Oil Basins Limited (ASX:OBL) Non-Renounceable Rights Issue To Raise A$5,261,810

Melbourne, Aug 17, 2010 AEST (ABN Newswire) - Oil Basins Limited (ASX:OBL) is pleased to announce a fully underwritten non-renounceable rights issue to shareholders (Rights Issue), to raise A$5,261,810 before costs.

Under the Rights Issue, the Company will offer its shareholders, whose registered addressed are within Australia and New Zealand (Eligible Shareholders) one (1) new fully-paid ordinary share for every one (1) fully paid ordinary share held as at 5:00pm on Thursday 26 August 2010 (Rights Issue Share) with one (1) free new option (each with an exercise price of A$0.04 and an expiry date of 30 June 2014) (Rights Issue Option) for every four (4) Rights Issues Shares subscribed for. The issue price for the Rights Issue Shares will be A$0.04. Fractional entitlements will be rounded down to the nearest whole number and the Rights Issue Shares will rank equally with the Company's fully paid ordinary shares on issue.

Shareholder approval of the Rights Issue is not required. The Company will despatch to Eligible Shareholders the Rights Issue Prospectus, setting out the terms of the Rights Issue together with a personalised Entitlement and Acceptance Form, on or about Monday 30 August 2010. Eligible Shareholders should read the Prospectus carefully.

The Rights Issue is fully underwritten by Patersons Securities Limited and will result in the issue of 131,545,267 Rights Issue Shares and 32,886,316 Rights Issue Options, to raise A$5,261,810 before costs.

The funds raised by the Rights Issue will be used for funding drilling and completion costs to earn a 90% interest in Backreef-1, exploration costs including CSG & Shale Gas assessment, advancing Native Title negotiations in Canning Basin permit 5/07-8 EP, and general working and administrative capital.

In accordance with the ASX Listing Rules, the Company has decided that the Rights Issue will not be extended to shareholders with registered addresses outside Australia or New Zealand as the Company has formed the view that it would be unreasonable to extend the offer in such a way having regard to:

1. the number of shareholders outside Australia and New Zealand as a proportion of the total shares of the Company;

2. the number and value of securities to be offered to shareholders outside of Australia and New Zealand; and

3. the costs of complying with the legal requirements and requirements of regulatory authorities overseas jurisdictions.

The Prospectus will be lodged with the Australian Securities and Investments Commission at 5.00pm (AEST) and will be available on the ASX website for inspection at; http://www.asx.com.au

Optionholders

Under the terms of the existing options you currently hold, there is no entitlement to participate in the Rights Issue unless you exercise your options and are entered on to the register as a shareholder on or before the Record Date. Under the terms of the options you are entitled to receive seven (7) days notice of the Rights Issue. The purpose of this letter is to give you the notice in order to allow you to participate in the Rights Issue should you wish to do so.

If you are not a shareholder and wish to participate in the Rights Issue, it will be necessary for you to exercise all or part of your options, and the shares issued on the exercise of those options must have been allotted to you before the Record Date. If you wish to do so, you should complete a Notice of Exercise of Options (attached) and lodge that notice with Computershare Investor Services Pty Limited (Computershare), together with your payment for the number of shares you wish to take up.

Notice of exercise of your options and payment of the exercise price of options should be received by Computershare on or before Tuesday 24 August 2010 as holders lodging notices of exercise after that date cannot be assured of the allotment of shares by the Record Date.

If you do not wish to participate in the Rights Issue in respect of your options, you do not need to take any action. Before deciding whether to exercise any or all of your options, you should read the announced Prospectus in its entirety and if any doubt consult your professional advisor. This letter is only intended to inform you of your rights in relation to your options. This letter is not an offer or an invitation to acquire shares in Oil Basins Limited or to participate in the Rights Issue.

Timetable*

The proposed timetable for the Rights Issue is as follows:---------------------------------------------------------------Initial announcement of Rights Issue,lodgement of Appendix 3B and Prospectus        Tue 17 Aug 2010---------------------------------------------------------------Despatch of letter to shareholders             Wed 18 Aug 2010---------------------------------------------------------------"Ex" Date (i.e. date from which securitiescommence trading without the entitlementto participate in the Rights Issue)            Fri 20 Aug 2010---------------------------------------------------------------Record Date (i.e. date for determiningentitlement to participate inthe Rights Issue) Thu 26 Aug 2010---------------------------------------------------------------Despatch of Rights Issue offer document andpersonalised Entitlement and Application Form  Mon 30 Aug 2010---------------------------------------------------------------Closing Date                                   Mon 13 Sept 2010--------------------------------------------------------------Company notifies ASX of under subscriptions    Thu 16 Sept 2010--------------------------------------------------------------Allotment of Rights Issue Shares               Tue 21 Sept 2010--------------------------------------------------------------Despatch of holding statements                 Tue 21 Sept 2010---------------------------------------------------------------

* These dates are indicative only and subject to change. The Company reserves the right, subject to the Corporations Act, the ASX Listing Rules and other applicable laws, to vary the dates of the Rights Issue, including extending the Closing Date/s or accepting late applications, either generally or in particular cases, without notifying you. You are encouraged to submit your application as soon as possible. Any extension of the Closing Date/s will have a consequential effect on the date of the issue of the securities.

Contact

Melanie Leydin Company Secretary Oil Basins Limited Tel: +61-3-9692-7222 Email: admin@oilbasins.com.au www.oilbasins.com.au