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ENE Corporate Activity Update

8 Sep 2009

Energy Developments Limited (ASX: ENE or the “Company”) refers to its ASX release of Tuesday, 25 August 2009 where the Company disclosed that it was in discussions with a party in relation to a potential transaction for 100% of ENE.

ENE confirms that this party, which is a private equity fund, has provided a proposal to acquire 100% of ENE on a fully diluted basis at an indicative price of $2.80 per ENE share (the “Proposal”). The Proposal is non-binding, conditional and incomplete.

After consultation with its major shareholders, the Company has invited this party into an exclusive confirmatory due diligence process, which is due to commence shortly.

The Board of ENE makes no recommendations concerning the suitability of the Proposal and there is no assurance that this process will result in an offer capable of being put to shareholders for consideration.

UK/France Offer
In parallel to the Proposal, ENE remains in discussions with an international infrastructure specialist fund manager in relation to the potential divestment of the Company’s UK and French landfill gas power generation assets. There can be no assurances the Company will reach agreement on terms acceptable to the Board.

Financial Outlook and Australian Regulatory Developments
Irrespective of the outcome of any such corporate activities, the Company’s outlook has been strengthened through improved operating performance and the recent completion of power projects in Australia, leading to ENE’s recent upgraded earning guidance of a normalised EBITDA for the year ending 30 June 2010 of between $135 to $145 million.

Longer term, the Company’s outlook has also been strengthened through the inclusion of certain of the Company’s Waste Coal Mine Gas (“WCMG”) projects under the Renewable Energy Target (“RET”) from 1 July 2011.

Furthermore, on 2 September 2009, the Minister for Climate Change and Water, Senator Penny Wong announced a transitional assistance package of $130 million for entities potentially adversely affected by the transition from the New South Wales Greenhouse Gas Reduction Scheme to the proposed Carbon Pollution Reduction Scheme (“CPRS”).

In addition to including WCMG in the RET, the Federal Government, working with the NSW Government, will provide transitional cash assistance to landfill gas and avoided methane generators and holders of unused NSW Greenhouse Gas Abatement Certificates (“NGACs”).

ENE is continuing to work with the Commonwealth and State Governments, all Parliamentary parties and industry groups on resolution of appropriate transition arrangements designed to further protect and encourage its valuable carbon abatement activities through waste methane power generation, as the broader CPRS legislation is developed.
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