HYTERRA LTD - AGM Information 2015

TRIPLE ENERGY LIMITED ACN 116 829 675

NOTICE OF GENERAL MEETING

TIME : 12.00 pm DATE : 24 April 2015 PLACE : BDO 38 Station Street Subiaco WA 6008

The Independent Expert has concluded that the Blue Sky Transaction, being the subject of Resolution 2 outlined in this Notice of Meeting, is NOT FAIR BUT REASONABLE to Shareholders.

All Shareholders should refer to the Independent Expert’s Report enclosed with this Notice of Meeting.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Managing Director on +61 8 9381 3322.

Business of the Meeting (setting out the proposed Resolutions)	4
Explanatory Statement (explaining the proposed Resolutions)	6
Glossary	20
Schedules 1 – 3	22
Proxy Form	29

IM PORTANT INFORM ATION

Time and place of Meeting

Notice is given that the Meeting will be held at 12.00 pm (WST) on 24 April 2015 at:

38 Station Street, Subiaco WA 6008

Your vote is important

The business of the Meeting affects your shareholding and your vote is important.

Voting eligibility

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 Shareholders at 5.00 pm AWST on 22 April 2015.

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

each Shareholder has a right to appoint a proxy;
the proxy need not be a Shareholder of the Company; and
a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

if proxy holders vote, they must cast all directed proxies as directed; and

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any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on, the proxy must vote on a poll, and must vote that way (ie as directed); and
if the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (ie as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
! the proxy is not recorded as attending the meeting; or
! the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

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BUSINESS OF THE M EETING

AGENDA

1. RESOLUTION 1 - CREATION OF A NEW CLASS OF SECURITIES

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

“ That, for the purpose of Section 246B of the Corporations Act and for all other purposes, the Company is authorised to issue Performance Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE – TRANCHE 1 PLACEMENT OF SHARES

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 158,000,000 Shares on the terms and conditions set out in the Explanatory Statement.”

3. RESOLUTION 3 – APPROVAL OF BLUE SKY TRANSACTION

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

“That, for the purposes of section 611(Item 7) of the Corporations Act and for all other purposes, approval is given for the Company to proceed with the Blue Sky Transaction on the terms and conditions set out in the Explanatory Statement, which subject to the passing of Resolution 4, may result in Blue Sky’s voting power increasing from 19.9% to an estimated maximum of 64.78% in the capital of the Company.”

Expert’s Report : Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval required under Section 611 Item 7 of the Corporations Act. The Independent Expert’s Report comments on the fairness and reasonableness of the transactions the subject of this Resolution to the non-associated Shareholders in the Company.

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directions on the Proxy Form, or, 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 – PLACEMENT – TRANCHE 2 PLACEMENT OF SHARES TO RAISE UP TO $2,000,000

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

“That, conditional on the passing of Resolution 3, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 333,333,333 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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 – PLACEMENT – OPTIONS – IN CONSIDERATION OF CORPORATE SERVICES

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

“That, conditional on the passing of Resolution 3, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 20,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

DATED: 18 March 2015

BY ORDER OF THE BOARD

ALEX NEULING COMPANY SECRETARY

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EXPLANATORY STATEM EN T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. BACKGROUND

1.1 Execution of Investment Agreement

As announced on 26 November 2014, the Company entered into a binding Memorandum of Understanding with Blue Sky Holdings Limited, a Bermudan registered company, whose principal place of business is in Hong Kong ( Blue Sky ) ( Investment Agreement ).

Subject to Shareholder Approval and pursuant to the Investment Agreement, Blue Sky will invest approximately $6,000,000 in the Company pursuant to a multi-tranche investment set out in section 1.2 of this Explanatory Memorandum ( Blue Sky Transaction ).

Completion of the Blue Sky Transaction will result in Blue Sky taking a controlling interest in the Company. However, the Blue Sky Transaction will allow the Company to progress its coal gas project in Heilongjiang, China.

1.2 Blue Sky Transaction Overview

Completion of the Blue Sky Transaction, involves the following tranches:

(a) Blue Sky subscribing for a placement of 158,000,000 Shares in the Company at a price of $0.005 per share to raise $790,000, resulting in an initial holding by Blue Sky of 19.9% of all Shares on issue ( Tranche 1 Placement );
(b) The provision of an interest free convertible loan to wholly owned subsidiary CFT Heilongjang (HK) Limited in the amount of $500,000, to facilitate the drilling of 2 wells in Hegang ( Convertible Loan ). The Convertible Loan is to be satisfied by conversion into Shares at a price of $0.006 per Share;
(c) The Company undertaking a placement of Shares to raise $2,000,000 at an issue price of $0.006 per Share which is unconditionally underwritten by Blue Sky, but for Shares to the value of $750,000 which will be preferentially reserved for non-associated Shareholders ( Tranche 2 Placement ); and
(d) The Company entering into a drilling agreement procured by Blue Sky, for the drilling of 2 x wells in Hegang at a capped cost to the Company of US$2,750,000, to be satisfied through the issue of Performance Shares to Blue Sky at $0.006 per Share ( Procurement of Drilling Services ).

As announced on 9 December 2014, the Tranche 1 Placement has now been completed. However the ratification of the issue of those Shares pursuant to the Tranche 1 Placement is the subject of Resolution 2.

As a result of the completion of the Tranche 1 Placement and as announced on 9 December 2014, Blue Sky has nominated and the Company has appointed Mr Tommy Cheng, Chairman of Blue Sky as a non-executive Chairman of the Company.

Subject to Shareholder approval of Resolutions 3 and 4 and the completion of the Tranche 2 Placement, Blue Sky will be entitled under the Investment Agreement to appoint a second director to the Board of the Company, Mr Po Chan.

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1.3 Blue Sky

Blue Sky is a public company dually listed on the Hong Kong and Singapore Stock Exchanges. Blue Sky has recently transformed its strategy from the printing sector to the downstream distribution of natural gas sector in China and has recently acquired numerous equity interests in China as detailed in its public announcements to the listed markets. Blue Sky’s Chairman, Tommy Cheng, is also the newly appointed Chairman of the Company. Blue Sky intends to grow the Company’s upstream gas business in China by funding the 2015 well programme and seeking out other business development opportunities via its contact network in China. Blue Sky has proposed the appointment of a second executive director, Mr Po Chan to join the existing Board of the Company. Blue Sky has advised that it will continue to employ the existing personnel of the Company and its subsidiary in Hong Kong and in respect to the Aolong JV.

1.4 Shareholder Approvals Required

In order to proceed to completion with the Blue Sky Transaction, the following Shareholder approvals are required:

(a) overall approval of the Blue Sky Transaction to allow Blue Sky to increase its shareholding and voting power to a controlling interest, pursuant to Resolution 3; and
(b) approval to issue Shares to Blue Sky and other non-associated Shareholders under the Tranche 2 Placement, pursuant to Resolution 4.

Resolutions 4 and 5 are conditional on Resolution 3 being passed by Shareholders.

1. RESOLUTION 1 - CREATION OF A NEW CLASS OF SECURITIES

This Resolution seeks Shareholder approval for the Company to be authorised to issue the Performance Shares.

A company with a single class of shares on issue, which proposes to issue new shares not having the same rights as its existing shares, is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

Section 246B of the Corporations Act and clause 2.4 of the Constitution provide that the rights attaching to a class of shares cannot be varied without:

(a) a special resolution passed at a meeting of the Members holding Shares in that class; or
(b) the written consent of the Members who are entitled to at least 75% of the votes that may be cast in respect of Shares in that class.

Accordingly, the Company seeks approval from Shareholders for the issue of the Performance Shares as a new class of shares on the terms set out in Schedule 3 of this Explanatory Memorandum. This Resolution is a special resolution.

The Company will also seek Shareholder approval in Resolution 3 for the Blue Sky Transaction, under which It will issue the Performance Shares to Blue Sky.

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2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE – TRANCHE 1 PLACEMENT OF SHARES

2.1 General

On 11 December 2014, the Company issued 158,000,000 Shares at an issue price of $0.005 per Share to raise $790,000. Pursuant to the terms of the Investment Agreement, all Shares issued pursuant to the Tranche 1 Placement are subject to a 12 month voluntary escrow. The Shares issued under Tranche 1 were issued as follows:

a) 94,405,907 Shares were issued within the limit of 15% of issued capital that the Company may issue in any 12 month period without Shareholder approval (under ASX Listing Rule 7.1); and
b) 63,594,093 Shares were issued within the limit of 10% of its issued capital that the Company may issue pursuant to shareholder approval previously granted at the Company’s 2014 Annual General Meeting in accordance with Listing Rule 7.1A.

Resolution 2 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Ratification ).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity 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.

ASX Listing Rule 7.1A provides that an eligible entity may seek shareholder approval at its annual general meeting to have the additional capacity to issue equity securities during any 12 month period up to that amount which represents 10% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period, subject to that issue satisfying certain criteria.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rules 7.1 and 7.1A. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rules 7.1 and 7.1A (and provided that the previous issue did not breach ASX Listing Rules 7.1 or 7.1A) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rules 7.1 and 7.1A.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 in the next 12 months and up to the 10% limit prior to the 2015 Annual General Meeting without the requirement to obtain prior Shareholder approval.

2.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

(a) 158,000,000 Shares were issued, of which 94,405,907 were issued under Listing Rule 7.1 and 63,594,093 were issued under Listing Rule 7.1A;
(b) the issue price was $0.005 per Share;
(c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

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(d) the Shares were issued to Blue Sky; and
(e) the funds raised from this issue were used for planning and managing the drilling of two wells in the Hegang area of China, the costs of this transaction and general working capital.

3. RESOLUTION 3 – APPROVAL OF BLUE SKY TRANSACTION

3.1 General

Resolution 3 seeks Shareholder approval for the purpose of Item 7 of Section 611 of the Corporations Act to allow the Company to proceed with the Blue Sky Transaction which subject to the passing of Resolution 3 and 4, completion of the Blue Sky Transaction and satisfaction of the milestone conditions attaching to the Performance Shares, may result in Blue Sky’s voting power increasing from 19.9% to an estimated maximum of 64.78% . The actual voting power upon completion of the Blue Sky Transaction will depend on the extent to which existing Shareholders elect to take up Shares which are to be preferentially allocated to them under the Tranche 2 Placement of Shares and satisfaction of the milestone conditions attaching to the Performance Shares.

3.2 Item 7 of Section 611 of the Corporations Act

(a) Section 606 of the Corporations Act – Statutory Prohibition

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the company increases:

(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%,

( Prohibition ).

(b) Voting Power

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting shares in the company in which the person and the person’s associates have a relevant interest.

(c) Blue Sky’s entitlements in the Company

Blue Sky currently holds the following Shares and/or Options in the Company:

Current holdings of Blue Sky:

Shares	Options	Voting Power
158,000,000	Nil	19.9%

Subject to the passing of Resolution 3, Blue Sky’s resulting maximum voting power in the Company, will be as follows:

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Maximum holdings of Blue Sky following the Blue Sky Transaction

	Shares	Options	Voting Power
As at the date of this Notice	158,000,000	Nil	19.9%
On conversion of the Convertible Loan	241,333,334	Nil	27.51%
On completion of the Tranche 2 Placement	574,666,667	Nil	47.47%
On satisfaction of the milestone conditions attaching to the Performance Shares	1,169,930,835 *	Nil	64.78%

(d) Associates

For the purposes of determining voting power under the Corporations Act, a person ( second person ) is an “associate” of the other person ( first person ) if:

(i) (pursuant to Section 12(2) of the Corporations Act) the first person is a body corporate and the second person is:
(A) a body corporate the first person controls;
(B) a body corporate that controls the first person; or
(C) a body corporate that is controlled by an entity that controls the person;
(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; or
(iii) the second person is a person with whom the first person is acting or proposes to act, in concert in relation to the company’s affairs.

Associates are, therefore, determined as a matter of fact. For example where a person controls or influences the board or the conduct of a company’s business affairs, or acts in concert with a person in relation to the entity’s business affairs.

(e) Relevant Interests

Section 608(1) of the Corporations Act provides that a person has a relevant interest in securities if they:

(i) are the holder of the securities;
(ii) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(iii) have power to dispose of, or control the exercise of a power to dispose of, the securities.

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It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

In addition, Section 608(3) of the Corporations Act provides that a person has a relevant interest in securities that any of the following has:

(i) a body corporate in which the person’s voting power is above 20%;

(ii) a body corporate that the person controls.

(f) Associates of Blue Sky

No associates of Blue Sky currently have or will have a relevant interest in the Company.

3.3 Reason Section 611 Approval is Required

Item 7 of Section 611 of the Corporations Act provides an exception to the Prohibition, whereby a person may acquire a relevant interest in a company’s voting shares with shareholder approval.

Following the Blue Sky Transaction, Blue Sky will have an estimated maximum relevant interest in 1,169,930,835 Shares in the Company, representing an estimated maximum 64.78% voting power in the Company. This assumes that no other Shares are issued or Options are exercised.

Accordingly, Resolution 3 seeks Shareholder approval for the purpose of Section 611 Item 7 and all other purposes to enable the Company to proceed with the Blue Sky Transaction.

3.4 Specific Information required by Section 611 Item 7 of the Corporations Act and ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders under the Corporations Act and ASIC Regulatory Guide 74 in respect of obtaining approval for Item 7 of Section 611 of the Corporations Act. Shareholders are also referred to the Independent Expert’s Report prepared by BDO annexed to this Explanatory Statement.

(a) Identity of the Acquirer and its Associates

It is proposed that Blue Sky will be issued Shares pursuant to Resolutions 3 and 4.

No associates of Blue Sky currently have or will have a relevant interest in the Company.

(b) Relevant Interest and Voting Power

(i) Relevant Interest

The relevant interests of Blue Sky in voting shares in the capital of the Company (both current, and following the issue of the Shares as contemplated by this Notice) are set out in the table below:

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Party	Relevant Interest as at the date of this Notice of Meeting	Estimated Maximum Relevant Interest after the issue of the Shares pursuant to Resolutions 3 and 4
Blue Sky	158,000,000	1,169,930,835
Non-associated Shareholders	635,940,944	635,940,944
TOTAL	793,940,944	1,805,871,779

(ii) Voting Power

The voting power of Blue Sky in voting shares in the capital of the Company (both current, and following the issue and vesting of the Shares as contemplated by this Notice) are set out in the table below:

Party	Voting Power as at the date of this Notice of Meeting	Maximum Voting Power after the issue of the Shares pursuant to Resolutions 3 and 4
Blue Sky	19.9%	64.78%
Non-associated Shareholders	80.1%	35.22%
TOTAL	100%	100%

Further details on the voting power of Blue Sky are set out in the Independent Expert’s Report prepared by BDO.

(iii) Summary of increases

From the above chart it can be seen that the maximum relevant interest that Blue Sky will hold after completion of the Blue Sky Transaction is 1,169,930,835* Shares, and the maximum voting power that Blue Sky will hold is 64.78%. This represents a maximum increase in voting power of 44.88% (being the difference between 19.90% and 64.78%).

(iv) Assumptions

Note that the following assumptions have been made in calculating the above:

(A) the Company has 793,940,944 Shares on issue as at the date of this Notice of Meeting;
(B) the Company does not issue any additional Shares other than those Shares pursuant to Resolutions 3 and 4;
(C)
no Options are exercised; and
(D) existing Shareholders elect not to subscribe for any of the A$750,000 preferential allocation under Tranche 2 of the Placement.

(c) Reasons for the proposed issue of securities

The reason for the Blue Sky Transaction is to procure the Drilling Services to a value of US$2,750,000 and raise up to a further $2,000,000 to enable the

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Company to advance the Aolong JV in China, to develop new gas opportunities in China and for working capital purposes.

(d) Blue Sky’s Intentions

Other than as disclosed elsewhere in this Explanatory Statement, the Company understands that Blue Sky:

(i) has no present intention of making any significant changes to the business of the Company;
(ii) has no present intention to inject further capital into the Company;
(iii) has no present intention regarding the future employment of the present employees of the Company;
(iv) does not intend to redeploy any fixed assets of the Company;
(v) does not intend to transfer any property between the Company and Blue Sky; and
(vi) has no intention to change the Company’s existing policies in relation to financial matters or dividends.

These intentions are based on information concerning the Company, its business and the business environment which is known to Blue Sky at the date of this document.

These present intentions may change as new information becomes available, as circumstances change or in the light of all material information, facts and circumstances necessary to assess the operational, commercial, taxation and financial implications of those decisions at the relevant time.

(e)

Identity, associations and qualifications of Nominee Director

Subject to the passing of Resolution 4, the Company will appoint Mr Po Chan as an executive director with effect from the date of the this Meeting ( Nominee Director ).

Mr Chan is a fellow of the Institute of Chartered Accountants in Australia and is a Director of Afanti Asset Management in Hong Kong. Mr Chan has experience in business consulting and investment banking in China and the Asia Pacific region. Mr Chan has held roles as a Director at PwC in the Advisory division and as a Senior Manager at ANZ in its Project Finance division and has significant experience in transactions in China and Asia Pacific. He holds a Masters Degree in Commerce (specialized in Banking and Finance) from the University of New South Wales in Sydney and a Bachelor Degree in Commerce from the University of Sydney in Sydney.

Neither Mr Chan nor any of his associates currently holds or has a relevant interest in any Shares or Options in the Company.

Subject to the above appointment, the Board will consist of two existing directors of the Company and two representatives of Blue Sky, with the first representative, Mr Tommy Cheng already having been appointed on 9 December 2014. Mr Paul Underwood is expected to continue in his current role as Managing Director / CEO.

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(f) Interests and Recommendations of Directors
(v) None of the current Board members have a material personal interest in the outcome of Resolution 3, except for Mr Tommy Cheng.
(vi) The Directors, other than Mr Tommy Cheng, unanimously recommend that Shareholders vote in favour of Resolution 3. The Director’s recommendations are based on the reasons outlined in sections 3.5 and 3.6 below.
(vii) The Directors are not aware of any other information other than as set out in this Notice of Meeting that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 3.
(g) Capital Structure

Below is a table showing the Company’s current capital structure and the possible capital structure on completion of the Blue Sky Transaction.

	Ordinary Shares	Performance shares	Options
Balance at the date of this Notice	793,940,944		85,000,000
Maximum Shares to be issued on conversion of Convertible Loan	83,333,334
Maximum Shares to be issued on completion of the Tranche 2 Placement	333,333,333	-
Estimated maximum shares to be issued as consideration for drilling services	-	558,963,540	-
Estimated maximum balance after completion of the Blue Sky Transaction	1,210,607,611	558,963,540	105,000,000

Assumptions:

no additional Shares are issued by the Company; and
none of the Options have been exercised.

3.5 Advantages of the Blue Sky Transaction

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on proposed Resolution 3:

(a) the completion of the Blue Sky Transaction, would provide the Company with additional funds of up to $2,000,000 (before costs);
(b) with these additional funds the Company’s cash position will increase to approximately $2,961,526 on a pro-forma basis;

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(c) the funds raised will enable the Company to advance the Aolong JV in China and develop new business opportunities in the upstream gas sector in China;
(d) the Drilling Services will be procured at a fixed price (subject to variations only in the event that the programme is modified from the agreed content, e.g. deepening or side-tracking wells) for a majority of non-cash consideration, further advancing the Aolong JV whilst preserving the Company’s cash reserves.

BDO has concluded that the Blue Sky Transaction is not fair but reasonable to the non-associated Shareholders.

3.6 Disadvantages of the Blue Sky Transaction

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on proposed Resolution 3:

(a) No control premium is being paid under the Blue Sky Transaction; and
(b) the completion of the Blue Sky Transaction will increase the voting power of Blue Sky from 19.9% to an estimated maximum of 64.78%, reducing the voting power of non-associated Shareholders in aggregate from 80.1% to an estimated 35.22%

There is no guarantee that the Company’s Shares will not fall in value as a result of the completion of the Blue Sky Transaction.

3.7 Independent Expert’s Report

The Independent Expert's Report prepared by BDO (a copy of which is attached as Annexure A to this Explanatory Statement) assesses whether the Blue Sky Transaction contemplated by Resolution 3 is fair and reasonable to the non-associated Shareholders of the Company.

The Independent Expert’s Report concludes that the Blue Sky Transaction is not fair but reasonable to the non-associated Shareholders of the Company.

The Independent Expert notes that the key advantages of the proposal raised in Resolution 3 to the Company and existing Shareholders are as follows:

(a) funding will be received to advance the Company’s exploration assets; and
(b) the Transaction will include the provision of drilling services.

The key disadvantages noted by the Independent Expert are as follows:

(a) existing Shareholders’ interest in the Company will be diluted as a result of the issue of Shares to Blue Sky; and
(b) the Transaction is not fair, based on a calculation that the preferred value of a Share pre Transaction on a controlling basis is greater than the value of a Share post Transaction on a minority interest basis.

Shareholders are urged to carefully read the Independent Expert’s Report to understand the scope of the report, the methodology of the valuation and the sources of information and assumptions made.

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3.8 Pro forma balance sheet

A pro forma balance sheet of the Company post the completion of Blue Sky Transaction is set out in Schedule 2.

4. RESOLUTION 4 – PLACEMENT – TRANCHE 2 PLACEMENT OF SHARES

4.1 General

Resolution 4 seeks Shareholder approval, subject to the passing of Resolution 3, for the issue of up to 333,333,333 Shares at an issue price of $0.006 per Share to raise up to $2,000,000 ( Tranche 2 Placement ).

A summary of ASX Listing Rule 7.1 is set out in section 2.1 above.

The effect of Resolution 4 will be to allow the Company to issue the Shares pursuant to the Tranche 2 Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Shares to be issued is 333,333,333;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur progressively;
(c) the issue price will be $0.006 per Share;
(d) the Directors will determine to whom the Shares will be issued but these persons will not be related parties of the Company and 125,000,000 of the total Shares to be issued are intended to be issued to parties other than Blue Sky, its Related Body Corporates and Associates;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) the Company intends to use the funds raised from the Placement towards advancement of the Aolong JV and general working capital.

5. RESOLUTION 5 – PLACEMENT – OPTIONS IN CONSIDERATION FOR CORPORATE SERVICES

5.1 General

Resolution 5 seeks Shareholder approval for the issue of up to 20,000,000 Options in consideration for certain corporate services pursuant to an engagement letter between the Company and Canaccord Genuity (Australia) Limited ( Canaccord ), dated on or about 8 August 2014 ( Engagement Letter ) ( Placement ).

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Pursuant to the Engagement Letter, Canaccord exclusively acted as financial advisor to the Company in respect to the Transaction ( Corporate Services ). In partpayment of the consideration of the Corporate Services, the Company agreed, subject to shareholder approval, to issue 20,000,000 Options to Canaccord.

A summary of ASX Listing Rule 7.1 is set out in section 2.1 above.

The effect of Resolution 5 will be to allow the Company to issue the Options pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

5.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Options to be issued is 20,000,000;
(b) the Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Options will occur on the same date;
(c) the Options will be issued for nil cash consideration in satisfaction of the Corporate Services;
(d) the Options will be issued to Canaccord, (or its nominees) none of whom are related parties of the Company;
(e) the Options will be issued on the terms and conditions set out in Schedule 1; and
(f) no funds will be raised from the Placement as the Options are being issued in consideration for the Corporate Services.

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GLOSSARY

$ means Australian dollars.

Investment Agreement has the meaning given to it in Section 1.1 of the Explanatory Statement.

Associate has the same meaning as under the Corporations Act.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Blue Sky means Blue Sky Power Holdings Limited (Bermudan Company Number 39018).

Blue Sky Transaction has the meaning given to it in Section 1.1 of the Explanatory Statement.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Canaccord means Canaccord Genuity (Australia) Limited (ABN 19 075 071 466).

Chair means the chair of the Meeting.

Company means Triple Energy Limited (ACN 116 829 675).

Completion means completion under the Investment Agreement.

Constitution means the Company’s constitution.

Convertible Loan has the meaning given to it in Section 1.2 of the Explanatory Statement.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Drilling Contract means the contract to be procured by Blue Sky in respect to the completion of the Drilling Services.

Drilling Services means turnkey drilling services in respect to all matters related to the supply, mobilisation and demobilisation of all equipment and personnel, planning, well design and engineering, drilling, testing, logging, casing, cementing, coring, fraccing and 6 months production testing of two test wells for the Aolong JV, as well as well sites restoration at a fixed cost of A$3,571,585, before 31 December 2015. Such wells are to be drilled to a minimum depth such that they at least intersect Seam #3 and #6 in Bird Mountain and Seam #11 through to Seam #22 in Yixin Area (or another area if necessary in place of Yixin Area as agreed by the Board. Included within the fixed price and scope of the Drilling Services is the acquisition of wirleine desorption core (and desorption analysis) over the main seams in the Yixin Well and Bird Mountain Wells, conducting Drill Stem Tests in the two best coal seams of each the Yixin Area well and the Bird Mountain Area, gas analysis, mud and wireline logging, fraccing three seams in Yixin and one seam in Bird Mountain, six months production testing and supervision of both wells and all associated Reports as set out in the Drilling Agreement.

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Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Independent Expert Report means the Independent Experts Report prepared by BDO which is attached to this Notice as Annexure 1.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share on the terms and conditions set out in Schedule 1.

Performance Shares mean performance shares on the terms and conditions set out in Schedule 3.

Procurement of Drilling Services has the meaning given to it in Section 1.2 of the Explanatory Statement.

Proxy Form means the proxy form accompanying the Notice.

Related Bodies Corporate has the same meaning as under the Corporations Act.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

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

Shareholder means a registered holder of a Share.

Tranche 1 Placement has the meaning given to it in Section 1.2 of the Explanatory Statement.

Tranche 2 Placement has the meaning given to it in Section 1.2 of the Explanatory Statement.

WST means Western Standard Time as observed in Perth, Western Australia.

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SCHEDULE 1 – OPTION TERM S AND CONDITIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.006 ( Exercise Price )

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on expiration of the Exercise Period ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the date that is 180 days from the date of issue of the Options ( Exercise Period ).

(e)

Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g)

Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

(i) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
(iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being

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ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(l) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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SCHEDULE 2 – PRO FORM A BALANCE SHEET OF COM PANY

Assets Cash and cash equivalents (1) Other current assets Total Current Assets Non-current assets Deferred exploration and evaluation expenditure (2) Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and Other Payables Other Financial Liabilities (3) Total Current Liabilities Non-Current liabilities Total Liabilities Net Assets Equity Issued capital (4) Reserves Accumulated losses Parent Entity Interest Non-controlling interests Total equity	Consolidated Consolidated 30-Sep-14 Pro-forma Audit Reviewed 397,486 2,961,526 170,483 170,483
	567,969 3,132,009
	203,155 203,155 4,629,210 8,200,795
	4,832,365 8,403,950
	5,400,334 11,535,959
	121,194 121,194 213,765 -
	334,959 121,194
	- -
	334,959 121,194
	5,065,375 11,414,765
	29,602,943 35,918,733 673,078 (7,639) (25,884,448) (25,884,448)
	4,391,573 10,026,646 673,802 1,388,119
	5,065,375 11,414,765

(1) Reconciliation of movements in Cash As at 30 September 2014 Additional funds received for Tranche 1 Placement Aolong Loan funds Tranche 2 Placement (maximum) Expected transaction costs Proforma	A$ 397,486 576,235 500,000 2,000,000 (512,195)
	2,961,526

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(2)	Reconciliation of movements in Deferred Exploration and Evaluation	Reconciliation of movements in Deferred Exploration and Evaluation	Reconciliation of movements in Deferred Exploration and Evaluation	Reconciliation of movements in Deferred Exploration and Evaluation	Reconciliation of movements in Deferred Exploration and Evaluation	Expenditure
					A$
	As at 30 September 2014				4,629,210
	Capitalised share-based drilling costs				3,571,585
	Proforma				8,200,795
(3)	Reconciliation of movements in Other financial			liabilities
	As at 30 September 2014				213,765
	Settlement under Tranche 1 Placement				(213,765)
	Proforma				-
(4)	Reconciliation of movements in Issued Capital
					A$	Shares
	As at 30 September 2014				29,602,943	635,940,932
	Tranche 1 placement				790,000	158,000,000
	Tranche 2 Placement (maximum)				2,000,000	333,333,333
	Aolong Loan conversion				500,000	83,333,334
	Drilling shares (estimated,	upon	vesting	and
	conversion)				3,571,585	595,264,168
	Equity-settled transaction costs (Canaccord options)				(33,600)	-
	Other transaction costs				(499,127)
	Proforma				35,918,733	1,805,871,767
(5)	Reserves
	As at 30 September 2014				673,078
	Change in net assets attributable to non-controlling
	interests				(714,317)
	Equity-settled transaction costs (Canaccord options)				33,600
	Proforma				(7,639)

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SCHEDULE 3 – TERM S AND CONDITIONS OF PERFORM ANCE SHARES

The terms of the Performance Shares are set out as follows:

(a) ( Performance Shares ): Each Performance Share is a share in the capital of the Company.
(b) (General Meetings) : The Performance Shares shall confer on the holder ( Holder ) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to the Company’s shareholders. Holders have the right to attend general meetings of the Company’s shareholders.
(c) (No Voting Rights) : The Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of the Company’s shareholders, subject to any voting rights under the Corporations Act 2001 (Cth) or the ASX Listing Rules where such rights cannot be excluded by these terms.
(d) (No Dividend Rights) : The Performance Shares do not entitle the Holder to any dividends.
(e) (No Rights on Winding Up) : Upon winding up of the Company, the Performance Shares may not participate in the surplus profits or assets of the Company.
(f) (Transfer of Performance Shares) : The Performance Shares are not transferable.
(g) (Reorganisation of Capital) : In the event that the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the ASX Listing Rules at the time of reorganisation provided that, subject to compliance with the ASX Listing Rules, following such reorganisation the economic and other rights of the Holder are not diminished or terminated.
(h) (Application to ASX) : The Performance Shares will not be quoted on ASX. Upon conversion of the Performance Shares into Shares in accordance with these terms, the Company must within seven (7) days after the conversion, apply for and use its best endeavours to obtain the official quotation on ASX of the Shares arising from the conversion.
(i) (Participation in Entitlements and Bonus Issues) : Subject always to the rights under item (g) ( Reorganisation of Capital ), Holders of Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(j) (Amendments required by ASX) : The terms of the Performance Shares may be amended as necessary by the board of directors of the Company in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or terminated.
(k) (No Other Rights) : The Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

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Conversion of the Performance Shares

(a) (Milestones) : The Performance Shares will convert into Shares on a one (1) for one (1) basis upon the Company determining that the Drilling Services have been completed in full ( Milestone* ).
(b) (Conversion of Performance Shares) : Each Performance Share will convert into one Company Share upon the relevant Milestone being achieved.
(c) (No Conversion if Milestone not Achieved) : The Milestone expiry date is 31 December 2015 ( Milestone Expiry Date ). Any Performance Share not converted into a Company Share by the Milestone Expiry Date will lapse ( Milestone Expiry Date ).
(d) (After Conversion) : The Shares issued on conversion of the Performance Shares will, as and from 5.00pm (WST) on the date of issue, rank equally with and confer rights identical with all other Shares then on issue and application will be made by the Company to ASX for official quotation of the Shares issued upon conversion.
(e) (Conversion Procedure) : The Company will issue the Holder with a new holding statement for the Shares as soon as practicable following the conversion of the Performance Shares into Shares.
(f) (Ranking of Shares) : The Shares into which the Performance Shares will convert will rank pari passu in all respects with the Shares on issue at the date of conversion.
(g) ( Conversion on Change in Control ): subject to item (h) ( Takeover Provisions ), if prior to the Milestone Expiry Dates a Change in Control Event occurs, then each Performance Share will automatically and immediately convert into a Share. However, if the number of Shares to be issued as a result of the conversion of the Performance Shares is in excess of 10% of the total fully diluted share capital of the Company at the time of the conversion, then the number of Performance Shares to be converted will be reduced so that the aggregate number of Shares to be issued on conversion of the Performance Shares is equal to 10% of the entire fully diluted share capital of the Company.

For the purpose of this clause, Change of Control means:

(i) a bona fide takeover bid is declared unconditional and the bidder has acquired a relevant interest in at least 50.1% of the Company’s issued Shares; or
(ii) a court approves under Section 411(4)(b) of the Corporations Act 2001(Cth) (Act) a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies.
(h) ( Takeover Provisions ):
(i) If the conversion of Performance Shares (or part thereof) would result in any person being in contravention of Section 606(1) of the Act then the conversion of each Performance Share that would cause the contravention shall be deferred until such time or times

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thereafter that the conversion would not result in a contravention of Section 606(1) of the Act.

(ii) The Holders shall give notification to the Company in writing if they consider that the conversion of Performance Shares (or part thereof) may result in the contravention of Section 606(1) of the Act failing which the Company shall assume that the conversion of Performance Shares (or part thereof) will not result in any person being in contravention of Section 606(1) of the Act.
(iii) The Company shall (but is not obliged to) by written notice request the Holders to give notification to the Company in writing within 7 days if they consider that the conversion of Performance Shares (or part thereof) may result in the contravention of Section 606(1) of the Act. If the Holders do not give notification to the Company within 7 days that they consider the conversion of Performance Shares (or part thereof) may result in the contravention of Section 606(1) of the Act then the Company shall assume that the conversion of Performance Shares (or part thereof) will not result in any person being in contravention of Section 606(1) of the Act.

*Drilling Services means turnkey drilling services in respect to all matters related to the supply, mobilisation and demobilisation of all equipment and personnel, planning, well design and engineering, drilling, testing, logging, casing, cementing, coring, fraccing and 6 months production testing of two test wells for the Aolong JV, as well as well sites restoration at a fixed cost of US$2,750,000, before 31 December 2015. Such wells are to be drilled to a minimum depth such that they at least intersect Seam #3 and #6 in Bird Mountain and Seam #11 through to Seam #22 in Yixin Area (or another area if necessary in place of Yixin Area as agreed by the Board. Included within the fixed price and scope of the Drilling Services is the acquisition of wirleine desorption core (and desorption analysis) over the main seams in the Yixin Well and Bird Mountain Wells, conducting Drill Stem Tests in the two best coal seams of each the Yixin Area well and the Bird Mountain Area, gas analysis, mud and wireline logging, fraccing three seams in Yixin and one seam in Bird Mountain, six months production testing and supervision of both wells and all associated Reports as set out in the Drilling Agreement.

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ANNEXURE 1 – INDEPENDENT EXPERT’S REPORT

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TRIPLE ENERGY LIMITED Independent Expert’s Report NOT FAIR BUT REASONABLE

17 March 2015

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Financial Services Guide

17 March 2015

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 (‘ we ’ or ‘ us ’ or ‘ ours ’ as appropriate) has been engaged by Triple Energy Limited (‘ Triple Energy ‘) to provide an independent expert’s report on the proposal to provide underwriting, a conversion of a loan and procuring drilling services for cash by Blue Sky Power Limited is fair and reasonable to non associated shareholders. You will be provided with a copy of our report as a retail client because you are a shareholder of Triple Energy.

Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (‘ FSG ’). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

Who we are and how we can be contacted;
The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 316158;
Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
Any relevant associations or relationships we have; and
Our internal and external complaints handling procedures and how you may access them.

Information about us

BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services.

We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients.

When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you.

General Financial Product Advice

We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice.

BDO CORPORATE FINANCE (WA) PTY LTD

Financial Services Guide

Page 2

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Fees, commissions and other benefits that we may receive

We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $24,000.

Except for the fees referred to above, neither BDO, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from Triple Energy for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Complaints resolution

Internal complaints resolution process As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA 6872.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (‘ FOS ’). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter. Our FOS Membership Number is 12561. Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399 Email: [email protected]

Contact details

You may contact us using the details set out on page 1 of the accompanying report.

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1.	Introduction	1
2.	Summary and Opinion	2
3.	Scope of the Report	4
4.	Outline of the Transaction	5
5.	Profile of Triple Energy Limited	6
6.	Profile of Blue Sky	11
7.	Economic analysis	14
8.	Industry analysis	15
9.	Valuation approach adopted	19
10.	Valuation of a Triple Energy Share prior to the Transaction	21
11.	Valuation of Triple Energy following the Transaction	28
12	Is the Transaction fair?	30
13	Is the Transaction reasonable?	31
12.	Conclusion	34
13.	Sources of information	34
14.	Independence	34
15.	Qualifications	35
16.	Disclaimers and consents	35

Appendix 1 – Glossary

Appendix 2 – Valuation Methodologies

Appendix 3 - Independent Valuation Report prepared by AWT International

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17 March 2015

Triple Energy Limited Unit 15, Level 1 100 Railway Road SUBIACO WA 6008

Dear Directors

INDEPENDENT EXPERT’S REPORT

1. Introduction

On 26 November 2014, Triple Energy Limited (‘ Triple Energy ’ or ‘ the Company ’) announced that further to the Memorandum of Understanding ( ‘MoU’ ) entered into with Blue Sky Power Holdings Limited ( ‘Blue Sky’ ), of Hong Kong on 13 August 2014, an updated binding MoU was executed and a share placement of A$790,000 at a price of A$0.005 has been agreed. On completion of this transaction, Blue Sky will hold 19.99% of Triple Energy’s issued capital. The placement has been completed and Mr Tommy Cheng has been appointed to the Board.

The MoU sets out a number of transactions between the Company and Blue Sky being;

Blue Sky will provide an interest free loan of A$500,000 to Triple Energy’s wholly owned subsidiary CFT Heilongjiang (HK) in order to facilitate the preparation of further drilling activities in Hegang, this loan is convertible into Triple Energy shares at a price of A$0.006, these funds have been received.
Triple Energy are arranging a placement of shares to raise A$2,000,000 at an issue price of A$0.006, unconditionally underwritten by Blue Sky to the extent of A$1,250,000 with A$750,000 reserved for existing shareholders for a time when shareholders wish to apply for shares.
Additionally, Blue Sky is required to procure a China-based drilling company for Triple Energy, in order to execute a two well drilling program. The drilling service will be capped at A$2,750,000 with the fee to be paid to Blue Sky by an issue of shares in Triple Energy at a price of A$0.006. These shares will be voluntarily escrowed for a 12 month period from the date of issue, theses shares will initially be performance shares that will vest only on completion of the drilling.

The transactions outlined in the binding MoU will subsequently be referred to as ( ‘the Transaction’ ).

Following the issue of shares under the Transaction, Blue Sky’s interest will exceed 20%. Completion of the Transaction requires approval of Triple Energy’s shareholders, pursuant to Section 611 Item 7 of the Corporations Act 2001 (Cth) (the ‘Act” ), because the issue of shares would result in Blue Sky obtaining greater than 20% voting power in the Company.

Refer to Section 4 of our report for further details surrounding the Transaction.

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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2. Summary and Opinion

2.1 Purpose of the report

The directors of Triple Energy have requested that BDO Corporate Finance (WA) Pty Ltd (‘ BDO ’) prepare an independent expert’s report (‘ our Report ’) to express an opinion as to whether or not the Transaction is fair and reasonable to the non-associated shareholders of Triple Energy (‘ Shareholders ’).

Our Report is prepared pursuant to section 611 of the Act and is to be included in the Explanatory Memorandum for Triple Energy in order to assist the Shareholders in their decision whether to approve the Transaction.

2.2 Approach

Our Report has been prepared having regard to Australian Securities and Investments Commission (‘ ASIC ’), Regulatory Guide 74 ‘Acquisitions Approved by Members’ ( ‘RG 74’ ), Regulatory Guide 111 ‘Content of Expert’s Reports’ (‘ RG 111 ’) and Regulatory Guide 112 ‘Independence of Experts’ (‘ RG 112 ’).

In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this report. We have considered:

How the value of a Triple Energy share prior to the Transaction on a controlling interest basis compares to the value of a Triple Energy share on a minority interest basis following the Transaction;
The likelihood of a superior alternative offer being available to Triple Energy;
Other factors which we consider to be relevant to the Shareholders in their assessment of the Transaction; and
The position of Shareholders should the Transaction not proceed.

2.3 Opinion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that, in the absence of a superior offer, the Transaction is not fair but reasonable to Shareholders.

In our opinion, the Transaction is not fair because the value of a Triple Energy Share prior to the Transaction on a controlling basis exceeds the value of a Triple Energy share following the Transaction on a minority interest basis. However, we consider the Transaction to be reasonable because the advantages of the Transaction to Shareholders are greater than the disadvantages. In particular, Triple Energy has sought funding for a significant period of time to fund further exploration activities and may face difficulties in finding alternate funding if the Transaction does not proceed, in addition to this the funding of will provide the ability to further advance the project which may enhance the value of the project due to the early stage information currently available which has limited the approach of the independent valuer in their report contained in Appendix 3.

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2.4 Fairness

In section 12 we determined how the value of a Triple Energy share prior to the Transaction on a controlling interest basis compares to the value of a Triple Energy share on a minority interest basis following the Transaction, as detailed below.

		Low	Preferred	High
	Ref
		$	$	$
Value of a Triple Energy share pre Transaction	10.1	0.0066	0.0064	0.0088
Value of a Triple Energy share post Transaction	11	0.0044	0.0049	0.0054
The above valuation ranges are graphically presented below: Valuation Summary
Value of a Triple Energy share following the Transaction on a minority basis Value of a Triple Energy share prior to the Transaction on a control basis
0.000 0.002 0.004 0.006 0.008 Value ($)				0.010

The above pricing indicates that, in the absence of any other relevant information, and a superior offer, the Transaction is not fair for Shareholders.

2.5 Reasonableness

We have considered the analysis in section 13 of this report, in terms of both

advantages and disadvantages of the Transaction; and
other considerations, including the position of Shareholders if the Transaction does not proceed and the consequences of not approving the Transaction.

In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the position if the Transaction is not approved. Accordingly, in the absence of any other relevant information and/or a superior proposal we believe that the Transaction is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

ADVANTAGES AND DISADVANTAGES

	Section	Advantages	Section	Disadvantages
	13.4	Funding to advance the Company’s exploration assets	13.5	The Transaction is not fair
	13.4	Procurement of drilling services	13.5	Dilution of existing shareholders

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Other key matters we have considered include:

Section	Description
13.1	Alternative proposals
13.2	Practical level of control
13.3	Consequences of not approving the Transaction

3. Scope of the Report

3.1 Purpose of the Report

Section 606 of the Corporations Act Regulations (‘ the Act ’) expressly prohibits the acquisition of shares by a party if that acquisition will result in that person (or someone else) holding an interest in 20% or more of the issued shares of a public company, unless a full takeover offer is made to all shareholders.

Section 611 permits such an acquisition if the shareholders of that entity have agreed to the issue of such shares. This agreement must be by resolution passed at a general meeting at which no votes are cast in favour of the resolution by any party who is associated with the party acquiring the shares, or by the party acquiring the shares. Section 611 states that shareholders of the company must be given all information that is material to the decision on how to vote at the meeting.

RG 74 states that the obligation to supply shareholders with all information that is material can be satisfied by the non-associated directors of Triple Energy, by either:

undertaking a detailed examination of the Transaction themselves, if they consider that they have sufficient expertise; or
by commissioning an Independent Expert's Report.

The directors of Triple Energy have commissioned this Independent Expert's Report to satisfy this obligation.

3.2 Regulatory guidance

Neither the Listing Rules nor the Corporations Act defines the meaning of ‘fair and reasonable’. In determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should consider to assist security holders to make informed decisions about transactions.

This regulatory guide suggests that where the transaction is a control transaction, the expert should focus on the substance of the control transaction rather than the legal mechanism to affect it. RG 111 suggests that where a transaction is a control transaction, it should be analysed on a basis consistent with a takeover bid.

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In our opinion, the Transaction is a control transaction as defined by RG 111 and we have therefore assessed the Transaction as a control transaction to consider whether, in our opinion, it is fair and reasonable to Shareholders.

3.3 Adopted basis of evaluation

RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the securities subject of the offer. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length. When considering the value of the securities subject of the offer in a control transaction the expert should consider this value inclusive of a control premium. Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid.

Having regard to the above, BDO has completed this comparison in two parts:

A comparison between the value of a Triple Energy share prior to the Transaction and the value of a Triple Energy share following the Transaction on a minority interest basis (fairness – see Section 12 ‘Is the Transaction Fair?’); and
An investigation into other significant factors to which Shareholders might give consideration, prior to approving the resolution, after reference to the value derived above (reasonableness – see Section 13 ‘Is the Transaction Reasonable?’).

This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards Board professional standard APES 225 ‘Valuation Services’ (‘ APES 225 ’).

A Valuation Engagement is defined by APES 225 as follows:

‘an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time.’

This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.

4. Outline of the Transaction

On 26 November 2014, Triple Energy announced an agreement with Blue Sky whereby a binding Memorandum of Understanding had been reached in relation to four transactions. These four transactions involve the following:

Blue Sky subscribing via a placement of shares in Triple Energy to the value of A$790,000 at a price of A$0.005 per share, wherein Blue Sky will acquire 19.90% of Triple Energy. Following completion of this transaction, Blue Sky holds 19.9% of Triple Energy’s issued capital and Blue Sky chairman, Mr Tommy Cheng, has joined Triple Energy’s board as Non-Executive Chairman.
Blue Sky will provide an interest free loan of A$500,000 to facilitate the preparation for the drilling of two wells in Hegang. This loan is convertible into Triple Energy shares at a price of A$0.006.

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Triple Energy will arrange a placement of shares to raise $2,000,000 at an issue price of $0.006, unconditionally underwritten by Blue Sky to the extent of A$1,250,000 with A$750,000 reserved for existing shareholders should they wish to apply for shares.
Triple Energy will enter into an agreement with Blue Sky whereby Blue Sky will arrange a drilling company based in China to execute a two well drilling and testing programme. The fee for these drilling services will be capped at a value of US$2,750,000. The fee for these drilling services will be paid to Blue Sky by way of an issue of Triple Energy shares at a price of A$0.006. Such shares will be voluntarily held in escrow for a 12 month period from the date of issue.

5. Profile of Triple Energy Limited

5.1 History

Triple Energy is an oil and gas company with a mandate to invest in both conventional and unconventional sectors. The Company was formerly known as Brainz Instruments Limited and Tango Petroleum and listed on the ASX in December 2005. The Company’s key interest lies in its 80% owned coal mine gas project, located in China.

Hegang is the first project area encompassed into a Joint Venture Agreement with the owner of the coal mining leases, LongMay Coal mining Company Ltd ( ‘LongMay’ ). The Joint Venture incorporates three other ‘option’ areas, being Jixi, Shan Ya Shan and Qi Tai He.

The current directors and senior management of Triple Energy are:

Tommy Cheng – Non Executive Chairman

Paul Underwood - Chief Executive Officer

Garry Ralston – Non-executive Director

5.2 Projects

Coal Mine Gas Project

Triple Energy acquired an 80% profit share of the project in December 2012 which is located in Heilongjiang Province, China. Triple Energy funded the first well ( ‘Xian Xian’ ) in June 2013. The Hegang coal mine gas project is located in the Xian Xian area of Hegang in China and was the first project area included in a Joint Venture Agreement (“ JVA ”) with the owner of the coal mining leases, LongMay. The JVA incorporates three other “option areas being Jixi, Shan Ya Shan and Qi Tai He.

The Xian Xian well demonstrated reservoir permeability and high methane gas levels suitable for an unconventional gas project. Three principal coal seams of interest were penetrated in the Xian Xian well:

Seam #15 – Encountered at 592.2 meters with log data confirming the total net coal seam thickness of 7.2 meters. The seam had gas readings of 15.03% which is the highest in the well. The permeability in the well is approximate to successful producing coal seam mining projects in Bowen Basin in Queensland.

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Seam #11 – Encountered at 485.2 meters and is interpreted on logging data as being 7.8 meters thick. The drillings indicated relatively low permeability but the readings are within the present commercial completion practices.
Seam #18 – Encountered a 7.6 meter thick coal seam at 626.8 meters. Seam #18 has similar characteristics to seam #15 with high relative methane measurements.

Further information on the Company’s project is included in the independent specialists report prepared by AWT included at Appendix 3.

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5.1 Historical Balance Sheet

Triple Energy Limited - Statement of Financial Position	Reviewed period Audited for the Audited for the ended 30 -Sept-14 year ended 31-Mar-14 year ended 31-Mar-13 $ $
CURRENT ASSETS Cash assets Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Tangible fixed assets Exploration and evaluation TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables Other financial liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES	397,486 850,955 2,166,950 170,483 167,275 123,949
	567,969 1,018,230 2,290,899 203,155 211,210 29,591 4,629,210 4,227,231 2,034,416
	4,832,365 4,438,441 2,064,007

	5,400,334 5,456,671 4,354,906
	121,194 316,977 229,928 213,765
	334,959 316,977 229,928
	- - - - - -
	334,959 316,977 229,928

NET ASSETS	5,065,375 5,139,694 4,124,978
EQUITY Issued capital Reserves Accumulated losses	29,602,943 29,602,943 27,887,943 673,078 520,350 991,951 (25,884,448) (25,619,219) (25,016,354)
Parent entity interest	4,391,573 4,504,074 3,863,540
Non-controlling interests	673,802 635,620 261,438
TOTAL EQUITY	5,065,375 5,139,694 4,124,978

Source: Triple Energy Half year report and 2014 Annual report

Cash decreased to A$850,955 as at 31 March 2014 from A$2,166,950 as at 31 March 2013 primarily due to an increase in payments for exploration and evaluation expenditure, as well as an increase in payments for other fixed assets. Further expenditure saw cash decrease to 30 September 2014, a further $213,000 was received as an exclusivity fee as part of the Transaction which resulted in a liability for a future issue of shares also being recorded.

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5.2 Historical Statement of Comprehensive Income

Triple Energy Limited - Statement of Comprehensive Income	Reviewed period Audited for the Audited for the Audited for the ended 30 -Sept-14 year ended 31-Mar-14 year ended 31-Mar-13 year ended 31-Mar-12 $ $ $
Revenue Other income Expenses Share based payments expense Exploration expenditure written off Administrative expenses Directors fees Other expenses Loss from continuing operations before income tax Income tax expense Loss from continuing operations after income tax Exchange differences on translation of foreign operations	3,769 17,155 28,924 5,131 - - (164,000) (127,951) - - (202,215) (1,635,964) (182,365) - - - (86,633) - - - - (620,020) (629,755) (656,662)
	(265,229) (602,865) (967,046) (2,415,446) - - - -
	(265,229) (602,865) (967,046) (2,415,446)
	190,910 - - -
Total comprehensive loss for the year	(74,319) (602,865) (967,046) (2,415,446)

Source: Triple Energy Half year report and 2014 Annual report

5.3 Capital Structure

The share structure of Triple Energy as at 30 December 2014 is outlined below:

	Number
Total ordinary shares on issue	793,940,932
Top 20 shareholders	407,853,309
Top 20 shareholders - % of shares on issue	51.37%

Source: Share registry report

The range of shares held in Triple Energy as at 30 December 2014 is as follows:

	Number of Ordinary	Number of Ordinary	Percentage of Issued
Range of Shares Held	Shareholders	Shares	Shares (%)
1 - 1,000	38	12,638	0.00%
1,001 - 5,000	65	232,667	0.03%
5,001 - 10,000	111	1,012,667	0.13%
10,001 - 100,000	279	13,932,692	1.75%
100,001 - and over	438	778,750,268	98.09%
TOTAL	931	793,940,932	100.00%

Source: Share registry report

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The ordinary shares held by the most significant shareholders as at 30 June 2014 are detailed below:

Name	Number of Ordinary Shares Held Percentage of Issued Shares (%)
Waypost Limited Hazardous Inv PL Paul Underwood Mandalay Capital Group Ltd Webinvest PL Weston Ben Subtotal	158,000,000 19.90% 67,591,704 8.51% 25,000,000 3.15% 19,075,750 2.40% 14,010,694 1.76% 13,700,000 1.73%
	139,378,148 17.56%
Others	654,562,784 82.44%
Total ordinary shares on Issue	793,940,932 100.00%

Source: Share registry report as at 30 December 2014

As at the date of this report, the following Triple Energy listed options were on issue:

Current Options on Issue	Number
Class A options exercisable at $0.03	15,000,000
Class B options exercisable at $0.03	15,000,000
Class C* options exercisable at $0.04	15,000,000
Class E options exercisable at $0.04	40,000,000
TOTAL	85,000,000
Source: Triple Energy Limited 2014 & 2013 annual reports

*Class C options are subject to a vesting condition of a VWAP of 5 cents or above on the ASX for 10 consecutive trading days.

On 7 February 2013, pursuant to shareholder approval, the Company issued 350,000,000 performance shares in respect of the acquisition of CFT Heilongjiang (HK) Limited. The performance shares were issued in four tranches. 125 million Tranche 4 performance shares remain on issue. The vesting milestones are

Tranche 4 – Vesting upon the completion of 20 development wells having been drilled and completed on the CFT CBM Project or the completion of an alternative development well drill programme which the parties have agreed, which independent engineers prognose will deliver an equivalent or better economic outcome at a similar cost as a 20 well programme producing not less than 10mmscf/day. The Tranche 4 performance shares expire 24 months from the date of issue.

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6. Profile of Blue Sky

6.1 History

Blue Sky is a Hong Kong listed energy and printing company. The Company is incorporated in Bermuda and listed on the HKE in July 2011. The Company is also listed on the Singapore Stock Exchange. The Company’s key activity is investment holding. The Companies major interest lies in its 80% owned Hegang coal mine gas project, located in China. Other activities include the sale of book products and the sale of specialised products (custom made and value added printing products).

The current directors and senior management of Blue Sky are:

Tommy Cheng – Executive Chairman

Thomas Sze – Chief Executive Officer

Kwok Shek San – Chief Financial Officer and Executive Director

Raymond Chan – Chief Operating Officer and Executive Director

Hung Tao – Executive Director

Stella Chung – Executive Director

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6.2 Historical Balance Sheet

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Source: Blue Sky Power Holdings Interim Results announcement

We have not undertaken a review of Blue Sky’s unaudited accounts in accordance with Australian Auditing and Assurance Standard 2405 ‘Review of Historical Financial Information’ and do not express an opinion on this financial information.

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6.3 Historical Statement of Comprehensive Income

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Source: Blue Sky Power Holdings Interim Results announcement

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7. Economic analysis

7.1 Australia

8 Growth in the global economy continued at a moderate pace in 2014. A similar performance is expected by most observers in 2015, with the US economy continuing to strengthen, even as China’s growth slows a little from last year’s outcome.
9 Commodity prices have declined over the past year, in some cases sharply. The price of oil in particular has fallen significantly. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates.
10 Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns at all-time lows over recent months. Some risk spreads have widened a little but overall financing costs for creditworthy borrowers remain remarkably low.
11 In Australia the available information suggests that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak. As a result, the unemployment rate has gradually moved higher over the past year. The economy is likely to be operating with a degree of spare capacity for some time yet. With growth in labour costs subdued, it appears likely that inflation will remain consistent with the target over the next one to two years, even with a lower exchange rate.
12 Credit is recording moderate growth overall, with stronger growth in lending to investors in housing assets. Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities over recent months. The Reserve Bank of Australia (‘ the Bank ’) is working with other regulators to assess and contain risks that may arise from the housing market. In other asset markets, prices for equities and commercial property have risen, in part as a result of declining longterm interest rates.
13 The Australian dollar has declined noticeably against a rising US dollar, though less so against a basket of currencies. It remains above most estimates of its fundamental value, particularly given the significant declines in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.
14 At today’s meeting the Board of the Bank judged that, having eased monetary policy at the previous meeting, it was appropriate to hold interest rates steady for the time being. Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board of the Bank will further assess the case for such action at forthcoming meetings.
15 Source: www.rba.gov.au Statement by Glenn Stevens, Governor: Monetary Policy Decision, 3 March 2015.

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15.1 People’s Republic of China

The Monetary Policy Committee of the People’s Bank of China held its 3rd quarterly meeting on 5 October 2014 in Beijing.

The participants analysed the current economic and financial situation in China and beyond, and were of the view that performance of the Chinese economy is still within a reasonable range. The performance of the financial sector and the overall price level are both stable. However, the complexities of the situation should not be underestimated. The international economic situation and monetary policy of the major economies have diverged as there are more positive signals in the U.S., the euro area has further relaxed its monetary policy, and the real sector in some developing economies faces many difficulties.

It was emphasized at the meeting that the decisions and resolutions adopted at the 18[th] CPC National Congress, 3[rd] Plenum of the 18[th] CPC Central Committee and Central Economic Work Conference will be earnestly implemented. The PBC will closely monitor the latest developments in the real economy and financial sector at home and the world and changes in global capital flow, follow the overall requirements of making progress while maintaining stability, reform and innovation, continue to implement the sound monetary policy, use a multiple of monetary policy tools flexibly, keep liquidity at appropriate levels, and bring about reasonable growth of money, credit and all-system financing aggregates. The financing and credit structure will be improved and financial sector reform will be deepened to improve efficiency and build stronger capacity to serve the real economy. The market-based interest rate regime reform and RMB exchange rate regime will be furthered to keep RMB exchange rate basically stable at an adaptive and equilibrium level.

Source: http://www.pbc.gov.cn/ Statement by People’s Bank of China, 5 October 2014

8. Industry analysis

8.1 Overview on Natural Gas

Natural gas is a flammable mixture of hydrocarbon gases. It is comprised mainly of methane (CH4), with varying levels of heavier hydrocarbons and other gases such as carbon dioxide. Gas is used to generate electricity and to power appliances such as heaters and stoves. It is also used in many industrial processes, including the production of fertilisers, glass, steel, plastics, paint, and fabrics.

There are two main types of natural gas produced:

Conventional Gas: Gas that is typically located in underground reservoirs and trapped in rock; and
Unconventional Gas: Gas that is trapped in impermeable rock, which cannot migrate to a trap and form a conventional gas deposit.

8.2 Overview on Coal Bed Methane

Coal bed methane, also known as coal seam gas, is a form of natural gas that is typically extracted from coal seams at depths of 300-1,000 metres. It is usually comprised of more than 95% pure methane. Coal bed methane was formed over 200 million years ago during coal formation and is contained in the fine

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structures of coal seams. Extraction of coal bed methane requires water extraction which reduces the pressure in the coal seam, allowing the methane to be released from the coal.

Similarly to conventional gas, coal bed methane is used in domestic households, industrial processes and for electricity generation.

The main difference between conventional gas and unconventional gas such as coal bed methane is the type of reservoir from which they are produced. Due to unconventional gas being located in impermeable structures, it is more difficult to extract than conventional gas.

8.3 Liquefied natural gas

Liquefied natural gas ( ‘LNG’ ) is natural gas that is stored to minus 161 Celsius, so that it becomes a liquid. Before that natural gas can be liquefied, impurities including carbon dioxide, sulphur compounds and heavier hydrocarbons must be removed. Once it has become liquefied, the methane takes up less space. As LNG occupies approximately 1/6000 the space of methane in its gaseous form, it can be exported in purpose-built tanker ships. Once delivered to a terminal, the liquid is then heated and turned back into gas.

As LNG is non-toxic and colourless, it is considered to be one of the safest and cleanest fuels available. When burned, LNG produces mostly carbon dioxide and water vapour.

8.4 Global Gas Reserves

At the end of 2013, proved global gas reserves stood at 185.7 trillion cubic metres, which was a 19.27% increase on the reserves at the end of 2003. The Middle East, Africa, Europe and Eurasia are the biggest players collectively representing 89.5% of total proved gas reserves.

Global Proved Gas Reserves - 2013

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6% [4%]
8%
43%
8%
31%
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Middle East Europe and Eurasia Asia Pacific Africa North America South and Central America

Source: BP Statistical Review of World Energy June 2014

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8.5 Global Gas Production and Consumption

Global Production and Consumption of Natural Gas (2003-2013)

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3,600
3,400
3,200
3,000
Consumption
2,800
Production
2,600
2,400
2,200
Billion cubic metres
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Source: BP Statistical Review of World Energy June 2014

As illustrated in the graph above, global production of gas has trended upwards and has consistently exceeded global consumption. This is primarily due to natural gas being in a constant state of oversupply due to the difficulty faced by operators in reducing production. This is because ceasing production and shutting off wells runs the risk of losing the supply altogether.

In 2009, global production of gas contracted due to the global financial crisis resulting in an economic slowdown. As producers were unable to reduce production during the start of the recession in 2008, this resulted in gas producers accumulating large stockpiles of gas, leading to a fall in production in 2009.

In 2010, improvement in the global economy saw an increase in consumption and by the end of 2010, gas operators had exhausted their accumulated stockpiles. Since 2010, production of gas has continued to grow and outstrip consumption, with the increase primarily driven by the relative cost advantages of natural gas over coal for power generation. Furthermore, production of natural gas is anticipated to continue to increase as a result of advanced technologies enabling the production of unconventional gas such as shale gas and coal bed methane to be economically viable.

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8.6 Prices

Supply and demand factors are most influential in driving fluctuations in gas prices. The graph below highlights the dramatic change in gas prices in and around the time of the global financial crisis.

Henry Hub Natural Gas Spot and Forecast Prices

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14
12
10
8
6
4
2
0
Henry Hub Gas Spot Price NYMEX Henry Hub Gas Forecast Price
US$/MMbtu
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Source: Bloomberg

Prior to the financial crisis, natural gas prices were increasing, primarily driven by high oil prices along with stabilizing gas reserves. The financial crisis of 2008 saw natural gas prices fall substantially and in 2009, prices dropped to US$1.82/MMbtu as a result of reduced demand and accumulated stockpiles. In 2011, the economy showed signs of recovery with growing demand for natural gas in Asia driving prices up. By 2012, the price of natural gas showed a relative downward trend and fell below US$2/MMbtu. The fall was a result of a mild winter experienced in the northern hemisphere.

Historically, the price of natural gas has been positively correlated with prices of coal and crude oil. However the last five years have seen the price of natural gas decreasing while the prices of oil increase. This is largely due to the globalisation of natural gas, companies specialising in exploration of natural gas and the emergence of shale gas and coal bed methane.

The graph below illustrates the prices of LNG for U.S. natural gas exports over the past seven years. The price for LNG has been very volatile, reflecting that the market is dominated by ever-changing short term demand and supply dynamics. The price of LNG (for U.S. natural gas exports) bottomed out at approximately US$6.00/thousand cubic feet during the global recessionary period in early 2009 and in recent years has trended between USD10.00-16.00/ thousand cubic feet.

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Price of Liquefied Natural Gas

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20
18
16
14
12
10
8
6
4
2
0
feet
US$/Thousand cubic
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Source: U.S Energy Information Administration

8.7 Outlook

In the four years to 2018, the price of natural gas is forecast to increase by 2.6% annually. The increase is primarily driven by the increased demand from China along with the shift from coal and crude oil towards natural gas due to it being a cheaper and cleaner substitute.

While demand for natural gas is expected to increase, supply increases will offset some of the rising demand. Previously, the supply of natural gas was heavily dependent on Middle Eastern and Russian reserves; however the discovery of natural gas in locations closer to the demand centres such as North America, Western and Eastern Europe, Africa, and North Asia will reduce the dependency. Furthermore, the introduction of advanced technologies such as the practice of hydraulic fracturing will result in the extraction of unconventional gas formations such as coal bed methane and shale gas become economically viable.

Sources: IBISWorld, Africa Energy Yearbook 2013, BP Statistical Review of World Energy June 2014, Geoscience Australia, CSIRO, U.S Energy Information Administration

9. Valuation approach adopted

There are a number of methodologies which can be used to value a business or the shares in a company. The principal methodologies which can be used are as follows:

Capitalisation of future maintainable earnings (‘ FME ’)
Discounted cash flow (‘ DCF ’)
Quoted market price basis (‘ QMP ’)
Net asset value (‘ NAV ’)
Market based assessment A summary of each of these methodologies is outlined in Appendix 2.

Different methodologies are appropriate in valuing particular companies, based on the individual circumstances of that company and available information. In our assessment of the value of Triple Energy shares we have chosen to employ the following methodologies:

NAV on a going concern basis as our primary valuation methodology; and
QMP as our secondary valuation methodology.

We have chosen these methodologies for the following reasons:

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Being an exploration and pre-development company, the core value of Triple Energy is in the gas assets it holds. We have instructed AWT International (‘ AWT ’) to act as independent specialist and to provide an independent market valuation of the Company’s exploration assets in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports 2005 ( ‘the Valmin Code’ ). AWT’s full report may be found in Appendix 3. We have considered this in the context of Triple Energy’s other assets and liabilities on a NAV basis;
The QMP basis is a relevant methodology to consider because Sunbird’s shares are listed on the ASX. This means there is a regulated and observable market where Triple Energy’s shares can be traded. However, in order for the QMP methodology to be considered appropriate, the Company’s shares should be liquid and the market should be fully informed as to its activities. We have considered these factors in section 10.2 of our Report;
Triple Energy does not generate regular trading income. Therefore there are no historic profits that could be used to represent future earnings. This means that the FME valuation approach is not appropriate; and
Triple Energy has no foreseeable future net cash inflows and therefore the application of the DCF valuation approach is not appropriate.

In our assessment of the value of Sunbird shares following the Transactions we have chosen to employ the following methodology:

NAV as our primary valuation methodology.

The net asset value of Triple Energy shares following the Transaction will involve the following items:

The value of Triple Energy prior to the Transactions;
Incorporate the effects of the Transactions in the context of Triple Energy’s other assets and liabilities on a NAV basis; and
The number of shares on issue will incorporate the shares to be issued in accordance with the Transaction.

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10. Valuation of a Triple Energy Share prior to the Transaction

10.1 Net Asset Valuation of Triple

The value of Triple Energy on a going concern basis is reflected in our valuation below:

Note Statement of Financial Position	Reviewed period ended 30 -Sept-14 Low value Preferred value High value $ $ $ $
CURRENT ASSETS Cash and cash equivalents a Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Tangible fixed assets Exploration expenditure b TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Other financial liabilities c TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NON CONTROLLING INTEREST d	397,486 973,721 973,721 973,721 170,483 170,483 170,483 170,483
	567,969 1,144,204 1,144,204 1,144,204 203,155 203,155 203,155 203,155 4,629,210 4,063,200 4,956,600 5,850,000
	4,832,365 4,266,355 5,159,755 6,053,155
	5,400,334 5,410,559 6,303,959 7,197,359
	121,194 121,194 121,194 121,194 213,765
	334,959 121,194 121,194 121,194
	334,959 121,194 121,194 121,194
	673,802 77,948 77,948 77,948

NET ASSETS Shares on issue (number) e Value per share ($)	4,391,573 5,211,417 6,104,817 6,998,217
	793,940,944 793,940,944 793,940,944 $0.0066 $0.0077 $0.0088

Source: BDO analysis

We have been advised that there has not been a significant change in the net assets of Triple Energy since 30 September 2014 except as discussed in the notes below. The table above indicates the net asset value of a Triple Energy share is between $0.0066 and $0.0088 with a preferred value of $0.0077.

The following adjustments were made to the net assets of Triple Energy in arriving at our valuation.

Note (a) Cash

Subsequent to 30 September 2014 Triple Energy received $576,235 being the remaining balance of the Tranche 1 subscription by Blue Sky at $0.005 per share.

Note (b) Valuation of Triple Energy’s exploration assets

We instructed AWT International to provide an independent market valuation of the exploration assets held by Triple Energy. AWT considered a number of different valuation methods when valuing the exploration assets of Triple Energy The comparable transaction method was used by AWT and involves calculating a value per common attribute in a comparable transaction and applying that value to the subject asset. A common attribute could be the amount of resource or the size of a tenement. We

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consider these methods to be appropriate given the stage of development of Triple Energy’s exploration assets.

The range of values for each of Triple Energy’s exploration assets as calculated by AWT is set out below:

	Low Value	High Value
	$	$
Exploration assets	6,779,249	8,566,049

Source: Appendix 3

Within the values above AWT included the drilling program which is to be funded by the Transaction, accordingly we have excluded this from our pre Transaction valuation this results in a range of values between $4,063,200. and $5,850,000, with a preferred value of $4,956,600 based on the midpoint.

Note (c) Other financial liabilities

Other financial liabilities represent funds received as a non refundable deposit which have subsequently been applied to the subscription in Tranche 1 by Blue Sky.

Note (d) Non controlling interest

Triple Energy has an 80% ownership of their Aolong subsidiary and accordingly a non controlling interest is calculated for the value of assets and liabilities held by this subsidiary to reflect the interests in these from outside of the Triple Energy group. This has been adjusted due to the value provided by AWT relating to the 80% interest held by Triple Energy to which the minority interest does not apply. This results in a recalculated minority interest value of $77,948.

Note (e) Share capital

Post 30 September 2014, 158 million shares were issued in respect of the Tranche 1 subscription by Blue Sky.

10.2 Quoted Market Prices for Triple Energy Securities

To provide a comparison to the valuation of Triple Energy in Section 10.1, we have also assessed the quoted market price for a Triple Energy share.

The quoted market value of a company’s shares is reflective of a minority interest. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

RG 111.11 suggests that when considering the value of a company’s shares for the purposes of approval under Item 7 of s611 the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of another company. These advantages include the following:

control over decision making and strategic direction;
access to underlying cash flows;

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control over dividend policies; and
access to potential tax losses.

Whilst Blue Sky will not be obtaining 100% of Triple Energy, RG 111 states that the expert should calculate the value of a target’s shares as if 100% control were being obtained. RG 111.13 states that the expert can then consider an acquirer’s practical level of control when considering reasonableness. Reasonableness has been considered in Section 2.5.

Therefore, our calculation of the quoted market price of a Triple Energy share including a premium for control has been prepared in two parts. The first part is to calculate the quoted market price on a minority interest basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

Minority interest value

Our analysis of the quoted market price of a Triple Energy share is based on the pricing prior to the announcement of the Transaction. This is because the value of an Triple Energy share after the announcement may include the affects of any change in value as a result of the Transaction. However, we have considered the value of a Triple Energy share following the announcement when we have considered reasonableness in Section 13.

Information on the Transaction was announced to the market on 13 August 2014. Therefore, the following chart provides a summary of the share price movement over the 12 months to 12 August 2014 which was the last trading day prior to the announcement.

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----- Start of picture text -----

TNP share price and trading volume history
0.012 14.0
0.010 12.0
10.0
0.008
8.0
0.006
6.0
0.004
4.0
0.002 2.0
0.000 -
Volume Closing share price
(millions)
Share Price ($) Volume
----- End of picture text -----

Source: Bloomberg

The daily price of Triple Energy shares from 12 August 2013 to 12 August 2014 has ranged from a low of $0.003 on 30 June 2014 to a high of $0.0120 on 21 August 2014 although closing at $0.011 on that date.

High volumes of shares were traded on 30 July 2014 and 11 September 2014. The high volume traded on 30 July may be attributable to speculation surrounding the results of the quarterly activities report being released on the following day, 31 July 2014.

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During this period a number of announcements were made to the market. The key announcements are set out below:

		$ Closing Share Price One Day Prior to Announcement	$ Closing Share Price Following Announcement Movement	$ Closing Share Price Following Announcement Movement	$ Closing Share Price Three Days After Announcement Movement	$ Closing Share Price Three Days After Announcement Movement	$ Closing Share Price Three Days After Announcement Movement
31/07/2014	Quarterly Activities and Cashflow Reports	0.006	0.006 �	0.0%	0.006	�	0.0%
01/05/2014	Quarterly Activities & Cashflow Reports	0.005	0.005 �	0.0%	0.006	�	20.0%
16/04/2014	Update on Activities	0.006	0.006 �	0.0%	0.006	�	0.0%
12/02/2014	Results of Meeting - Overwhelming Support for Existing Board	0.008	0.009 �	12.5%	0.007	�	22.2%
31/01/2014	Quarterly Activities and Cashflow Reports	0.008	0.007 �	12.5%	0.007	�	0.0%
16/12/2013	Placement to raise up to $600,000	0.006	0.006 �	0.0%	0.006	�	0.0%

To provide further analysis of the market prices for a Triple Energy share, we have also considered the volume weighted average market price for 10, 30, 60 and 90 day periods to 12 August 2014.

Share Price per unit	12-Aug-14	10 Days	30 Days	60 Days	90 Days
Closing price	$0.007
Volume weighted average price (VWAP)		$0.006	$0.007	$0.006	$0.006

Source: Bloomberg, BDO analysis

The above weighted average prices are prior to the date of the announcement of the Transaction, to avoid the influence of any increase in price of Triple Energy shares that has occurred since the Transaction was announced.

An analysis of the volume of trading in Triple Energy shares for the twelve months to 12 August 2014 is set out below:

Trading days	Share price	Share price	Cumulative volume	As a % of
	low	high	traded	Issued capital
1 Day	$0.007	$0.007	538,566	0.09%
10 Days	$0.005	$0.008	12,663,119	2.04%
30 Days	$0.004	$0.009	31,842,137	5.13%
60 Days	$0.003	$0.009	55,704,207	8.97%
90 Days	$0.003	$0.009	66,174,205	10.66%
180 Days	$0.003	$0.010	99,121,901	15.96%
1 Year	$0.003	$0.012	212,246,459	34.18%

Source: Bloomberg, BDO analysis

This table indicates that Triple Energy’s shares display a low level of liquidity, with 34.18% of the Company’s current issued capital being traded in a twelve month period. For the quoted market price methodology to be reliable there needs to be a ‘deep’ market in the shares. RG 111.69 indicates that a ‘deep’ market should reflect a liquid and active market. We consider the following characteristics to be representative of a deep market:

Regular trading in a company’s securities;
Approximately 1% of a company’s securities are traded on a weekly basis;

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The spread of a company’s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and
There are no significant but unexplained movements in share price.
A company’s shares should meet all of the above criteria to be considered ‘deep’, however, failure of a company’s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares cannot be considered relevant.

In the case of Triple Energy, it is our view that the low liquidity and the level of volatility means that a deep market does not exist and as such we cannot rely on QMP as a primary methodology.

Our assessment is that a range of values for Triple shares based on market pricing, after disregarding post announcement pricing, is between $0.006 and $0.007.

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Control Premium

We have reviewed the control premiums paid by acquirers of oil and gas companies listed on the ASX. We have summarised our findings below:

	Number of		Average Control Premium
Year	Transactions	Average Deal Value (A$m)	(%)
2014	1	2482.88	50.24
2013	0	N/A	N/A
2012	4	55.40	35.97
2011	3	348.39	42.64
2010	5	794.42	46.09
2009	3	343.87	62.01
2008	10	524.16	66.36
2007	1	8.06	24.67
2006	4	450.22	28.46
	Mean	625.92	44.55
	Median	399.31	44.36

Source: Bloomberg and BDO analysis

We consider there to be an insufficient number of control transactions (with announced premiums) involving Australian oil and gas companies on which to derive a control premium. Therefore, we have also considered the historical control premiums paid by acquirers of all ASX listed companies. Our findings are summarised below:

	Number of	Average Deal Value	Average Control Premium
Year	Transactions	(A$m)	(%)
2014	22	531.02	43.78
2013	39	194.10	47.97
2012	49	357.36	40.41
2011	66	777.45	45.82
2010	67	756.42	37.33
2009	65	317.39	44.63
2008	43	753.31	39.47
2007	84	1008.24	21.79
2006	96	647.74	22.95
	Mean	532.98	35.02
	Median	531.03	39.94

Source: Bloomberg and BDO analysis

In arriving at an appropriate control premium to apply we note that observed control premiums can vary due to the:

Nature and magnitude of non-operating assets;
Nature and magnitude of discretionary expenses;
Perceived quality of existing management;

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Nature and magnitude of business opportunities not currently being exploited;
Ability to integrate the acquiree into the acquirer’s business;
Level of pre-announcement speculation of the transaction;
Level of liquidity in the trade of the acquiree’s securities.

If the Transaction is approved, Blue Sky has the potential to increase their holding to a maximum of X%, assuming no further shares are issued. As a result, Blue Sky should be expected to pay a control premium. In determining the premium for control to be paid by Blue Sky we have taken into account the above analysis and believe that an appropriate control premium is between 20% and 25%.

Quoted market price including control premium

Applying a control premium to Triple Energy’s quoted market share price results in the following quoted market price value including a premium for control]

Quoted market price including control premium

Applying a control premium to [Client]’s quoted market share price results in the following quoted market price value including a premium for control:

	Low	Midpoint	High
	$	$	$
Quoted market price value	0.006	0.0065	0.007
Control premium	20%	22.5%	25%
Quoted market price valuation including a premium for control	0.007	0.008	0.009

Source: BDO analysis

Therefore, our valuation of a Triple Energy share based on the quoted market price method and including a premium for control is between $0.007 and $0.009, with a midpoint value of $0.008.

10.3 Assessment of Triple Energy Share Value

The results of the valuations performed are summarised in the table below:

	Low	Preferred	High
	$	$	$
Net assets value (Section 10.1)	0.0066	0.0077	0.0088
ASX market prices (Section 10.2)	0.007	0.008	0.009

Source: BDO analysis

Based on the results above we consider the value of a Triple Energy share to be between $0.0066 and $0.0088, with a preferred value of $0.0077. We believe the Net asset approach is the most appropriate approach to undertake due to the level of liquidity of the QMP and due to the significance of the exploration assets for which the Net asset value approach is best suited.

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11. Valuation of Triple Energy following the Transaction

Assessing non-cash consideration in control transactions

When assessing non-cash consideration in control transactions, RG 111.31 suggests that a comparison should be made between the value of the securities being offered (allowing for a minority discount) and the value of the target entity’s securities, assuming 100% of the securities are available for sale. This comparison reflects the fact that:

(a) the acquirer is obtaining or increasing control of the target; and
(b) the security holders in the target will be receiving scrip constituting minority interests in the combined entity.

The value of Triple Energy on a going concern basis following the Transaction is reflected in our valuation below:

Note Statement of Financial Position	Pre Transaction Low value Preferred value High value $ $ $ $
CURRENT ASSETS Cash and cash equivalents a Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Tangible fixed assets Exploration expenditure b TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Other financial liabilities c TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NON CONTROLLING INTEREST d	973,721 2,256,526 2,256,526 2,961,526 170,483 170,483 170,483 170,483
	1,144,204 2,427,009 2,427,009 3,132,009 203,155 203,155 203,155 203,155 4,629,210 6,779,249 7,672,649 8,566,049
	4,832,365 6,982,404 7,875,804 8,769,204
	5,976,569 9,409,413 10,302,813 11,901,213
	121,194 121,194 121,194 121,194 213,765
	334,959 121,194 121,194 121,194
	334,959 121,194 121,194 121,194
	673,802 77,948 77,948 77,948

NET ASSETS Shares on issue (number) e Value per share ($) Minority discount Value per share (minority interest basis)	4,967,808 9,210,271 10,103,671 11,702,071
	793,940,932 1,680,871,767 1,680,871,767 1,805,871,767 $0.0055 $0.0060 $0.0065
	20% 18% 17% $0.0044 $0.0049 $0.0054

The table above indicates the net asset value of a Triple Energy share post Transaction on a minority basis is between $0.0044 and $0.0054 with a preferred value of $0.0049.

The following adjustments were made to the net assets of Triple Energy in arriving at our valuation.

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Note (a)

Cash

Under the Transaction the following cash is to be received by Triple Energy

	Low Value	Preferred Value	High Value
	$	$	$
Loan Funds	500,000	500,000	500,000
Placement funds	1,250,000	1,250,000	2,000,000
Costs of the transaction	(467,195)	(467,195)	(512,195)

Our preferred valuation for the placement funds is based on the amount that has been underwritten by Blue Sky. We note that current shareholders will receive priority for the remaining $750,000 of the placement.

Note (b) Valuation of Triple Energy’s exploration assets

We instructed AWT International to provide an independent valuation of the exploration assets held by Triple Energy. AWT considered a number of different valuation methods when valuing the exploration assets of Triple Energy The farm in method was used by AWT and involves calculating a value per common attribute in a comparable transaction, in this case relating to previous transactions involving the asset and applying that value to the subject asset. A common attribute could be the amount of resource or the size of a tenement. We consider these methods to be appropriate given the stage of development of Triple Energy’s exploration assets. We note that AWT have provided a technical valuation to us as defined by VALMIN and after considering the contents of their report and the approach undertaken we have concluded that the technical valuation is equivalent to the market valuation.

The range of values for each of Triple Energy’s exploration assets as calculated by AWT is set out below:

	Low Value	High Value
	$	$
Exploration assets	6,779,249	8,566,049

Source: Appendix 3

Within the values above AWT included the drilling program which is to be funded by the Transaction, accordingly we have included this in our post Transaction valuation this results in a range of values between $6,779,249. and $8,566,049, with a preferred value of $7,672,649 based on the midpoint.

We note that AWT has included the value of the drilling of two wells based on Triple’s interest in the project on a cost basis. Should the results of the program be successful it is likely that the resulting value from the activity will exceed the expenditure and may increase the value attributable to the property.

Note (c) Other financial liabilities

Other financial liabilities represent funds received as a non refundable deposit which have subsequently been applied to the subscription in Tranche 1 by Blue Sky.

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Note (d) Non controlling interest

Note (e) Share capital

Under the transaction the following shares are to be issued

	Low	Preferred	High
Loan Funds	83,333,333	83,333,333	83,333,333
Placement funds	208,333,333	208,333,333	333,333,333
Drilling services	595,264,168	595,264,168	595,264,168

Our preferred valuation for the placement funds is based on the shares to be issued that have been underwritten by Blue Sky. Our high valuation assumes that the full placement will be taken up. The drilling services are not to exceed US$2.75 million and these will be converted to shares at A$0.006.

12 Is the Transaction fair?

The value of a Triple Energy share prior to the Transaction on a controlling interest basis is compared to the value of a Triple Energy share following the transaction on a minority interest below:

		Low	Preferred	High
	Ref
		$	$	$
Value of a Triple Energy share pre Transaction	10.1	0.0066	0.0064	0.0088
Value of a Triple Energy share post Transaction	11	0.0044	0.0049	0.0057

We note from the table above that the preferred value of a Triple Energy share pre Transaction on a controlling basis is greater than the value of a Triple Energy share post Transaction on a minority interest basis. Therefore, we consider that the Transaction is not fair.

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13 Is the Transaction reasonable?

13.1 Alternative Proposal

We are unaware of any alternative proposal that might offer the Shareholders of Triple Energy a premium over the value ascribed to, resulting from the Transaction.

13.2 Practical Level of Control

If the Transaction is approved then Blue Sky will hold an interest of up to a maximum of 61.5% (assuming there is no participation in the placement and Blue Sky take up their underwriting commitment in full) in Triple Energy. In addition a director of Blue Sky Mr Tommy Cheng, has joined Triple Energy’s board as Non-Executive Chairman.

When shareholders are required to approve an issue that relates to a company there are two types of approval levels. These are general resolutions and special resolutions. A general resolution requires 50% of shares to be voted in favour to approve a matter and a special resolution required 75% of shares on issue to be voted in favour to approve a matter. If the Transaction is approved then Blue Sky will be able to block special and general resolutions and pass general resolutions.

Triple Energy’s Board currently comprises three directors. This means that Blue SKy nominated directors make up 33% of the Board.

Blue Sky’s control of Triple Energy following the Transaction will be significant when compared to all other shareholders. Therefore, in our opinion, while Blue Sky will be able to significantly influence the activities of Triple Energy, it will be able to exercise a similar level of control as if it held 100% of Triple Energy. As such, Blue Sky should be expected to pay a similar premium for control as if it were acquiring 100% of Triple Energy.

13.3 Consequences of not Approving the Transaction

Consequences

If the Transaction is not approved Triple Energy will need to seek alternative funding to advance their exploration interests. Triple Energy will also need to continue to procure drilling services that are to be arranged by Blue Sky as part of the Transaction. As announced on 16 April 2014 discussions with strategic investors were on foot at that time and management had been in China in January 2014 to begin negotiations with drilling service providers. Given the length of time to negotiate the Blue Sky transaction it is possible that the Company may not be able to find further funding.

Potential decline in share price

We have analysed movements in Triple Energy’s share price since the Transaction was announced. A graph of Triple Energy’s share price since the announcement is set out below.

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----- Start of picture text -----

Triple Energy share price and trading volume history
----- End of picture text -----

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----- Start of picture text -----

0.007 5.0
4.5
0.006
4.0
0.005 3.5
0.004 3.0
2.5
0.003 2.0
0.002 1.5
1.0
0.001
0.5
0.000 -
Volume Closing share price
(millions)
Share Price ($) Volume
----- End of picture text -----

Source: Bloomberg

Since the announcement the price has declined and traded for a period in a range slightly below the value of the Placement under the Transaction to the value of the Placement price. We note that market conditions have been difficult during this period with prices declining across many ASX stocks and volumes also down due to holiday periods.

Given the above analysis it is possible that if the Transaction is not approved then Triple Energy’s share price may decline as an alternative proposal would need to be sought in difficult trading conditions.

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13.4 Advantages of Approving the Transaction

We have considered the following advantages when assessing whether the Transaction is reasonable.

Advantage	Description
Funding received to advance the Company’s	Under the Transaction Triple Energy is to receive $1.75 million from
exploration assets	Blue Sky in cash which can be applied to further developing the
	Company’s exploration assets. We note that the valuation of Triple
	Energy is based on a technical value provided by AWT which
	incorporates the value of the drilling program on a dollar of
	expenditure basis in proportion to Triple Energy’s share of the
	project. Should the program deliver successful results it is possible
	that there may be a realisation of value in excess of this amount.
	We note that AWT referred to other deals that occurred in China
	that were not comparable to do differing geology and due to the
	location being in a different basin. We note that these transactions
	demonstrate that there is potential for value to be realised once
	the project is further advanced which the drilling program that is to
	be funded via the Transaction will enable progress occur. The
	results of the program are by their nature uncertain. Should the
	results be successful Triple may have a market revaluation of their
	project realised in the share price and the possibility of conducting
	transactions with areas contained within the JV could also be
	possible. We note that it is not uncommon in the region for
	signature bonuses to be realised in such situations.
Provision of drilling services	Under the Transaction Blue Sky are to procure drilling services to
	drill two wells for a maximum value of US$ 2,750,000.

13.5 Disadvantages of Approving the Transaction

If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those listed in the table below:

Disadvantage	Description
The Transaction is not fair	As set out in Section 12 the Transaction is not fair.
Dilution of existing	The Transaction will result in current shareholders (excluding Blue Sky) being diluted
shareholders	from 80.1% to a minimum position of 35.22% on the basis that the placement is fully
	subscribed by non shareholders.

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12. Conclusion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is not fair but reasonable to the Shareholders of Triple Energy.

13. Sources of information

This report has been based on the following information:

Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;
Audited financial statements of Triple Energy for the years ended 31 March 2013 and 31 March 2014
Reviewed accounts of Triple Energy for the period ended 30 September 2014;
Independent Valuation Report of Triple Energy mineral assets dated 9 January 2014 performed by AWT International;
Share registry information;
Information in the public domain; and
Discussions with Directors and Management of Triple Energy.

14. Independence

BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $24,000 (excluding GST and reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

BDO Corporate Finance (WA) Pty Ltd has been indemnified by Triple Energy in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by Triple Energy

, including the non provision of material information, in relation to the preparation of this report.

Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence with respect to Triple Energy and Blue Sky and any of their respective associates with reference to ASIC Regulatory Guide 112 ‘Independence of Experts’. In BDO Corporate Finance (WA) Pty Ltd’s opinion it is independent of Triple Energy and Blue Sky and their respective associates.

Neither the two signatories to this report nor BDO Corporate Finance (WA) Pty Ltd, have had within the past two years any professional relationship with Triple Energy, or their associates, other than in connection with the preparation of this report.

A draft of this report was provided to Triple Energy and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review.

BDO is the brand name for the BDO International network and for each of the BDO Member firms.

BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).

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15. Qualifications

BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions.

BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act.

The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Adam Myers of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia and were supported by other BDO staff.

Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of the Institute of Chartered Accountants in Australia. He has over twenty five years experience working in the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been responsible for over 200 public company independent expert’s reports under the Corporations Act or ASX Listing Rules. These experts’ reports cover a wide range of industries in Australia with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia, Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader for BDO in Australia.

Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam’s career spans 17 years in the Audit and Assurance and Corporate Finance areas. Adam has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors.

16. Disclaimers and consents

This report has been prepared at the request of Triple Energy for inclusion in the Explanatory Memorandum which will be sent to all Triple Energy Shareholders. Triple Energy engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider the proposal to provide underwriting, a conversion of a loan and procuring drilling services for cash by Blue Sky Power Limited is fair and reasonable to non associated shareholders.

BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Explanatory Memorandum. Apart from such use, neither the whole nor any part of this report, nor any reference thereto may be included in or with, or attached to any document, circular resolution, statement or letter without the prior written consent of BDO Corporate Finance (WA) Pty Ltd.

BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Explanatory Memorandum other than this report.

We have no reason to believe that any of the information or explanations supplied to us are false or that material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to perform any due diligence procedures on behalf of the Company. The Directors of the Company are responsible for conducting appropriate due diligence in relation to Blue Sky.

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BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process.

The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions prevailing at the date of this report. Such conditions can change significantly over short periods of time.

With respect to taxation implications it is recommended that individual Shareholders obtain their own taxation advice, in respect of the Transaction, tailored to their own particular circumstances. Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Triple Energy, or any other party.

BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon independent valuations for mineral assets held by Triple Energy.

The valuer engaged for the mineral asset valuation, AWT International, possess the appropriate qualifications and experience in the industry to make such assessments. The approaches adopted and assumptions made in arriving at their valuation is appropriate for this report. We have received consent from the valuer for the use of their valuation report in the preparation of this report and to append a copy of their report to this report.

The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd has no obligation to update this report for events occurring subsequent to the date of this report.

Yours faithfully

BDO CORPORATE FINANCE (WA) PTY LTD

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Sherif Andrawes Director

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Adam Myers Director

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A endix 1 – Glossar of Terms pp y

Reference	Definition
The Act	The Corporations Act
APES 225	Accounting Professional & Ethical Standards Board professional standard APES 225
	‘Valuation Services’
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
BDO	BDO Corporate Finance (WA) Pty Ltd
Blue Sky	Blue Sky Power Holdings Limited
The Company	Triple Energy Limited
DCF	Discounted Future Cash Flows
EBIT	Earnings before interest and tax
EBITDA	Earnings before interest, tax, depreciation and amortisation
FME	Future Maintainable Earnings
NAV	Net Asset Value
Our Report	This Independent Expert’s Report prepared by BDO
RG 111	Content of expert reports (March 2011)
RG 112	Independence of experts (March 2011)
The Transaction	The proposal to provide underwriting services, a conversion of a loan and procuring
	drilling services for cash by Blue Sky Power Limited is fair and reasonable to non
	associated shareholders.
Shareholders	Shareholders of Triple Energy not associated with Blue Sky
Valmin Code	The Code of Technical Assessment and Valuation of Mineral and Petroleum Assets and
	Securities for Independent Expert Reports
Valuation Engagement	An Engagement or Assignment to perform a Valuation and provide a Valuation Report
	where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and
	Valuation Procedures that a reasonable and informed third party would perform taking

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	into consideration all the specific facts and circumstances of the Engagement or
	Assignment available to the Valuer at that time.
VWAP	Volume Weighted Average Price

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A endix 2 – Valuation Methodolo ies pp g

Methodologies commonly used for valuing assets and businesses are as follows:

1 Net asset value (‘NAV’) Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

Orderly realisation of assets method
Liquidation of assets method
Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when an entity is not making an adequate return on its assets, a significant proportion of the entity’s assets are liquid or for asset holding companies.

2 Quoted Market Price Basis (‘QMP’) A valuation approach that can be used in conjunction with (or as a replacement for) other valuation methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a ‘deep’ market in that security.

3 Capitalisation of future maintainable earnings (‘FME’) This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

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The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (‘ EBIT ’) or earnings before interest, tax, depreciation and amortisation (‘ EBITDA ’). The capitalisation rate or ‘earnings multiple’ is adjusted to reflect which base is being used for FME.

4 Discounted future cash flows (‘DCF’) The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

Considerable judgement is required to estimate the future cash flows which must be able to be reliably estimated for a sufficiently long period to make this valuation methodology appropriate.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

5 Market Based Assessment

The market based approach seeks to arrive at a value for a business by reference to comparable transactions involving the sale of similar businesses. This is based on the premise that companies with similar characteristics, such as operating in similar industries, command similar values. In performing this analysis it is important to acknowledge the differences between the comparable companies being analysed and the company that is being valued and then to reflect these differences in the valuation.

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Appendix 3 – Independent Specialist Valuation Re ort p

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17 March 2015

Triple Energy Limited Unit 15, Level 1, 100 Railway Road Subiaco, WA 6011 Attn: Paul Underwood

Brisbane Head Office Level 10, 300 Ann Street PO Box 10810 Brisbane, Queensland 4000 TEL: +61 7 3505 4500 FAX: + 61 7 3505 4599

ABN 67 076 484 770 www.awtinternational.com

BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco, WA 6008 Attn: Adam Myers

Dear Paul Underwood and Adam Myers

Valuation of Triple Energy Ltd 80% Interest in the Acreage Held by the Aolong JV

1.0 INTRODUCTION

In correspondence dated 28 November 2014, and after further discussions, Triple Energy Ltd (Triple) and BDO Corporate Finance (WA) Pty Ltd (BDO) requested that AWT International Pty Ltd (AWT) prepare a Valuation Report for Triple’s 80% interest in the acreage held by Heilongjiang Aolong Energy Co. Ltd (Aolong JV). The Aolong JV is between CFT Heilongjiang (HK) Ltd (a wholly owned subsidiary of Triple) and Heilongjiang Longmay Coal Mining Group Joint Stock Company Ltd (Longmay) and covers approximately 2,700 km[2 ] (Figure 1).

The acreage within the Aolong JV includes gas extraction rights over:

Hegang Mine Area
Shuan Ya Shan Mines
Qi Tai He Mines
Ji Xi Mines

2.0 SUMMARY

AWT’s technical valuation of Triple’s 80% interest in the acreage held by the Aolong JV is between A$6,779,249 and A$8,566,049 as determined on 5 January 2015 (Table 1).

The valuation does not include any other assets or liabilities that the Aolong JV may or may not have.

Table 1: Valuation of Triple ’ s interest in the acreage held by the Aolong JV


Triple Value (A$)
Low	High
A$6,779,249	A$8,566,049

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3.0 TECHNICAL VALUE

The fair technical value of a mineral or petroleum asset or security is the amount of money (or cash equivalent of some other consideration) determined by the Expert in accordance with the provisions of the VALMIN Code for which the mineral or petroleum asset or security should change hands on the Valuation Date in an open and unrestricted market between a - willing buyer and a willing seller in an “arms length” transaction, prudently and without compulsion (Valmin, 2005, part of D43). A number of valuation methods were investigated. AWT prefers to use farm-in deals and sales to gauge value in exploration permits and only departs from this method on occasions where a better value can be determined by another method, or in the absence of relevant and recent farm-ins and sales.

4.0 VALUATION METHODS

The principles conveyed in the Valmin Code, Revised Edition April 2005 (Valmin, 2005), and in the Australian Securities and Investment Commission (ASIC) Regulatory Guide 111 and 112 have been applied by AWT. Reserve and Resource concepts follow the definitions as laid down by the Society of Petroleum Engineers (SPE) Inc. Petroleum Resources Management System PRMS (SPE PRMS, 2011).

There are several methods that can be used to estimate the fair and reasonable technical value of exploration and production assets. These include and are not limited to the methods described below, which are:

Production and reserve information leading to cash flow analysis – present value (NPV);
Production estimates and cash flow analysis (NPV) based on current prospects –
(undrilled) and incorporating expected chances of success (COS) expected monetary value (EMV);
Recent farm-in Actual Costs (value of work to be undertaken) and premiums or promotes (amounts above the Actual Cost of the work) paid in the permit or similar nearby permits;
Exploration and production acreage asset sales, either cash and/or shares and/or acreage swap: and
Estimated Actual Cost of committed work programs (deal between permit holder and the governing authority) and operator budgets.

As a rule of thumb, an attempt is made to maintain a range between high and low side estimates of no more than 2.5 times for a portfolio. Wider ranges can be justified where uncertainty is high.

4.1 NPV

For an oil or gas field, a value can be determined from the proven (1P), proven plus probable (2P) and proven plus probable plus possible (3P) reserve. Calculation of the net present

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value (NPV) of production can be made using discounted cash flow. Various combinations of reserve categories may be assessed to obtain the best estimate, such as:

2P by itself; OR
1P plus 50% of the 2P; OR
(0.9 x proved ( P1 or 1P ) + 0.5 x probable ( P2 ) + 0.1 x possible ( P3 )); OR
others.

The NPV is equivalent to the value of the project and possibly the permit. An NPV calculation based on only the 1P reserve map constitute a low-side value.

4.2 EMV

It is possible to value an exploration permit by firstly selecting the prospect (not a lead) most likely to be drilled in the near future. By calculating the NPV on either the mean or best estimate Prospective Resource, and the COS for discovery on a reserve, the expected monetary value (EMV) can be determined. The mean Prospective Resource is often estimated as 0.3 x P90 + 0.4 x P50 + 0.3 x P10 (Swanson’s Mean), or more accurately calculated using a Monte-Carlo simulator.

EMV is calculated as:

– – (NPV x COS) [exploration Actual Cost (eg: dry well) x (1 COS)]

The EMV is equivalent to the value of the prospect and may be used to value the permit. Note that ASIC does not usually allow this type of method and AWT does not apply it to companies listed on the stock market.

4.3 FARM-IN/WORK PROGRAM/SALE OF INTEREST

A reliable value of an exploration permit may be estimated based on farm-in/farm-out or purchase transactions within the permit or in adjacent permits with comparable geological prospectivity and operating constraints. This is achieved by comparing the acreage with similar acreage and the farm-in/farm-out deals that have been consummated, or are in progress in various permits.

4.3.1 Full Value and Premium within Farm-in Deals

The farminee (purchaser) agrees to fund a significant exploration program, which is often agreed to be a particular dollar value or, sometimes, capped at a particular dollar value. This work usually takes the form of either drilling and/or seismic, in return for the farmor (seller) transferring a significant equity to the farminee. Where the farminee pays the normal exploration Actual Costs of the work being done for the interest being acquired and then also covers some or all of the Actual Costs of the farmor, this extra Actual Cost is called a premium (or promote).

A value for the permit can be considered based on the actual cost of the premium. In estimating the worth of a permit using the farm-in method, AWT usually calculates the premium value which may be set as high or low depending on market conditions and other circumstances. At other times the premium may be calculated and that set as the middle

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value with a range being determined as a 20-25% increase for the high value and a 20-25% decrease for a low value. The Total or Actual Cost of the farm-in is not often used. Any combinations may be employed.

4.4 COMMITTED WORK PROGRAMS

In cases where a permit has a committed work program, one that cannot usually be varied, the value of the permit is the Actual Cost required to retain it and explore for hydrocarbons. Depending on how this is viewed it is similar to the total Actual Cost or the premium of a farm-in. The government can be considered to have farmed out the permit, so this is treated in a similar way to method 4.3.1, above.

5.0 AOLONG JV ACREAGE REVIEW AND VALUATION

The Aolong JV agreement allows Triple to drill for, produce and sell methane gas to be extracted ahead of mining. This is commonly known as coal mine methane (CMM) or coal bed methane (CBM). Longmay must otherwise de-gas its mining areas for safety reasons. The term of these coal mining leases is up to 45 years. The mine areas include:

Hegang Mine Area
Shuan Ya Shan Mines
Qi Tai He Mines
Ji Xi Mines

5.1 HEGANG COAL MINE AREA

The Hegang Coal Mine area is located in the northeastern Heilongjiang Province of China and belongs to the jurisdiction of Hegang City (Figure 1). The total Hegang coal field covers an area of approximately 250 km[2] . The mining area was discovered in 1914 and developed in 1917. The mining area is one of the old industrial bases in China. Coal production was estimated to be as much as 17 million tons in 2010.

Hegang Coal Industry Group Co. Ltd holds the mines listed Table 2. This company is a wholly owned subsidiary of Longmay. These mines are also shown in Figure 2. Also included in the Hegang area are the exploration areas listed in Table 3.

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Table 2: Mines within	the Hegang mine area
Mine Name	Estimated Area (km2)
Xinxing	6.3
Xinling	3.6
Xian Xian	14.0
Yixin	3.8
Bird Mountain	8.3
Nanshan	10.5
Xinlu	7.5
Fuli	6.3
Xiangan	20.8
Junde	19.6
Total	100.7

Table 3: Exploration Areas within the Hegang mine area

Exploration Area	Estimated Area (km2)
Qunyingshan (6 km2overlaps Area 1)	6.8
Exploration Area 1	50.0
Gold and Mercury Mine	7.3
Xinhua	9.7
Total	73.8

5.1.1 Geological Setting

The Hegang Basin is a Mesozoic fault bounded basin. The western boundary of the basin is a major fault in front of the Qinhei Mountains. The southeast boundary of the basin is defined by the major Yilan - YiTong fault. Following deposition of the coal sequences the basin was affected by tectonic stresses during the middle and late Yan Mountain Movement, and early, middle and late Xi Mountain Movement.

The Hegang coal field trends in a north to south direction in a monoclinal structure that dips towards the east (Figure 2). The inclination of the strata is about 15° to 35°.

The coal bearing strata are within the Jixi Group, which is Early Cretaceous in age. The Jixi Group is composed of alternating marine and non-marine deposits (2001).

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5.1.2 Acreage Interest

On the 8[th] December 2010 CFT Heilongjiang (HK) Limited (CFTH), a wholly owned subsidiary of CFT Holdings Ltd (CFT) and Heilongjiang Longmay Coal Mining Group Joint Stock Company Ltd (Longmay), signed a Cooperative Joint Venture agreement (Aolong JV). Longmay became free carried under this agreement in 2012. CFTH has the right to produce CBM ahead of the mining of coal and to sell gas, or the electric power produced from the gas.

CFTH holds an 80% interest, while Longmay holds a 20% full carried interest in the Aolong JV.

On 7[th] February 2013, under a new agreement, Triple purchased 100% of CFTH. This deal is detailed in Section 5.1.5. Triple now owns its 80% interest in the Aolong JV via its 100% owned subsidiary, CFTH.

Table 4 outlines the Aolong JV interest.

olong JV interest.
Table 4: Aolong	JV Interest
Company	JV Interest (%)
Triple*	80
Longmay	20

via its wholly-owned Hong Kong registered subsidiary CFT Heilongjiang (HK) Limited

5.1.3 Work Program

There are no registered work commitments for the acreage as it is not a normal production lease arrangement with the central government, rather it is a commercial agreement with Longmay.

The Aolong JV plans to drill two exploration wells. The estimated cost of these two wells is US$2,750,000 (Table 5).

The objective of these wells is to:

Test the coal for CBM potential; and
Fracc the wells and place on 6 month extended production tests.

These wells should provide an understanding of gas saturation, gas composition and gas deliverability, which are important factors in measuring the success of the project.

Table 5: Summary of Work Program	Table 5: Summary of Work Program	Table 5: Summary of Work Program
Detail	US$	A$
Well Cost ( 2 wells)	2,750,000	3,395,062
*US$ exchange rate equals 0.81 (5 January 2015)

In June/July 2013 Triple, through CFTH and on behalf of the Aolong JV, drilled Xian Xian-1, located in the southern part of Xian Xian mine (Figure 2). The well was designed to prove

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coal thickness and test the permeability of the coal. The well intersected the seams outlined in Table 6, with a total net coal of 63.4 m. Interpretation from the gas log suggests that only seams 11 and deeper seams contain significant levels of gas. There are five seams of thickness greater than 2 m, which could warrant completion and production testing of CBM potential in the future wells (Table 6).

Two drill stem tests (DSTs) were successfully run on the well. The operation of and interpretation of the DSTs were undertaken by personnel from the Xian Research Institute of China Coal Technology and Engineering Group. The first DST was conducted over Seam 11, while the second DST was conducted over Seam 15. The interpretation of these DSTs indicated permeability of 0.86 mD and 3.56 mD respectively (Table 7).

Table 6: Coal seams intersected in Xian Xian-1

Seam Name	Net Coal
3	9.0
Un-named	7.0
5	0.6
6	1.4
7-1	2.2
7-2	1.0
9-1	2.4
9-2	1.2
Un-named	1.8
11	7.8
Un-named	1.0
Un-named	1.8
Un-named	1.0
14-2	1.4
Un-named	3.2
15	7.2
18	7.6
21-1	0.4
22-1	1.6
Un-named	3.2
Un-named	0.6
Total Net Coal (m)	63.4

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Table 7: Summary of Xian Xian-1 DTS results

Test Number	Interval (m)	Seam	Permeability (mD)
1	482.0– 493.5	11	0.86
2	595.5– 601.5	15	3.56

In 2011/2012 AWT was engaged to carry out desk top studies of the CBM potential of the Junde, Xingan, Yixin, Xian Xian and Bird Mountain mines for CFTH. While working on this project, AWT constructed a geological model of the areas including seam depth maps and net coal maps. However, data used is of uncertain quality. Using available mine maps supplied by Longmay, the following seams were reviewed:

Seam 11
Seam 15
Seam 17
Seam 18
Seam 21
Seam 22
Seam 30
Seam 33 o Seam 35

Gas-in-Place (GIP) was estimated using the net coal map and general assumptions of coal density and gas content (no actual information at the time). A gas composition of 100% methane was assumed though it is possible that carbon dioxide is also present.

The other blocks in the Hegang Coal Mine area (Table 2) were not assessed at the time. However, it would be expected that the same seams are present and that they will contain gas.

Xian Xian-1 intersected more coal seams than were previously analysed in the AWT study, with 2 seams up to 8 to 9 metres thick. This well has added important data to the project and has increased the prospectivity of the acreage.

5.1.4 Potential Markets

Triple has advised AWT that methane is currently being produced from the coal mine drives in Junde and power is generated for the mine. Gas is proven. Whether it can be produced at rates sufficient to sustain a standalone CBM business is the objective of the exploration wells and flow testing.

Table 8 outlines the current gas prices for 1 mcf of gas (US dollars) for various markets. This data was supplied to AWT by Triple and was sourced from various Chinese Municipality websites. The prices have been converted on an exchange rate of 1 RMB = US$0.16 (22[nd] December 2014).

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	Table 8: CurrentGas prices in the	Table 8: CurrentGas prices in the	Table 8: CurrentGas prices in the	mine areas	(US$/MCF)
Market	Beijing	Harbin	Hegang	Ji Xi	Shuan Ya Shan	Qi Tai He
Residential	10.42	12.80	4.57	5.94	-	5.94
Industry	16.68	20.84	7.31	9.14	-	9.14
Business	16.68	20.84	7.31	9.14	-	9.14

This shows that gas in this area has the potential to be commercialized on a standalone basis.

The Ministry of Finance has introduced a subsidy standard (CBM gas bonus) of 0.2 RMB / cubic metre. This equates to approximately $1.22 per mcf (based on an exchange rate of 1 RMB = A$0.20, 5[th] January 2015).

5.1.5 Farmin and Sales Deals

5.1.5.1 CFT / Longmay Deal

In December 2010, CFT Holdings Ltd acquired an 80% interest in the Aolong Joint Venture via a 100% owned Hong Kong incorporated subsidiary called CFT Heilongjiang (HK) Ltd. Longmay Coal Mining Group Joint Stock Company Ltd, holds the other 20% interest in the Aolong JV.

As part of the JV agreement CFT was to contribute approximately A$1.2 million (RMB 8 million) and Longmay A$300,000 (RMB 2 million). However, at the time of the deal it was agreed that the total amount of investment in the company would have a value of approximately A$2.1 million (RMB 14 million). The A$ value is based on an exchange rate of 1RMB to A$0.15 (December 2010).

Longmay became free carried for all forward programs in 2012.

5.1.5.2 Triple Purchase of CFTH

On the 5[th] October 2012 Triple entered into a deal with CFT to purchase CFTH. This was completed on the 7[th] February. The deal is outlined below and shown in Table 9.

Initially, Triple paid $150,000 cash as consideration for the shares in CFTH. Triple agreed to issue 30,000,000 shares in Triple (A$450,000 at A$0.015/share, February 2012) in consideration for incurred expenses of defined CFT lenders.

Triple also agreed to issue 350,000,000 performance shares (A$5,250,000 at $0.015/share) to CFT shareholders which were to vest according to the following milestones:

Tranche 1 – 50,000,000 shares to vest on positive DST results in a well planned for October 2012. The condition was not met and CFT was allocated 5 ordinary shares.
Tranche 2 – 50,000,000 shares to vest on positive results in recovered pressurised core taken in a new core hole planned for March / April 2013. This condition was not met and CFT was allocated 5 ordinary shares.

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Tranche 3 – 125,000,000 shares to vest when 10 development wells are drilled / completed (within 18 months). This condition was not met and CFT was allocated 12 ordinary shares.
Tranche 4 – 125,000,000 shares to vest when 20 development wells are drilled / completed (within 24 months). This condition was not met.

The acquisition was primarily performance linked. None of the above tranches were met and Triple acquired CFT at an approximate cost of A$600,000. The full value had all tranches been met is A$5,850,000.

A$5,850,000.	A$5,850,000.
Table 9: Summary		of CFT / Triple Deal
	Number of shares	Share Price (A$)	Amount (A$)	Implied Value (A$)
Initial payment and share issue
Cash	-	-	150,000	600,000
Shares to CFT Lenders	30,000,000	0.015	450,000
Performance Tranches
Tranche 1	50,000,000	0.015	750,000	1,350,000
Tranche 2	50,000,000	0.015	750,000	2,100,000
Tranche 3	125,000,000	0.015	1,875,000	3,975,000
Tranche 4	125,000,000	0.015	1,875,000	5,850,000
Total	380,000,000		5,850,000	5,850,000

5.2 SHUAN YA SHAN, QI TAI HE AND JI XI MINE AREAS

Shuan Ya Shan, Qi Tai He and Ji Xi mine areas are also located in the Heilongjiang Province of China and form part of the Aolong JV. These areas are shown in Figure 2.

In 2013 Longmay drilled a well in the Ji Xi permit. The well was completed over a 2 metre seam which is understood to have been fracture stimulated and produced 100 mcf/d for 6 months. Triple currently does not have detailed information about this well.

Work on these areas will only be undertaken in the future once Hegang has been developed. They form part of the Aolong JV and so are part of the total value implied by the various transactions.

6.0 DEALS IN CHINA

In December 2009 Arrow Energy subsidiary Arrow Energy International (AEI) signed an agreement with Fortune Oil subsidiary, Fortune Green Energy (FGE), to acquire a 35 percent stake in Fortune Liulin Gas (FLG). Total consideration for this stake is US$13.3m with US$6m of these funds being committed to the 2010 work program which includes the

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drilling of horizontal pilot wells. Arrow has conditional options to increase its stake to 75 percent over time.

Fortune Liulin Gas' sole asset is a 50 percent participating interest in the Luilin CBM block which has been the subject of considerable exploration activity since 1999, and is one of the most advanced CBM prospects in China. The block has certified 3P reserves of 89 petajoules. Arrow's net interest will be 15 PJ of certified 3P reserves once the transaction is completed. Arrow expects further reserves certification within the next two years.

The Luilin block covers 198 km2 and is located 35 km from Luliang and 500 km south-west of Beijing within the south-east Ordos Basin in Shanxi Province. There are three target coal seams with high gas content and saturations.

In February 2009, the Liulin block was designated a State Special Pilot Project enabling the acceleration of the exploration and development program. Arrow, Fortune and CUCBM, the Chinese counterparty to the Production Sharing Contract covering the transaction, will be working collaboratively to achieve commercial gas production from the block within 12 to 18 months.

This deal has not been used in the valuation as the geology is different from the Aolong JV acreage and it is in a different basin. This PSC is also further advanced than the Aolong JV acreage and project.

In June 2012 Sino Gas & Energy Holdings Limited (Sino Gas) and MIE Holdings Corporation (MIE) formed a strategic partnership to develop the Sanjiaobei and Linxing PSCs in the Ordos Basin, Shanxi Province, China. The partnership will combine MIE’s financial strength, on- ground operational capability and Chinese regulatory experience with Sino Gas’ gas projects and technical expertise.

Under the terms of Definitive Agreements, MIE will progressively invest US$90 million in Sino Gas’ subsidiary Sino Gas & Energy Limited (SGE) that holds the Sanjiaobei and Linxing PSCs. It will also acquire US$10 million of existing shares in SGE from Sino Gas at closing which was expected to occur on or before 6 July 2012. The combined investment will result in MIE holding a 51% interest in SGE. Sino Gas believes that the US$90 million that MIE is investing in SGE will be sufficient to fund the Sanjiaobei and Linxing PSCs through Chinese Reserve Reports and Overall Development Plan.

Sanjiaobei and Linxing PSCs have been independently assessed to contain some 3.7 TCF of Reserves, Contingent and Prospective Resources (100%, Mid Case) with 60% of the acreage still to be explored.

The lack of known, detailed CBM data in the Aolong acreage means that comparisons with other acreage are not relevant to the valuation of the Aolong acreage.

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7.0 VALUATION

The valuation of Triple’s 80% interest in the Aolong JV acreage, is based on both the CFT/Longmay deal and the Triple purchase of CFTH.

Under the CFT/Longmay deal, the initial amount of investment in the Aolong JV was approximately A$2,100,000 (RMB 14 million). CFTH’s contribution of this amount, based on its 80% interest, is A$1,680,000. With the drilling of the Xian Xian-1 well at A$2,979,000 (80% of the investment remains with CFTH which is A$2,383,200) , CFTH’s 80% interest can be valued at A$4,063,200.

Triple’s eventual purchase of CFTH for a cash expenditure of A$150,000 plus A$450,000 worth of Triple shares issued to the CFT shareholders valued CFTH at the time at A$600,000. However, the Triple/CFT Share Sale Agreement also called for the issuance of performance shares which would vest once certain performance criteria were met. Although none of these criteria were met, they were expected to occur. The agreement implies value for each of the four tranches as detailed in Table 9. Inclusion of the tranches values the asset at A$5,850,000.

The proposed forthcoming work program of two new exploration wells will add further value to the acreage. The work program of US$2,750,000 is equivalent to A$3,395,062 based on an $0.81 exchange rate (5[th] January 2015). 80% of the value of the investment will remain with CFTH and this is A$2,716,049.

AWT believes that it is appropriate to take the CFTH implied values of A$4,063,200 and A$5850,000 and add the value of the two proposed exploration wells to each. This gives values of A$6,779,249 and A$8,566,049 respectively.

AWT assesses the value of the Triple assets (80% of the Aolong JV acreage) at between A$6,779,249 and A$8,566,049.

8.0 REFERENCES

Jingeng Sha et al (2001) Studies on the Early Cretaceous Longzhaogou and Jixi Groups of eastern Heilongjiang, northeast China and their bearing on the age of supposedly Jurassic strata in eastern Asia.

9.0 STATEMENTS

9.1 LIMITATIONS

AWT has primarily relied on data supplied by Triple. These reports and information were compiled and written by various industry and government bodies as well as consultants. The material was reviewed for its quality, accuracy and validity and was considered to be acceptable. It is believed that the information received is reliable and there is no reason to believe that any material facts have been withheld. However, the level of review of the information provided to us does not amount to an audit, verification or due diligence, save to the extent necessary to satisfy ourselves that it is reasonable for us to rely on that

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information, and no warranty can be given that this review has analysed all of the matters which a more extensive examination might reveal. AWT has reviewed documents supplied by Triple which pertain to the status of the permits. AWT knows of no issue which would cast doubt on this status. No warranty can be given that this review has analysed all of the matters, which an extensive examination might reveal.

This report or any reference thereto, may not be included in any other document or distributed for any other purpose without the prior written consent of AWT to the purpose of such distribution and to the form and context in which the report or reference appears.

The opinions and statements in this report are made in good faith and in the belief that such opinions and statements are not misleading.

9.2 DECLARATION

9.2.1 Independence

This report is our genuine opinion and the product of our professional judgment. AWT has not had and, at the date of this report, does not have any relationship with Triple or its subsidiary companies that could be regarded as capable of affecting AWT’s ab ility to provide an unbiased opinion in relation to this report. In particular, neither the authors of this report, or any director or senior employee of AWT involved in preparing the report has a substantial interest in, or is a substantial creditor of, or has any material financial interest in the transaction.

9.2.2 Fees and other benefits

A fee of $38,000 ex GST will be received for the preparation of this letter as part of the valuation of Triple’s acreage. Payment of the fee is not contingent on any matter. AWT will receive no other benefit for the preparation of the report. The author of this report has no pecuniary or other interest which could be regarded as capable of affecting his ability to provide an unbiased opinion in relation to this report.

9.2.3 Changes in facts or circumstances

Advance copies of this report were provided to the Directors of Triple and minor changes were made as a consequence. There have been no material changes made to the report. The author confirms that there has been no material change of circumstances, or of available information that AWT is aware of since this report was compiled, and AWT is not aware of any significant matters arising from this evaluation that are not covered by this report, which might be of a material nature.

9.2.4 Currency of Report

This report has been prepared based on information available up to and including 5 January 2015 .

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9.2.5 Consent for use

AWT has given and not withdrawn its written consent to the inclusion of this report in the Independent Expert’s Report by BDO to be provided to Triple shareholders in the form and context in which this report appears.

10.0QUALIFICATIONS OF THE AUTHORS

10.1 WAL MUIR

Wal Muir has a B.Sc. (Hons) degree from the University of New South Wales (1978) with a double major in Geology, a major in Pure Mathematics and Honours in Geophysics. He has a Master of Business Administration (1989) from the University of Queensland. Mr Muir has more than 35 years of experience in the petroleum exploration and production industry, both within Australia and overseas.

Wal is a member of the Australian Society of Exploration Geophysicists, Queensland Petroleum Exploration and is a Distinguished Member of the Petroleum Exploration Society of Australia (PESA). He has filled all the executive positions at PESA Queensland, and was Federal President of PESA from 1997 until 1999. Mr Muir was an Adjunct Professor in Biogeosciences at the Queensland University of Technology from 2009 to 2013.

An experienced and motivated petroleum professional, Mr Muir specialises in the accurate evaluation of the value and risks associated with exploration and production acreage. He has specific skills in seismic interpretation, risk analysis, play and prospect evaluation and team leadership. Prior to founding his own consulting group in 2001, Wal was the New Ventures and Exploration Manager for Petroz NL. He has worked on all Australian petroleum basins, and extensively in basins overseas including SE Asia, the North Sea, Italy, Falklands, US and East Africa.

10.2 KANE RAWSTHORN

Kane Rawsthorn joined AWT in 2010 and was appointed to the position of Manager Geosciences in January 2014. Kane manages the geoscience technical group responsible for the preparation of reports and papers across the spectrum of scientific, commercial, well completion, well proposal and annual exploration and development activities. Kane specialises in new ventures to operated permits reviews, incorporating play and prospect generation, basin and reservoir characterisation, mapping and geophysical identification using 2D and 3D seismic interpretation and data room reviews.

Graduating with a Bachelor of Science (Geoscience) from Monash University, Kane has also gained a Graduate Diploma (with Merit) from ANU specialising in Basin Analysis and Modelling. Further career highlights include positions with Baker Hughes and Geoscience Australia working with the Carbon, Capture and Storage group and assisted with the development of the world first acreage release for offshore storage sites.

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Kane has 10 years’ experience working in the petroleum industry with exposure to both onshore and offshore sedimentary basins in Australia, South East Asia, North America and Africa. Kane is a member of Petroleum Exploration Society of Australia (PESA).

Yours Sincerely

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Wal Muir

Principal Geophysicist

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TRIPLE ENERGY LIMITED

ACN: 116 829 675

REGISTERED OFFICE:

UNIT 15 LEVEL 1 100 RAILWAY ROAD SUBIACO WA 6008

SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to:

PO BOX 535, APPLECROSS WA 6953 AUSTRALIA

«HOLDER_NAME» «ADDRESS_LINE_1» «ADDRESS_LINE_2» «ADDRESS_LINE_3» «ADDRESS_LINE_4» «ADDRESS_LINE_5»

770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected] W: www.securitytransfer.com.au

Code: Holder Number:	TNP
	«HOLDER_NUM

PROXY FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

The meeting chairperson OR

or failing the person named, or if no person is named, the Chairperson of the meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the General Meeting of the Company to be held at 12:00pm WST on Friday 24 April 2015 at BDO, 38 Station Street, Subiaco, WA 6008 and at any adjournment of that meeting.

SECTION B: Voting Directions

Please mark "X" in the box to indicate your voting directions to your Proxy. The Chairperson of the Meeting intends to vote undirected proxies in FAVOUR of all the resolutions. In exceptional circumstances, the Chairperson of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

RESOLUTION	RESOLUTION
1.	CREATION OF	A NEW CLASS OF SEC URITIES
2.	RATIFICATION OF PRIOR ISSUE - TRANCHE 1 PLACEMENT OF SHARES
3.	APPROVAL OF BLUE SKY TRANSACTION

PLACEMENT - TRANCHE 2 PLACEMEN T OF SHARES TO RAISE UP TO $2, 000,000
PLACEMENT - OPTIONS - IN CONSI DERATION OF CORPORATE SERVICES

If no directions are given my proxy may vote as the proxy thinks fit or may abstain. * If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SECTION C: Signature of Security Holder(s)

This section must be signed in accordance with the	instructions overleaf to enable your directions to be implemented.
Individual or Security Holder	Security Holder 2	Security Holder 3

Sole Director & Sole Company	Director	Director/Company Secretary

Proxies must be received by Security Transfer Registrars Pty Ltd no later than 12:00pm WST on Wednesday 22 April 2015.

TNPPX1240415

TNP

My/Our contact details in case of enquiries are:

Name:

Number:

( )

1. NAME AND ADDRESS

This is the name and address on the Share Register of the Company. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. APPOINTMENT OF A PROXY

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a shareholder of the Company.

3. DIRECTING YOUR PROXY HOW TO VOTE

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by contacting the Company's share registry or you may photocopy this form.

5. SIGNING INSTRUCTIONS

Individual: where the holding is in one name, the Shareholder must sign. Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. LODGEMENT OF PROXY

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than the date and time stated on the form overleaf. Any Proxy form received after that time will not be valid for the scheduled meeting.

To appoint a second Proxy you must:

a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and
b) Return both forms in the same envelope.

Security Transfer Registrars Pty Ltd

Postal Address PO BOX 535 Applecross WA 6953 AUSTRALIA Street Address Alexandrea House Suite 1, 770 Canning Highway Applecross WA 6153 AUSTRALIA Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email [email protected]

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of security holders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external + service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

AI assistant

HYTERRA LTD — AGM Information 2015

65084_rns_2015-03-18_e001f9d0-5967-4ba3-b7fd-98b5c494b372.pdf

TRIPLE ENERGY LIMITED ACN 116 829 675

NOTICE OF GENERAL MEETING

CONTENTS

IM PORTANT INFORM ATION

Time and place of Meeting

Your vote is important

Voting eligibility

Voting in person

Voting by proxy

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

BUSINESS OF THE M EETING

AGENDA

1. RESOLUTION 1 - CREATION OF A NEW CLASS OF SECURITIES

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE – TRANCHE 1 PLACEMENT OF SHARES

3. RESOLUTION 3 – APPROVAL OF BLUE SKY TRANSACTION

4. RESOLUTION 4 – PLACEMENT – TRANCHE 2 PLACEMENT OF SHARES TO RAISE UP TO $2,000,000

5. RESOLUTION 5 – PLACEMENT – OPTIONS – IN CONSIDERATION OF CORPORATE SERVICES

BY ORDER OF THE BOARD

EXPLANATORY STATEM EN T

1. BACKGROUND

1.1 Execution of Investment Agreement

1.2 Blue Sky Transaction Overview

1.3 Blue Sky

1.4

Shareholder Approvals Required

1. RESOLUTION 1 - CREATION OF A NEW CLASS OF SECURITIES

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE – TRANCHE 1 PLACEMENT OF SHARES

2.1 General

2.2

Technical information required by ASX Listing Rule 7.4

3. RESOLUTION 3 – APPROVAL OF BLUE SKY TRANSACTION

3.1 General

3.2 Item 7 of Section 611 of the Corporations Act

(a) Section 606 of the Corporations Act – Statutory Prohibition

( Prohibition ).

(b) Voting Power

(c) Blue Sky’s entitlements in the Company

Current holdings of Blue Sky:

Maximum holdings of Blue Sky following the Blue Sky Transaction

(d) Associates

(e) Relevant Interests

(f) Associates of Blue Sky

3.3 Reason Section 611 Approval is Required

3.4 Specific Information required by Section 611 Item 7 of the Corporations Act and ASIC Regulatory Guide 74

(a) Identity of the Acquirer and its Associates

(b) Relevant Interest and Voting Power

(i) Relevant Interest

(ii) Voting Power

(iii) Summary of increases

(iv) Assumptions

(c) Reasons for the proposed issue of securities

(d) Blue Sky’s Intentions

(e)

Identity, associations and qualifications of Nominee Director

3.5 Advantages of the Blue Sky Transaction

3.6 Disadvantages of the Blue Sky Transaction

3.7 Independent Expert’s Report

3.8 Pro forma balance sheet

4. RESOLUTION 4 – PLACEMENT – TRANCHE 2 PLACEMENT OF SHARES

4.1 General

4.2 Technical information required by ASX Listing Rule 7.1

5. RESOLUTION 5 – PLACEMENT – OPTIONS IN CONSIDERATION FOR CORPORATE SERVICES

5.1 General

5.2 Technical information required by ASX Listing Rule 7.1

GLOSSARY

SCHEDULE 1 – OPTION TERM S AND CONDITIONS

(a) Entitlement

(b) Exercise Price

(c) Expiry Date

(d) Exercise Period

(e)

Notice of Exercise

(f)

Exercise Date

(g)

Timing of issue of Shares on exercise

HYTERRA LTD AGM Information 2015