TALIUS GROUP LIMITED — Capital/Financing Update 2008

Aug 7, 2008

7 August 2008

Dear Shareholder

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NON RENOUNCEABLE ISSUE NOW TO CLOSE 18 AUGUST

We enclose a copy of the Prospectus dated 4 July 2008 (including your Entitlement and Acceptance Form), under which Advance Energy Limited ( Advance Energy or the Company ) made a non-renounceable pro-rata offer to Eligible Shareholders (as that term is defined in the Prospectus) of up to 49,499,356 ordinary fully paid shares in the capital of Advance Energy ( Shares ) at an issue price of $0.08 per Share, on the basis of 5 Shares for every 7 Shares held as at 18 July 2008 ( Rights Issue ).

We also attach a copy of a Supplementary Prospectus dated 1 August 2008. This was lodged in view of the release of the June Quarterly Report showing record production and revenues, and it details recent developments since the lodgement of the original Prospectus on 4[th] July 2008.

The main points covered in the Supplementary Prospectus are summarised below (together with the relevant reference in the Supplementary Prospectus):

The following additional information is included as section 2.4 “Company Background” in the Supplementary Prospectus:

• On completion of the Rights Issue, the Company will have an asset backing per share of more than 17 cents;

• Revenue for the Quarter ending 30 June 2008 was $1,559,742 – an increase of 95% on the revenues for the previous quarter;

• Advance Energy’s operations manager, Hibernia Resources, LLC, expects additional net production of 26 MCFPD and 13 BOPD on connection of two wells that were drilled in May 2008. Based on current prices ($127[1] /barrel and $9.30/MMBTU[2] ), this equates to additional annualised revenue of $707,000;

• The recently completed workover of the Alexander-1 well resulted in an increase of 80MCFPD (AVD Net 56MCFPD). Based on current gas prices, this equates to additional revenue of $226,000 to Advance Energy;

1 www.nymex.com 31 July 2008

2 Average Energy Content Ratio 1.19MMBTU (Million British Thermal Units) to 1 MCF (Thousand Cubic Feet)

• Advance Energy will drill six additional wells before the end of 2008 including its first in the recently acquired Mother Lode III project;

• Advance Energy is expecting to receive term sheets from various parties for the sale of its Lone Camp project. The operational cashflows from the Lone Camp project have exceeded acquisition and development costs over the past 30 months. This sale will therefore successfully demonstrate the effectiveness of your Company’s core strategy in acquiring producing properties, adding value through workovers and divestment on achieving payback;

• Advance Energy’s US bankers, Sterling Bank of Texas, have extended its facility from US$20m to US$40m and reduced its interest rate to Prime + 1.0% (i.e. 6.0%).

Consents

Section 3 of the Supplementary Prospectus sets out Anndev Pty Ltd's consent to be named as an underwriter of the offer in the Supplementary Prospectus in the form and context in which it is named, and confirms it has not withdrawn its consent before the lodgement of the Supplementary Prospectus.

The Directors believe that there have been no materially adverse changes since the lodgement of the original Prospectus on 4[th] July 2008.

You should consider the Prospectus and the Supplementary Prospectus in deciding whether to acquire the Shares under the non-renounceable pro-rata offer by Advance Energy which is made in the Prospectus.

I encourage you to read these documents and to call me on 08 9486 1122 if you wish to discuss any aspect of the offer contained in them. Please note that both the Prospectus and Supplementary Prospectus contained in this communication are the same documents as previously despatched to you. Please also note that these documents can also be found on the Company’s website (www.advanceenergyltd.com.au) and further copies can be requested by contacting our office.

If you wish to acquire the shares under the Rights Issue, you will need to complete the Entitlement and Acceptance form which accompanies the Prospectus. The closing date for acceptances has now been extended to Monday 18 August to give all shareholders sufficient further time to digest the additional information.

Yours Sincerely

Advance Energy Ltd

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Alex Bajada Chairman