HYTERRA LTD — Capital/Financing Update 2011

Jun 6, 2011

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7 June 2011

##Insert Name of Shareholder## ##Insert Address of Shareholder## ##Insert Address of Shareholder##

Dear Shareholder

NON-RENOUNCEABLE ENTITLEMENT ISSUE

On 3 June 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 option exercisable at 6 cents on or before 30 June 2012 ( Option ) to acquire a 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 0.5 cents per Option to raise up to approximately $430,000 ( Offer ).

All of the Shares allotted upon the future exercise of the Options will rank equally with the Shares on issue at the date of the Prospectus. The Prospectus contains further information regarding the full terms and conditions attaching to the Options and 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 to fund part of the Company’s share of dry hole costs of a test well at the Lyons Point Prospect. However, as the funds to be raised from the Offer when combined with the Company’s existing cash reserves as at the date of this Prospectus are not sufficient to cover the Company’s share of the dry hole costs for the test well at the Lyons Point Prospect1 the Company will also be undertaking a placement of Shares and Options to raise up to a further $1,190,000 ( Placement ). In the event the Company does not raise funds sufficient to cover its share of dry hole costs of the test well (i.e. from the Offer and the Placement or any other source of funding), it will not proceed with the participation in the Lyons Point Prospect and will instead use the funds raised under the Offer for general working capital, including but not limited to, appraisal of other project opportunities and operating costs.

Application for quotation

The Company has applied to ASX for quotation of the Options 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 Options and will repay all application monies for the Options within the time prescribed under the Corporations Act, without interest.

Manager to the Offer

The Company has entered a mandate letter agreement with Alto Capital to act as manager to the Offer, including the placement of the Shortfall. The fee payable to Alto Capital under the mandate is $10,000 (excluding GST) plus 5% (excluding GST) of the amount raised pursuant to the Shortfall Offer.

Timetable

The timetable in respect of the Offer is set out below:

Lodgement of Appendix 3B with ASX	23 May 2011
Lodgement of Prospectus with the ASIC and ASX	3 June 2011
Notice sent to Shareholders	On or before 7 June 2011
Ex date	8 June 2011
Record Date for determining Entitlements	5.00 pm (WST) on
	15 June 2011
Prospectus despatched to Shareholders	21 June 2011
Closing Date*	5.00 pm (WST) on
	5 July 2011
Securities quoted on a deferred settlement basis	6 July 2011
ASX notified of under subscriptions	On or before 8 July 2011
Despatch of holding statements	Before 12.00 pm (WST) on
	13 July 2011
Quotation date of Securities issued under the Offer*	14 July 2011

* 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 Options 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 Options offered under the Prospectus are issued[1] ), the capital structure of the Company will be:

Shares

Shares
	Number
Shares currently on issue	86,000,000
Shares offered pursuant to the Offer	NIL
Total Shares on issue after completion of the Offer1	86,000,000

Options

Options
	Number
Options currently on issue	NIL
Options (quoted) offered pursuant to the Offer(exercise price 6 cents / expiry date 30 June 2012)	86,000,000
Total Options on issue after completion of the Offer1	86,000,000

1 As announced on 23 May 2011, the Company will also be undertaking a placement of up to 34,000,000 Shares at an issue price of 3.5 cents per Share, together with 34,000,000 free attaching Options on the same terms as those issued under the Offer (on a 1:1 basis with each Share subscribed for and issued), to raise up to $1,190,000 ( Placement ). The Placement is subject to Shareholder approval which is intended to be sought at the annual general meeting of Shareholders to be held on or about 8 July 2011 as such the Shares and Options the subject of the Placement will not be issued prior to the completion of the Offer.

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 DIRECTOR

TANGO PETROLEUM LIMITED

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