TALIUS GROUP LIMITED — Interim / Quarterly Report 2007

Jul 30, 2007

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ASX Announcement

31 July 2007

JUNE 2007 QUARTERLY ACTIVITIES REPORT

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

• Production increased from AU$692,000 during the first quarter to AUD$1,054,000 in the second quarter, representing an increase of 52%.

• Completed the acquisition (12.5% working interest and an average net revenue interest of 9.51%) of another three producing wells and a minimum of 9 additional development wells to be drilled over the next 18 months within the Company’s Motherlode Phase II Project.

• Entered into a Letter of Intent and Participation Agreement to acquire a 50% working interest in 75 square miles (194 square kilometers) of 3-D seismic data with an existing 15 prospects within the Motherlode Phase III Project

• Successfully drilled and completed the Strain 16-3 well on the Motherlode Phase II Totem Prospect.

• Further designed and prepared for the execution of the development campaign on the Company’s Possum Kingdom and Lone Camp Assets.

• Raised an additional $1,000,000 through the issue of various convertible notes

• The company continued to promote itself both locally and offshore resulting in the expansion of its financing capability

OPERATIONS

It should be noted that during the quarter excessive rainfall in both Palo Pinto and Martin County caused many of the wells to be shut in. Further, routine goods and services were interrupted due to the well sites being inaccessible. This flooding and the associated back log after the water receded caused workovers to be delayed and a reduction of production due to the above mentioned shut in time. As of the time of this report all wells have been restored to their normal production.

Advance Energy Limited ASX Code: AVD Website: www.advanceenergyltd.com.au

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Palo Pinto-Possum Kingdom Project

During the quarter AEL and NAE revised the initial development plan for the Possum Kingdom Project (“PK Project”). This development campaign, slated to start in April 2007 but delayed due to weather, was altered to begin in July 2007 as follows:

Lease Name	Well No.	WI	NRI	Development Description	Date	Net cost to AEP (US$)
Deno Gragg	3	90.00%	72.00%	Isolate Lower Conglomerate and Frac	July 07	$67,500
Coleman	1	90.00%	71.14%	Isolate Upper Conglomerate and Frac	July 07	$67,500
Coleman	2	90.00%	71.14%	Isolate, Perf, Frac and Test Upper Conglomerate	July 07	$72,000
Deno Gragg	2	90.00%	72.00%	Test Fluid Level and Evaluate for Pump Change	July 07	$9,000
Deno Gragg	1	90.00%	72.00%	Test Fluid Level and Evaluate for Pump Change	July 07	$9,000
Dabney	1	90.00%	71.14%	Test Fluid Level and Evaluate for Pump Change	July 07	$9,000
Dabney	2	90.00%	71.14%	Test Fluid Level and Evaluate for Pump Change	July 07	$9,000
TOTALS						243,000

Several of the wells that were originally slated to be re-worked were producing at higher rates then forecasted 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 later this year.

Palo Pinto-Lone Camp Project

During the quarter AEL and NAE staked and permitted the drilling of two Conglomerate development wells. Further, the company and NAE analyzed 3-D seismic data that was shot, processed and paid for by EOG resources, (on of the largest publicly traded oil and gas producers in the US) as part of a 3-D seismic agreement executed in late 2006. EOG, as previously disclosed by the company, has the largest acreage position in Palo Pinto County, Texas and are targeting the Barnett Shale, the largest onshore gas filed in the US. During the quarter EOG successfully completed two Barnett Shale wells within two miles of the Lone Camp Project that are currently reported to be making in excess of 2,000 MCFPD.

The Company and NAE are in ongoing negotiations with EOG and several other large Barnett Shale operators to discuss the development of the Barnett Shale asset underneath the Lone Camp Project.

Lastly, the Company has been participating in the design of two major workovers to be performed on the existing assets on the Lone Camp project.

Martin County

As highlighted, the company continues to implement the previously announced workover plan on the Martin County properties.

The Company completed the acquisition (12.5% working interest and an average net revenue interest of 9.51%) of another long life high quality Permian Basin asset comprised of three producing wells (gross production of 185 barrels of oil equivalent per day, “BOEPD) within the Company’s Motherlode Phase II Project. This asset, the Key East Prospect acquired effective May 1, 2007, has a minimum of 9 additional development wells to be drilled over the next 18 months.

Advance Energy Limited ASX Code: AVD Website: www.advanceenergyltd.com.au

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The Company entered into a Letter of Intent and Participation Agreement to acquire a 50% working interest in 75 square miles (194 square kilometers) of 3-D seismic data with an existing 15 prospects to develop low risk step out fields similar to such assets AEL has been developing for over two years. This project, the Motherlode Phase III Project, will also allow the Company to explore for oil and gas reservoirs that have the potential to produce in excess of 1,000,000 BOE per well based on offset fields and utilizing a proven prospecting model that has been executed with their operating partner in the United States, North American Energy, Inc. (“NAE”).

In late May, as part of the Company’s aggressive development plans for the above mentioned acquisition, AEL participated in the drilling of the Thomas 5-1, the first of the above mentioned development wells. This well is currently being completed and looks to be far superior to the offset wells.

During the quarter, the company successfully drilled and completed the Strain 16-3 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.

Details are presented to the market on a continuous basis and revenue is increasing as expected.

Subsequent and Future activities

Subsequent to the quarter end, the company has announced the following developments:

• Commencement of the above mentioned Development Program on its Possum Kingdom Assets.

• The spudding of the Strain 16-4 on its totem Prospect in Martin County, Texas.

• BOEPD is arrived at by adding oil production to natural gas production converted at a ratio of 6:1 based on BTU content.

Information in this report pertaining to mineral resources and exploration results was compiled by Mr E Canterbury who is a member of the Society of Petroleum Engineers with not less than five years experience in the relevant fields and who consents to the report appearing in the form and context in which it appears.

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. One a property has reached its full productive potential and/or has achieved economic payout to AVD 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.

For further information contact:

Mr Lance Camacho Company Secretary Telephone: 08 9486 1122 Facsimile: 08 9486 1011

Advance Energy Limited ASX Code: AVD Website: 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 June 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 ( 6 months) $A’000
	855 (159) (0) (284) 10 (455) 0	1,675 (309) (32) (1,172) 36 (657) 0
	(33)	(459)

• 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 ( 6 months) $A’000
1.8 Net operating cash flows (carried forward)
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	(1,547)	(1,839)
	(1,547)	(1,839)
	(1,580)	(2,298)
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	0 0 1,000 (438)	0 0 2,275 (1,251)
	562	1,024
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	(1,018) 1,471 7	(1,274) 1,727 7
	460	460

• See chapter 19 for defined terms.

24/10/2005

Appendix 4C Page 2

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
		93
		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)	460	1,471
Total: cash at end of quarter(item 1.23)	460	1,471

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 July 2007… ( ~~Director/~~ Company secretary)

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

• See chapter 19 for defined terms.

24/10/2005

Appendix 4C Page 4

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