RED SKY ENERGY LIMITED. — Proxy Solicitation & Information Statement 2009

Aug 11, 2009

RED SKY ENERGY LIMITED

ACN 099 116 275

NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at The Celtic Club, West Perth, Western Australia on 11 September 2009 at 1.00pm (WST).

This Notice of General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please contact the Company Secretary on (08) 9486 1122.

RED SKY ENERGY LIMITED

A C N 0 9 9 1 1 6 2 75

NOTICE OF GENERAL MEETING

Notice is hereby given that the General Meeting of Shareholders of Red Sky Energy Limited (Company) will be held at The Celtic Club, 48 Ord St West Perth, Perth, WA on 11 September 2009 at 1.00pm (WST) (General Meeting).

The Explanatory Memorandum to this Notice of General Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Memorandum and Proxy Form are part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered as Shareholders of the Company on 9 September 2009 at 5.00pm (WST).

Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Schedule 1 of the Explanatory Memorandum.

AGENDA

1. Resolution 1 - Issue of Vendor Securities

To consider, and if thought fit, pass as an ordinary resolution with or without amendment the following:

"That, in accordance with ASX Listing Rule 7.1 and for all other purposes, the Shareholders approve the issue to the Vendors or their nominees of:

• (a) 150,000,000 Shares (Vendor Shares);
• (b) 150,000,000 unlisted options each at an issue price of $0.04 and an expiry date of 5 years after the date of issue to acquire ordinary fully paid shares in the capital of the Company and have the further terms and conditions in Schedule 2 (Vendor Options); and
• (c) 150,000,000 Shares upon achievement of the Milestone (Deferred Shares),

in accordance with the Acquisition Agreement and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the Vendor Securities and a person who might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or an associate of that person.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• (b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. Resolution 2 – Issue of Advisor Options

To consider, and if it thought fit, pass as an ordinary resolution with or without amendment the following:

"That, in accordance with ASX Listing Rule 7.1 and for all other purposes, the Shareholders approve the issue to GBU Capital or its nominees of 50,000,000 unlisted options to subscribe for fully paid ordinary shares in accordance with the Acquisition Agreement and on the terms and conditions in Schedule 2 and the Explanatory Memorandum (Advisor Options)."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the Advisor Options and a person who might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or an associate of that person.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• (b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. Resolution 3 – Approve Placement

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

"That, in accordance with Listing Rule 7.1 and for all other purposes, the Shareholders approve the issue of up to 200,000,000 Shares each at an issue price of $0.02 to raise up to $4,000,000 (before costs) on the terms and conditions in the Explanatory Memorandum (Placement)."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the proposed Placement and a person who might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or an associate of that person.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• (b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

BY ORDER OF THE BOARD

Company Secretary Dated: 12 August 2009

RED SKY ENERGY LIMITED

A CN 099 116 275

EXPLANATORY MEMORANDUM

1. Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at The Celtic Club, 48 Ord St West Perth, Perth, WA on 11 September 2009 at 1.00pm (WST)

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolution in the Notice.

A Proxy Form is located at the end of the Explanatory Memorandum.

2. Action to be Taken by Shareholders

Shareholders should read the Notice and Explanatory Memorandum carefully before deciding how to vote on the Resolution.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative ("proxy") to vote in their place. All Shareholders are invited and encouraged to attend the General Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the General Meeting in person.

3. Background Information

3.1 Agreement with Cydonia

On 28 July 2009, Red Sky announced that it had entered into the Acquisition Agreement with the Vendors to acquire 100% of the issued capital of Cydonia.

Cydonia has the rights to earn up to 100% interest in two Coal Seam Gas (CSG) permits in the highly prospective Surat Basin, Queensland region of Australia. The permits are for the sole right to farm in to the non-conventional rights of Authorities to Prospect (ATP) 840 and 904. The permit areas cover an approximate area of 1700km2, are located close to existing and planned gas infrastructure and adjacent significant acreage positions held by the major CSG/LNG companies.

The permits cover approximately 1700km2 in highly prospective Queensland Surat Basin, the most sought after gas exploration address in Australia due to its potential to host substantial CSG resources. The permits lie in the sparsely explored Taroom Trough, where it is thought a major new CSG play comprising Cretaceous age coals could be present within the Bungil Formation. The Cretaceous coals show in old wells that were targeting deeper plays, with some well completion reports indicating the coals are gassy. The Bungil Formation shows significant lateral extent across the area with thickening over the Taroom Trough.

Cydonia's technical evaluation, based on the available public data and comparable net to gross coal thicknesses and gas contents within the Surat Basin indicates the permits potential recoverable resource across the Project is 8 TCF*. Furthermore, the permits could contain coals of potentially similar CSG potential to those that were recently sold by Pangaea Resources to Origin for $650m.

On discovery of a significant CSG resource the project would have numerous development/exit options available to it given the infrastructure in close proximity to the Project. The northern boundary of ATP 840 is only 70kms from the Roma to Brisbane pipeline and the proposed route for the Wallumbilla to Newcastle pipeline passes through ATP 904.

Exploration of the project will be led by Mr Rohan Gillespie (Managing Director of Cydonia) and the team at CRL who have industry leading expertise in CSG exploration and gas commercialisation. Mr Gillespie led BHP Billiton's CSG business as Vice President and Chief Operating Officer. Subsequently he established Energy Infrastructure and Resources Limited (EIR) to undertake corporate advisory work and develop low emission energy businesses. EIR is a major shareholder in CRL and will manage the Cydonia work program under a services agreement.

At completion of the Acquisition and Placement, Mr Gillespie will be invited onto the Board of Red Sky as Managing Director.

This project represents a major growth opportunity for Red Sky creating significant value for Red Sky shareholders and offering new investors outstanding exposure to exploration in the Surat Basin, one of the most exciting gas exploration areas in Australia.

The Acquisition Agreement was executed with the Vendors as a terms sheet on 24 July 2009 with the intention to agree a definitive agreement with Cydonia and the Vendors before completion.

3.2 Consideration

The consideration payable by the Company under the Acquisition Agreement consists of the Vendor Shares and the Vendor Options to the Vendors (or their nominees). Upon meeting the Milestone, the Deferred Shares to the Vendors (or their nominees).

The Company will also issue the Advisor Options to GBU Capital (or its nominees) for corporate advisory services provided in connection with the Acquisition.

3.3 Milestone

The issue of the Deferred Shares by the Company Sky will only occur on the date that Cydonia earns a 50% interest in either ATP 840 or ATP 904 (the Milestone). The conditions for earning such 50% interest are:

• (a) ATP 840: completion by Cydonia of the initial work program (subject to availability of coring rigs and no extended wet weather delays) by 31 March 2010; or
• (b) ATP 904: completion by Cydonia of the initial work program within the second year of work commitments following the grant of the application by the Queensland government.

The Company has obtained a waiver from the ASX of Listing Rule 7.3.2 to the extent necessary to enable the Company to issue the Deferred Shares later than 3 months after the General Meeting on the conditions that:

• (a) The Deferred Shares are issued no later than 30 June 2011.
• (b) The Notice includes the full terms and conditions of the Deferred Shares and the terms of the agreement between the Company and the Vendors, including the relevant Milestones and their assessment.
• (c) Red Sky releases the terms of the waiver to the market no later than the time of the release of the Notice.
• (d) For the periods in which the Deferred Shares are issued or remain to be issued, the Company's annual reports include full details of the Deferred Shares that have been issued in the relevant period and those Deferred Shares that may be issued in the future.

It is the current expectation of the Company that the Milestone will be achieved before 31 March 2010.

3.4 Vendors

The Vendors own all of the shares in the capital of Cydonia. The Vendors will be entitled to the following Vendor Securities in accordance with the Acquisition Agreement:

Vendor(ornominee)	VendorShares	VendorOptions	DeferredShares(noOptions)	TotalVendorSecurities
EnergyInfrastructureandResourcesLimited	97,500,000	97,500,000	97,500,000	195,000,000Shares97,500,000Options
SerecPtyLtdastrusteeforTheFamilyAccount	45,000,000	45,000,000	45,000,000	90,000,000Shares45,000,000Options
Scott Thomson	7,500,000	7,500,000	7,500,000	15,000,000Shares7,500,000Options
TOTAL	150,000,000	150,000,000	150,000,000	300,000,000Shares150,000,000Options

3.5 Acquisition Agreement and Conditions

The Acquisition Agreement is subject to the satisfaction of a number of conditions precedent including the following:

• (a) The Company holding cash not less than $4,000,000 at the time of completion of the acquisition of Cydonia (after allowing for all expenditure, and for the accrual of trade creditors, debts and other liabilities up to that time).
• (b) The obligation of the Vendors to transfer their Cydonia shares is conditional on the Company shareholder approval, and all other regulatory approvals, necessary for:
  • (i) the issue of the Vendor Securities;
  • (ii) the issue of the Advisor Options.
• (c) The obligation of the Company to issue the Vendor Shares and Vendor Options is conditional upon Cydonia a executing a farmin agreement and royalty agreement pursuant to and in accordance with each of the ATP 840 terms sheet and the ATP 904 terms sheet.
• (d) The Acquisition Agreement is subject to due diligence by the Company and Cydonia within 14 days of the execution of the Acquisition Agreement.

The Company further warrants in the Acquisition Agreement that it will not alter the terms of the Placement (including but not only by including any option or other inducements to acquire shares under the Placement) without first consulting with Cydonia and agreeing upon an adjustment to the consideration payable for the Cydonia shares which avoids any actual or potential dilution of Cydonia's proportional interest in the securities of the Company as a whole.

3.6 Advisor Options

The Company proposes to the issue the Advisor Options to GBU Capital (or its nominees) for their corporate advisory services in connection with the Acquisition.

3.7 Placement

The Company proposed to undertake a placement of 200,000,000 Shares each at an issue price of $0.02. The Placement will raise approximately $4,000,000. The lead manager for the Placement is Indian Ocean Capital. The Company will apply for quotation of the Placement shares on the ASX.

3.8 Revised Capital Structure

If the Resolutions are passed by the Shareholders, upon the close of the transaction with Cydonia and the Placement (excluding the Deferred Shares), the proposed capital structure is:

• (a) Shares: approximately 684 million.
• (b) Listed Options: 300 million options (exercisable at 2 cents, expiring on or before two years from the date of issue).
• (c) Unlisted Options: 200 million options (exercisable at 4 cents, expiring on or before five years from the date of issue).

(d) Unlisted Options: approximately 12 million options (exercisable at 20 cents, expiring at various dates).

4. Resolution 1 – Approve issue of Vendor Securities

4.1 General

Resolution 1 seeks Shareholder approval for the authority to issue to the Vendors (or their nominees) the Vendor Securities which shall comprise of:

• (a) the Vendor Shares;
• (b) the Vendor Options; and
• (c) the Deferred Shares,

and on the terms and conditions in the Explanatory Memorandum.

4.2 Listing Rule 7.1 – Shareholder Approval

Listing Rule 7.1 requires Shareholder approval for the issue of the Vendor Securities. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

The issue of the Vendor Securities represents more than 15% of the Company's securities on issue for the purposes of Listing Rule 7.1. The Company is seeking Shareholder approval of the issue of the Vendor Securities so that the Company does not exceed its 15% capacity under Listing Rule 7.1. Accordingly, Shareholder approval is sought in accordance with Listing Rule 7.3.

4.3 Specific information required by Listing Rule 7.3

For the purposes of the Shareholder approval of the issue of securities under the Acquisition Agreement and the requirements of Listing Rule 7.3, information is provided as follows:

• (a) A maximum of 150,000,000 Vendor Shares, 150,000,000 Vendor Options and 150,000,000 Deferred Shares will be issued.
• (b) The Company will issue the:
  • (i) Vendor Shares and Vendor Options in accordance with the terms of the Acquisition Agreement and no later than 3 months after the date of the General Meeting (or such longer period of time as ASX may in its discretion allow); and
  • (ii) Deferred Shares in accordance with the terms of the Acquisition Agreement and no later that 30 June 2011 (or such longer period of time as ASX may in its discretion allow).
• (c) The Vendor Securities will be issued in consideration of the acquisition by the Company of all of the issued capital of Cydonia. The deemed issue price for the Vendor Securities will be $0.0035 (0.35 cents) for each Vendor Share and Deferred Share and $0.001 (0.1 cents) for each Vendor Option.

(d) The Vendor Securities will be issued to the Vendors (or their nominees) as described below:

Vendor(ornominee)	VendorShares	VendorOptions	DeferredShares(noOptions)	TotalVendorSecurities
EnergyInfrastructureandResourcesLimited	97,500,000	97,500,000	97,500,000	195,000,000Shares97,500,000Options
SerecPtyLtdastrusteeforTheFamilyAccount	45,000,000	45,000,000	45,000,000	90,000,000Shares45,000,000Options
Scott Thomson	7,500,000	7,500,000	7,500,000	15,000,000Shares7,500,000Options
TOTAL	150,000,000	150,000,000	150,000,000	300,000,000Shares150,000,000Options

• (e) The Vendor Securities will have the following terms:
  • (iii) the Vendor Shares and the Deferred Shares will be fully paid ordinary shares in the capital of the Company;
  • (iv) the Vendor Options will have an exercise price of $0.04, expire 5 years after the date of issue and have the terms and conditions in Schedule 2; and
  • (v) the Vendor Securities will be subject to a trading lock from the date of the issue of the Vendor Shares, Vendor Options or Deferred Shares (as the case may be).
• (f) No funds will be raised from the issue of the Vendor Securities.
• (g) The issue of the Vendor Securities will occur progressively.
• (h) A voting exclusion statement is included in the Notice.

5. Resolution 2 – Issue of Advisor Options

5.1 General

Resolution 2 seeks Shareholder approval for the authority to issue to GBU Capital (or its nominees) the Advisor Options on the terms and conditions in the Explanatory Memorandum.

The Advisor Options expire 5 years after the date of issue and have the terms and conditions in Schedule 2.

5.2 Listing Rule 7.1 – Shareholder Approval

Listing Rule 7.1 requires Shareholder approval for the issue of the Advisor Options. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

The effect of passing Resolution 2 will be to allow the Directors to issue the Advisor Options during the three month period after the General Meeting (or a longer period, if allowed by ASX), without using up the Company's 15% placement capacity under ASX Listing Rule 7.1. Accordingly, Shareholder approval is sought in accordance with Listing Rule 7.3.

5.3 Specific information required by Listing Rule 7.3

ASX Listing Rule 7.3 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval for the issue:

• (a) A maximum of 50,000,000 Advisor Options will be issued.
• (b) The Company will issue the Advisor Options no later than 3 months after the date of the General Meeting (or such longer period of time as ASX may in its discretion allow).
• (c) The Advisor Options will issue in consideration of GBU Capital's corporate advisory services in connection with the Acquisition.
• (d) The Advisor Options will be issued to GBU Capital (or its nominees).
• (e) The Advisor Options will have an exercise price of $0.04, expire 5 years after the date of issue and have the further terms and conditions in Schedule 2.
• (f) No funds will be raised by the issue of the Advisor Options.
• (g) The issue of the Vendor Securities will occur progressively.
• (h) A voting exclusion statement is included in the Notice.

6. Resolution 3 – Approve Placement

6.1 General

Resolution 3 seeks Shareholder approval for the issue of up to 200,000,000 Shares each at an issue price of $0.02 to raise up to $4,000,000 (before costs) on the terms and conditions in the Explanatory Memorandum.

6.2 Listing Rule 7.1 – Shareholder Approval

Listing Rule 7.1 requires Shareholder approval for the Placement. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

The Placement represents more than 15% of the Company's securities on issue for the purposes of Listing Rule 7.1. The Company is seeking Shareholder approval of the Placement so that the Company does not exceed its 15% capacity under Listing

Rule 7.1. Accordingly, Shareholder approval is sought in accordance with Listing Rule 7.3.

6.3 Specific information required by Listing Rule 7.3

For the purposes of the Shareholder approval of the issue of securities under the Placement and the requirements of Listing Rule 7.3, information is provided as follows:

• (a) A maximum of 200,000,000 Shares will be issued under the Placement.
• (b) The Company will issue the Shares under the Placement no later than 3 months after the date of the General Meeting (or such longer period of time as ASX may in its discretion allow).
• (c) The Shares will each have an issue price of $0.02.
• (d) The Shares will be issued under a prospectus to the general public who are clients of various brokers that participated in the Placement and are not related parties of the Company.
• (e) The Shares will be fully paid ordinary shares in the capital of the Company.
• (f) The funds from the Shares will be used to fund ongoing activities at the Company's key projects and for working capital purposes.
• (g) The Shares issued under the Placement will occur progressively.
• (h) A voting exclusion statement is included in the Notice.

Schedule 1 – Definitions

In this Explanatory Memorandum and Notice:

Acquisition means the acquisition by the Company of all of the issued capital of Cydonia in accordance with the terms of the Acquisition Agreement.

Acquisition Agreement means the terms sheet dated 24 July 2009 between the Company and the Vendor Shareholders.

Advisor Options has the meaning given to it in Resolution 2.

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited and where the context permits the Australian Securities Exchange operated by ASX Limited.

ATP has the meaning given to it in section 3.1 of this Explanatory Memorandum.

Board means the Company's board of Directors.

Business Day means as defined in the Listing Rules.

Company or Red Sky means Red Sky Energy Limited ACN.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

CSG has the meaning given to it in section 3.1 of this Explanatory Memorandum.

Cydonia means Cydonia Resources Pty Ltd ABN 68 137 806 181.

Deferred Shares has the meaning given to it in Resolution 1.

Director means a director of the Company and Directors means all of them.

Explanatory Memorandum means this explanatory memorandum.

GBU Capital means GBU Capital Pty Ltd ABN 54 132 445 900.

General Meeting has the meaning given in the introductory paragraph of the Notice.

Listing Rules means the listing rules of ASX.

Milestone has the meaning given to in section 3.3 of this Explanatory Memorandum.

Notice means the Notice of General Meeting to which the Explanatory Memorandum is attached.

Placement has the meaning given to it in Resolution 3.

Proxy Form means the proxy form attached to the Notice.

Resolution means a resolution referred to in the Notice.

Share means a fully paid ordinary share in the capital of the Company.

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Shareholder means a shareholder of the Company.

Vendor Securities means the Vendor Shares, the Vendor Options and the Deferred Shares.

Vendor Shares has the meaning given to it in Resolution 1.

Vendor Options has the meaning given to it in Resolution 1.

Vendors mean Energy Infrastructure and Resources Limited, Serec Pty Ltd and Scott Thompson.

WST means Western Standard Time.

In this Notice, words importing the singular include the plural and vice versa.

Schedule 2 – Terms and Conditions of Vendor Options and Advisor Options

2. Entitlement

The Vendor Options entitle the holder to subscribe for one (1) unissued Share upon the exercise of each Option.

3. Exercise Price

The exercise price of each Option is A$0.04.

4. Expiry Date

Each Option expires five (5) years from the date of issue.

5. Exercise Period

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

6. Notice of Exercise

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

7. Shares issued on exercise

Shares issued on exercise of the Options rank equally with other issued Shares.

8. Quotation of Shares on exercise

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

9. Timing of issue of Shares

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

• (a) issue the Share; and
• (b) do all such acts matters and things to obtain:
  • (i) the grant of quotation for the Share on ASX no later than 5 days from the date of exercise of the Option; and
  • (ii) receipt of cleared funds equal to the sum payable on the exercise of the Options.

10. Trading Lock

The Share that is issued by the Company after a Option is validly exercised will be subject to a 12 month trading lock.

11. Participation in new issues

There are no participation rights or entitlements inherent in the Options and the holder will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, 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 Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

12. Adjustment for bonus issues of Shares

If 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):

• (a) the number of Shares which must be issued on the exercise of a Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Vendor Option before the record date for the bonus issue; and
• (b) no change will be made to the Exercise Price.

13. Adjustment for rights issue

If 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 = $$ O - \frac{E[P - (S + D)]}{N + 1} $$

• O = the old Exercise Price of the Option.
• E = the number of underlying Shares into which one (1) 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.
• S = the subscription price of a Share under the pro rata issue.
• D = the dividend due but not yet paid on the existing underlying Shares (except 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 (1) new Share.

14. Adjustments for reorganisation

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

15. Options transferable

The Options are transferable .

16. Lodgement Instructions

Cheques shall be in Australian currency made payable to Company and crossed "Not Negotiable". The application for Shares on exercise of the Options with the appropriate remittance should be lodged at Company's share registry.

RED SKY ENERGY LIMITED ACN 099 116 275

P R O X Y F O R M

The Company Secretary Red Sky Energy Limited

Suite 4, 16 Ord Street Suite 4, 16 Ord Street

By delivery: By post: By facsimile: Red Sky Energy Limited Red Sky Energy Limited 08 9486 1011 WEST PERTH WA 6005 WEST PERTH WA 6005

I/We 1 ________________________________________________________________________________________

of __________________________________________________________________________________________

being a Shareholder/Shareholders of the Company and entitled to _______________________________________

votes in the Company, hereby appoint 2 ____________________________________________________________

or failing such appointment the chairman of the General Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Company to be held at The Celtic Club, 48 Ord St West Perth, Perth, WA on 11 September 2009 at 1.00pm (WST and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Shareholder's votes*/ [ ] of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON RESOLUTION

Important:

If the chairman of the General Meeting is to be your proxy and you have not directed your proxy how to vote on please tick this box. By marking this box you acknowledge that the chairman of the General Meeting may exercise your proxy even if he has an interest in the outcome of the Resolution and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the chairman of the General Meeting will not cast your votes on Resolution and your votes will not be counted in computing the required majority if a poll is called on this Resolution.

The chairman of the General Meeting intends to vote undirected proxies in favour of the Resolutions.

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

Resolution 1	Approve issue of Vendor Securities
Resolution 2	Approve issue of Advisor Options

Resolution 3 Approve Placement

For Against Abstain

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1	Shareholder 2	Shareholder 3
Sole Director and Sole CompanySecretary	Director	Director/Company Secretary
_________________________Contact Name	_______________________Contact Daytime Telephone	___________________Date
1Insert name and address of Shareholder	2Insert name and address of proxy	*Omit if not applicable

20090812_ Notice of Meeting - Red Sky Energy Limited_Released to ASX 1

Proxy Notes:

A Shareholder entitled to attend and vote at the General Meeting may appoint a natural person as the Shareholder's proxy to attend and vote for the Shareholder at that General Meeting. If the Shareholder is entitled to cast 2 or more votes at the General Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a body corporate as the Shareholder's proxy to attend and vote for the Shareholder at that General Meeting, the representative of the body corporate to attend the General Meeting must produce the 'Certificate of Appointment of Representative' prior to admission. A form of the certificate may be obtained from the Company's share registry.

You must sign this form as follows in the spaces provided:

• Joint Holding: where the holding is in more than one name all of the holders must sign.
• Power of Attorney: if signed under a power of attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the power of attorney to this Proxy Form when you return it.
• Companies: a director can sign jointly with another director or a company secretary. A sole director who is also a sole company secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the General Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's share registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Company's share registry (Suite 4, 16 Ord Street, West Perth, WA 6005 or Facsimile number 9486 1011 if faxed within Australia or +61 8 9486 1011 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the General Meeting (WST).