METGASCO LTD — AGM Information 2006

Nov 14, 2006

2006 Annual General Meeting

Managing Directors Review

METGASCO'S BUSINESS OPPORTUNITY

2006 YEAR IN REVIEW

OBJECTIVES FOR 2007

QUESTION AND ANSWER SESSION

THE OPPORTUNITY

• Hydrocarbon potential of the Clarence Moreton Basin in northern NSW

• Underexplored Jurassic Cretaceous Basin

• Coal Seam Gas of the Walloon Coal Measures

• $\triangleright$ Conventional oil and gas potential
• $\triangleright$ South east Queensland and north east New South Wales are Australia's fastest growing regions
• Close to markets (70km from Gold Coast) and a "market gap" with no local energy supply

• Significant Investment is required:

  • $\triangleright$ Tweed/Gold Coast has rapid electricity load growth of up to 100Mw/pa
  • $\triangleright$ NE NSW has rapid electricity load growth $25+Mw/pa$
  • $\triangleright$ NE NSW has only electricity- bottle gas in energy mix NE KIA

• Reserves & Production $\mathbf{r}$

• Richmond Valley Power Station Ħ.
• Additional Market Opportunities iii.
• Exploration iv.
• Management & Stakeholder Outcomes $V_{\cdot}$

Reserves & Production

• Independent Review of drilling methods and results at South ↘ Casino
• High gas content lower permeability environment suitable for ↘ lateral drilling
• Commenced lateral drilling program in January ↘
• Immediate results with up to 100,000 scf/d in MSC-09 ्रहे
• MSC-10 demonstrated 100,000 scf/d in August 2006
• Each Basin is unique right technology to match reservoir ↘
• Further technical appraisals on well productivity ↘
• Arkoma Basin (Oklahoma) site visits خو
• Remove water and keep seam(s) dry ेले
• Improvements to well geometry and water extraction design ्रे
• New pumping methods currently being trialled ↘

Reserves & Production

• March 2006 PEL 16 Gas Reserve Certification ↘
• Probable (2P) 21Bcf (22 Pj) $\rightarrow$ Possible (3P) 1,080 Bcf (1,123 Pj) $\frac{1}{2}$
• Largest Certified Gas Reserves in NSW $\geqslant$
• On $3P$ Basis, sufficient to supply NSW for $> 8$ years ↘
• 2P covering 4% of PEL 16, 3P covering 50% of PEL 16 ↘
• No Reserves yet for PEL 13 ↘
• 3P Reserves cover 24% of MEL Net Acreage position ↘
• A large resource with plenty of room for further increases ↘

ZOOS YEARDINEREVIEW

Richmond Valley Power Station ("RVPS")

• Gas fired power station to be built near Casino NSW ↘
• Completed FEED in October 2006 ↘
• Optimal Configuration 30Mw, up from 12Mw المتحر
• "Major Projects Status" awarded in September 2006 ्रे
• EIS commenced ्रे
• Current negotiations with infrastructure partner ्रे
• Estimated Capital cost of \$34 million ↘
• Major investment in region, will benefit area by: ↘
• Network Support ्रे
• Construction employment $\rightarrow$
• Full time jobs ्रे
• On going services support requirement $\frac{1}{\sqrt{2}}$

Richmond Valley Power Station

Additional Market Opportunities

• Regional Power Market ➣
• ↘ By 2010 it is estimated that about 650Mw of installed generation capacity will be required to service northern NSW (ACIL Tasman)
• MEL working assumption on current demand load growth northern NSW- $\geqslant$ Gold Coast 50Mw/Annum
• $\geqslant$ Powerlink annual review statescurrent demand load growth in SE Queensland as up to 260Mw/Annum
• Regional Gas Market ➣
• Major Gas consumers in SE Queensland and NE New South Wales ➢
• Local Gas Market
• Substantial Industrial & Consumer Base in Casino Lismore Ballina ➣
• ➣ Opportunity to supply gas via pipeline, reticulation, LPG substitution

ZOOSYEARINEREVIEW

Additional Market Opportunities - have commenced !

EXPLORATION

• PEL 13 Farm in with Molopo Limited, right to earn up to 75% WI ↘
• 408,500 acres south and west of PEL 16
• Drilled initial MMMC-01 well in July 2006 ↘
• Located ~15km south west of South Casino trial field ्रिके
• Identified total 22 $m$ of coal seams $> 1.5m$ thick i
  Fals
• Sampling of chips shows methane gas bearing ्रे
• To complete hole with coring and well testing ेळ
• Has opened up additional 150 km² of development potential ्रे
• Commenced budgetting for 2D seismic on conventional potential ↘
• Consideration of extending proposed CSM well for conventional ↘ test

Management and Stakeholder Outcomes

• New Safety Management Plan, regular toolbox meetings ↘
• Commenced development of Environmental Management Plan ↘
• Commenced EIS for RVPS ↘
• Heritage, cultural studies خو
• Noise, visual impact studies ্যু
• Flora and fauna studies $\frac{1}{2\pi}$
• Ground hydrology studies $\frac{1}{2}$
• Community consultation process $\overline{\phantom{a}}$
• New non executive director Mr Nick Heath ↘
• Established Remuneration Committee ↘
• Developing remuneration program and process ्रे
• In conjunction with budgetting and staffing planning ستفر

2007 OENEOTIVES

• $\triangleright$ Continue CSG Well productivity optimisation
• Develop 2P Reserves > 100Bcf $\sum_{i=1}^{n} a_i$
• Conventional $\sum_{i=1}^{n} a_i$
• $\triangleright$ Complete seismic over leads identified

• Drill at least one conventional well

• $\triangleright$ Richmond Valley Power Station
• $\triangleright$ DA approvals, Community consultations
• $\triangleright$ Financial close March Ofr 07
• $\triangleright$ Construct & Commission thereafter
• $\triangleright$ Complete MOU, pre feasibility on:

• 200Mw Power Station, and/or

• $\triangleright$ Regional Gas Market Opportunity

QUESTION AND ANSWERSESSION