HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2014

Mar 13, 2014

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Pryme Energy Limited

ABN 75 117 387 354

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid+securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary Shares
	(a)_Maximum of 295,708,568 fully paid ordinary shares to be issued under a non-renounceable rights issue including any share issued under the shortfall announced on 14 March 2014(Rights Issue) (b)_6,000,000 fully paid ordinary shares to be issued to vendors of the Capitola Oil Project announced on 11 February 2014 and 14 March 2014(Capitola Shares) (collectively,the Shares)
	Fully paid ordinary shares

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state: •the date from which they do •the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment •the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in relation to the+securities_ the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	The Shares issued will rank equally with the existing class of fully paid ordinary shares traded under the code PYM. The Capitola Shares will be entitled to participate in the Rights Issue.
	(a) $0.020 per share (b) non-cash consideration (Please refer to the ASX announcement lodged on 11 February 2014)
	The funds raised from the Rights Issue, after the expenses of the Rights Issue and normal working capital requirements, will be used for the drilling and development of the Capitola Oil Project. The Capitola Shares are issued as part consideration for acquisition of the Capitola Oil Project located in the Eastern Shelf of the Permian Basin, Texas, USA (Please refer to the ASX announcement lodged on 11 February 2014)
	Yes
	24 April 2013
	Not Applicable
	6,000,000

• See chapter 19 for defined terms.

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6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.	Not Applicable
	295,708,568 being issued under the Rights Issue under exception 1 of Listing Rule 7.2 – pro-rate offer
	Capitola Shares are issued for non-cash consideration. (Please refer to the ASX announcement lodged on 11 February 2014)
	14 March 2014
	As per Annexure 1, post issue, the issue capacity is as follows: Listing Rule 7.1 – 43,456,285 fully paid ordinary shares Listing Rule 7.1A - 22,970,856 fully paid ordinary shares.
	Issue date for Capitola Shares is 14 March 2014 Issue date for shares issued under the Rights Issue is 16 April 2014 (other than shares issued under the shortfall which will be entered into uncertificated holdings by 8 July 2014).

Number ~~+~~Class 8 Number and+class of all +securities quoted on ASX (_including_the+securities in section 2 if applicable) 591,417,136 Fully paid ordinary shares Number ~~+~~Class 9 Number and+class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) Nil - 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) None Part 2 - Bonus issue or pro rata issue 11 Is security holder approval required? No 12 Is the issue renounceable or non- renounceable? Non-renounceable 13 Ratio in which the+securities will be offered 1 new fully paid ordinary share for every 1 fully paid ordinary share held at the Record Date 14 +Class of +securities to which the offer relates Fully paid ordinary Shares 15 +Record date to determine entitlements 24 March 2014 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? No 17 Policy for deciding entitlements in relation to fractions Where fractions arise in the calculation of entitlements, they will be rounded up to the nearestwholenumber	Number	Number	~~+~~Class
	591,417,136		Fully paid ordinary shares
	Number		~~+~~Class
	Nil		-
	None
		No
		Non-renounceable
		1 new fully paid ordinary share for every 1 fully paid ordinary share held at the Record Date
		Fully paid ordinary Shares
		24 March 2014
		No
		Where fractions arise in the calculation of entitlements, they will be rounded up to the nearestwholenumber

• See chapter 19 for defined terms.

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18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable)	All countries other than Australia and New Zealand
	8 April 2014 5pm AEST
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	25 March 2014
	Not Applicable
	Not Applicable
	Not Applicable

30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 + Issue date	Not Applicable
	Not Applicable
	Not Applicable
	16 April 2014

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities

• ( tick one )

• (a)[Securities described in Part 1 ]

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Items 35 - 42 are not applicable.

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 14 March 2014 (Director)

Print name: Justin Pettett

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 289,708,568
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following: Nil
• Number of fully paid [+] ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid [+] ordinary securities
issued in that 12 month period with
shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary Nil
securities cancelled during that 12 month
period
“A” 289,708,568
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

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“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 43,456,285
Step 3: Calculate “C”, the amount of placement capacity under rule
7.1 that has already been used
Insert number of [+] equity securities issued 43,456,285
or agreed to be issued in that 12 month
period not counting those issued:
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule
7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
“C” 43,456,285
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining
placement capacity under rule 7.1
“A” x 0.15 43,456,285
Note: number must be same as shown in
Step 2
Subtract “C” 43,456,285
Note: number must be same as shown in
Step 3
Total [“A” x 0.15] – “C” 0
[Note: this is the remaining placement
capacity under rule 7.1]
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• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 289,708,568 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 28,970,856 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of[+] equity securities issued 6,000,000 or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items “E” 6,000,000

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	28,970,856
Subtract“E” Note: number must be same as shown in Step 3	6,000,000
Total[“A” x 0.10] – “E”	22,970,856 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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