METGASCO LTD — Capital/Financing Update 2007

Jul 4, 2007

MEDIA RELEASE

$5^th$ July 2007

First Farm-in Programme Completed in PEL 13, Clarence Moreton Basin

Molopo Australia Limited announces that, pursuant to the PEL 13 Farmin Agreement between Molopo and Metgasco Limited, Metgasco has fulfilled its obligations with respect to the First Farmin Programme.

These obligations included the planning, execution and testing of coalbed methane (CBM) exploration hole Metgasco Molopo Middle Creek (MMMC1) and a deviated fully cored hole, with the total incurred expenditure exceeding the \$500,000 minimum farmin requirement. Metgasco is now entitled to take an assignment from Molopo of 51% of the CBM interests in PEL 13.

MMMC1a was successfully drilled as a deviation cored hole from the original MMMC1 hole. A gross coal thickness of 21.1m in seams greater than 1.5 m thick was intersected in the Walloon Coal Measures, confirming earlier MMMC1 openhole logging results. The Richmond seam had the greatest thickness at 5.9m, at a depth of approximately 411m, with at least four additional seams about 2m thick to a depth of approximately 550m.

Analysis of 20 coal core samples at MMMC1, taken for long term desorption testing, indicates gas content is in the range $1.6m^3/t$ to $15.6m^3/t$ (daf), with high methane composition and low carbon dioxide. Permeability testing was completed in four coal seams which were at a depth of 409m to 584m, and results are currently undergoing final interpretation.

Metgasco has also given notice of its election to undertake the Second Farmin Programme pursuant to the Farmin Agreement. Metgasco is entitled to increase its CBM interest to 75% by completing a mutually agreed Second Farmin Programme, including reprocessing of existing seismic surveys and acquisition of new seismic data.

As previously announced, in PEL 13 Metgasco has also farmed into the conventional hydrocarbon interests held by Molopo. Metgasco intends to earn up to 50% of the conventional hydrocarbon interests by undertaking a mutually agreed work program with an expenditure of \$300,000. Molopo also announced recently that Metgasco was earning a 50% interest in the much larger Clarence Moreton basin permit PEL 426.

issued by:	Molopo Australia Ltd
For further information contact:	Stephen Mitchell MD		03 9618-8722
	Ric Sotelo		CFO 03 9618-8722

Molopo Australia Limited is an ASX listed gas producer focused on the development of coalbed methane and other on-shore gas projects. 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 50% interest is a US gas project, a 50% interest in two permits in the Clarence Moreton Basin, NSW, an interest in the Liulin CBM project in China, and a 100% interest in two South African projects covering 250,000 hectares.

Registered Office Level 14, 31 Queen Street, Melbourne, Vic. 3000, Australia GPO Box 223, Melbourne, Vic. 3001, Australia

Telephone: (61-3) 9618 8722 Facsimile: (61-3) 9620-2804. Website, www.molopo.com.au Email: slord@lowell.net.au NSW Office: Suite 1006, Level 10, 50 Clarence Street, Sydney, NSW, 2000, Australia GPO Box 7075, Sydney, NSW, 2001, Australia

Felephone: (61-2) 9290-2267 Facsunile: (61-2) 9290-2099