ASX ANNOUNCEMENT ASX CODE: CTP TO: The Manager, … · TO: The Manager, Company Announcements ASX Limited RENOUNCEABLE RIGHTS ISSUE Central Petroleum Limited (“Central”) (ASX:CTP)

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ASX ANNOUNCEMENT ASX CODE: CTP 17 March 2010 TO: The Manager, Company Announcements ASX Limited

RENOUNCEABLE RIGHTS ISSUE

Central Petroleum Limited (“Central”) (ASX:CTP) is pleased to advise that its Entitlement Issue

Prospectus was lodged with ASIC earlier today. The $22.47 million issue is underwritten by

Patersons Securities Limited (“Patersons”) who have also been appointed Lead Manager to the

rights issue.

The renounceable rights issue offers one (1) new share for every two (2) shares held at the

record date at 7.5 cents per share together with one (1) free CTPO option (exercisable at 16

cents per option on or before 31 March 2014) for every five (5) new shares subscribed for to

raise $22.47 million.

The underwriting will involve the issue of approximately 60 million CTPO options to

underwriters.

The issue price represents a discount of approximately 29% to the volume weighted average

price of Central shares during the 30 trading day period. The capital raising was keenly sought

after by both Institutions, professional and sophisticated investors of Patersons in Australia.

A copy of the Entitlement Issue Prospectus and Appendix 3B is attached.

John Heugh Managing Director Central Petroleum Limited

Central Petroleum Limited Tel: +61 8 9474 1444

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CENTRAL PETROLEUM LIMITED

ABN 72 083 254 308

ENTITLEMENT ISSUE PROSPECTUS

For a pro rata renounceable entitlement issue of one (1) Share for every two (2) Shares held by Shareholders at an issue price of $0.075 per Share together with one (1) free New Option for every five (5) new Shares issued to raise approximately $22,468,970 (Offer) for the purpose of enabling the Company to independently fund its 2010 exploration programme and budget. A detailed outlined of the use of the funds raised under the Offer is outlined in Section 4.1 of this Prospectus.

The Offer is conditionally underwritten by Patersons Securities Limited (AFSL 239052). Refer to Section 7.2 for details regarding the terms of the Underwriting Agreement.

IMPORTANT NOTICE

This document is important and should be read in its entirety. If after reading this Prospectus you have any questions about the Securities being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser.

The Securities offered by this Prospectus should be considered as speculative.

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TABLE OF CONTENTS

1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES ....................................... 2

2. CORPORATE DIRECTORY .............................................................................................. 5

3. DETAILS OF THE OFFER .................................................................................................. 6

4. PURPOSE AND EFFECT OF THE OFFER ......................................................................... 11

5. RIGHTS AND LIABILITIES ATTACHING TO THE SHARES AND NEW OPTIONS ............... 16

6. RISK FACTORS ............................................................................................................ 19

7. ADDITIONAL INFORMATION ...................................................................................... 26

8. AUTHORITY OF DIRECTORS ......................................................................................... 41

9. DEFINITIONS ............................................................................................................... 42

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1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

TIMETABLE AND IMPORTANT DATES* Lodgement of Prospectus with ASIC and ASX 17 March 2010

Notice sent to Shareholders 19 March 2010

Ex Date (date on which Shares commence trading on an ex-rights basis)

29 March 2010

Rights trading commences 29 March 2010

Record Date for determining Shareholder entitlements 6 April 2010

Prospectus despatched to Shareholders 8 April 2010

Rights trading ceases 15 April 2010

Closing Date of Offer 22 April 2010

Securities quoted on a deferred settlement basis 23 April 2010

Notify ASX of under-subscriptions 27 April 2010

Despatch date/Shares entered into Shareholders’ security holdings

3 May 2010

* These dates are determined based upon the current expectations of the Directors and may be changed with 6 Business Days’ prior notice.

IMPORTANT NOTES

Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisors.

This Prospectus is dated 17 March 2010 and a copy of this Prospectus was lodged with the ASIC on that date. The ASIC and ASX take no responsibility for the content of this Prospectus.

The expiry date of the Prospectus is 16 April 2011 (Expiry Date). No Shares will be allotted or issued on the basis of this Prospectus after the Expiry Date.

Applications for Securities offered pursuant to this Prospectus can only be submitted on an original Entitlement and Acceptance Form which accompanies this Prospectus.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

The Offers to New Zealand investors are regulated offers made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act and the Corporations Regulations 2001. In New Zealand, this is Part 5 of the Securities Act 1978 and the Securities (Mutual Recognition of Securities Offerings – Australia) Regulations 2008.

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The Offer and the content of the Prospectus are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act sets out how the Offer must be made.

There are differences in how securities are regulated under Australian law.

The rights, remedies, and compensation arrangements available to New Zealand investors in Australian securities may differ from the rights, remedies, and compensation arrangements for New Zealand securities.

Both the Australian and New Zealand securities regulators have enforcement responsibilities in relation to the Offer. If you need to make a complaint about the Offer, please contact the Securities Commission, Wellington, New Zealand. The Australian and New Zealand regulators will work together to settle your complaint.

The taxation treatment of Australian securities is not the same as for New Zealand securities.

If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser.

The Offer may involve a currency exchange risk. The currency for the Securities is not New Zealand dollars. The value of the Securities will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the Securities to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars.

As noted in the Prospectus at Section 3.7, the Company will apply to the ASX for quotation of the Shares and New Options offered under this Prospectus. If quotation is granted, the Shares and New Options offered under this Prospectus will be able to be traded on the ASX. If you wish to trade the Shares and/or New Options through that market, you will have to make arrangements for a participant in that market to sell the Securities on your behalf. As the ASX does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the securities and trading may differ from securities markets that operate in New Zealand.

No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

KEY RISKS

The key risks associated with an investment in the Company are outlined in Section 6. A summary of some of the key risks include:

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(a) Joint Venture Operations

The Company is actively involved in various farm-out and farm-in agreements and associated joint venture operating agreements. Under these various agreements, the Company may be voted into expenditure programmes and budgets which it does not necessarily agree with or have the cash resources to fund. Furthermore, the situation could arise where any or all of the joint venture parties are unable to fund their pro-rata contributions to expenditure in which case the Company may have to make increased contributions to ensure that the programme succeeds.

(b) Operating risks

The Company’s operations are subject to various operational risks including general geological and mechanical risks associated with exploration and specific weather or climate risks associated with the areas where the Company’s operations are located.

A detailed list of the risks associated with an investment in the Company, including risks related to the Company’s business and operations is outlined in Section 6 of this Prospectus. Investors are encouraged to consider the matters outlined in Section 6 when deciding whether to make an investment in the Company.

ELECTRONIC PROSPECTUS

Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian or New Zealand resident and must only access the Prospectus from within Australia or New Zealand.

The Corporations Act prohibits any person passing onto another person an Entitlement and Acceptance Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

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2. CORPORATE DIRECTORY

*This party has been included for information purposes only. It has not been involved in the preparation of this Prospectus.

Directors

Henry Jan Askin Non-Executive Chairman

John Heugh Managing Director

Richard Waddy Faull Non-Executive Director

William John Dunmore Non-Executive Director

Company Secretaries

Daniel Christopher Matthew White Bruce William Elsholz

Registered Office

Southshore Centre Level 4, Suite 3 85 The Esplanade SOUTH PERTH WA 6951 Telephone: (08) 9474 1444

Underwriter

Patersons Securities Limited Level 23, Exchange Plaza 2 The Esplanade PERTH WA 6000

Share Registry*

Computershare Investor Services Pty Limited Level 2 45 St Georges Terrace PERTH WA 6000 Telephone: 1300 55 70 10 Solicitors

Steinepreis Paganin Lawyers and Consultants Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

Auditor

Stantons International 1st Floor 1 Havelock Street WEST PERTH WA 6005

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3. DETAILS OF THE OFFER

3.1 Offer

By this Prospectus, the Company offers for subscription approximately 299,586,259 new Shares and 59,917,252 New Options pursuant to a pro-rata renounceable entitlement issue to Shareholders of one (1) new Share for every two (2) Shares held on the Record Date at an issue price of $0.075 per Share together with one (1) New Option for every five (5) new Shares issued. Fractional entitlements will be rounded up to the nearest whole number.

Based on the capital structure of the Company (and assuming no existing Options are exercised prior to the Record Date), the maximum number of Shares and New Options to be issued pursuant to the Offer is approximately 299,586,259 new Shares and 59,917,252 New Options. The Offer will raise approximately $22,468,970. The purpose of the Offer and the use of funds raised are set out in Section 4 of this Prospectus.

Holders of existing Options will not be entitled to participate in the Offer. The Company currently has 310,637,332 Options on issue as at the date of this Prospectus, which Options may be exercised by the Option holder prior to the Record Date in order to participate in the Offer.

In addition to the New Options to be issued pursuant to the Offer, the Company has agreed to issue 59,917,252 Sub-Underwriter Options on the same terms and conditions as the New Options to the sub-underwriters on the basis of one (1) Sub-Underwriter Option for every five (5) Shares subscribed for by the sub-underwriters. Refer to Section 7.2.3 for further details of the Sub-Underwriter Options. The Sub-Underwriter Options will be issued in addition to the New Options issued as part of the Offer.

3.2 Rights Trading

Entitlements to Shares pursuant to the Offer are renounceable and accordingly, rights will be traded on ASX. Details on how to sell your rights are set out in Section 3.3 below.

3.3 How to Accept the Offer

Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Prospectus. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

You may participate in the Offer as follows:

(a) if you wish to accept your Entitlement in full:

(a) complete the Entitlement and Acceptance Form, filling in the details in the spaces provided; and

(b) attach your cheque for the amount indicated on the Entitlement and Acceptance Form; or

(b) if you only wish to accept part of your Entitlement:

(c) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and

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(d) attach your cheque for the appropriate application monies (at $0.075 per Share);

(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

Alternatively, you can trade your Entitlement rights as follows:

(a) to sell any or all of your Entitlement you will need to instruct a stockbroker to sell the Entitlement rights which you wish to renounce. If you wish to do so you must instruct your stockbroker by completing the panel headed “Instructions to your Stockbroker” on the back of the Entitlement and Acceptance Form and lodge that form with your stockbroker. Your stockbroker must sell those rights before the rights trading ceases; or

(b) if you wish to transfer all or part of your rights to another person other than on ASX you must forward a completed renunciation form (which you can obtain by contacting the Share Registry) together with the Entitlement and Acceptance Form.

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “Central Petroleum Limited – Entitlement Offer Account” and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form and cheque must reach the Company’s share registry no later than 5.00pm WST on the Closing Date.

Please note that all payments using the Bpay payment option must be received by 4.00pm (WST) on the Closing Date. Applicants paying by Bpay should follow the instructions on their Entitlement and Acceptance Form.

3.4 Minimum Subscription

The minimum subscription in respect of the Offer is $22,468,970.

3.5 Underwriting

The Offer is conditionally underwritten by Patersons Securities Limited (AFSL 239052).

Refer to Section 7.2 of this Prospectus for further details of the terms of the underwriting.

3.6 Shortfall

If you do not wish to take up any part of your Entitlement or trade your Entitlement rights under the Offer, you are not required to take any action. That part of your Entitlement not taken up or traded will form part of the Shortfall. The Directors reserve the right to issue Shortfall Shares and Options at their absolute discretion in consultation with the Underwriter pursuant to the terms of the Underwriting Agreement.

The offer of any Shortfall Shares and Shortfall Options is a separate offer made pursuant to this Prospectus and will remain open after the Closing Date. The issue price of any Shortfall Shares shall be $0.075 being the price and terms at which the Entitlement has been offered to Shareholders pursuant to this Prospectus. For every five (5) Shortfall Shares issued, the Company will also issue one (1) Shortfall

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Option. The Company reserves the right to allot to an applicant a lesser number of Shortfall Shares and Shortfall Options than the number for which the applicant applies, or to reject an application, or to not proceed with placing the Shortfall, subject to the consultation with the Underwriter.

3.7 Australian Securities Exchange Listing

Application for official quotation by ASX of the Shares and New Options offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Prospectus, (or such period as modified by the ASIC), the Company will not issue any Shares and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant official quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

3.8 Allotment of Securities

Securities issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date. The Company will allot the Securities on the basis of a Shareholder’s Entitlement. Where the number of Securities issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the applicant as soon as practicable after the Closing Date.

Pending the allotment and issue of the Securities or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

3.9 Overseas Shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Securities these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and Securities will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to exercise their Entitlements under the Offer.

Pursuant to ASX Listing Rule 7.7, the Company has lodged an application with the ASIC to have Patersons Securities Limited (AFSL 239052) appointed as the Nominee to sell the Entitlements to which non-qualifying foreign shareholders are entitled. The net proceeds (if any) of the sale of each Entitlement will then be forwarded by the Company’s share register as soon as practicable to the non-

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qualifying foreign shareholders. There can be no guarantee that a market for the Entitlement of non-qualifying shareholders will exist and the Nominee is under no obligation to take up any Entitlement for which it is unable to find a qualified buyer. The Nominee will have the absolute and sole discretion to determine the timing and the price at which the Entitlements may be sold and the manner in which any sale is made.

Neither the Company nor the Nominee will be liable for a failure to sell Entitlements or to sell Entitlements at any particular price.

3.10 Taxation Implications

The Directors do not consider that it is appropriate to give Applicants advice regarding the taxation consequences of applying for Securities under this Prospectus, as it is not possible to provide a comprehensive summary of the possible taxation consequences. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to Applicants. Potential Applicants should, therefore, consult their own professional tax adviser in connection with the taxation implications of the Securities offered pursuant to this Prospectus.

3.11 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share certificates. The Company will apply to ASX to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of Shares and Options allotted to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

3.12 Privacy Act

If you complete an application for Shares, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

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Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASTC Settlement Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

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4. PURPOSE AND EFFECT OF THE OFFER

4.1 Purpose of the Offer

The purpose of the Offer is to raise approximately $22,468,970 (before expenses). The proceeds of the Offer are planned to be used in accordance with the table set out below:

Additional funding required for a 3 well drilling programme in EP82 and EP115

$18,100,000

2010 Geology and Geophysics work programme $2,500,000

Lead Manager and Underwriting Fees $1,627,894

Working capital $189,076

Expenses of the Offer $52,000

Total $22,468,970

Notes:

1. The above use of proceeds is based on the “worst case” assumption that no further funding is received from any joint venture participant. The Company has previously announced to ASX that it intends undertaking new drilling programmes at its projects in the Amadeus Basin in 2010. The funds raised are intended to be used to complete the drilling programme by the Company in the event that its joint venture partners in the various projects either fail to, or elect not to contribute to the cash costs associated with those drilling programmes.

2. The Company’s estimated available cash excluding the issue proceeds and at the end of the current Phase One programme of five (5) CSG wells and 1,380kms of seismic will be approximately $7.5 million. This will accommodate $4 million of corporate overheads for at least twelve months and provide surplus funds to devote to additional drilling such as a well planned for the Simpson Prospect Block of EP97.

3. Refer to Section 7.6 of this Prospectus for further details relating to the estimated expenses of the Offer.

4.2 Effect of the Offer and Pro Forma Consolidated Balance Sheet

The principal effect of the Offer will be to (assuming the Offer is fully subscribed):

(a) increase the cash reserves by approximately $20,789,076 immediately after completion of the Offer after deducting the estimated expenses of the Offer; and

(b) increase the number of Shares on issue from 599,172,518, to approximately 898,758,777 Shares following completion of the Offer; and

(c) increase the number of Options on issue from 310,637,332, to approximately 430,471,836 Options following completion of the Offer and issue of the Sub-Underwriter Options.

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4.3 Consolidated Balance Sheet

The audit reviewed Balance Sheet as at 31 December 2009 and the unaudited Pro Forma Balance Sheet as at 31 December 2009 shown on the following page have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. They have been prepared on the assumption that all Shares and Options pursuant to the Offer in this Prospectus are issued.

The audit reviewed Balance Sheets have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

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Consolidated Balance Sheet and Pro Forma Balance Sheet as at 31 December 2009 (audit reviewed)

PRO-FORMA 31 December

2009 Effect of Pro-forma

CONSOLIDATED BALANCE SHEET Entitlement

Issue 31 December

2009

as at 31 December 2009 $ $

CURRENT ASSETS

Cash and cash equivalents 33,161,370 20,789,076 53,950,446

Trade and other receivables 3,225,767 3,225,767

Inventory 774,033 774,033

TOTAL CURRENT ASSETS 37,161,170 20,789,076 57,950,246

NON-CURRENT ASSETS

Property, plant and equipment 449,238 449,238

Exploration assets 10,211,058 10,211,058

Other financial assets 949,054 949,054

TOTAL NON-CURRENT ASSETS 11,609,370 - 11,609,350

TOTAL ASSETS 48,770,520 20,789,076 69,559,596

CURRENT LIABILITIES

Trade and other payables 6,098,200 6,098,200

Provisions 122,825 122,825

TOTAL CURRENT LIABILITIES 6,221,025 - 6,221,025

NON-CURRENT LIABILITIES

Provisions 32,079 32,079

TOTAL NON-CURRENT LIABILITIES 32,079 - 32,079

TOTAL LIABILITIES 6,253,104 - 6,253,104

NET ASSETS 42,517,416 20,789,076 63,306,492

EQUITY

Issued capital 71,405,080 20,789,076 92,194,156

Share options reserve 6,568,660 6,568,660

Accumulated losses (35,456,324) (35,456,324)

TOTAL EQUITY 42,517,416 20,789,076 63,306,492

Notes:

1. On 22 January 2010, the Company announced that it had issued $1,000,000 in convertible bonds under its convertible bond facility. At the date of this Prospectus, 50 bonds ($500,000) had been converted into ordinary shares in the Company as previously announced on 4 March 2010. At the date of this Prospectus, the bonds have not been fully converted into Shares in the Company. Conversion of the remaining $500,000 will result in a further issue of a maximum of 6,666,667 Shares in the Company

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assuming an issue price of $0.075 per Share, being the minimum conversion price of the convertible bonds.

2. Terrex Seismic has completed a total of 430km of high quality 2D seismic out of a total Phase One programme of 1,380 km. The acquisition of seismic over the Johnstone, Surprise, Stuart and North West Mereenie oil prospects within EP 115 has been completed as well as the Pararra seismic survey within EP 112 and EP 118. Preliminary interpretation has indicated robust closure over all of the oil prospects named within EP 115 and the seismic over Pararra and North West Mereenie is still being processed.

The third well in the planned 5 well CSG programme, CBM 107-001 reached Total Depth on 23 February 2010. The fourth well CBM 107-002 has been delayed by excessive rainfall in the region.

4.4 Effect on Capital Structure

A comparative table of changes in the capital structure of the Company as a consequence of the Offer is set out below, assuming that the Offer is fully subscribed and on the basis of the capital structure as at the date of lodgement of this Prospectus.

Shares

Number

Shares on issue at date of Prospectus 599,172,518

Shares offered pursuant to the Offer 299,586,259

Total Shares on issue after completion of the Offer1 898,758,777

Notes:

1. The Company currently has on issue convertible bonds totalling $1,000,000, which convertible bonds may be converted by the bond holder for Shares. At the date of this Prospectus, 50 bonds ($500,000) had been converted into ordinary shares in the Company as previously announced on 4 March 2010. In the event that the convertible bond holder elects to convert the remaining 50 bonds ($500,000), the Company will be required to issue up to a maximum of 6,666,667 new Shares assuming an issue price of $0.075 per share, being the minimum conversion price of the convertible bonds, which will increase the Shares on issue as at the Record Date to 905,425,444 Shares.

Options

Number

Listed exercisable at $0.16 on or before 31 March 2014 153,506,297

Listed exercisable at $0.25 on or before 30 June 2010 95,947,703

Unlisted exercisable at $0.20 on or before 31 May 2010 21,250,000

Unlisted exercisable at $0.20 on or before 20 February 2011 7,000,000

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Unlisted exercisable at $0.30 on or before 30 November 2010

1,800,000

Unlisted exercisable at various prices on or before 3 January 2012

11,000,000

Unlisted exercisable at $0.30 on or before 31 March 2011 1,450,000

Unlisted exercisable at $0.33 on or before 31 July 2011 200,000

Unlisted exercisable at $0.30 on or before 31 August 2011 500,000

Unlisted exercisable at $0.25 on or before 17 November 2011

666,666

Unlisted exercisable at $0.25 on or before 19 January 2012 1,000,000

Unlisted exercisable at $0.25 on or before 16 February 2012 250,000

Unlisted exercisable at $0.25 on or before 23 February 2012 200,000

Unlisted exercisable at various prices on or before 31 March 2014

7,500,000

Unlisted exercisable at $0.20 on or before 31 March 2014 8,366,666

New Options offered pursuant to the Offer 59,917,252

New Sub-Underwriter Options 59,917,252

Total Options on issue after completion of the Offer1 430,471,836

Notes:

1. In addition to the New Options to be issued pursuant to the Offer, the Company has agreed to issue 59,917,272 Sub-Underwriter Options on the same terms and conditions as the New Options to the sub-underwriters on the basis of one (1) Sub-Underwriter Option for every five (5) Shares subscribed for by the sub-underwriters. The Sub-Underwriter Options issued to the sub-underwriters will be issued in addition to the New Options that will be issued under the Offer and the Shortfall Offer. The Sub-Underwriter Options will be issued for nil consideration. Refer to Section 7.2.4 for further details of the Sub-Underwriter Options.

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5. RIGHTS AND LIABILITIES ATTACHING TO THE SHARES AND NEW OPTIONS

5.1 Terms of Shares

The following is a summary of the more significant rights and liabilities attaching to Shares and New Options to be issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in the Company’s Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

5.1.1 General Meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution of the Company.

5.1.2 Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

(a) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

(b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

(c) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for each Share held, but in respect of partly paid shares shall have a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue price for the share.

5.1.3 Dividend Rights

The Directors may from time to time declare and pay or credit a dividend in accordance with the Corporations Act. Subject to any special right as to dividends attaching to a share, all dividends will be declared and paid according to the proportion which the amount paid on the Share is to the total amount payable in respect of the Shares (but any amount paid during the period in respect of which a dividend is declared only entitles the Shareholder to an apportioned amount of that dividend as from the date of payment). The Directors may from time to time pay or credit to the Shareholders such interim dividends as they may determine. No dividends shall be payable except out of profits. A determination by the Directors as to the profits of the Company shall be conclusive. No dividend shall carry interest as against the Company.

The Directors may from time to time grant to Shareholders or any class of shareholders the right to elect to reinvest cash dividends paid by the Company by subscribing for Shares in the Company on such terms and conditions as the Directors think fit. The Directors may, at their discretion, resolve in respect of any dividend which it is proposed to pay or to declare on any Shares of the

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Company, that holders of such Shares may elect to forgo their right to the whole or part of the proposed dividend and to receive instead an issue of Shares credited as fully paid to the extent and on the terms and conditions of the Constitution. The Directors may set aside out of the profits of the Company such amounts as they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

5.1.4 Winding-Up

If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the authority of a special resolution, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

5.1.5 Transfer of Shares

Generally, Shares in the Company are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act and the Listing Rules.

5.1.6 Future Increase in Capital

The allotment and issue of any new Shares is under the control of the Directors of the Company. Subject to restrictions on the issue or grant of securities contained in the Listing Rules, the Constitution and the Corporations Act (and without affecting any special right previously conferred on the holder of an existing share or class of shares), the Directors may issue Shares as they shall, in their absolute discretion, determine.

5.1.7 Variation of Rights

Under Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

5.2 Terms and Conditions of New Options

The terms and conditions of the New Options are as follows:

(a) Each New Option entitles the holder to subscribe for one (1) Share at a subscription price of $0.16 per Share.

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(b) The New Options are exercisable at any time on or prior to 5.00pm (WST) on 31 March 2014 by completing an option exercise form and delivering it to the Company’s Share Registry together with payment for the number of Shares in respect of which the New Options are exercised.

(c) Shares will be issued not more than 10 business days after receipt of a properly executed option exercise form together with payment for the number of Shares in respect of which the New Options are exercised.

(d) Subject to the Corporations Act, the ASX Listing Rules and the Company’s Constitution, the Company will apply to ASX for the New Options to be admitted to quotation.

(e) Subject to the Corporations Act, the ASX Listing Rules and the Company’s Constitution, the New Options may be transferred at any time in whole or in part.

(f) The New Options held by each optionholder may be exercised in whole or in part, but if exercised in part, multiples of 1,000 New Options must be exercised on each occasion. Where less than 1,000 New Options are held, all New Options must be exercised together.

(g) All Shares issued upon exercise of the New Options will rank equally in all respects with the Company’s then existing Shares. The Company will apply to ASX for the Shares issued upon exercise of the New Options to be admitted to quotation not later than 3 business days after their date of issue.

(h) Holders of New Options may only participate in new issues of securities to Shareholders if a New Option has been exercised and a Share issued in respect of that New Option before the record date for determining entitlements to the new issue. The Company must give holders of New Options notice at least 9 business days before the record date for any new issue for determining entitlements to that issue in accordance with the ASX Listing Rules.

(i) There will be no change to the exercise price of a New Option or the number of Shares over which a New Option is exercisable in the event of the Company making a pro rata issue of Shares or other securities to holders of Shares (including a bonus issue).

(j) If, prior to the expiry of the New Options, there is a reorganisation of the issued capital of the Company, the New Options are to be treated in the manner set out in the ASX Listing Rules applying to reorganisations at that time.

(k) The Company must give holders of New Options a notice including all of the details required by the ASX Listing Rules at least 20 business days before the expiry date of 31 March 2014.

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6. RISK FACTORS

Applicants should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Shares. Potential Applicants should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares.

The exploration and development of natural resources is a speculative activity that involves a high degree of financial risk. An investment in the Company may not be suitable for all recipients of this document.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

6.1 Joint venture operations

The Company is actively involved with various farm-out and farm-in agreements and associated joint venture operating agreements. Under such agreements, the Company may be voted into programmes and budgets which it does not necessarily agree with or have the cash resources to fund. It may also be required to contribute to any increase in capital expenditure requirements and/or operating costs. Furthermore, the situation could arise where any or all of the joint venture parties are unable to fund their pro-rata contributions to expenditure in which case the Company may have to make increased contributions to ensure that the programme succeeds.

Other companies may from time to time be operators under joint venture operating agreements and, to the extent that it may become a minority joint venture partner, the Company will be dependent to a degree on the efficient and effective management of those companies as manager. The objectives and strategy of these operating companies may not always be consistent with the objectives and strategy of the Company, however, the operators must act in accordance with the joint venturers’ directions.

The Company will be required under joint operating agreements to pay its percentage interest share of all costs and liabilities incurred by the joint venture in connection with joint venture activities. In common with other joint venture parties, if the Company fails to pay its share of any cost and liabilities it may or may not be able to transfer its interests in the relevant exploration permits and the joint operating agreements to other joint venture participants.

6.2 Operating risks

The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of factors, including:

(a) adverse geological conditions, including, without limitation, inappropriately placed or timed petroleum generation or migration, ineffective seal or later disruption of the trap. A potential trap may also contain non-commercial volumes of petroleum due to adverse reservoir conditions or inadequate petroleum charge. Discussion of petroleum traps including structures by the Company should not be taken to imply that a commercial accumulation is known to exist;

(b) limitations on activities due to seasonal weather patterns and cyclone activity;

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(c) alterations to joint venture programmes and budgets;

(d) unanticipated operational and technical difficulties encountered in seismic surveys, drilling and production activities;

(e) mechanical failure of operating plant and equipment;

(f) adverse weather conditions, industrial and environmental accidents, industrial disputes and other force majeure events;

(g) unavailability of drilling equipment or equipment to undertake seismic surveys, appropriate personnel and other geological and geophysical investigations;

(h) unexpected shortages or increases in the costs of labour, consumables, spare parts, plant and equipment;

(i) inability to obtain necessary consents or approvals;

(j) prevention of access by reason of political unrest, outbreak of hostilities;

(k) contracting risk from third parties providing essential services; and

(l) potential problems in locating and securing the services in a timely and cost effective fashion of appropriately skilled employees, consultants or contractors.

6.3 Native Title and Title Risks

Both the Native Title Act 1993 (Cth), related State Native Title legislation and Aboriginal Land Rights and Aboriginal Heritage legislation may affect the Company’s ability to gain access to prospective exploration areas or obtain production titles. There is significant uncertainty associated with native title in Australia and this may impact on the Company’s operations and plans in the future. The discovery of Aboriginal sacred sites or artefacts on permits held by the Company could limit or preclude exploration or drilling activities within spheres of influence of those sites. As a result, delays and expenses could be incurred in obtaining the necessary clearances.

Compensatory obligations may be necessary in settling Native Title claims if lodged over any tenements acquired by the Company. The existence of outstanding registered Native Title claims means that the grant of a tenement in respect of a particular tenement application may be significantly delayed or thwarted pending resolution of future act procedures in the Native Title Act. The level of impact of these matters will depend, in part, on the location and status of the tenements acquired by the Company. At this stage it is not possible to quantify the impact (if any) which these developments may have on the operations of the Company.

6.4 Ability to exploit successful discoveries

It may not always be possible for the Company to participate in the exploitation of successful discoveries made in any areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company. Such further

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work may require the Company to meet or commit to financing obligations for which it may not have planned.

6.5 Estimates of saleable commodities

Resource data disclosed by the Company represent estimates only. Such estimates are based upon a number of variable factors and assumptions, some of which are out of the control of the Company. Some of these factors and assumptions may include historical production from the properties, comparisons with production from other producing areas, the assumed effects of regulation by government agencies, assumptions on the underlying geology and structure of prospects to be drilled and assumptions regarding future hydrocarbon prices and capital and operating costs. All of these factors and assumptions may vary considerably from actual results. Investors should be aware that resource estimates are expressions of judgement based on knowledge, experience and industry practice. As exploration activity occurs estimates may change significantly as new information becomes available.

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

6.6 Acts and omissions of joint venture partners, agents and contractors

If any of the Company's or its relevant subsidiaries joint venture partners fail to agree on work programs and/or budgets for the development of projects or fail to meet their obligations under the joint venture agreements with the Company or its relevant subsidiaries, this will likely delay or otherwise impact on the progress of the relevant joint venture project which could subsequently have a material adverse effect on the Company's business and its financial performance.

The Company is unable to predict the risk of financial failure or default by a participant in any joint venture to which the Company is or may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used by the Company for any activity.

6.7 Insurance

Insurance of all risks associated with oil, gas and other saleable commodity exploration and production is not always available and, where available, the cost can be high. The Company will have insurance in place considered appropriate for the Company’s needs. The Company will not be insured against all possible losses, either because of the unavailability of cover or because the Directors believe the premiums are excessive relative to the benefits that would accrue. The Directors believe that the insurance they have in place is appropriate. The Directors will continue to review the insurance cover in place to ensure that it is adequate.

6.8 Access to Infrastructure

The Company will require access to processing and gas or liquids, or other saleable commodity transmission facilities including pipelines in order to commercially exploit any hydrocarbons discovered. Third party access to such infrastructure may depend on the level of uncontracted capacity available

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from time to time. Access to processing plant is likely to depend on the successful negotiation of commercial arrangements with the owner of such plant.

6.9 Financial Default

The financial failure by any participant involved in a farm-in or joint venture or contract or agreement that the Company is a party to may have a significant and adverse effect on the Company.

6.10 Unitisation

In the case of any cross border discovery or a cross-permit discovery involving another permit holder, the Company will be required to share production in accordance with the requirements of the relevant regulatory authorities of the applicable state or territory or of any relevant unitisation agreement agreed to between the parties as the case may be.

6.11 Competition

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

6.12 Environmental Risks and Regulations

The Company’s projects are subject to Commonwealth and State laws and regulations regarding environmental matters and the discharge of hazardous wastes and materials. As with all oil and gas projects, these projects would be expected to have a variety of environmental impacts should development proceed.

The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws and industry standards. Areas disturbed by the Company’s activities will be rehabilitated as required by the conditions attaching to the Tenements.

6.13 Exploration and development risk

There is no assurance that oil, gas, helium or other saleable commodities will be discovered in the areas in which the Company has an interest. Even if further oil, gas, helium or other saleable commodities are discovered in those areas, there is no assurance that commercial quantities of such commodities can be recovered from the Company’s permits to allow development of such deposit.

Furthermore, the Company will only progress exploration or development projects when data and evaluations demonstrate that an oil, gas, condensate, helium or other saleable commodity deposit(s) is economically viable.

6.14 Oil, gas, helium, condensate and other saleable commodity price fluctuations

The price for saleable commodities that may be recovered from the Company’s projects will depend on available markets at acceptable prices and transmission, distribution and other costs. Any substantial decline in the prices of

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oil or an increase in transmission, distribution or other costs could have a material adverse effect on the Company.

6.15 Drilling and operating risks

Exploration activities including drilling for oil and gas, helium and other saleable commodities are subject to numerous risks, many of which are beyond the Company's control. The Company’s operations may be curtailed, delayed or cancelled as a result of these risks, which may include, but are not limited to, weather conditions, mechanical difficulties, shortage or delays in the delivery of rigs and/or other equipment and compliance with governmental requirements. Hazards incidental to the exploration and development of oil, gas, condensate, helium and other saleable commodities such as unusual or unexpected formations, pressures, oceanographic conditions or other factors are inherent in drilling and operating wells and may be encountered by the Company.

Fire, explosions, blow-outs, pipe failure, well collapse, abnormally pressure formations and environmental spills or leakage of petroleum liquids, ruptures or discharges of toxic gases, could cause the Company substantial loss due to the cost of personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations.

Any of these events might also give rise to claims against the Company.

6.16 Economic Risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and future production activities, as well as on its ability to fund those activities.

6.17 Market conditions

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities and in particular, resources stocks. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

6.18 Security Investments

Applicants should be aware that there are risks associated with any securities investment. Securities listed on the stock market, and in particular securities of oil and gas exploration companies have experienced extreme price and volume fluctuations that have often been unrelated to the operating performances of such companies. These factors may materially affect the market price of the securities regardless of the Company’s performance.

Exploration in itself is a speculative endeavour, while oil and gas operations can be hampered by force majeure circumstances and cost overruns for unforeseen events.

6.19 Legislative changes, Government policy and approvals

Changes in government regulations and policies may adversely affect the financial performance of the Company. For example, any increased rentals under the relevant petroleum legislation in the Northern Territory may impact on

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the Company's actual financial statements. The Company's capacity to explore and mine, in particular the Company' ability to explore and mine any reserves, may be affected by changes in government policy, which are beyond the control of the Company.

6.20 Future Capital Requirements

The Company’s ongoing activities will require substantial expenditures. There can be no guarantee that the funds raised through the Offer will be sufficient to successfully achieve all the objectives of the Company’s overall business strategy. If the Company is unable to continue to use debt or equity to fund expansion after the substantial exhaustion of the net proceeds of the Offer, there can be no assurances that the Company will have sufficient capital resources for that purpose, or other purposes, or that it will be able to obtain additional fundraising on terms acceptable to the Company or at all. Any additional equity financing may be dilutive to shareholders and any debt financing if available may involve restrictive covenants, which may limit the Company’s operations and business strategy.

The Company’s failure to raise capital if and when needed could delay or suspend the Company’s business strategy and could have a material adverse effect on the Company’s activities.

6.21 Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of, or significant investments in, companies, products, technologies or resource projects. Any such future transactions would be accompanied by the risks commonly encountered in making acquisitions of companies, products, technologies or resource projects.

6.22 Reliance on Key Personnel and Employees

The Company’s prospects depend in part on the ability of its executive officers, senior management and key consultants to operate effectively, both independently and as a group. To manage its growth, the Company must attract and retain additional highly qualified management, technical, sales and marketing personnel and continue to implement and improve operational, financial and management information systems. Investors must be willing to rely to a significant extent on management’s discretion and judgement, as well as the expertise and competence of outside contractors.

In addition, Australia is currently experiencing a shortage of skilled labour including those skills utilised in the oil and gas industry. The Company cannot guarantee that its oil and gas exploration activities will not be negatively affected by an inability to employ appropriately skilled staff.

An investment in the Company is not risk free and prospective new investors should consider the risk factors described below, together with information contained elsewhere in the Prospectus, before deciding whether to apply for Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

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6.23 Future Capital

The Company believes that its available cash and the net proceeds of this Offer will be adequate to satisfy its anticipated working capital and other requirements. Should the Company require additional funding, there can be no assurance that additional funding will be available on acceptable terms or at all.

Any inability to obtain additional funding, if required, may have a material adverse effect on the Company.

The Company’s ability to raise such funding will vary according to a number of factors including:

(a) the success or otherwise of exploration and the future development of any hydrocarbons discovered;

(b) stock market conditions;

(c) oil and gas prices; and

(d) access to pipeline or other facilities required to transport any produced hydrocarbons to point of sale.

For future capital raising the relevant legal and regulatory requirements to extend an offer outside of Australia and New Zealand (in particular, to shareholders in the United Kingdom) may be such that the Company is unable to extend rights issues to shareholders outside of Australia and New Zealand at reasonable cost.

Any additional equity financing may be dilutive to the Company’s existing Shareholders and any debt financing, if available, may involve restrictive covenants, which limit the Company’s operations and business strategy. The Company’s failure to raise capital if and when needed could delay or suspend the Company’s business strategy and could have a material adverse effect on the Company’s activities.

6.24 General risks

The value of the Company’s Securities are affected by a number of general factors which are beyond the control of the Company and its Directors.

Factors such as inflation, currency fluctuation, interest rates, supply and demand and industrial disruption have an impact on operating costs, commodity prices, local and international economic conditions and general investor sentiment.

The Company’s share price can be afflicted by these factors which are beyond the control of the Directors. F

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7. ADDITIONAL INFORMATION

7.1 Continuous Disclosure Obligations

The Company is a “disclosing entity” (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

This Prospectus is a “transaction specific prospectus”. In general terms “transaction specific prospectuses” are only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

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

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

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

(a) it is subject to regular reporting and disclosure obligations;

(b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in Section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and

(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:

(i) the financial statements of the Company for the financial year ended 30 June 2009 being the last financial statements for a financial year, of the Company lodged with the ASIC before the issue of this Prospectus;

(ii) any half year financial statements of the Company lodged with ASIC since the lodgement of the last financial statements for the

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year ended 30 June 2009 lodged with ASIC before the issue of this Prospectus; and

(iii) any documents used to notify ASX of information relating to the Company in the period from lodgement of the financial statements referred to in paragraph (i) above until the issue of the Prospectus in accordance with the Listing Rules as referred to in Section 674(1) of the Corporations Act.

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

The Company has lodged the following announcements with ASX since the lodgement of the 2009 audited financial statements:

Date Description of Announcement

16/03/2010 Half Yearly Accounts

15/03/2010 Reinstatement to Official Quotation

15/03/2010 Fully Underwritten Renounceable Rights Issue

15/03/2010 Central commences road works ahead of Ooraminna 2 drilling

12/03/2010 ROG: CTP Farm In Update

11/03/2010 Suspension from Official Quotation

11/03/2010 10.03.11 Seismic Acquisition

10/03/2010 Request for Trading Halt

10/03/2010 Trading Halt

05/03/2010 10.03.05 JV Developments

05/03/2010 10.03.05 BRR Interview

04/03/2010 Conversion of Bonds and Appendix 3B

03/03/2010 10.03.03 Discovery Notification

26/02/2010 10.02.26 Exploration Update CBM107-001

26/02/2010 10.02.26 JV Developments

11/02/2010 10.02.11 CTP Exploration Date

05/02/2010 10.02.05 CTP Exploration Update

29/01/2010 Quarterly Report and Appendix 5B - December 2009


22/01/2010 Issue of Convertible Bonds

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15/01/2010 10.01.15 CTP Notice of Discovery



04/01/2010 Ceasing to be a substantial holder

29/12/2009 09.12.24 Red Sky Energy Limited Announcement 09.12.17

23/12/2009 09.12.22 Corrected Form 603 for MHL

23/12/2009 09.12.22 Ceasing to become a sub shareholder for MHL

22/12/2009 09.12.21 Rolling Bond Conversion and 3B


18/12/2009 09.12.08 Appendix 3B

17/12/2009 ROG: Farm in resolution

17/12/2009 Exploration Programme Update

17/12/2009 Becoming a substantial holder for MHL

10/12/2009 Company Secretary Appointment/Resignation

08/12/2009 Results of Meeting

08/12/2009 09.12.08 AGM Chairman’s Address

08/12/2009 09.12.08 CBM93001 Update

04/12/2009 09.12.04 CTP spuds first well in 2009 Phase ne Programme

04/12/2009 09.12.04 BRR Announcement

03/12/2009 Bond Conversion and Appendix 3B

03/12/2009 09.12.03 Finance News Network MD Interview


26/11/2009 Appendix 3B – Exercise of Options

26/11/2009 09.11.26 Helium Extraction

25/11/2009 2009.11.25 Rolling Bond Drawdown

25/11/2009 09.11.24 Red Sky Arbitration

18/11/2009 RAW: Exploration Update: 2009-2010

16/11/2009 09.11.16 Central Green Pty Ltd

16/11/2009 09.11.16 Exploration Programme

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09/11/2009 Extension of Time to Hold AGM and 2009 AGM Notice

09/11/2009 Key Drilling Contract

03/11/2009 Appendix 3B – exercise of options

30/10/2009 September 2009Quarterly Report and Appendix 5B

23/10/2009 09.10.23 Exploration Programme

21/10/2009 09.10.21 Senior Legal Appointment CTP

20/10/2009 09.10.19 GSA Exercises Pre-Emptive Rights EPA 130

16/10/2009 09.10.16 CTP to Commence Proceedings Red Sky Farmin

15/10/2009 ROG: Central Petroleum Farm-In

15/10/2009 09.10.14 Red Sky Farmin

13/10/2009 Rolling Convertible Bond Conversion and ASX Appendix 3B

09/10/2009 Rolling Convertible Bond Conversion and ASX Appendix 3B

07/10/2009 Issue of Convertible Bonds

06/10/2009 09.10.06 BRR Broadcast Red Sky Farmin

01/10/2009 09.09.30 Major Farmout to Red Sky Energy (NT) Pty Ltd

01/10/2009 2009 Annual Report

ASX maintains files containing publicly available information for all listed companies. The Company’s file is available for inspection at ASX during normal office hours.

The announcements are also available through the Company’s website www.centralpetroleum.com.au.

7.2 Material Contracts

The following are summaries of the significant terms of the material agreements which relate to the business of the Company.

7.2.1 Underwriting Agreement

By an agreement between Patersons Securities Limited (Underwriter) and the Company (Underwriting Agreement), the Underwriter agreed to conditionally underwrite the Offer for 299,586,259 Shares and 59,917,252 New Options (Underwritten Securities).

Pursuant to the Underwriting Agreement, the Company has agreed to pay the Underwriter an underwriting fee of 7% of the amount underwritten by the Underwriter, a corporate advisory fee of $40,000 and, in the event that either the Company terminates the Underwriting Agreement without cause, or the Underwriter terminates the Underwriting Agreement for cause, a fee of $40,000.

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The Company has also agreed to issue 59,917,272 Sub-Underwriter Options to the sub-underwriters of the Offer on the basis of one (1) Sub-Underwriter Option for every five (5) Shares applied for by the sub-underwriters.

The Agreement is conditional upon:

(a) Due diligence: the Underwriter being satisfied with the due diligence investigations and the results of the due diligence by the date of lodgement of this Prospectus;

(b) Underwriter's consent to be named: the Underwriter being satisfied with the form of the Prospectus (in its absolute discretion) and having given its consent to be named in the Prospectus by the date of lodgement as evidence thereof;

(c) Legal sign off: a legal sign off letter being provided to the Due Diligence Committee by the Company's solicitors, to the satisfaction of the Underwriter, and addressed to be for the benefit of the Underwriter, by the date of lodgement of the Prospectus;

(d) Prospectus: the Prospectus being lodged with the ASIC prior to 5.00pm on 17 March 2010;

(e) Sub Underwriting: the Underwriter entering into sub underwriting agreements with sub underwriters on terms and conditions satisfactory to the Underwriter (in its sole and absolute discretion) for the entire Offer.

The obligation of the Underwriter to underwrite the Offer is subject to certain events of termination. The Underwriter may terminate its obligations under the Underwriting Agreement if:

(a) Indices fall: the All Ordinaries Index (IRESS XAO.ASX), the S&P/ASX 200 (IRESS:XJO.ASX) or the S&P/ASX 200 Energy (IRESS:XEJ.ASX) as published by ASX is at any time after the date of the Underwriting Agreement is 10% or more below its respective level as at the close of business on the Business Day prior to the date of the Underwriting Agreement;

(b) Share price: the Shares of the Company finish trading on the ASX under the ASX code of “CTP” on any two (2) consecutive trading days with a closing price that is less than the issue price of the Shares under the Offer;

(c) Prospectus: the Company does not lodge the Prospectus on the 17 March 2010 or the Prospectus or the Offer is withdrawn by the Company;

(d) Copies of Prospectus: the Company fails to provide the Underwriting with 25 copies of the Prospectus within seven days of the date of lodgement of the Prospectus with ASX and such failure is not remedied within two days;

(e) No Official Quotation: Official Quotation has not been granted for all the Shares and New Options by the date designated by the Underwriter in the Underwriting Agreement or, having been granted, is subsequently withdrawn, withheld or qualified; or

(f) Supplementary prospectus:

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(f) the Underwriter, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of new circumstance occurring, forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or

(g) the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter;

(g) Non-compliance with disclosure requirements: it transpires that the Prospectus does not contain all the information required by section 713 of the Corporations Act;

(h) Misleading Prospectus: it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from this Prospectus (having regard to the provisions of section 713 of the Corporations Act) or if any statement in this Prospectus becomes misleading or deceptive or likely to mislead or deceive or if the issue of this Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;

(i) Restriction on allotment: the Company is prevented from allotting the Shares, Options and Sub-Underwriter Options within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority;

(j) Withdrawal of consent to Prospectus: any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent;

(k) ASIC application: an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus and at the deadline for the issuing of the shortfall notice by the Company to the Underwriter, that application has not been dismissed or withdrawn;

(l) ASIC hearing: ASIC gives notice of its intention to hold a hearing under section 739 or any other provision of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 or any other provision of the Corporations Act;

(m) Takeovers Panel: the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;

(n) Hostilities: there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of the

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Underwriting Agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, or the Peoples Republic of China, Israel or any member of the European Union, or a major terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world;

(o) Authorisation: any authorisation which is material to anything referred to in this Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

(p) Indictable offence: a director or senior manager of the Company or any of its subsidiaries is charged with an indictable offence;

(q) Sub-underwriters: any of the sub-underwriters that are introduced by the Company do not comply with its obligation under the sub-underwriting agreements or threaten to not comply with all of its respective obligations under the sub-underwriting agreements with the Underwriter;

(r) Termination Events: any of the following events occurs where the Underwriter determines, acting in good faith, that the event has had a material adverse effect (as defined in the Underwriting Agreement) or could give rise to a liability of the Underwriter under the Corporations Act or otherwise:

(i) Default: default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;

(ii) Incorrect or untrue representation: any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;

(iii) Contravention of constitution or Act: a contravention by the Company or any of its subsidiaries of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;

(iv) Adverse change: an event occurs which gives rise to a Material Adverse Effect (as defined in the Underwriting Agreement) or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of the Company or its subsidiaries including, without limitation, if any forecast in this Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time;

(v) Error in Due Diligence Results: it transpires that any of the results of the due diligence or any part of the verification materials compiled was false, misleading or deceptive or that there was an omission from them;

(vi) Significant change: a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;

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(vii) Public statements: without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer or the Prospectus;

(viii) Misleading information: any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the affairs of the Company or its subsidiaries is or becomes misleading or deceptive or likely to mislead or deceive;

(ix) Official Quotation qualified: the Official Quotation is qualified or conditional other than as agreed by the Underwriter in the Underwriting Agreement;

(x) Change in Act or policy: there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any legislation or prospective legislation or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;

(xi) Prescribed Occurrence: a Prescribed Occurrence (as defined in the Underwriting Agreement) occurs;

(xii) Suspension of debt payments: the Company suspends payment of its debts generally;

(xiii) Event of Insolvency: an Event of Insolvency (as defined in the Underwriting Agreement) occurs in respect of the Company or its subsidiaries;

(xiv) Judgment against the Company or a subsidiary: a judgment in an amount exceeding $25,000 is obtained against the Company or any of its subsidiaries and is not set aside or satisfied within 7 days;

(xv) Litigation: litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against the Company or any subsidiary, other than any claims foreshadowed in the Prospectus;

(xvi) Board and senior management composition: there is a change in the composition of the Board or a change in the senior management of the Company before completion of the Underwriting Agreement without the prior written consent of the Underwriter;

(xvii) Change in shareholdings: there is a material change in the major or controlling shareholdings of the Company or any of its subsidiaries or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to the Company or its subsidiaries;

(xviii) Timetable: there is a delay in any specified date in the timetable which is greater than 3 Business Days;

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(xix) Force Majeure: a force majeure affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of 7 days occurs;

(xx) Certain resolutions passed: the Company or any subsidiary passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter;

(xxi) Capital Structure: the Company or any subsidiary alters its capital structure in any manner not contemplated by this Prospectus;

(xxii) Investigation: any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or any subsidiary;

(xxiii) Market Conditions: a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets; or

(xxiv) Material Breach: if the Company fails to rectify any material breach of the mandate having been given 10 business days notice in writing by the Underwriter of such breach having occurred.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter that are considered standard for an agreement of this type.

7.2.2 Disclosure of Underwriter Voting Power

As set out above, the Offer is fully underwritten by Patersons Securities Limited (Underwriter).

The Underwriter does not currently have any interest in Shares in the Company. In the unlikely event that no Shareholder applies for Shares under the Offer and the Underwriter is required to apply for all of the 299,586,259 Shares under the terms of the Underwriting Agreement, the Underwriter could potentially increase its interest in the Company to 33.33%.

However, it is unlikely that no Shareholders will take up their Entitlement under this Offer (the Directors have indicated that it is their present intention to take up all or part of their respective Entitlements). The underwriting obligation of the Underwriter, and therefore voting power of the Underwriter, will reduce by a corresponding amount for the amount of Entitlements taken up by Shareholders.

Further, the Underwriting Agreement gives the Underwriter the right to enter into sub-underwriting agreements to pass on some or all of its obligations to subscribe for the Shortfall under the Underwriting Agreement. The Underwriter has advised the Company that it has or will after the date of this Prospectus entered into a number of sub-underwriting agreements with its clients to take up the Shortfall.

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The Underwriter has advised the Company that following the issue of the Shortfall neither the Underwriter nor any of its sub-underwriters, individually, will have a voting power in the Company in excess of 20%. Therefore, the Underwriter will not obtain control of the Company as a result of the Underwriter underwriting the Offer.

7.2.3 Sub-Underwriters

The Underwriter has advised the Company that it has entered into agreements with various sub-underwriters pursuant to which the individual sub-underwriters will agree to sub-underwrite the commitments of the Underwriter under the Underwriting Agreement.

The Company has agreed to issue each sub-underwriter with one (1) Sub-Underwriter Option for every five (5) Shares that each sub-underwriter applies for pursuant to the terms of their respective sub-underwriting agreement with the Underwriter. A minimum of 59,917,252 Sub-Underwriter Options will therefore be issued by the Company in addition to the New Options to the sub-underwriters.

The Sub-Underwriter Options will be issued on the same terms and conditions as the New Options and will be listed on ASX. This will increase the total number of Options on issue in the Company by a minimum of 59,917,252 Options. The Sub-Underwriter Options issued to the sub-underwriters will be in addition to the New Options that will be issued to those sub-underwriters under the terms of the Shortfall Offer.

7.3 Directors’ interests

Other than as set out below or elsewhere in this Prospectus, no Director nor any firm in which such a Director is a partner, has or had within 2 years before the lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;

(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer pursuant to this Prospectus; or

(c) the Offer pursuant to this Prospectus,

and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) to any Director or to any firm in which any such Director is a partner, either to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or by the firm in connection with the formation or promotion of the Company or Offer pursuant to this Prospectus.

Directors’ interests in securities of the Company at the date of this Prospectus are: F

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Name Shares Options Entitlement Remuneration ($)

Henry Askin 2,400.000 5,900,000 1,200,000 70,000

John Heugh 5,683,803 12,050,000 2,841,902 350,000

William Dunmore 776,666 4,000,000 388,333 50,000

Richard Faull 2,311,100 5,065,550 1,155,550 50,000

Notes:

1. Each of the Directors has indicated that it is their present intention to subscribe for all or part of their respective Entitlements under the Offer.

The Constitution of the Company provides that the non-executive Directors may be paid for their services as Directors, a sum not exceeding such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Directors and in default of agreement then in equal shares. The Company paid to the Directors a total of $464,522 the year ended 30 June 2008 and $596,132 for the year ended 30 June 2009. In addition to the above, the Directors have been paid fees totalling $361,993 from the end of the previous financial year until the date of this Prospectus. Directors, companies associated with the directors or their associates are also reimbursed for all reasonable expenses properly incurred in the course of conducting their duties which include, but are not in any way limited to, out of pocket expenses, travelling expenses, disbursements made on behalf of the Company and other miscellaneous expenses.

7.4 Interests and Consents of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no expert, underwriter, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any of those persons is or was a partner, nor any company with which any of those persons is or was associated, has or had within 2 years before the lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company; or

(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer of securities pursuant to this Prospectus; or

(c) the Offer of securities pursuant to this Prospectus,

and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) to any expert, underwriter, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, or to any firm in which any of those persons is or was a partner, or to any company with which any of those persons is or was associated, for services rendered by that person, or by the firm or the company, in connection with the formation or promotion of the Company or the Offer pursuant to this Prospectus.

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Pursuant to Section 716 of the Corporations Act, Patersons Securities Limited has given and has not withdrawn its consent to being named as Underwriter to the Offer in the Corporate Directory of this Prospectus and as the Nominee for the Entitlement of non-qualifying foreign Shareholders of the Company in this Prospectus in the form and context in which it is named. Patersons Securities Limited has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Patersons Securities Limited (including its related entities) does not currently have any interest in any Shares or Options in the Company.

Patersons Securities Limited will be paid an underwriting fee equal to 7% of the amount underwritten by the Underwriter. Patersons Securities Limited will also be paid $40,000 for corporate advisory services provided to the Company. In the past two years, Patersons Securities Limited has been paid fees totalling $1,918,477 by the Company inclusive of commissions and advisory fees. Patersons Securities Limited will be paid fees of $150 (plus GST) or 1% of the value of the sales executed, whichever is greater, for acting as the Nominee in relation to the Offer.

Pursuant to Section 716 of the Corporations Act, Stantons International Pty Ltd trading as Stantons International has given, and has not withdrawn its consent to being named as auditors to the Company in the Corporate Directory of this Prospectus in the form and context in which it is named and to the inclusion of the audit reviewed balance sheet. Stantons International Pty Ltd has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Pursuant to Section 716 of the Corporations Act, Steinepreis Paganin has given, and has not withdrawn its consent to being named as Solicitors to the Company in the Corporate Directory of this Prospectus in the form and context in which it is named. Steinepreis Paganin has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Steinepreis Paganin act as solicitors to the Company. Steinepreis Paganin will be paid approximately $15,000 for services in relation to this Prospectus.

7.5 Legal Proceedings

The Company is currently dealing with the following legal proceedings as previously released to the market:

7.5.1 Petroleum Exploration Australia Limited dispute – Red Sky Energy (NT) Pty Ltd farm-in

On 30 September 2009, the Company, its relevant wholly owned subsidiaries and Red Sky Energy (NT) Pty Ltd (ROG NT), a wholly owned subsidiary of the ASX listed Red Sky Energy Limited (Red Sky), executed a farmout agreement whereby the Company’s relevant wholly owned subsidiaries exercised their respective right to assign to ROG a 10% Participating Interest in the following granted permits and applications EP-82 (remaining area outside of the Magee Prospect Block), EP-93, EP-105, EP-106, EP-107, EP-112, EP-115, EP-118, EP-125 (remaining area outside of the Mt Kitty Prospect Block), EPA-92, EPA-111, EPA-120, EPA-124, EPA-129, EPA-131, EPA-132, EPA-133, EPA-137, EPA-147, EPA-149, EPA-152, EPA-160, ATP-909, ATP- 911, ATP-912, PELA -77, PEPA 16/08-9, PEPA 18/08-9, and PEPA 17/08-9.

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The agreement, inter alia, calls for ROG NT to fund at the 2:1 (2 for 1) promoted level the first 20% of the next three wells and the next $3 million of seismic in each of the permits and applications subject to grant. In addition ROG NT will pay the Company a reserve premium of $5 million indexed to various production standard prices from time to time for each incremental 3P (proved, probable and possible) trillion cubic feet of gas or oil equivalent at final investment decision which may be discovered in the Joint Venture area.

It was the Company’s view that Petroleum Exploration Australia Limited (PXA) was obliged to execute certain ancillary documents to enable the full entry of ROG NT into the Joint Venture and, for some time, PXA refused or failed to execute these documents. As a result, the matter was referred to arbitration for determination. ROG by its ASX announcement dated 17 December 2009, advised that ROG NT had reached “further agreement” with PXA (the details of which are as yet unknown to the Company). This "further agreement" apparently resulted in PXA executing the required ancillary documents with an agreed date of execution of 30 September 2009 and ROG NT was formally admitted to the Joint Ventures concerned.

The Company has continued with the arbitration process to address issues which have arisen since the commencement of the arbitration and which the Company says have expanded the scope of the arbitration to include issues arising out of the “further agreement” referred in ROG NT’s ASX announcement, together with the Company’s claim for an award of costs.

The Company has made an application to the Supreme Court of Western Australia for "pre-action discovery" in respect of the “further agreement” and other documents. At the time of preparation of this document, the Company’s legal representatives were completing certain court processes to start the application.

7.5.2 Petroleum Exploration Australia Limited, Red Sky Energy (NT) Pty Ltd and Trident Energy Limited disputes – non-payment of cash calls and farm-out costs

Pursuant to the relevant Farm Out Agreements (FOAs) and Joint Operating Agreements (JOAs) between variously the Company, certain of its subsidiaries, Petroleum Exploration Australia Limited (PXA), ROG NT, Red Sky, and He Nuclear Limited (HEN), a series of default notices were sent on 26 February 2010: (i) by the Company, in its capacity as Operator of the various Joint Ventures, for recovery of monies owed to the affected Joint Ventures from defaulting parties for outstanding cash calls issued totalling approximately $3.2 million; and (ii) by the respective Central subsidiaries for recovery of Farm-out Costs under various FOAs totalling approximately $6.2 million (this sum includes the previously referred $3.2 million).

Since the issuance of the notices referred to in this Section 7.5.2:

(a) PXA has demanded that the Company, as Operator, withdraw the notices of default and shortfall issued to PXA under each of the FOAs and JOAs relating to the Broadacre Joint Ventures and the EP 97 Rawson Joint Venture as detailed in Central’s announcement of 26 February 2010. PXA has also purported to give Central notice of a dispute and commence an arbitration process under the terms of the FOAs and JOAs respectively disputing the validity of: the default notices referred above; the 2010 minimum commitment programme and budget in respect of which certain Cash Calls were issued; those Cash Calls and others; certain Shortfall Notices; and in respect of certain funds retained by the Joint Ventures for the drilling of wells CBM107001,

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CBM93002 and Ooraminna 2;

(b) ROG NT has notified the Company, as Operator, in-line with its ASX Announcement dated 12 March 2010, that it will pay monies owed in respect to EP-93, EP-107, EPA-131 and PELA-77 and will not make payment monies owed in respect to EP-82, EP-105, EP-106, EP-125, EP-112, EP-115, EP-118, EPA-129 and EPA-147; and

(c) Trident Energy Limited has issued notices to the Company, as Operator, that it challenges the validity of certain shortfall notices which relate to non-payment of cash calls by PXA.

The Company is currently assessing the options available to it, including, but not limited to, legal action in consultation with its legal advisors in respect to the matters in this Section 7.5.2.

7.6 Estimated Expenses of Offer

In the event that the Offer is fully subscribed, the estimated expenses of the Offer are as follows:

$ ASIC fees 2,010 ASX fees 24,024 Underwriting fees 1,134,210 Legal expenses 15,000 Broker and lead manager fees 493,684 Printing and other expenses 10,966 Total 1,679,894

7.7 Market Price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest and lowest market sale prices of the Company’s Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

Highest: $0.16 on 21 December 2009

Lowest: $0.08 on 15 March 2010

The latest available closing sale price of the Company’s Shares on ASX prior to the lodgement of this Prospectus with the ASIC was $0.087 on 17 March 2010.

7.8 Electronic Prospectus

Pursuant to Class Order 00/044, the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the application form. If you have not, please phone the Company and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus,

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or both.

The Company reserves the right not to accept an application form from a person if it has reason to believe that when that person was given access to the electronic application form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

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8. AUTHORITY OF DIRECTORS

8.1 Directors’ Consent

Each of the Directors of Central Petroleum Limited has consented to the lodgement of this Prospectus with the ASIC in accordance with Section 720 of the Corporations Act

Dated the 17th day of March 2010

Signed by John Heugh Managing Director for and on behalf of Central Petroleum Limited

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9. DEFINITIONS

Applicant means a Shareholder or Underwriter or other party instructed by the Underwriter who applies for Securities pursuant to the Offer or the Shortfall Offer.

ASIC means the Australian Securities and Investments Commission.

ASTC Settlement Rules means the settlement rules of the securities clearing house which operates CHESS.

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange as required.

Board means the board of Directors unless the context indicates otherwise.

Business Day means a day on which trading takes place on the stock market of ASX.

Closing Date means the closing date of the Offer, being 5.00pm (WST) on 22 April 2010 (unless extended).

Company means Central Petroleum Limited (ABN 72 083 254 308).

Constitution means the Company’s Constitution as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001(Cth).

Directors means the directors of the Company at the date of this Prospectus.

Dollar or “$” means Australian dollars.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Prospectus.

Issue means the issue of Shares offered by this Prospectus.

Listing Rules or ASX Listing Rules means the Listing Rules of the ASX.

New Option means an Option issued pursuant to the Offer to acquire a Share exercisable at $0.16 on or before 31 March 2014.

Nominee means Patersons Securities Limited (AFSL 239052).

Offer means the renounceable entitlement offer pursuant to the Prospectus of one (1) new Share for every two (2) Shares held by a Shareholder on the Record Date together with one (1) new Option for every five (5) new Shares issued to raise $22,468,970.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official List means the official list of ASX.

Option means an option to acquire a Share.

Prospectus means this prospectus.

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Quotation and Official Quotation means official quotation on ASX.

Record Date means 5.00pm (WST) on 6 April 2010.

Related Corporation has the meaning given to that term in the Corporations Act.

Securities means Shares and Options.

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

Shareholder means a shareholder of the Company.

Shortfall means those Securities under the Offer not applied for by Shareholders under their Entitlement.

Shortfall Offer means the offer of all Shares and New Options for which valid Entitlement and Acceptance Forms have not been received at the Closing Date to be made on the terms and conditions outlined in Section 3.6.

Shortfall Application Form means the shortfall application form attached to or accompanying this Prospectus.

Sub-Underwriter Options means the Options issued to the sub-underwriters on the same terms and conditions as the New Options.

Underwriter means Patersons Securities Limited (ABN 69 008 896 311).

Underwriting Agreement means the Underwriting Agreement between the Company and the Underwriter dated 17 March 2010.

WST means Western Standard Time.

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ONLY COMPLETE THIS SHORTFALL APPLICATION FORM IF INSTRUCTED BY THE UNDERWRITER OR THE COMPANY.

SHORTFALL APPLICATION FORM CENTRAL PETROLEUM LIMITED

ABN 72 083 254 308

REGISTERED OFFICE: Southshore Centre SHARE REGISTRY: Computershare Investor Services Pty Limited Level 4 Suite 3 Level 2 85 The Esplanade 45 St Georges Terrace South Perth WA 6951 Perth WA 6000 Tel: 1300 55 70 10 Fax: +61 (0)8 9323 2033

APPLICANT’S DETAILS:

Full name (PLEASE PRINT) Title, Given Name(s) & Surname or Company Name

Joint Applicant #2 or <designated account>

Joint Applicant #3 or <designated account>

Postal Address (PLEASE PRINT) Street Number Street

Suburb/Town State Post Code

ABN, Tax File Number or Exemption Applicant #2 Applicant #3

CHESS HIN or Existing SRN (where applicable)

Number of Shares applied for Application Money enclosed at 7.5 cents per Share

A$…………………………… Please note that participants in the Shortfall will receive one (1) free Option for every five (5) Share allotted and issued pursuant to the Shortfall. I/We whose full name(s) and address appear above hereby apply for the number of Shares and Options shown above (to be allocated to me/us by the Company in respect of this Application) under the Prospectus on the terms set out in the Prospectus. Cheque Details:

PLEASE ENTER Drawer Bank BSB or Branch Amount CHEQUE DETAILS

THANKYOU

My/Our contact numbers in the case of inquiry are: Telephone ( ) . . . . . . . . . . . . . . . . . . . . . . . . . Fax ( ) . . . . . . . . . . . . . . . . . . . . . . . NOTE: Cheques should be made payable to “Central Petroleum Limited – Entitlement Offer Account”, crossed “NOT NEGOTIABLE” and forwarded to the address outlined on

the back of this Shortfall Application Form to arrive no later than 5.00 pm WST on that date which is 3 months after the Closing Date (or such earlier date as directed by the Company).

Declaration This Shortfall Application Form does not need to be signed. By lodging this Shortfall Application Form and a cheque for the application money this Applicant hereby: (1) applies for the number of Shares and Options specified in the Shortfall Application Form or such lesser number as may be allocated by the Directors; (2) agrees to be bound by the constitution of the Company; and (3) authorises the Directors to complete or amend this Shortfall Application Form where necessary to correct any errors or omissions.

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INSTRUCTIONS TO APPLICANTS Please post or deliver the completed Shortfall Application Form together with a cheque to the share registry of the Company. If an Applicant has any questions on how to complete this Shortfall Application Form, please telephone Central Petroleum Limited. The Form must be received by the Share Registry no later than 5.00pm on the date which is 3 months after the Closing Date (or such earlier date as directed by the Company). A. Application for Shares and Options

The Shortfall Application Form must only be completed in accordance with instructions included in the Prospectus.

B. Name of Applicant Write the Applicant’s FULL NAME. This must be either an individual’s name or the name of a company. Please refer to the bottom of this page for the correct form of registrable title. Applications using the incorrect form of registrable title may be rejected.

C. Name of Joint Applicants or Account Designation If JOINT APPLICANTS are applying, up to three joint Applicants may register. If applicable, please provide details of the Account Designation in brackets. Please refer to the bottom of this page for instructions on the correct form of registrable title.

D. Address Enter the Applicant’s postal address for all correspondence. If the postal address is not within Australia, please specify Country after City/Town.

E. Contact Details Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Shortfall Application Form.

F. CHESS HIN or existing SRN Details The Company participates in CHESS. If the Applicant is already a participant in this system, the Applicant may complete this section with their existing CHESS HIN. If the applicant is an existing shareholder with an Issuer Sponsored account, the SRN for this existing account may be used. Otherwise leave the section blank and the Applicant will receive a new Issuer Sponsored account and statement.

G. Cheque Details Make cheques payable to “Central Petroleum Limited– Entitlement Offer Account” in Australian currency and cross them “Not Negotiable”. Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown on the Shortfall Application Form.

H. Declaration By completing the Shortfall Application Form, the Applicant will be taken to have made to the Company the declarations and statements therein. The Shortfall Application Form does not need to be signed. If a Shortfall Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept a Shortfall Application Form, and how to construe, amend or complete it, shall be final. A Shortfall Application Form will not however, be treated as having offered to subscribe for more Shares and Options than is indicated by the amount of the accompanying cheque.

Forward your completed application together with the application money to:

Central Petroleum Limited – Entitlement Offer Account PO Box 197 SOUTH PERTH WA 6951

CORRECT FORMS OF REGISTRABLE TITLE Note that ONLY legal entities are allowed to hold securities. Shortfall Application Forms must be in the name(s) of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each natural person. Shortfall Application Forms cannot be completed by persons under 18 years of age. Examples of the correct form of registrable title are set out below.

Type of Investor Correct Form of Registration Incorrect Form of Registration

Individual Use given names in full, not initials Mr John Alfred Smith J A Smith Company Use the company’s full title, not abbreviations ABC Pty Ltd ABC P/L or ABC Co Joint Holdings Use full and complete names

Mr Peter Robert Williams & Ms Louise Susan Williams

Peter Robert & Louise S Williams

Trusts Use the trustee(s) personal name(s).

Mrs Susan Jane Smith <Sue Smith Family A/C>

Sue Smith Family Trust

Deceased Estates Use the executor(s) personal name(s).

Ms Jane Mary Smith & Mr Frank William Smith <Est John Smith A/C>

Estate of late John Smith or John Smith Deceased

Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation.

Mr John Alfred Smith <Peter Smith A/C>

Master Peter Smith

Partnerships Use the partners personal names.

Mr John Robert Smith & Mr Michael John Smith <John Smith and Son A/C>

John Smith and Son

Long Names. Mr John William Alexander Robertson-Smith

Mr John W A Robertson-Smith

Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s).

Mr Michael Peter Smith <ABC Tennis Association A/C>

ABC Tennis Association

Superannuation Funds Use the name of the trustee of the fund.

Jane Smith Pty Ltd <Super Fund A/C>

Jane Smith Pty Ltd Superannuation Fund

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Appendix 3B New issue announcement

+ See chapter 19 for defined terms. 24/10/2005 Appendix 3B Page 1

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities

and agreement Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005. Name of entity

CENTRAL PETROLEUM LIMITED

ABN

72 083 254 308

We (the entity) give ASX the following information.

Part 1 - All issues You must complete the relevant sections (attach sheets if there is not enough space). 1 +Class of +securities issued or to

be issued

(a) Listed ordinary shares (b) Listed options

2 Number of +securities issued or to

be issued (if known) or maximum number which may be issued

(a) 299,586,259 (b) 59,917,272

3 Principal terms of the +securities

(eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

(a) Fully paid ordinary shares. (b) Exercise price of 16 cents and expiry

date 31 March 2014.

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+ See chapter 19 for defined terms. Appendix 3B Page 2 24/10/2005

4 Do the +securities rank equally in

all respects from the date of allotment with an existing +class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they

participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

(a) Yes for the ordinary shares. (b) Yes for the options. This new issue of options

will be added to the existing class of quoted options with ASX code: CTPO The Company also has a second class of quoted options with ASX code: CTPOA A share issued on exercise of the option will rank equally in all respects with shares already on issue.

5 Issue price or consideration

(a) $22,468,970 ($0.075 per share). (b) Issued free

6 Purpose of the issue

(If issued as consideration for the acquisition of assets, clearly identify those assets)

The funds will be used to continue the Company’s exploration and development objectives.

7 Dates of entering +securities

into uncertificated holdings or despatch of certificates

3 May 2010.

Number +Class 8 Number and +class of all

+securities quoted on ASX (including the securities in clause 2 if applicable)

898,758,777

213,423,569

95,947,703

Ordinary fully paid shares.

Options exercisable at $0.16 each on or before 31 March 2014 Options exercisable at $0.25 each on or before 30 June 2010

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Number +Class 9 Number and +class of all

+securities not quoted on ASX (including the securities in clause 2 if applicable)

21,250,000 7,000,000 1,800,000 11,000,000 1,450,000 200,000 500,000 666,666

1,000,000 250,000 200,000

7,500,000 8,366,666

Options $0.20 31/5/10 Options $0.20 20/2/11 Options $0.30 30/11/10 Options (various) 3/1/12 Options $0.30 31/03/11 Options $0.33 31/07/11 Options $0.30 31/08/11 Options $0.25 17/11/11 Options $0.25 19/1/12 Options $0.25 16/2/12 Options $0.25 23/2/12 Options(various) 31/3/14 Options $0.20 31/3/14

10 Dividend policy (in the case of a

trust, distribution policy) on the increased capital (interests)

Not Applicable

Part 2 - Bonus issue or pro rata issue 11 Is security holder approval

required?

No

12 Is the issue renounceable or non‐

renounceable? Renounceable

13 Ratio in which the +securities

will be offered One share for every two shares held

14 +Class of +securities to which the

offer relates Fully paid Ordinary shares

15 +Record date to determine

entitlements 6 April 2010

16 Will holdings on different

registers (or subregisters) be aggregated for calculating entitlements?

N/A

17 Policy for deciding entitlements

in relation to fractions

N/A

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+ See chapter 19 for defined terms. Appendix 3B Page 4 24/10/2005

18 Names of countries in which the entity has +security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with.

Cross reference: rule 7.7.

UK, Singapore, Thailand, China, Malaysia, USA, Denmark, Hong Kong, PNG, Germany, Japan, Lebanon, Mexico, Namibia, Oman, Ireland, Netherlands, Philippines, Vanuatu, Canada and South Africa.

19 Closing date for receipt of

acceptances or renunciations 22 April 2010

20 Names of any underwriters

Patersons Securities Limited

21 Amount of any underwriting fee

or commission Underwriting fee of 7% Corporate Advisory Fee ‐ $40,000 New options (CTPO) exercisable at 16 cents on or before 31 March 2010

22 Names of any brokers to the

issue

Patersons Securities Limited

23 Fee or commission payable to

the broker to the issue See 21. above

24 Amount of any handling fee

payable to brokers who lodge acceptances or renunciations on behalf of +security holders

N/A

25 If the issue is contingent on

+security holders’ approval, the date of the meeting

N/A

26 Date entitlement and acceptance

form and prospectus or Product Disclosure Statement will be sent to persons entitled

8 April 2010

27 If the entity has issued options,

and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders

17 March 2010

28 Date rights trading will begin (if

applicable) 29 March 2010

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29 Date rights trading will end 15 April 2010 30 How do +security holders sell

their entitlements in full through a broker?

Rights will be listed and can be traded on the ASX

31 How do +security holders sell

part of their entitlements through a broker and accept for the balance?

To sell part of the Rights shareholders will need to instruct a stockbroker to sell the Rights which they wish to renounce by completing the panel headed “Instructions to your Stockbroker” on the back of the Entitlement and Acceptance Form and lodging that form with their Stockbroker.

32 How do +security holders

dispose of their entitlements (except by sale through a broker)?

If shareholders wish to transfer all or part of their rights to another person other than on the ASX, they must forward a completed Renunciation Form together with the Entitlement and Acceptance Form.

33 +Despatch date

3 May 2010

Part 3 - Quotation of securities You need only complete this section if you are applying for quotation of securities 34 Type of securities

(tick one)

(a) Securities described in Part 1

(b)

All other securities Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a) Additional securities forming a new class of securities Questions 35 to 37 - Not Applicable

Entities that have ticked box 34(b) Questions 38 to 42 - Not Applicable

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+ See chapter 19 for defined terms.

Quotation agreement 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX

may quote the +securities on any conditions it decides. 2 We warrant the following to ASX.

• The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those +securities should not be granted

+quotation.

• An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act. Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to

any applications received by us in relation to any +securities to be quoted and that no‐one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the

+securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

3 We will indemnify ASX to the fullest extent permitted by law in respect of any

claim, action or expense arising from or connected with any breach of the warranties in this agreement.

4 We give ASX the information and documents required by this form. If any

information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: .......................................................... Date: 17 March 2010 (Joint Company Secretary) Print name: Bruce Elsholz

Appendix 3B Page 6 24/10/2005

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Documents

ASX ANNOUNCEMENT ASX CODE: CTP TO: The Manager, … · TO: The Manager, Company Announcements ASX Limited RENOUNCEABLE RIGHTS ISSUE Central Petroleum Limited (“Central”) (ASX:CTP)