H3 ENERGY LIMITED — Proxy Solicitation & Information Statement 2011

Apr 7, 2011

TRANSERV ENERGY LIMITED

A C N 0 7 9 4 3 2 7 9 6

NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at Level 21, Allendale Square, 77 St Georges Terrace, Perth on 11 May 2011 at 11AM (WST).

This Notice of 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 (08) 9389 2000

TRANSERV ENERGY LIMITED

A C N 0 7 9 4 3 2 7 9 6

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of Transerv Energy Limited ( Transerv or Company ) will be held at Level 21, Allendale Square, 77 St Georges Terrace, Perth on 11 May 2011 at 11AM (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 9 May 2011 at 5pm (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Section 6 of the Explanatory Memorandum.

AGENDA

1. Resolution 1 – Approve the Issue of Options to Mr Brett Mitchell

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

"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 30,000,000 Options to Mr Brett Mitchell or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

The Company will disregard any votes cast on this Resolution 1 by Mr Brett Mitchell or his nominee and any of their associates. However, the Company need 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.

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2. Resolution 2 – Approve the Issue of Options to Mr Andrew Leibovitch

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

"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 10,000,000 Options to Mr Andrew Leibovitch or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

The Company will disregard any votes cast on this Resolution 2 by Mr Andrew Leibovitch or his nominee and any of their associates. However, the Company need 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.

3. Resolution 3 – Approve the Issue of Options to Mr Tim Wise

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

"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 5,000,000 Options to Mr Tim Wise or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

The Company will disregard any votes cast on this Resolution 3 by Mr Tim Wise or his nominee and any of their associates. However, the Company need 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.

4. Resolution 4 – Approve the Issue of Options to Mr William Bloking

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

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"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 15,000,000 Options to Mr William Bloking or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

The Company will disregard any votes cast on this Resolution 4 by Mr William Bloking or his nominee and any of their associates. However, the Company need 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. Resolution 5 – Approve the Issue of Options to Mr Will Barker

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

"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 10,000,000 Options to Mr Will Barker or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

The Company will disregard any votes cast on this Resolution 5 by Mr Will Barker or his nominee and any of their associates. However, the Company need 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.

6. Resolution 6 – Approve the Issue of Options to Mr Stephen Keenihan

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

"That in accordance with Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, Shareholders approve and authorise the issue of 30,000,000 Options to Mr Stephen Keenihan or his nominee on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion:

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The Company will disregard any votes cast on this Resolution 6 by Mr Stephen Keenihan or his nominee and any of their associates. However, the Company need 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.

7. Resolution 7 – Ratification of Issue of Options to Key Personnel

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

"That, in accordance with Listing Rule 7.4 and for all other purposes, Shareholders ratify the prior issue by the Directors of 45,000,000 Options to the Key Personnel and/or their nominees on the terms and conditions in the Explanatory Memorandum.”

Voting exclusion

The Company will disregard any votes cast on this Resolution 7 by the Key Personnel or their nominees and any of their associates. 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 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.

8. Resolution 8 – Section 195 Approval

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

“That, for the purposes of section 195(4) of the Corporations Act and for all other purposes, Shareholders approve and authorise the Directors to complete the transactions as contemplated in this Notice."

Dated 8 April 2011

BY ORDER OF THE BOARD

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BRETT MITCHELL Executive Director

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TRANSERV ENERGY LIMITED

A C N 0 7 9 4 3 2 7 9 6

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 Level 21, Allendale Square, 77 St Georges Terrace, Perth, Western Australia on 11 May 2011 at 11AM (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.

This Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolutions:

Section 2 Action to be taken by Shareholders Section 3 Resolutions 1 – 6 (inclusive) – Approval of issue of Options to Directors Section 4 Resolution 7 – Ratification of issue of Options to Key Personnel Section 5 Section 195 Approval Schedule 1 Terms and Conditions of Options Schedule 2 Vesting Conditions of Options

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

2. Action to be taken by Shareholders

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

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 provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

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3. Resolutions 1 to 6 (inclusive) – Approval of Issue of Options to Directors and Past Director

3.1 General

Resolutions 1 to 6 (inclusive) seek Shareholder approval in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act for the issue of a total of 100,000,000 Options to the Directors or Past Director (or their nominees) as follows:

• (a) Mr Brett Mitchell 30,000,000 Options; (b) Mr Andrew Leibovitch 10,000,000 Options; (c) Mr Tim Wise 5,000,000 Options; (d) Mr William Bloking 15,000,000 Options; (e) Mr Will Barker 10,000,000 Options; and (f) Mr Stephen Keenihan 30,000,000 Options

The Options will vest in accordance with the Vesting Conditions for each Director and the Past Director as detailed in Schedule 2.

The Options being issued to both the Directors and the Past Director are unlisted and are transferable at the discretion of the Board. No application for quotation of the Options will be made by the Company until such time as the Company in its absolute discretion determines otherwise.

Resolution 3 seeks Shareholder approval in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act for the issue of 5,000,000 Options to Mr Wise. Whilst Mr Wise ceased to be a Director on 21 March 2011, by virtue of the operation of Section 228(5) of the Corporations Act, he is still considered to be a related party of the Company and accordingly requires Listing Rule 10.11 approval in addition to section 208(1) of the Corporations Act.

The issue of Options to Mr Wise are in consideration for the service Mr Wise has given to the Company during his 4 year tenure as Director. The Directors unanimously recommend that Shareholders vote in favour of this Resolution.

The purpose of the issue of the Options is to provide a mechanism to the Directors to participate further in the development of the Company and as incentive for their future involvement with, and commitment to, the Company. The Company acknowledges that the grant of options to non-executive Directors is contrary to recommendation 8.2 of the Corporate Governance Principles and Recommendations. However, the Board considers the issue of Options in Resolutions 1 and 2 and 4 - 6 (inclusive) to be reasonable in the circumstances given the Company's size and stage of development whilst still maintaining a cash reserve.

Resolutions 1 – 6 (inclusive) are ordinary resolutions.

3.2 Necessary Approval

Shareholder approval is required under Listing Rule 10.11 and section 208 of the Corporations Act because the Directors and Past Director are related parties of the Company.

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Approval pursuant to Listing Rule 7.1 is not required as approval is being obtained under Listing Rule 10.11. Furthermore, Shareholder approval of the issue of Options means that the issue will not reduce the Company's 15% placement capacity under Listing Rule 7.1.

3.3 Specific information required by Listing Rule 10.13 and section 219 of the Corporations Act

Listing Rule 10.13 and section 219 of the Corporations Act require that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval for the issue of the Options:

(a) 100,000,000 Options will be granted to the Directors and Past Director (or their nominees) as follows:

,000,000 Options will be minees) as follows:	granted to the Directors and Past Dir
Name of Director	Number of Options to be issued
Brett Mitchell	30,000,000
Andrew Leibovitch	10,000,000
Tim Wise	5,000,000
William Bloking	15,000,000
Will Barker	10,000,000
Stephen Keenihan	30,000,000

The Options will vest in accordance with the Vesting Conditions for each Director and the Past Director as detailed in Schedule 2.

(b) The Company is a junior listed company. The Company has limited funds, most of which are allocated to specific development activities. As a result, the Board has chosen to issue Options to the Directors as a key component of the incentive portion of their remuneration in order to retain the services of the Directors and to provide incentive linked to the performance of the Company. The Board considers that the experience of the Directors will greatly assist the development of the Company. As such, the Board believes that the number of Options to be granted to the Directors are commensurate with their value to the Company.

Given the speculative nature of the Company’s activities and the small management team responsible for its operation, it is considered that the performance of the Directors and the performance and value of the Company are closely related. As such, the Options issued will generally only be of benefit if the Directors perform to the level whereby the value of the Company increases sufficiently to warrant exercising the Options.

• (c) Each Option will be issued for nil consideration. Each Option entitles the holder to subscribe for one (1) Share at an exercise price of $0.032 on or before 30 June 2015.

• (d) The Options are unlisted and are transferable at the discretion of the Board. No application for quotation of the Options will be made by the Company until such time as the Company in its absolute discretion determines otherwise. Further terms and conditions of the Options are contained in Schedule 1.

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• (e) The Company will issue the Options no later than one (1) month after the date of the Meeting or such longer period of time as ASX may in its discretion allow.

• (f) Each Director has an interest in the Resolutions under which Options will be issued to him and therefore believes it inappropriate to make a recommendation. Each Director recommends the issue of Options to each of the other Directors as it allows the Company to retain directors of high calibre and it aligns the interests of the Company and its Directors to maximise Shareholder value.

• (g) The dilution effect if all of the Options granted are exercised is as follows:

Current number of Shares on issue	1,262,349,071
Number of Options to be granted under Resolutions 1 to 7 (inclusive)	100,000,000
Dilution effect if all Options granted are exercised	1,362,349,071

• (h) The current relevant interests in security holdings of the individuals receiving Options are as follows:

Name	Shares	Options
Brett Mitchell	11,250,000	Nil
Andrew Leibovitch	1,250,000	Nil
Tim Wise	7,132,421	Nil
William Bloking	890,000	Nil
Will Barker	Nil	Nil
Stephen Keenihan	5,550,000 Ordinary Shares 317,520,000 Converting Shares2	56,000,0001

1 Unlisted Options exercisable at 1.5c expiring 21 March 2015. Exercise of the Options is subject to certain vesting conditions relating to the Alberta Project.

2 Converting Shares convert to ordinary shares in the event that Amazon Project is not commercial.

• (i) A voting exclusion statement is included in the Notice.

• (j) No funds will be raised by the issue of the Options as they are being issued for nil consideration.

• (k) Shareholders have previously approved an aggregate amount of up to $250,000 to be paid as directors fees. Previously the Directors have resolved that the Executive Director shall receive the amount of $120,000 per annum as a Director’s fee plus statutory superannuation and that each non-executive Director shall receive the amount of $36,000 per annum as Directors’ fees plus statutory superannuation.

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(l) Amounts paid to Directors in the twelve (12) months to 23 March 2011 are as follows:

Name of Director or Past Director	Salary and Fees	Super	Total
	$	$	$
Brett Mitchell	147,750	Nil	147,750
Andrew Leibovitch	55,500	Nil	55,500
Tim Wise	33,500	Nil	33,500
William Bloking	Nil	Nil	Nil
Will Barker	Nil	Nil	Nil
Stephen Keenihan	Nil	Nil	Nil

On the basis of the assumptions below, independent accountants BDO has determined the technical value of one (1) Option approximates:

Volatility	Value per Option	Total Value
100%	$0.0148	$1,776,660
75%	$0.115	$1,380,000
50%	$0.0076	$912,000

The value may go up or down after that date as it will depend on the future price of a Share. Black & Scholes methodology has been used, together with the following range of assumptions:

• (i) interest rate set at the Commonwealth Government securities rate of 5.07%;

• (ii) the date of valuation is for the purposes of settling the current market value of a Share was on the 16 March 2011, the day the Board resolved the issue;

• (iii) at this date the Share price was $0.022 which is the price used in the valuation;

• (iv) the standard deviation of returns of the Options is set at 50%, 75% and 100% which is based on the Company's historical data; and

• (v) the Options will be exercisable upon issue.

• (m) The market price of Shares would normally determine whether the Directors will exercise the Options or not. If the Options are exercised at a price that is lower than the price at which Shares are trading on ASX, there may be a perceived cost to the Company.

• (n) Historical share price information for the last twelve months is as follows:

	Price	Date
Highest	$0.029	29 March 2011
Lowest	$0.012	30 November 2010
Last	$0.028	28 March 2011

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• (o) Other than the information above and otherwise in this Explanatory Memorandum, the Company believes that there is no other information that would be reasonably required by Shareholders to pass Resolutions 1 to 7 (inclusive).

• (p) As Shareholder approval is sought under Listing Rule 10.11, approval under Listing Rule 7.1 is not required.

4. Resolution 7 – Ratification of Issue of Options to Key Personnel

4.1 General

Resolution 7 seeks Shareholder ratification pursuant to Listing Rule 7.4 of the issue of a total of 45,000,000 Options to the Key Personnel (or their nominees) for nil consideration as follows:

(a) Brent Villemarette 20,000,000 (b) Jo-Ann Long 15,000,000; (c) Tarnya Inglis 3,000,000; (d) Rachel Jelleff 3,000,000; (e) Suzana Makuljevic 1,500,000; (f) Sallie Fernandes 1,500,000; and (g) Gemma Ellis 1,000,000.

The Options were issued within the Company's 15% annual limit permitted under Listing Rule 7.1 without the need for Shareholder approval. The effect of Shareholders passing Resolution 7 ratifying the issue of the Options will be to restore the Company's ability to issue further capital to the maximum 15% limit during the next twelve (12) months.

Resolution 7 is an ordinary resolution.

4.2 Specific information required by Listing Rule 7.5

For the purposes of Shareholder ratification of the issue of the Option to Key Personnel and the requirements of Listing Rule 7.5, information is provided as follows:

• (a) The number of Options allotted by the Company was 45,000,000.

• (b) The Options were issued for nil consideration.

• (c) The terms and conditions of the Options are contained in Schedule 1. Vesting Conditions for each Key Personnel are contained in Schedule 2.

• (d) The Options were issued to the Key Personnel as follows:

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Name	Number of Options to be issued
Brent Villemarette	20,000,000
Jo-Ann Long	15,000,000
Tarnya Inglis	3,000,000
Rachel Jelleff	3,000,000
Suzana Makuljevic	1,500,000
Sallie Fernandes	1,500,000
Gemma Ellis	1,000,000

• (e) No funds were raised from the issue of the Options.

• (f) A voting exclusion statement is included in the Notice.

5. Resolution 8 – Section 195 Approval

Section 195 of the Corporations Act provides that a director of a public company may not vote or be present during meetings of directors when matters in which that director holds a “material personal interest” are being considered.

Some of the Directors may have a material personal interest in the outcome of Resolutions 1 to 6 (inclusive). In the absence of this Resolution 8, the Directors may not be able to form a quorum at directors meetings necessary to implement Resolutions 1 to 6 (inclusive).

The Directors have accordingly exercised their right under section 195(4) of the Corporations Act to put the issue to Shareholders to resolve upon.

Resolution 8 is an ordinary resolution and is subject to and conditional upon Shareholders approving and passing Resolutions 1 – 7 (inclusive).

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6. Definitions

In this Explanatory Memorandum and Notice:

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited ACN 009 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Company or Transerv means Transerv Energy Limited ACN 079 432 796.

BDO means BDO Audit (WA) Pty Ltd ACN 112 284 787.

Board means the board of Directors.

Constitution means the Constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth) .

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum attached to the Notice.

Key Personnel means each of:

• (a) Brent Villemarette

• (b) Jo-Ann Long;

• (c) Tarnya Inglis;

• (d) Rachel Jelleff;

• (e) Suzana Makuljevic;

• (f) Sallie Fernandes; and

• (g) Gemma Ellis.

Listing Rules means the listing rules of ASX.

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

Notice means this notice of meeting.

Option or Options means an option which entitles the holder to subscribe for one (1) Share on the terms and conditions in Schedule 1.

Past Director means Mr Tim Wise.

Proxy Form means the proxy form attached to the Notice.

Resolution or Resolutions means a resolution contained in this Notice.

Schedule means a schedule to this Notice.

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

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Shareholder means a shareholder of the Company.

Vesting Conditions means the vesting conditions in Schedule 2.

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

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

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Schedule 1 – Terms and Conditions of Options

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

1. The exercise price of each Option is $0.032 ( Exercise Price )

2. The expiry date for each Option is 30 June 2015 ( Expiry Date ).

3. The Options will vest when granted unless otherwise provided for in Schedule 2 (if applicable).

4. Each Option exercised will entitle the holder to one (1) fully paid ordinary share in the capital of the Company ( Share ).

5. The notice attached to this certificate must be completed when exercising the Options ( Notice of Exercise ).

6. 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 Option being exercised prior to the Expiry Date.

7. Shares issued on the exercise of an Option will not be offered for sale by the holder unless:

8. (h) the offer is made under circumstances that do not require disclosure to investors under Part 6D.2 of the Corporations Act; or

9. (i) 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.

10. Unless prohibited under the Corporations Act, in relation to each Share that is issued on the exercise of each Option, the Company will:

11. (j) give ASX a notice that complies with section 708A(5)(e) of the Corporations Act; or

12. (k) lodge a prospectus with ASIC that qualifies the Shares for resale under section 708A(11) of the Corporations Act.

13. All Shares issued upon exercise of the Options will rank pari passu in all respects with the Company's then existing Shares.

14. Shares allotted and issued pursuant to the exercise of 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 Option being exercised. The Company will apply for official quotation on ASX of Shares issued pursuant to the exercise of Options.

15. The holder of Options cannot participate in new issues of securities to holders of Shares unless the Options have been exercised and the Shares have been allotted and

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registered in respect of the Options before the record date for determining entitlements to the issue. The Company must give notice to the holder of the Options of any new issue before the record date for determining entitlements to the issue in accordance with the ASX Listing Rules. Options can only be exercised in accordance with these terms and conditions.

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

2. 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 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 Option.

• E = the number of underlying Shares into which one 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.

1. 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 Option or the Exercise Price of an Option or both will be reorganised in the manner as specified in the ASX Listing Rules at the time of the reorganisation.

2. Subject to paragraphs 11, 12 and 13, the Exercise Price and the number of Shares to be issued on the exercise of Options will not change in the event of a new issue of securities by the Company.

3. The Company will give notice to each holder of the Options of any adjustment to the number of Shares which the holder of the Options is entitled to subscribe for or be issued on exercise of an Option or the Exercise Price of an Option in accordance with the ASX Listing Rules at that time.

4. Options are transferrable at the discretion of the Board.

5. Application will not be made for the official quotation on ASX of the Options.

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Schedule 2 – Vesting Conditions of Options

The Options will be issued on the terms and conditions in Schedule 1 and will vest as follows:

Brett Mitchell
Vesting Conditions	15,000,000 Options vest and become exercisable immediately upon issue and 3,750,000 vest and become exercisable immediately upon satisfaction of each milestone set out below from 1 January 2011: (a) 6 months continuous service as a director or executive of the Company; (b) 12 months continuous service as a director or executive of the Company; (c) 18 months continuous service as a director or executive of the Company and (d) 24 months continuous service as a director or executive of the Company.
Andrew Leibovitch
Vesting Conditions	5,000,000 Options vest and become exercisable immediately upon issue and 1,250,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as a director or executive of the Company; (b) 12 months continuous service as a director or executive of the Company; (c) 18 months continuous service as a director or executive of the Company and (d) 24 months continuous service as a director or executive of the Company.
Tim Wise
Vesting Conditions	5,000,000 Options vest and become exercisable immediately upon issue.
William Bloking
Vesting Conditions	3,750,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as a director or executive of the Company; (b) 12 months continuous service as a director or executive of the Company; (c) 18 months continuous service as a director or executive of the Company and (d) 24 months continuous service as a director or executive of the Company.

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Will Barker
Vesting Conditions	2,500,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as a director or executive of the Company; (b) 12 months continuous service as a director or executive of the Company; (c) 18 months continuous service as a director or executive of the Company and (d) 24 months continuous service as a director or executive of the Company.
Stephen Keenihan
Vesting Conditions	7,500,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as a director or executive of the Company; (b) 12 months continuous service as a director or executive of the Company; (c) 18 months continuous service as a director or executive of the Company and (d) 24 months continuous service as a director or executive of the Company.
Brent Villamarente
Vesting Conditions	5,000,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as an employee of the Company; (b) 12 months continuous service as an employee of the Company; (c) 18 months continuous service as an employee of the Company and (d) 24 months continuous service as an employee of the Company.
Jo-Ann Long
Vesting Conditions	3,750,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as an employee of the Company; (b) 12 months continuous service as an employee of the Company; (c) 18 months continuous service as an employee of the Company and

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	(d) 24 months continuous service as an employee of the Company.
Tarnya Inglis
Vesting Conditions	750,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service as an employee of the Company; (b) 12 months continuous service as an employee of the Company; (c) 18 months continuous service as an employee of the Company and (d) 24 months continuous service as an employee of the Company.
Rachel Jelleff
Vesting Conditions	1,500,000 Options vest and become exercisable immediately upon issue and 375,000 vest and become exercisable immediately upon completion of: (a) 6 months continuous service to the Company from 1 January 2011; (b) 12 months continuous service to the Company from 1 January 2011; (c) 18 months continuous service to the Company from 1 January 2011 and (d) 24 months continuous service to the Company from 1 January 2011.
Suzana Makuljevic
Vesting Conditions	1,500,000 Options vest and become exercisable immediately upon issue.
Sallie Fernandes
Vesting Conditions	1,500,000 Options vest and become exercisable immediately upon issue.
Gemma Ellis
Vesting Conditions	1,000,000 Options vest and become exercisable immediately upon issue.

18

TRANSERV ENERGY LIMITED ACN 0 7 9 4 3 2 7 9 6

PROXY FORM

The Company Secretary Transerv Energy Limited

By delivery: Level 21, Allendale Square By post: PO Box Z5446 By facsimile: +61 8 9389 2099 77 St Georges Tce St Georges Tce Perth WA 6000 Perth WA 6831

I/We[1] ________________

of _____________

being a Shareholder/Shareholders of the Company and entitled to __________

votes in the Company, hereby appoint[2 ] _____________

or failing such appointment the chairman of the general meeting as my/our proxy to vote for me/us on my/our behalf at the general meeting of the Company to be held at Level 21, Allendale Square, 77 St Georges Terrace, Perth on 11 May 2011 at 11AM (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes that this proxy is authorised to exercise is * [. . ]% of the Shareholder's votes*/ [. . . ] of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company, on request).

Instructions as to Voting on Resolutions

Important:

The chairman of the meeting intends to vote undirected proxies in favour of all of the Resolutions.

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

			For	Against Abstain	Against Abstain
Resolution	1	Approve issue of Options to Mr Brett Mitchell
Resolution	2	Approve issue of Options to Mr Andrew Leibovitch
Resolution	3	Approve issue of Options to Mr Tim Wise
Resolution	4	Approve issue of Options to Mr William Bloking
Resolution	5	Approve issue of Options to Mr Will Barker
Resolution	6	Approve issue of Options to Mr Stephen Keenihan
Resolution	7	Ratification of issue of Options to Key Personnel
Resolution	8	Section 195 approval

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 1Insert name and address of Shareholder	Shareholder 2 Director _____ Contact Daytime Telephone	Shareholder 3 Director/Company Secretary _______ Date
	2Insert name and address of proxy	*Omit if not applicable

Proxy Notes: .

A Shareholder entitled to attend and vote at the general meeting may appoint a natural person as the Shareholder's proxy to attend and vote for the Shareholder at that general meeting. If the Shareholder is entitled to cast 2 or more votes at the general 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 general meeting, the representative of the body corporate to attend the general 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 general 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 Perth office of the Company by post to P.O. Box Z5446, St Georges Terrace, Perth WA 6831 or Facsimile (08) 9389 2099 if faxed from within Australia or +618 9389 2099 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).