Roc Oil Company · 2010-12-17 · 31 July 2008 The Manager, Companies Australian Securities Exchange ROC AND AEL MERGER SCHEME BOOKLET AND NOTICE OF SCHEME MEETING On 16 June 2008,

31 July 2008 The Manager, Companies Australian Securities Exchange

ROC AND AEL MERGER

SCHEME BOOKLET AND NOTICE OF SCHEME MEETING

On 16 June 2008, ROC and Anzon Energy Limited announced their intention to merge by way of scheme of arrangement. Further to this announcement attached is Anzon Energy Limited’s Scheme Booklet and Notice of Scheme Meeting. Yours sincerely,

SHEREE FORD Company Secretary

Roc Oil Company Limited (ACN 075 965 856) Level 14, 1 Market Street, Sydney NSW 2000, Australia. Telephone: +61 2 8356 2000 Facsimile: +61 2 9380 2066

L:\Administration\ASX_AIM\Releases\2008\July\Letter_Scheme Booklet_310708.doc

Scheme Booklet

This is an impor tant document and requires your immedia te a t tention. I t should be read in its entirety. If you are in doubt as to what you should do, you should consult your legal, investment or other professional adviser.

For the scheme of arrangement in rela tion to the proposed acquisition of all your Anzon Energy Limited shares by Roc Oil Company Limited

Your Direc tors unanimously

recommend tha t you

VOT E I N FAVOUR of the Scheme, in the absence

of a Superior Proposal

Legal adviser to Anzon Energy Limited Financial adviser to Anzon Energy Limited

This Scheme Booklet has been sent to you to help you understand the terms of the Scheme under which (if approved) ROC (or its wholly owned Subsidiary nominee) will acquire all the issued shares in AEL.

The Scheme is subject to the approval of AEL Shareholders and this Scheme Booklet includes information relevant to the decision of AEL Shareholders as to whether to approve the Scheme.

Is the Scheme in the best interests of AEL Shareholders?

3 Your Directors unanimously recommend that you vote in favour of the Scheme in the absence of a Superior Proposal.

3 The Independent Expert has concluded that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders.

What you should do next

You should read and carefully consider the information included in this Scheme Booklet to help you make an informed decision.

If you are in any doubt as to what you should do, you should consult your legal, investment or other professional adviser before making any decision in relation to your AEL Shares and how to vote at the Scheme Meeting.

You should vote on the Scheme.

Why you should vote

As an AEL Shareholder, you have a say in whether ROC will acquire all of the issued shares in AEL – your vote will be very important in determining whether the Merger will proceed.

Overview of this Scheme Booklet

For further informationFor further information, please call the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia), or 0800 450 974 (within New Zealand), or +61 3 9415 4639 outside Australia and New Zealand.

1Anzon Energy Scheme Booklet

Contents

Letter from the Chairman of AEL 2Letter from the Chairman of ROC 4Important dates 5Important notices 6

Part A – Overview of the Scheme 9

1 Merger overview 10

2 Reasons to vote for or against the Scheme 11

3 What you need to do 12

4 Answers to key questions 14

Part B – Scheme 17

5 Summary of the Merger 18

6 Scheme Meeting and how to vote 27

7 Assessment of the Merger 30

8 Risks 37

9 Profi le of AEL 43

10 Profi le of ROC 54

11 Profi le of the Merged Group 84

12 Implementation of the Scheme 102

13 Key terms of the Merger Implementation Deed 106

14 AEL additional information 111

15 ROC additional information 114

16 General additional information 117

Part C – Additional Materials and Documents 119

17 Taxation implications of the Scheme 120

18 Concise Independent Expert’s Report 127

19 Scheme 164

20 Deed Poll 176

21 Notice of Scheme Meeting 181

Part D – Glossary 185

22 General glossary 186

23 Technical glossary 197

Corporate Directory IBC

2 Anzon Energy Scheme Booklet

Letter from the Chairman of AEL

30 July 2008

Dear AEL Shareholder,

I am pleased to provide this Scheme Booklet to you, which sets out the details of the off er from Roc Oil Company Limited (ROC) to acquire all of your Anzon Energy Limited (AEL) shares.

On 16 June 2008, AEL announced that it had entered into a Merger Implementation Deed with ROC to eff ect a merger of ROC and AEL (Merger). The Merger is proposed to be implemented by way of a scheme of arrangement (Scheme) under which each AEL Shareholder will receive ROC Shares in exchange for their AEL Shares.

ROC has also announced its intention to make an off -market takeover off er for all of the shares in Anzon Australia Limited (AZA Takeover Off er). As AEL’s only material asset is its investment in AZA, the number of ROC Shares you will receive under the Scheme is to be set by reference to a value of $1.65 per AZA Share (the implied off er price under the AZA Takeover Off er as at 13 June 2008). Based on current estimates, the implied merger ratio for AEL Shareholders (Merger Ratio) is approximately 1.33 ROC Shares for every AEL Share held (Scheme Consideration).1 As at 13 June 2008 (being the last Trading Day before the announcement of the Merger), the value of the Scheme Consideration was estimated to be $2.69 (£1.30)2 per AEL Share. AEL Shareholders should note that the ROC Share price has declined since the announcement of the Merger on 16 June 2008, which has had the eff ect of decreasing the current value of the Scheme Consideration off ered under the Merger.

The Merger with ROC will provide AEL Shareholders with a number of important benefi ts including:

Substantial premium to historical trading pricesn – Based on the estimated value of the Scheme Consideration of $2.69 (£1.30)3 per AEL Share on 13 June 2008, the off er for AEL represents a signifi cant premium over the historical market price of AEL Shares. This includes a 35% premium to the closing price of AEL Shares on 13 June 2008 and a 103% premium to the closing price of AEL Shares on the last Trading Day on which AEL Shares traded prior to the Initial Approach Date;

Diversifi cationn – The Merger will provide AEL Shareholders with exposure to a diversifi ed portfolio of assets including existing oil production from the Basker Manta Gummy (BMG) oil and gas fi elds as well as ROC’s six producing oil fi elds located in Australia, China, Mauritania and the North Sea. In addition, AEL Shareholders will have access to the growth potential from ROC’s suite of development, appraisal and exploration assets located in Australia, China, Angola, Mauritania, Madagascar and Equatorial Guinea. Importantly, AEL Shareholders will also maintain indirect exposure to the upside from the continued development of the BMG oil and gas project in the Bass Strait;

Removal of trading discountn – AEL has consistently traded at a discount to the “see through” value of its investment in AZA. This discount can be attributed to a number of factors including single asset risk and stock market illiquidity, each of which has continued to adversely impact the share price of AEL and its ability to grow and develop. The Merger with ROC should rectify this issue;

Improved market liquidity and potential re-ratingn – The Merger provides AEL Shareholders with the opportunity to own ROC Shares, which have signifi cantly greater market liquidity than AEL Shares. The enhanced liquidity together with the increased market capitalisation and asset diversifi cation of the Merged Group may provide the opportunity for AEL Shareholders to participate in a potential re-rating of the Merged Group; and

Roll-over reliefn – Eligible Scheme Shareholders may be entitled to Australian capital gains tax (CGT) roll-over relief in respect of their Scheme Consideration. CGT roll-over relief would enable eligible Scheme Shareholders to defer any potential CGT liability, which may be attributable to the Scheme Consideration, until they dispose of the New ROC Shares.

Directors’ recommendation

Your Directors consider the Merger with ROC warrants their recommendation and that AEL Shareholders should be given the opportunity to vote on the Scheme to eff ect the Merger.

The AEL Directors have concluded that the Scheme is in the best interests of all AEL Shareholders and unanimously

recommend that you vote in favour of the Scheme, in the absence of a Superior Proposal.

All AEL Directors who hold AEL Shares intend to vote in favour of the Scheme, in respect of all their AEL Shares in the absence of a Superior Proposal.

1 Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in Section 5.4.2 Based on a AUD:GBP exchange rate of 0.485. Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in

Section 5.4. 3 Based on a AUD:GBP exchange rate of 0.485. Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in

Section 5.4.


Independent Expert’s conclusion

The AEL Board commissioned the Independent Expert, Deloitte Corporate Finance Pty Limited, to prepare an Independent Expert’s Report to assess the merits of the Scheme.

The Independent Expert, whose concise report is contained in Section 18, has concluded that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders.

The proposed Merger

The Merger of AEL and ROC is proposed to be implemented by way of a scheme of arrangement. The Scheme is subject to a number of conditions which are described in Section 13.2, including the approval of AEL Shareholders at the Scheme Meeting and the approval of the Court. The conditions also include the receipt of certain other regulatory approvals.

If the Scheme is implemented, all AEL Shares will be transferred to ROC (or a wholly owned Subsidiary of ROC) and Scheme Shareholders will receive New ROC Shares as consideration. If you are an Ineligible Foreign Shareholder, the New ROC Shares you would otherwise have become entitled to receive as Scheme Consideration will be sold under the Sale Facility and you will receive the cash proceeds of this sale in exchange for your AEL Shares.

Process and Scheme Meeting

AEL Shareholders will be asked to vote on the proposed Merger with ROC at the Scheme Meeting, which is to be held at 10am (AEST) on 3 September 2008, at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney NSW, 2000. AEL Shareholders may vote in person, by proxy, by attorney, or, in the case of a corporate AEL Shareholder, by corporate representative.

Section 3 contains information on how to vote on the Scheme.

Queries

If you have any questions, please call the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia), or 0800 450 974 (within New Zealand), or +61 3 9415 4639 outside Australia and New Zealand or consult your legal, investment or other professional adviser without delay.

You are strongly encouraged to read the information in this Scheme Booklet carefully, as it sets out the information which is material for you to make a decision whether to approve the Scheme.

My fellow AEL Directors and I look forward to the exciting combination of AEL and ROC and encourage you to vote in favour of the Scheme.

Yours sincerely

Michael ArnettChairmanAnzon Energy Limited


Letter from the Chairman of ROC

30 July 2008

Dear AEL Shareholder,

On behalf of the Directors of ROC, I wish to encourage all AEL Shareholders to support and participate in the creation of a new upstream oil and gas company listed on both ASX and AIM through the acquisition by ROC of all the shares in AEL (Merger).

ROC has also made an off -market takeover off er (AZA Takeover Off er) to acquire all of the shares in AEL’s subsidiary Anzon Australia Limited. The Merger is not dependent on the outcome of the AZA Takeover Off er.

The Merger will provide AEL Shareholders with an exposure to ROC’s global portfolio of producing assets as well as the BMG oil and gas project. The merged ROC and AEL will have attributable production from eight producing fi elds and development, appraisal and advanced exploration projects in Australia, China, Mauritania, Angola, Equatorial Guinea, Madagascar and New Zealand.

There are many other benefi ts of the Merger for AEL Shareholders which include an attractive premium, removal of single asset risk and gaining exposure to the benefi ts of a diversifi ed group with increased scale, liquidity and an enhanced market profi le. These combined benefi ts are likely to generate increased investor interest in the merged entity.

The Merger is endorsed by the AEL Board who unanimously recommend that you vote in favour of the resolution to approve the Scheme in the absence of a Superior Proposal. Each of your AEL Directors who holds shares in AEL intends to vote in favour of the Scheme in respect of their AEL Shares, in the absence of a Superior Proposal. The Independent Expert has also concluded that the Merger is fair and reasonable and therefore in the best interests of AEL Shareholders. The Merger is also unanimously supported by the Directors of ROC.

The Scheme Booklet provides details of the Merger, including a summary of the Independent Expert’s Report and information on how to vote. Please read it carefully before making your decision.

I encourage you to vote in favour of the resolution to approve the Scheme at the Scheme Meeting on 3 September 2008.

Yours sincerely,

Andrew LoveChairmanRoc Oil Company Limited


Important dates

Date and Time Event

10am on 2 September 2008 Last date and time for lodgement of Proxy Form(s) or powers of attorney for the Scheme Meeting

10am on 2 September 2008 Date and time for determining eligibility to vote at the Scheme Meeting

10am on 3 September 2008

Scheme Meeting

Scheme Meeting to vote on the Scheme to be held at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney NSW, 2000

5 September 2008

Second Court DateCourt hearing date for approval of the Scheme

8 September 2008 Lodge Court order with ASIC

8 September 2008

Eff ective DateEff ective Date of the Scheme

9 September 2008 New ROC Shares commence trading on ASX on a deferred settlement basis

7.00pm on 15 September 2008

Record DateRecord Date for determining entitlement to Scheme Consideration

22 September 2008

Implementation Date

Implementation of the Scheme including ROC issuing the Scheme Consideration

22 September 2008Expected date for despatch of holding statements for New ROC Shares to Scheme Shareholders, which will in any event be despatched within 5 Business Days after the Implementation Date

23 September 2008 Commencement of normal trading of New ROC Shares on ASX

The timetable above is indicative only and certain dates and times are subject to all necessary approvals being received from AEL Shareholders, the Court and other Regulatory Authorities. AEL has the right to vary any or all of these dates and times, subject to Court approval where required. Any changes to the above timetable will be published on AEL’s website at www.anzonenergy.com and announced to AIM at www.londonstockexchange.com.

The actual timetable will depend on factors outside the control of AEL and ROC and the implementation of the Scheme is subject to the satisfaction or, if applicable, waiver of the Scheme Conditions (see Section 13.2).

All times are referenced to AEST unless otherwise stated.

Deferred settlement trading of New ROC Shares is expected to commence at the start of trading on 9 September 2008 with normal trading expected to commence on 23 September 2008.

It is the responsibility of any AEL Shareholder proposing to sell their New ROC Shares on a deferred settlement basis to confi rm their holding before doing so. Any New ROC Shares sold during the deferred settlement trading period and prior to the receipt of a holding statement will be sold at the risk of the holder of the New ROC Shares because they will not know for certain how many New ROC Shares they will receive until they receive their holding statement (see Section 12.5).


Important notices

The Scheme Booklet

This Scheme Booklet is dated 30 July 2008 and sets out details of the Merger and constitutes the Explanatory Statement for the Scheme for the purposes of section 412(1) of the Corporations Act. It explains the eff ect of the scheme between AEL and AEL Shareholders to be considered at the Scheme Meeting. A copy of the proposed Scheme is included in this Scheme Booklet at Section 19.

You should read this Scheme Booklet in its entirety before making a decision as to how to vote on the resolution to be considered at the Scheme Meeting. If you are in doubt as to what you should do, you should consult your legal, investment or other professional adviser.

ASIC and ASX

A copy of this Scheme Booklet has been examined and the Explanatory Statement registered by ASIC for the purposes of section 412(6) of the Corporations Act. ASIC has been requested to provide a statement, in accordance with section 411(17)(b) of the Corporations Act, that ASIC has no objection to the Scheme. If ASIC provides that statement, then it will be produced to the Court at the time of the Court hearing to approve the Scheme. Neither ASIC nor any of its offi cers takes any responsibility for the contents of this Scheme Booklet.

A copy of this Scheme Booklet has been provided to ASX. Neither ASX nor any of its offi cers takes any responsibility for the contents of this Scheme Booklet. The fact that ASX may grant offi cial quotation of the New ROC Shares is not to be taken in any way as an indication of the merits of ROC or the Scheme. ROC Shares will continue to be quoted on ASX and AIM if the Scheme is not approved.

London Stock Exchange

A copy of this Scheme Booklet will be sent to London Stock Exchange, however London Stock Exchange has not examined or approved the contents of this document.

Investment decisions

The information contained in this Scheme Booklet does not constitute fi nancial product advice. This Scheme Booklet does not take into account the investment objectives, fi nancial situation or particular needs of individual AEL Shareholders or any other person. Independent fi nancial and taxation advice should be sought before making any decision in relation to the Scheme.

Responsibility statement

The AEL Scheme Information has been prepared by AEL and its Directors and is the sole responsibility of AEL. None of ROC, its directors, offi cers or advisers assumes any responsibility for the accuracy or completeness of the AEL Scheme Information.

The ROC Scheme Information has been provided by ROC and its directors and is the sole responsibility of ROC. None of AEL, its Directors, offi cers or advisers assumes any responsibility for the accuracy or completeness of the ROC Scheme Information.

The Joint Information has been prepared jointly by AEL and ROC based on information each company has provided to the other, and each of AEL and ROC is responsible for the information it has provided to the other.

Corrs Chambers Westgarth has prepared the general outline of taxation implications of the Scheme in Section 17 of this Scheme Booklet and is responsible for that Section only.

Deloitte has prepared the concise Independent Expert’s Report in Section 18 and is responsible for that report only.

Forward looking statements

Certain statements in this Scheme Booklet relate to the future. All statements other than statements of historical fact are, or may be deemed to be, forward looking statements. All forward-looking statements in this Scheme Booklet refl ect the current expectations of either AEL or ROC as the context requires concerning future results and events and generally may be identifi ed by the use of forward-looking words such as “believe”, “aim”, “expect”, “anticipate”, “intending”, “foreseeing”, “likely”, “should”, “planned”, “may”, “estimate”, “potential”, or other similar words. Similarly, statements that describe AEL’s or ROC’s objectives, plans, goals or expectations are or may be forward-looking statements.

The statements contained in this Scheme Booklet about the impact that the Merger may have on the results of ROC’s operations and the advantages and disadvantages anticipated to result from the Merger, are also forward-looking statements. Such statements involve known and unknown risks, uncertainties, assumptions and other important factors that may cause the actual results, performance or achievements of AEL, ROC or the Merged Group to be materially diff erent from the results, performance or achievements expressed or implied by such statements. The operation and fi nancial performance of AEL, ROC and the Merged Group are subject to various risks that are summarised in this Scheme Booklet and which may be beyond the control of each of AEL and ROC. As a result, the actual results of the Merged Group’s operations and earnings following implementation of the Merger and the actual advantages of the Merger may diff er from those that are anticipated. AEL Shareholders should note that historical fi nancial performance of AEL or ROC is no assurance of future fi nancial performance of AEL or ROC.

Any forward looking statements in this Scheme Booklet are made, and refl ect views held, only as at the date of this Scheme Booklet. AEL and ROC make no representation and give no assurance or guarantee that the occurrence of the events or the achievement of results expressed or implied in such statements will actually occur. You are cautioned not to place undue reliance on any forward looking statement, and all subsequent written or oral forward looking statements attributable to AEL or ROC or any person acting on their behalf are qualifi ed by this cautionary statement. Subject to any continuing obligations under the Listing Rules, AIM Rules or the Corporations Act, and except as set out in Sections 9.15, 10.18, 14.10 and 15.4, neither AEL nor ROC gives any undertaking to update or revise any forward


looking statements after the date of this Scheme Booklet, to refl ect any changes in expectations in relation thereto or any change in events, conditions or circumstances on which any such statement is based.

Privacy and personal information

AEL will need to collect personal information to implement the Scheme. The personal information may include the names, contact details and details of shareholdings of AEL Shareholders, plus contact details of individuals appointed by AEL Shareholders to act as proxies, corporate representatives or attorneys at the Scheme Meeting. The primary purpose of the collection of personal information is to assist AEL in the conduct of the Scheme Meeting and to enable the Scheme to be implemented. The collection of certain personal information is required or authorised by the Corporations Act.

AEL Shareholders, and other individuals in respect of whom personal information is collected, have certain rights to access the personal information collected about them and can contact the AEL Share Registry on 1300 85 05 05 (within Australia) or +61 9415 4000 (outside Australia) if they wish to exercise those rights.

Personal information may be disclosed to the share registrars of AEL or ROC, print and mail service providers, authorised securities brokers, Related Bodies Corporate of AEL and to AEL’s advisers to the extent necessary to eff ect the Scheme. If the information outlined above is not collected, AEL may be hindered in, or prevented from, conducting the Scheme Meeting, or implementing the Scheme eff ectively or at all. AEL Shareholders who appoint a named person to act as their proxy, corporate representative or attorney at the Scheme Meeting should ensure that they inform that person of the matters outlined above.

Notice to foreign shareholders

This Scheme Booklet and the Scheme have been prepared in compliance with the disclosure requirements of Australia which may be diff erent from those in other jurisdictions. This Scheme Booklet and the Scheme do not in any way constitute an off er of securities or a solicitation of an off er to purchase securities in any place in which, or to any person to whom, it would not be lawful to make such an off er or solicitation.

AEL Shareholders in jurisdictions outside Australia and its external territories and New Zealand may be considered to be Ineligible Foreign Shareholders under the Scheme and should refer to Sections 5.9 and 16.1. ROC is not obliged to issue New ROC Shares to any Ineligible Foreign Shareholder unless AEL and ROC determine that it is not precluded from lawfully issuing New ROC Shares to that Ineligible Foreign Shareholder, either unconditionally or after compliance with conditions which AEL and ROC in their sole discretion regard as acceptable and not unduly onerous. As at the date of this Scheme Booklet, AEL and ROC expect that AEL Shareholders whose address is shown in the AEL Share Register at the Record Date is in any of the following jurisdictions will also

receive the New ROC Shares as Scheme Consideration: Ras Al Khaimah (United Arab Emirates - other than any AEL Shareholders located in the Dubai International Finance Centre), Liechtenstein, Cayman Islands, British Virgin Islands or the United Kingdom (or who are acting on behalf of such persons). This is subject to there being no change in the relevant law of these particular jurisdictions prior to the Implementation Date.

The New ROC Shares that would otherwise have been issued to Ineligible Foreign Shareholders will be sold under the Sale Facility. For details on the Sale Facility refer to Section 16.1.

The New ROC Shares off ered as a consequence of the Scheme are off ered in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002. This exemption relieves ROC from certain requirements of the New Zealand Securities Act 1978 and the New Zealand Securities Regulations 1983 and means that ROC is able, subject to certain conditions, to make the off er of the New ROC Shares in New Zealand pursuant to this Scheme Booklet. This Scheme Booklet is not therefore a prospectus or an investment statement under New Zealand law and has not been registered, fi led with or approved by any New Zealand regulatory authority under or in accordance with the Securities Act 1978 (or any other relevant New Zealand law). This Scheme Booklet may not contain all the information that a prospectus or investment statement under New Zealand law is required to contain. New Zealand investors should seek their own advice and satisfy themselves as to the Australian and New Zealand tax implications of participating in the Scheme. ROC is not, and will not be, listed on the New Zealand Stock Exchange, and investors may not have access to information on it in the same way as they would if it were so listed.

This Scheme Booklet does not constitute a prospectus within the meaning of section 85 of the Financial Services and Markets Act 2000 as amended (FSMA), and has not been drawn up in accordance with the Prospectus Rules published by the United Kingdom Financial Services Authority and has not been approved by or fi led with the United Kingdom Listing Authority as a prospectus under the Prospectus Rules (made under Part VI of FSMA) or by the London Stock Exchange.

ROC is not licensed by the United Arab Emirates Central Bank, the Dubai International Finance Centre or the Dubai Financial Services Authority, nor licensed by any other government authority in the United Arab Emirates. The ROC Shares to be issued under the Scheme will be issued in Australia and not in the United Arab Emirates.

References to time and currency

Unless otherwise stated, a reference to time in this Scheme Booklet is a reference to AEST. References to ($) dollars in this Scheme Booklet are to Australian dollars, unless otherwise stated.


Rounding

Certain fi nancial fi gures in this Scheme Booklet have been rounded as applicable, unless otherwise stated. Such fi gures should be considered as approximate fi gures. Any discrepancies in any table between totals and sums of amounts listed therein or to previously published fi nancial fi gures are due to rounding.

Defined terms and interpretation

Capitalised terms used in this Scheme Booklet are defi ned either in the General Glossary in Section 22 or the Technical Glossary in Section 23 or in the body of this Scheme Booklet.

Tax

AEL Shareholders should consult their own professional tax adviser as to the tax consequences of the Scheme relevant to their specifi c circumstances.

Court process

The Court is not responsible for the contents of this Scheme Booklet and, in ordering that the Scheme Meeting be convened, the Court does not in any way indicate that the Court has approved or will approve the terms of the Scheme. An order of the Court under sections 411(1) and 411(1A) of the Corporations Act is not an endorsement of, or any other expression of opinion on, the Scheme.


PART A

OVERVIEW OF THE SCHEME


1. Merger overview

This is an important document. You should read the information in this Scheme Booklet in its entirety before making a decision on how to vote on the resolution to be considered at the Scheme Meeting.

The information in this Section is a summary only. You should read the entire Scheme Booklet before deciding how to vote on the Scheme.

The Merger AEL has announced that it intends to merge with ROC by way of scheme of arrangement.

Scheme

Consideration If the Scheme is approved, AEL Shareholders (other than Ineligible Foreign Shareholders)

will receive the Scheme Consideration for each AEL Share they hold.

Based on current estimates, the Scheme Consideration is calculated to be approximately 1.33 ROC Shares for every AEL Share held. AEL Shareholders should be aware that the Scheme Consideration may need to be adjusted to refl ect the Net Cash position on the Record Date. Any change is not expected to be material. Further details in relation to the calculation of the Scheme Consideration are set out in Section 5.4(e).

If you are an Ineligible Foreign Shareholder, the New ROC Shares you would otherwise have become entitled to receive as Scheme Consideration will be sold under the Sale Facility, and you will receive the proceeds of the sale so that you receive only cash in exchange for your AEL Shares.

Directors’

recommendation Your Directors have concluded that the Scheme is in the best interests of all AEL Shareholders

and unanimously recommend that AEL Shareholders vote in favour of the Scheme, in the absence of a Superior Proposal.

Independent

Expert’s

conclusion

The Independent Expert, whose concise report is contained in Section 18, has concluded that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders.

No Superior

Proposal

Since the announcement of the Merger on 16 June 2008, no Superior Proposal has emerged.

The AZA

Takeover Offer

On 16 June 2008, ROC also announced an off -market takeover off er (AZA Takeover Off er) to acquire all of the ordinary shares in AZA.

As the Scheme is not dependent on the outcome of the AZA Takeover Off er there are a number of potential transaction outcomes for AEL Shareholders:

the Scheme is implemented and all AZA Shares are acquired by ROC under the AZA n

Takeover Off er. Under this scenario, ROC will acquire both AEL and AZA and they will become wholly owned subsidiaries of ROC;

the Scheme is implemented but ROC does not acquire all of the outstanding AZA n

Shares under the AZA Takeover Off er. Under this scenario, ROC will acquire AEL and the Merged Group will own at least 53% of AZA; and

the Scheme is not implemented and ROC does not acquire any AZA Shares under the n

AZA Takeover Off er. Under this scenario, AEL will remain admitted to trading on AIM and continue to operate its business in the manner in which it is currently operated. In addition, none of the benefi ts outlined in Section 7 will be realised.


2. Reasons to vote for or against the Scheme

The information in this Section is a summary. You should read the entire Scheme Booklet before deciding how to vote.

In determining whether to vote for or against the Scheme, AEL Shareholders cannot be assured that ROC will acquire all of the outstanding AZA Shares under the AZA Takeover Off er and therefore that all of the benefi ts outlined below as reasons to vote in favour of the Scheme will be delivered.

2.1 Key reasons to vote for the Scheme

Substantial premium over historical trading prices for AEL Shares

Independent Expert has concluded the Scheme is fair and reasonable and therefore is in the best interests of AEL Shareholders

Through exposure to ROC’s suite of production, development, appraisal and exploration assets, the Merger provides AEL Shareholders with asset diversifi cation, signifi cant growth potential and removes the “single asset” exposure

Merger removes the factors that have led to AEL Shares trading at a discount to the “see through” value of its investment in AZA, assuming AZA becomes a wholly owned subsidiary of ROC

Merger provides increased scale and may provide the opportunity for AEL Shareholders to participate in a potential re-rating of the Merged Group

If the Scheme is not implemented, then in the absence of another proposal emerging, the AEL Share price may fall

Any potential Australian CGT liability, which may be attributable to the Scheme Consideration received by eligible AEL Shareholders, may be deferred until the subsequent sale of the New ROC Shares

2.2 Key reasons to consider voting against the Scheme

Following the Merger, the value of the ROC Shares received may fl uctuate, which may impact the value that could be realised from their sale

The benefi ts associated with any future development of AEL’s assets, including the BMG Project, will be shared amongst all shareholders in the Merged Group rather than just the AEL Shareholders

You may not agree with the AEL Directors’ recommendation and the Independent Expert’s conclusions

You will be exposed to the potential risks of the Merger as set out in Section 8

You may consider there is potential for a Superior Proposal to be made to AEL Shareholders

Section 7 provides greater details on the reasons why you may consider voting for or against the Scheme.


3. What you need to do

3.1 Carefully read and consider this Scheme Booklet

This is an important document. You should read the information in this Scheme Booklet in its entirety before making a decision on how to vote on the resolution to be considered at the Scheme Meeting.

If you are in doubt as to what you should do, you should consult your legal, investment or other professional adviser.

3.2 Consider the reasons to vote for or against the Scheme and the risks of the Merger

Refer to Section 7.1 for a discussion of the reasons to vote in favour of the Scheme, Section 7.2 for a discussion of the reasons to vote against the Scheme and Section 8 for a discussion of risks in relation to the Merger.

3.3 Consider the AEL Board’s recommendation and the opinion of the Independent Expert

The AEL Directors unanimously recommend that you vote in favour of the Scheme in respect of all your AEL Shares in the absence of a Superior Proposal. Your Directors intend to vote in favour of the Scheme in respect of all of their AEL Shares in the absence of a Superior Proposal.

The Independent Expert has reviewed the terms of the Merger and concluded that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders. A copy of the concise Independent Expert’s Report is set out in Section 18. A copy of the complete Independent Expert’s Report is available at www.anzonenergy.com or by calling the Information Line.

3.4 Vote on the Scheme

The AEL Directors urge you to vote in favour of the resolution to approve the Scheme. Your vote will be very important in determining whether the Scheme is approved. The Scheme cannot proceed unless the resolution to approve the Scheme is passed by the requisite majorities.

The Notice of Scheme Meeting in Section 21 sets out the resolution relating to the Scheme.

How do I vote?

Each person who is registered on the AEL Share Register as an AEL Shareholder at 10am (AEST) on 2 September 2008, other than a holder of Excluded Shares, is entitled to attend and vote at the Scheme Meeting, either in person, by proxy or attorney or, in the case of a corporate AEL Shareholder, by representative.

You may vote by:

attending the Scheme Meeting at 10.am (AEST) on 3 September 2008, at Corrs Chambers Westgarth, Level 32, n

Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000 in person (or by sending an attorney, or, if you hold AEL Shares through a company, by authorising a corporate representative to attend on your behalf ); or

if you cannot attend the Scheme Meeting or you prefer to vote by proxy, you may appoint a proxy by completing n

the Proxy Form sent to you with this Scheme Booklet and returning it to AEL or Computershare, AEL’s Share Registry, by no later than 10am (AEST) on 2 September 2008.

Further information on how to vote is set out in Section 6.

3.5 Holders of depositary interests

If your interest in AEL Shares is held in CREST (DI Holder) you will have received the Scheme Booklet from the Depositary together with a request for your voting instructions on how to vote at the Scheme Meeting. As a DI Holder you have a say in whether ROC will acquire all of the issued shares in AEL and your voting instruction to the Custodian will be very important in determining whether the Merger with ROC proceeds. The voting instruction form must be returned to the Depositary no later than 12 noon (UK time) on 1 September 2008.


3.6 If you have any further queries

If you have any questions in relation to the Merger or the Scheme Meeting after reading this Scheme Booklet, please contact your legal, investment or other professional adviser, or telephone the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia) or 0800 450 974 (within New Zealand) or +61 3 9415 4639 outside Australia and New Zealand.

If you would like more information about AEL, you can visit the AEL website at www.anzonenergy.com.


4. Answers to key questions

This Section 4 answers some key questions that you may have about the Scheme. You should read the entire Scheme Booklet before deciding how to vote on the Scheme.

Questions Answers

What is the

Scheme?

ROC and AEL have agreed to merge by way of scheme of arrangement. Under the Scheme, Scheme Shareholders will be entitled to receive the Scheme Consideration in exchange for their AEL Shares.

Who is ROC? ROC is one of Australia’s leading independent oil and gas companies which has grown its business through a combination of organic exploration and development as well as through acquisitions. The ROC Group’s estimated net production for 2008 is approximately 10,000 boepd from six fi elds located in Australia, Africa, China and the North Sea.

What will

I receive if

the Scheme is

implemented?

If the Scheme is implemented, you will receive for each AEL Share you hold on the Record Date, the Scheme Consideration. Based on current estimates, the Scheme Consideration is calculated to be approximately 1.33 ROC Shares for every AEL Share held. AEL Shareholders should be aware that the Scheme Consideration may need to be adjusted to refl ect the Net Cash position on the Record Date. Any change is not expected to be material. Further details in relation to the calculation of the Scheme Consideration are set out in Section 5.4(e).

Where a Scheme Shareholder is an Ineligible Foreign Shareholder, the New ROC Shares to which that Ineligible Foreign Shareholder would otherwise have become entitled will be sold through the Sale Facility and the net proceeds remitted to the Ineligible Foreign Shareholder.

What is the AZA

Takeover Off er?

ROC has also announced an intention to make an off -market takeover off er for all the Shares in AZA.

The Scheme is not conditional on the AZA Takeover Off er, however the AZA Takeover Off er is conditional on the Scheme becoming Eff ective.

Are there any

conditions to the

Scheme?

There are a number of outstanding conditions that will need to be satisfi ed or waived before the Scheme can become Eff ective and the Merger can be implemented. See Section 13.2 for a full description of the conditions to the Scheme.

What happens if a

Superior Proposal for

AEL emerges?

If a Superior Proposal for AEL emerges, AEL Shareholders will be informed through an announcement to AIM.

What are the potential

transaction outcomes

for AEL Shareholders?

As the Scheme is not conditional on the AZA Takeover Off er, there are a number of potential transaction outcomes for AEL Shareholders:

the Scheme is implemented and all AZA Shares are acquired by ROC under the AZA Takeover n

Off er. Under this scenario, ROC will acquire both AEL and AZA and they will become wholly owned subsidiaries of ROC;

the Scheme is implemented but ROC does not acquire all of the outstanding AZA Shares n

under the AZA Takeover Off er. Under this scenario, ROC will acquire AEL and the Merged Group will own at least 53% of AZA; and

the Scheme is not implemented and ROC does not acquire any AZA Shares under the n

AZA Takeover Off er. Under this scenario, AEL will remain admitted to trading on AIM and continue to operate its business in the manner in which it is currently operated. In addition none of the benefi ts outlined in Section 7 will be realised.

When will I

receive my New

ROC Shares?

New ROC Shares will be issued to Scheme Shareholders (other than Ineligible Foreign Shareholders) on the Implementation Date. At this stage the Implementation Date is expected to be 22 September 2008. Your New ROC Shares will rank equally with existing ROC Shares. For more information please see Sections 5.5 and 12.4.

Holding statements detailing your holding of New ROC Shares are expected to be sent to you on the Implementation Date, and, in any event, within 5 Business Days after the Implementation Date.


Who is entitled

to vote?

AEL Shareholders who are registered as members on the AEL Share Register at 10am (AEST) on 2 September 2008, other than a holder of Excluded Shares, will be entitled to vote at the Scheme Meeting.

Why should I vote? Your vote will be very important in determining whether the Merger will proceed.

The AEL Board unanimously recommends that you vote in favour of the Scheme in respect of all your AEL Shares in the absence of a Superior Proposal. Your Directors intend to vote in favour of the Scheme in respect of all of their AEL Shares in the absence of a Superior Proposal.

Further details on how to vote are outlined in Section 6.

What happens if I vote

against the Scheme or

do not vote?

If you vote against the Scheme, or do not vote at all, then it may not be approved and the Merger may not proceed. If the Merger does not proceed, the benefi ts of the Merger in Section 7 will not be realised and the AEL Share price may fall.

However, even if you vote against the Scheme, or do not vote, this does not mean that the Scheme will not be approved. If the Scheme is approved by the requisite majority of AEL Shareholders and by the Court, the Merger will be implemented, your AEL Shares will be transferred to ROC, and you will receive the Scheme Consideration for your AEL Shares regardless of whether you voted against the Scheme (or did not vote at all).

What is the position

if I hold my AEL

Shares in CREST?

If your interest in AEL Shares is held in CREST, the Custodian will be registered in the AEL Share Register as the holder of your shares. If you wish the Custodian to vote your benefi cial ownership in AEL Shares at the Scheme Meeting you must instruct the Custodian on how you wish it to vote your shares. The voting instruction form must be returned to the Depositary no later than 12 noon (UK time) on 1 September 2008.

Can I sell my AEL

Shares now?

Yes, you can trade your AEL Shares now. If you sell your AEL Shares and the sale is settled and the transfer is registered prior to the Record Date you will not participate in the Scheme and you will not be issued with the Scheme Consideration.

AEL will not accept for registration any transfer of AEL Shares received after the Record Date. If you sell your AEL Shares and the sale is not settled, and the transfer is not received for registration prior to the Record Date, you will still participate in the Scheme and be issued with the Scheme Consideration. In these circumstances, the buyer of your AEL Shares will not

receive the Scheme Consideration and you may be liable to the buyer to account for the

Scheme Consideration.

When can I start

trading my New ROC

Shares on ASX?

Trading on the ASX of New ROC Shares issued as Scheme Consideration is expected to commence on a deferred settlement basis on or about 9 September 2008.

Deferred settlement trading will continue until holding statements are despatched for the New ROC Shares. If you sell your New ROC Shares during the deferred settlement trading

period and prior to receipt of your holding statements you do so at your own risk because

you will not know how many New ROC Shares you will receive until you receive your

holding statement.

AEL Shareholders should be aware that the exact number of New ROC Shares to be issued as Scheme Consideration will not be known until the fi nal calculations are made at the Record Date. As such, a Scheme Shareholder will not be able to trade ROC Shares on a deferred settlement basis with certainty as to the exact number of New ROC Shares they will be issued under the Scheme. Holding statements detailing your holding of New ROC Shares are expected to be sent to you on the Implementation Date, and will, in any event, be despatched within 5 Business Days after the Implementation Date. Once the holding statements are despatched, deferred settlement trading in New ROC Shares will cease and normal settlement trading will commence on the Business Day after such despatch. For further information on deferred settlement trading, refer to Section 12.5.


What are the

taxation implications

of the Scheme?

Eligible Scheme Shareholders may be entitled to Australian CGT roll-over relief in respect of their Scheme Consideration. CGT roll-over relief would enable eligible AEL Shareholders to defer any Australian CGT liability on the disposal of their AEL Shares until any subsequent disposal of New ROC Shares they receive under the Scheme.

The Australian taxation implications of the Scheme for certain AEL Shareholders are set out in Section 17.

AEL Shareholders should consult their own professional taxation adviser in relation to the taxation consequences of the Scheme relevant to their specifi c circumstances.

Who is entitled to

receive the Scheme

Consideration?

You will be a Scheme Shareholder and therefore entitled to receive the Scheme Consideration if you are registered on the AEL Share Register at 7.00pm (AEST) on the Record Date (currently 15 September 2008). If the Scheme becomes Eff ective you will receive the Scheme Consideration in exchange for your AEL Shares.

Refer to Section 5.4 for further details of the Scheme Consideration. Refer to Section 12.9 for further details regarding the determination of Scheme Shareholders and Sections 5.9 and 16.1 if you are an Ineligible Foreign Shareholder.

What vote is required

to approve the

Scheme?

For the Scheme to be approved, the resolution approving the Scheme must, unless the Court orders otherwise, be passed by a majority in number (i.e. more than 50%) of AEL Shareholders who are present and voting, either in person or by proxy, attorney or, in the case of a corporation, its duly appointed corporate representative at the Scheme Meeting and passed by at least 75% of the total number of votes cast on the resolution.

Who can help answer

my questions about

the Merger?

If you have any questions, please call the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia) or 0800 450 974 (within New Zealand) or +61 3 9415 4639 outside Australia and New Zealand or consult your legal, investment or other professional adviser without delay.


PART B

SCHEME OF ARRANGEMENT


5. Summary of the Merger

5.1 Background

Over the last 12-18 months, your Directors have actively considered strategic alternatives available to AEL to realise the value inherent in its main asset, being its 53% shareholding in AZA. During these deliberations, AZA announced on 27 August 2007 (Initial Approach Date), that it had received a number of approaches from parties which could lead to an off er or proposal being put to AZA Shareholders. Following that announcement, AZA then implemented a formal sale process. AEL, as part of its own assessment of its strategic alternatives, was fully supportive of the AZA sale process.

On 24 October 2007, AEL announced that ARC Energy Limited had been selected by both AEL and AZA as the preferred bidder to acquire both companies by way of separate schemes of arrangement and that AEL and AZA had entered into separate merger implementation deeds with ARC Energy Limited.

The Boards of AEL and AZA gave their unanimous support to the ARC Energy Limited off ers in the absence of a superior proposal emerging.

On 23 January 2008, AEL announced that it had received what it considered to be a superior proposal from Nexus Energy Limited and entered into a merger implementation deed to eff ect a merger of the companies. On 5 May 2008, both companies announced that the proposed merger would not proceed due to the parties not being able to agree on appropriate merger terms in light of the impact of the Basker 6 and Basker 6 ST1 drilling results on the Basker oil fi eld reserve.

On 16 June 2008, AEL announced that it had received a proposal from ROC and consequently entered into a Merger Implementation Deed to eff ect a Merger of ROC and AEL.

If implemented, the Scheme will result in ROC (or its wholly owned Subsidiary nominee) acquiring all the AEL Shares on issue in return for the issue of New ROC Shares. On 16 June 2008, ROC also announced the AZA Takeover Off er. The Scheme is not dependent upon the outcome of the AZA Takeover Off er. However, the AZA Takeover Off er is conditional on ROC acquiring 100% of AEL under the Scheme. On this basis there are a number of potential transaction outcomes for AEL Shareholders:

the Scheme is implemented and all AZA Shares are acquired by ROC under the AZA Takeover Off er. Under this n

scenario, ROC will acquire both AEL and AZA and they will become wholly owned subsidiaries of ROC;

the Scheme is implemented but ROC does not acquire all of the outstanding AZA Shares under the AZA Takeover n

Off er. Under this scenario, ROC will acquire AEL and the Merged Group will own at least 53% of AZA; and

the Scheme is not implemented and ROC does not acquire any AZA Shares under the AZA Takeover Off er. Under n

this scenario, AEL will remain admitted to trading on AIM and continue to operate its business in the manner in which it is currently operated. In addition none of the benefi ts outlined in Section 7 will be realised.

If the Scheme is implemented and all AZA Shares are acquired by ROC under the AZA Takeover Off er, the combined group will be one of Australia’s leading independent listed oil and gas companies with:

approximately 47 mmboen4 net 2P reserves including best estimate gas and condensate contingent resources;

estimated net production for 2008 of approximately 14,000 boepd; andn

an estimated market capitalisation of approximately $1.2 billion (£580 million)n5.

The Merged Group will provide AEL Shareholders with exposure to an attractive portfolio of geographically diverse assets with current oil production, signifi cant near and medium term development projects and a prospective exploration portfolio:

Current oil production n

The Merged Group will have estimated 2008 production of approximately 14,000 boepd, from eight fi elds located in Australia, China, Mauritania and the North Sea.

4 As at 1 April 2008, based on ROC’s remaining 2P reserves and an estimate of AZA’s 2P reserves and production forecasts calculated from public information and using due diligence materials provided to ROC by AZA in respect of the BMG Project. The best estimate gas and condensate contingent resources in the BMG Project have been included as 2P reserves for the purposes of this calculation.

5 Based on a AUD:GBP exchange rate of 0.485. Based on a ROC Share price of $2.02 (being the closing share price of ROC on 13 June 2008) and assumes ROC acquires all of the AZA Shares under the AZA Takeover Off er.


Near term developmentn

Expansion of the existing Zhao Dong C&D oil fi elds along with the development of the C4 oil fi eld in Bohai –

Bay, off shore China;

Wei 6-12, 6-12S and 12-8W oil fi elds in the Beibu Gulf, off shore China; and –

Expanded oil, gas and condensate BMG Project in the Gippsland Basin.–

Appraisaln

Massambala Heavy Oil and Coco oil discoveries in the Cabinda South Block, onshore Angola; –

Tiof and Banda appraisal, off shore Mauritania; –

Frankland and Dunsborough in the Perth Basin, off shore Western Australia; and –

Chimaera and Gummy projects in the Gippsland Basin. –

Explorationn

Perth Basin (WA-286-P), Vlaming Sub-Basin (WA-381-P and WA-382-P) and Carnarvon (WA-351-P), off shore –

Western Australia;

Cabinda South Block, onshore Angola; –

BMG near fi eld exploration, Gippsland Basin; –

Canterbury Basin, off shore New Zealand; and–

Equatorial Guinea, Mauritania and Madagascar. –

Further details of the Merged Group are set out in Section 11.

5.2 AEL Board recommendation

Your Directors unanimously recommend that AEL Shareholders vote in favour of the Scheme in the absence of a Superior Proposal.

In making this recommendation, your Directors have considered the following:

the opinion of the Independent Expert;n

the reasons to vote in favour of the Scheme as set out in Section 7.1;n

the reasons to consider voting against the Scheme as set out in Section 7.2; n

the risks associated with the Merger as set out in Section 8; andn

other strategic alternatives for AEL.n

Each AEL Director who holds AEL Shares intends to vote in favour of the Scheme in respect of all their AEL Shares, in the absence of a Superior Proposal.

5.3 Independent Expert’s Report

Deloitte was appointed by the AEL Board as the Independent Expert to assess the merits of the Merger on behalf of AEL Shareholders.

The Independent Expert has concluded in its report that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders. Section 18 contains a copy of the concise Independent Expert’s Report. A copy of the complete Independent Expert’s Report is available at www.anzonenergy.com or by calling the Information Line.

AEL expects to announce its half year fi nancial results to 30 June 2008 by 29 August 2008 and ROC expects to announce its half year results to 30 June 2008 by 29 August 2008. Following the release of these fi nancial results, the AEL Board will request the Independent Expert to review the fi nancial results and, if it is able to do so, confi rm that the fi nancial results do not change the Independent Expert’s opinion that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders. AEL proposes to announce the outcome of the review to AIM in advance of the Scheme Meeting.


5.4 Scheme Consideration

(a) Summary

AEL Shareholders at the Record Date will be entitled to receive for each AEL Share they own, the Scheme Consideration.

As AEL’s only material asset is its investment in AZA, the Merger Ratio will be set by reference to a value of $1.65 per AZA Share (the implied off er price under the AZA Takeover Off er as at 13 June 2008). Based on current estimates, the Scheme Consideration is calculated to be approximately 1.33 ROC Shares for every AEL Share held. AEL Shareholders should be aware that the Scheme Consideration may need to be adjusted to refl ect the Net Cash position on the Record Date. Any change is not expected to be material.

If you are an Ineligible Foreign Shareholder, the New ROC Shares you would otherwise have become entitled to receive as Scheme Consideration will be sold under the Sale Facility, and you will receive the proceeds of the sale so that you receive only cash in exchange for your AEL Shares. In relation to Ineligible Foreign Shareholders, see Sections 5.9 and 16.1.

Further details in relation to the calculation of the Merger Ratio are set out in Section 5.4(e).

(b) Implied value of the Scheme Consideration

Outlined in Table 1 below is an illustration of the implied value of the Scheme Consideration to be provided to AEL Shareholders based on historical ROC Share prices and the current estimate of the Merger Ratio of 1.33 ROC Shares for every AEL Share.

As at 13 June 2008 (the Trading Day before the Announcement Date), the value of the Scheme Consideration to be received by AEL Shareholders was estimated to be $2.69 (£1.30)6 per AEL Share. However, the value received on the Implementation Date will be subject to the ROC Share price prevailing at that time.

Table 1: Implied value of the Scheme Consideration

ROC Share price Implied value of Scheme Consideration

$/share $/share £/share7

Closing Price on $1.48 $1.97 £0.95 29 July 2008

1 month VWAP to $1.66 $2.20 £1.06 29 July 2008

3 month VWAP to $1.99 $2.64 £1.27 29 July 2008

Highest $2.68 $3.56 £1.72 recorded sale price in the three months to 29 July 2008

Lowest recorded $1.46 $1.94 £0.93 sale price in the three months to 29 July 2008

AEL Shareholders should note that the above Table 1 is for illustrative purposes only.

6 Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in Section 5.4. Based on the ROC Share price at close on 13 June 2008 of $2.02 and an AUD:GBP exchange rate of 0.485.

7 Based on an AUD:GBP exchange rate at close 29 July 2008 of 0.481.


(c) New ROC Shares

The New ROC Shares to be issued by ROC as Scheme Consideration will rank equally with all existing ROC Shares on issue and will be issued free from encumbrances.

ROC is listed on both AIM and ASX. An application will be made by ROC for admission to trading on ASX and AIM of the New ROC Shares to be issued in accordance with the Scheme. Figure 1 below provides an indication of the historical trading prices for ROC Shares on ASX against the performance of the S&P/ASX 200 index.

Figure 1: ROC Share price performance and S&P/ASX 200 index from 1 January 2006 to 29 July 2008

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

02-J an-06 02-May-06 02-S ep-06 02-J an-07 02-May-07 02-S ep-07 02-J an-08 02-May-08

Sh

are

Pri

ce (

A$)

R OC AS X S &P / AS X 200 (R ebased to R OC )

(d) Eff ects of rounding

(i) Subject to Section 5.4(d)(ii) below, where the calculation of the number of New ROC Shares to be issued to a particular Scheme Shareholder as Scheme Consideration would result in the issue of a fraction of a New ROC Share, the fractional entitlement will, after aggregating all holdings of the Scheme Shareholder, be rounded up or down to the nearest whole number of New ROC Shares with fractions of 0.5 or greater being rounded up.

(ii) If ROC reasonably forms the opinion that two or more Scheme Shareholders, each of whom holds a number of AEL Shares which results in a fractional entitlement to New ROC Shares in accordance with Section 5.4(d)(i) have, before the Record Date, been a party to shareholding splitting or division in an attempt to obtain advantage by reference to such rounding, ROC may send a notice to those Scheme Shareholders setting out the names and registered address of all of them, stating that opinion and attributing to one of them specifi cally identifi ed in the notice (the Deemed Holder) the AEL Shares held by all of them, and after the notice has been given:

(a) the Deemed Holder will for the purposes of the Scheme be taken to hold all the Scheme Shares referred to in the notice; and

(b) each of the other Scheme Shareholders whose names are set out in the notice will, for the purposes of the Scheme, be taken not to hold any of the Scheme Shares,

and by complying with this procedure, ROC will be taken to have satisfi ed and discharged its obligations under the terms of the Scheme to all the Scheme Shareholders named in the notice.


(e) Calculation of the Scheme Consideration

Under the terms of the Merger Implementation Deed, the Scheme Consideration will be calculated on the Record Date by dividing the AEL Off er Price by the ROC Share Price. The operation of this formula is set out in detail below.

Merger Ratio =AEL Off er Price

ROC Share Price

AEL Off er Price =AEL Value

Number of Fully Diluted AEL Shares

AEL Value is calculated as the aggregate of:

$1.65 x Number of AZA Shares held by AEL and its Subsidiaries on the Record Date;n

the value of all the AZA Options held by AEL and its Subsidiaries on the Record Date, being, in respect of each n

AZA Option held, an amount equal to $1.65 less the exercise price of the AZA Option; and

Net Cash on the Record Date.n

Number of Fully Diluted AEL Shares is calculated as the aggregate of:

the number of AEL Shares on issue as at the Record Date; andn

the maximum number of AEL Shares which would be issued on the exercise of all AEL Options outstanding n

as at the Record Date, which for the sake of clarity shall include all AEL Options that are to be, or have been, acquired by ROC under an Option Purchase Deed.

ROC Share Price is $2.02.

The current estimate of the Merger Ratio of 1.33 ROC Shares for every AEL Share is based on the above formula and the following assumptions:

Net Cash on the Record Date of negative $34.9 millionn8 plus an additional $5.6 million9 assumed to be

received from the exercise of the current outstanding AEL Options;

the AZA Options held by the AEL Group include:n

3.1 million options with an exercise price of $0.45; and–

4.2 million options with an exercise price of $0.8632; –

number of AZA Shares held by the AEL Group is 196,824,154;n

AEL Convertible Notes are redeemed for a cost of $44.3 millionn10 (including outstanding interest on the date

of redemption); and

AEL Shares on issue at the Record Date of 112,590,683 comprising the current number of AEL Shares on n

issue of 104,540,683 plus the number of AEL Shares that would be issued to the holders of AEL Options upon their exercise.

8 AEL’s current estimate of Net Cash is based on the forecast net debt balance on the Record Date and includes estimates of cash balances, transaction costs and accrued interest on and redemption of the AEL Convertible Notes and RAK Unsecured Notes (estimate is prior to the receipt of proceeds from the exercise of AEL Options). Based on an AUD:USD exchange rate of 0.939 and an AUD:GBP exchange rate of 0.485.

9 Based on the current outstanding AEL Options as follows: 7.3 million options with an exercise price of US$0.50; and 750,000 options with an exercise price of £1.13 and an AUD:USD exchange rate of 0.939 and a AUD:GBP exchange rate of 0.485.

10 Based on a face value for the AEL Convertible Notes of £20 million with an estimated interest payable of £1.49 million and an AUD:GBP exchange rate of 0.485.


On the basis of the above, the Merger Ratio is calculated as follows:

Value of AZA Shares

= $1.65 x 196,824,154

= $324.76 million

Value of AZA Options

= [($1.65 - $0.45) x 3.1 million] + [($1.65 – $0.8632) x 4.2 million]

= $3.72 million + $3.30 million

= $7.02 million

AEL Value= $324.76 million + $7.02 million - $34.9 million + $5.63 million

= $302.50 million

AEL Off er Price= $302.50 million / 112.59 million

= $2.69

Merger Ratio= $2.69 / $2.02

= 1.33

The only component of the AEL Off er Price which may change when it is calculated on the Record Date is the calculation of Net Cash. It is noted that any change in Net Cash is not expected to have a material impact on the AEL Off er Price.

(f ) AEL Convertible Notes and RAK Unsecured Notes

AEL has the following outstanding debt instruments:

AEL Convertible Notes in the amount of £20 million, which have been issued to RAK; and n

RAK Unsecured Notes in the amount of £20 million, which have also been issued to RAK.n

It is a condition of the Scheme that, before the Conditions Date:

all of the AEL Convertible Notes are redeemed, cancelled, or converted or the holder of AEL Convertible n

Notes has entered into an agreement to redeem, cancel or convert its AEL Convertible Notes on or after the Eff ective Date; and

the RAK Unsecured Notes are redeemed or the holder of the RAK Unsecured Notes has entered into an n

agreement to redeem the RAK Unsecured Notes on or after the Eff ective Date.

In relation to the RAK Unsecured Notes, AIL and RAK have entered into a deed of redemption whereby AIL will redeem the RAK Unsecured Notes once the Scheme has become Eff ective, with the redemption (including payment of accrued interest) being funded from AEL’s current cash resources.

In relation to the AEL Convertible Notes, AIL, RAK and ROC have entered into a deed of redemption whereby AIL will redeem the AEL Convertible Notes once the Scheme has become Eff ective, with the redemption (including payment of accrued interest) to be funded using cash provided by ROC. Any such funds provided by ROC for the redemption of the AEL Convertible Notes will be deemed to reduce the Net Cash at the Record Date. Accordingly, the Merger Ratio may change depending on the amount of cash required to redeem the AEL Convertible Notes. The current estimate of the implied Merger Ratio of 1.33 ROC Shares for every AEL Share held is based on a total cost of redemption of the AEL Convertible Notes of $44.3 million11 and RAK Unsecured Notes of $45.05 million.12

AEL Shareholders will be kept fully informed of developments and any other matters that may impact on the Merger Ratio.

11 Based on the face value of £20 million and accrued interest at the date of implementation of the deed of redemption of £1,486,301.12 Based on the face value of £20 million and accrued interest at the date of implementation of the deed of redemption of £1,850,000.


5.5 Issue date

New ROC Shares to be issued under the Scheme will be issued to Scheme Shareholders on the Implementation Date. New ROC Shares are currently expected to trade on a deferred settlement basis at the commencement of trading on 9 September 2008. Any New ROC Shares sold during the deferred settlement trading period will be sold at the

risk of the holder of the New ROC Shares because they will not know for certain how many New ROC Shares

they will receive until they receive their holding statement. AEL Shareholders should be aware that the exact number of New ROC Shares to be issued as Scheme Consideration may change when the fi nal calculations are made at the Record Date. As such, a Scheme Shareholder will not be able to trade ROC Shares on a deferred settlement basis with certainty as to the number of ROC Shares they will be issued under the Scheme. Holding statements for New ROC Shares are expected to be despatched to Scheme Shareholders on the Implementation Date (expected to be 22 September 2008) and in any event within 5 Business Days after the Implementation Date.

Trading on ASX of New ROC Shares on a normal settlement basis will commence on the Business Day after holding statements have been despatched.

5.6 Implementation of the Scheme

(a) Conditions of the Merger and status

The obligations of AEL and ROC to complete the Merger are subject to the Scheme Conditions which are summarised in Section 13.2. For the Scheme to be implemented, all Scheme Conditions must be satisfi ed or, if applicable, waived in accordance with the terms of the Merger Implementation Deed.

As at the date of this Scheme Booklet, neither AEL nor ROC is aware of any circumstances which would cause any Scheme Condition not to be satisfi ed or (if applicable) waived. An update of the status of the Scheme Conditions will be provided at the Scheme Meeting.

(b) Scheme approval conditions

The Scheme is subject to the approval of the requisite majorities of AEL Shareholders and the approval of the Court.

In order for the resolutions to approve the Scheme to be passed:

unless the Court orders otherwise, a majority in number (more than 50%) of AEL Shareholders present and n

voting (whether in person, by proxy, by attorney, or in the case of corporate AEL Shareholders, by corporate representative); and

at least 75% of the total number of votes cast on the resolution to approve the Scheme by AEL Shareholders n

entitled to vote on the resolution,

must be in favour of the resolution to approve the Scheme.

If the requisite majorities of AEL Shareholders vote in favour of the Scheme and all other conditions of the Scheme have been satisfi ed or (if applicable) waived, the Court will be asked to approve the Scheme. If the Court determines to approve the Scheme, the Scheme will become Eff ective once the Court orders are lodged with ASIC.


5.7 Taxation implications for AEL Shareholders

Eligible Scheme Shareholders may be entitled to Australian CGT roll-over relief in respect of their Scheme Consideration. CGT roll-over relief would enable eligible AEL Shareholders to defer any Australian CGT liability, on the disposal of their AEL Shares until any subsequent disposal of New ROC Shares they receive under the Scheme.

A general outline of the potential Australian taxation implications for certain AEL Shareholders in relation to the Scheme is set out in Section 17.

AEL Shareholders should consult their own professional taxation adviser in relation to the tax consequences of the Scheme relevant to their specifi c circumstances.

5.8 No brokerage or stamp duty

AEL Shareholders will not incur any brokerage or stamp duty on the transfer of their AEL Shares pursuant to the Scheme. Ineligible Foreign Shareholders will not pay any brokerage on the disposal of New ROC Shares to which they would otherwise have become entitled pursuant to the Scheme under the Sale Facility given that the Sale Facility Agent is acting as principal in respect of such shares. However, if you sell your New ROC Shares on ASX after implementation of the Scheme, you may incur brokerage.

5.9 Ineligible Foreign Shareholders

Generally speaking, AEL Shareholders whose address on the AEL Share Register at 7.00pm (AEST) on the Record Date is in a jurisdiction other than Australia and its external territories or New Zealand are Ineligible Foreign Shareholders under the Scheme.

ROC is not obliged to issue New ROC Shares to any Ineligible Foreign Shareholder unless ROC and AEL are reasonably satisfi ed that the issue of New ROC Shares to the Ineligible Foreign Shareholder is not prohibited, not unduly onerous and not unduly impracticable. As at the date of this Scheme Booklet, AEL and ROC expect that AEL Shareholders whose address is shown in the AEL Share Register at the Record Date is in any of the following jurisdictions will also receive the New ROC Shares as Scheme Consideration: Ras Al Khaimah (United Arab Emirates - other than any AEL Shareholders located in the Dubai International Finance Centre), Liechtenstein, Cayman Islands, British Virgin Islands or the United Kingdom (or who are acting on behalf of such persons). This is subject to there being no change in the relevant law of these particular jurisdictions prior to the Implementation Date. All other Ineligible Foreign Shareholders will not be entitled to receive New ROC Shares as Scheme Consideration under the Scheme.

The New ROC Shares that Ineligible Foreign Shareholders would otherwise have become entitled to receive will be sold by the Sale Facility Agent under the Sale Facility. For details of the Sale Facility see Section 16.1.

The New ROC Shares are off ered in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002. This exemption relieves ROC from certain requirements of the New Zealand Securities Act 1978 and the New Zealand Securities Regulations 1983 and means that ROC is able, subject to certain conditions, to make the off er of the New ROC Shares in New Zealand pursuant to this Scheme Booklet. This Scheme Booklet is not therefore, a prospectus or an investment statement under New Zealand law and has not been registered, fi led with or approved by any New Zealand regulatory authority under or in accordance with the Securities Act 1978 (or any other relevant New Zealand law). This Scheme Booklet may not contain all the information that a prospectus or investment statement under New Zealand law is required to contain.

The off ering and allotment of New ROC Shares will be done in the manner specifi ed in this Scheme Booklet, as prescribed by the laws of Australia and by the Deed Poll entered into by ROC. ROC may not be subject in all respects to New Zealand law, and the Deed Poll entered into by ROC concerning the New ROC Shares may not be enforceable in New Zealand courts.


In addition to the other risk factors specifi ed in Section 8, investing in New ROC Shares may involve currency risk for New Zealand investors and will have Australian and New Zealand taxation implications which are not set out in Section 17. New Zealand investors should seek their own advice and satisfy themselves as to the Australian and New Zealand taxation implications of participating in the Scheme. ROC is not, and will not be, listed on the New Zealand Stock Exchange, and investors may not have access to information on it in the same way as they would if it were so listed.

This Scheme Booklet does not constitute a prospectus within the meaning of section 85 of the Financial Services and Markets Act 2000 as amended (FSMA), has not been drawn up in accordance with the Prospectus Rules published by the United Kingdom Financial Services Authority and has not been approved by or fi led with the United Kingdom Listing Authority as a prospectus under the Prospectus Rules or by the London Stock Exchange.

ROC is not licensed by the United Arab Emirates Central Bank, the Dubai International Finance Centre or the Dubai Financial Services Authority, nor licensed by any other government authority in the United Arab Emirates. The ROC Shares to be issued under the Scheme will be issued in Australia and not in the United Arab Emirates.

5.10 Questions

If you have any questions about your AEL Shares or any other matter in this Scheme Booklet, please call the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia), or 0800 450 974 (within New Zealand), or +61 3 9415 4639 outside Australia and New Zealand or consult your legal, investment or other professional adviser without delay.


6. Scheme Meeting and how to vote

6.1 Scheme Meeting

The Scheme Meeting is a Court ordered meeting of AEL Shareholders at which AEL Shareholders will be asked to consider, and if thought fi t, vote in favour of the scheme of arrangement between AEL and AEL Shareholders.

In order for the resolution to approve the Scheme to be passed:

unless the court orders otherwise, a majority in number (more than 50%) of AEL Shareholders present and n

voting (whether in person, by proxy, by attorney or in the case of corporate AEL Shareholders by corporate representative); and

at least 75% of the total number of votes cast on the resolution to approve the Scheme at the Scheme Meeting by n

AEL Shareholders entitled to vote on the resolution,


The notice convening the Scheme Meeting is contained in Section 21. A personalised Proxy Form for the meeting is also enclosed with this Scheme Booklet.

6.2 Voting entitlements

(a) Attendance and voting

Each person who is registered on the AEL Share Register as an AEL Shareholder at 10am (AEST) on 2 September 2008, other than a holder of Excluded Shares, is entitled to attend and vote at the Scheme Meeting, either in person, by proxy or attorney or, in the case of a corporate AEL Shareholder, by corporate representative. Registrable transfers or transmission applications that are received after this time will be disregarded in determining entitlements to vote at the Scheme Meeting.

(b) Joint holders

In the case of AEL Shares held by joint holders, only one of the joint shareholders is entitled to vote.

If more than one AEL Shareholder votes in respect of jointly held AEL Shares only the vote of the AEL Shareholder whose name appears fi rst in the AEL Share Register will be counted.

(c) Voting in person

AEL Shareholders wishing to vote in person must attend the Scheme Meeting.

All persons attending the Scheme Meeting must bring their Proxy Form or provide their name and address at the registration desk on entry to the meeting.


(d) Voting by proxy

AEL Shareholders wishing to vote by proxy at the Scheme Meeting must complete and sign the personalised Proxy Form which is enclosed with this Scheme Booklet. A person appointed as a proxy may be an individual or a representative of a body corporate.

Completed Proxy Forms must be delivered to AEL or Computershare, AEL’s Share Registry, by no later than 10am (AEST) on 2 September 2008, or, if the Scheme Meeting is adjourned, at least 24 hours before the resumption of the Scheme Meeting in relation to the resumed part of the meeting in any of the following ways:

By post

to the AEL Share Registry at

Computershare Investor Services Pty LimitedGPO Box 242Melbourne VIC 3001Australia

or to AEL’s registered offi ce at

Level 1390 Arthur StreetNorth Sydney NSW 2060Australia

By fax to the AEL Share Registry on +61 3 9473 2118

Note: Proxy Forms may not be returned by email nor is internet voting possible.

(e) Undirected proxies

If a proxy appointment is signed by an AEL Shareholder but does not name the proxy or proxies in whose favour it is given, the Chairman of the Scheme Meeting will act as proxy.

Proxy appointments in favour of the Chairman of the Scheme Meeting, the AEL company secretary or any AEL Director which do not contain a direction will be voted in favour of the resolution to approve the Scheme at the Scheme Meeting (in the absence of a Superior Proposal prior to the Scheme Meeting).

(f ) Voting by attorney

AEL Shareholders wishing to vote by attorney at the Scheme Meeting must, if they have not already presented an appropriate power of attorney to AEL for notation, deliver or post to the AEL Share Registry (at the address provided in Section 6.2(d) (but not by facsimile)) the original instrument appointing the attorney or a certifi ed copy of it by no later than 10am (AEST) on 2 September 2008, or, if the meeting is adjourned, at least 24 hours before the resumption of the meeting in relation to the resumed part of that meeting.

Unless the contrary is evident from the express terms of attorney, any power of attorney granted by an AEL Shareholder will, as between AEL and that AEL Shareholder, continue in force and may be acted on, unless express notice in writing of its revocation or the death of the relevant AEL Shareholder is lodged with AEL.


(g) Voting by corporate representative

An AEL Shareholder which is a body corporate may appoint an individual to act as its representative at the Scheme Meeting.

To vote by corporate representative at the Scheme Meeting, a corporate AEL Shareholder should obtain an appointment of corporate representative form from the AEL Share Registry, and complete and sign the form in accordance with the instructions on it. The appointment should be received by AEL or the AEL Share Registry by no later than 10am (AEST) on 2 September 2008, or, if the meeting is adjourned, at least 24 hours before the resumption of the Scheme Meeting in relation to the resumed part of the meeting. Alternatively, the appointment may be produced at the Scheme Meeting.

The appointment of a representative may set out restrictions on the representative’s powers.

The original form of appointment of a representative, a certifi ed copy of the appointment, or a certifi cate of the body corporate evidencing the appointment of a representative is prima facie evidence of a representative having been appointed.

The Chairman of the Scheme Meeting may permit a person claiming to be a representative to exercise the body’s powers even if they have not produced a certifi cate or other satisfactory evidence of their appointment.

(h) Further information on voting

AEL Shareholders, their attorneys or representatives (including proxies) who plan to attend the Scheme Meeting in person are asked to arrive at the venue 15 minutes prior to the time designated for the commencement of the Scheme Meeting with written evidence of their name and address, if possible, so that their shareholding may be checked against the AEL Share Register and attendances noted. If not already delivered to the AEL Share Registry, attorneys should bring with them the original or a certifi ed copy of the power of attorney under which they have been authorised to attend and vote at the relevant meeting.

Further information relating to voting procedures are contained in the Notice of Scheme Meeting in Section 21.


7. Assessment of the Merger

This Section 7 considers the reasons to vote in favour of, and reasons why you may consider voting against the Scheme. Section 7 should be read in conjunction with the discussion of the risks in relation to the Merger outlined in Section 8.

There are a number of factors AEL Shareholders need to consider in deciding how to vote on the Merger. AEL Shareholders should read the Scheme Booklet in its entirety and consult with their legal, investment or other professional adviser if necessary.

7.1 Why AEL Shareholders should vote in favour of the Scheme

(a) The off er for AEL represents a substantial premium to the historical trading prices of AEL Shares

As at 13 June 2008, the Scheme Consideration was estimated to be $2.69 (£1.30)13 per AEL Share (based on the closing price of ROC Shares on 13 June 2008 of $2.02). This represents a premium of 35% over the closing price of AEL shares on the last Trading Day before the Announcement Date and 103% over the closing price of AEL Shares on the last Trading Day on which AEL Shares traded prior to the Initial Approach Date (27 August 2007).

The estimated value of the Scheme Consideration of $2.69 (£1.30)13 also provides a signifi cant premium relative to a range of trading prices of AEL Shares prior to the Announcement Date (16 June 2008). Figure 2 presents various premia based on this estimated value compared to various historical trading prices of AEL Shares.

Figure 2: Premia to various historical AEL trading prices14

£0.64 £0.97 £0.89 £0.90 £0.89 £1.00

£0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

£1.60

£1.80

Last T raded P rice(prior to Initial

Approach Date)

Last T raded P rice(prior to R OC offer)

5 day V W AP 1 month V W AP 3 month V W AP 6 month V W AP

Sh

are

Pri

ce (

£)

103% premium

35%premium

47%premium

45%premium

46%premium

30%premium

E s timated value of Anzon E nergy S cheme C ons ideration on 13 J une 2008

One of the premia calculated above refers to the price of AEL Shares on the last Trading Day on which AEL Shares traded prior to the Initial Approach Date as this was the last day on which AEL Shares traded without being impacted by corporate speculation. Various premia have also been calculated by reference to the price of AEL Shares prior to the Announcement Date as this represents the last day on which shares in AEL and ROC traded prior to the off er from ROC being announced to the market.

13 Based on a AUD:GBP exchange rate of 0.485. Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in Section 5.4.

14 Based on an AUD:GBP exchange rate of 0.485. VWAPs for AEL Shares are calculated over the relevant period up to and including 13 June 2008, being the last Trading Day prior to the Announcement Date. Refer to Table 1 in Section 5.4 for a calculation of the value of the Scheme Consideration based on various ROC Share prices.


Figure 3 illustrates the estimated value of the Scheme Consideration of $2.69 (£1.30)15 compared to the value at which AEL Shares have traded since AEL was admitted to trading on AIM in November 2005 up to and including the day prior to the date of this Scheme Booklet.

Figure 3: AEL Share price chart since admission to trading on AIM

£0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

Nov-05 Apr-06 S ep-06 F eb-07 J ul-07 Dec-07 May-08

An

zon

En

erg

y C

losi

ng

Sh

are

Pri

ce (

£)

103% premium

Initial A pproac h Date

A nnounc ement Date

35% premium

Estimated value of Anzon Energy Scheme Consideration on 13 June 2008

AEL Shareholders should note that the ROC Share price has fallen since the Announcement Date, which has had the eff ect of decreasing the current value of the Scheme Consideration off ered under the Merger. The ROC Share price at close of trade on 29 July 2008 was $1.48. On this basis, the estimated value of the Scheme Consideration to be received by AEL Shareholders as at 29 July 2008 is $1.97 (£0.95).16

(b) The Independent Expert has concluded that the Scheme is fair and reasonable and therefore in the best

interests of AEL Shareholders

The AEL Board appointed Deloitte to prepare an Independent Expert’s Report on behalf of the AEL Shareholders.

The Independent Expert has estimated the fair market value of an AEL Share to be £1.00 to £1.25. The estimated fair value of the Scheme Consideration off ered by ROC is valued at £1.05 to £1.20 per AEL Share.

15 Based on a AUD:GBP exchange rate of 0.485. Subject to the fi nal calculation of the AEL Off er Price on the Record Date according to the formula in Section 5.4.

16 Assumes the estimate of Net Cash on the Record Date remains unchanged. Based on an AUD:GBP exchange rate of 0.481.


Figure 4: Independent Expert exchange ratio

£1.30

£1.12

£0.64

£0.48

£0.18

£0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

Anzon E nergy S hare P rice atInitial Approach Date

P remium Deloitte As s es s ed Value Additional control premiumincluding pos s ible s trategic

value

Value of AE L S chemeC ons ideration

Sh

are

Pri

ce (

£)

AEL Shareholders should read the Independent Expert’s Report in its entirety. Section 18 contains a copy of the concise Independent Expert’s Report. A copy of the complete Independent Expert’s Report is available at www.anzonenergy.com or by calling the Information Line.

(c) The Merger provides AEL Shareholders with ROC Shares, which provides them with asset diversifi cation

and removes the single asset exposure currently faced by AEL Shareholders

If the Scheme is implemented, AEL Shareholders will receive ROC Shares and will become shareholders in the Merged Group which will be one of the leading independent companies in the Australian oil and gas sector.

Following implementation of the Merger, shareholders in the Merged Group (including AEL Shareholders) will benefi t from a diversifi ed portfolio of assets comprising the current assets owned by ROC together with AEL and AZA’s interests in AZA’s assets.

AEL Shareholders will gain exposure to ROC’s suite of production, development, appraisal and exploration assets. This includes ROC’s six producing fi elds located in Australia, China, Mauritania and the North Sea. In addition, AEL Shareholders will have access to the growth potential from ROC’s suite of development, appraisal and exploration assets located in Australia, China, Angola, Mauritania, Madagascar and Equatorial Guinea.

Owning ROC Shares will provide a more diversifi ed investment for AEL Shareholders than their current investment in AEL whilst also removing the single asset risk they currently face. Refer to Section 10 for further information on ROC’s assets and Section 11 for further discussion about the Merged Group.

(d) The removal of an ineffi cient corporate structure which has seen AEL consistently trade at a discount to

the “see through” value of its investment in AZA

AEL Shares have consistently traded at a discount to the theoretical “see through” value of AEL (calculated based on the value of AEL’s investment in AZA, adjusted for AEL’s net debt position and the value of any residual assets). This discount can be attributed to a number of factors including an ineffi cient corporate structure where AEL Shareholders have not held a direct interest in the assets of AZA but rather an indirect interest through AEL’s investment in AZA. This, together with the lack of direct access to the cashfl ows from the BMG Project, the risks associated with operating a single asset as opposed to a portfolio of assets, and the stock market illiquidity of AEL have continued to adversely impact the share price of AEL and its ability to grow.


As Figure 5 illustrates, since January 2006, AEL has traded at a discount to its “see through” value at nearly all times with the discount being up to 46%. As at 13 June 2008, the last Trading Day on which AEL Shares traded prior to the Announcement Date the implied discount was 6%.

Figure 5: AEL’s market capitalisation vs. AEL’s theoretical market capitalisation17

-

50

100

150

200

250

300

350

400

J an 06 Apr 06 J ul 06 Oct 06 J an 07 Apr 07 J ul 07 Oct 07 J an 08 Apr 08

(A$m

)

Anzon E nergy theoretical market capitalis ation Anzon E nergy actual market capitalis ation

The Merger provides AEL Shareholders with the opportunity to own ROC Shares which, assuming AZA becomes a wholly owned subsidiary of ROC, should address the issues set out above.

(e) The Merger provides AEL Shareholders with the opportunity to participate in a potential re-rating of the

Merged Group

The Merged Group is expected to be an attractive investment in the context of the Australian oil and gas sector. The Merger is also expected to stimulate increased focus from institutional investors and equity research analysts which may lead to increased stock market liquidity and a potential re-rating of the Merged Group. The factors which may lead to this re-rating include:

enlarged market capitalisation (estimated to be $1.2 billion (£580 million));n18

estimated net production for 2008 of approximately 14,000 boepd;n


enhanced exploration, development and appraisal opportunities; andn

the potential for improved access to debt and equity funding and consequently greater fi nancing fl exibility n

due to the increased scale of the Merged Group and the diversity of the asset base.

17 Based on AEL’s theoretical “see through” value (calculated based on the value of AEL’s investment in AZA, adjusted for AEL’s net debt position and the estimated value of any residual assets).




(f ) If the Scheme is not implemented, the AEL Share price may fall from its current level

If the Scheme does not proceed and AEL remains admitted to trading on AIM, then in the absence of another proposal emerging it is possible that AEL Shares will trade at a lower price than those at which they have traded since the Initial Approach Date.

AEL Shares closed at £0.64 on 22 August 2007, the last Trading Day on which AEL Shares traded prior to the Initial Approach Date. Since that time AEL Shares have traded in the range of £0.65 to £1.33. The AEL Share Price on 13 June 2008 was £0.965.

Figure 3 demonstrates the improvement in the AEL Share price following the Initial Approach Date.

The Independent Expert has also concluded that the AEL Share price is likely to fall if the Scheme is not implemented.

(g) Potential entitlement to Australian CGT roll-over relief

If the Scheme is successful, eligible Scheme Shareholders may be entitled to Australian CGT roll-over relief in respect of their Scheme Consideration. This would enable eligible AEL Shareholders to defer any CGT on the disposal of their AEL Shares until any subsequent disposal of New ROC Shares they receive as Scheme Consideration.

Section 17 of the Scheme Booklet considers the Australian taxation implications of the Scheme.

AEL Shareholders should consult their own professional taxation adviser in relation to the taxation consequences of the Scheme relevant to their specifi c circumstances.

7.2 Reasons AEL Shareholders may consider voting against the Scheme

Although your Directors unanimously recommend that, in the absence of a Superior Proposal, AEL Shareholders vote in favour of the Scheme, and the Independent Expert has concluded that the Scheme is in the best interests of AEL Shareholders, there are some reasons why you may consider voting against the Scheme. These are set out below.

(a) The value of New ROC Shares may fl uctuate

If the Merger proceeds, AEL Shareholders will receive New ROC Shares as consideration for their AEL Shares. The value of the New ROC Shares will be exposed to the risks associated with ROC’s operations as well as the normal risks associated with share ownership. As such, AEL Shareholders should be aware that if they retain their New ROC Shares with the intention of realising the value of those shares at a later date, then the trading price of the New ROC Shares may fl uctuate following implementation of the Merger, which may impact the value that could be realised from any future sale of those shares.

(b) If the Scheme is implemented, AEL Shareholders will reduce their exposure to the development and

exploration upside associated with the AEL assets

If the Scheme is implemented, AEL’s current portfolio of assets (see Section 9) will be owned by the Merged Group. Therefore the benefi ts associated with any future development and exploration upside of AEL’s assets, in particular the BMG Project, will be shared amongst all shareholders in the Merged Group, rather than just the shareholders of AEL.

AEL Shareholders will receive New ROC Shares as Scheme Consideration and those who retain their New ROC Shares following implementation of the Merger will maintain exposure to the assets of AEL, but on a diluted basis. However, AEL Shareholders will gain exposure to any upside from ROC’s current portfolio of assets as well as benefi ts from the Merged Group’s improved ability to fi nance the development of the BMG Project.

(c) You may not agree with your Directors’ recommendation and the Independent Expert’s conclusions

Despite the view of the AEL Directors and the Independent Expert, you may take a diff erent view and you may believe that the Scheme is not in your best interests or those of other AEL Shareholders. You may believe, for example, that each AEL Share is worth more than the Scheme Consideration.

You are not obliged to follow the recommendation of your Directors or agree with the Independent Expert’s conclusions.


(d) Exposure to the potential risks of the Merger for AEL Shareholders

Section 8.2 outlines the risks common to the businesses of AEL and ROC and Section 8.3 outlines the risks specifi c to the businesses of ROC. Section 8.4 outlines the risks related to the Merger and AZA Takeover Off er.

This Section 7 should be considered by AEL Shareholders in conjunction with Section 8.

Whilst the AEL Board acknowledges the risks of the Merger, it believes the advantages of the Merger signifi cantly outweigh the disadvantages. The AEL Board unanimously recommends that AEL Shareholders vote in favour of the resolution to approve the Scheme in the absence of a Superior Proposal.

(e) You may consider that there is the potential for a Superior Proposal to be made to AEL

It is possible that a more attractive proposal for AEL Shareholders could materialise in the future, for example a takeover bid by another party. However, as at the date of this Scheme Booklet, no proposal has emerged and your Directors are not aware of any such proposal.

Your Directors will continue to keep you informed of any developments between the date of this Scheme Booklet and the Scheme Meeting which may aff ect the AEL Board’s recommendation on the Scheme.

7.3 Other relevant considerations

(a) No direct transaction costs for AEL Shareholders

No brokerage or stamp duty will be paid by AEL Shareholders on the transfer of their AEL Shares for the Scheme Consideration. If AEL Shareholders dispose of their New ROC Shares after the implementation of the Scheme, they may have to pay brokerage.

(b) Exclusivity

During the Exclusivity Period, AEL and ROC must not, and must ensure that their respective Representatives do not, except with the prior consent of the other party:

(i) solicit, initiate or invite any enquiries, discussions or proposals in relation to, or which may reasonably be expected to lead to, a Third Party Proposal for that party;

(ii) participate in any discussions or negotiations in relation to, or which may reasonably be expected to lead to, a Third Party Proposal for that party;

(iii) provide any information relating to a party or any of its Material Subsidiaries or any of its businesses or operations to any person in relation to a current or future Third Party Proposal for that party; or

(iv) communicate to any person an intention to do any of the things referred to above.

The exclusivity provisions detailed above are subject to a customary fi duciary carve-out. For further information about the exclusivity obligations of AEL and ROC, refer to Section 13.3.

(c) Payment of costs

If the Merger is not implemented, depending on the reasons for the Merger not proceeding, either AEL or ROC may be liable to pay the other a fee of $2.7 million. For further details about this fee and the circumstances in which it is payable, refer to Section 13.4.


(d) Termination of the Merger Implementation Deed

If the Merger Implementation Deed is terminated by either party where:

the Scheme is not approved by the AEL Shareholders within 5 Business days after the End Date unless the n

failure to obtain approval arises out of any antecedent breach by the terminating party;

any Court or Regulatory Authority has issued an order, decree or ruling or taken any other action permanently n

enjoining, restraining or otherwise prohibiting the Merger, or has refused to do anything necessary to permit the Merger, and the order, decree, ruling, other action or refusal has become fi nal and non-appealable;

upon the failure of any of the conditions set out in Sections 13.2(a), 13.2(b) and 13.2(c), by the party (or n

parties) entitled to rely on that condition if the parties are unable to reach agreement within 5 Business Days after the relevant date or by the End Date unless the condition is waived by the relevant party or the failure of the condition arises out of any antecedent breach by the terminating party;

the Scheme has not become Eff ective on or before the End Date; orn

the Court refuses to make orders directing AEL to convene the Scheme Meeting or approving the Scheme n

and AEL and ROC have appealed the Court’s decision to the fullest extent possible except to the extent the parties otherwise agree, or independent Queen’s Counsel or Senior Counsel acceptable to AEL and ROC (acting reasonably) indicates that, in their opinion, an appeal would have no reasonable prospect of success,

no damages, fees, expenses or reimbursement of any kind are payable by either AEL or ROC under or in connection with the Merger Implementation Deed.

(e) Your warranties under the Scheme

If the Scheme is approved, all Scheme Shareholders will be taken to have warranted to ROC and AEL that all their AEL Shares (including any rights and entitlements attaching to those shares) which will be transferred under the Scheme will, at the date of transfer, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to transfer their AEL Shares together with any rights attaching to those shares.

(f ) Ineligible Foreign Shareholders’ acknowledgment

Under the Scheme, each Ineligible Foreign Shareholder agrees and acknowledges that the sale of the New ROC Shares to which that person would otherwise have become entitled as Scheme Consideration under the Sale Facility constitutes the satisfaction of ROC’s obligations to that Ineligible Foreign Shareholder under the Scheme.


8. Risks

8.1 Introduction

If the Merger proceeds, Scheme Consideration will be issued to Scheme Shareholders (other than Ineligible Foreign Shareholders). The value of the Scheme Consideration which Scheme Shareholders receive under the Scheme will be dependent on the future performance of ROC Shares.

The fi nancial performance and operations of the Merged Group’s business, the value of New ROC Shares and the amount and timing of any future dividends paid on ROC Shares will be infl uenced by a range of factors including:

risk factors that are common to both AEL’s and ROC’s businesses, which will therefore be risks to which the Merged n

Group will be exposed (see Section 8.2 below) – AEL Shareholders should note that they are already exposed to these risks in relation to AEL;

risk factors that are specifi cally relevant to the businesses of ROC (see Section 8.3 below) – AEL Shareholders n

should note that they will become exposed to these additional risks if they are issued ROC Shares under the Scheme; and

risk factors arising in relation to the Merger and AZA Takeover Off er (see Section 8.4 below).n

Many of these factors are beyond the control of AEL and ROC and will remain beyond the control of the Merged Group.

AEL Shareholders should be aware that the risks described in this Section 8 may aff ect the performance of the Merged Group and the value of New ROC Shares. However, many of the risks specifi c to an investment in the Merged Group described below already apply to AEL’s existing business and to ROC’s existing business. There are also general risks associated with any investment in securities.

The risk factors described in this Section 8 outline some of the key, but not all, risks associated with an investment in the Merged Group and New ROC Shares. The outline of risks in this Section 8 is a summary only and should not be considered exhaustive. You should carefully consider the following risks as well as the other information contained in this Scheme Booklet before deciding how to vote on the Scheme. This Section 8 does not take into account the investment objectives, fi nancial situation, taxation position or particular needs of AEL Shareholders.

8.2 Risks common to the businesses of AEL and ROC

AEL Shareholders should be aware that certain risks relevant to the existing businesses of AEL and ROC will continue to be relevant to the Merged Group. These risks are both specifi c to the Merged Group and also relate to the general business and economic climate. Individually, or in combination, these risks might aff ect the future operating performance of the Merged Group and the value of an investment in the Merged Group. Some of these risks can be mitigated by the Merged Group by the use of appropriate safeguards, systems and actions, but some are outside the control of the Merged Group. As AEL Shareholders are already exposed to risks of this nature, only a brief outline of the risks is set out below.

Generally, the operations of the Merged Group will be subject to risks associated with the acquisition, development and exploration for oil and gas, as are the operations of AEL. Exploration for oil and gas involves many specifi c risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. International operations may expose the Merged Group to risks which may not exist for domestic operations such as political and currency risks. Certain of the projects in which the Merged Group will be involved may require the Merged Group to hire personnel and consultants with specialised expertise and require signifi cant expenditure and fi nancing. These, and other risks, are discussed further below.

(a) Share market risks

The share price of ROC Shares after implementation of the Merger will be determined by the stock markets operated by ASX and London Stock Exchange and will be subject to a range of factors and risks beyond the control of the Merged Group. These factors include, but are not limited to, fl uctuations in international stock markets, changes in global economic conditions, and movements in interest rates and investor sentiment.

(b) General economic conditions

Material adverse changes in general economic conditions may have an adverse impact on the performance of the Merged Group. These general economic conditions are infl uenced by such things as economic growth, interest rates, infl ation, employment levels and consumer and business sentiment.


(c) Oil and gas industry risks

The exploration for, and production of, oil and gas involves numerous risks specifi c to the industry. Some of these risks are outside the control of the Merged Group and include:

Production risk:n Disruption to the Merged Group’s expected production may result in variations to the Merged Group’s expected revenue and could have an adverse eff ect on the Merged Group’s fi nancial performance and ongoing operations (for example cost overruns, operational failures and delays due to technical diffi culties);

Commodity price risk:n The demand for, and price of, oil is highly dependent on a variety of factors, including international supply and demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments. International oil prices have fl uctuated widely in recent years and may continue to fl uctuate signifi cantly in the future. Any substantial decline in the prices of oil and natural gas could have a material adverse eff ect on the Merged Group, particularly its revenue and rates of return. At present, ROC seeks to mitigate a portion of its commodity price risk by entering into oil price swap and put option contracts. However, to the extent there is a diff erence in the relative movement between the price ROC receives for its crude oil and the hedged prices, ROC’s hedging may prove imperfect. Hedging also reduces exposure to positive movements in oil prices;

Exploration risk: n There is a risk that exploration of the Merged Group’s permits will not result in the discovery of commercially viable hydrocarbon accumulations. Drilling oil and gas wells involves a high degree of risk, especially the risk of a dry hole or of a well that is not suffi ciently productive to provide economic return of the capital expended to drill the well. No assurances can be given that if resources are discovered by the Merged Group, it will be able to commercialise any such resources as intended. Projects can also be aff ected by a number of external factors which may result in unscheduled production downtime and cost overruns. The realisation of any of these risks can have an adverse impact on the profi tability and cash fl ows of the business of the Merged Group;

Drilling risk:n The Merged Group may encounter hazards inherent in oil and gas drilling activities. Examples of such hazards include the risk of unusual or unexpected formations, abnormal pressures or rock properties;

Field development risk:n The Merged Group has and will continue to have a number of fi eld development opportunities which, if progressed, may result in variations to the Merged Group’s expected revenue as a result of, for example, increases in development costs and delays to development timetables including delays and other timing issues associated with obtaining authorisations, consents and licences. Specifi cally the Merged Group, over the next three years will be required to spend signifi cant amounts of capital to develop the Zhao Dong oil fi elds and BMG Project. Such variations, if they arise, could have an adverse impact on the Merged Group’s fi nancial performance and ongoing operations;

Reserve estimates:n Reserve estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates, which were valid when made, may change signifi cantly when new information becomes available. In addition, reserve estimates depend to some extent on interpretations which may prove to be inaccurate. The actual reserves may diff er from those estimated which could have either a positive or negative eff ect on the Merged Group’s fi nancial performance;

Joint venture participants:n The Merged Group may be exposed to risks associated with the failure, fi nancial or otherwise, or default by a participant in any joint ventures or other contractual relationships with the Merged Group. While the Merged Group may seek contractual indemnities from any such participant, no assurance can be given that there would be suffi cient protection in the event that a particular project did not meet the Merged Group’s expectations (see Section 8.3 below in respect of ROC’s current joint venture risks); and

Funding risk:n Additional funding will be required for further exploration, appraisal and development of the Merged Group’s exploration permits in the form of debt, equity, asset sales or a combination of such. There can be no assurance the Merged Group will be able to secure any such additional fi nance on commercially acceptable terms or at all. Any failure or delay in obtaining additional fi nance (if required) may have a material adverse eff ect on the profi tability of the Merged Group by reducing the scope of its operations or forcing it to postpone planned expansions.


(d) Currency risk

The majority of the Merged Group’s revenues, expenditures, assets and liabilities are incurred in US dollars. Fluctuations in currencies other than the US dollar may result in foreign exchange gains and losses which may impact on the Merged Group’s fi nancial performance. To help manage this risk, ROC has a substantial proportion of its cash resources maintained in US dollars to meet its forecast US dollar and other foreign currency costs. ROC also holds its debt facility in US dollars.

(e) Changes to government policy and regulatory conditions

Governmental action, including delays, inactions or policy changes, particularly in relation to access to infrastructure, environmental regulation, taxation (including the treatment of PRRT and other petroleum taxes and levies), royalties and production and exploration licensing may adversely aff ect the Merged Group’s activities.

Introduction of new legislation or regulations, amendments to existing legislation or regulations, the application of developments in existing common law or the interpretation of those laws, could have a material adverse eff ect on the Merged Group.

(f ) Environmental risk

Oil and gas exploration, development and production can be hazardous to the environment. If it is responsible for environmental damage, the Merged Group may incur substantial costs for environmental rehabilitation, damage control and losses by third parties resulting from its operations.

The Merged Group will be subject to relevant environmental laws and regulations in connection with its operations, and intends to conduct its activities in an environmentally responsible manner. However, the Merged Group could be subject to liability due to risks inherent in its activities, such as accidental spills, leakages or other unforeseen circumstances.

The potential impact from climate change, both physical and as a result of new legislation and regulation, may have an adverse impact on the Merged Group’s operations or fi nancial performance. For instance, signifi cant liability could be imposed on the Merged Group for damages, clean-up costs or penalties in the event of certain discharges in the environment, environmental damage caused by previous owners of property acquired by the Merged Group or non-compliance with environmental laws or regulations. At present, ROC minimises these risks by taking steps to ensure compliance with environmental laws and regulations in the countries in which it operates and, where possible, by carrying appropriate insurance.

(g) Competition

The Merged Group operates in a competitive environment which includes major oil and gas companies. Some of these companies have greater fi nancial strength and other resources available to them than the Merged Group and, as a result, may be in a better position than the Merged Group to compete for future business opportunities.

(h) Contractual risks

Certain aspects of the Merged Group’s business may rely on contractors for whom there is no readily available alternative, in particular oil and gas transport, oil refi ning and drilling contractors. In the event that any of these contractors were unable to perform their obligations this may have a material adverse eff ect on the Merged Group’s business.

(i) Litigation risks

Exposure to litigation brought by third parties such as customers, regulators, employees or business associates could negatively impact upon the Merged Group through increased costs, payments for damages and damage to its reputation.


(j) Personnel

The Merged Group will be reliant on a number of key senior management staff . Loss of such personnel may have an adverse impact on the performance of the Merged Group. However, this risk is mitigated by the fact that the oil and gas industry is international in nature and has a signifi cant depth of suitably qualifi ed alternative personnel. Notwithstanding this, there may be periods of time where a particular position remains vacant while a suitable replacement is identifi ed and appointed.

(k) Financing and fi nancial risk management

The Merged Group’s continued ability to eff ectively implement its business plan over time may depend, in part, on its ability to raise additional funds. There can be no assurance that any such equity or debt funding, if required, will be available to the Merged Group on favourable terms or at all. If adequate funds are not available on acceptable terms, the Merged Group may not be able to take advantage of opportunities or otherwise respond to competitive pressures.

(l) Acquisitions and shareholder dilution

The Merged Group will continue to assess acquisitions that complement its existing business as part of its growth strategy. If the Merged Group makes an acquisition it will be exposed to the risks commonly associated with acquisitions of companies or businesses. These risks include the diffi culty of integrating the operations and personnel of the acquired business, problems with minority shareholders in acquired companies, the potential disruption of the business of the Merged Group, the possibility that indemnifi cation agreements with the sellers may be unenforceable or insuffi cient to cover potential liabilities and diffi culties arising out of integration. Furthermore, the value of any business the Merged Group acquires or invests in may be less than the purchase price paid by the Merged Group. Some of these risks will apply equally to the Merger.

The consideration payable in respect of any such acquisition may consist wholly or partly of new ROC Shares issued to the vendors or to third parties to fund the acquisition, in which case the shareholding of existing ROC Shareholders (which may include AEL Shareholders following implementation of the Scheme) will be diluted. Further, the Merged Group may seek to raise additional capital in order to fund acquisitions, or for other purposes, by new issues of ROC Shares or through debt refi nancing. This may also have the eff ect of diluting the shareholdings of existing ROC Shareholders.

(m) Insurance

As protection against operating risks, the Merged Group will maintain insurance which the directors of the Merged Group consider to be appropriate in accordance with industry practice. However, the nature of these risks is such that there may be circumstances where the Merged Group’s insurance will not cover, or will not be adequate to cover, the consequences of such events, or where the Merged Group may become liable for pollution or other operational hazards against which it either cannot insure or may have elected not to insure on account of high premium costs or otherwise, in which event the Merged Group could incur signifi cant costs that have a material adverse eff ect on its fi nancial position. In addition, there can be no assurance that the Merged Group will be able to maintain adequate insurance at rates the directors of the Merged Group consider reasonable.

(n) Interest rate risk

The Merged Group will be exposed to adverse interest rate movements that may aff ect the cost of borrowing, which in turn would impact on the Merged Group’s profi tability. Whilst this risk may be reduced through interest rate hedging, there is sometimes residual exposure. Movements in interest rates may aff ect the appropriate discount rate to be used to value investments.


8.3 Risks specifi c to the businesses of ROC

In addition to the risks common to both AEL and ROC mentioned in Section 8.2, the future operating performance of the Merged Group and the value of an investment in the Merged Group may also be aff ected by specifi c risks relating to ROC’s businesses.

(a) Foreign operations risks

Unlike the operations of AEL and AZA, which are based in Australia, ROC’s oil and natural gas operations and assets are located and carried out in a number of foreign jurisdictions. As a result, ROC is subject to additional political, economic and other uncertainties, including, but not limited to, changes in energy policies or the personnel administering them, nationalisation or expropriation of property, cancellation or modifi cation of contractual rights, foreign exchange restrictions, currency fl uctuations, royalty and tax increases and other risks arising out of foreign governmental sovereignty over the areas in which ROC’s operations are conducted.

In the event of a dispute arising in connection with its foreign operations, ROC may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts of ROC’s home jurisdiction or enforcing judgments obtained in its home jurisdiction in such other jurisdictions.

Contracts with host country governments can contain provisions that may give governments contractual rights to assume ownership of property and/or become the operator of fi elds and which limit crude oil entitlements or profi t which in turn can impact on revenue. If any foreign government or jurisdiction revises existing partnership agreements or laws or fails to meet its obligations under contracts including production sharing contracts, joint venture agreements and/or applicable laws, this may delay or otherwise impact on the progress of a project or restrict production from a project. In some circumstances ROC may not be able to infl uence or determine the outcome of this decision which may have an adverse impact on its profi tability and cash fl ow.

(b) Joint venture risks

ROC operates a number of joint ventures with a number of joint venture partners in a number of countries, including: Mauritania, China, United Kingdom, Australia, Angola and Equatorial Guinea.

ROC is subject to the risk of a joint venture failing to agree on work programs and budgets for proposed developments or exploration and joint venture partners failing to meet their obligations.

In some circumstances ROC may not be able to infl uence or determine the outcome of joint venture decisions and must act in accordance with the decision of the joint venture.

If any of ROC’s joint venture partners, including international oil companies, fail to agree on the work programs and budgets for proposed development or exploration or fail to meet their obligations under the joint venture agreements with ROC, this may delay or otherwise impact on the progress of the relevant joint venture project.

ROC and a number if its joint venture partners are currently in dispute with Pioneer in relation to the drilling of an exploration well in Equatorial Guinea. It is possible that, as a consequence of that dispute, the well will not be drilled.

(c) Customer risks

In some regions in which ROC operates there are limited or illiquid markets in which to sell oil or gas. The presence of limited options creates customer concentration risk.

The cancellation or breach of contracts with specifi c customers may impact on the ability of ROC to sell oil or gas. In particular, the Cliff Head oil fi eld produces crude oil that is trucked 350 km to the BP Refi nery at Kwinana. In the event that there were operational problems at the Kwinana Refi nery, ROC would experience diffi culty selling crude oil production from the Cliff Head oil fi eld.


8.4 Risks related to the Merger and AZA Takeover Off er

(a) Issue of New ROC Shares

ROC will issue a signifi cant number of New ROC Shares as Scheme Consideration in order to implement the Merger. Some AEL Shareholders who receive New ROC Shares may not wish to retain their shareholding and may sell their New ROC Shares on the market soon after receiving them. This may have an adverse impact on the market price of ROC Shares in the short term.

(b) Exchange rate risk

AEL Shares trade on AIM in GBP. The Scheme Consideration is denominated in Australian dollars. Therefore, the value of the Scheme Consideration in GBP will fl uctuate with movements in the AUD:GBP exchange rate.

(c) If the Merger does not proceed

If the Merger does not proceed, AEL and AEL Shareholders may be exposed to the following risks:

(i) Transaction costs

AEL will incur transaction costs of approximately $780,000, which will reduce its statutory profi t.

(ii) Break fee

Depending on the reasons for the Merger not proceeding, AEL may also be liable to pay a break fee of $2.7 million to ROC. Further information in relation to circumstances in which the break fee is payable is set out in Section 7.3(c).

(iii) Share price may fall

The AEL Board believes that in the absence of another proposal emerging the share price of AEL Shares may trade at a substantial discount to the value of the Scheme Consideration, as it did prior to the Initial Approach Date.

(d) If ROC does not acquire all of the outstanding AZA Shares under the AZA Takeover Off er

AEL Shareholders cannot be assured that the AZA Takeover Off er will be accepted by all AZA Shareholders.

If the Scheme is implemented and the AZA Takeover Off er lapses or is withdrawn, or ROC does not acquire all of the outstanding AZA Shares under the AZA Takeover Off er, AEL will become a wholly-owned subsidiary of ROC but AZA will become only a partly-owned subsidiary of ROC. As a result, the benefi ts that would otherwise accrue to ROC if AZA were to be a wholly-owned subsidiary of ROC may not be fully realised.


9. Profile of AEL

9.1 Background

AEL is a public company incorporated in Australia in August 2001. AEL was admitted to trading on AIM, a market of the London Stock Exchange on 16 November 2005. AEL was established for the purpose of developing oil and gas opportunities on a global basis.

AEL’s principal asset is its 53% shareholding in AZA, a public company incorporated in Australia and listed on the ASX. As at the date of this Scheme Booklet, AEL holds directly and indirectly 196,824,154 AZA Shares and 7,300,000 AZA Options. If AEL exercises the AZA Options it will increase its interest in AZA to approximately 54%.

Until recently, AEL also had investments in several Indonesian companies that held interests in oil fi elds in Indonesia (Indonesian Interests). The Indonesian Interests were sold in November 2007, with AEL receiving net proceeds of US$5.3 million.

Further information relating to AEL can be found on its website www.anzonenergy.com.

Figure 6: AEL Corporate Structure


9.2 Investment in AZA

AZA is an upstream oil and gas company with its principal business being the development, commercialisation and further exploitation of, and exploration for, oil and gas fi elds in Australia, New Zealand and South East Asia. The size of its existing reserve base positions AZA as a medium-size participant in Australia’s oil and gas industry.

Figure 7: Summary of AZA’s major shareholders and key assets

AZA listed on ASX on 15 December 2004. Its major asset is a 40% interest in the BMG Project. The BMG Joint Venture is currently developing the BMG Project, and the planned development of associated and non-associated gas and condensate in the BMG Project. The BMG Project is located in the Gippsland Basin, approximately 70 km off shore from south eastern Victoria. AZA is the Operator of the BMG Project.

Figure 8: Location of AZA’s Gippsland Basin permits and the BMG Project


During August 2007, AZA announced the Farm-out of a 10% stake in the BMG Joint Venture to CIECO, a wholly owned subsidiary of ITOCHU, for $123 million. Simultaneously, AZA’s joint venture partner, Beach, also announced a Farm-out to CIECO on similar terms.

The result of the above Farm-out activities reduced AZA’s total interest in the BMG Project to 40%. It has also reduced AZA’s future capital and operating cost obligations under the BMG Joint Venture which is consistent with AZA’s strategy of managing risk to an acceptable level and with its corporate objectives.

AZA holds 65.7 million shares in Nexus Energy Limited representing approximately a 10.3% interest in its share capital.

Further information relating to AZA can be found on its website, www.anzon.com.au.

9.3 AIL

AEL’s 100% owned subsidiary, AIL, is a Mauritius incorporated company that was established in September 2006 for the purposes of receiving an investment of £40 million from RAK. RAK’s investment comprises the following:

unsecured convertible notes to the value of £20 million (n AEL Convertible Notes); and

unsecured notes to the value of £20 million (n RAK Unsecured Notes).

Further details regarding the AEL Convertible Notes and RAK Unsecured Notes are contained in Sections 5.4(f ) and 9.14(c).

AIL also holds a 1.7% interest in the issued capital of AZA and holds 3.1 million AZA Options.

9.4 Other AEL subsidiaries

The following 100% subsidiaries of AEL (and their Subsidiaries) have no material assets:

Hercules Resources Limitedn

Anzon Energy Mauritius n

Anzon Africa Limitedn

9.5 AEL Directors

The AEL Directors as at the date of this Scheme Booklet are:

Mr Michael N Arnett

Chairman

Mr Andrew A Young

Managing Director and Chief Executive Offi cer

Mr Olivier Fric

Non-Executive Director

Mr Steven J Koroknay


Mr Robert C A Leon


Mr Vincenzo Paglione


Mr Charles J Pope ONZM


Biographies of each director can be found at www.anzonenergy.com.


9.6 AEL Board’s intentions

As soon as practicable after the Eff ective Date, AEL must if requested by ROC appoint two nominees of ROC to the AEL Board.

As soon as practicable after the Scheme Consideration has been provided, AEL must use its reasonable endeavours to ensure that all AEL Directors, other than ROC nominees, resign and provide written notice to the eff ect that all such AEL Directors have no claim outstanding for loss of offi ce, remuneration or otherwise against AEL. It will be for the reconstituted AEL Board to determine its intentions as to the continuation of the business of AEL. The current intentions of ROC with respect to the AEL business are set out in Section 11.5.

9.7 Summary historical fi nancial information

Sections 9.8, 9.9 and 9.10 set out the historical fi nancial information in relation to AEL. The fi nancial information has been extracted from AEL’s audited consolidated fi nancial statements for the full year ended 31 December 2007. These fi nancials do not take into account the eff ects of the Merger.

Copies of the AEL annual report for the year ended 31 December 2007 can be viewed on AEL’s website at www.anzonenergy.com. These reports contain details of AEL’s accounting policies.

AEL expects to announce its half year results to 30 June 2008 by 29 August 2008. AEL’s results will be available on its website www.anzonenergy.com and announced on AIM at www.londonstockexchange.com

Following the release of these results, the AEL Board will confi rm with the Independent Expert that the results do not change the Independent Expert’s opinion that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders. This confi rmation will be announced to AIM in advance of the Scheme Meeting.


9.8 Summary of historical consolidated income statement

Set out in Table 2 below is a summary of AEL’s historical income statement for the fi nancial year ended 31 December 2007.

Table 2: Summary historical consolidated income statement

Income Statement

For The Year Ended 31 December 2007 Consolidated

2007 2006

$’000 $’000

Continuing operations

Revenue 105,901 49,998Cost of sales (63,456) (18,478)

Gross profi t 42,445 31,520

Other income 106,734 12,200Exploration and evaluation expenses (355) (7,831)Depreciation and amortisation expense (4,197) (9,062)Administration expense (20,192) (10,108)Finance costs (18,359) (7,818)Impairment of non-current assets (7,894) (22,789)Fair value loss on fi nancial instruments (19,437) -Repairs and maintenance (17,109) -Other expenses (625) (1,031)Profit / (loss) from continuing operations before tax 61,011 (9,023)

Income tax benefi t / (expense) 72,896 (9,871)

Profi t / (loss) from continuing operations after tax 133,907 (18,894)

Discontinued operations

Loss from discontinued operations after tax (2,129) (3,448)Net profi t / (loss) for the period 131,778 (22,342)(Profi t) / loss attributable to minority interest (71,474) (3,732)Profi t / (loss) attributable to members of the parent entity 60,304 (26,074)Earnings / (loss) per share for profi t from continuing

operations attributable to the ordinary equity holders of

the Company

Basic (cents per share) 65.11 (27.28)Diluted (cents per share) 60.49 (27.28)

Earnings / (loss) per share for profi t attributable to the

ordinary equity holders of the Company

Basic (cents per share) 62.89 (31.00)Diluted (cents per share) 58.42 (31.00)


9.9 Summary historical consolidated balance sheet

Set out in Table 3 below is the summary of AEL’s historical balance sheet as at 31 December 2007.

Table 3: Summary historical consolidated balance sheet

Balance Sheet

As At 31 December 2007 Consolidated2007 2006

$’000 $’000

ASSETS

Current Assets

Cash and cash equivalents 130,872 102,790Trade and other receivables 18,414 5,128Inventories 8,322 3,491Other fi nancial assets - 2,004Total Current Assets 157,608 113,413

Non-current Assets

Plant and equipment 1,959 478Intangible assets 18,859 26,591Investments 120,222 90,659Exploration and evaluation expenditure 1,218 -Oil and gas assets 219,952 264,634Other non-current assets 1,996 4,378Deferred tax assets 95,090 14,076Total Non-current Assets 459,296 400,816TOTAL ASSETS 616,904 514,229

LIABILITIES

Current Liabilities

Trade and other payables 27,880 33,069Provisions 24,750 425Interest bearing liabilities 38,838 81,384Other fi nancial liabilities 12,169 13,297Total Current Liabilities 103,637 128,175

Non-current Liabilities

Interest bearing liabilities 51,147 75,009Provisions 31,083 23,070Other fi nancial liabilities 41,787 46,117Deferred tax liabilities 45,328 53,421Total Non-current Liabilities 169,345 197,617TOTAL LIABILITIES 272,982 325,792NET ASSETS 343,922 188,437

EQUITY

Contributed equity 109,933 109,358Retained earnings 31,041 (29,263)Reserves 31,321 18,170Parent entity interest 172,295 98,265Minority interest 171,627 90,172TOTAL EQUITY 343,922 188,437


9.10 Summary historical consolidated statement of cash fl ows

Set out in Table 4 below is a summary of AEL’s historical statement of cash fl ows for the fi nancial year ended 31 December 2007.

Table 4: Summary historical consolidated statement of cash fl ows

Cash Flow Statement

For The Year Ended 31 December 2007 Consolidated

2007 2006

$’000 $’000

Cash fl ows from operating activities

Receipts from oil and gas production 98,459 43,853Other receipts 8,885 7,147Payments to suppliers and employees (88,877) (33,709)Borrowing costs (15,188) (12,719)Interest received 8,317 2,765Net cash fl ows provided by / (used in) operating activities 11,596 7,337

Cash fl ows from investing activities Purchase of plant and equipment (1,772) (378)Proceeds from sale of subsidiaries 5,902 -Purchase of available-for-sale fi nancial assets (5) -Payments for exploration expenditure (1,638) (4,392)Purchase of exploration licences (8) (3,587)Sale of retention leases 126,491 50,000Payments for development expenditure (34,020) (163,519)Payment for purchase of investments - -Advances from / (to) related entities - -Net cash fl ows provided by / (used in) investing activities 94,950 (121,876)

Cash fl ows from fi nancing activities

Proceeds from issue of ordinary shares - 11,503Payment of share issue costs - (648)Proceeds from exercise of options 575 13,685Proceeds from convertible notes - 50,390Proceeds from borrowings (net of costs) 12,489 101,303Repayment of borrowings (63,355) (1,348)Payment for fi nancial instruments (18,562) -Net cash fl ows (used in) / provided by fi nancing activities (68,853) 174,885

Cash and cash equivalents at beginning of the year 102,790 46,307Net increase / (decrease) in cash and cash equivalents 37,693 60,346Eff ects of exchange rate changes on cash (9,611) (3,863)Cash and cash equivalents at the year end 130,872 102,790


9.11 Management discussion and analysis of fi nancial performance for the year ended 31 December 2007

(a) Financial highlights

As AEL has a 53% controlling interest in AZA, the AEL fi nancial statements are prepared on a consolidated basis. Accordingly, the fi nancial highlights during the year include the following:

Full fi eld productionn – AZA commenced full fi eld production from the BMG Project which represents a signifi cant milestone.

ITOCHU Farm-outn – On 10 August 2007, it was announced that AZA would receive proceeds of $123 million after concluding negotiations with ITOCHU for the sale of 10% of the BMG Joint Venture. AZA and Beach each divested 10% of their holding to ITOCHU which used its wholly owned subsidiary, CIECO, to become a 20% participant in the BMG Joint Venture. The Farm-out was eff ective as of 1 June 2007 and completed on 5 October 2007.

ITOCHU is a highly respected international organisation. The BMG Joint Venture will benefi t from the technical competence and fi nancial strength of ITOCHU.

(b) Oil production and revenue

Oil production from the BMG Project (100%) during the year ended 31 December 2007 amounted to approximately 2.5 million barrels. The BMG Project sold approximately 2.1 million barrels of crude oil in the year ended 31 December 2007, resulting in US$158 million in gross sales revenue. AZA’s share of oil revenue amounted to approximately $92 million from its interest in the BMG Joint Venture during the year.

(c) Earnings

The main items impacting earnings during the year were:

Productionn - Production from the BMG Project was lower than forecast during the fi rst half of the year due to a range of equipment problems encountered during the commissioning of the Crystal Ocean FPSO and a higher than anticipated gas to oil ratio constraining oil production.

Hedging arrangementsn - Realised and unrealised losses resulting from oil price hedging arrangements which expired in August 2007.

Indonesian write downn - The impairment expense (write down) of the value of the Kruh oil fi eld in Indonesia in the amount of $5.5 million.

Single Point Mooring (SPM) failuren - On 5 July 2007, the SPM subsea chain for the Basker Spirit parted and the Basker Spirit drifted away from its location. No personnel were injured and no environmental incident occurred. The construction vessel Havila Harmony was contracted to undertake repair work. The repair work to the SPM system was completed in early November 2007. On 14 November 2007, AZA announced that normal operations had been re-established following the completion of repairs to the mooring chain. AZA has subsequent to 31 December 2007 received insurance proceeds for both the SPM re-instatement work and for loss of profi t from the incident.

Sale of Indonesian assets n - On 17 September 2007, AEL announced that it had entered into a contract for the sale of two of its Indonesian companies, PT Binatek Reka Kruh and PT Indama Putera Kayapratama, which held interests in oil fi elds located in South Sumatra in Indonesia. The sale was subject to a conditional sale and purchase agreement. The sale of the Indonesian assets was completed on 14 November 2007, with AEL receiving net proceeds of US$5.3 million. Following the sale of PT Binatek Reka Kruh and PT Indama Putera Kayapratama, PT Anzon Energy Indonesia holds no material assets.

(d) Listed investments

At 31 December 2007, AZA had an equity interest of 65.7 million shares in Nexus Energy Limited (with a market value of $120 million). The average cost price of these shares was $0.64 per share.


9.12 Material changes in AEL’s fi nancial position since 31 December 2007

The following material events took place subsequent to the reporting date:

On 23 January 2008 AEL and AZA terminated the respective merger implementation deeds with ARC Energy n

Limited. As a result, total break fees of $6.5 million were paid to ARC Energy Limited ($4 million from AZA, and $2.5 million from AEL).

On 22 April 2008 AEL announced that following receipt of a notice of intention to convert convertible loan n

notes from Kings Road Investments Ltd, it has issued 8,620,690 AEL Shares at a conversion price of US$1.16 per share. The shares are issued in accordance with the convertible note deed of 20 April 2005 between Kings Road Investments Ltd and AEL. Following the issue of the 8,620,690 AEL Shares, Kings Road Investments Ltd has an interest of 8.25% in AEL. Following the issue of the 8,620,690 AEL Shares, the total issued share capital of AEL is 104,540,683 AEL Shares.

9.13 Recent AEL Share price performance

The latest recorded closing price for AEL Shares on AIM on 29 July 2008 was £0.94. During the three months ended 29 July 2008:

the highest recorded daily closing price for AEL Shares on AIM was £1.14 on 16 June 2008; andn

the lowest recorded daily closing price for AEL Shares on AIM was £0.87 on 6 May 2008.n

AEL Shares closed at £0.965 on 13 June 2008, the last Trading Day on which AEL Shares traded prior to the Announcement Date.

Figure 9: Daily closing price of AEL Shares since AIM listing

A nzon E nergy S hare pric e c hart s inc e admis s ion to A IM

£0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

£1.60

Nov-05 May-06 Nov-06 May-07 Nov-07 May-08

An

zon

En

erg

y C

losi

ng

Pri

ce (

£)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Vo

lum

e (m

)


9.14 AEL securities on issue

(a) AEL Shares

As at 29 July 2008, AEL had a total of 104,540,683 AEL Shares on issue held by approximately 2,450 shareholders.

(b) AEL Options

As at 29 July 2008, AEL had 8,050,000 AEL Options on issue. Details of these AEL Options are set out in Table 5 below.

Table 5: AEL Options

Number of Share Options Exercise Price Expiry Date

1,800,000 US$0.50 16 February 2009

5,500,000 US$0.50 5 April 2010

750,000 £1.13 1 February 2014

(c) AEL Convertible Notes

As at 29 July 2008, convertible notes having a principal amount of £20 million were on issue.

9.15 Continuously disclosing entity

As a company admitted to trading on AIM, AEL is subject to regular reporting and disclosure requirements. These obligations require AEL to announce price sensitive information as soon as it becomes aware of the information, subject to the exceptions for certain confi dential information. AEL’s recent AIM announcements are available from the AEL website at www.anzonenergy.com and www.londonstockexchange.com.

Further announcements concerning developments at AEL will continue to be made available on this website after the date of this Scheme Booklet.

Historical AIM announcements and copies of half-yearly and annual fi nancial results (and accompanying releases) are also available from the AEL website together with corporate governance policies and AEL’s constitution. Copies will also be provided, free of charge, for any AEL Shareholder who requests this information prior to the Scheme Meeting.


9.16 Recent AEL announcements

Table 6 summarises key events in relation to AEL and announcements made to AIM by AEL that may have aff ected share price movements over the period since 31 December 2007 up to 29 July 2008.

Table 6: Recent AIM announcements

Date Event

7 July 2008 AZA - BMG Project Major Expansion

16 June 2008 ROC to acquire AEL

16 June 2008 Off -Market Takeover Off er for Anzon

30 May 2008 Change in Board and Results of 2008 AGM

13 May 2008 AZA Director’s Interest Notice

7 May 2008 Scheme Meeting – EGM Dissolved

6 May 2008 AZA Basker 6 ST1 Outstanding Test

6 May 2008 AZA Basker 6 ST1 Production Tests

6 May 2008 Nexus Merger Termination

2 May 2008 AZA Basker 6 ST1 Progress Report

30 April 2008 AZA Quarterly Report

30 April 2008 AZA Basker Operations Update

28 April 2008 AZA Basker 6 Well - Update

22 April 2008 Issue of Equity

18 April 2008 Shareholder Meetings Update

18 April 2008 Basker 6 Well - Update


11 April 2008 Adjournment of Meetings



3 April 2008 Independent Expert Review

31 March 2008 Final Results

28 March 2008 Basker 6 Well - Update

27 March 2008 AZA Basker Progress Report

20 March 2008 AZA Basker Progress Report

19 March 2008 AZA Independent Expert Review

14 March 2008 Basker 6 Well Progress Report

11 March 2008 Notice of EGM

11 March 2008 BMG SPM Insurance Settlement

10 March 2008 Anzon Energy Scheme Meeting

5 March 2008 AZA Commencement of Well

5 March 2008 Merger Scheme Meeting-Amend

5 March 2008 AZA Update re: Nexus Merger

4 March 2008 AZA – Conditional Dividend

29 February 2008 AZA Preliminary Results

31 January 2008 AZA Quarterly Reports

29 January 2008 Letter to Shareholders

24 January 2008 Cancellation of ARC Meeting

23 January 2008 Termination of ARC Merger

23 January 2008 Nexus Energy to Acquire Anzon

21 January 2008 Result of EGM


10. Profi le of ROC

10.1 Background and business overview

ROC was founded by Dr John Doran as a privately owned company in late 1996 and was publicly listed on ASX in 1999 and AIM in 2004.

ROC is an Australian based, international exploration and production company, currently estimated to produce approximately 10,000 boepd net for 2008 (almost entirely oil) from six fi elds in four countries. As at 31 December 2007, ROC had net 2P reserves of 21.4 mmboe. The company has active exploration and appraisal programs in Australia, China, Angola, Equatorial Guinea, Madagascar and Mauritania. Through its well established operating capabilities, built up over ten years, ROC seeks to bring its experience and knowledge to projects through the expertise of its people. ROC is the operator of the majority of its assets and employs approximately 185 professional, operational and support staff , primarily located in its head offi ce in Sydney and its offi ce in Beijing.

ROC has a strong balance sheet with net debt of US$91.9 million as at 31 December 2007. ROC’s sales revenue and cash fl ow from operations for the year ended 31 December 2007 was US$208.5 million and US$138.1 million, respectively, supported by strong production from its core assets, which averaged 9,668 boepd for the year. During the fi rst quarter 2008, ROC’s strong operating performance continued with production averaging 10,961 boepd and sales revenue of US$102 million.

ROC’s strategy is to create shareholder value by acquiring meaningful interests, generally as operator, in regions containing, or adjacent to, proven hydrocarbons with considerable exploration upside. Its core focus areas are Australia, Africa and parts of Asia, preferably in countries with attractive fi scal regimes.

From its inception, ROC’s portfolio growth has been achieved through a combination of acquiring producing and developed assets and through organic growth from exploration, appraisal and development success.

A summary of ROC’s key assets is set out in Figure 10.

Figure 10: Location of ROC’s key assets

Operated / Managed

Non-operated

CHINA

24.5% & 40% (3)

EQUATORIAL

GUINEA

18.75% (4)

MADAGASCAR

75% (6)

ANGOLA

60% (5)

UK (1)

NORTH SEA

12% (2) & 12.5% (2)

MAURITANIA

2% - 5.49%

AUSTRALIA

20% - 37.5%

(1) Excludes onshore UK(2) Post unitisation(3) Pre 51% Government Back-In for Block 22/12(4) 15% Free carried through next exploration well(5) 75% contributing interest for exploration(6) 100% contributing interest for exploration


10.2 Reserves and production

Table 7: ROC’s net working interest reserves at 31 December 2007

Reserves category Oil mmstb Sales gas BCF Total BOE mmstb

1P 12.1 0.2 12.1

2P 21.1 1.7 21.4

ROC also has best estimate contingent resources of 5.2 mmbbl net to ROC in the Beibu Gulf, off shore China. These resources are not yet included in ROC or the Merged Group 2P reserve base. The development of these resources is expected to be subject to FID in second half 2008, which on FID will be booked as 2P reserves.

Figure 11: ROC’s 2P reserves distribution at 31 December 2007

By Field By Region By Product

UK

22%

Africa

5%

China

54%

Australia

19%

Zhao DongC&D Fields

45%

Zhao Dong C4 Field

9%

Cliff Head

19%

Chinguetti

5%

Blane

17%

Enoch

5%

Oil

99%

Gas

1%

During fi rst quarter 2008, ROC’s net working interest oil production of 10,961 boepd came from six fi elds: Cliff Head; Enoch; Blane; Chinguetti; and Zhao Dong C and D oil fi elds. The distribution of ROC’s production during fi rst quarter 2008 is set out in Figure 12.

Figure 12: ROC’s production distribution

By Field By Region By Product

UK

27%

Africa

3%

China

43%

Australia

27%

Zhao Dong C&D Fields

43%

Cliff Head

27%

Chinguetti

3%

Blane

18%

Enoch

9%

Oil

98%

Gas

2%


10.3 Assets

The following summary of ROC’s key assets illustrates the broad range and diversity of projects in the company’s portfolio.

Australia

ROC’s Australian interests are located in the Perth Basin (Abrolhos and Vlaming Sub-Basins) and Carnarvon Basin, all Western Australia.

ROC’s total gross exploration acreage covers an area of approximately 16,000km2.

(a) Cliff Head oil field

ROC’s major producing asset in Australia is the Cliff Head oil fi eld in production licence WA-31-L in the Perth Basin, approximately 10km off shore Western Australia. The fi eld, in 15-20 metres of water, was discovered, appraised and developed by ROC and its co-venturers in a sensitive off shore and coastal environment. First oil was achieved in record time of 14 months from FID.

Table 8: Key details of the Cliff Head oil fi eld

Field Cliff Head oil field, WA-31-L, Perth Basin, Offshore Western Australia

ROC interest 37.5% and operator

Production start-up May 2006

Development costs (gross) $327 million

2P remaining reserves as at 31 December 2007

10.6 mmbbl, ROC net 4.0 mmbbl

1Q08 production rate 8,035 bopd, ROC net 3,013 bopd

Field facilities Remotely controlled unmanned platform with 6 producing wells and 2 water injectors connected via two 14km, 250mm diameter pipelines, power cable and umbilical to an onshore crude oil stabilisation plant

The Cliff Head project represents an innovative solution to the development of a technically and operationally challenging resource, including:

The cycling of hot water to maintain higher temperatures within the pipelines and production facilities to n

manage the relatively high pour point temperature of the crude oil;

The use of electrical submersible pumps (ESPs) for artifi cial lift deployed on coiled tubing which allows for n

cost effi ciency in future workovers without the requirement of a jackup rig; and

Unmanned, remotely controlled off shore facilities designed for zero off shore emissions. n

The project has an excellent production and operating performance record over more than two years with less than 4% facilities downtime, no material environmental incidents and no lost time injuries.


Production from the fi eld is transported by pipeline to shore where it is processed at the onshore crude stabilisation plant and trucked 350km to the BP Refi nery at Kwinana. The oil is sold to BP under a term contract covering the life of the fi eld at a price linked to regional crude oil prices. Realised prices in 2007 were approximately equivalent to the Brent crude oil price.

Cliff Head produced 5.2 mmbbl (gross) to 31 December 2007. The project development cost of $327 million (gross) was recovered after 18 months of production.

During fi rst quarter 2008 production from the Cliff Head oil fi eld averaged 8,035 bopd (3,013 bopd net to ROC) generating sales revenue to ROC of approximately US$26.6 million.

Figure 13: Cliff Head oil fi eld and exploration permit WA-286-P

LEGEND

Prospects

Established Gas Fields

New Gas Fields

Established Oil Fields

New Oil Field with Gas

Oil Pipelines

Gas Pipelines

Diana 3DSeismicSurvey


Figure 14: Cliff Head’s onshore Arrowsmith stabilisation plant

(b) Australia - Exploration

(i) Abrolhos Sub-Basin – Within the off shore North Perth Basin, (WA-286-P, TP/15), ROC has made two additional discoveries: Dunsborough (oil and gas) and Frankland (gas). The commercial potential of the fi elds is yet to be determined. The exploration potential of the surrounding areas is currently being evaluated, utilising recently acquired 3D seismic data.

(ii) Vlaming Sub-Basin (WA-381-P & WA-382-P) – ROC has a 20% interest and is operator of two exploration permits, off shore Perth in the Vlaming Sub-basin. Through a farm-in arrangement ROC has further options to acquire up to an 80% interest in each Permit.

(iii) Carnarvon Basin (WA-351-P) – ROC holds a 20% interest in exploration permit WA-351-P, operated by BHP Billiton, located off shore in the Carnarvon Basin in water depths of 1,000-1,300 metres, some 100km west of the Gorgon gas fi eld. The potential of the larger area as a gas province is beginning to emerge with recent drilling activity by Hess (the fi rst well in a 16 well exploration program) in WA-390-P which is immediately to the north of WA-351-P reportedly discovering gas. The current plan is to acquire a 3,500km2 3D survey in late 2008.


Figure 15: Exploration permit WA-351-P

LEGENDOil FieldsGas FieldsLeads

GLENCOE-1

Jurassic gas discovery

China

ROC has built a signifi cant position as an independent oil company in China and is now the fourth largest foreign operator of oil production in the country. ROC has assets in two off shore areas: the Bohai Bay in North East China and the Beibu Gulf, some 2,500km to the South West. The company manages its Chinese activities with approximately 80 local and expatriate staff from its principal offi ce in Beijing and an operating offi ce in Zhanjiang.

(a) Zhao Dong

ROC acquired its interest in the Zhao Dong Block, off shore Bohai Bay in 2006. The asset comprises two producing fi elds (C and D) and a further fi eld (C4) currently under development, with production from that fi eld expected to commence in late 2008. ROC operates the project with a 24.5% interest (11.6% unitised interest in C4) on behalf of its co-venturers comprising PetroChina (51%) and New-XCL China (24.5%).

Table 9: Key details of the Zhao Dong oil fi eld

Field Zhao Dong C, D and C4 oil fields, Bohai Bay, Offshore China

ROC interest C and D Fields – 24.5% and operatorC4 Field – 11.57% (unitised) and operator

Production start-up date 2003

2P remaining reservesas at 31 December 2007

39.2 mmbbl C and D Fields, ROC net 9.6 mmbbl17.2 mmbbl C4 Field, ROC net 2.0 mmbbl

1Q08 production rate 19,025 bopd, ROC net 4,661 bopd

Field facilities Two bridge linked off shore platforms. Export is via barges to the Tanggu onshore oil terminal.


The C and D oil fi elds have been developed via two bridge-linked platforms: one primarily for drilling and accommodation and the other for processing and storage. Produced crude oil is transported by barge from the platform to Tanggu port where it is loaded into tankers for export. The oil is low API/low sulphur crude with its sale price at a variable premium to Platts Duri crude.

During fi rst quarter 2008 production from the fi elds averaged 19,025 bopd (4,661 bopd net to ROC) generating sales revenue to ROC of approximately US$43 million.

During late 2007 and fi rst half 2008 ROC has carried out a successful development drilling program in the C and D oil fi elds, with the objective of maintaining average production around 20,000 bopd (gross) being largely achieved. The benefi t of the 2007 and 2008 drilling is demonstrated in Figure 16 below.

Figure 16: Zhao Dong production profi le/drilling program

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500

25,000

27,500

1-

Jan

-0

7

1-

Feb

-0

7

1-

Mar

-0

7

1-A

pr-

07

1-M

ay-

07

1-Ju

n-

07

1-Ju

l-0

7

1-

Au

g-

07

1-

Sep

-0

7

1-O

ct-

07

1-N

ov-

07

1-D

ec-

07

1-

Jan

-0

8

1-

Feb

-0

8

1-

Mar

-0

8

1-A

pr-

08

1-M

ay-

08

1-Ju

n-

08

30-

Jun

-0

8

Oil,

bbl

/day

2008 Wells2007 WellsPre- 2007 Wells

Figure 17: Zhao Dong off shore platform and drill rig


ROC is currently expanding the platform facilities on the C and D oil fi elds, which involves installing a second drilling platform and an additional processing platform. The project involves a currently approved budget investment of approximately US$426 million (gross) for the expansion of the facilities and ongoing drilling and well re-completion activities in the C and D oil fi elds including the as yet undeveloped Extended Reach Area (ERA).

In addition, ROC is also developing the unitised C4 oil fi eld, which straddles the boundary with the adjacent Eastern block. Installation and commissioning of the new C4 unit development facilities has commenced. These facilities include a drilling conductor pod, a pipeline terminal, produced fl uids pipeline and water return line to and from the Zhao Dong facilities located some 4.5km away. The project involves a currently approved budget investment of approximately US$160 million (gross) for the C4 production facilities and drilling.

In total, 110 wells and re-completions are planned to be drilled in the C and D (including the ERA) and C4 oil fi elds over the next four years.

Figure 18: Zhao Dong development

New extension for processing (OPB)

Original Zhao Dong process platform (OPA)

Original Zhao Dong drilling platform (ODA)

New Conductor Pod at C4 location (CP)

New Pipeline Terminal (PT)

Oil & water injection pipelinesto / from C4 facilities

New extension for drilling (ODB)

Appro

x 4.5

km


(b) Beibu Gulf

ROC has a 40% operated interest in Block 22/12 in the Beibu Gulf (reducing to 19.6% on development, assuming Government participation in fi eld development through CNOOC). The Block contains a number of discovered fi elds, two of which, Wei 6-12 and Wei 6-12S oil fi elds, were discovered by ROC and are undergoing pre-development feasibility review. A third fi eld, the Wei 12-8W Oil and Gas Field, is being considered for development as a tie-back to the main 6-12 development. If all three fi elds are approved for development, this project has the potential to move currently unbooked discovered resources of approximately 5.2 mmbbl, net to ROC, into booked 2P reserves.

Table 10: Key details of Block 22/12

Field Block 22/12 (Wei 12-8 West, Wei 6-12 South and Wei 6-12)

ROC interest

Production start-up date Expected 2010

Contingent Resources c.27 mmbbl, ROC net 5.2 mmbbl

Development concept Well-head platform & FPSO

40%21 & Operator

Development planning is currently underway, with the preferred scenario, subject to Government and CNOOC approvals, being an unmanned platform and FPSO allowing standalone development. Assuming Government and CNOOC approvals are obtained, FID is expected in second half 2008, with fi rst oil targeted for late 2010.

Figure 19: Block 22/12

Oil AccumulationGas AccumulationProspect

Block 22/12

21 The government through CNOOC has an entitlement to participate for up to a 51% interest in fi eld development.


North Sea

ROC has unitised, non-operated interests in two trans-median (UK-Norway) fi elds in the North Sea: the Blane oil fi eld (12.5%) and the Enoch Oil and Gas Field (12.0%). The fi elds have been developed as tie-backs to third party facilities and pipelines.

Both fi elds came into production in 2007 and have performed strongly since start-up. In fi rst quarter 2008 ROC’s net share of production was 2,842 boepd and 0.5 mmscfd of gas generating combined sales revenue to ROC of approximately US$30 million.

Table 11: Key details of the Enoch oil and gas fi eld

Field Enoch oil and gas field, P219-Block 16/13a&e, North Sea

ROC interest 12.0% unitised

Operator Talisman North Sea Limited

Production start-up date May 2007

2P remaining reserves(as at 31 December 2007)

9.2 mmboe, ROC net 1.1 mmboe

1Q08 production rate 7,853 boepd, ROC net 942 boepd

Field facilities 1 subsea production well tied back to Brae-A platform

Table 12: Key details of the Blane oil fi eld

Field Blane oil field development, P111-Block 30/3a, North Sea

ROC interest 12.5% unitised

Operator Talisman Energy (UK) Limited

Production start-up date September 2007


28.8 mmboe, ROC net 3.6 mmboe

1Q08 production rate 15,873 boepd, ROC net 1,984 boepd

Field facilities 2 subsea producing wells and 1 subsea water injection well tied back to Ula platform


Figure 20: Enoch oil and gas fi eld / Blane oil fi eld

Enoch Oil and

Gas Field

Blane Oil Field

Oil Field

0 100Kilometres

Gas Field

ENOCH OIL & GAS FIELD

BRAE ‘A’

UKCS

NCS

8’ PRODUCTION

3’ GAS LIFT

UMBILICAL

FUTURE ENOCH UPSIDE WELLHEAD

ENOCH SUBSEA WELLHEAD

BLANE OIL FIELDULAPRODUCTIONPLATFORM

QP DP PP

WATER INJECTION

PRODUCTION

BLANE RISER

CASSION

GAS LIFT

UMBILICAL

BLANE WATER INJECTION WELLHEAD

BLANE PRODUCTION WELLHEAD 1

BLANE PRODUCTION WELLHEAD 2

GAS LIFT PRODUCTION AND PROTECTION STRUCTURE


Mauritania

(a) Chinguetti oil field

ROC currently has non-operated interests ranging from 2.00% to 5.49% in eight blocks in deep water off shore Mauritania. These interests include a 3.25% interest in the Chinguetti oil fi eld, which is operated by Petronas.

Table 13: Key details of the Chinguetti oil fi eld

Field Chinguetti oil field, PSC Area B, Offshore Mauritania

ROC interest 3.25%

Operator PC Mauritania I Pty Ltd

Production start-up date February 2006


33.8 mmbbl, ROC Net 1.1 mmbbl

1Q08 production rate 10,968 bopd, ROC Net 356 bopd

Field facilities 7 producing wells and 5 water injection wells tied back to a turret moored FPSO, with a gas fl owline to and gas injection well in the nearby Banda Gas Field. The CH-19 infi ll production well is currently being completed and will be followed by the CH-20 infi ll production well.


Figure 21: ROC’s Mauritanian interests

Dana Operated Blocks

Tullow Operated Blocks

Petronas Operated Blocks

Oil fi eldGas fi eldSalt diapirs


Figure 22: Berge Helene FPSO on the Chinguetti oil fi eld

(b) Appraisal and exploration

ROC’s Mauritanian interests also include a number of undeveloped resources, the commercial potential of which have yet to be determined: the Tiof and Tévét oil fi elds, the Banda oil and gas fi eld and the Pelican gas fi eld.

Angola

ROC holds a 60% interest in and is operator of the Cabinda South Block, onshore Angola. On-the-ground exploration activities commenced in mid-2005, marking the return of signifi cant exploration activity to onshore Angola after an absence of more than 30 years.

Between 2005 and 2007 ROC acquired a total of 722km 2D and 618km2 3D seismic data, which has been used to identify the prospect inventory now being drilled.

A multi-well exploration drilling program is currently in progress. To date, six wells have been drilled. The fi rst three were drilled in the post-salt section, with one discovery: the Massambala heavy oil fi eld. The next three wells targeted sub-salt objectives, two of which had encouraging results:

Milho-1 found rich source rocks and excellent quality reservoir but no trapped hydrocarbons. n

Coco-1 discovered medium quality oil (26 API) in two intervals. Oil and gas were fl owed to surface but because of n

test equipment constraints, the size, producibility and commercial potential of the Coco-1 discovery has not yet been determined. The well has been suspended for future testing.

The third well, Sesamo-1, reached a total depth of 3,013 mBRT and was plugged and abandoned with no Hydrocarbon shows.

The forward program is to drill one further sub-salt exploration well, Arroz-1, to carry out an appraisal drilling program of up to six shallow wells on the Massambala heavy oil discovery to better defi ne the volumetric potential in the second half 2008 and to carry out testing activities in relation to the Coco discoveries.


Figure 23: Location of Cabinda South Block, Onshore Angola

M’BOUNDI FIELD

One of the larger recent

oil discoveries, onshore

Africa

ca 250 MMBO


Equatorial Guinea

ROC farmed into Block H in 2000 and is the Technical Manager with an 18.75% interest.

To date ROC has acquired a 1,400km2 3D seismic survey and has drilled one exploration well (Bravo-1, a dry hole).

The Aleta deep water prospect is proposed to be drilled, subject to resolution of a dispute between Pioneer and the co-venturers in the Block. If the well is drilled ROC will be free-carried for 15% of the well cost.

Figure 24: Block H

Key producing areas, off shore Equatorial Guinea

BLOCK H - ROC 18.75% & TECHNICAL MANAGER

ALETA PROSPECT


Madagascar

ROC was awarded the Belo Profond Block, off shore Madagascar, in 2007 and holds a 75% operated interest (100% contributing interest). This frontier exploration block of 13,770km2 (gross) is located in the deepwater Mozambique Channel. Exploration is at an early stage with a block-wide aeromagnetic data survey currently being acquired.

ROC has also applied for a large area approximately 52,000km2 (gross), immediately north of Belo Profond (as shown in orange in Figure 25). The Juan De Nova application is currently under consideration by the French Government.

Figure 25: Mozambique Channel

Juan De Nova Application

ROC 75% & Operator


10.4 Permit interests

Set out in the table below is a summary of ROC’s permit interests.

Table 14: ROC’s permit interests

Block Field Discovery

ROC Interest

Acreage Agreement Type

Operator

GrossSq km

ROC netSq km

Australia

WA-286-P Frankland, Dunsborough 37.5% 6,618 2,482 Expln ROC

WA-31-L Cliff Head 37.5% 72 27 Prodn ROC

TP/15 20.0% 647 129 Expln ROC

WA-351-P 20.0% 3,773 755 Expln BHP Billiton

WA-381-P 20.0% 2,120 424 Expln ROC

WA-382-P 20.0% 2,420 484 Expln ROC

EP-413 0.25% 507 1.3 Expln Origin Energy

L14 Jingemia 0.25% 40 0.1 Prodn Origin Energy

Total Australia 16,198 4,302

Equatorial Guinea

H/15 & H/16 18.75% 991 186 PSC ROC (Tech Mgr)

Mauritania

PSC A Banda 4.155% 6,970 290 PSC Petronas

PSC B Tiof, Tiof West, Tevet 3.693% 8,028 296 PSC Petronas

Chinguetti EEA Chinguetti 3.250% PSC Petronas

PSC C, Block 2 5.49% 4,979 273 PSC Tullow

PSC C, Block 6 5.0% 3,854 193 PSC Petronas

PSC Block 1 2.0% 3,936 79 PSC Dana Petroleum

PSC Block 7 Pelican 4.95% 6,680 331 PSC Dana Petroleum

PSC Block 8 5.0% 11,813 591 PSC Dana Petroleum

Total Mauritania 46,259 2,052

Angola

Cabinda South Block Massambala,Coco 60.0% 1,073 644 PSA ROC

Madagascar

Block Belo Profond 75.0% 13,770 10,328 PSC ROC

Total Africa 62,093 13,209


Block Field Discovery

ROC Interest

Acreage Agreement Type

Operator

GrossSq km

ROC netsq km

China

Beibu Gulf Block 22/12

Wei 12-8, 6-12, 6-12S 364 146 PSC ROC

Zhao Dong Block, Bohai Bay C, D 24.5% 28 7 PSC ROCZhao Dong Block, Bohai Bay C4 11.575%Total China 392 152

Onshore UK

PEDL 002 (carried interest) 5.0% 240 12 PEDL Star EnergyPEDL 030 100.0% 214 214 PEDL ROC

Total Onshore UK 454 226

UK North Sea

P111-Block 30/3a (Upper) 15.24% 47 7 E&P Licence Talisman

Blane 12.50%

P219-Block16/13a & e J1 15.0% 40 6 E&P Licence Talisman

Enoch 12.0%

Total Offshore UK 86 13

Total UK 540 239

TOTAL ROC ASSETS 79,223 17,903

40.0%22

10.5 ROC Board

Andrew J Love, Chairman, BCom, FCA, MAICD

Mr Love has been a director of ROC since 1997. Mr Love is Chairman of the Board of ROC, a Fellow of The Institute of Chartered Accountants in Australia. Mr Love is a former Senior Partner in the fi rm of Ferrier Hodgson, Chartered Accountants. He is now a consultant to the fi rm and holds a number of directorships. Appointed in July 2005, Mr Love is a non-executive director of Babcock & Brown Communities Limited (formerly Primelife Corporation Limited). Since April 2006 he has been Deputy Chairman of Riversdale Mining Limited and in April 2008 was appointed as a non-executive director of Babcock and Brown Capital Ltd. Mr Love is also a director of the Museum of Contemporary Art.

Bruce Clement, Executive Director, Acting Chief Executive Officer, BSc, BEng, MBA

Mr Clement joined ROC in 1997 and held the positions of Commercial Manager, Company Secretary, and Chief Financial Offi cer before being appointed Chief Operating Offi cer in 2003 and an executive director on 1 July 2007. Mr Clement was appointed Acting Chief Executive Offi cer in June 2008.

Mr Clement has over 28 years of oil and gas industry experience, including banking sector exposure, having held engineering, commercial and management roles with Exxon Corporation, Ampolex and AIDC Limited (Australian resource bank).

William G Jephcott, Deputy Chairman, BCom, FCPA, FAICD

Mr Jephcott has been a director of ROC since 1997. He is an investment banker who specialises in merger and acquisition advice. He also has experience in the fi nancing and structuring of major resource projects, including those in the oil and gas industry. Since July 2006 Mr Jephcott has been Special Advisor to Gresham Partners Limited. He is also a director of New South Wales Rugby Union Limited.

22 Subject to government back in for up to 51% on development.


Sidney J Jansma, Jr, Non-Executive Director, MBA

Mr Jansma has been a director of ROC since 1998. Mr Jansma began his career in the oil and gas industry in 1959 working for his father’s private oil company. In 1978, Mr Jansma purchased the company from his father. In 1997, Mr Jansma merged his company with Dominion Resources, Inc, where he remained as President and Chief Executive Offi cer of Dominion Midwest Energy, Inc, a wholly-owned subsidiary of Dominion Resources, Inc.

Mr Jansma founded Wolverine Gas and Oil Corporation and explores for oil and gas in the United States. Mr Jansma has served as a member of the Board of Governors of the Independent Petroleum Association of America and Chairman of both its Tax and Environmental Committees. In addition, Mr Jansma currently serves on the board of the American Petroleum Institute.

Adam C Jolliffe, Non-Executive Director

Mr Jolliff e has been a director of ROC since 1998. Prior to joining Cargill Financial Markets plc (‘Cargill’) in 1981, Mr Jolliff e worked for Tenant Trading (Metals) Ltd, a subsidiary of Consolidated Gold Fields, trading non-ferrous metals. In 1990 he joined Cargill’s Financial Trading Division and became the Manager of Western European Equity Trading. Mr Jolliff e resigned from Cargill in November 2003 and is now an independent fi nancial consultant.

Dennis Paterson, Executive Director, President - Roc Oil (China) Company, BSc, MSc, DIC

Mr Paterson joined ROC in October 2006 in the capacity of President of Roc Oil (China) Company and was appointed as an Executive Director eff ective 23 March 2007. Mr Paterson has more than 30 years of international oil and gas exploration and production experience.

Mr Paterson formed and managed Genting Oil and Gas which participated in the Indonesian gas discoveries which are now being developed as the Tanngguh LNG Project by BP plc. Prior to that he was Managing Director of British Gas Malaysia and Country Manager, British Gas Indonesia.

Mr Paterson has been a Director of a number of small independent oil and gas exploration companies including BPC Limited, Ramco plc and Medusa Oil and Gas.

Douglas A Schwebel, Non-Executive Director, BSc (Hons), PhD

Dr Schwebel was appointed a non-executive director of ROC on 1 September 2007. Prior to joining ROC, Dr Schwebel was Exploration Director of Esso Australia. Positions held by Dr Schwebel while at ExxonMobil include Exploration Advisor in Houston, Production Geology Manager in Sydney; Manager Planning in Melbourne and International Planning Advisor in New Jersey. Dr Schwebel was also a director of various ExxonMobil Australian subsidiaries as well as Great Artesian Oil and Gas Limited.

10.6 Corporate governance

As an Australian based international oil and gas exploration and production company, publicly listed on ASX and AIM, ROC is subject to and conducts its business within the listing rules, laws and regulatory requirements of the jurisdictions and countries in which it operates.

The Board and Management are committed to the highest standards of corporate governance embracing the ASX Corporate Governance Council “Principles of Corporate Governance and Best Practice Recommendations”.

ROC’s business framework aims to promote transparency and responsible behaviour. Its principles and processes are periodically reviewed to ensure that ROC maintains the highest standards of Corporate Governance.

Policies and documents associated with ROC’s governance and related practices can be found at ROC’s website:

http://www.rocoil.com.au/Public/Responsibility/Corporate_Governance.aspx


10.7 Historical fi nancial information

(a) Overview

Sections 10.7, 10.8, 10.9 and 10.10 set out the historical fi nancial information in relation to ROC. The fi nancial information has been extracted from ROC’s audited consolidated fi nancial statements for the full year ended 31 December 2007. The fi nancial information contained within these sections does not take into account the eff ects of the Merger or the AZA Takeover Off er.

Copies of the ROC annual report for the year ended 31 December 2007 can be obtained from ROC’s website www.rocoil.com.au. The annual report contains details of ROC’s accounting policies.

ROC expects to announce its half year results to 30 June 2008 by 29 August 2008. ROC’s results will be available on its website www.rocoil.com.au and announced on ASX at www.asx.com.au.

ROC understands that, following the release of these results, the AEL Board will request that the Independent Expert review the results and, if it is able to do so, confi rm that the results do not change the Independent Expert’s opinion that the Scheme is fair and reasonable and therefore in the best interests of AEL Shareholders. ROC also understands that AEL proposes to announce the outcome of this review to ASX and AIM in advance of the Scheme Meeting.

(b) Summary historical consolidated income statements

Set out in the table below is a summary of ROC’s historical consolidated income statements for the fi nancial years ended 31 December 2007 and 31 December 2006.

Table 15: Summary historical consolidated income statements

2007US$’000

2006US$’000

Sales revenue 208,513 109,710

Operating costs (121,077) (86,966)

Trading profit 87,436 22,744

Other income 7,294 2,942

Exploration expensed (88,948) (51,791)

(81,787) (8,729)

Finance costs (13,045) (10,220)

Loss before income tax (89,050) (45,054)

Income tax benefi t/(expense) 5,769 142

Net loss (83,281) (44,912)

Basic loss per share (27.9) (19.4)

Diluted loss per share (27.9) (19.4)

Other costs23

The notes to the fi nancial statements are an integral part of these consolidated fi nancial statements.

23 Includes $69.2 million in derivative losses.


10.8 Financial performance

Financial highlights

2007 financial highlights

For the fi nancial year ended 31 December 2007, ROC reported a net loss after tax of US$83.3 million which included signifi cant items relating to unrealised hedging losses of US$64.9 million partially off set by a gain of US$21.4 million resulting from a change in the Chinese corporate tax rate. After excluding these signifi cant items and US$88.9 million of exploration costs expensed, ROC’s adjusted profi t was US$49.1 million.

Net cash generated from operating activities was US$138.1 million for the period. The funds were primarily used for development expenditure of US$62.3 million and exploration expenditure of US$82.4 million.

At 31 December 2007, ROC’s net debt was US$91.9 million. During the year, the refi nancing of ROC’s US$137.5 million bridging loan facility was successfully completed with a new four year US$200 million loan facility to support future growth opportunities and provide general working capital.

Sales and production

ROC experienced record production for 2007 totalling 3.5 mmboe (9,668 boepd) Total sales revenue of US$209 million came predominantly from oil sales with an average realised price of US$70.16/bbl before hedging; a discount of 3% to the Brent oil price average of US$72.39/bbl.

Earnings

Operating costs of US$121.1 million included production costs of US$30.5 million (US$8.64/boe), amortisation costs of US$98.7 million (US$27.98/boe) and Chinese levies and special taxes of US$6.9 million, partially off set by stock and overlift movements of US$15.1 million.

ROC incurred exploration and evaluation expenditure of US$94.7 million, of which US$88.9 million was expensed.

At 31 December 2007, ROC held Brent oil price swap contracts for 3.2 mmbbl, representing approximately 15% of the Group’s 2P reserves, at an average price of $69.66/bbl for the period from January 2008 to December 2011.


10.9 Summary historical consolidated balance sheets

Set out in the table below is ROC’s audited balance sheet for the fi nancial years ended 31 December 2007 and 31 December 2006.

Table 16: Summary historical consolidated balance sheets

2007US$’000

2006US$’000

Current Assets

Cash assets 41,437 47,955

Trade and other receivables 30,210 117,914

Derivatives – 11,914

Inventories 7,156 2,204

Total current assets 78,803 179,987

Non-current assets

Derivatives – 9,628

Oil and gas assets 423,476 455,928

Exploration and evaluation expenditure 92,727 86,937

Property, plant and equipment 2,428 2,599

Deferred tax assets 9,630 14,625

Total non-current assets 528,261 569,717

Total assets 607,064 749,704

Current liabilities

Bank loans – 137,486

Trade and other payables 43,128 35,529

Current tax liabilities 4,730 5,663

Derivatives 58,628 5,972

Provisions 1,427 89,609

Total current liabilities 107,913 274,259

Non-current liabilities

Bank loans 133,304 –

Long term liabilities 341 450

Deferred tax liabilities 61,924 88,343


Total non-current liabilities 209,277 101,336

Total liabilities 317,190 375,595

Net assets 289,874 374,109

Equity

Share capital 435,790 434,953

Accumulated losses (187,940) (104,659)

Other reserves 42,024 43,815

Total equity 289,874 374,109



10.10 Summary historical consolidated statements of cash fl ows

Set out in the table below is a summary or ROC’s historical statement of cash fl ows for the fi nancial years ended 31 December 2007 and 31 December 2006.

Table 17: Summary historical consolidated statement of cash fl ows

2007US$’000

2006US$’000

Cash flows from operating activities

Cash generated from operations 171,616 64,992Derivatives paid (3,933) (6,513)Interest received 854 2,360Finance cost paid (13,882) (8,544)Income taxes paid (16,556) (5,258)Net cash generated from/(used in) operating activities 138,099 47,037

Cash flows from investing activities

Acquisition of controlled entities – (257,314)Payments for plant and equipment (626) (325)Payments for development expenditure (62,255) (86,909)Payments for exploration expenditure (82,363) (64,940)Proceeds from sale of assets 695 50Net cash used in investing activities (144,549) (409,438)

Cash flows from financing activities

Proceeds from share issues 963 231,190Share issue expenses (126) (5,710)Bank loan advances 173,000 323,120Bank loan repayments (175,500) (185,620)Loan to associate (44) –Net cash used in financing activities (1,707) 362,980

Net (decrease)/increase in cash held (8,157) 579

Cash at beginning of fi nancial year 47,955 48,700Eff ect of exchange rate changes on the balance of cash held in foreign currencies 1,639 (1,324)

Cash at end of financial year 41,437 47,955


10.11 Material changes in ROC’s fi nancial position since last published accounts for the year ended 31 December 2007

To the knowledge of ROC’s Directors, as at the date of this Scheme Booklet and except as disclosed to the market as part of ROC’s continuous disclosure regime, there have been no material changes to ROC’s fi nancial position since 31 December 2007.


10.12 Overview of ROC’s capital structure

As at 29 July 2008 ROC had 298,902,006 fully paid ordinary shares on issue, 1,997,600 employee share options and 11,990,900 executive options had been granted.

All issued fully paid ordinary shares carry one vote per share and carry the right to dividends.

10.13 Summary of rights attaching to ROC Shares

(a) General

New ROC Shares will be fully paid ordinary shares and will rank equally in all respects with all existing ordinary shares currently on issue.

The following is a broad summary of the rights and liabilities which attach to all ROC Shares. It is not intended to be an exhaustive or defi nitive summary of the rights and obligations of ROC Shareholders which can involve complex questions of law arising from the interaction of ROC’s constitution, statutes, common law and Listing Rule requirements. To obtain a defi nitive assessment of the rights and liabilities which attach to ROC Shares in any specifi c circumstances, investors should seek their own advice.

(b) General meetings and notices

Each ROC Shareholder is entitled to receive notice of, and to attend and vote at, general meetings of ROC and to receive all notices, accounts and other documents required to be furnished to shareholders under the Constitution, the Corporations Act and Listing Rules. ROC may serve notice on a ROC Shareholder by, among other methods, serving it personally at the ROC Shareholder’s registered address or by sending it by prepaid post or facsimile transmission addressed to the ROC Shareholder’s registered address.

(c) Voting rights

Subject to any rights or restrictions for the time being attached to any class of shares, at a meeting of ROC Shareholders, each holder of ROC Shares entitled to vote may vote in person or by proxy or attorney or, being a corporation, by representative duly authorised under the Corporations Act, and has one vote on a show of hands and one vote per fully paid ROC Share on a poll.

(d) Dividend rights

The Directors may pay any interim and fi nal dividends as, in their opinion, the fi nancial position of ROC justifi es. ROC’s Constitution requires that the Directors pay any dividend required to be paid under the terms of issue of a ROC share.

Subject to the rights or restrictions attached to a share or class of shares, dividends are to be paid in the proportion which the amount paid on the share bears to the total amount payable on the share.

(e) Right on winding-up

Subject to the rights of holders of any other securities who have priority on a winding up, if ROC is wound up, any surplus will be divided amongst holders of ROC Shares in proportion to the number of ROC Shares held by them. If ROC is wound-up, the liquidator may, with the authority of a special resolution, divide among the ROC Shareholders in kind the whole or any part of the property of ROC.

(f ) Transfer of ROC Shares

Subject to the Constitution, the Corporations Act, Listing Rules and ASTC Settlement Rules, Shares in ROC are freely transferable. Subject to Listing Rules and the Corporations Act, the Directors may refuse to register a transfer or apply a holding lock to prevent a transfer of Shares only in limited circumstances, such as where ROC has a lien on those Shares.


(g) Issue of further ROC Shares

Subject to the Constitution, the Corporations Act, Listing Rules and ASTC Settlement Rules, the Directors have the right to issue shares or grant options over unissued shares to any person on the terms and conditions they think fi t. Also subject to the Listing Rules and ASTC Settlement Rules, any share in ROC may have preferred, deferred or other special rights or special restrictions about dividends, voting, return of capital, participation in the property of the company on a winding up or otherwise, as the Directors think fi t. Shares must not be issued if to do so would adversely aff ect any special rights of holders of any shares or class of shares.

(h) Variation of rights

ROC currently has only ordinary shares on issue. The rights, privileges and restrictions attaching to those ROC Shares or to any other class of shares which may be issued in the future, can only be varied by a special resolution passed at a general meeting of ROC and the holders of each relevant class of shares or with the written consent of the holders of at least three quarters of the shares in the relevant class.

(i) Share buy-backs

ROC may buy shares in itself on the terms and at the times determined by the Directors, to the extent and in the manner permitted by the Corporations Act.

(j) Number of directors

The Constitution provides that the Board may determine the number of directors, subject to the number of directors not being less than three or more than twelve unless the company in general meeting determines otherwise. The Board may not determine a maximum which is less than the number of directors in offi ce at the time the determination takes eff ect.

(k) Amending the Constitution

The Corporations Act provides that the constitution of a company may be modifi ed or repealed by a special resolution passed by the members of the company (i.e. passed by at least 75% of the votes cast by members entitled to vote on the resolution).

The Constitution does not provide any further requirements to be complied with to eff ect a modifi cation of, or to repeal, the Constitution.

10.14 Recent ROC Share price performance

The latest recorded closing sale price of ROC Shares on ASX and AIM before the date on which the Court made orders convening the Scheme Meeting (being 29 July 2008) was $1.48 and £0.71.

The highest and lowest recorded sale price of ROC Shares on ASX during the three months immediately before the date on which the Court made orders convening the Scheme Meeting (being 29 July 2008) was:

Exchange 3 Month High 3 Month Low

ASX $2.68 on 22 and 23 May 2008 $1.46 on 29 July 2008

AIM £1.30 on 21 and 22 May 2008 £0.68 on 29 July 2008

The last recorded sale price of ROC shares on ASX and AIM on 13 June 2008, the last Trading Day immediately before the Announcement Date, was $2.02 (on ASX) and £0.995 (on AIM).


Figure 26 sets out the daily closing price and daily volume traded of ROC Shares from 1 January 2007 to 13 June 2008 (the last trading day before the announcement date of the Scheme) (inclusive).

Figure 26: Daily closing price of ROC Shares from 1 January 2007 to 13 June 2008

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

J an 07 F eb 07 Mar 07 May 07 J un 07 J ul 07 Aug 07 Oct 07 Nov 07 Dec 07 F eb 08 Mar 08 Apr 08 J un 08

Sh

are

Pri

ce (

A$)

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

AS X Volume AIM Volume AS X AIM

10.15 Dividends

No dividends were paid or declared during or since the fi nancial year ended 31 December 2007.

10.16 Employment / incentive plans

(a) Employee Share Option Plan and Executive Share Option Plan

ROC has two employee share option plans, the Employee Share Option Plan and the Executive Share Option Plan, the details of which are as set out below.

(i) Employee Share Option Plan

As at 29 July 2008 ROC had on issue 1,997,600 employee share options which were held by 81 optionholders. The weighted average share price for share options exercised in 2007 was $3.19 (2006: $3.35). The range of exercise prices at the end of the 2007 fi nancial year is between $1.48 and $3.46 with a weighted average remaining contractual life of 3.69 years.

Under the Employee Share Option Plan, the options vest after two years. Options expire fi ve years after they are granted.

The exercise price of the options is the price of shares on ASX on the day of the grant.

If there is a change of control of ROC, all unexercised options will become immediately exercisable.


(ii) Executive Share Option Plan

As at 29 July 2008 ROC had 11,990,900 executive share options on issue which were held by 54 optionholders. The weighted average share price for share options exercised in 2007 was $3.22 (2006: $3.46). The range of exercise prices at the end of the fi nancial year was between $4.25 and $1.35 with a weighted average remaining contractual life of 4.5 years.

Under the rules of the Executive Share Option Plan, 30% of the options granted vest after two years. An additional 30% vest after three years and the remaining 40% vest after four years. Options expire six years after they are granted. Of the options granted to an employee, 50% are performance options and are only exercisable if certain share performance benchmarks are met and 50% are price options which require share price performance measures to be met.

The exercise price of performance options is calculated as the weighted average price for sale of shares on the ASX in the 90 days before the grant date. The exercise price for price options is calculated as 115%, 122.5% and 130% of this price respectively over the vesting period.

10.17 ROC substantial shareholders

As at 29 July 2008, substantial shareholders as disclosed in substantial shareholder notices given to the Company are set out in Table 18 below.

Table 18: Substantial shareholders

Shareholder Number Held %

Merrill Lynch & Co., Inc 27,367,070 9.16

JPMorgan Chase & Co., Inc. 24,868,136 8.32

Orbis MIS-Orbis/SM Australia Equity Fund 24,248,786 8.11


Table 19 below sets out the top 20 ROC shareholders with their related shareholdings as at 29 July 2008.

Table 19: Twenty largest shareholders as at 29 July 2008

Shareholder Number Held %

Computershare Clearing Pty Ltd 36,058,126 12.06National Nominees Limited 25,538,111 8.54JP Morgan Nominees Australia Limited 20,618,651 6.90HSBC Custody Nominees (Australia) Limited 18,003,681 6.02ANZ Nominees Limited 10,727,350 3.59Citicorp Nominees Pty Limited 7,706,886 2.58HSBC Custody Nominees (Australia) Limited - A/C 3 4,791,421 1.60CS Fourth Nominees Pty Ltd 4,120,110 1.38Cogent Nominees Pty Limited 2,433,627 0.81Celtic Energy Pty Limited 2,405,000 0.80Celtic Energy Pty Ltd 1,750,719 0.59Queensland Investment Corporation 1,648,549 0.55Mirrabooka Investments Limited 1,425,000 0.48WERFT Pty Limited 1,400,000 0.47Forty Traders Limited 1,166,000 0.39MLEQ Nominees Pty Limited 1,128,244 0.38Irrewarra Investments Pty Ltd 1,100,000 0.37Citicorp Nominees Pty Limited 1,065,703 0.36HSBC Custody Nominees (Australia) Limited – A/C 2 1,056,570 0.35Mount International Limited 923,112 0.31Top 20 Total 145,066,860 48.53

10.18 Continuously disclosing entity

As a company with securities quoted on the ASX and being a ‘disclosing entity’ under the Corporations Act, ROC is subject to regular reporting and disclosure obligations. These obligations require ROC to announce price sensitive information as soon as it becomes aware of the information, subject to the exceptions for certain confi dential information. ROC’s recent ASX announcements are available from the ROC website at www.rocoil.com.au and ASX’s website at www.asx.com.au. It is intended that further announcements concerning developments at ROC will continue to be made on this website after the date of this Scheme Booklet. Historical ASX announcements and copies of half-yearly and annual fi nancial results (and accompanying releases) are also available from the ROC website.

ROC will provide, free of charge, to any AEL Shareholder who requests it before the Scheme Meeting, a copy of:

ROC’s constitution;n

the fi nancial report of ROC for the fi nancial year ended 31 December 2007 (being the annual fi nancial report most n

recently lodged with ASIC by ROC before the date of this Scheme Booklet); and

any of the announcements to ASX which are listed in the table below.n

All requests for copies of these documents should be addressed to the Company Secretary, Roc Oil Company Limited, Level 14, 1 Market Street, Sydney NSW 2000. These documents can also be obtained from ROC’s website (www.rocoil.com.au).


10.19 Recent ROC announcements

Table 20 set out below summarises announcements made to ASX by ROC that may have aff ected share price movements over the period between 4 April 2008 and the date of this Scheme Booklet.

Table 20: Recent ROC announcements

Date Event

30/07/2008 Form 603 - Notice of Initial Substantial Holder for AZA

30/07/2008 Bidder’s statement for Anzon Australia Limited

30/07/2008 ROC and AEL Merger

30/07/2008 Report for Quarter Ended 30 June 2008

07/07/2008 Appendix 3Z Final Director’s Interest Notice

30/06/2008 Dr John Doran

25/06/2008 Activity Update - Drilling

25/06/2008 Ceasing to be a substantial holder from NAB

23/06/2008 Appointment of Acting CEO

18/06/2008 Latest Investor Presentation - June 2008

17/06/2008 WEBCAST - ROC/Anzon Transaction Briefi ng

16/06/2008 ROC Announces Off Market Takeover Off er for Anzon

16/06/2008 ROC to Acquire AEL


08/05/2008 Chairman’s and CEO’s Addresses to Shareholders

08/05/2008 REMINDER - Webcast - Annual General Meeting

08/05/2008 Resolutions put to AGM and Disclosure of Proxy Votes

07/05/2008 Drilling Update - Banda NW ST-1, Off shore Mauritania

05/05/2008 WEBCAST Annual General Meeting


30/04/2008 Quarterly Report 31 March 2008

29/04/2008 Replacement of Appendix 3B

28/04/2008 Appendix 3B -

24/04/2008 Reprint of ROC`s Annual Report



10/04/2008 Latest Investor Presentation April 2008


04/04/2008 2007 Annual Report

04/04/2008 Notice of Annual General Meeting/Proxy Form

Copies of the announcements listed above may be obtained from ASX’s website at www.asx.com.au.

On 30 July 2008, ROC released to the ASX its quarterly activities report for the 3 month period ended 30 June 2008. A copy of that release is available on the ROC website (www.rocoil.com.au). The matters in that quarterly report do not impact ROC’s production estimate for 2008 of approximately 10,000 boepd (as outlined in this Scheme Booklet).

As at the date of this Scheme Booklet, AZA has yet to release its quarterly activities report for the 3 month period ended 30 June 2008. Given this and to ensure consistency in reporting periods between ROC and AZA, the production results presented in this Scheme Booklet have been based on the operating data released respectively by ROC and AZA in respect of the quarter ended 31 March 2008.

ROC expects to announce its half year fi nancial results to 30 June 2008 by 29 August 2008. ROC’s results will be available on its website www.rocoil.com.au and announced on ASX at www.asx.com.au.


11. Profile of the Merged Group

11.1 Introduction

The profi le of the Merged Group will vary depending upon the outcome of the AZA Takeover Off er. Unless otherwise indicated, the description of the Merged Group in section 11.2 assumes that both AEL and AZA have become wholly owned subsidiaries of ROC, as a result of the implementation of the Scheme and ROC acquiring directly or indirectly all of the AZA Shares following completion of the AZA Takeover Off er.

If the Scheme is implemented, but ROC does not acquire any AZA Shares under the AZA Takeover Off er, the Merged Group will only own 53% of AZA’s issued capital. In this instance, AEL will become a wholly owned subsidiary of ROC but AZA would become a controlled partly owned subsidiary of ROC. As a result, the benefi ts that would otherwise accrue to ROC if AZA were to become a wholly owned subsidiary of ROC may not be fully realised.

11.2 Overview of the Merged Group

The Merged Group will be one of Australia’s leading independent oil and gas producers with:

an estimated market capitalisation of approximately A$1.2 billion (£580 million)n24;


and

estimated net production for 2008 of approximately 14,000 boepd. n

The Merged Group’s diversifi ed portfolio of production assets will include AZA’s BMG Project, together with ROC’s six producing fi elds located in Australia, China, Mauritania and the North Sea and a suite of development, appraisal and exploration assets in Mauritania, China, Australia, Angola, New Zealand, Madagascar and Equatorial Guinea. The Merged Group will also hold a 10.3% shareholding in Nexus Energy Limited.

Figure 27 below shows the location of the Merged Group’s area of key operation.

Figure 27: Assets of the Merged Group

Operated / Managed

Non-operated

EQUATORIAL

GUINEA

18.75% (4)

MADAGASCAR

75% (6)

ANGOLA

60% (5)

MAURITANIA

2% - 5.49%

AUSTRALIA (7)

20% - 37.5%

(1) Excludes onshore UK(2) Post unitisation(3) Pre 51% Government Back-In for Block 22/12(4) 15% Free carried through next exploration well(5) 75% contributing interest for exploration(6) 100% contributing interest for exploration(7) Mostly ROC operated

UK (1)

NORTH SEA

12% (2) & 12.5% (2)

CHINA

24.5% & 40% (3)

NEW ZEALAND

15%

BASKER MANTA

GUMMY (BMG)

40%


25 As at 1 April 2008, based on ROC’s remaining 2P reserves and an estimate of AZA’s 2P reserves and production forecasts calculated from public information and using due diligence materials provided to ROC by AZA in respect of the BMG Project. The best estimate gas and contingent resources in the BMG Project have been categorised as 2P reserves for the purposes of this calculation.


It is expected that the combination of ROC’s assets with those of AEL and AZA will deliver material strategic benefi ts to shareholders of the Merged Group. The larger scale, diversifi cation and strong operating cash fl ows will provide improved fi nancial fl exibility to pursue organic and acquisition growth opportunities. It is also believed that substantial value can be generated through the combination of the existing technical and management teams of the companies.

The Merger fi ts within ROC’s communicated strategy of acquiring and developing a portfolio of new and existing exploration and production assets:

(a) preferably in Australia, Africa and parts of Asia with meaningful interests, generally as operator;

(b) in areas containing, or adjacent to proven hydrocarbons with considerable upside; and

(c) preferably in countries with attractive fi scal regimes.

Reserves

The Merged Group will have net 2P reserves of 47 mmboe26 diversifi ed across a number of projects and with a balance between liquids and gas, as shown in Figure 28 below.

Figure 28: Merged Group reserve distribution as at 1 April 2008

Reserves by asset Reserves by location Reserves by product splitUK

9%Africa

2%

China

23%

Australia

66%

BMG

58%

Zhao DongC&D Fields

19%

Zhao DongC4 Field

4%Cliff Head

8%Chinguetti

2%Blane

7% Enoch

2%

Condensate

5%

Oil

65%

Gas

30%

Production

The Merged Group will have estimated 2008 net production of approximately 14,000 boepd, from eight fi elds located in four geographical regions.

Figure 29: Merged Group Production Distribution for 1Q 2008

Prouction assets Production location Production product split

UK

20%

Africa

2%

China

32%Australia

46%

BMG

24%

Zhao DongC&D Fields

33%

Cliff Head

21%

Chinguetti

2%

Blane

14%

Enoch

6%

Oil

99%

Gas

1%



Development, Appraisal and Exploration

In addition to the producing assets identifi ed above, the Merged Group will also have an attractive portfolio of development, appraisal and exploration projects. This pipeline of opportunities represents signifi cant upside potential for the Merged Group and includes:

(a) Near term development

(i) Expansion of the existing Zhao Dong C&D oil fi elds along with the development of the C4 oil fi eld in Bohai Bay, off shore China;

(ii) Wei 6-12, 6-12S and 12-8W oil fi elds in the Beibu Gulf, off shore China; and

(iii) BMG Project expanded oil, gas and condensate project in the Gippsland Basin.

(b) Appraisal

(i) Massambala Heavy Oil and Coco oil discoveries in the Cabinda South Block, onshore Angola;

(ii) Tiof oil fi eld and Banda oil and gas fi eld appraisal, off shore Mauritania;

(iii) Frankland gas fi eld and Dunsborough oil fi eld in the Perth Basin, off shore Western Australia; and

(iv) Chimaera and Gummy fi elds in the Gippsland Basin.

(c) Exploration

(i) Perth Basin (WA-286-P), Vlaming Sub-Basin (WA-381-P and WA-382-P) and Carnarvon (WA-351-P) off shore Western Australia;

(ii) Cabinda South Block, onshore Angola;

(iii) BMG near fi eld exploration and Vic P49, Gippsland Basin;

(iv) Canterbury Basin, off shore New Zealand; and

(v) Equatorial Guinea, Mauritania and Madagascar.


The Merged Group’s forecast 18 month drilling program is outlined in Figure 30 below.

Figure 30: Merged Group’s Committed Drilling Program

MERGED COMPANY DRILLING FORECAST - 18 Months

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

AFRICA

MAURITANIA

PSC Area A/B

ANGOLA

Cabinda South Block

EQUATORIAL GUINEA

H Blocks 15 & 16

CHINA

BOHAI BAY

Zhao Dong Block

AUSTRALIA

CARNARVON

WA-351-P

BMG

Exploration/Appraisal Drilling Development Drilling Dashed outline = contingent

NOTE: The order, timing and number of wells will vary due to rig availability, operational reasons and joint venture and government approvals.

Chinguetti-19 (Ph2b)

Chinguetti-20 (Ph2b)

IDP - C&D Development drilling IDP - C&D Development drilling

ERA - C4 Development drilling

Up to 4 wells and workovers

Up to 3 wells, completions

and workovers

ERA - C4 Development drilling

Chinguetti Dev Wells (Phase 3)

Massambala

Appraisal Wells

Arroz-1Sesamo-1

1 well

2-well

programme

1 well

Aleta subject to dispute

11.3 Ownership structure of the Merged Group

The ownership and capital structure of the Merged Group will vary depending on the level of acceptances under the AZA Takeover Off er, and the level of take-up of the cash consideration component of the AZA Takeover Off er, in circumstances where a full scrip alternative is off ered by ROC.

If both AEL and AZA become wholly owned subsidiaries of ROC, AEL Shareholders will collectively own approximately 25.3% of the Merged Group. If ROC does not acquire any AZA Shares under the AZA Takeover Off er, AEL Shareholders will collectively own 33.4% of the Merged Group.

Table 21 sets out further details of the pro forma ownership of ROC following implementation of the AEL Scheme and completion of the AZA Takeover Off er. The following assumptions have been made27:

(a) the AEL Scheme Consideration is based on an implied Merger Ratio of 1.33 ROC Shares per AEL Share;

(b) AEL does not accept the AZA Takeover Off er in respect of its holding of AZA Shares;

(c) all of the AZA Shareholders who accept the AZA Takeover Off er choose the cash and scrip alternative (i.e. 0.792 ROC Shares plus A$0.05 cash per AZA Share) rather than any other alternative that may be off ered;

(d) the AEL Convertible Notes are redeemed for cash;

27 Numbers subject to rounding.


(e) AEL Options and AZA Options are acquired directly by ROC in return for ROC Shares with the number of ROC Shares to be issued based on the intrinsic value (ie. value of Scheme Consideration minus exercise price) of the relevant options; and

(f ) no further ROC Shares are issued other than as contemplated by the Scheme or pursuant to the AZA Takeover Off er.

Table 21: Capital Structure of ROC following implementation of the AEL Scheme

Number of ROC Shares on issue (assuming AEL and AZA become

wholly-owned subsidiaries of ROC)

ROC Shares after the Merger (assuming AEL becomes a

wholly-owned subsidiary of ROC but ROC does not acquire any AZA Shares under the AZA

Takeover Offer)

(by number) (by %) (by number) (by %)

Existing ROC Shareholders 299 million 50.4% 299 million 66.6%

AEL Shareholders and 150 million 25.3% 150 million28 33.4% option holders

AZA Shareholders and 144 million 24.3% Nil Nil option holders

Total 593 million 100.0% 449 million 100.0%

Under the terms of the relevant Option Purchase Deeds, the acquisition by ROC of the AEL Options is conditional on the Scheme becoming Eff ective. The value of ROC Shares being provided to holders of AEL Options under the Option Purchase Deeds is consistent with the value provided to AEL Shareholders under the Scheme.

11.4 Directors of the Merged Group

On implementation of the Merger each of the ROC Directors will continue as a director of ROC. The ROC Directors also intend to invite one AEL nominee to join the ROC Board in a non-executive capacity. Assuming that the AEL nominee accepts this invitation, the ROC Board will be constituted by:

Mr Andrew Love, Chairman;n

Mr Bruce Clement, Acting Chief Executive Offi cer;n

Mr William Jephcott, Deputy Chairman;n

Mr Sidney Jansma, Jr, Non-Executive Director;n

Mr Adam Jolliff e, Non-Executive Director;n

Mr Dennis Paterson, Executive Director;n

Dr Douglas A Schwebel, Non-Executive Director;n

a nominee of AEL.n

Further information on ROC’s current Board is set out in Section 10.5.

28 Assumes net debt balance for AEL of A$34.9 million on the Record Date and AEL and AZA options are acquired for ROC Shares at their intrinsic value (consideration minus exercise price).


11.5 ROC’s intentions

This Section 11.5 sets out the intentions of ROC in relation to:

the continuation of the businesses of AEL and AZA;n

any major changes to the business of AEL and AZA, and any redeployment of the fi xed assets of AEL and AZA; n

and

the future employment of the present employees of AEL and AZA.n

These intentions are based on the information concerning each of AEL and AZA, their respective businesses and the general business environment which is known to ROC at the time of preparation of this Scheme Booklet, which is limited to publicly available information and a due diligence review of certain non-public material provided by AEL and AZA. Final decisions regarding these matters will only be made by ROC in light of material information and circumstances at the relevant time. Accordingly, the statements set out in this Section 11.5 are statements of current intention only, which may change as new information becomes available to ROC or as circumstances change.

(a) Scenario 1: Both AEL and AZA become wholly-owned subsidiaries of ROC

This Section 11.5(a) sets out ROC’s intentions if the Scheme is implemented and ROC acquires relevant interests in 90% or more of the AZA Shares and ROC is entitled to proceed to compulsory acquisition of the remaining AZA Shares.

(i) Corporate matters

It is intended that ROC would:

(A) procure AEL to make an announcement in accordance with Rule 41 of the AIM Rules and to notify the London Stock Exchange of the proposed cancellation of the admission of AEL Shares to trading on AIM;

(B) re-constitute, or complete the reconstitution of, the AEL and AZA Boards (see Section 11.4) so that all of its members are nominees of ROC. Those nominees have not yet been identifi ed by ROC. Final decisions on the selection of ROC’s nominees will be made in light of the circumstances at the relevant time;

(C) proceed with compulsory acquisition of the outstanding AZA Shares in accordance with the provisions of Chapter 6A.1 of the Corporations Act (or under Chapter 6A.2 if rights accrue under that Chapter but not under Chapter 6A.1); and

(D) arrange for AZA to be removed from the Offi cial List of ASX.

ROC may also, but has not decided whether to, proceed to compulsory acquisition of the AZA Options which have not been exercised and have not lapsed, or alternatively pursue other arrangements in relation to those AZA Options.

(ii) Business operations

ROC intends to continue to operate the assets of AEL and AZA in largely the same manner as they are currently operated. Specifi cally, in relation to the BMG Joint Venture, ROC intends to continue with the development of the BMG Project as currently planned (see Section 11.2), except to the extent necessary to eliminate duplicate costs. ROC will also use its operating skill set and experience in further developing the BMG reserve base and realising the full exploration potential in the licence and permit areas.

(iii) Head office

ROC intends to combine certain common ROC, AEL and AZA corporate head offi ce functions (such as fi nance and accounting, human resources, risk management, IT and in-house legal) as well as those functions involved in setting overall planning and control of the operations of the Merged Group, with the aim of eliminating duplication of tasks. This may result in the closure of AEL’s and AZA’s head offi ce at North Sydney, NSW. The corporate headquarters of the Merged Group will be ROC’s current headquarters in Sydney, NSW.


(iv) Management and employees

It is intended that Mr Bruce Clement, Acting Chief Executive Offi cer of ROC, will lead the Merged Group’s management team.

ROC intends to undertake a functional review of the existing employee base of AEL and AZA. No specifi c redundancies have been identifi ed at this stage, but it is likely that the integration of the BMG Project into ROC’s management organisation and the combination of ROC, AEL and AZA head offi ce functions will involve some redundancies. If any employee is made redundant, they will, as a minimum, receive payment and other benefi ts in accordance with contractual and legal entitlements.

(b) Scenario 2: AEL becomes wholly-owned subsidiary of ROC, but AZA becomes partly-owned subsidiary

of ROC

(i) This section sets out ROC’s intentions if the Scheme is implemented but ROC does not directly or indirectly own all of the AZA Shares following completion of the AZA Takeover Off er.

It is intended that ROC would, through its nominees on the AZA Board, propose that AZA implements a similar strategy to that outlined in Section 11.5(a) above, with the aim of pursuing, to the maximum extent possible and appropriate, the types of opportunities which might have been available to ROC if ROC had acquired all of the AZA Shares.

It is also intended that ROC would:

(A) maintain AZA’s listing on ASX, subject to the requirements for listing (including a suffi cient spread of investors) continuing to be satisfi ed (although in this event the liquidity of AZA Shares may be materially diminished depending on the level of acceptances under the AZA Takeover Off er); and

(B) subject to the Corporations Act and AZA’s constitution, seek to appoint its own nominees to constitute all or the majority of the AZA Board.

(i) Further acquisition of AZA Shares

ROC reserves the right to, at some later time, acquire further AZA Shares in a manner consistent with the Corporations Act.

(ii) Compulsory acquisition at a later time

If ROC becomes entitled at some later time to exercise general compulsory acquisition rights under the Corporations Act, it reserves the right to exercise those rights.

(iii) Limitations on intentions

The intentions and statements of future conduct with respect to AZA, as set out in this Section 11.5(b), must be read as being subject to:

(A) the law (including the Corporations Act) and the ASX Listing Rules, including in particular the requirements of the Corporations Act and the ASX Listing Rules in relation to confl icts of interest and ‘related party’ transactions given that, if ROC obtains control of AZA but does not acquire all of the AZA Shares, ROC will be treated as a related party of AZA for these purposes (and AEL will continue to be treated as a related party of AZA by virtue of its controlling shareholding in AZA); and

(B) the legal obligations of the AZA Directors at the time, including any nominees of ROC, to act in good faith in the best interests of AZA and for proper purposes and to have regard to the interests of all AZA Shareholders.

(c) Other intentions

Other than as set out in this Section 11.5, it is the present intention of ROC to:

(i) generally continue the businesses of AEL and AZA;

(ii) not make any major changes to the business of AEL and AZA, nor to redeploy any of the material fi xed assets of AEL and AZA; and

(iii) continue the employment of the present employees of AEL and AZA.


11.6 Dividend policy

ROC does not intend to pay dividends from the Merged Group in the short to medium term given the capital requirements that are required by the Merged Group to generate growth in the asset base. This policy may change as circumstances within the Merged Group change over time.

11.7 Pro forma historical fi nancial information for the Merged Group

(a) Introduction

This Section 11.7 contains the pro forma fi nancial information for the Merged Group, refl ecting the aggregated businesses of ROC, AZA and AEL. The pro forma fi nancial information is presented in this Section 11.7 to provide AEL Shareholders with an indication of the profi le of the Merged Group.

The information in this Section 11.7 is presented on a pro forma basis only, and as a result it is likely that this information will diff er from the actual fi nancial information for the Merged Group.

The Merged Group pro forma fi nancial information has been prepared under two scenarios:

(i) The Scheme is implemented and ROC owns directly or indirectly all of the AZA Shares following completion of the AZA Takeover Off er, that is AEL and AZA both become wholly-owned subsidiaries of ROC; and

(ii) The Scheme is implemented, but ROC does not acquire any AZA Shares under the Takeover Off er, that is AEL becomes a wholly-owned subsidiary of ROC but AZA becomes a controlled partly-owned (53%) subsidiary of ROC.

For each of the above scenarios, the pro forma historical balance sheet of the Merged Group as at 31 December 2007 and the pro forma adjustments is disclosed in this Section 11.7.

(b) Basis of preparation of pro forma financial information

The pro forma fi nancial information and notes have been prepared for ROC and AEL individually and are based on historical fi nancial statements and are prepared and presented in accordance with Australian equivalents to International Financial Reporting Standards.

The pro forma fi nancial information is presented in an abbreviated form and does not contain all the disclosures that are usually provided in an annual report in accordance with the Corporations Act. In particular, it does not include the notes to and forming part of the fi nancial statements of ROC or AEL.

Both ROC and AEL have fi nancial years ended on 31 December. As such, the fi nancial information presented has been based on audited accounts of ROC and AEL for the 12 months ended 31 December 2007.

References to notes in the fi nancial information presented refer to the tables set out at Section 11.7(e).


Table 22: ROC pro forma balance sheet as at 31 December 2007

ROC Dec-07 US$’000

Note Pro forma adjustments

US$’000

ROC pro forma Dec-07

US$’000

ASSETS

Current Assets

Cash and cash equivalents 41,437 41,437

Trade and other receivables 30,210 30,210

Inventories 7,156 7,156

Total current assets 78,803 78,803

Non-current assets

Plant and equipment 2,428 2,428

Oil and gas assets 516,203 516,203

Deferred tax assets 9,630 9,630

Total non-current assets 528,261 528,261

TOTAL ASSETS 607,064 607,064

LIABILITIES

Current liabilities

Trade and other payables 43,128 43,128


Other fi nancial liabilities 58,628 58,628

Total current liabilities 107,913 107,913


Interest bearing loans and borrowings 133,304 133,304


Other liabilities 341 341

Deferred tax liabilities 61,924 61,924

Total non-current liabilities 209,277 209,277

TOTAL LIABILITIES 317,190 317,190

NET ASSETS 289,874 289,874

EQUITY

Contributed equity 435,790 435,790

Retained earnings (187,940) (187,940)

Reserves 42,024 42,024

TOTAL EQUITY 289,874 289,874


Table 23: AEL pro forma balance sheet as at 31 December 2007.

AELDec-07 A$’000

AELDec-07

US$’000

Note Pro forma adjustments

US$’000

AEL pro formaDec-07

US$’000

ASSETS

Current Assets

Cash and cash equivalents 130,872 115,377 7, 8 (137,901) (22,524)Trade and other receivables 18,414 16,234 16,234

Inventories 8,322 7,337 7,337

Total current assets 157,608 138,948 (137,901) 1,047

Non-current assets

Plant and equipment 1,959 1,727 1,727

Investments 120,222 105,988 105,988

Oil and gas assets 240,029 211,609 2 (1,043) 210,566Capitalised borrowing costs 1,996 1,760 1,760

Deferred tax assets 95,090 83,831 1 (83,831) -

Total non-current assets 459,296 404,915 (84,874) 320,041

TOTAL ASSETS 616,904 543,863 (222,775) 321,088

LIABILITIES

Current liabilities

Trade and other payables 27,880 24,579 24,579

Provisions 24,750 21,820 21,820 Interest bearing loans and borrowings 38,838 34,240 7 (34,240) -

Other fi nancial liabilities 12,169 10,728 3 (10,728) -

Total current liabilities 103,637 91,367 (44,968) 46,399


Interest bearing loans and borrowings 51,147 45,091 7 (45,091) -

Provisions 31,083 27,403 27,403

Other liabilities 41,787 36,839 7 (36,839) -

Deferred tax liabilities 45,328 39,961 39,961 Total non-current

liabilities169,345 149,294 (81,930) 67,364

TOTAL LIABILITIES 272,982 240,661 (126,898) 113,763

NET ASSETS 343,922 303,202 (95,877) 207,325

EQUITY

Contributed equity 109,933 103,359 3 10,728 114,087

Retained earnings 31,041 29,185 1, 2, 8 (65,160) (35,975)

Reserves 31,321 19,352 19,352

Minority Interest 171,627 151,306 1, 2, 8 (41,445) 109,861

TOTAL EQUITY 343,922 303,202 (95,877) 207,325


(c) Basis of preparation of the Merged Group pro forma financial information

The Merged Group pro forma fi nancial information has been prepared on the basis that ROC acquires AEL and control of AZA and accordingly:

(i) the accounting policies of the Merged Group used to prepare the Merged Group pro forma fi nancial information are based on the accounting policies of ROC as at 31 December 2007, unless otherwise stated; and

(ii) the Merged Group pro forma fi nancial information has been presented based on the presentation of the ROC historical fi nancial information as set out in Sections 10.7, 10.8, 10.9 and 10.10.

The Merged Group pro forma fi nancial information is presented in an abbreviated form and does not contain all the disclosures that are usually provided in fi nancial statements prepared in accordance with the Corporations Act and applicable accounting standards. In particular, it does not include the notes which form part of the fi nancial statements of ROC and AEL.

No adjustments have been made in the Merged Group pro forma fi nancial information for any expected synergies, integration costs, changes in interest income or expense or other costs that may impact the consolidated income statement following the implementation of the Scheme and the AZA Takeover Off er.

No adjustments have been made in the Merged Group pro forma fi nancial information for any one-off or non-recurring costs or discontinued operations.

The pro forma fi nancial information is presented in US dollars, the reporting currency of ROC.

(d) Pro forma consolidated balance sheet as at 31 December 2007

The Merged Group pro forma balance sheet is compiled from the aggregation of the:

(i) ROC historical balance sheet as at 31 December 2007 as set out in Section 10.9;

(ii) AEL historical consolidated balance sheet as at 31 December 2007 as set out in Section 9.9;

(iii) Pro forma adjustments to align AEL’s accounting policies to ROC’s accounting policies as set out in Section 11.7(e)(i);

(iv) Pro forma adjustments to refl ect an assumed acquisition of AEL and AZA by ROC on 31 December 2007 as adjusted for circumstances as set out in Section 11.7(e)(ii) .

The Merged Group pro forma historical balance sheet is prepared on the basis that the Scheme was implemented on 31 December 2007 and the acquisition of AZA Shares under the AZA Takeover Off er also occurred on 31 December 2007. The Scheme will not be implemented until September 2008 at the earliest (and only if approved by AEL Shareholders and the relevant conditions precedent having been satisfi ed). The AZA Takeover Off er is conditional on the Scheme becoming Eff ective.

Set out on the right is the Merged Group pro forma historical balance sheet as at 31 December 2007 for each of the two scenarios described in Section 11.7(a) above.


Table 24: Both the Scheme is implemented and ROC directly or indirectly owns all of the AZA Shares

following completion of the AZA Takeover Off er, that is AEL and AZA both become wholly-owned

subsidiaries of ROC.

ROCDec-07

US$’000

AELDec-07

US$’000

Note Consolidation adjustments

US$’000

ROC Group Dec-07

US$’000

ASSETS

Current Assets

Cash and cash equivalents 41,437 (22,524) 5 (12,868) 6,045Trade and other receivables 30,210 16,234 46,444

Inventories 7,156 7,337 14,493


Non-current assets


Investments - 105,988 4 2,732 108,720

Oil and gas assets 516,203 210,566 4 355,305 1,082,074Capitalised borrowing costs - 1,760 1,760

Deferred tax assets 9,630 - 9,630

Total non-current assets 528,261 320,041 358,037 1,206,339

TOTAL ASSETS 607,064 321,088 345,169 1,273,321

LIABILITIES

Current liabilities


Provisions 6,157 21,820 27,977

Other fi nancial liabilities 58,628 - 58,628

Total current liabilities 107,913 46,399 154,312


Interest bearing loans and borrowings 133,304 - 133,304

Provisions 13,708 27,403 41,111

Other liabilities 341 - 341

Deferred tax liabilities 61,924 39,961 4, 9 (39,961) 61,924 Total non-current

liabilities209,277 67,364 (39,961) 236,680

TOTAL LIABILITIES 317,190 113,763 (39,961) 390,991

NET ASSETS 289,874 207,325 385,130 882,329

EQUITY

Contributed equity 435,790 114,087 4, 6 443,107 992,984

Retained earnings (187,940) (35,975) 4, 9 126,828 (97,087)

Reserves 42,024 19,352 4, 6 (74,944) (13,568)

Minority Interest - 109,861 4, 6 (109,861) -

TOTAL EQUITY 289,874 207,325 385,130 882,329


Table 25: The Scheme is implemented, but ROC does not acquire any AZA Shares under the Takeover Off er,

that is, AEL becomes a wholly-owned subsidiary of ROC but AZA becomes a controlled partly-owned

(53% ) subsidiary of ROC

ROCDec-07

US$’000

AELDec-07

US$’000

Note Consolidation adjustments

US$’000

ROCDec-07

US$’000

ASSETS

Current Assets

Cash and cash equivalents 41,437 (22,524) 5 (2,351) 16,562Trade and other receivables 30,210 16,234 46,444

Inventories 7,156 7,337 14,493


Non-current assets


Investments - 105,988 4 2,732 108,720

Oil and gas assets 516,203 210,566 4 355,305 1,082,074Capitalised borrowing costs - 1,760 1,760

Deferred tax assets 9,630 - 9,630

Total non-current assets 528,261 320,041 358,037 1,206,339

TOTAL ASSETS 607,064 321,088 355,686 1,283,838

LIABILITIES

Current liabilities


Provisions 6,157 21,820 27,977

Other fi nancial liabilities 58,628 - 58,628

Total current liabilities 107,913 46,399 154,312


Interest bearing loans and borrowings 133,304 - 133,304

Provisions 13,708 27,403 41,111

Other liabilities 341 - 341

Deferred tax liabilities 61,924 39,961 4 107,411 209,296Total non-current

liabilities209,277 67,364 107,411 384,052

TOTAL LIABILITIES 317,190 113,763 107,411 538,364

NET ASSETS 289,874 207,325 248,275 745,474

EQUITY

Contributed equity 435,790 114,087 4 170,670 720,547

Retained earnings (187,940) (35,975) 4 (20,543) (244,458)

Reserves 42,024 19,352 4 (19,352) 42,024

Minority Interest - 109,861 4 117,500 227,361

TOTAL EQUITY 289,874 207,325 248,275 745,474


(e) Pro forma adjustments

The following pro forma adjustments have been made in the compilation of Merged Group pro forma fi nancial information:

(i) Aligning the accounting policies of ROC, AZA and AEL

Other than ‘Successful Eff orts Accounting for Exploration Expenditure’ and the early adoption of AASB Interpretation 1003 ‘Australian Petroleum Resource Rent Tax’ there were no material diff erences noted between the accounting policies of ROC, AZA and AEL.

Note Description

1 The reversal of US$83.8 million PRRT asset created as a result of the early adoption of AASB Interpretation 1003.

2 The reversal of US$1.0 million of capitalised exploration as a result of adopting ROC’s successful eff orts accounting policy. AEL’s accounting policy is to capitalize exploration expenditure until enough information is available to determine the recoverability of the expenditure. ROC’s accounting policy is diff erent and is based on successful eff orts which requires all non-successful wells and exploration (ie non-commercial) to be written-off as incurred. As such, an appropriate adjustment (albeit immaterial) has been made to refl ect AEL’s results as if ROC’s policy had been adopted.

The material accounting policies are set out in Section 11.7(g).

(ii) Pro forma adjustments to refl ect the assumed acquisition of AEL by ROC on 31 December 2007

Note Description

3 The conversion of US$10.7 million of convertible note debt in respect of Polygon into 8,620,690 AEL Shares.

4 The fair value allocation of ROC’s purchase price of AEL of US$287 million.

5 Payment of advisory fees on completion of the Scheme and completion of the AZA Takeover Off er and the US$8.2 million cash component of the consideration payable on acquisition of AZA.

6 ROC’s purchase of the minority interests in AZA for US$283 million.

7 Repayment of US$41 million in loans held in AZA and US$75 million of loans and convertible loans held in AEL on completion of acquisition by ROC, and payment of outstanding interest.

8 Payment of break fees to ARC Energy Limited of US$5.7 million on the termination of the ARC Energy Limited merger implementation deed.

9 Deferred tax of US$147 million eliminated after ROC acquires 100% of AZA and AEL and therefore entering the ROC tax consolidation group as a result of tax pushdown of the purchase price.

(f ) Main Assumptions used

The following is a list of the material assumptions used in the presentation of the pro forma and Merged Group accounts:

(i) no account has been taken of any potential fi nance which may be used by ROC to acquire AEL and AZA;

(ii) 143,448,088 ROC Shares are issued as consideration for AZA Shares and AZA Options on issue (based on an implied Merger Ratio of 0.792 ROC Shares per AZA Share);

(iii) 149,935,117 ROC Shares are issued as consideration for AEL Shares and AEL Options on issue (based on an implied merger ratio of 1.33 ROC Shares per AEL Share);


(iv) ROC Share Price is $2.02 on acquisition;

(v) AUD:USD exchange rate is 0.94 as at 13 June 2008 (being the last Trading Day before the Announcement Date);

(vi) AUD:GBP exchange rate is 0.48 as at 13 June 2008 (being the last Trading Day before the Announcement Date);

(vii) the AZA and AEL 31 December 2007 Balance Sheet was converted with an exchange rate of AUD:USD 0.88;

(viii) the cash component of the AZA Takeover Off er is US$8.2 million;

(ix) the fair value of AZA and AEL oil and gas assets is US$566 million, being US$355 million above the pre-acquisition carrying value;

(x) AEL Convertible Notes are settled for GBP20 million in cash before completion of the Scheme;

(xi) ROC forms a tax consolidated group with all 100% owned subsidiaries;

(xii) ROC has assessed the fair value of the assets based on AZA initially becoming a partly owned Subsidiary and therefore not immediately entering ROC’s tax consolidation group. This results in a lower tax base of AZA’s assets than if ROC has acquired 100% of AZA immediately. Under the accounting rules this diff erence in tax base gives rise to a premium which is immediately expensed. Due to the accounting rules, the fair value of the AZA assets are not re-determined once ROC acquired 100%;

(xiii) the current tax legislation in respect of scrip for scrip transactions is not amended;

(xiv) neither the acquisition of AEL Shares under the Scheme and AZA Shares under the AZA Takeover Off er is deemed to be a reverse takeover in accordance with AASB 3 Business Combinations;

(xv) AZA Options are acquired based on an eff ective share price of $1.65 per share; and

(xvi) Assumes a net debt balance of AEL of $34.9 million at the Eff ective Date.

(g) Material accounting policies used

The following critical accounting policies have been applied in preparing the Merged Group pro forma historical fi nancial information:

(i) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable in respect of taxable profi ts. It is calculated by using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Tax for the current and prior periods is recognised as a liability to the extent that it is unpaid.

Deferred tax

Deferred income tax is provided on all temporary diff erences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes. Deferred income tax liability is recognised for all taxable temporary diff erences except where:

(A) the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, aff ects neither the accounting profi t nor taxable profi t or loss; and

(B) in respect of taxable temporary diff erences associated with investments in subsidiaries, associate companies and interests in joint ventures, the timing of the reversal of the temporary diff erences can be controlled and it is probable that the temporary diff erences will not reverse in the foreseeable future.

(C) Deferred income tax assets are recognised only to the extent that it is probable that taxable profi t will be available against which the deductible temporary diff erences and the carry forward of unused tax assets and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.


Income taxes relating to items recognised directly in equity are recognised in equity and not in the Income Statement.

Where deferred tax arises from the initial accounting for a business combination, it is taken into account in the determination of goodwill.

Tax consolidation

The Merged Group and all its wholly-owned Australian resident entities are part of a tax consolidation group under Australian taxation law. ROC is the head entity in the tax consolidation group.

Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary diff erences of the members of the tax consolidation group are recognised in the separate fi nancial statements of the members of the tax consolidation group using the ‘stand-alone taxpayer’ approach. Current tax liabilities and deferred tax assets arising from unused tax losses and tax credits of the members of the tax consolidation group are recognised by the Merged Group (as head entity in the tax consolidation group).

Due to the existence of a tax funding arrangement between the entities in the tax consolidation group, amounts are recognised as payable to or receivable by the Merged Group and each member of the group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax consolidation group in accordance with the arrangement.

(ii) Exploration and evaluation expenditure

Exploration and evaluation expenditure in respect of each area of interest is accounted for using the successful eff orts method of accounting. An area of interest refers to an individual geological area which is considered to constitute a favourable environment for the presence of an oil or gas fi eld, or has been proved to exist, usually represented by an individual oil or gas fi eld.

The successful eff orts method requires all exploration and evaluation expenditure in relation to an area of interest to be expensed in the period it is incurred, except the costs of successful wells, the costs of acquiring interests in new exploration assets and pre-development costs where the rights to the tenure of the area of interest are current and the expenditure either:

(A) is expected to be recovered through sale or successful development and exploitation of the area of interest; or

(B) relates to an exploration discovery for which at balance date a reasonable assessment of the existence or otherwise of economically recoverable reserves is not yet complete, or additional appraisal work is underway or planned.

Pending assessment of the results of a well, the costs are initially capitalised then expensed or remain capitalised, depending on a review of the results in accordance with successful eff orts accounting criteria.

When an oil or gas fi eld has been approved for development, the accumulated exploration and evaluation costs are transferred to oil and gas assets.

(iii) Oil and gas assets

Development expenditure is stated at cost less accumulated depletion and any impairment in value. Where commercial production in an area of interest has commenced, the associated costs together with any forecast future capital expenditure necessary to develop proved and probable reserves are amortised over the estimated economic life of the fi eld, on a unit-of-production basis. Costs are amortised only once production begins.

Changes in factors such as estimates of proved and probable reserves that aff ect unit-of-production calculations do not give rise to prior year fi nancial period adjustments and are dealt with on a prospective basis.

(iv) Impairment

At each reporting date, the Merged Group assesses whether there is any indication that an asset, other than inventories and deferred tax assets, may be impaired. Where an indicator of impairment exists, the Merged Group makes an estimate of recoverable amount. An impairment loss is recognised in the Income Statement whenever the carrying amount of the asset or cash generating unit exceeds its recoverable amount.


Calculation of recoverable amount

The recoverable amount of an asset is the greater of its net selling price and value in use. In assessing the value in use, the estimated discounted future cash fl ows based on management’s expectations are used.

Where conditions giving rise to impairment subsequently reverse, the eff ect of the impairment charge is also reversed as a credit to the Income Statement, net of any amortisation that would have been charged since the impairment.

(v) Foreign currency translation

Functional and presentation currency

Items included in the fi nancial statements of the Merged Group are measured using the currency of the primary economic environment in which the entity operates (‘functional currency’). The consolidated fi nancial statements are presented in USD, which is ROC’s functional currency.

ROC has selected USD as its functional and presentation currency for the following reasons:

(A) a signifi cant portion of ROC’s activity is denominated in USD;

(B) a signifi cant portion of ROC’s assets and liabilities are denominated in USD; and

(C) USD is primarily the global currency used in the oil industry.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement.

Merged Group

The results and fi nancial position of the Merged Group that have a functional currency diff erent from the presentation currency are translated into the presentation currency as follows:

(A) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(B) income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

(C) all resulting exchange diff erences are recognised as a separate component of equity.

On consolidation, exchange diff erences arising from the translation of any net investment in foreign entities are taken to equity. When a foreign operation is sold, a proportionate share of such exchange diff erences is recognised in the Income Statement, as part of the gain or loss on sale.

(iv) Interest in joint venture operations

Interests in joint venture operations, where there is joint control, have been reported in the fi nancial statements by including the Merged Group’s share of assets and liabilities of the joint venture and its share of any income and expenses incurred.


11.8 Forecast Financial Information

ROC has given careful consideration as to whether a reasonable basis exists to produce reliable and meaningful forecast fi nancial information. The ROC Directors have concluded that forecast fi nancial information would be misleading to provide, as a reasonable basis does not exist for producing forecasts that would be suffi ciently meaningful and reliable as required by applicable law, policy and market practice. The fi nancial performance of ROC in any period will be infl uenced by various factors that are outside the ROC Directors’ control and that cannot be predicted with a high level of confi dence. In particular, the fi nancial performance of ROC will be materially aff ected by:

(a) Prevailing oil and gas prices which are subject to material change from time to time;

(b) Prevailing exchange rates which are subject to material change from time to time;

(c) The timing and level of production; and

(d) Costs related to exploration, development and operating activities.

ROC does not have an established practice of issuing fi nancial forecasts given the potential impact of the above considerations.


12. Implementation of the Scheme

If the Scheme becomes Eff ective, implementation of the Scheme, through the transfer of all the AEL Shares on issue to ROC (or its wholly owned Subsidiary nominee), will result in AEL becoming a wholly owned Subsidiary of ROC and each Scheme Shareholder will receive the Scheme Consideration.

12.1 Steps in implementing the Merger

(a) AEL and ROC have executed the Merger Implementation Deed under which AEL agreed to propose the Scheme. A summary of the key terms of the Merger Implementation Deed is included in Section 13.

(b) ROC has executed the Deed Poll in favour of AEL Shareholders under which ROC covenants to perform certain obligations imposed on it under the Merger Implementation Deed and the Scheme, including to provide to each Scheme Shareholder the Scheme Consideration to which the Scheme Shareholder is entitled under the terms of the Scheme. A copy of the Deed Poll is included in Section 20.

(c) The Court has ordered that AEL convene the Scheme Meeting to be held at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000 at 10am (AEST) on 3 September 2008, for the purpose of AEL Shareholders voting on the Scheme. The order of the Court to convene the Scheme Meeting is not, and should not be treated as, an endorsement by the Court of, or any other expression of opinion by the Court on, the Scheme.

(d) On 3 September 2008, the AEL Shareholders will vote at the Scheme Meeting on the Scheme.

(e) If the Scheme is approved by the requisite majorities at the Scheme Meeting and the other Scheme Conditions (other than Court approval of the Scheme) have each been satisfi ed (or waived, as applicable), then AEL will apply to the Court for orders approving the Scheme.

(f ) It is expected that the Court hearing to approve the Scheme will be held on or about 5 September 2008. If the Scheme is approved by the AEL Shareholders and becomes Eff ective:

(i) AEL and ROC will become bound to implement the Scheme in accordance with the terms of the Merger Implementation Deed, the Scheme and the Deed Poll; and

(ii) AEL Shareholders will be bound by, and have the benefi t under, the Scheme.

Each AEL Shareholder has the right to appear at Court at the hearing of the application by AEL for orders approving the Scheme. The Court has an overriding discretion whether or not to approve the Scheme, even if the Scheme is approved by the requisite majorities at the Scheme Meeting.

If the Scheme Conditions referred to in Section 13.2 are not satisfi ed or, where applicable, waived, including if the Scheme is not approved by the requisite majority of AEL Shareholders or approved by the Court, the Scheme will not become Eff ective and the Merger will not be implemented.

(g) If Court orders approving the Scheme are made, AEL and ROC have agreed they will take or procure the taking of the steps required for the Scheme to proceed, including:

(i) AEL will lodge with ASIC an offi ce copy of the Court orders approving the Scheme under section 411(10) of the Corporations Act. The Scheme will become Eff ective on the date on which an offi ce copy of the Court orders are lodged with ASIC. It is expected that this will occur on or about 8 September 2008;

(ii) on the Implementation Date, being the fi fth Business Day after the Record Date:

(A) ROC will issue the Scheme Consideration to Scheme Shareholders (other than Ineligible Foreign Shareholders);

(B) all the AEL Shares will be transferred to ROC or its wholly owned Subsidiary nominee without any further action by any Scheme Shareholder; and

(C) AEL will enter the name of ROC (or its wholly owned Subsidiary nominee) into the AEL Share Register in respect of the AEL Shares.

Upon completion of the steps set out above, ROC or its wholly owned Subsidiary nominee will hold all of the AEL Shares.


12.2 Eff ect of Scheme

If the Scheme becomes Eff ective, the Scheme binds AEL and all Scheme Shareholders and, to the extent of any inconsistency and to the extent permitted by law, overrides the constitution of AEL.

12.3 Enforcement of Deed Poll

ROC has entered into the Deed Poll under which it covenants in favour of Scheme Shareholders to provide the Scheme Consideration as contemplated by the Scheme.

If the Scheme becomes Eff ective:

(a) Scheme Shareholders will be deemed to have authorised AEL to do and execute all acts, matters, things and documents on the part of each Scheme Shareholder necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Shareholder, a share transfer or transfers in relation to their AEL Shares; and

(b) AEL undertakes in favour of each Scheme Shareholder to enforce the Deed Poll against ROC on behalf of and as agent and attorney for the Scheme Shareholders.

12.4 Issue of Scheme Consideration

New ROC Shares to be issued as Scheme Consideration under the Scheme will be issued to Scheme Shareholders on the Implementation Date.

Holding statements detailing Scheme Shareholders holding of New ROC Shares are expected to be sent on the Implementation Date (expected to be 22 September 2008) and will in any event be despatched within 5 Business Days after the Implementation Date.

12.5 Deferred settlement trading

Deferred settlement trading of New ROC Shares issued as Scheme Consideration is expected to commence at the start of trading on 9 September 2008 with normal trading expected to commence on 23 September 2008.

It is the responsibility of any Scheme Shareholders proposing to sell their New ROC Shares on a deferred settlement basis to confi rm their holding before doing so. Any New ROC Shares sold during the deferred settlement trading

period and prior to the receipt of a holding statement will be sold at the risk of the holder of the New ROC

Shares because they will not know how many New ROC Shares they will receive until they receive their holding

statement. AEL Shareholders should be aware that the exact number of New ROC Shares to be issued as Scheme Consideration may change when the fi nal calculations are made at the Record Date. As such, an AEL Shareholder will not be able to trade ROC Shares on a deferred settlement basis with certainty as to the number of ROC Shares they will be issued under the Scheme. To the extent permitted by law, AEL, the AEL Share Registry and ROC disclaim all liability, whether in negligence or otherwise, to persons who sell their New ROC Shares before receiving their holding statement, whether on the basis of a confi rmation of allocation provided by AEL, the AEL Share Registry, the Information Line, a broker or otherwise.

12.6 Scheme Conditions

The Scheme is conditional on the Scheme Conditions and will not become Eff ective unless each of them is satisfi ed or, where applicable, waived. A summary of the Scheme Conditions is set out in Section 13.2.

12.7 Status of Scheme Conditions

As at the date of this Scheme Booklet, AEL and ROC are not aware of any circumstances that would cause the outstanding Scheme Conditions not to be satisfi ed or waived.


12.8 End Date

If the Scheme is approved by AEL Shareholders at the Scheme Meeting, the Merger still may not be implemented if all the Scheme Conditions referred to in Section 13.2 are not satisfi ed or waived. Furthermore, the Scheme will be of no force or eff ect if it has not become Eff ective before 30 November 2008 or any later date AEL and ROC agree.

12.9 Determination of Scheme Shareholders

(a) Classes of AEL Shareholders affected by the Scheme

The class of members aff ected by the Scheme are all holders of AEL Shares as at 7.00pm (AEST) on the Record Date. The eff ect of the Scheme on AEL Shareholders is that each AEL Shareholder at 7.00pm on the Record Date will cease to be a holder of, or have any interest in, AEL Shares in return for receiving the Scheme Consideration, and dealings in AEL Shares will not be permitted after the Eff ective Date although the process to register dealings that took place on or before the Eff ective Date will continue until 7.00pm (AEST) on the Record Date.

(b) Dealings on or before the Record Date

To determine who qualifi es as Scheme Shareholders, dealings in AEL Shares will only be recognised if:

(i) in the case of dealings of the type to be eff ected using CHESS, the transferee is registered in the AEL Share Register as the holder of the relevant AEL Shares on or before the Record Date; and

(ii) in all other cases, registrable transfers in respect of those dealings are received on or before the Record Date at the place where the AEL Share Register is kept.

(c) Registration of transfers

AEL must register registrable transmission applications or transfers of AEL Shares by the Record Date.

(d) No registrations after the Record Date

AEL will not accept for registration or recognise for any purpose any transmission application or transfer in respect of AEL Shares received after the Record Date.

(e) Maintenance of the AEL Share Register

For the purpose of determining entitlements to the Scheme Consideration, AEL must maintain the AEL Share Register in accordance with the provisions of this Section 12.9 until the Scheme Consideration has been paid to the Scheme Shareholders. The AEL Share Register in this form will solely determine entitlements to the Scheme Consideration.

(f ) Scheme Shareholder details

As soon as possible after the Record Date and in any event at least 2 Business Days before the Implementation Date, AEL will ensure that details of the names, registered addresses and holdings of AEL Shares for each Scheme Shareholder as shown in the AEL Share Register on the Record Date are available to ROC in the form ROC reasonably requires.

(g) Effect of the Record Date

All statements of holding for AEL Shares will cease to have eff ect from the Record Date as documents of title in respect of those shares and, as from that date, each entry current at that date on the AEL Share Register will cease to have eff ect except as evidence of entitlement to the Scheme Consideration in respect of the AEL Shares relating to that entry.


12.10 Appointment of ROC as proxy

Upon the Scheme being implemented, and until AEL registers ROC (or a wholly owned Subsidiary nominee) as the holder of all AEL Shares in the AEL Share Register, each Scheme Shareholder:

(a) is deemed to have irrevocably appointed ROC as attorney and agent (and directed ROC in such capacity) to appoint an offi cer or agent of ROC as its sole proxy and, where applicable, corporate representative to attend shareholders’ meetings, exercise the votes attaching to the AEL Shares registered in their name and sign any shareholders’ resolution, and no Scheme Shareholder may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative;

(b) undertakes not to otherwise attend shareholders’ meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders’ resolutions, whether in person, by proxy or corporate representative;

(c) must take all other actions in the capacity of a registered holder of AEL Shares as ROC reasonably directs;

(d) acknowledges and agrees that in exercising the powers referred to in 12.10(a) above, ROC and any offi cer or agent nominated by ROC under 12.10(a) above may act in the best interests of ROC as the intended registered holder of the AEL Shares; and

(e) any binding instructions between a Scheme Shareholder and AEL relating to AEL Shares (including, without limitation, any instructions relating to payment of dividends or to communications from AEL) will from the Implementation Date be deemed, by reason of the Scheme, to be a similarly binding instruction to and accepted by ROC in respect of New ROC Shares issued to Scheme Shareholders until that instruction is revoked or amended in writing addressed to ROC at its share registry.

12.11 Scheme Meeting

On 30 July 2008, the Court ordered that the Scheme Meeting be convened to consider the Scheme. The Scheme Meeting is to be held on 3 September 2008, at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW, 2000. The Scheme Meeting will commence at 10am (AEST). The notice convening this meeting is set out in Section 21. For actions to be taken by AEL Shareholders who propose to attend and vote at the Scheme Meeting or to appoint a proxy to attend and vote on the shareholder’s behalf, see Section 6.

12.12 Resolution and required majorities

The Scheme will not proceed unless the resolution to approve the Scheme is passed by AEL Shareholders. A copy of the Scheme is set out in Section 19.

In order for the resolution to approve the Scheme to be passed:

(a) unless the Court orders otherwise, a majority in number (more than 50%) of AEL Shareholders present and voting (whether in person, by proxy, by attorney or in the case of corporate AEL Shareholders by corporate representative) at the Scheme Meeting; and

(b) at least 75% of the total votes cast on the resolution to approve the Scheme at the Scheme Meeting by AEL Shareholders entitled to vote on the resolution,



13. Key terms of the Merger Implementation Deed

13.1 Introduction

AEL and ROC entered into a Merger Implementation Deed on 16 June 2008. The Merger Implementation Deed sets out the terms and the parties’ respective obligations in connection with the implementation of the Scheme. A copy of the Merger Implementation Deed is available at www.anzonenergy.com or by calling the Information Line. An outline of the key terms of the Merger Implementation Deed is set out below.

13.2 Conditions precedent

The Scheme will not become Eff ective unless each of the following conditions precedent are satisfi ed or waived in the manner set out in the Merger Implementation Deed:

(a) Regulatory Approvals

Before the Conditions Date, ASIC, ASX and the London Stock Exchange provide or issue the consents and approvals and do any other acts necessary or desirable to implement the transactions contemplated by the Merger Implementation Deed.

(b) Other restrictions

No order, temporary restraining order, preliminary or permanent injunction, decree or ruling issued by any Court or Governmental Agency enjoining, restraining or otherwise imposing a legal restraint or prohibition preventing the consummation of the Merger is in eff ect at 5pm on the day prior to the Scheme Meeting or on the Conditions Date.

(c) AEL Shareholder approval

AEL Shareholders approve the Scheme at the Scheme Meeting (or at any adjournment or postponement of it at which the Scheme is to be voted on) by the requisite majorities under the Corporations Act.

(d) Court approval

The Court approves the Scheme under section 411(4)(b) of the Corporations Act.

(e) Independent Expert report

The Independent Expert gives a report to AEL that in its opinion the Scheme is in the best interests of AEL Shareholders and the Independent Expert does not change its conclusions or withdraw its report prior to the Conditions Date.

(f ) AEL Material Adverse Change

Between the date of the Merger Implementation Deed and the Conditions Date, no AEL Material Adverse Change occurs.

(g) ROC Material Adverse Change

Between the date of the Merger Implementation Deed and the Conditions Date, no ROC Material Adverse Change occurs.

(h) AEL Prescribed Occurrence

Between the date of the Merger Implementation Deed and the Conditions Date, no AEL Prescribed Occurrence occurs.

(i) ROC Prescribed Occurrence

Between the date of the Merger Implementation Deed and the Conditions Date, no ROC Prescribed Occurrence occurs.

(j) AEL representations

No representation given by AEL under Schedule 1 of the Merger Implementation Deed is materially incorrect as at the date of the Merger Implementation Deed or as at 8am on the Second Court Date.


(k) ROC representations

No representation given by ROC under Schedule 2 of the Merger Implementation Deed is materially incorrect as at the date of the Merger Implementation Deed or as at 8am on the Second Court Date.

(l) AEL Convertible Notes

In accordance with the terms of the Merger Implementation Deed, before the Conditions Date:

(i) all of the AEL Convertible Notes being redeemed, cancelled or converted; or

(ii) the holder of AEL Convertible Notes has entered into an agreement to redeem, cancel or convert its AEL Convertible Notes on or after the Eff ective Date.

(m) RAK Unsecured Notes

In accordance with the terms of the Merger Implementation Deed, before the Conditions Date:

(i) all of the RAK Unsecured Notes being redeemed; or

(ii) the holder of the RAK Unsecured Notes has entered into an agreement to redeem the RAK Unsecured Notes on or after the Eff ective Date.

(n) AEL Options

AEL having used its best endeavours to procure that each holder of AEL Options has entered into an Option Purchase Deed or exercised all of their AEL Options on or before the date of the Scheme Meeting.

13.3 Exclusivity

(a) Exclusivity

During the Exclusivity Period, AEL and ROC must not, and must ensure that their respective Representatives do not, except with the prior consent of the other party:

(i) solicit, initiate or invite any enquiries, discussions or proposals in relation to, or which may reasonably be expected to lead to, a Third Party Proposal for that party;

(ii) participate in any discussions or negotiations in relation to, or which may reasonably be expected to lead to, a Third Party Proposal for that party;

(iii) provide any information relating to a party or any of its Material Subsidiaries or any of its businesses or operations to any person in relation to a current or future Third Party Proposal for that party; or

(iv) communicate to any person an intention to do any of the things referred to above.

(b) Notification of approaches

During the Exclusivity Period, AEL or ROC must notify the other party of:

(i) any approach, inquiry or proposal made to, and any attempt or any intention on the part of any person to initiate or continue any negotiations or discussions with, AEL or ROC or any of their respective Representatives with respect to, or that could reasonably be expected to lead to, any Third Party Proposal, whether unsolicited or otherwise;

(ii) any request for information relating to AEL or ROC or any of their respective Material Subsidiaries (other than AZA) or any of their businesses or operations or any request for access to the books or records of AEL or ROC or any of their respective Material Subsidiaries (other than AZA) , which AEL or ROC (as applicable) has reasonable grounds to suspect may relate to a current or future Third Party Proposal;

(iii) any breach of the obligation of exclusivity or the obligation to notify of an approach; and

(iv) any provision by AEL or ROC or any of their respective Representatives of any information relating to AEL or ROC (as applicable) or any of their respective Material Subsidiaries (other than AZA) or any of their businesses or operations to any person in connection with or for the purposes of a current or future Third Party Proposal by providing in writing to the other party details of the expression of interest, off er or proposal or proposed Third Party Proposal made by the person making the approach and details of any material discussions between such person and AEL or ROC (as applicable) or their respective Representatives.


Such notice must be accompanied by written details of:

(i) all relevant details of the relevant event, including the identity of the person or persons taking any action referred to in (i) or (ii) above (the Relevant Persons);

(ii) the terms and conditions of any Third Party Proposal or any proposed Third Party Proposal (to the extent known to AEL or ROC (as applicable)), including details of the proposed consideration, timing and any break fee; and

(iii) details of any material discussions between the Relevant Persons and AEL or ROC (as applicable) or their Representatives.

(c) Normal provision of information

Nothing in the exclusivity provisions prevents a party or its Representatives from:

(i) providing information to its Representatives;

(ii) providing information required to be provided by law, a Court or any Regulatory Authority including ASX or the London Stock Exchange; or

(iii) making presentations to brokers, portfolio investors and analysts in the ordinary and usual course of business.

(d) Fiduciary carve-out

(i) The obligations referred to in Sections 13.3(a)(ii), 13.3(a)(iii) and 13.3(a)(iv) above do not require AEL or ROC or any of their respective directors to do or refrain from doing anything with respect to a bona fi de Third Party Proposal (which was not solicited by the party in breach of the no-shop provision in Section 13.3(a)(i)), provided that the AEL Board or ROC Board (as applicable) has determined in good faith and acting reasonably after consultation with its fi nancial advisers and receiving written legal advice by external legal advisers, that failing to respond to such Third Party Proposal would likely constitute a breach of the directors’ fi duciary or statutory obligations.

(ii) The obligation referred to in Section 13.3(b) above does not require AEL or ROC or any of their respective directors to provide any notifi cation to the other party to the extent that the AEL Board or the ROC Board (as applicable) has determined in good faith and acting reasonably after consultation with its fi nancial advisers and receiving written legal advice by external legal advisers, that providing such notifi cation would likely constitute a breach of the directors’ fi duciary or statutory obligations.

13.4 Break fee

(a) Undertaking by AEL

A break fee of $2.7 million will be payable by AEL to ROC if before the Eff ective Date, the Merger Implementation Deed is terminated:

(i) by ROC if AEL is in breach of a material term of the Merger Implementation Deed which has not been rectifi ed;

(ii) by ROC because AEL has failed to satisfy one of the following conditions precedent:

(A) AEL Material Adverse Change (see Section 13.2(f ) above);

(B) AEL Prescribed Occurrence (see Section 13.2(h) above); or

(C) AEL representations (see Section 13.2(j) above);

(iii) by ROC if the AEL Board (or a majority of the AEL Board):

(A) withdraws its approval or recommendation of the Merger; or

(B) makes a public statement that they support a Third Party Proposal for AEL,

except as a result of the Independent Expert opining that the Merger is not in the best interests of AEL Shareholders;


(iv) by either ROC or AEL if the AEL Board has received a Superior Proposal and pursuant to that Superior Proposal the voting power (as defi ned in the Corporations Act) of the proponent of the Superior Proposal becomes or increases to more than 50% of the AEL Shares;

(v) by either AEL or ROC if all of the following occur:

(A) a Third Party Proposal is announced;

(B) AEL Shareholders do not approve the Scheme at the Scheme Meeting (or at any adjournment or postponement of it at which the Scheme is to be voted on) by the requisite majorities under the Corporations Act; and

(C) pursuant to the Third Party Proposal, the voting power (as defi ned in the Corporations Act) of the proponent of the Third Party Proposal becomes or increases to more than 50% of the AZA Shares; or

(vi) by AEL if the AEL Board has received a Superior Proposal and the AEL Board (or a majority of the AEL Board) withdraws its approval or recommendation of the Merger, provided that such Superior Proposal was not solicited, initiated or invited by AEL in breach of the no-shop provision in Section 13.3(a)(i) above.

(b) Undertaking by ROC

A break fee of $2.7 million will be payable by ROC to AEL if before the Eff ective Date, the Merger Implementation Deed is terminated by AEL because of one of the following circumstances:

(i) ROC is in breach of a material term of the Merger Implementation Deed which has not been rectifi ed;

(ii) ROC has failed to satisfy one of the following conditions precedents:

(A) ROC Material Adverse Change (see Section 13.2(g) above);

(B) ROC Prescribed Occurrence (see Section 13.2(i) above);

(C) ROC Representations (see Section 13.2(k) above); or

(iii) ROC has failed to satisfy its obligation to announce the AZA Takeover Off er or despatch the AZA Takeover Off er, as contemplated in Section 13.7 below.

13.5 Termination

The Merger Implementation Deed may be terminated at any time prior to the commencement of the Court hearing on the Second Court Date:

(a) by either ROC or AEL if any Court or Regulatory Authority has issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Merger, or has refused to do anything necessary to permit the Merger, and the order, decree, ruling, other action or refusal has become fi nal and non-appealable;

(b) by either ROC or AEL if:

(i) the other is in breach of a material term of the Merger Implementation Deed (other than as a result of a breach by the terminating party);

(ii) where the breach is a breach of a representation or warranty by a party, the breach must result in or disclose something which would individually or in aggregate amount to either an AEL Material Adverse Change or ROC Material Adverse Change as the case may be; and

(iii) where the breach is capable of rectifi cation prior to the Conditions Date, the party not in breach has given written notice to the other setting out the relevant circumstances and stating an intention to terminate, and the breach has not been rectifi ed within 5 Business Days or within the period ending on the Conditions Date (whichever is the shorter period);

(c) by either ROC or AEL if the resolution submitted to the Scheme Meeting in relation to the Scheme is not passed by the majorities required under the Corporations Act;

(d) upon the failure of any other condition set out in Section 13.2 above, by the party (or parties) entitled to rely on that condition if the parties are unable to reach agreement within 5 Business Days after the relevant date or by the End Date;


(e) by ROC if the AEL Board (or a majority of the AEL Board):

(i) withdraws its approval or recommendation of the Merger; or

(ii) makes a public statement that they support a Third Party Proposal for AEL;

(f ) by AEL if the AEL Board has received a Superior Proposal and the AEL Board (or a majority of the AEL Board) withdraws its approval or recommendation of the Merger, provided that such Superior Proposal was not solicited, initiated or invited by AEL in breach of the no-shop provision in Section 13.3(a)(i) above;

(g) by either AEL or ROC if:

(i) the AEL Board has received a Superior Proposal; and

(ii) pursuant to that Superior Proposal the voting power (as defi ned in the Corporations Act) of the proponent of the Superior Proposal becomes or increases to more than 50% of the AEL Ordinary Shares;

(h) by either AEL or ROC if all of the following occur:

(i) a Third Party Proposal is announced;

(ii) AEL Shareholders do not approve the Scheme at the Scheme Meeting (or at any adjournment or postponement of it at which the Scheme is to be voted on) by the requisite majorities under the Corporations Act; and

(iii) pursuant to the Third Party Proposal, the voting power (as defi ned in the Corporations Act) of the proponent of the Third Party Proposal becomes or increases to more than 50% of the AZA Ordinary Shares;

(i) by AEL or ROC if the Scheme has not become Eff ective on or before the End Date;

(j) by AEL or ROC if the Court refuses to make orders directing AEL to convene the Scheme Meeting or approving the Scheme, and after AEL and ROC have appealed the Court’s decision to the fullest extent possible; or

(k) by AEL if ROC has failed to satisfy its obligation to announce the AZA Takeover Off er or despatch the AZA Takeover Off er, as contemplated in Section 13.7 below.

13.6 Representations and warranties

Each of AEL and ROC have given representations and warranties to the other which are considered to be normal for an agreement of this kind.

13.7 AZA Takeover Off er

In accordance with the Merger Implementation Deed, ROC announced on 16 June 2008 its intention to make an off -market takeover bid for all of the AZA Shares on terms and conditions no less favourable than those set out in an annexure to the Merger Implementation Deed.

In accordance with Chapter 6 of the Corporations Act, ROC must despatch the takeover off er and accompanying documents to AZA Shareholders within 2 months of the announcement by ROC of its intention to make an off -market takeover off er.


14. AEL additional information

14.1 Marketable securities of AEL held by or on behalf of AEL Directors

The number and description of marketable securities in AEL held by or on behalf of (or in which a Relevant Interest is held by) each AEL Director as at the date of this Scheme Booklet are set out in Table 26 below.

Table 26: Marketable securities of AEL held by or on behalf of AEL Directors

Director AEL Shares AEL Options

Michael Arnett 367,375 500,000

Olivier Fric 350,000 500,000

Steven Koroknay 2,245,000 500,000

Robert Leon 250,000 500,000

Vincenzo Paglione 350,000 500,000

Charles Pope Nil 500,000

Andrew Young 85,500 500,000

Total 3,647,875 3,500,000

Other than as set out in this Section 14.1, in the four months ending on the date of this Scheme Booklet, no AEL Director has provided, or agreed to provide, or has received or agreed to receive consideration for an AEL Share or an AEL Option under a sale, purchase or agreement for sale or purchase of AEL Shares or AEL Options.

14.2 Marketable securities of ROC held by or on behalf of AEL Directors

Each of the AEL Directors who hold AEL Shares may be issued with New ROC Shares if the Scheme is implemented. Details of AEL Directors’ interests in AEL Shares are set out in Section 14.1. At the date of this Scheme Booklet, it is not possible to quantify the number of New ROC Shares that each AEL Director may receive as Scheme Consideration, as this will depend on whether each is an Ineligible Foreign Shareholder and the Merger Ratio.

Under the Merger Implementation Deed, AEL has an obligation to use its best endeavours to procure that each holder of AEL Options has:

(a) entered into an Option Purchase Deed; or

(b) exercised all of their AEL Options,

on or before the date of the Scheme Meeting.

The AEL Directors who hold AEL Options are detailed in Section 14.1. Each AEL Director who is not an Ineligible Foreign Shareholder and who holds AEL Options will be off ered ROC Shares by ROC as consideration for the acquisition of his AEL Options. Under the terms of the AEL Options, each AEL Option is exercisable into one AEL Share. Accordingly, if an AEL Director accepts the off er from ROC and enters into an Option Purchase Deed, that AEL Director will receive in consideration for the transfer of each of his options the number of ROC Shares equal to the Scheme Consideration less the exercise price of his AEL Options. The proposed Option Purchase Deed is conditional on the Scheme becoming Eff ective.

At the date of this Scheme Booklet, it is not possible to quantify the number of ROC Shares that each AEL Director would receive in consideration for the transfer of his AEL Options to ROC under any Option Purchase Deed, as the number is dependent upon the:

(a) Merger Ratio; and

(b) relevant exchange rate on the date specifi ed in the relevant Option Purchase Deed.

Other than as set out in this Section 14.2, in the four months ending on the date of this Scheme Booklet, no AEL Director has provided, or agreed to provide, or has received or agreed to receive consideration for a marketable security under a sale, purchase or agreement for sale or purchase of marketable securities in ROC.


14.3 Payments or other benefi ts to AEL Directors, secretaries or executive offi cers

Other than as set out below, it is not proposed in connection with the Scheme that any payment or other benefi t will be made or given to any director, secretary or executive offi cer of AEL or of any corporation related to AEL as compensation for loss of, or as consideration for or in connection with, their retirement from offi ce as director, secretary or executive offi cer of AEL or any corporation related to AEL.

(a) AEL Directors

Upon termination of employment, if applicable, the AEL Directors will be entitled to estimated termination benefi ts as set out in Table 27 below.

Table 27: AEL Directors’ estimated termination benefi ts as at 31 August 2008

Director Estimated termination benefit

Andrew Young $1,253,045

(b) Executive officers of AEL

Upon termination of employment, if applicable, the executive offi cers of AEL (excluding AEL Directors) will be entitled to estimated termination benefi ts as set out in Table 28 below.

Table 28: AEL offi cers estimated termination benefi ts as at 31 August 2008

Officer Estimated termination benefit

Bruce Atkins $446,328

Tony Strasser $743,335

14.4 Agreements or arrangements with Directors

Other than as set out in Sections 14.2 and 14.3, there are no other agreements or arrangements made between any AEL Director and any other person in connection with or conditional upon the outcome of the Scheme.

It is anticipated that a nominee of AEL, will join the ROC Board.

14.5 AEL Directors’ interests in ROC contracts

Other than as set out in Section 14.4, there are no other agreements or arrangements made between any AEL Director and ROC.

14.6 Material changes in the fi nancial position of AEL

The latest published fi nancial statements of AEL are the fi nancial statements for the year ended 31 December 2007 that were released to AIM on 31 March 2008.

To the knowledge of AEL Directors, at the date of this Scheme Booklet there has been no material change to the fi nancial position of AEL since 31 December 2007 other than as disclosed to the market as part of AEL’s continuous disclosure regime.

14.7 Eff ect of the Scheme on AEL Options

As at 29 July 2008, AEL had 8,050,000 AEL Options on issue. As detailed in Section 14.2, ROC will make off ers to each holder of AEL Options to acquire all their AEL Options in exchange for the issue of New ROC Shares. The number of New ROC Shares each holder of AEL Options will receive for each AEL Option in consideration of the transfer of their AEL Options will be the Scheme Consideration less the exercise price of their AEL Options.


14.8 Eff ect of the Scheme on creditors

AEL has paid and is paying all its creditors within normal terms of trade. It is solvent and is trading in an ordinary commercial manner.

14.9 No unacceptable circumstances

The AEL Directors do not consider that the Merger involves any circumstances in relation to the aff airs of AEL that could reasonably be characterised as constituting “unacceptable circumstances” for the purposes of section 657A of the Corporations Act.

14.10 Other material information

Except as set out in this Scheme Booklet, there is no information material to the making of a decision in relation to the Scheme, being information that is within the knowledge of any AEL Director or a Related Body Corporate, at the time of lodging this Scheme Booklet with ASIC for registration, which has not previously been disclosed to AEL Shareholders.

AEL will provide AEL Shareholders with supplementary information that it becomes aware of between the date of this Scheme Booklet and the Second Court Date in relation to a material statement in any information about AEL, AEL Shares or the Merged Group that is misleading or deceptive (including by way of material omission) or not true and correct in any material respect.

14.11 Consents

The following parties have given and have not, before the date of this Scheme Booklet, withdrawn their written consent to be named in this Scheme Booklet in the form and context in which they are named:

(a) ROC (in respect of the ROC Scheme Information and, to the extent provided by ROC, the Joint Information provided by ROC);

(b) Macquarie Capital Advisers Limited as fi nancial adviser to AEL;

(c) Corrs Chambers Westgarth as legal adviser and taxation adviser to AEL, and to the inclusion of the general outline of taxation implications of the Merger in Section 17;

(d) PKF as auditor of AEL;

(e) Deloitte as the Independent Expert and to the inclusion of the concise Independent Expert’s Report set out in Section 18;

(f ) Grant Thornton UK LLP, as nominated adviser to AEL; and

(g) Computershare Investor Services Pty Limited as the AEL Share Registry.

Each of the above entities:

(a) does not make, or purport to make, any statement in this Scheme Booklet or any statement on which a statement in this Scheme Booklet is based other than, in the case of ROC, Deloitte and Corrs Chambers Westgarth, a statement or report included in this Scheme Booklet with the consent of that party; and

(b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Scheme Booklet, other than a reference to its name and, in the case of ROC, Deloitte and Corrs Chambers Westgarth, any statement or report which has been included in this Scheme Booklet with the consent of that party.


15. ROC additional information

15.1 Interests of ROC Directors in ROC securities

The ROC Directors’ interests in ROC Shares and ROC Options as at 29 July 2008 are detailed in the following Table 29.

Table 29: Interests of ROC Directors

Name ROC Shares % ROC Options

Mr William Jephcott 1,117,300 0.37 Nil

Mr Andrew Love 561,353 0.19 Nil

Mr Sidney Jansma 444,641 0.15 Nil

Mr Adam Jolliff e 100,000 0.03 Nil

Mr Bruce Clement 80,000 0.03 680,000

Dr Douglas Schwebel 30,000 0.01 Nil

Mr Dennis Paterson Nil Nil 450,000

Total 2,333,294 0.78 1,130,000

15.2 Interests of ROC Group and ROC Directors in AEL securities

As at the date of this Scheme Booklet, neither ROC, nor any of its Subsidiaries, holds any interest in any AEL securities, and neither ROC nor any of its Subsidiaries has voting power in AEL.

As at the date of this Scheme Booklet, none of the ROC Directors hold any relevant interests in any AEL securities.

Apart from the Scheme Consideration, during the four months before the date of this Scheme Booklet, none of ROC or any Associate of ROC or any Director of ROC has:

provided, or agreed to provide, or has received or agreed to receive consideration for an AEL Share under a sale, n

purchase or agreement for sale or purchase of AEL Shares;

given, off ered to give or agreed to give a benefi t to another person which was likely to induce the other person, n

or any associate of the other person, to:

vote in favour of the Scheme; or–

dispose of AEL Shares,–

which was not off ered to all AEL Shareholders.


15.3 Disclosure of other interests

No Director or proposed Director of ROC holds, or held at any time during the 2 years before the date of this Scheme Booklet, any interests in:

(a) the formation or promotion of ROC;

(b) any property acquired or proposed to be acquired by ROC in connection with its formation or promotion of the off er of New ROC Shares under the Scheme; or

(c) the issue of New ROC Shares under the Scheme,

except in a capacity as a holder of ROC Shares or ROC Options.

No person has paid or agreed to pay any amount, or provided or agreed to provide any benefi t to a Director or proposed Director of ROC:

(d) to induce them to become or qualify as a Director of ROC; or

(e) for services provided by that person in connection with the formation or promotion of ROC or the issue of New ROC Shares under the Scheme.

Except as set out in this Scheme Booklet, no person named in this Scheme Booklet as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Scheme Booklet has, or has had in the 2 years before the date of this Scheme Booklet, an interest in:

(f ) the formation or promotion of ROC;

(g) any property acquired or proposed to be acquired by ROC in connection with its formation or promotion of the off er of New ROC Shares under the Scheme; or

(h) the issue of New ROC Shares under the Scheme,

and no amounts (whether in cash or securities or otherwise) have been paid or agreed to be paid, and no one has given or agreed to give a benefi t, to any such person for services rendered in connection with the promotion or formation of ROC or the off er of New ROC Shares under the Scheme.

15.4 Other information material to decision in relation to the Scheme

Except as set out in this Scheme Booklet, there is no information material to the making of a decision in relation to the Scheme, being information that is within the knowledge of any ROC Director, at the time of lodging this Scheme Booklet with ASIC for registration, which has not previously been disclosed to AEL Shareholders.

ROC will provide AEL with supplementary information that it becomes aware of between the date of this Scheme Booklet and the Second Court Date in relation to a material statement in any information about ROC, ROC Shares or the Merged Group that is misleading or deceptive (including by way of material omission) or not true and correct in any material respect.

15.5 Funding Arrangements

ROC intends to fund the cash consideration payable to RAK under the AEL Convertible Notes Deed using its existing cash reserves, its existing loan facility with BOS International, Commonwealth Bank of Australia and Société Générale Australia Branch and a new working capital facility of US$30 million to be provided by Commonwealth Bank of Australia. The working capital facility is to be documented in a facility agreement which is expected to be fi nalised prior to the Eff ective Date.


15.6 Formal Disclosures and Consents

Allens Arthur Robinson has acted as legal adviser on behalf of ROC and Gresham Partners has acted as fi nancial adviser on behalf of ROC in connection with the Scheme and the preparation of this Scheme Booklet.

The following parties have given, and have not withdrawn before the time of registration of this Scheme Booklet with ASIC, their consent to be named in this Scheme Booklet in the form and context in which they are named:

Allens Arthur Robinson as legal adviser to ROC;n

Gresham Partners as fi nancial adviser to ROC;n

BOS International as lender under an existing facility;n

Commonwealth Bank of Australia as lender under an existing facility plus provider of the working capital facility n

referred to in Section 15.5; and

Société Générale Australia branch as lender under an existing facility.n

Each person named in this Section 15.6:

(a) has not authorised or caused the issue of this Scheme Booklet;

(b) does not make, or purport to make any statement in this Scheme Booklet or any statement on which a statement in this Scheme Booklet is based, other than as specifi ed in this Section 15.6; and

(c) to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representations regarding and takes no responsibility for, any part of this Scheme Booklet, other than a reference to its name and statements (if any) included in this Scheme Booklet with the consent of that party as specifi ed in this Section 15.6.


16. General additional information

16.1 Treatment of Ineligible Foreign Shareholders

If you are an Ineligible Foreign Shareholder, you will not be able to receive the Scheme Consideration under the Scheme.

Restrictions in certain foreign countries make it unduly onerous, unduly impractical or unlawful for ROC to off er New ROC Shares as Scheme Consideration to AEL Shareholders in those countries or for AEL Shareholders in those countries to receive New ROC Shares as Scheme Consideration. Accordingly, ROC will not issue New ROC Shares to any Ineligible Foreign Shareholder.

Where a Scheme Shareholder is an Ineligible Foreign Shareholder the number of New ROC Shares to which that Ineligible Foreign Shareholder would otherwise have become entitled under the Scheme will be issued to the Sale Facility Agent which will then sell those New ROC Shares as part of the Sale Facility.

Under the Sale Facility, the Sale Facility Agent:

(a) will sell the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme on the stock market conducted by ASX, via a bookbuild or other sale process (or a combination of these) as soon as practicable after the Implementation Date at such price as the Sale Facility Agent shall determine, provided the Sale Facility Agent uses all reasonable endeavours to achieve the best price reasonably obtainable at the time of sale;

(b) remit the proceeds of sale (after deduction of any applicable selling costs, taxes and charges) (Proceeds) to ROC which ROC will hold on trust for each Ineligible Foreign Shareholder;

(c) ROC will pay to each Ineligible Foreign Shareholder by dispatching, or procuring the dispatch of, a cheque to the Ineligible Foreign Shareholder by prepaid post to their address recorded in the AEL Register (at the Record Date) the amount “A” calculated in accordance with the following formula and rounded down to the nearest cent:

A = (B/C) x D

where:

B = the number of New ROC Shares that would have been issued to that Ineligible Foreign Shareholder had it not been an Ineligible Foreign Shareholder.

C = the total number of New ROC Shares which would otherwise have been issued to all Ineligible Foreign Shareholders had they not been Ineligible Foreign Shareholders and which are issued to the Sale Facility Agent.

D = the Proceeds (as defi ned above).

There is no assurance as to the price the Sale Facility Agent will receive for New ROC Shares as this will depend on prevailing market conditions.

16.2 Queries

If you have any questions or require further information, you can call the Information Line between 9:00am to 5:00pm (AEST) Monday to Friday on 1300 309 234 (within Australia), or 0800 450 974 (within New Zealand), or +61 3 9415 4639 outside Australia and New Zealand.

If you are in any doubt about anything in this Scheme Booklet, please contact your fi nancial, legal, taxation or other professional adviser.


This page has been left blank intentionally


PART C

ADDITIONAL MATERIALS AND DOCUMENTS


17. Taxation implications of the Scheme








18. Concise Independent Expert’s Report

Anzon Energy Limited Concise independent expert’s report 29 July 2008


Deloitte Corporate Finance Pty Limited ACN 003 833 127 AFSL 241457 180 Lonsdale Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia

Note: This report consists of both a Financial Services Guide and an independent expert’s report

Part 1 - Financial Services Guide

29 July 2008

What is a Financial Services Guide? This Financial Services Guide (FSG) is an important document whose purpose is to assist you in deciding whether to use any of the general financial product advice provided by Deloitte Corporate Finance Pty Limited (ABN 19 003 833 127). The use of “we”, “us” or “our” is a reference to Deloitte Corporate Finance Pty Limited as the holder of Australian Financial Services Licence (AFSL) No. 241457. The contents of this FSG include:

� who we are and how we can be contacted

� what services we are authorised to provide under our AFSL

� how we (and any other relevant parties) are remunerated in relation to any general financial product advice we may provide

� details of any potential conflicts of interest

� details of our internal and external dispute resolution systems and how you can access them.

Information about us We have been engaged by Anzon Energy Limited to give general financial product advice in the form of a report to be provided to you in connection with the issue of various securities by Anzon Energy Limited. You are not the party or parties who engaged us to prepare this report. We are not acting for any person other than the party or parties who engaged us. We are required to give you an FSG by law because our report is being provided to you. You may contact us using the details located above.

Deloitte Corporate Finance Pty Limited is ultimately owned by the Australian partnership of Deloitte Touche Tohmatsu. The Australian partnership of Deloitte Touche Tohmatsu and its related entities provide services primarily in the areas of audit, tax, consulting, and financial advisory services. Our directors may be partners in the Australian partnership of Deloitte Touche Tohmatsu.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of

member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com.au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

The financial product advice in our report is provided by Deloitte Corporate Finance Pty Limited and not by the Australian partnership of Deloitte Touche Tohmatsu, its related entities, or the Deloitte Touche Tohmatsu Verein.

We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and the Australian partnership of Deloitte Touche Tohmatsu (and its related bodies corporate) may from time to time provide professional services to financial product issuers in the ordinary course of business.

What financial services are we licensed to provide?The AFSL we hold authorises us to provide the following financial services to both retail and wholesale clients:

� to provide financial product advice in respect of: � debentures, stocks or bonds to be issued or

proposed to be issued by a government � interests in managed investment schemes

including investor directed portfolio services

� securities.

� to deal in a financial product by arranging for another person to apply for, acquire, vary or dispose of financial products in respect of: � debentures, stocks or bonds issued or to be

issued by a government � interests in managed investment schemes

including investor directed portfolio services

� securities.

Information about the general financial product advice we provide The financial product advice provided in our report is known as “general advice” because it does not take into account your personal objectives, financial situation or needs. You should consider whether the general advice contained in our report is appropriate


3Deloitte: Anzon Energy Limited – Concise independent expert’s report

for you, having regard to your own personal objectives, financial situation or needs.

If our advice is being provided to you in connection with the acquisition or potential acquisition of a financial product issued by another party, we recommend you obtain and read carefully the relevant Product Disclosure Statement (PDS) or offer document provided by the issuer of the financial product. The purpose of the PDS is to help you make an informed decision about the acquisition of a financial product. The contents of the PDS will include details such as the risks, benefits and costs of acquiring the particular financial product.

How are we and our employees remunerated?Our fees are usually determined on an hourly basis; however they may be a fixed amount or derived using another basis. We may also seek reimbursement of any out-of-pocket expenses incurred in providing the services.

Fee arrangements are agreed with the party or parties who actually engage us, and we confirm our remuneration in a written letter of engagement to the party or parties who actually engage us.

Neither Deloitte Corporate Finance Pty Limited nor its directors and officers, nor any related bodies corporate or associates and their directors and officers, receives any commissions or other benefits, except for the fees for services rendered to the party or parties who actually engage us. Our fee is $60,000 and will also be disclosed in the relevant PDS or offer document prepared by the issuer of the financial product.

All of our employees receive a salary. Our employees are eligible for annual salary increases and bonuses based on overall performance but do not receive any commissions or other benefits arising directly from services provided to you. The remuneration paid to our directors reflects their individual contribution to the company and covers all aspects of performance. Our directors do not receive any commissions or other benefits in connection with our advice.

We do not pay commissions or provide other benefits to other parties for referring prospective clients to us.

What should you do if you have a complaint? If you have any concerns regarding our report, you may wish to advise us. Our internal complaint handling process is designed to respond to your

concerns promptly and equitably. Please address your complaint in writing to:

The Complaints Officer Practice Protection Group Deloitte Corporate Finance Pty Limited PO Box N250 Grosvenor Place Sydney NSW 1220

If you are not satisfied with the steps we have taken to resolve your complaint, you may contact the Financial Ombudsman Service (FOS). FOS provides free advice and assistance to consumers to help them resolve complaints relating to members of the financial services industry. Complaints may be submitted to FOS at:

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Telephone: 1300 780 808 Fax: +61 3 9613 6399 Internet: http://www.fos.org.au Email: [email protected]

If your complaint relates to the professional conduct of a person who is a Chartered Accountant, you may wish to lodge a complaint in writing with the Institute of Chartered Accountants in Australia (ICAA). The ICAA is the professional body responsible for setting and upholding the professional, ethical and technical standards of Chartered Accountants and can be contacted at:

The Institute of Chartered Accountants GPO Box 3921 Sydney NSW 2001 Telephone: +61 2 9290 1344 Fax: +61 2 9262 1512 http://www.icaa.org.au

The Australian Securities and Investments Commission (ASIC) regulates Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit. Their website contains information on lodging complaints about companies and individual persons and sets out the types of complaints handled by ASIC.You may contact ASIC as follows:

Info line: 1 300 300 630 Email: [email protected] Internet: http://www.asic.gov.au/asic/asic.nsf


Deloitte Corporate Finance Pty Limited ACN 003 833 127 AFSL 241457

180 Lonsdale Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia

DX 111 Tel: +61 (0) 3 9208 7000 Fax: +61 (0) 3 9208 7716 www.deloitte.com.au

The Directors Anzon Energy Limited Level 13 90 Arthur Street Sydney NSW 2060

25 July 2008

Dear Directors

Concise independent expert’s report 1 Introduction On 16 June 2008, Anzon Energy Limited (Anzon Energy or the Company), together with the Board of Roc Oil Company Limited (ROC), announced a proposal under which ROC and Anzon Energy would merge via a scheme of arrangement (the Proposed Scheme). ROC intends to acquire all of the fully paid shares in Anzon Energy. Under the Proposed Scheme, holders of Anzon Energy shares (Shareholders) will receive a number of ROC shares for every Anzon Energy share held (the Merger Ratio), based on a merger ratio calculation (the Proposed Scheme Consideration).

On the same day as the Proposed Scheme was announced, ROC announced a proposal to make an off-market takeover offer for all the outstanding shares in Anzon Australia Limited (AZA) (the AZA Takeover Offer), a company in which Anzon Energy has a 53.0% interest. The takeover offer consideration consists of a combination of 0.792 ROC share plus five cents cash for each AZA share (the AZA Takeover Offer Consideration).

The Proposed Scheme Consideration has been set by reference to the AZA Takeover Offer Consideration and will be subject to the net debt position of Anzon Energy at the time when the merger becomes effective. Based on the AZA Takeover Offer Consideration, the anticipated net debt position of Anzon Energy and ROC’s share price prior to the announcement of the Proposed Scheme, the Merger Ratio is expected to be 1.33 ROC shares per Anzon Energy share.

ROC and Anzon Energy have entered into a merger implementation deed (MID), which sets out the obligations of ROC and Anzon Energy in relation to the implementation of the transaction.

Upon completion of the Proposed Scheme which is expected to be in September 2008, Anzon Energy will become a wholly owned subsidiary of ROC and will subsequently be delisted from the Alternative Investment Market of the London Stock Exchange (AIM). The board of Anzon Energy has prepared a scheme booklet containing the detailed terms of the Proposed Scheme (the Scheme Booklet) and an overview of the Proposed Scheme is provided in Section 1 of our detailed report.



2 Scope of the report 2.1 Purpose of the report Whilst an independent expert’s report is not required to meet any statutory obligations, the directors of Anzon Energy have engaged Deloitte Corporate Finance Pty Limited (Deloitte) to prepare an independent expert’s report advising whether, in our opinion, the Proposed Scheme is in the best interests of Shareholders.

This independent expert’s report has been prepared in a manner consistent with Part 3 of Schedule 8 of the Corporations Regulations 2001 (Cwlth) (Part 3) to assist Shareholders in their consideration of the Proposed Scheme. We have prepared this report having regard to Part 3 and the relevant ASIC Regulatory Guides.

This independent expert’s report is to be included in the Scheme Booklet to be sent to Shareholders and has been prepared exclusively for the purpose of assisting Shareholders in their consideration of the Proposed Scheme. The report cannot be used for any other purpose.

Deloitte has not been requested to consider the AZA Takeover Offer.

2.2 Basis of evaluation Schemes of arrangement can include many different types of transactions, including being used as an alternative to a Chapter 6 takeover bid. The basis of evaluation selected by the expert must be appropriate for the nature of each specific transaction.

Section 640 of the Corporations Act 2001 (Cwlth) (Corporations Act) (Section 640) requires an independent expert’s report in connection with a takeover offer to state whether, in the expert’s opinion, the takeover offer is fair and reasonable. Where the scheme of arrangement has the same effect as a takeover, the form of analysis used by the expert should be substantially the same as for a takeover bid, however, the opinion reached should be whether the proposed scheme is ‘in the best interests of the members of the company’. Accordingly, if an expert were to conclude that a proposal was ‘fair and reasonable’ if it was in the form of a takeover bid, it will also be able to conclude that the proposed scheme is ‘in the best interests of the members of the company’.

Under ASIC Regulatory Guide 111, which provides guidance in respect of the content of expert reports, a control transaction such as the Proposed Scheme is:

� fair, when the value of the consideration is equal to or greater than the value of the shares subject to the proposed scheme. The comparison must be made assuming 100% ownership of the target company. Our analysis of the fairness of the Proposed Scheme is set out in Section 4.1

� reasonable, if it is fair, or despite not being fair, after considering other significant factors, Shareholders should accept the offer under the proposed scheme, in the absence of any higher bids. Our analysis of these reasonableness factors is set out in Section 4.2.

To assess whether the Proposed Scheme is in the best interests of Shareholders, we have adopted the test of whether the Proposed Scheme is either fair and reasonable, not fair but reasonable, or neither fair nor reasonable, as set out in ASIC Regulatory Guide 111.

2.3 Limitations and reliance on information The opinion of Deloitte is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time. This report should be read in conjunction with the qualifications, declarations and consents outlined in Appendix 2.



Our procedures and enquiries do not include verification work nor constitute an audit in accordance with Australian Auditing Standards (AUS), nor do they constitute a review in accordance with AUS 902 applicable to review engagements.

3 Contents of the report This report is a concise independent expert’s report and includes the following:

� our opinion as to whether the Proposed Scheme is in the best interests of Shareholders

� valuation of the Basker-Manta-Gummy (BMG) project, which is the principal asset of AZA

� valuation of Anzon Energy

� valuation of the proposed merged entity comprising of Anzon Energy and ROC (Proposed Merged Entity)

� valuation of consideration.

In addition to the matters outlined in this report, our detailed report includes the following:

� terms of the Proposed Scheme

� profile of Anzon Energy

� profile of ROC

� profile of the Proposed Merged Entity

� valuation methodology

� discount rate calculation

� comparable entities to AZA and Anzon Energy

� profile of the Australian oil and gas industry

� sources of information.

This report is to be included in the Scheme Booklet to be sent to Shareholders. This report and our detailed report have been prepared for the exclusive purpose of assisting Shareholders in their consideration of the Proposed Scheme. Our detailed report is available at www.anzonenergy.com.

All amounts stated in this report are Australian dollars (AUD) unless otherwise stated and may be subject to rounding.



4 Evaluation and conclusion 4.1 The Proposed Scheme is fair ASIC Regulatory Guide 111 defines an offer as being fair if the value of the offer price is equal to or greater than the value of the securities being the subject of the offer. Set out in the table below is a comparison of our assessment of the fair market value of an Anzon Energy share with the consideration offered by ROC.

Table 1: Evaluation of fairness

Low value

per share

High value

per share

Estimated fair market value of an Anzon Energy share (AUD) 2.10 2.60 Estimated fair market value of consideration offered by ROC (AUD) 2.20 2.55

Estimated fair market value of an Anzon Energy share (GBP)1,2 1.00 1.25 Estimated fair market value of consideration offered by ROC (GBP) 1,2 1.05 1.20

Source: Deloitte analysis

Notes: 1. GBP – British Pounds 2. Converted based on the spot GBP per AUD exchange rate of GBP 0.48 3. Figures above are subject to rounding

The low end of our valuation range of AUD 2.10 per Anzon Energy share is supported by our discounted cash flow analysis of the BMG project, which is AZA’s major asset. In a recent transaction, Sojitz Corporation acquired a 10% interest in the BMG project for AUD 123 million and the resulting implied value for the BMG project forms the basis of the high end of our valuation range for an Anzon Energy share of AUD 2.60.

We have valued the consideration offered to Shareholders at between AUD 2.20 and AUD 2.55, or equivalent to a range of GBP 1.05 to GBP 1.20. We have estimated the fair market value of a share in the Proposed Merged Entity based on recent share market trading in ROC. Since the announcement of the Proposed Scheme, the ROC share has traded between AUD 1.55 and AUD 1.92, and the volume weighted average price (VWAP) has been AUD 1.75.

We would expect the value of both Anzon Energy and ROC to be influenced by changes in underlying economic factors. Consequently, whilst changes in these underlying economic parameters, such as the oil prices, will affect the value of an Anzon Energy share and a share in the Proposed Merged Entity, the relative values may not be materially affected.

The consideration offered by ROC under the Proposed Scheme is within the range of our estimate of the fair market value of an Anzon Energy share. ASIC Regulatory Guide 111.10 provides that ‘an offer is fair if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer’. ASIC Regulatory Guide 111.62 provides that ‘an expert should usually give a range of values’ for the securities the subject of the offer.

The high end of our assessed value of an Anzon Energy share is above the high end of our assessed value of the consideration offered by ROC, and the valuation range of the consideration falls within the valuation range of a share in Anzon Energy. In relation to the Proposed Scheme, we consider that, if the value of the consideration offered falls within the range of values for an Anzon Energy share, the offer is fair. It is therefore our opinion that the Proposed Scheme is fair.



4.2 The Proposed Scheme is reasonable In accordance with ASIC Regulatory Guide 111 an offer is reasonable if it is fair. On this basis, in our opinion the Proposed Scheme is reasonable. We have also considered the following factors in assessing the reasonableness of the Proposed Scheme.

Advantages of the Proposed Scheme: The likely advantages to Shareholders if the Proposed Scheme is approved include:

The Proposed Merged Entity will have increased scale

The Proposed Merged Entity is likely to have a market capitalisation in excess of AUD 800 million with proved and probable (2P) reserves of approximately 341 million barrels of oil equivalent (mmboe). This does not take into account any shares in AZA that may be acquired by ROC under the AZA Takeover Offer.

The increased market capitalisation of the Proposed Merged Entity and enlarged shareholder base may attract greater analyst coverage. The inclusion in additional Australian Securities Exchange (ASX) indices may enhance the profile of the Proposed Merged Entity, particularly with institutional investors. These factors should provide increased liquidity and greater trading depth than that currently experienced by Shareholders. This may also result in a positive re-rating of shares in the Proposed Merged Entity.

As a result of the increased market capitalisation, the Proposed Merged Entity may have improved access to both debt and equity funds on possibly more attractive terms, compared with those currently available to Anzon Energy.

The Proposed Merged Entity is more diversified than Anzon Energy Anzon Energy, through its investment in AZA, is effectively a single project company and is therefore fully exposed to all the risks associated with the success or failure of the development of the BMG project.

The Proposed Merged Entity will have:

� exposure to a more diversified portfolio of assets than Anzon Energy on a stand alone basis, comprising the BMG project and ROC’s diversified portfolio of production and exploration assets

� higher annual production – combining production from the BMG project and ROC’s producing assets

� multiple assets in production – removing the single asset risk to which Anzon Energy is currently exposed.

Shareholders are receiving a premium to Anzon Energy’s share price prior to the announcement of the Proposed Scheme

The consideration offered under the Proposed Scheme includes a control premium.

We have assessed the value of the consideration per Anzon Energy share pursuant to the Proposed Scheme to be in the range of AUD 2.20 to AUD 2.55 per Anzon Energy share, or equivalent to GBP 1.05 to GBP 1.20 per Anzon Energy share.

The volume weighted average price (VWAP) of Anzon Energy shares was AUD 2.04 one day prior and AUD 1.98 30 days prior (or equivalent to GBP 0.98 one day prior and GBP 0.95 (30 days prior) to the announcement of the Proposed Scheme.

1 As per the Proposed Scheme announcement on the 16 June 2008, assuming a 53.0% attributable interest in AZA



It is possible, that prior to the announcement of the Proposed Scheme, the Anzon Energy share price may already have incorporated element of a control premium as the Company has been involved in two proposed scheme of arrangement during the past eight months.

The consideration represents a control premium to the share trading in Anzon Energy shares prior to the announcement of Proposed Scheme, in the region of 16% over the one day VWAP and 20% over the 30 day VWAP.

In the absence of the Proposed Scheme, Anzon Energy shares may trade below current levels

In the absence of the Proposed Scheme or an alternative transaction, Anzon Energy shares may trade below the prices achieved since the announcement of the Proposed Scheme. We would expect Anzon Energy shares to trade at a price consistent with our valuation of an Anzon Energy share, after adjusting our control value for an appropriate minority interest discount in the absence of the Proposed Scheme.

Disadvantages of the Proposed Scheme The likely disadvantages to Shareholders if the Proposed Scheme is approved include:

Diluted participation in future growth of the BMG project

Following completion of the Proposed Scheme, it is likely that Shareholders will hold approximately 33% 2 of the total issued shares in the Proposed Merged Entity. Shareholders will have their exposure to the expected earnings from the BMG project significantly diluted.

This dilution of earnings from the BMG project will be exchanged for the right to participate in earnings attributable to ROC’s producing assets and earnings from future exploration success.

Other matters Taxation implications

Shareholders may be entitled to capital gains tax rollover relief for the capital gains attributable to the consideration received. Further detail in respect of the potential taxation implications is provided in Section 17 of the Scheme Booklet.

The Proposed Scheme is not dependent on the outcome of the AZA Takeover Offer

The Proposed Scheme is not dependent on the outcome of the AZA Takeover Offer. However, the AZA Takeover Offer is contingent on the success of the Proposed Scheme.

Proposed management of the Proposed Merged Entity

Following the approval of the Proposed Scheme, at least one of the current Anzon Energy directors will be invited to join the board of ROC.

Further information on the board of directors of ROC is set out in Section 10.5 of the Scheme Booklet.

Previous offers

Over the past 12 months, Anzon Energy was a party to the merger agreement between Anzon Energy and ARC Energy Limited (ARC Energy) (Proposed Anzon Energy ARC Scheme) in October 2008 and the merger agreement between Anzon Energy and Nexus Energy Limited (Nexus) (Proposed Anzon Energy Nexus Scheme) in January 2008. In both cases, the merger schemes were subsequently terminated.

2 Assuming the Anzon Energy’s convertible notes currently outstanding will be fully redeemed



In accordance with ASIC Regulatory Guide 111 an offer is reasonable if it is fair. On this basis, in our opinion the Proposed Schemes is reasonable.

4.3 OpinionBased on the foregoing, we are of the opinion that the Proposed Scheme is fair and reasonable. It is therefore in the best interests of Shareholders.

An individual Shareholder’s decision in relation to the Proposed Scheme may be influenced by his or her particular circumstances. If in doubt the Shareholder should consult an independent adviser.



5 Valuation of the BMG project 5.1 IntroductionAnzon Energy has a 53.0% shareholding in AZA and has no other significant operating assets. AZA’s principal asset is the BMG project.

In determining the fair market value for the BMG project we have used the following methods:

� the market based method, with reference to recent transactions in the BMG project

� the discounted cash flow method.

These are discussed in the following sections.

5.2 Recent market transactions in the BMG projectRecent transactions in the asset being valued are considered to provide strong evidence of value, where the market is informed and parties are transacting at arm’s length.

There have been a number of transactions in the BMG project in recent years involving various parties at different stages of the project’s development. The following table provides a summary of each of the transactions and the implied value for the entire BMG project, based on the interest transacted.

Table 2: Summary of transactions in the BMG project

Date of

transaction Purchaser

% of

interest

Stage of

development

Transaction

value

(AUD

million)

Implied

value for

100%

(AUD

million)

Total

reserves

and

resources3

(mmboe)

Implied

AUD/boe

August2005

Beach1 12.5% Pre Basker-2 drilling

39.0 312.0 49.5 6.3

December 2005

Beach1 12.5% Post first oil production from Basker-2

50.0 400.0 49.5 8.1

August2007

ItochuCorporation

20.0%2 Post completion of FFD and in advanced stage of planning the Integrated field development

246.0 1,230.0 114.1 10.8

February 2008

SojitzCorporation

10% Commenced phase II of the field integrated plan

123.0 1,230.0 114.1 10.8

Source: AZA, Deloitte analysis Notes:

1. Beach – Beach Petroleum Limited 2. AZA and Beach each sold a 10% interest in the BMG project to Itochu Corporation for AUD 123 million 3. Including 2P oil reserves and best estimate contingent gas resources based on reserve and resource figures sourced from

Gaffney, Cline and Associates (GCA) reports dated October 2005 and August 2006



transactions and the 2007 and 2008 transactions, with the implied value per boe increasing from AUD 6.3 in August 2005 to AUD 10.8 in August 2007 and February 2008. The increase in value is likely to be due to the following:

� a large reduction in the risk of the BMG project between the date of each of the transactions, as the BMG project has progressed from an early stage of development (with only one well, Basker-2, drilled) to completing the initial Basker-Manta oil development project, to its current position

� a significant increase in 2P oil reserves and best estimate contingent gas resources in June 2006

� a significant amount of capital expenditure has been incurred

� increased expectations for oil and gas prices.

Since these transactions, AZA has released the drilling results for the Basker-6 and Basker 6-side track one (ST1) development wells and the BMG joint venture (JV) has announced its intent to move forward with the integrated field development plan. In addition, the oil price has continued to increase. Notwithstanding these factors, we consider the transaction with Sojitz Corporation is good evidence of the value of the BMG project. Based on the above market evidence, the implied value of 100% of the BMG project is AUD 1.23 billion.

5.3 The discounted cash flow method The discounted cash flow method estimates market value by discounting a company’s future cash flows to their net present value. To value the BMG project using this method requires the determination of the following:

� future cash flows

� an appropriate discount rate to be applied to the cash flows.

In addition, we have considered a premium to the discounted cash flow valuation to account for a number of items which may contribute to the future cash flows of the BMG project, which are not included in the financial model for the BMG project, prepared my the management of AZA in January 2008 (the Model).

Our considerations on each of these components are presented below.

5.3.1 Future cash flows of the BMG project

The Model We have previously valued the BMG project using the discounted cash flow method, in our reports dated 3 March 2008 (Deloitte’s Previous Expert’s Reports), in connection with the Proposed Anzon Energy Nexus Scheme and the proposed merger between AZA and Nexus. We have not subsequently had access to AZA management nor a more current version of the financial model for the BMG project.

To derive an estimated market value for the BMG project, we have therefore used the Model that was made available to use for the preparation of Deloitte’s Previous Expert’s Reports.

The Model was built by AZA management in January 2008 and is based on the following information:

� GCA certified 2P oil reserves and best estimate contingent gas and condensate resources from the BMG project dated June 2006

� the integrated field development plan for the BMG project dated December 2006.



The Model includes projections of nominal after-tax cash flows denominated in AUD for the BMG project for the 12 years to 31 December 2020. The assumptions used in the Model are based on the technical information and analysis available to the management of AZA in January 2008.

At the time of preparing Deloitte’s Previous Expert’s Reports, we had discussions with AZA management concerning the preparation of the projections and their views regarding the assumptions on which the projections are based. Where it was considered appropriate, we made adjustments to the Model.

We have previously undertaken an analysis of the BMG project cash flow projections that included:

� analysing the Model, including limited procedures regarding the mathematical accuracy of the Model (but we have neither formally reviewed nor audited the Model)

� analysing the reasonableness of assumptions such as production profile, capital expenditure, operating costs, site rehabilitation and abandonment costs, depreciation, petroleum resource rent tax (PRRT) and taxes. A number of these inputs could be verified against a report prepared by GCA dated 16 August 2006, the integrated field development plan dated December 2006 and actual contracts and quotes secured and obtained by AZA.

On 7 July 2008, the BMG JV announced its intent to move forward with the integrated field development plan. The announcement included details of the proposed field development plan including key milestones. The Model is broadly consistent with the details included in the announcement, with the exception of capital costs which are expected to be approximately 5% higher than originally projected.

To take account of matters arising subsequent to the preparation of the Model and Deloitte’s Previous Expert’s Reports, we have further adjusted the Model as follows:

� to reflect a current fair market value of the BMG project we have adjusted the Model to incorporate the actual economic factors, such as oil and gas prices and foreign exchange rates for the six month period to June 2008. The Model incorporates cash flows generated from the BMG project up to the end of June 2008. We have further adjusted the Model to reflect our current assessment of future prices for oil and gas and foreign exchange rates

� the announcement of drilling results of Basker-6 and Basker 6-ST1 development wells has led to some uncertainty around the potential oil reserves and resources for the BMG project. AZA has not publicly released information outlining the impact of the wells on overall reserves and resources for the BMG project. To take account of the potential impact of the results from the Basker-6 and Basker 6-ST1 development wells on our valuation, we have considered the potential valuation outcome assuming reserves and resources and annual production rates are 5% and 10% lower than previously projected

� based on AZA’s announcement on 7 July 2008, projected capital costs have increased by approximately 5%. To allow for the increase in projected costs for capital and operating expenditure have increased, we have considered the potential valuation outcome assuming the costs have increased by 5% and 10%.

We have not undertaken a review of the projections in accordance with AUS 804 – The Audit of Prospective Financial Information. However, nothing has come to our attention as a result of our analysis that suggests the assumptions on which the projections are based have not been prepared on an appropriate basis.

Revenue assumptionsRevenue is a function of commodity prices and estimated volume, based on reserves and resources and the production profile.



Crude oil and condensate pricing The BMG project sells its oil on a spot cargo basis to local or international oil refineries. In considering an appropriate price to apply to the future sales of oil, we have had regard to the following:

� West Texas Intermediate (WTI) crude oil price

� Importer refinery acquisition cost (IRAC) reported by the Energy Information Administration (EIA)

� New York Mercantile Exchange (NYMEX) futures prices

� Asia Pacific Pricing Index (APPI) Tapis crude oil prices

� other publicly available industry estimates and commentary, including, but not limited to, industry research and brokers estimates.

Based on our analysis, we have adopted crude oil pricing, as set out below:

� the NYMEX futures prices in the short term

� medium term pricing based on consensus analyst projections

� a long term real oil price in the range of 75 United States Dollars (USD) to USD 85 per barrel in 2011 and thereafter. We have also shown valuation outcomes at long term prices of USD 70 per barrel and USD 90 per barrel.

The following table outlines the future real oil prices adopted in the Model.

Table 3: Real oil price assumptions

Calendar year 2008 2009 2010 2011 Thereafter

Real oil price USD/bbl1 135 110 95 75 – 85 75 – 85 Source: Deloitte analysis

Note: 1. bbl - barrel

� we have adopted an inflation rate to apply to our real pricing assumption, to express the prices in nominal terms. The assumption is set out in the following table:

Table 4: Inflation used in the Model

2009 2010 2011 2012 Thereafter

Inflation 3.3% 2.9% 2.6% 2.6% 2.5% Source: Deloitte analysis

� we have adopted the current forward exchange rate to convert USD denominated revenue to AUD.

Natural gas pricing Pricing for long term gas supply contracts is generally negotiated between the parties and is not typically publicly available information, due to the commercial sensitivity of the agreements.



In estimating an appropriate price to apply in the Model for the sale of natural gas from the BMG project to the Eastern Gas Pipeline, we have considered the following:

� industry estimates and commentary including, but not limited to the Australian Bureau of Agricultural and Resources Economics (ABARE)

� various broker estimates

� the pricing in the conditional contract between AZA and Alinta Limited (Alinta), which lapsed on 26 June 2007.

On the basis of our analysis, we have adopted gas prices in the range of AUD 3.25 per gigajoule (GJ) to AUD 3.75 per GJ from 1 January 2008.

It is common industry practice for gas pricing to escalate each year. We have adopted an escalation factor of 2.5%, consistent with the inflation assumption adopted in the Model, for the duration of the projection period.

Volumes

Reserves and resources The projected total production volume of crude oil and natural gas over the life of the BMG project in the Model is consistent with GCA’s certified 2P oil reserves and best estimate natural gas and condensate contingent resources in June 2006.

The results of the recent drilling at Basker-6 highlighted some uncertainty as to the potential volume of crude oil able to be produced. As a result, we have considered the potential impact on the fair market value of the BMG project if the total reserves and contingent resources were 5% and 10% below GCA’s June 2006 certified level.

Production rates The rate of production for oil and gas assumed in the Model is projected to maximise the value of the BMG project. However, these rates are limited by the infrastructure in place and hence the amount of capital expenditure on facilities, including the drilling of wells and establishment of subsea structure.

Based on the existing wells, the production rate of crude oil is projected to be 12,000 barrels of oil per day (bopd) until October 2009. This production rate has been achieved in the past with volumes reaching 15,000 bopd.

The integrated field development plan involves drilling three new Basker oil wells, one Manta gas well and one Gummy gas well. In addition, a new floating production storage offtake vessel (FPSO) will be leased to replace the current FPSO and the shuttle tanker. The new FPSO will have oil storage capacity of 850,000 barrels and will be suitable for handling higher oil, water and gas rates than the current system. Upon completion of these projects, the projected flow rates are set out below:

� crude oil is expected to peak at 25,000 bopd by April 2010 and decline progressively at approximately 2.1% per month thereafter

� first gas production will be in April 2010 with annual production of 35 petajoules (PJ) thereafter

� condensate production is expected to commence at 1,700 bopd and increase to a 2,450 bopd by 2018 and thereafter.

As set out above, we have considered the potential impact on value if the annual production profile were 5% and 10% below the original assumptions in the Model.



Capital costs Capital costs have previously been projected to provide sufficient production facilities to deliver the projected production rates and volume. Capital costs comprise the following:

� the expected cost of hiring a drilling rig and a drilling schedule determined by AZA’s operational team

� subsea equipment and installation for an additional three oil wells, two gas wells and Manta manifold

� other capital infrastructure such as offshore and onshore pipelines and facilities.

We have previously assessed the capital cost assumptions against the integrated field development plan, service contracts and quotes obtained by management of AZA and concluded that the projected capital costs included do not appear unreasonable.

The capital costs in the Model do not include the cost incurred in relation to sidetracking the Basker-6 development well. We have therefore allowed for additional capital costs of AUD 20 million, based on a high level estimate of the expenditure.

In addition, in its 7 July 2008 announcement, AZA indicated the total project costs for the integrated field development are expected to be AUD 1.23 billion. This amount is approximately 5% greater than that included in the Model.

Accordingly, in deriving our valuation for the BMG project we have increased capital costs by 5% in the Model. We have further considered the potential value impact if the capital costs were a further 5% higher.

Operating costs The Model includes projections of operating costs, including:

� FPSO and shuttle tanker leasing costs – including the leasing of Crystal Ocean up to the first quarter in 2010 and the new FPSO thereafter. The lease of the shuttle tanker will cease once the new FPSO is in place

� subsea costs – based on a fixed cost per month to operate wells and subsea facilities from the FPSO. Operating costs will not increase with the additional subsea facilities flowing into the system, given that no additional resources or personnel will be required on the new FPSO

� onshore support costs – based on a fixed cost per month for the number of personnel involved in onshore operations

� well intervention costs – based on a fixed cost on an annual basis for mechanical well repairs. The Model assumes that each well will require one mechanical repair over a 12 year life

� corporate overhead costs – based on a fixed cost per month for head office support and overheads

� abandonment costs – based on fixed costs for trenching and in-situ vitrification work for each well, and vessel and trencher hire. On average, the abandonment cost for each well is approximately AUD 5 million in nominal terms

� escalation – all operating costs are escalated at rates set out in Table 4.

These assumptions are based on information previously available, including AZA’s historical operating costs, the integrated field development plan and recent tenders for the new FPSO and we concluded that the operating costs projected in the Model did not appear unreasonable.



Similar to projected capital costs, our valuation of the BMG project is based on a 5% increase in the projected operating costs in the Model. We have considered the potential impact on the value if the operating costs were a further 5% higher.

OtherIn addition to the above assumptions, the Model assumes the following:

� PRRT is payable by AZA on its oil and gas revenue at a rate of 40%

� tax depreciation for oil and gas assets are based on the ‘project pool’ approach

� a corporate tax rate of 30% over the life of the fields, with all taxes paid quarterly in arrears

� there are no material working capital requirements.

5.3.2 Discount rates The discount rate used to equate the future cash flows to present value reflects the risk adjusted rate of return demanded by a hypothetical investor. We have selected a nominal after tax discount rate in the range of 11.0% to 12.0% to discount the future cash flows of the BMG project to their present value.

In selecting this range of discount rate, we have considered the following:

� the required rate of returns for comparable listed Australian and international exploration and production companies

� the debt to equity ratios of comparable oil and gas exploration and production companies

� company specific risks attributable to the BMG project

� an appropriate long term cost of debt for AZA.

A detailed consideration of these matters is provided in Appendix 2 of our detailed report.



5.3.3 The discounted cash flow valuation In the following table we have set out the fair market value of the BMG project derived from the discounted cash flow method under various long term oil price, reserves and resources and annual production rate assumptions.

Table 5: Summary of the discounted cash flow valuation – oil price, reserves and resources and annual

production rate assumptions (AUD million)

Oil price assumptions per bbl Discount rate

Implied

value

(boe)

Assuming long term gas price of AUD 3.50/GJ 12.00% 11.50% 11.00% (midpoint)

Base case USD 70 1,034 1,055 1,077 9.2 USD 75 1,089 1,111 1,134 9.7 USD 80 1,144 1,167 1,192 10.2 USD 85 1,198 1,223 1,249 10.7 USD 90 1,253 1,279 1,307 11.2 95% reserves/resources and 95% production rate USD 70 912 930 948 8.2 USD 75 961 980 1,000 8.6 USD 80 1,010 1,030 1,051 9.0 USD 85 1,059 1,081 1,103 9.5 USD 90 1,108 1,131 1,154 9.9 90% reserves/resources and 90% production rate USD 70 843 859 876 7.5 USD 75 890 908 926 8.0 USD 80 937 956 975 8.4 USD 85 984 1,004 1,025 8.8 USD 90 1,031 1,053 1,074 9.2


In the following table we have set out the fair market value of the BMG project derived from the discounted cash flow method under different gas price assumptions.

Table 6: Summary of the discounted cash flow valuation – gas price assumption (AUD million)

Gas price assumptions Discount rate

Implied

value

(boe)

Long term oil price of USD 80/ bbl 12.00% 11.50% 11.00% (midpoint)

Base case AUD 3.25 1,122 1,145 1,169 10.0 AUD 3.50 1,144 1,167 1,192 10.2AUD 3.75 1,165 1,189 1,215 10.4 Source: Deloitte analysis



In the following table we have set out the fair market value of the BMG project derived from the discounted cash flow method under different capital and operating cost assumptions.

Table 7: Summary of the discounted cash flow valuation – capital and operating cost assumptions

(AUD million)

Capital and operating cost assumptions Discount rate

Implied

value

(boe)

Long term oil price of USD 80/ bbl and gas price of

AUD 3.50/GJ 12.00% 11.50% 11.00% (midpoint)

Base case 1,144 1,167 1,192 10.2 A further 5% increase 1,056 1,079 1,101 9.5 Source: Deloitte analysis

The value of the BMG project is most sensitive to the long term real oil price assumption. A change to the long term oil price assumption of USD 10 per barrel results in a change of approximately 10% to the value of the BMG project.

The value of the BMG project is also sensitive to increased capital and operating cost assumptions. A further 5% increase in projected operating and capital costs reduces the value of the BMG project by approximately 7% from the base case value.

The value of the BMG project is not particularly sensitive to the discount rate or gas price adopted.

Based on the above analysis, the discounted cash flow method derives a current fair market value of the BMG project in the range of AUD 1,000 million to AUD 1,100 million.

5.3.4 Premium to discounted cash flow value The Model is based on the integrated field development plan for the BMG project dated December 2006 and represents the net cash flows attributable to the adjusted assumptions, which was originally derived from the GCA certified 2P oil reserves and best estimate of gas and condensate resources from the BMG project.

However, there are a number of items which may contribute to the future cash flows of the BMG project which are not included in the Model. These items include:

� life of fields greater than that captured in the Model – additional upside from existing field production over the period of the Model, as actual reserves over the life of fields are generally in excess of original estimates. As set out in Table 6 of our detailed report, as a high estimate, AZA has 817.9 PJ of gas, 45.2 million barrels of condensate and 1.6 million barrels of oil currently considered contingent resources, which have the potential to be sold in the future

� additional investment in infrastructure – the rate of production of oil and gas are limited by the infrastructure in place and hence the level of capital expenditure on facilities, including the drilling of wells and establishment of subsea structure. Accordingly, additional investment in infrastructure may enhance the value of the project

� exploration and discovery of further resources from existing acreage – additional discoveries within the BMG project tenements could be developed in conjunction with the existing and proposed BMG infrastructure

� higher gas prices – AZA may be able to contract at levels in excess of the gas prices adopted in the discounted cash flow valuation. In the event that higher gas prices are achieved, additional contingent resources may be sold



� potential strategic value – a potential purchaser of AZA may also be willing to pay a premium in excess of the discounted cash flow value for the strategic value offered by AZA and the BMG project. This strategic value may relate to the large potential resource base, access to infrastructure and pipeline networks and demonstrable production capability.

While all of the above factors cannot be precisely estimated, we have had regard to the potential value impact of each factor and exercised our professional judgement to estimate the overall impact on the value of the BMG project.

Based on this analysis, we have added a premium of 5% to 10% to our discounted cash flow valuation of the BMG project. The resulting value is in the range of AUD 1,050 million to AUD 1,210 million.

5.3.5 Summary of valuation for BMG project The following table sets out our valuations of the BMG project, including the implied value of the BMG project on a per barrel basis.

Table 8: Summary valuation – BMG project

Value of the BMG project

(AUD million)

Implied value per boe

(AUD)1

Sojitz Corporation – February 2008 1,230 10.8 Fair market value based on the discounted cash flows plus premium

1,050 - 1,210 9.2 – 10.6.

Deloitte assessed value for the BMG project

1,050 – 1,230 9.2 – 10.8

Source: Deloitte analysis Note:

1. Based on 2P reserves and best estimate resources of 114.1 million boe

Having considered the implied value from the recent transaction in the BMG project in February 2008 and the range of values derived from the discounted cash flow method, we have assessed the value of the BMG project to be in range of AUD 1,050 million to AUD 1,230 million. Accordingly, the value for AZA’s 40% interest in the BMG project is in the range of AUD 420 million to AUD 492 million.



6 Valuation of Anzon Energy 6.1 Valuation of Anzon Energy before the Proposed

SchemeWe have estimated the fair market value of Anzon Energy before the Proposed Scheme by determining the value of Anzon Energy’s interest in AZA, employee share options on issue and the net debt of Anzon Energy. We have cross checked our valuation of Anzon Energy using the following methods: � the enterprise value to 2P boe ratio (Reserve Ratio), whereby we have compared the

Reserve Ratio implied by our valuation of Anzon Energy with the Reserve Ratio of listed comparable companies

� the enterprise value to earnings before interest and tax (EBIT) multiple (EBIT multiple), whereby we have compared the EBIT multiple implied by our valuation of Anzon Energy with the EBIT multiples observed for listed comparable companies.

These are discussed in Sections 6.2 to 6.4.

6.2 Value of AZA We have estimated the fair market value of AZA before the Proposed Scheme using the sum of the parts methodology, including its interest in the BMG project, exploration portfolio, interest in Nexus, outstanding share options and net cash position.

6.2.1 AZA interest in the BMG projectAs shown in Section 5.3.5, our selected value for the BMG project is in the range of AUD 1,050 million to AUD 1,230 million. Accordingly, the value for AZA’s 40% interest in the BMG project is in the range of AUD 420 million to AUD 492 million.

6.2.2 Surplus assets AZA currently owns a portfolio of exploration assets outside the BMG project (refer to Section 3.2.7 of our detailed report), and a 10.3% interest in Nexus. The potential cash flows from these assets are not included in the Model and we have therefore treated them as surplus assets and have valued them separately.

Value of the exploration assets Forecast cash flows for the exploration assets are not available. In attributing a value to the exploration interests we have considered the following:

� exploration costs to date

� a resource multiple per unit of hydrocarbon.

Based on our previous analysis and discussions with AZA management regarding the characteristics and likely future prospects for the exploration interests, we have valued the exploration interests at between AUD 10.0 million and AUD 20.0 million.

Value of AZA’s shareholding in Nexus We have valued AZA’s stake in Nexus in the range of AUD 110.0 million to AUD 120.0 million, based on recent trading in Nexus shares.



6.2.3 Share options There are currently 18,750,000 share options on issue, which is equivalent to 5.2% of the total number of issued shares in AZA. These share options have vested with strike prices ranging from AUD 0.45 to AUD 1.47. We have valued these share options at their intrinsic value at AUD 15.6 million and deducted the value to reflect a dilution in the value of AZA.

6.2.4 Net debt AZA’s unaudited net debt position at 29 January 2008 was as follows:

Table 9: Net debt

(AUD million)

Current interest bearing liabilities 43.3Cash (54.9)Net debt/(cash) position (11.6)Capital gains tax liability associated with Itochu Corporation transaction 36.9Net debt after allowing for capital gains tax liability 25.3

Source: AZA, Deloitte analysis

AZA’s net cash position at 29 January 2008 is AUD 11.6 million. We have further adjusted the net cash position to allow for a capital gains tax liability associated with the Itochu Corporation transaction. The majority of AZA’s interest bearing debt and the proceeds from Itochu Corporation are denominated in USD. We have converted these items to AUD by applying an exchange rate of USD 0.96 per AUD as at 30 June 2008. Cash flows generated from the BMG project for the six month period to 30 June 2008 are included in the value derived by the Model.

6.2.5 Summary of valuation of AZA The following table summarises our valuation of AZA.

Table 10: Summary valuation – AZA1

Units

Low value

of AZA

High value

of AZA

AZA’s 40% interest in the BMG project AUD million 420.0 492.0 Surplus assets Exploration assets AUD million 10.0 20.0 10.3% interest in Nexus AUD million 110.0 120.0 Share options AUD million (15.6) (15.6) Net debt AUD million (25.3) (25.3)

Equity value (control value) AUD million 499.1 591.1

Value per AZA share2 AUD million 1.35 1.60

Source: Deloitte analysis Notes:

1. The above figures are subject to rounding 2. Based on 370.6 million AZA share outstanding



6.2.6 ConclusionWe have assessed the fair value of AZA to be in the range of AUD 499.1 million to AUD 591.1 million.

6.3 Value of Anzon Energy

6.3.1 Anzon Energy’s interest in AZA Our selected value for AZA is between AUD 499.1 million and AUD 591.1 million. Accordingly, the value of Anzon Energy’s 53.0% interest in AZA is in the range of AUD 265.0 million to AUD 313.9 million.

6.3.2 Convertible notes Anzon Energy currently has 2,000 unsecured convertible notes on issue, with a face value of GBP 10,000 per unsecured note. The holders of the convertible notes have several alternatives to realise their investment, including redemption or conversion of the notes. The economic impact of each alternative to Shareholders is similar. We have assumed that the unsecured convertible notes will be redeemed in accordance with the conditions in the Unsecured Convertible Note Deed Poll dated 27 September 2006.

6.3.3 Share options held in AZA Anzon Energy currently holds 7,300,000 share options in AZA. These options have vested and are currently in the money, with strike prices ranging from AUD 0.45 to AUD 0.86.

We have valued these outstanding share options at their intrinsic value at AUD 5.8 million, based on the mid point of our implied value range of an AZA share (refer to Section 7.4).

6.3.4 Employee share options There are currently 8,050,000 employee share options on issue, which is equivalent to 7.7% of the total number of issued shares in Anzon Energy. These employee share options have vested and are currently in the money. As part of the Proposed Scheme, all employee share options issued will either be purchased by ROC or exercised prior to the Scheme Meeting.

The impact of each alternative to Shareholders is similar. We have deducted the intrinsic value of the outstanding employee share options of AUD 14.2 million in our valuation of Anzon Energy, assuming the employee share options will be purchased by ROC. The intrinsic value is calculated based on the mid point of our implied value range of an AZA share (refer to Section 7.4).

6.3.5 Net debt Management of Anzon Energy expects the net debt immediately prior to the completion of the merger to be approximately AUD 34.8 million, after allowing for the repayment of the unsecured loan notes and the payment for the redemption of the unsecured convertible notes.



The following table summarises our valuation of Anzon Energy.

Table 11: Summary valuation – Anzon Energy3

Units Low value High value

Shares in AZA – 53.0% interest AUD million 265.0 313.9 Options in AZA AUD million 5.8 5.8 Employee share options AUD million (14.2) (14.2) Net debt AUD million (34.8) (34.8) Equity value of Anzon Energy (control value) AUD million 221.8 270.7

Valuation of Anzon Energy on per share basis1 AUD per share 2.12 2.59

Assessed value of an Anzon Energy share AUD per share 2.10 2.60

Valuation of Anzon Energy on per share basis2 GBP per share 1.03 1.25

Assessed value of an Anzon Energy share2 GBP per share 1.00 1.25 Source: Deloitte analysis Notes:

1. Based on 104.5 million outstanding Anzon Energy shares 2. Based on the spot GBP per AUD exchange rate of GBP 0.48 3. Figures above are subject to rounding

6.4 Cross checks We have cross checked the value of Anzon Energy with reference to the EBIT multiple and Reserve Ratio implied by our valuation of Anzon Energy compared to those observed for comparable listed companies.



The following table sets out the EBIT multiple and Reserve Ratio implied by our selected valuation range of AUD 2.10 to AUD 2.60 per share, equivalent to GBP 1.00 to GBP 1.25 for Anzon Energy.

Table 12: Cross checks of value of Anzon Energy 1, 4


Value per Anzon Energy share AUD 2.10 2.60 Shares outstanding in Anzon Energy million 104.5 104.5 Equity value of Anzon Energy AUD million 219.5 271.8 Net debt AUD million 34.8 34.8 10.3% interest in Nexus (Anzon Energy’s 53.0% share)

AUD million (58.4) (63.7)

Exploration assets (Anzon Energy’s 53.0% share) AUD million (5.3) (10.6) Enterprise value of the oil and gas assets AUD million 190.6 232.3

Anzon Energy EBIT2 AUD million 72.9 72.9 Implied EBIT multiple times 2.6 3.2 2P reserves of Anzon Energy3 mmboe 8.3 8.3 Implied Reserve Ratio times 22.9 27.9 Source: Deloitte Analysis

Notes: 1. While Anzon Energy is listed on London’s AIM Stock Exchange, the comparable companies are Australian based

companies. We have therefore presented the above cross check in AUD 2. There is no forecast consensus EBIT available for Anzon Energy. Given that Anzon Energy’s only significant asset is its

53.0% shareholding in AZA, we have adopted 53.0% of the forecast 2008 EBIT for AZA, as a proxy for the forecast 2008 EBIT for Anzon Energy. Anzon Energy does not have any other assets that contribute to its earnings

3. We have assumed 53.0% of AZA’s 2P reserves to be a proxy for Anzon Energy’s 2P reserves 4. Figures are subject to rounding

The EBIT multiple implied by our valuation of an Anzon Energy share is lower than those observed for comparable listed companies (listed in Appendix 3 of our detailed report). This may be due to the following: � Anzon Energy’s only significant asset is its 53.0% shareholding in AZA � AZA is effectively a single asset company, with significant reliance on the success of the

BMG project. Any disruption to the production from the BMG project will have an immediate adverse impact on AZA. By comparison, the comparable companies generally have interests in multiple projects, at various stages of development

� the life of the BMG project is relatively short, with the majority of cash flows projected to be realised by 2011

� significant capital expenditure is projected for the BMG project over the next two years, in order to develop the BMG project’s contingent gas resource

� AZA has several exploration assets, however, they are at a very early stage of exploration. The Reserve Ratio implied by our valuation of an Anzon Energy share is consistent with the average Reserve Ratio observed for comparable listed companies.

In our view, the Reserve Ratio cross check provides support for our valuation per share in Anzon Energy.



6.5 ConclusionWe have assessed the fair value of an Anzon Energy share to be in the range of AUD 2.10 to AUD 2.60, equivalent to the range of GBP 1.00 to GBP 1.25.



7 Valuation of Proposed Merged Entity 7.1 IntroductionIn this section we have estimated the fair market value of a share in the Proposed Merged Entity. This valuation has been performed on a minority interest basis because Shareholders who accept the Proposed Scheme will become minority holders of shares in the Proposed Merged Entity.

We are of the opinion that the most appropriate methodology to value a share in the Proposed Merged Entity is the market based method, based on recent share market trading activity in ROC shares.

We have not used the sum of the parts methodology for the valuation of a share in the Proposed Merged Entity as, in our view, the sum of the parts methodology derives a control value and does not represent the market price that Shareholders can achieve from the sale of a Proposed Merged Entity share. In addition, we did not have sufficient information on ROC’s assets to undertake valuation of ROC using the sum of the parts methodology.

Furthermore, we have compared the EBIT multiple and Reserve Ratio implied by our valuation of the Proposed Merged Entity with the EBIT multiples and Reserve Ratios observed in listed comparable companies.

7.2 Analysis of recent share trading in ROC

7.2.1 Basis of assessment The decision whether to hold or sell shares in the Proposed Merged Entity in the future is an investment decision which Shareholders will have to make if the Proposed Scheme proceeds. This report has not been prepared to assist Shareholders in deciding whether to hold or sell shares in the Proposed Merged Entity after the completion of the Proposed Scheme. Accordingly, our assessment of the consideration offered to Shareholders has been based on the current market value of the consideration offered and does not necessarily reflect our assessment of the long term prospects for the underlying business of the Proposed Merged Entity.

The market can be expected to provide an objective assessment of the fair market value of shares in a listed entity where the market is well informed and liquid. Market prices incorporate the influence of all publicly known information relevant to the value of an entity’s securities. Due to the information available to the market regarding ROC, we believe that the current market price of a ROC share provides good evidence of the market price of the consideration offered. Accordingly, we have used an analysis of recent trading in ROC shares to estimate the fair market value of shares in the Proposed Merged Entity.

If the Proposed Scheme is approved, the new ROC shares issued to Shareholders will effectively be shares in the Proposed Merged Entity. Movements in the price of ROC shares since the announcement of the Proposed Scheme on 16 June 2008 will incorporate the market’s view of the prospects of the Proposed Merged Entity, to the extent that market participants expect the Proposed Scheme to be accepted and approved by Shareholders.

There may be some discount built into ROC’s current share price due to any remaining risk that the Proposed Scheme may not proceed. Accordingly, the price at which ROC’s shares would trade after the completion of the Proposed Scheme could be different to recent trading prices for ROC shares. However, we believe that recent trading in ROC shares is still the best evidence available of the price at which ROC shares would trade immediately after the completion of the merger between ROC and Anzon Energy.



The market price of ROC shares has fluctuated in response to factors such as the release of financial reports, exploration and drilling progress updates, changing commodity prices, the expected effect of the Proposed Scheme, changes in the market’s sentiment to the oil and gas industry and overall share market movements. The market price of ROC’s shares will continue to fluctuate in response to these factors. However, as we are providing an estimate of the current value of shares in the Proposed Merged Entity, our analysis has been limited to consideration of the price of ROC’s shares in recent trading on the ASX.

7.2.2 Factors affecting recent trading in ROC We consider that the current market price of a ROC share provides evidence of the value the market attributes to the consideration offered and the price at which shares in the Proposed Merged Entity would trade immediately after the completion of the Proposed Scheme. We base this opinion on the following factors:

� there is a reasonable volume of trading in ROC shares (refer to Section 4.5 of our detailed report). In the six months prior to the date of the announcement of the Proposed Scheme, the average volume of shares traded in ROC shares was 0.5% of the issued capital per day, or 61% for the entire period

� ROC provided an investor briefing on the Proposed Scheme, outlining the strategic benefits to ROC on 17 June 2008

� ROC announced the details of the Proposed Scheme to the market on 16 June 2008

� results of exploration activities in ROC’s assets are frequently released to the market

� ROC’s report for the quarter ended 31 March 2008 was released on 30 April 2008, providing the market with details of its recent operational performance

� ROC is followed by a number of equity analysts including UBS, JP Morgan, Citigroup Global Markets and Morgan Stanley. The value per ROC share derived from the discounted cash flow method by various equity analysts in recent analyst reports is in the range of AUD 2.40 to AUD 2.83.

Based on these factors, it is reasonable to assume that the share market price represents an objective assessment of the price at which shares in the Proposed Merged Entity would trade immediately after the completion of the Proposed Scheme.



7.2.3 Recent share market trading The Proposed Scheme was announced on 16 June 2008. From 16 June 2008 to 25 July 2008 ROC shares have traded in a range of AUD 1.55 to AUD 1.92 with a VWAP of AUD 1.74. The following table sets out the share market trading in ROC shares prior to and since the announcement of the Proposed Scheme.

Table 13: Summary – analysis of recent share trading

Low value

(AUD)

High value

(AUD)

Share prices after the announcement of the Proposed Scheme Closing share price trading range (up to 25 July 2008) 1.55 1.92 VWAP (up to 25 July 2008) 1.74 1.74

VWAP prior to the announcement of the Proposed Scheme 90 days prior to announcement 2.10 2.10 60 days prior to announcement 2.18 2.18 30 days prior to announcement 2.34 2.34 10 days prior to announcement 2.20 2.20 1 day prior to announcement 2.01 2.01


We consider that the market price of a ROC share after the announcement of the Proposed Scheme provides evidence of the value the market attributes to the value of a share in the Proposed Merged Entity.

In selecting a value range for a share in the Proposed Merged Entity, we have had regard to the recent market volatility, the VWAP of ROC shares since the announcement of the Proposed Scheme and the recent trading liquidity in ROC shares. We consider the fair market value of a share in the Proposed Merged Entity to be AUD 1.65 to AUD 1.90.

The trading price of a ROC share has declined significantly since the announcement of the Proposed Scheme. The current trading price of a ROC share of AUD1.55 is below our assessed value range for a ROC share. We recommend that Shareholders monitor the trading price of a ROC share up until the time of the Scheme Meeting.

7.3 Cross check for the Proposed Merged Entity We have cross checked the value of the Proposed Merged Entity with reference to the EBIT multiple and Reserve Ratio implied by our valuation of the Proposed Merged Entity, compared with those observed for comparable listed companies.



The following table sets out the EBIT multiples and Reserve Ratios implied by our selected valuation range of AUD 1.65 to AUD 1.90 per share of the Proposed Merged Entity.

Table 14: Implied EBIT multiples and Reserve Ratios


Value per share in the Proposed Merged Entity AUD 1.65 1.90 Shares outstanding in the Proposed Merged Entity1 million 448.6 448.6 Equity value of the Proposed Merged Entity AUD million 740.2 852.3 Net debt2 AUD million 122.9 122.9 Working capital AUD million 6.0 6.0 10.3% interest in Nexus (Anzon Energy’s 53.0% share) AUD million (58.4) (63.7) Enterprise value of the oil and gas assets in the Proposed Merged Entity AUD million 810.7 917.5 Proposed Merged Entity EBIT4 AUD million 166.1 166.1 Implied EBIT multiple times 4.9 5.5 Proposed Merged Entity 2P reserves3 mmboe 29.7 29.7 Implied Reserve Ratio times 27.3 30.9

Source: Deloitte Analysis Notes:

1. Refer to Section 5.4 of our detailed report, assuming that the Proposed Scheme is approved 2. Based on pro forma financial position of the Proposed Merged Entity 3. Based on 2P reserves of Anzon Energy and ROC 4. Estimated Financial Year (FY) 2009 EBIT for the Proposed Merged Entity is based on the sum of consensus forecast

estimates of FY2009 EBIT for ROC and 53.0% of AZA 5. Figures in the table are subject to rounding

The EBIT multiple implied by our valuation of a share in the Proposed Merged Entity is lower than those observed for comparable listed companies (refer to Appendix 3). This may be due to the following: � Anzon Energy has a low EBIT multiple as discussed in Section 6.4 � Significant exploration expenditure planned by ROC over the next two to five years, in

particular the Zhao Dong Block and Angola � ROC’s Cliff Head oil field is in decline � ROC is exposed to political risks in regards to its operations in China and Africa � ROC has several high risk exploration assets, however, they are at a very early stage of

exploration.

The Reserve Ratio implied by our valuation of a share in the Proposed Merged Entity is consistent the average Reserve Ratios observed for comparable listed companies.

In our view, the Reserve Ratio cross check provides support for our valuation of the Proposed Merged Entity.



7.4 ConclusionBased on the foregoing, we are of the opinion that the fair market value of a share in the Proposed Merged Entity is in the range of AUD 1.65 to AUD 1.90.



8 Valuation of consideration If the Proposed Scheme is approved, Shareholders will receive a number ROC shares equivalent to the Merger Ratio for every Anzon Energy share held. In the table below we have set out the value of the consideration, based on our assessed range for the value of a share in the Proposed Merged Entity.

Table 15: Valuation of consideration offered per Anzon Energy share

Section Value of consideration (AUD)

Low High

Value of a share in the Proposed Merged Entity 7.2.3 1.65 1.90 Total consideration per Anzon Energy share1 2.19 2.53 Assessed consideration per Anzon Energy share (AUD) 2.20 2.55Assessed consideration per Anzon Energy share (GBP) 1.05 1.20 Source: Deloitte analysis

Note: 1. Based on Merger Ratio calculation

Regardless of the outcome of the Proposed Scheme, the future price of a ROC share will vary, with general market movements, commodity prices, developments in the oil and gas industry and changes in ROC’s producing and exploration assets. We have assessed the value of the consideration offered based on our assessment of the current fair market value of a share in the Proposed Merged Entity. We have set out in the table below the effective consideration per Anzon Energy share for a range of possible market prices for a ROC share.

Table 16: Sensitivity of the value of the consideration offered per ROC share (AUD)

ROC share market price (AUD)

Consideration per

Anzon Energy share

(AUD)1

Consideration per

Anzon Energy share

(GBP)2

1.35 1.80 0.86 1.45 1.93 0.93 1.55 2.06 0.99 1.65 2.19 1.051.75 2.33 1.121.80 2.39 1.151.90 2.53 1.212.00 2.66 1.28 2.10 2.93 1.40 2.20 3.06 1.47


Notes:

1. Based on the Merger Ratio 2. Based on the spot GBP per AUD exchange rate of GBP 0.48



This report is a concise independent expert’s report. For further detail, please refer to our detailed report at www.anzonenergy.com. The contents of this report and our detailed report are outlined in Section 3.

Yours faithfully

DELOITTE CORPORATE FINANCE PTY LIMITED

Stephen Reid Nicki Ivory

Director Director



Appendix 1: Glossary

Reference Definition

2P Proved and Probable reserves ABARE Australian Bureau of Agricultural and Resource Economics AFSL Australian Financial Services Licence AIM Alternative Investment Market of the London Stock Exchange Alinta Alinta Limited Anzon Energy Anzon Energy Limited APPI Asia Pacific Pricing Index ARC Energy ARC Energy Limited ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange AUD Australian dollars AUS Australian Auditing Standards AZA Anzon Australia Limited AZA Takeover Offer An off market takeover offer by ROC AZA Takeover Offer Consideration The takeover consideration offered by ROC, which is 0.792 ROC share

and AUD 0.05 per AZA shares Beach Beach Petroleum Limited BMG Basker-Manta-Gummy boe Barrels of oil equivalent boepd Barrels of oil equivalent per day bopd Barrels of oil per day Company, the Anzon Energy Limited Corporations Act Corporations Act 2001 (Cwlth) Deloitte Deloitte Corporate Finance Pty Limited Deloitte’s Previous Expert’s Reports Previous valuation of the BMG project using the discounted cash flow

method, in our reports dated 3 March 2008, in connection with the Proposed Anzon Energy Nexus Scheme and the Proposed AZA and Nexus Scheme

Directors The directors of Anzon Energy EBIT Earnings before interest and tax EBIT multiple Ratio of enterprise value to EBIT EIA Energy Information Administration FOS Financial Ombudsman Service FPSO Floating production storage offtake vessel FSG Financial Services Guide FY Financial year GBP British pound GCA Gaffney, Cline and Associates GJ Gigajoule ICAA Institute of Chartered Accountants in Australia IRAC Importer refinery acquisition cost JV Joint venture Merger Ratio Under the Proposed Scheme, Shareholders would receive a number of

ROC shares for every Anzon Energy share held MID Merger Implementation Deed mmboe million boe



Reference Definition

Model, the Financial model for the BMG project prepared by the management of AZA in January 2008

Nexus Nexus Energy Limited NYMEX New York Mercantile Exchange Part 3 Part 3 of Schedule 8 of the Corporations Regulations 2001 (Cwlth) PJ Petajoules Proposed Anzon Energy ARC Scheme

Merger agreement between Anzon Energy and ARC Energy entered into on 24 October 2008

Proposed Anzon Energy Nexus Scheme

Merger agreement between Anzon Energy and Nexus entered into on 23 January 2008

Proposed Merged Entity Proposed merged entity comprising of Anzon Energy and ROC Proposed Scheme, the Proposal under which ROC and Anzon Energy will merge via a scheme

of arrangement Proposed Scheme Consideration If the Proposed Scheme is approved, Shareholders will receive 1.33

ROC shares for every Anzon Energy share PRRT Petroleum resource rent tax Reserve Ratio Enterprise value to 2P boe ratio ROC Roc Oil Company Limited Scheme Booklet A scheme booklet containing the detailed terms of the Proposed

SchemeScheme Meeting The Shareholder meeting to approve the Proposed Scheme Section 640 Section 640 of the Corporations Act Shareholders Existing holders of Anzon Energy shares ST1 Side track one USD United States dollars VWAP volume weighted average price WTI West Texas Intermediate



Appendix 2: Qualifications, declarations and consentsThe report and a concise version of this report have been prepared at the request of the Directors of Anzon Energy. The concise version of this report is to be included in the Scheme Booklet to be given to Shareholders for approval of the Proposed Scheme. Accordingly, each of these reports has been prepared only for the benefit of the Directors and those persons entitled to receive the Scheme Booklet to assist in their assessment of the Proposed Scheme outlined in the report and should not be used for any other purpose. We are not responsible to you, or any one else, whether for our negligence or otherwise, if the report is used by any other person for any other purpose. Further, recipients of this report should be aware that it has been prepared without taking account of their individual objectives, financial situation or needs. Accordingly, each recipient should consider these factors before acting on the Proposed Scheme.

The report represents solely the expression by Deloitte of its opinion as to whether the Proposed Scheme is in the best interest of the Shareholders as a whole. Deloitte consents to the concise version of this report being included in the Scheme Booklet and to this report being available from Anzon Energy’s head office and the company website.

Statements and opinions contained in this report are given in good faith but, in the preparation of this report, Deloitte has relied upon the information provided by Anzon Energy and its officers, employees, agents and advisors which Deloitte believes, on reasonable grounds, to be reliable, complete and not misleading. Deloitte does not imply, nor should it be construed, that it has carried out any form of audit or verification on the information and records supplied to us. Drafts of our report were issued to Anzon Energy management for confirmation of factual accuracy.

In recognition that Deloitte may rely on information provided by Anzon Energy and its officers, employees agents and advisors, Anzon Energy has agreed to make no claim against Deloitte to recover any loss or damage which Anzon Energy may suffer as a result of that reliance and that it will indemnify Deloitte against any liability that arises out of either Deloitte’s reliance on the information provided by Anzon Energy and its officers, employees, agents or advisors or the failure by Anzon Energy and its officers, employees, agents or advisors to provide Deloitte with any material information relating to the Proposed Scheme.

To the extent that this report refers to prospective financial information we have considered the prospective financial information and the basis of the underlying assumptions. The procedures involved in Deloitte’s consideration of this information consisted of enquiries of Anzon Energy personnel and analytical procedures applied to the financial data. These procedures and enquiries did not include verification work nor constitute an audit in accordance with Australian Auditing Standards, nor did they constitute a review in accordance with AUS 902 applicable to review procedures.

Based on these procedures and enquiries, Deloitte considers that there are reasonable grounds to believe that the prospective financial information for Anzon Energy included in this report has been prepared on a reasonable basis. In relation to the prospective financial information, actual results may be different from the prospective financial information of Anzon Energy referred to in this report since anticipated events frequently do not occur as expected and the variation may be material. The achievement of the prospective financial information is dependent on the outcome of the assumptions. Accordingly, we express no opinion as to whether the prospective financial information will be achieved.



Deloitte holds the appropriate AFSL to issue this report and is owned by the Australian Partnership Deloitte Touche Tohmatsu. The employees of Deloitte principally involved in the preparation of this report were Stephen Reid, Director, M App. Fin. Inv., B.Ec, F Fin, CA, Nicki Ivory, Director, B.Comm(Hons), CA,CFA, Jennifer Liu, Client Manager, CFA, B.Com (Hons) and Odette Linnett, Analyst, B.Comm, Grad Dip App. Fin. Inv. Stephen and Nicki each have many years experience in the provision of corporate financial advice, including specific advice on valuations, mergers and acquisitions, as well as the preparation of expert reports.

Neither Deloitte, Deloitte Touche Tohmatsu, nor any partner or executive or employee thereof has any financial interest in the outcome of the proposed transaction which could be considered to affect our ability to render an unbiased opinion in this report. Deloitte will receive a fee of AUD 60,000 exclusive of GST in relation to the preparation of this report. This fee is based upon time spent at our normal hourly rates and is not contingent upon the success or otherwise of the Proposed Scheme.

Consent to being named in Scheme Booklet Deloitte Corporate Finance Pty Limited (ACN 003 833 127) of 180 Lonsdale Street, Melbourne VIC 3000 acknowledges that:

� Anzon Energy proposes to issue an explanatory statement in respect of the scheme of arrangement between Anzon Energy and the holders of Anzon Energy shares

� the Scheme Booklet will be issued in hard copy and be available in electronic format

� it has previously received a copy of the draft Scheme Booklet (draft Scheme Booklet) for review

� it is named in the Scheme Booklet as the ‘independent expert’ and the Scheme Booklet includes its independent expert’s report in Appendix A of the Scheme Booklet.

On the basis that the Scheme Booklet is consistent in all material respects with the draft Scheme Booklet received, Deloitte Corporate Finance Pty Limited consents to it being named in the Scheme Booklet in the form and context in which it is so named, to the inclusion of its independent expert’s report in Appendix A of the Scheme Booklet and to all references to its independent expert’s report in the form and context in which they are included, whether the Scheme Booklet is issued in hard copy or electronic format or both.

Deloitte Corporate Finance Pty Limited has not authorised or caused the issue of the Scheme Booklet and takes no responsibility for any part of the Scheme Booklet, other than any references to its name and the independent expert’s report as included in Appendix A.

About Deloitte ‘Deloitte’ refers to the Australian partnership of Deloitte Touche Tohmatsu and its subsidiaries. Deloitte, one of Australia’s leading professional services firms, provides audit, tax, consulting, and financial advisory services through around 3000 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we arededicated to helping our clients and our people excel. For more information, please visit Deloitte’s web site at www.deloitte.com.au.

Deloitte is a member of Deloitte Touche Tohmatsu (a Swiss Verein). As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names “Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other, related names. Services are provided by the member firms or their subsidiaries and affiliates and not by the Deloitte Touche Tohmatsu Verein.

Liability limited by a scheme approved under Professional Standards Legislation.

Confidential - this document and the information contained in it are confidential and should not be used or disclosed in any way without our prior consent.

© Deloitte Touche Tohmatsu. July, 2008. All rights reserved.


19. Scheme

This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth)

Parties Anzon Energy Limited ABN 43 097 972 362 of Level 13, 90 Arthur Street, North Sydney, New South Wales (Anzon)

The holders of fully paid ordinary shares in the capital of Anzon (other than holders of Excluded Shares) as at the Transaction Record Date (Scheme Shareholders).

It is agreed

1. Definitions and interpretation

1.1 Definitions

In this Scheme:

(1) AIL means Anzon Investments Limited;

(2) AIM means the Alternative Investment Market operated by the London Stock Exchange;

(3) AIM Rules means the rules and guidance published by the London Stock Exchange governing admission to and operation of AIM as amended from time to time;

(4) Anzon Convertible Notes means convertible notes issued by AIL to RAK Petroleum PCL on the terms contained in the Unsecured Convertible Note Deed Poll, entitling the holder upon conversion to subscribe for or acquire Anzon Ordinary Shares;

(5) Anzon Group means Anzon and its Subsidiaries other than AZA;

(6) Anzon Net Cash means Anzon Group's total cash at bank less any outstanding indebtedness of Anzon Group on the Transaction Record Date, as certified pursuant to clause 5.1(18) of the Merger Implementation Deed and for the purposes of the calculation of Anzon Net Cash, the following shall apply:

(a) Anzon Net Cash shall be reduced by any amount paid or payable by ROC (including on behalf of the Anzon Group) to redeem, cancel or acquire the Anzon Convertible Notes;

(b) the face value of Anzon Convertible Notes that are outstanding at the Transaction Record Date and are subject to an agreement under which the Anzon Convertible Notes are to be redeemed, cancelled converted or acquired by ROC (or a Related Body Corporate of ROC) shall be excluded from the calculation of outstanding indebtedness. For the sake of clarity, Anzon Convertible Notes outstanding at the Transaction Record Date that are not subject to such an agreement shall be included in outstanding indebtedness;

(c) any accrued interest payable in relation to the Anzon Convertible Notes shall be excluded from the calculation of outstanding indebtedness (but to the extent any such accrued interest is not to be paid, or payable, by ROC under (a) above then it shall be included in the calculation of outstanding indebtedness);

(d) trade creditors and debtors shall be included in the calculation of Anzon Net Cash, which for the sake of clarity shall include outstanding corporate advisory costs and legal costs of Anzon in relation to the Merger (if any);

(e) Anzon Net Cash shall be increased by any amount paid in respect of Permitted Transactions;

(f) Anzon Net Cash shall be increased by an amount equal to the Anzon Options Proceeds;

(g) Anzon Net Cash shall be calculated in Australian dollars; and where any of the components required to determine Anzon Net Cash are expressed in a currency other than Australian dollars they shall be converted to Australian dollars at the relevant


exchange rate for that currency as quoted at close on Bloomberg on the Transaction Record Date.

(7) Anzon Options means options issued by Anzon entitling the holder to subscribe for or acquire Anzon Ordinary Shares;

(8) Anzon Options Proceeds means the cash proceeds which would have been received if all the Anzon Options outstanding at the Transaction Record Date had been exercised as at that date, which for the sake of clarity shall include all Anzon Options that are to be, or have been, acquired by ROC under an Option Purchase Agreement;

(9) Anzon Ordinary Share means a fully paid ordinary share in the capital of Anzon;

(10) Anzon Ordinary Shareholder means each person who is registered in the register of members of Anzon as a holder of one or more Anzon Ordinary Shares;

(11) ASIC means the Australian Securities and Investments Commission;

(12) ASX means the ASX Limited ABN 98 008 624 691 or, as the context requires, the financial market operated by it;

(13) AZA means Anzon Australia Limited ACN 107 406 771;

(14) AZA Options means options issued by AZA entitling the holder to subscribe for or acquire AZA Ordinary Shares;

(15) AZA Ordinary Share means a fully paid ordinary share in the capital of AZA;

(16) AZA Share Offer means the takeover offer by ROC to acquire all of the AZA Shares as contemplated in clause 2.4 of the Merger Implementation Deed;

(17) Business Day means a day that is not a Saturday, Sunday or any other day which is a public holiday in Sydney, Australia;

(18) Conditions Date means 8am on the day of the Second Court Date;

(19) Corporations Act means the Corporations Act 2001 (Cth);

(20) Court means the Federal Court of Australia or any other court of competent jurisdiction under the Corporations Act agreed in writing by ROC and Anzon;

(21) Deed Poll means the deed poll executed by ROC under which it covenants in favour of the Scheme Shareholders to perform its obligations under the Merger Implementation Deed and the Scheme;

(22) Effective Date means the date on which the Scheme becomes Effective, and for this purpose Effective means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the Scheme;

(23) End Date means 30 November 2008, or such later date as may be agreed by Anzon and ROC;

(24) Excluded Shares means any Anzon Ordinary Shares held by ROC or its Related Bodies Corporate;

(25) FSA means the United Kingdom Financial Services Authority;

(26) Governmental Agency means any foreign or Australian government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world, and includes FIRB, ASIC, FSA, London Stock Exchange and ASX (and any other securities exchange);

(27) Implementation Date means the fifth Business Day after the Transaction Record Date, or such other date as Anzon and ROC agree;


(28) Ineligible Foreign Shareholder means a Scheme Shareholder who is (or is acting on behalf of) a citizen or resident of a jurisdiction other than residents of Australia and its external territories or New Zealand (Relevant Jurisdictions) or whose address as shown in the Register at the Transaction Record Date is in a jurisdiction other than the Relevant Jurisdictions, except where Anzon and ROC are reasonably satisfied that the issue of New ROC Shares to the Scheme Shareholder is not prohibited, not unduly onerous and not unduly impracticable in that jurisdiction and is lawful for that person to participate in the Scheme by the law of the relevant place outside the Relevant Jurisdictions;

(29) Listing Rules means the official listing rules of the ASX;

(30) London Stock Exchange means London Stock Exchange Plc;

(31) Merger Implementation Deed means the merger implementation deed dated 16 June 2008 between Anzon and ROC relating to the implementation of the Scheme;

(32) New ROC Shares means the ROC Shares to be issued pursuant to the Scheme as Scheme Consideration;

(33) Nominee means a wholly owned subsidiary of ROC nominated by ROC under clause 2.5 of the Merger Implementation Deed;

(34) Option Purchase Agreement means an agreement between ROC and a holder of Anzon Options under which ROC has agreed to purchase all of that holders Anzon Options in exchange for ROC Shares such agreement to be subject to the Scheme becoming effective;

(35) Permitted Transactions means any acquisitions made by Anzon as contemplated by paragraph (h)(iv) of the definition of Anzon Prescribed Occurrence in the Merger Implementation Deed;

(36) Register means the register of members of Anzon;

(37) Registrar means Computershare Investor Services Pty Limited ACN 078 279 277;

(38) Related Body Corporate has the meaning given in Section 50 of the Corporations Act;

(39) ROC means Roc Oil Company Limited ABN 32 075 965 856;

(40) ROC Register means the register of members of ROC;

(41) ROC Shares means fully paid ordinary shares in the capital of ROC;

(42) Sale Facility means the facility made available to Ineligible Foreign Shareholders and under which the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme are sold, to be implemented by the Sale Facility Agent, the terms of which are to be more fully described and contained in the Scheme Booklet;

(43) Sale Facility Agent means the appropriate licensed agent appointed by ROC to administer the Sale Facility;

(44) Scheme means this scheme of arrangements subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by Anzon and ROC;

(45) Scheme Booklet means the scheme booklet of Anzon in relation to the proposed scheme of arrangement between Anzon and holders of its ordinary shares pursuant to Part 5.1 of the Corporations Act;

(46) Scheme Consideration means the consideration to which Scheme Shareholders are entitled for the transfer of each Anzon Ordinary share in accordance with this Scheme;

(47) Scheme Meeting means the meeting of Anzon Ordinary Shareholders ordered by the Court to be convened under section 411(1) of the Corporation Act;


(48) Scheme Shareholders means each person, who is registered in the register of members of Anzon as the holder of an Anzon Ordinary Share as at the Transaction Record Date (other than holders of Excluded Shares);

(49) Scheme Shares means Anzon Ordinary Shares held by Scheme Shareholders at the Transaction Record Date;

(50) Scheme Transfer means for each Scheme Shareholder, a duly completed and executed instrument of transfer of the Anzon Ordinary Shares for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all the Anzon Ordinary Shares;

(51) Second Court Date means the first day on which an application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Scheme is heard or, if the application is adjourned for any reason, the first day on which the adjourned application is heard;

(52) Subsidiary has the meaning given to it in the Corporations Act;

(53) Trading Day means a day upon which ASX or AIM is open for trading, as the context requires;

(54) Transaction Record Date means 7.00pm (Sydney time) on the fifth Trading Day after the date on which the Scheme, if approved, becomes Effective, or such earlier date (after the Effective Date) as Anzon and ROC may agree in writing;

(55) Unsecured Convertible Note Deed Poll means the Unsecured Convertible Note Deed Poll executed by Anzon Investments Limited on 27 September 2006; and

(56) Unsecured Note Deed Poll means the unsecured note deed poll executed by Anzon Investments Limited on 27 September 2006.

1.2 Interpretation

(1) Reference to:

(a) one gender includes the others;

(b) the singular includes the plural and the plural includes the singular;

(c) a person includes a body corporate;

(d) a party includes the party's executors, administrators, successors and permitted assigns;

(e) a statute, regulation, code or other law or a provision of any of them includes:

(i) any amendment or replacement of it; and

(ii) another regulation or other statutory instrument made under it, or made under it as amended or replaced;

(f) dollars means Australian dollars unless otherwise stated;

(g) time is to time in Sydney, New South Wales, Australia, unless otherwise stated;

(h) proceeds is to proceeds in Australian dollars, unless otherwise stated; and

(i) cheques is to cheques drawn in Australian dollars, unless otherwise stated.

(2) "Including" and similar expressions are not words of limitation.

(3) Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.

(4) Headings and any table of contents or index are for convenience only and do not form part of this Scheme or affect its interpretation.


(5) A provision of this Scheme musty not be construed to the disadvantage of a party merely because that party was responsible for the preparation of the Scheme or the inclusion of the provision in the Scheme.

(6) A reference to a document (including the Deed Poll) includes all amendments or supplements to, or replacements or novations of that document.

(7) A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this Scheme and a reference to this Scheme includes any schedule, attachment and exhibit.

(8) If an act must be done on a specified day which is not a Business Day, it must be done instead on the next Business Day.

1.3 Parties

(1) If a party consists of more than 1 person, this Scheme binds each of them separately and any 2 or more of them jointly.

(2) An obligation, representation or warranty in favour of more than 1 person is for the benefit of them separately and jointly.

(3) A party which is a trustee is bound both personally and in its capacity as a trustee.

2. Preliminary matters

2.1 Anzon is a public company registered in New South Wales and is a company limited by shares.

2.2 As at 29 July 2008:

(1) 104,540,683 Anzon Ordinary Shares and 8,050,000 Anzon Options were on issue; and

(2) Anzon Convertible Notes with principal amounts of £20 million were outstanding.

2.3 ROC is a company registered in New South Wales and is a company limited by shares.

2.4 If the Scheme becomes Effective:

(1) in consideration for the transfer of each Scheme Share to ROC (or the Nominee), Anzon will procure ROC to provide the Scheme Consideration in accordance with the Scheme; and

(2) all the Scheme Shares, and all the rights and entitlements attaching to them as at the Implementation Date, will be transferred to ROC (or the Nominee) and Anzon will enter the name of ROC (or the Nominee) in the Register in respect of the Scheme Shares.

2.5 Anzon and ROC have agreed, by executing the Merger Implementation Deed, to implement the Scheme.

2.6 ROC has executed the Deed Poll, pursuant to which it has covenanted to perform its obligations under this Scheme, including the obligations to:

(1) provide or procure the provision of the Scheme Consideration to the Scheme Shareholders, except as provided in clause 2.6(2); and

(2) distribute the net proceeds of sale under the Sale Facility of the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme, received from the Sale Facility Agent to those Ineligible Foreign Shareholder (calculated on an averaged basis so that all Ineligible Foreign Shareholders receive the same price per New ROC Share, subject to rounding down to the nearest whole cent) after deduction of any selling costs, taxes and charges.

2.7 The Sale Facility Agent is appointed by ROC as contemplated in clause 5 to sell as principal the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme and remit the proceeds of sale to ROC (after the deduction of any applicable selling costs, taxes


and charges) in accordance with the Scheme, which ROC will hold on trust for each Ineligible Foreign Shareholder.

3. Conditions to the Scheme

3.1 The Scheme is conditional on:

(1) all the conditions in clause 3.1 of the Merger Implementation Deed required to be satisfied or waived by the Conditions Date having been satisfied or (other than the conditions precedent which cannot be waived by either party to the Merger Implementation Deed) waived in accordance with the terms of the Merger Implementation Deed by the Conditions Date;

(2) approval of the Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and

(3) the Merger Implementation Deed not having been terminated by either party to that agreement before the Conditions Date.

3.2 The satisfaction of the conditions precedent in clause 3.1 is a condition precedent to the operation of clauses 4.2, 5.1, 5.3, 5.6 and 5.7.

3.3 The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the End Date or any later date Anzon and ROC agree.

4. Transfer of Scheme Shares

4.1 Lodgement of Court orders

Anzon will lodge with ASIC office copies of the court orders under section 411 of the Corporations Act approving the Scheme by 5.00pm on the first Business Day after the day on which the Court approves the Scheme.

4.2 Transfer of Scheme Shares

On the Implementation Date, subject to provision by ROC of the Scheme Consideration in the manner contemplated by clause 5:

(1) all of the Scheme Shares, together with all rights and entitlements attaching to them as at the Implementation date, will be transferred to ROC (or the Nominee) without the need for any further act by any Scheme Shareholder (other than acts performed by Anzon as attorney and agent for Scheme Shareholders under clause 9) by:

(a) Anzon delivering to ROC (or the Nominee) the Scheme Transfer to transfer all Scheme Shares to ROC (or the Nominee), without the need for any further act by any Scheme Shareholders; and

(b) ROC (or the Nominee) duly executing the Scheme Transfer, attending to the stamping of the Scheme Transfer (if required) and delivering it to Anzon for registration; and

(2) immediately after receipt of the Scheme Transfer, Anzon will enter the name of ROC (or the Nominee) in the Register in respect of the Scheme Shares subject to the Scheme Transfer; and

(3) the transfer of Scheme Shares will be deemed to be effective on the Implementation Date.

4.3 Entitlement to Scheme Consideration

On the Implementation Date, in consideration for the transfer to ROC of each Scheme Share, each Scheme Shareholder will be entitled to receive the Scheme Consideration in accordance with clause 5.

4.4 Agreement by Scheme Shareholders

(1) Each Scheme Shareholder agrees to the transfer of their Scheme Shares to ROC in accordance with the terms of this Scheme.


(2) Each Scheme Shareholder to whom New ROC Shares are to be issued under this Scheme, other than Ineligible Foreign Shareholders, agrees:

(a) to become a member of ROC for the purposes of section 231 of the Corporations Act;

(b) to have their name and address entered in the ROC Register; and

(c) to be bound by the constitution of ROC as in force from time to time in respect of the New ROC Shares.

5. Provision of Scheme Consideration

5.1 Provision of Scheme Consideration

On the Implementation Date, ROC will issue to each Scheme Shareholder such number of New ROC Shares determined in accordance with clause 5.2, as Scheme Consideration for the transfer to ROC of each Scheme Share.

5.2 Calculation of Scheme Consideration

The Scheme Consideration for each Scheme Share will be such number of New ROC Shares calculated on the Transaction Record Date in accordance with the following formula:

Anzon Offer Price / ROC Share Price

where:

(a) Anzon Offer Price is calculated as follows:

Anzon Value / Number of Fully Diluted Anzon Shares

(b) Anzon Value is calculated as the aggregate of:

(i) $1.65 x Number of AZA Ordinary Shares held by Anzon and its Subsidiaries on the Transaction Record Date;

(ii) the value of all the AZA Options held by Anzon and its Subsidiaries on the Transaction Record Date, being, in respect of each AZA Option held, an amount equal to $1.65 less the exercise price of the AZA Option; and

(iii) Anzon Net Cash on the Transaction Record Date;

(c) Number of Fully Diluted Anzon Shares is calculated as the aggregate of:

(i) the number of Anzon Ordinary Shares on issue as at the Transaction Record Date; and

(ii) the maximum number of Anzon Ordinary Shares which would be issued on the exercise of all Anzon Options outstanding as at the Transaction Record Date, which for the sake of clarity shall include all Anzon Options that are to be, or have been, acquired by ROC under an Option Purchase Agreement;

(d) ROC Share Price means $2.02.

5.3 Provision of New ROC Shares as Scheme Consideration

(1) Subject to clause 5.6, the obligation of ROC to provide New ROC Shares pursuant to clause 5.1 will be satisfied by ROC, on the Implementation Date:

(a) entering in the ROC Register:

(i) the name of each Scheme Shareholder, other than Ineligible Foreign Shareholders, in relation to all the New ROC Shares which the Scheme Shareholder is entitled to receive as Scheme Consideration in accordance with the Scheme; or


(ii) the name of the Sale Facility Agent in respect of those New ROC Shares to which each Ineligible Foreign Shareholder would otherwise have become entitled; and

(b) as soon as practicable after the Implementation Date and in accordance with the Listing Rules (but in any event within 5 Business Days after the Implementation Date), dispatching or procuring the dispatch to each Scheme Shareholder entitled to receive the New ROC Shares, other than Ineligible Foreign Shareholders or the Sale Facility Agent (as the case may be), by pre-paid post to his or her address recorded in the Register at the Transaction Record Date, an uncertificated holding statement for the New ROC Shares issued to the Scheme Shareholder or the Sale Facility Agent (as the case may be) in accordance with the Scheme.

(2) In the case of Scheme Shares held in joint names, any uncertified holding statement for New ROC Shares must be issued in the names of the joint holders and forwarded to the holder whose name appears first in the Register at the Transaction Record Date.

5.4 Status of New ROC Shares

Upon issue:

(a) the New ROC Shares will rank equally with all existing ROC Shares; and

(b) each New ROC Share will be fully paid and free from any mortgage, charge, lien, encumbrance or other security interest.

5.5 Binding instructions

Any binding instructions between a Scheme Shareholder and Anzon relating to Anzon Ordinary Shares (including, without limitation, any instructions relating to payment of dividends or to communications from Anzon) will from the Implementation Date be deemed, by reason of the Scheme, to be a similarly binding instruction to and accepted by ROC in respect of New ROC Shares issued to Scheme Shareholders until that instruction is revoked or amended in writing addressed to ROC at its share registry.

5.6 Ineligible Foreign Shareholders

ROC will be under no obligation under the Scheme to issue, and will not issue, any New ROC Shares to an Ineligible Foreign Shareholder, and instead:

(1) ROC will:

(a) procure that the Sale Facility Agent (subject to clause 5.7(2)) sells under the Sale Facility (in any of the manners set out in clause 5.7(2)) the New ROC Shares to which each Ineligible Foreign Shareholder would otherwise have become entitled under the Scheme (if they were not an Ineligible Foreign Shareholder) and remits the proceeds of sale (after deduction of any applicable selling costs, taxes and charges) to ROC (Proceeds) in accordance with the Scheme, which ROC will hold on trust for each Ineligible Foreign Shareholder; and

(b) pay, or cause the Sale Facility Agent to pay, to each Ineligible Foreign Shareholder by dispatching, or procuring the dispatch of, a cheque to the Ineligible Foreign Shareholder by prepaid post to their address recorded in the Register (as at the Transaction Record Date), such cheque being drawn in the name of the Ineligible Foreign Shareholder (or, in the case of joint holders of Scheme Shares, the cheque will be forwarded to the holder whose name appears first in the Register on the Transaction Record Date), the amount "A" calculated in accordance with the following formula and rounded down to the nearest cent:

A = (B/C) X D

where:

B = the number of New ROC Shares that would have been issued to that Ineligible Foreign Shareholder had it not been an Ineligible Foreign Shareholder;


C = the total number of New ROC Shares which would otherwise have been issued to all Ineligible Foreign Shareholders had they not been Ineligible Foreign Shareholders and which are issued to the Sale Facility Agent; and

D = the Proceeds (as defined in clause 5.6(1)(a) above);

(2) the Sale Facility Agent will sell the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme under the Sale Facility on the stock market conducted by ASX, via a bookbuild or other sale process (or a combination of these) as soon as practicable after the Implementation Date at such price as the Sale Facility Agent shall determine, provided the Sale Facility Agent uses all reasonable endeavours to achieve the best price reasonably obtainable at the time of sale;

(3) none of Anzon, ROC or the Sale Facility Agent gives any undertaking, representation, warranty or assurance as to the price that will be achieved for the sale of New ROC Shares described in clause 5.6(1) above; and

(4) each Ineligible Foreign Shareholder acknowledges that the Sale Facility Agent is acting as principal in dealing with the ROC Shares attributable to it and implementing the actions set out in this clause 5.6, and that the Sale Facility Agent is not a broker or other agent of the Ineligible Foreign Shareholder.

5.7 Fractional entitlements and splitting

(1) Subject to clause 5.7(2), where the calculation of the number of New ROC Shares to be issued to a particular Scheme Shareholder as Scheme Consideration would result in the issue of a fraction of a New ROC Share, the fractional entitlement will, after aggregating all holdings of the Scheme Shareholder, be rounded up or down to the nearest whole number of New ROC Shares with fractions of 0.5 or greater being rounded up.

(2) If ROC reasonably forms the opinion that 2 or more Scheme Shareholders, each of whom holds a number of Scheme Shares which results in a fractional entitlement to New ROC Shares in accordance with clause 5.7(1) have, before the Transaction Record Date, been party to shareholding splitting or division in an attempt to obtain advantage by reference to such rounding, ROC may give a notice to those Scheme Shareholders setting out the names and registered addresses of all of them, stating that opinion and attributing to one of them specifically identified in the notice (the Deemed Holder) the Scheme Shares held by all of them, and after the notice has been given:

(a) the Deemed Holder will for the purposes of the Scheme be taken to hold all the Scheme Shares referred to in the notice; and

(b) each of the other Scheme Shareholders whose names are set out in the notice, will for the purposes of the Scheme be taken not to hold any of the Scheme Shares,

and by complying with this clause 5.7(2), ,ROC will be taken to have satisfied and discharged its obligations under the terms of the Scheme to all the Scheme Shareholders named in the notice.

6. Dealings in Anzon Ordinary Shares

(1) To determine who qualifies as a Scheme Shareholder, dealings in Anzon Ordinary Shares will only be recognised if:

(a) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Register as the holder of the relevant Anzon Ordinary Shares on or before the Transaction Record Date; and

(b) in all other cases, registrable transfers in respect of those dealings are received on or before the Transaction Record Date at the place where the Register is kept.

(2) If the Scheme becomes Effective, a holder of Scheme Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Shares or any interest in them after the Transaction Record Date.


(3) Anzon must, by the Transaction Record Date, register registrable transmission applications or transfers of Anzon Ordinary Shares received in accordance with clause 6(1)(b).

(4) Anzon will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Anzon Ordinary Shares received after the Transaction Record Date (except for a transfer of Anzon Ordinary Shares to ROC pursuant to the Scheme and any subsequent transfer by ROC or its successors in title).

(5) For the purpose of determining entitlements to the Scheme Consideration, Anzon must maintain the Register in accordance with the provisions of this clause 6 until the Scheme Consideration has been paid to the Scheme Shareholders. The Register in this form will solely determine entitlements to the Scheme Consideration.

(6) All statements of holding for Anzon Ordinary Shares will cease to have effect from the Transaction Record Date as documents of title in respect of those shares (other than statements of holding for Anzon Ordinary Shares in favour of ROC and its successors in title) and, as from that date, each entry current at that date on the Register (other than entries in respect of ROC or its successors in title) will cease to have any effect except as evidence of entitlement to the Scheme Consideration in respect of the Anzon Ordinary Shares relating to that entry.

(7) As soon as possible after the Transaction Record Date and in any event at least 2 Business Days before the Implementation Date, Anzon will ensure that details of the names, registered addresses and holdings of Anzon Ordinary Shares for each Scheme Shareholder as shown in the Register on the Transaction Record Date are available to ROC in the form ROC reasonably requires.

7. Quotation of Anzon Ordinary Shares

On a date after the Implementation Date to be determined by ROC, Anzon will make an announcement in accordance with Rule 41 of the AIM Rules for Companies and will notify the London Stock Exchange of the proposed cancellation for the admission of the Anzon Ordinary Shares to trading on AIM.

8. General Scheme provisions

8.1 Ineligible Foreign Shareholders acknowledgement

Under this Scheme, each Ineligible Foreign Shareholder agrees and acknowledges that the sale of the New ROC Shares (to which that person would otherwise have become entitled as Scheme Consideration) under the Sale Facility constitutes the satisfaction of ROC's obligations to that Ineligible Foreign Shareholder under this Scheme.

8.2 Consent to Scheme amendments

If the Court proposes to approve the Scheme subject to any alterations or conditions to the Scheme, Anzon may by its counsel or solicitor consent on behalf of all persons concerned to those alterations or conditions to which ROC has consented.

8.3 Scheme Shareholders' agreements and representations

(1) The Scheme Shareholders agree to the transfer of their Scheme Shares in accordance with the Scheme.

(2) The Scheme Shareholders are taken to have warranted to ROC and Anzon that all their Scheme Shares (including any rights and entitlements attaching to those shares) which are transferred to ROC (or the Nominee) under the Scheme will, at the date of transfer, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to sell and to transfer their Scheme Shares together with any rights and entitlements attaching to those shares to ROC under the Scheme.


8.4 Title to and rights in Scheme Shares

(1) The Scheme Shareholders (and not ROC) shall be entitled to any dividends and other distributions declared or paid on the Scheme Shares in accordance with the Merger Implementation Deed prior to the Implementation Date.

(2) On and from the Implementation Date, ROC (or the Nominee) will be beneficially entitled to the Scheme Shares transferred to it under the Scheme pending registration by Anzon of ROC (or the Nominee) in the Register as the holder of the Scheme Shares.

8.5 Appointment of ROC as sole proxy

From the Implementation Date until Anzon registers ROC (or the Nominee) as the holder of all Scheme Shares in the Register, each Scheme Shareholder:

(1) is deemed to have irrevocably appointed ROC as attorney and agent (and directed ROC in such capacity) to appoint an officer or agent of ROC as its sole proxy and, where applicable, corporate representative to attend shareholders' meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders' resolution, and no Scheme Shareholder may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative;

(2) undertakes not to otherwise attend shareholders' meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders' resolutions, whether in person, by proxy or corporate representative;

(3) must take all other actions in the capacity of a registered holder of Scheme Shares as ROC reasonably directs; and

(4) acknowledges and agrees that in exercising the powers referred to in clause 8.5(1), ROC and any officer or agent nominated by ROC under clause 8.5(1) may act in the best interests of ROC as the intended registered holder of the Scheme Shares.

8.6 Effect of the Scheme

The Scheme binds Anzon and all Scheme Shareholders from time to time and, to the extent of any inconsistency and to the extent permitted by law, overrides the constitution of Anzon.

8.7 Enforcement of Deed Poll

Anzon undertakes in favour of each Scheme Shareholder to enforce the Deed Poll against ROC on behalf of and as agent and attorney for the Scheme Shareholders.

9. Power of attorney

(1) Scheme Shareholders will be deemed to have authorised Anzon to do and execute all acts, matters, things and documents on the part of each Scheme Shareholder necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Shareholder, a share transfer or transfers in relation to Scheme Shares as contemplated by clause 9(2).

(2) Each Scheme Shareholder, without the need for an further act, irrevocably appoints Anzon and all its directors and officers (jointly and severally) as its attorney and agent for the purpose of executing any document necessary to give effect to this Scheme including a Scheme Transfer.

10. General

10.1 Stamp duty

ROC will pay all stamp duty payable in connection with the transfer of Anzon Ordinary Shares to ROC.


10.2 Consent

(1) The Scheme Shareholders consent to Anzon doing all things necessary or incidental to the implementation of the Scheme.

(2) Each of the Scheme Shareholders acknowledge that this Scheme binds Anzon and all Scheme Shareholders (including those who do not attend the Scheme Meeting, do not vote at the Scheme Meeting or vote against the Scheme at the Scheme Meeting).

10.3 Notices

(1) If a notice, transfer, transmission, application, direction or other communication referred to in the Scheme is sent by post to Anzon, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at Anzon's registered office or at the office of the Registrar.

(2) The accidental omission to give notice of the Scheme Meeting or the non-receipt of such a notice by any Scheme Shareholder shall not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings of the Scheme Meeting.

10.4 Governing law

(1) The law of New South Wales governs this Scheme.

(2) Anzon and the Scheme Shareholders submit to the non-exclusive jurisdiction of the courts of New South Wales and of the Commonwealth of Australia.

10.5 Further action to be taken at Anzon expense

Anzon must, at its own expense, do all things and execute all documents necessary or expedient to give full effect to, and perform its obligations under or in relation to, the Scheme and the transactions contemplated by it.


20. Deed Poll

Deed Poll made 30 July 2008

Parties Roc Oil Company Limited ABN 32 075 965 856, of Level 14, 1 Market Street, Sydney, New South Wales (ROC)

In favour of each holder of ordinary shares in Anzon Energy Limited ABN 43 097 972 364 (Anzon) as at the Transaction Record Date other than a holder of Excluded Shares (Scheme Shareholders).

Introduction

A. The directors of Anzon have resolved that Anzon should propose the Scheme.

B. The effect of the Scheme will be that all Scheme Shares will be transferred to ROC.

C. On 16 June 2008, Anzon and ROC entered into the Merger Implementation Deed.

D. In the Merger Implementation Deed, ROC agreed to enter into this Deed Poll.

E. ROC is entering into this Deed Poll for the purpose of covenanting in favour of Scheme Shareholders to perform its obligations under the Merger Implementation Deed and the Scheme.

It is agreed

1. Definitions and interpretation

1.1 Definitions

In this deed:

(1) CGT Roll-over Relief means capital gains tax roll-over relief under Subdivision 124-M or any other applicable provision of the Income Tax Assessment Act 1997 (Cth);

(2) Merger Implementation Deed means the merger implementation deed dated 16 June 2008 between Anzon and ROC, relating to the implementation of the Scheme;

(3) Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Anzon and Scheme Shareholders in respect of all the Anzon Ordinary Shares, in substantially the form of Annexure B to the Merger Implementation Deed, with such amendments as Anzon and ROC may agree; and

(4) other capitalised words and phrases have the same meaning as given to them in the Scheme.

1.2 Interpretation

(1) Reference to:

(a) one gender includes the others;

(b) the singular includes the plural and the plural includes the singular;

(c) a person includes a body corporate;

(d) a party includes the party's executors, administrators, successors and permitted assigns;

(e) a statute, regulation, code or other law or a provision of any of them includes:

(i) any amendment or replacement of it; and


(ii) another regulation or other statutory instrument made under it, or made under it as amended or replaced;

(f) dollars means Australian dollars unless otherwise stated;

(g) time is to time in Sydney, New South Wales, Australia, unless otherwise stated;

(h) proceeds is to proceeds in Australian dollars, unless otherwise stated; and

(i) cheques is to cheques drawn in Australian dollars, unless otherwise stated.

(2) "Including" and similar expressions are not words of limitation.

(3) Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.

(4) Headings and any table of contents or index are for convenience only and do not form part of this Deed Poll or affect its interpretation.

(5) A reference to a document includes all amendments or supplements to, or replacements or novations of that document.

(6) A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this Deed Poll and a reference to this Deed Poll includes any schedule, attachment and exhibit.

(7) If an act must be done on a specified day which is not a Business Day, it must be done instead on the next Business Day.

2. Nature of Deed Poll

ROC acknowledges that:

(1) this Deed Poll may be relied on and enforced by any Scheme Shareholder in accordance with its terms, even though the Scheme Shareholders are not party to it; and

(2) under the Scheme, each Scheme Shareholder irrevocably appoints Anzon and all of its directors, secretaries and officers (joint and severally) as its agent and attorney for the purposes of, among other things, enforcing this Deed Poll against ROC.

3. Conditions and Termination

3.1 Conditions

ROC's obligations under clause 4 are subject to the Scheme becoming Effective.

3.2 Termination

If:

(1) the Merger Implementation Deed is terminated in accordance with its terms; or

(2) the Scheme does not become Effective on or before the End Date,

ROC's obligations under this Deed Poll automatically terminate and the terms of this Deed Poll will be of no further force or effect, unless ROC and Anzon otherwise agree in accordance with the Merger Implementation Deed.

3.3 Consequences of termination

If this Deed Poll is terminated under clause 3.2, in addition and without prejudice to any other rights, powers or remedies available to them:


(1) ROC is released from its obligations to further perform this Deed Poll except those obligations under clause 9.1; and

(2) Scheme Shareholders retain the rights they have against ROC in respect of any breach of this Deed Poll which occurs before it is terminated.

4. Scheme Consideration

(1) Subject to clause 3, in consideration for the transfer to ROC of each Scheme Share on the Implementation Date (or to its nominee if such a nomination is made under clause 2.5 of the Merger Implementation Deed), ROC will:

(a) provide the Scheme Consideration in accordance with clause 5 of the Scheme; and

(b) distribute the net proceeds of sale, under the Sale Facility, of the New ROC Shares to which Ineligible Foreign Shareholders are entitled under the Scheme received from the Sale Facility Agent to those Ineligible Foreign Shareholders (calculated on an averaged basis so that all Ineligible Foreign Shareholders receive the same price per New ROC Share, subject to rounding down to the nearest whole cent) after deduction of any selling costs, taxes and charges, in accordance with 5.5(1) of the Scheme.

(2) ROC undertakes to use its best endeavours (including payment of any applicable listing fees) to procure confirmation from ASX that, as from the Business Day following the date of the Scheme becomes Effective, the New ROC Shares will be quoted on the financial market operated by ASX, initially on a deferred settlement basis and thereafter on an ordinary settlement basis.

5. ROC undertakings

ROC undertakes that it will:

(1) not make any choice or election which is or may become available to be made under a tax law which would have the effect of preventing a Scheme Shareholder from choosing the CGT Roll-over Relief otherwise available to the Scheme Shareholder; and

(2) procure that its Nominee (if applicable) will not make any choice or election which is or may become available to be made under a tax law which would have the effect of preventing a Scheme Shareholder from choosing the CGT Roll-over Relief otherwise available to the Scheme Shareholder,

provided that:

(3) the undertakings in (1) and (2) will not be breached to the extent that ROC or its Nominee (if applicable) has acted in accordance with the terms of the Merger Implementation Deed or Scheme; and

(4) the undertakings in (1) and (2) do not require ROC or its Nominee (if applicable) to make a choice of the kind referred to in paragraph 124-780(3)(d) of the Income Tax Assessment Act 1997 (Cth).

6. Warranties

ROC represents and warrants that:

(1) it is a corporation validly existing under the laws of its place of registration;

(2) it has the corporate power to enter into and perform its obligations under this Deed Poll and to carry out the transactions contemplated by this Deed Poll;

(3) it has taken all necessary corporate action to authorise its entry into this Deed Poll and has taken or will take all necessary corporate action to authorise the performance of this Deed Poll and to carry out the transactions contemplated by this Deed Poll;


(4) upon issue, each New ROC Share will be:

(a) validly issued and rank equally in all respects with existing ROC Shares; and

(b) fully paid and free from any mortgage, charge, lien, encumbrance or other security interest; and

(5) this Deed Poll is valid and binding on it.

7. Continuing obligations

This Deed Poll is irrevocable and, subject to clause 3, remains in the full force and effect until:

(1) ROC has fully performed its obligations under this Deed Poll; or

(2) the earlier termination of this Deed Poll under clause 3.

8. Notices

8.1 How and where Notices may be sent

A notice or other communication in respect of this Deed Poll (Notice) must be in writing and delivered by hand or sent by pre-paid post or fax to ROC at the address or the fax number for ROC set out below or as otherwise specified by ROC by Notice:

Attention: Company Secretary Address: Level 14, 1 Market Street, Sydney New South Wales Fax no: +61 2 9380 6913

8.2 Notices to be in legible writing in English

A Notice to or by ROC must be in legible writing and in English.

8.3 How a Notice must be signed.

A Notice must be signed by the person giving the Notice or by a person duly authorised by that person.

8.4 Email not to be used

Email or similar electronic means of communication must not be used to give Notices in respect of this Deed Poll.

8.5 When Notices are taken to have been given and received

(1) A Notice sent by post is regarded as given and received on the second Business Day following the date of postage.

(2) A fax is regarded as given and received on production of a transmission report by the machine form which the fax was sent which indicates that the fax was sent in its entirety to the recipient's fax number, unless the recipient informs the sender that the Notice is illegible or incompetent within 4 hours of it being transmitted.

(3) A Notice delivered or received other than on a Business Day or after 4.00pm (recipient's time) is regarded as received at 9.00am on the following Business Day and a Notice delivered or received before 9.00am (recipient's time) is regarded as received at 9.00am.

9. General

9.1 Stamp duty

ROC will:


(1) pay or procure payment of all stamp duties and any related fines and penalties (if any) in respect of the Scheme and this Deed Poll, the performance of this Deed Poll and each transaction effected by or made under the Scheme and this Deed Poll; and

(2) indemnify each Scheme Shareholder against any liability arising from failure to comply with clause 9.1(1).

9.2 Governing law and jurisdiction

(1) The law of New South Wales governs this Deed Poll.

(2) ROC submits to the non-exclusive jurisdiction of the courts of New South Wales and of the Commonwealth of Australia.

9.3 Waiver

ROC may not rely on the words or conduct of any Scheme Shareholder or Ineligible Foreign Shareholder as a waiver of any right unless the waiver is in writing and signed by the Scheme Shareholder or Ineligible Foreign Shareholder granting the waiver.

The meanings of the terms used in this clause 9.3 are set out below.

Term Meaning

conduct includes delay in the exercise of a right.

right any right arising under or in connection with this deed and includes a right to rely on this clause and any breach of, or default under, this deed.

waiver includes an election between rights and remedies, and conduct which might otherwise give rise to an estoppel.

9.4 Variation

A provision of this Deed Poll may be varied if the variation is:

(1) agreed to by Anzon, which agreement Anzon may give or withhold in its absolute discretion and without reference to or approval by any Scheme Shareholder or Ineligible Foreign Shareholder; and

(2) the Court indicates that the amendment would not of itself preclude approval of the Scheme,

in which event ROC will enter into a further Deed Poll in favour of the Scheme Shareholders giving effect to the amendment.

9.5 Cumulative rights

The rights, powers and remedies of ROC and Scheme Shareholders under this Deed Poll are cumulative and do not exclude any other rights, powers or remedies provided by law independently of this Deed Poll.

9.6 Assignment

(1) The rights and obligations of ROC and each Scheme Shareholder created by this Deed Poll are personal and must not be assigned, charged or otherwise dealt with at law or in equity.

(2) Any purported dealing in contravention of clause 9.6(1) is invalid.

9.7 Further action

ROC must, at its own expense, promptly do all things and execute all documents necessary to give full force and effect to this Deed Poll.


21. Notice of Scheme Meeting

ACN 097 972 364

Notice of Scheme Meeting

Notice is given that by an order of the Federal Court of Australia made on 30 July 2008, pursuant to section 411(1) of the Corporations Act, a meeting of Anzon Energy Limited shareholders (AEL Shareholders) will be held at Corrs Chambers Westgarth, Level 32, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000 on 3 September 2008, at 10am (AEST).

The Court has appointed Michael Arnett, or failing him, Andrew Young to act as Chairperson of the Scheme Meeting.

Terms used in this notice have the meaning given in the glossary to the Scheme Booklet or as defi ned within the Scheme Booklet which accompanies this notice.

Purpose of meeting

The purpose of the Scheme Meeting is to consider and, if thought fi t, to agree to a scheme of arrangement (with or without modifi cation) to be made between Anzon Energy Limited and AEL Shareholders (Scheme).

To enable you to make an informed voting decision, further information on the Scheme is set out in the Scheme Booklet accompanying this notice. A copy of the Scheme is set out in Section 19 of the Scheme Booklet and its purpose and eff ect are discussed throughout that document.

Business

To consider and, if thought fi t, to pass the following resolution in accordance with section 411(4)(a)(ii) of the Corporations Act:

“That pursuant to and in accordance with section 411 of the Corporations Act, the scheme of arrangement proposed to be entered into between Anzon Energy Limited and holders of its fully paid ordinary shares (other than holders of Excluded Shares) (Scheme) under which Roc Oil Company Limited ACN 075 965 856 or its wholly owned subsidiary nominee will acquire all the ordinary shares in Anzon Energy Limited, as contained in and more particularly described in the Scheme Booklet accompanying the notice convening this meeting, is agreed to and the Board of Directors of Anzon Energy Limited is authorised to agree to such alterations or conditions as are thought fi t by the Court and, subject to approval of the Scheme by the Court, to implement the Scheme with any such alterations or conditions.”

By order of the Board

Tony Strasser

Company Secretary30 July 2008


Notes:

Requisite majority

The resolution to approve the Scheme must be approved by:

(a) unless the Court orders otherwise, a majority in number of AEL Shareholders present and voting (whether in person or by proxy, attorney or corporate representative) at the Scheme Meeting; and

(b) at least 75 per cent of the total number of votes cast on the resolution at the Scheme Meeting.

Court approval

In accordance with section 411(4)(b) of the Corporations Act, the Scheme is subject to the approval of the Court. If the resolution put to this Scheme Meeting is approved by the requisite majorities set out above and the Scheme Conditions referred to in Section 13.2 of the Scheme Booklet are satisfi ed or (where applicable) waived, AEL intends to apply to the Court for approval of the Scheme.

Voting entitlements

A person’s entitlement to vote at the Scheme Meeting to consider the Scheme will be determined in accordance with their holding of AEL Shares (as recorded in the AEL Share Register) at 10am (AEST) on 2 September 2008. Accordingly, those persons (other than holders of Excluded Shares) will be entitled to attend and vote at the Scheme Meeting and share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Scheme Meeting.

How to vote

AEL Shareholders entitled to vote at the Scheme Meeting can vote in one of the following ways:

(a) by attending the Scheme Meeting and voting in person;

(b) by appointing an attorney to attend the Scheme Meeting and vote on their behalf, or in the case of corporate shareholders, a corporate representative to attend the meeting and vote on its behalf; or

(c) by appointing a proxy to attend and vote on their behalf, by using the Proxy Form accompanying this Notice.

Proxies

An AEL Shareholder entitled to attend and vote at the Scheme Meeting has the right to appoint a proxy to attend and vote at the Scheme Meeting, who need not be a shareholder of AEL. If an AEL Shareholder is entitled to two or more votes at the Scheme Meeting, they may appoint two proxies and may specify the percentage of votes each proxy is appointed to exercise. If proportions or numbers are not specifi ed, each proxy may exercise half the AEL Shareholder’s votes.

For the appointment of a proxy to be eff ective, the Proxy Form (and any authority under which the Proxy Form is signed, or a certifi ed copy of the authority) must be received by:

the AEL Share Registry at

Computershare Investor Services Pty LimitedGPO Box 242Melbourne VIC 3001Australia

or AEL’s registered offi ce at

Level 1390 Arthur StreetNorth Sydney NSW 2060Australia

or by facsimile to the AEL Share Registry on outside Australia on +61 3 9473 2118 by no later than 10am (AEST) on 2 September 2008, or if the Scheme Meeting is adjourned, at least 24 hours before the resumption of the Scheme Meeting in relation to the resumed part of the Scheme Meeting. Proxy Forms received after this time will be invalid.


Voting in person or by authorised corporate representative

AEL Shareholders or their authorised corporate representatives who plan to attend the Scheme Meeting are asked to arrive at the venue 15 minutes prior to the time designated for the Scheme Meeting, if possible, so that shareholders may be checked against the AEL Share Register and attendances noted.

In order to vote in person at the Scheme Meeting, a corporation which is an AEL Shareholder may appoint an individual to act as its representative. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should lodge with AEL before the Scheme Meeting or bring to the Scheme Meeting evidence of their appointment, including any authority under which it is signed.

Voting by attorney

Attorneys must provide to AEL the original or a certifi ed copy of the power of attorney under which they have been authorised to attend and vote at the Scheme Meeting. The power of attorney appointing the attorney must be duly executed and must specify the name of each of the AEL Shareholder, AEL and the attorney, and also specify the meetings at which the appointment may be used. The appointment may be a standing one. The original or a certifi ed copy of the power of attorney must be provided to AEL in the same manner as Proxy Forms and must be received by AEL’s Share Registry or AEL by 10am (AEST) on 2 September 2008.




PART D

GLOSSARY


22. General glossary

Defi nitions and phrases in this Scheme Booklet have the following meaning unless the context requires otherwise.

Term Meaning

$ or AUD Australian dollars, unless otherwise stated

AASB Australian Accounting Standards Board

ACCC Australian Competition and Consumer Commission

AEL Anzon Energy Limited ABN 43 097 972 364

AEL Board board of Directors of AEL

AEL Convertible

Notes

convertible notes issued by AIL to RAK on the terms contained in the Unsecured Convertible Note Deed Poll, entitling the holder upon conversion to subscribe for or acquire AEL Shares

AEL Data Room the data room established by Deacons on behalf of AEL containing the documents in the AEL Data Room Index

AEL Data Room Index the data room index provided by AEL to ROC and initialled by both parties for identifi cation

AEL Directors or

Directors

each of the directors of AEL who as at the date of this Scheme Booklet are set out in Section 9.5

AEL Group AEL and its Subsidiaries other than AZA except where the term is used in the defi nition of AEL Material Adverse Change when AEL Group shall include AZA

AEL Material

Adverse Change

matters, events or circumstances (whether individually or in aggregate), including where it becomes known to ROC that information disclosed by AEL or any of its Material Subsidiaries is, or is likely to be, incomplete, incorrect, untrue or misleading, but other than:

(i) those required to be done pursuant to the Merger Implementation Deed;

(ii) those which AEL and ROC agree in writing are not an AEL Material Adverse Change; or

(iii) those fully and fairly disclosed in the Data Rooms or any public fi lings made by AEL prior to the date of the Merger Implementation Deed,

having occurred, been announced or becoming known to ROC which have or could reasonably be expected to result in, either individually or when aggregated together, a diminution of the net assets of the AEL Group by more than $50 million

AEL Off er Price is calculated as follows:

AEL Value / Number of Fully Diluted AEL Shares

AEL Value is calculated as the aggregate of:

(a) $1.65 x Number of AZA Shares held by AEL and its Subsidiaries on the Record Date;

(b) the value of all the AZA Options held by AEL and its Subsidiaries on the Record Date, being, in respect of each AZA Option held, an amount equal to $1.65 less the exercise price of the AZA Option; and

(c) Net Cash on the Record Date

Number of Fully Diluted AEL Shares is calculated as the aggregate of:

(a) the number of AEL Shares on issue as at the Record Date; and

(b) the maximum number of AEL Shares which would be issued on the exercise of all AEL Options outstanding as at the Record Date, which for the sake of clarity shall include all AEL Options that are to be, or have been, acquired by ROC under an Option Purchase Deed

AEL Options options issued by AEL entitling the holder to subscribe for or acquire AEL Shares


Term Meaning

AEL Prescribed

Occurrence

other than as required by or as a consequence of the Merger Implementation Deed or the Scheme, the occurrence of any of the following between the date of the Merger Implementation Deed and the Conditions Date:

(a) AEL converting all or any of its shares into a larger or smaller number of shares;

(b) AEL or a Material Subsidiary:

(i) entering into a buy-back agreement; or

(ii) resolving to approve the terms of a buy-back agreement;

(c) AEL or a Material Subsidiary resolving to reduce its share capital in any way or reclassifying, combining, splitting or redeeming or repurchasing directly or indirectly any of its shares;

(d) AEL or a Material Subsidiary:

(i) making an issue of, or granting an option to subscribe for, any shares or securities convertible into shares; or

(ii) agreeing to make an issue or to grant an option referred to in clause (d)(i);

other than issues of shares following an election to convert by the holder of an AEL Option or AEL Convertible Notes on issue as of the date of the Merger Implementation Deed;

(e) AEL making any change or amendment to its constitution;

(f) AEL makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie);

(g) AEL or a Material Subsidiary issuing, or agreeing to issue convertible notes or other debt securities;

(h) AEL or a Material Subsidiary:

(i) acquiring or disposing of;

(ii) agreeing to acquire or dispose of; or

(iii) off ering, proposing, announcing a bid or tendering for;

any business, assets, entity or undertaking, the value of which exceeds $1 million, other than:

(iv) the entry into contractual arrangements for any fl oating production storage and offl oading vessel, following consultation with ROC;

(v) the entry into international farm in opportunities, with the consent of ROC; or

(vi) in the ordinary course of conduct of the operations of AEL or a Material Subsidiary;

(i) AEL or a Material Subsidiary creating, or agreeing to create, any Security Interest over the whole, or a substantial part, of its business or property:

(i) otherwise than in the ordinary course of business; and

(ii) other than a lien which arises by operation of law or legislation securing an obligation that is not yet due;


Term Meaning

(j) AZA or a Subsidiary of AZA disposing of or transferring, or entering into an agreement to dispose or transfer, any shares held by AZA or a Subsidiary of AZA in Nexus Energy Limited ABN 64 058 818 278; or AZA disposing, or entering into an agreement to dispose, of any interest in the BMG Project; or AZA ceasing, or agreeing to cease, to be an operator of that project;

(k) AEL or a Material Subsidiary of AEL resolving that it be wound up or the making of an application or order for the winding up or dissolution of AEL or a Material Subsidiary of AEL other than:

(i) where the application or order is set aside within 14 days; or

(ii) a solvent winding-up;

(l) the appointment of a liquidator or provisional liquidator of AEL or a Material Subsidiary of AEL;

(m) the making of an order by a Court for the winding up of AEL or a Material Subsidiary of AEL, other than a solvent winding-up;

(n) the appointment of an administrator of AEL or a Material Subsidiary of AEL under the Corporations Act;

(o) AEL or a Material Subsidiary of AEL being deregistered as a company or otherwise dissolved;

(p) AEL or a Material Subsidiary of AEL becoming unable to pay its debts when they fall due within the meaning of the Corporations Act or otherwise being presumed to be insolvent under the Corporations Act;

(q) AEL or a Material Subsidiary of AEL executing a deed of company arrangement; or

(r) the appointment of a receiver or a receiver and manager, in relation to the whole, or a substantial part, of the property of AEL or of a Material Subsidiary of AEL

AEL Scheme

Information

the information other than the ROC Scheme Information and any Joint Information which is provided by ROC contained in this Scheme Booklet

AEL Share Register the register of members of AEL

AEL Share Registry or

Registry

Computershare

AEL Shareholder each person who is registered in the register of members of AEL as the holder of AEL Shares

AEL Shares fully paid ordinary shares in the capital of AEL

AEST Australian Eastern Standard Time

AIL Anzon Investments Ltd, a company incorporated in Mauritius

AIM the AIM market operated by the London Stock Exchange

AIM Rules the AIM Rules for Companies as published by the London Stock Exchange from time to time

Announcement Date 16 June 2008, being the date on which ROC announced its intention to merge with AEL via a scheme of arrangement and, concurrently, announced the AZA Takeover Off er

ASIC the Australian Securities and Investments Commission

Associate has the meaning given in section 12 of the Corporations Act

ASTC Settlement

Rules

the business rules of the ASX Settlement and Transfer Corporation Pty Limited ACN 008 504 532


Term Meaning

ASX ASX Limited ABN 98 008 624 691 or, as the context requires, the fi nancial market operated by it

ASX Market Rules the market rules of ASX

AZA Anzon Australia Limited ABN 46 107 406 771

AZA Data Room the data room established by Deacons on behalf of AZA and the “black box” data room containing the documents in the AZA Data Room Index

AZA Data Room

Index

the data room index provided by AZA to ROC and initialled by both parties for identifi cation

AZA Options options issued by AZA entitling the holder to subscribe for or acquire AZA Shares

AZA Takeover Off er the proposed takeover off er by ROC to acquire all of the AZA Shares, as described in Section 13.7

AZA Shareholders each person, who is registered in the register of members of AZA as the holder of one or more AZA Shares

AZA Shares fully paid ordinary shares in the capital of AZA

Beach Beach Petroleum Limited ABN 20 007 617 969

BMG Basker Manta Gummy

BMG Joint Venture BMG joint venture consisting of the parties to the BMG Project who are AZA, Beach, CIECO and Sojitz

BMG Project BMG oil and gas project comprising production licences VIC/L26, VIC/L27 and VIC/L28

Business the business carried on by AEL and its Subsidiaries as at 16 June 2008

Business Day a day that is not a Saturday, Sunday or any other day which is a public holiday in Sydney, Australia

CGT capital gains tax

CIECO CIECO Exploration and Production (Australia) Pty Ltd ABN 11 107 688 148 a 100% subsidiary of ITOCHU

Computershare Computershare Investor Services Pty Limited ABN 48 078 279 277

Conditions Date 8.00am (AEST) on the day of the Second Court Date

Corporations Act the Corporations Act 2001 (Cth)

Corporations

Regulations

the Corporations Regulations 2001 (Cth)

Court the Federal Court of Australia or any other court of competent jurisdiction agreed in writing between AEL and ROC

CREST the relevant system (as defi ned in the CREST Regulations) for the paperless settlement of share transfers and the holding of shares in uncertifi cated form which is administered by Euroclear UK & Ireland Limited

CREST Regulations means the United Kingdom Uncertifi cated Securities Regulations 2001 (SI 2001/3755)

Custodian Computershare Clearing Pty Limited ABN 16 063 826 228

Data Room

Documentation

any document or written information in any form relating to AEL or any member of the AEL Group which has been made available to ROC, or any of its Representatives, or to which ROC or any of its Representatives has had access by whatever means (including through Data Rooms, virtual data rooms, site visits, management presentations and other written correspondence) in respect of the Due Diligence

Data Rooms the AEL Data Room and the AZA Data Room


Term Meaning

Deed Poll the deed poll dated 30 July 2008 under which ROC covenants in favour of AEL Shareholders to perform its obligations under the Merger Implementation Deed and the Scheme in the form set out in Section 20

Deloitte Deloitte Corporate Finance Pty Limited ABN 19 003 833 127

Depositary Computershare Investor Services PLC

DI Holder a holder of depositary interests in AEL as at the Record Date

Due Diligence the due diligence investigations into the AEL Group conducted by ROC and its Representatives prior to 16 June 2008

Eff ective when used in relation to a scheme, the coming into eff ect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the scheme

Eff ective Date the date on which the Scheme becomes Eff ective

End Date 30 November 2008, or such later date as may be agreed by AEL and ROC

Excluded Shares AEL Shares held by ROC or its Related Bodies Corporate

Exclusivity Period the period from and including 16 June 2008 up to the earlier of:

(a) the End Date; or

(b) the termination of the Merger Implementation Deed in accordance with its terms

Explanatory

Statement

the explanatory statement for the purposes of section 412 of the Corporations Act, constituted by this Scheme Booklet

FID fi nal investment decision

FSA the United Kingdom Financial Services Authority

GBP pounds sterling

Governmental

Agency

any foreign or Australian government or governmental, semi-governmental, administrative, regulatory, fi scal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world, and includes ASIC, FSA, London Stock Exchange and ASX (and any other securities exchange)

Implementation Date the fi fth Business Day after the Record Date, or such other date as the parties agree

Independent Expert the independent expert appointed by AEL being Deloitte

Independent Expert’s

Report

the report prepared by the Independent Expert a concise copy of which is included in Section 18 and a complete copy of which is available at www.anzonenergy.com or by calling the Information Line

Ineligible Foreign

Shareholder

a Scheme Shareholder who is (or is acting on behalf of ) a citizen or resident of a jurisdiction other than residents of Australia and its external territories or New Zealand (Relevant

Jurisdictions) or whose address as shown in the AEL Share Register at the Record Date is in a jurisdiction other than the Relevant Jurisdictions, except where AEL and ROC are reasonably satisfi ed that the issue of ROC Shares to the Scheme Shareholder is not prohibited, not unduly onerous and not unduly impracticable in that jurisdiction and is lawful for that person to participate in the Scheme by the law of the relevant place outside the Relevant Jurisdictions

Information Line 1300 309 234 (within Australia) or 0800 450 974 (within New Zealand) or +61 3 9415 4639 outside Australia and New Zealand between 9:00am to 5:00pm (AEST) Monday to Friday

Initial Approach Date 27 August 2007, being the date on which AZA announced that it had received approaches from interested parties which could lead to an off er for AZA

ITOCHU ITOCHU Corporation of Japan


Term Meaning

Joint Information Sections 4, 5.1, 5.6(a), 5.9, 8.1, 8.2, 11, 12.5, 12.7 and 16.1 being information that is prepared jointly by AEL and ROC

Listing Rules the offi cial listing rules of ASX

London Stock

Exchange

London Stock Exchange plc

Material Subsidiary (a) in the case of AEL, an operating Subsidiary of AEL having assets or liabilities in excess of $500,000; and

(b) in the case of ROC, an operating Subsidiary of ROC having assets or liabilities in excess of $500,000

Merged Group ROC and its Subsidiaries following implementation of the Merger (when AEL and its Subsidiaries will be Subsidiaries of ROC)

Merger the acquisition by ROC of all the AEL Shares through implementation of the Scheme in accordance with the Merger Implementation Deed

Merger

Implementation

Deed

the Merger Implementation Deed between ROC and AEL dated 16 June 2008, a summary of which is set out in Section 13 and a complete copy of which is available at www.anzonenergy.com or by calling the Information Line

Merger Ratio AEL Off er Price / ROC Share Price

Net Cash AEL Group’s total cash at bank less any outstanding indebtedness of AEL Group on the Record Date, as certifi ed pursuant to the Merger Implementation Deed and for the purposes of the calculation of Net Cash, the following shall apply:

(a) Net Cash shall be reduced by any amount paid or payable by ROC (including on behalf of the AEL Group) to redeem, cancel or acquire the AEL Convertible Notes;

(b) the face value of AEL Convertible Notes that are outstanding at the Record Date and are subject to an agreement under which the AEL Convertible Notes are to be redeemed, cancelled, converted or acquired by ROC (or a Related Body Corporate of ROC) shall be excluded from the calculation of outstanding indebtedness. For the sake of clarity, AEL Convertible Notes outstanding at the Record Date that are not subject to such an agreement shall be included in outstanding indebtedness;

(c) any accrued interest payable in relation to the AEL Convertible Notes shall be excluded from the calculation of outstanding indebtedness (but to the extent any such accrued interest is not to be paid, or payable, by ROC under (a) above then it shall be included in the calculation of outstanding indebtedness);

(d) trade creditors and debtors shall be included in the calculation of Net Cash, which for the sake of clarity shall include outstanding corporate advisory costs and legal costs of AEL in relation to the Merger (if any);

(e) Net Cash shall be increased by any amount paid in respect of Permitted Transactions;

(f) Net Cash shall be increased by an amount equal to the Options Proceeds;

(g) Net Cash will be calculated in Australian dollars, and where any of the components required to determine Net Cash are expressed in a currency other than Australian dollars they shall be converted to Australian dollars at the relevant exchange rate for that currency as quoted at close on Bloomberg on the Record Date

New ROC Shares ROC Shares to be issued to Scheme Shareholders as Scheme Consideration

Notice of Scheme

Meeting or Notice

the notice of Scheme Meeting as set out in Section 21


Term Meaning

Option Purchase

Deed

an agreement between ROC and a holder of AEL Options under which ROC has agreed to purchase all of that holders AEL Options in exchange for ROC Shares, with such agreement to be subject to the Scheme becoming Eff ective

Options Proceeds the cash proceeds which would have been received if all the AEL Options outstanding at the Record Date had been exercised as at that date, which for the sake of clarity shall include all AEL Options that are to be, or have been, acquired by ROC under an Option Purchase Deed

Permitted

Transactions

any acquisitions made by AEL as contemplated by (h)(iv) of the defi nition of AEL Prescribed Occurrence

Prescribed

Occurrence

an AEL Prescribed Occurrence or a ROC Prescribed Occurrence

Proxy Form the proxy form for the Scheme Meeting enclosed with this Scheme Booklet

PRRT Tax assessed pursuant to the Petroleum Resource Rent Act 1987, generally known as Petroleum resource rent tax

RAK RAK Petroleum PCL

RAK Unsecured Notes unsecured notes issued by AIL to RAK under the Unsecured Note Deed Poll

Record Date 7.00pm (AEST) on the fi fth Trading Day after the date on which the Scheme, if approved, becomes Eff ective, or such earlier date (after the Eff ective Date) as AEL and ROC agree in writing

Regulatory Approvals has the meaning given in Section 13.2(a)

Regulatory Authority includes:

(a) a Governmental Agency;

(b) any regulatory organisation established under statute;

(c) the London Stock Exchange; and

(d) ASX

Related Body

Corporate

has the meaning given in section 50 of the Corporations Act

Relevant Interest has the meaning given in sections 608 and 609 of the Corporations Act

Representative in relation to a party:

(a) each of the party’s Subsidiaries; and

(b) each of the directors, offi cers, senior managers, agents, contractors, advisers and fi nanciers of the party or of any of its Subsidiaries

other than AZA and directors, offi cers, senior managers, agents, contractors, advisers and fi nanciers of AZA

ROC Roc Oil Company Limited ABN 32 075 965 856 and includes where the context requires its Subsidiaries

ROC Board the board of directors of ROC

ROC Directors each of the directors of ROC who as at the date of this Scheme Booklet are set out in Section 10.5

ROC Group ROC and its Subsidiaries


Term Meaning

ROC Material Adverse

Change

matters, events or circumstances (whether individually or in aggregate), including where it becomes known to AEL that information disclosed by ROC or any of its Material Subsidiaries is, or is likely to be, incomplete, incorrect, untrue or misleading, but other than:

(a) those required to be done pursuant to the Merger Implementation Deed;

(b) those which AEL and ROC agree in writing are not a ROC Material Adverse Change; or

(c) those fully and fairly disclosed to AEL or in any public fi lings made by ROC prior to 16 June 2008,

having occurred, been announced or becoming known to AEL which have or could reasonably be expected to result in, either individually or when aggregated together, a diminution of the net assets of the ROC Group by more than $50 million

ROC Options options issued by ROC entitling the holder to subscribe for or acquire ROC Shares

ROC Prescribed

Occurrence

other than as required by or as a consequence of the Merger Implementation Deed or the Scheme, the occurrence of any of the following between 16 June 2008 and the Conditions Date:

(a) ROC converting all or any of its shares into a larger or smaller number of shares;

(b) ROC or a Material Subsidiary:

(i) entering into a buy-back agreement; or

(ii) resolving to approve the terms of a buy-back agreement;

(c) ROC or a Material Subsidiary resolving to reduce its share capital in any way or reclassifying, combining, splitting or redeeming or repurchasing directly or indirectly any of its shares;

(d) ROC or a Material Subsidiary:

(i) making an issue of, or granting an option to subscribe for, any shares or securities convertible into shares; or

(ii) agreeing to make an issue or to grant an option referred to in clause (d)(i);

other than:

(iii) issues of ROC Shares following an exercise by the holder of an option in issue as of 16 June 2008;

(iv) the issue of ROC Shares and options under the ROC Executive Share Option Plan and Employee Share Option Plan and the issue of ROC Shares following an exercise of such options;

(v) the issue of options to a director of ROC with ROC shareholder approval;

(vi) in addition to issues of ROC Shares as permitted pursuant to clauses (d)(iii), (iv) and (v) above, the issue of ROC Shares for a value in aggregate of up to US$10 million ;

(e) ROC making any change or amendment to its constitution;

(f) ROC makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie);

(g) ROC or a Material Subsidiary issuing, or agreeing to issue convertible notes;


Term Meaning

(h) ROC or a Material Subsidiary:

(i) acquiring or disposing of;

(ii) agreeing to acquire or dispose of; or

(iii) off ering, proposing, announcing a bid or tendering for;

any business, assets, entity or undertaking, the value of which exceeds $50 million other than in the ordinary course of conduct of the operations of ROC or a Material Subsidiary other than with the express written consent of AEL;

(i) ROC or a Material Subsidiary creating, or agreeing to create, any Security Interest over the whole, or a substantial part, of its business or property other than:

(i) in the ordinary course of business including in connection with the Beibu Gulf project and the fi nancing of that project and the ongoing subordination arrangements entered into in relation to subordinated notes issued by ROC;

(ii) in favour of ROC’s fi nancier in relation to or in connection with funding with respect to the Scheme or the AZA Takeover Off er; or

(iii) a lien which arises by operation of law or legislation securing an obligation that is not yet due;

(j) ROC or a Material Subsidiary resolving that it be wound up or the making of an application or order for the winding up or dissolution of ROC or a Subsidiary of ROC other than:

(i) where the application or order is set aside within 14 days; or

(ii) a solvent winding-up;

(k) the appointment of a liquidator or provisional liquidator of ROC or a Material Subsidiary;

(l) the making of an order by a Court for the winding up of ROC or a Material Subsidiary, other than a solvent winding-up;

(m) the appointment of an administrator of ROC or a Material Subsidiary under the Corporations Act;

(n) ROC or a Material Subsidiary being deregistered as a company or otherwise dissolved;

(o) ROC or a Material Subsidiary becoming unable to pay its debts when they fall due within the meaning of the Corporations Act or otherwise being presumed to be insolvent under the Corporations Act;

(p) ROC or a Material Subsidiary executing a deed of company arrangement; or

(q) the appointment of a receiver or a receiver and manager, in relation to the whole, or a substantial part, of the property of ROC or of a Material Subsidiary

ROC Representations

and Warranties

the representations and warranties given by ROC in the Merger Implementation Deed, as described in Section 13.6

ROC Scheme

Information

Sections 8.3, 10, and 15 which have been provided by or on behalf of ROC to AEL (and, for the avoidance of doubt, excludes the AEL Scheme Information and any Joint Information provided by AEL)

ROC Share Price $2.02

ROC Shareholders each person who is registered in the register of members of ROC as the holder of ROC Shares


Term Meaning

ROC Shares fully paid ordinary shares in the capital of ROC

Sale Facility the facility made available to Ineligible Foreign Shareholders and under which the New ROC Shares to which Ineligible Foreign Shareholders would otherwise have become entitled under the Scheme are sold, to be implemented by the Sale Facility Agent, as described in Section 16.1

Sale Facility Agent the appropriately licensed agent appointed by ROC to administer the Sale Facility

Scheme the scheme of arrangement under Part 5.1 of the Corporations Act between AEL and the Scheme Shareholders in respect of all the AEL Shares in substantially the form of Section 19 with such amendments as AEL and ROC agree

Scheme Booklet this document

Scheme Conditions the conditions of the Scheme as set out in Section 13.2

Scheme

Consideration

per AEL Share, such number of ROC Shares as equals the Merger Ratio, being the consideration to be provided by ROC to Scheme Shareholders for the transfer of each AEL Share in accordance with the Scheme

Scheme Meeting the meeting of AEL Shareholders ordered by the Court pursuant to the Scheme to be convened under section 411(1) of the Corporations Act

Scheme Shareholders each person, who is registered in the register of members of AEL as the holder of an AEL Share as at the Record Date (other than holders of Excluded Shares)

Scheme Shares AEL Shares held by Scheme Shareholders at the Record Date

Second Court Date the fi rst day on which an application is made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme is heard or, if the application is adjourned for any reason, the fi rst day on which the adjourned application is heard

Security Interest includes any mortgage, pledge, lien or charge or any security or preferential interest or arrangement of any kind (including retention of title and any deposit of money by way of security)

Sojitz Sojitz Energy Australia Pty Ltd ABN 53 129 690 740

Subsidiary has the meaning given to it in the Corporations Act

Superior Proposal a publicly announced bona fi de Third Party Proposal which the AEL Board acting in good faith (after consultation with its legal and fi nancial advisers) determines is:

(a) reasonably capable of being completed taking into account all aspects of the Third Party Proposal; and

(b) more favourable for AEL Shareholders than the Scheme (taking into account, among other things, all legal, fi nancial, regulatory and other aspects of the Third Party Proposal and the identity of the off erer)

Tax any tax, levy, charge, impost, duty, fee, deduction, compulsory loan or withholding, which is assessed, levied, imposed or collected by any Governmental Agency and includes any interest, fi ne, penalty, charge, fee or any other amount imposed on, or in respect of any tax


Term Meaning

Third Party Proposal in relation to a party or any Material Subsidiary of a party, any expression of interest, proposal or off er in relation to a bid, scheme, joint venture, dual listed company structure, purchase of a main undertaking, share issue or other similar reorganisation by any person under which if the interest, proposal or off er is entered into or completed a person other than the other party and its Representatives:

(a) (together with the person’s Associates) may acquire a Relevant Interest in more than 20% of one or more classes of securities of the party;

(b) may acquire voting power (as defi ned in Chapter 6 of the Corporations Act) of more than 20% in the party’s share capital;

(c) may acquire, directly or indirectly any interest (including legal, equitable or economic) in all or a material part of the business or assets (on a consolidated basis) of the party;

(d) may otherwise merge or amalgamate with the party; or

(e) may acquire control (as determined in accordance with section 50AA of the Corporations Act) of the party or any Material Subsidiary of the party.

For the purposes of paragraph (c), the acquisition of an interest in a part of the business or assets (on a consolidated basis) of a party or any of its Material Subsidiaries will be material if:

(f) the relevant business or businesses contribute 20% or more of the consolidated net profi t after Tax of the party or the Material Subsidiary (as appropriate); or

(g) the assets represent 20% or more of the total consolidated assets of the party or the Material Subsidiary (as appropriate)

Trading Day a day upon which ASX or AIM is open for trading, as the context requires

Unsecured

Convertible Note

Deed Poll

unsecured convertible note deed poll executed by AIL on 27 September 2006

Unsecured Note

Deed Poll

unsecured note deed poll executed by AIL on 27 September 2006

US$ or USD United States dollars

VWAP volume weighted average price


23. Technical glossary

Term Meaning

2D two dimensional

2P the sum of proved and probable reserves or in-place quantities, depending on the context

3D three dimensional

3D seismic a seismic survey (a geophysical survey, used in making maps delineating Prospects, where the travel times of seismic waves are measured as they are refl ected back to the surface from subsurface boundaries) made up of very closely spaced data whereby a “3D” image can be processed

acreage the area covered by petroleum exploration tenements

basin a segment of the earth’s crust which has downwarped and in which sediments have accumulated

bbl barrel

block a petroleum tenement, permit, lease or licence

boe; boepd barrels of oil equivalent; barrels of oil equivalent per day

bopd barrels of oil per day

contingent resources those estimates of petroleum which, on a given date, are potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable according to the defi nitions of the Society of Petroleum Engineers & World Petroleum Congresses. Contingent Resources may be assessed at diff erent confi dence levels (P90, P50, P10); unless otherwise stated, data is provided at a P50 confi dence level

ESP electronic submersible pump

farm-in, farm-out a transaction in which a partner makes available to a farmee an interest in a property by funding the work program

FPSO fl oating production, storage and offl oading vessel

GWC gas water contact

hydrocarbon naturally occurring organic compounds containing carbon and hydrogen; includes natural gas, liquid petroleum gases, natural gas condensate and crude oil

km2 square kilometre

LPG liquefi ed petroleum gas

mmbbl millions of barrels

mmboe million barrels of oil equivalent

mmscfd millions of standard cubic feet per day

mmstb million stock tank barrels

operator the member of an exploration joint venture of two or more exploration companies which has been appointed to carry out all operations on behalf of the parties

petroleum all phases of naturally occurring hydrocarbons

PJ peta (1015) joules

probable reserves those reserves which, when calculated probabilistically, have a 50% confi dence level (P50), i.e. there should be at least a 50% probability that the quantities actually recovered will equal or exceed the proved plus probable reserves estimate


Term Meaning

prospect a geological or geophysical anomaly that has been surveyed and defi ned, usually by seismic data, to the degree that its confi guration is fairly well established, and on which further exploration such as drilling can be recommended

proved reserves those reserves which, when calculated probabilistically, have a 90% confi dence level (P90), i.e. there is a 90% probability that the quantities of petroleum actually recovered will equal or exceed the proven (1P) reserves estimate

reserves quantities of hydrocarbons which are anticipated to be commercially recovered from known accumulations according to the defi nitions of the Society of Petroleum Engineers and World Petroleum Congresses

SPM single point mooring

Terms used in this Scheme Booklet may diff er from similarly titled terms used by other entities.





Anzon Energy Limited

ABN 43 097 972 364 Level 1390 Arthur StreetNorth Sydney NSW 2060Telephone +61 2 9024 3555 Facsimile +61 2 9024 3536www.anzonenergy.com

Directors

Mr Michael N Arnett Chairman

Mr Andrew A Young Managing Director and Chief Executive Officer

Mr Olivier FricNon-Executive Director

Mr Steven J KoroknayNon-Executive Director

Mr Robert LeonNon-Executive Director

Mr Vincenzo PaglioneNon-Executive Director

Mr Charles J Pope, ONZMNon-Executive Director

Company Secretaries

Mr Anthony J Strasser

Ms Gillian M Nairn

Auditors

PKFLevel 101 Margaret StreetSydney NSW 2000www.pkf.com.au

Financial Advisers

Macquarie Capital Advisers Limited No. 1 Martin PlaceSydney NSW 2000www.macquarie.com.au

Legal Advisers

Corrs Chambers WestgarthGovernor Phillip Tower1 Farrer PlaceSydney NSW 2000www.corrs.com.au

Share Registry

Computershare Investor Services Pty LimitedLevel 2, 60 Carrington StreetSydney NSW 2000www.computershare.com.auTel: 1300 85 05 05

Nominated Adviser

Grant Thornton UK LLP30 Finsbury SquareLondon, EC2P 2YUUnited Kingdomwww.grantthornton.co.uk

Corporate Directory

Designed and Produced by Computershare

Anzon Energy Limited

ABN 43 097 972 364Level 13, 90 Arthur Street, North Sydney NSW 2060 AustraliaTelephone: +61 2 9024 3555 Facsimile: +61 2 9024 3536web: www.anzonenergy.com

197CA

10686