Annual Report

for the Year Ended 30 June 2016

Eden Energy Ltd

& Controlled Entities

ABN 58 109 200 900

CONTENTS

Highlights 3

Corporate Directory 5

Review of Operations 6

Directors' Report 15

Auditors' Independence Declaration 20

Consolidated Statement of Profit or Loss and Other Comprehensive Income 21

Consolidated Statement of Financial Position 22

Consolidated Statement of Changes in Equity 23

Consolidated Statement of Cash Flows 24

Notes to the Financial Statements 25

Directors' Declaration 40

Independent Auditor's Report 41

Additional Information for Listed Public Companies 43

EdenCreteTM

HIGHLIGHTS DURING THE 2015-2016 FINANCIAL YEAR

• Georgia Department of Transportation (GDOT)

  • I-20 Interstate Highway field trial, using EdenCreteTM added to GDOT's 24 hour accelerated concrete repair mix in two trial slabs, was conducted (Augusta, August 2015) .

  • Results were 45.8% improvement in compressive strength, and a 56% reduction in the depth of wear in an abrasion resistance test.

  • Eden received formal approval from the GDOT New Products Evaluation Committee for use of EdenCreteTM in GDOT 24 hour accelerated concrete applications and Class B concrete applications and discussions commenced in relation to specifications for the use of 24-Hour

    Accelerated Concrete/ Class B Concrete.

  • Since the end of the financial year:

    • an inspection of the I-20 field trail slab shows it is showing no visible cracking or significant signs of wear after 11 months of highway wear, whereas the control section is already showing a significant crack developing; and

    • GDOT has advised it proposes to use EdenCreteTM in several state funded forthcoming suitable highway slab replacement projects in Georgia.

    • GDOT intends that the requests for tender in these selected projects will specify that EdenCreteTM be added to the concrete.

    • These will be the first commercial contracts for EdenCreteTM for US highway repair projects.

  • The GDOT field trial of EdenCreteTM in Class 1 concrete has been included in a new section of highway that is being tendered and is presently anticipated to take place in 2018 unless this timetable can be accelerated.

• Commercial order received for use of EdenCreteTM in replacing a section of a high strength concrete slab at an industrial site that is subject to extreme wear and abrasion, following an earlier successful field trial at the site (October 2015). This project was completed and since the end of the financial year,

  a second section of concrete slab has been replaced using concrete with EdenCreteTM added.

• First commercial EdenCreteTM order received for an infrastructure project, for use at a new MARTA bus garage in Atlanta, Georgia and the project was undertaken, achieving the following improvements in performance:

  38%

  59%

  24%

  47%

  • Compressive Strength Increase -

  • Split Tensile Strength Increase -

  • Modulus of Elasticity Increase -

  • Abrasion Resistance Increase -

  • Shrinkage Reduction (Improvement) - 9%

• Trials of EdenCreteTM with lower dosage rates of EdenCreteTM showed material improvement in performance characteristics of concrete, including a 46% reduction (improvement) in the rate of abrasion using ½ US gallon of EdenCreteTM / yard3 of concrete, which would have added only approximately 3.5% - 4% to the installed cost of the concrete paid by GDOT on the I-20 field trial.

• Eden completed the testing ASTM C494 S testing of the EdenCreteTM enriched concrete which showed:

  • 41% increase in compressive strength at 28 days (ASTM C39);

  • 32% increase in flexural strength at 28 days (ASTM C78);

  • 29% increase in split tensile strength at 28 days (ASTM C496);

  • 59% increase in abrasion resistance at 90 days (ASTM C779 Proc C);

  • 61% reduction in ultimate shrinkage at 35 days (ASTM C105);

  • 9.5% increase in freeze / thaw resistance at 180 days (from 88 to 96.4) (ASTM C666) and

  • 3 minute delay in Time of Set (ASTM C403).

• The expansion of Eden's Colorado based production capability of EdenCreteTM, from its present level of approximately 108,000 gallons per year to a targeted maximum of 2 million -2.4 million gallons per year commenced and is on schedule to be operational by early in 2017. Plans are also underway to acquire the Colorado facility which has previously been occupied under a lease.

• Eden identified a suitable site in Augusta, Georgia for it to build its large scale, future global EdenCreteTM production facility and secured a financial assistance and incentives package (including a conditional land grant of 112 acres along with various exemptions and rebates from future taxes and

  levies) worth in aggregate US$24.76 million from Georgia Economic Development Authority and Augusta Economic Development Authority.

• Eden commenced assembling a US team of highly experienced concrete admixture sales staff and since the end of the financial year has engaged 5 full time sales staff appointed with a collective aggregate of

  109 years' experience covering more than 30 states in the USA. At least three further similarly experienced sales staff are also considering joining the Eden sales team.

• Eden finalised its agreement with Deakin University to proceed with a collaborative Australian Research Council ("ARC") Linkage Grant research project into ultra-high strength carbon nanotube enriched concrete requiring little or no reinforcing steel.

  CNT Enriched Polymers and Plastics- EdenPlastTM

• The ongoing collaborative research project between Eden and the University of Queensland (funded by the Australian Research Council to the extent of A$255,000 and commenced in 2014), into carbon nanotubes in plastics, achieved very encouraging preliminary results.

  Optiblend™ Dual Fuel

• 24 units sold in India and the USA during the year, totalling $1.1 million.

  Corporate

• Eden completed the sale of its 100% owned UK subsidiary that held all its UK gas assets, to the parent of its UK Joint Venture partners in consideration for an earn-out arrangement.

• Eden raised A$17.45 million additional capital through a placement to two US investment funds, a placement to sophisticated and professional investors, a rights issue and the exercise of options.