METGASCO LTD — Investor Presentation 2006

Nov 2, 2006

NH K A COrd ACN ORR 196,380

Mining 2006 Resources Convention

1-2 November 2006

METCASCO

OVERVEW

• $\triangleright$ Metgasco (MEL) is a Coalseam gas exploration and development company which listed on ASX in December 2004.
• $\triangleright$ It has identified a substantial resource in northern New South Wales, on the doorstep one of the most significant markets in Australia which is also one of the fastest growing regions in Australia
• $\triangleright$ Metgasco is focused on delivering energy to this market and SE Queensland with:
• $\triangleright$ Coal Seam Gas Development
• $\triangleright$ Conventional Oil and Gas Exploration and Development
• $\triangleright$ Development of Gas fired Electrical Power
• $\triangleright$ Development of Wholesale & Retail Gas Markets

LOCATION OF ACTIVITIES

• $\triangleright$ MEL has a dominant position in the Clarence Moreton Basin near Casino/Lismore in northern NSW
• $> 100\%$ of PEL16 833 km²
• $> 75\%$ of PEL13 (farm-in) 1,654 km²
• $\triangleright$ Net Acreage achieveable: 512,154 acres
• $\triangleright$ Close to markets (70km from Gold Coast)
• $\triangleright$ Market gap highest population growth in Australia, but no local energy supply

REGENEZQETEVEMENTS

• ▶ March 2006 largest Certified Gas Reserves in NSW
• $\geq 1,080$ BCF (Possible 3P)
• $\geq$ 21 BCF (Probable 2P)
• $\triangleright$ Achieved on slender capital outlays in just 15 months from listing
• Declared "Major Project" by NSW government for 30Mw Richmond
  Valley Power Station at Casino NSW Commenced DA approval Allaha studies
• $\triangleright$ Farm in to PEL 13 and drilled MMC-01 well with >22m Walloon Coal Measures
• $\triangleright$ Developed plan for supplying gas to regional market and SE Queensland

DESCRIPTION OF ACTIVITES

COAL SEAM GAS (CSG)

• $\triangleright$ Core business activity; First mover advantage with CSG from Walloon Coal Measures
• $\triangleright$ Largest Certified Gas Reserves in NSW
• $\geq 1,080$ Bcf (Possible 3P)
• $\triangleright$ 21 Bcf (Probable 2P)
• $\triangleright$ 2P covering 4% of PEL 16, No Reserves yet for PEL 13,
• $\triangleright$ 3P Reserves cover 24 % of MEL Net Acreage position,
• $\triangleright$ A large resource with plenty of room for further increases

DESCRIPHON OF ACTIVITIES

COAL SEAM GAS (CSG)

• $\triangleright$ Well Optimisation Program Underway Rates up to 100Mcf/d after 2 weeks production
• $\triangleright$ Each Basin is unique have to find the right technology to match reservoir character
• $\triangleright$ Hole design
• $\triangleright$ Pumping technology
• $\triangleright$ MMMC-01 : > 22m coal, methane charged, opens up 150km² for additional development - Large acreage position
• $\triangleright$ High Gas Content, low permeability the future of CSM

DESCRIPHON OF ACTIVITIES

CONVENTIONAL OIL AND GAS EXPLORATION

• $\triangleright$ PEL 16 located in the Jurassic age Clarence Moreton Basin
• $\triangleright$ One of the most underexplored basins in Australia
• $\triangleright$ Potential for conventional oil and gas discoveries
• $\triangleright$ PEL straddles a mid basin high, a number of prospective leads identified
• $\triangleright$ Seismic planning & budgeting underway

DESCRIPTION OF ACTIVITES

RICHMOND VALLEY POWER STATION

• 30Mw Gas fired Power Station and associated Casino Gas Field

• $\triangleright$ To supply gas fired power to Casino, will improve reliability of supply in area
• $\triangleright$ Located south of town of Casino NSW
• $\triangleright$ Casino Gas Field delivering 3.3pJ/Annum
• $\triangleright$ ~ Gas fired 2.5Mw Engines
• $\triangleright$ Declared Major Projects Status
• $\triangleright$ Will facilitate planning and approvals for project
• $\triangleright$ Detailed studies on site issues, engineering design, grid connection completed
• $\triangleright$ EIS studies underway
• $\triangleright$ Commence Power Delivery in early 2008

DESCRIPTION OF ACTIVITIES

ADDITIONAL MARKET OPPORTUNITIES

$\triangleright$ Regional Power Market

• $\triangleright$ By 2010 it is estimated that about 650Mw of installed generation capacity will be required to service northern NSW (ACIL Tasman)
• ► Current Demand load growth northern NSW- Gold Coast > 50Mw/Annum

▶ Local Gas Market

• $\triangleright$ Substantial Industrial & Consumer Base in Casino Lismore Ballina
• $\triangleright$ Opportunity to supply gas via pipeline, reticulation, LPG substitution
• $\triangleright$ Commenced pipeline crossing to North Casino to supply customers
• $\triangleright$ Regional Gas Market
• $\triangleright$ Major Gas consumers in SE Queensland and NE New South Wales

42-43 MONTHOBJEGTMES

• $\triangleright$ Continue CSG Well productivity optimisation
• ▶ Develop 2P Reserves > 100Bcf Drilling commences December

$\triangleright$ Conventional

• $\triangleright$ Complete seismic over leads identified
• $\triangleright$ Drill at least one conventional well
• $\triangleright$ Richmond Valley Power Station
• $\triangleright$ Cost estimate October 06
• $\triangleright$ Financial close March Otr 07
• $\triangleright$ Construct & Commission thereafter
• $\triangleright$ Complete MOU, pre feasibility on:
• $\triangleright$ 200Mw Power Station, and/or
• $\triangleright$ Regional Gas Market Opportunity

EXPERIENCED BOARD AND MANAGEMENT

Dr Peter Power – Chairman (Non-executive) 獵

Former Managing Director of Ampolex. Over 40 years experience. Foundation Head of Geology at WAIT (now Curtin University). Past President of Australian Geoscience Council. Past Chairman of APPEA. Director, Petsec.

David Johnson - Managing Director

Professional geologist with 20 years experience in the minerals and petroleum sectors. Background in field geology in gold in south west Pacific and coal seam methane.

Glenda McLoughlin - Director & Chief Financial Officer

Former investment banker with over 20 years experience. Previously head of Utilities & Infrastructure group with Barclays Capital and Vice President with Morgan Stanley (Melbourne & Singapore). Director, Elk Petroleum.

Rick Wood – Director & Director, Operations 獵

Over 30 years experience in engineering and operations in upstream oil & gas. Over 18 years with Esso and former General Manager of Operations with Ampolex. Chairman, Elk Petroleum.

Nicholas Heath - Non Executive Director

Former Director ExxonMobil Australia Ltd. 30 years experience in petroleum engineering, operations management and oil and gas marketing. Past Chairman APPEA and Commonwealth Ministerial Roundtable on Greenhouse Gas Emissions.

FINANCIAL SNAPSHOT

INSUMMARY

• Rapid development of gas reserves since IPO
• Largest certified gas reserves in NSW
• Substantial leverage to 2P Reserve growth
• Well defined commercialisation strategy
• Next to fast growing energy markets pipeline transportation cost advantage
• Experienced management and board
• "IN THE MARKET"

CONTACTS

David Johnson

Managing Director

T: 02 9923 9100

F: 02 9923 9199

E: david.johnson@metgasco.com.au

Glenda McLoughlin Chief Financial Officer T: 02 9923 9100 F: 02 9923 9199 E: glenda.mcloughlin@metgasco.com.au

DISOLAIMER

This presentation may contain forward looking statements that are subject to risk factors associated with the oil and gas business. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: exploration and appraisal drilling; operating and production results, estimates of resources in place; competition; environmental risks; legislative risks; access to capital; project delay or advancement; approvals; cost estimates; price fluctuations and demand

Investors should undertake their own analysis and seek advice from their professional advisor before deciding to invest in Metgasco shares.