STRIKE ENERGY LIMITED - Capital/Financing Update 2011

STRIKE ENERGY LIMITED ACN 078 012 745

OFFER DOCUMENT

For a non renounceable pro-rata offer to Eligible Shareholders on the basis of one New Share for every fifteen Shares held as at the Record Date at an Issue Price of $0.10 ( Offer ).

IMPORTANT NOTICE

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

This Offer Document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser without delay.

This Offer opens on Wednesday, 11 January 2012 and closes at 5:00pm WST on Wednesday, 25 January 2012 ( unless extended ) . Valid acceptances must be received before that time.

Please read the instructions in this Offer Document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

IMPORTANT NOTES

This Offer Document has been prepared by Strike Energy Limited ACN 078 012 745 ( Strike or the Company ) and is dated 21 December 2011. This Offer Document is not a prospectus or other form of disclosure document under the Corporations Act and has not been lodged with ASIC. The Offer contained in this Offer Document is being made without disclosure in accordance with section 708AA of the Corporations Act, as modified by ASIC Class Order 08/35.

This is an important document.

The information contained in this Offer Document does not constitute investment advice and has been prepared without taking into account each Eligible Shareholder's investment objectives or financial circumstances. You should seek advice from your professional adviser before deciding to invest. Investing in the Company involves risks. The Offer Document does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding the Offer or about the rights attaching to the New Shares offered by this Offer Document.

Disclaimer

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer. To the extent permitted by law, neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Offer Document, except as required by law and then only to the extent so required.

Future performance and forward looking statements

Neither the Company nor any other person warrants, represents or guarantees (expressly or by implication) the future performance of the New Shares or any particular rate of return on any investment made pursuant to Offer, or any particular tax treatment.

This Offer Document contains certain “forward looking statements”. Forward-looking statements, opinions and estimates provided in the information in this Offer Document are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions.

No representation or warranty (express or implied) is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this Offer Document.

While due care and attention have been used in the preparation of forward-looking statements, you are cautioned not to place undue reliance on such statements. Forward-looking statements only speak as to the date of this Offer Document. To the maximum extent permitted by law, the Company disclaims any obligation or undertaking to release any updates or revisions to such information to reflect any change in expectations or assumptions.

An investment in the Company is subject to investment and other known and unknown risks, uncertainties and assumptions, many of which are outside the control of the Company and its board, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by any forward-looking statements in this Offer Document.

Past performance

Investors should note that the past share price performance of Shares provides no guarantee or guidance as to future share price performance. Past performance information given in this Offer Document is provided for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Eligibility

Applications for New Shares by Eligible Shareholders can only be made on an original Entitlement and Acceptance Form sent with this Offer Document. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer.

Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would be unlawful to make such an offer or to issue this Offer Document. No action has been taken to permit a public offering of the New Shares under the Offer in any jurisdiction outside of Australia and New Zealand.

It is not practicable for the Company to comply with the securities laws of any other overseas jurisdictions other than Australia and New Zealand having regard to the number of overseas Shareholders, the number and value of the New Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction .

The New Shares have not been and will not be registered under the US Securities Act of 1933 and may only be offered, sold or resold in, or to persons in, the United States in accordance with an available exemption from registration.

It is the responsibility of any Applicant to ensure compliance with any laws of a country relevant to their application. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company as a representation that there has been no breach of such laws, that the Applicant is an Eligible Shareholder and that the Applicant is physically present in Australia or New Zealand. Shareholders outside Australia and New Zealand ( Ineligible Foreign Shareholders ) should refer to Section 1.14 for details of how their Entitlement will be dealt with.

Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer.

Privacy Act

If you complete an application for New Shares, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and uses 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 Company’s share registry.

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

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. You should note that if you do not provide the information required on the application for New Shares, the Company may not be able to accept or process your application.

KEY OFFER DETAILS

Key details of the Offer
Offer to Eligible Shareholders	1 New Share for every 15 Shares held at the Record Date
Issue Price per New Share	$0.10
Discount on the Issue Price to the closing price of Shares on ASX on 16 December 2011 (being the last trading date before the announcement of the Offer)	20.0%
Maximum number of New Shares under the Offer	31,054,468 New Shares
Proceeds from the Offer (excluding costs associated with the Offer)	$3,105,447
Maximum number of Shares on issue following the Offer and the Placement (refer to Section 2.1 below)	496,871,494 Shares

IMPORTANT DATES

Event	Date
Announcement of the Offer	Wednesday, 21 December 2011
Offer Document, Cleansing Notice and Appendix 3B for the Offer lodged with ASX
Settlement of the Placement	Friday, 23 December 2011
"Ex" date for the Offer (being the date that Shares start trading without the Entitlements to participate in the Offer)	Tuesday, 3 January 2012
Record Date to determine Entitlements under the Offer	Monday, 9 January 2012
Opening Date of Offer	Wednesday, 11 January 2012
Despatch of the Offer Document and Entitlement and Acceptance Form to Eligible Shareholders
Closing Date for acceptances under the Offer	Wednesday, 25 January 2012
ASX notified of under subscription under the Offer	Monday, 30 January 2012
Allotment of the New Shares	Tuesday, 31 January 2012
Despatch of holding statements for the New Shares	Wednesday, 1 February 2012
Trading of New Shares expected to commence	Thursday, 2 February 2012

The above dates are indicative only. The Company reserves the right, subject to the Corporations Act and the Listing Rules, to extend the Closing Date or to withdraw the Offer at any time without prior notice, in which case all application monies for New Shares which have not been issued will be refunded (without interest) as soon as practicable.

CHAIRMAN'S LETTER

Dear Shareholder,

I am pleased to invite you to participate in Strike Energy Limited’s non-renounceable entitlements offer. Under the Offer you have the opportunity to subscribe for 1 New Share for every 15 Shares held at the Record Date, Monday 9 January 2012. You also have the opportunity to further increase your shareholding in Strike by submitting an application to subscribe for Additional Shares, those New Shares that are not taken up by other Shareholders under the Offer.

At an Issue Price of $0.10 per New Share, the New Shares will be issued at a 20% discount to the most recently traded price of Strike’s Shares on 16 December 2011 and at a substantial 35% discount to the Company’s one month volume weighted average share price.

Participation in the Offer will assist Strike to progress its exciting unconventional oil and gas projects. In the Eagle Ford, Strike has over 8,100 net acres under lease largely within the preferred gas/condensate window and has undertaken a comprehensive technical evaluation program to confirm the prospectivity of the acreage. While some leasing activity is continuing, preparations are underway for a production evaluation program which is expected to commence during the first half of 2012. The Company anticipates that its Eagle Ford investment will be substantially re-valued following successful production testing.

In the Cooper Basin, Strike has a very large acreage position across the Southern Flank of the basin. As previously announced, the Company has estimated a net 6 TCF prospective resource within its key unconventional permits (PELs 94, 95 and 96). In cooperation with partners Beach Energy (PEL 94 and 95) and Senex Energy (PEL 94), Strike will drill two vertical evaluation wells – one in the Battunga Trough (PEL 95) and one in the Milpera Trough (PEL 94). The wells will extensively test the underlying shales and coals and are scheduled to spud in February / March 2012.

Both the Eagle Ford and Cooper Basin assets have the scale and potential to deliver very significant returns to Shareholders. Such returns will be achieved by incrementally proving-up the commercial potential of the plays – firstly through geological analysis and vertical evaluation drilling, and then through horizontal production drilling, completion and flow testing. Such activities require significant capital, but the potential rewards are considerable.

Strike is acutely aware of the dilution caused to Shareholders by issuing new equity capital to fund development activities, especially at low share prices. Accordingly, the Company’s aim is to raise the minimum amount of capital required to achieve specific goals – in this case, the planned activity in the Eagle Ford and Cooper Basin. In parallel, Strike’s management is investigating alternative funding options for the remainder of the 2012 exploration and development program, including transactions at the asset and corporate level. The Company is also implementing a program to reduce corporate overhead costs.

In concluding, I am very optimistic about Strike’s prospects. Never has the Company had such a strong suite of assets with such clear upside potential. Accordingly, I urge you to participate in Strike Energy’s entitlements offer and in that regard, I encourage you to read this Offer Document carefully and seek any required independent professional advice. Each of Strike’s Shareholder directors, including myself, intend to participate in the Offer.

Yours faithfully

==> picture [97 x 40] intentionally omitted <==

Tim Clifton Chairman

1. DETAILS OF THE OFFER

1.1 The Offer

The Company is offering Eligible Shareholders the opportunity to subscribe for 1 New Share for every 15 Shares held at 4:00pm (WST) on 9 January 2012 at an Issue Price of $0.10 per New Share.

Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of a New Share, that will be rounded up to the nearest whole New Share.

As described in Section 1.10, Eligible Shareholders (other than Directors and related parties of the Company) may, in addition to taking up their Entitlements in full, apply for Additional Shares in excess of their Entitlements. Additional Shares will only be available where there is a shortfall between applications received from Eligible Shareholders and the number of New Shares proposed to be issued under the Offer. Additional Shares will be issued at the Issue Price of $0.10 per share.

Your Entitlement under the Offer is shown on the accompanying Entitlement and Acceptance Form. Details on how to accept the Offer are set out in Section 3.

1.2 Placement

As announced on 21 December 2011, the Company has undertaken a placement to sophisticated and professional investors (as defined in sections 708(8) and 708(11) of the Corporations Act respectively) ( Placement ). The Placement comprises the issue of 25,000,000 Shares at an Issue Price of $0.10 per Share to raise $2,500,000 (before costs).

The Shares issued pursuant to the Placement ( Placement Shares ) will be issued within the 15% limit of the Company's capital permitted under Listing Rule 7.1 without requiring Shareholders' approval. The subscribers of the Placement Shares will be able to participate in the Offer.

1.3 Size of the Offer

As at 21 December 2011 and with the issue of the Placement Shares, the Company will have, on issue on or about 28 December 2011:

465,817,026 Shares; and
34,885,000 Options (which carry no entitlement to participate in the Offer without the Options first being exercised).

On the basis that no Options are exercised prior to the Record Date, approximately 31,054,468 New Shares will be offered under the Offer to raise approximately $3,105,447 before the expenses of the Offer.

1.4 Use of Funds

Completion of the Placement and Offer will result in an increase in cash in hand of up to approximately $5.6 million (before the payment of costs associated with the Placement and Offer).

The Company proposes to use the funds raised under the Placement and Offer to fund oil and gas exploration projects in the USA and Australia, specifically in the Eagle Ford Shale, Texas and the Cooper Basin, South Australia and to provide additional working capital. The funds raised will be allocated as follows:

Description	Total
Eagle Ford Shale exploration and development including leasing, technical evaluation and preparation of production drilling	$2.5 million
Cooper Basin evaluation drilling and testing	$2.5 million
Working capital	$0.4 million
Costs of the Offer and Placement	$0.2 million
Total funds raised under the Placement and Offer	$5.6 million

1.5 Opening and Closing Date

The Offer will open for receipt of acceptances on Wednesday, 11 January 2012. The Closing Date for acceptance of your Entitlement is 5.00 pm (WST) on Wednesday, 25 January 2012.

The Company reserves the right, subject to the Corporations Act and the Listing Rules, to extend the last date for receipt of the Entitlement and Acceptance Form, or to delay or withdraw the Offer at any time without prior notice, in which case all application monies for New Shares which have not been issued will be refunded (without interest) as soon as practicable.

1.6 Entitlements under the Offer

The Offer is non-renounceable, and therefore the Entitlements are not transferable and cannot be traded on the ASX or any other exchange or privately transferred. Shareholders will not receive any value if they do not take up their Entitlements. Shareholders who do not take up their Entitlements in full will have their percentage interest in the Company diluted.

1.7 Entitlements and acceptance

The Entitlement of Eligible Shareholders to participate in the Offer will be determined on the Record Date. Your Entitlement is shown on the Entitlement and Acceptance form accompanying this Offer Document.

1.8 Underwriting

The Offer is not underwritten. However, the Company’s top three shareholders, accounting for approximately 22% of total Shares on issue (after the Placement), have committed to fully take up their Entitlements under the Offer.

1.9 No cooling off rights

Cooling off rights do not apply to an investment in New Shares. You cannot withdraw your Application once it has been accepted.

1.10 Shortfall

Eligible Shareholders (other than directors and related parties of the Company) may, in addition to taking up their Entitlements in full, apply for Additional Shares in excess of their Entitlements. Additional Shares will only be available where there is a shortfall between Applications received from Eligible Shareholders and the number of New Shares proposed to be issued under the Offer. Additional Shares will be issued at the Issue Price of $0.10 per Share.

Eligible Shareholders who have applied for Additional Shares through the Top-Up Facility will receive all Additional Shares they have applied for, unless there is an over subscription for Additional Shares through the Top-Up Facility, in which case all applications for Additional Shares will be scaled back on a pro rata basis having regard to the amount of Additional Shares applied for by each Eligible Shareholder.

If any shortfall remains after the allocation of Additional Shares to Eligible Shareholders as provided above, the Company reserves the right to place the remaining shortfall at its discretion (at a price not less than the Issue Price of $0.10 per Share).

Eligible Shareholders who apply for Additional Shares may be allocated a lesser number of Additional Shares than applied for, or may be allocated no Additional Shares at all, in which case excess application monies will be refunded without interest.

1.11 Issue and despatch

The issue of New Shares offered by this Offer Document is expected to occur on Tuesday, 31 January 2012 with dispatch of holding statements expecting to occur on Wednesday, 1 February 2012. Note that the Company reserves the right to change dates in relation to the Offer without prior notice to Shareholders.

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

1.12 ASX listing

The Company has made an application for official quotation by ASX of the New Shares offered pursuant to this Offer Document. It is expected that normal trading of New Shares will commence on or about Thursday, 2 February 2012.

If that permission is not granted by ASX, the Company will not issue any New Shares and all application monies received will be refunded in full to the Applicants (without interest). The fact that ASX may grant official quotation to the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares.

1.13 CHESS

The Company will apply to ASX to participate in CHESS for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of New Shares allotted to them under this Offer Document. The notice will also advise holders of their Holder Identification Number ( HIN ) and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

1.14 Ineligible Foreign Shareholders

This Offer Document and Entitlement and Acceptance Form are only being sent to Eligible Shareholders that meet all the following criteria:

they were registered as Shareholders with registered addresses in Australia and New Zealand at 4:00pm (WST) on the Record Date of Monday, 9 January 2012;
they are not in the United States or a US Person or acting for the account or benefit of such persons; and
they are eligible under all applicable securities law to receive an offer under the Offer.

The Offer is not being extended to any Shareholders whose registered address is outside Australia or New Zealand. In accordance with the Listing Rules and the Corporations Act, the Company is of the view that it is unreasonable to make the Offer to Ineligible Foreign Shareholders, having regard to:

(a) the number of Ineligible Foreign Shareholders;
(b) the number and value of New Shares to be offered to those Ineligible Foreign Shareholders; and
(c) the cost of complying with overseas legal requirements in those jurisdictions.

Accordingly, no Entitlement and Acceptance Forms will be sent, and no offer will be made, to Ineligible Foreign Shareholders. This Offer Document will be sent to them for information purposes only.

The Offer contained in this Offer Document to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any New Shares.

To the extent that a person holds Shares on behalf of another person resident outside Australia or New Zealand, it is that person's responsibility to ensure that any acceptance complies with applicable foreign laws.

The Company reserves the right to reject any Application that it believes come from a person who is not an Eligible Shareholder.

1.15 Rights and liability attaching to New Shares

The New Shares issued under the Offer will be on a fully paid basis and will rank equally in all respects with existing Shares. Full details of the rights and liabilities attaching to Shares are set out in the Company’s Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours. You may also contact the Company Secretary by telephone on +61 (0) 8 6103 0999 for a copy of the constitution.

2. EFFECT OF THE OFFER

2.1 Effect of the Offer on the capital structure of the Company

The total number of New Shares to be issued pursuant to the Offer will be approximately 31,054,468 (the exact number depends on the rounding up of individual holdings).

The table below sets out, for illustrative purposes only, the existing capital structure (before the Offer and the Placement) together with the impact of the issue of:

(a) the New Shares under the Offer; and
(b) the Placement Shares.

Ordinary Shares	Number
Existing Shares as at 21 December 2011	440,817,026
Placement Shares to be issued by 28 December 2011	25,000,000
Maximum number of New Shares issued pursuant to the Offer	31,054,468
Total issued Shares post completion of the Placement and Offer	496,871,494

The effect of the Offer and the Placement will be to increase the number of Shares on issue in the Company and increases the cash held by the Company from approximately $1.0 million (16 December 2011) to $6.6 million.

Expenses of the Offer and the Placement are expected to be approximately $0.2 million.

2.2 Potential effect on control of the Company

Shareholders' interest in the Company will be diluted by the Placement by approximately 6%. Eligible Shareholders who take up their Entitlements in full should not have their interest in the Company further diluted by the Offer (subject to immaterial movements as a result of rounding of Entitlements).

The potential effect the Offer will have on the control of the Company, and the consequences of that effect, will depend on a number of factors, including investor demand. However, given the structure of the Offer as a pro rata issue, the absence of any existing holders with voting power of greater than 20%, and the fact that the Offer is being conducted on the basis of 1 New Share for every 15 Shares held at the Record Date, the Offer is not expected to have any material effect or consequences on the control of the Company.

Following the Placement, the potential effect of the Offer on the control of the Company is as follows:

(a) If all Eligible Shareholders take up their Entitlements under the Offer, then the Offer will have no significant effect on the control of the Company.
(b) If some Eligible Shareholders do not take up all of their Entitlements under the Offer, then the interests of those Eligible Shareholders will be diluted.
(c) The proportional interests of Ineligible Foreign Shareholders will be diluted because those

Ineligible Foreign Shareholders are not entitled to participate in the Offer.

(d) Shareholders that apply for Additional Shares under the Top-Up Facility (under which any shortfall between Applications received and the number of New Shares proposed to be issued under the Offer may be applied for by those who have accepted their Entitlements in full) may increase their interests beyond their Entitlement. This could result in the dilution of holdings of those who failed to accept their Entitlements in full and those who failed to apply for Additional Shares.

3. ACTION REQUIRED BY SHAREHOLDERS

3.1 What Eligible Shareholders may do

The number of New Shares to which you are entitled (your Entitlement ) is shown on the accompanying Entitlement and Acceptance Form.

If you do not take up your Entitlement, then your percentage holding in the Company will be diluted.

As an Eligible Shareholder you may:

(a) take up all or part of your Entitlement (refer to Section 3.2 below); or
(b) allow all of your Entitlement to lapse (refer to Section 3.4 below); or
(c) take up all of your Entitlement and apply for Additional Shares under the Top-Up Facility (refer to Section 3.3 below).

As provided in Section 1.14, Ineligible Foreign Shareholders cannot take any of the steps set out below.

3.2 Applying for New Shares

You may take up all or part of your Entitlement by completing the Entitlement and Acceptance Form and attaching payment to reach Computershare Investor Services Pty Limited ( Share Registry ) by no later than 5:00pm (WST) on the Closing Date or by paying by BPay[®] .

The Issue Price for each New Share accepted under your Entitlement is payable on application. You have the following payment options:

By attaching to your completed Entitlement and Acceptance Form a cheque, bank or money order in Australian currency for the amount of your application money to “Strike Energy Ltd – Subscription Account – Share Account” and crossed “Not Negotiable” .

You should ensure that sufficient funds are held in relevant account(s) to cover the application monies. If the amount of your cheque for application monies (or the amount for which the cheque clears in time for allocation) is insufficient to pay in full for the number of New Shares you have applied for in your Entitlement and Acceptance Form, you will be taken to have applied for such lower number of whole New Shares as your cleared application monies will pay for (and to have specified that number of New Shares on your Entitlement and Acceptance Form). Alternatively, your Application will not be accepted.

If paying via BPay[®] :

(i) Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the Applicant to ensure that funds are submitted through BPay[®] by the date and time mentioned above;
(ii) you must follow the instructions for BPay[®] set out in the Entitlement and Acceptance Form;
(iii) you do not need to return the Entitlement and Acceptance Form but are taken to make each of the statements and representations on that form; and

(iv) if you subscribe for less than your Entitlement or do not pay for your full Entitlement, you are taken to have accepted your Entitlement in respect of such whole number of New Shares which is covered in full by your application monies.

3.3 Top-Up Facility

As detailed in Section 1.10 above, Eligible Shareholders (other than Directors and related parties of the Company) may, in addition to taking up their Entitlements in full, apply for Additional Shares in excess of their Entitlements.

if you wish to subscribe for Additional Shares in addition to your Entitlement, then you should nominate the maximum number of Additional Shares you wish to subscribe for on the Entitlement and Acceptance Form and make payment for your full Entitlement plus the Additional Shares (at the Issue Price $0.10 for each Additional Share).

If your payment is being made by BPay[®] :

you do not need to submit the personalised Entitlement and Acceptance Form but are taken to make each of the statements and representations on that form; and
if your payment exceeds the amount payable for your full Entitlement, you are taken to have accepted your Entitlement in full and to have applied for such number of Additional Shares which is covered in full by your application monies.

3.4 Entitlements not taken up

If you do not wish to accept any of your Entitlement, you are not obliged to do anything. The number of Shares you currently hold and the entitlement attaching to those Shares will not be affected should you choose not to accept any part of your Entitlement.

3.5 Entitlement and Acceptance Form is binding

A completed and lodged Entitlement and Acceptance Form constitutes a binding offer to acquire New Shares on the terms and conditions set out in this letter of offer and, once lodged, cannot be withdrawn. If the Entitlement and Acceptance Form is not completed correctly, it may still be treated as a valid application for New Shares. The Directors’ decision whether to treat an acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

3.6 Brokerage

No brokerage is payable by Shareholders who accept their Entitlement. No stamp duty is payable for subscribing for an Entitlement.

3.7 Queries concerning your Entitlement

If you have any queries concerning your Entitlement please contact Computershare Investor Services Pty Ltd at 1300 557 010.

4. ADDITIONAL INFORMATION REGARDING THE OFFER

4.1 Reliance on Offer Document

The Offer is made pursuant to section 708AA of the Corporations Act without the issue of a prospectus or disclosure document under Chapter 6D of the Corporations Act. This Offer Document is not a prospectus, disclosure document or other offering document under the Corporations Act (or any other Australian or foreign law) and has not been lodged with ASIC.

For the Company to rely on the disclosure exemption in section 708AA of the Corporations Act, the Company is required to lodge a "cleansing notice" under section 708AA(2)(f) of the Corporations Act. That notice is required to:

(a) set out any information that has been excluded from a continuous disclosure notice in accordance with the Listing Rules and that investors and their professional advisers would reasonably require, and would reasonably expect to find in a disclosure document, for the purpose of making an informed assessment of:
(i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or
(ii) the rights and liabilities attaching to the New Shares; and
(b) state the potential effect of the issue of the New Shares on the control of the Company and the consequences of that effect.

The Company lodged a cleansing notice in respect of the Offer with ASX on Wednesday, 21 December 2011.

4.2 Announcements

Eligible Shareholders intending to participate in the Offer should refer to the announcements made by the Company to the ASX. This information is available from the ASX website, www.asx.com.au (ASX Code: STX), and the Company's website, www.strikeenergy.com.au. Copies of the announcements will also be available from the Company's secretary.

4.3 Risks

An investment in New Shares should be regarded as speculative and involves many risks.

Shareholders should consider the investment in the context of their individual risk profile for speculative investments, investment objectives and individual financial circumstances. Each Shareholder should consult their own stockbroker, solicitor, accountant or other professional adviser before deciding whether or not to invest in the New Shares.

The New Shares carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those shares.

The information in the Offer Document does not constitute a recommendation to subscribe for New Shares and this Offer Document does not purport to contain all the information that you may require to evaluate a possible application for New Shares. You should make your assessment of what information is relevant to your decision to participate in the Offer.

4.4 Taxation implications

Eligible Shareholders should be aware that there may be taxation implications associated with participating in the Offer. The Directors do not consider it appropriate to give Shareholders advice

regarding the taxation consequences of subscribing for New Shares under this Offer Document. The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders.

Shareholders should consult their professional tax adviser in connection with subscribing for New Shares under this Offer Document.

4.5 Governing law

This Offer Document and the contracts which arise on the acceptance of the personalised Entitlement and Acceptance Forms are governed by the laws applicable in Western Australia, Australia. Each Eligible Shareholder submits to the non-exclusive jurisdiction of the courts of Western Australia.

4.6 Enquiries concerning this Offer Document

Enquiries relating to this Offer Document should be directed to the Company Secretary by telephone on +61 (0) 8 6103 0999.

5. DEFINED TERMS

$ or AUD means Australian dollar.

Additional Shares means New Shares applied for by an Eligible Shareholder that are in excess of the Eligible Shareholder’s Entitlement.

Applicant refers to a person who submits an Entitlement and Acceptance Form.

Application refers to the submission of an Entitlement and Acceptance Form.

ASX means ASX Limited (ACN 008 624 691).

Board means the board of Directors.

Closing Date means the closing date of the Offer being Wednesday, 25 January 2012 (subject to the right of the Company to vary the date without notice).

Company or Strike means Strike Energy Ltd (ACN 078 012 745).

Directors means the directors of the Company.

Eligible Shareholder means a Shareholder whose details appear on the Company's register of Shareholders as at the Record Date whose registered address is in Australia or New Zealand.

Entitlement means the entitlement to subscribe for one (1) New Share for every fifteen (15) Shares held by an Eligible Shareholder on the Record Date and as set out in the Entitlement and Acceptance Form and Entitlements has a corresponding meaning.

Entitlement and Acceptance Form means the Entitlement and Acceptance Form accompanying this Offer Document.

Ineligible Foreign Shareholder means a Shareholder, at the Record Date whose registered address is not situated in Australia or New Zealand.

Issue Price means $0.10 per New Share.

Listing Rules means the listing rules of the ASX.

New Shares means the Shares proposed to be issued pursuant to this Offer.

Offer means the non-renounceable pro rata offer of New Shares on the basis of one (1) New Share for every fifteen (15) Shares held on the Record Date at the Issue Price pursuant to this Offer Document.

Offer Document means this Offer Document dated 21 December 2011.

Opening Date means the opening date of the Offer being Wednesday, 11 January 2012.

Option means an option in the capital of the Company.

Placement has the meaning given in Section 1.2.

Placement Shares means the Shares issued pursuant to the Placement.

Record Date means Monday, 9 January 2012.

Section means a section of this Offer Document.

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

Shareholder means a holder of Shares.

Top-Up Facility means the mechanism by which Eligible Shareholders can apply for Additional Shares.

US Person means a "US Person" as defined in Regulation S under the US Securities Act of 1933, as amended.

WST means Australian Western Standard Time.

6. CORPORATE DIRECTORY

DIRECTORS

Tim Clifton ( Non-Executive Chairman ) David Wrench (Managing Director) Ben Thomas (Executive Director) Simon Ashton ( Non-Executive Director ) Timothy Goyder ( Non-Executive Director ) Eytan Uliel (Non-Executive Director)

COMPANY SECRETARY

Andrew Dimsey

REGISTERED OFFICE

Ground Floor, 10 Ord Street, WEST PERTH WA 6005

Tel : (+61 8) 6103 0999 Fax : (+61 8) 6103 0990

WEBSITE

http://www.strikeenergy.com.au

LEAD MANAGER

Blackswan Equities Limited Level 12, 28 The Esplanade PERTH WA 6000

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace PERTH WA 6000

Tel : 1300 557 010