Retail Entitlement Offer Booklet and Covering Letter - AJ Lucas

Key Risks
1. Specific risks relating to investing in the Offer Shares
1.1 Market Conditions
The market price of shares can fall, as well as rise, and may be subject to varied and unpredictable influences. Neither AJL nor the Directors warrant the
future performance of the Offer Shares, AJL or any return on an investment in AJL.
1.2 Liquidity
There can be no guarantee that an active market in the Shares on ASX will exist at all times. There may be relatively few or many potential buyers or sellers
of the Shares on the ASX at any given time. This may increase the volatility of the market price. It may also affect the market price at which Shareholders
are able to sell their Shares. This may result in Shareholders receiving a market price for Shares that is less or more than the Offer Price for Offer Shares.
Liquidity in AJL shares has typically been low and there can be no assurance that liquidity will improve.
1.3 Future issue of securities of AJL
While AJL anticipates that the Recapitalisation Plan will substantially reduce its debt and meet its funding needs to sustain its investment in Cuadrilla and for
the Bowland and Bolney Projects until after CY2014, this will depend upon the full Recapitalisation Plan being completed and AJL’s ability to generate
income from its operations. Accordingly, it is possible that AJL may require further financing in addition to the amounts raised under the Offer and other
elements of the Recapitalisation Plan. Any additional equity financing may dilute shareholdings, and any debt financing, if available, may involve restrictions
on financing and operating activities. Any inability to obtain additional finance, if required, could have a material adverse effect on AJL’s operations and its
financial condition and performance. (See also Slide 19 - Forward Program for Cuadrilla)
A condition of Kerogen’s consent is that any equity raising at AJL over the next 12 months must be way of pro-rata offer.
23