capital raising, page-26

Your thoughts on the directors bonus.

My thoughts are they should have been linked to the share price increasing not to how many barrels of oil we produce. Since the 8th of November 2012 we have gone from having 939,444,979 fully paid shares to 1517,717,910. If it was linked to the share price do you think there would have been as much dilution?

For those who haven't read resolution 9 read below.




10. RESOLUTION 9 – APPROVAL OF BONUS POOL
Resolution 9 seeks Shareholder approval for the Directors to establish a bonus
pool of cash funds on the terms and conditions set out below (Bonus Pool):
(a) For every barrel of oil equivalent after the first 10,000 barrels of oil
equivalent per year produced by the Company and any of its
subsidiaries the Company will contribute $2 to the Bonus Pool to a
maximum of 150,000 barrels of oil equivalent per year. For every barrel of
oil equivalent after the first 150,000 barrels of oil equivalent per year
produced by the Company and any of its subsidiaries the Company will
contribute $3 to the Bonus Pool.
(b) The calculations will be based on the number of barrel of oil equivalents
produced by the Company each financial year.
(c) Distribution of the funds collected in the Bonus Pool will be allocated at
the discretion of the Directors.
(d) The Directors will determine how, or if at all, the Bonus Pool will be
distributed. Any balance in the Bonus Pool left undistributed will be
carried forward.
(e) It is intended that the funds from the Bonus Pool will be allocated as a
cash bonus to Directors or management staff in recognition of their
contribution to the Company’s success.
Set out below are two examples, using an assumed price per barrel of oil of
AUD$100.
If the Company were to produce 20,000 barrels of oil in one financial year the
total revenue would equal $2,000,000. The Company would contribute $2 to the
tte notice of agm 08-nov-12.doc 18
Bonus Pool for every barrel of oil equivalent after the first 10,000 barrels of oil
equivalent per year produced, which would mean $2 multiplied by 10,000. The
Bonus Pool contribution would therefore be $20,000.
If the Company were to produce 150,000 barrels of oil in one financial year the
total revenue would equal $15,000,000. The Company would contribute $2 to
the Bonus Pool for every barrel of oil equivalent after the first 10,000 barrels of oil
equivalent per year produced, which would mean $2 multiplied by 140,000. The
Bonus Pool contribution would therefore be $280,000.
The Directors consider that the establishment of the Bonus Pool will provide a
performance linked incentive to the remuneration of Directors and
management staff and will motivate and reward the performance of Directors
and management staff in their respective role.
The Directors recommend that all Shareholders vote in favour of Resolution 9.