METGASCO LTD — Capital/Financing Update 2008

May 5, 2008

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ASX ANNOUNCEMENT

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6 May 2008

CAPITAL RAISING COMPLETED

Metgasco (ASX:MEL) is pleased to advise that the Share Purchase Plan announced on 31 March 2008 has closed with shareholders lodging applications for $2.6 million.

The offer closed on 24[th] April and raised approximately $2.6 by issuing 3,777,226 shares at $0.70 per share. Shares have been allotted and shareholding statements will be mailed to shareholders today.

In addition, the Company has placed a further 6,666,667 shares at $0.75 to existing institutional shareholders of Metgasco through Bell Potter Securities to raise an additional $5 million. These shares have been placed pursuant to Listing Rule 7.1.

The Company is very pleased with the strong support shown by our shareholders to the Company with new capital raised totalling $7.6 million.

The Company has established the largest independently certified gas reserve position in New South Wales with 2P reserves of 247 petajoules now established in PEL 16. Further reserve upgrades are anticipated to be received during this quarter. The Company has also achieved positive early results from its coal seam gas pilot and looks forward to progressing the pilot production testing program.

Funds from this recent capital raising will be used to progress the Company’s reserve development program and pilot testing program.

For further information contact: David Johnson Glenda McLoughlin 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

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