MACMAHON HOLDINGS LIMITED — M&A Activity 2008

Sep 29, 2008

30 September 2008

Dear fellow Shareholder,

MACMAHON TAKEOVER OFFER FAILS

The hostile Takeover Offer by Macmahon Holdings Limited (Macmahon) for Ausdrill Limited has now formally expired.

The closing date for the Offer was September 29, by which time it had attracted less than 5.7% of formal acceptances from Ausdrill shareholders. This was significantly less than the 50.1% acceptances required under the conditions of the Offer. Since the conditions were not satisfied or waived, the small number of acceptances lapsed and Macmahon did not acquire any Ausdrill shares under the Offer.

We are pleased that the overwhelming majority of shareholders have supported Ausdrill and its future as an independent company and, on behalf of the Board, I would like to thank you for your ongoing support.

The Board of Ausdrill believes that this outcome is in your long term best interests. It will allow all shareholders to remain as owners in Ausdrill, to extract the full benefits from our superior margin business and to directly share in our significant growth potential.

Shareholders may have also noticed the considerable volatility in the Ausdrill share price in recent weeks. During this period, our share price has been affected by speculative trading from hedge funds in light of the evident failure of the Macmahon Offer. However, this is only a short term impact, and the Board believes the fundamental outlook for Ausdrill remains very positive.

Ausdrill was disappointed that it was forced to invest time and resources to defend what was an uninvited, hostile and inadequate Takeover Offer from Macmahon. However, it is important to note that this has not distracted us from our core business, and during recent months we have taken some significant strides in the growth of your Company.

Since May we have secured $600 million in new or extended contracts. This means we now have about four years of contracted work ahead of us, and we have identified a pipeline of further growth opportunities in Australia and Africa during the next two years.

This follows an outstanding year in 2007/08, in which the Company delivered a successive record result, with net profit after tax of $35.3 million. Looking to the 2008/09 financial year, the Board is expecting to deliver another strong performance, with a forecast 20 – 30% profit increase.

We are in our best ever operational and financial shape, are well positioned for growth and now look forward to getting on with the job. Finally, I would like to thank you again for your ongoing support, and look forward to sharing in a prosperous future as an Ausdrill shareholder.

Yours sincerely

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Terence O’Connor AM QC Chairman