ZIMI LIMITED — Proxy Solicitation & Information Statement 2011

Apr 28, 2011

WHL ENERGY LIMITED ACN 113 326 524

NOTICE OF GENERAL MEETING

TIME : 2:00pm (WST) DATE : 31 May 2011 PLACE : The Celtic Club 48 Ord Street West Perth WA 6005

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 6500 0271.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	5
Schedule 1–Terms and Conditions of the Scheme Options	13
Schedule 2–Valuation of Scheme Options	15
Glossary	16
**TIME AND PLACE OF MEETING AND HOW TO VOTE **

VENUE

The general meeting of the Shareholders to which this Notice of Meeting relates will be held at 2:00pm (WST) on 31 May 2011 at:

The Celtic Club, 48 Ord Street, West Perth, Western Australia

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

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NOTICE OF GENERAL MEETING

Notice is given that the general meeting of Shareholders will be held at 2:00pm (WST) on 31 May 2011 at The Celtic Club, 48 Ord Street, West Perth, Western Australia.

The Explanatory Statement provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at 2:00pm (WST) on 29 May 2011.

Terms and abbreviations used in this Notice of Meeting are defined in the Glossary.

AGENDA

1 RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – SHARES

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

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 127,000,000 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

2 RESOLUTION 2 – PLACEMENT – SHARES

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 185,500,000 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, 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 it is cast by a person as a 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.

3 RESOLUTION 3 – ADOPTION OF COMPANY EMPLOYEE SHARE OPTION PLAN

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

“That, for the purpose of ASX Listing Rule 7.2 (Exception 9) and for all other purposes, approval is given to adopt the Company’s Employee Share Option Scheme and to issue securities under that Scheme on the terms and conditions summarised in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by the Directors of the Company (except those who are ineligible to participate in any employee incentive scheme in relation to the Company) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

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4 RESOLUTION 4 – APPROVAL OF ISSUE OF SCHEME OPTIONS TO DIRECTOR UNDER EMPLOYEE SHARE OPTION PLAN – MR DAVID ROWBOTTAM

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

“That, for the purposes of ASX Listing Rule 10.14, Section 208 of the Corporations Act and for all other purposes, approval is given for the Directors to issue up to 10,000,000 Scheme Options to Mr David Rowbottam (or his nominee) pursuant to the Employee Share Option Plan in accordance with the terms and conditions of the Employee Share Option Plan, a summary of which is set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by a Director and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

5 RESOLUTION 5 – APPROVAL OF ISSUE OF SCHEME OPTIONS TO DIRECTOR UNDER EMPLOYEE SHARE OPTION PLAN – MR STEVEN NOSKE

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

“That, for the purposes of ASX Listing Rule 10.14, Section 208 of the Corporations Act and for all other purposes, approval is given for the Directors to issue up to 15,000,000 Scheme Options to Mr Steven Noske (or his nominee) pursuant to the Employee Share Option Plan in accordance with the terms and conditions of the Employee Share Option Plan, a summary of which is set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by a Director and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

DATED: 29 APRIL 2011

BY ORDER OF THE BOARD

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MATTHEW EDMONDSON COMPANY SECRETARY

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the General Meeting to be held at 2:00pm (WST) on 31 May 2011 at The Celtic Club, 48 Ord Street, West Perth, Western Australia.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. BACKGROUND

As announced on 8 April 2011, the Company has proceeded with an issue of Shares by way of a two tranche placement to sophisticated and professional investors, none of whom are related parties of the Company (for the purposes of Section 708 of the Corporations Act) to raise up to approximately $10,000,000.

The issue is to be made in two tranches as follows:

• (a) an issue of 127,000,000 Shares ( Tranche 1 Shares ) at an issue price of $0.032 each (which has been completed); and

• (b) subject to the approval of Shareholders, an issue of up to 185,500,000 Shares ( Tranche 2 Shares ) at an issue price of $0.032 each.

Resolutions 1 and 2 seek approval for the ratification of the issue of the Tranche 1 Shares and approval for the issue of the Tranche 2 Shares.

2. RESOLUTION 1– RATIFICATION OF PRIOR ISSUE – SHARES

2.1 General

On 19 April 2011, the Company issued the Tranche 1 Shares.

The subscribers pursuant to this issue were not related parties of the Company.

Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Share Ratification ).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in a general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

2.2

Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Share Ratification:

• (a) 127,000,000 Shares were allotted;

• (b) the issue price was $0.032 per Share;

• (c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Shares were allotted and issued to certain institutional, sophisticated and professional investor clients of Hartleys Limited, none of whom were related parties of the Company (for the purposes of Section 708 of the Corporations Act); and

• (e) the funds raised from this issue are intended to be used for progressing the Company’s offshore Seychelles oil and gas project and ongoing working capital.

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3. RESOLUTION 2–PLACEMENT - SHARES

3.1 General

Resolution 2 seeks Shareholder approval for the allotment and issue of up to 185,500,000 Shares at an issue price of $0.032 per Share to raise up to $5,936,000 ( Share Placement ).

None of the subscribers pursuant to this issue will be related parties of the Company.

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

The effect of Resolution 2 will be to allow the Directors to issue the Shares pursuant to the Share Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without impacting on the Company’s 15% annual placement capacity.

3.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Share Placement:

• (a) the maximum number of Shares to be issued is 185,500,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (c) the issue price will be $0.032 per Share;

• (d) the Shares will be allotted and issued to certain institutional, sophisticated and professional investor clients of Hartleys Limited, none of whom were related parties of the Company (for the purposes of Section 708 of the Corporations Act);

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

• (f) the Company intends to use the funds raised from the Share Placement towards progressing the Company’s offshore Seychelles oil and gas project and ongoing working capital.

4. RESOLUTION 3 – ADOPTION OF COMPANY’S EMPLOYEE SHARE OPTION PLAN

4.1 Background

As part of its review of appropriate remuneration for management and key personnel, the Board considers that it is appropriate to adopt a new employee share option scheme ( Scheme ). The objective of the Scheme is to provide the Company with a remuneration mechanism to motivate and reward the performance of management and key personnel and align their interests with the interests of Shareholders.

4.2 Requirement for Shareholder Approval

Resolution 3 seeks Shareholder approval under exception 9(b) of ASX Listing Rule 7.2 to allow the issue of Options under the Scheme ( Scheme Options ) as an exception to ASX Listing Rule 7.1.

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

Exception 9(b) of ASX Listing Rule 7.2 provides that a company may make an issue of securities under an employee incentive scheme (such as the Scheme) if, within three years before the date of issue, holders of ordinary securities in the company have approved the issue of securities under the scheme as an exception to ASX Listing Rule 7.1.

If Resolution 3 is passed, the Company will have the ability to issue Scheme Options to eligible participants under the Scheme over a period of three years without impacting on the Company’s 15% placement capacity under ASX Listing Rule 7.1.

4.3 Information required by the ASX Listing Rules

The following information is provided to satisfy the requirements of the ASX Listing Rules:

• (a) no qualifying rights have been issued under the Company’s existing Wind Hydrogen Qualifying Rights Plan since the date of its approval in June 2008; and

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• (b) the main terms of the Scheme are summarised below and a full copy of the Scheme is available for inspection at the Company’s registered office until the date of the General Meeting.

4.4 Summary of terms of the Scheme

(a) Eligibility

The Board may invite full or part time employees and directors of the Company or an Associated Body Corporate of the Company to participate in the Scheme. Participants may also include:

• (i) casual employees where:

• (A) the casual employee has worked for the company for more than 12 months; and

• (B) the employer regards the employee as equivalent to part time employees; and

• (ii) an individual contractor that has:

• (A) performed work for the Company, or a related body corporate of the Company, for more than 12 months; and

• (B) received 80% or more of their income in the preceding year from the Company or a related body corporate of the Company; or

• (iii) a company contractor where each of the following are satisfied in relation to the company:

• (A) throughout the previous 12 months, the company has had a contract in place with the Company, or a related body corporate of the Company, for the provision of the services of an individual ( Contracting Individual ) to the Company;

• (B) the Contracting Individual has performed work for the Company, or a related body corporate of the Company, for more than 12 months;

• (C) the Contracting Individual has been the only member of the company for more than 12 months; and

• (D) more than 80% of the aggregate income of the company and the Contracting Individual from all sources (other than from each other) in the preceding 12 months was received from the Company or a related body corporate of the Company,

(together, the Eligible Employee ).

Eligible Employees do not possess any right to participate in the Scheme, as participation is solely determined by the Board.

Please note that the Company is currently seeking relief under Section 741(1) of the Corporations Act to modify the Corporations Act as it applies to the Company so that the Company can make offers to casual employees and contractors under the Scheme.

(b) Offer of Scheme Options

The Scheme will be administered by the Board which may, in its absolute discretion, offer Scheme Options to any Eligible Employee from time to time as determined by the Board and, in exercising that discretion, may have regard to some or all of the following considerations:

• (i) the Eligible Employee’s length of service with the Company;

• (ii) the contribution made by the Eligible Employee to the Company;

• (iii) the potential contribution of the Eligible Employee to the Company; or

• (iv) any other matter the Board considers relevant.

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(c) Number of Scheme Options

The number of Scheme Options to be offered to an Eligible Employee will be determined by the Board in its discretion and in accordance with the rules of the Scheme and applicable law.

(d) Conversion

Each Scheme Option is exercisable into one Share in the Company ranking equally in all respect with the existing issued Shares in the Company.

(e) Consideration

Scheme Options issued under the Scheme will be issued for nil consideration.

(f) Exercise price

The exercise price for Scheme Options offered under the Scheme will be determined by the Board.

(g) Exercise conditions

The Board may impose conditions, including performance-related conditions, on the right of a participant to exercise Scheme Option granted under the Scheme.

(h) Exercise of Scheme Options

A participant in the Scheme will be entitled to exercise their Scheme Options in respect of which the exercise conditions have been met provided the Scheme Options have not lapsed and the exercise of the Scheme Options will not result in the Company contravening ASIC Class Order 03/184. A holder may exercise Scheme Options by delivering an exercise notice to the Company Secretary along with the Scheme Options certificate, and paying the applicable exercise price of the Scheme Options multiplied by the number of Scheme Options proposed to be exercised.

Within ten (10) Business Days of receipt of the required items, the Company will, subject to the ASX Listing Rules, issue to the participant the relevant number of Shares.

(i) Cessation of employment

If the participant in the Scheme ceases to be an employee or director of, or render services to, the Company or an Associated Body Corporate for any reason (other than by death, permanent disability or permanent retirement from the workforce) prior to the lapse of the Scheme Options, and the exercise conditions attaching to the Scheme Options have been met, the participant will be entitled to exercise their Scheme Options in accordance with the Scheme for a period of up to 60 days after the date of the cessation event.

(j) Death, permanent disability or retirement

If the participant in the Scheme dies, becomes permanently disabled or permanently retires from the workforce as an employee or director of the Company prior to the lapse of the Scheme Options, the participant, or the participant’s legal personal representative, will be entitled to exercise their Scheme Options in accordance with the Scheme rules for the period commencing on the date of the cessation event and ending on the first to occur of the date of lapsing of the Scheme Options and the date which is six months after the date of the cessation event.

(k) Lapse of Scheme Options

Scheme Options held by a participant in the Scheme will lapse immediately if:

(i) the Scheme Options have not been exercised by the date which is two years after the date of issue, or such other date as the Board determines in its discretion at the time of issue of the Scheme Options;

• (ii) the exercise conditions attaching to the Scheme Conditions are unable to be met; or

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• (iii) the holder ceases to be an employee or director of the Company or an Associated Body Corporate and the deadline set out in paragraph 4.4 (i) or (j) has passed.

(l) Participation in Rights Issues and Bonus Issues

The Scheme Options granted under the Scheme do not give the holder any right to participate in rights issues or bonus issues unless Shares are allotted pursuant to the exercise of the relevant Scheme Options prior to the record date for determining entitlements to such issue. The number of Shares issued on the exercise of Scheme Options will be adjusted for bonus issues made prior to the exercise of the Scheme Options in accordance with the Listing Rules.

(m) Reorganisation

The terms upon which the Scheme Options will be granted will not prevent the Scheme Options being reorganised as required by the ASX Listing Rules on the reorganisation of the capital of the Company.

(n)

Limitation on offers

If the Company makes an offer under the Scheme where:

• (i) the total number of Shares to be received on exercise of Scheme Options the subject of that offer exceeds the limit set out in ASIC Class Order 03/184; or

• (ii) the Offer does not otherwise comply with the terms and conditions set out in ASIC Class Order 03/184,

the Company must comply with Chapter 6D of the Corporations Act at the time of that offer.

(o) Trigger event

If any of the following events occur:

• (i) the Company is subject to a takeover bid;

• (ii) the Company proposes a scheme of arrangement with its members under Part 5.1 of the Corporations Act; or

• (iii) a person, or group of associated persons, becomes entitled to sufficient Shares to give him or them the ability, in general meeting, to replace all or a majority of the Board, where such ability was not already held by a person associated with such a person or group of persons,

then the Board may:

• (i) determine that Scheme Options may be exercised at any time from the date of such event so as to permit the holder to participate in the change of control arising from the event; or

• (ii) use its reasonable endeavours to procure that an offer is made to holder of Scheme Options on like terms to the terms proposed in such event.

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5. RESOLUTIONS 4 AND 5 - ISSUE OF SCHEME OPTIONS TO DIRECTORS UNDER EMPLOYEE SHARE OPTION PLAN

5.1 General

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue a total of 25,000,000 Scheme Options to Mr David Rowbottam and Mr Steven Noske ( Related Parties ) pursuant to the Scheme and on the terms and conditions set out below.

A summary of the terms and conditions of the Scheme is set out in Section 4.4 above. The full terms and conditions of the Scheme may be obtained free of charge by contacting the Company.

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.14 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities under an incentive option scheme to a director of the entity, an associate of the director, or a person whose relationship with the entity, director or associate of the director is, in ASX’s opinion, such that approval should be obtained.

The issue of Scheme Options to the Related Parties requires the Company to obtain Shareholder approval because this constitutes giving a financial benefit. As Directors, Mr David Rowbottam and Mr Steven Noske are related parties of the Company. Peter Barter, the other Director of the Company, will not be receiving Scheme Options pursuant to this Notice.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of Scheme Options to the Related Parties.

5.2 Shareholder Approval (Chapter 2E of the Corporations Actand Listing Rule 10.14)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.15A, the following information is provided in relation to the proposed issue of Shares to the Related Parties:

• (a) the related parties are Mr David Rowbottam and Mr Steven Noske, and are related parties of the Company by virtue of being Directors;

• (b) the maximum number of Scheme Options (being the nature of the financial benefit being provided) to be granted to the Related Parties is:

• (i) 10,000,000 Scheme Options to Mr David Rowbottam; and

• (ii) 15,000,000 Scheme Options to Mr Steven Noske;

• (c) the exercise price of each Scheme Option will be set at a 50% premium of the five day VWAP for the previous five trading days before the date of the Notice of Meeting;

• (d) the Scheme Options will be issued on the terms and conditions set out in Schedule 1;

• (e) the Company is seeking approval for the adoption of the Scheme pursuant to Resolution 3 of this Notice;

• (f) no Scheme Options have previously been issued under the Scheme to a Director or an associate of the Director;

• (g) any person who is in the full-time or part-time employment of, or is a director of the Company or any subsidiary (if any) is entitled to participate in the Scheme. Please note that the Company is currently seeking relief under Section 741(1) of the Corporations Act to modify the Corporations Act as it applies to the Company so that the Company can make offers to casual employees and contractors under the

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Scheme. As at the date of this Notice of Meeting, the Related Parties (being either directors or employees) are eligible to participate in the Scheme;

• (h) the Scheme Options will be issued to the Related Parties no later than three years after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (i) details of any Scheme Options issued under the Scheme will be published in each annual report of the Company relating to a period in which Scheme Options have been issued, and that approval for the issue of the Scheme Options was obtained under Listing Rule 10.14;

• (j) other people who would be a related party under the Corporations Act and become entitled to participate in the Scheme and have not been named in this Notice will not participate in the Scheme until approval is obtained under Listing Rule 10.14;

• (k) the value of the Scheme Options and the pricing methodology is set out in Schedule 2;

• (l) the relevant interests of the Related Parties in securities of the Company are set out below;

below;
Related Party	Shares	Options	Scheme Options
David Rowbottam	Nil	5,000,0001	10,000,000
Steven Noske	Nil	5,000,0001	15,000,000

1 Exercisable at $0.075 on or before 30 June 2012.

• (m) the remuneration from the Company to the Related Parties for both the current financial year and previous financial year are set out below:

Related Party	Current Financial Year to 30 April	Current Financial 1 May to 30 June	Previous Financial Year
David Rowbottam	$130,136	$47,534	Nil
Steven Noske	$105,914	$77,534	Nil

(n) in the event Shareholder approval is obtained a total of 25,000,000 Scheme Options will be allotted and issued. If exercised, this will increase the number of Shares on issue from 1,161,588,386 to 1,186,588,386 (assuming all of the Shares are issued pursuant to Resolution 2, that no other Options are exercised and no other Shares issued) with the effect that the shareholding of existing Shareholders would be diluted by 2.11%.

(o) the trading history of the Shares on ASX in the 12 months before the date of this Notice of General Meeting is set out below:

	Price	Date
Highest	$0.072	21 April 2010
Lowest	$0.014	31 August 2010, 10 September 2010 and 13 October 2010
Last	$0.038	18 April 2011

(p) the primary purpose of the issue of the Scheme Options to the Related Parties is to provide cost effective consideration to the Related Parties for their ongoing commitment and contribution to the Company in their respective roles as Directors. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Scheme Options upon the terms proposed;

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• (q) the Board acknowledges the issue of the Scheme Options to Mr Steven Noske is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the issue of the Scheme Options to Mr Steven Noske reasonable in the circumstances, given the necessity to attract the highest calibre of professionals to the Company, whilst maintaining the Company’s cash reserves;

• (r) Mr David Rowbottam declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material personal interest in the outcome of this Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 4, recommend that Shareholders vote in favour of Resolution 4. The Board (other than Mr David Rowbottam) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution; and

• (s) Mr Steven Noske declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 5, recommend that Shareholders vote in favour of Resolution 5. The Board (other than Mr Steven Noske) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution.

6. ENQUIRIES

Shareholders are requested to contact the Company Secretary on (+ 61 8) 6500 0273 if they have any queries in respect of the matters set out in these documents.

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SCHEDULE 1 – TERMS AND CONDITIONS OF THE SCHEME OPTIONS

The Scheme Options have the following rights attached to them:

• (a) In these terms, the following definitions apply:

• (i) Licences means the 35 exploration blocks located on the southern continental shelf off-shore Seychelles held by PetroQuest International Inc.

• (ii) Work Commitment means the obligation of SEYCO Energy Pty Ltd (ABN 87 145 434 457) (under the sale agreement entered into with the shareholders in PetroQuest International Inc) to fund the drilling of the first two wells in the Phase Two work program.

• (b) The Scheme Options are options to subscribe for ordinary shares in the capital of WHL Energy Ltd ( Shares ).

• (c) The exercise price of the Scheme Options will be set at a 50% premium of the five day VWAP for the previous five trading days before the date of the Notice of Meeting, per Scheme Option.

• (d) The Scheme Options will lapse on 31 December 2013 ( Expiry Date ).

• (e) The Scheme Options will not vest and become exercisable unless:

• (i) the Company (or one of its subsidiaries) has entered into one or more binding farmin agreements with one or more third parties under which the farminee/s’ have a collective obligation to spend the greater of $10,000,000 or 50% of the Work Commitment on the Licences; or

• (ii) the volume weighted average price of the Company’s shares as traded on ASX is at least 10 cents or more for ten (10) consecutive trading days,

in either case prior to the Expiry Date. For the avoidance of doubt, if one of the above events does not occur prior to the Expiry Date, the Scheme Options will immediately lapse.

• (f) The Scheme Options will be transferable in whole or in part subject to the provisions of the constitution of the Company, Corporations Act and the ASX Listing Rules.

• (g) The Scheme Options may be exercised wholly or in part by delivering a duly completed form of notice of exercise together with a cheque for the exercise price per Scheme Option to the Company at any time on or after the date on which the Scheme Options are issued and on or before the Expiry Date. Scheme Options not exercised before the Expiry Date will lapse.

• (h) Upon the valid exercise of the Scheme Options and payment of the exercise price, the Company will issue Shares ranking pari passu with the then issued Shares of the Company.

• (i) The Company shall apply for listing on the ASX of the resultant Shares issued upon exercise of any of the Scheme Options.

• (j) Reconstruction of Capital : If during the currency of the Scheme Options the issued capital of the Company is reconstructed (including capital reductions and share consolidations and divisions), the number or nominal value of the Scheme Options to which the holder is entitled will be reconstructed in the same proportion as the issued capital of the Company is reconstructed in accordance with the ASX Listing Rules but in all respects the term of the exercise of the Scheme Options shall remain unchanged. Where appropriate the exercise price of the Scheme Options will be revised in accordance with the ASX Listing Rules.

• (k) Bonus Issue : If there is a bonus issue to the holders of the ordinary Shares of the Company, the number of ordinary Shares over which the Scheme Option is exercisable will be increased by the number of ordinary Shares which the holder of the Scheme Option would have received if the Scheme Option had been exercised before the record date for the bonus issue.

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• (l) Rights Issue: If the Company makes a rights issue (other than a bonus issue), the exercise price of Scheme Options on issue will be reduced accordingly as set out in the ASX Listing Rules.

• (m) Participating Rights and Entitlements: The Scheme Options carry no right (without exercising the Scheme Options) to participate in rights issues which may be offered by the Company to its Shareholders after the date of the issue of the Scheme Options or in dividends. However, the Company must give prior notice to the Scheme Option holders of any new issue before the record date for determining entitlements to the issue in accordance with ASX Listing Rules and Scheme Option holders have the right to exercise the Scheme Options prior to the record date for determining entitlements.

• (n) Amendments: Despite anything else contained in these terms to the contrary, the terms and conditions may be changed by the Company to the extent it reasonably considers to be necessary to comply with the ASX Listing Rules, particularly as they may apply to are construction or reorganisation of the capital of the Company at the time of reorganisation or reconstruction.

• (o) Selling Licences : Notwithstanding any other terms and conditions, all Scheme Options shall vest and may be exercised if the Company (or one of its subsidiaries) sells or transfers the Licences to any party(excluding any transfer or sale that occurs under a farm in arrangement in respect of the Licences).

14

SCHEDULE 2 – VALUATION OF SCHEME OPTIONS

The Scheme Options to be issued to the Related Parties pursuant to Resolutions 4 and 5have been valued by management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Scheme Options were ascribed a value range, as follows:

**Assumptions: **
Valuation date	19 April 2011
Market price ofShares	$0.037
Exercise price	$0.056*
Expiry date	31 December 2013
Risk free interest rate	5.01%
Volatility	1.1062
Discount rate (to reflect the fact that the vesting conditions may not be achieved)	30%
Indicative value per Scheme Option	$0.015
Total Value of Scheme Options	$371,943

Note: The valuation ranges noted above are not necessarily the market prices that the Scheme Options could be traded at and they are not automatically the market prices for taxation purposes.

*Assumes a VWAP of $0.037 for the 5 trading days preceding the date of the Notice of Meeting.

15

GLOSSARY

• $ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

Associated Body Corporate means:

• (a) a body corporate that is a related body corporate (as defined in the Corporations Act) of the Company;

• (b) a body corporate that has voting power in the Company of not less than 20%; and

• (c) a body corporate in which the Company has voting power of not less than 20%.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Company means WHL Energy Limited (ACN113 326 524).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Employee Share Option Plan or the Scheme means the employee share option plan to be approved by Shareholders in this Notice of Meeting pursuant to Resolution 3.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

General Meeting or Meeting means the meeting convened by the Notice.

Notice or Notice of Meeting or Notice of General Meeting means this notice of general meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share with the terms and conditions set out in Schedule 1.

Optionholder means a holder of an Option or Scheme Option as the context requires.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Scheme Option means an option to acquire a Share on the terms and conditions set out in Section 4.4 of the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

VWAP means volume weighted average price.

WST means Western Standard Time as observed in Perth, Western Australia.

16

PROXY FORM

APPOINTMENT OF PROXY WHL ENERGY LIMITED ACN 113 326 524

GENERAL MEETING

I/We

of

being a member of WHL Energy Limited entitled to attend and vote at the General Meeting, hereby

Appoint

Name of proxy

OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the General Meeting to be held at 2:00pm (WST), on 31 May 2011 at The Celtic Club, 48 Ord Street, West Perth, Western Australia, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

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If the Chair of the General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolution 3 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the General Meeting may exercise your proxy even if he has an interest in the outcome of Resolution 3 and that votes cast by the Chair of the General Meeting for Resolution 3 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolution 3 and your votes will not be counted in calculating the required majority if a poll is called on Resolution 3.

OR

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN Resolution 1 – Ratification of Prior Issue – Shares Resolution 2 – Placement – Shares Resolution 3 – Adoption of Employee Share Option Plan Resolution 4 – Approval of Issue of Scheme Options to Director under Employee Incentive Option Plan – Mr David Rowbottam Resolution 5 – Approval of Issue of Scheme Options to Director under Employee Incentive Option Plan – Mr Steven Noske Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will 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 ___% Signature of Member(s): Date: ____ Individual or Member 1 Member 2 Member 3 Sole Director/Company Secretary Director Director/Company Secretary

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

Contact Name: _____ Contact Ph (daytime): _________

WHL ENERGY LIMITED ACN 113 326 524

Instructions for Completing ‘Appointment of Proxy’ Form

1. ( Appointing a Proxy ): A member entitled to attend and vote at the General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.A duly appointed proxy need not be a member of the Company.

2. ( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing Instructions ):

  - ( **Individual** ): Where the holding is in one name, the member must sign.

  - ( **Joint Holding** ): Where the holding is in more than one name, all of the members should sign.

  - ( **Power of Attorney** ): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it. ( **Companies** ): Where the company has a sole director who is also the sole company secretary, that person must sign.  Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone.  Otherwise, a director jointly with either another director or a company secretary must sign.  Please sign in the appropriate place to indicate the office held.

1. ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the General Meeting.

2. ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

3. (a) post to Advanced Share Registry Ltd, P.O. Box 1156, Nedlands WA 6909;or

4. (b) facsimile to the Company on facsimile number +61 8 9389 7871; or

5. (c) email to the Company at m.sanchez@advancedshare.com.au,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy forms received later than this time will be invalid.