Re: related party transaction

Global Petroleum Ltd
02 November 2005


                            Global Petroleum Limited
   
   Extension of certain conditions relating to previous acquisition agreement

Background

On 6 December 2004, Global Petroleum Limited ('Global') acquired 100% of Astral
Petroleum Limited ('Astral') from its then owners (the 'Vendors') under the
terms of an acquisition agreement approved by shareholders on 25 November 2004
('the Original Transaction'). The consideration payable under the acquisition
consisted of three tranches.

The Vendors included Peter Blakey, Peter Taylor and TM Services Ltd, a company
associated with Peter Blakey and Peter Taylor. Peter Blakey and Peter Taylor are
both directors of Global and substantial shareholders.

The Company paid cash of 195,000 (A$504,000) and issued one million shares to
the Vendors ('Tranche 1'). Tranches 2 and 3 are contingent upon certain
conditions relating to the farmout of the interests acquired by Global in Irish
and Maltese permit areas:

   •if Global enters into a farmout in respect of the Irish Licensing Option,
    the Company will issue 4 million Global shares ('Tranche 2') to the Vendors
    on or before 25 November 2005; and


   •if Global enters into a farmout in respect of the Maltese Exploration
    Study Agreement, the Company will issue 4 million Global shares ('Tranche
    3') to the Vendors on or before 25 November 2005.

In accordance with resolutions passed by shareholders at the meeting on 25
November 2004 the Company was to enter into conditional farmouts for both the
Ireland Licensing Option and the Malta Exploration Study Agreement before 25
November 2005, otherwise this approval for issue of Tranche 2 and Tranche 3
shares would lapse.

Due to a delay caused by the serious illness of a consultant engaged by Global
to work on obtaining the farmouts, it is now likely that the necessary farmouts
will not take place before 25 November 2005. The non-associated Directors, being
Dr John Armstrong, Mr Peter Dighton and Mr Mark Savage, (together the
'Non-associated Directors') recognise that the Vendors were not responsible for
this delay.


Proposal

Shareholder approval is being sought at the Company's AGM on 24 November 2005
for a once-only extension of the approval time for the issue of Tranche 2 and
Tranche 3 shares until 30 June 2006. The non-associated Directors are required
to seek shareholder approval for the extension in accordance with ASX Listing
rule 10.11, section 208 and item 7 of section 611 of the Corporations Act. They
support the proposal because it will allow more time to achieve the farmouts and
because there are certain potential adverse consequences for non-associated
shareholders if the extension is not approved.

The board of Global has amended the Acquisition Agreement to provide for the
extension date of 30 June 2006 in respect of the Tranche 2 and Tranche 3 shares.
No other amendment was made.

Specifically, under the amended Acquisition Agreement, approval is being sought
for:

   •the issue to the Vendors of an additional 4 million fully paid shares in
    the capital of Global on or before 30 June 2006 as additional consideration
    for the acquisition of the issued share capital of Astral under the Amended
    Acquisition Agreement ('Tranche 2 shares') if the Company enters into a
    farmout of the Irish Licensing Option ('Ireland Farmout'); and


   •the issue to the Vendors of an additional 4 million fully paid shares in
    the capital of Global on or before 30 June 2006 as additional consideration
    for the acquisition of the issue capital of Astral under the Amended
    Acquisition Agreement ('Tranche 3 shares') if the Company enters into a
    farmout of the Malta Study Agreement ('Malta Farmout').

If a farmout agreement is made with another person such that the other person
agrees:

(i) to acquire, process and interpret seismic data, at least to the extent of 
    the minimum work commitment Global has undertaken to perform;

(ii) to drill at least one well; and

(iii) that Global is fully carried for its costs in respect of the work referred 
      to in subparagraphs (i) and (ii) above and Global has at least a 20% 
      remaining interest in respect of the Irish Licensing Option,

then Global must pay the Tranche 2 shares to the Vendors.

Similarly, if Global enters into a farmout in respect of the Maltese Exploration
Study Agreement, and the other person agrees with items (i) (ii) and (iii)
above, then Global must pay the Tranche 3 shares to the Vendors.


Rationale

(a)    Benefits of approving proposal

Global would like to recognise that the Vendors complied with their obligations
but due to circumstances beyond the Vendors and Global's control Global has been
unable to achieve a Farmout in the relevant areas.

Global believes that obtaining a longer period to achieve a Farmout and agreeing
to issue the Tranche 2 and Tranche 3 shares if the Farmouts are achieved by 30
June 2006 will preserve the goodwill between Global and the Vendors.

The Company will have additional time (until 30 June 2006) to undertake further
work, mostly remapping and studies combined with some reprocessing to improve
the quality of the seismic lines in the deeper sections to provide information
which will be attractive to potential farminees for both of the Ireland and
Malta interests.

No further extensions of time will be sought from shareholders.

Global will only be obliged to pay additional consideration, namely Tranche 2
shares and Tranche 3 shares, to the Vendors if Global achieves a Farmout as
described above.

(b) Risks associated with approving Resolution
Even if farmouts as described above are achieved, there is no guarantee that oil
or gas will be found.

(c) Risks associated with not approving Resolution
The delay caused by the serious illness of the consultant engaged by Global to
work on obtaining Farmouts has resulted in a Farmout being unlikely to occur by
the end date set out in the original 2004 Astral Acquisition Agreement. The
non-associated Directors recognise that the Vendors were not responsible for
this delay.

The non-associated Directors formed the view that to preserve the goodwill
between Global and the Vendors they should seek shareholder approval for an
extension in relation to the Tranche 2 and
Tranche 3 shares. The Non-associated Directors consider that there are certain
potential consequences of not obtaining shareholder approval for an extension.

These potential consequences are:

(i) Jeopardising business relationship with Peter Blakey and PeterTaylor

Peter Blakey and Peter Taylor have built up a significant contact network over
25 years experience in the resource industry in Europe and the Middle East. This
experience and network delivered the key exploration asset of the four Kenya
Blocks to Global in May 2002. The expertise of Peter Blakey and Peter Taylor has
proved invaluable to the board of Global. The non-associated Directors believe
that it is commercially sensible to maintain a good business relationship with
Peter Blakey and Peter Taylor and believe they will continue to play an
important role in the growth of the Company.

This relationship may be jeopardised if shareholders do not approve an extension
of time for the issue of Tranche 2 and Tranche 3 until 30 June 2006.

(ii) Shareholders could lose confidence

If the relationship is jeopardised, shareholders could lose confidence in the
Company's ability to grow and expand the explorations assets, without the future
involvement of Peter Blakey and Peter Taylor given the role that they have
played in the short history of the Company to date.

The non-associated Directors believe that the Company's ability to raise further
capital to pursue its strategic goals could also be affected.

(iii) Company's reputation and standing in the industry damaged

Global's business relies on good relationships within the resource industry. The
Directors believe that if shareholders do not approve an extention of time in
relation to the Tranche 2 and Tranche 3 shares, the resource industry may
perceive that Global has failed to act in good faith in its dealings with the
Vendors. Such a perception may result in the Company's reputation throughout the
resource industry suffering.


Interests of Peter Blakey, Peter Taylor and TM Services Ltd

The following table sets out the interests of Peter Blakey, Peter Taylor and TM
Services Ltd:

                               Peter Blakey   Peter Taylor   TM Services Ltd
                               (including     (including     (including
                               associates*)   associates*)   associates*)
Global shares in which
relevant interests are held
(by the person named or their
associates) at date of this
announcement                     55,136,637     55,136,637         55,136,637

Voting power held at date of
this announcement                    32.40%         32.40%            32.40%
Global shares in which
relevant interests will be
held after issue of Tranche 2
shares                           57,996,566     57,996,566         57,996,566

Voting power after issue of
Tranche 2 shares                     33.30%         33.30%            33.30%

Global shares in which
relevant interests will be
held after issue of Tranche 3
shares                           60,856,495     60,856,495         60,856,495

Voting power after issue of
Tranche 3 shares                      34.10%        34.10%             34.10%

* Peter Blakey, Peter Taylor and TM Service Ltd are associates of each other
because they act in concert in relation to the affairs of Global.

Recommendation

Peter Blakey, Peter Taylor and TM Services Ltd are to be regarded as related
parties for the purposes of Rule 13 of the AIM Rules.

The non-associated Directors believe, on balance that the interests of
shareholders are better served by approving an extension of six months to 30
June 2006. They believe that obtaining an extension is in keeping with the
spirit and good faith of the 2004 Astral Acquisition agreement. They accordingly
recommend that shareholders vote in favour of Resolution 5. The non-associated
Directors therefore consider that, having consulted with KBC Peel Hunt Ltd, the
terms of the transaction are fair and reasonable insofar as its shareholders are
concerned.

Shareholder approval

Under the rules of the ASX, Global is required to seek approval from its
shareholders for the proposals and as a result has convened a general meeting
for 24 November 2005 to consider, and if thought fit, pass a resolution to
implement the proposals. Further details, including various technical
information required under the ASX rules, can be found at http://
www.global-petroleum.co.uk/agm/agm0510.htm.

                                      END

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