Entek Energy : Notice of General Meeting & Proxy Form

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of Entek Energy Limited (Company) will be held at 338 Hay Street, Subiaco, Western Australia on Wednesday 8 February 2017 at 10 a.m. (WST) (Meeting).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form forms part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on 6 February 2017 at 5 p.m. (WST).

Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Section 7.

AGENDA

1. Resolution 1 - Ratification of Placement

   To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

   "That, for the purposes of Listing Rule 7.4, and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 63,800,000 Shares with 12,760,000 free attaching Options (on a pre-Consolidation basis) each at an issue price of $0.005 (Placement) on the terms and conditions set out in the Explanatory Memorandum."

   Voting Exclusion

   The Company will disregard any votes cast on this Resolution by a person who participated in the Placement and any of their associates.

   However, the Company will not disregard a vote if:

2. it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

3. it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. Resolution 2 - Approval of Share Consolidation

   To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

   "That for the purposes of section 254H of the Corporations Act, and for all other purposes, Shareholders approve and authorise the Directors to consolidate the issued capital of the Company on the basis that every four Shares be consolidated into one Share (Consolidation)."

5. Resolution 3 - Authority to grant Facilitator Options to Facilitators

   To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

   "That, subject to Resolution 2 being passed, for the purpose of Listing Rule 7.1, and for all other purposes, Shareholders authorize and approve the Directors to grant (on a post-Consolidation basis) up to 10,000,000 Facilitator Options each exercisable at $0.04 on or before 31 March 2020 to the Facilitators (and/or their nominees) on the terms and conditions set out in the Explanatory Memorandum."

   Voting Exclusion

   The Company will disregard any votes cast on this Resolution by the Facilitators and their nominees and a person who might obtain a benefit (except a benefit solely in their capacity as holder of ordinary securities) if the Resolution is passed and any associates of those persons.

   However, the Company will not disregard a vote if:

6. it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

7. it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Dated 9 January 2017

BY ORDER OF THE BOARD

Ms Nerida Schmidt Company Secretary

This Notice of General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on [phone] or for procedural matters, Computershare Investor Services on 1300 850 505. EXPLANATORY MEMORANDUM
1. Introduction

   This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at 338 Hay Street, Subiaco, Western Australia on Wednesday 8 February 2017 at 10 a.m. (WST).

   This Explanatory Memorandum should be read in conjunction with, and forms part of, the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice.

   A Proxy Form is located at the end of the Explanatory Memorandum.

2. Action to be taken by Shareholders

   Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.
3. Proxies

   A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a 'proxy') to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgment of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

   Please note that:

4. a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;

5. a proxy need not be a member of the Company; and

6. a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

   The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

7. Background to Resolutions

   On 11 November 2016 the Company announced that it had received commitments through the placement of Shares each at an issue price of $0.005 to raise $319,000 (before costs) under the Company's 15% annual limit permitted under Listing Rule 7.1.

   A summary of Listing Rules 7.1 and 7.4 is provided in section 3.

   In order to reduce the number of Shares on issue, the Company is seeking Shareholder approval to undertake a Consolidation of the number of Shares on issue on the basis that four

   (4) Shares held be consolidated into one (1) Share.

   Upon receiving Shareholder approval to consolidate the Shares and the Consolidation being effected, the Company intends to immediately undertake a non-renounceable 1:1 rights issue at a price of $0.02 per Share (Rights Issue) which reflects the issue price of the Placement Shares on a post Consolidation basis. See Section 5 for further information about the Consolidation.

   The Placement and the Rights Issue (together the Capital Raising) will provide the Company with approximately $2.8 million of additional capital and will allow the Company to continue to progress its existing assets as well as provide additional working capital to pursue new venture opportunities.

   The Company has agreed that, subject to and following successful subscriptions being received for the full amount of the Capital Raising to issue the Facilitators with Facilitator Options exercisable at a post Consolidation price of $0.04 per share (see Section 6). The Facilitator Options are in part consideration for the services being provided by the Facilitators as part of the Capital Raising and the Directors consider their issue to be in the best interests of Shareholders.

8. Resolution 1 - Ratification Placement
9. General

On 16 November 2016, the Company issued 63,800,000 Shares with 12,760,000 free attaching Options (on a pre-Consolidation basis) at an issue price of $0.005 to sophisticated and professional investors to raise $319,000 (before costs).

The funds raised from the issue of the Placement have been, or will be, used by the Company for general working capital for existing assets, business and administration costs (including the costs of the Placement) and to assess new opportunities.

The Placement Shares and Options were issued under the Company's 15% annual limit permitted under Listing Rule 7.1.

Listing Rule 7.1 provides that a company must not (subject to specified exceptions), without the approval of shareholders, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of ordinary securities on issue at the commencement of that 12 month period.

Listing Rule 7.4 provides that where a company in general meeting ratifies a previous issue of securities made pursuant to Listing Rule 7.1, providing that the previous issue did not breach Listing Rule 7.1, the issue of those securities will be deemed to have been with shareholder approval for the purpose of Listing Rule 7.1.

Resolution 1 seeks Shareholder approval for the ratification of the issue of the Placement Shares and Options pursuant to Listing Rule 7.4. The effect of Shareholders passing Resolution 1 will be to restore the Company's ability to issue securities within the 15% placement capacity under Listing Rule 7.1 during the next 12 months.

Resolution 1 is an ordinary resolution.