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ASX Announcement

29 January 2013

Entitlement Issue of Options – Prospectus Despatched

In accordance with the timetable included in the Prospectus lodged with ASIC and ASX on 14 January 2013, Advance Energy Ltd confirms that the attached Prospectus has been despatched to shareholders and that the offer is now open.

FOR FURTHER INFORMATION CONTACT

Mr Anthony Short (Managing Director) Or Mr Alistair Jobling (Company Secretary) Telephone: 08 9429 2900 Facsimile: 08 9486 1011 ASX CODE: AVD www.advanceenergyltd.com.au

29 January 2013

ADVANCE ENERGY LIMITED ACN 111 823 762

PROSPECTUS

FOR

A non-renounceable pro-rata offer to Eligible Shareholders on the basis of 1 Listed Option for every 1 Share held as at the Record Date at an issue price of 0.1 cents per Listed Option.

The Listed Options are exercisable at 0.4 cents each on or before 31 December 2014

THIS OFFER CLOSES AT 5.00PM WST ON 15 FEBRUARY 2013

VALID ACCEPTANCES MUST BE RECEIVED BEFORE THAT TIME.

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

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT SHOULD BE READ IN ITS ENTIRETY. IF YOU ARE IN DOUBT ABOUT WHAT TO DO, YOU SHOULD CONSULT YOUR PROFESSIONAL ADVISER WITHOUT DELAY.

THE OPTIONS OFFERED BY THIS PROSPECTUS ARE OF A SPECULATIVE NATURE.

IMPORTANT INFORMATION

This Prospectus is dated 14 January 2013 and was lodged with the ASIC on that date with the consent of all Directors. Neither ASIC nor ASX nor their respective officers take any responsibility for the contents of this Prospectus.

No Listed Options will be issued on the basis of this Prospectus any later than 13 months after the date of this Prospectus (being the expiry date of this Prospectus).

A copy of this Prospectus is available for inspection at the registered office of the Company at Suite 4, 16 Ord Street, West Perth 6005, during normal business hours. The Company will provide a copy of this Prospectus to any person on request. The Company will also provide copies of other documents on request (see Section 5.6).

The Listed Options offered by this Prospectus and their underlying shares should be considered speculative. Please refer to Section 4 for details relating to investment risks.

The Entitlement and Acceptance Form accompanying this Prospectus is important. Please refer to instructions in Section 1.8 regarding the acceptance of your Entitlement. Applications for Listed Options can only be submitted on an original Entitlement and Acceptance Form sent with a copy of this Prospectus by the Company. The Entitlement and Acceptance Form sets out an Eligible Shareholder’s Entitlement to participate in the Offer.

Revenues and expenditures disclosed in this Prospectus are recognised exclusive of the amount of goods and services tax, unless otherwise disclosed.

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

No action has been taken to permit the offer of Listed Options under this Prospectus in any jurisdiction other than Australia and New Zealand.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws. This Prospectus does not constitute an offer of Listed Options in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Prospectus.

This document is important and should be read in its entirety before deciding to participate in the Offer. This does not take into account the investment objectives, financial or taxation or particular needs of any Applicant. Before making any investment in the Company, each Applicant should consider whether such an investment is appropriate to his/her particular needs, and considering their individual risk profile for speculative investments, investment objectives and individual financial circumstances. Each Applicant should consult his/her stockbroker, solicitor, accountant or other professional adviser without delay. Some of the risk factors that should be considered by potential investors are outlined in Section 4.

By returning an Entitlement and Acceptance Form, you acknowledge that you have received and read this Prospectus and you have acted in accordance with the terms of the Offer detailed in this Prospectus.

Definitions of certain terms used in this Prospectus are contained in Section 7. All references to currency are to Australian dollars and all references to time are to WST, unless otherwise indicated.

Eligible Shareholders with registered addresses in Australia and New Zealand only can obtain a copy of this Prospectus during the period of the Rights Issue on the Company's website, www.advanceenergyltd.com.au. The electronic version of this Prospectus does not include the Entitlement and Acceptance Form which accompanies the printed copy of this Prospectus to be mailed to Eligible Shareholders with registered addresses in Australia and New Zealand on or around 29 January 2013.

CORPORATE DIRECTORY

Directors

Auditor

Anthony Short Managing Director Kip Plankinton Non-Executive Director Alistair Jobling Non-Executive Director

Somes Cooke 1304 Hay Street West Perth WA 6005

Company Secretary

Share Registry

Alistair Jobling

Registered Office

Advanced Share Registry Services Pty Ltd 150 Stirling Highway Nedlands WA 6009

Suite 4, 16 Ord Street West Perth 6005 Western Australia

Telephone: +61 8 9429 2900

Facsimile: +61 8 9486 1011

ASX Code: AVD

Website: www.advanceenergyltd.com.au

PROPOSED TIMETABLE

PROPOSED TIMETABLE
Appendix 3B given to ASX	14 January 2013
Lodgement of Prospectus with ASIC and provision of copies to ASX	14 January 2013
Company sends letter to Shareholders containing information required by Appendix 3B	15 January 2013
Existing Shares quoted on an "ex" basis	17 January 2013
Record date for determining entitlements	23 January 2013
Prospectus and Entitlement and Acceptance Form despatched to Eligible Shareholders	29 January 2013
Announce to ASX that Prospectus has been sent to Eligible Shareholders	29 January 2013
Closing Date	15 February 2013
Listed Options quoted on a deferred settlement basis	18 February 2013
Notify ASX of under-subscriptions	19 February 2013
Anticipated date for allotment and issue of the Listed Options	20 February 2013
Anticipated date for despatch of holder statements (and last day for the Company to confirm to ASX all information required by Appendix 3B)	21 February 2013
Anticipated date of commencement of Listed Options trading	22 February 2013

This timetable is indicative only and subject to change. Subject to the Listing Rules, the Directors reserve the right to vary these dates, including the Closing Date for the Offer, without prior notice. Any extension of the Closing Date will have a consequential effect on the anticipated date for allotment and issue of the Listed Options. The Directors also reserve the right not to proceed with the whole or part of the Rights Issue at any time prior to allotment. In that event, the relevant Application Monies will be returned without interest.

RISK FACTORS

An investment in Options and the underlying Shares is subject to risks and uncertainties and should be considered speculative. Some of the more significant risks which affect an investment in the Company include (but are not limited to):

(a) Operating Risks in Ukraine - The Company owns assets in Ukraine, which has a less developed legal system than more established countries and where there are additional risks that include political instability, currency, laws affecting foreign ownership, government participation, exploration licensing and government control over mineral properties. Refer to Sections 4.1(a) and 4.1(b) for more details.
(b) Risks associated with the acquisition of an established company – in September 2012, the Company acquired Epic Energy Ukraine Ltd, a company that was incorporated in 2007 and which has been party to contracts, agreements and transactions. While every effort has been made to identify and eliminate risks associated with an established company, not all may have been identified or effectively dealt with. Refer to Section 4.1(u) for more details;
(c) Technical Risk - The Company plans to undertake the development and enhancement of existing well(s) that are either shut-in, incomplete or otherwise not producing. While a substantial amount of technical information has been obtained with regard to these wells, their condition may not be known until operations commence. Furthermore, there is no guarantee of success that hydrocarbons can be commercially produced from any well. Refer to Section 4.1(c) for more details;
(d) License Risks - Advance has acquired a company that has entered Joint Activity Agreements with the holders of subsoil licenses. The continuing validity of the company’s interest in the licenses is subject to several factors including the company meeting the JAA work programs. Refer to Sections 4.1(d) and 4.1(e) for more information;
(e) Funding Requirements - The Company seeks to raise sufficient funds to acquire additional licenses and to undertake the evaluation of oil and gas assets with a view bringing these assets into production and preparing an independent assessment of recoverable reserves. The Company will also need to raise sufficient working capital to fund administrative activities in Ukraine and in Australia. At this stage, the Company does not have an accurate estimate of the cost of the proposed evaluation and development activities or of the production (if any) that can be achieved as a result. There is therefore a risk that the company may need to obtain additional capital. Refer to Section 4.1(s) for further information;
(f) Oil and Gas Commercial Risks - The Company will continue to be exposed to a range of oil and gas commercial and operational risks including oil and gas price volatility, hydrocarbon reserves and resource estimates, exchange rate risks, environmental risks and contract risks. Refer to Sections 4.1(c), 4.1(f), 4.1(g), 4.1(j) and 4.1(k) for further details.

Section 4 includes further details of the risks of an investment in the Company

	TABLE OF CONTENTS
Section	Page No
1.	Details of the Offer ............................................................................................ 7
2.	Effect of the Offer ............................................................................................ 11
3.	Action required by Shareholders .................................................................. 13
4.	Risk factors ..................................................................................................... 15
5.	Additional information .................................................................................... 22
6.	Directors' Statement and Consent ................................................................ 30
7.	Glossary of Terms .......................................................................................... 31

1. Details of the Offer

1.1 The Offer

The Offer under this Prospectus is a non-renounceable pro-rata offer to Eligible Shareholders on the basis of 1 Listed Option for every 1 Share held on the Record Date at an issue price of $0.001 (0.1 cent) per Listed Option ( Entitlement Offer ).

The Listed Options have an expiry date of 31 December 2014 and an exercise price of $0.004 (0.4 cents).

At the date of this Prospectus, the Company has 1,186,399,438 Shares, 6,630,500 Listed Convertible Notes and 9 Convertible Performance Shares on issue.

The Offer is for up to 1,186,399,438 Listed Options.

Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of an Listed Option, such fraction will be rounded down to the nearest whole Listed Option.

Refer to Section 5.1 for a summary of the terms and conditions attaching to the Listed Options and Section 5.2 for a summary of the rights attaching to the underlying Shares.

1.2 Purpose of the Offer

Completion of the Offer will result in an increase in cash in hand of approximately $1,186,399 (before the payment of costs associated with the Offer).

Funds raised under the Offer are proposed to be expended as follows:

Description of Cash Outflows	$
1. Acquisition of additional licenses	350,000
2. Acquisition of Seismic Data on Ortynytska Project	200,000
3. Evaluation and development	250,000
4. Preparation of a Reserve Report on Ukrainian Assets	80,000
5. Ukraine Office and Personnel Costs	120,000
6. Perth Office Costs	173,112
7. Costs of the Offer1	13,287
Total funds raised under this Offer	$1,186,399

1 See Section 5.12 for further details

1.3 Opening and Closing Dates

The Company will accept Entitlement and Acceptance Forms from the Record Date for determining Eligible Shareholders’ Entitlements under the Offer until 5.00pm WST on the Closing Date or such other date as the Directors in their absolute discretion shall determine, subject to the requirements of the Listing Rules.

1.4 Shortfall Offer

The Offer is not underwritten. If all Eligible Shareholders do not accept their full entitlement pursuant to the Offer, the Directors reserve the right, subject to any restrictions imposed by the Corporations Act and the Listing Rules, to issue the Shortfall Options at their sole discretion. Refer to Section 5.11 for further details of the Shortfall Offer.

If Shareholders wish to take up more than their Entitlement under the Offer, they may apply to participate in any Shortfall that may arise under the Offer. For further details on how to apply for Shortfall Options, please refer to Section 3.1. The Shortfall Offer is a separate offer made pursuant to this Prospectus and remains open for up to three months following the Closing Date.

1.5 Risks of the Offer

An investment in Listed Options and the underlying Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are set out in Section 4.

1.6 Non-renounceable offer

The rights to Listed Options under the Offer are non-renounceable. Accordingly, there will be no trading of Entitlements on ASX and you may not dispose of your Entitlement to subscribe for Listed Options to another party. If you do not take up your Entitlement under the Offer by the Closing Date, the Offer to you will lapse.

1.7 Entitlement and Acceptance Forms

Acceptance of a completed Entitlement and Acceptance Form by the Company creates a legally binding contract between the Applicant and the Company for the number of Listed Options accepted by the Company. The Entitlement and Acceptance Form does not need to be signed to be a binding acceptance of Listed Options.

If the Entitlement and Acceptance Form is not completed correctly it may still be treated as valid. The Directors’ decision as to whether to treat the acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

1.8 Issue and dispatch

Listed Options under the Offer are expected to be issued, and security holder statements dispatched, on or before the date in the proposed timetable in this Prospectus.

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

1.9 Application Monies held on trust

All Application Monies received for the Listed Options will be held on trust in a bank account maintained solely for the purpose of depositing Application Monies received pursuant to this Prospectus until the Listed Options are issued. All Application Monies will be returned (without interest) if the Listed Options are not issued.

1.10 ASX quotation

Application has been made to ASX for official quotation of the Listed Options. If permission is not granted by ASX for the official quotation of the Listed Options offered by

this Prospectus within 3 months after the date of this Prospectus (or such period as the ASX allows), the Company will repay, as soon as practicable, without interest, all Application Monies received pursuant to this Prospectus.

1.11 CHESS

The Company participates in the Clearing House Electronic Subregister System, known as CHESS. ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532 ( ASTC ), a wholly owned subsidiary of ASX, operates CHESS in accordance with the Listing Rules and the Securities Clearing House Business Rules.

Under CHESS, Applicants will not receive a certificate but will receive a statement of their holding of Listed Options.

If you are broker sponsored, ASTC will send you a CHESS statement.

The CHESS statement will set out the number of Listed Options issued under this Prospectus, provide details of your holder identification number, the participant identification number of the sponsor and the terms and conditions applicable to the Shares.

If you are registered on the Issuer Sponsored subregister, your statement will be dispatched by Advanced Share Registry Services and will contain the number of Listed Options issued to you under this Prospectus and your security holder reference number.

A CHESS statement or Issuer Sponsored statement will routinely be sent to Listed Optionholders at the end of any calendar month during which the balance of their Listed Optionholding changes. Listed Optionholders may request a statement at any other time; however, a charge may be made for additional statements.

1.12 Residents Outside Australia and New Zealand

The Offer is not being extended to any shareholders whose registered address is outside Australia or New Zealand. The Company is of the view that it is unreasonable to make the Offer to shareholders outside Australia and New Zealand, having regard to:

the number of those Shareholders;
the number and value of Listed Options to be offered to those persons; and
the cost of complying with overseas legal requirements.

The Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer other than for shareholders in Australia and New Zealand. The Company is not required to make offers under the Prospectus to Shareholders other than in Australia and New Zealand. Where the Prospectus has been dispatched to Shareholders domiciled outside Australia or New Zealand and where the country's Shares code or legislation prohibits or restricts in any way the making of the Offer contemplated by the Prospectus, the Prospectus is provided for information purposes only.

1.13 Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for Listed Options under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders. As a result, Shareholders should

consult their professional tax adviser in connection with subscribing for Listed Options under this Prospectus.

1.14 Major activities and financial information

A summary of the major activities and financial information relating to the Company for the six months ending 30 June 2012 is set out in the half year report of the Company lodged with ASX on 27 August 2012 a copy of which is available on the Company's website at www.advanceenergyltd.com.au.

The Company's continuous disclosure notices (i.e. ASX announcements) since 27 August 2012 are listed in Section 5.5.

Copies of these documents are available free of charge from the Company. Directors strongly recommend that Shareholders and potential investors review these and all other announcements prior to deciding whether or not to participate in the Offer.

1.15 Privacy

The Company collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing the Acceptance and, if the Acceptance is successful, to administer the Applicant’s security holding in the Company.

By submitting an Entitlement and Acceptance Form, each Applicant agrees that the Company may use the information provided by an Applicant on the Entitlement and Acceptance Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the share registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory authorities.

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 Acceptance.

An Applicant has an Entitlement to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company’s registered office.

1.16 Enquiries concerning Prospectus

Enquiries relating to this Prospectus should be directed to the Company Secretary by telephone on 08 9429 2900.

2. Effect of the Offer

2.1 Capital Structure on completion of the Offer

Balance at the date of this Prospectus Options to be issued pursuant to the Offer(2) Balance after the Offer (if fully subscribed)	Number of Shares Number of Options Number of Listed Convertible Notes Number of Unlisted Performance Shares 1,186,399,438 NIL 6,630,500(1) 9 1,186,399,438 - -
	1,186,399,438 1,186,399,438 6,630,500 9

(1) Listed Convertible Notes may only be exercised on 31 December or 30 June each year. The Listed Convertible Notes mature in December 2014.
(2) Maximum number of options to be issued pursuant to the Offer and/or the Shortfall Offer

2.2 Pro forma statement of financial position

Basis of Preparation

The pro-forma statement of financial position below has been prepared in accordance with the draft ASIC Guide to Disclosing Pro-Forma Financial Information (issued July 2005).

The pro-forma statement of financial position is based on the audit reviewed statement of financial position at 30 June 2012 adjusted by the following material transactions between 30 June 2012 and 10 January 2013 (Sections 2.2 (a) to (e) inclusive) and the proforma adjustments associated with the Offer described in Sections 2.2 (f) and (g):

(a) the issue of 15,000,000 shares at $0.004 per Share and 73,333,333 shares at $0.003 per Share to raise $260,000;
(b) the issue of 6,250,000 Shares at $0.004 to satisfy the provision of professional services;
(c) the issue of 232,602,337 shares to satisfy interest of $475,629 payable to Listed Convertible Noteholders for the quarters ending 30 June 2012, 30 September 2012 and 31 December 2012;
(d) operating loss of $150,000 for the period between 1 July 2012 and 10 January 2013;
(e) the issue of 500,000,000 Shares at a deemed issue price of $0.005 per share (0.5 cents) to the vendors of Celiastad Pty Ltd;
(f) the issue of 1,186,399,438 Options each at $0.001 pursuant to the Offer; and
(g) payment of costs associated with the Offer as outlined in Section 5.12.

	Unaudited Pre- Entitlement Offer (10 January 2013)	Proforma Adjustments	Proforma Post Entitlement Offer
	$	$	$

Current assets
Cash and cash equivalents	112,063	1,173,112	1,271,888
Trade & other receivables	75,057		75,057
Total Current Assets	187,120		1,346,945

Non-Current Assets
Property, Plant and equipment	2,504,413		2,504,413
Oil and Gas Exploration	615,813		615,813
Other Financial Assets	58,724		58,724
Total Non-Current Assets	3,178,950		3,178,950

Total Assets	3,366,070		4,525,895

Current Liabilities
Trade and otherpayables	513,880		513,880
Interest BearingLiabilities	0		0
Accrued Interest - Convertible Notes	158,543		158,543
Total Current Liabilities	672,423		672,423

Non-Current Liabilities
Interest BearingLiabilities	6,630,500		6,630,500
Total Non-Current Liabilities	6,630,500		6,630,500

Total Liabilities	7,302,923		7,302,923

Net Assets	(3,936,853)		(2,777,028)

Equity
Contributed equity	19,848,347	1,186,399	21,034,746
Reserves	(687,337)		(687,337)
Accumulated losses	(23,097,863)	(13,287)	(23,124,437)

Total Equity	(3,936,853)		(2,777,028)

2.3 Market price of Shares

The highest and lowest market sale prices of the Company’s Shares on ASX during the 3 months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

Highest: $0.004 per Share on 22 October 2012 Lowest: $0.001 per Share on 27 December 2012

The latest available market sale price of the Company’s Shares on ASX prior to the date of lodgement of this Prospectus with the ASIC was $0.002 per Share on 11 January 2013.

2.4 Dividend policy

The Directors are not able to say when and if dividends will be paid in the future, as the payment of any dividends will depend on the future profitability, financial position and cash requirements of the Company.

3. Action required by Shareholders

3.1 Acceptance of Listed Options under this Prospectus

Your entitlement to participate in the Offer will be determined on the Record Date. The entitlement of Eligible Shareholders receiving this Prospectus is shown on the Entitlement and Acceptance form sent to Eligible Shareholders with this Prospectus.

Should you wish to accept all of your Entitlement to Listed Options, then applications for Listed Options under this Prospectus must be made on the Entitlement and Acceptance Form which accompanies this Prospectus, in accordance with the instructions referred to in this Prospectus and on the Entitlement and Acceptance Form. Please read the instructions carefully.

Should you wish to only take up part of your Entitlement, then applications for Listed Options under this Prospectus must be made on the Entitlement and Acceptance Form which accompanies this Prospectus in accordance with the instructions referred to in this Prospectus and on the Entitlement and Acceptance Form. Please read the instructions carefully.

Please complete the Entitlement and Acceptance Form by filling in the details in the spaces provided and attach a cheque for the amount indicated on the Entitlement and Acceptance Form.

Should you wish to take up more than your Entitlement under the Offer, you may apply to participate in any Shortfall that may arise under the Offer. To apply for Shortfall Options, you should complete the Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of that form in the section marked “Additional Number of Options Applied For”.

Completed Entitlement and Acceptance Forms must be accompanied by a cheque in Australian dollars, crossed "Not Negotiable" and made payable to "Advance Energy Limited - Subscription Account" and lodged at any time after the issue of this Prospectus and on or before the Closing Date at the Company’s share registry (by delivery or by post) at:

By delivery Advanced Share Registry Services Pty Ltd 150 Stirling Highway Nedlands WA 6009 By post Advanced Share Registry Services Pty Ltd PO Box 1156 Nedlands WA 6909

If paying via BPAY, 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. If you elect to pay via BPAY, you must follow the instructions for BPAY set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

3.2 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 hold and the entitlement attaching to those Shares will not be affected should you choose not to accept any part of your Entitlement.

3.3 Enquiries concerning your Entitlement

If you have any queries concerning your Entitlement please contact Advanced Share Registry Services, 150 Stirling Highway Nedlands, on Telephone: +61 8 9389 8033

4. Risk factors

Activities in the Company and its controlled entities, as in any business, are subject to risks, which may impact on the Company’s future performance. The Company and its controlled entities have implemented appropriate strategies, actions, systems and safeguards for known risks, however, some are outside its control.

The Directors consider that the following summary, which is not exhaustive, represents some of the major risk factors which Shareholders need to be aware of in evaluating the Company’s business and risks of increasing your investment in the Company. Shareholders should carefully consider the following factors in addition to the other information presented in this Prospectus.

The principal risks include, but are not limited to, the following:

4.1 Specific Risks associated with the Company

(a) Risks Associated with operating in Ukraine

The Company’s projects are located in Ukraine and the Company will be subject to the risks associated with operating in that country. Such risks can include economic, social or political instability or change, hyperinflation, currency nonconvertibility or instability and changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, labour relations as well as government control over mineral properties or government regulations.

Changes to Ukraine’s fiscal regime for oil and gas companies or investment policies and legislation or a shift in political attitude may adversely affect the Company’s operations and profitability.

(b) Ukraine Legal Environment

Ukraine’s legal system is less developed than more established countries and this could result in the following risks:

(i) political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of law or regulation or in an ownership dispute;
(ii) a higher degree of discretion held by various government officials or agencies;
(iii) the lack of political or administrative guidance on implementing applicable rules and regulations, particularly in relation to taxation and property rights;
(iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or
(v) relative inexperience of the judiciary and court in matters affecting the Company.
(c) Exploration and Development Risks

The business of oil and gas exploration, project development and production, by its nature, contains elements of significant risk with no guarantee of success.

Ultimate and continuous success of these activities is dependent on many factors such as:

(i) the discovery and/or acquisition of economically recoverable reserves;
(ii) access to adequate capital for project development;
(iii) design and construction of efficient development and production infrastructure within capital expenditure budgets;
(iv) securing and maintaining title to interests;
(v) obtaining consents and approvals necessary for the conduct of oil and gas exploration, development and production; and
(vi) access to competent operational management and prudent financial administration, including the availability and reliability of appropriately skilled and experienced employees, contractors and consultants.

Whether or not income will result from projects undergoing exploration and development programs depends on successful exploration and establishment of production facilities. Factors including costs, actual hydrocarbons and formations, flow consistency and reliability and commodity prices affect successful project development and operations.

Drilling activities carry risk and as such, activities may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, shortages or delays in the delivery of drill rigs or other equipment.

Industry operating risks include fire, explosions, unanticipated reservoir problems which may affect field production performance, industrial disputes, unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment, mechanical failure or breakdown, blow outs, pipe failures and environmental hazards such as accidental spills or leakage of liquids, gas leaks, ruptures, discharges of toxic gases or geological uncertainty (such as lack of sufficient sub-surface data from correlative well logs and/or formation core analyses). The occurrence of any of these risks could result in legal proceedings against, and substantial losses to the Company due to injury or loss of life, damage to or destruction of property, natural resources or equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation, and penalties or suspension of operations. Damage occurring to third parties as a result of such risks may give rise to claims against the Company.

There is no assurance that any exploration on current or future interests will result in the discovery of an economic deposit of oil or gas. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically developed.

(d) Risks associated with exploration licence retention and renewal and work programs

The ability of the Company to develop and exploit oil and gas reserves in Ukraine depends on the continued compliance of Epic, being the participant in the Ortynytska Project JAA, with the obligations of its current exploration and development licences and Epic's ability to convert these licences into production licenses. The continuing validity of the licenses and their renewal depends on the steps taken by Epic. The continued good standing and, where appropriate, renewal of these approvals, permits and licenses cannot be assured. In addition, exploration and development licenses held by Epic may not be converted into production licenses. In addition, Epic may be required to cease production at a

field for a period of up to seventy days while an application for conversion is considered by governmental authorities.

Ukrainian legislation in relation to the issue of licenses to explore and develop oil and gas reserves is in some cases unclear and subject to ambiguity. There can be no assurance that the regulators will not adopt a more stringent approach to granting, maintaining, renewing or converting licenses than has been the case to date.

(e) Risks relating to ability to convert licences from exploration to production

According to The Law of Ukraine “On Oil & Gas” dated 12 July 2001 ( Oil and Gas Law ) in the case of discovery of oil and gas deposit, the permit holder that performed exploration, subject to meeting other conditions of the application, has the preferential right to receive special permit for production of oil and gas.

According to Article 15 of the Oil and Gas Law, in the case where the holder of permit performed geological survey for further industrial development and received a positive decision regarding confirmation of the deposits, the oil and gas subsoil shall be transferred into permit holder’s use without application.

The exploration and production subsoil licence granted to ZakhidUkrGeologiya was granted for an initial five year period and has been extended until 24 December 2014.

In the event that either ZakhidUkrGeologiya or Epic must apply for a production permit in accordance with Oil and Gas Law, there is no guarantee that the permit will be granted. Even if a production permit is granted, the license holder must continue to comply with the conditions of the permit to return the licence and carry out its production activities. There are risks that the relevant permit can be suspended and cancelled for non-compliance or breach.

(f) Oil and Gas Price Volatility

The demand for, and price of, oil and natural gas is highly dependent on a variety of factors, including international supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments.

International oil and gas prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. Fluctuations in oil and gas prices and, in particular, a material decline in the price of oil or gas may have a material adverse effect on the Company's business, financial condition and results of operations.

(g) Hydrocarbon Reserves and Resource Estimates

Hydrocarbon reserve and resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates, that were valid when originally calculated, may alter significantly when new information or techniques become available. In addition, by their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis the estimates are likely to change. This may result in alterations to development and production plans which may in turn, adversely affect the Company’s operations.

(h) Oil Reserves and Commercial Oil Flow

Oil reserves are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, oil reserves are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and commercial oil flow plans which may, in turn, adversely affect the Company’s operations.

(i) General Economic and Political Risks

Changes in the general economic and political climate in the Ukraine, Australia and on a global basis that could impact on economic growth, the oil and gas prices, interest rates, the rate of inflation, taxation and tariff laws, domestic security which may affect the value and viability of any oil and gas activity that may be conducted by the Company.

(j) Commodity Price Volatility and Exchange Rate Risks

If the Company achieves success leading to hydrocarbon production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for oil and gas, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

(k) Environmental Risks

The Company will be subject to environmental laws and regulations in connection with operations it may pursue in the oil and gas industry. Such operations are currently in Ukraine. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Company may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.

Further, the Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals will prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

(l) Competition

The Company will compete with other companies, including major oil and gas companies. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. Many of the Company's competitors not only explore for and produce oil and gas, but also carry out downstream

operations on these and other products on a worldwide basis. There can be no assurance that the Company can compete effectively with these companies.

(m) Regulatory

Changes in relevant taxes, legal and administration regimes, accounting practice and government policies may adversely affect the financial performance of the Company.

(n) Insurance

Insurance against all risks associated with oil and gas production is not always available or affordable. The Company will maintain insurance where it is considered appropriate for its needs. However, it will not be insured against all risks either because appropriate cover is not available or because the Directors consider the required premiums to be excessive having regard to the benefits that would accrue.

(o) Operating Risks

The operations of the Company may be affected by various factors, including failure to locate or identify oil reserves, failure to achieve predicted well production flow rates, operational and technical difficulties encountered in production, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated reservoir problems which may affect field production performance, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

(p) Transport and infrastructure risk

The Company's drilling and production activities may be impaired due to inadequate state infrastructure in Ukraine. The deterioration of the state gas and oil pipeline in Ukraine could disrupt the transportation of goods and supplies and interrupt business operations. In general, Ukraine's physical infrastructure, including power generation and transmission stations, communication systems and road network largely dates back to Soviet times and are relatively poor in comparison with other developed countries. The Ukrainian Government has been implementing plans to develop Ukraine's rail, electricity and telephone systems which may result in increased charges or tariffs while failing to generate sufficient funding to repair, maintain or improve these systems. The failure to maintain adequate transport services and networks or a disruption in transport services could cause transportation delays for the Company's products and impair the Company's ability to supply its customers.

(q) Drilling contract risks

Oil and gas development and exploration activities are dependent on the availability of drilling rigs and related equipment and the provision of third party services in the particular areas where such activities will be conducted. The Company will need to lease equipment and obtain services from third parties to undertake its proposed operations. Such equipment and services may be in short supply and may not be readily available at the times and places required. Demand for limited equipment such as drilling rigs may affect the availability of such equipment to the Company and may delay its development and exploration activities. Failure by the Company to secure necessary equipment could adversely affect the Company's business, results of operations or financial condition. The failure of a third party provider, or supplier, to perform its contractual obligations, or an inability to achieve a commercially viable contract

with a third party provider or supplier would have a material adverse impact on the Company's business, the results of operations or financial condition.

(r) Energy demand from Ukraine

Although Ukraine's economic outlook has stabilised significantly over recent years, there can be no assurance that anticipated levels of growth in its economy or its energy requirements will in fact materialise. Should its economy fail to grow, then demand for energy and accordingly oil and gas may not continue to increase in accordance with projected growth rates or may decline. In such circumstances, the Company may need to find alternative markets for certain of its future oil and gas developments. Such markets may not be available or it may not be economical to access such alternative markets. Should any of these factors occur and if no alternative markets for the Company's anticipated production is then available, the productivity of the Company may decline. Even if such markets are available, the costs of accessing such alternative markets may be much higher. Any of these factors may have a material adverse effect on the Company's business, results of operations or financial condition.

(s) Uncertainty with regard to funding requirements

The Company has prepared a budget which includes seismic acquisition and interpretation, well design and re-entry and administrative costs and aims to raise sufficient funds to meet these budgeted expenses. However, the company does not yet have an accurate estimate of the cost of the proposed re-entry or of any contingencies that may eventuate nor is it able to predict when the cash flows from a successful well might commence. There is therefore a risk that the company may need to obtain additional capital.

(t) Impact of Future funding

The Company may require further financing in the future, in addition to amounts raised pursuant to the Offer. Any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the current market price (or Offer price) or may involve restrictive covenants which limit the Company's operations and business strategy. Debt financing, if available, may involve restrictions on financing and operating activities.

Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or funding, if and when needed, will be available on terms favourable to the Company or at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and this could have a material adverse effect on the Company's activities and could affect the Company's ability to continue as a going concern.

(u) Commercial Risks associated with the acquisition of Epic

In September 2012, the Company acquired Epic Energy Ukraine Ltd, a company that was incorporated in 2007 and which has been party to contracts, agreements and transactions. A number of risks were identified and considered as part of the due diligence process and were minimised where possible by obtaining warranties from the vendor. Nonetheless, there may still be undisclosed issues and risks that the Company may have to deal with post-completion that may result in delays to the program.

4.2 General Risks

(a) Securities investments

There are risks associated with any securities investment. The prices at which the Options and the underlying Shares trade may fluctuate in response to a number of factors.

Furthermore, the stock market, and in particular the market for mining and exploration companies, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. There can be no guarantee that these trading prices will be sustained. These factors may materially affect the market price of the Shares regardless of the Company’s operational performance.

(b) Share market conditions

Share market conditions may affect the value of Shares regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;
(ii) interest rates and inflation rates;
(iii) changes in investor sentiment toward particular market sectors;
(iv) the demand for, and supply of, capital; and
(v) terrorism or other hostilities.

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company, or any return on an investment in the Company.

(c) Economic Risk

Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors that may contribute to that general economic climate include the level of direct and indirect competition against the Company, industrial disruption, the rate of growth of gross domestic product in Australia, or any other country in which the Company may operate, interest rates and the rate of inflation.

4.3 Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company.

The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Securities offered under this Prospectus. Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities. Potential investors should consider that the investment in the Company is speculative and should consult their professional adviser before deciding whether to apply for Securities pursuant to this Prospectus.

5. Additional information

5.1 Terms and Conditions attaching to Listed Options

(a) Entitlement

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

(b) Exercise Price

The Exercise Price of each Listed Option is $0.004.

Each Listed Option expires on 31 December 2014

(d) Exercise Period

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

(e) Notice of Exercise

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

(f) Shares issued on exercise

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

(g) Quotation of Shares on exercise Application will be made by the Company to ASX for the official quotation of Shares issued upon the exercise of the Listed Options.
(h) Timing of issue of Shares

After a Listed Option is validly exercised, the Company must as soon as possible issue the Share and 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 Listed Option; and
(ii) receipt of cleared funds equal to the sum payable on the exercise of the Listed Options.
(i) Participation in new issues

There are no participation rights or entitlements inherent in the Listed Options and the holder will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Listed Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 Business Days after the issue is announced. This will give Listed Optionholders the opportunity

to exercise their Listed Options prior to the date for determining entitlements to participate in any such issue.

(j)
Adjustment for bonus issues of Shares

If the 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):

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

If the 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 a Listed Option will be reduced according to the following formula:

– New exercise price = O – E [P (S+D)]

N+1

O = the old Exercise Price of the Listed Option.
E = the number of underlying Shares into which one (1) Listed 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.
(i) Adjustments for reorganisation

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

(l) Adjustments for reorganisation

(m) Quotation of Listed Options

Application for quotation of the Listed Options will be made by the Company.

(n) Listed Options transferable

The Listed Options are transferable.

(o) Lodgement Instructions

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

5.2 Rights Attaching to Shares

A summary of the rights attaching to Shares in the Company is set out below. This summary is qualified by the full terms of the Constitution (a full copy of the Constitution is available from the Company on request free of charge) and does not purport to be exhaustive or to constitute a definitive statement of the rights and liabilities of Shareholders. These rights and liabilities can involve complex questions of law arising from an interaction of the Constitution with statutory and common law requirements. For a Shareholder to obtain a definitive assessment of the rights and liabilities which attach to Shares in any specific circumstances, the Shareholder should seek legal advice.

(a) Voting

At a general meeting, on a show of hands every Shareholder present in person has one vote. At the taking of a poll, every Shareholder present in person or by proxy and whose shares are fully paid has one vote for each of his or her Shares. On a poll, the holder of a partly paid share has a fraction of a vote with respect to the share. The fraction is equivalent to the proportion which the amount paid (not credited) bears to the total amount paid and payable (excluding amounts credited).

(b) General meetings

Each Shareholder is entitled to receive notice of, attend and vote at general meetings of the Company and to receive all notices, reports and financial reports and other documents required to be sent to Shareholders under the Constitution of the Company, the Corporations Act and the Listing Rules.

(c) Dividends

The Directors may pay to Shareholders any interim and final dividends as, in the Directors' judgement, the financial position of the Company justifies. The Directors may fix the amount, the record date for determining eligibility and the method of payment. All dividends must be paid to the Shareholders in proportion to the number and the amount paid on the shares held.

(d) Transfer of Shares

Generally, all Shares in the Company are freely transferable subject to the procedural requirements of the Constitution, and to the provisions of the Corporations Act, the Listing Rules and the ASTC Settlement Rules. The Directors may decline to register an instrument of transfer received where the transfer is not in registrable form or where refusal is permitted under the Listing Rules or the ASTC Settlement Rules. If the Directors decline to register a transfer the Company must give reasons for the refusal. The Directors must decline to register a transfer when required by the Corporations Act, the Listing Rules or the ASTC Settlement Rules.

(e) Variation of rights

The Company may only modify or vary the rights attaching to any Shares with the prior approval by a special resolution of the holders of Shares, or with the written consent of the holders of at least three-fourths of the issued Shares.

(f) Directors

The minimum number of Directors is three and the maximum is ten. Currently, there are three Directors. Directors must retire on a rotational basis so that onethird of Directors must retire at each annual general meeting. Any other Director who has been in office for three or more years must also retire. A retiring Director is eligible for re-election. The Directors may appoint a Director either in addition to existing Directors or to fill a casual vacancy, who then holds office until the next annual general meeting.

(g) Decisions of Directors

Questions arising at a meeting of Directors are decided by a majority of votes. In the case of an equality of votes on a resolution, the Chairman has a casting vote.

(h) Issue of further Shares

Subject to the Constitution, the Corporations Act 2001 and the Listing Rules, the Directors may issue, or grant options in respect of, Shares to such persons on such terms as they think fit. In particular, the Directors may issue preference shares, including redeemable preference shares, and may issue shares with preferred, deferred or special rights or restrictions in relation to dividends, voting, return of capital and participation in surplus on winding up.

(i) Officers' indemnity

To the full extent permitted by the law and to the extent not covered by insurance, the Company must indemnify each officer of the Company against all losses and liabilities incurred by the person as an officer of the Company, including costs and expenses incurred in defending an action for liability incurred by that person.

(j) Alteration to the Constitution

The Constitution can only be amended by a special resolution passed by at least 75% of Shareholders present and voting at a general meeting. At least 28 days' notice of the intention to propose the special resolution must be given.

5.3 Directors' interests in Company Securities

The Directors or their nominees currently each hold Shares as follows:

Director	No. of Shares	No. of Listed Convertible Notes	No. of CPS
Anthony Short	25,792,438	NIL	3
Alistair Jobling1	84,529	2,000	-
Gordon Sklenka2	10,927,499	NIL	1
Kip Plankinton	-	NIL	-

~~1~~ Appointed as a Director on 12 December 2012

2 Resigned as a Director on 12 December 2012

5.4 Company is a disclosing entity

The Company is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under both 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 purpose of ASX making the information available to the stock market conducted by ASX. In particular, the Company has an obligation under the Listing Rules (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 Shares or Options.

The Company is also required to prepare and lodge with ASIC yearly and half-yearly financial statements accompanied by a Directors' statement and report, and an audit review or report.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from, or inspected at, an ASIC office (see Section 5.5 below).

5.5 Copies of documents

Copies of documents lodged by the Company in connection with its reporting and disclosure obligations may be obtained from, or inspected at, an office of ASIC. The Company will provide free of charge to any person who requests it during the period of the Offer, a copy of:

(a) the Annual Report of the Company for the year ended 31 December 2011, being the last financial year for which an annual financial report was lodged with the ASIC on 30 March 2012 in relation to the Company before the issue of this Prospectus;
(b) the Half-Yearly Report and Accounts for the period ending 30 June 2012 as lodged with ASX on 27 August 2012;
(c) the following continuous disclosure notices given by the Company to notify ASX of information relating to the Company since the Company lodged its most recent Half-Yearly Report for the period ended 30 June 2012 and before the date of issue of this Prospectus are as follows:

Date Lodged	Subject of Announcement
14/01/2013	Change of Director’s Interest Notice
14/01/2013	Change in substantial holding
10/01/2012	Appendix 3B
20/12/2012	Convertible Notes- Interest Payable in Shares and
	Conversion
17/12/2012	Final/Initial Directors’ Notices
14/12/2012	Deferral of Entitlement Offer/ Company Update
12/12/2012	Revised Entitlement Offer and Board Change
11/12/2012	Change in substantial holding
10/12/2012	Options Entitlement Offer and Placement
07/12/2012	Appendix 3B and s 708A Notice
31/10/2012	Quarterly Cashflow and Activities Report
26/10/2012	Change in substantial holding
15/10/2012	Change in substantial holding
12/10/2012	Waiver from Listing Rule 14.7
11/10/2012	Appendix 3B
02/10/2012	Change in substantial holding
26/09/2012	Convertible Note Record Date – Correction
26/09/2012	Interest in Producing Oil Asset in Ukraine
26/09/2012	Completion of Acquisition- Appendix 3B and s708A
	Notice
12/09/2012	Prospectus
11/09/2012	Option Entitlement Offer and Acquisition Update
10/09/2012	Investor Presentation
07/09/2012	Appendix 3B – Exercise and Expiry of Options
04/09/2012	Update on Acquisition of Ortynytska Project
27/08/2012	Half Yearly Accounts

The following documents are available for inspection throughout the application period of this Prospectus during normal business hours at the registered office of the Company at Suite 4, 16 Ord Street, West Perth, Western Australia:

(a) this Prospectus;
(b) the Constitution; and
(c) the consents referred to in Section 5.13 and the consents provided by the Directors to the issue of this Prospectus.

5.6 Information excluded from continuous disclosure notices

There is no information which has been excluded from a continuous disclosure notice in accordance with the Listing Rules, and which is required to be set out in this Prospectus.

5.7 Determination by the ASIC

The ASIC has not made a determination which would prevent the Company from relying on section 713 of the Corporations Act in issuing the Listed Options under this Prospectus.

5.8 Directors' interests

Except as disclosed in this Prospectus, no Director or proposed director, and no firm in which a Director or proposed director is a partner:

(a) has any interest nor has had any interest in the last two years prior to the date of this Prospectus in the formation or promotion of the Company, the Offer or property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(b) has been paid or given or will be paid or given any amount or benefit to induce him or her to become, or to qualify as, a Director, or otherwise for services rendered by him or her in connection with the formation or promotion of the Company or the Offer.

5.9 Directors remuneration

The following table shows the total remuneration, including Directors’ fees, paid to both Directors and former Directors in the last two years.

Director	Director Fees, Consulting $	Total $
Mr Anthony Short 2012 2011	55,000 220,000	55,000 220,000
Mr Alistair Jobling1 2012 2011	NIL NIL	NIL NIL
Mr Gordon Sklenka2 2012 2011	25,000 100,728	25,000 100,728
Mr Kip Plankinton 2012 2011	11,363 49,904	11,363 49,904

1 Appointed as a Director on 12 December 2012

2 Resigned as a Director on 12 December 2012

5.10 Interests of other persons

Except as disclosed in this Prospectus, the promoter and all other persons named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus do not have, and have not had in the 2 years before the date of this Prospectus, any interests in:

(a) the formation or promotion of the Company;
(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) and no other benefit has been given or agreed to be given to any of those persons for services provided by those persons in connection with the formation or promotion of the Company or the Offer.

5.11 Shortfall Offer

If the Directors exercise their sole discretion to issue the Shortfall Options then, pursuant to this Prospectus, the Company will offer the Shortfall Options ( Shortfall Offer ) as a separate offer. The parties to whom Shortfall Offers are made will be determined by the Directors in their absolute discretion.

The Shortfall Offer will be made at an issue price of $0.001 per Option, which is the issue price at which the Offer has been made to Eligible Shareholders.

Applications for Shortfall Options can only be made by completing and returning the Shortfall Application Form which will be sent to the parties to whom the Company makes Shortfall Offers.

The Company reserves the right to issue to an applicant for Shortfall Options a lesser number of Shortfall Options than the number applied for in a Shortfall Application Form, reject an application for Shortfall Options or not proceed with the issuing of the Shortfall Options or part thereof. If the number of Shortfall Options issued is less than the number applied for in a Shortfall Application Form, surplus Application Monies will be refunded in full. Interest will not be paid on any Application Monies refunded.

5.12 Expenses of Offer

The estimated expenses of the Offer are as follows:

ASIC Lodgement fee ASX quotation fee Legal and preparation expenses Printing, mailing and other expenses Total	$ 2,171 4,916 5,000 1,200
	13,287

These expenses have been paid or will be payable by the Company.

5.13 Consents

The following consents have been given in accordance with the Corporations Act and have not been withdrawn as at the date of lodgement of this Prospectus with the ASIC:

(a) Advanced Share Registry Services has given and, as at the date hereof, has not withdrawn, its written consent to be named as share registrar in the form and context in which it is named. Advanced Share Registry Services has had no involvement in the preparation of any part of this Prospectus other than being named as share registrar of the Company. Advanced Share Registry Services has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of this Prospectus.

6. Directors' Statement and Consent

This Prospectus is issued by Advance Energy Limited. The issue of this Prospectus has been authorised by a resolution of the Directors of the Company.

In accordance with section 720 of the Corporations Act, each of the Directors of the Company has consented to the lodgement of this Prospectus with ASIC pursuant to section 718 of the Corporations Act and has not withdrawn that consent.

This Prospectus is signed for and on behalf of all the Directors by:

==> picture [213 x 73] intentionally omitted <==

Anthony Short Director

Dated: 14 January 2013

7. Glossary of Terms

These definitions are provided to assist persons in understanding some of the expressions used in this Prospectus.

$ means Australian dollars.

Acceptance means a valid acceptance of Shares made pursuant to this Prospectus on an Entitlement and Acceptance Form.

Annual Report means the financial report lodged by the Company with ASIC in respect to the year ended 31 December 2011 and includes the corporate directory, chairman’s report, review of activities, Shareholder information, financial report of the Company and its controlled entities for the year ended 31 December 2011, together with a Directors’ report in relation to that financial year and the auditor’s report for the period to 31 December 2011.

Applicant means a person who submits an Entitlement and Acceptance Form.

Application Monies means application monies for Listed Options received by the Company from an Applicant.

ASIC means the Australian Securities and Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532.

Associate has the meaning given to it in the Corporations Act.

ASX means ASX Limited ABN 98 008 624 691 and where the context permits, the Australian Securities Exchange operated by ASX Limited.

Board means the Directors meeting as a board.

Business Day means Monday to Friday inclusive, other than a day that ASX declares is not a business day.

CHESS means ASX Clearing House Electronic Subregistry System.

Closing Date means the date identified as such in the proposed timetable.

Company or Advance Energy means Advance Energy Limited ACN 111 823 762.

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act (Cth) 2001.

CPS means the converting performance shares issued by the Company at the date of this Prospectus.

Directors mean the directors of the Company as at the date of this Prospectus.

Eligible Shareholder means a person registered as the holder of Shares on the Record Date whose registered address is in Australia and New Zealand.

Entitlement means the entitlement to Listed Options under the Offer as set out in Section 1.1.

Entitlement and Acceptance Form means the Entitlement and acceptance form sent with this Prospectus that sets out the Entitlement of Shareholders to subscribe for Listed Options pursuant to the Offer.

Issuer Sponsored means Shares issued by an issuer that are held in uncertificated form without the holder entering into a sponsorship agreement with a broker or without the holder being admitted as an institutional participant in CHESS.

Listed Convertible Notes means the listed convertible notes issued by the Company at the date of this Prospectus.

Listed Option or Option means the Listed Option described in Section 5.1.

Listed Optionholder means a holder of Listed Options.

Listing Rules means the Listing Rules of ASX.

Offer means the Offer as defined in Section 1.1.

Prospectus means this prospectus dated in Section 6.

Record Date means 5:00pm (WST) on the date identified in the proposed timetable.

Rights Issue means the rights issue as defined in Section 1.2.

Section means a section of this Prospectus.

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

Shareholders mean a holder of Shares.

Shortfall Offer means the offer of Shortfall Options

Shortfall Options means that number of the Listed Options that have not validly been applied for by the Closing Date.

WST means Western Standard Time, being the time in Perth, Western Australia.