Empire Oil & Gas NL : Letter to Shareholders

W E B w w w . e m p i r e o i l . c o m . a u

S T R A L I A

1 November 2013
The Manager
The Australian Securities Exchange
Company Announcements Office
Level 4/20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam

RE: LETTER TO SHAREHOLDERS

Please find attached a letter to Shareholders from Dr Bevan Warris, Executive Director of
Empire Oil & Gas NL.

Yours faithfully

Kim Hogg

Company Secretary

EMPIRE OIL & GAS NL

U S T R A L I A

31 October, 2013
Dear Shareholder
E M A I L a d m i n i s t r a t i o n @ e m p i r e o i l . c o m . a u

W E B w w w . e m p i r e o i l . c o m . a u

EXTRAORDINARY GENERAL MEETING TO BE HELD ON 26 NOVEMBER 2013 AT 2PM

I last wrote to you on 18 October 2013 informing you of the Extraordinary General Meeting of the Company to be held on Tuesday, 26 November 2013 as a result of a requisition by ERM Power Limited ("ERM") seeking to remove all of the Board except for myself and to replace them with two of its own directors.
In that letter I spelt out my view, as your Company's representative, of ERM's board challenge.
As stated in my letter of 18 October 2013, I do not believe that replacing my fellow directors with Mr Iannello and Mr Heading is in the best interests of the Company or for the benefit of shareholders.
In addition to the matters addressed in that letter, I point out the following:

1. The current Board has a corporate strategy for Empire; the ERM nominees do not.

2. The current Board is a team of "hands on" experienced oil and gas specialists; the ERM

nominees are not.

3. The current Board's focus is on improving shareholder value and is not diverted by potential conflicts of interest; ERM's nominees are likely to be presented with conflicts of interest in relation to each of the 9 joint ventures in the Perth Basin in which ERM is a participant with Empire. In addition, ERM has publicly stated it is considering a demerger of its gas business which includes both its joint venture interests with Empire in WA and other assets elsewhere in Australia. Any demerger is likely to cause further conflicts of interest.

4. ERM's proposal will cause significant cost to Empire and delay Empire's current corporate and

exploration plans significantly.

5. A vote AGAINST each of the resolutions the subject of the General Meeting, is a vote for certainty, whereas a vote for the resolutions is a vote for uncertainty; no one knows what ERM's review will determine or who will end up on your Company's Board.

I urge shareholders not to be swayed by ERM's repeated statements that it is not attempting to seize board control of your Company. Plainly, that is what it is intending to do without paying or making any offer for that control. Why else would ERM be going to such lengths and spending so much time and energy on an asset outside ERM's core business?
Your current Board has, through sheer hard work, experience and diligence, completed the construction and commissioning of the Red Gully Facility within 8 months and is now earning significant revenue from the sale of gas and condensate from that Facility.
The Company is about to embark on what I consider to be an exciting period within its history and, with respect, does not need its minority joint venture partner, a large Queensland electricity marketer, to take control of your Company's Board and to determine for you:
(a) the future makeup of your Company's Board and management; and
(b) how your Company's assets are to be managed.
On 23 October 2013, ERM announced that it intended to send shareholders a pre-completed blue proxy form. In response to that announcement, and given my strong views about the impact those resolutions may have on the future of the Company, I felt it necessary to provide you with a pre-completed yellow proxy form to vote AGAINST each of the 5 resolutions. Enclosed with this letter is a pre-completed yellow proxy form voting against each of the 5 resolutions. That proxy form also appoints the chairman of the meeting as your proxy for the meeting. To vote against the proposed resolutions and therefore to retain the current Board of Empire, shareholders will simply need to sign at the bottom of the form in accordance with the instructions on the form and return it to Empire's share registry using the pre-addressed pre-paid envelope provided.
If you have already lodged a proxy against the resolutions you do not need to send another one. If you have already lodged a proxy in favour of the resolutions and want to change your proxy, by signing and returning the yellow proxy you will override your earlier proxy.
Given the importance of these resolutions to the future of your Company, I urge that you vote

AGAINST each resolution in accordance with the attached yellow proxy form.

For more information, including Empire's detailed response to the issues raised by ERM and other issues Empire believes are relevant to ERM's proposal to change your Board, please visit the Empire website at www.empireoil.com.au.
I would welcome the opportunity to discuss this matter of paramount importance to the future of our company with you on (08)9286-4600.

Yours faithfully

Bevan Warris

Executive Director

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.. LODGE YOUR PROXY aFORM

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By mail:

·, Empire Oil & Gas NL

Cl- Link Market Services Limited

Locked Bag A14

By fax: +61 2 9287 0309

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ABN 55 063 613 730

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Sydney South NSW 1235 Australia

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Ali enquiries to: Telephone: +61 1300 554 474

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SECURITYHOLDER PROXY FORM

1/We being a member (s) of Empire Oil & Gas NL and entitled to attend and vote hereby appoint:

APPOINT A PROXY

the Chairman

' of the Meeting

(mark box)

OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered securityholder) you are appointing as your proxy

or failing the person/body corporate named, or if no person /body corporate is named, the Chairman of the Meeting, as my/our proxy and to vote for me/us on my/our behalf at the Extraordinary General Meeting of the Company to be held at 2:00pm (WST) on Tuesday,

26 November 2013, at The University C lub of Western Australia, Banquet Hall South, 35 Stirling Highway, Crawley WA 6009 and at any adjournment or postponement of the meeting.

, The Chairman of the Meeting intends to vote undirected proxies against all items of business.

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e read the voting instructions overleaf before marking any boxes with an

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Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the meeting.

Pleas

Resolution 1 Abstain* Resolution 4 For Against Abstain*

Appointment of Director - Removal of Director -

James Brett Lochran Heading Jeffrey MacDonald

Resolution 2 Resolution 5

Appointment of Director - Removal of Director -

Antonino Mario lannello '

Resolution 3 [R] D

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l Kevin Joyce

Removal of Director ot' ,•

John Lloyd Craig Marshall

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* lf you mark the Abstain box fora particular ltem, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

CONTACT DETAILS

Email Address Telephone Number =

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SIGNATURE OF SECURITYHOLDERS - THIS MUST BE COMPLETED

Securityholder 1 (Individua[) Joint Securityholder 2 (Individua[) Joint Securityholder 3 (Individua[) =

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Sole Director and Sole Company Secretar y Director/Company Secretary (Delete one) Director

This form should be signed by the securityholder. lf a joint holding, either securityholder may sign. lf signed by the securityholder's attorney,

the power of attorney mus t have been previous ly noted by the registr y or a certified copy attached to this form. lf executed by a company, =

the form must be executed in accordance with the company's constitution and the Corporations Act 2001 (Cth).

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•' HOW TO COMPLETE THIS PROXY FORM

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Your Name and Address

This is your name and address as it appears on the Company's security register. lf this information is incorrect, please make the correction on the form. Securityholders sponsored by a broker should advise their broker of any changes. Piease note: you cannot change ownership of your securities using this form.

Appointment of a Proxy

lf you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. lf the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. lf you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy.

A proxy need not be a securityholder of the Company. A proxy

may be an individuai or a body corporate.

Votes on ltems of Business - Proxy Appointment

You may direct your proxy how to vote by placing a mark in one of the boxes apposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. lf you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. lf you mark more than one box on an item your vote on that item will be invalid.

Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. lf you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company's security registry or you may copy this form and return them both together.

To appoint a second proxy you must:

(a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. lf the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and

(b) return both forms together.

Signing lnstructions

You must sign this form as follows in the spaces provided:

Individuai: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, either securityholder may sign.

Power of Attorney: to sign under Power of Attorney, you must lodge a certified copy of the Power of Attorney with the registry or the company's registered office. lf you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when yow return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. lf the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate piace.

Corporate Representatives

lf a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to

admission in accordance with the Notice of Meeting. A form

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of the certificate may be obtained from the Company's security registry.

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Lodgement of a Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 2:00pm (WST) on Sunday, 24 November 2013, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy Forms may be lodged using the reply paid envelope or:

by mail:

Empire Oil Et Gas NL

Cl- Link Market Services Limited

Locked Bag A14

Sydney South NSW 1235

Australia

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+61 2 9287 0309 ••• ìr

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by hand:

delivering it to Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138.

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Proxy Forms may also be lodged by mail or fa x at the Company's registered office.

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