METGASCO LTD — Capital/Financing Update 2009

Apr 2, 2009

3 April 2009

Company Announcements Australian Securities Exchange Bridge Street SYDNEY NSW 2000

Dear Sirs

We advise that the Rights Offer Booklet and Letter from the Managing Director has been dispatched to Shareholders today.

Yours faithfully

NJV Geddes Secretary

RIGHTS OFFER BOOKLET

A NON RENOUNCEABLE RIGHTS ISSUE OF ONE (1) NEW SHARE FOR EVERY EIGHT (8) SHARES HELD BY ELIGIBLE SHAREHOLDERS REGISTERED AT 7PM (AEDT) ON MONDAY 30TH MARCH 2009 AT AN ISSUE PRICE OF \$0.40 PER NEW SHARE TO RAISE APPROXIMATELY \$7.7 MILLION

3 April 2009

RIGHTS OFFER

For a non-renounceable rights issue of one (1) New Share for every eight (8) ordinary shares held by Eligible Shareholders registered at 7.00pm AEDT on Monday 30th March 2009 at an issue price of \$0.40 per New Share to raise approximately \$7.7 million.

In addition, Eligible Shareholders may apply for additional New Shares over and above their Entitlement if there is a Shortfall.

CLOSING DATE: 5.00 PM AEST ON FRIDAY 24TH APRIL 2009

This document is important and requires your immediate attention. Shareholders that take no action in respect of their rights will receive no benefit. You may wish to consult your professional adviser about its contents.

This document is not a prospectus. It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This is an important document which should be read in its entirety. If you do not understand its contents or you are in doubt as to the course of action you should take, you should consult your stockbroker, accountant or other licensed financial adviser without delay.

If you do not lodge an Entitlement and Acceptance Form together with payment by 5.00pm AEST on Friday 24th April 2009, you will not be issued New Shares in Metgasco Ltd.

CONTENTS

1.	Chairman's Letter…………………………………………………………………………3
2.	Key Dates5
3.	Details of the Offer 6
4.	What You Need To Do8
5.	Purpose and Effect of the Offer	11
6.	ASX Announcement	12
7.	Important Information	39
8.	Defined Terms	42
9.	Corporate Directory	44

3rd April 2009

Dear Shareholder

Capital Raising – Non-Renounceable Rights Offer (the "Rights Offer")

Over the past twelve months, despite turbulent global equity market conditions, the Australian coal seam gas sector has been one of the most dynamic, fast growing sectors of the Australian stock market. With its large independently certified gas reserves and strategic location close to markets, Metgasco is uniquely positioned as a key participant in this sector.

In order to progress the company's attractive growth strategies, Metgasco recently successfully completed a placement of ordinary shares at \$0.40 per ordinary share in Metgasco to institutional and sophisticated investors to raise approximately \$8 million ("Institutional Placement").

Recognising the significant support the Company has received from its existing investors, the Directors now wish to invite retail shareholders to acquire new Metgasco ordinary shares under an entitlement offer at the same price as was offered to institutional and sophisticated investors through the Institutional Placement. The Rights Offer is a non-renounceable rights issue of one for eight shares at \$0.40 per new Metgasco ordinary share ("New Share") to raise approximately \$7.7 million. The Rights Offer price represents a 23% discount to the volume weighted average price over the previous five trading days to Wednesday 11th March 2009.

If you were a shareholder on the Record Date (7.00pm on Monday 30th March 2009) with a registered address in Australia or New Zealand, you are eligible to participate in the Rights Offer. It is important to note that the Rights Offer closes at 5.00pm on Friday 24th April 2009. If you decide to increase your investment in Metgasco please ensure that you have completed your Entitlement and Acceptance Form and your application monies are received by our share registry, Computershare Investor Services Pty Limited, by this date.

Proceeds from the issue of shares pursuant to the Institutional Placement and the Rights Offer and existing cash reserves will be utilised in providing funding to:

• Expand the Company's gas reserve base through exploration, appraisal and drilling programs;
• Progress the development of key energy infrastructure projects: the Richmond Valley Power Station and The Lions Way Pipeline;
• Meet joint venture exploration commitments; and
• Replenish working capital and meet corporate costs.

This funding will strengthen the company and provide Metgasco with an ability to expand gas reserves to meet demand for gas from customers in south-east Queensland.

An investment in Metgasco involves general risks associated with an investment in the share market because the market price for New Shares may rise or fall. There are also a number of risk factors, both specific to Metgasco and of a general nature, which may affect the future operating and financial performance of the Company and the value of an investment in Metgasco. There is a limited review of risk factors in section 6 and, before deciding to invest in Metgasco, Eligible Shareholders and other prospective investors should consider all risk factors carefully.

Director's Interests

Each of the Directors of Metgasco has either a direct or indirect interest in Metgasco shares. The Directors or their associates intend to take up their allocations of shares under the Rights Offer in the following manner.

Director	Shares	Entitlement	Intentions
Peter Power	4,023,276	502,910	Intends to take up entitlement in full
David Johnson	10,092,167	1,261,521	Intends to take up entitlement to 400,000 shares
Glenda McLoughlin	5,886,140	735,768	Intends to take up entitlement to 500,000 shares
Rick Wood	745,626	93,203	Intends to take up entitlement in full
Nick Heath	129,825	16,228	Intends to take up entitlement in full

If you require further information please contact our Shareholder Information Line on 1300 755 127 (local call cost from within Australia) or +61 3 9415 4218 (from outside Australia) at any time from 8:30am to 5:00pm Monday to Friday during the Rights Offer period or at queries@computershare.com.au. You can also contact our Company Secretary, Nick Geddes on 02 9252 1933 or by email at ngeddes@austcosec.com.au. You can also visit the Company's website at www.metgasco.com.au.

On behalf of the Board, I thank you for your continued support of Metgasco. We invite you to consider supporting the Rights Offer to enable you to participate in the continued growth and success of Metgasco.

Yours sincerely,

Dr Peter Power Chairman

2. Key Dates

The following are key dates1 relating to the Rights Offer that you need to be aware of:

Event	Date
Record Date for the Rights Offer	7:00pm (AEDT) on 30 March 2009
Mailing of Entitlement and Acceptance Form to Shareholders	3 April 2009
Rights Offer opens	3 April 2009
Rights Offer closes	5:00pm (AEST) on 24 April 2009
Deferred settlement trading commences on ASX	27 April 2009
Settlement of the Rights Offer	28 April 2009
Last day of deferred settlement trading and allotment of New Shares under the Rights Offer	30 April 2009
Issue of New Shares under the Rights Offer	30 April 2009
Normal trading of New Shares issued under the Rights Offer expected to commence on ASX	1 May 2009
Dispatch of holding statements	4 May 2009

Applicants are encouraged to submit their Entitlement and Acceptance Forms as soon as possible after the Rights Offer opens. Metgasco reserves the right, subject to the Corporations Act 2001 (Cth), ASX Listing Rules and other applicable laws to vary the dates of the Rights Offer, including extending the Rights Offer or accepting late applications, either generally or in particular cases, without notice. No cooling off rights apply to the Rights Offer.

Enquiries

If you have any questions, please call the Metgasco Ltd Shareholder Information Line on 1300 755 127 (local call cost from within Australia) or +61 3 9415 4218 (from outside Australia) at any time from 8:30am to 5:00pm Monday to Friday during the Rights Offer period, or at queries@computershare.com.au. You can also contact our Company Secretary, Nick Geddes on 02 9252 1933 or by email ngeddes@austcosec.com.au.

Website: www.metgasco.com.au

METGASCO RIGHTS OFFER Page 5 ¹ The above timetable is indicative only and subject to change. Metgasco, subject to the Corporations Act, the ASX Listing Rules and other applicable laws, has the right to vary any of the above dates without notice. The commencement of quotation of New Shares is subject to confirmation from ASX.

3. Details of the Offer

3.1 The Offer

Metgasco is making a non-renounceable rights issue offering to Eligible Shareholders of one (1) New Share for every eight (8) Shares held at the Record Date to raise approximately \$7.7 million. The issue price of \$0.40 per New Share is payable in full on Application.

The number of New Shares to which you are entitled is shown on the accompanying personalised Entitlement and Acceptance Form.

Also, if you are an Eligible Shareholder and you apply for all of your Entitlement, you may, in addition to taking up all of your Entitlement, apply for additional New Shares in a Shortfall (if a Shortfall exists following the Offer).

The Rights Offer is being made pursuant to provisions of the Corporations Act which allow rights issues to be offered without a prospectus. As a result, it is important for Eligible Shareholders to read and understand the information on Metgasco and the Rights Offer made publicly available, prior to accepting all or part of their Entitlement. In particular, please refer to the attached materials, Metgasco annual reports and other announcements made available at www.metgasco.com.au.

3.2 Your Entitlement

Your Entitlement is set out on the accompanying personalised Entitlement and Acceptance Form, and has been calculated as one (1) New Share for every eight (8) Shares you held as at the record date of 7.00 pm AEDT on Monday 30 March 2009.

If you have more than one holding of Shares you will be sent more than one Entitlement and Acceptance Form and you will have separate Entitlements for each separate holding. New Shares issued pursuant to the Rights Offer will be fully paid and rank equally with existing Metgasco Ordinary Shares on issue.

Note, the Entitlement stated on your Entitlement and Acceptance Form may be in excess of the actual Entitlement you may be permitted to take up where, for example, you are holding Shares on behalf of a Non-participating Shareholder (as defined below).

3.3 Opening and Closing Dates

The Offer will open for receipt of acceptances on 3 April 2009. The Closing Date and time for acceptances and payments is 5.00pm AEST on 24 April 2009, subject to Metgasco varying the Closing Date in accordance with the Corporations Act and Listing Rules.

3.4 Who is entitled to participate in the Offer?

Every Eligible Shareholder who is registered as the holder of Shares at 5.00pm AEST on the Record Date is entitled to participate in the Offer.

3.5 Issue Price

The issue price is \$0.40 per New Share which represents a 23% discount to volume weighted average price over the previous five trading days to Wednesday 11 March 2009.

3.6 Rights Trading

Rights are non-renounceable and therefore cannot be sold. Accordingly, Eligible Shareholders may elect to take up some or all of their Rights, but cannot transfer their Rights.

3.7 Issue of New Shares and refund of subscription monies

Metgasco expects that the New Shares will be issued on or around 30 April 2009 and holding statements will be despatched on or around 4 May 2009. Issues of New Shares under this booklet will only be made after permission for their quotation on ASX has been granted.

Application monies will be held in a subscription account established and kept by Metgasco on behalf of each Eligible Shareholder until the New Shares are issued. If the above quotation condition for the issue of New Shares is not satisfied:

• the Application monies will be refunded to Eligible Shareholders as soon as reasonably practicable; and
• interest earned on the Application monies will be for the benefit of Metgasco and will be retained by the Company irrespective of whether New Shares are issued.

Upon issue, the New Shares will be fully paid and rank equally with the Existing Shares on issue.

3.8 Underwriting

The Offer is not underwritten; however, the Directors reserve the right to obtain underwriting commitments any time before the Closing Date.

3.9 Non-participating Shareholders

The Offer is open only to Eligible Shareholders.

Beyond Australia and New Zealand, Metgasco has decided that it is unreasonable for the Company to make the Offer to Shareholders in other jurisdictions as at the Record Date (Non-participating Shareholders), having regard to the number of Shareholders in each other jurisdiction, the number and value of Shares held by those Shareholders and the costs of complying with the legal and regulatory requirements in those jurisdictions. Accordingly, in accordance with the Listing Rules, Entitlement and Acceptance Forms are not being sent to Non-participating Shareholders.

It is the responsibility of any person who comes into possession of this booklet outside Australia or New Zealand to ensure compliance with all laws of any country relevant to their application. Any person not in Australia or New Zealand considering taking up their Entitlement and Shareholders who are resident outside those countries should consult their professional advisers as to whether or not any governmental or other consents are required, or if other formalities need to be observed, to enable them to accept the New Shares under this booklet.

4. What You Need To Do

If you have any questions about your Entitlement to New Shares, please contact:

• the Share Registry, Computershare Investor Services Pty Limited, telephone 1300 755 127; or
• your stockbroker or professional adviser.

The information below applies to all Eligible Shareholders. If you are a Non-participating Shareholder please read section 3.9.

4.1 What you may do

The Offer is non-renounceable. This means that if you do not wish to apply for your Rights you cannot sell all or part of your Entitlement. You should carefully consider how to deal with your Rights given if you let them lapse, you will receive no value.

The number of New Shares to which you are entitled is shown on the accompanying personalised Entitlement and Acceptance Form. You may:

• apply for all of your Entitlement to New Shares (refer to section 4.2);
• apply for additional New Shares (refer to section 4.3);
• apply for part of your Entitlement and allow the balance to lapse (refer to section 4.4); or
• not apply for any of your Entitlement and allow it to lapse (refer to section 4.5).

4.2 If you wish to apply for all of your Entitlement

If you wish to apply for all of your Entitlement, complete the accompanying personalised Entitlement and Acceptance Form in accordance with the instructions set out in that Form. The Entitlement and Acceptance Form sets out the number of New Shares to which you are entitled.

Payment by Cheque, Money Order or Bank Draft

The completed Entitlement and Acceptance Form must be accompanied by a cheque or bank draft payable at an Australian Bank for the appropriate Application Monies, calculated at \$0.40 per New Share accepted, and received by Metgasco's share registry by no later than 5.00 pm (AEST) on 24 April 2009:

Delivery and mail address:

Computershare Investor Services Pty Limited Metgasco Ltd 2009 Rights Offer GPO Box 505 Melbourne VIC 8060 AUSTRALIA

Alternatively, you may pay your Application Monies via BPAY pursuant to the instructions set out on the Entitlement and Acceptance Form.

Payment by BPAY

METGASCO RIGHTS OFFER Page 8 For payment by BPAY please follow the instructions on the Entitlement and Acceptance Form (which includes the biller code and your unique customer reference number). You can only make a payment via BPAY if you are the holder of an account with an Australian financial institution that supports BPAY transactions.

Please note that should you choose to pay by BPAY:

• you do not need to submit the personalised Entitlement and Acceptance Form but are taken to make the declarations on that Form; and
• if you do not pay for your full Entitlement, you are deemed to have taken up your Entitlement in respect of such whole number of New Shares which is covered in full by your Application Monies.

It is your responsibility to ensure that your BPAY payment is received by the Share Registry by no later than 5:00pm (AEST) on 24 April 2009 (subject to variation). You should be aware that your financial institution may implement earlier cut off times with regards to electronic payment, and you should therefore take this into consideration when making payment.

By completing and returning an Entitlement and Acceptance Form or making a payment by BPAY, you will be deemed to have represented that you are an Eligible Shareholder.

4.3 Applications for additional New Shares

If you are an Eligible Shareholder and you apply for all of your Entitlement, you may, in addition to taking up all of your Entitlement, apply for additional New Shares in a Shortfall (if a Shortfall exists following the Offer) (Shortfall Shares). A Shortfall arises if the aggregate of the actual Applications received for New Shares is less than the number of New Shares to be issued under the Offer.

Applicants wishing to apply for Shortfall Shares are required to complete the additional Shares section in the Entitlement and Acceptance Form in accordance with the instructions on that Form. The completed Form must be accompanied by a cheque or bank draft for the appropriate Application Monies, calculated at \$0.40 per additional New Shares you wish to apply for, and received by the Company's Share Registry by no later than 5.00pm (AEST) on 24 April 2009.

To the extent Eligible Shareholders do not take up their full Entitlement, Shortfall Shares will, at the discretion of the Directors and underwriter, if an underwriter is appointed, be offered to Eligible Shareholders who have applied for Shortfall Shares.

The following allocation policy will apply:

• all Eligible Shareholders will receive their Entitlement to the extent to which the Offer is accepted by them; and
• any Shortfall Shares applied for by an Eligible Shareholder (and Eligible Shareholders may apply for additional Shortfall Shares only if they have applied for their full Entitlement) may be accepted (in full or in part) or rejected at the absolute discretion of the Company in consultation with the underwriter, if an underwriter is appointed.

Eligible Shareholders who apply for Shortfall Shares will not be assured of receiving any Shortfall Shares applied for. The Company reserves its right to allocate Applications for Shortfall Shares in its absolute discretion in consultation with the underwriter, if an underwriter is appointed.

In the event that Applications for Shortfall Shares are not accepted in part or in full, the relevant Application Monies (without interest) will be refunded by the Company in accordance with the provisions of the Corporations Act. Any Application Monies received for more than your final allocation of New Shares and Additional New Shares will be refunded (without interest) on or around Monday 11 May 2009.

4.4 If you wish to apply for part of your Entitlement and allow the balance to lapse

If you wish to apply for part of your Entitlement and allow the balance to lapse, complete the accompanying personalised Entitlement and Acceptance Form in respect of the number of New Shares you wish to apply for in accordance with the instructions set out on the Entitlement and Acceptance Form.

The completed Entitlement and Acceptance Form must be accompanied by a cheque or bank draft for the appropriate Application Monies calculated at \$0.40 per New Share you wish to accept, and received by Metgasco's Share Registry no later than 5.00 pm (AEST) on 24 April 2009.

Alternatively, you may pay your Application Monies via BPAY pursuant to the instructions set out on the Entitlement and Acceptance Form.

4.5 Entitlements not subscribed for

If you are an Eligible Shareholder and do not wish to apply for all or part of your Entitlement, you are not obliged to do anything. Your Rights will lapse.

Entitlements to New Shares not accepted will form part of the Shortfall that will be dealt with in accordance with section 4.3 and you will receive no benefit.

The number of Existing Shares you hold as at the Record Date will not be affected if you choose not to accept any of your Entitlement.

4.6 Payment

Entitlement and Acceptance Forms must be accompanied by a cheque or bank draft, in Australian dollars and payable at an Australian bank, for the Application Monies. Cheques must be made payable to 'Metgasco Limited' and crossed 'Not Negotiable'. Alternatively, you may pay your Application Monies via BPAY pursuant to the instructions set out on the Entitlement and Acceptance Form.

Cash will not be accepted and receipts will not be issued. Payment for the New Shares must be made in full at the price of \$0.40 per New Share.

The Company will present the cheque or bank draft on or around the day of receipt of the Entitlement and Acceptance Form. Accordingly, if a cheque is not honoured upon its first presentation, Metgasco reserves the right to reject the relevant Entitlement and Acceptance Form.

If the amount of your cheque or bank draft for Application Monies (or the amount for which that cheque or bank draft clears in time for allocation) is insufficient to pay for the number of New Shares you have applied for in your Entitlement and Acceptance Form, you may be taken to have applied for such lower number of New Shares as your cleared Application Monies will pay for (and to have specified that number of New Shares in your Entitlement and Acceptance Form) or your Application may be rejected.

The Entitlement and Acceptance Form is required to be completed in accordance with the instructions on the Entitlement and Acceptance Form.

5. Purpose and Effect of the Offer

5.1 Purpose of the Offer

On 10 March 2009, Metgasco announced a milestone achievement – the first 1P gas reserves from the Clarence Moreton basin in Northern New South Wales. Having achieved this milestone, Metgasco is undertaking a capital raising involving the Institutional Placement and this Rights Offer, to allow the Company to more rapidly progress its gas commercialisation strategy. Metgasco intends to expand its gas reserve position, demonstrate that additional coal seam gas pilot wells can deliver gas on a commercial, repeatable and reliable basis and continue working towards developing its pipeline to market and finalising gas sale arrangements.

In addition to the Company's proven coal seam gas reserves, Metgasco's Kingfisher Field discovery provides the opportunity to develop conventional gas reserves. The capital raised will also allow Metgasco to undertake further drilling at its Kingfisher Field with the potential for conventional gas discovered at this location to be quickly recognised as proven reserves. Successful appraisal of the Kingfisher Field will also auger well for additional drilling on other conventional gas structures on the Mackeller high trend in PEL 16. While Metgasco tends to see Clarence Moreton as a gas charged basin, the Company has not ruled out the possibility that there is condensate or oil deeper in the system.

5.2 Use of proceeds

The New Shares will raise gross proceeds of approximately \$7.7 million for Metgasco. The funds raised via the Rights Offer, the Institutional Placement and Metgasco's existing cash reserves, will be utilised to:

• Increase 1P reserves through additional coal seam gas production drilling;
• Increase 2P reserves through further coal seam gas reserve evaluation drilling;
• Undertake potential high impact appraisal drilling at the Company's recent Kingfisher field conventional gas discovery and similar locations on the Mackellar High Trend;
• Meet working commitments to Joint Ventures;
• Progress the development of the Lions Way Pipeline development to connect the Casino gas field with the south-east Queensland gas markets and the Richmond Valley Power Station; and
• Replenish working capital.

5.3 Investor Update presentation

Further detail on the prospects of Metgasco is included in the Investor Update Presentation included in this booklet.

5.4 Risk factors

There are risks associated with investing in any form of business and with investing in the share market generally. There are also a range of specific risks that may materially affect the performance of Metgasco and the value of the New Shares. Many of these risks are outside the control of Metgasco and cannot be mitigated in any way, although prudent management may partly minimise some of these risks.

Further detail on the risk factors associated with an investment in Metgasco is included in the Investor Update Presentation included in this booklet.

5.5 Capital structure

This table shows the number of issued Shares at the date of the Offer and the total number of issued Shares at the close of the Offer.

Issued capital	Number
Issued Shares at the date of the Offer	153,323,134
New Shares offered under the Offer	19,165,392
Total issued Shares on the Close of the Offer	172,488,526

6. ASX Announcement

12 March 2009 – Investor Update

Please see following presentation

r e m ai cl s i D	mpleteness or correctness of information Such forward-looking m any future results or performance expressed This presentation is being provided for the sole purpose of providing the recipients with background information about Metgasco Ltd mates and mptions that are subject to change (and in many cases are outside the control of Metgasco, its Directors and Officers) which ment or reasonableness of any forecasts, prospects, mber of esti ments"). ments are by their nature subject to significant uncertainties and contingencies and are based on a nu ments in relation to future matters contained in the presentation ("forward-looking state mplied, is made as to the fairness, accuracy, co may cause the actual results or performance of Metgasco to be materially different fro contained in this presentation, including the accuracy, likelihood of achieve ments. No representation, express or i mplied by such forward-looking state returns or state (Metgasco).	mplete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of mary form only and is not intended to be co m This presentation provides information in su any particular investor.	All references Due care and consideration should be undertaken when considering and analysing Metgasco's financial performance. to dollars are to Australian Dollars unless otherwise stated.	m m fault or negligence, for any loss arising fro mployees or agents, nor any w, neither Metgasco nor its related corporations, Directors, e mitation, any liability arising fro the use of this presentation or its contents or otherwise arising in connection with it. other person, accepts any liability, including, without li m extent permitted by la mu To the maxi	This presentation should be read in conjunction with other publicly available material. Further information including historical results m.au. metgasco.co and a description of the activities of Metgasco is available on our website, www.
	state assu or i

Today's agenda

Executive summary

• Overview
• Industry dynamics
• Coal seam gas
• Conventional gas
• Commercialisation strategy
• Next 12 months
• Capital raising
• Investment risks
• Appendix

u s Key Value Proposition e v ti Capital Raising u c e x E	Proxi a m m	9.9m shares to institutional and sophisticated investors at an issue price of mity of assets to markets and infrastructure provides Metgasco cost of supply advantages W m Gas and conventional hydrocarbon assets in NS med at exploiting both gas and ment of its resources mbarked on a well defined gas strategy ai m to fast track develop Metgasco holds a portfolio of Coal Sea \$0.40/per share to raise \$8.0m electricity markets with an ai ment of 1 Metgasco has e Private place y
Use of Funds	\$7.6m	1:8 non-renounceable pro-rata rights issue at an issue price of \$0.40 per share to raise up to P and 2P position ment Way pipeline develop Conventional appraisal drilling near recent Kingfisher field discovery med at increasing Metgasco's 1 wer Station and Lions Further CSG reserve drilling ai mond Valley Po Replenish working capital Progress Rich

si a g n di uil B	ni g	s a g al n o ti n e v n o c & G S C n i e c n e s e r p t n a c fi
		Wales m of exploring and developing the coal w South mber 2004 with the ai Metgasco listed on the ASX in Dece sea
mber 2004 Listed in Dece		mercialisation m Metgasco has since developed a large reserve base and steadily progressed its co m and conventional gas potential of the Clarence Moreton Basin in northern Ne strategy
		wth with: me is driving CSG reserves gro m Metgasco's drilling progra
Reserves base		P (Proven) reserves at 2.7 PJ (gross) & 2.3 PJ (net) 1
		w at 1,538 PJ (gross) & 1,389 PJ (net) & 247 PJ (net) w at 298 PJ (gross) 3P (Proven + Probable + Possible) reserves no 2P (Proven + Probable) reserves no
Conventional discovery		mate mber 2008 with a contingent resource esti 4 PJ (P10) mate of 90 PJ (Pmean) and 91 menced in Septe OGIP esti of 41 PJ (Pmean) and 77 PJ (P10) and m Discovery of Kingfisher Field co
and resources		0 PJ (P10) identified Additional leads and prospects of 520 PJ (Pmean) and 5,71
		ment. wer Station (RVPS) in develop mond Valley Po Rich
mercialisation Co		CS Energy Farm-in and proposed gas sale
m		BP gas sale in discussion
		mers ment to connect field to custo Way Pipeline in develop Lions
ment Board and Manage		ment and financing mercialisation, develop m Strong Board with track record of discovery, energy co
		mented with capable field staff in Casino mple m co ment tea Experienced senior manage

Overview

Industry dynamics CSG is a growing energy resource in Australia

• CSG production in 1996: < 1PJ /year
• CSG production by 2008: > 127 PJ /year
• Between 1997 to 2008 CSG 2P reserves have grown from 95 PJ to 12,174 PJ
• Total CSG resources on the east coast are estimated at 54,400 PJ
• Development to date has focused on CSG in Queensland
• Clarence Moreton, Gunnedah and Gloucester in NSW are all seen as emerging production areas

d d n e a s m a e cre n ort d n sia o n erati s i mity to A p x a g h 5, total e n e wer g n erators di e to proxi n tra o stralia 01 d p o y 2 n d missi e s fire n city g g b u u a n A e e d n e n g a m ers ci ore g orta ctri s i n o n e sto city retail urce n of carb e e h d m d el d s s m 0 m nt at Gla d 3 s o o 0 a s s fire a e nts c y 2 g g s re e g ctri d n o e b n cti a a mi n pla

Industry dynamics CSG is a strategically valuable asset A number of recent transactions have occurred that highlight the value of Australian CSG assets

• Values paid for these acquisitions have ranged from: \$1.67- \$4.91/GJ for 2P reserves
• \$0.67 \$1.88/GJ for 3P reserves
• These acquisitions provide an arm's length benchmark value for Australian CSG assets

Values are influenced by a wide variety of factors including location, maturation profile, stage of development, and additional resources

Coal seam gas Tenements and location

Large acreage position in northern NSW of 6,000 km2 (gross)

Metgasco's CSG Acreage position

m2) ross Area (k G	m2 0 k 83	m2 652 k 1,	m2 448 k 2,	m2 0 k 93 5,
	6 1 L 1 E P	32 L 1 E P	62 L 42 E P	otal T

1. In JV with CS Energy; 2. In JV with Molopo

2. Close to markets and infrastructure

3. CSG and Conventional appraisal & exploration opportunities

Coal seam gas Significant gas resources located in Clarence Moreton

A substantial reserve position has been established

PEL 16 - Growth in gross reserve base (PJ)

• Significant opportunity for further reserve growth :
• 2P reserves booked in 4 out of 11 blocks in PEL 16
• represents 5-10% of total acreage covered to date
• reserves grown strongly for the past three years

Reserves have been certified by Mr Tim Hower of MHA Petroleum Consultants (Denver) who is a qualified person as defined under the ASX Listing Rule 5.11. Reserves have been developed within the guidelines of the SPE. Mr Hower has consented to the use of the reserve figures in this presentation.

d e h s bli a t s e s e v r e s s e a r g s m a g a e n s e al v o o r C P	nts e g e a s cre pre a 6 re G S L 1 C o's E n P c s d) i a etg e p M o n el e i v e u d g val n n, u n e erlyi s (prov d n e u e ul hts th o etaj 7 P g hli n of 2. g d hi n o e a cati n sto e certifi e mil nt erv orta s P re p m 1 i	ce : n ca nifi g ercial si m m o C	n drill y it ca b ere wh m nis a ch e m d a e d prov sis n d a a ercial b e ntifi e d m s i m a o o h n a c c s a wells o etg M s ete strate pl m n o o d c m e n d a	P e 2 o's larg c s a etg M e of g nta erce all p m n of s o ersi v s n e o erv nitial c s P re e i nto 1 nly th e i nts o s a e b e s erv pre s re re	d el s fi ward e to g praisal sta p d a n n a o orati pl x m e o fro c s a etg M nt n of e m o p siti o el n v tra e d	d e ntifi e d w i o s n n o cati o g l n ority drilli h pri g Hi

Conventional gas Substantial prospects

• Kingfisher discovery announced September 2008:
• Located on the Mackellar high trend
• Well was drilled to a depth of 1,296 meters and limited by capability of rig
• 700 meters of additional potential pay deeper in sequence
• Liquids (condensate, oil) deeper in the system?
• Metgasco has appointed financial advisors to formally progress farm-out discussions and data room is currently open

ates) m P esti
GI O
s ( d ea
d L n cts a
e p s 6 - Pro
L 1 E P

	n Mea P	0 P1
	PJ	PJ
Kingfisher (contingent resource)	41	77
Kingfisher (OGIP est.)	90	4 91
Mackellar (OGIP est.)	69	757
Mackellar North (OGIP est.)	61 1	1,972
werbird (OGIP est.) Bo	31	325
Cicada (OGIP est.)	39	387
Fantail (OGIP est.)	33	347
Monarch (OGIP est.)	58	581
Triller (OGIP est.)	40	428
Total (OGIP est.)	520	0 5,71

Conventional gas Significant growth potential with Kingfisher Field

• Kingfisher field is part of larger geological structure "Mackellar High Trend"
• Processing and interpretation of recently shot seismic has identified a number of attractive leads and prospects in PEL 16
• Conventional gas complements CSG field economics
• flexible supply opportunities
• can accelerate development
• wet gas potential

Commercialisation strategy

Demand Base

• Carbon Pollution Reduction Scheme & Gladstone LNG will support east coast gas demand and require additional supply
• Flexible supply capability into market
• Alliances in place with strong counterparties for gas off take
• CS Energy Farm in and proposed sale for 18 PJ/year
• BP Australia proposed gas sale of 15 PJ/year

Commercialisation strategy

Supply Base

• Lions Way Gas Pipeline Pipeline to connect gas field to customers in QLD under development:
• Lions Way pipeline 145km pipeline starting in Casino (NSW) and finishing in Ipswich (QLD)
• Development of pipeline will allow for supply of gas into South East Queensland via an alternative delivery route and alternative supply basin
• Richmond Valley Power Station (30 MW) 2.5 PJ/ year in development

	t n e m p o el v e d
	e r u t c u tr s a fr n i
s	d n a
h t n o m	g n rilli d
2 t 1 x e N	r e h rt u F

• Reserve development drilling to:
• increase reserves ( 2P & 3P)
• repeat and improve CSG pilot well engineering performance ( 1P)
• appraise Kingfisher conventional gas discovery and Mackellar advanced prospect (diversify supply)

• develop capability in reserve conversion for broad scale production

• Commercial development

• Development approval and FID of 30 MW Richmond Valley power station
• Complete Environmental Assessment on Lions Way pipeline
• Progress on Stratheden Joint Venture
• Progress other gas sale agreements

Capital raising

• Total amount to be raised up to \$15.6m, comprising:
• Share placement of 19.9m shares at an issue price of \$0.40 per share to raise up to \$8.0m

1:8 non-renounceable pro rata rights at an issue price of \$0.40 per share to raise up to \$7.6m. Placement shares eligible to participate in rights issue

Use of funds

		% rights issue taken up
as m G oal Sea C	% 0	% 50	% 00 1
G production drilling S C	0 3.	0 3.	0 3.
eserve evaluation and ment drilling develop R	0 2.	0 2.	2.5
onventional C
wells) ppraisal drilling (2-3 A		2.5	0 4.
nergy Infrastructure E
S FID P V R		0.3	0.3
A Way E Lions		0.5	0.5
Working Capital
ment eplenish Working Capital R	0 3.	3.5	5.3
Total	0 8.	8 11.	6 5. 1

nt e v E	ate D
Trading halt	March 2 hu, 1 T
nd rights issue ent a m ounce place nn A	March 7 ue, 1 T
ent shares m ent of place m ettle S	March 0 Fri, 2
ecord date for the Rights Offer R	March 0 Mon, 3
Rights Offer opens	pril Fri, 3 A
olders m to shareh or nce F pta cce nd A ent a m ntitle Mailing of E	pril Fri, 3 A
Rights Offer closes	pril Fri, 24 A
X S ences on A m m ent trading co m eferred settle D	pril Mon, 27 A
ent of the Rights Offer m ettle S	pril 8 A ues, 2 T
ent of shares m nd allot ent trading a m ast day of deferred settle L	pril 9 A ed, 2 W
ents m olding state nd dispatch h al trading a m or ent of n m ence m m o C	May Fri, 1

Rights issue indicative timetable

k
s
ri
t n
e
m
t
s e
v
n I

Metgasco's activities, as in any business, are subject to range of internal and external risks and uncertainties which may impact on its future performance. Many are outside the control of the Board and the Company. Prior to making any decision to accept the Offer, investors should carefully consider the following risk factors applicable to the Company and other information provided to you by Metgasco in connection with the offer.

The shares offered should be considered speculative because of the inherent risk associated with CSG and conventional gas exploration, production appraisal, development, production, transportation and sales. There are also various risks associated with investing in any form of business and with investing in the share market generally Careful consideration should be given to the following risk factors, as well as the Eligible Shareholders own knowledge and enquiries, before an investment decision is made. Some of the risks may be mitigated by the Company using safeguards and appropriate systems and taking certain actions. Some of the risks may be outside the control of Metgasco and are not capable of mitigation. There are also general risks associated with any investment in shares. The risks listed should not be taken as exhaustive of the risks faced by Metgasco. Factors other than those listed may in the future materially affect the financial performance of Metgasco and the value of the New Shares offered under this Prospectus and documentation. Investors should read this Prospectus in its entirety, examine all prior ASX announcements and consult their professional advisers before deciding whether to accept the Offer for New Shares.

k s ri t e k r a M	and pipeline projects. The nature of the industry is highly speculative and no assurances can be made that the Company's particular interests or The shares issued by Metgasco are speculative due to the nature of the Company. Metgasco has interest in the development of gas, electricity projects will be successful. Key risks are summarised below:	specifically affecting the Australian resources sector and exploration companies in particular. The Shares carry no guarantee of factors (both national and international) that may affect the share market price and neither the Company nor its Directors in respect of profitability, dividends, return on capital, or the price at which they may trade on the ASX. There are a number The market price of Shares can be expected to rise and fall in accordance with general market conditions and factors have control of those factors. Share market risk and volatility	industrial disruption, interest rates, currency fluctuations, inflation and global economic conditions. These factors are beyond The companies future revenues and costs can be affected by factors such as supply and demand for goods and services, the control of the company. Economic conditions	Wales, will have an impact on the supply demand features of the local markets. The fluctuations can impact gas prices and The availability or otherwise of competing sources of gas , whether from within or outside of Queensland and New South will have a impact on the valuation of the commercial endeavors undertaken. Competing sources of gas	Exploration in and development of any of the conventional properties will be subject to meeting planning and environmental The company's exploration and development program will, in general be subject to approval by governmental authorities. laws and guidelines and approval by governmental authorities. Environmental impact constraints	Changes in government regulations and policies may adversely affect the financial performance or the current and proposed operations of the company. Legislative change	gas and electricity. Historically all three of the markets have tended to be volatile. Energy markets are influenced not only by prevailing and future economic conditions but also climatic conditions. Sharp changes in the price of oil, gas and electricity The company's financial condition and growth trajectory are dependent on both the present and future price for oil, natural could have a material effect on the Company. Energy market volatility
--------------------------------------------	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	--

Company risk

In addition to the general market risk noted in the previous section, shareholders should be aware of the company specific risk. These include but are not limited to the risks below:

General project risk	be successful. The drilling of gas wells involves a high degree of risk, especially the risk of a dry hole or of a well that is not There can be no assurance that the Company's planned development projects and exploration and appraisal activities will risks associated with the Company's reliance on third parties during the conduct of exploration and development activities. sufficiently productive to provide economic return of the capital expended to drill the well. There are also delays and other
Environmental impact constraints	The company's exploration and development program will, in general be subject to approval by governmental authorities. Exploration in and development of any of the conventional properties will be subject to meeting planning and environmental laws and guidelines and approval by governmental authorities.
mitment License com	Under the exploration license areas and certain other contractual agreements to which the Company is subject to payment minimum work commitments attaching to the exploration license. Failure to meet these work commitments will render the and other obligations. In particular the licence area holders are required to expend the funds necessary to meet the license areas liable to be cancelled.
Exploration	Exploration is a speculative endeavor. Exploration and development operations can be impacted by unforeseen circumstances (force majeure), cost overruns including unexpected variations in location and quality of gas.
Appraisal drilling risk	quantities of gas can be recovered from these wells. No assurance can be given if commercial reserves are discovered Even when drilling in a existing fields there is no assurance that gas will be discovered or, even if it is that commercial the company will be able to realize such reserves as intended.
Production	Production is the successful establishment of commercial gas reserves, design, construction, managerial performance; and efficient marketing of gas.

limited to the risks below:	In addition to the general market risk noted in the previous section, shareholders should be aware of the company specific risk. These include but are not
Land access	Access to land for exploration purposes can be affected by land ownership, including private (freehold) land, pastoral lease and Native Title land or claims under the Native Title Act 1993 (Commonwealth). Rights to petroleum tenements carry with them various obligations in regard to minimum expenditure levels and responsibilities in respect of the environment and Land access is critical for exploration, evaluation and finally production. Acquisition of prospective tenements is a complicated and ability to negotiate satisfactory commercial arrangements with other parties is often essential. safety. Failure to observe these requirements could prejudice the right to maintain title to a given area.
Policy and Taxation	may have an adverse effect on the assets, operations and ultimately the financial performance of both the Company and the Changes in taxation, interest rates, other legal, legislative and administrative regimes, and Government policies in Australia, In addition to the normal level of income tax imposed on all industries, the petroleum industry is required to pay government royalties, indirect taxes, GST and other imposts which generally relate to revenue or cash flows. Industry profitability can be entities in which the Company invests. These factors may ultimately affect the financial performance of the Company and affected by changes in government taxation policies. the market price of its securities.
Production	mongst other Production is the successful establishment of commercial gas reserves, design, construction, managerial performance; and guarantee that the Company will be able to successfully transport the gas to commercially viable markets or sell the gas to processing and transportation facilities. Even if the Company recovers potentially commercial quantities of gas, there is no factors, success in production is dependent on successful design, construction and operation of efficient gathering, efficient marketing of gas. The business of commodity development and production involves a degree of risk. A customers to achieve a commercial return.
Negotiations	Various aspects of the company's future performance and profitability are dependent on the outcome of future negotiations with third parties. These include negotiations on land access arrangements and any title based issues.
Key personnel	The success of the Company and its ability to continue operations is dependent upon its ability to retain the services of key consultants and Directors is not assured and loss of their services to the Company may have a material adverse effect on employees, consultants and members of Board of Directors. The continued involvement of certain key employees, the performance of the Company.

Company risk (continued)

		T N E M E G A N A M	Former Head of Strategy for Australian Pipelines Trust, 30 Kevin Dixon – General Manager Gas Marketing Mobil. years experience with Exxon	m with Former leader of Onshore Exploration evaluation tea more – General Manager Exploration Peter Stan	Previously 30 years experience with Santos and ment. m exploration and develop Mobil in petroleu Santos. Exxon	ment Mick O'Brien – General Manager Develop	Over 30 years experience in energy sector engineering. Former Worley Parsons in Brisbane. m Gas group for head of Coal Sea
x di n e p p A	t n e m e g a n a M & d r a o B	D R A O B	mpolex. Past Chairman of APPEA. Managing Director Former Managing Director of A wer – Chairman David Johnson – Dr Peter Po	m Geologist with 20 years experience in the minerals and petroleu sectors.	Utilities & Infrastructure group with Barclays Capital and Vice President Former investment banker with over 20 years experience: Head of O Glenda McLoughlin – Director & CF	at Morgan Stanley.	m oil Over 30 years experience in engineering and operations in upstrea 8 years with Esso and former General Manager of Wood – Director & Director, Operations mpolex. Operations with A Over 1 & gas. Rick	Past Chairman and Mobil Australia with responsibility for the marketing of natural gas throughout Australia. Nick Heath – Non-Executive Director Former Director of Exxon Councilor of APPEA.

Appendix Financial Data

nge xcha n ustralia ecurities E Listed A X) S (A S	004 ec 2 D
ode X C S A	L ME
hare Price urrent S C	55 0. \$
p a Market C	million 3 \$7
hares on issue S	million 3 33. 1
ptions on issue O	million 0 2

	s m r e t
	y e k f
x di n	o y r a s
e p p A	s o l G

ASX	Australian Stock Exchange Limited
Bcf	Billion cubic feet (109 cubic feet)
M CS	M). Natural Gas contained within coals Coal Seam Gas. Also known as coal bed methane (CB
CPRS	Carbon Pollution Reduction Scheme
Clarence Moreton Basin	A sedimentary basin containing early Triassic and mid to late Jurassic sediments
Gas-in-Place	A technical estimate of potential gas volumes or GIP contained within a defined area
GJ	Gigajoule (109 joules)
Joule	A unit of energy
MOU	Memorandum of Understanding
W or Megawatt M	One million watts of power
LNG	Liquid Natural Gas
PEL	Petroleum Exploration License Number 16
PJ	Petajoule (1015 joules)
RVPS	Richmond Valley Power Station 30 Mw currently being developed by Metgasco near the town of Casino
1P	proved reserves as defined by the Society of Petroleum Engineers
2P	sum of proved reserves plus probable reserves, as defined by the Society of Petroleum Engineers
3P	sum of proved reserves plus probable reserves plus possible reserves, as defined by the Society of Petroleum Engineers

7. Important Information

This booklet and enclosed Entitlement and Acceptance Form and accompanying Information have been prepared by Metgasco.

This Information is important and requires your immediate attention.

You should read this Information carefully in its entirety before deciding whether to invest in the New Shares or Shortfall Shares. In particular, you should consider the risk factors that could affect the performance of an investment in Metgasco.

Metgasco has applied for the grant by ASX of official quotation of the New Shares.

7.1 Eligible Shareholders

This Information contains an offer to Eligible Shareholders in Australia or New Zealand of New Shares, and has been prepared in accordance with section 708AA of the Corporations Act as modified by ASIC Class Order 08/35. The Rights Offer is not being extended to any Shareholder outside Australia and New Zealand.

7.2 Applications for Additional New Shares in excess of Entitlement

Shareholders may apply for additional New Shares which may be available in the event of a shortfall ("Shortfall Shares"). Metgasco reserves the right to allot additional New Shares or scale back your application for Shortfall Shares in its absolute discretion. Therefore, your application for Shortfall Shares may not be successful (wholly or partially). The decision of Metgasco on the number of Shortfall Shares to be allocated to you will be final.

7.3 No cooling off rights

Cooling off rights do not apply to an investment in the New Shares or Shortfall Shares. You cannot, in most circumstances, withdraw the application once it has been accepted. Further, Entitlements cannot be traded on the ASX or any other exchange, nor can they be privately transferred.

7.4 Not investment advice

The Information is not a prospectus under the Corporations Act and has not been lodged with ASIC. It is also not financial product advice and has been prepared without taking into account your investment objectives, financial circumstances or particular needs. Metgasco is not licensed to provide financial product advice in respect of the New Shares or Shortfall Shares. The Information does not purport to contain all the information that you may require to evaluate a possible application for New Shares.

Before deciding whether to apply for New Shares, you should consider whether they are a suitable investment for you in light of your own investment objectives and financial circumstances and having regard to the merits or risks involved. If, after reading the Information, you have any questions about the Rights Offer, you should contact your stockbroker, accountant or other independent professional adviser.

7.5 Broker Stamping Fee

A stamping fee of 1% of Application Monies (exclusive of GST) on New Shares allotted will be paid to stockbrokers (being those entities name as full service (advisory) brokers or non-advisory brokers on the ASX website) who submit a valid claim for a broker stamping fee on successful Applications, subject to a fee limit of \$100 (exclusive of GST) for each such Application. This fee is to be paid by Metgasco. Details of the claims process are to be separately communicated.

7.6 Rounding of Entitlements

Where fractions arise in the calculation of Entitlements, less than 0.5 will be rounded down and 0.5 and greater rounded up. Where an Eligible Shareholder holds Metgasco ordinary shares on the Record Date, that shareholder's Entitlement (as shown on the Entitlement and Acceptance Form) has been calculated as the shareholder's prima facie Entitlement with respect to its holding of Metgasco ordinary shares on the Record Date and any fractional entitlement is rounded in the manner described above.

7.7 Information availability

Eligible Shareholders in Australia and New Zealand can obtain a copy of this Information during the period of the Rights Offer on the Metgasco website at www.metgasco.com.au or by calling the Metgasco Ltd Shareholder Information Line. Persons who access the electronic version of this Information should ensure that they download and read the entire Information. The electronic version of this Information on the Metgasco website will not include an Entitlement and Acceptance Form. A replacement Entitlement and Application Form can be obtained from the Share Registry.

Neither this Information nor the accompanying Entitlement and Acceptance Form may be sent to investors in the US or that are, or are acting on behalf of or for the account or benefit of, a US Person, or otherwise distributed in the US.

7.8 Future performance and forward-looking statements

Neither Metgasco nor any other person warrants or guarantees the future performance of the New Shares,or any return on any investment made pursuant to this Information. Forward looking statements, opinions and estimates provided in the Information are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions.

Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. They are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of Metgasco and the Board, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by the forwardlooking statements in this Information.

7.9 Past performance

Investors should note that the past share price performance of Metgasco provides no guidance as to its future share price performance.

7.10 Governing law

This Information, the Rights Offer and the contracts formed on acceptance of the Entitlement and Acceptance Forms are governed by the laws applicable in New South Wales, Australia. Each applicant for New Shares submits to the non-exclusive jurisdiction of the courts of New South Wales, Australia.

7.11 Foreign jurisdictions

This Information has been prepared to comply with the requirements of the securities laws of Australia and New Zealand.

The New Shares being offered under this Information are also being offered to Eligible Shareholders with registered addresses in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). This Information is not an investment statement or prospectus under New Zealand law, and may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

No action has been taken to register or qualify the Rights Offer, the Entitlements or the New Shares, or otherwise permit the public offering of the New Shares, in any jurisdiction other than Australia and New Zealand.

The distribution of this Information (including an electronic copy) outside Australia and New Zealand is restricted by law. If you come into possession of this Information, you should observe such restrictions and should seek your own advice on such restrictions. Any non-compliance with these restrictions may contravene applicable securities laws.

The following international selling restrictions relate to the issue of New Shares and Shortfall Shares under the Rights Offer:

United States

This Information does not constitute an offer of shares for sale in the US, or to any person that is or is acting for the account or benefit of any US person, or in any other place in which, or to any person to whom, it would not be lawful to make such an offer.

Neither the Entitlements nor the New Shares have been or will be registered under the Securities Act or the securities laws of any state of the United States and may not be offered or sold in the US or to, or for the account or benefit of, US Persons.

New Zealand

This Information has not been registered, filed with or approved by any New Zealand regulatory authority under or in connection with the Securities Act 1978 (New Zealand).

In accordance with relevant New Zealand securities law, a person who, on the Record Date, being 7:00pm (AEDT) on Monday 30 March 2009, was registered as a holder of ordinary shares in Metgasco with a New Zealand address but who, as at the time of this Rights Offer no longer holds those shares, is not eligible to participate in this Rights Offer.

7.12 Disclaimer of representations

No person is authorised to give any information, or to make any representation, in connection with the Rights Offer that is not contained in this Information.

Any information or representation that is not in this Information may not be relied on as having been authorised by Metgasco, or their respective related bodies corporate in connection with the Rights Offer. Except as required by law, and only to the extent so required, none of Metgasco, or any other person, warrants or guarantees the future performance of Metgasco or any return on any investment made pursuant to this Information.

8. Defined Terms

\$ means Australia Dollars

AEST means Australian Eastern Standard Time.

AEDT means Australian Eastern Daylight Savings Time

Allotment Date means the date on which the New Shares are issued and allotted.

Applicant(s) means a person(s) who submit an Application.

Application means a valid application made to subscribe for a specified number of Shares pursuant to this booklet.

Application Monies means the money received by the Company from a Shareholder, being the Issue price multiplied by the number of New Shares applied for.

ASIC means the Australian Securities and Investments Commission.

ASX means the Australian Securities Exchange Limited.

Board means the board of Directors of Metgasco Limited.

CHESS means the Clearing House Electronic Sub-Register System operated by ASX Settlement and Transfer Corporation Pty Limited, a wholly owned subsidiary of the ASX.

Closing Date means the last date for accepting an application for New Shares, being 5.00pm AEST on 24 April 2009.

Company or Metgasco means Metgasco Limited ACN 088 196 383.

Corporations Act means the Corporations Act 2001 (Cth).

Directors(s) means a director(s) of Metgasco as at the date of this Offer.

Eligible Shareholders means those holders of Shares who:

• are registered as a holder of Shares as at 7:00pm AEDT on Monday 30 March 2009 (Record Date);
• have a registered address in Australia or New Zealand;
• are not in the United States ("US") or a US person (as defined in Regulation S under the United States Securities Act of 1933, as amended ("Securities Act)) (US Person) or acting for the account or benefit of a US Person;
• are not Ineligible Shareholders; and
• are eligible under all applicable securities laws to receive an offer under the Rights Offer.

Entitlement means the entitlement to subscribe for New Shares offered to a holder of Rights.

Entitlement and Acceptance Form means the form accompanying this booklet, which is particularised for the relevant Eligible Shareholder.

Existing Shares means the Shares on Issue at the Record Date

METGASCO RIGHTS OFFER Page 42 Listing Rules means the official listing rules of ASX.

New Shares means a Share to be issued pursuant to this Letter of Offer at \$0.40 per Share.

Non-participating Shareholder(s) means a Shareholder(s) whose registered address is not in Australia or New Zealand as at the Record Date.

Record Date means 7.00pm AEDT on 30 March 2009.

Right means the right to subscribe for one (1) New Share for every eight (8) Shares held by an Eligible Shareholder on the Record Date and Rights has a corresponding meaning.

Rights Issue means the pro-rata Entitlement to New Shares under the Offer.

Rights Offer means the Offer made under this booklet of one (1) New Share for every eight (8) Shares held by an Eligible Shareholder on the Record Date.

Share means a fully paid ordinary Share in the capital of the Company and Shares has a corresponding meaning.

Share Registry means Computershare Investor Services Pty Limited.

Shareholder(s) means a registered holder(s) of Shares as at the Record Date.

Shortfall means the situation where the aggregate of actual valid applications received for new Shares at the Closing Date is less than the number of New Shares to be issued under the Offer.

Shortfall Shares means New Shares offered as a result of a Shortfall.

9. Corporate Directory

METGASCO LIMITED

ACN 088 196 383

Registered Office: Level 9, 77 Pacific Highway North Sydney NSW AUSTRALIA 2060 Telephone: +61 2 9923 9100 Facsimile: +61 2 9923 9199 www.metgasco.com.au

DIRECTORS

Dr Peter Power (Non-Executive Chairman)

Mr David Johnson (Managing Director)

Ms Glenda McLoughlin (Director, CFO)

Mr Rick Wood (Non-executive Director)

Mr Nicholas Heath (Non-executive Director)

COMPANY SECRETARY

Ms Glenda McLoughlin Mr Nicholas Geddes

ASX CODE

MEL

SOLICITORS TO THE OFFER

Allens Arthur Robinson Level 28 Deutsche Bank Place (corner of Hunter & Phillip Streets) Sydney NSW AUSTRALIA 2000

AUDITOR

BDO Kendalls (NSW) Level 19, 2 Market St Sydney NSW 2000

SHARE REGISTRY

Computershare Investor Services Pty Limited GPO Box 7405 Sydney NSW Australia 1115 Telephone: 1300 755 127 or +61 3 9415 4218