METGASCO LTD — AGM Information 2005

Nov 22, 2005

23 November 2005

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

CHAIRMAN'S ADDRESS

2005 Annual General Meeting - 23 November 2005

Good Afternoon Ladies and Gentlemen

This is the first Annual General Meeting of Metgasco as a publicly listed company and it is a pleasure to meet with you today to report on the performance of your Company over the past year.

As you know we joined the public list of the Australian Stock Exchange in December last year when we raised just over 5 million dollars to appraise the coal seam gas potential of the Walloon coal measures in northern New South Wales.

Metgasco is the first company to conduct an appraisal drilling program in the Clarence Moreton basin and the work conducted to date indicates that we have discovered a very significant gas resource.

Since completing our inaugural drilling program we have quadrupled our estimate of the gas in place in PEL16 from 1 Trillion cubic feet, as described in our December prospectus, to 4.8 Trillion cubic feet. Over the next 6 months we expect to undertake additional development drilling to convert this gas in place estimate to proven gas reserves.

Since the Company listed we have completed five pilot production wells which have now been flowing gas for several months.

In July, we retained independent petroleum reservoir engineers, Malkewicz Hueni Associates of Denver to review the project. As part of this review, Malkewicz Hueni has conducted detailed simulation modeling on the South Casino project. They have also case matched the Walloon coals at South Casino with a global data base of producing coal seam gas fields. This review has identified horizontal drilling as the optimal development strategy for the South Casino coals.

Over the past quarter, your Company has been preparing for this horizontal drilling program. In October, we completed a successful placement of stock to raise \$3.99 million dollars to fund this program and provide additional working capital for the development of the company.

The first issue under this placement was completed on the 28^th of October and the second issue will be completed this week subject to your approval of the issue of these shares today.

We have obtained all required approvals for this drilling program and are currently finalizing terms on a drilling contract.

This contract will be for two horizontal wells with an option for a third well. We expect to inform shareholders over the coming week that this contract has been signed. Drilling is planned to commence in early December. This drilling program will also include some further core drilling which will be undertaken to expand the scope of our reserve base.

We anticipant that the next 12 months will mark a major transformation of your Company from pioneering explorer to gas producer. Over the next 6 months we hope $\mathsf{to}$ :

• Obtain an independent certification of gas reserves for PEL16:
• Successfully complete our horizontal drilling program to demonstrate commercial deliverability of South Casino gas;
• Conduct additional core drilling to convert 3P reserves to 2P reserves;
• Reach financial close on our proposed 12 MW power station:
• Complete a feasibility study for the co-generation project with the Northern Coop Meat Works:

At the same time we are examining the possibility of expanding the 12MW project at Casino. We are also in discussions on other gas sale opportunities.

There are many exciting commercial opportunities ahead for your company.

PEL16 is located on the doorstep of the fastest growing population centre in Australia and Metgasco is well located to meet the gas and power needs of this fast growing area.

Our Managing Director, David Johnson will expand further on these opportunities in his presentation later in this meeting. After this presentation there will be an opportunity for shareholders to ask questions of management about the company and its performance.

This has been a year of solid achievement and we look forward to reporting on further positive developments over the coming year.

Dr Peter Power Chairman

For further information please contact: Glenda McLoughlin Metaasco Level 3, 32 Walker St, North Sydney Tel: +61-2 9923 9100 Fax: +61-2-9923 9199 www.metgasco.com.au

2005 Annual General Meeting

Managing Directors Review

METGASCO'S BUSINESS OPPORTUNITY

2005 YEAR IN REVIEW

OBJECTIVES FOR 2006

QUESTION AND ANSWER SESSION

THE OPPORTUNITY

South east Queensland and north east New South Wales are Australia's fastest growing regions.

The population of these areas is expected to increase from an estimated 2.65 million in 2004 to 3.7 million by 2026

THE OPPORTUNITY

Significant Investment is required to meet forecast demographic growth.

• Tweed/Gold Coast has rapid electricity load growth
• NE NSW has rapid electricity load growth
• NE NSW has only electricitybottle gas in energy mix

THE OPPORTUNITY

44% FORECAST GROWTH

ACIL Tasman estimate that electricity demand within a 100km radius of PEL 16 -Clarence Moreton Basin is 450Mw and is forecast to grow by 200Mw by 2010

$\rightarrow$ Metgasco is in the middle of a market ready for both gas and electric power sales

TECHNICAL

• $\checkmark$ Increased Gas in Place Estimates from 1.05 Tcf to 3.9 (low) and 4.8Tcf (high)
• $\checkmark$ Commenced Trial Production at South Casino now flowing gas and water

TECHNICAL

• $\checkmark$ Increased Gas in Place Estimates from 1.05 Tcf to 3.9 (low) and 4.8Tcf (high)
• $\checkmark$ Commenced Trial Production at South Casino now flowing gas and water
• $\checkmark$ Examining the conventional potential of PEL 16
• $\checkmark$ Commenced engineering and design for 12 Mw Power Station

FINANCIAL

• $\checkmark$ Listed on ASX in December 2004 raising \$5.1m
• $\checkmark$ Further issue October 05 to raise \$3.9m
• $\checkmark$ Share Price up 40% on December 2004 listing (ASX All Ordinaries $15%$

COMMERCIAL

• Signed HOA for cogeneration with Northern Coop Meat Company (10 $Mw$
• Pipeline pre-feasibility Study (~ 10pj/a) $\checkmark$
• Pursuing other gas sales/ power opportunities $\checkmark$

STAKEHOLDERS

• Close landowner liasion $\checkmark$
• Community consultations

COMMERCIAL

• $\checkmark$ Signed HOA for cogeneration with Northern Coop Meat Company (10 $Mw$
• Pipeline pre-feasibility Study $($ $\sim$ 10 pj/a) $\checkmark$
• Pursuing other gas sales/ power opportunities $\checkmark$

STAKEHOLDERS

• Close landowner liasion
• Community consultations $\checkmark$
• Compliance with Dept Primary Industry (DPIMR) requirements $\checkmark$ including OH&S requirements
• Continuous discussions with Richmond Valley Council

TECHNICAL

Optimise drilling method and well productivity $\blacktriangleright$

Horizontal CBM Well

TECHNICAL

• Optimise drilling method and well productivity ➤
• Begin Gas Reserve Certification $\blacktriangleright$
• Development drilling program $\blacktriangleright$
• In field development (gathering & compression) $\blacktriangleright$
• Power Station construction $\blacktriangleright$
• $\triangleright$ Investigate conventional potential

TECHNICAL

• Optimise drilling method and well productivity
• Begin Gas Reserve Certification $\blacktriangleright$
• Development drilling program ➤
• In field development (gathering & compression) ≻
• $\triangleright$ Power Station construction
• $\triangleright$ Investigate conventional potential

COMMERCIAL

• $\triangleright$ Power Purchase Agreement 12Mw Project
• DA approvals, PPL approval ➤
• Northern Meats Co-op feasibility study ➤
• Additional gas sales ➤
• Commence 200Mw feasibility study ➤

FINANCIAL

Financial Close 12Mw Power Plant $\blacktriangleright$

STAKEHOLDERS

• Work closely with landholders ➤
• Maintain a safe working environment ➤
• Further Community Consultations $\blacktriangleright$
• Develop Environmental Management Program $\blacktriangleright$

IN SUMMARY

• $\triangleright$ Large and growing market for energy gas and electricity
• $\triangleright$ Transition from explorer to producer in next 12 months
• $\triangleright$ Delivering energy into embedded market potential for substantial gain to MEL shareholders
• $\triangleright$ With success be conscious of community obligations

QUESTION AND ANSWER SESSION