UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 29, 2014 (July 28, 2014)

MAGNUM HUNTER RESOURCES CORPORATION

(Exact Name of Registrant as Specified in its Charter)

777 Post Oak Boulevard, Suite 650

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(832) 369-6986

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01              Regulation FD Disclosure.

On July 29, 2014, Magnum Hunter Resources Corporation (the “Company”) issued a press release in Australia related to the findings of the Australian Government Takeovers Panel (the “Panel”) in connection with the takeover offer by the Company for Ambassador Oil and Gas Limited, an Australian company listed on the ASX (ASX: AQO) (“Ambassador”).  A copy of the press release is attached hereto as Exhibit 99.1.

* * * * *

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including the related Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 8.01              Other Events.

On June 10, 2014, the Company filed a Current Report on Form 8-K to report under Item 8.01 that the Company had filed with the Australian Securities Exchange (the “ASX”) a notice of intention to make a takeover offer (the “Notice”) for Ambassador, stating the Company’s intention to make an offer to acquire all of the outstanding ordinary (or common) shares of Ambassador in exchange for common stock of the Company.

On June 16, 2014, Ambassador released an announcement stating that its board of directors (the “Ambassador Board”) had determined that a competing bid for Ambassador (which was subsequently increased, collectively, the “Drillsearch Offer”) by Drillsearch Energy Limited, an Australian company listed on the ASX (ASX: DLS) (“Drillsearch”), was superior to the Company’s offer announced on June 10, 2014 and that the Ambassador Board had recommended that Ambassador shareholders accept the Drillsearch Offer.

On June 17, 2014, the Company filed with the ASX a supplement to the Notice, stating that the Company intended to increase its offer consideration for the shares of Ambassador and removing any closing conditions (the “Revised Offer”).

On June 19, 2014, Ambassador issued an announcement stating that, in light of the Company’s Revised Offer, the Ambassador Board has now withdrawn its recommendation of the Drillsearch Offer and would continue to assess the merits of the Company’s Revised Offer.

On June 20, 2014, the Company, through its wholly owned subsidiary, Outback Shale Hunter Pty Ltd, an Australian company, lodged a Bidder’s Statement with the Australian Securities and Investments Commission (“ASIC”) to commence its takeover offer (the “Offer”) for Ambassador.  Pursuant to the Offer, the Company is offering one share of Company common stock, par value $0.01 per share, for every 23.6 ordinary (or common) shares of Ambassador.

In response to the June 16, 2014 announcement by Ambassador that shareholders of Ambassador holding approximately 26.43% of Ambassador’s shares, and both Ambassador’s non-executive chairman and managing director (representing approximately 6.34% of Ambassador’s shares), had accepted the Drillsearch Offer, on June 17, 2014, the Company made an application (the “Application”) to the Panel to consider certain actions taken by Ambassador and Drillsearch.  The Company made the Application out

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of concerns that the actions of Ambassador and Drillsearch denied Ambassador shareholders the opportunity to participate in the Company’s improved offer, and that such acceptances of the Drillsearch Offer did not take place in an efficient, competitive and informed market and were inconsistent with the actions that would normally be associated with achieving the best possible outcome for Ambassador shareholders.

After considering multiple submissions by the Company, Ambassador, Drillsearch and others relating to the Application, on July 28, 2014, the Panel made a “declaration of unacceptable circumstances” (the “Declaration”) in relation to the affairs of Ambassador.  Specifically, the Panel determined that, among other things,

·                  Drillsearch was associated with certain directors and shareholders of Ambassador and a corporate advisor to Ambassador, whom, in the aggregate, owned or controlled a substantial block of Ambassador’s outstanding ordinary (or common) shares, for the purpose of controlling or influencing the conduct of Ambassador’s affairs;

·                  As a result of this association, Drillsearch had voting power of at least 19.5% of Ambassador prior to Drillsearch acquiring its 19.9% pre-bid stake in Ambassador, and therefore Drillsearch’s pre-bid stake was acquired in breach of Australian law; and

·                  The corporate advisor to Ambassador and an Ambassador director arranged for public statements (“Intention Statements”) by certain directors and shareholders of Ambassador of their intention to accept the Drillsearch Offer within 14 days of the opening of the offering period, in the absence of a superior proposal.  The Panel determined that the acceptance of the Drillsearch Offer by these directors and shareholders four days after the Drillsearch Offer opened was in contravention of their Intention Statements, to which ASIC’s truth in takeovers policy applied.

As a result of the unacceptable circumstances set forth in the Declaration, on July 28, 2014, the Panel issued certain final orders, summarized below (the “Final Orders”):

·                  Drillsearch is required to lodge with ASIC and ASX and dispatch to Ambassador shareholders a supplementary bidder’s statement in a form approved by the Panel;

·                  Drillsearch must ensure that its offer remains open for a period of not less than 21 days after the date on which its supplementary bidder’s statement is sent to Ambassador shareholders;

·                  Acceptances of the Drillsearch Offer by certain interested parties representing 19.55% of the issued shares of Ambassador are reversed and those parties must wait 14 days from the release of Drillsearch’s supplementary bidder’s statement before deciding whether to accept the Drillsearch Offer; and

·                  The former Ambassador shareholders who sold their shares as part of Drillsearch’s 19.9% pre-bid stake, and all other shareholders who have accepted the Drillsearch Offer representing a further 14.69%, are given a “withdrawal” right which is operative up until 14 days after the release of Drillsearch’s supplementary bidder’s statement.

The foregoing summary of the Declaration and Final Orders does not purport to be complete and is qualified in its entirety to the full text of the Declaration and Final Orders, copies of which, together with a Media Release issued by the Panel, is attached hereto as Exhibit 99.2.

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The Company previously extended the offer period in relation to its Revised Offer to August 22, 2014. In light of the Declaration and the Final Orders, which created a more level playing field where all Ambassador shareholders can more properly consider the competing Company and Drillsearch bids for Ambassador in due course, the Company, through its wholly-owned subsidiary, intends to proceed with the Offer and lodge with ASIC and ASX and dispatch to Ambassador shareholders a supplementary bidder’s statement containing additional information regarding the Company and the Offer.

* * * * *

Notice to U.S. Shareholders of Ambassador. The offer described in this report is for the securities of a non-U.S. company. The offer is subject to disclosure requirements of a country that are different from those of the United States. You should be aware that the offeror may purchase securities otherwise than under the offer, such as in open market or privately negotiated purchases.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K includes “forward-looking statements” as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in this current report and other filings made by us with the SEC. Among the factors that could cause results to differ materially are those risks discussed in this and other reports filed by us with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in this and those filings, specifically those under the heading “Risk Factors.” Forward-looking statements speak only as of the date of the document in which they are contained, and we do not undertake any duty to update any forward-looking statements except as may be required by law.

Item 9.01              Financial Statements and Exhibits.

(d)          Exhibits

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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INDEX TO EXHIBITS

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Exhibit 99.1

29 July  2014

Takeovers Panel Decides in Favour of Magnum Hunter

Takeovers Panel Issues Findings against Drillsearch, Ambassador Directors and Certain Shareholders of Ambassador

All Ambassador Shareholders Free to Accept Magnum Hunter Offer

Magnum Hunter Resources Corporation (Magnum Hunter) said today it was proceeding with its takeover bid for Ambassador Oil & Gas Limited (Ambassador) following a Takeovers Panel declaration of unacceptable circumstances against Drillsearch Energy Limited (Drillsearch), the Ambassador directors and certain shareholders of Ambassador.

Holders of more than 54 per cent of Ambassador shares who had previously accepted an offer from Drillsearch — which was found by the Takeovers Panel to be improperly associated with the Ambassador directors and major shareholders — have had their acceptances reversed or are able to now withdraw their earlier acceptance(s) and accept Magnum Hunter’s competing bid.

Magnum Hunter applied to the Takeovers Panel complaining that there was an orchestrated attempt by Drillsearch and directors and certain shareholders of Ambassador to deliver control of Ambassador to Drillsearch before the Drillsearch offer had opened, and that all of the acceptances to the Drillsearch offer should be reversed or unwound.

Welcoming the Panel’s findings, Mr Gary C. Evans, Chairman and Chief Executive Officer of Magnum Hunter, commented as follows: “We are pleased the Takeovers Panel agreed with our application and ordered that Drillsearch, the Ambassador directors and certain Ambassador shareholders unwind such shareholders’ acceptances of the Drillsearch offer. We were of the view that this offer was orchestrated to deliver control of Ambassador to Drillsearch contrary to the principle that corporate takeovers must occur in an efficient, competitive and informed market. The declaration and orders have now created a level playing field where all Ambassador shareholders can properly consider the competing bids. Magnum Hunter continues to be committed to expanding its interest in the Cooper Basin and we recommend all Ambassador shareholders properly consider and fully assess our Offer in light of the Panel’s findings and the additional information that we will furnish to Ambassador shareholders in a supplementary bidder’s statement, which we intend to dispatch to Ambassador shareholders in the near future.”

“We are confident that, after understanding the current and future business prospects of Magnum Hunter, many Ambassador shareholders will wish to acquire and hold Magnum Hunter stock in order to benefit from our planned accelerated shale gas development in the US and our desire to expand our position in the Cooper Basin.”

Magnum Hunter is currently a 17 per cent shareholder in New Standard Energy Limited, which is the majority partner and operator of exploration permit PEL 570 in the Cooper Basin. Ambassador owns 47.5 per cent of PEL 570, which is its primary asset.

Under the current Magnum Hunter offer, Ambassador shareholders will receive one Magnum Hunter share for every 23.6 Ambassador shares they hold.

Ends

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Exhibit 99.2

Australian Government

Takeovers Panel

MEDIA RELEASE

No: TP14/63

Monday, 28 July 2014

Ambassador Oil and Gas Limited 01 - Decision

The Panel has made a declaration of unacceptable circumstances (Annexure A) and orders (Annexure B) on an application dated 18 June 2014 by Magnum Hunter Resources Corporation in relation to the affairs of Ambassador Oil and Gas Limited (see TP 14/39).

Background

On 28 May 2014, Drillsearch Energy Limited and Ambassador announced Drillsearch’s intention to make a recommended conditional off-market scrip bid for Ambassador. The offer consideration comprised 1 Drillsearch share for every 5.4 Ambassador shares. Drillsearch and Ambassador also announced that:

·                                Drillsearch had acquired a relevant interest in 19.9% of Ambassador and

·                                Mrs Fotoula Hatziladas and Eye Investment Fund Ltd, who collectively held 17.6% of Ambassador, and the directors of Ambassador, who collectively held 7.4% of Ambassador, had advised Ambassador that they intended to accept the bid “within 14 days from the opening of the offer, in the absence of a superior offer [or proposal]” (Intention Statements).

The 19.9% pre-bid stake and Intention Statements were arranged either by a director of Ambassador or by Mr Kleo Hatziladas. Mr Hatziladas has a relevant interest in his wife’s shareholding. Mr Hatziladas was also corporate adviser to Ambassador and negotiated the proposed offer with Drillsearch on Ambassador’s behalf.

On 10 June 2014, Magnum announced its intention to make an off-market conditional scrip bid for Ambassador. The offer consideration comprised 1 share of Magnum common stock for every 27.8 Ambassador shares.

On 12 June 2014, Drillsearch’s offer opened.

On 16 June 2014, Drillsearch increased its bid by adding 5 cents cash per Ambassador share and declared its bid unconditional. On the same day, Ambassador announced that its board had determined that Drillsearch’s revised offer was superior to Magnum’s offer and that it had become aware that shareholders representing approximately 32.77% of the issued shares in Ambassador had accepted Drillsearch’s offer (including Mrs Hatziladas, Eye Investment and two Ambassador directors, Mr David Shaw and Mr Giustino Guglielmo).

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On 17 June 2014, Magnum increased the scrip consideration offered under its bid by offering 1 share of Magnum common stock for every 23.6 Ambassador shares and declared its offer unconditional.

Magnum submitted that (among other things):

·                                Drillsearch was associated with each of the shareholders who gave an Intention Statement and therefore acquired its pre-bid stake in breach of s606(1) and

·                                in accepting Drillsearch’s bid early, Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw had acted contrary to their Intention Statements.

Declaration

The Panel considered that the circumstances were unacceptable because (among other things):

1.                            Drillsearch was associated with each of Mr Hatziladas, Mrs Hatziladas, Mr Guglielmo, Mr Shaw and Mr Correia under s12(2)(b) for the purpose of controlling or influencing the conduct of Ambassador’s affairs or under s12(2)(c) in relation to Ambassador’s affairs. As a result, Drillsearch had voting power of at least approximately 19.55% of Ambassador prior to acquiring the 19.9% pre-bid stake. Accordingly, the pre-bid stake was acquired in breach of s606 and

2.                            Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw did not give effect to their respective Intention Statements, by accepting 4 days after Drillsearch’s offer opened rather than the 14 days referenced in their intention statements.

The Panel did not consider it against the public interest to make the declaration, and in making it had regard to the matters in s657A(3).

Orders

The Panel has made orders to the effect that:

·                                Drillsearch lodge with ASIC, ASX and dispatch to Ambassador shareholders a supplementary bidder’s statement in a form approved by the Panel.

·                                Drillsearch must ensure that its offer remains open for a period of not less than 21 days after the date on which its supplementary bidder’s statement is sent to shareholders.

·                                Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw’s acceptances of Drillsearch’s offer are reversed and they must wait 14 days from the release of Drillsearch’s supplementary bidder’s statement before deciding whether to accept Drillsearch’s offer.

(1) References are to the Corporations Act 2001 (Cth) unless otherwise indicated

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·                                The former Ambassador shareholders who sold their shares as part of the pre-bid stake, and all other shareholders who have accepted Drillsearch’s offer, are given a ‘withdrawal’ right which is operative up until 14 days after the release of Drillsearch’s supplementary bidder’s statement.

The sitting Panel was Martin Alciaturi, David Friedlander and Nora Scheinkestel (sitting President).

The Panel will publish its reasons for the decision in due course on its website www.takeovers.gov.au.

Allan Bulman

Director, Takeovers Panel

Level 10, 63 Exhibition Street
Melbourne VIC 3000

Ph: +61 3 9655 3597

allan.bulman@takeovers.gov.au

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Australian Government

Takeovers Panel

ANNEXURE A

CORPORATIONS ACT

SECTION 657A

DECLARATION OF UNACCEPTABLE CIRCUMSTANCES

AMBASSADOR OIL AND GAS LIMITED 01

CIRCUMSTANCES

1.                            Ambassador Oil and Gas Limited (Ambassador) is an ASX listed entity.

2.                            The directors of Ambassador have, or at all material times had, a relevant interest in Ambassador shares as follows:

(a)                        Mr Giustino Guglielmo, approximately 7.1%

(b)                        Mr David Shaw, approximately 0.7% and

(c)                         Mr Emmanuel Correia, at least approximately 0.088%.(2)

3.                            On 28 May 2014, Drillsearch Energy Limited (Drillsearch) and Ambassador jointly announced:

(a)                        Drillsearch’s intention to make a recommended conditional off-market bid for Ambassador, offering 1 Drillsearch share for every 5.4 Ambassador shares (an implied consideration of $0.293 per share)

(b)                        that Drillsearch had “entered into acquisition agreements with several Ambassador shareholders under which it has agreed to acquire a total of 19.9% of Ambassador at an offer price of 1 Drillsearch share for every 5.4 Ambassador shares (i.e. the same consideration as under the Offer)”(3)

(c)                         that “Mrs Hatziladas and Eye Investment Fund Ltd [Eye Investment], who collectively hold 17.6% of Ambassador, have advised Ambassador that they intend to accept the Offer within 14 days from the opening of the Offer, in the absence of a superior offer” (Intention Statement)(4) and

(d)                        that the two companies had entered into a bid implementation agreement.

4.                            Also on 28 May 2014, Ambassador separately announced that “all the directors have today advised Ambassador that they intend to accept the Offer within 14 days of the opening of the Offer Period, in the absence of a superior proposal” (also an

(2) Peleton Capital Pty Ltd, of which Mr Correia is a director, has or had a relevant interest in additional shares but it is unclear if Mr Correia had a relevant interest in those shares

(3) 32 shareholders in total

(4) Prior to 28 May 2014, each of Mrs Hatziladas, Eye Investment, Mr Guglielmo, Mr Shaw and Mr Correia advised Ambassador that they consented to or approved the making of the Intention Statement

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Intention Statement). The announcement also stated that the directors held a beneficial interest in approximately 7.4% of Ambassador.(5)

5.                            On 10 June 2014, Magnum Hunter Resources Corporation (Magnum) announced its intention to make a conditional off-market bid for Ambassador, offering 1 share of Magnum common stock for every 27.8 Ambassador shares (an implied consideration of $0.34 per share).(6)

6.                            On 12 June 2014, Drillsearch lodged its bidder’s statement with ASIC and its offer opened.

7.                            On 16 June 2014, Drillsearch increased its bid by adding 5 cents cash per Ambassador share (increasing the implied consideration to $0.338) and declared its bid unconditional. Also on 16 June 2014, Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw accepted Drillsearch’s offer.

8.                            Mr Kleo Hatziladas had a relevant interest in 11.65% of Ambassador shares through the holding registered in the name of his wife, Mrs Hatziladas.

9.                            Mr Hatziladas acts as corporate adviser to Ambassador.

10.                     Mr Hatziladas arranged Drillsearch’s pre-bid stake at Drillsearch’s request.

11.                     Mr Hatziladas arranged the Intention Statements following discussions with Drillsearch, other than for Eye Investment which had discussions with Mr Guglielmo.

12.                     The directors of Ambassador acquiesced in the role played by Mr Hatziladas in arranging the pre-bid stake and Intention Statements and negotiating the offer with Drillsearch generally.

13.                     The Panel considers that Drillsearch is associated with each of Mr Hatziladas, Mrs Hatziladas, Mr Guglielmo, Mr Shaw and Mr Correia under section 12(2)(b)(7) for the purpose of controlling or influencing the conduct of Ambassador’s affairs.

14.                     In the alternative, the Panel considers that Drillsearch is associated with each of Mr Hatziladas, Mrs Hatziladas, Mr Guglielmo, Mr Shaw and Mr Correia under section 12(2)(c) in relation to the affairs of Ambassador.

Pre-bid acquisition

15.                     On 28 May 2014, when Drillsearch acquired a relevant interest in Ambassador of approximately 19.9% under the acquisition agreements, it had voting power in at least approximately 19.55% of Ambassador and so the 19.9% was acquired in contravention of section 606.

(5) Mr Guglielmo and Mr Correia sold some shares as pre-bid sales

(6) Magnum’s offer was subsequently increased on 17 June 2014 to 1 share of Magnum common stock for every 23.6 Ambassador shares (an implied consideration of $0.38)

(7) References are to sections of the Corporations Act 2001 (Cth) unless otherwise indicated.

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Intention Statements

16.                     Further, the Intention Statements were statements to which ASIC’s truth in takeovers policy under Regulatory Guide 25 Takeovers: False and misleading statements applied.

17.                     By accepting Drillsearch’s offer on 16 June 2014 (four days after the offer opened rather than the 14 days referenced in their Intention Statements) Mrs Hatziladas, Eye Investment, Mr Guglielmo and Mr Shaw departed from their Intention Statements such that:

(a)                        the acquisition of control over Ambassador shares did not take place in an efficient, competitive and informed market and

(b)                        Ambassador shareholders were not given enough information to enable them to assess the merits of the proposal.

Unacceptable circumstances

18.                     It appears to the Panel that the circumstances are unacceptable:

(a)                        having regard to the effect that the Panel is satisfied the circumstances have had, are having, will have or are likely to have on:

(i)                           the control, or potential control, of Ambassador or

(ii)                        the acquisition, or proposed acquisition, by a person of a substantial interest in Ambassador and

(b)                        having regard to the purposes of Chapter 6 set out in section 602 and

(c)                         because they constituted or constitute a contravention of a provision of Chapter 6.

19.                     The Panel considers that it is not against the public interest to make a declaration of unacceptable circumstances. It has had regard to the matters in section 657A(3).

DECLARATION

The Panel declares that the circumstances constitute unacceptable circumstances in relation to the affairs of Ambassador.

Alan Shaw

Counsel

with authority of Nora Scheinkestel
President of the sitting Panel

Dated 28 July 2014

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Australian Government

Takeovers Panel

ANNEXURE B

CORPORATIONS ACT
SECTION 657D
ORDERS

AMBASSADOR OIL AND GAS LIMITED

The Panel made a declaration of unacceptable circumstances on 28 July 2014.

THE PANEL ORDERS

1.             Disclosure

Drillsearch must as soon as reasonably practicable, in a form approved by the Panel:

(a)                       lodge with ASIC, ASX and dispatch to Ambassador shareholders including Ambassador shareholders who have accepted the Offer, a supplementary bidder’s statement disclosing:

(i)                  a summary of the Panel’s findings set out in the declaration of unacceptable circumstances dated 28 July 2014

(ii)               the effect of the reversal of acceptances of the Offer by the Intention Statement Shareholders

(iii)            the effect of the right to withdraw acceptances by an Ambassador shareholder (other than the Intention Statement Shareholders)

(iv)           the effect of the right to reverse a Share Purchase Deed by a Selling Shareholder

(v)              that the offer period has been, or will be, extended so as to comply with order 6 and

(vi)           a statement that the supplementary disclosure was required by the Panel

(b)                       together with the supplementary bidder’s statement, send a letter to the Intention Statement Shareholders, which explains the effect of order 3 including how the Intention Statement Shareholders may comply with order 3.3(a)

(c)                        together with the supplementary bidder’s statement, send a cover letter (which includes a withdrawal form and a reply paid self-addressed envelope) to each Ambassador shareholder who has accepted the Offer, other than the Intention Statement Shareholders, which:

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(i)                  notifies the shareholder of the right to withdraw their acceptance under order 4

(ii)               gives instructions as to what the shareholder must do to exercise that right and

(iii)            states that if the shareholder exercises their right to withdraw their acceptance:

(A)                     any Drillsearch securities that have been issued to them as consideration will be cancelled and

(B)                     they will be free to deal with their Ambassador shares as they wish and

(d)                       together with the supplementary bidder’s statement, send a letter (which includes a reversal form and a reply paid envelope self-addressed envelope) to the Selling Shareholders, which:

(i)                  notifies the Selling Shareholders of the right to reverse their Share Purchase Deed under order 5

(ii)               gives instructions as to what they must do to exercise that right and

(iii)            states that if a Selling Shareholder exercises their right to reverse their Share Purchase Deed:

(A)                     any Drillsearch shares that have been issued to them as consideration will be cancelled and

(B)                     they will be free to deal with their Ambassador shares as they wish including, for example, accepting the Offer or a competing offer.

2.                                      Dealings by certain Intention Statement Shareholders

Mrs Fotoula Hatziladas, Miller Anderson Pty Ltd and Mr David Shaw must not dispose of, transfer or grant a security interest over any shares in Drillsearch issued to them or any associate as a result of accepting the Offer, except as will occur by order 3. This order 2 ceases on satisfaction of order 3.

3.                                      Reversal of acceptances by Intention Statement Shareholders

3.1                     This order 3 has effect on and after the date of dispatch of the supplementary bidder’s statement under order 1.

3.2                     The contract for acceptance of the Offer by each Intention Statement Shareholder is void and of no effect and, without any need for transfer, the legal title and beneficial ownership in the Ambassador shares re-vests in the respective Intention Statement Shareholder.

3.3                     Drillsearch, Ambassador and each Intention Statement Shareholder must do all such acts as are reasonably necessary to give effect to order 3.2, including:

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(a)                        each Intention Statement Shareholder must return to Drillsearch an amount equal to the cash consideration received no later than 14 days after the date of dispatch of the supplementary bidder’s statement under order 1

(b)                        Drillsearch must notify Ambassador immediately upon each Intention Statement Shareholder returning the cash consideration and

(c)                         Ambassador must register each Intention Statement Shareholder as a member on its register in respect of that number of shares that re-vest within 1 business day of notification from Drillsearch.

3.4                     In respect of each contract for acceptance that is void, the Drillsearch securities issued as consideration are cancelled.

3.5                     Each Intention Statement Shareholder must wait 14 days after the date of dispatch of the supplementary bidder’s statement under order 1 before deciding whether to accept the Offer. For avoidance of doubt, the Intention Statement Shareholders are free to accept the Offer after this period, and the decision as to what constitutes a “superior proposal” or “superior offer” is that of the Intention Statement Shareholder.

4.                                      Withdrawal right for other accepting shareholders

4.1                     This order 4 does not apply to the Intention Statement Shareholders.

4.2                     All contracts for acceptance of the Offer on or prior to the date of these orders are voidable and each Ambassador shareholder who has accepted the Offer on or prior to the date of these orders has a right to withdraw their acceptance.

4.3                     An Ambassador shareholder who wishes to exercise their right to withdraw under order 4.2 must:

(a)                        give Drillsearch notice (so that it is received no later than 14 days after the date of dispatch of the supplementary bidder’s statement under order 1) in the form attached to the supplementary bidder’s statement or complying with Corporations Regulation 6.6.01(1), as the case may be

(b)                        give Drillsearch any certificates and transfer documents needed to effect the return of the securities issued as consideration or complying with Corporations Regulation 6.6.01(2), as the case may be and

(c)                         where relevant, return to Drillsearch an amount equal to the cash consideration received together with the notice and other documents provided under orders 4.3(a) and 4.3(b).

4.4                     Drillsearch must comply with Corporations Regulation 6.6.01(3) in relation to each Ambassador shareholder who withdraws their acceptance.

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4.5                     In respect of each acceptance withdrawn, the Drillsearch securities issued as consideration are cancelled.

5.                                      Option to reverse Share Purchase Deeds

5.1                     Subject to order 5.5, at the election of each Selling Shareholder, the Share Purchase Deed entered into by the Selling Shareholder is voidable and where a Selling Shareholder so elects, the Share Purchase Deed is of no effect and, without any need for transfer, the legal title and beneficial ownership in the number of Ambassador shares the subject of the Share Purchase Deed re-vests in the relevant Selling Shareholder.

5.2                     A Selling Shareholder who wishes to exercise their right to avoid their Share Purchase Deed under order 5.1 must give Drillsearch notice (so that it is received no later than 14 days after the date of dispatch of the supplementary bidder’s statement under order 1).

5.3                     In respect of each Share Purchase Deed that is avoided, the number of Drillsearch securities equal to the number issued as consideration under the Share Purchase Deed that are held by a Selling Shareholder who provides a notice under order 5.2 are cancelled.

5.4                     Drillsearch and Ambassador must do all such acts as are reasonably necessary to give effect to order 5.1, including:

(a)                        Drillsearch must notify Ambassador as soon as reasonably practicable upon each Selling Shareholder exercising its right under order 5.1 and

(b)                        Ambassador must register each Selling Shareholder as a member on its register in respect of that number of shares that re-vest within 1 business day of notification from Drillsearch and remove a corresponding number of Ambassador shares from the register record of Drillsearch’s shareholding in Ambassador.

5.5                     The right under order 5.1 is only exercisable where the Selling Shareholder is, at the time the right is exercised, the registered holder of at least the number of Drillsearch shares issued as consideration under the Share Purchase Deed.

6.                                      Extension of Drillsearch offer period

Drillsearch must do all things necessary to ensure that the offer period under its Offer closes on a date that is no earlier than 7.00pm on the date that is 21 days after the date that the supplementary bidder’s statement is dispatched to Ambassador shareholders.

7.                                      Definitions

In these orders the following terms have the following meanings:

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Alan Shaw

Counsel

with authority of Nora Scheinkestel

President of the sitting Panel

Dated 28 July 2014

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