METGASCO LTD — Capital/Financing Update 2009

Jun 4, 2009

ABN 79 003 152 154

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MOLOPO AUSTRALIA LIMITED

ASX ANNOUNCEMENT

5 June 2009

MONTHLY DRILLING AND OPERATIONS UPDATE AS AT END MAY 2009

Molopo Australia advises that as at the end of May 2009 the status of the Company’s drilling and operational activities were as follows:

Australia – Queensland

Australia – Queensland	Australia – Queensland	Australia – Queensland
Well Name:	Mungi-20V (previously referred to in ASX announcements as Mungi-20b)
Objective:	The trial and development of innovative multi-lateral drilling and production techniques in the Mungi Field. Mungi-20V tested the ability to drill and intersect wells with gross coal lengths of 1000-1250m length in the Mungi Coals.
Status:	The well had reached	TD on all six planned laterals.
Well Type:	Lateral trial development
Molopo Interest:	100% Sole risk
Operator:	Drilling: Molopo Production: Anglo
Spud Date:	28/2/09
Permit:	PL94 Sub-Lease
Target Depth (TD):	Lateral lengths 900- 1100m
Other Interests:	Anglo 25.5% Mitsui 24.5%

NSW Office: Suite 1006, Level 10, 50 Clarence Street, Sydney, NSW, 2000, Australia GPO Box 7075, Sydney, NSW, 2001, Australia

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@molopo.com.au

Telephone: (61 2) 9290 2267 Facsimile: (61 2) 9290 2099

Australia – Queensland (continued)

Australia – Queensland (continued)	Australia – Queensland (continued)	Australia – Queensland (continued)
Well Name:	Mungi-21
Objective:	The trial and development of innovative multi-lateral drilling and production techniques in the Mungi Field. The well will test lateral drilling lengths of 1200-1500m prior to vertical well intersection. Mungi-21 will also trial the concept of a triple lateral/triple seam design with potentially up to nine laterals intersecting the one vertical.
Status:	The vertical well Mungi-21V was setting surface casing.
Well Type:	Lateral trial development
Molopo Interest:	100% Sole risk
Operator:	Drilling: Molopo Production: Anglo
Spud Date:	28/5/09
Permit:	PL94 Sub-Lease
Target Depth (TD):	Lateral lengths 1200-1500m
Other Interests:	Anglo 25.5% Mitsui 24.5%

2

South Africa - Virginia Area	South Africa - Virginia Area
Well Name:	HDR1
Objective:	The drilling and coring of three exploration wells in the Sand River Play of the Virginia Exploration area. Drilling, coring and logging operations will be conducted over the Karoo and deeper Wits/Venterdorp sections which have provided gas indications and confirmed gas flows in existing minerals core holes.
Status:	As at this report date the well had reached a total depth of 415.6m against a planned TD of 450m. Coring operations have been suspended due to experiencing total drilling fluid losses in the fractured sediments. Some indications of gas have been encountered while drilling, particularly over the last 100m of the well.
Well Type:	Exploration
Location:
Molopo Interest:	100%
Operator:	Molopo
Spud Date:	Not applicable-Batch Drilling Approach
Permit:	Virginia Permit #1
Target Depth (TD):	450m
Other Interests:	Not applicable

South Africa - Virginia Area (continued)

South Africa - Virginia Area (continued)	South Africa - Virginia Area (continued)
Well Name:	HADV1
Objective:	The drilling and coring of three exploration wells in the Sand River Play of the Virginia Exploration area. Drilling, coring and logging operations will be conducted over the Karoo and deeper Wits/Venterdorp sections which have provided gas indications and confirmed gas flows in existing minerals core holes.
Status:	The well had reached a total depth of 347m against a planned TD of 480m. Coring operations are underway.
Well Type:	Exploration
Location:
Molopo Interest:	100%
Operator:	Molopo
Spud Date:	Not applicable - Batch Drilling Approach
Permit:	Virginia Permit #1
Target Depth (TD):	480m
Other Interests:	Not applicable

Canada - Quebec

Canada - Quebec	Canada - Quebec	Canada - Quebec
Objective:	Exploration drilling, coring and logging of the Lorraine and Utica Shales and deeper targets in the Quebec Basin. Between 3 and 5 wells are expected to be drilled over the next 12 months depending on seismic acquisition and early well results.
Status:	Well permitting activities were underway and discussions in progress with other operators for sharing rig spreads for the wells. Additional 2D seismic data is to be shot for selection of the later wells in the programme commencing with a survey in the Lyster Area.
Molopo Interest:	100% working interest
Operator:	Molopo

Non-Operated Activities: Australia - Clarence Moreton Basin	Non-Operated Activities: Australia - Clarence Moreton Basin	Non-Operated Activities: Australia - Clarence Moreton Basin
Well Name:	Wyan-E1
Objective:	Wyan-E1 is a vertical coal bed methane exploration well designed to evaluate coal development in the Walloon Coal Measures.
Status:	Drilling at 404m
Well Type:	Exploration
Molopo Interest:	25%
Operator:	Metgasco Ltd
Spud Date:	29 May 2009
Permit:	PEL13
Target Depth (TD):	700m
Other Interests:	Metgasco Ltd 75%

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Non-Operated Activities: China – Liulin Project	Non-Operated Activities: China – Liulin Project
Well Name:	EP3
Objective:	Core and production test
Status	Drilled and awaiting fraccing
Well Type:	Appraisal
Molopo Interest:	34% (prior to Govt back-in rights)
Operator:	Fortune Liulin Gas Company Ltd
Spud Date:	24thMarch 2009
Permit:	Liulin Production Sharing Contract
Target Depth (TD):	860m
Other Interests:	66% Fortune Oil

Issued by:	Molopo Australia	Limited
For further information contact:	Stephen Mitchell	MD	+61 3 9618 8722
	Ian Gorman	COO	+ 61 3 9618 8722
	Anthony Bishop	CFO	+61 3 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 50% interest in several gas fields located in the Bowen Basin, Queensland, a 50% interest in a US gas project, a 100% interest in a shale gas project in eastern Canada, interests 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.

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