H3 ENERGY LIMITED — Proxy Solicitation & Information Statement 2012

May 7, 2012

ABN 68 079 432 796

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NOTICE OF GENERAL MEETING

For the General Meeting of the Company to be held at 1:30pm (WST) on Tuesday, 12 June 2012 at Ground Floor 1292 Hay Street West Perth, Western Australia

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 +61 8 6313 5790

TRANSERV ENERGY LIMITED

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NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of Transerv Energy Limited ( Company ) will be held at Ground Floor, 1292 Hay Street, West Perth, Western Australia on Tuesday, 12 June 2012 at 1:30pm (WST) ( Meeting ).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and 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 10 June 2012 at 1:30pm (WST).

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

AGENDA

1. Resolution 1 – 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 ratify the issue of 35,000,000 Options to the lenders under the Facility Agreement on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person and any of their associates who were granted Options.

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 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.

2. Resolution 2 – Ratification of Placement

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 ratify the issue of 418,000,000 Shares to professional and sophisticated investors each at an issue price of $0.013 on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person and any of their associates who participated in the issue of the Shares.

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 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 8 May 2012

BY ORDER OF THE BOARD

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Sophie Raven Company Secretary

TRANSERV ENERGY LIMITED

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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 Tuesday, 12 June 2012 at 1:30pm (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 ( 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.

3. Resolution 1 – Ratification of Prior Issue of Options

3.1 General

Resolution 1 seeks Shareholder ratification for the issue of 35,000,000 Options issued to various lenders under the Facility Agreement.

As announced on 5 August 2011 and 23 August 2011, the Company has entered into a loan agreement for an unsecured $7 million loan facility ( Loan Facility ) with various lenders including Apollo Asia Opportunities Fund (part of the Apollo Management Group) ( Facility Agreement ) and Argonaut Equity Partners Pty Limited ( Argonaut ) as facility agent and member of the lending syndicate.

As announced on 21 February 2012, pursuant to a variation to the Facility Agreement, the Company agreed to issue a further 35,000,000 Options to the lenders under the Facility Agreement on a pro-rata basis for their loan amounts, exercisable at $0.015 per option and expiring on or before 22 March 2015.

Resolution 1 seeks Shareholder ratification pursuant to Listing Rule 7.4 of the issue of 35,000,000 Options to the lenders under the Facility Agreement who are not related parties or associates of related parties of the Company.

3.2 Listing Rule 7.4

The Options were issued within the Company’s 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 1 will be to restore the Company’s ability to issue securities within that limit during the next 12 months.

Resolution 1 is an ordinary resolution.

3.3 Specific Information about the Options Required by Listing Rule 7.5

For the purposes of Shareholder ratification of the issue of the Options and the requirements of Listing Rule 7.5, information is provided as follows:

• (a) The number of Options issued by the Company was 35,000,000.

• (b) The Options were issued at $0.00001 each and as consideration for the Loan Facility.

• (c) Each Option entitles the holder to subscribe for one (1) Share at an exercise price of $0.015 and has an expiry date of 22 March 2015. Upon exercise of the Options, the Shares issued will rank pari passu with the Company's existing Shares on issue. Further terms and conditions of the Options are in Schedule 2.

• (d) The Options were issued to the following lenders under the Facility Agreement:

Name	No. of Options
Argonaut	6,000,000
Apollo Asia (NETH) SPV B.V.	24,000,000
Hoperidge Enterprises Pty Ltd	2,500,000
Areley Kings Pty. Ltd. as trustee for the Raef Trust	1,250,000
Brent Stewart (as trustee for the Stewart Trust) or any nominee of Brent Stewart (as trustee for the Stewart Trust)	1,250,000
**Total **	35,000,000

• (e) The funds raised from the issue of the Options will be used to fund general working capital.

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

4. Resolution 2 – Ratification of Placement

4.1 General

On 26 April 2012 the Company announced it was undertaking a capital raising of $5.4 million through a placement of 418 million Shares ( Placement Shares ) at an issue price of 1.3 cents per share to sophisticated and professional investors ( Placement ).

The Placement was completed pursuant to the Company’s 15% capacity under ASX Listing Rule 7.1.

Hartleys Limited and Argonaut Securities Pty Limited were Joint Lead Managers to the Placement.

Funds raised pursuant to the Placement will be used for drilling and related exploration operations on the Company’s unconventional and conventional oil and gas assets in Canada, the completion of recent unconventional acreage acquisitions in Canada and for general working capital purposes.

Resolution 2 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Placement Shares to sophisticated and professional investors who are not related parties or associates of related parties of the Company.

4.2

Listing Rule 7.4

The Placement Shares were issued within the Company's 15% placement capacity permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 2 by ratifying the issue of the Placement Shares will be to restore the Company's ability to issue securities within that 15% limit.

4.3

Specific information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purposes of obtaining Shareholder approval for the issue of the Placement Shares pursuant to Listing Rule 7.4:

• (a) 418,000,000 Shares were allotted on or about 4 May 2012.

• (b) The Placement Shares were issued at $0.013 per Share.

• (c) The Placement Shares are fully paid ordinary Shares in the capital of the Company and rank equally with the Company's existing Shares.

• (d) The Placement Shares were allotted and issued to sophisticated and professional investors who are not related parties or associates of related parties of the Company.

• (e) The funds raised will primarily for drilling and related exploration operations on the Company's unconventional and conventional oil and gas assets in Canada, the completion of recent unconventional acreage acquisitions in Canada and for general working capital purposes.

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

Schedule 1 - Definitions

In this Notice and the Explanatory Memorandum:

• $ means Australian Dollars.

Argonaut means Argonaut Equity Partners Pty Limited ACN 128 423 843.

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

Board means the board of Directors.

Business Day means:

• (a) 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

• (b) 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.

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

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.

Facility Agreement has the meaning given in Section 3.1.

Listing Rules means the listing rules of ASX.

Loan Facility has the meaning in Section 3.1 Error! Reference source not found. .

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 on the terms and conditions in Schedule 2.

Placement has the meaning in Section 4.1.

Placement Shares has the meaning in Section 4.1.

Proxy Form means the proxy form attached to the Notice.

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.

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

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 Options

1. The exercise price of each Option is $0.015.

2. The Options are exercisable:

3. (a) either in total or in lesser amounts;

4. (b) from time to time prior to 5pm (Perth time) on 22 March 2015 ( Expiry Date );

5. (c) by lodging at the registered office of the Company, before the Expiry Date:

   • (i) a written notice of exercise of Options specifying the number of Options being exercised; and

   • (ii) a cheque or electronic funds transfer for that part of the purchase price (if any) which is not to be effected through a prepayment of the Loan Facility in accordance with paragraph 3.

( Exercise Notice ).

1. If the holder of the Options is a lender, as defined in the Facility Agreement, the purchase price for the Options may be satisfied in whole or in part by the prepayment of the whole or a portion of that part of the Loan Facility which is owing to the holder in accordance with the terms and conditions of clause 7 of the Facility Agreement.

2. Except as provided for in the Facility Agreement, there are no participating rights or entitlements inherent in the Options.

3. In the event of any reorganisation (including consolidation, subdivision, reduction, cancellation or return) of the issued capital of the Company, the Options are to be reorganised in a manner required by the listing rules or regulations of the ASX on a reorganisation of capital (irrespective of whether the Company is or is not listed).

4. Shares allotted and issued pursuant to the exercise of Options will be allotted and issued by the Company within 3 Business Days after receipt by the Company of both a properly executed Exercise Notice in accordance with paragraph 2 above and payment of that part (if any) of the purchase price for those Shares which is not to be effected through a prepayment of the Loan Facility in accordance with paragraph 3. The Company will also issue within this period a replacement option certificate to the holder for the balance of any unexercised Options.

5. Application will not be made to ASX for Official Quotation of the Options.

6. All Shares issued upon exercise of any Option will rank pari passu in all respects with the Company’s then issued Shares and will be entitled to all dividends declared by the board of the Company in respect of shares of the same class as the Exercise Shares after the day the Company has received an Exercise Notice and has received or is deemed to have received all of the Exercise Price payable which, for the avoidance of doubt, in the case of Options in respect of which the Exercise Price is satisfied by a prepayment under paragraph 3, is the day the Company receives or is deemed to receive payment of the Exercise Price by the prepayment of the Loan Facility in accordance with paragraph 3.

7. The Company will apply within 3 Business Days of the lender having exercised any Options (or earlier if required by the listing rules or regulations of the ASX) for Official Quotation with ASX for all Shares issued upon exercise of any such Options.

8. The Company will give the lender at least 10 Business Days written notice prior to the record date for any pro-rata issue of Shares or other securities of the Company.

9. The lender will be entitled to participate in new securities offered to shareholders (including new prospective shareholders) in the Company to the extent that it has exercised its Options prior to the date that is 10 Business Days prior to the books closing date for the new issue (or such later date as is not less than 10 Business Days following notice of the applicable new issue to the lender).

10. If there is a bonus issue to holders of Shares prior to the Expiry Date, the number of Shares over which Options are exercisable will be increased in accordance with Listing Rule 6.22.3.

11. Until the Expiry Date, the Company must:

12. (a) ensure that each lender is given notice of all general meetings of shareholders of the Company and of all resolutions to be considered at those meetings;

13. (b) at all times maintain its authorised but unissued and unallotted share capital at a sufficient level to enable the Options to be issued and exercised fully; and

14. (c) if at any time the Company is not listed on the ASX, the Company must:

    • (i) not reduce its capital without the prior consent in writing of the facility agent; and

    • (ii) not do anything by way of altering its constitution or otherwise which has the effect of changing or converting any Shares into shares of another class.

15. Subject to the Corporations Act, the Listing Rules and the constitution of the Company, the Options are transferable.

16. To the extent that any provision of this option certificate (or any replacement certificate) is inconsistent or different in any way from any provision of the Listing Rules in respect of Options to subscribe for ordinary shares in companies listed on the ASX, the Listing Rules prevail.

17. The Company must issue a "cleansing notice" under section 708A(5) and (6) of the Corporations Act within 5 Business Days of the issue of any Shares upon exercise of the Options.

TRANSERV ENERGY LIMITED ABN 68 079 432 796

PROXY FORM

The Company Secretary Transerv Energy Limited By delivery: By post: Ground Floor P.O. Box 1100 1292 Hay Street West Perth WA 6872 West Perth WA 6005 Name of Shareholder: Address of Shareholder: Number of Shares entitled to vote: Step 1 - Appoint a Proxy to Vote on Your Behalf The Chairman of the Meeting (mark box)  ORif you areNOTappointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered shareholder) you are appointing as your proxy	The Company Secretary Transerv Energy Limited By delivery: By post: Ground Floor P.O. Box 1100 1292 Hay Street West Perth WA 6872 West Perth WA 6005 Name of Shareholder: Address of Shareholder: Number of Shares entitled to vote: Step 1 - Appoint a Proxy to Vote on Your Behalf The Chairman of the Meeting (mark box)  ORif you areNOTappointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered shareholder) you are appointing as your proxy	By facsimile: +61 8 6313 5799

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 1:30pm (WST time) on Tuesday, 12 June 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

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.

Please read the voting instructions overleaf before marking any boxes with 

Step 2 - Instructions as to Voting on Resolutions

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

For Against Abstain

Resolution	1	Ratification of Prior Issue of Options
Resolution	2	Ratification of Placement

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

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 2 Insert 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).