MACMAHON HOLDINGS LIMITED — M&A Activity 2008

Jun 23, 2008

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24 June 2008

Dear Ausdrill Shareholder

Macmahon Offer for Ausdrill more compelling than ever

As you will be aware, on 21 May 2008 Macmahon announced a takeover offer (“the Offer”) for Ausdrill. Under the Offer, Macmahon is offering you 1.45 Macmahon shares for each of your Ausdrill shares, a premium of 33% above the price of your shares immediately prior to the Offer being announced.

You have been provided with a Bidder’s Statement describing the compelling rationale for combining Ausdrill with Macmahon and the significant benefits you will receive if you accept Macmahon’s Offer.

Ausdrill recently issued its Target’s Statement, which urges you to ignore all correspondence from Macmahon but fails to make a case for not accepting the Macmahon Offer.

There is nothing in Ausdrill’s Target’s Statement that has changed our view that the Offer is attractive for Ausdrill shareholders. There are no credible arguments to support the decision of the Ausdrill Directors not to accept Macmahon’s Offer .

In particular, we believe:

• the Target’s Statement contains no alternative proposal for Ausdrill shareholders other than to maintain the status quo;

• Ausdrill’s Board argues that the company is undervalued but, significantly, chose not to provide you with an Independent Expert’s valuation that would provide you with an objective, unbiased view on the value of the Offer;

• the Target’s Statement fails to address the many benefits Ausdrill shareholders would receive if they did accept the Offer;

• Macmahon has a proven track record of delivering superior returns and earnings per share (EPS) growth, a key driver of its sustained high market rating. Macmahon is forecasting EPS growth of 38.2% for FY 2008, compared to Ausdrill’s FY 2008 forecast of just 8.1%;

• those that have been investors in Macmahon for 12 months, three years or five years have received higher total returns (including dividends) than investors holding Ausdrill shares for the same periods;

• contrary to Ausdrill’s assertions, shareholders holding approximately 85% of Ausdrill’s shares are free to accept the Offer; and

• given Ausdrill has stated it is not seeking an alternative bidder, the value of your Ausdrill shares is highly likely to drop significantly if Macmahon’s Offer lapses.

Disappointingly, the Ausdrill Board has failed to provide any alternative to the Offer.

Instead, Ausdrill is asking you to believe that it will substantially improve its future performance relative to recent years and will deliver higher returns and higher earnings per share growth.

Macmahon Holdings Ltd ABN 93 007 634 406 Lvl 3, Durack Centre, 263 Adelaide Tce Perth WA 6000, PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

Ausdrill appears to be arguing that future growth prospects will have a significant impact on the value of your shares. However, Ausdrill has not released any information on its contract order book that would enable you to make a judgement on growth beyond FY 2009. Neither has it released any information to the market on future profitability that is outside the previous estimates of market analysts before Macmahon made its Offer.

With this in mind, we believe you should question why Ausdrill’s Directors chose not to engage an Independent Expert to provide you with an objective, unbiased opinion on the Offer.

Contrary to statements by Ausdrill and its Board, we believe that the combination of the two companies will result in a substantial reduction in the risk faced by Ausdrill shareholders. In particular, we are concerned that statements made by Ausdrill since the Offer was announced suggest African activities will contribute a majority of Ausdrill’s earnings in the future. For a smaller company like Ausdrill, this is an unacceptable risk profile.

Due to the Offer, Ausdrill shares are currently trading at a significant premium to pre-Offer levels. Prior to the announcement of Macmahon’s Offer, Ausdrill’s shares were trading at $1.95, compared to $2.56 as at 20 June 2008. Macmahon has therefore provided Ausdrill shareholders with a substantial takeover premium.

Ausdrill shares have only ever traded at current levels when there has been speculation of a takeover or an actual Offer for the company. Ausdrill has said it is not seeking an alternative bidder to Macmahon and instead is asking shareholders to support the status quo.

If the Offer lapses without Macmahon gaining at least 50.1% of acceptances, it is highly likely that Ausdrill’s share price will fall heavily and could potentially return to pre-Offer levels.

The combination of Macmahon and Ausdrill represents a very attractive opportunity for Ausdrill shareholders. It will provide you with benefits from the growth prospects and geographic diversity of the combined business, whilst being exposed to lower levels of operating risk. That Ausdrill has not made a credible case for rejecting the bid makes it more compelling than ever for Ausdrill shareholders to ACCEPT our Offer .

The Offer is due to close on 18 July 2008 unless extended. Macmahon urges you to consider all information sent to you and to ACCEPT the offer as soon as possible.

Further detail on the reasons why you should accept the Offer may be found in the Bidder’s Statement and in Macmahon’s response to the Target’s Statement. For further information or assistance, please contact the Offer Information Line on 1300 726 037 (or +61 3 9415 4345 for international callers).

Yours sincerely

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R J Carter Chairman