TALIUS GROUP LIMITED — Interim / Quarterly Report 2013

Jan 29, 2014

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ADVANCE ENERGY LIMITED ACN 111 823 762

QUARTERLY REPORT 31 DECEMBER 2013

ADVANCE ENERGY LIMITED - QUARTERLY REPORT FOR THE PERIOD ENDING 31 DECEMBER 2013

CORPORATE OVERVIEW

On 18 December 2013 the Company announced that it had reached provisional agreement with 91% of its convertible note holders to convert their notes into shares at a price of $0.0008 per note, such conversion price having been approved by ordinary shareholders at the Annual General Meeting on 31 May 2013. The Company is currently working through a number of technical issues in regard to the Notice of Meeting for ordinary shareholders to approve the conversion of the notes, and hopes to have all necessary documentation finalised by the end of February, with the meeting to be held by the end of March.

The Company now believes that, until this corporate restructuring has been finalised, it will be unable to raise finance for its Ukrainian ventures (or for any other project), and has decided, with regret, to terminate its involvement. The Company still retains a 50% working interest in the Mother Lode III project in the Permian Basin in Texas, US, as well as joint ownership of seismic survey data over the area.

The Company will endeavour to finalise its corporate restructuring over the next 60 days to allow it to move forward.

For further information contact:

Mr Anthony Short (Managing Director)

Telephone: 08 9429 2900 Facsimile: 08 9486 1011

ADVANCE ENERGY LIMITED Quarterly Report 31 December 2013 ASX CODE: AVD www.advanceenergyltd.com.au

pg. 1

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

Name of entity
Advance Energy Limited
ABN 62 111 823 762	Quarter ended (“current quarter”)
62 111 823 762	31 December 2013

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 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 Net Operating Cash Flows	Current quarter $A’000	Year to date (12months) $A’000
	- - - - (12) - - - - -	- - (28) - (100) - 1 - - -
	(12)	(127)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - - - - - -	- - - - - - -
	-	-
	(12)	(127)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(12)	(127)
Cash flows related to financing activities 1.14 Proceeds from issues of shares and notes 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (option issue refunded) Net financing cash flows	- - 31 - - (19)	- - 31 - - -
	12	31
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	- 1 -	(96) 101 (4)
	1	1

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

Current quarter $A'000 - -

		Current quarter $A'000 -
1.23	Aggregate amount of payments to the parties included in item 1.2
		-
1.24	Aggregate amount of loans to the parties included in item 1.10
1.25	Explanation necessary for an understanding of the transactions

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

During the quarter 21,686,714 shares were issued as part payment of convertible note interest in the amount of approximately $17,000 due as at 30 September 2013. Payment of a further amount of interest in respect of the September quarter of approximately $140,000 was deferred, and accrued for accounting purposes. Further interest of approximately $158,000 will be accrued in respect of the December quarter.

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

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements- line of credit	Amount available $A’000	Amount available $A’000	Amount used $A’000
	-		-
	-		-
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration (including interest)		$A’000
		5
		-
		-
		5
Total		10

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter shown in the consolidated statement of cash flows) $A’000 $A’000 to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 1 1 5.2 Deposits at call - - 5.3 Bank overdraft - - 5.4 Other (provide details): - - 1 1

Total: cash at end of quarter (item 1.22)

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	N/A	For details of current oil and gas interests see Annexure A
	N/A

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases- capital returns, buy- backs or redemptions	9	Unquoted
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases- through issues (b) Decreases- capital returns or buy-backs	1,298,272,886	1,298,959,600		Fully paid
	21,686,714	21,686,714
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases- maturing or conversion of securities	6,630,500	6,630,500	9.5% coupon, expires Dec 2014.
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

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

Sign here: Date: ..30 January 2014 ( ~~Director~~ /Company secretary)

Print name: R Berzins

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 “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 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.

== == == == ==

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Annexure A

Oil and Gas Interests as at 31 December 2013

Lease	WI	NRI	API#	RRC#	Field	Location
					Name
Roman “27” #1 *	50.00%	38.75%	42-317-36123	40739	Spraberry	Texas,USA

• Interest is APO (after payout only) and the operator is Endeavor Energy Resources L.P. Total acreage held is 160. The interest is held by the Company’s US incorporated subsidiary, Advance Exploration and Production, Inc.

The Company’s subsidiary, Epic Energy Ukraine Ltd, is party to a Joint Activity Agreement in the following hydrocarbon license in the Ukraine:

Subsoil Exploration License Number	Licensee	Name and Location	Area (Km2)	Interest (pre payback)	Interest (post payback)
2664	ZakhidUkrGeologiya	Ortynytska, Ukraine	19.5	70%	50%

• See chapter 19 for defined terms.

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