METGASCO LTD — Capital/Financing Update 2009

Mar 9, 2009

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ASX ANNOUNCEMENT

10[th] March 2009

Metgasco receives first certification of 1P Reserves

Metgasco Limited (ASX:MEL) today announced that it had received its first certification of 1P Proven gas reserves from its coal seam gas pilot wells.

Metgasco has received 1P reserve certification of 2.7 Petajoules (proven, undeveloped) within the area of its pilot wells in PEL 16. This confirms that gas development from the Company’s operations meets commercial criteria and is an important step forward in the Company’s growth.

PEL 16 – Independently certified gas reserves (Petajoules)

1P (Proven) Reserves	2.7 Pj
2P (Proven + Probable) Reserves	298 Pj
3P (Proven + Probable + Possible) Reserves	1,538 Pj

These are the first ever proven coal seam gas reserves out of the Clarence Moreton basin in northern New South Wales. This development is significant because:

• It demonstrates that Metgasco has identified and proved a mechanism whereby it can drill and complete wells on a commercial basis;

• It represents only the initial conversion of a small percentage of Metgasco’s large 2P reserve base into 1P Proven reserves. Further increases in 1P reserves can be achieved with additional production drilling; and

• It is further tangible progress of Metgasco’s transition from exploration and appraisal stage towards field development.

Following a recent review of the project, Metgasco has identified several variations in drilling and completion techniques which are expected to result in reduced costs while contributing to well productivity. These improvements are expected to result in improvements in margins from the project. At the same time the Company has made considerable progress in delineating the relative productivity of areas under investigation which will allow a more focussed approach as the Company moves into field development.

Commenting on the announcement Metgasco’s managing director, Mr David Johnson, said “We are pleased to have achieved this important milestone in establishing the first 1P Proven commercial gas reserves from the Clarence Moreton Basin. These results further highlight the underlying value of our resource acreage.”

“This development combined with our emerging conventional gas resources, following the discovery of the Kingfisher Field, demonstrates that the Clarence Moreton basin will play an important role in supplying gas to Queensland and New South Wales. Metgasco is uniquely placed to play a leading role in the development of the Clarence Moreton basin’s energy resources.”

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Compliance Statement

The Reserves statement provided in this announcement has been prepared by Mr Tim Hower of MHA Petroleum Consultants (Denver) and personnel under his supervision. Reserve estimates have been developed within the guidelines of definitions of proved, probable and possible reserves provided by the Society of Petroleum Engineers and the World Petroleum Council. These methods are consistent with the ASX Listing Rules. Mr Hower has consented to the use of the reserves figures in this announcement and the form and context in which the information appears.

For further information contact: David Johnson Glenda McLoughlin Managing Director Chief Financial Officer

Metgasco Limited

ACN 088 196 383 Level 9, 77 Pacific Highway North Sydney NSW 2060 Tel: (02) 9923 9100 Fax: (02) 9923 9199 Website: www.metgasco.com.au

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