Bidders Statement

Blaze Asset Pty Ltd ACN 134 038 412

in relation to an off-market bid to acquire all of your fully paid ordinary shares in

Target Energy Ltd ABN 73 119 160 360

This Bidder's Statement is dated 16 April 2009. A copy of this Bidder's Statement was lodged with the ASIC on 16 April 2009. The ASIC takes no responsibility for the content of this Bidder's Statement.

Important information

This Bidder's Statement is issued by Blaze Asset Pty Ltd ACN 134 038 412 under Part 6.5 of the Corporations Act.

A copy of this Bidder's Statement was lodged with ASIC on 16 April 2009. Neither ASIC nor its officers takes any responsibility for the content of this Bidder's Statement.

Investment advice

In preparing this Bidder's Statement, Blaze has not taken into account the individual objectives, financial situation or individual needs of individual Target Shareholders. Accordingly, before making a decision whether or not to accept the Offer, you should consult with your financial or other professional adviser.

Disclaimer as to forward looking statements

Some of the statements appearing in this Bidder's Statement may be in the nature of forward looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industry in which Target and Blaze operate as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement. None of Blaze, Odin or Advance or the officers of Blaze, Odin or Advance, any persons named in this Bidder's Statement with their consent or any person involved in the preparation of this Bidder's Statement, makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. You should not place undue reliance on any forward looking statement. The forward looking statements in this Bidder's Statement reflect views held only as at the date of this Bidder's Statement.

Disclaimer as to Target information

The information on Target and Target's securities contained in this Bidder's Statement has been prepared by Blaze using publicly available information.

The information in this Bidder's Statement concerning Target and the assets and liabilities, financial position and performance, profits and losses and prospects of Target, has not been independently verified by Blaze. Accordingly Blaze does not, subject to the Corporations Act, make any representation or warranty, express or implied, as to the accuracy or completeness of such information.

Further information relating to Target's business may be included in Target's target's statement which Target must provide to its shareholders in response to this Bidder's Statement.

Foreign jurisdictions

The distribution of this Bidder's Statement in jurisdictions outside Australia and New Zealand may be restricted by law, and persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Bidder's Statement does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register or qualify Advance or to otherwise permit a public offering of Advance shares outside Australia or New Zealand. Advance shares have not been, and will not be, registered under the United States Securities Act of 1933 (Securities Act) and may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person (as defined in Regulation S under the Securities Act), except in a transaction exempt from the registration requirements of the Securities Act and applicable United States state securities laws.

Privacy

Blaze has collected your information from the Target Shareholders register for the purpose of making this Offer and, if accepted, administering your holding of Target Shares. The Corporations Act requires the name and address of shareholders to be held in a public register. Your information may be disclosed on a confidential basis to Blaze's related bodies corporate and external service providers, and may be required to be disclosed to regulators such as ASIC. The registered address of Blaze is Suite 2, 16 Ord Street, West Perth, Western Australia 6005.

Defined terms

A number of defined terms are used in this Bidder's Statement. Unless the contrary intention appears, the context requires otherwise or words are defined in Section 12, words and phrases in this Bidder's Statement have the same meaning and interpretation as in the Corporations Act.

1.	Chairman's Letter 2
2.	Summary of Takeover offer 3
2.1	What is Blaze offering to buy? 3
2.2	Structure of Bidder 3
2.3	What will you receive if you accept the Offer? 3
2.4	Why you should accept the Offer? 4
2.5	How to accept the Offer? 4
2.6	When will you receive the consideration? 5
2.7	When does the Offer close? 5
2.8	What conditions attach to the Offer? 5
2.9	Is Blaze making an offer in respect of Target Options? 5
2.10	Further information 6
2.11	Important notice 6
3.	Reasons for accepting the Offer 7
3.1	Disadvantages if you don't accept the Offer 7
3.2	Advantages if you accept the Offer 9
3.3	Benefits for Target Shareholders if Blaze acquires a controlling interest in Target 13
3.4	Benefits for Target Shareholders if Blaze does not acquire a controlling interest in
Target	14
4.	Profile of and Intentions of Blaze 15
4.1	Structure and Ownership 15
4.2	Blaze Shareholder Agreement 15
4.3	Board of Blaze 16
4.4	Intentions of Blaze 16
4.5	Intentions upon acquisition 0% to 50% of Target 17
4.6	Intentions upon acquisition of more than 50% but less than 90% of Target 18
4.7	Intentions upon acquisition of 90% or more of Target 19
5.	Profile of Advance 20
5.1	Overview of Advance's activities 20
5.2	Group Structure of Advance 20
5.3	Principal activities of Advance 20
5.4	Advance's ongoing strategies 21
5.5	Successful Projects 22
5.6	Directors of Advance 22
5.7	Summary of historical financial information 23
5.8	Information about Advance Securities 26
5.9	Advance Shareholders 28
5.10	Trading in Advance Shares 28
5.11	Website 29
5.12 5.13	Further Information 29 Dividend Policy 29

6.	Profile of Odin 30
6.1 6.2	Overview of Odin's Activities 30 Financial Performance 30
6.3	Financial Position 30
6.4	Directors 30

7.	Profile of Target 32

7.1	Disclaimer 32
7.2	Overview of Target's activities 32
7.3	Group Structure of Target 32
7.4	Principal activities of Target 33
7.5	Information about Target Shares and Target Options 36
7.6	Change in Target's financial position and information on Target 37
8.	Effect of the Offer on Blaze, Odin and Advance 38
8.1	Overview 38
8.2	Effect of the Offer on Blaze 38
8.3	Effect of the Offer on Odin 38
8.4	Effect of the Offer on Advance 38
9.	Australian Tax Considerations 46
9.1	Introduction 46
9.2	Income Tax and Capital Gains Tax Issues 46
9.3	GST Considerations 48
10.	Terms of Offer 50
10.1	General Terms 50
10.2	Offer Period 51
10.3	Who May Accept 51
10.4	How to Accept this Offer 52
10.5	The Effect of Acceptance 53
10.6	Blaze's Obligations in respect of Target Shares Acquired 56
10.7	Foreign Shareholders 57
10.8	Conditions of this Offer 58
10.9 10.10	Withdrawal of Offer 59 Variation 59
10.11	Broker handling fees 59
10.12	No stamp duty or other costs 60
10.13	Governing Law 60
10.14	Date of Offer 61
11.	Other Information 62
11.1	Blaze's Interest in Target 62
11.2	Collateral Benefits 62
11.3	Further details to be included in the Offer 62
11.4	Advance is a Disclosing Entity 62
11.5	Information about Advance Shares 63
11.6	Risk Factors 65
11.7	Fees and benefits payable to Blaze's directors and advisers 74
11.8	Consents 75
11.9	Date for Determining Target Shareholders 75
12.	Definitions and Interpretation 76
12.1	Definitions 76
12.2	Interpretation 78
	Annexure 'A' 79

	Annexure 'B' 80

CORPORATE DIRECTORY

Company

Blaze Asset Pty Ltd Suite 2, 16 Ord Street West Perth WA 6005

Legal Adviser

Hardy Bowen Level 1, 28 Ord Street WEST PERTH WA 6005

Important Dates:

Date Bidder's Statement was lodged with the ASIC and date of Bidder's	16 April 2009
Statement
Date of Offer	30 April 2009
Offer closes, unless withdrawn or extended*	05 June 2009

Note:

*This date is indicative only and may be changed as permitted by the Corporations Act.

Important Notice

This is an important document and requires your immediate attention. You should read all of the contents of this Bidder's Statement in its entirety. If you are in doubt as to how to deal with this document, please consult your financial or other professional adviser.

1. Chairman's Letter

Dear Target Shareholder

On behalf of the directors of Blaze Asset Pty Ltd (Blaze), which is a company jointly owned by Advance Energy Ltd (Advance) and Odin Energy Ltd (Odin), I am pleased to enclose an Offer by Blaze to acquire all the shares in Target Energy Ltd (Target).

By accepting the Offer you will receive one cent in cash and 0.75 Advance shares for every Target Share you hold, subject to the terms and conditions in the Offer.

This market climate has provided some good opportunities to purchase and manage producing assets in Texas. As a result of your Board's failure to engage a suitably qualified and dedicated in country management team, Target has been unable to acquire operating interests in quality projects. This has resulted in substantial delays in developing assets and ineffective use of its cash.

The Offer from Blaze will allow for the better management of Target's cash resources through access to a deal flow and an experienced US based operational team.

Current market conditions have caused severe falls in stock prices and very low liquidity in market turnover. The partial cash bid allows Target Shareholders to continue with their effective shareholding and also to have access to part of their cash investment.

Please refer to Section 11.6 to understand the risks associated with the Offer.

I very much look forward to your acceptance of the Offer.

Yours sincerely

Alex Bajada Chairman Blaze Asset Pty Ltd

2. Summary of Takeover offer

2.1 What is Blaze offering to buy?

Blaze is offering to buy all of your Target Shares, including Target Shares that are issued during the Offer Period whether due to the conversion of Target Options or otherwise, on the terms and conditions in Section 10.

If you accept the Offer, Blaze will be entitled to all Rights in respect of your Target Shares. You may only accept the Offer in respect of all of the Target Shares held by you.

2.2 Structure of Bidder

Blaze is jointly owned by Advance and Odin in equal portions.

On 6 April 2009, Advance and Odin entered into a Blaze Shareholders Agreement in respect of the Offer. Refer to Section 4.2 for a summary of the material terms of the Blaze Shareholders Agreement.

2.3 What will you receive if you accept the Offer?

(a) Total Consideration

You will receive one cent (\$0.01) cash and 0.75 Advance Shares for each Target Share. The Offer is equal to a value of \$0.0590 per Target Share.

The method used to calculate the value of \$0.0590 per Target Share is in the table below:

VWAP for Advance on Tuesday 14 April and Wednesday 15 April 2009	\$0.0654
(a) 75% of \$0.0654 (0.75 of one Advance Share)	\$0.0490
(b) Plus one cent cash	\$0.01
Value of consideration (a) plus (b)	\$0.0590

The VWAP for Target on Tuesday 14 April and Wednesday 15 April 2009 using the same methodology is equal to \$0.0396.

(c) Cash

If you accept this Offer, you will receive cash of one cent (\$0.01) for every one of your Target Shares.

The cash component of the consideration under the Offer is being provided by Odin. Odin is making the cash payments from its existing cash reserves.

(d) Advance Shares

If you accept this Offer, in addition to receiving \$0.01 cash for every Target Share, you will also receive 0.75 Advance Shares for every one of your Target Shares.

The Advance Shares to be offered as consideration under the offer will rank equally with all Advance Shares then on issue.

Advance is admitted to the Official List and existing Advance Shares have been granted Official Quotation. Application will be made to ASX within seven days after the start of the Offer Period for the granting of Official Quotation of the Advance Shares to be issued under the terms of the Offer.

2.4 Why you should accept the Offer?

The Directors of Blaze believe you should accept the Offer for the following reasons:

Target's board has failed to engage a suitably qualified and dedicated in country management team;
Target has been unable to acquire operating interest in quality projects which has resulted in a lack of control, substantial delays in developing assets and ineffective use of its cash;
Blaze is offering better management of Target's cash resources through access to an extensive deal flow and highly experienced management teams;
The partial cash bid allows Target shareholders to continue with their shareholding and also to have access to part of their cash investment; and
You will gain exposure to a broader portfolio of US oil and gas assets, including Advance's long life assets as well as the benefit of its in-country expertise to operate exploration and production projects.

Please refer to Section 3 of this Bidder's Statement for details of the reasons why Target Shareholders should accept the Offer.

2.5 How to accept the Offer?

(a) Issuer sponsored shareholders

If your Target Shares are held on Target's issuer sponsored sub-register (such holdings will be evidenced by an "I" appearing next to your holder number on the enclosed Acceptance Form), to accept this Offer you must complete and sign the Acceptance Form enclosed with this Bidder's Statement and return it to the address indicated on the form before the Closing Date.

(b) CHESS sponsored shareholders

If your Target Shares are in a CHESS Holding (such holdings will be evidenced by an "X" appearing next to your holder number on the enclosed Acceptance Form), you may accept this Offer by either:

(i) completing and signing the enclosed Acceptance Form and returning it to the address indicated on the form; or
(ii) calling your broker and instructing your broker to accept this Offer on your behalf, before the Closing Date.

(c) Brokers and non-broker participants

If you are a broker or non-broker participant, acceptance of this Offer must be initiated in accordance with rule 16.3 of the SCH Business Rules before the end of the Offer Period.

(d) Further details

Full details on how to accept this Offer are in Section 10 and also on the enclosed Acceptance Form.

If you have any queries about how to accept this Offer, please contact a Blaze on (08) 9486 1122 if in Australia or +61 8 9486 1122 if outside Australia.

2.6 When will you receive the consideration?

Once you have validly accepted the Offer you will receive the cash component and Advance Shares on or before the earlier of:

(a) one month after this Offer is accepted, or the contract resulting from its acceptance becomes unconditional (whichever is the later); and
(b) 21 days after the end of the Offer Period.

2.7 When does the Offer close?

The Offer closes at 5:00pm (Perth time) on 5 June 2009 unless it is withdrawn or extended in accordance with the Corporations Act.

2.8 What conditions attach to the Offer?

The Offer is subject to the conditions in Section 10.8. These conditions include, without limitation:

(a) Certain occurrences not taking place during the Offer Period, including, Target changing its capital structure or the capital structure of a subsidiary, or acquiring or disposing of a substantial part of its business or property, or charging a substantial part of its business or property or resolving that it or a subsidiary be wound up.
(b) ASX granting Official Quotation to the Advance Shares being offered as consideration under the Offer.

Refer to Section 10.8 of this Bidder's Statement for further details on the conditions of the Offer.

2.9 Is Blaze making an offer in respect of Target Options?

Blaze is not making an offer in respect of Target Options. However, Target Optionholders who exercise any Target Options before or during the Offer Period will be able to accept the Offer in respect of the Target Shares issued upon exercise of the Target Options.

If Blaze is able to proceed to compulsory acquisition of the Target Shares, it may make an offer to acquire the Target Options in accordance with the provisions of the Corporations Act.

2.10 Further information

Refer to Section 10 and the Acceptance Form for instructions on how to accept the Offer. If you have any queries on how to accept the Offer, please contact Blaze on (08) 9486 1122 if in Australia or +61 8 9486 1122 if outside Australia.

2.11 Important notice

The information in this Section 2 is a summary of the Offer only.

You should read the entire Bidder's Statement and the separate target's statement which will be sent to you directly by Target in relation to the Offer before deciding whether to accept the Offer.

3. Reasons for accepting the Offer

3.1 Disadvantages if you don't accept the Offer

The following are disadvantages of not accepting the Offer and remaining a Target Shareholder:

(a) Inefficient use of cash

Target currently has a cash position but does not have the assets or expertise to use its cash resources effectively. Its minority interests make it reliant on well operators having the desire and capacity to explore and develop these assets. The reliance on operators, subsequent delays in drilling development wells and the withdrawal from prospective projects have wasted cash resources.

With the majority of its funds required to meet development expenditure on its existing assets and without appropriate expertise, Target will be unable to capitalise on current opportunities to acquire quality assets at historically low prices. Consequently, Target is likely to have a diminishing cash position with little or no benefit to Target Shareholders.

(b) Uncertainty of Target's assets' economic life

Target's producing assets are in areas of Louisiana that are marshy and difficult to access and will require ongoing capital expenditure to maintain production.

Target has yet to disclose the likely economic life of these wells or the development expenditure required thereby depriving investors of information necessary to assess future cash flows. Wells in this region typically have an economic life of 4-5 years per zone but can vary significantly.

For the following reasons, Blaze does not believe that Target's current management has the necessary skills to operate efficiently and grow shareholder value:

(i) Withdrawal from "Company maker" Catapult project and Parks North project:

Target described the Catapult prospect as a potential "Company maker" prospect in its announcement on 17 January 2008. Target undertook a rights issue in June 2008 to raise \$3.4m to fund several activities including initial exploration wells in the Catapult and Parks North prospects, the Snapper A-3 well and the Bayou Berard sidetrack (Beyt#1A). On 16 January 2009, Target announced to ASX that it had withdrawn from the Catapult and Parks North opportunities and was yet to drill the other two wells. Withdrawal from the Catapult project removes the only prospect target has described as a 'Company maker'. Delays in the Snapper A-3 and Beyt#1A wells suggest a lack of managerial control resulting from its non-operator position.

(ii) Actual production significantly lower than forecasted:

During flow testing on Pine Pasture#2 in September 2008, Target indicated that it expected the well to flow at 600-790 barrels of oil per day (BOPD). In the final quarter of 2008, average production for this well was only 108 BOPD, which is significantly lower than Target's forecast. As a result of the high volume of water production (currently over 440 barrels per day) which must be pumped and trucked off-site for disposal, the recurring expense to handle water production suggests that the well is marginally profitable, if at all, at current commodity prices. Target has yet to provide any comment as to why production has failed to achieve expected levels.

(iii) Lack of information regarding key operational risks:

There is a lack of consistency or detail in Target's statements regarding the reserves and rates of depletion of its producing assets.

In its presentation to the Good Oil Conference in September 2008, Target indicated that the 'unrisked potential recoverable reserves' from its East Chalkley prospect were 2.4 million barrels of oil (MMBO) but that the risked potential was only 0.46 MMBO. This indicates a very high risk factor (approximately 80%) compared to its other prospects. Target has not provided any commentary on what risks need to be overcome in order to maximise recoverable reserves.

Furthermore, Target has failed to give any indication as to the likely depletion rate or economic life of its current production wells (Snapper A-1, A-2 and Pine Pasture#2). It would appear on research of publicly available information by Blaze that one zone has already been deemed depleted or non-commercial in the Snapper A-1 and A-2 wells.

(iv) Lack of disclosure regarding likely development costs or cash calls:

Target is not the operator on any of its areas of interest. Consequently, it is a price and timetable taker that may be subject to cash calls if the operator aggressively develops the assets.

Blaze estimates that Target faces cash calls of up to US\$1.225m (A\$1.75m) in the next six months for its contributions to the Snapper A-3, Beyt#1A, East Chalkley Salt Water Disposal and Pine Pasture#3 wells.

Furthermore, in order to fully develop the East Chalkley reservoir, Blaze believes that the operator will need to drill up to eight wells (including the existing well and the wells described above at an average cost of US\$1.7m per well (US\$425,000 net to Target). If this occurs, Target may be required to make additional contributions of up to US\$2.55m on a schedule dictated by the operator.

In the event that the operators elect to fully develop the assets in which Target has an interest, Target may be subjected to total cash calls of at least US\$3.775m (A\$5.4m based on exchange rate of A\$1.00 = US\$0.70)- a situation that would require more cash than is currently available.

(d) Target lacks a dedicated in country management team

On 11 December 2007, Target announced the appointment of Mr Ron Krenzke as manager of its North American activities. The announcement highlights Mr Krenzke's experience and success as an explorer but makes no reference to experience in developing existing discoveries. Mr Krenzke was appointed "on a consulting basis initially, as he continues to support other existing clients".

Mr Krenzke is partly remunerated by the issue of Target Options including 500,000 unlisted options exercisable at \$0.12 on or before 7 August 2011 that were issued on 7 August 2008. At the time of issue, the 30 day VWAP of Target Shares was approximately \$0.10 and these options represented an appropriate incentive. With the Target Share price currently less than \$0.12, these options are currently 'out of the money' and do not represent a meaningful incentive for him to increase value to Target.

Mr Krenzke has taken up a position as Executive Vice President with Saxet Petroleum Inc of Houston, Texas. It is not clear whether this role will impact Mr Krenzke's availability to undertake work for Target as no announcements have been made.

Target has minority (non-operator) interests in each of its wells as it does not have the on-site capability to operate them. In comparison, Odin and Advance have the dedicated services of Hibernia Resources LLC enabling it to operate projects and to minimise delays and expenditure in implementing a development strategy.

Generally, the operator of an oil and gas lease dictates the strategy and timings for its exploration and development and negotiates the budget. A non-operating partner is simply advised of the operator's intention and typically has 30 days in which to decide whether to participate. In the event that the non-operator does not participate, it effectively relinquishes its entitlement to revenues until its share of the costs and a penalty has been recovered by the carrying party. This penalty is typically 400% of the costs so that the carried party effectively foregoes in excess of five times the cost of its contribution. In some cases, there is an 'in or out' clause whereby a non-operating owner can not buy back into an asset.

Due to Target's lack of in-country management, it relies on third parties to operate its projects, effectively making Target a price and timetable taker. As a non operator of all of its projects, Target is vulnerable to costly penalties in the event that Target elects not to participate in the operator's Exploration and Production plans.

Target's lack of management experience is evidenced by its East Chalkley prospect, which may require a salt water disposal well and up to seven further development wells in order to drain the reservoir.

3.2 Advantages if you accept the Offer

The advantages of accepting the Offer and becoming an Advance Shareholder are as follows:

(a) There are cash benefits of accepting the Offer
(i) Offer by Blaze to all Target Shareholders

Blaze is offering all Target Shareholders one cent (\$0.01) and 0.75 Advance Shares for every Target Share they hold.

The 2 day VWAP for Advance (Tuesday 14 April to Wednesday 15 April 2009) is equal to \$0.0654. The 2 day VWAP for Target (Tuesday 14 April to Wednesday 15 April 2009) is equal to \$0.0396.

(ii) Opportunity for partial cash payment and ongoing exposure to US oil and gas

Blaze is offering Target Shareholders a cash component of \$0.01 per Target Share as well as through an Advance Shareholding continued exposure to a broader portfolio of US oil and gas assets, including Advance's long life assets and the benefit of its in-country expertise.

(iii) No stamp duty or brokerage

If you accept the Offer in accordance with Section 10, you will not pay any brokerage or stamp duty on the sale of your Target Shares to Blaze.

(b) Access to a committed US Management Team with the competencies and skill sets to operate exploration and production projects.

Advance has an extensive management team based in Houston, Texas including the dedicated services of Hibernia Resources LLC which has managed Advance's interests since 2005. This team provides expertise on exploration, transactions & finance, development and production. This team includes the following:

(i) Hibernia Resources LLC

Hibernia is an oil and gas exploration and production company based in Houston, Texas. Hibernia provides a range of services for Advance including identification and evaluation of exploration opportunities, exploration, development, production, accounting and regulatory activities. Hibernia's interests are strongly aligned with those of its clients as it receives carried interests and/or back-in payments on economic payout.

Hibernia has a well-developed network that provides Advance with opportunities to acquire quality operator-position assets prior to their auction.

Advance's relationship with Hibernia enables it to operate assets and to take controlling interests in projects thereby controlling and reducing costs. Whereas Target, as a non-operator of its projects, is currently vulnerable to cash calls and risks dilution if partners do not consent to expenditure requirements.

Advance's managing director, Anthony Short, has worked with Hibernia's principal, P Embry Canterbury, since 1998. Embry graduated from Texas A & M University in 1995 with a Bachelor of Science in Petroleum Engineering and has worked as a district engineer for Haliburton Energy Services in Odessa, Texas. He provides the hands-on development and production services necessary to enable his clients to take operator-positions on oil and gas leases. As operator, Advance is able to dictate the development schedule and not be subject to unexpected cash calls driven by an unrelated operator.

(ii) Southern Producer Services LLC (SPS)

Advance has a US-based financial and capital advisory capability provided by SPS. This includes debt facilitation, risk management (hedging), deal sourcing, acquisition and divestment.

Carl Carter III, founder and owner of SPS has been in the producer finance business since early 2002 and has been responsible for arranging equity, mezzanine and senior debt for oil and gas producers. SPS is a full service capital advisory firm for facilitating transactions involving oil and gas assets including deal structuring, pricing, valuation analysis, financial modelling and investment return evaluation.

Carl's experience as an Associate Director (Origination) with UBS Warburg Energy's Producer Finance Group give him an excellent knowledge of production finance, including hedging and debt facilities. This knowledge has been invaluable to Advance and is reflected by its US\$900,000 mark to market gain on its hedging contracts.

(iii) Brian Ayers

Brian Ayers has more than 28 years experience in the US oil and gas industry including four years as president and chief executive officer of Centurion Resources, the current operator of Target's Louisiana assets. Brian is currently a Director of Kilgore which listed on ASX in 2008 and which has had more than a 50% success rate on the 11 wells drilled since then. Brian was responsible for developing the portfolio of exploration assets of Kilgore and has excellent knowledge of Target's operating environment.

(iv) Kip I Plankinton

Kip I Plankinton is an oil and gas attorney with over 19 years' experience in the oil and gas industry. Kip is Board Certified in Oil, Gas and Mineral Law by the Texas Board of Legal Specialization, and is licensed to practice in Texas, Oklahoma and Colorado. Prior to starting his own practice in 2006, Kip served as in-house counsel for ExxonMobil, Colorado Interstate Gas Company, Texaco and Marathon Oil Company. Kip began his legal career at the law firm Davis, Graham & Stubbs in Denver.

Advance's interests are strongly aligned with its in-country management team of Hibernia and SPS. This expertise has enabled Advance to acquire projects before competitive tender processes, to own up to 100% working interests in projects, to operate projects and to divest projects.

Advance incentivises Hibernia and SPS by paying them 10% of the sales price of a project less the payout amount (the payout amount is total invested capital less total field revenue) on any project divested. The recent sale of the Lone Camp project owned by Advance saw Hibernia receive an incentive payment of over US\$140,000. Advance believes that this type of incentive maximises the returns on projects managed by Hibernia and SPS.

(d) Advance's historical financial performance

Advance has demonstrated significant growth since 2005 with revenue from sales, hedging and interest increasing as depicted below:

The 2008 revenue does not include profit from the sale of the Lone Camp asset but the chart illustrates the growth in Advance's revenues since it was established in 2005.

(e) Ability to leverage reserves

Advance's broader and more mature asset base of 26 wells enables it to leverage acquisition and development through a low-cost senior debt facility.

Advance's wholly-owned subsidiary, Advance Exploration and Production Inc (AEPI), has had a credit facility with Sterling Bank of Texas since 2006 enabling it to acquire and develop producing properties without having to issue securities and dilute Advance Shareholder's shareholding. In March 2008, this facility was renewed as follows:

The maximum credit facility was increased from US\$20m to US\$40m;
The interest rate was reduced from US prime (currently 3.25%) plus 1.5% to US prime plus 1.0%; and
The facility matures on 31 March 2011;

This credit facility enabled Advance to acquire the US\$1.1m acquisition of the Lone Camp project with 100% debt in 2006. As a result, the project achieved a levered internal rate of return (IRR) of over 100% when it was sold for US\$2m in 2008. From the experience of the boards of Odin and Advance, banks are reluctant to lend against short life water drive reservoirs in difficult areas such as Target's East Chalkley reservoir.

Advance has also developed alternative funding relationships with third parties and has issued more than A\$10m in convertible notes of which more than \$6m has been redeemed as they have reached maturity.

(f) Access to long-life, low cost reserves

(i) Well Life Span

Advance's assets are in the North Texas and Permian Basins. The Permian Basin area is characterised by stable, long-life, shallow decline reserves¹ that typically have an economic life of over 30 years.

(ii) Development Costs

Advance's access to senior debt would enable the development of Target's assets to be funded by low-cost debt whereas Target would need to issue additional securities, enter into a farm-out arrangement with another party or consider other avenues to fund development of its assets.

(iii) Production

Advance's production is greater and more predictable than Target's. In December 2008, Advance's net daily production was 150 BOEPD. Publicly available data from Drilling Info suggest that Target's net production, based on its Net Revenue Interests, from Snapper A-1 and A-2 was approximately 28 BOEPD in December 2008 with a further 21 BOEPD from Pine Pasture#2.

(g) Independent Engineer Reports

As a condition of its debt facility, an independent engineer certifies all of Advance reserves thereby providing banks and investors with reassurance of its future prospects. Using the same methodology, public data and information from Target announcements, Blaze and Hibernia have undertaken an estimate of Target's total proven reserves and believe it to be less than the Snapper 3P reserves stated in its recent quarterly report. Target has yet to provide a comparable independent assessment of its proven reserves.

(h) Proven Management Team

Advance's board of directors has extensive experience in establishing and managing listed companies and in managing US- focussed oil and gas companies. Advance's managing director, Anthony Short, was a founding director of Amadeus Energy Ltd. Amadeus was one of the pioneers of ASX listed companies acquiring and operating US based oil and gas assets and Anthony has developed many of his key relationships with banks and specialists since then.

Advance's expertise is in maximising shareholder value from assets by enhancing value (through acquisition, exploration and development) before divesting and re-deploying those funds in other undervalued assets. It has demonstrated the success of this business model by the sale of its Lone Camp project US\$2m delivering an \$812,000 profit and a levered Internal Rate of Return of over 100%.

3.3 Benefits for Target Shareholders if Blaze acquires a controlling interest in Target

In the event that Blaze acquires more than 50% of Target Shares and obtains effective control of Target, Blaze believes the benefits to Target Shareholders are as follows:

(a) Cost Savings

If Blaze obtains control of Target, it will seek to implement intentions in Section 4.4 to reduce costs by consolidating many of the administrative functions currently undertaken by Target with those of Advance. This may include corporate office, financial and accounting, insurance and company secretarial expenses. Blaze would also seek representation on Target's Board thereby providing opportunities for reducing total Target board remuneration which was \$497,875 in 2008.

(b) Access to Advance and Odin experienced management teams

If Blaze obtains control of Target, it will seek to appoint experienced representatives to the board of Target who will have direct access to the operating experience and involvement of the US based management team and the extensive experience of the board of Advance and Odin:

(i) US based experienced management team

If Blaze obtains control of Target, Target and its shareholders will have the benefit of access to the US-based oil and gas specialists utilised by Advance including Hibernia Resources LLC (Petroleum Engineering), Brian Ayers (Exploration), Southern Producer Services (Capital Advisory) and Kip Plankinton (Legal). This team is properly incentivised and has demonstrated its value during the acquisition, development and divestiture of assets for Advance. Section 3.2 (b) provides a brief overview of the competencies and skill sets of the US based management team.

(ii) Board of Advance

Target shareholders will benefit from the collective experience of Advance's board who have extensive knowledge and skills in the management of ASX listed entities as well as the management of US oil and gas exploration and development projects. Section 5 provides a brief overview of the Advance board.

(iii) Board of Odin

Target shareholders will benefit from the collective experience Odin's board who have relevant knowledge and skills in oil and gas exploration, development and operating industries in Australia and internationally and the management of ASX listed companies. Section 6 provides a brief overview of the Odin board.

3.4 Benefits for Target Shareholders if Blaze does not acquire a controlling interest in Target

The Offer is not subject to a minimum acceptance condition. Therefore, it is possible that Blaze will acquire Target Shares either under the Offer or otherwise, but at the end of the Offer Period, will not be in a position to unilaterally control Target. If Blaze does not achieve control of Target it considers its potential investment in Target to have benefits for all Target Shareholders. The extent to which Blaze will be able to influence Target and implement any benefits will depend upon the number of Target Shares acquired by Blaze.

Blaze will use its voting power in Target to implement the benefits as far as possible in Section 3.3 above and seek to increase value of the investment.

4. Profile of and Intentions of Blaze

4.1 Structure and Ownership

Blaze was incorporated on 5 November 2008. Blaze is a special purpose vehicle with Advance and Odin each owning 50% of Blaze's issued share capital. Blaze has access to the extensive experience of the Boards of Advance and Odin as well as the technical in-country expertise of the US management team described in Section 3.2a). Blaze has access to Advance's shares and Odin's cash under commercial terms as defined in a Blaze Shareholder Agreement

4.2 Blaze Shareholder Agreement

On 6 April 2009, Advance, Odin and Blaze entered into an agreement where by Advance and Odin, as joint shareholders of Blaze, propose to regulate the manner in which they hold, deal with and vote their Blaze shares in respect of the Offer made by Blaze and any Target Shares that Blaze, Advance and Odin acquires under the Offer or otherwise (Blaze Shareholders Agreement).

(a) Shareholding and Voting

The Blaze Shareholders Agreement specifies the manner in which the parties hold, deal and vote their shares including:

(i) Advance and Odin have one Share each;
(ii) Each Share has the right to one vote;
(iii) Each Shareholder undertakes with each other party that it will exercise all voting rights of their shares;
(iv) Each Shareholder may appoint one Director; and
(v) All resolutions of the Board and Shareholders must be unanimous.
(b) Advance Energy Ltd

Under the Blaze Shareholder Agreement, Advance will issue any new Advance Shares required to meet the share component of the consideration under the Offer. Assuming no Target Options are exercised, a maximum of 78,240,877 Advance Shares may be issued to Target Shareholders.

The shares issued by Advance will be accounted for as Shareholder Loans to Blaze and valued at the 5 day VWAP for Advance Shares prior to the date of issue of that Advance Share.

Under the Blaze Shareholders Agreement Odin will provide up to \$1.04m for the cash component of the consideration under the Offer. The cash will be accounted for as a Shareholder Loan to Blaze.

(d) Deadlock

If, after the end of the Takeover bid period, the Blaze Shareholders are unable to pass a resolution unanimously, the Blaze Shareholders Agreement will terminate and the Target Shares held by Blaze will be transferred to Advance and Odin in full and final settlement of those Shareholder Loans in proportion to their respective Shareholder Loans.

4.3 Board of Blaze

Alex Bajada

Mr Bajada is a corporate consultant with over 30 years experience in the corporate sector and has been involved in the management of ASX listed companies for many years fulfilling the roles of chairman and director. He is currently chairman of Odin and Advance, non executive chairman of AXG Mining Limited, managing director of Excalibur Mining Corporation Limited, director of Wesbeam Pty Ltd and Hawkesbridge Limited. Mr Bajada has been an independent director of the WA Local Government Superannuation Plan (which has \$1.3 billion of member funds under management) for the last 15 years and served as chairman for at least ten years.

Anthony Short

Mr Short has over 18 years experience in the administration and management of listed public companies. He has extensive experience at board level in the management and formation of public companies in gold mining, drilling and oil and gas in the USA. He has been chairman, chief financial officer and managing director in a number of listed public companies and corporate advisor on a number of public company listings. He is also currently a director of Advance, Regal Resources Limited, Kilgore, Vector Resources Ltd and Palace Resources Limited.

4.4 Intentions of Blaze

Section 4.4 to 4.7 set out the intentions of Blaze on the basis of facts and information concerning Target which are known to Blaze at the time of preparation of this Bidder's Statement. However, Blaze will only reach final decisions in light of material facts and circumstances at the relevant time. Accordingly, the statements in these Sections are statements of current intentions only, which may vary as new information becomes available or circumstances change.

Blaze seeks to acquire control of Target in order to implement a range of benefits and improvements. Its ability to implement these changes will depend on the level of acceptances by Target Shareholders.

(a) Composition of the Board

Blaze intends to replace some or all of the members of Target's board of directors. Blaze's nominees have not yet been identified and their identity will depend on the circumstances at the relevant time.

In addition, it is Blaze's current intention to retain Target personnel who have extensive knowledge of Target's assets and who have the skills and experience required to effectively operate Target's business.

(b) Strategic and Operational review

Blaze has not had access to all the information relevant to making a final decision regarding any changes to be made to Target's operations.

(i) Strategic Review of Assets

At the end of the Offer Period, Blaze in conjunction with it's US based technical and commercial consultants will continue to conduct Target's business and undertake an immediate and broad based review of Target's assets on both a strategic and financial level. The key objective of this strategic review will be to:

(A) identify and dispose of assets that are underperforming or do not meet strategic investment criteria;
(B) determine mechanisms for improving operational performance and provide value to shareholders; and
(C) consider alternative utilisations of cash reserves including the acquisition of operating interests in quality assets.
(ii) Operational Review

On completion of the strategic review, Blaze, in conjunction with Advance and Odin will undertake an operational review with the objective of achieving cost savings by:

(A) eliminating any duplicated activities and functions, including management, presently carried out by Advance, Odin and Target where it is economically efficient to do so;
(B) sharing or centralising administrative functions such as company secretarial, financial management, accounting and promotion will be shared or centralised; and
(C) transferring the corporate head office of Target into the shared premises currently occupied by Advance and Odin.

(c) Growth planning

Target does not have the capacity to operate producing oil and gas properties or exploration prospects and as a consequence, it has been limited to taking minority (25% or less) interests in projects. Blaze has an established relationship with Hibernia that has enabled Advance to acquire operating interests in several projects thereby giving it control over the timing and cost of developing or divesting projects. Blaze's US management team will give Target the capacity to acquire and operate oil and gas interests thereby giving it control over its own destiny.

4.5 Intentions upon acquisition 0% to 50% of Target

Blaze's intentions in the event that it acquires up to 50% of Target Shares are as follows:

(a) General

Blaze intends to hold the Target Shares it acquires as a portfolio investment. If at any time the Target Shares held by Blaze do not achieve an appropriate portfolio return, and Blaze forms the view that continuing to hold those Target Shares is not in the best interests of Blaze shareholders, it may dispose of those Target Shares.

Further, depending on the level of its shareholding in Target, Blaze intends to utilise all means available to replace some or all of Target's directors with Blaze nominees. Blaze's nominees have not yet been identified and their identity will depend on the circumstances at the relevant time.

Blaze will continue to carefully monitor Target's corporate behaviour and compliance with acceptable governance practices to seek to ensure that the interests of all Target Shareholders are considered and appropriately protected.

Blaze will assess its support (or otherwise) for Target and its management on an ongoing basis and will vote its Target Shares on any corporate proposals as it sees appropriate at the relevant time.

Blaze also intends to notify the Target directors that it may be interested in participating in future equity raisings. Any such investment would be subject to Blaze assessing and being satisfied with the terms and conditions of the proposed issue of securities and the purpose for which the funds are to be raised.

Blaze will also implement the intentions described in Sections 4.4 and 4.5 to the extent that it is economically feasible and able to do so and subject to the requirements of the Listing Rules, Corporations Act and any other applicable laws or regulations. These intentions specifically include those in respect of, operational review, business integration and growth planning.

(b) Target Options

Blaze has made no decision on whether to make a separate offer for or otherwise seek to acquire existing Target Options. In part, that decision will be influenced by the level of Blaze's shareholding in Target.

(c) Effect on Target listing and liquidity if Blaze acquires control of Target

It is expected that Target will continue to be listed on ASX, but Target Shareholders should be aware that they are likely to have a minority shareholding in Target, which may affect the liquidity of Target Shares.

4.6 Intentions upon acquisition of more than 50% but less than 90% of Target

Blaze's intentions in the event that it acquires control (ie more than 50% but less than 90% of Target Shares) of Target are as follows:

(a) General

Blaze will replace some or all of the members of Target's board of directors with Blaze's nominees. Blaze's nominees have not yet been identified and their identity will depend on the circumstances at the relevant time.

Blaze will also implement the intentions described in Section 4.4 to the extent that it is economically feasible and able to do so and subject to the requirements of the Listing Rules, Corporations Act and any other applicable laws or regulations. These intentions specifically include those in respect of, operational review, business integration and growth planning.

(b) Target Options

(c) Effect on Target listing and liquidity if Blaze acquires control of Target

4.7 Intentions upon acquisition of 90% or more of Target

Blaze's intentions if it acquires 90% or more of Target Shares are as follows:

(a) Compulsory acquisition

Blaze intends to proceed with compulsory acquisition of the outstanding Target Shares in accordance with the provisions of Chapter 6A of the Corporations Act.

(b) Target Options

If Blaze becomes entitled to compulsorily acquire outstanding Target Shares in accordance with the provisions of Chapter 6A of the Corporations Act and assuming it is not otherwise entitled to compulsorily acquire Target Options, it intends to exercise its rights as a 90% holder under Part 6A of the Corporations Act to compulsorily acquire any Target Options.

(c) General

Blaze will implement the intentions in Sections 4.4 to 4.6 to the extent that it is economically feasible and able to do so and subject to the requirements of the Listing Rules, Corporations Act and any other applicable laws or regulations. These intentions specifically include those in respect of composition of the board, operational review, business integration and growth planning.

5. Profile of Advance

5.1 Overview of Advance's activities

Advance is a limited liability company, limited by shares and is incorporated and domiciled in Australia. It was established in 2004 to acquire and develop oil and gas producing assets in the USA. It was admitted to the Official List on 31 May 2006.

Advance acquires assets with proven production close to infrastructure, proven behind pipe reserves and step-out/infill drilling potential. It aims to optimise existing production through workovers and field expansion before divesting once payback has been achieved, typically within a 4 year period.

Advance has a current market capitalization of approximately \$7m and has 553 shareholders. The Directors own 23.4% of Advance Shares.

5.2 Group Structure of Advance

A group structure, showing the principal activities and businesses of the Advance group is shown below:

Advance's subsidiary, Advance Exploration and Production Inc (AEPI) is the owner of all its US assets.

5.3 Principal activities of Advance

(a) Producing Assets

Since being admitted to the Official List in 2006, Advance has established a portfolio of mature, long life assets with low decline. Advance's major projects are as follows:

(i) Martin County, Texas - Mother Lode Project

The Mother Lode 3D Project is located north of Midland, Texas and covers around 400 km² of contiguous 3D seismic data.

Phase I (Homestake and RKE Prospects)

Advance acquired 22.5% working interest in five wells producing from the Strawn Limestone. Production was enhanced as a result of fracture stimulation and Advance also participated in the drilling of a new offset well, Graham-1.

In 2008, Advance increased its working interest (WI) in this project from 22.5% to 100% and in December 2008 had net production of 115 Thousand cubic feet per day (MCFPD) and 43 BOPD. Cash flows from the initial 22.5% interest acquired in May 2005 have more than offset the acquisition and development costs to date demonstrating the success of Advance's business model.

Phase II (Totem and Key East Prospects)

Advance acquired an average 12.5% interest in three wells in the Key East and Totem prospects in 2006 and has since participated in the drilling of a further six wells.

Net production has increased from 96 Thousand cubic feet equivalent per day (MCFEPD) on acquisition in 2006 to 192 MCFEPD in December 2008.

(ii) Palo Pinto County, Texas - Possum Kingdom Project

In December 2006, Advance acquired an average WI of 90% in the nine-well, 1,015-acre Possum Kingdom project. This interest was increased to 100% through the purchase of the remaining 10% from North America Energy in August 2008. Production in December 2008 was 335 MCFEPD.

(b) Exploration Assets

Martin County, Texas - Mother Lode Phase III

Advance has a 50% interest in the Mother Lode Phase III project that comprises 48,000 acres of 3D seismic data. This project has eight deep prospects including one PUD prospect. Leasing of the first three prospects has been completed and Advance anticipates commencing drilling in mid-2009 when drilling costs have further reduced.

The first well to be drilled is likely to be the Roman 27-2 PUD which will target the Spraberry-Dean-Wolfcamp trend. Wells are expected to initially commence production at around 100 BOEPD and to have an economic life of over 25 years.

5.4 Advance's ongoing strategies

Advance is strongly focussed on maximising shareholder value, minimising dilution of its shareholders by financing acquisition and development through bank debt and convertible notes. It utilises local expertise that is strongly incentivised to achieve Advance's goals.

Advance has a portfolio of producing oil and gas assets centred on the Permian Basin of Texas. Its business model involves the acquisition of producing properties with immediate cash flow but with the potential for enhancement and expansion. Through judicious use of hedging and low-cost debt facilities, Advance aims to achieve payback of its initial acquisition and development costs within 24-48 months before divesting projects at a significant premium.

Advance's Mother Lode Phase III project has three prospects that are fully-leased and a further four development targets.

5.5 Successful Projects

In December 2008, Advance announced the sale of its Lone Camp project in Palo Pinto County in the Fort Worth basin for US\$2m. The project was acquired for US\$1.25m in November 2005 and, since then and up to the date of sale, produced approximately 158,000 thousand cubic feet (MCF) of gas net to Advance and US\$1.2m of net revenues enabling considerable enhancement to be undertaken out of cash flow. Daily production on the project has been increased from 225MCF to 412 MCF. The project achieved an unleveraged Internal Rate of Return (IRR) of over 53% and a leveraged IRR of 102% (based on 50% debt funding).

This divestment, completed at a time when both oil and gas prices were significantly below the highs achieved in mid-2008 demonstrates that Advance has the capacity to add value to assets it owns or manages and the ability to market projects even in adverse market conditions.

5.6 Directors of Advance

Details of the responsibilities and experience of the Advance directors (as at the date of this Bidder's Statement) is set out below.

Alex Bajada (Chairman) B Econ (UWA)

Mr Bajada is a corporate consultant with over 30 years experience in the corporate sector and has been involved in the management of ASX listed companies for many years fulfilling the roles of chairman and director. He is currently chairman of Odin, non executive chairman of AXG Mining Limited, managing director of Excalibur Mining Corporation Limited, director of Wesbeam Pty Ltd and Hawkesbridge Limited. Mr Bajada has been an independent director of the WA Local Government Superannuation Plan (which has \$1.3 billion of member funds under management) for the last 15 years and served as chairman for at least ten years.

Kip I Plankinton (Non-Executive Director) BA,JD

Mr. Plankinton is an oil and gas attorney with over 19 years' experience in the oil and gas industry. Mr. Plankinton is Board Certified in Oil, Gas and Mineral Law by the Texas Board of Legal Specialization, and is licensed to practice in Texas, Oklahoma and Colorado. Prior to starting his own practice in 2006, Mr. Plankinton served as inhouse counsel for ExxonMobil, Colorado Interstate Gas Company, Texaco and Marathon Oil Company. Mr. Plankinton began his practice with the law firm of Davis, Graham & Stubbs in Denver.

Anthony Short (Managing Director) BPE, B.Comm, Grad Dip Fin, MAICD

Mr Short has over 18 years experience in the administration and management of listed public companies. He has extensive experience at board level in the management and formation of public companies in gold mining, drilling and oil and gas in the USA. He has been chairman, chief financial officer and managing director in a number of listed public companies and corporate advisor on a number of public company listings. He is a director of Regal Resources Limited, Kilgore, Vector Resources Ltd and Palace Resources Limited.

Gordon Sklenka (Non-Executive Director) B Comm (UWA)

Mr Sklenka has over 17 years experience in corporate finance in the areas of capital

raisings, IPOs, acquisitions and project finance in the resources and technology sectors. He has worked with a number of listed public companies in both Australia and Canada and developed extensive experience in company formation, capital raising and project acquisition. He is Chairman of Kilgore and a director of Regal Resources Limited, AXG Mining Limited, Vector Resources Ltd, Tribune Resources NL and Rand Mining NL.

5.7 Summary of historical financial information

The historical financial information below does not include or make provision for the Offer. The full financial accounts for the financial periods shown, including the relevant notes to the accounts, can be found in the relevant annual reports.

(a) Balance Sheets

The summarised historical balance sheets for Advance below have been extracted from the audited financial accounts for the periods ending 31 December 2008, 2007 and 2006.

The information below should be read in conjunction with the relevant notes of the financial report.

Advance Energy Ltd ‐ Statements of Financial Position as at 31December

	2008	2007	2006
	\$'000	\$'000	\$'000
CURRENT ASSETS
Cash and cash equivalents	2,421	1,936	1,727
Receivables	926	740	465
Current Portion of Commodity Financial Instruments	1,056
Total Current Assets	4,403	2,676	2,192

NON CURRENT ASSETS
Property, Plant and Equipment	1,472	1,327	1,427
Oil and Gas Properties	22,963	14,484	14,269
Non Current Portion of Commodity Financial Instrum	254
Other non‐current assets	17		402
Total Non Current Assets	24,706	15,811	16,098

TOTAL ASSETS	29,109	18,487	18,290

CURRENT LIABILITIES
Payables	2,255	418	382
Provisions	245	28	44
Interest bearing liabilities	5,985	5,800	‐
Mark‐to‐market Escrowed Funds	1,213	‐
Total Current Liabilities	9,698	6,246	426

NON CURRENT LIABILITIES
Deferred tax liability	‐	37	85
Interest bearing liabilities	9,734	9,218	12,336
Total non current liabilities	9,734	9,255	12,421

TOTAL LIABILITIES	19,432	15,501	12,847

NET ASSETS	9,677	2,986	5,443

EQUITY
Issued share capital Reserves	12,692 4,444	9,029 581	8,764 1,514
Accumulated Losses	(7,459)	(6,624)	(4,835)
Total Equity	9,677	2,986	5,443

(b) Income Statements

The summarised historical income statements for Advance below have been extracted from the audited financial accounts for the periods ending 31 December 2008, 2007 and 2006.

The information below should be read in conjunction with the relevant notes of the financial report.

Advance Energy Ltd ‐ Statements of Financial Performance for Years Ending 31 December

	2008	2007	2006
	\$'000	\$'000	\$'000
Revenue from continuing operations
Sale of Goods	5,071	3,630	1,118
Finance charges earned	3	56	99
Other income	1,154	266	55
	6,228	3,952	1,272
Profit on sale of asset	812	‐	‐
Expenses
Cost of Oil and Gas sold	(1,348)	(735)	(297)
Finance costs	(1,704)	(1,266)	(1,218)
Depreciation	(415)	(319)	(106)
Depletion of oil and gas properties	(2,107)	(793)	(156)
Exploration costs written off	0	(292)
Foreign exchange gains/(losses)			(23)
Staff costs	(157)	(629)	(1,369)
Administrative expenses	(2,181)	(1,641)	(1,674)
Operating results before tax	(872)	(1,723)	(3,571)
Income expense benefit/(expense)	37	(66)	63
Net loss attributable to shareholders	(835)	(1,789)	(3,508)
	2005	2006	2007
Total Revenue	451	1,173	3,896

(c) Management's Commentary on Historical Results

Advance's asset base has grown steadily since its first acquisition in 2005 enabling it to increase total revenues from ordinary activities to over \$6.2m in 2008. This comprises revenue from the sale of oil and gas, and from hedging revenues as a result of having hedged the majority of Advance's oil production at US\$90 per barrel and over. A further \$812,000 profit from the sale of the Lone Camp asset was also recognised in 2008.

Advance's interest-bearing liabilities have increased but its cash flows are more than adequate to service the finance costs. 100% of the issued convertible notes have been issued to a UK-based yield investor. The investor 'rolled over' (redeemed and re-issued) \$2m in notes in 2008 and has advised Advance that it intends doing the same for the \$2.3m in notes due for redemption in May 2009.

Advance's dual strategy of borrowing senior debt and hedging a proportion of its production has proven its value. Hedging is required by energy lenders and enables them to have confidence in the borrower's ability to service the loan and make repayments as required. Without this credit facility, Advance would have to raise significantly more equity thereby diluting the interests of shareholders. In the current market, it is extremely difficult for junior mining and energy companies to undertake any form of capital raising; this facility therefore provides greater security for the company. The hedging arrangements have also become extremely valuable in their own right with Advance receiving US\$95 per barrel for the sale of 1,000 barrels a month until June 2010.

The current market presents enormous opportunities for energy companies with production, reserves and cash to acquire additional assets and ride the anticipated increase in energy prices. Most indicators of future energy prices including NYMEX and the US Government's Energy Information Administration2 suggest that both oil and gas prices are likely to increase from their current levels providing some comfort of upside in any acquisition

5.8 Information about Advance Securities

(a) Advance Shares

At the date of this Bidder's Statement, Advance has 118,798,222 Advance Shares on issue. Further information about Advance Shares is provided in Section 11.5 of this Bidder's Statement.

(b) Advance Options

At the date of this Bidder's Statement, Advance has granted the following Advance Options:

Number of Advance Options granted1	Exercise Price	Expiry Date
13,850,000	\$0.25	31 December 2010
5,000,000	\$0.60	15 December 2009
250,000	\$0.65	29 December 2009
250,000	\$0.40	31 December 2010

Notes

All Advance Options are unlisted.

(c) Advance Convertible Notes

At the date of this Bidder's Statement, Advance has 4,300,000 convertible notes on issue.

The material terms of the convertible notes are as follows:

(i) each convertible note has a face value price of \$1.00;
(ii) interest accrues on each convertible note at rates of between 11% and 12% per annum payable quarterly in arrears;
(iii) the convertible notes will mature on the dates and are convertible as shown in the table below. On this date, Advance must redeem the face value and any accrued interest to the convertible noteholder or the convertible noteholder may elect to convert the amount due into Advance Shares;
(iv) Advance and the convertible noteholders may also agree to simultaneously redeem existing notes and issue new replacement notes;
(v) the convertible notes are an unsecured debt instrument, ranking along side general unsecured creditors; and
(vi) the convertible noteholders have the right to convert each convertible note into one Advance Share in accordance with the table below.

Face Value	Conversion or Repayment	Conversion
\$1,000,000	29/1/2010	The greater of \$0.10 or 30% discount to 30 day VWAP of Advance Shares
\$1,000,000	9/5/2010	The greater of \$0.10 or 30% discount to 30 day volume weighted average price of Advance Shares
\$2,300,000 1	22/5/2009	\$0.50

¹ Noteholder has agreed to 'roll over' notes on similar terms as those due for redemption on 9/5/2010

Refer to Section 11.6 (a) (i) for the risks associated with the convertible notes.

(d) Advance Converting Preference Shares

At the date of this Bidder's Statement, Advance had 9 Converting Preference Shares (CPS) on issue.

CPS are held by management with each converting to 1,000,000 ordinary shares on achieving certain production targets.

Class	Number	Production Target
Class B	5	Company achieving 500 BOEPD
Class C	2	Company achieving 1,000 BOEPD
Class D	2	Company achieving 1,500 BOEPD

5.9 Advance Shareholders

As at 8 April 2009, there were 553 Advance Shareholders and the top ten Advance Shareholders were:

Shareholder	Number of Shares	% Shares
Fay Holdings Pty Ltd	13,476,740	11.34%
Bardev Pty Ltd	7,167,187	6.03%
Formaine Pty Ltd	5,767,857	6.03%
Accord Investment Corporation Pty Ltd	5,320,885	4.86%
Sealblue Investments Pty Ltd	4,363,258	4.48%
Spartan Nominees Pty Ltd	4,202,144	3.67%
Jet Strike Pty Ltd	3,250,000	3.54%
Pinewood Holdings Pty Ltd	3,125,000	2.73%
Dalveen Pty Ltd	3,083,333	2.63%
Beachcraft Pty Ltd	3,010,000	2.60%
Total	52,766,404	44.42%

5.10 Trading in Advance Shares

Advance Shares are listed for Official Quotation.

Below is a table showing comparative trading prices of Advance Shares on ASX:

Comparative Trading Period	Price of Advance Shares
Last trading price prior to the date of this Bidder's Statement	\$0.075
Closing trading price on the date Advance announced the Takeover Bid	\$0.039
Approximate volume weighted average price in the 1 month prior to the date of this Bidder's Statement	\$0.045

The closing price of Advance Shares on ASX on 15 April 2009 was \$0.075. The closing price of Target Shares on ASX on the same date was \$0.042.

5.11 Website

Advance maintains a website which contains further information about Advance and its operations. Advance's website address is www.advanceenergyltd.com.au.

5.12 Further Information

As a company whose shares are quoted on ASX, Advance is a disclosing entity and is subject to regular reporting and disclosure obligations. Copies of all documents lodged with the ASIC in relation to Advance may be obtained for a fee from, or inspected at, an office of the ASIC.

Advance will provide a copy of the documents referred to below, free of charge, to any person who asks for them during the Offer Period:

(a) the financial statements for the 12 months ended 31 December 2008 (being the latest annual financial report containing the financial statements for a financial year most recently lodged with ASX in relation to Advance before the date of this Bidder's Statement); and
(b) all documents used to notify ASX of information relating to Advance under the provisions of the Listing Rules since lodgement of the financial statements referred to in paragraph (a) above, being the documents set out in Annexure "A".

There is no information which has been excluded from a continuous disclosure notice in accordance with the Listing Rules or in the Bidder's Statement that Target Shareholders and their professional advisers would reasonably require for the purpose of making an informed assessment of:

(a) the assets and liabilities, financial position and performance, profits and losses and prospects of Advance; or
(b) the rights and liabilities attaching to the Advance Shares to be issued pursuant to the Offer.

5.13 Dividend Policy

Advance's dividend policy is determined by its board of directors. No assurance can be given as to the timing or amount of future dividends. There are many factors which will influence any dividends being declared by Advance, including the amount of profit (if any) available for distribution (which itself is dependent on a number of variables) and the need for Advance to retain earnings to meet the costs of capital expenditure or other expenses.

6. Profile of Odin

6.1 Overview of Odin's Activities

Odin was admitted to the Official List of ASX on 31 August 2007. Odin's principal purpose for listing on ASX was to farm into the Spinel Block of Petroleum Exploration License (PEL) 106 with Kompliment Pty Ltd, a subsidiary of Blue Energy Ltd (ASX: BUL). A condition of this agreement was that Odin would fund the \$4.5m cost of the Spinel 3D Seismic Survey.

When it became apparent that there were considerable delays in acquiring, processing and interpreting the 3D seismic survey, Odin acquired a 19% shareholding in Victoria Petroleum NL. It subsequently sold this stake for a \$1.475m profit in October 2008 and, shortly thereafter, terminated the farm-in agreement with Kompliment Pty Ltd. Odin is taking legal action to recover the cost of the 3D seismic survey plus interest.

On 10 March 2009, Odin and Kilgore entered into a memorandum of understanding giving Odin the right to to farm into Kilgore's offshore interests by funding the dry hole and completion costs of the Snipe, Egret and Sandpiper wells earning it 50% interest in Kilgore's 11.25% completion working interests in each of these prospects (ie 5.625% net to Odin). All three wells have been commercial discoveries and are to be completed with production expected to commence in early Quarter 3 2009. Reserve estimates are currently being prepared.

6.2 Financial Performance

The net operating loss for the group for the six month period ending 31 December 2008 was \$3.592m. This includes impairment of exploration and evaluation costs of \$4.568m representing the cost of Odin's payment for the Spinel 3D seismic survey which it is currently seeking to recover. Without this expense, Odin would have made a profit of \$976,000 for the six-month period.

6.3 Financial Position

As at 31 December 2008, Odin had net assets of \$10.009m including \$6.596m in cash and cash equivalents and \$2.818m in interest bearing assets.

6.4 Directors

Alex Bajada, Chairman

Andrew Dimsey, Managing Director

Mr Dimsey has 28 years experience in the oil and gas exploration, development and operating industries in Australia and internationally. He has a commercial background and has held senior management positions in a number of public companies. He has significant experience in the management and administration of public companies, mergers and acquisitions, corporate restructuring, oil and gas infrastructure development and management, establishing and managing new oil and gas operations and oil and gas marketing. Mr Dimsey has held senior management positions with Beach Petroleum NL, Alliance Oil Development NL, Claremont Petroleum NL, Origin Energy Ltd and ARC Energy Ltd.

Roland Berzins, Non Executive Director

Mr. Berzins graduated from the University of Western Australia with a Bachelor of Commerce degree majoring in accounting and finance. He has over 22 years experience in the mining industry and was previously chief accountant for 6 years at Kalgoorlie Consolidated Gold Mines Pty Ltd ("Kalgoorlie Super Pit"). Since 1996 Mr Berzins has been company secretary for a variety of ASX listed companies and has also had experience in retail, merchant banking, venture capital and small to medium business advisory.

7. Profile of Target

7.1 Disclaimer

This overview of Target and all financial information concerning Target contained in this Bidder's Statement has been prepared by Blaze using publicly available information and adjusted where considered appropriate by Blaze based on its industry knowledge and expertise or that of its technical associates.

The information in this Bidder's Statement concerning Target has not been independently verified. Blaze does not, subject to the Corporations Act, make any representation or warranty, express or implied, as to the accuracy or completeness of this information.

The primary sources of information about Target used by Blaze are as follows:

(a) Target's annual report for the 2008 financial year;
(b) Target's quarterly and half yearly reports including the reports for the period ending 31 December 2008;
(c) press releases and ASX announcements made by Target in the last 12 months;
(d) Target's website (www.targetenergy.com.au);
(e) other publicly released information in relation to Target;
(f) Advance's own knowledge and industry expertise; and
(g) Technical opinions provided by Hibernia.

Further information relating to Target is expected to be included in a target's statement which Target must provide to Target Shareholders.

7.2 Overview of Target's activities

Target is an oil and gas exploration and production company with assets in Texas and Louisiana in the United States. Target admitted to the Official List on 22 November 2006.

7.3 Group Structure of Target

A group structure, showing the principal activities and business of the Target group is shown below (100% owned unless otherwise stated):

7.4 Principal activities of Target

Target has the following interests:

Prospect	Location Interest	Prospect Area (acres)	Working Interest	NRI to 100%
Garwood Frio	Colorado County, TX	680	25%	74%
Thoroughbred	Colorado County, TX	340	25%	74%
Snapper A-1	St Martin Parish, LA	60	25%*	72%
Snapper A-2	St Martin Parish, LA	30	25%*	72%
East Chalkley	Cameron Parish, LA	N/A	25%	N/A
Bayou Berard	St Martin Parish, LA	60	10%	72%

* Subject to completion of proposed farmin agreement and/or planned utilization agreement

A summary of Target's key projects and interests is described below:

(a) Snapper Prospect (A-1 and A-2 wells) –Target Working Interest (WI) – 25%

The Snapper A-1 well was drilled in May 2007 and the A-2 well drilled in November 2007. Harper and Associates undertook an independent assessment of the Snapper A-1 and Snapper A-2 wells as follows:

Reserve Report for SML (Snapper) A1 and A2 Wells
		Gross	Net
	Gas Oil (BCF) (MBO)		Gas (BCF)	Oil (MBO)
Proved	3.95	423.2	0.99	105.8
Probable	1.37	41.9	0.34	10.5

Possible	0.72	31.3	0.18	7.8
Total #P	6.04	496.4	1.51	124.1
Produced to 31/12/08	0.92	4.9	0.23	1.2
Remaining 3P	5.12	491.5	1.28	122.9

On the basis of 6MCF: 1 BO, Target's claimed 3P reserves are 336,233 barrels of oil equivalent (BOE) or 2.02 billion cubic feet equivalent (BCFE).

The wells produced a combined gross volume of 220.7 million cubic feet (MMCF) and 864 BO in the final quarter of 2008 – an average daily production of 613 MCFEPD net to Target.

(b) East Chalkley (Pine Pasture#2 well)

Target acquired a 25% working interest in the East Chalkley project in May 2008 with the aim of targeting a 'most likely' recoverable volume of oil resource of 2.4 MMBO. The Pine Pasture#2 well was drilled to a depth of 2,975m on 28 June 2008 and was put on production shortly thereafter. During its first full quarter of production, the well produced an average of 80 BOPD (20 BOPD dayPER DAY net to Target) peaking at 120 BOPD and 440 barrels of water per day (BWPD). Until a salt water disposal well is drilled, this water will need to be trucked away from the well and disposed of safely.

The Bayou Berard prospect is operated by Cypress Productions of Azle, Texas and was drilled to a depth of 3,251m on 16 January 2008. The well encountered a previously unobserved fault at 3,171m approximately 24m above the first target. Consequently, it was completed in the shallower Marg Vag sand flowing at rates up to 1.1MCFGD. Production was terminated on 21 July 2008 when the borehole loaded up with formation water.

On depletion of the Marg Vag, Cypress plans to drill a sidetrack from the existing Beyt #1 borehole to intersect the untested Marg Tex sands. Revised volumes in Marg Tex total 1.1 MMBO and 0.4 BCF (unrisked, recoverable).

(d) Thoroughbred

Thoroughbred#1 was drilled to a depth of 1,298m and became Target's first production well in June 2007. The well produced 82MMCF of gas prior to apparent depletion and was shut in on 8 May 2008. The operator, Everest Resources, is contemplating plans to re-perforate the Frio sandstone at a later date.

(e) Garwood

The Garwood#1 well was completed for production in the lowermost of the Frio sandstones and tied into the local gathering system with flows commencing on 20 September 2007.

Target Energy – Production in Q408
			Q408 Gas Prod		Q408 Oil Production		Net Daily Production
Well	TEX WI %	Gross (MMCF)	Net (MMCF )	Gross (BO)	Net (BO)	BOEPD	MCFEPD
Thoroughbred	25%
Snapper A-1	25%	102.5	25.5	213	53.2	46.8	281
Snapper A-2	25%	118.2	29.6	651	162.7	55.4	332
Garwood*	25%	4.7	1.2			2.2	13
Beyt#1	15%
Pine Pasture#2	25%			7,340	1,835	19.9	120
TOTAL		225.3	56.3	8,204	2050.9	124.3	746

(f) Unsuccessful/ Relinquished Projects

(i) Kant Prospect (25% WI)

The Kant#1 well was drilled to a depth of 1,448m in December 2006 to test an anomaly at a depth of approximately 988m. Wireline logs indicated the presence of hydrocarbons but in sub-economic quantities. Consequently, the well was plugged and abandoned.

(ii) Teche Prospect (10% WI)

Target participated in the drilling of the Teche prospect in Jefferson Davis Parish, Louisiana by drilling the Riviana Foods#1 well to a depth of 4,105m. After experiencing significant problems during the logging operations, it was determined that the targeted Bol Mex 2 and Bol Mex Harris sands were present but were water wet. The well was plugged and abandoned on 31 March 2008.

(iii) Bandito Prospect (15% WI)

Target tested the bandito prospect by drilling the Mary Vincent#1 well reaching a Total Depth of 3,932m on 31 July 2008. The targeted bol Mex sands were absent and the well was subsequently plugged and abandoned.

(iv) Catapult 3 Prospect

In December 2008, Target relinquished its opportunity to earn a 15% interest in the Catapult 3 prospect in Vermillion Parish, Louisiana. The prospect was estimated to have the potential to hold up to 204 BCF of recoverable gas with up to 10 million barrels of condensate.

(v) Parks North Prospect

In December 2008, Target relinquished its opportunity to earn a 10% interest in the Parks North prospect in St Martin Parish, Louisiana. Total unrisked potential hydrocarbon volumes were 25.7 BCF and 150,000 BO.

7.5 Information about Target Shares and Target Options

(a) Target Shares

As at 2nd April 2009, Target had 104,321,170 fully paid ordinary shares on issue and there were approximately 1,066 holders of Target Shares. The top ten Target shareholders as at 2nd April 2009 were as follows:

Shareholder	No of Shares	% Shares
Petroe Exploration Services	5,000,000	4.793%
UBS Wealth Management Australia Nominees Pty Ltd	4,406,316	4.224%
Hosier Investments Pty Ltd	4,038,161	3.871%
Energy Solar Central Pty Ltd	2,981,265	2.407%
Motta Property Investments Pty Ltd	2,000,000	1.917%
Andrew & Adrienne Hopkins	2,000,000	1.917%
Mr Cleanthe Hatziladis	1,605,612	1.539%
Bond Street Custodians Ltd	1,370,000	1.313%
Mrs Sharon Lloyd	1,250,000	1.198%
Gregory & Julie-Anne Jakab	1,179,982	1.131%
Total	25,831,636	24.762%

(b) Target Options

As at 31 December 2008, Target had granted 69,562,164 Target Options as follows:

Number	Exercise Price	Expiry Date
6,000,000	\$0.20	20 June 2011
63,062,164	\$0.25	26 November 2009
500,000	\$0.12	7 August 2011

7.6 Change in Target's financial position and information on Target

(a) Half Year Report for the 6 months ended 31 December 2008

Other than as disclosed in this Bidder's Statement, Advance is not aware of there being any material change in the financial position of Target since the lodgement with ASX on 13 March 2009 of Target's half year financial report for the six months ended 31 December 2008.

(b) Other publicly available information

Target has been admitted to the Official List and is required to comply with continuous disclosure requirements of ASX. A substantial amount of information concerning Target has previously been notified to ASX and is therefore publicly available.

Target Shareholders may obtain or inspect a copy of documents lodged with the ASIC at an office of the ASIC or of documents lodged with ASX at an office of ASX. In addition, on request to Target and free of charge, Target Shareholders may obtain a copy of, or inspect, any documents referred to in this Bidder's Statement which have been lodged with the ASIC or given to ASX or which have already been published in a book, journal or comparable publication.

The announcements which have been made by Target to ASX since 15 October 2008, being the date of lodgement of Target's 2008 annual financial report, are set out in Annexure "B".

8. Effect of the Offer on Blaze, Odin and Advance

8.1 Overview

Section 8 of this Bidder's Statement provides an overview of the effect of the Offer on Blaze, Odin and Advance. The intentions of Blaze concerning the business, assets and employees of Target are in Section 4.

As the Offer is not subject to a minimum acceptance condition, there are a range of potential outcomes arising from the Offer. This Section outlines these impacts on the basis that Blaze is successful in acquiring up to 50% of Target Shares, between 50.1% and 89.9% of Target Shares and more than 90% of Target Shares.

8.2 Effect of the Offer on Blaze

(a) Effect on the Financial Position

The effect of the Offer on Blaze will depend on the level of acceptance of the Offer by Target Shareholders. The value of Blaze's interest in Target will reflect the number of Target Shares acquired and the Target share price.

Blaze will have Shareholder Loans with Advance and Odin equal to the value of the Advance Shares provided by Advance and the cash provided by Odin.

(b) Effect on Capital Structure

Irrespective of the level of acceptance, the capital structure of Blaze will remain the same with Odin and Advance owning one share each.

8.3 Effect of the Offer on Odin

(a) Effect on the Financial Position

Odin will have a Shareholder's Loan with Blaze equal to the value of the cash component provided

As a 50% shareholder of Blaze, Odin will own 50% of Blaze's interest in Target described in Section 8.

(b) Effect on the Capital Structure

Irrespective of the level of acceptance, the capital structure of Odin will remain the same as no Odin Shares are to be issued.

8.4 Effect of the Offer on Advance

Advance's annual report for the year ended 31 December 2008 includes a statement of accounting policies and various notes to the financial statements. Advance has applied those same accounting policies in the preparation of the financial information below.

(a) Blaze acquisition of 0% to 50% of Target
(i) Effect on the financial position if Blaze acquires 0% to 50% of Target

(A) Pro forma Balance Sheet

To illustrate the financial impact of Blaze acquiring 0% to 50% of Target Shares, a pro forma balance sheet of Advance has been prepared based on its audited balance sheet as at 31 December 2008. The pro forma balance sheet assumes that Blaze acquires 30% of Target Shares:

Pro forma Balance Sheet Advance Energy Ltd

	Advance 31/12/2008 audited \$'000	Effect on Advance if Blaze acquires 30% of Target \$'000
Total current assets	4,403	5,938
Total non-current assets	24,706	24,706
TOTAL ASSETS	29,109	30,644

Total current liabilities	9,698	9,698
Total non-current liabilities	9,734	9,734
TOTAL LIABILITIES	19,432	19,432
NET ASSETS	9,677	11,212
Issued share capital	12,692	14,227
Reserves	4,444	4,444
Asset revaluation
Minority Interest
Accumulated losses	-7,459	-7,459
TOTAL EQUITY	9,677	11,212

(B) Key Financial Impacts
Current shareholder loan in Balance Sheet of \$1.535m;
No increase in liabilities; and
Increase in share capital of \$1.535m.
(ii) Effect on capital structure if Blaze acquires 0% to 50% of Target
(A) Issued capital

Assuming Blaze acquires 30% of the Target Shares on issue as at the date of this Bidder's Statement and issues Advance Shares as consideration under the Offer, the total number of Advance Shares which would be on issue is in the table below.

	30% Acceptances and no Target Options Exercised1	30% Acceptances and all Target Options Exercised2
Issued Advance Shares as at the date of this Bidder's Statement	118,798,222	118,798,222
Number of Advance Shares to be issued under the Offer	23,472,263	75,643,886
Issued Advance Shares following the Offer	142,270,485	194,442,108

Notes:

1. This represents the number of Advance Shares that would be issued based on the existing number of Advance Shares on issue and no Target Options being exercised during the Offer Period.
1. This represents the maximum number of Advance Shares that would be issued pursuant to the Offer, assuming all Target Options are exercised during the Offer Period. The exercise prices of the Target Options range from \$0.12 to \$0.25 per option, and if all Target Options were exercised, Target would receive additional cash of approximately \$16.96 million from the payment of the exercise price of the options.

The actual number of Advance Shares on issue will depend upon the number of acceptances of the Offer and the effect of rounding of fractional entitlements (which will be rounded up to the nearest whole number).

(B) Ownership structure

The issue of Advance Shares to pay for Blaze's acquisition of Target Shares will impact upon Advance's substantial shareholders. Based on current shareholdings, the table below summarises the expected substantial shareholders of Advance on completion of the Offer.

		Current Holdings		Post offer Based on 30% acceptances and all Target Options exercised
Shareholder	Number of Advance Shares	Percentage	Percentage	Percentage
Bardev Pty Ltd	10,156,165	8.55%	7.14%	5.22%
A N Short/Fay Holdings Pty Ltd	16,458,599	13.85%	11.57%	8.46%
R P Martin	9,318,211	7.84%	6.55%	4.79%
G A Sklenka/Formaine Pty Ltd	6,805,357	5.73%	4.78%	3.50%
A J Carew‐Reid	7,527,172	6.34%	5.29%	3.87%
	50,265,504	42.31%	35.33%	25.85%

(b) Effect upon Advance of acquiring greater than 50% but less than 90% of Target
(i) Effect on the financial position if Blaze acquires more than 50% but less than 90% of Target.
- (A) Pro forma Balance Sheet

To illustrate the financial impact of Blaze acquiring more than 50% of Target Shares, a pro forma Balance Sheet of Advance has been prepared based on its audited Balance Sheet as at 31 December 2008. The pro forma Balance Sheet assumes that Blaze acquires 60% of Target Shares and that no Target options are exercised during the Offer period:

Pro forma Balance Sheet Advance Energy Ltd

	Advance 31/12/2008 audited	Effect on Advance if Blaze acquires 60% of Target
	\$'000	\$'000
Total current assets	4,403	7,473
Total non-current assets	24,706	24,706
TOTAL ASSETS	29,109	32,179

Total current liabilities	9,698	9,698
Total non-current liabilities	9,734	9,734
TOTAL LIABILITIES	19,432	19,432
NET ASSETS	9,677	12,747
Issued share capital	12,692	15,762
Reserves	4,444	4,444
Asset revaluation
Minority Interest
Accumulated losses	-7,459	-7,459
TOTAL EQUITY	9,677	12,747

(B) Key Financial Impacts

The key financial impacts of Blaze acquiring control of Target are summarised below:

Current shareholder loan in balance sheet of \$3,070,000;
No increase in liabilities; and
Increase in share capital of \$3,070,000
(ii) Effect on capital structure if Advance acquires 60% of Target
(A) Issued capital

Assuming Blaze acquires 60% of the Target Shares on issue as at the date of this Bidder's Statement and issues Advance Shares as consideration for under the Offer, the total number of Advance Shares which would be on issue are in the table below.

	60% Acceptances and no Target Options Exercised1	60% Acceptances and all Target Options Exercised2
Issued Advance Shares as at the date of this Bidder's Statement	118,798,222	118,798,222
Number of Advance Shares to be issued under the Offer	46,944,527	99,116,150
Issued Advance Shares following the Offer	165,742,749	217,914,372

Notes:

1. This represents the number of Advance Shares that would be issued based on the existing number of Advance Shares on issue and no Target Options being exercised during the Offer Period.
1. This represents the maximum number of Advance Shares that would be issued pursuant to the Offer, assuming all Target Options are exercised during the Offer Period. The exercise prices of the Target Options range from \$0.12 to \$0.25 per Target Option, and if all Target Options were exercised, Target would receive additional cash of approximately \$16.96 million from the payment of the exercise price of the Target Options.

(B) Ownership structure

	Current Holdings		Post offer Based on 60% acceptances and no Target Options exercised	Post offer Based on 60% acceptances and all Target Options exercised
Shareholder	Number of Advance	Percentage	Percentage	Percentage
	Shares
Bardev Pty Ltd	10,156,165	8.55%	6.13%	4.66%
A N Short/Fay Holdings Pty Ltd	16,458,599	13.85%	9.93%	7.55%
R P Martin	9,318,211	7.84%	5.62%	4.28%
G A Sklenka/Formaine Pty Ltd	6,805,357	5.73%	4.11%	3.12%
A J Carew‐Reid	7,527,172	6.34%	4.54%	3.45%
	40,109,339	42.31%	30.33%	23.07%

(i) Effect on the financial position if Blaze acquires 100% of Target

(A) Pro forma Balance Sheet

To illustrate the financial impact of Blaze acquiring all Target Shares, a pro forma balance sheet of Advance has been prepared based on its audited balance sheet as at 31 December 2008. The pro forma Balance Sheet assumes that Blaze acquires all Target Shares.

Pro forma Balance Sheet Advance Energy Ltd

	Advance 31/12/2008 audited	Effect on Advance if Blaze acquires 100% of Target
	\$'000	\$'000
Total current assets	4,403	9,520
Total non-current assets	24,706	24,706
TOTAL ASSETS	29,109	34,226

Total current liabilities	9,698	9,698
Total non-current liabilities	9,734	9,734
TOTAL LIABILITIES	19,432	19,432
NET ASSETS	9,677	14,794
Issued share capital	12,692	17,809
Reserves	4,444	4,444
Asset revaluation
Minority Interest
Accumulated losses	-7,459	-7,459
TOTAL EQUITY	9,677	14,794

(B) Key Financial Impacts

The key financial impacts of Blaze acquiring all Target Shares are summarised below:

Current shareholder loan in balance sheet of \$5,117,000;
No increase in liabilities; and
Increase in share capital of \$5,117,000.
(ii) Effect on capital structure if Blaze acquires 100% of Target
(A) Issued capital

Assuming Blaze acquires all Target Shares on issue as at the date of this Bidder's Statement and issues Advance Shares as consideration for the above acquisition, the total number of Advance Shares which would be on issue are set out in the table below. The table sets out the number of Advance Shares which would be on issue, both if no existing Target Options are exercised and if all the existing Target Options are exercised. The exercise prices of the Target Options range from \$0.12 to \$0.25 per option, and if all Target Options were exercised, Target would receive additional cash of approximately \$16.96 million from the payment of the exercise price of the options.

	100% Acceptances and no Target Options Exercised1	100% Acceptances and all Target Options Exercised2
Issued Advance Shares as at the date of this Bidder's Statement	118,798,222	118,798,222
Number of Advance Shares to be issued under the Offer	78,240,878	130,412,501
Issued Advance Shares following the Offer	197,039,100	249,210,723

Notes:

1. This represents the number of Advance Shares that would be issued based on the existing number of Advance Shares on issue and no Target Options being exercised during the Offer Period.
1. This represents the maximum number of Advance Shares that would be issued pursuant to the Offer, assuming all Target Options are exercised during the Offer Period.

(B) Ownership structure

Blaze's acquisition of Target will impact the substantial shareholders of Advance. Based on current shareholdings, the table below summarises the expected substantial shareholders of Advance

	Current Holdings		Post offer Based on 100% acceptances and no Target Options exercised	Post offer Based on 100% acceptances and all Target Options exercised
Shareholder	Number of Advance Shares	Percentage	Percentage	Percentage
Bardev Pty Ltd	10,156,165	8.55%	5.15%	4.08%
A N Short/Fay Holdings Pty Ltd	16,458,599	13.85%	8.35%	6.60%
R P Martin	9,318,211	7.84%	4.73%	3.74%
G A Sklenka/Formaine Pty Ltd	6,805,357	5.73%	3.45%	2.73%
A J Carew‐Reid	7,527,172	6.34%	3.82%	3.02%
	50,265,504	42.31%	25.51%	20.17%

assuming compulsory acquisition of all Target Shares on completion of the Offer:

If Blaze acquires 100% of Target (and assuming all existing and proposed options in Target are exercised and accepted into the Offer), former Target Shareholders will hold approximately 52.33% of the issued shares of Advance.

9. Australian Tax Considerations

9.1 Introduction

This Section of this Bidder's Statement summarises some of the tax consequences to Australian resident Target Shareholders as a result of accepting the Offer.

Any Target Shareholders not resident in Australia should seek their own independent taxation advice.

The Australian taxation consequences for Target Shareholders who accept the Offer will be dependent upon a number of factors, including:

(a) whether the Shareholder holds their shares in Target on capital or revenue account or as trading stock;
(b) the tax residency of the Shareholder (i.e. whether Australian resident or not); and
(c) whether the level of acceptances under the Offer is at least 80%.

The tax consequences outlined in this report are referable to a Target Shareholder who is a resident of Australia for tax purposes. The outline set out below does not take into account or anticipate changes in the law (by legislation or judicial decision). In addition, the outline is not exhaustive of all income tax considerations which could apply in all circumstances of any given shareholder. Special additional rules may apply to particular Target Shareholders, such as insurance companies, superannuation funds and financial institutions.

Target Shareholders who are not resident in Australia for tax purposes should also take into account the tax consequences under the laws of their country of residence, as well as Australian law, of acceptance of the Offer and the acquisition, ownership and disposal of Advance Shares.

All Target Shareholders should consult their own independent tax advisers regarding the income tax and capital gains tax consequences of disposing of Target Shares having regard to their particular circumstances.

9.2 Income Tax and Capital Gains Tax Issues

The taxation consequences associated with the Offer will depend upon whether the Target Shareholders hold the Target Shares as:

(a) capital assets;
(b) revenue assets; or
(c) trading stock.

Each Target Shareholder will need to determine which category they fall into. The Australian income tax consequences of accepting the Offer for each Target Shareholder will differ depending on which category of ownership applies to them.

(d) Shares held on capital account

Shareholders who hold their Target Shares as passive investments with the intention of generating dividend income and long term capital growth are likely to be considered to hold shares on capital account for tax purposes.

To the extent that the value of the consideration received (being the market value of the Advance Shares) is greater or less than the cost base of the Target Shares, a capital gain or capital loss may result. If a Target Shareholder (being an individual or trust) has held their Target Shares for at least 12 months, any capital gain may be treated as a Discount Capital Gain.

Further, if a capital gain accrues to a Target Shareholder as a result of accepting this Offer, they may be eligible for tax relief upon the disposal of their Target Shares under the scrip for scrip rollover provisions.

In order for a Target Shareholder to be eligible for scrip for scrip rollover relief, it is a requirement that there be at least an 80% acceptance of this Offer by Target Shareholders.

If the pre-conditions for scrip for scrip rollover relief are satisfied, than the Target Shareholders who elect for it to apply should not be required to include a capital gain in their assessable income in respect of disposing of Target Shares for shares in Advance.

Special rules apply if a Target Shareholder together with its associates, holds 30% or more of the voting, dividend or capital distribution rights of Target immediately before the commencement of the Offer Period. Such Target Shareholders should seek separate advice on this issue.

Broadly, scrip for scrip rollover relief may not be available for non resident Target Shareholders unless the Advance Shares will remain within the Australian capital gains tax regime.

It should be noted that scrip for scrip rollover is only available for scrip received on disposal of the Target Shares. The cash component is treated as "ineligible proceeds" and rollover is denied for the cash component received from the sale of Target Shares. Therefore shareholders will derive a capital gain or loss attributable to the cash component received on the disposal of Target Shares.

(e) Shares held on revenue account

Target Shareholders who acquired their Target Shares with the dominant purpose of reselling them at a profit are likely to be considered to hold their Target Shares on revenue account for tax purposes.

Where this is the case, any gain or loss realised on disposal of the Target Shares (determined based on the market value of Advance Shares) will be assessed as ordinary income or claimed as a revenue deduction. The scrip for scrip rollover relief provisions will have no application.

(f) Shares held as trading stock

Target Shareholders, who are engaged in the business of share trading, whereby they regularly acquire shares and hold them with a view to making short-term profits through sale or exchange in the ordinary course of carrying on a business, would hold the Target Shares as trading stock.

Where this is the case, scrip for scrip rollover relief will not be available on acceptance of the Offer. Any proceeds received from the sale arising from the Offer (being the market value of the Advance Shares) will be included in assessable income in these circumstances.

(g) Ownership and disposal of Advance Shares

If the holders of Target Shares have any questions about the financial or taxation aspects of holding or disposing of Advance Shares, then they should consult a suitably qualified adviser, prior to making a decision whether or not to accept the Offer for their Target Shares.

Subject to paragraph (b) above, the Australian income tax and capital gains tax consequences of ownership of Advance Shares will broadly be the same as those consequences of ownership of Target Shares. Similarly, the disposal of shares in Advance will be subject to the same Australian capital gains tax consequences as are described above in relation to the disposal of Target Shares, subject to the following differences in the case of an Target Shareholder who makes a valid election for scrip for scrip rollover relief to apply in relation to the exchange of Target Shares for shares in Advance.

When a Target Shareholder is eligible for scrip for scrip rollover relief, and makes an election for it to apply, then:

for the purposes of determining whether the Advance Shares issued under this Offer have been held for at least 12 months, and therefore potentially eligible for a Discount Capital Gain on any subsequent disposal of the Advance Shares issued under this Offer, those shares will be taken to have been acquired at the time the Target Shares were originally acquired; and
the capital gains tax cost base and reduced costs base of the Advance Shares issued under this Offer will be determined on the basis of a reasonable apportionment of the cost base and reduced costs base of the Target Shares disposed of by the accepting Target Shareholder.

Where scrip for scrip rollover relief did not apply to the disposal of Target Shares, the cost base of the Advance Shares issued under this Offer shall generally be the value of the Target Shares on the date on which an Target Shareholder accepts the Offer or on the date on which the contract created by acceptance of the Offer becomes unconditional.

9.3 GST Considerations

Target Shareholders who accept the Offer and who are registered, or required to be registered for GST will also need to consider whether there is a GST impact to them.

A supply of shares is an input taxed (exempt) supply for GST purposes. Consequently, the disposal of shares by Target Shareholders to Advance will not give rise to any GST liability.

However, any GST on costs associated with the sale or acquisition of shares may become a cost to the Target Shareholders. This is because GST incurred on costs that relate to the making of input tax supplies is not generally recoverable as input tax credits. However, any impact will be dependant upon the level of costs associated with the sale and the individual Target Shareholder's own GST status.

As special rules exist which may reduce partially or possibly in full, input tax credits in certain circumstances, each Target Shareholder should obtain their own advice.

10. Terms of Offer

10.1 General Terms

(a) Blaze offers to acquire all of your Target Shares on the terms and conditions of this Offer.
(b) The consideration being offered by Blaze for the acquisition of all of your Target Shares is one cent in cash (\$0.01) and 0.75 Advance Shares for every Target Share.
(c) This Offer relates to:
(i) all Target Shares which exist (or will exist) as at the date set by Blaze under Section 633(2) of the Corporations Act; and
(ii) any Target Shares which may be issued after the date set by Blaze under section 633(2) of the Corporations Act and prior to the close of the Offer Period pursuant to the exercise of Target Options.
(d) This Offer does not extend to the Target Options.
(e) If necessary, the number of your Target Shares to which this Offer relates will be rounded up to the next nearest whole number.
(f) If you accept this Offer and Blaze acquires your Target Shares, Blaze is also entitled to any Rights in respect of your Target Shares.
(g) Except as provided in Section 10.7(a), if you wish to accept this Offer and receive cash and Advance Shares for your Target Shares and you are not resident in the Commonwealth of Australia or New Zealand or your acceptance is for any reason governed by a Foreign Law, then you must comply with any relevant Foreign Law. It is your sole responsibility to satisfy yourself as to full compliance with the Foreign Law and any other necessary formality and to obtain any necessary governmental or other consents.

This Offer is not registered in any jurisdiction outside Australia or New Zealand. If you are subject to a Foreign Law which you believe precludes you from receiving Advance Shares, then you may, if permitted by the Foreign Law, accept this Offer and by so indicating in the appropriate place on the Acceptance Form, require Blaze to deal with your acceptance and any Advance Shares to which you would otherwise be entitled as a result of that acceptance in the same way as an acceptance of this Offer to which Section 10.7(a) applies.

(h) Advance will apply to ASX for quotation of the Advance Shares to be issued pursuant to this Offer within 7 days after the start of the Offer Period. Refer to Section 11.6 in relation to the risk of Advance Shares not being admitted for Official Quotation.
(i) The Advance Shares to be issued pursuant to this Offer will, from their date of issue, rank equally with existing Advance Shares currently on issue.

(j) A summary of the rights and obligations attaching to the Advance Shares is in Section 11.6.

10.2 Offer Period

Unless withdrawn, this Offer will remain open for acceptance during the period commencing on the date of this Offer and ending at 5:00pm (WST) on 05 June 2009, subject to any extension of that period pursuant to section 650C of the Corporations Act (Offer Period).

10.3 Who May Accept

(a) This Offer is being made to each Target Shareholder registered, or entitled to be registered, in the register of Target Shareholders as at 5.00pm (WST) on 16 April 2009.
(b) A person who:
(i) is able during the Offer Period to give good title to Target Shares; and
(ii) has not already accepted this Offer which relates to those Target Shares,

may accept as if an Offer from Blaze on terms identical with this Offer had been made to that person in relation to those Target Shares.

(c) If at any time during the Offer Period and before this Offer is accepted you hold your Target Shares in two or more distinct portions (for example, as trustee, nominee or otherwise on account of another person) within the meaning of section 653B of the Corporations Act, then:
(i) this Offer is deemed to consist of a separate corresponding Offer to you in relation to each distinct portion of your Target Shares;
(ii) to accept any of those corresponding Offers, you must specify by written notice to Blaze that your Target Shares consist of distinct portions and the number of the Target Shares to which the acceptance relates; and
(iii) otherwise section 653B of the Corporations Act applies to this Offer in respect of your Target Shares and any acceptance of this Offer by you.
(d) If at the time this Offer is made to you, or at any time during the Offer Period and before you accept this Offer another person is, or is entitled to be, registered as the holder of some or all of your Target Shares (Transferred Shares):
(i) this Offer is deemed to have been withdrawn;
(ii) a corresponding Offer is taken to have been made to that other person in respect of the Transferred Shares; and
(iii) a corresponding Offer is taken to have been made to you in respect of your Target Shares other than the Transferred Shares.

10.4 How to Accept this Offer

(a) You may only accept this Offer during the Offer Period.
(b) Subject to Section 10.3(c), you may only accept this Offer in respect of 100% (and not a lesser proportion) of your Target Shares. For example, if you have 10,000 Target Shares and you wish to accept the Offer, you may only accept this Offer in respect of 10,000 Target Shares.
(c) The method by which you can accept this Offer will depend on whether your Target Shares are in an Issuer Sponsored Holding or a CHESS Holding. Your Target Shares are in an Issuer Sponsored Holding if they are sponsored directly by Target as issuer. Your Target Shares are in a CHESS Holding if they are sponsored by a Broker or other CHESS participant or if you are a Broker or Non-Broker Participant.

(d) Issuer Sponsored Holdings

If your Target Shares are held on Target's issuer sponsored subregister when you accept, you must:

(i) complete and sign the Acceptance Form in accordance with the instructions on the Acceptance Form; and
(ii) ensure that the Acceptance Form together with all other documents required by the instructions on it (including the certificates in respect of any of your Target Shares which are certificated) are received at the following address before the end of the Offer Period:

Mailing Address: PO Box 1779 West Perth WA 6872

Delivery Address:

Blaze Asset Pty Ltd Suite 2, 16 Ord Street WEST PERTH WA 6005

(e) CHESS Holdings

If your Target Shares are in a CHESS Holding when you accept this Offer, you must comply with the SCH Business Rules. Accordingly, to accept this Offer in respect of your Target Shares, you should:

(i) instruct your Controlling Participant to initiate acceptance of this Offer in accordance with rule 16.3 of the SCH Business Rules before the end of the Offer Period. For non institutional shareholders, your "Controlling Participant" will normally be the stockbroker through whom you either bought your Target Shares or through whom you ordinarily acquire shares on ASX; or
(ii) if you are a Broker or a Non-Broker Participant (i.e. CHESS participants who are not brokers eg institutions, custodian, trustees), initiate acceptance of this Offer in accordance with Rule 16.3 of the SCH Business Rules before the end of the Offer Period.

Alternatively, you may sign and complete the accompanying Acceptance Form in accordance with the terms of this Offer and the instructions on the

Acceptance Form and ensure that it is received before the expiry of the Offer Period at the address specified in Section 10.4. In that case, you will be deemed to have authorised Blaze and its Share Registry to forward your instructions to your Controlling Participant, who will then accept this Offer on your behalf during the Offer Period in accordance with the SCH Business Rules and the Corporations Act.

CHESS holders should note that acceptance of the Offer will not be effected until it is received by their Controlling Participant and processed by them electronically through CHESS.

(f) The return of the Acceptance Form to Blaze by facsimile does not satisfy the requirements of Sections 10.4(d) or 10.4 (c) (unless you have made prior arrangements with Blaze). If your Acceptance Form is returned by post, it will be deemed to have been received in time if the envelope in which it is sent is post-marked before the end of the Offer Period.
(g) Once you have accepted this Offer, you will be unable to revoke your acceptance and the contract resulting from your acceptance will be binding on you, subject to section 650E of the Corporations Act.
(h) Blaze may, in its sole discretion, at any time deem any Acceptance Form it receives to be a valid acceptance in respect of your Target Shares even if a requirement for acceptance has not been complied with.

10.5 The Effect of Acceptance

(a) By following the procedures described in Sections 10.4(c), 10.4(d) and 10.4(e), you will be deemed to have:
(i) irrevocably accepted this Offer in respect of the Target Shares registered in your name to which this Offer relates, regardless of the number of Target Shares specified in the Acceptance Form [subject however to Sections 10.3 (b) and 10.3(c)];
(ii) agreed to transfer your Target Shares to Blaze;
(iii) agreed to accept the consideration being offered by Blaze and agreed to be bound by the constitution of Advance;
(iv) authorised Blaze to complete the Acceptance Form by correcting any errors in or omissions from the Acceptance Form as may be necessary:
- (A) to make the Acceptance Form an effective acceptance of this Offer; and
- (B) to enable registration of the transfer to Blaze of your Target Shares;
(v) irrevocably authorised and directed Target to pay to Blaze or to account to Blaze for all dividends and other distributions and entitlements which are declared, paid or which arise or accrue after the date of this Offer in respect of your Target Shares which Blaze acquires pursuant to this Offer (subject to Blaze accounting to you for any dividends, distributions or entitlements received by it if your acceptance of this Offer is validly withdrawn pursuant to section 650E

of the Corporations Act or the contract resulting from that acceptance becomes void);

(vi) represented and warranted to Blaze that Blaze will acquire good title to and beneficial ownership of all of your Target Shares free from all mortgages, charges, liens, encumbrances (whether legal or equitable) and other third party interests of any kind;
(vii) unless you are a foreign shareholder [as that expression is defined in section 10.7 (a)], agreed to accept the Advance Shares to which you become entitled by accepting this Offer subject to Advance's constitution and the terms of issue of the Advance Shares and to have authorised Advance to place your name on its register of shareholders as the holder of your respective portion of Advance Shares;
(viii) represented and warranted to Blaze that, unless you have provided notice in accordance with Section 10.3 (c), your Target Shares do not consist of distinct parcels of Target Shares;
(ix) represented and warranted to Blaze that the making by Blaze to you, and your acceptance, of this Offer is lawful under any Foreign Law which applies to you, to the making of this Offer, and to your acceptance of this Offer;
(x) agreed to indemnify Blaze fully in respect of any claim, demand, action, suit or proceeding made or brought against Blaze and any loss, cost, expense, damage or liability whatsoever suffered or incurred by Blaze as a result of Blaze not receiving from you any certificate(s) for your Target Shares;
(xi) appointed Blaze or any nominee of Blaze as your agent and attorney to exercise all the powers and Rights attaching to your Target Shares and agreed not to revoke that appointment during the period (Proxy Period) between the date of your acceptance of this Offer and the earlier of:
(A) the date on which Blaze is registered as the holder of your Target Shares;
(B) the date on which your acceptance is validly withdrawn pursuant to section 650E of the Corporations Act; or
(C) the date on which the contract resulting from your acceptance becomes void under section 650G of the Corporations Act;
(xii) agreed that in exercising the powers conferred by the power of attorney in section 10.5(a)(xi) above, Blaze or its nominee is entitled to act in the interests of Advance;
(xiii) authorised Blaze, as your agent and attorney, and in your name and on your behalf, to execute, at any time after your acceptance of this Offer, all forms, notices and instruments in respect of your Target Shares, and to have agreed not to revoke that authority during the Proxy Period;
(xiv) if Target makes any offer for the issue of any securities in Target to you between the period commencing on 8 April 2009 (being the date of announcement of the Takeover Bid) (Additional Target Securities) and expiring at the end of the Offer Period, irrevocably appointed Blaze and its directors from time to time jointly and severally as your attorney in your name and on your behalf, with effect from the date that the Offer, or any contract resulting from your acceptance of the Offer, becomes unconditional, to execute all such instruments as Blaze may require including, without limitation, the rights to:
(A) receive, on your behalf, any offer made by Target for the issue of Additional Target Securities;
(B) accept, on your behalf, any offer made by Target for the issue of Additional Target Securities by:
- (1) completing any application form for the issue of the Additional Target Securities in your name; and
- (2) remitting the subscription monies to Target in payment for the Additional Target Securities the subject of the offer; and
(C) execute all forms, transfers, assignments, notices, instruments, consents and agreements as may be required for the purpose of vesting in Blaze the Additional Target Securities in satisfaction of the loan that will arise as a result of Blaze remitting the subscription monies to Target in accordance with paragraph 10.5 (a)(xiv), (B)(2) above;

and to have agreed that in exercising the powers conferred by that power of attorney, the attorney shall be entitled to act in the interests of Blaze as the beneficial owner and intended registered holder of your Target Shares in respect of which you have accepted this Offer and to have further agreed to do all such acts, matters and things that Blaze may require to give effect to the matters the subject of this paragraph (including the execution of a written form of application for the Additional Target Securities to the same effect as this paragraph which complies in all respects with the requirements of the constitution of Target) if requested by Blaze; and

(xv) irrevocably appointed Blaze and its directors from time to time jointly and severally as your attorney in your name and on your behalf, with effect from the date that the Offer, or any contract resulting from your acceptance of the Offer, becomes unconditional to exercise all powers and Rights which you may have as the holder of your Target Shares including, without limitation, the rights to:
(A) attend and vote in respect of your Target Shares at any and all meetings of Target;
(B) requisition or join with other holders of Target Shares in requisitioning and/or convening a meeting of the members of Target;
(C) demand a poll for any vote to be taken at any meeting of Target Shareholders;
(D) propose or second any resolutions to be considered at any, and all meetings of Target Shareholders;
(E) execute all forms, transfers, assignments, notices, instruments (including instruments appointing a director of Blaze as a proxy in respect of all or any of your Target Shares and a transfer form for your Target Shares), proxies, consents, agreements and resolutions relating to your Target Shares;
(F) request Target to register in the name of Blaze or its nominee your Target Shares which you hold on any register of Target,

and to have agreed that in exercising the powers conferred by that power of attorney, the attorney shall be entitled to act in the interests of Blaze as the beneficial owner and intended registered holder of your Target Shares in respect of which you have accepted this Offer and to have further agreed to do all such acts, matters and things that Blaze may require to give effect to the matters the subject of this paragraph (including the execution of a written form of proxy to the same effect as this paragraph which complies in all respects with the requirements of the constitution of Target) if requested by Blaze.

(b) Blaze may at any time in its absolute discretion:
(i) treat the receipt by it of an Acceptance Form during the Offer Period (or in an envelope post-marked before the expiry of the Offer Period) as a valid acceptance notwithstanding that one or more of the other requirements for a valid acceptance have not been complied with; and
(ii) where you have satisfied the requirements for acceptance in respect of only some of your Target Shares, treat the acceptance as a valid acceptance in respect of all of your Target Shares.

In respect of any part of an acceptance treated by it as valid, Blaze will provide you with the relevant consideration in accordance with Section 10.6 (a), and the exercise of Blaze's rights under this Section 10.5 (a)(i) will be conclusively and only evidenced by its so doing. This Section is not a condition of this Offer.

10.6 Blaze's Obligations in respect of Target Shares Acquired

(a) Subject to this Offer, Blaze will provide the consideration for your Target Shares not later than one month after this Offer is accepted or this Offer (or the contract resulting from its acceptance) becomes unconditional, whichever is the later, but in any event (assuming the Offer becomes or is declared unconditional) not later than 21 days after the end of the Offer Period.
(b) Subject to Section 10.7, a holding statement for the Advance Shares to which you become entitled by accepting this Offer will be sent by pre-paid mail (airmail in the case of overseas Target Shareholders) to your address as shown on the Acceptance Form.
(c) If at the time of acceptance of this Offer you are resident in, or a resident of, a place outside Australia or New Zealand, you will not be entitled to receive any

consideration pursuant to that acceptance until you obtain all requisite authorities or clearances (if any) of the Reserve Bank of Australia (whether under the Banking (Foreign Exchange) Regulations or otherwise) or the Australian Taxation Office.

(d) Where the Acceptance Form requires an additional document to be given with your acceptance (such as a power of attorney):
(i) if that document is given with your acceptance, Blaze will provide the consideration in accordance with Section 10.6 (a);
(ii) if that document is given after acceptance and before the end of the Offer Period while this Offer is subject to a defeating condition, Blaze will provide the consideration by the end of whichever of the following periods ends earlier:
- (A) within one month after this Offer becomes unconditional; or
- (B) 21 days after the end of the Offer Period;
(iii) if that document is given after acceptance and before the end of the Offer Period while this Offer is not subject to a defeating condition, Blaze will provide the consideration by the end of whichever of the following periods ends earlier:
- (A) one month after that document is given; or
- (B) 21 days after the end of the Offer Period; and
(iv) if that document is given after the end of the Offer Period, Blaze will provide the consideration within 21 days after that document is given.

10.7 Foreign Shareholders

(a) If you are (or are acting on behalf of) a resident in, or a resident of, a place outside Australia or New Zealand, you will be a foreign shareholder for the purposes of Section 10.7 and you will not be entitled to receive Advance Shares as the consideration for your Target Shares as a result of accepting this Offer.
(b) If you are a foreign shareholder (as that expression is defined in Section 10.7 (a)), and you accept this Offer, Blaze will:
(i) arrange for the issue to a nominee approved by the ASIC of the number of Advance Shares to which you and all other foreign shareholders would have been entitled but for Section 10.7 (a);
(ii) cause those Advance Shares to be offered for sale in such manner, at such price and on such other terms and conditions as are determined by the nominee; and
(iii) pay to you the amount ascertained in accordance with the following formula:

Net Proceeds of Sale x NAS TAS Where:

(A) Net Proceeds of Sale is the amount remaining after deducting the expenses of the sale from the proceeds of sale;
(B) NAS is the number of Advance Shares which would, but for Section 10.7 have been allotted and issued to you; and
(C) TAS is the total number of Advance Shares allotted and issued to the nominee under this Section in respect of the Target Shares held by all foreign shareholders.
(c) You will be paid your share of the proceeds of the sale of the Advance Shares by the nominee in Australian currency.
(d) Payment will be made by cheque posted to you at your risk by ordinary mail (or in the case of overseas Target Shareholders, by airmail) determined by using the most up to date copy of the Target Shareholders register provided to Blaze before your consideration cheque is produced as soon as practicable and in any event within the period required by the Corporations Act.
(e) Under no circumstances will interest be paid on your share of the proceeds of the sale of Advance Shares by the nominee or Blaze, regardless of any delay in remitting these proceeds to you or your receipt of those proceeds.

10.8 Conditions of this Offer

(a) Subject to Section 10.7(a), this Offer and any contract that results from acceptance of this Offer are each conditional on none of the following occurrences (being the prescribed occurrences listed in section 652C of the Corporations Act) occurring on and from the commencement of the Offer Period to and including the end of the Offer Period:
(i) Target converts all or any of its shares into a larger or smaller number of shares under section 254H of the Corporations Act;
(ii) Target or a subsidiary of Target resolves to reduce its share capital in any way (other than a selective capital reduction in connection with the Target Preference Shares);
(iii) Target or a subsidiary of Target enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;
(iv) Target or a subsidiary of Target issues shares (other than as a result of the exercise of Target Options) or grants an option over its shares, or agrees to make such an issue or grant such an option;
(v) Target or a subsidiary of Target issues, or agrees to issue, convertible notes;
(vi) Target or a subsidiary of Target disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;
(vii) Target or a subsidiary of Target charges, or agrees to charge, the whole, or a substantial part, of its business or property;
(viii) Target or a subsidiary of Target resolves to be wound up;
(ix) a liquidator or provisional liquidator of Target or of a subsidiary of Target is appointed;
(x) a court makes an order for the winding up of Target or of a subsidiary of Target;
(xi) an administrator of Target or of a subsidiary of Target is appointed under section 436A, 436B or 436C of the Corporations Act;
(xii) Target or a subsidiary of Target executes a deed of company arrangement; or
(xiii) a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of Target or a subsidiary of Target,

(Prescribed Occurrences).

(b) At 5pm (WST) on Tuesday, 8 April 2009, none of the Prescribed Occurrences have happened.
(c) Each condition in Section 10.8 (a) is a separate, several and distinct condition, operates as a condition subsequent and is for the benefit of Blaze alone and may only be relied upon by Blaze.
(d) Blaze may free this Offer, and any contract resulting from its acceptance, from all or any of the conditions in Section 10.8(a) by giving notice to Target declaring the Offers to be free from the conditions specified in accordance with Section 650F of the Corporations Act. This notice may be given not later than 7 days before the end of the Offer Period.
(e) If, at the end of the Offer Period, the conditions in Section 10.8(a) have not been fulfilled and Blaze has not declared the Offer (or it has not become) free from those conditions, all contracts resulting from the acceptance of the Offer will be automatically void.
(f) The date for giving the notice required by section 630(3) of the Corporations Act is the date that is the last day of the Offer Period, subject to extension in accordance with section 630(2) of the Corporations Act if the Offer Period is extended pursuant to section 650(C) of the Corporations Act.

10.9 Withdrawal of Offer

Blaze may withdraw this Offer at any time before you accept it, but only with the consent in writing of the ASIC (which consent may be given subject to such conditions, if any, as are imposed by the ASIC).

10.10 Variation

Blaze may vary this Offer in accordance with section 650D of the Corporations Act.

10.11 Broker handling fees

Blaze will pay a broker handling fee to participating organisations of ASX (Brokers) in respect of valid acceptances received from retail shareholders in connection with the

Offer which bear the Broker's official stamp or are accepted through the Broker via CHESS.

The handling fee will be 1% of the value of the Target Shares covered by the acceptance.

Brokers are precluded from receipt of payment of any handling fee in respect of shares in which they or their associates have relevant interests (within the meaning of those terms under the Corporations Act).

To qualify for the handling fee, valid acceptances must be received by Blaze on or before the end of the Offer Period and Brokers must submit a tax invoice addressed to Blaze.

Further conditions attaching to the offer of a Broker handling fee are as follows:

(a) the submission of any valid acceptances bearing a Broker's official stamp will constitute an acknowledgment by the Broker that it has represented to Blaze that:
(i) neither it nor an associate of it is the accepting Target Shareholder;
(ii) the handling fee will not be shared directly or indirectly with the accepting Target Shareholder;
(iii) it and the accepting Target Shareholder are not associated for any other reason under the Corporations Act; and
(iv) if requested, the Broker will confirm the above in writing to Blaze before fees are paid;
(b) for Target Shareholders on the CHESS sub-register that are Broker sponsored, where that shareholder directly requests Blaze (and not the Broker) to initiate acceptance of the Offer on their behalf, the Broker will not be entitled to receive the handling fee;
(c) subject to the terms above and receipt of a tax invoice, payment of the handling fee will be made by cheque within one month after the Offer Period and once a valid tax invoice has been received; and
(d) Blaze reserves the right in its absolute discretion not to pay brokerage on acceptances it deems to be a duplicate copy of an acceptance, an acceptance from non-retail Target Shareholders or acceptances that appear to have been split.

10.12 No stamp duty or other costs

All costs and expenses of the preparation, dispatch and circulation of this Offer and any stamp duty payable in respect of the transfers will be paid by Blaze. No brokerage is payable by you if you accept this Offer.

10.13 Governing Law

This Offer and any contract that results from your acceptance of this Offer are governed by the laws in force in Western Australia.

10.14 Date of Offer

This Offer is dated 16 April 2009.

11. Other Information

11.1 Blaze's Interest in Target

At the date of this Bidder's Statement, there are 104,321,170 Target Shares on issue and 69,312,164 Target Options on issue. Please refer to Section 7.5 of this Bidder's Statement for details on the Target Shares and Target Options.

Immediately before this Bidder's Statement was lodged with the ASIC and as at the date immediately before the first Offer is sent, Blaze and its associates had no (zero) interest in, and voting power in relation to, Target securities.

11.2 Collateral Benefits

During the period of 4 months before the date of this Bidder's Statement, neither Blaze nor any associate of Blaze gave, or offered to give or agreed to give, a benefit to another person that was likely to induce the other person, or an associate of that person, to:

(a) accept the Offer; or
(b) dispose of their Target Shares,

and which is not offered to all holders of Target Shares under the Takeover Offer.

11.3 Further details to be included in the Offer

The expiry date of the Offer will be inserted into Section 10 of this Bidder's Statement (which contains details of the Offer).

Each Offer will bear the same date, being a date that is not more than 3 days before the date on which the Offer is dispatched to Target Shareholders.

11.4 Advance is a Disclosing Entity

Due to the fact that Blaze is offering Advance Shares as consideration for the acquisition of Target Shares, the Corporations Act requires that this Bidder's Statement must include all information that would be required for a prospectus for an offer of Advance Shares under Sections 710 to 713 of the Corporations Act.

Advance is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, Advance is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of Advance's securities. The Advance Shares that will be issued pursuant to this Bidder's Statement have been quoted on the official list of ASX during the 12 months prior to the date of this Bidder's Statement.

For this reason, Advance is only required to disclose information in this Bidder's Statement that would usually be required in a "transaction specific prospectus".

In general terms "transaction specific prospectuses" are only required to contain information in relation to the effect of the issue of securities on Advance and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of

the issuing company unless such information has not previously been disclosed to ASX.

Having taken such precautions and having made such enquiries as are reasonable, Advance believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 12 months before the issue of this Bidder's Statement which required Advance to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Bidder's Statement other than that which is considered necessary to make this Bidder's Statement complete.

The Company, as a disclosing entity under the Corporations Act, states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and
(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Bidder's Statement and the Closing Date:
(i) the annual financial report most recently lodged by the Company with the ASIC;
(ii) any half year financial report lodged with the ASIC by the Company after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Bidder's Statement with the ASIC; and
(iii) any documents used to notify ASX of information relating to the Company during that period in accordance with ASX Listing Rules as referred to in Section 674(1) of the Corporations Act.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

For details of documents lodged with ASX since the date of lodgement of the Company's latest annual financial report refer to Annexure "A".

11.5 Information about Advance Shares

The Advance Shares to be issued pursuant to the Offer will, from their date of issue, rank equally in all respects with existing Advance Shares on issue. The rights attaching to the Shares arise from a combination of Advance's Constitution, statute and general law. A summary of the rights attaching to the Advance Shares is set out below:

(a) Share Capital

The share capital in Advance consists of ordinary shares and converting preference shares which only convert into ordinary shares. Refer to Section 10 for terms and conditions. All existing issued Advance Shares are of the same class and rank equally in all respects.

(b) Voting Rights

Subject to any rights for the time being attached to any class or classes of shares and provided no amount due and payable in respect of a call is unpaid, at present there are no partly paid shares or unpaid calls, and at a general meeting of Advance every holder of shares present in person or by proxy, attorney or representative has on a show of hands one vote, and on a poll one vote, per share.

(c) Dividend Rights

Subject to the rights of holders of shares issued with any special preferential or qualified rights, the profits of Advance which the directors of Advance may from time to time determine to distribute by way of dividend will be declared and paid according to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited), on the shares in respect of which the dividend is paid. Any amount paid up on a share during the period in respect of which a dividend is declared only entitles the holder of that share to an apportioned amount of that dividend as from the date of payment.

(d) Rights on Winding-up

Subject to the rights of holders of shares with special rights on a winding-up of Advance the surplus assets must first be applied in paying off the capital on any shares which are issued with a preference as to capital and any unpaid dividend to which the holders of those shares may be entitled according to their respective rights between each other.

If in the winding-up the assets available for distribution among the members are more than sufficient to repay the whole of the capital paid up on those shares, after distribution of entitlements to shareholders with preferred rights, Advance assets are to be distributed in proportion to the capital, at the commencement of the winding-up paid up, on those shares held by them respectively.

(e) Transfer of Shares

Subject to Advance's Constitution and the Corporations Act, Advance's shares are freely transferable.

(f) Creation and Issue of Further Shares

The allotment and issue of any new shares is at the discretion of the Board of Advance. Subject to any restrictions on the allotment of shares imposed by Advance's Constitution, the Corporations Act and the Listing Rules, the Board of Advance may issue those new shares on such terms and conditions, and with rights and privileges, as the Board of Advance from time to time may determine.

(g) Variation of Rights

The share capital in Advance consists of ordinary shares and converting preference shares which only convert into ordinary shares. Refer to Section 10 for terms and conditions. If shares of another class are issued, the rights, privileges and restrictions attaching to the shares may be altered with the sanction of a special resolution passed at a separate general meeting of the

shareholders of the shares, or with the written consent of at least three quarters of the shareholders of the shares.

(h) General Meetings

Each holder of shares is entitled to receive notice of, and to attend and vote at, general meetings of Advance and to receive all notices, accounts and other documents required to be furnished to shareholders under Advance's Constitution, the Corporations Act or the Listing Rules.

(i) Buy Back

Advance may buy shares in itself in accordance with the Corporations Act on the terms and at the times determined by the Board.

(j) Calls on Shares

Where shares are issued as partly paid (at present there are none) the Directors of Advance may make calls upon the holders of those shares to pay the whole of or a portion of the balance of the issue price. If a shareholder fails to pay a call or instalment of a call, then subject to the Corporations Act and the Listing Rules the shares in respect of the call may be forfeited in accordance with Advance's Constitution.

Advance Shares are quoted on ASX.

11.6 Risk Factors

Target Shareholders should read the Bidder's Statement carefully and consult their professional advisers before deciding whether to accept the Takeover Offer. By accepting the Takeover Offer, Target Shareholders will be investing in Advance. As a result, Target Shareholders who accept the Offer will continue to be indirectly exposed to the risks associated with having an interest in Target's assets and to general and exploration and mining industry risks.

There are also a number of other risks and relevant factors associated with becoming a shareholder of Advance, including becoming exposed to:

risks which are specific to Advance and its current operations;
additional risks which relate to the Takeover Bid and the Merged Entity;
Oil and gas industry risks; and
General investment risks

While most risk factors are largely beyond the control of Advance and its directors, Advance will seek to mitigate the risks where possible by implementing appropriate risk-management strategies, including by obtaining appropriate insurances.

A non-exhaustive summary of some of the potential risks is outlined below.

(a) Risks specific to Advance Energy
(i) Funding Ongoing Operations

Further debt or equity raising will be required to increase production from current oil and gas properties. Additional equity financing, if available, may be dilutive to Shareholders and at lower prices than the current market price. Debt financing, if available, may involve restrictions on financing and operating activities. If Advance is unable to obtain additional financing as needed, it will not be able to further develop its projects which may impact on the viability of Advance.

Advance has issued convertible notes such that \$2.3m is repayable on 22nd May, 2009 and \$1m is repayable on 9th May, 2010 and \$1m is repayable on 29th January, 2010. Advance has reached an agreement with the \$2.3m noteholder to replace the current \$2.3m convertible note with new convertible notes on similar terms and conditions for a period of 18 months.

There is a risk that if the convertible notes are not extended and become payable that this may affect Advances ability to operate as a going concern.

(ii) Currency and Hedging Risk

Advance Energy's main business operations are based in the USA. As a result, revenues, cash inflows, expenses, capital expenditure and commitments will be primarily denominated in United States dollars.

To comply with Australian reporting requirements for Advance Energy, the income, expenditure and cash flows of its subsidiary will be converted to and accounted for in Australian dollars. This will result in the income, expenditure and cash flows of Advance being exposed to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar, as determined in international markets.

Advance undertakes a hedging programme where it hedges a certain proportion of its expected production. This results in Advance being exposed to the effects of the change in currency (exchange rate) risk, which may have an adverse impact on the profitability and/or financial position of Advance. This exposure may be magnified in the event that Advance's production profile is insufficient to meet hedging commitments.

(iii) Reliance on Key Personnel and consultants

Advance is reliant on a small number of key personnel and consultants. The loss of one or more of these key contributors could have an adverse impact on the operations and success of the business.

It may be particularly difficult for Advance to attract and retain suitably qualified and experienced people, given the current high demand in the industry and relatively small size of Advance, compared to other industry participants.

(iv) Third Party Risks

The operations of Advance require the involvement of a number of third parties, including suppliers, contractors and customers. Financial failure, default or contractual non-compliance on the part of such third parties may have a material impact on Advance's operations and performance. It is not possible for Advance to predict or protect itself against all such risks.

(v) Minority Interest in Projects

Advance has a minority interest in one of its projects and does not act as operator. There exists a risk that as a minority participant in the project, Advance may have the value of its interest in its project reduced by actions taken by majority holders or the operators. There may be few legal impediments preventing majority holders and operators from exploiting their positions as controlling joint venture participants to the detriment of minority participants in a project.

Should majority interest holders not act in the best interests of Advance Energy as a minority holder in any of its projects, this may have a material adverse effect on the value of Advance Energy's holding in the project, which may in turn have a material adverse effect on Advance's profitability and/or the market price of Advances Shares.

(vi) New Projects and Acquisitions

Advance will consider acquisitions that may add value to Advance. The acquisition of new business opportunities (whether completed or not) may require the payment of monies (as a deposit and/or exclusivity fee) after only limited due diligence and prior to the completion of comprehensive due diligence. There can be no guarantee that any proposed acquisition will be completed or be successful. If the proposed acquisition is not completed, monies already advanced may not be recoverable, which may have a material adverse effect on Advance.

If an acquisition is completed, Advance's board of directors will need to reassess, at that time, the funding allocated to current projects and new projects, which may result in Advance reallocating funds from other projects and/or the raising of additional capital (if available). Furthermore, notwithstanding that an acquisition may proceed upon the completion of due diligence, the usual risks associated with oil and gas activities will remain.

(b) Risks Specific to the Offer

There are a number of risks which relate to the Offer and Blaze. A nonexhaustive list of some of the more important of these risks is set out below:

(i) Issue of Advance Shares as consideration:

Target Shareholders are being offered consideration under the Offer that consists of a specified number of Advance Shares, rather than a number of Advance Shares with a specified market value. As a result, the market price of the consideration will fluctuate depending upon the market price of Advance Shares. There is an ongoing risk, as exists for all shares, that the price of Advance Shares (and therefore the value of the offer consideration received by accepting Target Shareholders) may fall in the future.

(ii) Uncertainty regarding the level of integration that may be achievable:

As discussed in Section 4, Blaze intends to seek to integrate Target's operations within Advance's so as to maximise operational synergies as well as eliminating a range of duplicated effort and costs. However, the extent to which these synergy benefits and cost savings are realisable depends upon a range of factors, including the preparedness of Target to negotiate appropriate integration arrangements and the level of acceptances received under the Offer. Whilst there is no guarantee that the synergy benefits or costs savings associated with the integration of these projects will be achieved, Advance believes that the value that can be created through integration creates an incentive for all of the interested parties to agree to integrate the projects to share in the benefits of integration.

(iii) Potential unavailability of scrip for scrip rollover relief:

The Offer is unconditional. This means that Target Shareholders who accept the Offer and receive Advance Shares may, in some circumstances (particularly where Advance does not acquire 80% of the Target Shares under the Offer), have a capital gains tax liability but will not be able to claim scrip for scrip rollover relief. The Australian tax implications of accepting the Offer are discussed in greater detail in Section 10.

Advance operates in the oil and gas sector and is subject to risks relating to exploration, drilling and production of oil and gas which may not generally be associated with other sectors.

The exploitation of oil and gas reserves and successful project development is considered to be of a high risk nature and contains inherent risks including but not limited to:

(i) Acquisition Risks

Prior to any acquisition, Advance will conduct due diligence on the projects to satisfy itself in relation to the potential to successfully achieve an economically recoverable hydrocarbon reserve. There can be no guarantee, however, that such a reserve will result from such an acquisition and Advance may have expended resources which do not result in discoveries being economically viable.

(ii) Exploration and Development Risks

Oil and gas exploration and development involves significant risks which only occasionally provide high rewards. In addition to the normal competition for prospective ground, and the high costs of discovery and development of an economic deposit, factors such as demand for commodities, stock market fluctuations affecting access to new capital, sovereign risk, environmental issues, labour disruption, project financing, foreign currency fluctuations and technical problems all affect the ability of a company to profit from a discovery.

There is no assurance that exploration and development of Advance's projects, or any other projects that may be acquired in the future, will result in the discovery of an economic oil and gas deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.

(iii) Drilling Risks

Advance's drilling operations may be curtailed, delayed or cancelled due to a number of factors including weather conditions, mechanical difficulties, shortage or delays in the delivery of rigs and/or other equipment and compliance with governmental requirements. While drilling may yield some hydrocarbons there can be no guarantee that the discovery will be sufficiently productive to justify commercial development or cover operating costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs.

(iv) Operating Risks

Industry operating risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures or discharges of toxic gasses, the occurrence of any of which could result in substantial losses to Advance due to injury or loss of life, severe damage to or destruction or property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations. Damages occurring as a result of such risks may give rise to claims against Advance. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of operations of Advance.

(v) Commercialisation of Discoveries

It may not always be possible for Advance to participate in the exploitation of any successful discoveries which may be made in any projects in which Advance has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as Advance. As described above, such further work may require Advance to meet or commit to financing obligations for which it may not have planned.

(vi) Hydrocarbon Reserve Estimates

Hydrocarbon reserve estimates are an expression of judgment based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available.

In addition, reserve estimates are necessarily imprecise and depend to some extent on interpretations, which may prove inaccurate. Should Advance encounter oil and/or gas deposits or formations different from those predicted by past drilling, sampling and similar examinations, reserve estimates may have to be adjusted and production plans may have to be altered in a way which could adversely affect Advance's operations.

(vii) Competition

Advance will compete with other companies, including major oil companies. Some of these companies have greater financial and other resources than Advance and, as a result, may be in a better position to compete for future business opportunities. Many of Advance's competitors not only explore for and produce oil and gas, but also carry out refining operations and market petroleum and other products on a worldwide basis. There can be no assurance that Advance can compete effectively with these companies.

(viii) Claims by Indigenous Inhabitants

The current and future oil and gas assets of Advance may be subject to land claims by indigenous people. Should this occur, Advance's ability to conduct exploration and/or mining activities may be affected, which may have a material adverse effect on Advance's financial performance and the price at which its securities trade.

Advance is not aware of any land claims or potential claims by indigenous people in respect of its exploration activities that could significantly affect its tenure or mining exploration or any future production operations.

(ix) Insurance

Insurance of all risks associated with oil and gas exploration and production is not always available and, where it is available, the cost may be high. Advance will have insurance in place considered appropriate for Advance's needs. Advance may not be insured against all losses due to either the insurance not being available or due to the premium being excessive in relation to the benefits accruing.

(x) Government Regulation

Advance's operations are in the oil and gas industry in the USA which is subject to extensive regulation and present operations are subject to regulation by the Texas Railroad Commission. Regulations relating to the exploration for and development, production, gathering and marketing of oil and gas will affect Advance's operations. Some of the regulations set forth standards for discharge permits for drilling operations, drilling and abandonment bonds or other financial responsibility requirements, reports concerning operations, the spacing of wells, unitisation and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity to conserve supplies of oil and gas.

Advance cannot predict how existing, or future laws and regulations may be interpreted by enforcement agencies or court rulings, whether additional laws and regulations will be adopted, or the effect such changes may have on Advance's business or financial condition.

(xi) Environmental and Other Regulatory Requirements

Advance's operations will be subject to environmental laws, including but not limited to, those governing the management of waste, the protection of water and air quality, the discharge of materials into the environment, and the preservation of natural resources, impact and influence Advance's operations. If Advance fails to comply with environmental laws regarding the discharge of oil, gas, or other materials into the air, soil or water it may be subject to liabilities to the government and third parties, including civil and criminal penalties.

Existing and possible future environmental legislation, regulations and actions could cause additional expense, capital expenditures, restrictions and delays in the activities of Advance, the extent of which cannot be predicted. Before exploration and production activity can commence on any property, Advance must obtain regulatory approvals and there is no assurance that such approvals will be obtained.

Advance has, and may from time to time in the future agree to, indemnify sellers of producing properties against some liabilities for environmental claims associated with these properties.

(xii) Hydrocarbon Product Prices

The market price of hydrocarbon products is volatile and cannot be controlled. If the price of hydrocarbons should drop significantly and remain depressed, the economic prospects of the projects which Advance has an interest in could be significantly reduced or rendered uneconomic. There is no assurance that, even if significant quantities of hydrocarbon products are discovered, a profitable market may exist for their sale. Factors beyond the control of Advance may affect the marketability of any commodity discovered. Oil and gas prices have fluctuated widely in recent years. The marketability is also affected by numerous other factors beyond the control of Advance, including government regulations relating to royalties, allowable production and importing and exporting of oil and gas and petroleum products, the effect of which cannot be accurately predicted.

(xiii) Title

The system for obtaining title to oil and gas leases in Texas and generally other areas of the United States that Advance may operate in is complex given that numerous parties may hold the undivided mineral rights to a particular tract of land. Securing the leases to those rights often requires lengthy negotiation with the various parties. In order to independently verify that the parties with whom Advance is dealing are the correct and sole holders of the mineral rights and to analyse the full rights and restrictions applying to the interest held by those parties requires that a company obtain detailed title opinions from appropriately qualified and experienced lawyers. This can be a lengthy and expensive process and the final opinions are often the subject of numerous qualifications. It is therefore customary that such title opinions are not sought until Advance proposed to conduct a drilling operation and/or expend significant amounts of money on a particular lease.

Advance has adopted this customary approach and, accordingly, may not have obtained the detailed title opinions on its leases other than those that are currently in production or on which drilling has been proposed in the near future.

As a consequence there may be third parties that hold or claim mineral rights in relation to the leases held by Advance which have not previously been identified.

Further, some of the leases in which Advance has an interest may have a fixed term and be subject to applications for renewal. The renewal of the term of each lease is usually at the discretion of the relevant lessor. If a lease is not renewed or granted, Advance may suffer significant damage through loss of the opportunity to develop and discover any oil or gas resources on that lease.

(xiv) Land Access

Immediate access to leases cannot in all cases be guaranteed. Advance may, from time to time, be required to seek consent of landholders or other persons or groups with an interest in real property encompassed by Advance's leases. Compensation may be required to be paid by Advance to land holders in order that Advance may carry out exploration and/or production activities.

(xv) Equipment and Personnel Availability

Due to exploration and development activities in the USA, and in Texas particularly, there may be delays in securing drilling rigs or other equipment and personnel required to carry out Advance's planned activities.

In addition, there may also be upward pressure on costs and mechanical failure may result in delays which may result in significant cost overruns.

Any of these factors may have a material impact on Advance's profitability and cash flows.

(d) General Investment Risks
(i) Securities Investment

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

Furthermore, the stock market, and in particular the market for oil and gas 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 Advance Shares regardless of Advance's operational performance.

There is no guarantee of profitability, dividends, return of capital, or the price at which the Advance Shares will trade on ASX after completion of the Offer.

(ii) Share Price Variations

Advance Shares are to be quoted on the ASX, where their price may rise or fall in relation to the issue price. Advance Shares issued under the Offer carry no guarantee in respect of profitability, dividends, return of capital, or the price at which they may trade on the ASX. The value of Advance Shares will be determined by the stock market and will be subject to a range of factors beyond the control of Advance, and the directors and officers of Advance. Such factors include, but are not limited to, the demand for and availability of Advance Shares, movements in domestic interest rates, exchange rates, fluctuations in the Australian and international stock markets and general domestic and economic activity. Returns from an investment in the Advance Shares may also depend on general stock market conditions as well as the performance of Advance. There can be no guarantee that an active market in the Advance Shares will develop or that the market price of the Advance Shares will not decline below the issue price.

(iii) Regulatory Risks

Changes to legislation in Australia and the USA, including changes to the taxation system, may affect future earnings and the relative attractiveness of investing in Advance. Changes in government policy or statutory changes may affect Advance and the attractiveness of an investment in it.

(iv) General Economic Conditions

Economic conditions in Australia, the USA and globally, may affect the performance of Advance. Factors such as currency fluctuations, inflation, interest rates, supply and demand and industrial disruption may have an impact on operating costs and share market prices. Advance's future possible revenue and Share price can be affected by these factors all of which are beyond the control of Advance or its directors. In addition, Advance's ability to raise additional capital, should it be required, may be affected.

(v) Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by Advance or by investors in Advance. The above factors, and others not specifically referred to above, may, in the future materially affect the financial performance of Advance and the value of the Shares offered under this Offer. Therefore, the Shares to be issued pursuant to this Offer carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares. Potential investors should consider that the investment in Advance is speculative and should consult their professional adviser before deciding whether or not to accept the Offer.

11.7 Fees and benefits payable to Blaze's directors and advisers

Other than as set out below or elsewhere in this Bidder's Statement:

(a) No director or proposed director of Blaze;
(b) No person named in this Bidder's Statement as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Bidder's Statement;
(c) No promoter of Blaze; or
(d) No broker or underwriter in relation to the Issue,

has, or had within 2 years before the date of this Bidder's Statement, any interest in:

(i) the formation or promotion of Blaze;
(ii) any property acquired or proposed to be acquired by Blaze in connection with its formation or promotion or in connection with the Issue; or
(iii) the issue of Advance Shares under this Bidder's Statement,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons as an inducement to become, or to qualify as, a director or expert of Advance or otherwise for services rendered by him in connection with the formation or promotion of Advance or the issue of Advance Shares under this Bidder's Statement.

The directors of Blaze have the following interests in Advance securities (either held directly, held by entities controlled by them or held by entities of which they are directors):

Director	Advance Shares	Advance Options	Advance Converting Preference Shares*
Anthony Short	16,423,168	4,000,000	3
Alex Bajada	5,177,144	2,000,000	1

* Terms of Converting Preference Shares (CPS)

Each CPS is convertible into 1,000,000 Advance Shares on achieving the following operational targets:

Class	Anthony Short	Alex Bajada	Conversion Threshold
Class B	1	1	500 BOEPD
Class C	1	0	1,000 BOEPD
Class D	1	0	1,500 BOEPD

There is no intention to remunerate the Directors, companies associated with the Directors or their associates in their capacity as directors for services provided in relation to the Offer.

Hardy Bowen has acted as the legal advisers to Advance and Odin in relation to the Offer. Blaze estimates it will pay Hardy Bowen approximately \$40,000 for these services. During the 24 months preceding the date of this Bidder's Statement, Hardy Bowen has acted as legal advisers to Odin and Advance and has received fees for these services.

11.8 Consents

In accordance with Section 636(3) of the Corporations Act, each person other than Target referred to in the Bidder's Statement has consented to being named in the Bidder's Statement and to consented to the inclusion of any statement attributed to it in the form in which it appears in this Bidder's Statement.

In accordance with Section 636(3) of the Corporations Act, Hardy Bowen has consented to being named as legal advisers to Advance in this Bidder's Statement and has not withdrawn its consent prior to lodgement of this Bidder's Statement with the ASIC.

11.9 Date for Determining Target Shareholders

For the purposes of Section 633(2) of the Corporations Act, the date for determining the people to whom information is to be sent under Items 6 and 12 of Section 633(1) of the Corporations Act is 16 April 2009.

This Bidder's Statement is dated 16 April 2009 and was approved pursuant to a resolution passed unanimously at a meeting of directors of Blaze held on 16 April 2009 and in accordance with its Constitution.

Signed for and on behalf of Blaze Asset Pty Ltd

Alex Bajada Director

12. Definitions and Interpretation

12.1 Definitions

In this Bidder's Statement (including its annexures), unless the context otherwise requires:

Acceptance Form means the form of Acceptance Form enclosed with this Bidder's Statement.

Advance or Company means Advance Energy Ltd ACN 134 038 412.

Advance Option means an option to acquire an Advance Share expiring 2010 and exercisable at \$0.25.

Advance Share means a fully paid ordinary share in Advance.

Announcements means the announcements made by Advance to ASX in Annexure "A".

ASIC means the Australian Securities and Investments Commission.

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

BCF means Billion Cubic Feet (of gas).

BCFE means Billion Cubic Feet Equivalent (of gas).

BO means Barrels of Oil.

BOE means Barrels of Oil Equivalent.

BOEPD means Barrels of Oil Equivalent Per Day.

BOPD means Barrels of Oil Per Day.

Bidder's Statement means this Bidder's Statement.

Blaze means Blaze Asset Pty Ltd ACN 134 030 412.

Broker means a person who is a sharebroker and a participant under the SCH Business Rules.

CHESS means the Clearing House Electronic Subregister System which provides for electronic share transfers in Australia.

CHESS Holding has the meaning given to that term in the SCH Business Rules.

Controlling Participant means a Broker or Non-Broker Participant who is designated as the controlling participant for shares in a CHESS Holding in accordance with the SCH Business Rules.

Corporations Act means Commonwealth Corporations Act 2001 (Cth).

Discount Capital Gain means generally a capital gain derived by an individual, trust or complying superannuation fund from the disposal of an asset that has been held for at least 12 months. For individuals and trusts the amount of the discount capital gain they may need to include in assessable income is 50% of the net capital gain after applying current and prior year capital losses. For superannuation funds only two-thirds of the discount capital gain may need to be included in assessable income after applying current and prior year capital losses.

Foreign Law means a law of a jurisdiction other than Australia.

Hibernia means Hibernia Resources LLC.

Issue means the issue of Advance Shares pursuant to the Takeover Offers.

Issuer Sponsored Holding means a holding of Target Shares on Target's issuer sponsored subregister.

Blaze Shareholders Agreement has the meaning in Section 4.2.

Kilgore means Kilgore Oil and Gas Limited.

Listing Rules means the Official Listing Rules of ASX, as amended from time to time.

MBO means Thousand Barrels of Oil.

MCF means Thousand Cubic Feet (of gas).

MCFE means Thousand Cubic Feet Equivalent.

MCFEPD means Thousand Cubic Feet Equivalent Per Day.

MCFPD means Thousand Cubic Feet Per Day.

MMBO means Million Barrels of Oil.

MMCF means Million Cubic Feet.

Non-Broker Participant means a non-broker participant under the SCH Business Rules.

Odin means Odin Energy Ltd ACN 124 941 416.

Offer Period has the meaning given to that term in the Corporations Act.

Offers or Takeover Offers means the offers, referred to in Section 2, to be made by Blaze to acquire Target Shares on the terms set out in Section 10 and Offer or Takeover Offer means one of those offers.

Official List means the official list of entities that ASX has admitted and not removed.

Official Quotation means official quotation on ASX.

PUD means Proved Undeveloped.

Rights means all accretions to and rights attaching to the relevant Target Share at or after the date of this Bidder's Statement (including, but not limited to, all dividends and all rights to receive dividends and to receive or subscribe for shares, stock units, notes or options declared, paid, or issued by Target).

SCH means ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532) approved as the Securities Clearing House under the Corporations Act.

SCH Business Rules means the business rules of SCH.

Section means a section in this Bidder's Statement.

SPS means Southern Producer Services LLC.

Takeover Bid means Advance's takeover bid for Target by making the Offer.

Target means Target Energy Ltd ACN 119 160 360.

Target Optionholder means a holder of Target Options.

Target Option means an option to subscribe for a Target Share with an exercise price and an expiry date as set out in Section 7.5 of this Bidder's Statement.

Target Share means a fully paid ordinary share in Target, and all Rights attaching to that share.

Target Shareholder means a holder of Target Shares who is able to accept the Offer.

VWAP means volume weighted average price.

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

\$ means Australian dollars.

12.2 Interpretation

In this Bidder's Statement:

(a) Words and phrases have the same meaning (if any) as is given to them by the Corporations Act.
(b) Words importing one gender include the other genders.
(c) Words (including defined terms) importing the plural include the singular and vice versa.
(d) A reference to a person includes a reference to a corporation.
(e) Headings are for ease of reference only and do not affect the interpretation of this Bidder's Statement.
(f) References to Sections are to sections of this Bidder's Statement.
(g) Annexures and appendices to this Bidder's Statement form part of the Bidder's Statement.
(h) All references to time in this Bidder's Statement are to Australian Western Standard Time (WST).

Annexure 'A' ADVANCE ENERGY'S ASX ANNOUNCEMENTS SINCE 2 MARCH 2008

Date Lodged	Description of Document
15/04/2009	Initial Director's Interest Notice
09/04/2009	Appointment of Director
08/04/2009	TEX: Target Receives Unsolicited Takeover Bid
08/04/2009	ODN: Off Market Takeover of Target Energy Ltd
08/04/2009	Off Market Takeover of Target Energy Ltd
02/03/2009	Preliminary Annual Report

Date Lodged	Description of Document
15/04/2009	Site Work to Commence at Snapper A-3
08/04/2009	Target Receives Unsolicited Takeover Bid
08/04/2009	ODN: Off Market Takeover of Target Energy Ltd
08/04/2009	AVD: Off Market Takeover of Target Energy Ltd
13/03/2009	Target Energy Half Year Report
16/02/2009	Appendix 3B
05/02/2009	Details of Company Address
29/01/2009	Quarterly Report ending 31 December 2008
16/01/2009	Target withdraws from Catapult and Parks North
01/12/2008	Appendix 3B
20/11/2008	Target Energy Ltd – Results of AGM 2008
20/11/2008	Target Energy Ltd – 2008 AGM Presentation
10/11/2008	Target Energy Ltd – Release of securities from Escrow
24/10/2008	Quarterly Report 30 September 2008
15/10/2008	Target Energy Ltd – 2008 Annual Report

Annexure 'B' TARGET'S ASX ANNOUNCEMENTS SINCE 15 OCTOBER 2008

1. Form of acceptance and transfer

Offer by Blaze Asset Pty Ltd (ACN 134 038 412) (Blaze) to acquire 100% of your fully paid ordinary shares in Target Energy Ltd (ABN 73 119 160 360) (Target). Your acceptance must be received by no later than 5pm Australian Western Standard Time on 5 June 2009 (unless the Offer is extended).

Shareholder Details	Number of Target Shares you hold
	Holder Identification Number /Security holder Reference Number
	Securities Subregister

Please complete the information above in relation to your Target Shares. You should read the Bidder's Statement which accompanies this form. To accept the Offer contained in the Bidder's Statement, complete this form below.

If your shares are held on the Issuer Sponsored Subregister, please read Section 2 overleaf and then complete this page and return this form.

If your shares are held on the CHESS Subregister, please read Section 2 overleaf then you can accept this Offer by either instructing your broker to accept the Offer on your behalf, or by completing this page and Section 3 overleaf and returning the form.

Number of Target Shares you hold is: .....................................

Number of Target Shares which you wish to sell to Blaze (being 100% of the number

of Target Shares you hold) is: .....................................

Consideration for Target Shares which you wish to sell to Blaze (on the basis of 0.75 Advance Shares

and \$0.01 for every 1 Target Share) is:

.....................................Advance Shares

\$……………………………………………..

Foreign Shareholders

Please tick the following box if you are a foreign shareholder and require Blaze to deal with your acceptance and any Advance Shares to which you would otherwise be entitled.

Signature(s)

I/We, the person(s) named above, being the holder(s) of the Target Shares shown above accept the Offer in respect of the number of my/our Target Shares shown above and hereby agree to transfer to Blaze those Target Shares for the consideration specified above and agree to be bound by the terms and conditions of the Offer. If this form is signed under Power of Attorney, the Attorney declares that he has no notice of revocation of that power.

Shareholder 1	Shareholder 2 (if joint)	Shareholder 3	Affix common seal
Sole Director and Sole Company Secretary (if company)	Director/Secretary (if company)	Director (if company)	here if required by constitution
Name and contact number of at least one signatory:

Dated / /2009

2. How to Accept the Offer

THIS IS AN IMPORTANT DOCUMENT. IF YOU ARE IN DOUBT AS TO HOW TO COMPLETE THIS FORM PLEASE CONSULT YOUR BROKER OR FINANCIAL ADVISER IMMEDIATELY.

Your acceptance must be received by no later than 5pm Australian Western Standard Time on 5 June 2009 (unless the Offer is extended).

Instructions for all holders

To accept the Offer you should complete, sign and date the form on the reverse side.

Please note:

(a) Joint Holders

All joint holders must sign this form.

(b) Corporations

This form must be signed by the authorised officers of the corporation and sealed (if required by, and in accordance with, the corporation's constitution), or a duly appointed attorney.

If this form is signed under power of attorney, or by the executors of a deceased estate, or by the administrators, the relevant power of attorney, probate or letters of administration, together with any other documents required by law, must be attached.

Shareholders should mail or deliver their completed form to:

Mailing Address: Advanced Share Registry Ltd PO Box 1156 Nedlands WA 6909

Delivery Address: Advanced Share Registry Ltd 150 Stirling Hwy Nedlands WA 6009

Overseas shareholders are urged to return their completed form by airmail.

3. Additional instructions for CHESS holders

To accept the Offer you should:

(a) Call your broker and instruct them to accept the Offer, or
(b) Complete and sign the Acceptance Form on the reverse side and complete the following details, sign below, and mail this form to Advanced Share Registry Ltd or your sponsoring broker.

Name of your Controlling Participant (broker):

I/We request and authorise you to instruct my/our Controlling Participant (broker) to accept the Offer in respect of those shares indicated on the Acceptance Form.

Signature:

If you have any queries concerning your shareholding or need help in completing this form please contact Blaze Asset Pty Ltd on (08) 9486 1122.

AI assistant

TALIUS GROUP LIMITED — Merger & Acquisition 2009

65893_rns_2009-05-04_c29357ad-55c7-4ecb-af75-146db5206df5.pdf

Blaze Asset Pty Ltd ACN 134 038 412

Target Energy Ltd ABN 73 119 160 360

Important information

Investment advice

Disclaimer as to forward looking statements

Disclaimer as to Target information

Foreign jurisdictions

Privacy

Defined terms

Table of Contents

CORPORATE DIRECTORY

Company

Legal Adviser

Important Dates:

Note:

Important Notice

1. Chairman's Letter

2. Summary of Takeover offer

2.1 What is Blaze offering to buy?

2.2 Structure of Bidder

2.3 What will you receive if you accept the Offer?

(a) Total Consideration

(c) Cash

(d) Advance Shares

2.4 Why you should accept the Offer?

2.5 How to accept the Offer?

(a) Issuer sponsored shareholders

(b) CHESS sponsored shareholders

(c) Brokers and non-broker participants

(d) Further details

2.6 When will you receive the consideration?

2.7 When does the Offer close?

2.8 What conditions attach to the Offer?

2.9 Is Blaze making an offer in respect of Target Options?

2.10 Further information

2.11 Important notice

3. Reasons for accepting the Offer

3.1 Disadvantages if you don't accept the Offer

(d) Target lacks a dedicated in country management team

3.2 Advantages if you accept the Offer

(e) Ability to leverage reserves

(f) Access to long-life, low cost reserves

3.3 Benefits for Target Shareholders if Blaze acquires a controlling interest in Target

(a) Cost Savings

3.4 Benefits for Target Shareholders if Blaze does not acquire a controlling interest in Target

4. Profile of and Intentions of Blaze

4.1 Structure and Ownership

4.2 Blaze Shareholder Agreement

4.3 Board of Blaze

Alex Bajada

Anthony Short

4.4 Intentions of Blaze

(a) Composition of the Board

(b) Strategic and Operational review

(c) Growth planning

4.5 Intentions upon acquisition 0% to 50% of Target

(a) General

(b) Target Options

(c) Effect on Target listing and liquidity if Blaze acquires control of Target

4.6 Intentions upon acquisition of more than 50% but less than 90% of Target

(a) General

(b) Target Options

(c) Effect on Target listing and liquidity if Blaze acquires control of Target

4.7 Intentions upon acquisition of 90% or more of Target

(a) Compulsory acquisition

(b) Target Options

(c) General

5. Profile of Advance

5.1 Overview of Advance's activities

5.2 Group Structure of Advance

5.3 Principal activities of Advance

(a) Producing Assets

Phase II (Totem and Key East Prospects)

(b) Exploration Assets

5.4 Advance's ongoing strategies

5.5 Successful Projects

5.6 Directors of Advance

TALIUS GROUP LIMITED Merger & Acquisition 2009