XSTATE RESOURCES LIMITED

==> picture [191 x 98] intentionally omitted <==

----- Start of picture text -----

ABN
96
009
217
154
----- End of picture text -----

==> picture [452 x 61] intentionally omitted <==

----- Start of picture text -----

15
April
2011
ASX
Limited Electronic
lodgement
----- End of picture text -----

NOTICE
OF
ANNUAL
GENERAL
MEETING

XState
Resources
Limited
wishes
to
advise
that
the
notice
of
Annual
General
Meeting
was
today posted
to
shareholders.

For
and
on
behalf
of
the
Board.

41
Stirling
Highway,
Nedlands
WA
6009 Tel
+
61
8
9423
3200

Fax
+61
8
9389
8327 www.xstate.com.au

==> picture [144 x 66] intentionally omitted <==

ABN 96 009 217 154

NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM ```````````````

AND

EXPLANATORY MEMORANDUM

Date of Meeting Thursday 19[th] May 2011

Time of Meeting 10:00am (WST)

Place of Meeting

Seminar Room 1

The University Club of Western Australia Hackett Drive-Entrance#1 Crawley, Western Australia

XSTATE RESOURCES LIMITED ABN 96 009 217 154

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the Shareholders of XState Resources Limited will be held at Seminar Room 1, The University Club of Western Australia, Hackett Drive, Crawley, Western Australia on Thursday 19[th] May 2011 at 10.00 am.

In order to determine voting entitlements, the register of Shareholders will be closed at 10:00am 17[th] May 2011

An Explanatory Memorandum containing information in relation to each of the resolutions to be put to the meeting accompanies this Notice.

AGENDA

To consider and, if thought fit, to pass the following resolutions.

ORDINARY BUSINESS

2010 Accounts

To receive and consider the Directors’ report and income statement for the year ended 31 December 2010, the balance sheet at that date, the Auditors’ report and the Directors’ declaration on the accounts.

Non-binding Ordinary Resolution 1: Directors’ Remuneration Report

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That pursuant to and in accordance with section 250R (2) of the Corporations Act the Directors’ Remuneration Report contained within the Directors’ Report be adopted.”

Ordinary Resolution 2: Re-election of a Director

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That Mr Ross Kestel, a director retiring by rotation in accordance with clause 12.2 of the Company’s Constitution, is re-elected a director of the Company.”

Ordinary Resolution 3: Election of a Director

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That Mr David Whitby, a Director who, having been appointed since the last Annual General Meeting, and retires in accordance with the Company’s Constitution, be elected a Director of the Company”

Ordinary Resolution 4: Election of a Director

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That Mr James Brown, a Director who, having been appointed since the last Annual General Meeting, and retires in accordance with the Company’s Constitution, be elected a Director of the Company”

Ordinary Resolution 5: Ratification of Issue of Shares

To consider and, if thought fit, to pass, with or without amendment, as an ordinary resolution:

“That for the purposes of Listing Rule 7.4 of the ASX Listing Rules and for all other purposes, the Company ratifies the allotment and issue of 10,000,000 fully paid ordinary shares on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 5 by any persons who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Ordinary Resolution 6: Approval to Issue up to 25,000,000 Shares

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That for the purposes of Listing Rule 7.1 of the ASX Listing Rules and for all other purposes, approval is given for the Directors to issue and allot up to 25,000,000 Shares on the terms and conditions described in the Explanatory Memorandum.

Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 6 by a person who may participate in the issue or any person who may obtain a benefit if the Resolution is passed (except a benefit solely in the capacity of a holder of ordinary securities) and any associates of those persons. However, the Company need not disregard a vote if cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Ordinary Resolution 7: Increase in Maximum Aggregate - Non-Executive Directors’ Remuneration

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That pursuant to ASX Listing Rule 10.17 and the Company’s Constitution, the maximum aggregate remuneration payable to the Non-Executive Directors for their services as Non-Executive Directors, for the years from and including the year commencing 1 January 2011 be increased from $200,000 to $400,000 per annum and divided among the Directors in the manner the Directors agree.”

Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 7 by any of the Directors and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

By Order of the Board

==> picture [147 x 55] intentionally omitted <==

D M McARTHUR Company Secretary

Dated: 8 April 2011

XSTATE RESOURCES LIMITED ABN 96 009 217 154

EXPLANATORY MEMORANDUM

This Explanatory Memorandum is intended to provide shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting (“ Notice ”) of the Company.

The Directors of the Company (“ Directors ”) recommend shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.

The following information should be noted in respect of the various matters contained in the accompanying Notice:

NON-BINDING ORDINARY RESOLUTION 1 – Directors’ Remuneration Report

Pursuant to Section 250R (2) of the Corporations Act, a resolution adopting the Directors’ Remuneration Report contained within the Directors’ Report must be put to the vote of the Company.

Shareholders are advised that pursuant to Section 250R (3) of the Corporations Act, this resolution is advisory only and does not bind the Directors or the Company.

The Director’s Remuneration Report is set out within the Director’s Report. The Report:

explains the Board’s policy for determining the nature and amount of remuneration of executive and non executive Directors and senior executives of the Company;
sets out remuneration details for each Director and the 4 most highly remunerated senior executives of the Company;
details and explains any performance conditions applicable to the remuneration of executive Directors and senior executives of the Company; and
provides an explanation of share based compensation payments for each Director and senior executives of the Company.

A reasonable opportunity will be provided for discussion of the Directors’ Remuneration Report at the Meeting.

The Board unanimously recommends that shareholders vote in favour of adopting the Directors’ Remuneration Report.

ORDINARY RESOLUTION 2 – Re-election of Mr Ross Kestel as a Director of the Company

Clause 12.2 of the Company’s Constitution provides that at every Annual General Meeting of the Company one-third of the Directors (other than alternate Directors and the Managing Director) shall retire from office. The Directors to retire at an Annual General Meeting are those who have been longest in office since their last election. A retiring Director is eligible for re-election.

Accordingly, pursuant to Clause 12.2 of the Company’s Constitution, Ross Kestel, being a Director of the Company, retires by way of rotation and, being eligible, offers himself for re-election as a Director of the Company.

ORDINARY RESOLUTION 3 – Election of Mr David Whitby as a Director of the Company

Clause 12.4 of the Company’s Constitution provides that any Director appointed since the last Annual General Meeting shall retire from office and be elected at the next following Annual General Meeting. Mr David Whitby was appointed a Director of the Company on 11 February 2011.

Accordingly, pursuant to Rule 12.4 of the Company’s Constitution, Mr Whitby retires as a Director and offers himself for election as a Director of the Company.

Mr Whitby brings a wealth of international experience having worked in Canada, Indonesia and Australia in senior positions with Husky Oil, Gulf Canada and ConocoPhilips. Most recently, Mr Whitby has been CEO and then Chairman of Nido Petroleum, an ASX listed company. He remains a non-executive Director of Nido. His particular passion is in developing oil and gas projects which he has done successfully on a number of occasions in Indonesia. This well rounded experience is the key for XState to monetize two gas discoveries in its acreage. Please refer the attached resume of Mr Whitby.

ORDINARY RESOLUTION 4 – Election of Mr James Brown as a Director of the Company

Clause 12.4 of the Company’s Constitution provides that any Director appointed since the last Annual General Meeting shall retire from office and be elected at the next following Annual General Meeting. Mr James Brown was appointed a Director of the Company on 4 April 2011.

Accordingly, pursuant to Rule 12.4 of the Company’s Constitution, Mr Brown retires as a Director and offers himself for election as a Director of the Company.

Mr Brown brings a significant amount of international finance industry experience to the Board of the Company. His prior positions include First Vice President of Merrill Lynch and Vice President of Morgan Stanley, where he served in equity research roles and supported numerous financial transactions in the Asia-Pacific region. Mr Brown served on the Board of ASX listed Nido Petroleum for five years as an independent non-executive Director. Mr Brown currently consults to energy companies in Australia and South-East Asia.

ORDINARY RESOLUTION 5 – Ratification of Issue of Shares

Resolution 5 seeks Shareholder ratification for the purposes of Listing Rule 7.4 for an issue of 10,000,000 fully paid ordinary shares that your Directors made to raise $1,250,000 in working capital.

As announced to ASX on 25 February 2011, the Company issued 10,000,000 fully paid ordinary shares at 12.5 cents each to raise $1,250,000 in working capital. The Shares were issued to sophisticated investors and other investors exempt from the requirement to be provided with a disclosure document, pursuant to S 708 of the Corporations Act, none of whom are related parties of the Company.

ASX Listing Rule 7.1 provides that the Company must not issue or agree to issue, subject to specified exceptions, during any 12 month period any equity securities which, when aggregated with the number of other securities issued within that 12 month period exceeds 15% of the number of ordinary shares on issue at the beginning of that 12 month period, unless the issue falls within one of the nominated exceptions ,or the prior approval of members of the Company at a general meeting is obtained..

Listing Rule 7.4 provides an issue made within the 15% limit will be treated as having been made with the approval of shareholders under Listing Rule 7.1 if subsequently approved by shareholders, thereby ‘refreshing’ the company’s ability to issue shares within the 15% limit, and restoring the company’s ability to make placements within that limit (if that is thought desirable) without the need for shareholder approval.

While the Shares described in this Resolution 5 have been issued within the 15% limit, the Company seeks Shareholder ratification of the issue of those Shares for the purpose of Listing Rule 7.4 so that the Company’s ability to issue securities will be refreshed and it will have the flexibility to issue further securities should the need or opportunity arise.

In accordance with the requirements of Listing Rule 7.5, the following information is provided to Shareholders to allow them to assess the ratification of the issue of the Shares the subject of this Resolution 5:

(a) the number of Shares issued and allotted by the Company was 10,000,000;

(b) the shares were issued for 12.5 cents;
(c) the Shares rank pari passu with the Company’s existing Shares;
(d) the Shares were issued to sophisticated investors and other investors exempt from the requirement to be provided with a disclosure document, none of whom are related parties of the Company;
(e) the funds will be used for working capital;
(f) a voting exclusion statement has been included.

ORDINARY RESOLUTION 6– Approval to Issue up to 25,000,000 Shares

The Board of Directors seek shareholder approval to issue up to 25,000,000 Shares in the Company within 3 months after the date of this Annual General Meeting. Resolution 6 will enable the Company to raise additional funds throughout the 3 month period after the Annual General Meeting through the issue of 25,000,000 Shares without the need to seek further Shareholder approval.

Listing Rule 7.1 provides that a listed company must not issue or agree to issue subject to specified exceptions ,during any 12 month period any equity securities which, when aggregated with the number of the other securities issued within that 12 month period, exceed 15% of the number of ordinary shares on issue at the beginning of the 12 month period, unless the issue falls within one of the nominated exceptions, or the prior approval of members of the company at a general meeting is obtained.

In compliance with Listing Rule 7.3, Shareholders are advised as follows:

(a) the maximum number of shares to be issued and allotted is 25,000,000 Shares;
(b) the Shares will be issued and allotted at a date no later than 3 months after the date of the Annual General Meeting (or such later date as is approved by ASX) and it is intended that the Shares will be issued and allotted progressively during that period;
(c) the issue price of the Shares will be a minimum of 80% of the volume weighted average market price of the Shares traded on the ASX over the last 5 days before the date that the offer is made;
(d) it is intended that the Shares will be issued and allotted to sophisticated investors or other parties that may be issued Shares without the need for a prospectus under Section 708 of the Corporations Act;
(e) the Shares will rank pari passu in all respects with the Company’s existing Shares;
(f) none of the allottees will be related parties of the Company; and
(g) the Shares will be issued to provide funds for pursuing ongoing project opportunities and for working capital purposes.

ORDINARY RESOLUTION 7 – Increase in Maximum Aggregate – Non-Executive Directors’ Remuneration

Under ASX Listing Rule 10.17 and Article 13.7 of the Company’s Constitution, the members by resolution in General Meeting are required to set the aggregate sum of remuneration to be paid to NonExecutive Directors for their services as Non-Executive Directors. This amount was last set by members at an aggregate of $200,000.

Current corporate practice in Australia is for Boards to be composed with a majority of Non-Executive Directors. Your Company currently has four Non-Executive Directors. The Company’s Executive Directors do not receive Directors’ fees.

Your Non-Executive Directors have given and will continue to give a significant time commitment in overseeing the progression of the Company’s business plan. As the Company now has three NonExecutive Directors, and to allow for an increase in Non-Executive Directors to satisfy ongoing

governance requirements, it is necessary to increase the maximum amount of remuneration available for those Non-Executive Directors.

To accommodate the above and allow for future Non-Executive Director fee increases, it is proposed that the maximum aggregate remuneration by increased by $200,000 to $400,000 per annum.

The directors and their respective associates will not cast any vote on this Resolution and any votes cast will be disregarded except if cast as a proxy for a person who is entitled to vote and in accordance with the directions of the proxy.

PROXY FORM APPOINTMENT OF PROXY XSTATE RESOURCES LIMITED ABN 96 009 217 154

ANNUAL GENERAL MEETING

I/We Address being a Member of XState Resources Limited entitled to attend and vote at the Meeting, hereby Appoint Name of proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the Annual General Meeting to be held at Seminar Room 1, The University Club of Western Australia, Hackett Drive, Crawley, Western Australia at 10.00am (WST) on Thursday 19[th] May 2011 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

Voting on Business of the Annual General Meeting


Resolution	1	Directors’ Remuneration Report
Resolution	2	Re-election of Mr R Kestel as a Director
Resolution	3	Election of Mr D Whitby as a Director
Resolution	4	Election of Mr J Brown as a Director
Resolution	5	Ratification of Issue of Shares
Resolution	6	Approval to Issue Shares
Resolution	7	Increase in Non-Executive Directors’ Fees

OR

In relation to the Resolutions, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on these Resolutions, please place a mark in this box

By marking this box, you acknowledge that if you have appointed the Chairman as your proxy the Chairman may exercise your proxy in relation to Resolution 7, even though he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of the interest. The Chairman intends to vote in favour of all of the resolutions in relation to proxy votes.

YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY FORM WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

Signed this day of 2011

By:

Individuals and joint holders Signature Signature Signature

Companies (affix common seal if appropriate) Director Director/Company Secretary Sole Director and Sole Company Secretary

Instructions for Completing ‘Appointment of Proxy’ Form

A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies.
If a member appoints two proxies, each proxy must be appointed to represent a specified portion or number of the member’s voting rights and neither proxy may vote on a show of hands.
If a member appoints two proxies, and the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, each proxy may exercise half of the votes.
A proxy need not be a member of the Company.
If a corporate representative is to attend the meeting on behalf of a corporation, a formal notice of appointment must be brought to the meeting.
The Proxy Form must be signed by the shareholder or the shareholder’s attorney. If the shareholder is a corporation, the Proxy Form should be signed under its common seal, or by two directors (or a director and a company secretary), or if a corporation with a sole director and sole secretary by that director, with the office held printed under each signature. Alternatively, a corporation can sign by its attorney or duty authorised officer.
The Proxy Form and any power of attorney or authority under which it is signed must be received at the registered office of the Company not less than 48 hours prior to the appointed time of Meeting. Proxy Forms can be lodged:

. in person at: XState Resources Limited 41 Stirling Highway NEDLANDS WA 6009 . by post to: XState Resources Limited PO Box 985 NEDLANDS WA 6909

. by facsimile on: (61 8) 9389 8799

In accordance with Regulation 7.11.37 of the Corporations Regulations 2001, the Directors have set a snapshot date to determine the identity of those entitled to attend and vote at the Meeting. The snapshot date is 10.00 am on 17[th] May 2011

Please advise of any change of address by completion of the section below:

My new address is

AI assistant

XSTATE RESOURCES LIMITED AGM Information 2011

66107_rns_2011-04-14_6c07546c-54b3-41ab-a598-34ef9d0e2cfe.pdf