METGASCO LTD — Director's Dealing 2015

Jan 15, 2015

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15 January 2015

Elvis Onyura Senior Adviser, Listing Compliance Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

Dear Mr Onyura,

We refer to your letter dated 14 January 2015 referencing the Appendix 3Y lodged with the ASX on 12 January 2015 and advise the following:

1. The late lodgement of the Director’s Interest Notice was an administrative oversight.

The administrative oversight occurred as a result of two factors:

• the relevant circumstances did not involve the director concerned either buying or selling securities in Metgasco Limited. The notice concerned the cancellation of securities that had been issued under the Company’s employee and officers’ share equity plan. Before the cancellation of those securities, the director did not have the ability to trade those securities as they were held in an escrow account, subject to satisfaction of specific performance measures which had been set by the Metgasco Board and approved by members at the 2011 AGM; and

• notice of the cancellation of these securities was given to the market on 27 October 2014 (in the notice of meeting for the 2014 AGM). The notice was made because the relevant performance measures had not been met, resulting in the shares being formally cancelled at the 2014 AGM on 28 November 2014.

While the Appendix 3Y should have been lodged within the appropriate time period, it was these two factors that contributed to the administrative oversight occurring and the Company notes that notwithstanding this oversight the notice of the cancellation was disclosed to the market on 27 October 2014 and that there was no trading in these shares by the relevant director.

1. Metgasco has procedures in place to ensure compliance with listing rule 3.19B. Each director is also aware of his obligation to advise the Company of transactions involving direct or indirect interests in a timely manner. Trading by directors is restricted to specific periods and only permitted when the director is not in possession of unreleased price sensitive information. Following a trade of securities by directors, confirmation of price and quantity is provided to the Company Secretary to ensure that the notification obligations of directors of Metgasco under ASX Listing Rule 3.19A or Corporations Act s205G are satisfied.

In this instance no securities were traded, rather this notice concerned the cancellation of shares that had lapsed under the Company’s employee and officers’ equity plan. The

Metgasco Limited ACN 088 196 383 PO Box 517, North Sydney, NSW 2059 | Phone: +61 2 9923 9100 | Fax: +61 9923 9199 www.metgasco.com.au

Company maintains a record of all securities issued under the Company’s employee and officers’ equity plan and their vesting status. The Company’s recordkeeping and reporting procedures in this regard can be seen to have been effective in that the notice of cancellation was given to the market in the notice of meeting for the 2014 AGM. This demonstrates that, notwithstanding the administrative oversight in relation to the Appendix 3Y, the Company is sufficiently prepared and committed to ensuring compliance with the Listing Rules at all times.

Metgasco’s share trading policy can be found on our website at:

www.metgasco.com.au/information/securities-trading-policy.

1. The Company considers the current arrangements and procedures in place to be adequate.

Yours sincerely

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Sean Hooper Company Secretary Metgasco Limited

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ASX Compliance ABN 26 087 780 489 20 Bridge Street Sydney NSW 2000 PO Box H224 Australia Square NSW 1215 www.asx.com.au

14 January 2015

Mr Sean Hooper Chief Financial Officer & Company Secretary Metgasco Limited Level 11 2 Elizabeth Plaza North Sydney NSW 2060

By Email

Dear Mr Hooper,

Metgasco Limited (the “Company ”)

We refer to the following;

1. The Appendix 3Y lodged by the Company with ASX on 12 January 2015 for Mr Peter Henderson;

2. Listing rule 3.19A which requires an entity to tell ASX the following:

3. 3.19A.1 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the following times.

   • On the date that the entity is admitted to the official list.

   • On the date that a director is appointed.

   • The entity must complete Appendix 3X and give it to ASX no more than 5 business days after the entity’s admission or a director’s appointment.

4. 3.19A.2 A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust). The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.

5. 3.19A.3 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The entity must complete Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.

6. Listing rule 3.19B which states as follows.

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

1. The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

The Appendix 3Y indicates that a change in the Director’s notifiable interests occurred on 28 November 2014. It appears that the Appendix 3Y should have been lodged with ASX by 5 December 2014, in relation to the changes in the Director’s notifiable interests that occurred on 28 November 2014. Consequently, the Company may be in breach of listing rules 3.19A and/or 3.19B. It also appears the director concerned may have breached section 205G of the Corporations Act.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: “Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities”, we ask that you answer each of the following questions:

1. Please explain why the Director’s Interest Notice was lodged late.

2. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

3. 3 If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail to elvis.onyura@asx.com.au. It should not be sent to the ASX Market Announcements Office.

A response is requested as soon as possible and, in any event, not later than 9.30 a.m. AEDT on Friday, 16 January 2015 .

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and should separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.

Yours sincerely,

[Sent electronically without signature]

Elvis Onyura Senior Adviser, Listings Compliance (Sydney)

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