METGASCO LTD — Capital/Financing Update 2006

Jan 29, 2006

Registered Office: Level 14 31 Queen Street Melbourne Vic 3000

Telephone: (613) 9618 8722 $(613)$ 9620 2804 Facsimile:

30 January 2006

(ASX Code: MPO)

NEWS RELEASE

MOLOPO FARMS OUT CLARENCE MORETON BASIN ACREAGE

Molopo Australia Limited (MPO) announces that Metgasco Limited has farmed into PEL 13 in the Clarence Moreton Basin in north-eastern New South Wales. Metgasco will operate and initially earn a 51% interest in the coalbed methane (CBM) rights by funding 100% of the work programme, which will involve drilling one new well and seismic reprocessing.

Once Metgasco has earned 51%, it will have the option to take its interest to 75% by spending a further \$267,000 in PEL 13. Molopo will retain a 100% interest in the conventional petroleum (i.e. non-CBM) rights in the permit.

PEL 13 covers an area of 1,654km². Despite exploration dating back to the 1960's, the Clarence Moreton basin remains under explored and has the potential to host both coal seam gas and conventional hydrocarbon accumulations, with earlier exploration identifying a number of structures, which are as yet untested.

Molopo's Managing Director, Stephen Mitchell, stated "Farming-out Molopo's Clarence Morton acreage to Metgasco, an experienced CBM operator in the region, will allow us to concentrate our resources on the continued development of the Mungi Gas Field in Queensland and the appraisal of our Gloucester Basin interest in NSW".

Yours faithfully, MOLOPO AUSTRALIA LIMITED

Ric Sotelo Chief Financial Officer

Molopo Australia Limited is an ASX-listed resources company focusing on oil and gas. Molopo holds a 25% interest in several gas fields located in the Bowen Basin, Queensland, a 30% interest in CBM operations located in the Gloucester Basin (NSW), a 100% interest in the Clarence Moreton Basin (NSW), a 50% interest in several gas fields in the USA and Republic of South Africa, and a 50% interest in a CBM project in Liulin, Shanxi Province, China.