HYTERRA LTD — Capital/Financing Update 2011

Dec 11, 2011

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12 December 2011

Dear Shareholder

NON-RENOUNCEABLE ENTITLEMENT ISSUE

On 8 December 2011, Tango Petroleum Limited (ACN 116 829 675) ( Company ) lodged a prospectus ( Prospectus ) with the Australian Securities & Investments Commission ( ASIC ) in relation to a non-renounceable entitlement issue of 1 fully paid ordinary share in the capital of the Company ( Share ) for every 1 Share held by shareholders of the Company as at the Record Date (as set out in the timetable below) ( Eligible Shareholders ) at an issue price of 1 cent per Share to raise up to $1,200,000 ( Offer ).

All of the Shares allotted will rank equally with the Shares on issue at the date of the Prospectus. The Prospectus contains further information regarding the rights and liabilities attaching to the Shares.

Offer to Australia and New Zealand investors only

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand. Shareholders resident in New Zealand should consider the additional disclosures specific to them as set out in the Prospectus and should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to exercise their entitlements under the Offer.

Availability of Prospectus

The Prospectus together with a personalised entitlement and acceptance form will be sent to Eligible Shareholders on the date set out in the timetable below. Instructions on how and when to apply under the Offer are set out in the Prospectus. The Prospectus is an important document and should be read in its entirety before deciding whether to accept an entitlement. If after reading the Prospectus you have any questions you should consult your stockbroker, accountant or other professional adviser.

The Prospectus has also been lodged with ASX and is available on the ASX website at www.asx.com.au and on the Company’s website at http://tangopetroleum.com.au/.

Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675

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Use of Funds

The funds raised from the Offer are planned to be used by the Company primarily for working capital. The Company has recently completed funding its share of costs in relation to an initial dry hole well on the Lyons Point Prospect to earn a 17.25% working interest. The Company has been advised that following completion of drilling and logging operations the well was not commercial and a decision has been made to plug and abandon is waiting on the results of this well. The Company will await a decision on any future exploration programs on the Lyons Point Prospect from the operator of this project before committing to fund its share of any further costs. In addition, the funds raised from the Offer may not be sufficient to meet its share of funding on further operations. Until such time as further details are available the Company will use funds raised from the Offer for working capital.

Application for quotation

The Company has applied to ASX for quotation of the Shares to be issued pursuant to the Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

Timetable

Timetable
The timetable in respect of the Offer is set out below:
Lodgement of Prospectus with the ASIC	8 December 2011
Lodgement of Prospectus & Appendix 3B with ASX	8 December 2011
Notice sent to Shareholders	12 December 2011
Ex date	13 December 2011
Record Date for determining Entitlements	4.00pm (WST) 19 December 2011
Prospectus despatched to Shareholders & Company	23 December 2011
announces despatch has been completed
Closing Date*	5.00pm (WST) on 11 January 2012
Securities quoted on a deferred settlement basis	12 January 2012
ASX notified of under subscriptions	16 January 2012
Despatch of holding statements	19 January 2012
Quotation of Shares issued under the Offer*	20 January 2012

* The directors of the Company may extend the Closing Date by giving at least 6 business days notice to ASX prior to the Closing Date. As such the date the Shares are expected to commence trading on ASX may vary.

Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675

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Capital Structure

Upon completion of the Offer (assuming all the Shares offered under the Prospectus are issued and no Options are exercised prior to the Record Date), the capital structure of the Company will be:

Shares

Shares
	Number
Shares currently on issue	120,000,000
Shares offered pursuant to the Offer	120,000,000
Total Shares on issue after completion of the Offer1	240,000,000

Options

Options
	Number
Options currently on issue (quoted – ASX code: TNPOA)(exercise price 6 cents, expiry date 30 June 2012)	99,000,000
Options offered pursuant to the Offer	NIL
Total Options on issue after completion of the Offer1	99,000,000

Enquiries

If you have any questions about applying for securities under the Prospectus, please contact James Robinson at the Company on +61 8 6460 4960 or the share registry on +61 8 9315 2333.

Yours faithfully

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MATHEW WALKER EXECUTIVE CHAIRMAN

Office - Suite 9, 1200 Hay Street, West Perth WA 6005 Postal - PO Box 281, West Perth WA 6872 Ph: 08 6460 4960 Fax: 08 9324 3045 Web: www.tangopetroleum.com.au ACN - 116 829 675