TALIUS GROUP LIMITED — Capital/Financing Update 2013

May 9, 2013

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10 May 2013

Australian Securities Exchange –Perth Home Office Level 8 Exchange Plaza 2 The Esplanade Perh WA 6000

Attention : Dave Filov Adviser, Listings Dave.Filov@asx.com.au

Dear Dave,

Advance Energy Limited (“ AVD ” or “ the Company ”)

Further to your letter dated 8 May 2013, please find below responses to your questions relating to the Appendix 5B for the quarter ending 31 March 2013 (“Appendix 5B”).

1. The Company has engaged Energy Capital Partners (www.ecapitalpartners.com.au) to raise up to $500,000 through a converting loan (“Loan”). Funds will be used to provide working capital and to undertake development of the Company’s Ukrainian assets. It is proposed that, subject to the approval of shareholders, the Loan would convert into fully paid ordinary shares in the Company and the Company will commit to holding a meeting of shareholders to approve this conversion within 3 months of Loan drawdown.

Energy Capital Partners has facilitated placements into the Company in 2012 and has successfully provided equity finance for several other oil and gas companies, including Aleator Energy, Austin Exploration and MOV Corporation. Its clients are already significant shareholders in the Company and Energy Capital Partners has advised that it is confident in being able to source sufficient capital to enable the Company to continue as a going concern.

One of the major barriers to Advance raising funds in recent months has been the suspension of Aleator Energy Ltd (“Aleator”) from ASX since September 2012. Advance and Aleator have a number of common shareholders with both companies having operations in Ukraine and having been funded by Energy Capital Partners. The current suspension of Aleator has ‘locked in’ many of these shareholders for the last eight months. Aleator has advised the market that it expects its securities to re-list in early May thereby providing the opportunity for many Aleator shareholders to reduce their exposure and, potentially, switch some of their support to Advance.

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Energy Capital Partners has also been engaged to facilitate the acquisition of Notes held by some of the largest holders of listed convertible notes (“Notes”). The presence of the Notes and the likelihood that, when converted, there will be a significant dilution of shareholders has proven to be a barrier to obtaining additional equity finance. A number of the larger noteholders have advised that they are unable or unwilling to convert their Notes and have asked the Company to source potential buyers of these Notes. We have been advised that Energy Capital Partners has a number of interested parties and that these parties would intend converting these Notes at first available opportunity thereby reducing the company’s liabilities significantly. In anticipation of this acquisition, the Company is seeking noteholder and shareholder approval to amend the Note terms so that they can be converted at any time and at no greater than $0.0008 per share.

1. The Company does expect to have negative operating cash flows similar to those reported in the Appendix 5B. However, as indicated in 1) above, it is confident that it will be able to raise sufficient funds to offset these negative operating cash flows and to pursue its business objectives.

2. The Company is currently focussing on re-capitalising and restructuring, including facilitating the Note take out. Once this has been completed, the Company will be in a better position to raise the funds it requires to progress the development of its Ukrainian energy project.

3. The Company confirms that it is in compliance with the Listing Rules, particularly Listing Rule 3.1.

4. The Board believes that the Company continues to comply with Listing Rule 12.2 for the following reasons:

5. a. The Company has been given confidence by Energy Capital Partners that it will be able to raise funds for the Company in the near future;

6. b. We anticipate that the acquisition of notes from significant noteholders will result in the new noteholders converting them. This will result in a significant strengthening of the Company’s balance sheet and a reduction in the company’s net liabilities.

Yours sincerely

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Alistair Jobling Company Secretary Advance Energy Limited

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ASX Compliance Pty Limited ABN 26 087 780 489 Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

GPO Box D187 PERTH WA 6840

Telephone 61 8 9224 0000 Facsimile 61 8 9221 2020 www.asx.com.au

8 May 2013

Mr Alistair Jobling Company Secretary Advance Energy Limited

By email

Dear Alistair

Advance Energy Limited (“Company”)

I refer to the Company’s Quarterly Report in the form of Appendix 5B for the period ended 31 March 2013 , released to ASX Limited ("ASX") on 30 April 2013 (the “Appendix 5B”).

ASX notes that the Company has reported the following.

1. Receipts from product sales of nil.

2. Net negative operating cash flows for the quarter of $65,000.

3. Cash at end of quarter of $52,000.

4. In light of the information contained in the Appendix 5B, please respond to each of the following questions.

5. It is possible to conclude on the basis of the information provided that if the Company were to continue to expend cash at the rate for the quarter indicated by the Appendix 5B, the Company may not have sufficient cash to fund its activities. Is this the case, or are there other factors that should be taken into account in assessing the Company’s position?

6. Does the Company expect that in the future it will have negative operating cash flows similar to that reported in the Appendix 5B for the quarter and, if so, what steps has it taken to ensure that it has sufficient funds in order to continue its operations at that rate?

7. What steps has the Company taken, or what steps does it propose to take, to enable it to continue to meet its business objectives?

8. Can the Company confirm that it is in compliance with the listing rules, and in particular, listing rule 3.1?

9. Please comment on the Company’s compliance with listing rule 12.2, with reference to the matters discussed in the note to the rule.

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Listing rule 3.1

Listing rule 3.1 requires an entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. The exceptions to this requirement are set out in the rule.

In responding to this letter you should consult listing rule 3.1 and the guidance note titled “Continuous disclosure: listing rules 3.1 – 3.1B”.

If the information requested by this letter is information required to be given to ASX under listing rule 3.1 your obligation is to disclose the information immediately.

Your responsibility under listing rule 3.1 is not confined to, or necessarily satisfied by, answering the questions set out in this letter.

This letter and your response will be released to the market. If you have any concerns about your response being released, please contact me immediately. Your response should be sent to me on facsimile number +61 8 9221 2020 or email dave.filov@asx.com.au . It should not be sent to ASX Market Announcements.

Unless the information is required immediately under listing rule 3.1, a response is requested as soon as possible and, in any event, not later than 3.00 pm WST on Friday 10 May 2013 .

If you are unable to respond by the time requested you should consider a request for a trading halt in the Company’s securities.

If you have any queries please let me know.

Yours sincerely,

[sent electronically without signature]

Dave Filov Adviser, Listings Compliance (Perth)

Direct: +61 8 9224 0014

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