Global Petroleum Regulatory News (GBP)

GLOBAL PETROLEUM LIMITED

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of shareholders of Global Petroleum Limited ("Company") will be held at 10.30am (AWST) on 19 August 2011 at the Plaza Level, BGC Centre, 28 The Esplanade, Perth, Western Australia ("General Meeting").

The notice of general meeting ("Notice") and the explanatory memorandum accompanying the Notice ("Explanatory Memorandum") published today provide additional information on matters to be considered at the General Meeting. The Notice, Explanatory Memorandum and a form of proxy for use at the General Meeting ("Proxy Form") are being sent to shareholders in the Company and are available from the Company's website www.globalpetroleum.com.au and from ASX at http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=GBP

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders at 5pm (AWST) on 17 August 2011.

At the General Meeting resolutions will be proposed to

1. approve the acquisition of Jupiter Petroleum Limited from Mr Peter Taylor and Mr Peter Blakey for an aggregate consideration of 25,000,000 new ordinary shares ("Shares") in the Company;

2. approve the grant of incentive options to Mr Clint McGhie; and

3. grant the Company authority to issue incentive options to key consultants.

A. Acquisition of Jupiter Petroleum Limited

On 31 January 2011 the Company announced that it had entered into a conditional sale and purchase agreement to acquire Jupiter Petroleum Limited ("Jupiter") which holds prospective oil and gas exploration interests in offshore Namibia and offshore Juan de Nova, a French dependency in the Mozambique Channel (the "Acquisition").

The two directors and shareholders of Jupiter are Mr Peter Blakey and Mr Peter Taylor ("Vendors").

The Vendors are also directors of the Company and are therefore a 'related party' pursuant to the Corporations Act and AIM Rules.

The Vendors currently hold the following number of Shares and exercise the following voting power in the Company:

After completion of the Acquisition, the Vendors will hold the following number of Shares and exercise the following voting power in the Company:

Mr Blakey and Mr Taylor have both lodged notices advising that they have a relevant interest in the others holding of Shares on the basis that they are Associates.

As a consequence of the increase in the Vendor's voting power in the Company on completion of the Acquisition and the fact that the Vendors are a related party, the Company will need shareholder approval to complete the Acquisition. Specifically, shareholder approval is required pursuant to:

(a) Item 7 of section 611 of the Corporations Act because the Acquisition will result in an increase in the Vendors ownership of the issued share capital of the Company from a starting point of above 20% to between 20% and 90%; and

(b) Listing Rule 10.1 and Listing Rule 10.11 because the Acquisition is of a substantial asset and the Vendors are related parties of the Company.

1. Overview of Projects and Corporate Structure

Jupiter is a private limited company incorporated in the United Kingdom on 20 July 2005, which holds prospective oil and gas exploration interests in offshore Namibia ("Namibian Project") and in offshore Juan de Nova, a French dependency in the Mozambique Channel ("Juan de Nova Project").

Jupiter's interests in the Namibian Project and Juan de Nova Project exist pursuant to a mixture of licences and joint bidding or operating agreements and related documents held or entered into by its wholly owned subsidiaries, and are therefore partly contractual in nature, rather than absolute and sole legal title.

Jupiter is owned by Mr Peter Taylor and Mr Peter Blakey who each own 40,000 shares, being 50% of the issued share capital of Jupiter.

Jupiter is the holding company for the Jupiter Group which is comprised of the following wholly-owned Subsidiaries:

(a) Jupiter Petroleum (Namibia) Limited which was incorporated in the British Virgin Islands on 9 April 2010 (Jupiter Namibia); and

(b) Jupiter Petroleum Juan de Nova Limited which was incorporated in the British Virgin Islands on 5 October 2006 (Jupiter Juan de Nova).

1.1 Namibian Project

The Namibian Project consists of an 85% participating interest in Petroleum Exploration Licence No. 0029 ("Licence") covering Offshore Blocks 1910B and 2010A in the Republic of Namibia issued on 3 December 2010. The Licence covers 11,730 square kilometres and is located in offshore Namibia in water depths ranging from 1,200 metres to 3,000 metres.

A reconnaissance grid of 1995 2D seismic data over both blocks is available for purchase and following completion of the acquisition of Jupiter, is expected to be one of the first steps taken by the Company in advancing the project. Preliminary examination suggests the presence of large structural highs and the presence of a significant Early Cretaceous and possibly older section beneath the main highs. Although only a few wells have been drilled in the area, they have established the presence of oil and gas-prone source rocks, good potential reservoirs and migrated hydrocarbons in the region, making this an attractive frontier play.

It is believed that the regional basin or basins were formed in response to thermal subsidence following the rifting preceding the separation of Africa from South America.

The Jupiter blocks lie adjacent to acreage held by Arcadia Petroleum Limited, whose partner Tower Resources recently announced encouraging estimates (from a Competent Person's Report) for finding hydrocarbons in one or more of their prospects.

To the north east of the Jupiter blocks, a well drilled last year by Sintezneftgaz (Nakor Investments) reportedly found a substantial gas column whilst Chariot Oil and Gas has recently announced the identification of new structures and increases in its estimates of gross unrisked mean prospective resources in its licences in offshore Namibia. Chariot has shot 3D seismic and also has a Competent Person's Report.

The Jupiter blocks represent one of the last remaining opportunities to participate in this prospective and active exploration province in this part of offshore Namibia.

The Licence is held jointly by Jupiter Namibia, the National Petroleum Corporation of Namibia (Pty) Ltd ("NAMCOR") and Bronze Investments Pty Ltd ("Bronze"). In addition to the Licence, Jupiter Namibia, NAMCOR and Bronze are parties to:

(a) a Petroleum Agreement dated 3 December 2010 between them and The Government of the Republic of Namibia ("Petroleum Agreement"); and

(b) a Joint Operating Agreement dated 6 December 2010 between them, pursuant to which they have agreed to hold their interests as a participating interest of 85% for Jupiter Namibia, and carried interests (carried through exploration) of 10% for NAMCOR and 5% for Bronze ("JOA").

In accordance with the terms of the Petroleum Agreement and JOA, the following minimum work and expenditure programme must be undertaken and funded by Jupiter:

(a) Initial Exploration Period (First Four Years of Licence):

Undertake geological, geochemical, geophysical and related studies and review all existing gravity and magnetic data, and other available information, including the purchase of existing relevant and reasonable quality seismic data and acquire, process and interpret a minimum of 1,000 kilometres of 2D seismic data. Minimum exploration expenditure for the Initial Exploration Period is US$1 million.

(b) First Renewal of Exploration Period (Two Years):

The drilling of one exploration well. Minimum exploration expenditure for the First Renewal Exploration Period is US$20 million.

(c) Second Renewal Period (Two Years):

Acquisition, processing and interpretation of additional seismic data (if necessary) and the drilling of one exploration well.

Minimum exploration expenditure for the Second Renewal Exploration Period is US$20 million, or US$21 million if new seismic is required.

Please refer to section 3 below for a summary of the key risks associated with the Namibian Project.

1.2 Juan de Nova Project

Jupiter Juan de Nova has a 30% interest in the Juan de Nova Est Permit which was issued by the French Government in December 2008. The Permit covers approximately 9,010 square kilometres and is situated to the east of the small island of Juan de Nova in the Mozambique Channel, immediately to the west of Madagascar.

The permit lies within the exclusive economic zone surrounding Juan de Nova which is under French control. The remainder of the exclusive economic zone is covered by a permit operated by Roc Oil (Madagascar) Pty Ltd which is immediately to the west of Juan de Nova Est.

Water depths range from 200 metres to approximately 1,500 metres, with at least half of the permit lying in shallow water on the continental shelf of the island of Madagascar. The shallow water shelf area is probably underlain by late Paleozic and early Mesozoic rocks, mainly sandstone and shales with interbedded volcanics, whilst the deeper water areas are probably underlain by younger rocks of late Mesozoic and Tertiary age, whose lithology is unknown.

No systematic petroleum exploration has taken place around Juan de Nova and this area is considered to be a frontier province.

Wessex Exploration PLC is the operator and 70% interest holder in the Juan de Nova Est Permit. The current term of the exploration permit runs to 31 December 2013 with three phases of exploration and a production period of 25 years for any discovery made. The work obligations for the current term of the exploration permit include geologic studies, seismic acquisition and reprocessing and a commitment to drill one well with a contingency for a second well. The total financial commitment for this period is €8.38 million.

Wessex has engaged an agent to assist in finding a partner who is willing to earn into the Juan de Nova Est Permit by funding exploration activities. Jupiter's interest in the Juan de Nova Est Permit would be part of any farmout arrangement.

Preliminary work undertaken on the permit to date has included an assessment of the available data and an extensive review of literature on the North Morondava Basin in which the permit lies.

Please refer to section 3 below for a summary of the key risks associated with the Juan de Nova Project.

2. Material Terms of the Acquisition

2.1 Share Purchase Agreement

Pursuant to the Share Purchase Agreement, the Company has agreed to purchase 100% of the issued share capital of Jupiter, in consideration for issuing the Vendors 25,000,000 ordinary shares in the Company on completion.

The Company has loaned A$251,000 to Jupiter to assist in meeting bank guarantee requirements and other license payments for the Namibian petroleum licence whilst the Company performed an initial assessment of Jupiter and its assets and undertook preliminary due diligence.

Prior to completion and upon receipt of suitable documentation, the Company will also reimburse the Vendors for any actual costs incurred in connection with obtaining the licence and other reasonable costs in connection with the agreement, anticipated to be in the order of £250,000 (A$400,000). In accordance with the terms of the loan agreement between the Company and Jupiter, these amounts will be fully repayable to the Company in the event that the transaction does not complete.

In order to ensure that Jupiter can commit to and meet the work program for the Namibian Project, it may be necessary for the Company to loan additional funds to Jupiter prior to completion. This is expected to include the acquisition of seismic data which is anticipated to cost approximately US$640,000 (A$610,000) and will enable Jupiter to secure and schedule technical services and studies for the initial exploration period. Any additional funds loaned to Jupiter will be on the same terms and conditions as the original loan and will be fully repayable to the Company in the event that the transaction does not complete.

2.2 Conditions Precedent

The Share Purchase Agreement is subject to the following conditions precedent:

(a) The Company completing due diligence investigations, including confirmation of title of the Licence and Juan de Nova Est Permit, and due diligence on the Petroleum Agreement, Jupiter and its subsidiaries. As at the date of this Notice, the Company is continuing to undertake due diligence investigations. The Company expects to have completed its due diligence investigations by 31 August 2011 (or another later date agreed by the parties to the Share Purchase Agreement).

(b) The Company and/or the Vendors obtaining all consents, approvals, waivers or authorisations from any governmental authority or third parties necessary to give effect to the transaction. The Company announced on 8 June 2011 that it had received notification from the Namibian Competition Commission approving the acquisition of Jupiter for the purposes of the Namibian Project. As at the date of this Notice, the Company expects to have been granted all required consents, approvals, waivers or authorisations (if any) by 31 August 2011 (or another later date agreed by the parties to the Share Purchase Agreement).

(c) The independent expert concluding that the transaction is fair and reasonable to the Company's shareholders. This condition precedent has been satisfied.

(d) The independent directors of the Company making an announcement containing a statement that, having consulted with the Company's nominated adviser, they consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned. This condition precedent has been satisfied by the release of this announcement .

(e) The Company's shareholders passing a resolution as required under the Listing Rules, the Company's constitution and the Corporations Act to give effect to the transaction. This condition will be satisfied if Resolution 1 is passed.

If the conditions precedent are not satisfied by 31 August 2011 (extended from 30 June 2011) or a later date as agreed by the parties to the Share Purchase Agreement, then the acquisition of Jupiter will not proceed and the Share Purchase Agreement will terminate.

2.3 Warranties

Both the Company and the Vendors have provided normal commercial warranties in relation to the acquisition.

3. Advantages, Disadvantages and Risk Factors of the Acquisition

3.1 Advantages of Acquisition

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on Resolution 1:

(a) The acquisition of Jupiter will enable the Company to participate in the prospective and active exploration province of offshore Namibia and position itself as an African focused oil and gas explorer. Global will be able to increase its value if it is able to achieve exploration success attributed to Jupiter's exploration assets.

(b) Global's operations will not be affected by the acquisition of Jupiter as the Vendors do not intend to change the business, redeploy fixed assets or change significantly Global's existing policies in financial matters.

(c) The acquisition of Jupiter is consistent with Global's strategy of actively seeking projects in Africa that will add shareholder value in the long term.

3.2 Disadvantages of Acquisition

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote of Resolution 1:

(a) Should the Share Purchase Agreement be completed, the Company's Shareholders will have their voting powers reduced. As such, the ability of the existing Shareholders to influence decisions, including the composition of the Board or the acquisition or disposal of assets will be reduced accordingly.

(b) Following the issue of the Shares as the consideration under the Share Purchase Agreement, Mr Peter Taylor and Mr Peter Blakey will remain the two largest shareholders of the Company. In this scenario, Mr Taylor and Mr Blakey may have the ability to significantly influence or control the Company.

(c) More shares on issue in the Company may result in greater volatility.

3.3 Risk Factors

The Company is in the process of completing due diligence with respect to the acquisition of Jupiter, however it should be noted that the usual risks associated with companies undertaking exploration and development activities in the resources sector in Namibia and Juan de Nova, still remain notwithstanding this due diligence process.

A summary of the risk factors of the acquisition of Jupiter and the Namibian Project and Juan de Nova Project are in Schedule 2 of the Notice. The key risks include:

(a) the nature of Jupiter's interests in the Namibian Project and Juan de Nova Project exist pursuant to a mixture of licences and joint bidding or operating agreements and related documents and are therefore partly contractual in nature, rather than absolute and sole legal title. (see section 5 of Schedule 2 of the Notice);

(b) the obligations of Jupiter in respect of the licences and agreements, including joint and several liability, and reliance on third parties to observe contractual obligations (see section 6 and 7 of Schedule 2 of the Notice);

(c) sovereign risks associated with the Namibian Project and the Juan de Nova Project; (see sections 1, 2 and 8 of Schedule 2 of the Notice) and

(d) the risks associated with exploration and development of the Namibian Project and the Juan de Nova Project, including the risks associated with offshore deep water drilling (see sections 10 and 11 of Schedule 2 of the Notice).

6. Independent Experts Report

The Directors who do not have an interest in the transaction resolved to appoint BDO Corporate Finance (WA) Pty Ltd ("BDO") as an independent expert and commissioned it to prepare a report to provide an opinion as to whether or not the proposal in Resolution 1 is fair and reasonable to the existing Shareholders.

What is fair and reasonable must be judged by the independent expert in all the circumstances of the proposal. This requires taking into account the likely advantages to shareholders if the proposal is approved and comparing them with the disadvantages to them if the proposal is not approved.

BDO has concluded that the proposed transaction is fair and reasonable to the existing Shareholders.

The Company strongly recommends that shareholders read the Independent Expert's Report in full, a copy of which is set out in Annexure A to the Explanatory Memorandum.

7. Corporations Act, Listing Rules and Regulatory Information

7.1 Section 611 Corporations Act

(a) Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the issued voting shares of the Company if, because of the acquisition, that person's or another person's voting power in the Company increases from:

(i) 20% or below to more than 20%; or

(ii) a starting point that is above 20% and below 90%.

(b) The voting power of a person in the Company is determined by reference to section 610 Corporations Act. A person's voting power in the Company is the total of the votes attaching to the Shares in the Company in which that person and that person's associates (within the meaning of the Corporations Act) have a relevant interest.

(c) Under section 608 Corporations Act a person will have a relevant interest in Shares if:

(i) the person is the registered holder of the Shares;

(ii) the person has the power to exercise or control the exercise of votes or disposal of the Shares; or

(iii) the person has over 20% of the voting power in a company that has a relevant interest in Shares, then the person has a relevant interest in said Shares.

(d) For the purpose of determining who is an associate you need to consider section 12 of the Corporations Act. Any reference in chapters 6 to 6C of the Corporations Act to an associate is as that term is defined in section 12. The definition of 'associate' in section 12 is exclusive. If a person is an associate under section 11, 13 or 15 of the Corporations Act then it does not apply to chapters 6 to 6C. A person is only an associate for the purpose of chapter 6 to 6C if he is an associate under section 12.

(e) A person (second person) will be an associate of the other person (first person) if:

(i) the first person is a body corporate and the second person is:

(A) A body corporate the first person controls;

(B) A body corporate that controls the first person: or

(C) A body corporate that is controlled by an entity that controls the first person;

(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the board of a body corporate or the conduct of the affairs of a body corporate; and

(iii) the second person is a person with whom the first person is acting or proposes to act, in concert in relation to the affairs of a body corporate.

(f) The Corporations Act defines 'control' and 'relevant agreement' very broadly as follows:

(i) Under section 50AA of the Corporations Act control means the capacity to determine the outcome of decisions about the financial and operating policies of the Company. In determining the capacity you need to take into account the practical influence a person can exert and any practice or pattern of behaviour affecting the financial or operating policies of the Company.

(ii) Under section 9 of the Corporations Act relevant agreement means an agreement, arrangement or understanding:

(A) whether formal or informal or partly informal and partly informal;

(B) whether written or oral or partly written and partly oral; and

(C) whether or not having legal or equitable force and whether or not based on legal or equitable rights.

(g) Associates are determined as a matter of fact. For example where a person controls or influences the Board or the conduct of the Company's business affairs, or acts in concert with a person in relation to the entity's business affairs.

(h) Section 611 of the Corporations Act has exceptions to the prohibition in section 606 of the Corporations Act. Item 7 of section 611 of the Corporations Act provides a mechanism by which Shareholders may approve an issue of Shares to a person which results in that person's or another person's voting power in the Company increasing from:

(i) 20% or below to more than 20%; or

(ii) a starting point that is above 20% and below 90%.

(i) To comply with the requirements of the Corporations Act (as contained in ASIC Regulatory Guide 74), the Company provides the information in section 8 of the Explanatory Memorandum to Shareholders in relation to Resolution 1.

7.2 Information required by item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74

The information that Shareholders require under item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74 is included in section 8 of the Explanatory Memorandum.

7.3 Listing Rule 10.10

ASX Listing Rule 10.10 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval for the Acquisition:

(a) A voting exclusion statement is included in the Notice.

(b) A report on the Acquisition from an independent expert is included in Annexure A to this Explanatory Memorandum. BDO has concluded that the proposed transaction is fair and reasonable to the non associated Shareholders.

7.4 Listing Rule 10.13

ASX Listing Rule 10.13 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval for the issue:

(a) 25,000,000 Shares will be issued to the following directors of the Company as follows:

Name of Director Number of Shares to be issued

Mr Peter Blakey 12,500,000

Mr Peter Taylor 12,500,000

(b) The Company will issue the Completion Shares on completion of the Share Purchase Agreement which will be no later than one month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).

(c) The Consideration Shares will be issued to the Vendors as consideration for purchasing 80,000 shares in Jupiter. The Consideration Shares will be quoted on ASX and will be subject to a 12 month trading lock from the date of issue.

(d) Mr Peter Blakey and Mr Peter Taylor have an interest in Resolution 1 under which the Shares will be issued and therefore believe it inappropriate to make a recommendation.

(e) A voting exclusion statement is included in the Notice.

(f) No funds will be raised by the issue of the Shares as they are being issued as consideration for purchasing 100% of the issued share capital of Jupiter.

8. Director's Recommendation

Based on the information available, including:

(a) the information contained in the Explanatory Memorandum;

(b) the Independent Expert's Report, including the advantages and disadvantages of approving the transaction outlined; and

(c) the Company having consulted in writing with it's nominated advisor, Northland Capital Partners Limited, in accordance with AIM Rule 13,

the Directors who do not have an interest in the transaction contemplated by Resolution 1 consider that Resolution 1 is fair and reasonable insofar as shareholders are concerned in the best interests of the Company and recommend that Shareholders vote in favour of Resolution 1.

B. Authority to Grant Incentive Options to a Director - Mr Clint McGhie

1. Grant of Incentive Options

On 13 May 2011, the Company advised that it had agreed, subject to Shareholder approval, to grant up to 400,000 $0.25 incentive options, including 300,000 incentive options to Mr Clint McGhie, Non-Executive Director and Company Secretary. The remaining incentive options will be issued to key consultants of the Company. Resolution 2 seeks approval to grant the incentive options to Mr Clint McGhie and Resolution 3 seeks approval to grant incentive options to key consultants of the Company.

Resolution 2 seeks Shareholder authority pursuant to Listing Rule 10.11 and Chapter 2E of the Corporations Act for the Company to grant a total of 300,000 Incentive Options to Mr Clint McGhie (or his nominee) who is a Director.

2. Listing Rule 10.11 and Section 208 of the Corporations Act

Shareholder approval is required under ASX Listing Rule 10.11 and section 208 of the Corporations Act because Mr McGhie is a Director and therefore a related party of the Company. Furthermore, Shareholder approval of the grant of the McGhie Incentive Options means that this issue will not reduce the Company's 15% placement capacity under ASX Listing Rule 7.1.

3. Specific Information Required by Listing Rule 10.13 and section 219 of the Corporations Act

For the purposes of Listing Rule 10.13 and section 219 of the Corporations Act information regarding the McGhie Incentive Options is provided as follows:

(a) 300,000 Incentive Options will be issued to Mr Clint McGhie (or his nominee), who is a related party of the Company;

(b) The Company will issue the Incentive Options to Mr McGhie no later than one month after the date of the General Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of Listing Rule 10.13.3);

(c) Mr McGhie commenced as a Non-Executive Director and Company Secretary of the Company on 1 June 2010.

Mr McGhie gained a Bachelor of Commerce degree from the University of Western Australia and is a member of the Institute of Chartered Accountants, the Institute of Chartered Secretaries and the Financial Services Institute of Australasia. He commenced his career with an international Chartered Accounting firm and has since worked in the role of Company Secretary and Chief Financial Officer for a number of listed companies that operate in the resources and energy sectors.

Mr McGhie plays a key role in the financial and corporate administration of the Company.

This proposed grant of Incentive Options was announced on 12 May 2011. The average closing price of the Company's Shares during the twenty trading days up to the date of this announcement was $0.248.

The Company is small listed company, which is focussed on exploration and development activities and acquisition of new business opportunities. The Company has limited funds, most of which are allocated to specific exploration and development activities. The Board has chosen to issue incentive securities to Mr McGhie as a key component of his remuneration in order to attract and retain his services and to provide incentive linked to the performance of the Company. The Board considers that Mr McGhie's experience will greatly assist the Company. As such, the Board believes that the number of Incentive Options to be granted to Mr McGhie is commensurate to his value to the Company.

There are no additional performance criteria on the Incentive Options. Given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of the Directors and the performance and value of the Company are closely related.

(d) It is noted that the granting of Options to Mr McGhie as a non-executive director is contrary to ASX Corporate Governance Guideline 8.3. However, for the reasons outlined in paragraph (c), the other Directors still consider the granting of Options in these circumstances to be appropriate and accordingly, Shareholder approval is sought to grant these Options.

(e) In addition to the Incentive Options to be issued in accordance with Resolution 2, Mr McGhie receives directors fees of $45,000 per annum plus compulsory superannuation contributions in his capacity as a non-executive director. In addition, Mr McGhie may provide services to the Company as a consultant.

(f) Mr McGhie is entitled to reimbursement of all reasonable travelling, accommodation and other expenses that a Director or alternate Director properly incurs in attending meetings of Directors or any meetings of committees of Directors, in attending any meetings of members and in connection with the business of the Company. Other than as set out in this Notice, Mr McGhie does not receive any other emoluments.

(g) Mr McGhie provides services as the Company's Company Secretary through a services agreement with Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd provides administrative, company secretarial and accounting services, and the provision of a fully serviced Australian office to the Company for a monthly retainer of $19,000. Mr McGhie is an employee of Apollo Group Pty Ltd.

(h) The Incentive Options will be granted for nil consideration.

(i) Upon exercise of the Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares.

(j) Each $0.25 Incentive Option entitles the holder to subscribe for one Share at an exercise price of $0.25, exercisable from the date of issue until the Expiry Date. The Incentive Options will not be quoted on ASX. Further terms and conditions of the Incentive Options are detailed in Schedule 5 of the Notice.

(k) The Company will issue the Incentive Options no later than one month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).

(l) Mr McGhie has an interest in this Resolution under which Incentive Options will be issued to him and will not make a recommendation. In relation to the Incentive Options. Each other Director has no interest in the outcome of the grant of Incentive Options and is in favour of the Resolution.

(m) Other than the Incentive Options the subject of this Resolution 2, Mr McGhie currently has no interest in any securities of the Company:

(n) The Board has received independent advice on the value of the Incentive Options and determined on the basis of the assumptions set out below the technical value of one Option is as follows:

(o) This valuation imputes a total value of $40,800 to the Incentive Options. The value may go up or down after the date of valuation as it will depend on the future price of a Share. The Black Scholes Pricing Model has been used to value the Incentive Options, with the following assumptions:

(i) the risk free rate of 4.84% is the Reserve Bank of Australia's 3-year bond rate;

(ii) the underlying security spot price of $0.24 used for the purposes of this valuation is based on the share price of the Company on the day of the report;

(iii) the estimated volatility used in the option valuation is 85%;

(iv) for the purposes of the valuation, no future dividend payments have been forecast; and

(v) for the purposes of the valuation it is assumed that the Incentive Options will be issued on date of the valuation, 7 June 2011, and the Incentive Options will have a life of 3.06 years from the commencement date.

(p) If the Shareholders approve the proposed grant of Incentive Options under this Resolution, the exercise of those Incentive Options will result in a dilution of all other Shareholders' holdings in the Company of 0.2% based on issued Shares as at the date of this Notice.

(q) Under the accounting standard AASB 2 Share based Payments; the Company will recognise an expense in the income statement on the date of issue of the fair value of the options. The total of the fair value of the Incentive Options issued is $40,800 at the date of the notice of meeting.

(r) The market price of Shares would normally determine whether Mr McGhie will exercise the Incentive Options or not. If the Incentive Options are exercised at a price that is lower than the price at which Shares are trading on ASX, there may be a perceived cost to the Company.

(s) Historical quoted price information for the Company's listed securities for the last twelve months is as follows:

(t) No funds will be raised by the issue of the McGhie Incentive Options as they are being issued for nil consideration.

(u) Other than the information above and otherwise set out in this Explanatory Memorandum, the Company believes that there is no other information that would be reasonably required by Shareholders to pass Resolution 2.

(v) A voting exclusion statement is included in the Notice.

C. Authority to Grant Incentive Options to Key Consultants

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of the Consultant Incentive Options, to be granted at the discretion of the Directors to key consultants of the Company.

1. Listing Rule 7.1

Listing Rule 7.1 requires Shareholder approval for the issue of the Consultant Incentive Options. Listing Rule 7.1 provides that, subject to certain exceptions, Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

Although the grant of the Consultant Incentive Options under Resolution 3 would not result in the Company exceeding this 15% threshold, Shareholder approval has been sought by the Company pursuant to Listing Rule 7.1 to preserve its ability to use the 15% threshold exemption going forward.

Resolution 3 is an ordinary resolution.

2. Specific Information Required by ASX Listing Rule 7.3

For the purposes of Shareholder approval of the issue of the Consultant Incentive Options and the requirements of Listing Rule 7.3, information is provided as follows:

(a) The maximum number of securities the Company can grant under Resolution 3 is 100,000 Incentive Options exercisable at $0.25 each on or before 30 June 2014.

(b) The Incentive Options will be granted to key consultants and advisors of the Company who are not related parties of the Company or their associates, at the discretion of Directors.

(c) The Company will issue the Incentive Options no later than 3 months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).

(d) The Incentive Options will be granted for no consideration.

(e) The Incentive Options have an exercise price of $0.25 each and an expiry date of 30 June 2014. Further terms and conditions of the Incentive Options are detailed in Schedule 5 of the Notice.

(f) The grant of the Incentive Options will occur progressively.

(g) No funds will be raised from the granting of the Incentive Options as they are being granted for no consideration.

(h) Upon exercise of the Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares.

(i) A voting exclusion statement is included in the Notice.

D. Pro Forma Statement of Financial Position following acquisition of Jupiter

Basis of Preparation

The pro forma statement of financial position has been prepared in accordance with the draft ASIC Guide to Disclosing Pro-Forma Financial Information (issued July 2005). The pro forma statement of financial position is based on the unaudited statement of financial position at 31 March 2011 that has been adjusted to reflect the acquisition of Jupiter Petroleum Limited.

(a) As at 31 March 2011, the only assets of Jupiter are cash and the prospective exploration interests in offshore Namibia and in offshore Juan de Nova. Accordingly, the transaction has been treated as an asset acquisition in the pro-forma statement of financial position. For accounting purposes, the acquisition will be recognised at cost. The total cost of the acquisition is estimated to be A$7,414,102, comprising of the following:

a. 25,000,000 Shares with an estimated fair value of A$5,925,000, based on a value A$0.237 per Share as per section 9.4 of the Independent Expert Report, a copy of which is in Annexure A to the Explanatory Memorandum. On completion, the actual value will be determined by reference to the fair value of the equity instruments granted;

b. A$251,101 loaned to Jupiter in December 2010;

c. Reimbursement for any actual costs incurred by the Vendors in connection with obtaining the licence and other reasonable costs in connection with the agreement, anticipated to be in the order of £250,000 (A$400,000) including loans to Jupiter at 31 March 2011;

d. Estimated costs of A$228,000 associated with the acquisition; and

e. Additional loan to Jupiter prior to completion for the acquisition of seismic data for the Namibian Project which is anticipated to cost approximately US$640,000 (A$610,000).

The cost has been allocated to the following assets and liabilities of Jupiter on acquisition:

The pro forma statement of financial position above reflects the acquisition Jupiter for accounting purposes. This differs from the Statement of Financial Position in Section 10.1 of the Independent Experts Report which uses preferred values for the oil and gas and exploration assets rather than cost.

(b) The 400,000 Incentive Options to be granted under Resolutions 2 and 3 have been valued using the Binomial option pricing model. An expense of $54,400 has been recognised in Accumulated Losses and credited to Reserves.

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