METGASCO LTD — Capital/Financing Update 2007

Mar 28, 2007

29 March 2007

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

\$12 MILLION SHARE PLACEMENT

Metgasco (ASX:MEL) is pleased to announce that it has completed a placement of 15,576,923 ordinary shares at 78 cents to raise new equity of \$12,150,000. These shares represent approximately 15% of the Company's issued capital and have been issued pursuant to Listing Rule 7.1.

The placement was jointly managed by Bell Potter Securities and Taylor Collison and attracted high demand from new and existing sophisticated and institutional investors. Over 85% of the shares have been placed with Australian institutions with the remaining shares placed with private clients of the brokers to the issue.

Proceeds from this placement will fund energy infrastructure development, additional drilling, and replenish working capital.

Metgasco is currently undertaking a major drilling program aimed at increasing its 2P gas reserves to 660 Petajoules over the next 12 months.

The Company's Managing Director, David Johnson, said "We are very pleased to welcome a number of new shareholders to the Company. The extremely positive response we have received for this share placement demonstrates the market's confidence in the commercial opportunity offered by Metgasco."

For further information contact:

David Johnson Managing Director

Glenda McLoughlin 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