Eden Energy plans $2m capital raising

Perth-based Eden Energy hopes to raise $2 million through a share placement plan to fund general capital works.

Eden will issue 40 million ordinary shares to eligible shareholders at 5 cents per share.

Under the SPP eligible shareholders can subscribe for between $1,000 and $15,000 of additional shares, without brokerage and transaction costs.

See full company statement below:

On behalf of the directors of Eden Energy Ltd A.C.N. 109 200 900 (Eden), I am pleased to offer all Eligible Shareholders of Eden the opportunity to participate in this SPP, which was announced on 18 August 2010.

This SPP is designed to raise up to A$2,000,000 through the issue of up to 40,000,000 ordinary shares in Eden (Shares) to Eligible Shareholders at a price of A$0.05 per Share (Issue Price). This SPP will allow Eligible Shareholders to subscribe for between A$1,000 to A$15,000 of additional Shares, without brokerage and transaction costs. The funds will be used to finance Eden's general working capital.

Participation in this SPP is optional and is open to all shareholders who, as at 5:00pm (WST) on 17 August 2010 (the Record Date), were holders of Shares in Eden and whose registered addresses are in Australia or New Zealand (Eligible Shareholders).

Under this SPP, Eligible Shareholders may apply for a parcel of Shares valued at either A$1,000 (20,000 Shares), A$2,000 (40,000 Shares), A$3,000 (60,000 Shares), A$4,000 (80,000 Shares), A$5,000 (100,000 Shares), A$7,500 (150,000 Shares), A$10,000 (200,000 Shares), A$12,500 (250,000 Shares) or A$15,000 (300,000 Shares), or alternatively may do nothing (thereby retaining their current shareholding).

Given the number of Eden's shareholders at the Record Date, each of whom will have a right to subscribe for up to A$15,000 of additional Shares, it is possible that Eden could receive from Eligible Shareholders applications for Shares which, in aggregate, exceed the maximum number of Shares proposed to be allotted under this SPP. Therefore the Directors have determined that, in the event that Eden receives applications for, in aggregate, more than 40,000,000 Shares, Eden will scale back applications received from Eligible Shareholders. If Eden is required to scale back applications, it will use its best endeavours to allocate the new Shares being offered under this SPP to Eligible Shareholders on a pro-rata basis, having regard to the number of new Shares each Eligible Shareholder applied for under this Offer. If any applications are scaled back, any surplus in the Application Amount paid by an Eligible Shareholder will be refunded by Eden to that Eligible Shareholder, without interest, following the issue. Eden therefore reserves the right to allot to an Eligible Shareholder fewer new Shares than that Eligible Shareholder applied for under this Offer.

This SPP opens on 23 August 2010 and is expected to close at 5:00pm WST on 28 September 2010.

Eligible Shareholders who choose to participate in this SPP should follow the instructions on the enclosed personalised application form.

The Issue Price at which Shares in Eden will be issued under this SPP is A$0.05 per Share, being approximately 80.44% of the volume weighted average market price of the Shares calculated over the last 5 trading days on which sales in the Shares were recorded before the date on which this SPP was announced.

The full terms and conditions of this SPP, and a personalised application form, are attached to this letter and I urge all Eligible Shareholders to read them in their entirety before they decide whether to participate in this SPP. The Offer being made to Eligible Shareholders under this SPP does not take into account the individual investment objectives, financial situation or particular needs of each Eligible Shareholder. If you have any concerns about what to do, you should consult your stockbroker, accountant or professional adviser.

Acquiring (and holding) Shares in Eden is considered a speculative form of investment as the future price of the Shares can rise or fall. Eligible Shareholders should be aware that there is a risk that the market price of the Shares may change between the date of the Offer under this SPP and the date when the new Shares are issued to Eligible Shareholders who apply for Shares under this SPP. This means that the Issue Price may be more than the market price of the Shares at the issue date and Eligible Shareholders may not be able to sell such Shares at a price equal to or greater than the Issue Price.

Eligible Shareholders should note that the Offer under this SPP is not made under a prospectus or other disclosure document. As a consequence, this letter and the attached terms and conditions of this SPP and the application form do not contain the level of disclosure required under the Corporations Act 2001 to be included in a disclosure document. Eligible Shareholders will therefore be required to rely on their own knowledge of Eden and previous disclosures made by Eden on the ASX.
This SPP is intended as a one-off initiative to give Eligible Shareholders the opportunity to purchase additional Shares, without transaction costs and brokerage. However, the board of Eden reserves the right to make similar offers under similar share purchase plans in the future.

The following is a summary of recent developments on our major projects:

Pyrolysis Technology
The new technology developed with University of Queensland (UQ) to produce hydrogen and carbon fibre from natural gas - following the long delay by Indian Oil in progressing their non-binding terms sheet, Eden has decided to proceed with the initial up-scaling of this technology on its own at the Hythane Co premises in Colorado, and has commenced this process. At the same time Eden has signed the agreement with UQ to
acquire the 50% interest of UQ, taking Eden to 100%.

Hydrogen / Hythane® / Dual Fuel Projects
These Indian and US projects are proceeding, albeit that some are slower than previously anticipated.
However, the huge potential of both the dual fuel technology and Hythane® as a highly efficient, ultra-low emission premium blend of natural gas, particularly in India, remains. If the pyrolysis technology can be successfully scaled-up, the high value of the carbon fibre and carbon nanotubes will greatly subsidise the cost of the hydrogen, which is the other product of the process. It is hoped that this will lead to a very rapid rollout of Hythane® as a vehicle fuel as the hydrogen could potentially become very cheap.

Energy Projects
Eden is actively progressing negotiations, jointly with its Welsh joint venture partner, for either a joint venture partner or else a joint corporate involvement over their UK based coal bed methane, conventional gas and shale gas project which covers almost 1,800 km2 (500,000 acres) of the coal fields and shale gas targets in Wales, Bristol/Somerset and Kent. Eden has at the same time secured a 12 month suspension of its commitments on the majority of its geothermal licences in South Australia.