ODYSSEY

Berger Car Colla

For an offer of 25,000,000 Shares at an Issue price of \$0.20 each to raise \$5,000,000.

ABN 73 116 151 636

IMPORTANT NOTICE This is an important document that should be read in its entirety. If you do not understand it, you should consult your professional advisor without delay.

The Shares offered by this Prospectus should be considered speculative. Refer Section 9 for details relating to investment risks.

It is proposed that the Offer will close at 5pm (WST) on 15 November 2005. The Directors reserve the right to close the Offer earlier or extend this date without prior notices.

CORPORATE DIRECTORY

Directors Mr Ian Middlemas - Chairman Mr Mark O'Clery Mr Mark Pearce	Section
Company Secretary Mr Shane Cranswick
Technical Consultants Mr Mark O'Clery Mr Jeff Skates	1
Registered and Corporate Office Level 9, BGC Centre	2 3
28 The Esplanade Perth WA 6000	4
Telephone: 61 8 9322 6322 Facsimile: 61 8 9322 6558 Internet: www.odysseyenergy.com.au	5
Share Registry Computershare Investor Services Pty Ltd	6
Level ₂ 45 St Georges Terrace PERTH WA 6000	7
Telephone: 1300 557 010 International: 61 8 9323 2000 Facsimile: 61 8 9323 2033	8
Stock Exchange Listing Australian Stock Exchange Proposed ASX Code: ODY	9
Broker to the Offer Argonaut Securities Pty Ltd	10
Level 29, Allendale Square 77 St Georges Terrace Perth WA 6000	11
Telephone: 61 8 9224 6888 Facsimile: 61 8 9225 5511	12
Solicitors to the Company Hardy Bowen Lawyers	13
Investigating Accountant BDO Consultants (WA) Pty Ltd	14
Auditor BDO Accountants and Advisors	15
Independent Geologist Oso Energy Resources Corp.
	Front cover

Section	Description	Page No
	Important Notices	1
1	Letter from the Board	2
2	Summary of the Offer	3
3	Company and North Helper Gas Project Overview	5
4	Board and Management	9
5	Details of the Offer	12
6	Capital and Corporate Structure	17
7	Independent Geologist's Report	18
8	Investigating Accountant's Report	44
9	Risks and Investment Considerations	54
10	Material Contracts	65
11	Rights Attaching to Securities	72
12	Additional Information	77
13	Consents	81
14	Directors' Responsibility Statement and Consent	82
15	Glossary of Terms	83
	Application Form
Front cover	Drilling of Kenilworth Railroad #2. Odyssey has a 15% Working Interest in this well.

IMPORTANT NOTICES

This Prospectus is dated 18 October 2005 and was lodged with the ASIC on 18 October 2005. Neither the ASIC nor the ASX takes any responsibility for the contents of this Prospectus. No Shares will be allotted or issued on the basis of this Prospectus later than thirteen months after the date of this Prospectus.

Application will be made to the ASX within 7 days after the date of issue of this Prospectus for Official Quotation of the Shares the subject of this Prospectus.

No person has been authorised to provide information or to make any representation in connection with the Offer. Any such information or representation that is not contained in this Prospectus may not be relied upon as having been authorised by the Company. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Applications can only be made by completing the Application Form in full, in accordance with instructions contained on the reverse of the form. Certain words and terms used in this Prospectus have defined meanings, which appear in Section 15.

Unless otherwise disclosed assets depicted in this Prospectus are not assets of the Company or the North Helper Joint Venture.

In accordance with Chapter 6D of the Corporations Act, this Prospectus is subject to an exposure period of 7 days from the date of lodgement of the Prospectus with the ASIC and that examination may result in the identification of deficiencies in the Prospectus. In these circumstances, any application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. The 7 day exposure period may be extended by the ASIC by a further period of up to 7 days. The purpose of providing for an exposure period is to enable examination of this Prospectus by market participants prior to the raising of funds. Applications received during the exposure period will receive no priority and will not be processed until after the exposure period, when they will be treated as having been received simultaneously on the Opening Date.

A paper copy of this Prospectus will be made available upon request during the exposure period. The Prospectus may also be viewed online (for information purposes only) at www.odyssevenergy.com.au during the exposure period. Investors who wish to apply for Shares using the electronic version of the Application Form must download and read the entire Prospectus. The Offer is made in Australia and is only available to persons receiving an electronic version of this Prospectus in Australia. Persons who receive a copy of this Prospectus in electronic form at www.odysseyenergy.com.au are entitled to obtain a paper copy of the Prospectus which will be provided free of charge upon request by contacting the Company at 08 9322 6322 Shares will only be issued under this Prospectus upon receipt of an Application Form issued together with the Prospectus. The Corporations Act prohibits any person from passing on to another person the Application Form which accompanies this Prospectus, unless it is accompanied by a hard copy of this Prospectus, or the complete and unaltered electronic version of this Prospectus. There is no provision for electronic applications, nor for lodging a copy of an Application Form obtained electronically.

How to use this Prospectus

This Prospectus provides information for investors who wish to invest in the Company pursuant to this Offer only. It should be read in its entirety in order to make an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of the Company and the rights and liabilities attaching to the Securities. Oil and gas exploration involves a number of significant risks. Potential investors should take these factors into account and consider whether this is an appropriate investment in view of their personal circumstances. If in doubt investors should seek advice from their professional adviser before deciding whether to invest. There is no guarantee that the Shares offered under this Prospectus will make a return on capital invested, that dividends will be paid on the Shares, or that there will be any increase in the value of the Shares in the future. Investors who wish to subscribe for Shares should complete the Application Form included in this Prospectus. The Shares offered under this Prospectus should be considered speculative.

$\mathbf 1$ Letter from the Board

18 October 2005

Dear Investor,

On behalf of Odyssey Energy Limited ("Odyssey" or "The Company"), the Board is pleased to introduce this Prospectus and to invite you to become a Shareholder in the Company.

This Prospectus has been issued by Odyssey for the purposes of the offer of 25 million Shares at \$0.20 each to raise \$5 million before costs.

Odyssey has recently entered into an agreement to acquire a 15% Working Interest in the North Helper Gas Project. This Project is based in Carbon Country, Utah and is operated by Marion Energy, a wholly owned subsidiary of Carpenter Pacific Resources Limited, which is listed on the ASX.

The North Helper Gas Project is principally a coal bed methane ("CBM") project, located along the northern edge of the Helper Field on the same Ferron CBM trend as the substantial Drunkards Wash Field. Over 540 BCF of gas has been produced to date from Drunkards Wash and over 66 BCF of gas has been produced from the Helper Field.

The North Helper Gas Project comprises leases and farmout agreements covering approximately 5,000 acres and has drilled two wells, Kenilworth Railroad #1 and #2. In late 2005 the operator of the Project intends to complete these wells and over the next two years drill a further 8 wells. If commercial flow rates are achieved, an agreement with Anadarko Petroleum Corporation is in place to sell gas through their existing infrastructure.

The Company will seek to increase shareholder value by working with the operator to ensure a focused exploration, appraisal and development program for the North Helper Gas Project. The Board will also consider opportunities for other acquisitions, joint ventures, or investments in the oil and gas sector.

The Board of Odyssey along with the Company's key stakeholders are experienced in the resources industry. The Company's technical team of Mark O'Clery and Jeff Skates have substantial experience in the upstream oil and gas sector.

This Prospectus includes details of the Company, the assets and proposed operations, together with a statement of the risks associated with investing in Odyssey. We recommend that you study this document carefully and, if you are interested in investing in Odyssey, seek independent professional advice.

The Board looks forward to your participation in this Offer and to welcoming you as a Shareholder in the Company.

$2.$ Summary of the Offer

$2.1$ The Offer

The Company is offering 25,000,000 Shares at an Issue Price of \$0.20 per Share, payable in full on application, to raise \$5,000,000 (before the costs of the Offer).

All Shares issued under this Prospectus will be fully paid and rank equally with all existing Shares on issue.

$2.2$ Indicative Timetable

۰	Lodgement of Prospectus with ASIC	18 October 2005
۰	Expected Opening Date ⁽¹⁾	26 October 2005
۰	Expected Closing Date ⁽²⁾	15 November 2005
۰	Expected date of allotment and issue of Shares ⁽³⁾	25 November 2005
۰	Proposed date of trading of Shares to commence on the ASX $^{(3)}$	28 November 2005

Notes

$(1)$ The Offer is subject to an exposure period of 7 days which may be extended by the ASIC to 14 days. Any extension to the exposure period will impact on the Opening Date.
$(2)$ Investors are encouraged to submit their Applications as early as possible. The Directors reserve the right to close the Offer earlier or later than indicated above without prior notice to investors.
$(3)$ Indicative dates only. The date the Shares are expected to be issued and/or commence trading on the ASX may vary with any change to the Closing Date.

$2.3$ Condition Precedent

The Offer is conditional on the Company being satisfied that it can acquire the 15% Working Interest in the North Helper Gas Project and ASX approving the Official Quotation of the Shares offered under this Prospectus. If these conditions precedent are not satisfied, all Application Monies will be refunded in full, without interest.

2.4 Capital Structure

The capital structure of the Company is summarised below and assumes the Offer is fully subscribed.

	Number		%
Shares presently on issue	5,000,000	150,000	16.67
Shares now offered	25,000,000	5,000,000	83.33
Total Issued Capital	30,000,000	5,150,000	100.00

300,000 Options are also being offered pursuant to this Prospectus. See Section 11.2.

Further details of the Company's capital structure are detailed in Section 6.1.

$2.5$ Enquiries

Enquiries relating to this Prospectus or requests for additional copies of this Prospectus should be directed to the Broker to the Offer or the Company Secretary of Odyssey Energy Limited:

Odyssey Energy Limited		Argonaut Securities Pty Ltd
In Person:	Level 9, BGC Centre	In Person:	Level 29, Allendale Square
	28 The Esplanade		77 St Georges Terrace
	Perth WA 6000		Perth WA 6000
By Post:	P O Box Z5083	By Post	GPO Box 2553
	Perth WA 6831		Perth WA 6001
	By Facsimile: +61 8 9322 6558	By Facsimile:	+61 8 9225 5511
	By Telephone: +61 8 9322 6322		By Telephone: +61 8 9224 6888

The Company does not purport to give financial or investment advice. No account has been taken of the objectives, financial situation or needs of any recipient of this document. Because of this, any recipient of this document should have regard to their own objectives, financial situation and needs.

$3₁$ Company and North Helper Gas Project Overview

$3.1$ Background

Odyssey was recently incorporated to acquire and participate in the development of oil and gas opportunities, with a current focus on North America. The Company has identified a suitable initial project and has entered into an agreement to acquire a 15% Working Interest (12.375% Net Revenue Interest) in the Blackhawk Lease, which forms the primary component of the North Helper Gas Project, located in Utah, USA.

The North Helper Gas Project comprises approximately 5,000 acres, consisting of the 3,000 acre Blackhawk Lease and Farmout Agreements ("FOA") covering an additional area of approximately 2,000 acres. The Company also has an agreement in an Area of Mutual Interest ("AMI") covering approximately 180,000 acres surrounding the Blackhawk Lease, which enables Odyssey to participate in any farmout that it or its joint venture partner, Marion Energy, enters into within this area. Odyssey's initial Working Interest in the Westport FOA and Stone FOA will be 15%.

Mr Mark O'Clery, an experienced oil and gas geologist, has been retained by the Company as a technical consultant and has also joined the Board as a founding Director. Mr Jeff Skates, a petroleum engineer, has also been retained to provide additional technical expertise.

If successful, the exploration and appraisal activities at the North Helper Gas Project may allow Odyssey to become a gas producer in the short to medium term. The Company will also look to undertake further acquisitions, joint ventures and/or investments in the oil and gas industry as a means of enhancing shareholder value.

$3.2$ The North Helper Gas Project

Investors are referred to the Independent Geologists' Report contained in this Prospectus, which contains further information on the North Helper Gas Project, including location and technical maps/diagrams.

$3.3$ Location & History

The North Helper Gas Project is located along the northern edge of the Helper Field and on the same Ferron CBM trend as the substantial Drunkards Wash Field. Drunkards Wash was discovered on the southern edge of the Unita Basin in 1991 and is the largest producing gas field in Utah, producing an average of 5.4 BCF per month.

Over 800 wells are currently producing from the Ferron coals, with industry actively continuing to drill and expand the CBM fields in this area. Over 540 BCF of gas has been produced to date from Drunkards Wash alone, with production from the Helper Field (discovered in 1997) exceeding 66 BCF of gas.

Average production at Drunkards Wash is 320,000 cf/d per well whilst the younger Helper Field has an average of 304,000 cf/d per well. Drunkards Wash wells typically reach peak production rates in three years and are then expected to gradually decline. Average well spacing is 160 acres although consideration is being given to reducing this to 80 acres to enhance ultimate recoveries.

$3.4$ Geology Objective Gas Zones

The primary objective at the Helper Field is the Ferron (Coal) Formation of the Mancos Shale. The Upper Cretaceous age Ferron Coals are the source and reservoir rock with a portion of the gas producing out of marine Ferron sands that are inter-bedded with the coal beds. Wells commonly contain three to six coal beds over a stratigraphic section of 100-250 feet.

Results of Work to Date $3.5$

The North Helper Gas Project comprises leases and farmout agreements covering approximately 5,000 acres along the northern edge of the Helper Field and two wells, whch were drilled in the first half of 2005, Kenilworth Railroad #1 and #2. Though the wells have not yet been flow tested, the offsetting productive coals and sands are found in both at projected thickness. Coal thickness is measured at 20 and 26 feet in Kenilworth Railroad #1 and #2 respectively. There also appears to be approximately 18 feet of potential gas charged sand reservoirs in each well.

The Independent Geologist has estimated the gas in place ("GIP") for the Ferron coals and sands to be 3.0 BCF to 3.7 BCF for each 160 acres. Recovery factors are difficult to project in early testing, but historically, 50% of GIP for initial CBM production is considered acceptable.

Kenilworth Railroad #1 and #2 were relatively shallow vertical wells at less than 6,500 feet and should have been drilled and cased in six days or less. Both wells experienced mechanical problems and took significantly longer with commensurate cost overruns. As a result Marion Energy and the former joint venture drilling operator (who had a 15% WI in the North Helper Gas Project) reached a commercial agreement which has in turn led to the opportunity for Odyssey to acquire the 15% WI in the North Helper Gas Project as outlined in this Prospectus.

$3.6$ Proposed Exploration and Development Plan

Marion Energy, the North Helper Gas Project operator, has proposed to commence drilling three new wells in late 2005 and to complete the two existing wells. It is expected that these new vertical wells will cost US\$420,000 each to drill and complete, and completion and tie-in costs for Kenilworth Railroad #1 and #2 are expected to amount to US\$400,000 and US\$200,000 respectively.

Beyond this 2005 work program, there are currently up to 15 possible additional drilling locations, three of which would be step-outs offsetting existing wells, four would be located on the proved Ferron trend and eight other possible locations on trend that are within the geological environment for coal and sand potential in the Ferron Formation. Marion Energy is proposing to drill five of these locations with directional wells back-to-back during 2006 at an estimated cost to drill and complete of US\$500,000 per well.

In addition, there are further geological targets available, including the coals of the Blackhawk Formation at locations further north in the AMI and the possibility of deep gas charged sands, most likely to be in the Dakota Formation. With advances in drilling and completion technology, especially related to shale, the Mancos Shale is also considered a further potential target.

If commercial flow rates are achieved, an agreement is in place with Anadarko to sell gas through their existing field-gathering infrastructure.

$3.7$ Farmout Agreements

In addition to the 3,000 leased acres, Marion Energy has negotiated to farm-in to adjacent properties held by Stone Energy (approximately 940 acres) and Westport/Bayless (approximately 1,080 acres). For each farm-in, one well must be drilled every six months to earn 100% WI in 160 acres (Odyssey WI of 15%). The farmor has the right to back-in for equity after the farmee has been paid out their initial investment from production revenue. See Section 10 for further details of each farmout agreement.

Two of the three wells proposed to be drilled in late 2005 are located on this farmout acreage. The costs and rates for the wells should be approximately the same as the Blackhawk Lease wells as they are on contiguous lands.

Other Matters & Risk Factors $3.8$

The weather in Utah can be extremely harsh and can prevent or disrupt drilling and production activities.

Completion techniques have changed a number of times and improved since the development of the Helper Field began in 1997. The operator of the North Helper Gas Project intends to apply techniques that are consistent with these improved practices at Kenilworth Railroad #1 and #2. However, there can be no guarantee that these practices will be effective in the North Helper Gas Project wells.

Current exploration and development activities in the Drunkards Wash/Helper locality are at or near service capacity. The Company understands that drilling rigs are working at or near capacity and delays are expected unless existing contracts are in place. Marion Energy has advised that it has identified a suitable rig and is currently finalising negotiations to contract that rig to drill the next wells. In this environment there is also upward pressure on costs and, in the event of mechanical failure, delays and additional cost overruns may occur.

Investors are referred to the risk factors contained in Section 9 of this Prospectus for further details on risk associated with the Company and its planned activities.

3.9 Expenditure Summary

The Company proposes to fund its interest in the North Helper Gas Project as outlined in the table below from the proceeds of the Offer.

Description	Total Years 1 & 2 (AS)
Acquisition of North Helper Gas Project (unpaid amount)	1,266,667
Tie-in costs Kenilworth Railroad #1 & #2	120,000
Drill, complete and tie-in vertical wells	336,000
Drill, complete and tie-in directional wells	572,000
Other operational expenses	927,000

Total Expenditure	3,221,667

All amounts are in A\$ and assume an exchange rate of US\$0.75 = A\$1.00.

It should be noted that the expenditure budget will be subject to modification on an ongoing basis depending on the results obtained from exploration, appraisal and development activities as carried out. This involves the ongoing assessment of the North Helper Gas Project and may lead to increased or decreased levels of expenditure on certain matters reflecting a change of emphasis.

Due to market conditions, the development of new opportunities and or any number of other factors (including the risk factors outlined in this Prospectus), actual expenditure levels may differ significantly to the above estimates. The Company also intends to capitalise on other opportunities as they arise which may result in costs being incurred that are not included in these estimates.

$3.10$ Summary of Transaction to Acquire 15% WI

Odyssey has entered into a Purchase, Sale and Participation Agreement to acquire the 15% WI in the North Helper Gas Project, requiring payment as follows:

$(a)$ US\$50,000 non refundable deposit (paid);
Completion costs as they occur, of the Kenilworth Railroad #1 and #2 wells, $(b)$ estimated to be US\$90,000 to Odyssey's account; and
US\$950,000 upon the earlier of Odyssey listing on ASX, or 15 December 2005, $(c)$ or such later date mutually agreed by the parties.

Investors are also referred to Section 10.1 of this Prospectus.

$3.11$ Working Interest

The Company is acquiring the following Working Interests in the North Helper Gas Project;

(a)	Blackhawk Lease:	15% WI (12.375% NRI see Sections 10.2 and 10.10 for details)
(b)	Westport JOA:	15% WI (11.972% NRI subject to dilution) see Section 10.4 for details.
(c)	Stone JOA:	15% WI (11.972% NRI subject to dilution) see Section 10.5 for details.
(d)	Area of Mutual Interest:	(NRI to be determined when 15%WI anv acquisition/farmin arrangements are finalised).

$\overline{\mathbf{4}}$ . Board and Management

$4.1$ Directors' Profiles

The names and details of the current Directors in office at the date of this Prospectus are:

Mr lan Middlemas

Chairman Qualifications - B.Com, CA

Mr Middlemas is a Chartered Accountant, a member of the Securities Institute of Australia and holds a Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive corporate and management expertise and is currently a director of a number of publicly listed companies. Mr Middlemas was appointed a Director of the Company on 8 September 2005.

Mr Mark O'Clerv

Non Executive Director Qualifications - BSc(Hons)

Mr O'Clery is a Petroleum Geologist, specialising in exploration and production, with over 18 years experience in the international oil and gas business. He has held technical, commercial, operational and managerial roles with a number of large international petroleum companies including WMC Petroleum, British Gas E&P, Ampolex, Mobil E&P, Fusion Oil and Gas and OMV. Mr O'Clery was appointed a Director of the Company on 8 September 2005.

Mr Mark Pearce

Non Executive Director Qualifications - B.Bus, CA, FCIS, ASIA

Mr Pearce is a Chartered Accountant who currently holds the position of Company Secretary for a number of publicly listed companies. Mr Pearce is also a non executive director of several publicly listed companies that operate in the resources and/or industrial sector. Prior to this he was the CFO and Company Secretary for a publicly listed national manufacturer and has worked for several large international Chartered Accounting firms. Mr Pearce is a Fellow of the Institute of Chartered Secretaries and an Associate Member of the Securities Institute of Australia. Mr Pearce was appointed a Director of the Company on 8 September 2005.

4.2 Company Secretary

Mr Shane Cranswick

Company Secretary Qualifications - B.Com, CA, ACIS

Mr Cranswick gained a Bachelor of Commerce (Accounting and Finance) degree from the University of Western Australia and is a member of the Institute of Chartered Accountants and the Institute of Chartered Secretaries. Mr Cranswick commenced his career at Ernst & Young (previously Andersen) and has since worked in the Corporate Office of a number of listed companies that operate in the resources and industrial sectors where he currently holds the position of Company Secretary. Mr Cranswick was appointed Company Secretary of the Company on 8 September 2005.

$4.3$ Technical Consultants

The Company has appointed the following technical consultants:

Mr Mark O'Clery

In addition to his role as a non executive Director Mr O'Clery will provide geological services on a consulting basis.

Mr Jeff Skates

Mr Skates is a reservoir engineer with more than 20 years experience in the oil and gas industry. Mr Skates commenced his career in the oil and gas industry at Woodside focused on offshore drilling operations and reservoir engineering. He was then appointed as senior reservoir engineer for Apache Corporation in 1994 responsible for the reservoir management and simulation of producing oil and gas fields in the Carnarvon Basin, From 1997 to 2003, Mr Skates worked for Mitsubishi offshore Western Australia. Corporation, evaluating more than 100 acquisition and farm-in opportunities across Asia and Australia/New Zealand. Since 2003, Mr Skates has principally consulted to Argonaut Capital Limited, a Perth-based investment banking firm. At Argonaut Capital Limited, Mr Skates is responsible for assessing the technical aspects of oil and gas opportunities presented. Over the past two years the majority of his work has been on North American and European located projects. Mr Skates is a member of the Society of Petroleum Engineers. His B.Sc (Hons) and MBA were obtained from University of Western Australia.

44 Corporate Governance

The primary responsibility of the Board is to represent and advance shareholders' interests and to protect the interests of stakeholders. To fulfil this role the Board is responsible for the overall corporate governance of the Company including its strategic direction, establishing goals for management and monitoring the achievement of these goals.

The responsibilities of the Board include:

Protection and enhancement of shareholder value.
Formulation, review and approval of the objectives and strategic direction of the Company.
Monitoring the financial performance of the Company by reviewing and approving budgets and monitoring results.
Approving all significant business transactions including acquisitions, divestments and capital expenditure.
Ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained.
The identification of significant business risks and ensuring that such risks are adequately managed.
The review of performance and remuneration of executive directors and key staff.
The establishment and maintenance of appropriate ethical standards.
Evaluating and, where appropriate, adopting with or without modification the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations.

The Board recognises the need for the Company to operate with the highest standards of behaviour and accountability.

Subject to the exceptions outlined below the Company has adopted the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations.

Recommendation Ref	Notification of Departure	Explanation for Departure
2.1, 2.2, 2.3	No independent directors, including Chairman	The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of independent non-executive Directors.
		The Board believes that the individuals on the Board can make, and do make, quality and independent judgments in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves from the Board meeting before commencement of discussion on the topic.
		The Company's Chairman, Mr Ian Middlemas, - IS considered by the Board not to be independent in terms of the ASX Corporate Governance Council's definition of independent director. However the Board believes that the Chairman is able and does bring quality and independent judgment to all relevant issues falling within the scope of the role of a Chairman.
2.4	A separate Nomination Committee has not been formed.	The Board considers that the Company is not currently of a size to justify the formation of a nomination committee. The Board as a whole undertakes process of reviewing the skill base and experience of existing Directors to enable identification or attributes required in new Directors. Where appropriate independent consultants are engaged to identify possible new candidates for the Board.
4.2, 4.3	A separate Audit Committee has not been formed.	The Board considers that the Company is not of a size, nor are its financial affairs of such complexity to justify the formation of an audit committee. The Board as a whole undertakes the selection and proper application of accounting policies, the identification and management of risk and the review of the operation of the internal control systems.
9.2	There is no separate Remuneration Committee.	The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of a remuneration committee. The Board as a whole is responsible for the remuneration arrangements for Directors and executives of the Company.

As the Company's activities increase in size, scope and/or nature the Company's corporate governance principles will be reviewed by the Board and amended as appropriate.

5. Details of the Offer

This section is not intended to be comprehensive and prospective investors should read this Prospectus in its entirety. If you have any questions about investing in the Company, please contact your stockbroker, accountant or independent financial adviser.

$5.1$ The Offer

The Company is offering 25,000,000 Shares at an issue price of \$0.20 per Share to raise \$5,000,000 (before the costs of the Offer).

If the Board of Odyssey does not apply to the ASX for Shares offered under this Prospectus to be listed the Offer will be closed, and all Application Monies received will be refunded in accordance with Section 5.19.

All Shares offered under this Prospectus will rank equally with all existing Shares currently on issue. Further details on the rights and liabilities attaching to the Shares are contained in Section 11.1.

$5.2$ Offer Period

The Offer will be opened at 9am (WST) on 26 October 2005 (unless the Exposure Period is extended) and will remain open until 5.00pm WST on 15 November 2005, subject to the right of the Directors to either close the Offer at an earlier time and date or to extend the closing time and date without prior notice. Applicants are encouraged to submit their Applications as early as possible. No Shares will be issued under this Prospectus after the expiry of this Prospectus.

$5.3$ Minimum Application

Applications must be for a minimum of 10,000 Shares (\$2,000) and thereafter in multiples of 1,000 Shares (\$200). Applications to subscribe for Shares under the Offer will only be accepted on the Application Form attached to this Prospectus.

5.4 Minimum Subscription

The minimum subscription under the Offer is \$5,000,000. If the minimum subscription is not met in relation to the Offer, all Application Monies received will be refunded in accordance with Section 5.19.

$5.5$ Objectives of the Offer

The purpose of the Offer is to raise funds to:

Purchase a 15% Working Interest in the North Helper Gas Project; $(a)$
Fund ongoing working capital requirements of the North Helper Gas Project; $(b)$
Meet the costs of this Offer, including legal and experts fees as well as costs of $(c)$ printing, ASX, ASIC and distribution of the Prospectus; and
$(d)$ Comply with the requirements of Chapters 1 and 2 of the Listing Rules.

5.6 Use of the Funds

The total funds are proposed to be applied as follows:

Description	Total Years 1 & 2 (AS)

Acquisition of Interest (unpaid amount)	1,266,667
Operational expenses	1,955,000
Corporate and admin expenses year 1	290,000
Corporate and admin expenses year 2	295,000
Costs of the Offer	438,500
Working capital	754,833
Total Expenditure	5,000,000

The Company also intends to capitalise on other opportunities as they arise which may result in costs being incurred that are not included in the above estimates.

The Directors are of the opinion that upon completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives. Depending on the success of the exploration projects, the Company may require further debt or equity fundraisings.

5.7 How to Apply

If you wish to subscribe for Shares, you should complete and return the Application Form which accompanies or is attached to this Prospectus, or alternatively complete a paper copy of the electronic Application Form which accompanies the electronic version of the Prospectus. The electronic version of the Prospectus and Application Form can be found at, and downloaded from www.odyssevenergy.com.au. Instructions for completing the Application Form are set out on the Application Form. Investors should complete and return the Application Form, together with the Application Monies in full, prior to 5.00pm (WST) on the Closing Date. Please refer to the instructions set out in Section 5.8 and accompanying the Application Form.

5.8 Where to send your Application Form

Completed Application Forms and Application Monies must be received by the Company prior to 5.00pm WST on the Closing Date. Application Monies, where applicable, must be paid to the Company in accordance with the instructions on the Application Form. Cheques must be made payable to "Odyssey Energy Limited - Subscription Account" and crossed "Not Negotiable". All cheques must be in Australian currency. Application Forms should be mailed or delivered to:

By Post to	Or Delivered to
Odyssey Energy Limited C/- Computershare Investor Services Pty Ltd GPO Box D182 Perth WA 6840 Australia	Odyssey Energy Limited C/- Computershare Investor Services Pty Ltd Level 2 45 St Georges Terrace Perth WA 6000 Australia

. Or	Οr
Argonaut Securities Pty Ltd	Argonaut Securities Pty Ltd
GPO Box 2553	Level 29, Allendale Square
l Perth WA 600	77 St Georges Terrace
	Perth WA 6000

The Offer may be closed at an earlier date and time at the discretion of the Company without prior notice. Applicants are therefore encouraged to submit their Application Form as early as possible. However, the Company reserves the right to extend the Offer or accept late Applications.

5.9 Application Monies

All Application Monies received before the Shares are issued will be held by the Company on trust in a bank account established solely for the purpose of depositing Application Monies received. Any interest that accrues will be retained by the Company.

$5.10$ Company Discretion

The Company reserves the right to reject any Application, or to issue a lesser number of Shares than those applied for. Where the number of Shares issued is less than the number applied for, surplus Application Monies will be refunded (without interest) as soon as is reasonably practicable after the close of the Offer.

$5.11$ Allotment

Subject to ASX granting approval for Odyssey to be admitted to the Official List, the Directors will proceed with the allotment of the Shares as soon as possible after the Closing Date.

The Directors reserve the right to reject any Application and to allot and issue a lesser number of Shares than that applied for. Acceptance of an Application by Odyssey creates a legally binding contract between the Applicant and Odyssey for the number of Shares for which the Application is accepted.

If the number of Shares allotted is less than applied for, the surplus Application Monies will be refunded to the Applicant as soon as is reasonably practicable. Interest will not be paid on the refunded Application Monies.

Following the above events, statements of Share holdings will be despatched. It is the responsibility of Applicants to determine their allocation prior to trading in Shares. Applicants who sell their Shares before they receive their holding statements will do so at their own risk.

If ASX does not grant permission for Official Quotation of the Shares within 3 months after the date of this Prospectus (or within such longer period as may be permitted by ASIC) none of the Shares offered by this Prospectus will be allotted and issued. If no allotment and issue is made, all Application Monies will be refunded to Applicants as prescribed under the Corporations Act.

$5.12$ Capital Structure

The capital structure of the Company on completion of the Offer is detailed in Section 6.1.

5.13 Brokers

The Company will pay the Broker to the Offer, Argonaut Securities Pty Ltd a 5% (plus GST) commission on an amount of up to \$3,000,000 that it may raise under the Offer.

The Company may pay a maximum fee of 5% (plus GST) of the amount subscribed (and accepted by the Company) up to \$2,000,000 pursuant to the Offer to any holders of a Financial Services Licence in respect of Application Forms bearing their stamp.

5.14 Financial Prospects, Dividends and Risks

At the time of issue of this Prospectus no dividend has been forecast by the Board and none is anticipated for the foreseeable future.

The Directors consider that at this stage of the Company's development they are unable to provide potential investors with reliable revenue, profit or cash flow forecasts. The Directors will assess the ability to pay dividends, if and when deemed appropriate to the Company's circumstances, as the Company further develops.

An investment in the Shares under this Prospectus should be considered as speculative because of the inherent risks associated with the oil and gas exploration industry as well as those risks disclosed in Section 9. This Prospectus provides information for investors to decide if they wish to invest in the Company and should be read in its entirety. In particular, attention is drawn to the risk factors described in Section 9. If you have any questions about the desirability of, or procedure for, investing in the Company please contact your stockbroker, accountant or independent financial adviser.

$5.15$ ASX Listing

Odyssey will apply within 7 days after the date of this Prospectus for admission to the Official List of ASX and for Official Quotation of the Shares. The fact that ASX may admit Odvssev to its Official List is not to be taken in any way as an indication of the merits of Odyssey or the Shares offered under this Prospectus. ASX takes no responsibility for the contents of this Prospectus.

If granted, Official Quotation of the Shares will commence as soon as practicable after allotment.

If ASX does not grant permission for quotation of the Shares within 3 months after the date of this Prospectus, or such later date as may be approved by ASIC, none of the Shares offered under this Prospectus will be issued and all Application Monies will be refunded as soon as practicable. No interest will be paid on Application Monies refunded.

5.16 CHESS

The Company will apply to participate in the Clearing House Electronic Sub-register System ("CHESS"), operated by ASX Settlement and Transfer Corporation Pty Ltd ("ASTC") (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and ASTC Operating Rules. On admission to CHESS, the Company will operate an electronic issuer-sponsored sub-register and an electronic CHESS sub-register. The two subregisters together will make up the Company's register of Shareholders.

The Company will not issue certificates to Shareholders. Instead, as soon as is practicable after allotment, successful Applicants will receive a holding statement which sets out the number of Shares issued.

A holding statement will also provide details of a security holder's Holder Identification Number ("HIN") (in the case of a holding on the CHESS sub-register) or Shareholder Reference Number ("SRN") (in the case of a holding on the issuer sponsored sub-register).

Following distribution of these initial holding statements, an updated holding statement will only be provided at the end of any month during which changes occur to the number of Shares held. Shareholders may also request statements at any other time (although the Company may charge an administration fee).

5.17 Applicants Outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. It is the responsibility of any applicant outside Australia to ensure compliance with all laws of any country relevant to their application.

The Company has not taken any action to permit the offer of Shares under this Prospectus in any jurisdiction other than Australia.

5.18 Restricted Securities

Chapter 9 of the Listing Rules prohibits holders of restricted securities from disposing of those securities or an interest in those securities or agreeing to dispose of those securities or an interest in those securities for the relevant restriction periods. The holder is also prohibited from granting a security interest over those securities.

In accordance with the Listing Rules the Directors expect the ASX may classify certain Shares issued prior to the date of this Prospectus and the Options as restricted securities.

None of the Shares to be issued pursuant to this Prospectus are expected to be restricted securities.

5.19 Withdrawal

The Directors may at any time decide to withdraw this Prospectus or the Offer, in which case the Company will return all Application Monies without interest within 28 days of giving notice of withdrawal.

6. Capital and Corporate Structure

$6.1$ Proposed Capital Structure

The table below details the capital structure of the Company on completion of the Offer.

Shares currently on issue	5.000.000
Shares offered under the Offer	25,000,000
Number upon listing	30,000,000

Options

300,000 Options will be offered to Mr Mark O'Clery, a Director of the Company, pursuant to this Prospectus.

The Options are exercisable at 20 cents each on or before 31 December 2008. Refer Section 11.2 for further details of the terms and conditions of the Options.

$6.2$ Corporate Structure

Odyssey is a company limited by shares that is incorporated and domiciled in Australia. The Company owns 100% of OEL Operating (USA) Inc, a company incorporated and domiciled in the state of Texas in the USA.

$\overline{7}$ . Independent Geologist's Report

Geologic Report North Helper CBM Gas Project Carbon County, Utah

Prepared for the Due Diligence Committee (DDC) Odyssey Energy Limited Perth WA 6000, Australia

Prepared by Oso Energy Resources Corp. 900 Main Ave. Suite D Durango, CO 81301 USA

September 29, 2005

INDEPENDENT GEOLOGIST'S REPORT

Bradford C. Boyce President and Geologist Oso Energy Resources Corp. 900 Main St. Suite D Durango, CO 81301 USA 970-247-4126

Gary L. Trotter VP and Engineering Manager Oso Energy Resources Corp. 900 Main St. Suite D Durango, CO 81301 USA 970-247-4126

Kevin Smith Senior Geologist Oso Energy Resources Corp. 900 Main St. Suite D Durango, CO 81301 USA 970-247-4126

Dear Sirs:

At your request we have prepared the following geological report for your use in evaluating the Helper CBM project, Carbon County, Utah.

aal-Co-P

Bradford C. Boyce B.A., Geology President, Oso Energy Resources

Kevin Smith B.Sc., M.S. Senior Geologist, Oso Energy Resources

Gary IZ Trotter

B.Sc., Mechanical Engineering Vice-President, Operations Oso Energy Resources

Contents	Page Numbers
Introduction	21
Geologic Setting	24
Nearby Oil and Gas Fields	27
Objective Gas Zones, Marion Wells at Helper	27
Acreage Position	38
Field Operations	38
Gas Markets and Outlets	38
Proposed Development Plan and Costs	40
Declarations	40
Previous Geologic Reports	41
Independence	41
Conformity	41
References Cited	41
Authors' Qualifications	42

Maps and Charts

Fig. 1-CBM Coal Regions in the United States	21
Fig. 2- Drunkards Wash and Helper Fields, Location Map	22 ₁
Fig. 3- Summary of Production in Drunkards Wash, Helper and
Buzzard's Bench Fields	23
Fig. 4- Location of Kenilworth RR1 & RR2 Wells, and planned
2005 Drilling Locations	23
Fig. 5- Wasatch Plateau / San Rafael Swell East-West Cross Sections	25
Fig. 6- Uinta Piceance Stratigraphic Column	26
Fig. 7- Well Log X-Section N-S Showing Ferron Coals (K-K' on Figure 4)	28
Fig. 8- Northern Drunkards Wash, Location of Well Cross-Sections	30
Fig. 9A- Drunkards Wash Ferron Sandstone Completion Potential,
Wells $1 & 2$	31
Fig. 9B- Drunkards Wash Ferron Sandstone Completion Potential, 2
Wells $3 & 4$	32
Fig. 9C- Drunkards Wash Ferron Sandstone Completion Potential,
Wells $5 & 6$	33
Fig. 10A- Drunkards Wash Ferron Sandstone Completion Potential,
Wells $7 & 8 & 8$	34
Fig. 10B- Drunkards Wash Ferron Sandstone Completion Potential,
Wells 9 & 10	35.
Fig. 11-Ferron Sand Gas Effect Thickness, Helper Area	36
Fig. 12-Helper Treatment Size Graph	37
Fig. 13- Helper Field Normalized Gas vs. Time Graph	37
Fig. 14- Helper Leasehold Farmout Acreage Map	39.

$7.1$ Introduction

The Helper Coal Bed Methane (CBM) field is located adjacent to the Piceance-Uinta Basin (Figure 1) and is the northern extension of the huge Drunkards Wash CBM field (Figure 2). The Ferron Coal is the primary objective in the area and was first discovered in 1991 by River Gas and Texaco Corporation. Anadarko is the major operator within the Helper Field proper and initiated production in 1993. Other operators in Helper include Westport as well as Stone Petroleum. Drunkards Wash is currently the largest producing gas field in Utah, producing an average of 5.4 Bcf per month (PI Dwights, 2005).

Figure 1: CBM Coal Regions in the United States

The Upper Cretaceous age Ferron coals are the source and reservoir rock with a portion of the gas stream producing out of marine Ferron sands that are inter-bedded with the coal beds. The Ferron Formation is a western Cretaceous seaway shoreline transgressiveregressive sequence found in the Mancos Shale. To the east age equivalent rocks are marine shales and further west the rocks are continental deposits.

Figure 2: Drunkard's Wash and Helper Fields, Location Map

To date over 637 Bcfg (billion cubic feet of gas) has been produced from the Ferron coals with over 540 Befg being produced from the Drunkards Wash Field. The Helper Field has contributed over 66 Bcfg and Buzzards Bench approximately 31 Bcfg. Over 800 wells are now producing from the Ferron Formation coals with industry actively continuing to drill and expand these CBM fields. In certain areas the Ferron CBM wells have produced as much gas as the better Fruitland CBM wells of the San Juan Basin, CO and NM. Average production at Drunkards Wash is 320 Mcf/d (thousand cubic feet per day) per well while the younger Helper field has an average of 304 Mcf/d per well Figure 3). Drunkards Wash wells reached peak production rates in 3 years (Tabet, 2004). Helper has not been calculated for peak rates since it continues to be drilled. Projected average ultimate recovery for Drunkards is 1.75 Bcfg per well from 160 acres with a common range of .5 to 2.5 Bcfg per well (Tabet, 2004). Field owners are discussing whether to reduce the producing unit acreage from 160 acres per well to 80 acres per well to increase ultimate recoveries.

Summary of Production in the Drunkards Wash, Helper and Buzzard Bench Fields, Utah PI Dwights Data Base

Field Name						IMost Recent Gas Max Well		Total Most cervici MCFillionth
BUZZARD BENCH	390.	277.524	8.528.498	3.1.360.194	5.991	123.782	.	617.048	120.
DRUNKARDS WASH	.124	968.963		6.749.211: 540.681.591	9.738	66.941	320	5.414.352	560.
HELPER	16.967	500,669	3.716.687.	56,588,959	9.231	51.837.		, 727.594	133

Freid Name		BBL/Well	BBL Mell	Cura BBL	Most Recent Mater Ave tolet.	Most Recent Water Max Well	cerviel 1	Total Most BBL Month
BUZZARD BENCH	89	309 485	9 385 440	34.662.361	4387	149.506 .	١d،	416.798	120
DRUNKARDS WASH	824	294.625	2.951.994	164.400.840	1.900	57.998		1.041.350	560
HELPER	186	162.179	2.424.926	21.589.775	3.561	24 455		470.062	133.

Figure 3: Summary of Production in Drunkard's Wash, Helper and Buzzard's Bench Fields

In 2004-05 Marion Energy acquired a substantial acreage position along the northern edge of the Helper field and has drilled two wells through the productive Ferron section (Figure $4)$ .

Though not flow tested, the offsetting productive coals and sands are found in both wells at projected depths and thicknesses. It is expected the Marion wells, when completed, shall produce gas from the coals as well as the inter-bedded Ferron sands.

Figure 4: Location of Kenilworth RR1 & RR2 Wells, and planned 2005 Locations

Coal thickness is measured at 20 and 26 feet in the Kenilworth #1 and #2 wells, respectively. There also appears to be approximately 18 feet of potential gas charged sandstone reservoir in each well. The gas in place for the Ferron coals and sands is estimated at 3 to 3.7 Bcf for each 160 acres. Anadarko is currently producing gas from wells directly offsetting the referenced acreage.

Marion has proposed to commence drilling three additional wells in 2005 and to complete and produce the existing two wells which have already been drilled. Marion is negotiating a drilling contract for the three well program. Beyond 2005 there are seven to 15 additional locations, three would be step outs offsetting existing wells, four wells located on the proved Ferron trend and eight other possible locations on trend that are within the geologic environment for coal and sand potential in the Ferron Formation. In addition to Marion's leased acreage. Marion Energy Inc. has farm out arrangements with Stone for offset properties to be developed.

$7.2$ Geologic Setting

These oil and gas properties are located along the southern edge of the Uinta Basin, Carbon County, Utah where the Book Cliffs consisting of the Blackhawk Formation in the Mesaverde Group form a distinct topographic cliff feature extending for over 150 miles to the southeast (Figure 5). The Book Cliffs contain the Blackhawk coals at outcrop with the interbedded massive hard sands forming the cliff faces. Blackhawk coals have been and are currently mined throughout the area, predominately as underground mine operations. To the north and dipping deeper into the Uinta Basin these same coals produce coalbed methane at Castlegate Field, and most mines experience some methane gas contaminating the mine air in the subsurface workings.

Directly to the south, the San Rafael Swell is the prominent structural feature raising Jurassic and older rocks to the surface in a long 110 mile classic anticline. This prehistoric anticline is known to have contained large oil reserves before being raised to the surface and breached.

To the southwest and west is a southern extension of the Uinta Basin named the Wasatch Plateau, where surface elevations exceed 10,000 feet in many places, especially along the Plateau's spine. The Wasatch Plateau is marked by numerous faults and grabens. The structural high point contains the historic Clear Creek Field discovered in 1953 and has produced to date 135 Bcf of gas out of the Ferron sandstone with likely some contribution from the Ferron coals.

Cretaceous deposits are the most likely reservoirs for oil and gas in this province. North into the Uinta basin large oil and gas reserves are producing from younger sediments but those reservoirs do not exist at this location due to erosion (Figure 6). Cretaceous rocks are found from the surface down to depths of 5,000 to 7,000 feet. The surface rock is either Mancos shale or the Blackhawk Formation of the Mesaverde Group. The Mancos Shale is found consistently down to the top of the Ferron Sandstone member. Occasionally Emery sand is deposited approximately 3,000 feet above the Ferron, but generally the Emery does not extend this far to the east and has not been found to be productive. The Mancos shale is productive in other regions, but has not been tested here. Below the Ferron, the next possible productive unit is the Dakota Sandstone, with the Cedar Mt. Formation marking the bottom of the Cretaceous section.

Jurassic rocks have not been discovered to be hydrocarbon productive in the immediate area. Not far to the southwest, however, Michigan based Wolverine Oil & Gas Company has announced its huge Covenent Field discovery, a Rocky Mountain over-thrust play that has identified an oil filled section of lower Jurassic rocks thrusted into what is interpreted as splinter thrusts forming many anticlinal traps.

The massive Jurassic eolian deposits are well suited for water disposal when not a target of hydrocarbon exploration. A significant water volume from the Ferron coals is currently disposed into these rocks at depths of 5,000 to 7,000 feet. The Navajo Sandstone is up to 300 feet thick, and of that thickness, 200 feet may be clean and permeable sandstone quite capable of storing millions of barrels of produced water from one injector well. The shallower Entrada and deeper Kayenta and Wingate formations can have clean sand sections as well, which significantly add to water disposal potential.

Triassic and deeper rocks are not productive in this area and at depths of greater than 12,000 feet have not been pursued for testing. Further south into the Paradox Basin, an area of the Pennsylvanian and Mississippian rocks produce and are filled with gas and oil from reef structures. The Permian age White Rim Sandstone has all the makings of a great oil and/or gas reservoir, but to date, it has not been found to be filled with hydrocarbons.

Figure 5: Wasatch Plateau / San Rafael Swell East-West Cross Section

Figure 6: Uinta Piceance Stratigraphic Column

$7.3$ Nearby Oil and Gas Fields

In the early 1950's several fields associated with structures were discovered and mapped. The most extensive of these was the Clear Creek discovery and it generated considerable interest in the area.

Gorden Creek is located southwest of Helper, a small 4-5 section structure producing gas from the Ferron sands (see Figure 2). Recently a well owned by Forest Oil has been reportedly producing from the Mancos Shale as listed in the records of the Utah Oil and Gas commission. This well has not been analyzed, but may provide a new opportunity in Helper.

The next sizeable field discovered in this geologic province was many years later by River Gas and Texaco when they found Drunkards Wash in 1991. It is now the largest gas field in Utah and companies have yet to establish the geologic boundaries to the north and south, and to some extent to the west. Helper was discovered along the same Ferron CBM trend north of Drunkards Wash in and around the small towns of Helper and Kenilworth. Simple mapping shows that the two fields are geologically on trend. Anadarko drilled their first well in 1997 at Helper. Buzzards Bench is the southern extension of Drunkards Wash field as Helper field is to the north. A CBM play in the Blackhawk coals, Castlegate Field, is also located a few miles north of the Marion property.

Only a few well tests have drilled to the Dakota sandstone with no known production to date in the immediate area. The Dakota is well proven north in the Uinta Basin and across most of the Rocky Mountain region. It may be worth investigating its potential here.

$7.4$ Objective Gas Zones, Marion Wells at Helper

The primary objective at Helper is the Ferron Formation of the Mancos Shale. The Ferron is interpreted to be mainly a river dominated delta front located along the western edge of the Cretaceous Mancos seaway. The shoreline here transgressed and regressed only a small distance, stacking beach deposits behind which extensive swamps formed creating the material to form the Ferron coals.

Wells commonly contain three to six coal beds over a stratigraphic section of 100-250 feet. Interbedded with the coals are beach and channel sands that are gas reservoirs. Depositional trends are generally northeast - southwest forming an up-dip pinch-out of the coals to the east. Westward the Ferron coals are thinner and eventually pinch out.

The coals in the drilled wells are projected to contain upwards of 400 cubic feet of gas per ton of coal (cft). Therefore, in one foot of coal extending over 160 acres, there is 118,000 mcf of gas in place (GIP). In 25 feet of coal, approximately 2,950 Mmcf (million cubic feet) of gas will be contained in the coals. The closest known gas content measurement is from the Birkinshaw No. 18-149, T14S R9E Sec18, at a depth of 3,000 feet. Gas contents for this well are between 322 and 622 cft (Lamarre and Pratt, The Mountain Geologist Vol 39, No2, 2002). The next closest well, the State of Utah #36-10, T16S R7E Sec36, at a depth of 4,000 feet contains 429cft (cubic feet per ton), Dry Ash Free. The coals at Helper are slightly deeper and of higher maturation (rank) than both of these wells which causes them to have additional sorption capacity and higher pressures, so greater gas content is projected for Marion properties.

Though the Marion wells are not flow tested, the offsetting productive coals and sands are found in both wells at projected thicknesses (Figure 7). It is expected the Marion wells when completed shall produce gas from the coals as well as the interbedded Ferron sands.

Coal thickness is measured at 20 and 26 feet in the Kenilworth #1 and #2 wells respectively. There also appears to be approximately 18 feet of potential gas charged sandstone reservoir in each well. The gas in place for the Ferron coals and sands is estimated at 3 to 3.7 Bcf for each 160 acres. Recovery factors are difficult to project in

early testing, but historically, 50% of the GIP for initial CBM is acceptable and demonstrated. With production established and drilling additional wells, computer reservoir simulations can provide better estimates of gas recoveries.

Figure 7: Well Log X-Section N-S Showing Ferron Coals (K-K' on Figure 4)

Depositionally the coals can be correlated in packages but it is difficult to trace with assurance any single coal bed over any great distance. Therefore, these coals are considered lenticular and each bed may be a discrete reservoir. As an analogy, the San Juan Basin is allowing four wells on 320 acres to tap the lenticular Fruitland coal beds and increase the recovery to an estimated 70%-75% of the GIP. If the coal geology is similar in Helper, additional reserves may be added at a future date simply due to additional recoveries.

The interbedded Ferron sands, especially the marine sands, provide an excellent reservoir for gas as demonstrated by the 135 Bcf produced at Clear Creek. The sandstone portion of the Ferron Member in Drunkards Wash has largely been ignored due to little gas effect on density neutron logs and the knowledge that these sands are generally wet. The northern extension of the Drunkards Wash Field, the Helper Field, does not have the high water rates seen at the Drunkards Wash due to a lack of secondary porosity. The Ferron at Helper is also deeper in the basin than Drunkards Wash, which, along with a lack of secondary porosity, allows for gas from the coals to be trapped in adjacent sands in the Ferron section. These gas sands have not gone unnoticed at Helper and, after examination of offset well logs and completions, it has been noted that Anadarko has completed these sands more often than not. It is estimated that 90% of all wells that have gas charged sands have been completed in those sands, and have shown significantly higher gas rates as a result.

Several cross-sections were constructed in the Helper Field to illustrate the differences in wells with gas charged sand completions versus wells that do not (Figure 8). Cross-section E-E' is an example of the wells closest to Marion's acreage (Figures 9A, 9B and 9C). This cross-section shows wells that have been completed in the coal only, logs 1, 2, and 3, and wells that have been completed in gas charged sands as well as the coals, logs 4 and 6. Log 5 in cross-section E-E' is considered to be an open hole completion across all sands and coals.

Cross-sections F-F'and G-G' are examples from the middle of the Helper Field which show that not all sands in the Ferron are gas charged (Figure 10A, 10B). Logs 8 and 10 are gas charged and have been completed in the sands resulting in greater gas volumes in contrast to 7 and 9, which were frac'd in coals only.

While comparing completion types, pipeline parameters, surface equipment and field management all affect well performance and individual well analysis is difficult at best. however, a good correlation can be seen that wells perfed and frac'd in gas charged sands do produce more gas than wells frac'd in the coals alone, as illustrated by Figures 9A, 9B, 9C, 10A, and 10B.

Fig. 9A: Drunkards Wash Ferron Sandstone Completion Potential, Wells 1 & 2

Fig. 9B: Drunkards Wash Ferron Sandstone Completion Potential, Wells 3 & 4

Fig. 9C: Drunkards Wash Ferron Sandstone Completion Potential, Wells 5 & 6

10A: Drunkards Wash Ferron Sandstone Completion Potential, Wells 7 & 8

Fig. 10B: Drunkards Wash Ferron Sandstone Completion Potential, Wells 9 & 10

The Ferron Sand Gas Effect map (Figure 11) shows that not all wells have gas in the Ferron sands and that there is a general thickening of gas charged sands to the north in the Helper Field. This could be related to stratigraphic changes in the sand or a change in the sandstone cement type. It is also interesting that sand porosity seems to be improving slightly to the north. This could result in a basin centered gas deposit as one moves structurally deeper in the Ferron member.

Figure 11: Ferron Sand Gas Effect Thickness, Helper Area

Completions are very important in Helper and can be difficult to normalize against production with completion types and frac treatments changing throughout the field's history. "Treatment Size" (Figure 12) and "Cum Gas per Development Phase" (Figure 13) graphs are shown to illustrate that completion techniques have improved over recent years. Being aware of this experience, Marion intends to apply appropriate completion techniques to the wells on their acreage.

Secondary objectives in the project area include the coals of the Blackhawk Formation at locations further north and the possibility of deep gas charged sands, most likely to be found in the Dakota Formation. With advances in drilling and completion technology, especially related to shales, the Mancos Shale should be considered a future potential target. The Castlegate field, approximately four miles north of Marion's acreage, produces gas from Blackhawk coals at 4,000-5,000 feet. Oso has not studied this field, but note that Blackhawk coals underlay a portion of these lands and could be productive at shallow depths. It is also our understanding that in certain areas, the Blackhawk coals have been mined in the subsurface and this must be recognized should any testing of Blackhawk coals be considered. Maps are available from the state and other sources to pinpoint subsurface workings.

Figure 12: Helper Treatment Size Graph

Figure 13: Helper Field Normalized Gas vs. Time Graph

$7.5$ Acreage Position

Marion Energy has established an acreage position of approximately 5,000 acres made up of private, state and federal leases (Figure 14). There is an additional 1,300 acres of federal lands that will come up for lease within the project area. The additional leases are in locations that would make it difficult for another company to operate wells without directly working with Marion. Oso Energy has not reviewed the lease documents for title.

$7.6$ Field Operations

Price. Utah is the closest city of significant size, with many services serving the oil and gas industry. Vernal, Utah, to the north, is significantly larger and hosts many major oilfield supply operations such as Schlumberger and Halliburton. A few of the largest and historic Utah oil and gas fields are located in and around Vernal, which is situated in the center of the Uinta Basin. Price has other services such as hotels, restaurants and gas stations. There is good access north into Salt Lake City, Utah, especially for air travel.

Though the terrain is rugged, the canyons into the Book Cliffs provide access to many good drill sites. It is planned to drill directionally from existing and new well sites to tap the resources out to 2,000 feet horizontally from the surface location. Therefore, a well surface location may include two wells, a vertical well and a directional well. This is quite sensible for this area, and although drilling may be slightly more expensive, it will save on surface equipment, road building and pipelining. Directional drilling is quite common throughout the Rockies and the tools and equipment are available.

Marion has an agreement with Anadarko to utilize their water disposal system initially and if warranted, a water disposal well may need to be drilled. A water disposal well should only be considered if the economics are better than disposing water through the Anadarko system. Wells in this portion are not expected to produce the water volumes found further south at Drunkards Wash. A well, initially producing 50 bwp/d (barrels of water per day) is expected to decline to 10 bwp/d.

$7.7$ Gas Markets and Outlets

Marion has an agreement with Anadarko to sell gas through their field gathering system into the Questar main pipe line. Questar moves gas north-northwest, then into California via the Kern River. The Questar transportation system consists of 14 and 24 inch high pressure lines that have additional capacity (discussion with Questar, 2005). Anadarko has been producing wells in Helper since 1993 and some wells are on decline. They have expressed a desire to keep their facilities running at capacity and are willing to take additional gas (discussion with Anadarko, 2004 and 2005).

Figure 14: Helper Leasehold Farmout Acreage Map

7.8 Proposed Development Plan and Costs

It is understood from Marion Energy that the proposed well development program consists of completion of the Kenilworth RR1 & RR2 wells and commencement of drilling three additional wells in 2005: Cordingly Canyon #15-1, Cordingly Canyon #15-2 and the Ballpark Canyon #1. Marion then proposes to drill five wells in 2006: Ballpark Canyon #2, Cordingly Canyon #15-3, Cordingly Canyon #15-4, Cordingly Canyon 11-1, Cordingly Canyon #11-2. It is believed that the development schedule for both 2005 and 2006 is reasonable since it only requires a week of drilling per well. It is also understood from Marion Energy that the proposed cost to drill and complete a vertical development well is \$420,000, a directional well from the same pad is \$500,000. Again, this is believed to be reasonable. Possibly the challenge will be rig timing, but it is our understanding that a drilling rig is available to Marion. Local construction equipment and personnel are readily available for well site construction, pipe-lining and hook-ups.

These wells are relatively shallow at less than 6,500 feet and should be drilled and cased in six days or less. The Kenilworth #1 was drilled to within 175 feet of the planned total depth when the air hammer assembly failed, requiring a trip for replacement. The hammer became stuck on the surface casing shoe and a fishing job ensued. Hole problems in the shales above the pay zone due to exposure to wellbore fluids then created additional problems. If the air hammer had not failed, the well would have been completed on schedule. The Kenilworth #2 well experienced similar mechanical problems and took significantly longer than projected. It is clear that the drilling equipment was mostly to blame for drilling cost overruns, and the CDDT rig #5 is not recommended for future wells. Adjacent operators are drilling wells in 3-5 days and, depending on location, are completing and hooking up into sales within 30 days of drilling.

Current activities in the region are at or near service company capacity. Drilling rigs are at 100% capacity and delays must be expected unless there is an existing contract. Costs are changing quickly, such as a 50% fuel charge increase in the last six months. Crews are another source of possible delays and cost changes, and as a result many rigs are being required to utilize inexperienced crews.

7.9 Declarations

$(a)$ Information Sources

The information used in this report is based on data available from both public and commercial sources as well as direct inquiries to companies. Additionally, Oso Energy has previous experience in the Drunkards Wash-Helper CBM field area, including limited geologic work for Marion and A.C.T. Operating Company which has not impaired Oso's independence. Both parties are aware of and have approved of allowing Oso Energy to utilize data previously compiled for this region. Information has been obtained from the State of Utah Oil and Gas Division and Federal reporting records. Regarding commercial sources, we use data from IHS Energy for production and well records, well logs from state records and MJ Systems, topographic maps from the USGS and National Geographic computer topographic maps. Marion provided lease ownership information.

$(b)$ Site Inspection

A site inspection was not performed for this report. Previously, Oso Energy personnel have been on these sites and believe that physical access to the proposed locations is as stated.

$(c)$ Limitations and Risk

All parties reading and/or utilizing this report shall be aware that drilling for hydrocarbons involves a degree of risk and is considered speculative. There is the possibility that wells drilled in the project area may not recover oil and gas in commercial quantities, if any at all. Geologic discussions and interpretations are

not to be interpreted that commercial hydrocarbon accumulations exist within this project.

$(d)$ Date of Report

This report is dated September 29, 2005.

$(e)$ Consent

Oso Energy Resources Corp. has consented to the inclusion of this report in the Prospectus in the form and context in which it appears.

$7.10$ Previous Geological Reports

Odyssey Energy Limited has advised that they have not commissioned any previous Independent Geologist's Report relating to this Helper Project. As a professional advisory firm (on a fee for service basis), Oso Energy Resources Corp. has provided geological information about the Helper Project and surrounding areas to Marion Energy and unrelated other third parties.

$7.11$ Independence

Neither Oso Energy Resources Corporation or any of its employees have a direct or indirect interest in any of the acreage mentioned in this report, or any adiacent properties. They do not own any securities or equity interests in any of the companies mentioned in There are no other associations or relationships between Oso Energy this report. Resources Corporation that might reasonably be expected to be or have been capable of influencing Oso Energy Resources Corporation in providing this report (including no agreements to undertake further work on the acreage which is the subject of the agreement between Odyssey Energy and Marion Energy).

Fees are charged at commercial rates for the preparation of this report, the payment of which is not contingent upon the conclusions of the report. Oso Energy Resources Corporation will receive a fee of approximately US\$10,000 plus out of pocket expenses, if any, for providing the Independent Geologist's Report to Odyssey Energy Limited concerning the Helper Project.

$7.12$ Conformity

This report has been prepared in conformity with the requirements of American Association of Petroleum Geologists and the Australia Securities Investments Commission.

$7.13$ Consent

Oso Energy Resources Corp. consents to the inclusion of this report in the form and context in which it appears in Odyssey Energy's prospectus dated on or about 18 October 2005, and consents to being named in the prospectus as the Independent Geologist to Odyssey Energy and such consents have not been withdrawn before the date of the prospectus.

$7.14$ References Cited

Utah Oil and Gas Commission, records of wells and production reported.

Analysis of Production and Reservoir Characteristics from the Drunkards Wash Gas Field, Utah; Identification of Parameters Favoring High-Performance Gas Wells. Naranjo, J.C., Tabet, D.E., Utah Geological Survey, 2005.

Drunkards Wash Unit: Production Characteristics of an Expanding Coalbed Methane Field in East - Central, Utah. Lamarra, R.A. (Texaco), Burns, T.A. (River Gas) Rocky Mountain Association of Geologists, "The Future of Coal Bed Methane in the Rocky Mountains," 1999.

Reservoir Characterization Study: Calculation of Gas-in-Place in Ferron Coals at Drunkard's Wash Unit, Carbon and Emery Counties, Utah. Lamarre, Robert, A. and Timothy J. Pratt, The Mountain Geologist Vol 39, No. 2, April 2002, P 41-51.

Hydrodynamic and Stratigraphic Controls for a Large Coalbed Methane Accumulation in Ferron Coals of East-Central Utah, Lamarre, Robert A., Coalbed Methane of North America, 2002, P.71-82.

7.15 Authors' Qualifications

Brad Boyce $(a)$

Brad formed Oso Energy in 1996 to provide prospect generation and project management services to the industry with emphasis on unconventional gas resources. Under Brad's leadership, Oso has been successful specializing in coal bed methane projects for select clients and partners. Oso provided technical expertise to CDX Rockies, focusing on finding, acquiring and developing CBM reserves that could be enhanced by the CDX horizontal drilling technology. In fact, Oso managed the first very successful horizontal, multi-lateral, underbalanced CBM wells drilled in the Fruitland Coals of the San Juan Basin. Prior to this, Brad worked in the San Juan Basin in the beginning stages of its CBM activity and found and developed over 400 BCF of gas found in areas where conventional wisdom suggested the areas were most likely noncommercial. Previous experience as an independent petroleum geologist involved work for The Hillman Company throughout the Rockies. Brad arrived in the San Juan Basin in 1984 joining the Southern Ute Indian Tribe's hydrocarbon production company. He served as their Exploration and Production Manager during the period of their explosive growth where the very large gas reserves on their reservation were found and developed. Brad's skill set beyond planning and management include geology, property negotiations, reservoir analysis, economic projections and drilling/production engineering. Brad holds a B.A. degree in Geology from Middlebury College earned in 1978 and has taken numerous oil and gas exploration and development courses throughout his career.

$(b)$ Gary Trotter

With over thirty years of domestic and international exploration and production experience, Gary is the engineering and operations leader at Oso. He began his career with Sun Oil in 1972 where he worked as an offshore engineer. In 1976 he joined Houston Oil and Minerals and became Offshore Operations Manager. In 1983 he worked as Vice President Operations for Global Natural Resources managing operations in thirteen states in the U.S. In 1986 he became President of BWOC which became the fifteenth largest producer of oil in the state of Texas in 1988. In 1989 Gary founded Coastal Management Corporation which developed a strong project management track record for the next nine years. CMC drilled over 400 CBM wells in the Black Warrior Basin for Torch Energy, managed the 2,000 well Waddell Ranch Field in the Permian Basin for Burlington Resources and was involved in international projects in Mexico and Turkmenistan. Gary served as CEO of CMC until Schlumberger purchased the company in 1998. After the purchase, he worked with Schlumberger IPM on projects in Nigeria, Brazil, Canada and Russia as well as in the U.S. Prior to joining Oso Energy Gary served as V.P. Operations for CDX Gas where he gained experience drilling underbalanced, horizontal CBM wells in several U.S. coal basins. He is a graduate of Lamar University with a B.S. in mechanical engineering, is a 30 year member of the SPE and is a registered professional engineer in the State of Texas.

Kevin Smith $(c)$

Kevin joined Oso Energy in 2002, providing the team with his knowledge in the areas of geological GIS, data collection and processing. His expertise in information technology coupled with his experience in geology has been a

tremendous asset to the company. Kevin has served as a project geologist on several geologic prospects ranging from Appalachia to the Mid-Continent to the Rocky Mountains. Kevin excels in mutual collaboration with partners and clients to achieve detailed mapping and reservoir analysis and provide the best data set possible to ensure good decision making throughout the projects evolution from exploration to development. Kevin holds a B.Sc. degree in Geology and a B.Sc. degree in Environmental Science, University of Alabama, 1999 and M.Sc. degree in Geology from the University of Tennessee, 2001.

Investigating Accountant's Report 8.

BDO Consultants (WA) Pty Ltd

Level 8, 256 St George's Terrace Perth WA 6000 PO Box 7426 Cloisters Square Perth WA 6850 Tel: (61-8) 9360 4200 Fax: (61-8) 9481 2524 AFS Licence Number 246328 Email: [email protected] www.bdo.com.au

Our ref: SA: AM:

17 October 2005

The Directors Odvssev Energy Limited Level 9, BGC Centre 28 The Esplanade PERTH WA 6000

Dear Sirs

Investigating Accountant's Report

1. Introduction

We have prepared this Investigating Accountant's Report ("Report") on historical financial information of Odyssey Energy Limited ("Odyssey" or "the Consolidated Entity") for inclusion in a prospectus dated on or about 18 October 2005.

Expressions defined in the Prospectus have the same meaning in this Report.

2. Background

The Company was incorporated on 8 September 2005 and has recently entered into an agreement to acquire a 15% Working Interest in the North Helper Gas Project.

3. Scope

You have requested BDO Consultants (WA) Pty Ltd ("BDO") to prepare an investigating Accountant's Report covering the following financial information:

the historical balance sheet as at 30 September 2005 and the pro-forma balance sheet ٠ as at 30 September 2005 which assumes completion of the contemplated transactions disclosed in Section 6.

Advisors to growing businesses

Review of Historical Financial Information $3.1$

The historical financial information set out in the appendices to this Report has been extracted from the review of financial statements of the Consolidated Entity for the period ended 30 September 2005 which was reviewed by BDO Chartered Accountants and Advisors. An unqualified review opinion in respect of the historical financial information was issued.

The Directors are responsible for the preparation of the historical financial information, including determination of the adjustments.

We have conducted our review of the historical financial information in accordance with the Australian Auditing and Assurance Standard AUS 902 "Review of Financial Reports". We made such inquiries and performed such procedures as we, in our professional judgment, considered reasonable in the circumstances including:

analytical procedures on the reviewed financial performance of the Consolidated Entity for $\bullet$ the relevant historical period:
a review of work papers, accounting records and other documents;
a review of the assumptions used to compile the pro-forma balance sheet and/or income statement:
a review of the adjustments made to the pro-forma historical financial information;
a comparison of consistency in application of the recognition and measurement principles in ٠ Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Consolidated Entity disclosed in the appendices to this Report, and
$\bullet$ enquiry of Directors, management and others.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

4. Conclusion

Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that:

the pro-forma balance sheet has not been properly prepared on the basis of the pro-forma $\bullet$ transactions:
the historical financial information does not present fairly the historical balance sheet of the Consolidated Entity as described in Appendix 1, in accordance with the recognition and measurement principles prescribed in Accounting Standards and other mandatory professional reporting requirements, and accounting policies adopted by the Consolidated Entity disclosed in Appendix 2.

5. Subsequent Events

Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief, no material transactions or events outside of the ordinary business of the Consolidated Entity have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.

6. Assumptions Adopted in Compiling the Pro-forma Balance Sheet

The pro-forma balance sheet after issue is shown in Appendix 1. This has been prepared based on the reviewed financial statements as at 30 September 2005 after taking into account the following transactions:

The issue of 25,000,000 shares at \$0.20 each, thereby raising \$5,000,000 of capital, ٠ pursuant to the Prospectus;
The acquisition payment of the Working Interest of \$1,266,667 (being US\$950,000 at ٠ US\$0.75:\$A1.00);
The payment of expenses associated with the preparation and issue of the Prospectus and ٠ the capital raising costs of the Consolidated Entity amounting to \$438,500. These have been netted off against the share capital raised; and
The granting of 300,000 options to Mr Mark O'Clery pursuant to the Prospectus. ٠

7. Disclosures

BDO Consultants (WA) Pty Ltd is the licensed corporate advisory arm of BDO in Perth, and is wholly owned by partners of that firm.

Neither BDO Consultants (WA) Pty Ltd nor BDO (Perth), nor any partner or executive or employee thereof, has any financial interest in the outcome of the proposed transaction except for the normal professional fee due for the preparation of this Report.

Yours faithfully

BDO Consultants (WA) Pty Ltd

$40$

Sherif Andrawes Director

APPENDIX 1 ODYSSEY ENERGY LIMITED

CONSOLIDATED BALANCE SHEET

	Notes	30 September 2005 S	Pro-forma Adjustments	Pro-forma After Issue \$
CURRENT ASSETS Cash	2	84,837	3,294,833	3,379,670
TOTAL CURRENT ASSETS		84,837	3,294,833	3,379,670
NON-CURRENT ASSETS Exploration expenditure	3	65,163	1,266,667	1,331,830
TOTAL NON-CURRENT ASSETS		65,163	1,266,667	1,331,830
TOTAL ASSETS		150,000	4,561,500	4,711,500
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS		150,000	4,561,500	4,711,500
EQUITY Contributed capital Share based payment reserve Retained Profit/(Losses)	4 5 6	150,000	4,561,500 30,420 (30, 420)	4,711,500 30,420 (30, 420)
TOTAL EQUITY		150,000	4,561,500	4,711,500

The pro-forma Balance Sheet After Issue is as per the pro-forma Balance Sheet Before Issue adjusted for the transactions listed in section 6 of our Report. The Balance Sheet is to be read in conjunction with the notes to and forming part of the financial statements set out in Appendix 2.

Advisors to growing businesses

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The historical financial information has been prepared in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.

It is prepared on an accruals basis and in accordance with the historical cost convention.

Significant Accounting Policies

$(a)$ Principles of Consolidation

Subsidiaries are all those entities (including special purpose entities) over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively.

$(b)$ Exploration and evaluation expenditure

Exploration and evaluation is recorded at historical cost on an area of interest basis. Recovery of these costs is dependent upon the commercial success of future exploration and development or realisation by disposition of the interests therein.

Exploration and evaluation expenditure incurred by the Consolidated Entity subsequent to acquisition is expensed as incurred.

$(c)$ Recoverable amount of non-current assets

Each reporting period, the recoverable amount of all non-current assets is assessed. Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is revalued down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, such as at a mining operation, the recoverable amount is determined on the basis of the relevant group of assets.

The expected net cash flows included in determining recoverable amounts of non-current assets are discounted to their present values using a market-determined, risk-adjusted discount rate. The effect of capital gains tax has not been taken into account.

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

$(d)$ Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

$(e)$ Accounts Payable

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Consolidated Entity.

Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accrual basis.

Deferred cash settlements are recognised at the present value of the outstanding consideration payable on the acquisition of an asset discounted at prevailing commercial borrowing rates.

Taxes $(f)$

Income Taxes

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or liability. No deferred tax asset or liability is recognised in relation to these temporary differences if the arose in a transaction. Other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

$(g)$ Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The following specific recognition criterion must also be met before revenue is recognised:

Sale of Goods - Control of the goods has passed to the buyer.

Interest - Control of a right to receive consideration for the provision of, or investment in, assets has been attained.

Receivables $(h)$

Receivables are recorded at amounts due less any allowance for doubtful debts.

$\left{ i\right}$ Investments

Shares – investments in controlled entities are carried at the lower of cost and recoverable amount. Dividend and interest revenue is recognised in income when received. Other investments are recorded at cost.

(j) Joint ventures

Joint venture operations

Interests in joint venture operations are reported in the financial statements by including the Consolidated Entity's share of assets employed in the joint ventures, the share of liabilities incurred in relation to joint ventures and the share of any expenses incurred in relation to joint ventures in their respective classification categories.

$(k)$ Share Based Payments

From 1 July 2005 shares and options issued to directors and employees will be expensed in accordance with the requirements of AASB 2 "Share Based Payments".

		30 September 2005 S	Pro-forma After Issue \$
NOTE 2. CASH
Cash at bank		84,837	3,379,670
Adjustments arising in the preparation of the pro-forma cash balance are summarised as follows:
Reviewed balance at 30 September 2005 Acquisition of Working Interest Proceeds from shares issued under this prospectus Share issue costs			84,837 (1, 266, 667) 5,000,000 (438,500) 3,379,670
		30 September 2005 Ŝ	Pro-forma After Issue S
NOTE 3. EXPLORATION EXPENDITURE
Opening Balance		65,163	65,163
Acquisition of Working Interest			1,266,667
		65,163	1,331,830
NOTE 4. CONTRIBUTED EQUITY
	Number of	Number of	Value
As at 30 September 2005	Options	Shares 5,000,000	150,000
25,000,000 shares issued at 20 cents each pursuant to the prospectus		25,000,000	5,000,000
Options issued excersisable at 20 cents expiring 31 December 2008	300,000

Share issue expenses			(438, 500)
	300,000	30,000,000	4,711,500
		30 September 2005 \$	Pro-forma After Issue \$
NOTE 5. SHARE BASED PAYMENT RESERVE
Opening Balance
Options issued to Mark O'Clery			30,420
Pro-forma Balance			30.420

	30 September 2005 5	Pro-forma After Issue
NOTE 6. ACCUMULATED PROFIT/(LOSSES)
Opening Balance Options issued to Mark O'Clery	$\overline{\phantom{a}}$	(30, 420)
		(30, 420)

NOTE 7. RELATED PARTY DISCLOSURES

Directors' Interests in Shares

The table below sets out the interests of the Directors (personally and through associates) in Shares and Options in the Consolidated Entity as at the date of this Report.

Director	No. of Shares held directly	No. of Shares held indirectly	No. of Options held directly
Ian Middlemas	900,000	$\blacksquare$
Mark O'Clery	200,000	$\blacksquare$	300,000
Mark Pearce	$\mathbf{r}$	300,000

Directors' Remuneration

The Consolidated Entity's Constitution provides that the Consolidated Entity may remunerate the Directors. The remuneration shall, subject to any resolution of a general meeting, be fixed by the Directors.

The Constitution of the Consolidated Entity provides that the Non-Executive Directors may collectively be paid as remuneration for their services at a fixed sum not exceeding the aggregate maximum of \$150,000 per annum which has been determined by the Consolidated Entity in general meeting. It is currently resolved that the Chairman will receive directors fees of \$36,000 per annum and non executive directors will each receive directors fees of \$15,000 per annum.

A Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Directors' Interests

Apollo Group Pty Ltd, a company in which Mr Pearce is a director and beneficial shareholder will be paid \$15,000 for services provided in relation to this Prospectus and will receive a monthly retainer of \$10,500 for administration, company secretarial services and serviced office facilities going forward.

Mr O'Clery, will be paid approximately \$18,000 for services provided in relation to this Prospectus. In addition Mr O'Clery will receive ongoing consulting fees in relation to geological services provided by him. These services are charged to the Consolidated Entity at a rate of \$1,500 per day. Further, Mr O'Clery will be issued 300,000 Options pursuant to this Prospectus as the incentive component of his consultancy arrangements.

NOTE 8. COMMITMENTS AND CONTINGENCIES

At the date of the Report no material commitments or contingent liabilities exists other than the following

Odvssev entered into a Purchase and Sale and Participation Agreement effective from 1 October 2005 to acquire a 15% Working Interest in the North Helper Gas Project by payment in cash as follows:

$\bullet$ Payment of US\$50,000 non refundable deposit within 10 days of execution of the Letter of Intent which has been paid;
Payment of the completion costs as they occur, of the Kenilworth Railroad #1 and #2 wells, $\bullet$ estimated to be US\$90,000 to Odyssey's account; and
Payment of US\$950,000 (\$1,266,667) upon the earlier of Odyssey listing on ASX, or December $\bullet$ 15, 2005, or such later date mutually agreed by the parties.
Odyssey also agreed to participate in any Farmout on AMI lands in accordance with its WI. Any costs incurred on behalf of Odyssey on new wells (not to include expenditures on the Kenilworth Railroad #1 & #2) prior to completion will be reimbursed at completion.

NOTE 9. POST BALANCE DATE EVENTS

Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief no material transactions or events outside of the ordinary business of the Consolidated Entity have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.

9. Risks and Investment Considerations

Activities of Odyssey are subject to a number of risks and other factors which may impact on its future performance. Some of these risks can be mitigated by the use of safeguards and appropriate controls, however many are outside the control of Odyssey and cannot be mitigated. There are also general risks associated with any investment in shares.

Hence, investors should be aware that the performance of Odyssey may be affected and the value of its Shares may rise or fall over any given period. Factors which investors and their advisors should consider before they make a decision whether or not to take up the Offer include but are not limited to the following.

$9.1$ General Risks

$(a)$ Securities Investments

There are risks associated with any securities investment. The prices at which the Shares trade may fluctuate in response to a number of factors.

Furthermore, the stock market, and in particular the market for oil and gas exploration companies, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. There can be no guarantee that these trading prices will be sustained. These factors may materially affect the market price of the Shares regardless of the Company's operational performance.

Share Market Conditions $(b)$

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company, or any return on an investment in the company.

$(c)$ Changes in Legislation and Government Regulation

Changes to legislation in Australia and the USA, including changes to the taxation system, may affect future earnings and the relative attractiveness of investing in the Company. Changes in government policy or statutory changes may affect the Company and the attractiveness of an investment in it.

$(d)$ Economic Conditions

Economic conditions in Australia, the USA and globally, may affect the performance of the Company. Factors such as currency fluctuations, inflation, interest rates, supply and demand and industrial disruption may have an impact on operating costs and share market prices. The Company's future possible revenue and Share price can be affected by these factors all of which are beyond the control of the Company or its Directors. In addition, the Company's ability to raise additional capital, should it be required, may be affected.

$(e)$ Foreign Exchange Risk

On completion of the acquisition of its interest in the North Helper Gas Project, the Company's main business undertakings will be based in the USA. As a result, revenues, cash inflows, expenses, capital expenditure and commitments will be primarily denominated in United States dollars.

To comply with Australian reporting requirements for Odyssey, the income, expenditure and cash flows of OEL Operating (USA) Inc will need to be accounted for in Australian dollars. This will result in the income, expenditure and cash flows of the Company being exposed to the fluctuations and volatility of the price of oil and gas and the rate of

exchange between the United States dollar and the Australian dollar, as determined in international markets.

Furthermore, no hedging strategy has yet been developed by the Company. This may result in Odyssey being exposed to the effects of the change in currency (exchange rate) risk, which may have an adverse impact on the profitability and/or financial position of the Company.

Oil and Gas Price Volatility - USA Market $(f)$

The demand for, and price of, natural gas in the USA is highly dependent on a variety of factors, including supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments.

International oil and gas prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. Importantly, Shareholders should note that:

spot gas prices at Henry Hub have risen from \$US5.53 per mmBtu on 3 January 2005 to \$US15.27 per mmBtu as at 23 September 2005. Helper Gas Field sells gas (970 mmBtu/MCF) based on the Rocky Mountain Index which generally trades at a discount to Henry Hub. There can be no certainty that prices will maintain their recent levels; and
it is currently anticipated that the North Helper Joint Venture will sell most or all of the gas that is produced into the USA domestic market. Due to limited supply and high demand in recent times, natural gas in the USA is currently priced above the Australian market. As a result, should demand decrease and/or supply of natural gas in the USA increase, the selling price may decline, notwithstanding that international prices have remained at the same level or have increased.

Fluctuations in oil and gas prices and, in particular, a material decline in the price of oil or gas, may have a material adverse effect on the Company's business, financial condition and results of operations.

Termination of Contracts $(q)$

Current and future agreements may be at risk of being terminated prematurely due to default or at the discretion of another party. In negotiating licenses, the Company would seek to include termination payments for such an event. The Directors can provide no assurance, however, at this stage, as to the outcome of any negotiations.

$9.2$ General Risks Associated with Oil and Gas Operations in the USA

Title and Title Opinions $(a)$

The system for obtaining title to oil and gas leases in Utah and generally other areas of the USA that the Company may operate in, is complex given that numerous parties may hold the undivided mineral rights to a particular tract of land. Securing the leases to those rights often requires lengthy negotiation with the various parties. In order to independently verify that the parties with whom the Company is dealing are the correct and sole holders of the mineral rights and to analyse the full rights and restrictions applying to the interest held by those parties requires that a company obtain detailed title opinions from appropriately qualified and experienced lawyers. This can be a lengthy and expensive process and the final opinions are often the subject of numerous qualifications. It is therefore customary that such title opinions are not sought until it is proposed to conduct a drilling operation and/or expend significant amounts of money on a particular lease.

There may be third parties that hold or claim mineral rights in relation to the leases held by the North Helper Joint Venture, either executive or rights to royalty interest, which have not previously been identified.

Further, some of the leases in which the Company will acquire an interest may have a fixed term and be subject to applications for renewal. The renewal of the term of each permit or licence is usually at the discretion of the relevant lessor. If a lease is not renewed or granted, the Company may suffer significant damage through loss of the opportunity to develop and discover any oil or gas resources on that lease.

Regulation in the USA - General $(b)$

The oil and gas industry in the USA is extensively regulated. Extensive federal, state, local and foreign laws and regulations relating to the exploration for and development, production, gathering and marketing of oil and gas will affect the Company's operations. Some of the regulations set forth standards for discharge permits for drilling operations, drilling and abandonment bonds or other financial responsibility requirements, reports concerning operations, the spacing of wells, unitisation and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity to conserve supplies of oil and gas.

Numerous environmental laws, including but not limited to, those governing the management of waste, the protection of water and air quality, the discharge of materials into the environment, and the preservation of natural resources, impact and influence the Company's operations. If the Company fails to comply with environmental laws regarding the discharge of oil, gas, or other materials into the air, soil or water it may be subject to liabilities to the government and third parties, including civil and criminal penalties. These regulations may require the Company to incur costs to remedy the discharge. Laws and regulations protecting the environment have become more stringent in recent years, and may, in some circumstances, result in liability for environmental damage regardless of negligence or fault. New laws or regulations, or modifications of or new interpretations of existing laws and regulations, may increase substantially the cost of compliance or adversely affect our oil and gas operations and financial condition. From time to time, the Company may agree to indemnify sellers of producing properties against some liabilities for environmental claims associated with these properties. Material indemnity claims may also arise with respect to properties acquired by or from the Company.

The Company cannot predict how existing laws and regulations may be interpreted by enforcement agencies or court rulings, whether additional laws and regulations will be adopted, or the effect such changes may have on the Company's business or financial condition.

$(c)$ Regulation in the USA - Sale of Oil and Gas

Most sales of natural gas are not currently regulated and are generally made at market prices. The price received from the sale of these products is affected by the cost of transporting the products to market.

The Federal Energy Regulatory Commission in the USA regulates interstate and certain intrastate natural gas transportation rates and service conditions, which affect the marketing of natural gas produced by the Company, as well as the revenues received for sales of such production. Since the mid-1980s, the Federal Energy Regulatory Commission has issued a series of orders, culminating in Order Nos. 636, 636-A and 636-B, that have significantly altered the marketing and transportation of natural gas. These regulations mandated a fundamental restructuring of interstate pipeline sales and transportation service, including the unbundling by interstate pipelines of the sales, transportation, storage and other components of the city-gate sales services such pipelines previously performed.

One of the Federal Energy Regulatory Commission purposes in issuing these regulations was to increase competition within all phases of the natural gas industry. Generally, these regulatory orders have eliminated or substantially reduced the interstate pipelines' traditional role as wholesalers of natural gas and have substantially increased competition and volatility in natural gas markets.

$(d)$ Regulation in the USA - Exploration and Production

Oil and natural gas exploration, production and related operations are subject to extensive rules and regulations promulgated by federal, state and local agencies. Failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on the oil and gas industry increases the Company's cost of doing business and affects profitability. Because such rules and regulations are frequently amended or reinterpreted. the Company is unable to predict the future cost or impact of complying with such laws.

Permits are required by the State for drilling operations, drilling bonds and the filing of reports concerning operations and they impose other requirements relating to the exploration and production of oil and gas. Statutes or regulations addressing conservation matters also exist, including provisions for the unitisation or pooling of oil and natural gas properties, the establishment of maximum rates of production from oil and gas wells and the regulation of spacing, plugging and abandonment of such wells. The statutes and regulations of certain states limit the rate at which oil and gas can be produced.

The Company is required to comply with various federal and state regulations regarding plugging and abandonment of oil and natural gas wells, which impose a substantial rehabilitation obligation on the Company, which may have a material adverse effect on the Company's financial performance.

$(e)$ Regulation in the USA - Environmental

Various federal, state and local laws and regulations in the USA govern the discharge of materials into the environment, or otherwise relating to the protection of the environment, health and safety, affect operations and costs. These laws and regulations sometimes require governmental authorisation before conducting certain activities, limit or prohibit other activities because of protected areas or species, create the possibility of substantial liabilities for pollution related to operations or properties and provide penalties for noncompliance. In particular, drilling and production operations, activities in connection with storage and transportation of crude oil and other liquid hydrocarbons and use of facilities for treating, processing or otherwise handling hydrocarbons and related exploration and production wastes are subject to stringent environmental regulation.

As with the industry in general, compliance with existing and anticipated regulations increases the overall cost of business. While these regulations affect capital expenditures and earnings, the Company believes that such regulations do not affect its competitive position in the industry because environmental regulatory programs similarly affect competitors. Environmental regulations have historically been subject to frequent change and, therefore, the Company cannot predict with certainty the future costs or other future impacts of environmental regulations on future operations. A discharge of hydrocarbons or hazardous substances into the environment could subject the Company to substantial expense, including the cost to comply with applicable regulations that require a response to the discharge, such as containment or cleanup, claims by neighbouring landowners or other third parties for personal injury, property damage or their response costs and penalties assessed, or other claims sought, by regulatory agencies for response cost or for natural resource damages.

The following are examples of some environmental laws that potentially impact the Company and its operations.

$(i)$ Water

The Oil Pollution Act was enacted in 1990 and amends provisions of the Federal Water Pollution Control Act of 1972 and other statutes as they pertain to the prevention of and response to major oil spills. The Oil Pollution Act subjects owners of facilities to strict, joint and potentially unlimited liability for removal costs and certain other consequences of an oil spill along shorelines or that enters navigable waters. In the event of an oil spill into such waters, substantial liabilities could be imposed upon the Company.

Recent regulations developed under the Oil Pollution Act require companies that own onshore facilities, to demonstrate oil spill financial responsibility for removal costs and damage caused by oil discharge. Regulations are currently being developed under the Oil Pollution Act and similar state laws that may also impose additional regulatory burdens upon the Company.

$(i)$ The Federal Water Pollution Control Act

The Federal Water Pollution Control Act (US) imposes restrictions and strict controls regarding the discharge of produced waters, other oil and gas wastes, any form of pollutant, and, in some instances, storm water runoff, into waters of the USA. The Federal Water Pollution Control Act provides for civil, criminal and administrative penalties for any unauthorized discharges and, along with the Oil Pollution Act, imposes substantial potential liability for the costs of removal, remediation or damages resulting from an unauthorised discharge.

State laws for the control of water pollution also provide civil, criminal and administrative penalties and liabilities in the case of an unauthorised discharge into state waters. The cost of compliance with the Oil Pollution Act and the Federal Water Pollution Control Act have not historically been material to the Company's operations, but there can be no assurance that changes in federal, state or local water pollution control programs will not materially adversely affect it in the future.

$(iii)$ Air Emissions

The Federal Clean Air Act and comparable state programs require many industrial operations in the USA to incur capital expenditures in order to meet air emissions control standards developed by the USA Environmental Protection Agency and state environmental agencies. No assurances can be given that changes in federal, state or local air pollution control programs will not materially adversely affect the Company in the future.

Solid Waste $(iv)$

The Company will, through its joint venture operations, generate non-hazardous solid wastes that are subject to the requirements of the Federal Resource Conservation and Recovery Act and comparable state statutes. The Environment Protection Agency and the state in which the Company operates are considering the adoption of stricter disposal standards for the type of non-hazardous wastes generated. The Resource Conservation and Recovery Act also govern the generation, management, and disposal of hazardous wastes. At present, the Company is not required to comply with a substantial portion of the requirements under this law because the operations generate minimal quantities of hazardous wastes. However, it is possible that additional wastes, which could include wastes currently generated during operations, could in the future be designated as "hazardous wastes." Hazardous wastes are subject to more rigorous and costly disposal and management requirements than are non-hazardous wastes. Such changes in the regulations may result in additional capital expenditures or operating expenses.

$(v)$ The Comprehensive Environmental Response, Compensation, and Liability Act

The Comprehensive Environmental Response, Compensation, and Liability Act also known as "Superfund", imposes liability, without regard to fault or the legality of the original act, on certain classes of persons in connection with the release of a "hazardous substance" into the environment. These persons include the current owner or operator of any site where a release historically occurred and companies that disposed or arranged for the disposal of the hazardous substances found at the site. Superfund also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the

environment and to seek to recover from the responsible classes of persons the costs they incur.

In the course of ordinary operations, the Company may manage substances that may fall within Superfund's definition of a "hazardous substance". Therefore, it may become jointly and severally liable under the Superfund for all or part of the costs required to clean up sites where it disposed of or arranged for the disposal of these substances. This potential liability extends to properties that were previously owned or operated, as well as to properties owned and operated by others at which disposal of hazardous substances occurred.

$(f)$ Exploration and Development Risks

Oil and gas exploration involves significant risk only occasionally providing high rewards. In addition to the normal competition for prospective ground, and the high costs of discovery and development of an economic deposit, factors such as demand for commodities, stock market fluctuations affecting access to new capital, sovereign risk. environmental issues, labour disruption, project financing, foreign currency fluctuations and technical problems all affect the ability of a company to profit from a discovery.

There is no assurance that exploration and development of the successful prospects being acquired by the Company, or any other projects that may be acquired in the future, will result in the discovery of an economic oil and gas deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.

Furthermore, the Company will only proceed to the next stage of exploration or development when data supports the existence of an economically viable oil and gas deposit. Should the empirical data not support the existence of an economically viable oil and gas deposit, the Company will generally not proceed to the next stage of exploration.

Drilling and Operating Risks $(q)$

Oil and gas drilling activities are subject to numerous risks, many of which are beyond the Company's control. The Company's operations may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, shortage or delays in the delivery of rigs and/or other equipment and compliance with governmental requirements. Drilling may involve unprofitable efforts, not only with respect to dry wells, but also with respect to wells, which, through yielding some petroleum, are not sufficiently productive to justify commercial development or cover operating costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. Hazards incidental to the exploration and development of oil and gas properties such as unusual or unexpected formations, pressures, oceanographic conditions or other factors are inherent in drilling and operating wells and may be encountered by the Company.

Industry operating risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures or discharges of toxic gasses, the occurrence of any of which could result in substantial losses to the Company due to injury or loss of life, severe damage to or destruction or property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations. Damages occurring as a result of such risks may give rise to claims against the Company. Although the Company believes that it or the operator will carry adequate insurance with respect to its operations in accordance with industry practice, in certain circumstances the Company's or the operator's insurance may not cover or be adequate to cover the consequence of such events. In addition, the Company may be subject to liability for pollution, blow-outs or other hazards against which the Company or the operator does not insure or against which it may elect not to insure because of high premium costs or other reasons. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of operations of the Company. Moreover, there can be no assurance that the Company will be able to maintain adequate insurance in the future at rates that it considers reasonable.

$(h)$ Waterflood and other secondary recovery operations

Secondary recovery operations that may be used at the North Helper Gas Project or any other project the Company may acquire an interest in, involve certain risks especially the use of water flooding techniques. Waterflooding involves significant capital expenditures and uncertainty as to the total amount of recoverable secondary reserves. In waterflood operations, there is generally a delay between the initiation of water injection into a formation containing hydrocarbons and any increase in production. The operating cost per unit of production of waterflood projects is generally higher during the initial phases of such projects due to the purchase of injection water and related production enhancement costs. Costs are also higher during the later stages of the life of the project as production declines. The degree of success, if any, of any secondary recovery program depends on a large number of factors, including the amount of primary production, the porosity and permeability of the formation, the technique used, the location of injector wells and the spacing of both producing and injector wells.

$(i)$ Ability to Exploit Successful Discoveries

It may not always be possible for the Company to participate in the exploitation of any successful discoveries which may be made in any areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company. As described above, such further work may require the Company to meet or commit to financing obligations for which it may not have planned.

$\left( j\right)$ Hydrocarbon Reserve Estimates

Hydrocarbon reserve estimates are an expression of judgment based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available.

In addition, reserve estimates are necessarily imprecise and depend to some extent on interpretations, which may prove inaccurate. Should the Company encounter oil and/or gas deposits or formations different from those predicted by past drilling, sampling and similar examinations, reserve estimates may have to be adjusted and production plans may have to be altered in a way which could adversely affect the Company's operations.

$(k)$ Competition

The Company will compete with other companies, including major oil companies. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. Many of the Company's competitors not only explore for and produce oil and gas, but also carry out refining operations and market petroleum and other products on a worldwide basis. There can be no assurance that the Company can compete effectively with these companies.

$(1)$ Claims by Indigenous Inhabitants

The current and future oil and gas assets of the Company may be subject to land claims by indigenous people. Should this occur, the Company's ability to conduct exploration and/or mining activities may be affected, which may have a material adverse effect on the Company's financial performance and the price at which its securities trade.

The Company is not aware of any land claims or potential claims by indigenous people in respect of its exploration activities that could significantly affect its tenure or mining exploration or any future production operations.

$9.3$ Specific Risks associated with Odyssey and the Acquisition North Helper Gas Project

Limited Operating History of Odyssey $(a)$

The Company has limited operating history on which it can base an evaluation of its prospects.

The prospects of the Company must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly in the oil and gas exploration sector, which has a high level of inherent uncertainty.

$(b)$ Reliance on Key Personnel

The Company is reliant on a small number of key personnel and consultants. The loss of one or more of these key contributors could have an adverse impact on the business.

It may be particularly difficult for the Company to attract and retain suitably qualified and experienced people, given the current high demand in the industry and relatively small size of the Company, compared to other industry participants.

The continued availability of consultants and advisers is to some extent dependent on maintaining the professional relationships that the Company's personnel have developed over time and which may be lost if key personnel cease to be involved with the Company before replacement arrangements can be made. If the involvement of key oil and gas specialists, managers or other personnel cease for reasons of contract termination; ill health; death or disability the Company may be adversely affected.

Additional Requirements for Operational Funding $(c)$

The Company's funding requirements depend on numerous factors including the Company's ability to generate income from the North Helper Gas Project. It may require further financing in addition to amounts raised upon settlement of the acquisition in order to fund current operations including the drilling of the new exploration wells identified in this Prospectus.

Additional equity financing, if available, may be dilutive to Shareholders and at lower prices than the current market price. Debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.

$(d)$ Joint venture parties and contractors

The North Helper Gas Project is operated by Marion Energy, under the Helper JOA and FOA's which includes provisions that require certain decisions relating to the exploitation of the North Helper Gas Project to be passed by participants. Where a joint venture partner does not act in the best commercial interest of the joint venture, it could have a material adverse effect on the interests of the Company.

While, under the terms of the JOA, the Operator can be removed for "good cause" defined as gross negligence, wilful misconduct, material breach or material failure or inability by the operator to perform its obligations under the JOA, any such removal may be difficult.

Furthermore, the Directors are unable to predict the risk of:

financial failure, non compliance with obligations or default by a participant in any $\bullet$ joint venture to which the Company is, or may become, a party; or
insolvency or other managerial failure by any of the contractors used by the Company in its exploration activities; or
insolvency or other managerial failure by any of the other service provider used by the Company for any activity.
$(e)$ Minority Interest in the North Helper Gas Project

Marion Energy will have a majority WI in the North Helper Gas Project. There exists a risk that as a minority participant in the Project. Odyssey may have the value of its interest in the North Helper Gas Project reduced by actions undertaken by Marion Energy (as majority joint venture partner). There may be few legal impediments preventing Marion Energy from exploiting its position as a controlling joint venture participant to the detriment of minority participants in the Project given that the North Helper Gas Project is established under USA laws.

Should Marion Energy not act in the best interests of Odyssey as a minority holder in the North Helper Gas Project, this may have a material adverse effect on value of Odyssey's holding in the Project, which may in turn have a material adverse effect on the Company's profitability and/or the market price of Odyssey's Shares.

$(f)$ Water Production and Disposal

The profitability of operations can be affected by the rate at which water is produced during the production process and the costs associated with its disposal. There can be no guarantee that the rate at which water is produced or declines will be in line with expectations. Any water production beyond that expected may increase the costs of production and materially impact on the profitability of the Company.

The North Helper Joint Venture has an agreement with Andarko to dispose of water. There can be no guarantee that this agreement will continue or that the cost of Andarko providing water disposal will be economic. If the agreement is terminated or the cost of providing such services is uneconomic it may severely affect the operations of the Company and materially impact on its profitability.

Private Land $(g)$

The Blackhawk Lease is situated on private land and as such the rights of the Company to oil and gas from the area arise from a lease with a private landowner. As a consequence the lease is not registered in the public record of titles as would be the case if the lease had been issued by a government authority. The Company has no reason to believe that there are any interests in the land other than those set out in this Prospectus. There can be no guarantee that such an interest does not exist.

$(h)$ Joint and Several Liability

Participants in the Blackhawk Lease are jointly and severally liable to the lessor for liability arising under the lease. The contractual arrangements between the participants provide that the participants liability is several as between the participants If the lessor makes a claim it will be on a joint and several basis and the Company will need to rely on its ability to call on the indemnity between it and the other participants to the extent of the liability to the participating interests of the other parties.

$(i)$ Other Actions by Marion Energy

Marion Energy is the controlling joint venture participant and operator of the North Helper Gas Project. Odyssey is not aware of any legal restriction on Marion selling its interest in the Project or assigning its interest as operator of the Project to a third party.

Should Marion Energy sell its interest in the North Helper Gas Project to a third party, there can be no guarantee that the third party does not take action that is detrimental to minority shareholders in the Project or may take a different approach to managing its holding in the Project.

Should Marion Energy assign its interest as operator to a third party(s) there can be no quarantee that the third party(s) will operate the North Helper Gas Project in the same manner as Marion Energy, which may result in reduced profitability of the Project.

$(i)$ Markets

The marketability of the Company's production depends in part upon the availability. proximity and capacity of natural gas gathering systems, pipelines and processing facilities. Federal and state regulation of oil and natural gas production and transportation, tax and energy policies, changes in supply and demand and general economic conditions all could adversely affect the ability to produce and market oil and natural gas.

$(k)$ New Projects and Acquisitions

The Company proposes to actively seek acquisitions that may add value to the Company. The acquisition of new business opportunities (whether completed or not) may require the payment of monies (as a deposit and/or exclusivity fee) after only limited due diligence and prior to the completion of comprehensive due diligence. There can be no quarantee that any proposed acquisition will be completed or be successful. If the proposed acquisition is not completed, monies already advanced may not be recoverable, which may have a material adverse effect on the Company.

If an acquisition is completed, the Board will need to re-assess, at that time, the funding allocated to current projects and new projects, which may result in the Company reallocating funds from other projects and/or the raising of additional capital (if available). Furthermore, notwithstanding that an acquisition may proceed upon the completion of due diligence, the usual risks associated with mining and exploration activities will remain.

$(1)$ Future Capital Needs and Additional Funding

The future capital requirements of the Company will depend on many factors including the results of joint venture operations, future exploration and work programs and the acquisition of new projects.

Should the Company require additional funding there can be no assurance that additional financing will be available on acceptable terms, or at all. Any inability to obtain additional finance, if required, would have a material adverse effect on the Company's business and its financial condition and performance.

Completion Techniques $(m)$

While completion techniques have changed and improved since the initial development of the Helper Field, and the operator intends to apply techniques which are consistent with these improved practices at Kenilworth Railroad #1 and #2, there can be no quarantee that these practices will be effective.

If these completion techniques are not effective there may be a significant material impact on the Company's profitability and cans flows.

$(n)$ Weather

The weather in Utah can be extremely harsh at different times of the year which may disrupt drilling and production activities for extended periods of time.

Any disruptions caused by extreme weather conditions may result in a negative impact on the Company's revenues or increase operating costs, either of which which may have a material impact on the Company's profitability and cash flows.

Service Capacity $(0)$

Due to exploration and development activities in the Drunkards Wash/Helper locality being at near service capacity there may be delays in securing drilling rigs or other equipment and personnel required to carry out the Company's planned activities.

While the operator has advised that it has identified a suitable drilling rig and expects to complete negotiations to secure the rig to drill the next wells there can be no quarantee that this will be achieved.

In addition there may also be upward pressure on costs, and mechanical failure may result in delays which may result in significant cost overruns.

Any of these factors may have a material impact on the Company's profitability and cash flows.

$10_l$ Material Contracts

$10.1$ Sale and Purchase Agreement

Pursuant to the Purchase and Sale and Participation Agreement dated 1 October 2005 Marion Energy as Seller and OEL Operating (USA) Inc as Buyer, Marion Energy has agreed to sell an undivided 15% working interest to the Buyer of:

the Blackhawk Lease; $(a)$
the AMI under the terms of the Exploration Agreement; $(b)$
$(c)$ the Westport FOA:
$(d)$ the Stone FOA; and
$(e)$ The Helper JOA.

The purchase price for the sale and purchase is the sum of US\$1,090,000 requiring payment as follows:

US\$50,000 as non-refundable deposit (paid); $(a)$
completion costs as they occur, of the Kenilworth Railroad #1 and #2 Wells, $(b)$ estimated to be US\$90,000 to the buyer's account; and
US\$950,000 on the earlier to occur of the listing on the ASX or 15 December $(c)$ 2005 or such later date as mutually agreed by the parties.

Closing will occur at the time of the payment of the US\$950,000 and is conditional on Odyssey receiving from the ASX conditional approval to list on the ASX by 15 December 2005.

The Seller provides warranties as to title and standing and that it is not aware of the presence of any environmental liabilities. In addition the Seller provides an indemnity from and against all losses which arise from or in connection with the Seller's ownership of the assets on or before closing; and any breach by the seller of the agreement.

$10.2$ The Blackhawk Lease

The Blackhawk Lease. The Oil, Gas and Coalbed Methane Lease is dated June 15, 2004, recorded February 9, 2005, Book 584, Page 455, #109890, in the real property records of the Clerk and Recorder for Carbon County, Utah. Blackhawk Coal Company is the Lessor (hereinafter, the "Blackhawk Lease").

The Blackhawk Lease covers the following lands:

T13S-R10E, 6th P.M., Carbon County, Utah (as to 100% surface, coal, and oil $(a)$ and gas)

Section 2: All Section 4: S/2SW/4, SW/4SE/4 Section 8: S/2S/2 Section 9: All less SW/4NW/4 Section 10: SE/4, E/2SW/4 Section 11: SW/4 Section 16: NW/4, SW/4, SE/4, SE/4NE/4 Section 17: NE/4, N/2NW/4 Section 18: N/2NE/4 Containing 2,760 acres (2,760 net mineral acres)

T13S-R10E, 6th P.M., Carbon County, Utah (as to 100% surface and coal, and $(b)$ 50% oil and gas)

Section 5: N/2N/2 Section 6: N/2NE/4, NW/4, S/2SE/4 Containing 480 acres (240 net mineral acres)

T13S-R10E, 6th P.M., Carbon County, Utah (as to 100% surface only, no $(c)$ minerals)

Section 14: NW/4NW/4 Section 15: E/2NE/4, SE/4 Section 20: SE/4SE/4 Section 22: N/2NE/4 Section 28: NW/4NW/4 Section 29: NE/4NE/4 Containing 480 acres (0 net mineral acres)

The Blackhawk Lease has a five (5) year Primary Term commencing on June 15, 2004. Provided the Lessee has diligently and in good faith explored the Leased Premises during the Primary Term and drilled and completed wells as appropriate to commercially produce Minerals from the Leased Premises, at the end of the Primary Term the Lease will be extended for 10 years (the "Extended Term"). At the end of the Extended Term, the Blackhawk Lease shall continue for the 640 acre Production Unit applicable to each producing well for so long as oil or gas are produced in paying quantities.

The Lessor's royalty is 15% of production, less 15% of ad valorem taxes and production, severance or other excise taxes and the costs incurred by Lessee in delivering and processing such Minerals. In the event Minerals are produced, there is a minimum annual royalty of \$10,000. In addition, there is an annual surface rental fee of \$2.00 per net surface acre. Both of these payments are due on February 15, 2006. The Lease provides for a shut-in royalty of \$1,000 per well per year or portion thereof, payable within 90 days from suspension of production or failure to initiate sales from a well capable of producing Minerals in paying quantities.

The Blackhawk Lease requires the Lessee to establish a Letter of Credit in the amount of \$50,000, to secure Lessee's performance under the Lease.

The Lessor grants to Lessee a right of first refusal ("ROFR") to lease lands owned by Lessor in T13S-R11E or T12S-R10E, 6th P.M., Carbon County, Utah. Lessor will provide notice of any third party offer to lease the property and Lessee can elect to exercise the ROFR with respect to such property.

The Blackhawk Lease is not on a standard form and was drafted to describe the unique agreement between the parties. However, most of the terms and conditions are typical of oil and gas leases in the area. There are no material terms that would be considered unusual or that pose an unreasonable risk to the Lessee.

The Interests in the Blackhawk Lease following completion at the Purchase and Sale Agreement to the Company will be Marion Energy 63.75%, the Company 15%, 10.625% Pegasis Energy and two other US private interests each holding a 5.31% Working Interest.

$10.3$ The Exploration Agreement

The Exploration Agreement is dated effective December 3, 2004, and covers the Areas of Mutual Interest. (Hereinafter, the "Exploration Agreement") The term of the Exploration Agreement is three (3) years from the Effective Date, and as long thereafter as any oil and gas lease acquired by the parties pursuant to the Agreement remains in force.

If any party acquires a legal or beneficial interest, or the right to acquire same, in any leasehold interests in the AMI, the Acquiring Party shall notify the Non-Acquiring Party, who shall have fifteen (15) business days to elect to acquire its proportionate share in such leasehold interest by paying its proportionate share of the acquisition costs.

$10.4$ The Westport FOA

Marion entered into a Farmout Agreement dated February 4, 2005, with Westport Oil and Gas Company, L.P. ("Westport") and Robert L. Bayless, Producer LLC ("Bayless"), as Farmors (the "Westport FOA"). Marion agreed to commence drilling two (2) Test Wells on or before August 31, 2005, in Section 15: NE/4 or Section 16: NE/4, T13S-R10E, 6th P.M., Carbon County, Utah. Marion agreed to complete the Test Wells within 90 days from the date of commencement. Thereafter, Marion has the option to continue drilling with not more than 120 days to elapse between the date of rig release for the preceding well and the commencement of actual drilling of the next succeeding well, until the subject lands have been fully developed on a 160 acre spacing pattern or is terminated by one of the parties.

If operations are unavoidably delayed, including for rig availability, the parties will mutually agree to extend the date of commencement. The Operator must provide written notice to Farmors upon the occurrence of the delay and at the time the delay is removed. By Letter dated August 26, 2005. Marion cited rig availability as the reason for delay and requested an extension of time to November 30, 2005, to complete the first Test Well (the Kenilworth Railroad #2 Well located in Section 16: NE/4, T13S-R10E, 6th P.M., Carbon County, Utah). Marion also requested an extension to time to November 1, 2005, to commence drilling the second Test Well (proposed as the Cordingly Canyon #15-2 Well located in Section 15: NE/4, T13S-R10E, 6th P.M., Carbon County, Utah). Westport and Bayless approved the extension requests by signing the August 26, 2005, letter from Marion.

Upon the completion of each well, Marion will earn all of Farmor's rights in the 160 acre production unit applicable to the completed well. Marion's interest is limited from the surface to the stratigraphic equivalent of 100 feet below the total depth drilled in the well. The Farmor reserved an ORRI equal to the difference between existing lease burdens and 20%. Upon Payout, Farmors shall retain the ORRI and shall receive an assignment of an undivided 30% WI in the leases and completed well.

"Payout" is defined as that point in time when Operator has recovered the "Net Revenue" out of production from the applicable well equal to 120% of the costs of drilling, testing, completing, equipping and operating such vertical well provided that such amount does not exceed \$1,000,000. "Net Revenue" is defined as the value, determined by Operator's standard method of accounting of all oil, casinghead gas, gas, coalbed methane gas, distillate, and/or condensate and other minerals which are produced and saved from any well drilled hereunder (or any substitute or replacement well therefore), together with the processed value, if any, of such production and the proceeds from the sale of any material and equipment from such well, less (i) severance, production, and/or mineral ad valorem or other taxes measured by production and assessed on/or against the well, production unit for the well or production from the well, (ii) the Lessor's royalty, (iii) any overriding royalty in existence as of the date hereof, and (iv) Farmor's overriding royalty.

If the well is completed as a dry hole, Marion will receive an assignment of an undivided 70% of Farmors' interest in the leases and lands if Farmors do not elect to takeover the well. Farmors will continue to pay all delay rentals on the subject leases and Marion will reimburse Farmors for 70% of such payments.

The parties agree to enter into an Operating Agreement covering the subject leases and lands. The Operating Agreement will be on A.A.P.L. form 610-1989, with the COPAS 1984 Accounting Procedure attached thereto (the "Westport JOA"). The 5 leases covered by the Westport FOA and the Westport JOA are as follows:

USA UTU-81161, dated 4/1/2004, 12.5% RI, 2.0% ORRI, 85.50% NRI, covering $(a)$ Section 15: SW/4; Section 17: S/2; Section 18: NE/4SW/4, SE/4, T13S-R10E, 6th P.M., Carbon County, Utah, (680 acres) and recorded in Book 1464, page 395.
State of Utah ML-49248, dated 2/6/2004, 12.5% RI, 2.0% ORRI, 85.50% NRI, $(b)$ covering Section 14: NW/4NW/4, T13S-R10E, 6th P.M., Carbon County, Utah (40 acres) and recorded in Book 568, page 605.
$(c)$ State of Utah ML-49249, dated 2/6/2004, 12.5% RI, 2.0% ORRI, 85.50% NRI, covering Section 15: E/2NE/4, T13S-R10E, 6th P.M., Carbon County, Utah (80 acres) and recorded in Book 568, page 615.
$(d)$ State of Utah ML-48133, dated 12/16/1998, 12.5% RI, 87.50% NRI, covering Section 15: SE/4: Section 16: W/2NE/4, T13S-R10E, 6th P.M., Carbon County, Utah (240 acres), no recording information.
State of Utah ML-49250, dated 2/6/2004, 12.5% RI, 87.50% NRI, covering $(e)$ Section 16: NE/4NE/4, T13S-R10E, 6th P.M., Carbon County, Utah (40 acres), no recording information.

Upon completion of any well under the Westport FOA, Marion will earn 100% of Farmors' WI under the subject lease. Following the Assignment from Marion to OEL, Marion will be required to convey an undivided 15% WI in the earned lease to OEL. OEL's 15% WI will be subject to the existing RI's and ORRI's, including the Farmors' ORRI (20% - existing lease burdens) described in the Westport FOA.

The Westport FOA may not be assigned by Marion without the prior written consent of Farmors, which shall not be unreasonably withheld. Under typical farmout agreements, such consents will not be required until the Farmee actually earns interests under the farmout agreement. Here, no consent is required under the Westport FOA until Marion has fulfilled the drilling obligation and earned a record-title assignment of 100% WI in the subject lease. Following the assignment into Marion, Marion will request that Farmors consent to Marion's assignment of the 15% WI to OEL. Marion agrees to hold the 15% interest and any production proceeds attributable thereto in trust for OEL until the Farmors' consent can be obtained and Marion can assign the 15% record-title interest to OEL.

$10.5$ The Stone FOA

Marion entered into the Farmout and Option Agreement dated June 24, 2005, with Stone Energy Corporation ("Stone"), covering the North Helper Area, Carbon County, Utah (the "Stone FOA"). Marion agrees to commence one (1) test well (the "Initial Well"), on or before September 15, 2005, to test the Ferron Formation or reach a subsurface depth of 5,000', whichever is less. The Initial Well must be completed or plugged and abandoned within 60 days of commencement. Within 120 days from rig release for the Initial Well, Marion has the option to commence the actual drilling of an Option Well. The Option Well must be completed within 60 days from the commencement. Thereafter, Marion can drill Additional Option Wells under similar timeframes until Marion has earned an interest in all of the Farmout Acreage or has failed to timely commence the drilling of Additional Option Wells.

Under the Stone FOA, a party's performance can be suspended by force majeure. Force majeure events include the unavailability of a drilling or completion rig or any other unavoidable occurrence. The affected party must give written notice of the force majeure and remove such cause within a reasonable time. By Letter dated September 7, 2005, Marion requested an extension of time to commence the drilling of the Test Well. On September 26, 2005, Stone agreed to extend the commencement date to November 1, 2005.

Upon completion of the Initial Well and any Option Well, as a well capable of producing oil and/or gas in paying quantities (i.e., sufficient quantities to yield a profit after deducting the costs of operating the well), Marion will earn 100% of Stone's operating rights in the wellbore (the "Well"). Stone reserves a proportionate ORRI in the Well equal to the difference between all existing burdens and 20%. Stone's ORRI is convertible at "Payout" to a proportionately reduced 30% WI in the Well. Marion will also earn an assignment of an undivided 70% of Stone's operating rights in the state approved drillsite spacing unit for the Well (not to exceed the 160 acres drillsite quarter section), subject to Stone's reserved, non-convertible ORRI of 20% minus existing burdens. Marion's earned interests will be depth limited from the surface to 100 feet below the stratigraphic equivalent of the total depth drilled in the applicable Well.

"Payout" shall mean the time when the proceeds from all production from any Earning Well (after deducting leasehold royalty, overriding royalties, including the overriding royalty herein reserved to Stone and other burdens on production, and taxes, including excise taxes, chargeable to the working interest) equal 125% of the costs incurred by Farmee in drilling, testing, completing, and equipping said well to and including the tanks and/or separator, plus during the time required to recover the foregoing, 100% of the costs incurred by Farmee in operating said well.

Stone agrees to pay delay rentals and minimum royalties on the subject leases and Marion will reimburse Stone for 100% of such costs until Marion has earned all of the Farmout Acreage or has ceased to drill under the FOA. At that point, Marion shall bear 70% of the costs and Stone will bear 30%.

Stone reserves the right to participate in any drilling for $\frac{1}{2}$ of its WI with the remaining $\frac{1}{2}$ to be subject to the farmout terms. For example, if Stone owns 100% WI in the subject lease and state approved drillsite spacing unit and elects to participate for 50%, the costs and ownership in the Well would be split 50% to Stone and 50% to Marion before Payout; and 65% to Stone and 35% to Marion after Payout.

The Stone JOA will be on a standard A.A.P.L. form 610-1989 with the COPAS 1984 Accounting Procedure attached thereto. Marion will be the designated Operator under the Stone JOA. The Stone FOA and the Stone JOA both cover Federal Oil and Gas Lease UTU-81160, covering portions of Sections 13, 14, 15, 17 and 18, T13S-R10E, 6th P.M., Carbon County, Utah, comprising approximately 943 acres.

The terms and conditions of the Stone FOA are typical of farmout type agreements used in the oil and gas industry. Upon completion of any well under the Stone FOA, Marion will earn 100% of Farmor's WI under the subject lease. Following the Assignment from Marion to OEL, Marion will be required to convey an undivided 15% WI in the earned lease to OEL. OEL's 15% WI will be subject to the existing RI's and ORRI's, including the Farmors' ORRI (20% - existing lease burdens) described in the Stone FOA.

The Stone FOA may not be assigned by Marion without Stone's prior written consent, which shall not be unreasonably withheld. Under typical farmout agreements, such consents will not be required until the Farmee actually earns interests under the farmout agreement. Here, no consent is required under the Stone FOA until Marion has fulfilled the drilling obligation and earned a record-title assignment of 100% WI in the subject lease. Following the assignment into Marion, Marion will request Farmor to consent to Marion's assignment of the 15% WI to OEL. Marion agrees to hold the 15% interest and any production proceeds attributable thereto in trust for OEL until the Farmor's consent can be obtained and Marion can assign the 15% record-title interest to OEL.

$10.6$ The Helper JOA

Pursuant to the terms of the Exploration Agreement the Joint Operating Agreement dated December 3, 2004 was entered into (the "Helper JOA"). The Helper JOA, covers the Blackhawk Lease and AIM. The Helper JOA consists of a standard A.A.P.L. Form 610-1989 Model Form Operating Agreement, with a COPAS-1984 Onshore Accounting Procedure attached.

The Helper JOA provides typical non-consent penalties of 150% (surface equipment), 100% (operating costs), and 300% (drilling and completion costs and new downhole equipment). No party may transfer interests in the Helper JOA without the prior consent of Operator, which consent shall not be unreasonably withheld. There is a gas balancing agreement attached to the Helper JOA. The Helper JOA will remain in effect for so long as any of the subject leases remain in force as to any part of the areas covered by the agreement. It appears that the parties have elected to form a tax partnership for tax reporting purposes under Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended. The Helper JOA also contains reciprocal liens between the Operator and the non-operating parties to secure the parties' obligations and payments under the terms of the Helper JOA. These are standard provisions in the 1989 Model Form Operating Agreement and are commonly used in the industry.

$10.7$ The Disposal Agreement

Under the Produced Water Disposal Agreement dated March 1, 2005, (the "Disposal Agreement"), Anadarko Petroleum Corporation ("Anadarko") Anadarko operates the Disposal Well in the Helper Field and agrees to dispose of produced water. Anadarko will charge a Disposal Fee of \$2.00 per barrel of produced water delivered to the delivery point. The Disposal Fee will be adjusted annually based on the U.S. Department of Labor, Bureau of Labor Statistics Index of average weekly earnings for the Oil and Gas Extraction Industry. The term of the Disposal Agreement shall commence on April 1, 2005, and continue for one (1) year or until cancelled by either party. Title transfer and risk of loss will occur at the outlet of the meter installed at the Delivery Point. There are reciprocal indemnities and standard insurance coverage provisions.

$10.8$ The Gas Purchase Agreement

The Gas Purchase Agreement is dated November 1, 2004, with Anadarko Energy Services Company ("AESC") as Buyer (the "Gas Purchase Agreement"). Gas produced from wells will be delivered to the Central Delivery Point ("CDP") located in Section 22, T13S-R10E, 6th P.M. Carbon County, Utah. All gas will be exclusively sold to AESC. Gas quantities may be nominated on or before the twentieth (20th) day of each month for the following month. AESC will take delivery of the gas and title will pass at the CDP. AESC will pay a price per MMBtu based on Inside F.E.R.C.'s Gas Market Report index price for Rocky Mountains spot gas delivered to the Questar Pipeline, less \$0.55 tariff and less applicable fuel. The Gas Purchase Agreement is effective November 1, 2004, and will remain in force for one (1) month and month-to-month thereafter, unless terminated by either party.

Neither party may assign its rights under the Gas Purchase Agreement without the prior written consent of the other party, which consent may not be unreasonably withheld or delayed. However, no consent is necessary when a party transfers rights to an affiliate or pursuant to a merger or sale of all or substantially all of the party's assets. There are reciprocal indemnities between the parties. In addition, there are gas quality specifications attached to the Agreement. These appear to be standard specifications.

10.9 The Interconnect Agreement.

In order to effectuate the Gas Purchase Agreement, Anadarko Gathering Company ("AGC") entered into the Interconnect Agreement dated April 20, 2005, (the "Interconnect" Agreement"), to provide for the construction, installation, operation, maintenance and ownership of the necessary facilities. The Seller agreed to install and operate the Upstream Facilities and AGC agreed to install and operate the Downstream Facilities. The Seller agrees to reimburse AGC for the Downstream Facilities' construction and installation costs. There are reciprocal indemnities and standard insurance coverage provisions. The Interconnect Agreement cannot be assigned by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld. However, no consent is necessary if either party assigns to an affiliate or successor by purchase, merger, consolidation or other transfer of substantially all assets of the original party. The Interconnect Agreement shall remain in effect for as long as natural gas is or may be delivered through the Upstream Facilities and delivered into the Downstream Facilities. Provided, if gas is not delivered through such Facilities for a period of one hundred eighty (180) consecutive days, then either party may terminate the Agreement upon providing thirty (30) days written notice.

$10.10$ The Overriding Royalty Agreement.

A 2.5% ORRI is payable in any interests acquired in the AMI from Blackhawk Coal Company or in property where Blackhawk Coal Company owns any interest. A 0.1875% ORRI is payable in any interests acquired by Marion in the AMI which are not owned by Blackhawk Coal Company.

10.11 Directors Deeds of Indemnity

The Company has entered into deeds of access indemnity and insurance with each of the Directors.

The Company has undertaken, subject to the restrictions in the Corporations Act, to indemnify each Director and Officer in certain circumstances and to maintain Directors' and Officers' insurance cover (if available) in favour of each Director whilst a Director for seven years after the Director or Officer has ceased to be a Director.

The Company has undertaken with each Director to provide access to any Company records which are either prepared or provided to the Director during the period which he was a Director for a period of seven years after the Director has ceased to be a Director.

$11.$ Rights attaching to Securities

$11.1$ Rights attaching to Shares

General $(a)$

The Shares to be issued pursuant to this Prospectus are ordinary shares and will, as from their allotment, rank equally in all respects with all ordinary shares in the Company.

The rights attaching to the Shares arise from a combination of the Company's Constitution, statute and general law. Copies of the Company's Constitution are available for inspection during business hours at its registered office. The Constitution has been lodged with ASIC.

A summary of the more significant rights is set out below and assumes that the Company is admitted to the Official List of the ASX. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of the Company's Shareholders.

$(b)$ Reports and Notices

Shareholders are entitled to receive all notices, reports, accounts and other documents required to be furnished to shareholders under the Company's Constitution, the Corporations Act and the Listing Rules.

$(c)$ General Meetings

Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act. All members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is 2 eligible voters.

The Company will hold annual general meetings in accordance with the Corporations Act and the Listing Rules.

Shareholders are entitled to be present in person, or by proxy, attorney or representative (in the case of a company) to speak and to vote at general meetings of the Company.

$(d)$ Voting

Subject to any rights or restrictions at the time being attached to any class or classes of shares, at a general meeting of the Company on a show of hands, every ordinary Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote and upon a poll, every Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote for any Share held by the Shareholder.

A poll may be demanded by the chairperson of the meeting, any 5 Shareholders entitled to vote in person or by proxy, attorney or representative or by any one or more Shareholders holding not less than 5% of the total voting rights of all Shareholders having the right to vote.

Dividends $(e)$

The Directors may declare and authorise the distribution from the profits of the Company, dividends to be distributed to shareholders according to their rights and interests. The Directors may determine the property to constitute the dividend and fix the time for distribution. Except to the extent that the terms of issue of shares provide otherwise, each dividend must be distributed according to the amount paid up on the share in a manner calculated in accordance with the Constitution.

$(f)$ Winding Up

Subject to any rights or restrictions attached to a class of shares, on a winding up of the Company, any surplus must be divided among the Shareholders in the proportions which the amount paid (including amounts credited) on the Shares of a Shareholder is of the total amounts paid and payable (including amounts credited) on the Shares of all Shareholders. Subject to any rights or restrictions attached to a class of Shares, on a winding up of the Company, the liquidator may, with the sanction of a special resolution of the Shareholders:

$(i)$ distribute among Shareholders the whole or any part of the property of the Company: and
$(ii)$ decide how to distribute the property as between the Shareholders or different classes of Shareholders.

The liquidator of the Company may settle any problem concerning a distribution.

$(q)$ Transfer of Shares

Generally, Shares in the Company are freely transferable, subject to formal requirements, and to the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia.

$(h)$ Issue of Further Shares

The Directors may, subject to any restrictions imposed by the Constitution and the Corporations Act, allot, issue, grant options over, or otherwise dispose of, further Shares with or without preferential rights on such terms and conditions as they see fit.

$(i)$ Directors

The business of the Company is to be managed by or under the direction of the Directors.

Directors are not required under the Constitution to hold any Shares.

Unless changed by the Company in general meeting, the minimum number of Directors is 3 and the maximum is 10. The existing Directors may appoint a new Director to fill a casual vacancy or as an addition to the Board. Any such Director must retire at the next following annual general meeting of the Company (at which meeting he or she may be eligible for election as a Director).

The Constitution contains provisions relating to the rotation and election of directors. No Director other than the Managing Director may hold office later than the third annual general meeting after his or her appointment or election without submitting himself or herself for re-election.

For a person to be eligible for election as a Director, a nomination for the office of Director and the written consent of the proposed director must be received at the Company's registered office:

$(i)$ 30 business days prior to the meeting, in the case of a meeting of members that the Directors have been requested by members to call; and
$(ii)$ 35 business days prior to the meeting, in any other case.

$(1)$ Offer of Shares

Subject to the requirements of the Corporations Act and if applicable, the Listing Rules, the issue of Shares by the Company is under the control of the Directors. Under the Constitution the Company is empowered, without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, to issue shares with preferred, deferred or other rights.

The Constitution also contains provisions enabling the Directors to issue preference shares.

Variation of Shares and Rights Attaching to Shares $(k)$

Shares may be converted or cancelled with member approval and the Company's share capital may be reduced in accordance with the requirements of the Corporations Act.

Class rights attaching to a particular class of shares may be varied or cancelled with the consent in writing of holders of 75% of the shares in that class or by a special resolution of the holders of shares in that class.

$(1)$ Unmarketable Parcels

The Company may procure the disposal of Shares where the member holds less than a marketable parcel of Shares within the meaning of the Listing Rules (being a parcel of shares with a market value of less than \$500). To invoke this procedure, the Directors must first give notice to the relevant member holding less than a marketable parcel of Shares, who may then elect not to have his or her Shares sold by notifying the Directors.

Share Buy-Backs $(m)$

The Company may buy-back Shares in itself in accordance with the provisions of the Corporations Act.

$(n)$ Proportional Takeovers

The Constitution provides for Shareholder approval of any proportional takeover bid for the Company shares. Subject to the Listing Rules and SCH Business Rules, the provisions require the Directors to refuse to register any transfer of Shares made in acceptance of a proportional takeover offer until the requisite Shareholder approval has been obtained. To comply with the Corporations Act, the proportional takeover provisions must be renewed by members in general meeting at least every 3 years to remain in place.

$(0)$ Indemnity and Insurance of Officers

Under the Constitution the Company is obliged, to the extent permitted by law, to indemnify an officer (including Directors) of the Company against liabilities incurred by the officer in that capacity, against costs and expenses incurred by the officer in successfully defending civil or criminal proceedings, and against any liability which arises out of conduct not involving a lack of good faith.

To the extent permitted by law the Company may also pay the premium on any insurance policy for any person who is or has been an officer against a liability incurred by that person in his or her capacity as an officer of the Company provided that the liability does not arise out of conduct involving a wilful breach of duty.

$(D)$ Changes to the Constitution

The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the intention to propose the resolution as a special resolution must be given.

$(q)$ Listing Rules

Provided the Company is admitted to the Official List of the Australian Stock Exchange Ltd, then despite anything in the Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company's Constitution will be deemed to comply with the Listing Rules as amended from time to time.

$11.2$ Terms and Conditions of \$0.20 Options

Entitlement $(a)$

Each Option (together the "Options") entitles the holder to subscribe for one Share upon exercise of each Option.

Exercise Price and Expiry Date $(b)$

The Options have an exercise price of \$0.20 each and an expiry date of 31 December 2008.

Exercise Period $(c)$

The Options are exercisable at any time on or prior to the Expiry Date.

$(d)$ Notice of Exercise

The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

$(e)$ Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then shares of the Company.

Quotation of Shares on exercise $(f)$

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

$(g)$ Timing of issue of Shares

After an Option is validly exercised, the Company must as soon as possible:

issue and allot the Share: and $(i)$
do all such acts matters and things to obtain the grant of quotation for $(ii)$ the Share on ASX no later than 5 days from the date of exercise of the Option and receipt of cleared funds equal to the sum payable on the exercise of the Options.
$(iii)$ Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

$(h)$ Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

$(i)$ the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and
$(i)$ no change will be made to the Exercise Price.
$(i)$ Adjustment for pro-rata issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

New exercise price = $O - E[P-(S+D)]$ $N+1$

$O =$ the old Exercise Price of the Option.
$E =$ the number of underlying Shares into which one Option is exercisable.
$P =$ average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
the subscription price of a Share under the pro rata issue. $S =$
the dividend due but not yet paid on the existing underlying Shares (except $D =$ those to be issued under the pro rata issue).
$N =$ the number of Shares with rights or entitlements that must be held to receive a right to one new share.
$(i)$ Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction.

$(k)$ Quotation of Options

No application for quotation of the Options will be made by the Company.

$(1)$ Options non-transferable

The Options are non-transferable.

$12₁$ Additional Information

$12.1$ Company Incorporation, Tax Status and Financial Year

The Company was incorporated on 8 September 2005.

The Company's financial year ends on 30 June annually and the Directors expect the Company will be taxed in Australia as a public company

$12.2$ Continuous Disclosure

The Company is subject to regular reporting and disclosure obligations under the Corporations Act. Copies of documents lodged with the ASIC in relation to the Company may be obtained from, or inspected at, an ASIC office.

Further, the Company will adopt a continuous disclosure policy so as to comply with its continuous disclosure obligations once listed on ASX.

Those obligations will include being required to notify the ASX immediately of any information concerning the Company of which it is, or becomes aware of, and which a reasonable person would expect to have a material effect on the price or value of the Company's Shares. Exceptions apply for certain information which does not have to be disclosed.

Other documents that are required to be lodged include:

$(a)$ half yearly reports and preliminary financial statements, to be provided to the ASX within 75 days of the end of each half and full year accounting period respectively; and
financial statements, to be lodged with the ASX within a specified time after the $(b)$ end of each accounting period.

$12.3$ Privacy Disclosure

The Company collects information about each Applicant provided on an Application Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant's security holding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information provided by an Applicant on the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to the ASX and requlatory authorities.

If an Applicant becomes a security holder, the Corporations Act requires the Company to include information about the security holder (including name, address and details of the securities held) in its public register. The information contained in the Company's public register must remain there even if that person ceases to be a security holder. Information contained in the Company's register is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application. An Applicant has a right to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company's registered office.

$12.4$ Taxation Implications

The acquisition and disposal of Shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to take independent financial advice about the taxation and any other consequences of investing in the Company.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisers accept no liability or responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

$12.5$ Litigation

Legal proceedings may arise from time to time in the course of the Company's business. As at the date of this Prospectus the Company is not involved in any legal proceedings, nor so far as the Directors are aware, are any legal proceedings pending or threatened against the Company the outcome of which will have a material adverse effect on the business or financial position of the Company.

$12.6$ Directors' Interests

Except as disclosed in this Prospectus, no Director holds any interest in, or in connection with, the preparation or distribution of the Prospectus, or in the past two years has held any interest in:

the formation or promotion of the Company; or ٠
property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
the Offer.
Shareholding Qualifications $(a)$

The Directors are not required to hold any Shares in the Company under the Constitution of the Company.

Directors' Holdings

Set out in the table below are details of Directors' relevant interests in the Securities of the Company at the date of this Prospectus.:

Director	No. of Shares held directly	No. of Shares held indirectly	No. of Options held directly
Ian Middlemas	900,000	$\blacksquare$
Mark O'Clery	200,000		300,000
Mark Pearce		300,000

$(b)$ Directors Participation in Offer

The Directors may participate in the Offer by subscribing for Shares under the Offer.

$(c)$ Remuneration of Directors

No person has paid or agreed to pay any amount or has given any benefit to any Director to induce them to become, or qualify as a Director or for services provided by the Director, in connection with:

$(i)$ the formation or promotion of the Company; or
$(i)$ the offer of Shares under this Prospectus,

except as set out below or elsewhere in this Prospectus.

The Company's Constitution provides that the Company may remunerate the Directors. The remuneration shall, subject to any resolution of a general meeting. be fixed by the Directors.

The Constitution of the Company provides that the Non-Executive Directors may collectively be paid as remuneration for their services at a fixed sum not exceeding the aggregate maximum of \$150,000 per annum which has been determined by the Company in general meeting. It is currently resolved that the Chairman will receive directors fees of \$36,000 per annum and Non-Executive Directors will each receive directors fees of \$15,000 per annum.

Ofher Interests $(d)$

Apollo Group Pty Ltd, a company in which Mr Pearce is a director and beneficial shareholder will be paid \$15,000 for services provided in relation to this Prospectus and will receive a monthly retainer of \$10,500 for administration and company secretarial services and serviced office facilities going forward.

Mr O'Clery, will be paid approximately \$18,000 for services provided in relation to this Prospectus. Mr O'Clery will receive ongoing consulting fees in relation to consulting geological services provided by him. These services are charged to the Company at a rate of \$1,500 per day.

Further Mr O'Clery will be issued 300,000 Options pursuant to this Prospectus as the incentive component of his consultancy arrangements. Refer Section 11.2 for terms and conditions of the Options.

$12.7$ Interests of named persons

Except as disclosed in this Prospectus, no promoter or other person named in this Prospectus that has performed a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus holds, or in the past two years has held, any interest in:

$(a)$ the formation or promotion of the Company; or
property acquired or proposed to be acquired by the Company in connection with $(b)$ its formation or promotion or the Offer; or
$(c)$ the Offer,

and no amounts of any kind (whether in cash, Shares or otherwise) have been paid or agreed to be paid to a promoter or any person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or

distribution of the Prospectus for services rendered by that person in connection with the formation or promotion of the Company or the Offer.

The Argonaut Group has participated in various roles including acting as founders, corporate and financial advisors and as Broker to the Offer. The Argonaut Group has the following interests:

Argonaut Capital Limited, as a corporate advisor, will receive work fees of \$50,000 $\bullet$ payable upon the admission of Odyssey to the Official List of ASX.
Argonaut Securities Pty Ltd, as Broker to the Offer and having undertaken to place ٠ \$3,000,000 will receive a capital raising fee of 5% on this amount.
Argonaut Investments Pty Ltd as trustee for the Argonaut Investment Trust has an $\bullet$ existing holding of 2,500,000 Shares.
The Argonaut Group, its directors and its staff intend to participate in the Offer.

Hardy Bowen Lawyers act as solicitors to the Company and in that capacity have been involved in providing legal advice to the Company in relation to the Offer. The Company will pay approximately \$25,000 to Hardy Bowen Lawyers for these services.

Oso Energy Resources Corp. has prepared the Independent Geologist's Report included in Section 7 of this Prospectus. In respect of this work the Company will pay approximately US\$10, 000 for these services.

BDO Consultants (WA) Pty Ltd has prepared the Investigating Accountant's Report included in Section 8 of this Prospectus. In respect of this work the Company will pay approximately \$4,000 to BDO Consultants (WA) Pty Ltd.

BDO Accountants and Advisors, having consented, have been appointed auditor of the Company and will be paid for these services on standard industry terms and conditions.

The amounts disclosed above are exclusive of any amount of goods and services tax payable by the Company in respect of those amounts.

$12.8$ Options

The Company offers, pursuant to this Prospectus, 300,000 Options to Mr Mark O'Clery on the terms and conditions set out in Section 11.2 of this Prospectus.

Application for the Options can be made by completing and returning an application form which the Company will provide to Mr Mark O'Clery with a copy of this Prospectus to Odyssey Energy Limited, Level 9, BGC Centre, 28 The Esplanade Perth WA 6000.

$12.9$ Expenses of the Offer

The total expenses of the Offer payable by the Company are estimated at approximately \$438,500. These expenses include broker fees, expert fees, accounting fees, legal fees, ASX and ASIC fees, the cost of printing and distributing this Prospectus and other miscellaneous expenses.

These expenses have been paid or will be payable by the Company.

12.10 Forecasts

Due to the nature of the Company's current activities there are significant uncertainties associated with forecasting future revenue. On this basis, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included forecasts in this Prospectus.

$13.$ Consents

$13.1$ Consents

Each of the parties referred to in this Section:

has given the following consents in accordance with the Corporations Act which $(a)$ have not been withdrawn as at the date of lodgement of this Prospectus with the ASIC:
$(b)$ does not make, or purport to make, any statement in this Prospectus nor is any statement in this Prospectus based on any of those parties other than those referred to in this Section; and
$(c)$ to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Hardy Bowen Lawyers has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as solicitors to the Company.

BDO Consultants (WA) Pty Ltd has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as Investigating Accountant and to the inclusion in this Prospectus of the Investigating Accountant's Report in the form and context in which it appears.

BDO Accountants and Advisers has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as auditor of the Company. BDO has not authorised or caused the issue of this Prospectus or the making of the Offer.

Oso Energy Resources Corp. has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as the Independent Geologist to the Company and to the inclusion in this Prospectus of its Independent Geologist's Report in the form and context in which it appears.

Computershare Investor Services Pty Ltd has given and, as at the date hereof, has not withdrawn its written consent to be named in this Prospectus as the Company's share registry.

Argonaut Capital Limited has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as corporate advisor to the Company.

Argonaut Securities Pty Ltd has given and, as at the date hereof, has not withdrawn its written consent to being named in this Prospectus as Broker to the Offer.

Marion Energy Inc has given and, as at the date hereof, has not withdrawn its consent to the inclusion of the statements attributed to it in this Prospectus in the form and context in which they appear.

$14.$ Directors' Responsibility Statement and Consent

The Directors state that they have made all reasonable enquires and have reasonable grounds to believe that any statements made by the Directors in this Prospectus are true and not misleading and that, in respect of any other statements made in this Prospectus by persons other than the Directors, the Directors have made reasonable enquires and have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, and that those persons have given the consent to the inclusion of such statement or statements in this Prospectus and not have withdrawn that consent, before lodgement of this Prospectus with the ASIC or, to the Directors' knowledge, before any issue of securities pursuant to this Prospectus.

This Prospectus is prepared on the basis that:

certain matters may be reasonably expected to be known to professional advisers $(a)$ of any kind with whom applicants may reasonably be expected to consult; and
$(b)$ information is known to applicants or their professional advisers by virtue of any acts or laws of Western Australia or the Commonwealth of Australia.

Each Director has consented in writing to the lodgement of this Prospectus with the ASIC and has not withdrawn that consent.

Dated 18 October 2005

A Maria Barbara

Signed for and on behalf of Odyssey Energy Limited Ian Middlemas Chairman

Glossary of Terms $15.$

$15.1$ General Terms

These definitions are provided to assist persons in understanding some of the expressions used in this Prospectus.

"\$"	Australian Dollars except in the Independent Geologists' Report where it means United States Dollars.
"Anadarko"	Anadarko Petroleum Corporation or Anadarko Energy Services Company, as the case may be.
"Applicant"	A person who submits an Application Form.
"Application"	A valid application for Shares made pursuant to an Application Form.
"Application Form"	The application form attached to this Prospectus for the Offer.
"Application Monies"	Application monies for Shares received and banked by the Company.
"A\$"	Australian dollars.
"ASIC"	Australian Securities and Investments Commission.
"ASTC"	ASX Settlement and Transfer Corporations Pty Ltd (ACN 008 504 532).
"ASTC Operating Rules"	Operating rules of ASTC, except to the extent of any relief given by ASTC.

"ASX"	Australian Stock Exchange Limited (ACN 008 624 691).
"Board"	Directors of the Company as at the date of this Prospectus.
"Broker"	Argonaut Securities Pty Ltd
"Business Day"	A day on which the ASX is open for trading.
"CHESS"	Clearing House Electronic Subregistry System.
"Closing Date"	15 November 2005 or such earlier or later date and or time as the Directors may determine.
"Company" or "Odyssey"	Odyssey Energy Limited (ACN 116 151 636) and includes its controlled entities as the case may be.
"Constitution"	The current constitution of the Company.
"Corporations Act"	Corporations Act 2001 (Cth).
"Dealers Licence" or "Financial Services Licence"	Has the same meaning as an Australian Financial Services Licence as defined by the Corporations Act.

"GST"	Goods and Services Tax.
"Independent Accountant"	BDO Consultants (WA) Pty Ltd.
"Independent Accountant's Report"	The report prepared by the Independent Accountant that appears in Section 8.
"Independent Geologist"	Oso Energy Resources Corp.
"Independent Geologist's Report"	The report prepared by the Independent Geologist that appears in Section 7.
"Issue"	The offer or issue of any securities in the Company under this Prospectus.
"Issue Price"	\$0.20.
"Listing Rules"	The official Listing Rules of the ASX and any other rules of the ASX which are applicable while any Shares are admitted to the Official List of the ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by the ASX.
"Marion" or "Marion Energy"	Marion Energy Inc a company incorporated in the USA.
"OEL"	OEL Operating (USA) Inc.
"Offer"	The offer pursuant to this Prospectus by the Company to the public of 25,000,000 Shares at an issue price of \$0.20 each.
"Offer Period"	The period from the Opening Date up to and including the Closing Date.
"Official List"	The official list of the ASX.

"Official Quotation"	Quotation and ability to trade the Company's Shares on the Official List
'Opening Date"	26 October 2005 or should ASIC extend the Exposure Period then one day after the expiry of the Exposure Period.
"Options"	An option granted by the Company to subscribe for one Share exercisable at \$0.20 on or before 31 December 2008 on the terms and conditions contained in Section 11.2.
"Optionholder"	Any person holding Options.
"Prospectus"	This prospectus dated 18 October 2005.
"Section"	A section of this Prospectus.
"Securities"	Shares or Options issued or granted (as the case may be) by the Company.
"Share" or "Shares"	Ordinary fully paid voting shares in the capital of the Company.
"Share Registry"	Computershare Investor Services Pty Ltd.
"Shareholder"	Any person holding Shares.
"WST"	Western Standard Time, being the time in Perth, Western Australia.

$15.2$ Technical and Project Specific Terms

These definitions are provided to assist persons in understanding some of the expressions used in this Prospectus.

"AMI"	Area of Mutual Interest.
"Bcf" or "BCF"	Billions of cubic feet.
'Blackhawk Lease'	The lease in Section 10.2.
"CBM"	Coal Bed Methane.
"cf/d"	Cubic feet per day.
"Drunkards Wash" or "Drunkards Wash Field"	The CBM field identified in the introduction of the Independent Geologists Report in Section 7.
"Exploration Agreement"	The exploration agreement in Section 10.3.
"FOA" or 'Farmout Agreements"	The Westport FOA and the Stone FOA.
"GIP"	Gas in place
"Helper Field"	The CBM field identified in the introduction of the Independent Geologists Report in Section 7.
"Helper JOA"	The Helper JOA in Section 10.4.
"JOA"	Joint operating agreement.
"Mcf"	Thousands of cubic feet.
"mmBtu"	Million British Thermal Units.
"North Helper Gas Project" or "Project"	15% Working Interest (12.375% NRI) in the Blackhawk lease and 15% Working Interest in various farmout arrangements held by Marion Energy.
"North Helper Joint Venture"	The various agreements in respect to the North Helper Gas Project.
"NRI" or "Net Revenue Interest"	The percentage of revenues due a participant in a project, net of royalties or other burdens on the project.
"ORRI"	Overriding royalty interest.
"perm"	Permeability.
"RI"	Royalty interest.
"Stone FOA"	The farmout agreement in Section 10.5.
"Westport FOA"	The farmout agreement in Section 10.4.
"Working Interest" or "WI"	The percentage interest to which a participant bears the costs of exploration, development and operation of the project and, in return, is entitled to a share of the mineral production from the project or to a share of the proceeds (based on the level of net revenue interest).

	ODYSSEY ENERGY LIMITED APPLICATION FORM	Share Registrars use only
	Please read all instructions on reverse of this form			Broker reference - stamp only
А	Number of Shares applied for (Minimum 10000 Shares and then multiples of 1,000 Shares).		в Total amount payable cheque(s) to equal this amount
		at \$0.20 each =	A\$	Adviser Code Broker code
	you may be allocated all of the Shares above or a lesser number
C			Full name details title, given name(s) (no initials) and surname or company name	$\mathbf D$ Tax file number(s) Or exemption category
	Name of applicant 1			Applicant 1/company

	Name of joint applicant 2 or			Joint applicant 2/trust

	Name of joint applicant 3 or			Joint applicant 3/exemption

Ε Number/street	Full postal address			F. Contact details Contact name
				Contact daytime telephone number

Suburb/town			State/postcode	Contact email address

G н Drawer	CHESS HIN (if applicable) Cheque payment details. please fill out your cheque details and make your cheque payable to: "Odyssey Energy Limited - Subscription Account"	Cheque number	BSB number Account number	Total amount of cheque

Return of the Application Form and the Application Monies will constitute your offer to subscribe for Shares in the J Company. I/We declare that:
this Application is completed according to the declaration/appropriate statements on the reverse of this form and $(a)$ agree to be bound by the Constitution of the Company; and
$(b)$ I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy of the Application Form or a direct derivative of the Application Form, before applying for Shares.

No signature is required.

You should read the Prospectus dated 18 October 2005 carefully before completing this Application Form. The Corporations Act 2001 (Cth) prohibits any person from passing on this Application Form (whether in paper or electronic form) unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus (whether in paper or electronic form).

Guide to Odyssey Energy Limited Application Form

This Application Form relates to the Offer of 25,000,000 Shares in Odyssey Energy Limited at \$0.20 per Share pursuant to the Prospectus dated 18 October 2005. The expiry date of the Prospectus is the date which is 13 months after the date of the Prospectus. The Prospectus contains information about investing in the Shares of the Company and it is advisable to read this document before applying for Shares. A person who gives another person access to this Application Form must at the same time and by the same means give the other person access to the Prospectus, and any supplementary prospectus (if applicable). While the Prospectus is current, the Company will send paper copies of the Prospectus, and any supplementary prospectus (if applicable), and a Application Form, on request and without charge.

Please complete all relevant sections of the Application Form using BLOCK LETTERS. These instructions are cross referenced to each section of the Application Form. Further particulars and the correct forms of registrable titles to use on the Application Form are contained below.

Insert the number of Shares you wish to apply for. The Application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 А Shares.
R Insert the relevant amount of Application Monies. To calculate your Application Monies, multiply the number of Shares applied for by the sum of \$0.20
Ċ Write the full name you wish to appear on the statement of holdings. This must be either your own name or the name of the company. Up to three joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applicants using the wrong form of title may be rejected. Clearing House Electronic Sub-Register System (CHESS) participants should complete their name and address in the same format as that are presently registered in the CHESS system.
D. Enter your Tax File Number (TFN) or exemption category. Where applicable, please enter the TFN for each joint Applicant. Collection of TFN(s) is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application.
Ë Please enter your postal address for all correspondence. All communications to you from the share registry will be mailed to the person(s) and address as shown. For Joint Applicants, only one address can be entered.
Please enter your telephone number(s), area code, email address and contact name in case we need to contact you in relation to your F Application.
The Company will apply to ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned G subsidiary of Australian Stock Exchange Limited.

If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold securities allotted to you under this Application in uncertificated form on the CHESS subregister, complete Section G or forward your Application Form to your sponsoring participant for completion of this section prior to lodgement. Otherwise, leave Section G blank and on allotment, you will be sponsored by the Company and an SRN will be allocated to you. For further information refer to section 5.16 of the Prospectus.

H Please complete cheque details as requested: Make your cheque payable to "Odyssey Energy Limited - Subscription Account" in Australian currency and cross it "Not Negotiable". Your cheque must be drawn on an Australian Bank. The amount should agree with the amount shown in Section B. Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected.
Before completing the Application Form the Applicant(s) should read the Prospectus to which the Application relates. By lodging the Application $\mathbf{I}$ Form, the Applicant(s) agrees that this Application is for Shares in the Company upon and subject to the terms of this Prospectus, agrees to take any number of Shares equal to or less than the number of Shares indicated in Section A that may be allotted to the Applicant(s) pursuant to the Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form. Privacy - Please refer to Section 13.3 of the Prospectus for details about the collection, holding and use of your personal information. If you do not provide the information required on this Application Form, the Company may not be able to accept or process your Application. Correct form of Registrable Title

Note that only legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable title may be included by way of an account designation if completed exactly as described in the example of correct forms of registrable title below:

Type of investor	Correct form of	Incorrect form of
	Registrable Title	Registrable Title
Individual	Mr John Alfred Smith	JA Smith
Use names in full, no initials
Minor (a person under the age of 18)	John Alfred Smith	Peter Smith
Use the name of a responsible adult; do not use the name of a minor.
Company	ABC Ptv Ltd	ABC P/L
Use company title, not abbreviations		ABC Co
Trusts	Mrs Sue Smith	Sue Smith Family
Use trustee(s) personal name(s), do not use the name of the trust		Trust
Deceased Estates	Ms Jane Smith	Estate of late John
Use executor(s) personal name(s), do not use the name of the deceased		Smith
Partnerships	Mr John Smith and Mr Michael	John Smith and Son
Use partners personal names, do not use the name of the partnership	Smith

Return your completed Application Form to: By Facsimile 61 8 9323 2033 Computershare Investor Services

61 8 9225 5511 Argonaut Securities Pty Ltd By Mail Odyssey Energy Limited C/- Computershare Investor Services Pty Ltd GPO Box D182 Perth WA 6840 Australia

Or Argonaut Securities Pty Ltd GPO Box 2553 Perth WA 6001

By delivery C/- Computershare Investor Services Pty Ltd Level 2 45 St Georges Terrace Perth WA 6000 Australia Or Argonaut Securities Pty Ltd Level 29, Allendale Square 77 St Georges Terrace Perth WA 6000

Application Forms must be received no later than 5.00 pm WST time on 15 November 2005.

	ODYSSEY ENERGY LIMITED APPLICATION FORM	Share Registrars use only
	Please read all instructions on reverse of this form	Broker reference - stamp only
A	Number of Shares applied for (Minimum 10000 Shares and then multiples of 1,000 Shares).		Total amount payable в cheque(s) to equal this amount
		at $$0.20$ each =	A\$	Adviser Code Broker code
	you may be allocated all of the Shares above or a lesser number
С			Full name details title, given name(s) (no initials) and surname or company name	$\mathbf D$ Tax file number(s) Or exemption category
	Name of applicant 1			Applicant 1/company

	Name of joint applicant 2 or			Joint applicant 2/trust

	Name of joint applicant 3 or			Joint applicant 3/exemption

Е Number/street	Full postal address			Contact details F. Contact name
				Contact daytime telephone number

Suburb/town			State/postcode	Contact email address

G H Drawer	CHESS HIN (if applicable) Cheque payment details. please fill out your cheque details and make your cheque payable to: "Odyssey Energy Limited - Subscription Account" Cheque number BSB number Account number Total amount of cheque

J Return of the Application Form and the Application Monies will constitute your offer to subscribe for Shares in the Company. I/We declare that:

this Application is completed according to the declaration/appropriate statements on the reverse of this form and $(a)$ agree to be bound by the Constitution of the Company; and

I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or $(b)$ a copy of the Application Form or a direct derivative of the Application Form, before applying for Shares.

No signature is required.

Guide to Odyssey Energy Limited Application Form

Insert the number of Shares you wish to apply for. The Application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 A Shares.
R Insert the relevant amount of Application Monies. To calculate your Application Monies, multiply the number of Shares applied for by the sum of \$0.20
C Write the full name you wish to appear on the statement of holdings. This must be either your own name or the name of the company. Up to three joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applicants using the wrong form of title may be rejected. Clearing House Electronic Sub-Register System (CHESS) participants should complete their name and address in the same format as that are presently registered in the CHESS system.
Enter your Tax File Number (TFN) or exemption category. Where applicable, please enter the TFN for each joint Applicant. Collection of TFN(s) is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application.
Please enter your postal address for all correspondence. All communications to you from the share registry will be mailed to the person(s) and F address as shown. For Joint Applicants, only one address can be entered.
Ë Please enter your telephone number(s), area code, email address and contact name in case we need to contact you in relation to your Application.
G The Company will apply to ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited.

Please complete cheque details as requested: Make your cheque payable to "Odyssey Energy Limited - Subscription Account" in Australian currency and cross it "Not Negotiable". Your cheque must be drawn on an Australian Bank. The amount should agree with the amount shown in Section B. Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected.
Before completing the Application Form the Applicant(s) should read the Prospectus to which the Application relates. By lodging the Application Form, the Applicant(s) agrees that this Application is for Shares in the Company upon and subject to the terms of this Prospectus, agrees to take any number of Shares equal to or less than the number of Shares indicated in Section A that may be allotted to the Applicant(s) pursuant to the Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form. Privacy - Please refer to Section 13.3 of the Prospectus for details about the collection, holding and use of your personal information. If you do not provide the information required on this Application Form, the Company may not be able to accept or process your Application. Correct form of Registrable Title

Dr Antropring at region enterpressional Type of investor	Correct form of Registrable Title	Incorrect form of Registrable Title
Individual	Mr John Alfred Smith	JA Smith
Use names in full, no initials
Minor (a person under the age of 18)	John Alfred Smith	Peter Smith
Use the name of a responsible adult; do not use the name of a minor.	≺Peter Smith>
Company	ABC Pty Ltd	ABC P/L
Use company title, not abbreviations		ABC Co
Trusts	Mrs Sue Smith	Sue Smith Family
Use trustee(s) personal name(s), do not use the name of the trust		Trust
Deceased Estates	Ms Jane Smith	Estate of late John
Use executor(s) personal name(s), do not use the name of the deceased	≺Est John Smith A/C>	Smith
Partnerships	Mr John Smith and Mr Michael	John Smith and Son
Use partners personal names, do not use the name of the partnership	Smith

Return your completed Application Form to:

By Facsimile By Mail By delivery 61 8 9323 2033 Odyssey Energy Limited C/- Computershare Investor Services Computershare Investor Services C/- Computershare Investor Services Pty Ltd Pty Ltd Level 2 Or GPO Box D182 45 St Georges Terrace Perth WA 6840 Perth WA 6000 61 8 9225 5511 Australia Australia Argonaut Securities Pty Ltd Or Or Argonaut Securities Pty Ltd Level 29, Allendale Square Argonaut Securities Pty Ltd GPO Box 2553 77 St Georges Terrace Perth WA 6001 Perth WA 6000 Application Forms must be received no later than 5.00 pm WST time on 15 November 2005.

AI assistant

ODYSSEY GOLD LTD — Capital/Financing Update 2005

65484_rns_2005-10-31_9d87d07d-d43a-4c84-a5b0-36376be0894a.pdf

ODYSSEY

Berger Car Colla

CORPORATE DIRECTORY

CONTENTS

IMPORTANT NOTICES

How to use this Prospectus

$\mathbf 1$ Letter from the Board

$2.$ Summary of the Offer

$2.1$ The Offer

$2.2$ Indicative Timetable

Notes

$2.3$ Condition Precedent

2.4 Capital Structure

$2.5$ Enquiries

$31$ Company and North Helper Gas Project Overview

$3.1$ Background

$3.2$ The North Helper Gas Project

$3.3$ Location & History

$3.4$ Geology Objective Gas Zones

Results of Work to Date $3.5$

$3.6$ Proposed Exploration and Development Plan

$3.7$ Farmout Agreements

Other Matters & Risk Factors $3.8$

3.9 Expenditure Summary

$3.10$ Summary of Transaction to Acquire 15% WI

$3.11$ Working Interest

$\overline{\mathbf{4}}$ . Board and Management

$4.1$ Directors' Profiles

Mr lan Middlemas

Mr Mark O'Clerv

Mr Mark Pearce

4.2 Company Secretary

Mr Shane Cranswick

$4.3$ Technical Consultants

Mr Mark O'Clery

Mr Jeff Skates

44 Corporate Governance

5. Details of the Offer

$5.1$ The Offer

$5.2$ Offer Period

$5.3$ Minimum Application

5.4 Minimum Subscription

$5.5$ Objectives of the Offer

5.6 Use of the Funds

5.7 How to Apply

5.8 Where to send your Application Form

5.9 Application Monies

$5.10$ Company Discretion

$5.11$ Allotment

$5.12$ Capital Structure

5.13 Brokers

5.14 Financial Prospects, Dividends and Risks

$5.15$ ASX Listing

5.16 CHESS

5.17 Applicants Outside Australia

5.18 Restricted Securities

5.19 Withdrawal

6. Capital and Corporate Structure

$6.1$ Proposed Capital Structure

Shares

Options

$6.2$ Corporate Structure

$\overline{7}$ . Independent Geologist's Report

INDEPENDENT GEOLOGIST'S REPORT

Maps and Charts

$7.1$ Introduction

Summary of Production in the Drunkards Wash, Helper and Buzzard Bench Fields, Utah PI Dwights Data Base

$7.2$ Geologic Setting

$7.3$ Nearby Oil and Gas Fields

$7.4$ Objective Gas Zones, Marion Wells at Helper

$7.5$ Acreage Position

$7.6$ Field Operations

$7.7$ Gas Markets and Outlets

7.8 Proposed Development Plan and Costs

7.9 Declarations

$7.10$ Previous Geological Reports

$7.11$ Independence

ODYSSEY GOLD LTD Capital/Financing Update 2005

$3₁$ Company and North Helper Gas Project Overview

$10_l$ Material Contracts