METGASCO LTD — Capital/Financing Update 2005

Jun 19, 2005

20 June 2005

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

WEEKLY DRILLING UPDATE

• Drilling completed on fifth well MSC-07
• Gas and water flows continue to be assessed from MSC-03 and MSC-05 $\bullet$
• Well head assembly for MSC-06 currently being completed
• Drilling on final well in pilot production program MSC-08 expected to commence this week.

MSC-03

Water draw down of MSC-03 has now been completed and the well has been placed on production flow test. The well is continuing to deliver sustained gas flows while maintaining positive pressure.

MSC-04

Following commencement of drawdown of MSC-04, the down hole pump malfunctioned owing to solids blockage. This blockage has now been cleared and the wellhead is currently being reinstalled to recommence drawdown.

MSC-05

This well is currently being drawn down and will continue to be drawn down over the coming weeks. MSC-05 continues to demonstrate sustainable gas flows while maintaining positive pressure.

MSC-06

The well head assembly for MSC-06 is in the final stage of completion. Once the hook up is complete. water draw down will commence.

MSC-07

This well spudded on Friday 10^th June and reached a total depth of 680m on 17^th June. Following completion of down hole logging, the coal seam intervals were under reamed and the hole circulated clean prior to running 5" liner. Production tubing is now being installed and preparations are underway for the rig to shift to the pre-collar hole MSC-08.

MSC-08

Site preparations for the final well in this production test program are expected to be completed in the next few days.

Overview of Project

Metgasco owns 100% of PEL 16 located near Casino and Lismore in Northern New South Wales. The focus of exploration is coal bed methane of the Walloon Coal Measures of the Clarence Moreton Basin. The Walloon Coal Measures have been the subject of successful exploration and development activity in Queensland over the past 4 years. The trial production program will comprise five production test wells and one core hole. The wells will be flow tested to establish gas production rates with the objective of reserve certification. PEL 16 is well located in an area of no embedded energy supply in one of the fastest growing population areas of Australia.

For further information contact: Glenda McLoughlin Chief Financial Officer Metgasco Ltd Tel: (02) 9923 9100 Fax: (02) 9923 9199

Metgasco Limited

ACN 088 196 383 Level 3, 32 Walker St North Sydney NSW 2060 Tel: (02) 9923 9100 Fax: (02) 9923 9199 Website: www.metgasco.com.au