the Company’s Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and
(ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company’s Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset,

which may have an effect on the amount of funds raised by the issue of the Equity Securities.

The table on page 9 shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable “A” calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice.

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

EXpLANATORy MEMORANDUM

The table also shows:

(iii) two examples where variable “A” has increased, by 50% and 100%. Variable “A” is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and
(iv) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 50% as against the current market price.

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Dilution
$0.0055 $0.011 $0.022
Variable “A” in Listing
50% decrease in Issue Price 100% increase in
Rule 7.1A.2
Issue Price Issue Price
Current Variable A 10% voting Dilution 344,434,921 shares 344,434,921 shares 344,434,921 shares
3,444,349,218 Funds Raised $1,894,392 $3,788,784 $7,577,568
50% increase in 10% voting Dilution 516,652,382 shares 516,652,382 shares 516,652,382 shares
current Variable A
5,166,523,827 Funds Raised $2,841,588 $5,683,176 $11,366,352
100% increase in 10% voting Dilution 688,869,843 shares 688,869,843 shares 688,869,843 shares
current Variable A
6,888,698,436 Funds Raised $3,788,784 $7,577,568 $15,155,136
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The table has been prepared on the following assumptions:

(i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.
(ii) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
(iii) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based in that Shareholder’s holding at the date of the Meeting.
(iv) The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.
(v) The issue of Equity Securities under the 10% Placement Facility consists only of Shares.
(vi) The issue price is $0.011, being the closing price of the Shares on the ASX on 18 October 2012.
(c) The Company will only issue and allot the Equity Securities during the 10% Placement Period. The approval under Resolution 4 for the issue of the Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities or Listing Rule 11.2 (disposal of main undertaking).
(d) The Company may seek to issue the Equity Securities for the following purposes:
(i) non-cash consideration for the acquisition of the new resources assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or
(ii) cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of energy and resources assets or investments (which may include costs associated with due diligence and engagement of advisors in assessing new energy and resource assets) and/or continued exploration on the Company’s existing oil and gas assets in Canada and the United States.

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

EXpLANATORy MEMORANDUM

The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any Equity Securities.

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

(i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;
(ii) the effect of the issue of the Equity Securities on the control of the Company;
(iii) the financial situation and solvency of the Company; and
(iv) advice from corporate, financial and broking advisors (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

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

(e) The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.
(f) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder’s votes will therefore be excluded under the voting exclusion in the notice.

8. REsOLUTION 5 – ADOpTION OF pERFORMANCE RIGhTs pLAN

8.1 General

Resolution 5 seeks Shareholder approval in accordance with Listing Rule 7.2 for the establishment of the Transerv Energy Performance Rights Plan (Performance Rights Plan). The Performance Rights Plan provides for the issuance of performance rights (Performance Rights) which, upon a determination by the Board that the performance conditions attached to the Performance Rights have been met, are convertible into Shares.

The Company wishes to exempt issues of securities under the Performance Rights Plan from contributing towards the rolling annual limit of 15% of issued Shares prescribed by Listing Rule 7.1. This limit otherwise applies to all new issues of equity securities made without Shareholder approval. Shareholder approval of the Performance Rights Plan is therefore sought under Listing Rule 7.2, Exception 9, whereby the Shareholders may approve in advance the issue of securities made under the plan as an exception to the limit under Listing Rule 7.1.

Further information about the Performance Rights Plan is set out below. A copy of the full terms and conditions of the Performance Rights Plan can be obtained by contacting the Company.

8.2 Reasons for the new performance Rights plan

To achieve its corporate objectives, the Company needs to attract and retain its key staff. The Board believes that grants made to eligible participants under the Performance Rights Plan will provide a powerful tool to underpin the Company’s employment strategy, and that the implementation of the Performance Rights Plan will:

(a) enable the Company to recruit and retain the talented people needed to achieve the Company’s business objectives;
(b) link the reward of key staff with the achievements of strategic goals and the long term performance of the Company;

TRANsERv ENERGy NOTICE OF ANNUAL GENERAL MEETING AbN 68 079 432 796 1:00 Pm (WST) THurSdAy, 29 November 2012

EXpLANATORy MEMORANDUM

(c) align the financial interest of participants of the Performance Rights Plan with those of Shareholders; and
(d) provide incentives to participants of the Performance Rights Plan to focus on superior performance that creates Shareholder value.

8.3 summary of the performance Rights plan

This section gives a summary of how the Board intends to implement initial participation under the rules of the proposed Performance Rights Plan.

Participation

The Board wishes to issue Performance Rights under the Performance Rights Plan to employees and executive Directors to achieve the objectives outlined above. A Performance Right is a right to be issued a Share upon satisfaction of certain performance conditions that are attached to the Performance Right, as determined by the Board. In accordance with the requirements of the Listing Rules, prior Shareholder approval will be required before any Director or related party of the Company can participate in the Performance Rights Plan.

Performance Conditions

Performance Rights granted under the Performance Rights Plan will be subject to performance conditions as determined by the Board from time to time. These performance conditions must be satisfied in order for the Performance Rights to vest. Upon Performance Rights vesting, Shares will be issued.

The main features of the Performance Rights Plan are:

(a) Eligible Participants: The eligible participants under the Performance Rights Plan are employees and executive Directors of the Company determined by the Board to be eligible to receive grants of Performance Rights.
(b) Limits on Entitlements: The Performance Rights Plan has a fixed maximum percentage of Shares that may be issued under it. The maximum number of Shares that is issuable under the Performance Rights Plan, when combined with the number of Shares issued during the previous five years pursuant to the Performance Rights Plan or any other employee incentive scheme of the Company; but disregarding any offer made, or Performance Rights acquired or Shares issued by way of or as a result of: (i) an offer to a person situated at the time of receipt of the offer outside Australia; or (ii) an offer that did not need disclosure to investors because of section 708 of the Corporations Act; or (iii) an offer made under a disclosure document, must not exceed 5% of the total number of issued Shares.
(c) Issue Price and Exercise Price: The Board shall determine whether an issue price is payable in connection with the grant of a Performance Right. Upon Performance Rights vesting under the Plan, Shares may be issued for no consideration, or the Board may, at the time of grant, in its discretion, specify an exercise price payable for the issuance of Shares as a performance condition attached to a Performance Right.
(d) Vesting: The Performance Rights issued under the Performance Rights Plan and the performance conditions that must be satisfied in order for the Performance Rights to vest, at which time the Company is then obliged to issue a specified number of Shares to the participant, are established by the Board and expressed in a written offer (the Offer) made by the Company to each eligible participant which, subject to acceptance by the eligible participant within a specified period, is then subject to re-affirmation by the Board. These may vary between different participants. The performance conditions will be determined by the Board and will include an expiry date and other terms to be set out in the Offer. The Board shall determine whether performance conditions have been met and Performance Rights therefore have vested. Upon Performance Rights becoming vested, the Company shall issue Shares to the participant, without any further action being required on the part of the participant subject to any payment of the exercise price (if any).
(e) Term & Lapse: Performance rights have a term as the Board may determine in its absolute discretion and specify in the Offer, and are subject to lapsing if performance conditions are not met by the relevant measurement date or expiry date (if no other measurement date is specified) or if employment is terminated for cause or in circumstances other than as described in the next paragraph.

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

EXpLANATORy MEMORANDUM

(f) Retirement, Disability, Redundancy or Death: Upon the retirement, disability, redundancy or death of a participant, as defined in the Performance Rights Plan, provided that a participant continues to satisfy any other relevant conditions imposed by the Board at the time of grant, the Performance Rights will vest at the discretion of the Board.
(g) Assignment: Without approval of the Board, Performance Rights may not be transferred, assigned or novated, except upon death, a participant’s legal personal representative may elect to be registered as the new holder of such Performance Rights and exercise any rights in respect of them.
(h) Takeover Bid or Change of Control: All Performance Rights will vest at the discretion of the Board in the event of (i) a takeover bid (ii) a change of control of the Company, or (iii) approval by the court of a merger by way of scheme of arrangement.
(i) Alteration in Share Capital: The Board is empowered to make, without being required to seek shareholder approval, appropriate adjustments to Performance Rights in the event of a variation of the share capital of the Company.
(j) Suspension or Termination: The Board may suspend or terminate the Performance Rights Plan at any time.

8.4 specific information required under Listing Rule 7.2

For the purposes of Listing Rule 7.2 Exception 9(b), information regarding the Performance Rights Plan is provided as follows:
(a) the terms of the Performance Rights Plan have been summarised in paragraph 7.1 of this Explanatory Memorandum;
(b) this is the first approval sought under Listing Rule 7.2 Exception 9 with respect to the Performance Rights Plan;
(c) no securities have been issued under the Performance Rights Plan; and
(d) a voting exclusion statement is included in the Notice.

sChEDULE 1 - DEFINITIONs

In this Notice and the Explanatory Memorandum:

$ means Australian Dollars.

10% Placement Facility has the meaning given in Section 6.1.

10% Placement Period has the meaning given in Section 6.2(f).

Annual Report means the Directors’ Report, the Financial Report and the Auditor’s Report in respect to the financial year ended 30 June 2012.

ASX means ASX Limited (ACN 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX.

Auditor’s Report means the auditor’s report on the Financial Report.

Board means the board of Directors.

Business Day means:

(e) for determining when a notice, consent or other communication is given, a day that is

not a Saturday, Sunday or public holiday in the place to which the notice, consent or other communication is sent; and

(f) for any other purpose, a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Perth.

Chair or Chairman means the person appointed to chair the Meeting convened by this Notice.

Closely Related Party means:

(g) a spouse or child of the member; or
(h) has the meaning given in section 9 of the Corporations Act.

Constitution means the constitution of the Company as at the commencement of the Meeting.

Corporations Act means the Corporations Act 2001 (Cth).

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

sChEDULE 1 - DEFINITIONs

Director means a director of the Company.

Directors’ Report means the annual directors’ report prepared under chapter 2M of the Corporations Act for the Company and its controlled entities.

Equity Securities has the same meaning as in the Listing Rules.

Explanatory Memorandum means the explanatory memorandum attached to the Notice. Facilitation Agreement has the meaning in Section 6.1.

Financial Report means the annual financial report prepared under Chapter 2M of the Corporations Act of the Company and its controlled entities.

Hartleys means Hartleys Limited ACN 104 195 057.

Hartleys Options has the meaning in Section 6.1 and the terms and conditions in Schedule 2.

Key Management Personnel means persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.

Listing Rules means the listing rules of ASX.

Meeting has the meaning in the introductory paragraph of the Notice.

Notice means this notice of meeting.

Option means an option which entitles the holder to subscribe for one Share.

Performance Rights has the meaning in Section 8.1.

Performance Rights Plan has the meaning in Section 8.1.

Proxy Form means the proxy form attached to the Notice.

Remuneration Report means the remuneration report of the Company contained in the Directors’ Report.

Resolution means a resolution contained in the Notice.

Schedule means a schedule to this Notice.

Section means a section contained in this Explanatory Memorandum.

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

Shareholder means a shareholder of the Company.

Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules.

Transerv and Company means Transerv Energy Limited ABN 68 079 432 796.

Unlisted Options means unlisted options of the Company each with an exercise price of $0.032 and expiry date of 30 June 2015, an exercise price of $0.015 and an expiry date of 22 March 2015, an exercise price of $0.04 and an expiry date of 31 December 2014.

WST means Western Standard Time, being the time in Perth, Western Australia.

In this Notice and the Explanatory Memorandum words importing the singular include the plural and vice versa.

sChEDULE 2 - TERMs AND CONDITIONs OF hARTLEys OpTIONs

The following terms and conditions apply to each of the Hartleys Options:

The exercise price of each Hartleys Option is $0.015 (Exercise Price)
The expiry date for each Hartleys Option is 22 March 2015 (Expiry Date).
The Hartleys Options will vest when granted.
Each Hartleys Option exercised will entitle the holder to one (1) Share.
The notice attached to this certificate must be completed when exercising the Hartleys Options

(Notice of Exercise).

The Hartleys Options that have vested (if applicable) may be exercised by the holder completing and forwarding to the Company a Notice of Exercise and payment of the Exercise Price for each Hartleys Option being exercised prior to the Expiry Date.
Shares issued on the exercise of a Hartleys Option will not be offered for sale by the holder unless:
(a) the offer is made under circumstances that do not require disclosure to investors under Part 6D.2 of the Corporations Act; or

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

sChEDULE 2 - TERMs AND CONDITIONs OF hARTLEys OpTIONs

(b) one of the following occurs:
- (i) the Company gives ASX a notice that complies with section 708A(5)(e) of the Corporations Act;
- (ii) the Company lodges a prospectus with ASIC that qualifies the Shares for resale under section 708A(11) of the Corporations Act; or
- (iii) expiry of twelve (12) months after issue of the Shares.
Unless prohibited under the Corporations Act, in relation to each Share that is issued on the exercise of each Hartleys Option, the Company will:
(a) give ASX a notice that complies with section 708A(5)(e) of the Corporations Act; or
(b) lodge a prospectus with ASIC that qualifies the Shares for resale under section 708A(11) of the Corporations Act.
All Shares issued upon exercise of the Hartleys Options will rank pari passu in all respects with the Company's then existing Shares.
Shares allotted and issued pursuant to the exercise of the Hartleys Options will be allotted and issued not more than fifteen (15) Business Days after the receipt of a properly executed Notice of Exercise and payment for the Exercise Price of each Hartleys Option being exercised. The Company will apply for official quotation on ASX of Shares issued pursuant to the exercise of the Hartleys Options.
The holder of the Hartleys Options cannot participate in new issues of securities to holders of Shares unless the Hartleys Options have been exercised and the Shares have been allotted and registered in respect of the Hartleys Options before the record date for determining entitlements to the issue. The Company must give notice to the holder of the Hartleys Options of any new issue before the record date for determining entitlements to the issue in accordance with the Listing Rules. The Hartleys Options can only be exercised in accordance with these terms and conditions.
If the Company makes a pro rata bonus issue of Shares to holders of Shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) and no Shares have been allotted and registered in respect of the exercise of Hartleys Options before the record date for determining entitlements to the bonus issue, then the number of Shares or other securities for which the holder of the Hartleys Options is entitled to subscribe on exercise of the Hartleys Options

is increased by the number of Shares or other securities that the holder of the Hartleys Options would have received if the Hartleys Options had been exercised before the record date for the bonus issue. No change will be made to the Exercise Price.

If the Company makes a pro rata issue of securities (except a bonus issue) to the holders of Shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the exercise price of a Hartleys Option shall be reduced according to the following formula:

New Exercise Price = O - E [P-(S+D)]

N+1

O = the old Exercise Price of the Hartleys Option.

E = the number of underlying Shares into which one Hartleys Option is exercisable.

P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date. S = the subscription price of a Share under the pro rata issue.

D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

N = the number of Shares with rights or entitlements that must be held to receive a right to one new Share.

In the event of any reorganisation of the issued ordinary capital of the Company (including consolidation, subdivision, reduction or return) the number of Shares attaching to each Hartleys Option or the Exercise Price of a Hartleys Option or both will be reorganised in the manner as specified in the Listing Rules at the time of the reorganisation.
Subject to paragraphs 11, 12 and 13, the Exercise Price and the number of Shares to be issued on the exercise of the Hartleys Options will not change in the event of a new issue of securities by the Company.
The Company will give notice to each holder of the Hartleys Options of any adjustment to the number of Shares which the holder of the Hartleys Options is entitled to subscribe for or be issued on exercise of a Hartleys Option or the Exercise Price of a Hartleys Option in accordance with the Listing Rules at that time.
The Hartleys Options will be not be transferrable.
Application will not be made for the official quotation on ASX of the Hartleys Options.

TRANsERv ENERGy AbN 68 079 432 796

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

pROXy FORM

By delivery: Ground Floor 1292 Hay Street West Perth WA 6005

By post: P.O. Box 1100 West Perth WA 6872

By facsimile: +61 8 6313 5799

Name of Shareholder: Address of Shareholder: Number of Shares entitled to vote:

==> picture [273 x 66] intentionally omitted <==

Please mark ý to indicate your directions. Further instructions are provided overleaf.

Proxy appointments will only be valid and accepted by the Company if they are made and received no later than 48 hours before the Meeting.

Step 1 - Appoint a Proxy to Vote on Your Behalf

The Chairman of OR if you are NOT appointing the Chairman of the Meeting the Meeting as your proxy, please write the name of the person or body (mark box) corporate (excluding the registered shareholder) you are appointing as your proxy

==> picture [106 x 42] intentionally omitted <==

or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf, including to vote in accordance with the following directions (or, if no directions have been given, and to the extent permitted by law, as the proxy sees fit), at the Meeting of the Company to be held at 1:00 pm (WST) Thursday, 29 November 2012, at Ground Floor, 1292 Hay Street, West Perth, Western Australia and at any adjournment or postponement of that Meeting.

Important – If the Chairman of the Meeting is your proxy or is appointed your proxy by default

The Chairman of the Meeting intends to vote all available proxies in favour of Resolution 1. If the Chairman of the Meeting is your proxy or is appointed your proxy by default, unless you indicate otherwise by ticking either the ‘for’, ‘against’ or ‘abstain’ box in relation to Resolution 1, you will be authorising the Chairman to vote in accordance with the Chairman’s voting intentions on Resolution 1 even if Resolution 1 is connected directly or indirectly with the remuneration of a member of Key Management Personnel.

Step 2 - Instructions as to Voting on Resolutions

The e proxy is to vote for or against the Resolutions referred to in the Notice as follows:


Resolution	1	Remuneration Report
Resolution	2	Re-election of Director – Mr Brett Mitchell
Resolution	3	Ratifcation of Prior Issue of Options
Resolution	4	Approval of 10% Placement Facility
Resolution	5	Adoption of Performance Rights Plan

The Chairman of the Meeting intends to vote all available proxies in favour of each Resolution.

NOTICE OF ANNUAL GENERAL MEETING 1:00 Pm (WST) THurSdAy, 29 November 2012

TRANsERv ENERGy AbN 68 079 432 796

pROXy FORM

Authorised signature/s

This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1 Sole Director and Sole Company Secretary Contact Name	Shareholder 2 Director Contact Daytime Telephone	Shareholder 3

		Director/Company Secretary
		Date
1Insert name and address of Shareholder	2Insert name and address of proxy	*Omit if not applicable

Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a natural person as the Shareholder’s proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder’s votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a body corporate as the Shareholder’s proxy to attend and vote for the Shareholder at that Meeting, the representative of the body corporate to attend the Meeting must produce the Certificate of Appointment of Representative prior to admission. A form of the certificate may be obtained from the Company’s share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it. Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate ‘Certificate of Appointment of Representative’ should be produced prior to admission. A form of the certificate may be obtained from the Company’s Share Registry.

Proxy Forms (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 deposited at or received by facsimile transmission at the office of the Company at Ground Floor, 1292 Hay Street, West Perth, Western Australia, or by post to P.O. Box 1100, West Perth WA 6872, or facsimile (08) 6313 5799 if faxed from within Australia or +61 8 96313 5799 if faxed from outside Australia, not less than 48 hours prior to the time of commencement of the Meeting (WST).

AI assistant

H3 ENERGY LIMITED — AGM Information 2012

65034_rns_2012-10-28_b803f16e-1029-4e1f-99bd-c147f3172e90.pdf

Notice Of Annual General Meeting

NOTICE OF ANNUAL GENERAL MEETING

AGENDA

1. ANNUAL REpORT

2. REsOLUTION 1 – REMUNERATION REpORT

3. REsOLUTION 2 – RE-ELECTION OF DIRECTOR – MR BRETT MITChELL

4. REsOLUTION 3 – RATIFICATION OF pRIOR IssUE OF OpTIONs

Voting Exclusion

NOTICE OF ANNUAL GENERAL MEETING

5. REsOLUTION 4 – AppROvAL OF 10% pLACEMENT FACILITy

Voting Exclusion

However, the Company will not disregard a vote if:

6. REsOLUTION 5 – ADOpTION OF pERFORMANCE RIGhTs pLAN

Voting Exclusion

Sophie Raven

EXpLANATORy MEMORANDUM

1. INTRODUCTION

2. ACTION TO BE TAkEN By shAREhOLDERs

2.1 proxies

2.2 voting prohibition by proxy holders

3. ANNUAL REpORT

EXpLANATORy MEMORANDUM

4. REsOLUTION 1 – REMUNERATION REpORT

5. REsOLUTION 2 – RE-ELECTION OF DIRECTOR – MR BRETT MITChELL

EXpLANATORy MEMORANDUM

6. REsOLUTION 3 – RATIFICATION OF pRIOR IssUE OF OpTIONs

6.1 General

6.2 specific information required by Listing Rule 7.5

7. REsOLUTION 4 – AppROvAL OF 10% pLACEMENT FACILITy

7.1 General

EXpLANATORy MEMORANDUM

7.2 Description of Listing Rule 7.1 A

(A x D) - E

D is 10%.

EXpLANATORy MEMORANDUM

7.3

Listing Rule 7.1A

7.4 specific information required by Listing Rule 7.3A

EXpLANATORy MEMORANDUM

EXpLANATORy MEMORANDUM

8. REsOLUTION 5 – ADOpTION OF pERFORMANCE RIGhTs pLAN

8.1 General

8.2 Reasons for the new performance Rights plan

EXpLANATORy MEMORANDUM

8.3 summary of the performance Rights plan

Participation

Performance Conditions

EXpLANATORy MEMORANDUM

8.4

specific information required under Listing Rule 7.2

sChEDULE 1 - DEFINITIONs

sChEDULE 1 - DEFINITIONs

sChEDULE 2 - TERMs AND CONDITIONs OF hARTLEys OpTIONs

sChEDULE 2 - TERMs AND CONDITIONs OF hARTLEys OpTIONs

pROXy FORM

Step 1 - Appoint a Proxy to Vote on Your Behalf

Important – If the Chairman of the Meeting is your proxy or is appointed your proxy by default

Step 2 - Instructions as to Voting on Resolutions

pROXy FORM

Authorised signature/s

Proxy Notes:

More from H3 ENERGY LIMITED

H3 ENERGY LIMITED AGM Information 2012