NGE CAPITAL LIMITED — Proxy Solicitation & Information Statement 2010

Dec 22, 2010

NEW GUINEA ENERGY LTD

ACN 112 618 238

NOTICE OF GENERAL MEETING

A General Meeting of the members of New Guinea Energy Ltd will be held at 10.00 am (EST) on 28 January 2011 at the offices of Norton Rose Australia , Level 18, Grosvenor Place, 225 George St, Sydney.

Members should refer to the accompanying Explanatory Memorandum for further information on the matters to be considered at this meeting.

Terms used in this Notice are defined in Schedule 1.

ORDINARY RESOLUTIONS

To consider and, if thought fit, to pass the following ordinary resolutions:

1 . Approval for the issue of 2,500,000 Options I already issued in August 2010

“That approval is given in accordance with ASX Listing Rule 7.4 for the issue and allotment by New Guinea Energy Ltd in August 2010 of 2,500,000 unlisted Options I, each Option I exercisable for one fully paid ordinary share in New Guinea Energy Ltd at $0.45 as detailed in the explanatory statement that accompanies this Notice.”

• 2 . Approval for the issue of 100,181,598 new fully paid ordinary shares already issued in December 2010

“That approval is given in accordance with ASX Listing Rule 7.4 for the issue and allotment by New Guinea Energy Ltd of up to 100,181,598 new fully paid ordinary shares on 16 December 2010 at $0.122 per share and having the terms and conditions detailed in the explanatory statement that accompanies this notice”.

3. Approval for the issue of up to 65,265,607 new securities

“That approval is given in accordance with ASX Listing Rule 7.1 for the issue and allotment by New Guinea Energy Ltd of up to 65,265,607 new securities in New Guinea Energy Ltd at $0.122 per share as detailed in the explanatory statement that accompanies this notice.”

4 . Election of Mr Andrew A Young as a Director

“That Mr Andrew A Young, who has been appointed by the Directors of New Guinea Energy Ltd since the last Annual General Meeting and retires according to the Constitution of New Guinea Energy Ltd and being eligible, offers himself for election, be and is hereby elected as a Director”.

VOTING EXCLUSIONS

Resolutions 1 & 2

In accordance with ASX Listing Rule 7.5.6, the Company will disregard any votes cast on Resolutions 1 and 2 by:

• a person who participated in the issue of securities; and

• an associate of that person.

Resolution 3

In accordance with ASX Listing Rule 7.3.8, the Company will disregard any votes cast on Resolution 3 by:

• A person who may participate in the proposed issue of securities 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

• An associate of that person.

HOW TO VOTE

If you are a member entitled to attend and vote, you may attend the General Meeting in person or you may appoint a proxy or proxies to attend on your behalf. In relation to the appointment of proxies, refer to the notes on proxies at the end of the

1

Proxy Form. A body corporate may appoint a representative to attend in accordance with the Corporations Act 2001. An executed notice evidencing the appointment of the person attending is required when registering at the General Meeting.

To be valid, forms of proxy (enclosed) for use at the General Meeting must be completed and returned to the Company no later than 10.00 am EST on 26 January 2011.

ENTITLEMENT TO VOTE

For the purpose of the meeting, and in accordance with regulation 7.11.37 of the Corporations Regulations 2001, the Directors have determined that all the shares in the Company that are quoted on the ASX as at 7.00 pm (EST) on 27 January 2011 will, for the purposes of determining voting entitlements at the General Meeting, be taken to be held by the persons registered as holding the shares at that time. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the General Meeting.

Dated this 23rd day of December 2010

By Order of the Board of Directors of New Guinea Energy Ltd

==> picture [102 x 31] intentionally omitted <==

Lucy Rowe Company Secretary

2

NOTICE OF GENERAL MEETING

EXPLANATORY STATEMENT

This Explanatory Statement provides information to shareholders for the General Meeting of shareholders of New Guinea Energy Ltd to be held at 10.00am on 28 January 2011 at Norton Rose Australia, Level 18 Grosvenor Place, 225 George St, Sydney and it should be read in conjunction with the accompanying Notice of General Meeting.

Resolution 1 – Approval for the Issue of 2,500,000 Options I issued in August 2010

Under the terms of the Company’s agreement with YA Global SPV Master Fund Ltd ( YA Global ) in relation to the equity line of credit announced to the ASX on 27 July 2010, YA Global was entitled to be issued 2,500,000 options as part of their management fee.

Resolution 1 seeks shareholder ratification of the issue on 6 August 2010 of 2,500,000 Options I to YA Global. ASX Listing Rule 7.4 permits the ratification of previous issues of securities made without prior shareholder approval, provided the issue did not breach the 15% threshold set by ASX Listing Rule 7.1. The effect of such a ratification is to restore the Company’s ability to issue further shares of up to 15% of the issued capital of the Company without requiring shareholder approval.

The Company confirms that the issue and allotment of the Options I did not breach ASX Listing Rule 7.1.

ASX Listing Rule 7.5 contains certain requirements as to the contents of a notice sent to shareholders for the purposes of ASX Listing Rule 7.4 and the following information is included in this Explanatory Statement for that purpose:

• (a) 2,500,000 Options I were issued by the Company;

(b) the options were issued as part of YA Global’s management fee and the exercise price of each option is 45 cents;

(c) the options were issued to YA Global;

(d) funds raised on the exercise of the options will be applied to working capital and exploration; and

(e) a voting exclusion statement is included in this Notice, a person who participated in the issue of the 2,500,000 Options I and any associate of that person is excluded from voting on this resolution.

The Options I are granted on the following terms and conditions:

• 1 Each Option I entitles the holder to subscribe for one fully paid ordinary share in the capital of New Guinea Energy Ltd.

• The Options I expire at 5.00 pm EST on 27 July 2014 (the “Expiry Date”). Any Option I which has not been exercised prior to the Expiry Date automatically lapses.

• The Options I are exercisable at an exercise price of A$0.45 per share at any time on or before the Expiry Date.

• The Options I are not transferable and are subject to the provisions of any escrow, restriction, lock-in or similar agreement (“Escrow Agreement”) entered into by the option holder in respect of the Options I or any securities issued on exercise of those options.

• All shares issued pursuant to the exercise of Options I will be allotted within 10 business days after the exercise of the Options I and will rank pari passu in all respects with the Company’s then existing ordinary fully paid shares. If the Company is listed on a stock exchange, the Company will apply for official quotation by that stock exchange of all shares issued upon exercise of the Options I on or before the third business day on which that stock exchange is open after the date of allotment of the shares.

• Exercise of the Options I is effected by completing the Notice of Exercise of Options I and surrendering the certificate to the Company together with the required exercise price. If there is more than one Option I on a certificate and prior to the Expiry Date of those Options I, the Options I are exercised in part, the Company will issue another certificate for the balance of the Options I held and not yet exercised.

• There are no participating rights or entitlements inherent in the Options I and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Options I. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 business days after the issue is announced. This will give option holders the opportunity to exercise their Options I prior to the date for determining entitlements to participate in any such issue.

• In the event of reorganisation (including a consolidation, sub-division, reduction or return) of the issued capital of the Company, the number of Options I or the exercise price of the Options I or both shall be reorganised (as appropriate) in the manner required by the ASX Listing Rules .

3

1. If there is a pro-rata issue (except a bonus issue) to the holders of the ordinary shares, the exercise price of Option I shall be reduced according to the following formula.

2. O = O - E[P-(S+D)]

N + 1

Where

• O’ = the new exercise price of Option I.

• O = the old exercise price of Option I.

• E = the number of ordinary shares into which one Option I is exercisable.

• P = the average market price per ordinary shares (weighted by reference to volume) of the ordinary shares during the 5 trading days ending on the day before the ex-rights or ex-entitlements date.

• S = the subscription price for an ordinary share under the pro-rata issue.

• D = the dividend due but not yet paid on the ordinary shares (except those to be issued under the pro-rata issue).

• N = the number of ordinary shares with rights or entitlements that must be held to receive a right to one new ordinary share.

• If there is a bonus issue to the holders of ordinary shares, the number of securities over which the option is exercisable will be increased by the number of ordinary shares which the holder of Option I would have received if the Option I had been exercised before the record date for the bonus issue.

• If and to the extent any of the preceding terms and conditions are inconsistent with the rules or requirements of any stock exchange on which the Company’s shares are listed or are proposed to be listed from time to time, the rules of the relevant stock exchange will prevail in all respects to the extent of the inconsistency.

• These terms and conditions are governed by the laws of the State of NSW, Australia and the holder of the options unconditionally submits to the jurisdiction of the courts of that State and courts of appeal from them.

ASX Listing Rules Requirements

ASX Listing Rule 7.1 allows the Company to issue new securities up to 15% of the existing issued capital of the Company without prior approval of shareholders. The options issued on 6 August 2010 were within this limitation.

Under ASX Listing Rule 7.4, shareholders may subsequently approve the issue of securities made within the limitation of ASX Listing Rule 7.1. The Company is seeking this approval . Following this approval, the Company will again be able to issue new securities up to 15% of its existing issued capital without prior approval of shareholders.

Recommendation

The Directors recommend that shareholders vote in favour of Resolution 1.

Resolution 2 – Approval for the Issue of 100,181,598 fully paid ordinary securities issued in December 2010

On 16 December 2010, the Company issued 100,181,598 new fully paid ordinary shares at $0.122 per share to Quantum Partners LP, a private investment fund managed by Soros Fund Management LLC (“Quantum”).

Resolution 2 seeks shareholder ratification of the issue of the 100,181,598 shares on 16 December 2010. ASX Listing Rule 7.4 permits the ratification of previous issues of securities made without prior shareholder approval, provided the issue did not breach the 15% threshold set by ASX Listing Rule 7.1. The effect of such a ratification is to restore the Company’s ability to issue further shares of up to 15% of the issued capital of the Company without requiring shareholder approval.

The Company confirms that the issue and allotment of the 100,181,598 shares on 16 December 2010 did not breach ASX Listing Rule 7.1.

ASX Listing Rule 7.5 contains certain requirements as to the contents of a notice sent to shareholders for the purposes of ASX Listing Rule 7.4 and the following information is included in this Explanatory Statement for that purpose:

• (a) 100,181,598 shares were issued by the Company;

• (b) The issue price per share was $0.122;

• (c) The shares rank equally with existing fully paid shares issued by the Company;

4

• (d) The shares were allotted to Quantum;

• (e) funds raised from the issue will be applied to fund the Company’s exploration activities and general working capital and;

• (f) a voting exclusion statement is included in the Notice, a person who participated in the issue of the 100,181,598 shares and any associate of that person is excluded from voting on this resolution.

Recommendation

The Directors recommend that shareholders vote in favour of Resolution 2.

Resolution 3 – Approval for the Issue of up to 65,265,607 Fully Paid Ordinary Shares

On 8 December 2010, the Company announced that it had secured a private placement to Quantum of 165,447,205 fully paid ordinary securities at $0.122 per share (Placement Shares) . Prior to the date of the General Meeting, 100,181,598 of the Placement Shares (Tranche 1 Shares) have been issued (the ratification of which is the subject of Resolution 2 above).

The proposed issue of 65,265,607 of the Placement Shares ( Tranche 2 Shares ) would exceed the 15% threshold referred to in ASX Listing Rule 7.1 and, accordingly, shareholder approval is sought for the issue of the Tranche 2 Shares.

ASX Listing Rule 7.1 provides that the prior approval of the shareholders of the Company is required for an issue of equity securities if the number of securities issued will exceed 15% of the number of securities on issue 12 months before the date of issue aggregated with any securities issued by the Company in the previous 12 months under an exception in ASX Listing Rule 7.2 or issued with shareholder approval.

Pursuant to ASX Listing Rule 7.3, the following information is provided in relation to the issue of the Tranche 2 Shares:

• a) The maximum number of shares to be issued is 65,265,607 fully paid ordinary shares;

• b) The shares will be issued the business day after the date of the General Meeting and it is intended that allotment will occur on the same date and in any event no later than 3 months after the date of the general meeting;

• c) The issue price will be $0.122 per share;

• d) The shares will be issued to Quantum and this entity is not a related party of the Company.

• 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;

• f) The Company intends to use the funds raised towards the Company’s exploration activities and working capital; and

• g) A voting exclusion statement is included in this notice. A person who may participate in the proposed issue of securities 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 associate of that person is excluded from voting on this resolution.

Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 3.

Resolution 4 – Election of Mr Andrew A Young as Director

According to the Constitution of the Company any Director who has been appointed since the last annual general meeting shall automatically retire and be eligible for re-election.

Mr Andrew A Young was appointed a Non – Executive Director by the Directors of the Company on 26 October 2010.

Mr Young holds a B.E. (Chemical) degree from Melbourne University and an Executive MBA (Honours) from the University of Rochester, New York and has nearly 35 years continuous service in the Oil and Gas Industry. His specific expertise is in strategic planning and technical aspects across all areas of the upstream and downstream energy business.

He has an extensive background having held technical, leading management and board positions in major and small Energy & Petroleum operating companies and contract service companies, including onshore and offshore oil / gas

5

operations, gas processing, transportation, distribution, specialist pipeline engineering services, drilling and core analysis contract services.

Mr. Young was interim Managing Director (12 months) and a Non-Executive Director of Digitalcore Pty Ltd. Prior to this he was Chief Executive Officer and Managing Director of Anzon Energy Limited (AIM) and Anzon Australia Limited (ASX) until both companies merged with ROC Oil Limited.

Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 4.

6

Schedule 1 – Definitions

In this Explanatory Memorandum and Notice, the following definitions apply:

ASX means ASX Limited ACN 008 624 691;

ASX Listing Rules means the Listing Rules of ASX as amended or replaced from time to time; Company means New Guinea Energy Ltd ACN 112 618 238;

EST means Eastern Standard Time in Sydney, New South Wales; Notice means this Notice of General Meeting.

7

==> picture [106 x 93] intentionally omitted <==

## **YOUR VOTE IS IMPORTANT** **FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECORDED BEFORE 10.00AM WEDNESDAY 26 JANUARY 2011.** ## **TO VOTE ONLINE** ## **New Guinea Energy Ltd** ACN 112 618 238 **FOR ALL ENQUIRIES CALL:** (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600 ## **FACSIMILE** +61 2 9290 9655 ## **ALL CORRESPONDENCE TO:** Registries Limited GPO Box 3993 Sydney NSW 2001 Australia ## **Your Address** This is your address as it appears on the company’s share register. If this is incorrect, please mark the box with an “X” and make the correction on the form. Securityholders sponsored by a broker should advise your broker of any changes. **Please note, you cannot change ownership of your securities using this form.** ## **** **STEP 1 : VISIT http://www.registries.com.au/vote/ngegm2011 STEP 2: Enter your holding/Investment type STEP 3: Enter your SRN/HIN and VAC: ** ## **TO VOTE BY COMPLETING THE PROXY FORM** ## **STEP 1 Appointment of Proxy** ## Indicate here who you want to appoint as your Proxy If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space. ## **Proxy which is a Body Corporate** Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an “Appointment of Corporate Representative” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry. ## **Appointment of a Second Proxy** You are entitled to appoint up to two 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 telephoning the company’s securities registry or you may copy this form. To appoint a second proxy you must: (a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the 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 your votes. Fractions of votes will be disregarded. (b) return both forms together in the same envelope. ## **STEP 3 Sign the Form** ## The form **must** be signed In the spaces provided you must sign this form as follows: **Individual:** This form is to be signed by the securityholder. **Joint Holding** : where the holding is in more than one name, all the securityholders must sign. **Power of Attorney:** to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it. **Companies:** this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. **Please indicate the office held by signing in the appropriate place.** ## **STEP 4 Lodgement of a Proxy** This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting. **Proxies may be lodged using the reply paid envelope or:** **BY MAIL -** Share Registry – Registries Limited, GPO Box 3993, Sydney NSW 2001 Australia **BY FAX -** + 61 2 9290 9655 **IN PERSON -** Share Registry – Registries Limited, Level 7, 207 Kent Street, Sydney NSW 2000 Australia ## **STEP 2 Voting Directions to your Proxy** ## You can tell your Proxy how to vote To direct your proxy how to vote, place a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid. ## **Vote online at:** ## **http://www.registries.com.au/vote/ngegm2011 or turnover to complete the Form**  ## New Guinea Energy Ltd **==> picture [126 x 34] intentionally omitted <==** **----- Start of picture text -----**

**----- End of picture text -----**
## **STEP 1 - Appointment of Proxy** I/We being a member/s of **New Guinea Energy Ltd** and entitled to attend and vote hereby appoint the Chairman of the Meeting (mark with an **OR** ‘X’) **==> picture [178 x 33] intentionally omitted <==** If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy. or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy at the **General Meeting of New Guinea Energy Ltd to be held at Norton Rose Level 18, Grosvenor Place, 225 George St, Sydney** on **28 January 2011 at 10.00 am** and at any adjournment of that meeting, to act 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. If the Chairman of the Meeting is appointed as your proxy or may be appointed by default, and you do not wish to direct your proxy how to vote in respect of a resolution, please mark this box. By marking this box, you acknowledge that the Chairman of the Meeting may vote as your proxy even if he has an interest in the outcome of the resolution and votes cast by the Chairman of the Meeting for those resolutions, other than as proxy holder, will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called. The Chair intends to vote all undirected proxies in favour of the resolution. ## **STEP 2 - Voting directions to your Proxy – please mark**  **to indicate your directions** **Ordinary Business** **For Against Abstain*** Item 1 Approval for the issue of 2,500,000 Options I already issued in August 2010 Approval for the issue of 100,181,598 new fully paid ordinary shares already Item 2 issued on 16 December 2010 Item 3 Approval for the issue of 65,265,607 new securities Item 4 Election of Mr Andrew A Young as a Director **==> picture [87 x 88] intentionally omitted <==** In addition to the intentions advised above. The Chairman of the Meeting intends to vote undirected proxies in favour of each of the items of business. *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. **STEP 3 - PLEASE SIGN HERE This section** _**must**_ **be signed in accordance with the instructions overleaf to enable your directions to be implemented.** **Individual or Securityholder 1 Securityholder 2 Securityholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary** **Contact Name** ……………………………….…….. **Contact Daytime Telephone** ………………………………….. **Date** / /2011