PETRATHERM LIMITED

ACN 106 806 884

NON-RENOUNCEABLE PRO-RATA ENTITLEMENT OFFER

1 for 1 non-renounceable, pro-rata entitlement offer at an offer price of $0.01 per share to raise up to approximately $1,770,672

The Offer is partially underwritten by Taylor Collison Limited. Refer to Section 5.1 for details regarding the terms and conditions of the Underwriting Agreement.

The Entitlement Offer opens on 23 October 2013. The Entitlement Offer closes at 5:00pm Adelaide time on 7 November 2013 (unless extended).

Important Notice

This Offer Booklet is an important document that should be read in its entirety.

This Offer Booklet is not a prospectus or other disclosure document under the Corporations Act and it does not contain all of the information an investor would find in a prospectus or other disclosure document, or which may be required to make an informed decision regarding or about the rights attaching to the New Shares offered by this Offer Booklet.

If you do not understand the contents of this Offer Booklet, you should consult your financial or other professional adviser.

Any investment in Petratherm Limited should be considered speculative.

IMPORTANT INFORMATION 3
LETTER FROM THE CHAIRMAN 5
SECTION 1 – KEY INFORMATION 6
SECTION 2 - DETAILS OF THE ENTITLEMENT OFFER 8
SECTION 3 - REQUIRED ACTIONS 12
SECTION 4 - RISK FACTORS 16
SECTION 5 - ADDITIONAL INFORMATION 20
SECTION 6 - DEFINITIONS 26
CORPORATE DIRECTORY 28

IMPORTANT INFORMATION

This Offer Booklet is dated 10 October 2013.

Capitalised terms in this Offer Booklet are defined in Section 6 (Definitions).

This Offer Booklet is issued pursuant to section 708AA of the Corporations Act for the offer of New Shares without disclosure to investors under Part 6D.2 of the Corporations Act. This Offer Booklet was lodged with the ASX on 10 October 2013. ASX does not take any responsibility for the contents of this Offer Booklet.

This Offer Booklet does not contain all of the information which a prospective investor may require to make an informed investment decision or which would otherwise be required under Australian law or any other law to be disclosed in a prospectus.

Eligible Shareholders should rely on their own knowledge of the Company, refer to disclosures made by the Company to the ASX and consult their professional advisers before deciding whether to apply for New Shares. Announcements made by the Company to the ASX are available from the ASX website http://www.asx.com.au or from the Company's website http://www.petratherm.com.au.

The information in this Offer Booklet does not constitute a securities recommendation or financial product advice.

Offering Restrictions

No action has been taken to register or qualify the New Shares or the Entitlement Offer, or otherwise to permit an offering of the New Shares in any jurisdiction other than Australia or New Zealand or to a person that is not an Eligible Shareholder.

The Company has determined, having regard to the requirements and costs of compliance with the securities offering laws of other jurisdictions, that it will not make offers to Ineligible Shareholders.

This Offer Booklet and accompanying Entitlement and Acceptance Form do not, and are not intended to, constitute an offer in any place in which, or to any person whom, it would not be lawful to make such an offer. The distribution of this Offer Booklet and accompanying Entitlement and Acceptance Form may be restricted by law and persons who come into possession of this Offer Booklet and accompanying Entitlement and Acceptance Form should seek advice and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws.

Information publicly available

As noted above, information about the Company is publicly available and can be obtained from ASIC and ASX (including its website: www.asx.com.au). The contents of any website screen, ASIC or ASX filing by the Company are not incorporated into this Offer Booklet and do not constitute part of the Entitlement Offer. Regardless, this Offer Booklet is intended to be read in conjunction with the publicly available information in relation to the Company which has been lodged with ASX. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest in New Shares or the Company. Some of the risk factors that should be considered by potential investors are outlined in Section 4 of this Offer Booklet.

Disclaimer

No person is authorised to give any information or make any representation in connection with the Entitlement Offer described in this Offer Booklet, which is not contained in this Offer Booklet. Any information or representation not contained in this Offer Booklet may not be relied on as having been authorised by the Company in connection with the Entitlement Offer.

ASX and ASIC do not take any responsibility for the contents of this Offer Booklet.

Entire agreement

The terms contained in this Offer Booklet and the accompanying Entitlement and Acceptance Form constitute the entire agreement between the Company and you as to the Entitlement Offer and your participation in the Entitlement Offer to the exclusion of all prior representations, understandings and agreements between the Company and you.

Governing law

This Offer Booklet, the Entitlement Offer and the contracts formed on acceptance of the Applications are governed by the laws applicable in South Australia, Australia. Each Applicant for New Shares submits to the non-exclusive jurisdiction of the Courts of South Australia, Australia.

Privacy

If you complete an Application for New Shares, you will be providing personal information to the Company (directly or via the Share Registry). The Company will collect, hold and will use that information to assess your Application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies (including the Australian Taxation Office), authorised securities brokers, print service providers, mail houses and the Share Registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or the Share Registry if you wish to do so at the relevant contact numbers set out in this Offer Booklet.

The collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules and Procedures.

You should note that if you do not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process your Application.

LETTER FROM THE CHAIRMAN

10 October 2013

Dear Shareholder

On behalf of the board of directors of Petratherm Limited (Petratherm or the Company), I would like to invite you to participate in the 1 for 1 non-renounceable pro-rata entitlement offer of ordinary shares (New Shares) at an offer price of $0.01 per New Share (Offer Price) to raise gross proceeds of up to approximately $1,770,672 (Entitlement Offer). The Entitlement Offer is partially underwritten by Taylor Collison Limited to the extent of $600,000.

The Entitlement Offer closes at 5:00pm Adelaide time on 7 November 2013 (Closing Date). If you would like to participate, you need to ensure that either:

your completed personalised Entitlement and Acceptance Form and Application Monies are received by Computershare Investor Services Pty Limited; or
you have paid your Application Monies via BPAY®,

in line with the instructions that are set out on the personalised Entitlement and Acceptance Form and in this Offer Booklet, by 5:00pm Adelaide time on 7 November 2013.

If you are an Eligible Shareholder, you may do any one of the following (Options):

take up all of your Entitlement;
take up all of your Entitlement and also apply for Additional New Shares in excess of your Entitlement;
take up part of your Entitlement, in which case your shareholding in the Company will be diluted by the extent to which you do not take up your full Entitlement; or
do nothing and allow your Entitlement to lapse. If you do nothing your percentage holding in the Company will be diluted.

Further details on how to submit your Application and your Options are set out in this Offer Booklet. You should consult your stockbroker, accountant or other independent professional adviser to evaluate whether or not to participate in the Entitlement Offer.

I encourage you to carefully read this Offer Booklet.

Should you require further assistance, please contact Petratherm on (08) 8274 5000 at any time from 9:00am to 5:00pm Adelaide time Monday to Friday.

For further information on your Entitlement, please contact your professional adviser or Petratherm's share registry, Computershare Investor Services Pty Limited on 1300 556 161 from 8:30am to 5:00pm Adelaide time Monday to Friday.

On behalf of the Company, I thank you for your continued support of Petratherm.

Yours faithfully

Derek Carter Non-Executive Chairman

SECTION 1 – KEY INFORMATION

1.1 Key details of Equity Raising

Offer Price per New Share	$0.01
Entitlement under the Entitlement Offer	1 New Share for every 1 ExistingShare held as at the Record Date
Total number of Shares on issue immediately before theEntitlement Offer	177,067,166
Options currently on issue	35,103,711*
Number of New Shares offered under the EntitlementOffer	177,067,166
Amount raised under the Entitlement Offer	$1,770,672 (before costs)**
Total number of Shares on issue immediately aftercompletion of the Entitlement Offer	354,134,332***

*The Options have exercise prices of between $0.03 and $0.50. The Board considers it reasonable to assume that none of the Options will be exercised before the Record Date given the Company's share price as at close of trading on 9 October 2013 of $0.021.

**Assuming the Offer is fully subscribed.

***Assuming the Offer is fully subscribed and none of the Options currently on issue in the Company are exercised before the Record date.

1.2 Indicative Timetable

The following are key dates relating to the Entitlement Offer that you need to be aware of:

Activity	Date
Announcement of Entitlement Offer and Appendix 3B lodgedwith ASX	9 October 2013
Offer Booklet lodged with ASX	10 October 2013
Shareholder notice despatched	11 October 2013
Shares trade on an "ex" Entitlement basis	14 October 2013
Record Date for eligibility to participate in the EntitlementOffer	18 October 2013 at 7:00pmAdelaide time
OfferBookletandEntitlementandAcceptanceFormdespatched to Shareholders	23 October 2013
Opening Date for the Entitlement Offer	23 October 2013

Activity	Date
Closing Date for the Entitlement Offer	7 November 2013 at 5:00pmAdelaide time
Securities quoted on a deferred settlement basis	8 November 2013
Notify ASX of under subscriptions	12 November 2013
Issue of New Shares issued under the Entitlement Offer anddeferred settlement trading ends	15 November 2013
Normal ASX trading for New Shares commences	18 November 2013
Despatch of holding statements for New Shares issued underthe Entitlement Offer	20 November 2013

The above dates are indicative only and may change without notice. The Directors in conjunction with the Underwriter, reserve the right to amend this indicative timetable at any time (subject to the Corporations Act and the Listing Rules), to extend the Closing Date, to accept late Entitlement and Acceptance Forms either generally or in particular cases, to close the Entitlement Offer early or to cancel the Entitlement Offer without prior notice in their absolute discretion. The commencement of quotation of the New Shares is subject to confirmation from the ASX.

1.3 Use of funds

The Company is undertaking the Entitlement Offer for the primary purpose of:

(a) funding new project acquisitions or joint ventures;
(b) funding advancement of the Paralana Project; and
(c) providing working capital to the Company generally.

For further information, please see Section 2.3.

2 DETAILS OF THE ENTITLEMENT OFFER

2.1 Overview of the Entitlement Offer

Petratherm is undertaking a non-renounceable 1 for 1 pro-rata Entitlement Offer.

If you are an Eligible Shareholder you may apply for 1 New Share for every 1 Existing Share held at 7:00pm Adelaide time on 18 October 2013 (Record Date). This is called your Entitlement.

On Application, the Applicant must pay the Offer Price of $0.01 for each New Share the Applicant wishes to apply for in full.

Assuming that the Entitlement Offer is fully subscribed, on completion of the Entitlement Offer the Company will:

(a) issue 177,067,166 New Shares; and
(b) have raised $1,770,672 (before costs).

The Entitlement Offer is partially underwritten by Taylor Collison to the extent of $600,000. Under the terms of the underwriting agreement between the Company and Taylor Collison (Underwriting Agreement), the Underwriter may in consultation with the Company procure sub-underwriters to sub-underwrite a portion of the New Shares as the Underwriter thinks fit.

Eligible Shareholders will be sent the Offer Booklet and a personalised Entitlement and Acceptance Form.

Eligible Shareholders are invited to subscribe for all or part of their Entitlement under the Entitlement Offer and may also apply for Additional New Shares. To the extent that Shareholders do not participate in the Entitlement Offer, their percentage shareholding in the Company will be diluted.

2.2 Purpose of the Equity Raising

Petratherm's cash position at the end of June 2013 was approximately $877,345. Assuming that the Offer is fully subscribed, and provided that the Underwriting Agreement is not terminated, the Entitlement Offer will provide the Company with additional funds of $1,770,672 (before costs).

On this basis, on completion of the Entitlement Offer (before costs), the Company will have approximately $2,648,017 million in cash (made up of $1,770,672 raised under the Entitlement Offer and $877,345 cash balances at 30 June 2013 (before expenses incurred from 1 July 2013 to the date of this Offer Booklet).

2.3 Use of funds

As noted in Section 1, the Company is undertaking the Entitlement Offer for the primary purpose of:

(a) funding new project acquisitions or joint ventures;
(b) funding advancement of the Paralana Project; and
(c) providing working capital to the Company generally.

The funds raised under the Entitlement Offer, combined with those noted in Section 2.2 will be allocated as set out in the table below:

Item	Anticipated funds required ($)
Funding new project acquisitions or joint ventures	$500,000
Funding advancement of the Paralana Project	$1,348,017
Working capital	$800,000

2.4 New Shares

The Offer Price is payable in full by Eligible Shareholders on acceptance of the Entitlement Offer.

The Directors may at any time decide to withdraw this Offer Booklet and the Entitlement Offer made under it, in which case the Company will return all Application Monies (without interest) as soon as practicable.

(a) Rank

The New Shares will be fully paid ordinary shares and will rank equally in all respects from the date of allotment with the Existing Shares.

(b) Issue

New Shares taken up under the Entitlement Offer are expected to be issued on 15 November 2013 (subject to any changes in the timetable set out in Section 1, at the discretion of the Directors and the Underwriter, having regard to the Corporations Act and Listing Rules).

It is the responsibility of Applicants to determine their allocation prior to trading in New Shares. Applicants who sell New Shares before they receive their new holding statements following the issue of New Shares to them will do so at their own risk.

(c) ASX quotation of New Shares

The Company will apply to ASX for official quotation of the New Shares. If ASX does not grant permission for official quotation of the New Shares, all Application Monies will be returned, without interest, as soon as practicable.

2.5 Entitlements

The number of New Shares to which Eligible Shareholders are entitled is shown on the Entitlement and Acceptance Form accompanying this Offer Booklet.

Eligible Shareholders may accept all, all and Additional New Shares, part or none of their Entitlement.

If Eligible Shareholders choose not to accept any of their Entitlements, then they are not required to do anything.

To the extent that Shareholders do not participate in the Entitlement Offer, their shareholdings in the Company will be diluted by that portion, assuming that the Offer is fully subscribed.

Detailed instructions on how to accept all or part of your Entitlement are set out in Section 3.

2.6 Additional New Shares

Eligible Shareholders who apply for their full Entitlement, may also apply for Additional New Shares. Applicants for Additional New Shares (Additional Subscribers) will be allocated Additional New Shares from any Shortfall, which comprise New Shares equivalent to the number not taken up by Eligible Shareholders together with any New Shares that would have been offered to Ineligible Shareholders if they had been eligible to participate in the Entitlement Offer (the Shortfall).

Please note that Additional New Shares will only be allocated to you if there are sufficient New Shares available in the Shortfall, subject to any scale-back that the Company may apply (in its absolute discretion) in consultation with the Underwriter. If you apply for Additional New Shares there is no guarantee you will be allocated any. If you apply for Additional New Shares and are not allocated any or less than the number you applied for, the Application Monies in relation to those Additional New Shares will be returned to you, without interest, as soon as practicable.

2.7 Shortfall

If any Shortfall remains after the Closing Date, the Directors in conjunction with the Underwriter, reserve the right to place any Shortfall with:

(a) the Underwriter or any sub-underwriters (as applicable) as described further at Section 5.1;
(b) Additional Subscribers in accordance with Section 2.6; or
(c) any other parties selected by the Directors in conjunction with the Underwriter.

Pursuant to Listing Rule 7.2 (exception 2), any allocation of the Shortfall to the Underwriter or any sub-underwriter (if appointed) in accordance with the Underwriting Agreement, will not count towards the Company's 15% threshold under Listing Rule 7.1, provided the Underwriter receives the New Shares within 15 business days after the close of the Entitlement Offer.

Pursuant to Listing Rule 7.2 (exception 3), any allocation of the Shortfall to persons other than the Underwriter or any sub-underwriter (if appointed) in accordance with the Underwriting Agreement, will not count towards the Company's 15% threshold under Listing Rule 7.1, provided that the Company makes the issue within three months after the close of the Entitlement Offer and the issue price is not less than the price at which the Shares were offered under the Entitlement Offer. The Directors in conjunction with the Underwriter reserve the right to issue the Shortfall at their discretion.

2.8 Underwriting

The Underwriter has agreed to partially underwrite the Entitlement Offer pursuant to the Underwriting Agreement to the extent of $600,000. A summary of the Underwriting Agreement is set out in Section 5.1.

2.9 Persons with more than one holding

If you have more than one holding of Shares, you will be sent more than one personalised Entitlement and Acceptance Form, and you will have separate Entitlements for each separate holding.

If you have more than one shareholding of Shares and consequently receive more than one Entitlement and Acceptance Form, when taking up your Entitlement in respect of one of those shareholdings, only use the unique reference number specific to that shareholding as set out on the applicable Entitlement and Acceptance Form. Do not use the same reference number for more than one of your shareholdings as this can result in your Application Monies being applied to your Entitlement in respect of only one of your shareholdings (with the result that any application in respect of your remaining shareholdings will not be recognised as valid).

2.10 Opening and Closing dates

The Entitlement Offer will open for receipt of acceptances on 23 October 2013.

The Closing Date and time for acceptances and payments under the Entitlement Offer is 7 November 2013 at 5:00pm Adelaide time, subject to the Directors, in conjunction with the Underwriter, varying these dates (in accordance with the Corporations Act and the Listing Rules). The Company must receive your Entitlement and Acceptance Form and payment before the Closing Date otherwise the Entitlement Offer as it applies to you as an Eligible Shareholder will lapse. Further details on the timetable for the Entitlement Offer are set out in Section 1 of this Offer Booklet.

2.11 Market Prices for Shares on ASX

The lowest and highest market prices of the Shares of the Company on ASX during the 3 months immediately preceding the date of this Offer Booklet were $0.02 and $0.034 respectively.

The closing average price for Shares on the ASX over the 30 trading days preceding the date of announcement of the Entitlement Offer was $0.03. The Issue Price therefore represents a discount of approximately 67% to the 30 day closing average price for Shares.

2.12 Application Monies

Pending the allotment of the New Shares or return of Application Monies, the Application Monies will be held in trust for Applicants. No interest will be paid on any Application Monies received or refunded.

2.13 Foreign Shareholders

The New Shares being offered under this Offer Booklet are being offered to Eligible Shareholders only and will not be offered to shareholders resident outside of Australia or New Zealand.

The Company has determined that it is not economically viable and it is unreasonable for it to make offers to Shareholders resident outside of Australia or New Zealand, having regard to the amount seeking to be raised under the Entitlement Offer and the substantial costs involved in complying with the legal and regulatory requirements in those jurisdictions.

In compliance with Listing Rule 7.7, the Company will send each Ineligible Shareholder details of this Entitlement Offer and advise them that the Company will not offer New Shares to them.

New Shares to which any Ineligible Shareholder would otherwise be entitled will form part of the Shortfall (if any) and will be dealt with by the Underwriter and the Company in accordance with the Underwriting Agreement.

2.14 Regular Reporting and disclosure

The Company is a disclosing entity for the purposes of the Corporations Act and as such is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules. These obligations require the Company to notify ASX of information about specific events and matters as they arise for the purposes of ASX making that information available to the market.

In particular, the Company has an obligation (subject to certain limited exceptions) to notify ASX once it is, or becomes, aware of information concerning the Company which a reasonable person would expect to have a material effect on the price or value of the Company's securities. All announcements made by the Company are available from the ASX website asx.com.au or the Company's website http://www.petratherm.com.au.

2.15 No rights trading

This Entitlement Offer is made on a non-renounceable basis. Eligible Shareholders who are registered as at the Record Date may not renounce, sell, transfer or deal with all or any part of their Entitlement to the New Shares which they do not wish to accept.

If you do not take up your Entitlement by the Closing Date, the Entitlement Offer will lapse, your shareholding in the Company will be diluted and any Shortfall will be dealt with in accordance with Section 5 of this Offer Booklet.

2.16 Enquiries

If you have any questions concerning your Entitlement or this Offer Booklet, please contact your professional adviser or the Share Registry, Computershare Investor Services Pty Limited on 1300 556 161 (within Australia) or + 61 3 9415 4000 (outside Australia), from 8:30am to 5:00pm Adelaide time, Monday to Friday.

3 REQUIRED ACTIONS

3.1 Eligible Shareholders

If you are an Eligible Shareholder you may (Options):

(a) take up all of your Entitlement (Option 1):
(b) take up all of your Entitlement and subscribe for Additional New Shares (Option 2);
(c) take up part of your Entitlement (Option 3); or
(d) decline to exercise your Entitlement and do nothing (Option 4).

3.2 Acceptance

If you decide to take up all or part of your Entitlement or all of your Entitlement and subscribe for Additional New Shares (Options 1 to 3), please complete and return the Entitlement and Acceptance Form with the requisite Application Monies or pay your Application Monies via BPAY® by following the instructions set out in Section 3.4 and on the Entitlement and Acceptance Form.

The Company will treat you as applying for as many New Shares as your payment will pay for in full up to your full Entitlement and, in respect of amounts received by the Company in excess of your full Entitlement (Excess Amount), may treat your Application as applying for as many Additional New Shares as your Excess Amount will pay for in full, subject to any scale-back the Company in conjunction with the Underwriter may determine to implement in its absolute discretion in respect of Additional New Shares.

Acceptance and full payment of $0.01 per New Share that you wish to apply for must be received before 5:00pm Adelaide time on 7 November 2013. Further instructions for completion and lodgement of acceptances are set out on the Entitlement and Acceptance Form, and in this Section 3.

3.3 Deadline for receiving acceptances

Eligible Shareholders should ensure that their Entitlement and Acceptance Form and Application Monies are mailed early to ensure they arrive at the postal address noted below by 5:00pm Adelaide time on 7 November 2013 (or such other date as may be determined by the Directors and the Underwriter in accordance with the Underwriting Agreement, Listing Rules and the Corporations Act).

3.4 Action Required

(a) Option 1: All of your Entitlement

If you wish to take up all of your Entitlement, use the BPAY® facility as outlined in the accompanying Entitlement and Acceptance Form or complete the Entitlement and Acceptance Form in accordance with the instructions set out on the Entitlement and Acceptance Form and send the Entitlement and Acceptance Form together with your cheque for the amount shown on the form so that it reaches the Share Registry by no later than 5.00pm Adelaide time on 7 November 2013.

The mailing details for the Share Registry are as follows:

Computershare Investor Services Pty Limited GPO Box 2987 Adelaide SA 5001 Australia

Cheques and drafts should be made payable to 'Petratherm Limited' and crossed 'Not Negotiable'.

Any Excess Amounts received by the Company may be treated as you applying for as many Additional New Shares as your Excess Amount will pay for in full, subject to any scale-back the Company in conjunction with the Underwriter may determine to implement in its absolute discretion in respect of Additional New Shares.

Any Application Monies received for more than your final allocation of New Shares and Additional New Shares (only where the amount is $1.00 or greater) will be refunded as soon as practicable following the close of the Entitlement Offer. No interest will be paid on any Application Monies received or refunded.

(b) Option 2: All of your Entitlement and subscribe for Additional New Shares

If you wish to take up all of your Entitlement and subscribe for Additional Shares, use the BPAY® facility as outlined in the accompanying Entitlement and Acceptance Form or complete the enclosed Entitlement and Acceptance Form in respect of your Entitlement and the Additional New Shares you wish to take up in accordance with the instructions set out on the Entitlement and Acceptance Form and send the completed Entitlement and Acceptance Form together with your cheque for the relevant amount (being the number of New Shares you wish to take up multiplied by $0.01 per New Share) so that it reaches the Share Registry by no later than 5:00pm Adelaide time on 7 November 2013.

(c) Option 3: Part of your Entitlement

If you wish to take up part of your Entitlement, use the BPAY® facility as outlined in the accompanying Entitlement and Acceptance Form or complete the enclosed Entitlement and Acceptance Form in respect of the New Shares you wish to take up in accordance with the instructions set out on the Entitlement and Acceptance Form and send the completed Entitlement and Acceptance Form together with your cheque for the relevant amount (being the number of New Shares you wish to take up multiplied by $0.01 per New Share) so that it reaches the Share Registry by no later than 5:00pm Adelaide time on 7 November 2013.

If you decide to not take up your full Entitlement, your percentage shareholding in the Company will be diluted by the portion of your Entitlement that you do not take up.

(d) Option 4: None of your Entitlement

If you do not wish to take up any of your Entitlement, you do not need to take any action and:

(i) your Entitlement to the New Shares will lapse on the Closing Date; and
(ii) the relevant number of New Shares with respect to your Entitlement will form part of the Shortfall which will be dealt with in the manner set out in Section 2.7 of this Offer Booklet.

As the Entitlement Offer is non-renounceable, you will not receive any payment for Entitlements you do not take up. If you decide not to participate in the Entitlement Offer, you will continue to beneficially own the same number of Shares; however your percentage shareholding in the Company will be diluted by the portion of your Entitlement that you do not take up.

3.5 Closing Date

The Closing Date for the Entitlement Offer is 5:00pm Adelaide time on 7 November 2013, unless closed earlier or extended at the discretion of the Directors and the Underwriter in accordance with the Underwriting Agreement, Listing Rules and Corporations Act.

3.6 Declarations and certifications

You must make your application for New Shares and Additional New Shares in accordance with this Offer Booklet and the personalised Entitlement and Acceptance Form. Petratherm reserves the right to reject applications not made in this way.

Petratherm also reserves the right (in its absolute discretion) to reduce the number of New Shares allocated to Eligible Shareholders, or persons claiming to be Eligible Shareholders, if their claims prove to be overstated or if they or their nominees fail to provide information to substantiate their claims.

Submitting an Application constitutes a binding offer to acquire New Shares (and if applicable, Additional New Shares) on the terms and subject to the conditions set out in this Offer Booklet and Entitlement and Acceptance Form and, once lodged, cannot be withdrawn.

You do not need to sign the personalised Entitlement and Acceptance Form for it to be considered binding.

An Application may still be treated as a valid Application for New Shares (and if applicable, Additional New Shares) even if it is not completed or submitted correctly. The Company's decision whether to treat an Application as valid and how to construe, amend, complete or submit the Application is final.

By completing and returning your Entitlement and Acceptance Form with the requisite Application Monies or making a payment by BPAY®, you will be deemed to have acknowledged, represented and warranted:

(a) that you are an Eligible Shareholder and have read and understood this Offer Booklet and the personalised Entitlement and Acceptance Form and that you acknowledge the matters, and make the warranties and representations and agreements, contained in this Offer Booklet and the personalised Entitlement and Acceptance Form;
(b) that on behalf of yourself or each person on whose account you are acting that the law in your place of residence or where you have been given the Offer Booklet and Entitlement and Acceptance Form does not prohibit you from being given the Offer Booklet and Entitlement and Acceptance Form; and
(c) that you:
- (i) declare that you are eligible to participate in the Entitlement Offer;
- (ii) offer to acquire the New Shares (and if applicable, Additional New Shares) on the terms and subject to the conditions set out in this Offer Booklet;
- (iii) agree to be bound by the terms of this Offer Booklet and the provisions of the Company's constitution;
- (iv) authorise the Company to register you as the holder of the New Shares allotted to you;
- (v) declare that all details and statements in the Entitlement and Acceptance Form are complete and accurate;
- (vi) declare that you are over 18 years of age and have full legal capacity and power to perform all of your rights and obligations under the Entitlement and Acceptance Form;
- (vii) acknowledge that once the Company receives the completed Entitlement and Acceptance Form, you may not withdraw it;
- (viii) agree to apply for, and be issued with up to, the number of New Shares (and Additional New Shares, including if because of the receipt by the Company of an

Excess Amount from you) that you apply for at the Offer Price of $0.01 per New Share;

(ix) agree to be issued the number of New Shares that you apply for;
(x) authorise the Company and its respective officers or agents to do anything on your behalf necessary for the New Shares to be issued to you, including to act on instructions of the Share Registry, upon using the contact details set out in the Entitlement and Acceptance Form;
(xi) agree that the allotment of New Shares (and Additional New Shares, if applicable) to you constitutes acceptance of your Application;
(xii) acknowledge that the information contained in, or accompanying, the Offer Booklet is not investment or financial product advice or a recommendation that New Shares are suitable for you given your investment objectives, financial situation or particular needs;
(xiii) acknowledge that the New Shares have not, and will not be, registered under the securities laws in any jurisdiction and, accordingly, the New Shares may not be offered, sold or otherwise transferred in a jurisdiction outside Australia or New Zealand except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of applicable securities laws;
(xiv) agree to provide (and direct your nominee or custodian to provide) substantiation of your eligibility or of your holding of Shares upon request;
(xv) declare that you are the current registered holder of Shares and are a resident of Australia or New Zealand and are not in the United States or a U.S. Person, or acting for the account or benefit of a U.S. Person;
(xvi) agree that if in the future you decide to sell or otherwise transfer the New Shares (or Additional New Shares, if applicable), you will only do so outside the United States in a standard (regular way) brokered transaction on the ASX where neither you nor any person acting on your behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is, a person in the United States or person that is a U.S. Person or that is acting for the account or benefit of a U.S. Person, in accordance with Regulation S under the U.S. Securities Act; and
(xvii) have not, and will not, send any materials relating to the Entitlement Offer to any person in the United States or that is, or is acting for the account or benefit of, a U.S. Person.

4 RISK FACTORS

Prior to deciding whether to apply for New Shares under the Entitlement Offer, Eligible Shareholders should read this Offer Booklet in its entirety and review all announcements made by the Company to the ASX in order to gain an understanding of the Company, its activities, operations, financial position and prospects.

The risks included in this Section are key risks identified by the Board as being specific to the Company and its operations as at the date of this Offer Booklet and reasonably anticipated by the Board. It is important to note that the risks listed in this Section are not an exhaustive list of the risks relevant to the Company.

Shareholders are strongly encouraged to:

(a) rely on their own knowledge of the Company;
(b) refer to disclosures made by the Company to ASX; and
(c) consult their professional advisers,

before deciding whether to apply for New Shares.

Announcements made by the Company to ASX are available from the ASX website www.asx.com.au or from the Company's website www.petratherm.com.au.

The risks described in this Section may impact upon the Company's future performance, so the Company and its Directors have endeavoured (and will continue to do so) to take steps to safeguard the Company from, and to mitigate the Company's exposure to, these risks.

4.1 General Risks

(a) Share Market

Share market conditions may affect listed securities regardless of operating performance. Share market conditions are affected by many factors such as:

general economic outlook;
movements in, or outlook on, interest rates and inflation rates;
currency fluctuations;
commodity prices;
changes in investor sentiment towards particular market sectors; and
the demand for, and supply of, capital.

Many factors will affect the price of the New Shares including local and international stock markets, movements in commodity prices, interest rates, economic conditions and investor sentiment generally.

(b) Economic Factors

Factors such as inflation, currency fluctuation, interest rates, supply and demand and industrial disruption have an impact on operating costs, commodity prices and stock market processes. The Company's future possible revenues and Share price can be affected by these factors which are beyond the control of the Company and its Directors.

(c) Government

Changes in government, monetary policies, taxation and other laws can have a significant influence on the outlook for companies and the returns to investors.

4.2 Exploration and Development

The Company is an exploration and development company focusing on renewable geothermal energy from geothermal resources. There is a significant risk for the Company that the proposed exploration and development programs will not result in success. Exploration and development of this type, by its nature, is a high-risk endeavour and consequently there can be no assurance that exploration of the Company's project areas will result in a discovery of geothermal resources with the characteristics required to result successfully in the economic generation of power. Should a discovery be made, there is no guarantee that it will be commercially viable. While the Directors will make every effort to reduce these risks, through their experience in the exploration and oil/gas and geothermal industry, the fact remains that a commercially viable discovery is very much the exception rather than the rule and success can never be guaranteed.

Geothermal exploration, project development and energy production by their nature contain elements of significant risk. The success of these activities is dependent on many factors including:

the discovery and/or acquisition of economically recoverable renewable energy reserves;
successful conclusions to bankable feasibility studies;
access to adequate capital for project development;
investment from existing or new joint venture parties;
design and construction of efficient heat exchanger and surface infrastructure within budgets;
securing and maintaining title to tenements;
obtaining consents and approvals necessary for the conduct of exploration and energy production;
access to competent operational management and prudent financial administration;
availability and reliability of appropriately skilled and experienced employees;
cost and/or time overruns in relation to drilling;
technical problems with drilling;
adverse weather conditions over a prolonged period; and
equipment failures and other accidents.

Whether or not income will result from development of the Company's projects depends on the successful establishment of geothermal energy production. Factors including costs, depth to basement, consistency and reliability of geothermal and energy prices affect successful project development and heat extraction operations.

4.3 Native Title Risk

The Company's geothermal exploration licences (GELs) have been granted on the basis that the relevant native title legislation does not apply. The native title implications of the grant of the GELs have not been considered by any Court. There is a risk that the grant of the GELs may be challenged or ultimately held to be invalid as to native title.

4.4 Aboriginal Significant Sites

Commonwealth and State legislation obliges the Company to identify and protect sites of significance to Aboriginal custom and tradition. Some sites of significance may be identified within the Company's tenements. It is therefore possible that one or more sites of significance will exist in an area which the Company considers to be prospective. The Company's policy is to carry out clearance surveys prior to conducting exploration which would cause a disturbance to the land surface.

4.5 Environmental Risks

The petroleum and energy industries have become subject to increasing environmental responsibility and liability. The potential for liability is an ever-present risk.

Exploration work will be carried out in a way that causes minimum impact on the environment. Consistent with this, it may be necessary in some cases to undertake baseline environmental studies prior to certain exploration or drilling activities, so that environmental impact can be monitored and, as far as possible, minimised. While the Company is not aware of any endangered species of fauna and flora within any of its project areas, no baseline environmental studies have been undertaken to date, and discovery of such could prevent further work in certain areas.

4.6 No Valuation

No formal valuation has been completed of the geothermal projects or the Shares of the Company. The Company makes no representation as to the value of the geothermal assets. It is recommended that intending investors and their advisers should make their own assessment as to the value of the geothermal projects.

4.7 Regulatory Risk

The Company's activities will require compliance with various laws, both State and Commonwealth, relating to the protection of the environment and Aboriginal culture and heritage and native title. In particular, the Company will be relying upon financial incentives provided under the Renewable Energy (Electricity) Act 2000 (Cth). The introduction of new legislation, amendments to existing legislation, changes in government policy or interpretation of existing laws could have a material adverse effect on the Company. The Company's activities will also require compliance with various laws, both Regional and Federal, in Spain.

4.8 New Licences

The Company will have to obtain retention licences and production licences to extract or release geothermal energy. Native title legislation could apply to the grant of these licences and require the Company to follow the right to negotiate procedure before such tenements could be validly granted.

4.9 Electricity Market

The ability of the Company to successfully enter the commercialisation phase of its activities will depend upon its ability to sell the electricity on commercial terms and prices. There can be no assurance that the Company will ultimately be able to sell the electricity it produces on commercial terms. Electricity is a traded commodity in Australia and its long term price may rise or fall. The royalty requirements of the South Australian Government for a producing geothermal power station have not yet been determined. These requirements may have a material adverse effect on the Company. Similarly, the commercial success of the Company's activities depends on the electricity market in Spain.

4.10 Renewable Energy Certificates

The future value of renewable energy certificates depends in part on government policy and on the commercial outlook for participants in the electricity industry. The future price of renewable energy certificates may rise or fall depending upon the availability of qualifying electricity from other renewable sources and on demand for the certificates from electricity retailers. There can be no assurance that the Company will be able to obtain an adequate price for renewable energy certificates.

4.11 Future Financing

The Company will be required to raise significant additional equity and/or debt capital to finance its future exploration, development and commercialisation activities. There can be no assurance that the Company will be able to raise that finance on acceptable terms, in a timely manner or at all.

4.12 Competition

There is always the risk of competition both in relation to extraction of geothermal energy and to the creation of electricity from other renewable energy sources such as wind, hydro or solar power. Competition may have a material adverse effect on the Company.

4.13 Other Risks

While the Company will be subject to normal business risks as outlined in this Section 4, the immediate risks are associated with the accuracy of geophysical and geological modelling to provide estimations as to the actual source of the various features under examination, their depth of burial and their content of naturally occurring radiogenic material. This, together with the insulating properties of the overlying sediments, will determine the temperature of the geothermal source. In addition, risk is associated with the ability of stress modelling to provide accurate estimates of the ultimate fracture patterns that will result from the hydraulic fracturing process. This, in turn, will determine the Company's ability to develop a heat exchange process for the development of geothermal energy.

Beyond the exploration and commercialisation stages, there is unspecified long term operational risk arising from the fact that the generation of electricity from geothermal resources is an industry in its infancy. As a result, there is no long term operating history, or precedent, upon which to base a comprehensive assessment of the risks attached to the maintenance of long term (20 year plus) water re-circulation through a subsurface heat exchanger. It is possible that chemical interaction between circulating water and geothermal sources could lead to an alteration impairing the theoretical efficiency of the heat exchange mechanism and/or result in a build up of soluble compounds in re-circulated water, requiring treatment and operational expense beyond that projected in economic modelling.

5 Additional Information

5.1 Underwriting Agreement

By an Underwriting Agreement entered into between the Company and Taylor Collison Limited (Underwriter) dated 9 October 2013 (Underwriting Agreement), the Underwriter agrees to conditionally underwrite the offer for 60,000,000 Shares (Underwritten Shares) pursuant to the Entitlement Offer.

Pursuant to the Underwriting Agreement, the Company has agreed to pay the Underwriter:

(a) an underwriting fee of 5% of $600,000 (the amount underwritten pursuant to the Underwriting Agreement);
(b) a management fee of 1% of $600,000 (GST exclusive); and
(c) if the Underwriter places Shares that were not taken up under the Entitlement Offer, a placement fee of 5% and a management fee of 1% (GST exclusive) of the gross amount raised by the placement of those Shares.

In addition to the fees payable by the Company to the Underwriter set out above, the Company has agreed to pay and indemnify the Underwriter against and in relation to, all reasonable costs and expenses of and incidental to the offer of Shares under the Entitlement Offer (Offer) and the issue of the Underwritten Shares (Issue), up to a maximum of $25,000, provided that the Underwriter will obtain the Company's approval prior to incurring any individual expense greater than $2,000 or any legal costs.

In the event that the Issue does not proceed for any reason, including termination of the Underwriting Agreement (excluding failure by the Underwriter to perform its obligations under the Underwriting Agreement), the Company has agreed to reimburse and indemnify the Underwriter in relation to all its reasonable costs and expenses in relation to the Offer, up to the date of termination of the Underwriting Agreement or the date upon which the Issue is otherwise brought to an end (Termination Date), and, in the case of costs and expenses relating to subsequent investigations, enquiries or legal proceedings by ASIC, ASX or any other authority or agency at any time after the Termination Date.

The obligation of the Underwriter to underwrite the Offer is subject to certain events of termination. The Underwriter may terminate its obligations under the Underwriting Agreement in the event of any of the termination events set out below:

(a) (Documents): the Company does not lodge the Offer Booklet on the lodgement date (or other date agreed to by the Underwriter) or the Offer is withdrawn by the Company; or
(b) (No Listing Approval): Listing approval has not been granted (by ASX) by the Shortfall Notice Deadline Date (as defined in the Underwriting Agreement) or, having been granted, is subsequently withdrawn, withheld or qualified; or
(c) (Corrective Disclosure):
- (i) the Underwriter, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of an occurrence as described in clause (i)(4) below, forms the view on reasonable grounds that a corrective document should be lodged with ASX to comply with the Corporations Act and the Company fails to lodge a corrective document in such form and content and within such time as the Underwriter may reasonably require; or
(ii) the Company lodges a corrective document without the prior written agreement (such agreement not to be unreasonably withheld) of the Underwriter; or
(d) (Non-compliance with disclosure requirements): it transpires that the Offer Booklet does not contain all the information required by the Corporations Act;
(e) (Misleading Documents): it transpires that there is a statement in the Offer Booklet that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Offer Booklet or if any statement in the Offer Booklet becomes misleading or deceptive or likely to mislead or deceive or if the issue of the Offer Booklet is or becomes misleading or deceptive or likely to mislead or deceive;
(f) (Restriction on allotment): the Company is prevented from allotting the Underwritten Shares within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi governmental agency or authority;
(g) (ASIC application): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Offer, the Shortfall Notice Deadline Date (as defined in the Underwriting Agreement) has arrived, and that application has not been dismissed or withdrawn;
(h) (Market Movement): the ASX All Ordinaries Index is, at any time at a level which is 95.0% or less than the level at the close of trading on the date of the Underwriting Agreement;
(i) (Termination Events): any of the following events occurs:
- (i) (Default): default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;
- (ii) (Incorrect or untrue representation): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;
- (iii) (Contravention of constitution or Act): a contravention by the Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;
- (iv) (Adverse change): an event occurs which gives rise to a Material Adverse Effect (as defined in the Underwriting Agreement) after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, losses, prospects, business or operations of the Company;
- (v) (Misleading information): any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Issue or the affairs of the Company is or becomes misleading or deceptive or likely to mislead or deceive;
- (vi) (Change in Act or policy): there is introduced, or there is a public announcement of a new proposal to introduce, into the Parliament of Australia or the State of South Australia any new Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State of South Australia authority adopts or announces a

new proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy that has not previously been publicly disclosed;

(vii) (Prescribed Occurrence): any of the following occurs:

(A) the Company converting all or any of its shares into a larger or smaller number of shares;
(B) the Company resolving to reduce its share capital in any way;
(C) the Company:
- (i) entering into a buy back agreement; or
- (ii) resolving to approve the terms of a buy back agreement under section 257C or 257D of the Corporations Act;
(D) the Company making an issue of, or granting an option to subscribe for, any of its shares or any other securities, or agreeing to make such an issue or grant such an option, other than the issue of securities in accordance with the Rights Issue, any securities issued or granted pursuant to any incentive plan or scheme for the issue of securities to employees or officers of the Company, any securities issued as a result of a pro rata offering to existing shareholders of the Company, any securities issued on conversion of convertible securities that are on issue at the date of the Underwriting Agreement and any securities issued with the prior written consent of the Underwriter;
(E) the Company issuing, or agreeing to issue, convertible notes;
(F) the Company disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;
(G) the Company charging, or agreeing to charge, the whole, or a substantial part, of its business or property;
(H) the Company resolving that it be wound up;
(I) the appointment of a liquidator or provisional liquidator of the Company;
(J) the making of an order by a court for the winding up of the Company;
(K) an administrator of the Company, being appointed under section 436A, 436B or 436C of the Corporations Act;
(L) the Company executing a deed of company arrangement; or
(M) the appointment of a receiver, or a receiver and manager, in relation to the whole, or a substantial part, of the property of the Company.
(viii) (Suspension of debt payments): the Company suspends payment of its debts generally;
(ix) (Event of Insolvency): an Event of Insolvency (as defined in the Underwriting Agreement) occurs in respect of the Company;
(x) (Judgment against the Company): a judgment in an amount exceeding $100,000 is obtained against the Company and is not set aside or satisfied within seven days;
(xi) (Litigation): litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced against the Company;
(xii) (Board and senior management composition): there is a change in the composition of the Board or a change in the senior management of the Company before the issue of the Underwritten Shares without the prior written consent of the Underwriter, which consent will not be unreasonably withheld or delayed;
(xiii) (Indictable offence): a director or senior manager of the Company is charged with an indictable offence;
(xiv) (Change in shareholdings): a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to the Company;
(xv) (Timetable): there is a delay in any specified date in the timetable set out in this Offer Booklet, which is greater than 3 Business Days (as defined in the Underwriting Agreement), without the prior written consent of the Underwriter, such consent will not to be unreasonably withheld or delayed;
(xvi) (Force Majeure): a Force Majeure (as defined in the Underwriting Agreement) affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of seven days occurs;
(xvii) (Certain resolutions passed): the Company passes or takes any steps to pass a resolution under section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter, such consent will not be unreasonably withheld or delayed;
(xviii) (Capital Structure): the Company alters its capital structure in any manner not contemplated by the Offer Booklet;
(xix) (Investigation): any person is appointed under any legislation in respect of companies to investigate the affairs of the Company; or
(xx) (Hostilities) hostilities not presently existing commence (whether war has been declared or not) or a major escalation in existing hostilities occurs (whether war has been declared or not) involving any one or more of Australia, New Zealand, the United States of America, the United Kingdom any member state of the European Union, Japan, Russia or the People's Republic of China, or a terrorist act is perpetrated on any of those countries or any diplomatic or political establishment of any of those countries elsewhere in the world, or a national emergency is declared by any of those countries; or
(xxi) (Adverse Change in Financial Markets) there occurs any material adverse change or material adverse disruption to the political or economic conditions of financial markets in Australia, the United Kingdom, the United States of America or the international financial markets or any change or development involving a prospective change in national or international political, financial or economic conditions.

The events listed in Sections 5.1(d), (e) and (i) do not entitle the Underwriter to exercise its rights of termination unless, in the reasonable opinion of the Underwriter reached in good faith, the event has or is likely to have, or those events together have, or could reasonably be expected to have, a Material Adverse Effect (as defined in the Underwriting Agreement) or could give rise to a liability of the Underwriter under the Corporations Act.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter that are considered standard for an agreement of that type.

5.2 Effect of the Offer on control of the Company

The potential effect the Offer will have on the control of the Company is as follows:

(a) if all Shareholders are Eligible Shareholders and take up their Entitlements under the Offer then the Entitlement Offer will have no effect on the control of the Company;
(b) if not all Shareholders are Eligible Shareholders or do not take up their full Entitlements, the Shortfall will be allocated:
- (i) to Eligible Shareholders who subscribe for Additional New Shares; and
- (ii) by the Underwriter in consultation with the Company, to the Underwriter or any sub-underwriter (if appointed) to the Entitlement Offer (in accordance with Listing Rule 7.2 (exception 2)) or any other parties selected by them.

The effect the placement of the Shortfall may have on control will depend entirely on any Additional Subscriptions by Shareholders and the allocations made by the Underwriter or any sub-underwriter (if appointed);

(c) if some Shareholders do not take up their Entitlements (whether because they are Ineligible Shareholders or otherwise), their equity in the Company will be diluted. The equity of Shareholders who only take up part of their Entitlement will also be diluted, but to a lesser extent;
(d) the Options the Company currently has on issue are not expected to be exercised prior to the Record Date as the exercise price for these Options exceeds the Offer Price and the share price on 9 October 2013 of $0.021 per Share at close of trade, therefore the Options are expected to have no effect on the Offer or the control of the Company;
(e) given the Entitlement Offer is partially underwritten to the extent of $600,000 and that the Underwriter will enter into sub-underwriting arrangements with various parties, based on the structure of the Entitlement Offer and the current level of holdings of substantial shareholders, the Entitlement Offer is not expected to have a material effect or consequence on the control of the Company.

The capital structure of the Company on completion of the Entitlement Offer will be as follows (assuming none of the Options currently on issue are exercised before the Record Date):

Total number of Shares on issue immediately before theEntitlement Offer	177,067,166
Options currently on issue	35,103,711*
Number of New Shares offered under the Entitlement Offer	177,067,166

Total	number	of	Shares	on	issue	immediately	after	354,134,332**
	completion of the Entitlement Offer

Total amount to be raised from the Entitlement Offer $1,770,672 (before costs)***

**Assuming the Offer is fully subscribed and none of the Options currently on issue in the Company are exercised before the Record date.

***Assuming the Offer is fully subscribed.

5.3 CHESS

The Company participates in the CHESS operated by ASX Settlement Corporation (ASX Settlement), a wholly owned subsidiary of the ASX, in accordance with the Listing Rules and the ASX Settlement Operating Rules.

Under CHESS, the Company will not issue certificates to Applicants. Instead, Applicants will receive a statement of their holdings in the Company of New Shares. If the Applicant is broker sponsored, ASX Settlement will send them a CHESS statement.

The CHESS statement will set out the number of New Shares issued under this Offer Booklet, provide the details of a Shareholder's holder identification number, the participant identification number of the sponsor and the terms and conditions applicable to the New Shares.

If you are registered on the issuer sponsored sub-register, your statement will be dispatched by the Share Registry and will contain the number of New Shares issued to you under this Offer Booklet and your security reference number.

A CHESS statement or issuer sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their shareholding changes. Shareholders may request a statement at any other time; however a charge may apply for additional statements.

5.4 Taxation Implications

Shareholders should be aware that there may be taxation implications in participating in the Entitlement Offer and subscribing for New Shares. The taxation consequences of participating in the Entitlement Offer and/or acquiring New Shares may vary depending on the individual circumstances of each Shareholder. Before making a decision on whether or not to participate in the Entitlement Offer, Shareholders should consult their own professional taxation advisers to obtain advice in relation to the taxation laws and regulations applicable to their personal circumstances.

6 DEFINITIONS

Additional New Shares orShortfall Shares	New Shares that make up the Shortfall.
Additional Subscriber	an Eligible Shareholder who subscribes for Additional New Shares under theirEntitlement.
Additional Subscription	an Application made for Additional New Shares by Eligible Shareholders.
Applicant	a person who submits an Application.
Application	a validly completed Entitlement and Acceptance Form.
Application Monies	monies paid by Eligible Shareholders in respect of New Shares applied for.
ASIC	the Australian Securities and Investments Commission.
ASX	the Australian Securities Exchange or ASX Limited ACN 008 624 691.
ASX Settlement OperatingRules	the settlement rules of the securities clearing house which operates CHESS.
Board	the board of Directors of the Company.
Business Day	a day on which trading takes place on the stock market of ASX.
CHESS	Clearing House Electronic Subregister System.
Closing Date	the date on which the Entitlement Offer closes, being 5:00pm Adelaide time on7 November 2013, which may be varied by the Directors at their absolutediscretion.
Company	Petratherm.
Corporations Act	the Corporations Act 2001 (Cth).
Directors	the directors of the Company from time to time.
Dollars, A$, AUD or A	Australian dollars unless otherwise stated.
Eligible Shareholder	a Shareholder with a registered address in Australia or New Zealand who iseligible to participate in the Entitlement Offer.
Entitlement	the entitlement to subscribe for New Shares pursuant to the Entitlement Offer.
Entitlement andAcceptance Form	the entitlement and acceptance form accompanying this Offer Booklet.
Entitlement Offer	the non-renounceable pro-rata rights issue of New Shares on the basis of 1 NewShare for every 1 Existing Share held at the Record Date.
Excess Amount	has the meaning given in Section 3.2 of this Offer Booklet.
Existing Share	a Share on issue as at the Record Date.

Excess Amount	any Application Monies received by the Company in excess of your fullEntitlement, to be treated as an Application for Additional New Shares.
Ineligible Shareholder	a Shareholder who is not an Eligible Shareholder.
Listing Rules	the official Listing Rules of ASX.
New Share	a Share offered under the Entitlement Offer.
Offer Booklet	this document.
Offer	the Entitlement Offer.
Offer Price	$0.01 per New Share.
Official List	the Official List of ASX.
Opening Date	the date on which the Entitlement Offer opens, being 23 October 2013.
Option	an option to acquire a Share.
Petratherm	Petratherm Limited ACN 106 806 884.
Quotation and OfficialQuotation	official quotation on ASX.
Record Date	7.00pm Adelaide time on 18 October 2013.
Share	a fully paid ordinary share in the Company.
Share Register	the register of Shareholders maintained by the Share Registry.
Share Registry	Computershare Investor Services Pty Limited ABN 71 005 485 825.
Shareholder	a holder of Shares in the Company as at the Record Date.
Shortfall	the number of New Shares under the Entitlement Offer not applied for by EligibleShareholders under their Entitlement or offered to Shareholders because theyare Ineligible Shareholders.
Shortfall Shares orAdditional New Shares	the New Shares which make up the Shortfall.
Underwriter or TaylorCollison	Taylor Collison Limited ABN 53 008 172 450, AFSL 247083.
Underwriting Agreement	the underwriting agreement between the Underwriter and the Company dated9 October 2013.
Underwritten Amount	$600,000.
U.S Person	has the meaning given to that term in Regulation S under the US Securities Act.
U.S Securities Act	the United States Securities Act of 1933, as amended.

CORPORATE DIRECTORY

Directors

Mr Derek Carter (Non-Executive Chairman) Mr Terry Kallis (Managing Director) Mr Richard Bonython (Non-Executive Director) Mr Richard Hillis (Non-Executive Director) Mr Simon O'Loughlin (Non-Executive Director) Mr Lewis Owens (Non-Executive Director)

Company Secretary

Mr Donald Stephens

Auditors

Grant Thornton South Australian Partnership Chartered Accountants Level 1 67 Greenhill Road WAYVILLE SA 5034

Legal Advisers to the Company

O'Loughlins Lawyers Level 2 99 Frome Street ADELAIDE SA 5000

Registered Office

c/- HLB Mann Judd (SA) Pty Limited 169 Fullarton Road DULWICH SA 5065

Share Registrar

Computershare Investor Services Pty Limited Level 5 115 Grenfell Street ADELAIDE SA 5000

Contact Details

Petratherm Limited Level 1 129 Greenhill Road UNLEY SA 5061

Telephone (08) 8274 5000 Facsimile: (08) 8272 8141 Website: www.petratherm.com.au Email: [email protected]

ASX Code

PTR