TALIUS GROUP LIMITED — Interim / Quarterly Report 2007

Oct 30, 2007

ADVANCE ENERGY LIMITED QUARTERLY REPORT - 30 SEPTEMBER 2007

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ASX ANNOUNCEMENT

31 OCTOBER 2007

SEPTEMBER 2007 QUARTERLY ACTIVITIES REPORT

Overview

Advance Energy Limited, (“AVD”) presents the following highlights for the quarter ended 30 September 2007:

• Receipts from customers exceeded A$1,077 million

• Reflected positive net operational cash flows of A$548,000

• Successfully drilled and completed the Strain 16-4 well on the Motherlode Phase II Totem Prospect.

• Executed the development plan on the Company’s Possum Kingdom and Lone Camp Assets.

• Reprocessed 75 square miles of 3-D seismic data on the Company’s Motherlode Phase III Project and began acquiring various leasehold positions under the various targets identified.

• Raised an additional A$350,000 through the issue of new shares

Operations

Palo Pinto-Possum Kingdom Project

During the quarter AVD carried out its initial development plan for the Possum Kingdom Project (“PK Project”). Three major workovers were successfully performed on these assets that resulted in a combined production increase in excess of 300 Mcf/day.

Several of the wells that were originally slated to be re-worked were producing at higher rates than forecast at the time of the purchase. Therefore, the decision was made to optimize the existing production in these over-performing wells and bring on the behind pipe reserves at a later date.

Palo Pinto-Lone Camp Project

During the quarter AVD also performed two major workovers on its Lone Camp Assets. These two successful workovers added a combined 300 Mcf to the daily production coming from this Project.

The Company continues its negotiations with EOG and several other large Barnett Shale operators regarding development opportunities of the Barnett Shale asset underneath the Lone Camp Project and expect a final agreement by the end of this year. This decision will also impact the timing of the drilling of

ADVANCE ENERGY LIMITED QUARTERLY REPORT - 30 SEPTEMBER 2007 ASX CODE: AVD www.advanceenergyltd.com.au

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ADVANCE ENERGY LIMITED QUARTERLY REPORT - 30 SEPTEMBER 2007

the other development wells on the shallower horizons. At this time these wells are planned to commence in the first quarter of 2008.

EOG has completed two Barnet Shale wells offsetting the Lone Camp Project and have permitted another two wells.

Martin County

As highlighted, the company continues to implement the previously announced development plans on the prior held and newly acquired Martin County properties.

During the quarter, AVD participated in the successful drilling and completion of the Strain 16-4 well on the Motherlode Phase II Totem Prospect. This well, similar to the other wells on the prospect, continue to surpass the historic Spraberry/Dean/Wolfcamp wells in the county due to utilizing cutting edge drilling and hydraulic fracturing techniques.

AVD participated in the processing of 75 square miles of 3-D seismic data as part of their Motherlode Phase III Project. This reprocessing and subsequent full geological review has yielded numerous targets and lease acquisition and early drilling plans are underway. AVD expects the first wells will be drilled on this Project in the second quarter of 2008.

Subsequent and Future activities

The Company expects to continue to evaluate and excercise its options with respect to additional Motherlode opportunities as and when they become available.

The group will continue to actively seek additional appropriate investments which conform to the current acquisition criteria.

The directors are confident that the company is creating sufficient funding alternatives with which to continue the expansion and prospects of the business in line with stated objectives.

FOR FURTHER INFORMATION CONTACT

Mr Lance Camacho

Company Secretary

Telephone: 08 9486 1122 Facsimile: 08 9486 1011

ABOUT ADVANCE ENERGY LIMITED

Advance Energy Limited is focused on the acquisition and development of oil and gas producing assets in Texas USA. The company aims to acquire assets with a combination of debt and equity that have current production and cash flow and to enhance production and cash flow through the further development of these assets. Once a property has reached its full productive potential and/or has achieved economic payout to Advance Energy, the Company would look to on sell all or part of its interest. It is the aim of the Company to develop a portfolio of assets which will be developed and traded to maximize returns on funds invested.

ADVANCE ENERGY LIMITED QUARTERLY REPORT - 30 SEPTEMBER 2007 ASX CODE: AVD www.advanceenergyltd.com.au

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001, 24/10/2005.

Name of entity
ADVANCE ENERGY LIMITED
ABN 111 823 762	Quarter ended (“current quarter”)
111 823 762	30 September 2007

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Current quarter $A’000	Year to date ( 9 months) $A’000
	1077 (139) (31) (60) 2 (300)	2,752 (448) (63) (1,232) 38 (958)
	549	89

• See chapter 19 for defined terms.

24/10/2005

Appendix 4C Page 1

Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date ( 9 months) $A’000
1.8 Net operating cash flows (carried forward)		89
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows	(705)	(2,544)
	(705)	(2,544)
	(156)	(2,455)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Less capital raising costs 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (provide details if material) Net financing cash flows	350 (383)	350 2,275 (1,634)
	(33)	991
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments 1.23 Cash at end ofquarter	(189) 460 (12)	(1,464) 1,727 (4)
	259	259

• See chapter 19 for defined terms.

24/10/2005

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 1.25	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.11	Current quarter $A'000
		94
		Nil
1.26	Explanation necessaryfor an understandingof the transactions
	N/A

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

N/A

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	US$7.4million	US$6.0million
	-	-

• See chapter 19 for defined terms.

24/10/2005

Appendix 4C Page 3

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details)	259	460
Total: cash at end of quarter(item 1.23)	259	460

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	N/A

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: Date: .....31 October 2007… ( ~~Director/~~ Company secretary)

Print name: ...Lance Camacho.....

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.

3. 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss

4. • 9.2 - itemised disclosure relating to acquisitions • 9.4 - itemised disclosure relating to disposals • 12.1(a) - policy for classification of cash items • 12.3 - disclosure of restrictions on use of cash • 13.1 - comparative information

5. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

6. See chapter 19 for defined terms.

24/10/2005

Appendix 4C Page 5