METGASCO LTD — Capital/Financing Update 2009

Oct 1, 2009

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MOLOPO AUSTRALIA LIMITED

ABN 79 003 152 154

ASX ANNOUNCEMENT / MEDIA RELEASE

2 October 2009

MOLOPO TO SELL CLARENCE MORETON INTERESTS TO METGASCO LIMITED

Molopo Australia Ltd (“Molopo”) announces that it has entered a conditional agreement to sell its non-operated interests in the Clarence Moreton Basin, NSW, to Metgasco Limited (“Metgasco”) for $7million and a production royalty.

The sale consideration comprises $3million in cash, $4million in Metgasco shares (“Consideration Shares”), with the royalty component being 2.5% applied to the wellhead value of 50% of gas which is produced from reservoirs below 800 metres in PEL 13. Metgasco will have an option to buy out the royalty.

Molopo’s Managing Director, Stephen Mitchell said: “The sale of our interests in the Clarence Moreton Basin will allow Molopo to focus its resources on core assets in Queensland, Canada, and South Africa where we believe cash flow, reserves and value can be built more rapidly and efficiently”.

The Clarence Moreton Basin interests comprise Molopo’s 43.4% interest in each of the coalbed methane (CBM) and conventional gas resources in PEL 426, and its 25% and 50% interests in the CBM and conventional gas resources in PEL 13.

The transaction is conditional on Metgasco’s shareholders approving the issue of the Consideration Shares during Metgasco’s forthcoming Annual General Meeting, execution of the royalty agreement and approval by the Minister responsible for the Petroleum (Onshore) Act 1991, NSW, in respect of the transfer of legal title to the Permits.

The Consideration Shares will be allotted and quoted shortly after Completion. Half the Consideration Shares issued to Molopo will be subject to a trading restriction for a period 60 trading days following allotment, such that only 10% of the shares can be traded in any ASX trading day.

The other half of the Consideration Shares (“Tranche 2 Shares”) will be subject to a full trading restriction for a period 12 months after allotment (“Tranche 2 Restriction Period”), such that no shares can be traded during this period, after which only 10% of the shares will be able to be traded for 60 trading days following expiry of Tranche 2 Restriction Period.

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

NSW Office: Suite 7, Level 4, 95 Pitt St, Sydney, NSW, 2000, Australia GPO Box 7075, Sydney, NSW, 2001, Australia

Telephone: (61 3) 9618 8722 Facsimile: (61 3) 9620 2804 Website: www.molopo.com.au Email: slord@molopo.com.au

Telephone: (61 2) 8249 8186, Facsimile: (61 2) 8249 8321

The Tranche 2 Shares are subject to a price adjustment mechanism, such that on expiry of the Tranche 2 Restriction Period, should there be a reduction in the value of the Second Tranche Shares below $2million, further shares would be issued to Molopo such that the aggregate value of the Tranche 2 Shares and additional shares is restored to $2million.

The trading restrictions applicable to all Consideration Shares shall be lifted should there be a change in control of Metgasco.

Issued by:	Molopo Australia	Limited
For further information contact:	Stephen Mitchell	MD	+61 3 9618 8722
	Ian Gorman	COO	+61 3 9618 8722
	Ric Sotelo	CCO	+ 61 3 9618 8722

Molopo Australia Limited is an ASX listed petroleum producer focused on the exploration, appraisal, development and production of coalbed methane (CBM) and other on-shore petroleum projects. Molopo holds a 50% interest in several CBM fields located in the Bowen Basin, Australia, a 100% interest in a shale gas project in Quebec, Canada, an interest in the Bakken and Spearfish oil projects in Canada, a 100% interest in two South African projects, an interest in two permits in the Clarence Moreton Basin, Australia, an interest in the Liulin, Shanxi Province CBM project in China, and a 50% interest is a US gas project.

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Molopo Australia Limited

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