METGASCO LTD — Capital/Financing Update 2007

Apr 3, 2007

4 April 2007

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

METGASCO EXPANDS CLARENCE MORETON BASIN ACREAGE FURTHER

Metgasco (ASX:MEL) advises that it has expanded its interests in the Clarence Moreton Basin by farming in to PEL 426 and expanding our existing interests in PEL 13 to include conventional oil and gas rights.

Metgasco will operate and initially earn a 50% interest in the coalbed methane (CBM) and conventional hydrocarbon rights in PEL 426, currently held by Molopo (ASX: MPO) by funding an agreed work programme. This will involve drilling one new dual target exploration well and acquisition of new seismic and reprocessing of existing seismic over two identified highly prospective conventional hydrocarbon structures. Once Metgasco has earned 50%, by spending up to \$500,000, if both parties mutually agree, Metgasco may increase its interest to 75% by spending a further \$250,000 in PEL 426 on additional drilling or new seismic as agreed.

In PEL 13 Metgasco has farmed in to the conventional hydrocarbon interests held by Molopo. Metgasco intends to earn up to 50% interest by undertaking a mutually agreed work programme with an expenditure of \$300,000. Metgasco is currently completing a CBM programme for the right to earn up to 75% in the CBM interests in PEL 13.

PEL 426 and PEL 13 cover an area of approximately 3,450 km² and 1,200 km² respectively. 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.

Metgasco's Managing Director, David Johnson said "We are very pleased to be expanding our acreage further in the Clarence Moreton basin. We consider the conventional and CBM prospectivity to be very exciting in certain areas of this acreage. We are also delighted to be working more closely with Molopo in these new project areas."

For further information contact: Glenda McLoughlin David Johnson Managing Director Chief Financial Officer

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