MARKET RELEASE

10 February 2004

Planet Gas Limited

Planet Gas Limited has applied for admission to the official list of Australian Stock Exchange Limited and for quotation of its securities. It has been given a provisional ASX code. Provision of an ASX code and publication of the following information does not mean that the entity will be admitted or that its securities will be quoted.

Pam Ross Manager Company Announcements Office

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LANET GAS LIMITED

BN 46 098 952 035

DREGIORS ANNUAL

Norman A Seckold (Chairman) Anthony J McClure unthony J McDonald .Peter J Nightingale Bruce F Riederer .Norman J Zillman

COMPANY SECRETARY

Peter J Nightingale

PRINCIPAL AND REGISTERED OFFICE

Level 8, 261 George Street Sydney NSW 2000 Australia

+61-2 9247 5112 hone: +61-2 9247 7273 ax: mail: [email protected] Nebsite: www.planetgas.com

INDEPENDENT EXPERTS

. Keith Murray ndependent Geologist's R .United States of America

G.P. and R.J. McDonagh Independent Geologist's Report Australia

REPORTS ON TENEMENTS

J.L. Obourn, Jr. & Co.

Report on United States Tenements .Sean Sexton - Solicitor Report on Australian Tenements

獅

AUDITORS

Deloiffe Touche Tohmatsu Srosvenor Place 225 George Street Sydney NSW 2000

HARE REGISTRY

Computershare in Level 27, 345 Bisbane

Lodgement Date

January 2004 Exposure Period Ends

16 January 2004

Applications Open

19 January 2004

Applications Close

19 March 2004

Intended Allotment Date

29 March 2004

Intended Date of ASX Listing

5 April 2004

繰延

These dates are indicative only and subject to change. The Company reserves the right to vary all or any dat without prior notice.

This Prospectus is issued by Planet Gas Limited ('Planet Gas' or 'the Company') for the Offer of 60 million new hares at an issue price of 20 cents each to raise $$12^\circ$ million payable in full on Application. Oversubscriptions may be accepted through the issue of a further 15 million new Shares to raise an additional $3 million.

Applicants should read this Prospectus in its entirety in order to make an informed assessment of the assets and liabilities, financial position and prospects of the Compar and the rights attaching to the Shares offered by this Prospectus before deciding to apply for Shares. If you do not understand this Prospectus, you should consult your sharebroker, accountant or other professional advisor without delay in order to satisfy vourself as to the cont

of this Prospectus Alia Anticheline

IMPORTANT NOTES	$\overline{2}$
LETTER FROM THE CHAIRMAN	4
SECTION 1
INVESTMENT HIGHLIGHTS	5
SECTION 2
SUMMARY OF THE OFFER	6
SECTION 3
OVERVIEW OF PLANET GAS' PROJECTS	9
SECTION 4
OVERVIEW OF PLANET GAS	18
SECTION 5
INDEPENDENT EXPERTS' REPORTS	24
SECTION 6
REPORTS ON TENEMENTS	51
SECTION 7
MATERIAL RISK FACTORS	65
SECTION 8
ADDITIONAL INFORMATION	69
SECTION 9
MATERIAL CONTRACTS	72
SECTION 10
DEFINITIONS, GLOSSARY AND CONVERSIONS	76
DIRECTORS STATEMENT, AUTHORISATION AND CONSENT	80
APPLICATION FORMS	81

Definitions

Certain words and terms used in this Prospectus have defined meanings which appear in Section 10.

Exposure Period

This Prospectus will be made generally available during the Exposure Period by being posted on the Company's website at www.planetgas.com. In addition, copies of the Prospectus will be available on request to members of the public by contacting the Company on +61-2 9247 5112.

The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that such examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any Application and subscription money that has been received will be dealt with in accordance with Section 724 of the Corporations Act.

Date

This Prospectus is dated and was lodged with the ASIC on 9 January 2004. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus or the merits of the investment to which the Prospectus relates.

No Shares will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Electronic/Paper Prospectus

This Prospectus is available in electronic form at the Company's website at www.planetgas.com or in paper form by contacting the Company. A paper copy of the Prospectus will be sent free of charge on request during the period of the Offer.

Any person accessing the electronic version of this Prospectus for the purposes of becoming a shareholder must be an Australlan resident and must only access the Prospectus from within Australia.

Foreign Jurisdictions

This Prospectus, whether in electronic or paper form, does not constitute an offer of Shares in any jurisdiction where or to any person to whom it would not be lawful to make such an offer. Access to this Prospectus by persons outside of Australia is not permitted. Any recipient of this Prospectus residing outside Australia should consult their professional advisors on requisite compliance requirements. It is the responsibility of any overseas Applicant to ensure compliance with all laws of any country relevant to their Application. The return of a duly completed Application will be deemed to be a representation and warranty by the Applicant that there has been no breach of such laws. The Company is entitled to refuse an Application for Shares under this Prospectus if it believes the Applicant did not receive an Offer in Australia.

Applications

Applications for Shares can only be made by completing the Application Form in full, in accordance with the instructions in this Prospectus. The Company will not accept Application Forms electronically or by facsimile.

The Application Form may only be distributed attached to a complete and unaltered copy of this Prospectus. The Application Form included with this Prospectus contains a representation that the investor had personally received the complete and unaltered Prospectus prior to completing the Application Form.

The Company will not accept a completed Application Form if it has reason to believe that the Applicant has not received a complete paper copy or electronic copy of the Prospectus or if it has reason to believe that the Application Form or electronic copy of the Prospectus has been altered or tampered with in any way.

The Company will not accept Applications during the Exposure Period and no preference will be given to persons who lodge their Application Forms during the Exposure Period.

Read Prospectus

Applicants should read this Prospectus in its entirety in order to make an informed assessment of the assets and liabilities, financial position and prospects of the Company and the rights attaching to the Shares offered by this Prospectus before deciding to apply for Shares. If you do not understand this Prospectus, you should consult your sharebroker, accountant or other professional advisor without delay in order to satisfy yourself as to the contents of this Prospectus.

The Shares offered by this Prospectus are speculative in nature.

Privacy

In submitting an Application Form, an Applicant will be required to provide certain personal information on the Application Form for the purposes of enabling the Company to register that Applicant as the holder of a Share, to enter relevant information in the Company's register of members and to enable the Company to contact that Applicant. At all times, personal information may be required to be disclosed by the Company to the Australian Taxation Office, or other government authorities or agencies as required by law. Such information may be disclosed to an Applicant's accountants, financial advisors and others where the Applicant's authority has been received. All personal information so collected will be collected, used and stored by the Company for the purposes required by the Corporations Act or for direct and permitted communication by the Company with the Applicant.

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9 January 2004

anan danKabupatèn

On behalf of the Board, it gives me great pleasure to present Planet Gas Limited and to offer you the opportunity to become a Shareholder of the Company.

The Company is reaching its third year of development with the Board and management having been assembled to capitalise on the expansive Coal Bed Methane (CBM) industry in the United States of America (USA) and Australia.

CBM production in the USA is now a mature industry and contributes approximately 7.5% of USA natural gas production. Modern exploration and completion techniques have significantly contributed to the exponential growth of CBM production in North America. Through Planet Gas' development projects in the prolific Powder River Basin, Wyoming, the Company plans to utilise its skill base to develop the Company's considerable holdings in Australia.

We firmly believe this mix of USA and Australian assets is a good and beneficial one for the Company. On one hand, the USA brings the advantages of a much higher gas price and a very highly developed industry. On the other, we have acquired very large land holdings in Australia that are close to infrastructure and markets.

The Company's principal goal is the production of "greenhouse friendly" natural gas coupled with the continued sustainable growth of the Company's assets.

The Wyoming, USA assets are currently under development through two separate arrangements with American partners. Gas production is expected in 2004 with cash flow and the continued development adding to the underlying value of the Company.

Funds raised from the Prospectus proceeds and cash flow from operations will contribute to the ongoing Powder River Basin development program and to the exploration and appraisal of the Company's extensive holdings in Australia. Future acquisitions of other projects with high technical attributes and accessible infrastructure will continue to be targeted.

I very much look forward to your support and welcome you as a Shareholder of Planet Gas Limited.

Yours faithfully

Norman A Seckold Chairman

A view looking northeast across the Planet Gas licences in the Giposland Bosin Victoria (near Lechadtha)

INVESTMENT HIGHLIGHTS

® Planet Gas is a Coal Bed Methane (CBM) exploration and development company with rights to approximately two million hectares of tenements in the USA and Australia.
® The primary purpose of the Company is to develop CBM gas resources at its Esponda Project in the Powder River Basin in Wyoming, USA and to explore and develop its Australian CBM projects.
® The development program for the Esponda Project is currently underway with eight wells having been cased and completed as future production wells. Methane production is expected in calendar 2004.
The Company will also explore for, assess, and, if commercially attractive, develop its projects in the Gippsland and Otway Basins of Victoria, the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales, Australia.
® The Founders of Planet Gas have significant experience in the hydrocarbon industry, including CBM exploration. The Company will leverage its USA CBM exploration and extraction expertise into its Australian projects.
® Through the Esponda Project in Wyoming, Planet Gas will have significant exposure to USA gas prices which currently range from approximately US$5.50 (A$7.40) to over US$6.50 (A$8.80) per thousand cubic feet (Mcf). This compares with current gas prices in Australia of approximately A$3.00 per Mcf.
® The Independent Expert Report for the Esponda Project contained within this Prospectus has concluded that:

(i) "The exploration and development program planned by Planet Gas and its partners is expected to prove up economic reserves of CBM and enter CBM production in the Powder River Basin in calendar 2004".

(ii) "The fact that two successful operators have now drilled and run completion equipment on at least four Big George CBM wells located on Planet Gas' Esponda Project acreage bodes well for the early success of this exploration/development venture".

Drilling at Esponda Project, Wyoming USA late 2003.

NECHONOMIC

SUMMARY OF THE OFFER

2.1 THE OFFER

By this Prospectus, the Company seeks to raise $12 million by offering for subscription 60 million new Shares at an issue price of 20 cents each, payable in full on Application. The minimum subscription amount is $10 million and oversubscriptions may be accepted through the issue of a further 15 million new Shares to raise an additional $3 million.

2.2 PURPOSE OF THE OFFER AND USE OF FUNDS

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The proceeds from the Offer will be used predominantly to fund the exploration, appraisal drilling and development of the Esponda Project in the Powder River Basin in Wyoming, USA and the exploration and appraisal drilling of the Company's projects in the Gippsland and Otway Basins of Victoria, the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales, Australia. The Company will also consider new acquisitions. The costs associated with the Offer and the corporate overheads of the Company will also be covered by the proceeds of the Offer. The following table illustrates the proposed application over a two calendar year period of the funds to be raised by the Offer assuming exploration and appraisal success and implementation of production:

Total	12,000
Cash remaining for working capitaland new acquisitions	2.665
	9,335
Costs of the Offer and a costs of the OfferARRESTS FOR A PHOTOGRAPHICAL CALLS
Corporate costsALISTA ARTHUR ANGERIA INDIAN ANG INTERNASYONAL ANG ANGEL
Exploration and development	3.695
Australia
Exploration and development	4.020
United States
hidhisfadhala ann kilitir ach i	s annА

Further details on the application of funds are provided in Sections 4.5 and 8.6 of this Prospectus.

The Board is of the opinion that there will be sufficient. working capital to carry out the stated objectives if only the minimum subscription of $10 million is raised.

If the Company fails to raise the minimum subscription of $10 million the Company will refund all application money in accordance with Section 724 of the Corporations Act.

If the Company raises more than the minimum subscription of $10 million but less than the full subscription amount of $12 million or if oversubscriptions of up to $3 million (making a total of $15 million) are accepted by the Directors, the overall exploration and development budget will be adjusted either on a per project basis or adjustments to new project acquisition allocations.

2.3 CAPITAL STRUCTURE

The capital structure of the Company immediately following the issue of Shares under this Prospectus including maximum subscriptions will be as follows:

* The number of shares is variable depending upon the election made under the Greenpower Share Acquisition Agreement (refer Item 1 of Section 9 of this Prospectus).

2.4 HOW TO APPLY

An Application for Shares can only be made on the Application Form contained at the back of this Prospectus. The Application Form must be completed in accordance with the instructions set out on the Application Form. All Applications for Shares must be for a minimum of 10,000 Shares ($2,000) and after that in multiples of 2,500 Shares ($500). Applications for Shares must be accompanied by a cheque in Australian currency and made payable to "Planet Gas Limited -Share Issue Account" and crossed "Not Negotiable". Applicants should not forward cash. Receipts for payment will not be issued. The completed Application Form, together with the cheque(s) for the Application monies should be mailed or delivered to the Company's Registered Office, Level 8, 261 George Street, Sydney, NSW 2000, Australia. Application Forms must be received no later than 5.00pm Australian Eastern Summer Time ("AEST") on 19 March 2004, unless the Closing Date is varied. Successful Applicants will be advised of their holding following allotment of the Shares. The Directors reserve the right to reject any Application or to allocate to any Applicant a lesser number of Shares than that applied for. If an Application Form is not completed correctly, or if the amount of the accompanying payment is incorrect, it may still be accepted by the Directors. The Directors' decision as to whether to accept the Application, or how to construe, amend or complete the Application shall be final, but no Application will be treated as having offered to purchase more Shares than is indicated by the amount of the cheque accompanying the Application Form.

2.5 INVESTOR ENQUIRIES

Any potential investor wishing to make an enquiry about the Issue or requiring additional copies of this Prospectus should contact the Company at the address listed in the Corporate Directory of this Prospectus.

2.6 MINIMUM SUBSCRIPTION

The minimum subscription for the Offer is $10 million comprising 50 million new Shares. No Shares will be allotted under this Prospectus until the minimum subscription for the Shares has been reached.

If the Company fails to raise the minimum subscription of $10 million the Company will refund all application money in accordance with Section 724 of the Corporations Act.

2.7 STOCK EXCHANGE LISTING

The Company will apply to ASX within seven days after the date of this Prospectus for Planet Gas to be admitted to the Official List of ASX and for official quotation of its Shares on ASX. If the Application is not made within the seven days or the Shares are not admitted to quotation within three months after the date of this Prospectus, any Application and the subscription money received will be dealt with in accordance with Section 724 of the Corporations Act.

The fact that ASX may admit Planet Gas to the Official List is not to be taken in any way as an indication of the merits of Planet Gas.

Escrow restrictions may be imposed on some or all of the Founder Shares, Seed Capital and Project Vendor Shares in accordance with the ASX Listing Rules.

2.8 CHESS

The Company will apply to participate in CHESS pursuant to the ASX Listing Rules and the SCH Business Rules. In addition to a CHESS sub-register operated by ASX on the Company's behalf, the Company will operate an issuer sponsored sub-register. These two sub-registers together will make up the Company's register of members. A successful Applicant that elects to hold its securities on the issuer sponsored sub-register will be provided with a holding statement (similar to a bank account statement) which sets out the number of securities allotted to the Applicant under this Prospectus. For a successful Applicant that elects to hold its securities on the CHESS sub-register. the Company will, on allotment, issue an advice to the Applicant that sets out the number of securities allotted to the Applicant under this Prospectus and, at the end of the month of allotment, ASX (acting on behalf of the Company) will provide the Applicant with a holding statement that confirms the number of securities allotted. The Company will not issue certificates to successful Applicants. A holding statement (whether issued by the ASX or the Company) will also provide details of a successful Applicant's Holder identification Number (in the case of a holding on the CHESS sub-register) or Securityholder Reference Number (in the case of a holding on the issuer sponsored sub-register). Following distribution of these initial holding statements to all successful Applicants, a holding statement will only routinely be provided to a Securityholder at the end of any subsequent month during which the balance of the Securityholder's holding of securities changes. Additional holding statements may be requested at any other time (although an administration fee may be charged).

2.9 OVERSEAS INVESTORS

The distribution of this Prospectus in jurisdictions outside of Australia may be restricted by law and any person who receives this Prospectus should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This Prospectus does not constitute an Offer of Shares in any jurisdiction where, or to any person to whom it would not be lawful to issue the Prospectus. It is the responsibility of any overseas Applicants to ensure compliance with all laws of any country relevant to their Application.

The Shares have not been and will not be registered under the United States Securities Act and they may not be offered or sold in the United States or to, or for the account of or for the benefit of. United States persons except in transactions exempt from the requirements of the United States Securities Act. Accordingly, neither this Prospectus nor the Application Form may be sent to investors in the United States or otherwise distributed in the United States

OVERVIEW OF PLANET GAS' PROJECTS

3.1 INTRODUCTION

Planet Gas is an Australian company formed to produce and explore for Coal Bed Methane (CBM). The Company has acquired titles in the Powder River Basin, Wyoming, USA and has interests covering a major land position in five sedimentary basins in three Australian States. The tenements in which the Company has an interest total approximately 2.0 million hectares (refer Section 6 of this Prospectus) and in most cases are proximate to infrastructure that may facilitate the sale of any production that is achieved.

The projects in which Planet Gas has an interest have been acquired through outright purchase, joint venture and direct licence application with a view that the projects have the potential to contain CBM reserves that can be brought into production. The eastern blocks of the Esponda Project are currently under development with production expected in calendar 2004.

In 2001, Planet Gas purchased the rights to the Esponda Project which covers 5,232 hectares (12,929 acres) in Wyoming, USA. The areas under lease are located to the southeast of Buffalo and situated to the west of the main Powder River Basin CBM producing region centred on Gillette in the northeast of Wyoming.

In Australia, Planet Gas has rights to several prospective CBM projects in the Gippsland and Otway Basins of Victoria, the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales.

The Planet Gas exploration and development programs will initially focus on two main areas, the Powder River Basin, Wyoming, USA and the Gippsland Basin, Victoria, Australia. Both projects exhibit excellent technical characteristics and are close to significant infrastructure including pipeline facilities and markets.

Under two separate arrangements with Kennedy Oil and Lance Oil & Gas Company, Inc - a subsidiary of Western Gas Resources Inc (Western Gas) (refer Section 9 of this Prospectus), drilling has commenced in the eastern blocks of the Esponda Project in the Powder River Basin, Eight development wells have been drilled to date with each cased and completed as future production wells. A total of 20 wells are planned to be drilled in this first exploration and development program continuing through to the end of the first half of calendar 2004.

Project*	Location	Area GrossHectares	Planet GasInterest
United States
Various	Powder River Basin. Wyoming	※食べり	VOLTOUS
Australia
EL 4500	Gippstand Basin, Victoria	1.382	100%
EL 4535	Gippsland Basin, Victoria		100%
EL 4619	Gippsland Basin, Victoria		100%
EL 4620	Gippsiand Basin, Victoria		100%
ELA 4368	Otway Basin, Victoria	48.37a orthodox and a	100%
ELA 4369	Otway Basin, Victoria		100%
PELA 145	Willochra Basin, South Australia	619.432	100%
PELA 146	Eromanga Basin, South Australia,	267,786	100%
PEL 428	Gunnedah Basin, New South Wales	810,000	:20%
Total		2,035,707

* Refer to details in Section 6 of this Prospectus

Table 3.1. Planet Gas Title Holdings

In the Gippsland Basin, after the completion of data compilation, the Company plans the drilling of up to eight test wells to verify the economic viability of the drilling of production wells. The results from this initial program, which is planned over a six to eight month period, will determine the subsequent exploration and development program.

The Planet Gas projects in the Otway Basin of Victoria, the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales are relatively early stage exploration projects. The Company will continue its data collation program leading to the development of initial exploration programs which may include the drilling of appraisal wells.

3.2 CBM OVERVIEW

CBM is a natural by-product of the coalification process, which creates coal from peat accumulated in ancient swamps. Higher rank (bituminous) coals contain gas that is thermally generated by heat and pressure. Gas in low rank coals (such as in the Powder River Basin) is created by the decomposition of organic matter by bacteria living in oxygen free environments (anaerobic bacteria). This gas is known as bacterial or biogenic gas. Although much of the gas generated by the bacteria has left the coal to the atmosphere or adjacent rock units, a large volume of gas remains stored in the coal in the cleats (small fractures) or dissolved in water stored in the cleats and in the molecular structure (micropores) of the coal. The majority of gas in place is stored in the micropore spaces of the coal by a phenomenon known as adsorption. The methane held in the micropores is in pressure equilibrium with the remaining gas in the unfilled pore spaces and in open fractures within the coal matrix either in the form of free gas (dry coal bed) or solution gas (gas in water bearing coal). When the pressure within the coal bed is lowered, which occurs when water is withdrawn through the well, the gas contained in the fracture systems is evacuated, thereby altering the pressure equilibrium between the adsorbed and the free solution gas. The gas held in the micropores begins to break out in response to the lower pressure (desorption) and migrate to the fracture system in an attempt to equalise the pressure. The faster such pressure reduction occurs, the more rapidly gas desorption takes place resulting in greater gas production from the well.

In the Powder River Basin the typical CBM well produces significant quantities of water initially. As the water is produced, natural gas production also begins slowly. Typically, after a considerable amount of water is produced over a three to six month period, gas production increases and water production decreases. In some cases, wells do not produce any water and begin.

producing gas immediately. This free gas is produced from fractures in the coal that are attributable to subtle structural folding (anticline or dome shaped features) and post-depositional coal compaction structures. As the development expands down dip and dewatering occurs, the gas productive area expands and water production from these down dip areas decreases.

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Methane is principally used as a fuel. When burnt, the gas gives off heat and produces water and carbon dioxide. Compared with the burning of coal, methane produces approximately 80% less carbon dioxide per unit of energy produced.

CBM has been known for hundreds of years mostly as an explosive hazard associated with underground coal mining. In the 1950s, gas extracted from coal mines was used to generate electricity in Europe. CBM was effectively ignored as a source of energy until the late 1970s when commercial gas production from coal seams commenced in the USA. The first CBM fields were developed in high rank bituminous coals of Alabama, the Appalachians of Pennsylvania, Virginia and West Virginia and the San Juan Basin of Colorado and New Mexico. Commercial CBM production in the Powder River Basin began in 1987. Coals of the Powder River Basin are of a lower rank sub-bituminous nature. These coal beds are among the thickest coals in the world and contain extensive recoverable CBM reserves.

The CBM industry in the USA has been mainly driven by considerable exploration success where production has increased dramatically from 10 billion cubic feet (Bcf) in the mid 1980s to approximately 1500 Bcf in 2001. This increase was primarily the result of large scale commercial exploitation of the San Juan Basin, the Black Warrior Basin in Alabama and more recently, the Powder River Basin in Wyoming.

CBM gas production did not commence in the Powder River Basin in substantial volumes until 1995 and in the last eight years production has increased dramatically to be greater than 900 million cubic feet per day (MMcfd) (Figure 3.1.) during mid 2003.

The CBM industry in Australia is less mature than in the United States. Significant CBM resources exist in the sedimentary basins of Queensland and New South Wales where exploration has initially concentrated. The main focus of exploration and development to date has centred on the Bowen/Surat Basin in Queensland and the Sydney, Gunnedah and Clarence-Moreton Basins of New South Wales, in Queensland, approximately 25% of aas consumption today is from CBM developments.

3.3 UNITED STATES AND AUSTRALIAN NATURAL GAS MARKETS

Average monthly wellhead gas prices in the USA have been particularly buoyant since early 2003 with gas prices ranging from US$4.50 (A$6.10) to over US$6.50 (A$8.80) per Mcf. At the date of this Prospectus, the Wyoming Pool wellhead gas price was approximately US$5.80 (A$7.80) per Mcf, compared to the current Australian natural gas price of approximately A$3.00 per Mcf.

The U.S. Energy and Information Administration has estimated continued strong growth in natural gas demand in the United States. Projected consumption is estimated to grow by over 50% by 2025.

Over the past 20 years to 2001, the consumption of natural gas in Australia has increased by an average of 6.9% per year. In June 2003, the Australian Bureau of Agricultural and Resource Economics (ABARE) predicted natural gas consumption growth for primary energy to increase by 100% from 2001 to 2020.

3.4 ESPONDA PROJECT, POWDER RIVER BASIN, WYOMING, USA

Summary

Freehold holdings total 5,232 gross hectares (12,929 acres) (4,186 net hectares (10,344 acres)).
Multiple coals in Fort Union and Wasatch Formations.
© Coal thickness of Big George Coals 18 to 25 metres in wells completed to date.
© Cumulative coal thickness across Esponda Project ranges from 40 feet (12 metres) to more than 190 feet (58 metres).
Gas pipeline bisects project area.
Under separate programs Kennedy Oil and Western Gas have commenced drilling on the eastern block with eight wells completed to date as future production wells.
© Production planned for calendar 2004.

The primary objective of Planet Gas is to produce methane for sale. Independent Expert D. Keith Murray (Section 5 of this Prospectus) refers to data supplied by Kennedy Oil showing that the current development of the "Big Cat" or eastern blocks of the Esponda Project may have the following material assumptions:

Average completed well cost US$125,000 to US$130,000 to drill and complete including field gathering infrastructure.
@ Peak gas rate of at least 300 Mcfd.
$\bullet$ Recoverable reserves of $\pm 1$ Bcf per well.
O Dewatering 6 to 12 months.
Sas content of the Big George coal 120 Scf/ton.
© Overhead costs of US$350 per month per well.
© Operating costs of approximately US$0.60/Mcf.
Well life of 7 to 10 years.
Well spacing 1 per 80 acres (32 hectares).
State and other taxes of approximately 13% of gross wellhead revenue.

Introduction

The Powder River Basin encompasses approximately 67,000 square kilometres in the northern Rocky Mountains of the USA straddling the northeast of Wyoming and the southeast of Montana. The Basin is estimated to contain more than one trillion short tons (0.9 trillion tonnes) of coal with potential CBM resources of over 25 trillion cubic feet (Tcf). The Basin has been an important oil and gas producer for over 100 years and has been a significant producer of low-sulphur coal. CBM production in the Basin has increased at a rapid rate since 1995 with production today of around 900 MMcfd with over 10,000 producing wells.

Natural gas produced from the Powder River Basin coals is composed mostly of methane with minor amounts of ethane (average 0.2 percent) and carbon dioxide (average 0.5 percent).

Locally the gas content of the Tertiary coal is low (less than 75 standard cubic feet per tonne (Scf/t)). This is due to the shallow depth of burial and low rank coal, possibly the coals are under saturated with respect to gas.

Planet Gas Interests in the Powder River Basin

In late 2001, Planet Gas purchased the Esponda group of leases from the Esponda Family Mineral Trust. Consideration paid was US$100 per net acre for a total of 10.344 net acres (4,186 net hectares). A 20% net proceeds royalty at the well is payable. These leases are over freehold mineral rights. These types of leases have significant advantages

Figure 3.2. Powder River Basin Location

over State and Federal leases in that well permitting is much simpler, and subject to the oversight of fewer authorities. Typically, development of freehold leases can take place over a much shorter time frame.

The areas under lease are located in Johnson County, to the southeast of Buffalo and to the west of the main Powder River Basin CBM producing region centred on Gillette in the northeast of Wyoming. The area surrounding the Planet Gas leases is in a section of the Powder River Basin where exploration for CBM has only recently been increasing. The leases are known to overlie Wasatch and Fort Union Formation coals including the Felix, Bull Creek and Big George seams. These coals are producers of CBM throughout the Basin.

The most obvious short term potential for CBM production within the Esponda leases exists on the eastern portion of the block in Township 48 North, Range 79 West. In this area the Big George (Canyon) coal thickness is up to 25 metres and lies at a depth of approximately 640 metres. These features suggest the Big George Coal has sufficient potential for commercial CBM production.

Towards the east of the Esponda Project, the Big George Coals are currently being targeted by Anadarko Petroleum Corporation (Anadarko) and Devon Energy Corporation (Deven) The County Line Project operated by

Anadarko is located within 20 kilometres to the east of the eastern blocks of the Esponda Project, County Line produces approximately 22MMcfd from 75 wells. The Juniper Draw Project (Devon) is located approximately 10 kilometres towards the northeast of the eastern blocks of the Esponda Project. This development project is reported to be producing 7.7MMcfd from 10 wells.

Outside of the Big George Coals, interest in the area is also increasingly focusing on the shallow Wasatch Formation to the north and west of the Esponda acreage. This formation is also a significant target within the Esponda leases areas.

Under two separate arrangements, drilling has commenced in the eastern blocks of the Esponda Project through partners Western Gas and Kennedy Oil.

In late July 2003, Western Gas successfully drilled the Adami 41-2-4879 well which intersected 25 metres of the Big George Formation from 684 metres depth. This well is one of eight wells Western Gas will be drilling on the Esponda acreage as part of a larger 70 well program. Planet Gas holds a 19.8% non-consent interest in the initial well and plans to contribute in at least seven subsequent wells to maintain its respective percentage interests (refer Sections 6 and 9 of this Prospectus).

In August 2003, Kennedy Oil successfully completed Big Cat Fee 3210-4879 and intersected 24 metres of the Big George Formation (inclusive of a 2.4 metre shale band) from 640 metres depth.

In September 2003, Kennedy Oil successfully completed both Big Cat Fee 3409-4879 and 3410-4879 wells. The top of the Big George Coal formation was found at 624 metres and 626 metres with the formation thickness of approximately 18 and 19 metres respectively.

These four wells have been reported on by D. Keith Murray (refer Section 5 of this Prospectus).

Kennedy Oil has planned to sole fund twelve wells, in return for a 50-60% working interest. Prior to payback, Planet Gas will receive a 1.5% gross royalty at the wellhead.

Subsequent to the completion of D. Keith Murray's report, data on a further four wells completed by Kennedy Oil has been received. Results from these wells, which have all been cased, are:

8 Big Cat Fee 4111-4879 (Sec. 11, T48N, R79W) intersected 26 metres of the Big George Formation from 655 metres depth.
3 Big Cat Fee 3211-4879 (Sec. 11, T48N, R79W) intersected 26 metres of the Big George Formation from 639 metres depth.
Big Cat Fee 2111-4879 (Sec. 11, T48N, R79W) intersected 27 metres of the Big George Formation from 626 metres depth.
● Big Cat Fee 1211-4879 (Sec. 11, T48N, R79W) intersected 26 metres of the Big George Formation from 630 metres depth.

As shown in Figure 3.3., the Esponda leases are bisected by the Western Gas (MGTC) Pipeline System which runs west out of the Gillette production area to the Billy Creek Plant south of Buffalo.

Figure 3.3. Esponda Project Location

3.5 GIPPSLAND BASIN PROJECT, VICTORIA

The Gippsland Basin is a large offshore and onshore sedimentary basin situated in southeastern Australia in the State of Victoria.

Black sub-bituminous coal was first discovered in the Gippsland Basin in the 1820s leading to the development of the coal mining industry in Victoria.

All black coal production came from the lower Cretaceous Strzelecki Group rocks with the principal mines being Korumburra, Outtrim-Jumbunna, Wonthaggi, Kilcunda-Woolami, Coalville and Cape Paterson and from other minor deposits.

Planet Gas Interests in the Gippsland Basin

Planet Gas has 100% interests in four exploration licences in the onshore Gippsland Basin - EL 4500, 4535, 4619 and 4620 comprising 260,688 hectares. The Exploration Licences are issued under the Mineral Resources Development Act 1990 (Vic) which regulates the rights and obligations of the licence holder. The regulation includes the payments of fees, minimum expenditure requirements, work and environmental reporting, partial surrender of licence areas and other conditions which may be imposed at the time of grant of the licence. The four licence areas are located between 60 and 140 kilometres southeast of Melbourne in Victoria and adjacent to Victoria's Latrobe Valley brown coal fired power plant, and close to the electrical supply. infrastructure to three million of Victoria's population. The licences are also located near the main gas pipeline from the Bass Strait oil and natural gas production fields to Victoria, South Australia and New South Wales. The licences contain nearly all the known black coal reserves in Victoria. These thermally mature Cretaceous black coal deposits possess similar characteristics to the methane rich coals in the San Juan Basin, Colorado and New Mexico, one of the most productive CBM regions in the world.

Figure 3.4. Gippsland Basin Project Location

The licence areas were the source of black coal production in Victoria for the past 100 years. There have been more than 2000 well bores drilled and recorded over the years searching for coal and water. Two coal mining centres were located in these exploration areas -Wonthaggi on the southwest corner of EL 4500 and Korumburra on the western side of EL 4535. Due to the decline in the coal market and the dangers associated

with mining in the presence of methane gas coal production ceased in 1968.

Based on numerous coal and water wells, the licences are known to host Cretaceous black coal seams between the surface and a depth of greater than 300 metres. The overall thickness of the coal measures is not quantified however, known mined coal seams range up to 4 metres in thickness, Below the known coal measures other seams may exist. These areas were considered too deep for mining exploration assessment in the past.

Exploration Licence 4500

Granted on 5 October 2000 and expiring in 2005, this 100% owned renewable licence consists of 414 square kilometres and occupies an area approximately 32 kilometres east to west and 21 kilometres north to south. The Wonthaggi coal mining region is located in the southwest corner of the licence approximately 100 kilometres southeast of Melbourne.

Based on nearly 100 recorded coal bearing drill holes Cretaceous black coal was located at depths between the surface and 300 metres. Coal seams are evident over more than 160 square kilometres within the licence area. The cores were recorded from the uppermost layer of coal with a good possibility that additional reserves exist below these known coal beds.

Exploration Licence 4535

Granted on 26 February 2001 and expiring in 2006, this 100% owned renewable licence is 273 square kilometres in area, is adjacent to the northeast corner of EL 4500 and extends northeast for 30 kilometres. A review of historical data shows that more than 200 square kilometres of the licence area hosts black coal measures.

Exploration Licence 4619

Granted on 21 February 2002 and expiring in 2007, this 100% owned renewable licence is 1,143 square kilometres In area and is situated northwest of ELs 4500 and 4535. The licence extends 38 kilometres east to west and up to 60 kilometres north from the coastline. This licence area is known to contain prospective Cretaceous black coal seams. The central section of up to 150 square kilometres holds good potential for CBM.

Exploration Licence 4620

Granted on 21 February 2002 and expiring in 2007, this 100% owned renewable licence is 778 square kilometres in area and is situated to the southeast of the other licences and extends up to 60 kilometres east to west and 40 kilometres north to south. Approximately 500 square kilometres of the licence area is highly prospective for CBM.

Development Overview

Due to the extensive drilling activity over the past 100 years, and the comprehensive definition of the coal seams on the licences, it may not be necessary to conduct extensive exploration programs prior to appraisal drill testing and production of CBM. The initial program will consist of the examination of the known coal beds to determine the amount of methane held in the micropores and analyse the permeability, pressure and other factors affecting CBM production.

After the methane content is verified extensive analysis is needed to determine the most effective production method, address the need to dewater, determine the appraisal and production techniques to employ, and, determine which areas can be developed the most rapidly. The results from this initial program, which is planned over a six to eight month period, will determine the subsequent exploration and development program.

Based on existing knowledge of this field and the proximity to established gas pipelines, Planet Gas believes production could be achieved with twelve to eighteen months from commencement of the exploration phase.

The Cretaceous black coal deposits in the Gippsland Basin ELs are comparable to those in the San Juan Basin, USA one of the most productive CBM basins in the world (refer to Section 5 of this Prospectus).

3.6 OTWAY BASIN PROJECT, VICTORIA

The Otway Basin is the largest structural element of the Bassian Rift System situated to the west of the Bass and Gippsland Basins on-shore and off-shore in the southwest of Victoria, extending into the southeast of South Australia. The Otway Basin covers an area of approximately 150,000 square kilometres of which more than 48,000 square kilometres is on-shore in Victoria.

CBM exploration is currently in progress in the eastern Otway Basin by other companies. Exploration licence applications have been made by other groups in the Gippsland Basin and Murray Basin, within Victoria where CBM gas is the target.

Planet Gas Interests in the Otway Basin

In the Otway Basin, Planet Gas has entered a Heads of Agreement giving it a right to earn up to 100% of Exploration Licences to be issued as a result of the Applications for ELs 4368 and 4369 (refer Section 9 of this Prospectus). The Exploration Licence Applications have been made under the Mineral Resources Development Act 1990 (Vic) which will regulate the rights and obligations if and when a licence is granted. The regulation includes the payments of fees, minimum

expenditure requirements, work and environmental reporting, partial surrender of licence areas and other conditions which may be imposed at the time of grant of the licence.

Figure 3.5. Otway, Willochra and Eromanga Basins Project Locations

The Otway Basin is the westerly extension of the Gippsland/Bass Basin system. The Basin contains thick seams of lignite in the near surface and thin seams of black coals at depth. The Planet Gas acreage is on the western margin of the Otway Basin where little or no exploration for CBM has occurred.

Conventional oil and gas wells on the licence area and in the region have encountered black coal seams that will be targeted in the initial exploration program.

3.7 WILLOCHRA BASIN PROJECT, SOUTH AUSTRALIA

The Willochra Basin is located approximately 200 kilometres north of Adelaide and to the north east of Port Augusta. The Basin is an elongated north-south trending Tertiary Basin approximately 50 kilometres long and up to 18 kilometres wide. The township of Orroroo is located to the southeast of the licence and Quorn is located in the northwest of the licence area. The southeast of the Basin is situated approximately 50 kilometres from the main gas pipeline between Moomba and Adelaide, which may facilitate the sale of any gas discovered directly into Adelaide.

Planet Gas Interests in the Willochra Basin

Planet Gas has applied for a 100% interest in a Petroleum Exploration Licence, PELA 145 (Figure 3.5) which covers an area of 6,194 square kilometres. The Petroleum Exploration Licence Application has been made under the Petroleum Act 2000 (S.A.) which will regulate the rights and obligations if and when a licence is granted. The regulation includes the payment of fees, minimum expenditure and work program requirements, reporting, partial excision of licenced areas and other conditions which may be imposed at the time of grant of the licence. The Company has carried out no exploration work thus far in this Basin.

In the Willochra Basin the best potential for CBM exists in the lower Tertiary unit. There is no reliable subsurface data from within the Basin. The Basin is interpreted to shallow towards the north, reducing the probability CBM production from this section, due to the shallow depths.

3.8 EROMANGA BASIN PROJECT, SOUTH AUSTRALIA

The Eromanga Basin is a large on-shore sedimentary basin that covers southwest Queensland, northeast South Australia and northern New South Wales. The underlying Cooper Basin straddles the border area of southwest Queensland and northeast South Australia. The Cooper Basin has been responsible for large scale conventional gas and oil production on-shore in Australia. Within South Australia, the Cooper and Eromanga Basins have an area of 35,000 and 360,000 square kilometres respectively.

Planet Gas Interests in the Eromanga Basin

Planet Gas has applied for a Petroleum Exploration. Licence, PELA 146, within South Australia which is situated immediately to the south of the Cooper Basin and within. the Eromanga Basin (Figure 3.5). The Petroleum Exploration Licence Application has been made under the Petroleum Act 2000 (S.A.) which will regulate the rights and obligations if and when a licence is granted. The regulation includes the payment of fees, minimum expenditure and work program requirements, reporting, partial excision of licenced areas and other conditions which may be imposed at the time of grant of the licence. The Licence is 2,678 square kilometres and when granted will be 100% owned by the Company.

PELA 146 represents a greenfield acquisition because little is known of the coal beds in the area, even though to the north thick coals have been intersected in wells drilled by other companies.

There has been little or no exploration for CBM resources in the vicinity of the Planet Gas acreage in the Eromanga Basin. The nearest drill hole that intersected significant thickness of coal was drilled to the north of the licence application and was within the Permian boundary of the Cooper Basin. Both Basins are known to host coal seams and there is potential for the Planet Gas acreage to overlie black coals that have properties which indicate that they are potentially productive. In addition, conventional oil and gas migrating from the Cooper Basin may be trapped within the strata underlying PELA 146.

3.9 GUNNEDAH BASIN PROJECT, NEW SOUTH WALES

The Gunnedah Basin is an on-shore basin situated in northeast New South Wales and south of the Queensland state border. The Gunnedah Basin connects the related Sydney Basin to the south and the Bowen/Surat Basin to the north. The Gunnedah Basin has a long and well documented history of exploration for coal and conventional hydrocarbons. All of these east coast basins have active CBM exploration programs in train at this time with exceptional results coming from the Bowen/Surat Basin. Recently, the Gunnedah Basin provided the first commercial conventional gas flows in New South Wales from the Coonarah Field to the east of the Planet Gas licence.

Planet Gas Interests in the Gunnedah Basin

The Company holds a 20% interest in PEL 428 with Strike Oil NL as operator with an 80% holding. The Petroleum Exploration Licence is issued under the Petroleum (Onshore) Act 1991 (NSW) which regulates the rights and obligations of the licence holder. The regulation includes the payment of fees, minimum expenditure and work program requirements, reporting, partial surrender of licence areas and other conditions which may be imposed at the time of grant of the licence. During late 2002, the partners drilled two exploration wells in the south of the licence area and discovered gas depleted coal seams. At present the partners are considering their options but it is likely that a new round of exploration will concentrate on the northern portion of the licence.

Figure 3.6. Gunnedah Basin Project Locations

In the southern portion of the licence within the Black Jack Formation there is a 35 metre interval which holds 24 metres of net coal seams at a depth of 300 metres. This interval was tested by Terrawindah 2 drilled in late 2002 and was found to be degassed in the region of the well. Other wells in the southern portion of the licence have net coal of up to 28 metres at comparable depths and a large portion of the licence is underlain by coal seams that are 20 metres thick. Further exploration work will be attempted in the northern region of the licence to ascertain coal thickness and continuity.

The Gunnedah Basin is due south of the Bowen/Surat Basin where large quantities of methane are being produced from coal seams. The Gunnedah Basin has the potential to host significant quantities of methane within relatively thick permeable coal seams that are known to be significantly gassy.

OVERVIEW OF PLANET GAS

4.1 HISTORY AND PURPOSE

Planet Gas was incorporated under the Corporations Act 2001 and registered in New South Wales on 4 December 2001. The Company was formed to purchase the Esponda Project in Wyoming, USA and to acquire through outright purchase, joint venture and direct licence applications, projects in Australia with a view that the projects may have the potential to contain feasible CBM reserves that may be brought into production.

The primary purpose of the Company is to develop and produce CBM from the Esponda Project and to explore for. appraise, and if commercially attractive, develop CBM gas resources in the Gippsland and Otway Basins of Victoria. the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales, Australia.

4.2 MANAGEMENT AND CONSULTANTS

The current Board of Directors and management are experienced resource industry professionals who will continue with the ongoing direction and management of the Company.

The Company intends to employ other staff and engage consultants and contractors to carry out geological, administrative and field operations functions.

4.3 BOARD OF DIRECTORS

Norman Alfred Seckold, Chairman

Director since 4 December 2001.

Norman Seckold graduated with a Bachelor of Economics degree from the University of Sydney in 1970. He has spent more than 20 years in the full time management of natural resource companies, both in Australia and overseas.

Mr Seckold has been the Chairman of a number of publicly listed companies including Moruya Gold Mines (1983) NL, which acquired the Golden Reward heap leach gold deposit in South Dakota, USA, Pangea Resources Limited, which acquired and developed the Pauper's Dream gold mine in Montana, USA, Timberline Minerals, Inc. which acquired and completed a feasibility study for the development of the MacArthur copper deposit in Nevada, USA, Perseverance Corporation Limited, which discovered and developed the Nagambie gold mine in Victoria, Valdora Minerals NL, which developed the Rustler's Roost gold mine in the Northern Territory and the Ballarat East Gold Mine in Victoria, Viking Gold Corporation, which discovered a high grade gold deposit in northern Sweden and Mogul Mining NL, which drilled out the Magistral and Ocampo Gold deposits in Mexico.

Mr Seckoid is currently Chairman of Boinisi Gold NL which operates a large heap leach gold project in ex Soviet Georgia and which company is developing a native copper project in Queensland and undertaking advanced exploration for gold and precious metals in Mexico. Mr Seckold is also the Chairman of Kings Minerals NL, an explorer for diamonds, precious stones and minerals, most recently in the Republic of South Africa.

Anthony John McClure, Director

Director since 27 August 2003.

Anthony McClure graduated with a Bachelor of Science (Geology) degree from Macquarie University in 1986. Mr. McClure has over 15 years technical, management and financial experience in the resource sector within Australia, Africa and the Americas in project management and executive development roles. He has worked in the financial services sector and stockbroking, primarily as a resource analyst covering both mineral and energy sectors.

Mr McClure is currently an Executive Director of Kimberley Oil NL, a publicly listed company in Australia, whose main interests are in coal bed methane projects in Europe.

Anthony John McDonald, Director

Director since 19 November 2003.

Tony McDonald graduated with a Bachelor of Laws degree from the Queensland University of Technology in 1981. He was admitted as a Solicitor in 1982 and has been in private legal practice in Brisbane since that time.

Mr McDonald has been a director, secretary and/or legal advisor to a number of listed and unlisted public companies in the resources sector. He is also an executive director and corporate secretary of Kings Minerals NL.

Peter James Nightingale, Director, Chief Financial Officer and Company Secretary

Director since 4 December 2001.

Peter Nightingale graduated with a Bachelor of Economics degree from the University of Sydney and is a member of the Institute of Chartered Accountants in Australia. He has worked as a chartered accountant in both Australia and the USA.

Mr Nightingale has, for the past 16 years, been a director or company secretary of a number of private and publicly listed companies in Australia, the USA and Europe including Pangea Resources Limited, Timberline Minerals Inc., Perseverance Corporation Limited, Valdora Minerals NL, Bolnisi Gold NL, Biotron Limited, and Electronic Transaction Technology Limited. Mr. Nightingale has been responsible for the financial control, administration, secretarial and in-house legal functions of these companies.

Bruce Fullerton Riederer, Director of Exploration and Development

Director since 10 September 2003.

Bruce Riederer graduated with a Bachelor of Geoscience (Geology) degree from the University of Arizona in 1974. Mr. Riederer is one of the original founders of Planet Gas. He is a professional geologist and has over 29 years experience in the mining and resources industry.

For a number of years he has conducted a consulting practice in the management of CBM and conventional oil and gas exploration and development programs in the Powder River, Wind River and Green River Basins in Wyoming, the Cherokee Basin in Kansas, and the Gippsland and Otway Basins in Australia.

Norman Joseph Zillman, Director

Director since 20 August 2002.

Norman Zillman graduated with a Bachelor of Science degree in 1966 and a Bachelor of Science Honours degree from the University of Queensland in 1968. Mr Zillman is a professional geologist with over 35 years experience in the petroleum and coal industries in Australia and internationally. He has extensive worldwide experience in oil and natural gas exploration and production having worked in Australia, the United States, Asia, and Europe. His initial training was as a petroleum geologist with international companies Aquitaine Petroleum in Papua New Guinea and Union Oil Company of California (UNOCAL) in Indonesia.

Mr Zillman was the Deputy CEO of Crusader Limited and was the Manager of the Petroleum Branch of the Queensland Department of Mines and Energy. Mr Zillman was the founding Managing Director of Queensland Gas Company Limited, an Australian CBM company. He is currently the Non-Executive Chairman of Great Artesian Oil and Gas Limited, and a member of the Australasian Institute of Mining and Metallurgy and the Petroleum Exploration Society of Australia.

4.4 CORPORATE STRUCTURE

Planet Gas, the parent entity, owns 100% of the following controlled entities:

Sieenpower Energy Pty Ltd (ACN 092 403 506)
3 Davidson Prospecting Pty Ltd (ACN 060 258 031)
3 Pauper's Dream Company (C9840-1989)

Greenpower Energy Pty Ltd and Davidson Prospecting Pty Ltd are incorporated in Australia.

Pauper's Dream Company is incorporated in Nevada, USA.

4.5 FINANCIAL INFORMATION

The Company's audited balance sheet as at 31 December 2003 and a proforma balance sheet, showing the financial effects of the completion of the Offer and other transactions as detailed below, are as follows:

A LIBERTA ALA	BOTHER GIRLS
	BERSHIP
CURRENT ASSETS
Cash assetsReceivables	816,32221,254	12,186,32221,254
TOTAL CURRENT ASSETS	837,576	12,207,576
NON-CURRENT ASSETS
Plant and equipment	6,9152.491.482	6,9152,991,482
Exploration and evaluation expenditureOther	20,000	20,000
TOTAL NON-CURRENT ASSETS	2,518,397	3,018,397
TOTAL ASSETS	3,355,973	15,225,973
CURRENT LIABILITIES
PayablesOther	164,7822,500,000	164,782
TOTAL CURRENT LIABILITIES	2,664,782	164,782
TOTAL LIABILITIES	2,664,782	164,782
NET ASSETS	691,191	15,061,191
SHAREHOLDERS' EQUITY
Contributed equityAccumulated losses	1,322,054(630, 863)	15,692,054(630, 863)
TOTAL EQUITY	691,191	15,061,191

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The proforma balance sheet is based on the Company's audited 31 December 2003 balance sheet adjusted to reflect the following transactions:

© Completion of the Issue, pursuant to this Prospectus, of 60,000,000 new Shares for cash consideration totalling $12,000,000.
The estimated costs of the Issue, pursuant to this Prospectus, being $630,000 which are charged against contributed equity.
The conversion of $2,500,000 of convertible notes, recorded as other current liabilities at 31 December 2003, to 31,250,000 new Shares in accordance with the terms of the convertible notes.
@ The issue of 2,500,000 new Shares as part consideration totalling $500,000 in accordance with the terms of the acquisition of the Company's subsidiary, Greenpower Energy Pty Limited.

In the event that the Offer is oversubscribed to the $15 million maximum subscription amount, the estimated costs of the Issue would be increased by $120,000 and the proforma balance sheet would be affected as follows;

In the event that the Offer is only subscribed to the $10 million minimum subscription amount, the estimated costs of the Issue would be reduced by $80,000 and the proforma balance sheet would be affected as follows:

Funds raised pursuant to this Prospectus, which may be supplemented by other potential revenue, are proposed to be used as follows:

SOURCES OF FUNDS
Funds on hand (1)	816	8,870	816
Proceeds from the OfferInterest	12,000514	322	12,000836
TOTAL SOURCES OF FUNDS (2)	13,330	322	13,652
APPLICATIONS OF FUNDS	当校寺社
USA
Esponda Project
Exploration and development			4.NOC
AUSTRALIA
Gippsland Basin Project
Exploration and development	980	840	1.820
Otway Basin Project
Exploration and development	310	365	675
Willochra and Eromanga Basin Projects
Exploration and development	370	440	810
Gunnedah Basin Project
Exploration and development	125	265	390
Corporate and Overheads
Corporate costs	485	505	990
Costs of the Offer	630		630
TOTAL APPLICATIONS OF FUNDS	4,460	4,875	9,335
CASH BALANCE ON HAND	8,870	4,317	4,317

Notes (1) The funds on hand at the commencement of year 1 are the Company's 31 December 2003 cash balance.

(2) Due to the uncertainty of future events, no amount has been included in the Company's sources of funds for potential revenues from the sale of the Company's CBM production.

The above cash flows are based on best estimates and assumptions about future events. These estimates and assumptions may not occur. The continued funding of each project is dependent upon successful exploration and development results being achieved and the continued viability of each project. The Directors reserve the right to utilise the Company's funds in the manner they believe is most appropriate for the Company to achieve success. The actual utilisation of funds may differ from the projections contained in this Prospectus, and successful exploration results may lead to a need for additional funding requirements.

The exploration and development expenditures detailed for year 1 and year 2 in each case exceed the minimum expenditures required to keep the Company's projects in good standing with the relevant government authorities and, where applicable with joint venture partners.

In the event that the Company raises more than the minimum subscription of $10 million but less than the full subscription amount of $12 million the overall exploration and development pudget will be adjusted either on a per project dass or dejustments will be indue to thew project doquisition ducturions.

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4.6 BUSINESS OBJECTIVE AND WORKING CAPITAL

The Company's business objective is to develop and produce CBM from the Esponda Project in the Powder River Basin in Wyoming, USA and to explore for, appraise, and if commercially attractive, develop CBM gas resources in the Gippsland and Otway Basins of Victoria, the Eromanga and Willochra Basins of South Australia and the Gunnedah Basin of New South Wales, Australia.

The Company will also consider new acquisitions.

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The Board of Directors is of the opinion that there will be sufficient working capital to carry out the stated objectives if only the minimum subscription of $10 million is raised.

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INDEPENDENT EXPERTS' REPORTS

D. KEITH MURRAY 200 UNION BLVD., SUITE 215 Lakewood, Colorado 80228-1830 USA (303) 986-8554 email: [email protected] Oil · Gas · Coalbed Methane

19 December 2003

Independent Geologist's Report

Introduction

This report was prepared by D. Keith Murray following a request by the Directors of Planet Gas Limited ("Planet Gas" or "the Company") to undertake an independent geological and technical review of the Esponda Project, Wyoming, United States of America (USA) in which the Company has interests. The scope of the report was to investigate the Coal Bed Methane (CBM) potential of the Esponda Project.

This Independent Geologist's Report was prepared for inclusion in a Prospectus to be dated on or about 9 January 2004 for the issue of 60 million new Shares at an issue price of $0.20 to raise $12 million. Oversubscriptions of up to 15 million new Shares raising an additional $3 million may be accepted by the Company.

Executive Summary

Planet Gas has purchased the mineral rights under 12,929 gross acres (5232 hectares), 10,344 net acres (4186 hectares) in the deeper part of the Powder River Basin, Wyoming, southeast of the town of Buffalo.

In summary, the author concludes that the Planet Gas Esponda Project leasehold is favorably located in the synclinal part of the western Powder River Basin so as to be gas-productive in the thick Big George coal bed, as well as in other coals in the Fort Union and Wasatch Formations, which have been found productive elsewhere in the Powder River Basin. The exploration and development program planned by Planet Gas and its partners is expected to prove up economic reserves of CBM and enter CBM production in the Powder River Basin in calendar 2004.

The fact that two successful operators have now drilled and run completion equipment on at least four Big George CBM wells located on Planet Gas' Esponda Project acreage bodes well for the early success of this exploration/development venture.

Review of Coal Bed Methane Activity in the USA and in the Powder River Basin, Wyoming and Montana

In the USA, CBM currently is produced from 14 coal-bearing basins, with exploration and testing activities taking place in a number of as-yet non-producing basins. At the end of 2002, the Potential Gas Committee (PGC) (which is under the aegis of the Potential Gas Agency at the Colorado School of Mines, Golden) estimates the recoverable CBM for the entire USA totals approximately 163.3 trillion cubic feet (Tcf) (most likely value). This estimate is nearly 11 percent higher than that for year-end 2000 (The PGC publishes its estimate every two years).

According to the United States Department of Energy (USDOE) Energy Information Administration (EIA), USA CBM production in 2001 totaled more than 1.5 Tcf, which was an increase of 13.3 percent over the output in 2000. The leading producing field still is the San Juan Basin (Colorado-New Mexico), although production from the Cretaceous Fruitland coals in that basin may have begun to plateau. Rising production is obtained from the "second generation" plays such as the Powder River, Raton, Uinta, Central Appalachians, Arkoma, and Cherokee Basins. More than 8 percent of the dry-gas production (about 19 Tcf) in the lower 48 States comes from coal beds.

Proven reserves of CBM at the end of 2001 totaled more than 17.5 Tcf, which is an increase of 11.6 percent over the number reported at year-end 2000 (15.71 Tcf), according to the EIA.

The Powder River Basin, which encompasses nearly 26,000 square miles (67,000 square kilometres), is located in northeastern Wyoming and southeastern Montana.

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.1. Regional Structure and Tectonic Map of the Powder River Basin

Figure 5.2 shows the location of the Esponda Project in relation to the more densely drilled areas of CBM wells in the basin.

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.2. Coal Bed Methane Activity in the Powder River Basin

The Powder River Basin is one of the largest coal basins in the United States and contains some of the thickest individual coal beds in the world, including the Big George coal, the primary objective in Planet Gas' Esponda Project lease block, where this bed can exceed 150 to 200 plus feet (45 to 60 metres) in thickness. Other coal beds occur in the Tongue River Member of the Paleocene Fort Union Formation (which contains most of the coal in the basin), including the prominent Wyodak, Anderson, Canyon, and other relatively thick coals in this sequence. Although all of the Tongue River coals are of relatively low rank (subbitumious C to A) and exhibit low in-situ gas contents (rarely exceeding 75 to 100 standard cubic feet per short ton (Scf/ton), where analyzed), the sheer volume of coal in the Powder River Basin, more than one trillion short tons (0.9 trillion tonnes), has generated a very large volume of biogenic methane, possibly in excess of 40 to 50 Tcf.

Gas production has been reported from some 30 named Fort Union codi seams in the basin (either local splits or

geographically separated stratigraphic correlations); and from a thick coal bed in the overlying Wasatch Formation.

At the end of 2002, the PGC estimated that the Probable and Possible coal bed gas resources in the Powder River Basin are 26.7 Tcf (most likely value), an increase of 11 percent over their 2000 estimate.

The Wyoming Oil and Gas Conservation Commission has stated that the annual CBM production from the Wyoming part of the Powder River Basin was 323.6 billion cubic feet (Bcf) in 2002, a 27 percent increase over the previous year. From 1987 through 2002, the cumulative production from the Wyoming Powder River Basin exceeds 800 Bcf (0.8 Tcf). As of July 2003, daily CBM production was more than 900 million cubic feet per day (MMcfd), and cumulative production now exceeds 1 Tcf. Approximately 10,700 CBM wells were listed as producers in 2002, with some 28,600 permits to driil filed in the Wyoming Powder River Basin.

Figure 5.3 is a graph of daily CBM production and number of producing wells in the Wyoming part of the Powder River Basin, making this one of the most prolific CBM basins in the world, with daily production of more than 900 million. cubic feet per day.

Figure 5.4 shows the outline of Partition No. 6 (from a recent U.S. Department of Energy study) and the location of major gas pipelines and roads. Eight mappable Fort Union Formation coal beds occur within the boundary of Partition No. 6, with an average total thickness of 228 feet (69 metres) at average depths (to top of coal) ranging from 1,060 feet to 2,640 feet (323 metres to 805 metres). Of course, all of these coals may not be present in every part of Partition No. 6. This USDOE study shows that the total gas-in-place here is estimated at approximately 5.7 Tcf, with technically recoverable CBM at 3.1 Tcf (54.4%).

Review of the Exploration History, Available Drilling Data and Drilling Activity in the Area Encompassed the Esponda Project Fee Leases.

The Esponda Project acreage is located to the west of Gillette and to the southeast of Buffalo, Johnson County Wyoming (Figures 5.4, and 5.6).

Planet Gas purchased the Esponda Project mineral rights from the Esponda Family Mineral Trust in late 2001. This block of fee acreage totals 12,929 gross acres (5232 hectares), 10,344 net acres (4186 hectares). The leased lands, partially in non-contiguous blocks, are located southeast of the town of Buffalo, Wyoming, immediately south of Interstate 90 highway, which connects Gillette, Wyoming, and Buffalo. This area has seen very little drilling for CBM and is located near the synclinal axis of the Powder River Basin, where deaths to the farget Fort Union. coals can exceed 2,000 feet (600 metres).

Figure 5.3. Powder River Basin, Wyoming Coal Bed Methane Production

The Esponda Project lease block is located in the following townships in Johnson County, Wyoming:

The area of current CBM drilling involving Planet Gas'

T47N, R80W, 6th P.M. T48N, R79W T48N, R 80W T48N, R81W T49N, R80W T50N, R80W

approximately 1,640 acres (660 hectares). Assuming a well spacing of 80 acres (32 hectares) (which is now the practice in the Basin), the Planet Gas acreage in T48N, R79W could accommodate 20 CBM wells.

Based on data provided by Planet Gas and by the operators (Kennedy Oil, Gillette, Wyoming; and Western Gas Resources Inc., Denver, Colorado), the following wells were drilled in July through September 2003 by these two operators on Esponda Project acreage in which Planet Gas has an interest:

A total of 12 wells are to be drilled in the Kennedy Oil program.

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.4. Partition 6 and Regional Gas Pipeline Infrastructure

SW)

According to Kennedy Oil, all of their wells have been "technically completed" as future producers. The nearest pipeline connection is at the Dead Horse hub, about 18 miles (29 kilometres) to the east. Kennedy Oil hopes to get their wells on line by mid-2004.

Figure 5.5 shows projected gas and produced water rates for a typical Big George type CBM well in Partition No. 5, located several miles east and at a shallower depth than a Big George well on the Esponda Project acreage. Note that peak gas production (slightly more than 800 Mcfd) occurs about 3.4 years after first production; and water rates declining from about 2000 bblsd from year 3.4 to approximately 500 bblsd after about year 10. Big George wells drilled in Partition No. 6 are expected to behave in a similar fashion.

$2,400 -$

Figure 5.6 displays the Esponda Project acreage, the area of current Kennedy Oil-Western Gas drilling programs involving Planet Gas' interests, and line of west-east cross section A-A`, Wasatch and Fort Union coals across this same area (see Figure 5.7).

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.6. Esponda Project Titles showing cross section A-A'

Figure 5.7 shows the three well logs used to construct this cross section, and the area where the Big George coal splits. This split also is portrayed on Figure 5.8.

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.7. Esponda Project East Structural Cross Section A-A'

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.8. Esponda Project East Structural Diagrams

Additional information supplied by Kennedy Oil concerning the "Big Cat" area includes:

. Wells in the Big Cat area generally cost US$125,000 to US$130,000 to drill and complete including field gathering infrastructure,
. Peak gas rate of at least 300 Mcfd,
Recoverable reserves of $\pm$ 1 Bcf per well,
Dewatering 6 to 12 months,
· Overhead costs about US$350 per month per well,
Gas content of the Big George coal 120 Scf/ton of coal,
· Operating costs approximately US$0.60/Mcf,
Well life 7 to 10 years,
. Well spacing 1 per 80 acres (32 hectares),
State and other taxes approximately 13% of gross wellhead revenue

Summary of the Technical and Operational Issues Related to the Esponda Acreage

As shown on Figure 5.9, even within a relatively short distance the character and thickness of the Big George coal seam varies quite markedly, from approximately 40 feet (12 metres) to more than 190 feet (58 metres) from south to northwest across Esponda Project acreage.

Coals other than the Big George (and equivalent) exist in this part of the basin in the Tongue River Member and should be tested for possible commercial CBM production. The younger Wasatch Formation coals are beginning to prove productive of CBM in this part of the Powder River Basin, and they, too, need to be carefully evaluated in this prospect area.

mellisiai

An important operational issue to be carefully considered in the Esponda area is the produced CBM water. This issue is addressed in detail in a recent USDOE report (DOE/NETL-2003/1184), "Powder River Basin Coalbed Methane Development and Produced Water Management Study": The Powder River Basin is witnessing the most rapidly developing natural gas play in the USA. More than 10,000 CBM wells are now producing in the basin, with daily production exceeding 900 MMcfd. In 1998, CBM production was only 111 MMcfd. Although daily gas production is steadily increasing, as is water production, from 229 thousand barrels per day (Mbblsd) in 1998 to over 1.4 million bblsd by the end of 2001, CBM water to gas production ratio has decreased from 2.88 bbls/Mcf in 1999 to 1.75 bbls/Mcf in 2001. Likewise, water production per CBM well has declined from 396 bblsd in 1999 to 177 bblsd in 2001. From the data generated by this USDOE report it can be assumed that the dewatering of the target Big George coals in the Esponda lease area should present no undue water management problems.

Prepared December 2003 by D. Keith Murray for inclusion in a Prospectus for Planet Gas Limited

Figure 5.9. Esponda Project Total Coal Thickness Fort Union and Wasatch Coals in feet

Methodology and Assumptions Used

D. Keith Murray believes that the approach taken in the recent USDOE study is sound and is based on a large amount of production data, computer modeling, history matching, etc., using a dozen geologically consistent analytic units, or "partitions". These are based on coal depth, status of development, and geographic considerations. The Esponda Project acreage in question is located in Partition No. 6 ("West Central Area"), which is comprised of 31 townships, or about 714,240 acres (289,000 hectares) (or approximately 1,116 square miles (2890 square kilometres)), Some 6 major Fort Union seams, totaling 207 feet (63 metres) (average thickness), are

present in Partition No. 6. Therefore, the chances of encountering at least several of these coals in Esponda. Project acreage is considered very good.

Sources of Information

Besides the information provided by Planet Gas, the author utilized data contained in several publications of the following organizations: Potential Gas Committee, Wyoming Geological Survey, Wyoming Geologica1 Association. Wyoming Oil and Gas Conservation Commission, U.S. Geological Survey, and U.S. Department of Energy in addition, information from D. Keith Murray files was consulfed.

Qualifications of Expert

D. Keith Murray is an independent consulting geologist residing in the Denver, Colorado area, where he has lived since 1960. He has been involved in the energy industry for more than 50 years, the last 28 years of which have been spent primarily in CBM related activities, both domestic and international.

Within Australia, since 1988, D. Keith Murray has provided consulting services for both Australian and USA companies involved with CBM exploration and development in Queensland.

D. Keith Murray has been a member of the American Association of Petroleum Geologists for more than 50 years, the Rocky Mountain Association of Geologists for 43 years, and the Wyoming Geological Association for more than 30 years. Mr Murray is a Charter Member (since 1963) of the American Institute of Professional Geologists (Certified Professional Geologist No. 446), and is a Member of the Society of Independent Professional Earth Scientists $(S.I.P.E.S.)$

Disclosure

D. Keith Murray has no pecuniary or other interest, past or present, in any affairs of Planet Gas nor has he existing or previous relationship with Planet Gas or other interested parties within the past two years. D. Keith Murray and Associates has not had past, present, or future pecuniary interest or benefit resulting from the preparation of this Report. As agreed upon by the Directors of Planet Gas, D. Keith Murray will be paid a professional consulting fee of US$5,000, excluding expenses, for the preparation of this report. This fee is not in any way contingent upon the success or failure of the Offer.

D. Keith Murray consents for the inclusion of this Report in the Prospectus in the form and context in which it is included. This consent will not be withdrawn before lodgement of the Prospectus with the ASIC.

Keith Murray

D. Keith Murrav

G. P. and R. J. McDonagh Geological Consultant MS 312, Nundubbermere Road Stanthorpe Qld 4380, Australia Phone 61 7 4683 6319 Email [email protected]

19 December 2003

Independent Geologist's Report

This report was prepared by G. P. and R. J. McDonagh (ABN 94 541 625 113) following a request by the Directors of Planet Gas Limited ("Planet Gas" or "the Company") to undertake an independent geological and technical review of areas in which the Company has interests in Australia. The project areas are located within the states of Victoria, South Australia and New South Wales. The scope of the report was primarily to investigate the Coal Bed Methane (CBM) potential of the project areas within Australia, but where rights to conventional oil and gas is held discussion of that potential is included i.e. in South Australia and New South Wales.

1. EXECUTIVE SUMMARY

Planet Gas is a company formed to explore for and produce natural gas with an emphasis on CBM resources. The Company has acquired acreage in three Australian States covering five onshore Australian basins. The Company's Australian acreage which totals approximately 2.0 million hectares is in most cases proximate to substantial infrastructure that may facilitate the sale of any production that is achieved.

The projects under Planet Gas' control have been acquired through outright purchase, joint venture and direct licence application with the view that any economic CBM reserves discovered could be brought into production within a short period.

Project	무서 어땠나요!! 귀Location	AreaHectares	Planet GasInterest
EL 4500	Gippsland Basin, Victoria	41.382	100%
EL 4535	Gippsland Basin, Victoria	27.288	100%
EL 4619	Gippsland Basin, Victoria	114,251	100%
EL 4620	Gippsland Basin, Victoria	77.767	100%
ELA 4368	Otway Basin, Victoria	48,379	100%
ELA 4369	Otway Basin, Victoria	24,190	100%
PELA 145	Willochra Basin, South Australia.	619,432	100%
PELA 146	Eromanga Basin, South Australia	267,786	100%
PFL 428	Gunnedah Basin, New South Wales	810,000	20%
Total		2.030.475

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.10 Sedimentary Basins of Australia showing Planet Gas Project Locations

2. INTRODUCTION

Coal seams are a source of natural gas, mostly methane, which was formed during the conversion of organic plant matter into coal. The CBM gas is present in fractures, cleats, and pore spaces in the coal. Molecules of gas are attached to the coal molecules (adsorbed) and held in place by water (reservoir) pressure. Gas is also dissolved in the water contained within the coal seam.

Methane is also the main component of the natural gas used for industrial, commercial and domestic purposes but in contrast to CBM it accumulates in permeable reservoir rocks, usually sandstone, under sealing rocks such as shale. Conventional natural gas is produced from wells drilled into the reservoir rocks where migrating gas has been trapped. Conventional natural gas is composed of a number of light hydrocarbons from methane, the major component, through to heavier components such as butane, pentane, hexane and heptane.

The adsorbed gas is by far the most important with respect to the volume of gas that can be stored. A given volume of coal, at shallow depths, can contain as much as three times the amount of adsorbed gas as that contained in the same volume of typical sandstone.

CBM gas is usually produced from wells drilled directly into coal beds. Normal CBM production is achieved by reducing the formation pressure within the coal bed. Normal formation pressure is equivalent to the pressure of a column of water extending from the coal to the near surface (hydrostatic). Virtually all reservoir rocks including coals contain water and the ease of de-watering and consequent pressure reduction associated with de-watering is dependent on the porosity and permeability of the rock. Most coals have low porosity and permeability, but when reservoir properties are favourable water can be pumped out of the well bore thus reducing the formation pressure and releasing the adsorbed methane gas.

Production of the CBM often requires 'stimulation' of the seam to enhance permeability and increase gas flow. Hydraulic fracturing or 'fraccing' is a term for injecting high pressure fluid often laden with clean sand into the seam. The coal fractures, cavitates or splits (pre-existing fractures open up) and the sand grains 'prop' open the fractures. The fraccina fluid and formation water is then pumped out of the well, and when the confining pressure is lowered sufficiently, CBM gas is produced. Another method is to cavitate, (erode) the coal seam and as a chamber is formed a greater volume of coal is available to release aas to the well bore.

The rank of the coal and the formation pressure controls the volume of gas that can be held within coals. Coal rank is a function of the burial history. Formation pressure is generally related to the present day depth of burial. A coal is called 'saturated" when it holds all the methane it can, if it contains less it is "under-saturated". Coals that have been uplifted and/or exposed during their history may have lost some or all of their gas and become under-saturated.

By measuring the volume of gas desorbed (or released) from a core sample over a period of time the amount of gas present in a coal can be determined. The absorption/desorption plots are represented by Langmuir isotherms as shown in Figure 5.11. In a saturated coal (A) the gas content value of the coal lies directly on the adsorption isotherm and the desorption pressure and the reservoir pressure are identical. Any reduction of the reservoir pressure will allow methane to be released from the coal. In an under-saturated coal, (B), the gas content is less than the storage capacity of the coal. In such cases, before desorption can begin, the reservoir pressure must be reduced to the pressure on the isotherm which relates to the gas content of the coal. This is called the 'critical desorption pressure'. If the coal is only slightly under-saturated, the commercial viability of a project need not be adversely affected, but if the coal is considerably under-saturated, the volume of water required to be produced to achieve gas flow may make the project uneconomic.

Because CBM wells are generally not as productive as conventional aas wells, more wells may be required to achieve a gas production target. A CBM project is therefore particularly sensitive to both drilling and maintenance costs. This is offset by the fact that coals are normally extensive and large areas can prove to be productive. By comparison most conventional gas fields are controlled by structure or stratigraphy, are more difficult to find, and are much less extensive

3. HISTORY OF COAL BED METHANE EXPLORATION

Methane has been regarded as a hazard of coal mining operations throughout much of history but this gas was not extensively exploited as an energy source until gas drained from mines was used to generate electricity in Germany in the 1950s. CBM was virtually ignored by most oil and gas explorers until relatively recently. The main impetus in worldwide exploration came after economic success in the United States of America (USA).

Production of CBM in the USA has increased dramatically from 10 billion cubic feet (Bcf) in 1984 to over 1500 Bcf in

Adsorption Isotherm

2000, (Ayers, 2002). The increase resulted initially from large-scale commercial exploitation in the San Juan Basin of Colorado and the Black Warrior Basin in Alabama. These developments would probably not have taken place without tax incentives introduced by the USA government allowing exemptions in exploration for alternative energy sources in the 1980s. Advances in exploration methods, completion techniques and production technologies maintained the impetus after tax incentives were removed for new projects in 1992. Production levels continued to climb, and thousands of CBM wells are now producing in numerous basins across the USA. Wells in the fairway of the San Juan Basin peak between 1 and 6 MMcfd (Ayers, 2002).

Because production was first achieved in the San Juan and Black Warrior Basins, the type and rank of coal in these basins were set as the benchmark requirement for exploration to proceed in other basins. Coals with similar properties to the San Juan and Black Warrior Basins occur in the Bowen/Surat and Sydney Basins of Australia and initial exploration for CBM in Australia was focused on these areas. There is already significant gas production from fields in the Bowen/Surat Basins, central-southern Queensland.

CBM is now produced in substantial quantities from other basins in the USA. In particular, production from the Powder River Basin in Wyoming is of significance as the coals there were originally assessed as being too immature to contain sufficient gas for economic production (when compared to the properties of the San Juan and Black Warrior Basin

coals). The coals producing in the Powder River Basin are shallow, well costs are low, and advances in completion technology have resulted in continuing improvements in the gas flow rates of wells. The peak production rate from a typical shallow well in the Powder River Basin is between 130 and 350 Mcfd although some wells have peak production over 1 MMcfd (Ayers, 2002).

Increasing CBM exploration has taken place in Australia in the Permian coal measures of the Bowen, Gunnedah and Sydney Basins with ever increasing volumes of sales gas produced. More recently, the Jurassic coals of the Surat Basin have been targeted and contracts made for supply of gas to consumers in 2005.

4. GIPPSLAND BASIN, VICTORIA - AUSTRALIA

The Gippsland Basin is a large sedimentary basin situated in the southeast of Australia. Most of the basin occurs offshore in Bass Strait but a proportion is found onshore within the State of Victoria (Figure 5.12).

Payable black sub-bituminous coal was first discovered at Cape Paterson in 1826, which led to the exploration and development of the coal mining industry of Victoria. The coal deposits are present in separate geographical areas throughout the Gippsland Basin and are confined to the Early Cretaceous sediments of the Strzelecki Group (Table 5.1). Individual mined coal seams range up to 4 metres in thickness (Gallacher, 2002). Net coal thickness maps are not available.

ALBIAN
	WONTHAGGI		S
nda e e sorti a storeraAPTIAN	FORMATION		R
			E
			Z
BARREMAIN	Includes San RemoConglomerate Member		E

			E
	RINTOULS CREEK		C
	SANDSTONE	RHYLL ARKOSE	Κ
HAUTERIVIAN
			G
VALINGIAN			R
			O
	TYERS		п
			P
BERRAISIAN	CONGLOMERATE

Table 5.1. Stratigraphic Table of the Strzelecki Group of the Gippsland Basin

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.12. Sedimentary Basin Geology of Victoria showing Planet Gas' Gippsland and Otway Basin Project Locations

The presence of considerable methane has been recorded from the coal mines but was not evaluated economically for CBM as all the mines closed before CBM production was developed.

Black coal mining commenced during the late 1890s and continued until approximately 1960 both to supply the state railway system with locomotive fuel and for heating. Mining areas included those around Korumburra, Outtrim-Jumbunna, Wonthaggi, Kilcunda-Woolami and Cape Paterson along with other minor deposits.

Geology and Coal Properties of the Gippsland Basin

The sedimentary sequence of the Gippsiand Basin contains economic deposits of black coals thought to be formed from residual craanic debris/matter, of drift prigin, washed into depressions, averlain by sediments,

compressed and heated to form sub-bituminous coal (Edwards et al., 1944).

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一般精神

The black coalfields of the Gippsiand Basin are confined to the lowermost part of the Early Cretaceous Strzelecki Group sediments, These sediments outcrop in two prominent fault bounded lobes, the northeasterly trending Narracan Block (centred on Korumburra) and the Balook Block, separated by the Tarwin sunkland (Holgate and McNicol, 1992). These regional highs form the elevated Strzelecki Ranges, which are the horst-related blocks. They fault contact the underlying Silurian beds, which occur in Western Port, Wonthaggi, Korumburra and Kirrak. Tertiary and Quaternary beds fill the adjacent grabens.

Stratigraphic sub-division of the Strzelecki Group is difficult. because of the similar appearance of different portions of the sequence. Holgate and McNicol (1992) have subdivided the group into the Tyers Conglomerate, the Rintouls Creek Sandstone and the Wonthaggi Formation. The San Remo Conglomerate member occurs within the Wonthaggi Formation. The principal rocks are feldspathic sandstones/arkoses, interbedded mudstones, conglomerates and rarer lenses of coal up to 2 metres thick. The black coals are confined to the lower sections of the Wonthaggi Formation. Most of the published literature on the coal measures refers only to the mining of the coals.

Four stages of faulting were deduced (Willcox et al., 1992) from the structural relationships of the coalfields at Wonthaggi, Korumburra and Jumbana-Outtrim.

The first stage of faulting recognized (Wilcox et al., 1992), is growth faulting during deposition. These faults trend NE-SW and E-W with displacements of up to 230 metres. At the Wonthaggi coalfield syn-depositional faulting controls the lateral extent and thickness of the coal seams. A second structural dislocation took place with minor movement on normal faults on a northwest-southeast trend. Dolerite dykes intruded some of these faults. This was followed by another period of normal faulting, with faults on a north-south trend. Displacements of up to 120 metres are present with fault zones up to six metres wide. The final stage recognised by Wilcox et al., (1992) was compressional with low angle reverse faults striking

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.13. Regional Geological Map of the Gippsland Basin and Location of known Coal Deposits and State coal mine, Wonthaggi Cross Sections (from Knight, 1975).

northwest-southeast and high angle reverse faults striking northeast-southwest.

According to Holdgate (2003) the majority of onshore faults are related to the compressional faulting. The major faults that bound the Narracan and Balook Blocks are reverse faults, previously interpreted as extensional.

The scattered nature of the black coal fields of the Strzelecki Group indicates the limited presence of shallow economic coal deposits thick enough to warrant mining. Structural and depositional complexities also limited economic development. This does not deter from the CBM potential of the coal deposits.

Most coals were worked from the Narracan Block (Figure 5.13) from the commencement of mining in 1840 initially from the Kilcunda-Woolami area and the larger deposits of the Wonthaggi region through to the 1960s.

Wonthaggi Coalfield

The geology of the Wonthaggi coalfield is well described by Edwards et al., (1944) and Mirams, (1953). Located in South Gippsland, the coalfields are situated on the downfaulted block of the South Gippsland highlands, south of the Kongwak fault (Figure 5.13). Coal is Early Cretaceous in age and occurs in discrete intensely faulted sub-basins (Kirarrak and Dudley Basins) transected by an underlying Silurian basement ridge of concealed sediments.

Total production until cease of operations in 1943 was approximately 20 million tonnes. The excessive faulting and thinning of coal seams required many separate shafts and drives to properly work the coal measures. This faulting could be a positive feature for CBM production as permeability of the coals can be expected to be satisfactory.

Basement is composed of Silurian sediments (folded sandstones and shales dipping 45° to 80° with a strike of 20°) overlain by Early Cretaceous fresh-water mudstones and sandstones, or arkoses that contain thin lenticular bituminous coal seams of up to 1 metre thickness.

Ianeous rocks have intruded the Early Cretaceous sediments as a suite of basaltic dykes with a northwest trending strike.

Korumburra Coalfield

Korumburra contains five recognisable coal seams that dip to the northwest. Thickness of the coal seams range from 1 to 2 metres.

Jumbunna-Outtrim Coalfield

This coalfield is contained in the hilly region west of the Powlett River. The argillaceous sandstones, mudstones and shales dip to the northwest at 25° to 35°. The contained coals that occur in this area are up to 1.8 metres thick and thin out dramatically in the surrounding district. The main seam mined was approximately 1 to 1.5 metres thick. Another seam less worked (about 0.5 metres thick) lies 20 to 30 metres above the main seam that was mined.

Kilcunda-Woolamai

These coalfields represent the most westerly exploited black coal from the Gippsland Basin.

Coalville

The Coalville coal mining area is located on the northern edge of the Narracan Block, 45 kilometres NE of Korumburra and contains a seam 0.7 metres thick.

Mirboo North and adjacent areas

Further small outcrops of coal in the Strzelecki Group that have been exploited include areas such as Berry's Creek and Mirboo North. The coal seams reported average 1 to 1.5 metres thick, dipping ESE at 27° to 36°. Other coal seams with similar coal characteristics have been noted in areas surrounding Boolarra, 10 kilometres NE of Mirboo North, where a 0.7 metres thick coal seam is found. Other areas include between Yinnar South and Jeeralang Junction, approximately 20 kilometres NE of Mirboo North.

HAMBER AND CONSIGNMENT HERE IS STOLEN HERE IN STREET
No.1 top seam. Surface.		1.0 metresin the state of a support of the
No.2 main seam	25 metres	$1-1.4$ metres
No.3 middle seam	108 metres	Impersistant
No.4 deep seam and the state of 163 metres		1.8 metres of clean coal. Drilling identifiedcarbonaceous mudstone bands in seam
Additional displayers of the 180 metresNo.5		0.6 metres over limited area

Table 5.2. Stratigraphic Table of the Coal Seams of Korumburra.

Cape Paterson

........

This location is the site of the first discovery of black coals in Victoria. Coal seam thickness are relatively thin at only 0.4 to 0.8 metres.

The following table represents quantitative proximate coal analysis from Wonthaggi and other coal mines in Victoria.

Locality	Moist %	V.M. %	F.C. %	Ash %	Gross calorificvalue MJ/kg
Duckey Bosin
Dicleylored for seam and the final seam of the law				$\circ$ . The set of $\mathcal{L}$
Ducley area Bottom seam and the final party SOD		$1132112$ $12328$
20 shaft, Top seam				4۵. شتانشتا
20 shaft, Bottom seam
McBride Tunnel. No 3 Bench Top seam 338 38 38 30 13 52 15 32 15				∙ଦଃ∉
McBride Tunnel, No. 4 Bench, Bottom section			50,95
9 and 10 shaft		30.32#	155 NB
Western Area, Top seam
Western area, Bottom seam
**Kirrak Basin
Eastern area					ma seringan p
18 shaft
Kirrak area
Other Victorian coals
Jumbunna			10ZN		WEEKLY BEERING 300
Korumburra			15313	N KG
Outtrim			541,
MKilcunda
.Woolami			151105
Cape Paterson		ಸುಃ೧⊭	151 155
Miroo			55.55
Boolarra	456#	***35.21	11111152125

Table 5.3. Comparative Quantitative Coal Analyses from Gippsland Coal Mines, Victoria (Knight, 1975)

PLANET GAS' INTERESTS IN THE GIPPSLAND BASIN

Planet Gas has interests in four exploration licences in the onshore Gippsland Basin - EL 4500, 4535, 4619 and 4620. These licence areas are located to the southeast of Melbourne and contain a major proportion of the known black coal reserves in Victoria. These coals are mainly high volatile, banded bituminous coals with vitrinite reflectance at outcrop and shallow depths of between 0.5% and 0.67%. (Cook, 1981; Constantine and Holdgate 1993, in Holdgate, 2003). This places their maturity between the CBM productive fields of the Bowen Basin and the Surat Basin. Because of the structural complexity of the coal basins it is likely that vitrinite reflectance values are greater at depth, (Paton, 1982, Capital Energy, 1995 in Holdgate, 2003).

it is not possible, from the available data to place a firm figure on the volume of coal in place, as the figures given in the literature apply only to reserves available for mining (Knight, 1975, Gallacher, 2002). The thicker coal seams not mined, the areas too complex structurally to mine plus the seams too thin to mine would all be available. From the data on mineable coal seams at Korumburra (Table 5.3), and assuming the presence of coaly intervals too thin to mine, it seems likely that over 10 metres thickness of coal will be available for CBM production in areas of the Gippsland Basin.

It must be stressed that specific data on which to base possible reserves is not available but the information available in the literature is indicative of the presence of Coal Bed Methane, in addition, the incomplete data on coal volumes

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

suggests that sufficient coal is present for production if porosity and saturation are satisfactory.

The main gas pipeline from the offshore Gippsland Basin oil and aas production area to Melbourne and Sydney passes through the northern tenement offering ease of access to any CBM production.

Based on numerous coal and water wells the licences are known to host Cretaceous black coal seams between the surface and a depth of greater than 300 metres that contain individual seams up to 4 metres thick. It is thought that below these known coal seams may be others that were considered too deep for mining exploration assessment in the past.

While the permeability of the coal itself is not known, the presence of numerous faults throughout the sequence and the general tectonic setting suggest that good cleating and fracturing should be present and provide permeability for gas production. The mines experienced significant problems coping with the methane driven off during mine production.

Parameter	San Juan Basin	EL4500/EL4535EL4619/EL4620
AGE	Cretaceous 65-140 million years	Cretaceous 65-140 million years
THICKNESS	18 to 25 metres coal	10 metres coal(potentially greater)
MATURITY (vitrinite reflectance)	$0.8 - 1.5%$	$0.5 - 0.9%$ (Holdgate, 2003)
PERMEABILITY	High: 10 - 50 millidarcy (Md)	Should be satisfactory because ofstructural features
DEPTH	500 -1000 metres	0 to greater than 300 metres
GAS CONTENT	High: 300 - 500 Scf/t	Unknown (mines reported tobe gassy)
PRESSURE	Over Pressured	Unknown (probably normal)
PRODUCTIVITY	200 - 1,000 Mcfd	Unknown (assume 200 Mcfdor greater)
RESERVES	3 - 10 Bcf per well	Unknown (assume at least 0.5 Bcf.per well)

Figure 5.14. Gippsland Basin Project Title Plan with Infrastructure

Table 5,4 Coal Analysis Table of the San Juan Basin, USA and Planet Gas portion of the Gippsland Basin

Gas Saturation

No references are available giving gas saturation of the coals but the presence of considerable volumes of methane in the mines suggests a reasonable saturation. The only reference with specific data is from an unpublished letter from A.J.Hargreaves, Department of Mining Engineering, University of Sydney (1964) to the General Manager, State Coal mine, Wonthaggi, on gas emissions from the Kirrak mine where he gives emissions from boreholes of up to 2.8 cubic metres per tonne.

Potential

The Gippsland Basin hosts the black coalfields of Victoria which are confined within to the lowest part of the Early Cretaceous Strzelecki Group. Thus, wherever the Strzelecki group is present within the leases, the lowest 100 metres could be prospective. Based on geological mapping, this includes much of the Company's leases. Exploration for the coal with seismic survey tools has been generally unrewarding to date, but modern methods will probably be successful.

The history of the Gippsland black coal measures is one of mine closures due to explosions, gas blowouts and significant problems coping with the methane driven off during mine production. These reports suggest that the black coals are gassy and that there is significant permeability within the seams. Gas samples taken from the Kirrak mine in 1964 contained 77.29% methane, air free, (Hargreaves, 1964, unpublished).

Onshore CBM plays are starting to gain momentum in Victoria with wells planned in both the Gippsland and Otway Basins.

5. OTWAY BASIN, VICTORIA - AUSTRALIA

The Otway Basin is located on-shore and off-shore, southwest Victoria and the southeast South Australia (Figure 5.12.). It covers an area of approximately 150,000 square kilometres of which more than 48,000 square kilometres is located on-shore Victoria.

Geology and Coal Properties of the Otway Basin

Early Cretaceous rifting was followed by Late Cretaceous to Tertiary compressional structures which have resulted in the development of northeast oriented reverse faults and folds. Subsidence continued through the late Cretaceous and Tertiary into the Cainozoic, Cretaceous and Tertiary transgressive-regressive fluviatile and marginal marine deltaic sediments were deposited.

Tertiary and Quaternary reactivation of the earlier fault structures resulted in the development of 'highs' and 'lows' across the basins. These structures define the structural zones of the Basin

The Cretaceous and Tertiary sedimentary sequence rapidly thickens and deepens into the offshore Otway Basin. The basal sequence is called the Otway Supergroup. This unit is a predominantly fluviatile (non-marine) sequence. The overlying late Cretaceous Sherbrook Group is a shallow water, prograding delta sequence with marginal marine sediments at the top. Tertiary sediments of the Wangerrip, Nirranda and Heytesbury Groups overlie the Cretaceous sequence. Pliocene and Pleistocene sediments include extensive sands and volcanics.

Coal seams are known to occur throughout the Cretaceous and Tertiary sequences. Significant seams (for CBM) are confined to the Cretaceous Eumeralla Formation (Killara Coal), and the Warre Formation. Sub-bituminous coal is present in the Cretaceous sediments.

Oil exploration wells have recorded coal seams and the presence of gas associated with the seams. The seams are targets for CBM exploration.

A number of successful conventional natural gas discoveries have been made around the onshore Port Campbell area. Following the recent discoveries offshore from Port Campbell, and establishment of underground storage facilities at Iona, a pipeline to Adelaide (670 km) is now under construction.

Cretaceous coal at Coleraine has a calorific value of 24.6 MJ/kg (dry) (WMC 1982).

CBM exploration is currently in progress in the eastern Otway Basin by Eastern Star Gas Ltd.

JURASSIC		CrayfishGroup	Pretty Hill FormationCasterton Formation
	Otway Super Group	Eumeralla Group*(Killara coal)	Laira Formation
			Waarre Formation
	The process		Flaxman Formation
			Belfast Mudstone
the process of the controland the control of the con-			Paaratte Formation
CRETACEOUS Experience of the Company of the American Street, and the Company of the Company			Timboon Sandstone
			Pebble Point Formation
			Pember Mudstone
state of the first	医腹腔内医牙侧静脉医心脏	Wangerrip Group	Dilwyn Formation
			Mepunga Formation
		Nirranda Group	Narrawaturk Marl
			Gellibrand Marl
		Heytesbury Group	Port Campbell limestone
TERTIARY			Hanson Plains Sand / Basalt

* Coal Seams Present

na Bi

Table 5.5. Stratigraphic Table of the Otway Basin

PLANET GAS' INTERESTS IN THE OTWAY BASIN

In the Otway Basin, the Company has an agreement with Lynch Mining to Earn-In to up to 100% of two licences, once the Department approves and issues them. The licence applications ELA4368 and ELA4369 are near the border with South Australia in the Portland Sub-Basin.

Prepared December 2003 by G.R and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.15 Otway Basin Title Plan with Infrastructure

Thickness and Continuity of Coals

There is little information on coal occurrence in the lease area. In the Heathfield well, drilled in 1964, 1.8 metres of coal was intersected at 380 metres within the Tertiary, 1.5 metres of coal at 1277 metres, 0.6 metres at 1317 metres, 1.2 metres at 1318 metres, 0.6 metres at 1327 metres, 0.6 metres at 1331 metres, and 1.2 metres at 1453 metres. Impure coal seams were intersected at 1655 metres (1.5 metres), 1914 metres (0.9 metres), 2039 metres (0.9 metres) and 2046 metres (0.9 metres) giving a total of 11.7 metres. (Cundill, 1964). No analyses of these coals are available.

Potential

All of the black coal intersections recorded in the Heathfield well are too deep to be of interest for CBM testing. If a structure is present in the area where the seams are much closer to the surface then some potential might exist. Other wells in the lease areas, McEachern No 1, Tullich No 1, Casterton No 2 and Bus Swamp No 1 appear to have less coal in the Eumeralla section than Heathfield No 1 (Rutter, 2001).

Little or no exploration for CBM has taken place near the Planet Gas acreage.

6. WILLOCHRA BASIN, SOUTH AUSTRALIA

The Willochra Basin is located approximately 200 km north of Adelaide, the capital city of South Australia, and about 40 km east of Port Augusta. The basin is an elongate north-south trending Tertiary Basin approximately 50 km long and up to 18 km wide. The township of Quorn is located in the northwest of the licence area.

Geology of the Willochra Basin

The Willochra Basin is a valley within Pre-Cambrian sediments that is filled with fluviatile-lacustrine Tertiary sediments and younger Quaternary and Recent outwash sediments. There is no record of lignites or coal seams within the Basin.

Geology and Planet Gas Interests in the Willochra Basin

Planet Gas has one licence application in the Willochra Basin, Petroleum Exploration Licence Application PELA145. The Company has carried out no exploration work thus far in this basin.

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.16. Willochra Basin Geology, Title Plan and Infrastructure

7. EROMANGA BASIN, SOUTH AUSTRALIA

The Eromanga Basin is extensive, totalling approximately 360,000 square kilometres and covering much of central Queensland as well as a large proportion of northern South Australia.

LATE	TURONIAN		WINTON FORMATION*
CRETACEOUSCENOMANIAN		MACKUNDA FORMATION
	ALBIAN		ALLARU MUDSTONE
			TOOLEBUC FORMATION
	APTIAN		WALLUMBILLA FORMATION
EARLY			CADNA-OWIE FORMATION
CRETACEOUS	NEOCAMIAN		MURTA MEMBER
			NAMUR SANDSTONE MEMBER
	LATE JURASSIC
			WESTBOURNE FORMATION
			ADORL SANDSTONE
	MIDDLE JURASSIC	BIRKHEAD FORMATION*
			HUTTON SANDSTONE*
	EARLY JURASSIC
		POOLAWANNABEDS*	"BASAL JURASSIC"*

* Coal Seams Present

Table 5.6. Stratigraphic Table of the Eromanga Basin

The Eromanga Basin hosts a number of coal seams within the Early Jurassic Poolowanna Formation, sometimes in the basal Hutton Sandstone and the Late Jurassic Birkhead Formation, that need to be assessed locally for gas content and permeability. The Late Cretaceous Winton Formation also contains some coal seams that may be of too low rank for CBM production. Any one of these formations may contain coal seams that have the required depth of burial, gas content and permeability.

PLANET GAS' INTERESTS IN THE EROMANGA BASIN

Planet Gas has applied for a Petroleum Exploration Licence PELA 146, within the Eromanaa Basin, South Australia, which is situated south of the southern margin of the Cooper Basin. The Licence Application is 2679 square kilometres in area and is held one hundred percent by the Company.

This licence application represents a greenfield acauisition because little is known of the occurrence of coal in the area.

Thickness and Continuity of Coals

There has not been any investigation into the thickness or rank of coals in this area. No analyses of coal in the lease are available, so there is no Information on rank, permeability or gas saturation.

Potential

There has been little or no exploration for CBM resources in the vicinity of the Planet Gas acreage in the Eromanga Basin. The main potential for aranet Gas is the possibility of

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.17. Eromanga Basin Project Geology, Title Plan and infrastructure.

hydrocarbons migrating from the Cooper Basin in the north and being trapped in the permit area.

8. GUNNEDAH BASIN, NEW SOUTH WALES - AUSTRALIA

The Gunnedah Basin is an on-shore basin situated in northeast New South Wales. It connects the related Sydney Basin to the south to the Bowen Basin to the north. Recently, the Gunnedah Basin provided the first commercial conventional gas flows in New South Wales from the Coonarah Field to the east of the Planet Gas licence.

Geology and Coal Properties of the Gunnedah Basin

The Gunnedah Basin sediments unconformably overlie deformed and metamorphosed Ordivician to Devonian Lachlan Fold Belt strata in the west and abuts Devonian to Carboniferous New England Fold Belt strata to the east, along the east dipping Hunter-Mooki Thrust. The Basin is divided into the Maules Creek Sub-basin in the east and the West Gunnedah Sub-basin in the west (Stewart and Alder, 1995).

The initial deposition in the Basin was the Early Permian Leard Formation. This is overlain by the lacustrine Goonbri Formation, followed by the coarse volcanolithic sediments of the Maules Creek Formation.

The alluvial Maules Creek Formation gave way to progressively marine facies. The Porcupine and Watermark Formations were deposited on a marine shelf to prograding delta which continued during deposition of the Late Permian Black Jack Group. Inundation followed

with the return of marine conditions. The transgression was short lived. The Hoskisson Coal resulted from widespread peat development. The upper Black Jack Group was deposited in an alluvial system and marked the end of Permian sedimentation. During the Triassic the Digby Formation was overlain by the Napperby Formation. Jurassic to Cretaceous sediments of the Surat Basin unconformably overlie the Permo-Triassic sequence in the north and west and thicken rapidly to the northwest.

The main coal development is represented by the widespread occurrence of the Hoskinsson Seam which provides adequate thickness for CBM entrapment, but is characterised by variable gas contents and gas compositions across the basin. Permeability is also variable.

Reserves of coal in the area are vast, with aggregate coal thickness of up to 80 metres. The Basin has high potential for CBM production. Vitrinite reflectance values vary from 0.5% to 1.30%.

Rapid variations in gas composition have been observed in the Gunnedah Basin. These are thought to be associated with localised igneous activity. Helium has been recorded in some wells (Stewart and Alder, 1995).

PLANET GAS' INTERESTS IN THE GUNNEDAH BASIN

The Company holds a 20% interest in PEL 428 with Strike Oil NL as operator with an 80% holding. During late 2002 the partners drilled two exploration wells in the south of the licence area and discovered gas-depleted coal seams. At present the partners are considering their options.

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Finition 5.1.8 Clandrallson goology af the New South Virties antition of the SurghtQuinnerlah Basine

Prepared December 2003 by G.P. and R.J. McDonagh for inclusion in a Prospectus for Planet Gas Limited

Figure 5.19. Gunnedah Basin Project Title Plan with Infrastructure

* Coal Seams Present

Table 5.7. Stratigraphic Table of the Gunnedah Basin

Numerous companies are now undertaking exploration for CBM in the basin and recently Eastern Star Gas Ltd has discovered a conventional gas field greater than 10 Bcf due east of the Planet Gas acreage.

CONCLUSIONS

Although there is little information on CBM available in the areas discussed, it seems reasonable to assume that the prospect of locating reserves is good for the Gippsland Basin. Although the previous exploration in the Gunnedah Basin lease has been disappointing, the thickness of coal available and its maturity should be regarded as positive factors. Any exploration program in the Otway Basin must be directed to areas where the coal seams, over 11 metres net at Heathfield No 1, are present at economic depths. There is a possibility that, provided structures are present, the Eromanga Basin lease could trap oil and/or gas migrated from the Cooper Basin in the north.

SOURCES OF INFORMATION

This report is based on information and reports made available by Planet Gas and published articles. I have no reason to doubt the veracity of any of the information.

QUALIFICATIONS

Geoffrey P McDonagh received his BSc degree from the University of Queensland in 1961 and post-graduate Honours the following year. He has had over 35 years experience in petroleum exploration in Australia and overseas. This includes experience in CBM, initially in 1977 in the Bowen Basin and again since 1993 during exploration in the Galilee Basin. He has been a member of the American Association of Petroleum Geologists for over 30 years.

DISCLOSURE

Geoffrey P McDonagh has been paid, or will be paid, professional fees on a time-incurred basis for the preparation of this report. Other than these fees he will not receive, or expect to receive, any other benefit from Planet Gas.

BIBLIOGRAPHY

والمجمع

Ayers, W.B. inr	2002 Coalbed gas systems, resources, and production and a review ofcontrasting cases from the San Juan and Powder River Basins, AAPGBulletin, Vol 86 No. 11 pp 1853-1890
Cundill, J.R.	1964 Planet Heathfield No.1, Completion Report Unpublished
Edwards, A.B., Baker, G & Knight, J.L.	1944 The Geology of the Wonthaggi Coalfield, Victoria, Proceedings ofthe Australasian Institute of Mining and Metallurgy New Series, 134: 1 - 59
Galiacher, A.	2002 Review of the Historical Coal Mining Industry in Gippsland andthe potential for Coal Seam Methane Reserves. Victorian Black CoalMining Report
Hargreaves, A.J.	1964 Results of gas emission testing and seam gas sampling, Kirrak Mine.Unpublished letter to the General Manager, State Coal mine, Wonthaggi
Holgate, G.R. & McNicol, M.D.	1992 New Directions - Old Ideas Hydrocarbon Prospects of the StrzeleckiGroup, Onshore Gippsland Basin. Gippsland Basin Symposium Melbourne
Holdgate, G.R.	2003 In Birch, W.D. ed Geology of Victoria pp 489 - 516 Coal. World-classEnergy Reserves Without Limits., Geological Society of Australia,Special publication 23
Knight, J.L.	1975 Wonthaggi and Other Cretaceous Black Coal-fields, Victoria.Economic Geology of Australia and Papua New Guinea, 2, Coal.Australasian Institute of Mining and Metallurgy Monographic Series,6, pp 334-358
Mirams, R.C.	1953 Geological structure of the West Area pit, State Coal Mines,Wonthaggi Proceedings of the Australian Institute of Mining andMetallurgy, 170, pp. 19-45.
Rutter, H.	2001 A Report on the Prospectivity of Coal-Bed-Methane Deposits inS.W.Victoria, for Mineral Services Ltd. Flagsrtaff Geoconsultants,Melbourne (Unpublished)
Stewart, J.R. & Alder, J.D. eds	1995 New South Wales Petroleum Potential, New South Wales departmentof Mineral Resources, Sydney, 188 pp.
Willcox, J.B., Colwell, J.B. & Constantine, A.E.	1992 New Ideas on Gippsiand Basin regional Tectonics. Gippsiand BasinSymposium, Melbourne

EP M Dangt

REPORTS ON TENEMENTS REPORT ON UNITED STATES TENEMENTS

J. L. Obourn. Jr. & Co.

December 17, 2003

Planet Gas Limited Level 8 261 George St Sydney NSW 2000

Re: Planet Gas Limited, Land Title Report, USA

This report ("Report") is prepared for inclusion in a prospectus ("Prospectus") to be issued by Planet Gas Limited (ABN 46 098 952 035) ("Planet Gas" or "Company") to be dated on or about 9 January 2004 for the issue of 60 million new Shares at an issue price of 20 cents per share to raise $12 million. Oversubscriptions of up to 15 million new shares raising an additional $3 million may be accepted by the Company.

1. Scope of Report

This report relates to the Oil, Gas and Coalbed Methane Leases ("Leases") held by Pauper's Dream Company, a Nevada Corporation which we are instructed by the Directors is a wholly owned subsidiary of Planet Gas Limited.

2. Title Materials Provided

The law offices of Kirven & Kirven, located in Buffalo, Wyoming, have supplied a base Ownership Report reflecting surface and mineral ownership for the Esponda Family Mineral Trust. The base report is assumed to be accurate and my searches, refer to item 3 below, proceed from that base report.

3. Searches

Searches have been undertaken of public records at:

. Johnson County Wyoming Clerk and Recorders Office from the time of the base Ownership Report noted above to November 26, 2003, 8:00 AM, specifically as to the lands described under the Leases referred to in the attached schedule. Search results are summarized in 5 below.
. Johnson County Wyoming Clerk of the District Court's office from the base Ownership Report noted above to November 26, 2003, 8:00 AM, specifically as to unsatisfied Liens, Judgments and Pending Actions applicable to the Esponda Family Mineral Trust. Search results are summarized in 5 below.
. Johnson County Wyoming Assessor and Treasurer's Office on November 26, 2003, to confirm the status of property taxes. Search results are summarized in 5 below.
. Wyoming Oil and Gas Conservation Commission records on November 26, 2003, to confirm the presence or lack of wells on the lands leased by Esponda Family Mineral Trust to Pauper's Dream Company.

The information in this Report reflects the result of the searches of the records checked.

4. Notes

. The Leases granted by The Esponda Family Mineral Trust do not cover full mineral interests. Leases #1 and #2 appear of record to cover 1,640.00 gross acres / 1,160 net acres and 11,289.06 gross acres / 9,184 net acres, respectively. Gross acres being one and the same as surface acres and net acres reflecting the mineral ownership within the gross acres.
. The interests of Pauper's Dream Company in the Leases referred to in the Tenement Schedule may have varied pursuant to agreements which are summarized as Material Contracts in Section 9 of the Prospectus. They are not part of this report.
. The underlying Leases have been granted, duly recorded and do not appear to be subject to claims for competing interest.
. There have been several Assignments of Royalty which are noted in 5 below.

2773 West Long Drive . Littleton, CO 80120 (303) 734-8870 • (303) 734-8980 Fax (303) 810-2312 Cell

P.O. Box 1144 . Edwards, CO 81632 (970) 926-6608

5. Discussion of Search Results

. The Johnson County Clerk and Recorder's Office search confirmed the recording of two Leases to Pauper's Dream Company, which are referred to in the attached Tenement Schedule covering mineral interests owned by the Esponda Family Mineral Trust.

11111111111111111111111111111111111111

第三章医生理的

. The Johnson County Clerk of the District Court's Office search confirmed the absence of any Liens, Judgments or Pending Actions in which the Esponda Family Mineral Trust is a party to.
. The Johnson County Assessor and Treasurer's Office search confirmed that 2002 calendar year taxes on surface ownership by Esponda Family have been paid. 2003 calendar year being assessed in December 2003 and due on 31 December 2003. Mineral ownership is not taxed in Wyoming, therefore no taxes are due on full or severed mineral interests owned by the Esponda Family Mineral Trust.
. The Wyoming Oil and Gas Conservation Commission records indicate that no wells are presently located on Lease No. 2 and that several recent coalbed methane wells are located on Lease No 1.
. It should be noted that there were located of record several Assignments of Royalty affecting the mineral interests leased the Esponda Family Mineral Trust and we have inspected each of these, Said recorded Assignments of Royalty are from the Esponda Family Mineral Trust to various parties and are restricted to royalty entitlements held by Esponda Family Mineral Trust, Said Assignments of Royalty do not appear to create a burden on Pauper's Dream Company,
. At the time the Leases were granted by the Esponda Family Mineral Trust, as Lessor to Pauper's Dream Company, as Lessee, Lessor appeared to be the owner of mineral rights, including but not limited to oil, gas and coalbed methane and appeared to have the right to grant valid Leases. In the attached Tenement Schedule the interests of Pauper's Dream Company are noted. There are contractual arrangements between those parties upon which we are not authorized or instructed to comment and reference should be had to the summary of Material Contracts in Section 9 of the Prospectus.

6. Assumptions and Qualifications

This report is based on the following assumptions and qualifications:

. I have relied upon information provided by third parties, including the Offices referred to earlier in this Report, in searches made, or caused to be made by me and I have relied upon that information being accurate, complete and up to date.
. References to areas in the Tenement Schedule are taken from searches obtained from the relevant Offices. I have not undertaken surveys of the land and cannot verify the accuracy of such areas.
. Where agreements are not of record in Johnson County Wyoming that may affect the Leases, I have no information relating to the content of the agreements, nor the potential recording of the agreements. I express no opinion as the effect of recording these agreements, or the consequences of not recording.

7. Consents

I consent to being named in the Prospectus as being responsible for the preparation of this Report and the attached table. I have given, and have not before the lodgement of the Prospectus withdrawn my consent to the issue of the Prospectus with the inclusion of this Report.

I have not authorized or caused the issue of the Prospectus and have not been involved in its preparation.

I will be paid normal and usual fees for the preparation of this Report and related matters. Other than in respect of professional fees I have no interest in the promotion of Planet Gas.

Yours sincerely,

J. L. OBOURN, JR. & CO.

Will

President

Tenement Schedule

Interests in Leasehold

Lease $# 1$

Tenement Area/Identifying Description:

Township 48 North, Range 79 West, 6th P.M. Section 2: Lots 1, 2, 3, 4, S1/2N1/2, S1/2 (all) Section 9: EV2 Section 10: S1/2NE1/4, N1/2SE1/4, SW1/4SE1/4 Section 11: N1/2, SE1/4SE1/4 Section 15: NW1/4NE1/4, N1/2NW1/4 Johnson County, Wyoming

		Country/State Tenement/Lease Date of Grant Expiry Ront Minerals Porcente
	WATECHREGOICECH		раа		Leavered Linieresi		Holder/
							Applicant
USA Myommar	LO4000 crossacres 1,160 net acresBook 287,Page: 541	Bease dated the DecemberDecember 21, 21, 2006:2001 Term: 1Five $(5)$ years $\sim$Esponda Family.Mineral Trust to		Rentals Bea	NIA OLOCISEPaid Up and CoallMethane!!!	HOOK as the book of theWorkthainterest.Subjectificecontractualroyalties)	Portper's*** DreamCompany
353 年1月11日10日1月USA Myoming Unrecorded		illite #Company计调度器্যালক্ষ্য ক্ৰমে বিয়া বিয়ে কৰি কৰিছে। কিন্তু কৰি কৰি কৰি কৰি কৰি কৰি কৰি কৰি কৰি কৰি		- - - N/A - ---		MOII, Gast with Refer Section Pauper's:	超等の
		A affecting above Section 9iease to"Pauper's Dream!" : "Contracts!"Company, seeSection 9Material	Material		BedMethane:	Contracts	cand Coal (9 Material Dream Company
		:Contracts

Lease $# 2$

Tenement Area/Identifying Description:

Township 47 North, Range 80 West, 6th P.M.

Section 1: Lots 3(38.97), 4(38.57), SW1/ANE1/4, S1/2NW1/4, SW1/4, W1/2SE1/4

Section 2: Lots 1(38.47), 2(38.70), S1/2NE1/4, SE1/4NW1/4, E1/2SW1/4, SE1/4

Section 11: N1/2NE1/4, NE1/4NW1/4

Section 12: N1/2NW1/4, NW1/4NE1/4

Township 48 North, Range 80 West, 6th P.M. Section 3: Lot 3(37.77), SE1/ANW1/4, E1/2SW1/4, SW1/4SW1/4, SW1/ANW1/4, NW1/4SW1/4 Section 4: SE1/4SE1/4 Section 9: SE1/4SE1/4, NE1/4NE1/4, NE1/4SE1/4 Section 10: NW1/4SW1/4, SW1/4SW1/4, SE1/4NW1/4, SE1/4SE1/4, NE1/4NW1/4, SW1/4NW1/4, NW1/4NW1/4 Section 11: SE1/4 Section 14: NE1/4, SW1/4, NW1/4 Section 15: E1/2NE1/4, NE1/4SE1/4, NW1/4NW1/4 Section 18: SW1/4NE1/4, N1/2SE1/4 Section 20: W1/2NE1/4, SE1/4NE1/4, SE1/aNW1/4, NW1/4SE1/4 Section 21: S1/2NE1/4, N1/2NW1/4, SW1/4NW1/4 Section 22: S1/2NW1/4, SW1/4 Section 23: NW1/4 Section 26: NE1/4NE1/4

Section 27: NW1/4
Section 35: SE1/4

Lease $# 2$

-24

angelingAngeling

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Tenement Area/Identifying Description: Continued

Township 49 North, Range 80 West, 6th P.M.

Section 1:	Those portions of Lot 3 and the S 1 /2NW1/4 lying within the boundaries of US Interstate HighwayNo 90; those portions of the SE!/ANW!/4 and NW'/LSW!/4 lying within the boundaries of a tract ofland conveyed by Warranty Deed to Simon Harriet, et al, recorded in Book 87A-4 at Page 396in the Office of the County Clerk of Johnson County, Wyoming, SW1/4SW1/4, and all the S1/2NW1/4and NW1/4SW1/4 except those portions conveyed to the State of Wyoming for InterstateHighway 90 by Deed recorded in Book 87A-3, page 266, and to Simon Harriet, et al, by Deedrecorded Book 87A-4, page 396, in the office of the County Clerk of Johnson County, Wyoming
Section 2: E1/2SE1/4
Section 4: SE $1/4$ , SW $1/4$
Section 5: SW1/4
	Section 6: Lot 5(37.97), SW1/4NE1/4, SE1/4NW1/4
	Section 7: Lots 1(38.43), 2(38.52), SE1/4NW1/4, E1/2SW1/4
Section 8: E1/2, NW1/4
	Section 9: NW1/4, E1/2SE1/4, NE1/4
Section 10: SW1/4, SE1/4
	Section 11: S'/2SW1/4, SW1/4SE1/4, SE1/4SE1/4, N1/2SE1/4, NE1/4
	Section 12: SW1/4SW1/4, N1/2SW1/4, S1/2NW1/4
	Section 13: Ei/2SW1/a, SW1/aSW1/a, W1/2SE1/a, NW1/aSW1/a, W1/2NE1/a, W1/2NW1/a, SE1/2NW1/a
	Section 14: SE1/2SW1/4, NW1/4SE1/4
Section 15: W1/2, NE1/4
	Section 17: NEV 4 , NV 2 NWV 4
Section 18: N1/2NE1/4
Section 20: SE1/4
Section 21: W1/2SW1/4
	Section 23: E1/2NW1/a, SW1/aNW1/a, N1/2SW1/a, SW1/aSW1/a
Section 24: W1/2SW1/4
Section 25: W1/2NW1/4
	Section 26; W1/2SW1/4, W1/2NE1/4, E1/2W1/2, SE1/4NW1/4
	Section 27: N1/2SW1/4, NW1/4SE1/4
	Section 28: S1/2SW1/4, SW1/4SE1/4, NE1/4, E1/2NW1/4, N1/2SE1/4
	Section 29: N1/2NE1/4, NE1/4SW1/4, E1/2SE1/4
	Section 33: N1/2NW 1/4, NW1/4NE1/4
	Section 34: NE /4SW /4, W 1/2SE 1/4, NE /4SE /4
	Section 35: NW1/4NW1/4, SW1/4NW1/4
	Township 50 North, Range 80 West, 6th P.M.
Section 28: SE'/4SW'/4
	Section 30: Lots 3(36.46) and 4(36.76), E1/2SW1/4, SE1/2
	Section 31: Lots 1(37.02) and 2(37.22), E1/2NW1/z
Section 32: SE1/4
	Township 48 North, Range 81 West, 6th RM.
	Section 12: W /2NE /4, SW /4
Section 13: NW1/4

指揮ここに神奈子

Lease $# 2$

Tenement Area/Identifying Description: Continued

Country/State	Tenement/LeaseArea Recorded	Date of Grant	ExpiryDate	Rent	MineralsCovered	PercentageInterest	RegisteredHolder/Applicant
	USA Wyoming III/28900001035acres9,184 netscressBook 2871iPage 545 diam.	Lease datedDecember 21.2001 Term; iFive (5) years)Esponda FamilyMineral Trust to(Pauper's Dream(編纂Company	December121,2006	神経学Rentals Bed	OfficesiPalai Uto and CoalMethane.	100%WorkingInterest(subject forcontractud(royalties	Pouper'sDreamCompany
USA Wyoming Unrecorded		For Agreements Referaffecting above Section 9	-55		Oil, Gasand Coal 9 Material	Refer Section Pauper	Dream
		lease to communicated	- 6.868-66		®ed ∵	****Contracts	* Company
		Pauper's Dream"	Contracts		Methane
		Company, seeSection 9:MaterialContracts

$\frac{1}{2}$ .

REPORT ON AUSTRALIAN TENEMENTS

Sean Sexton - Solicitor

1/377 Brunswick St Fitzrov Victoria 3065 Phone/ Fax: 03 9415 7890

0421 661 939

[email protected]

The Directors

Planet Gas Limited Level 8 261 George St Sydney, NSW 2000

Dear Sirs

Re: Planet Gas Ltd

This report ("Report") was prepared for inclusion in a Prospectus to be issued by Planet Gas Limited (ABN 46 098 952 035) ("Planet Gas" or "Company") to be dated on or about 9 January 2004 for the issue of 60 million new Shares at an issue price of $0.20 to raise $12 million. Oversubscriptions of up to 15 million new Shares raising an additional $3 million may be accepted by the Company.

1. SCOPE OF REPORT

1.1 This report relates to the following titles (`Titles'):

Victoria

EL4619 - Gippsland Basin EL4620 - Gippsland Basin EL4500 - Gippsland Basin EL4535 - Gippsland Basin ELA4368 - Otway Basin ELA4369 - Otway Basin

South Australia

PELA145 - Willochra Basin PELA146 - Eromanga Basin

New South Wales

PFL428 - Gunnedah Basin

I have been requested to report on the status of the Titles the subject of the Prospectus, and also the status of any native title claims that overlay the Titles. Additionally I am asked to provide an explanation of the possible implications of native title.

This report is strictly limited to the matters it deals with and does not extend by implication or otherwise to any other matter.

$2.$ SEARCHES

2.1 NSW

On 31 October 2003 I conducted a search of the register maintained by the NSW Department of Mineral Resources.

2.2 Victoria

On 31 October 2003 I conducted a search of the register maintained by the Minerals and Petroleum Victoria.

2.3 South Australia

On 31 October 2003 I conducted a search of the register maintained by South Australian Department of Primary Industries.

2.4 Native Title

I have conducted a search of the Register of Native Title claims at the National Native Title Tribunal ("NNTT") as at 31 October 2003 in respect of the land covered by the Titles.

2.5 Cultural Heritage

I have not conducted a search of the register of Aboriginal heritage sites kept under the various legislative schemes that exist in respect of cultural heritage.

2.6 Background Land Tenure

I am not instructed to conduct any investigations in relation to the tenure history of the land the subject of the Titles for the purpose of identifying land in relation to which native title may be extinguished.

2.7 Searches and Titles

Set out as schedule 1 to this report is a table identifying the Titles and their current status, in respect of validity and holdings and in respect of native title.

The information contained within this report relating to the particulars of the Titles and native title reflects the information contained within the above registers as at the above dates. Where the Titles are not yet granted or renewed, I express no opinion as to whether such Title applications will be granted or renewed.

ENDORSEMENT 3.

3.1 As a result of the above searches, I am satisfied that (subject to my comments in this report):

1. the information I provide in relation to the Titles is accurate;
1. the Titles are in good standing;

3.2 The Company's interest in the Titles in respect of which the Company is not the registered holder arises pursuant to agreements summarised in Section 9, Material Contracts. The agreements establish contractual rights to acquire interests in the Titles which may subsequently be registered on the Titles.

3.3 A transfer of an interest in the Titles to the Company will depend on the Company and other parties complying with the terms of the relevant agreements and the Minister approving an application by the Title holder to vest the tenements entitlements in the Company.

3.4 In respect of competing interests, I have treated this issue such that competing interests or claims are defined to mean where two Titles or projects are proposed over the same ground. Typically this is often characterised by a dispute over who has rights to lodge over a certain area and apply and disputes about orders or priority.

Given the way in which interests in land or other forms of tenure form co existent matrixes, it is to be expected that where there are tenements for petroleum, there will also be tenements for exploration and mining, in addition to tenures for pastoral and other activities, and of course, native title where it exists. Competing interests are not to be conflated or mis-described as competing, where in fact they are more correctly characterised as co-existent. Competing interests or claims occur in specific circumstances, and the searches do not indicate save for the following comments, the presence of any competing claim issues at present.

What effectively this means is that on the searches, there is no evidence of competition or dispute over who holds the ground, or contention over holding it by a third party, as there is not the material in the searches to indicate otherwise. ------------------------------------

It is in this context that I am able to report that there are no competing interests, outside of what is identified in the schedule of tenements, and in particular I refer to the geo thermal energy licence being sought over land the subject of one of the South Australian tenements.

3.5 Scope of Titles

Ani dike

The scope of what the Titles enable the holder to undertake is partially set out in the schedule of tenements. In totality, what is permitted is set out in the legislation, and any Title is subject to the various approval processes applicable to those Titles. Typically this involves submission and approval of exploration work plans, prior to commencement.

3.6 Rentals and expenditure

I have made comments in the schedule, but will note here that the various States have different systems. In NSW and Victoria, an annual rental system is not used, whereas in South Australia, such a system is applied. In NSW and Victoria, fees are payable on grant and renewal.

NATIVE TITLE 4.

$4.1$ Native Title is the term used to describe the pre existing communally held rights and interests in land and waters, established by the law and custom of Australia's indigenous people. These rights were recognized by Australian law in the case known as Mabo v Queensland and others No.2 1992 175 CLR 1 ("Mabo No.2"). Native title is not to be confused or conflated with schemes for statutory land rights that have emerged from the Commonwealth and various Sates. These schemes are about satisfying certain criteria such that land is returned to indigenous people in a form set out by the particular scheme. The freehold grants under the Aboriginal Land Rights (Northern Territory) Act 1976 are one example.

Native title by way of contrast is an entirely different concept. Native title is directly the articulation of law and custom grounding rights now recognized by Australian law. By definition, native title predates the colonisation of Australia, and exists in a literal sense, entirely independent of Anglo Australian law.

4.2 Native Title Act

The Native Title Act 1993 (Cth)("NTA") was enacted as a response to the decision of the High Court of Australia in Mabo No.2 in which the Court held that the common law of Australia recognises a form of title held by indigenous people to lands and waters.

To summarise, the NTA:

(a) provides mechanisms for the recognition and protection of native title;
(b) establishes procedures for determining claims for native title;

(c) makes valid "past acts" which would otherwise be invalid because of native title and enables States and Territories to validate their past acts:

(d) establishes ways in which "future acts" may proceed with the provision of procedural rights to native title holders and claimants, including rights to compensation; and

(e) establishes a "right to negotiate" which is a procedure that provides negotiation and consultation rights for native title holders and claimants in relation to certain future acts such as the grant of mining and petroleum titles.

The NTA is complex and some aspects of the law are still uncertain and subject to continued litigation in the Courts. The NTA only applies to land in respect of which native title rights and interests have not been extinguished by previous "extinguishing acts" such as most grants of freehold title, most perpetual leases and lands that are appropriated or dedicated for public works.

Future acts are any acts that generally have occurred on or after 1 January 1994 and extinguish, or are completely or partly inconsistent with the continued existence, enjoyment or exercise of native title rights and interests. Where future acts are done on land in relation to which native title has not been wholly extinguished, the NTA future act provisions establish the "non-extinguishment principle" to apply to some future acts including the grant of mining and petroleum tities.

It is likely that the Titles the subject of this Prospectus fall into the category of interests that attract the non extinguishment principle. In other words, mining and exploration interests, in general extinguish or impair native title only for the duration of the existence of the Title.

When it expires, the native title effectively is revived, and capable of expression and recognition. I say in general terms, because in specific circumstances, mining interests have been found by the Court's to extinguish native title, However this is largely beyond the scope of this report. It is sufficient to say that in general terms contemporary mining interests do not ordinarily extinguish, and specific impacts need to be ascertained on a case by case basis.

Here, the type of tenures held appear to be of a different character to the large mining project leases formed by legislation for the Argyle project in Western Australia (which is an example of a Court making findings on mining tenures and extinguishment).

Applying the non-extinguishment principle, means any native title rights and interests will continue to exist notwithstanding the grant but will have no effect in relation to a tenement while it is in force. After the title or any valid extension of term, renewal or re-grant of it expires, the native title rights and interests become fully operative again.

4.3 Registration Test

In order to be afforded the procedural rights under the NTA, native title claimants must endeavour to have their claim registered. The registration process requires claims to pass the "registration test" which comprises certain onerous procedural and substantial tests intended to establish a prima facie case for the existence of native title to particular land or waters.

If the registration test is satisfied it will be entered on the Register of Native Title Claims administered by the NNTT and the claimants will then be registered native title claimants and entitled to procedural rights.

4.4 Right to Negotiate

The NTA provides native title claimants with a "right to negotiate" in relation to future acts that create a right to mine (and some compulsory acquisitions). This procedural right provides registered native title claimants with a right to negotiate with the applicant and the State with a view to obtaining their agreement to the grant of the future act, with or without further conditions.

The right to negotiate process commences with public notification, under the NTA, of the title application. Such notification must also include a date specified as the "notification day".

Persons then have four months to become a "native title party" in the right to negotiate process. To become a native title party claimants have their application for a determination of native title registered, by passing the registration test.

A nominal negotiation period of 2 months ensues, at the end of which, parties have the option to seek an arbitration by the NNTT. I say nominal, because in practice, many negotiations will take longer than 2 months to conclude.

There are obligations of good faith in negotiations, which are pre requisites for triggering arbitration. In other words, parties cannot arbitrate if they have not negotiated in good faith.

4.5 Implications of Native Title

I have not been instructed to undertake the probably significant amount of legal, historical, anthropological and ethnographic analysis which would be necessary to form an opinion as to the merits or otherwise of any existing or future claim for native title in respect of the land the subject of the Titles or the implications for the Company 's interests and operations in the event of a determination of native title in the area of the Titles. It is possible that additional claims may be made in the future, over any or all of the tenements the subject of this Prospectus.

As stated above, I am not in a position to judge the chances of success of establishing native title. However what I can say is that where claims have gone through the registration test and passed, they have done so in circumstances where the threshold requirements are onerous and specific, but this does not mean that a claim will ultimately succeed.

Having a registered claim effectively demonstrates a capacity to satisfy the test and ground the procedural rights. Proving native title is a function of having the evidence of law and custom to the satisfaction of the Courts and on the current law, this is a difficult task for many indigenous people to achieve.

The searches yield information as to status of claims. This is set out in the schedule. What they also show is status of any Indigenous Land Use Agreements (ILUA's) that may exist. ILUAs are a specific type of agreement under the NTA, and require notification and registration. ILUAs can be about a wide subject matter and purpose. What the searches show is that in Victoria, there is an agreement on foot as in the parties are currently seeking to register an ILUA, inside the boundary of one of the Titles.

In respect of the Victorian Titles, there are a number that the searches indicate do not contain land subject to native title. I have not gone beyond that assertion, however I have noted that these tenements are nominally within the external boundary of claims that are cast in terms of covering all land where native title is not extinguished inside a given boundary. Given the often derisory connotation, I do not use the term blanket claim. I prefer to characterise these kinds of claims as being country or group based claims, whose specifity is to be determined during the interlocutory phases of the determination in the Federal Court.

In conclusion, the impact of native title on the tenements the subject of this Prospectus is currently characterised as being contingent and procedural.

Contingent in the sense that ultimately native title must ultimately be proved, and procedural in the sense that where claims are currently registered, the procedural rights of the NTA flow to the claimants.

The Company retains the option of joining the native titie ciaims as parties, such that its interests can be recognized as part of any coexistent matrix of interests that result from a determination of native title.

ASSUMPTIONS AND QUALIFICATIONS $5.$

i 12.Emilio Antonio

5.1 This report is based on, and subject to, the assumptions and qualifications set out below and as otherwise specified elsewhere in this Report:

1. I have relied upon information provided by third parties, including the relevant mining departments and the Registrar of Native Title claims at the NNTT, in searches made, or caused to be made, by me and have relied upon that information being accurate, complete and up to date as at the date of its receipt.
1. References to area in the Tenement Schedule and the Schedule of Native Title claims are taken from the searches obtained from the relevant mining departments and the NNTT. I have not undertaken surveys of the land the subject of the Tenements and Tenement Applications and I cannot verify the accuracy of such areas.
1. Where the Tenement Applications that comprise applications for tenements and I express no opinion as to if and when such applications will ultimately be granted in whole or in part.
1. Where agreements have not been registered in relation to granted Tenements or tenements granted as a result of the Tenement Applications, I have had no instructions in relation to the registration of those agreements and express no opinion as to if such registration may be effected, or the consequences of non-registration.
1. Native title or Aboriginal heritage sites or objects may exist in the areas covered by the Tenements and Tenement Applications. I have conducted searches to ascertain what native title claims, if any, have been registered over these areas, but I have not conducted any independent investigations regarding the likely existence or non-existence of native title, Aboriginal heritage sites or objects.
1. Where Ministerial consent is required in relation to any agreements or to the transfer of any granted Tenements or tenements granted as a result of the Tenement Applications, I express no opinion as to if such consent will be granted, or the consequences of consent being refused, although I am not aware of any matter which would cause consent to be refused.
1. Where compliance with the terms and conditions of any Tenement or Tenement Application, including requirements necessary to maintain the Tenements in good standing, approval of work plans as required, or a possible claim in relation to the Tenements or Tenement Applications by third parties is not disclosed on the face of the searches referred to in paragraph (1) above, i express no opinion as to such compliance or claim.
1. No information has been received to indicate whether or not any part of the area of the Titles are the subject of such a declaration and I have not conducted any searches in this regard.

CONSENTS 6.

Sean Sexton - Solicitor, consents to being named in this Prospectus as being responsible for the preparation of this report. I have given, and have not before the lodgment of this Prospectus, withdrawn my consent to the issue of this Prospectus with the inclusion of this report.

Except for this report (including any annexures to this report) Sean Sexton - Solicitor:

have not in any way authorised or caused the issue of this Prospectus;
have not been involved in the preparation of any part of this Prospectus;
are not responsible for any matter included in or omitted from this Prospectus;

4.make no representations or warranties (either express or implied) with respect to the completeness or accuracy of the information contained in this Prospectus; and

disclaim liability to any person in respect of any statement included in or omitted from this Prospectus.

$71$ DISCLOSURE OF INTEREST

Sean Sexton - Solicitor will be paid normal and usual fees for the preparation of this report and related matters. Other than in respect of professional fees, I have no interest in the promotion of the Company.

Yours faithfully

Sean Sexton 10 December 2003

Tenement Schedule

Holdings - Specifications - Native Title

eap	1,143
ğdApplicanRegisterHolder/	Signature NIGolden	778Signature NLGoldenis a	414Directors adviseEnergy Pry Ltdby Planet Gaswholly ownedGreenpowerCompany isthat thisLimited)
Notes	Nill competing interest/LUA – Bassgas Project(Vi2001/010)subject to proposedEL covers an drea.No native ciaimsencumbrancepedpol	Micompeting interest)Tenement inside themipCispatial boundary ofGunal Kumal ClaimNo land subject toencumbrancesBoonerwrungGunal KurnaV¢ 6007/98VG 6005/98native title	Nil competing interest.subject to proposedILUA – Bassas ProjectNo Native title claimsEl covets an drea,encumbrances(VI2001/010)current
	Contractssection 9MaterialRefer toO	Contractssection 9MaterialRefer toO	Contractssection 9MaterialRefer to0
CoveredMinerals	MineralSands78CodCBM.	VineralSandsਨਨCBM.	ndustrialVilneralsVineralSands,ਨCoGold,
CommitmentFinancial	Y3 $152,160.00Y4 $152,160.00Y1 $100,725.00Y2 $129,310.00Y5 $180,450.00	Y4 $108,360.00$131,700.00Y2 $92,800.00Y3 $108,360.00Y1 $73,350.00۹Ś	Y1 $112,400.00Y2 $161,800.00Y3 $97,800.00Y4 $97,800.00Y5 139,200.00
Rent	₹N	$\frac{1}{2}$
볞	12/07ସି	02/07ସି	10/05ఇ
	Application19/11/01	Application19/11/01	Application18/04/00
	Gippsland$E14619 -$Basin	GippslandBasinEL4620-	GippslandVictoria EL4500 -Basin
	Victoria	Victoria

HE WASHINGTON

相信外交医生理的性质中国家和城市 - 19 横甲板 - 10 横甲板 - 10 横甲板 - 10 横甲板

(approx)sq kmArea	23484242
RegisteredApplicantHolder/	by Planet GasLimited)ph Ad Abieu sthis CompanyLynch MiningPfy LtdLynch MiningGreenpoweradvise thatOllectorss whollypedvoPfyld
Notes	、 No noive jie 11.eTenement inside the secondspatial boundary ofin 1991.Ngjarje小地医小学十二Gunal Kurnal ClaimVG 6007/98Coloring to the Company of Company of the Coloring Coloring Coloring Coloring Coloring Coloring Coloring ColorNil competing interest/Nil competing interestyGoundich Mara Clathe land - GoumairdMara ClaimArea Includes nativetitle land - tenementArea includes nativearea covered byNT process (RTN)encumbrancesencumbrancesencumbrancesNT process (RTNcommencedcommencedVG 6004/98VG 6004/98
Percentagehterest	Moterial经外部抵押计多数的制龜神学の生きには、その生き的复数医学家医偏● 特性のありののはせんのの様MateriatContracts● インストランスいっとのうまRefer tosection 9Contracts福林三年南東交易前機Materialiskiei
MineralsCovered	Mineral:MineralsMinerdisSands and無名取りたい中国大学大学、中国大学、中国大学、中国大学、中国大学、中国大学、中国大学、中国大2010年第1章事業事業11. 11. 11. 11. 11. 11. 11. 11. 11. 11.Cod.IndustrialMinerals撮影さんすい电电影
CommitmentFinancial	医皮肤麻痹医心理学医心理学医心理学医心理学医心理学医心理学医心理学医心理学Confidence of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract ofの中に事業の「中国語」を開催した。現代の経済を実施することを実施04/17/03were varied orNote: Y2.3.84Y2 $63,600.00Y3 $69,600.00Y5 $96,900.00579,8000Y4 $69,600.00ApplicationApplication
Reni	ΚÃ.
ExpiryDate	02/06 N/Athe company of1200 年前期ton est医学院iorAppli-Pappli-生活性质お食い(部)1おもの大きい大きく
Grant (orpending)Date of	Victoria ELA 4369 - Application AppVictoria ELA 4369 - Application AppChway - 27/08/98 - CatiLBastr10.2000年10月10日,全國的《日本語》,在1999年,中国的《西方》,中國的《日本語》,在1999年,1999年,1999年,1999年,1999年,1999年,1999年,1999年,199Victorio EL433 - Application 26/Victorio Leippsiand 05/12/00$\begin{bmatrix} \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1} & \text{1$富ندياورافل27/08/98Application1$\begin{array}{c} \frac{1}{2} \left( \frac{1}{2} \right) \ \frac{1}{2} \left( \frac{1}{2} \right) \end{array}$
ReferenceTenementSJα	● 「のののののののののののののののののの科學4精细样理论TTIVictoria ELA4368Website the WaterEuropa estadounidadeOtwayBasin
State	11歳に多様につい一种的细胞的中国电图象糖苷糖等。· 中国の世界の世界によるので、eng计数据库a ang ang

$\begin{aligned} \mathcal{L}(\mathbf{r}) & = \mathcal{L}{\mathbf{r},\mathbf{r}}(\mathbf{r}) \ & = \frac{1}{2} \mathcal{L}{\mathbf{r}}(\mathbf{r}) \ & = \frac{1}{2} \mathcal{L}{\mathbf{r}}(\mathbf{r}) \ & = \frac{1}{2} \mathcal{L}{\mathbf{r}}(\mathbf{r}) \ & = \frac{1}{2} \mathcal{L}_{\mathbf{r}}(\mathbf{r}) \end{aligned}$

$\circledcirc$

(地方) 11:00 mm (地方) 20:00 mm (地方) 20:00 mm (地方) 20:00 mm (地方) 20:00 mm (地方) 20:00 mm (地方) 20:00 mm (地方) 20:00 m(地方) 20:00 mm (地方) 20:00 mm (地方)

مبران أعود سرايت

$\mathbf{g}$	6194	2678	8100
Applicant	PianetGos Ltd	$G$ os LtdPlanet	Strike Oil NL

Noles	Area covered by theBamparia $G6001/98following native titleNukunu $G6001/98AdnyamathanhaKujahi SG6004/9889/100298claims:	No dompeting interestsAred covered by thefollowing marke titleOverlapping part ofPELA 146 is angeothermal energyAdnyamathanhaKuichi SG4004/98application for a8G6001/98icenceclaims:	Tendment issue subjectNo Native title claimsto the RTN beingundertaketcurrent
3nterest	$\overline{5}$	8	Contractssection 9MaterialRefer to
MineralsCovered	gasificationCool seamnethaneIn situ	gastficationCoal seammethaneIn situ	Petroleum
FinancialCommitment	Application19/03/02	Application19/03/02	ÑApplication
Rent	$4,647.75	$2,455.00	upon grantupon grantor renewalor renewalfor 5 yearsfor 3 yearsNo rental$10,000$15,000reSiFee ofFee of$\leq$
	igdyApp$\vec{5}$	σAppहु	ROVਜ਼ੋ
	Application19/03/02	Application19/03/02	Application15/09/98
	PELA145-WillochraBasin	EromangaBasinPELA 146 -iSaint-SaintSaint-Saint	GunnedahPEL428Basin ®
	AustrallaSouth	AustraliaSouth	WalesSouth.New

Code: EL - Exploration Licence

ELA - Expioration Licence Application

: Ratiolaum Exploration I nanna

PELA - Petroleum Exploration Licence Application

CBM - Coal Bed Methane Petroleum – includes hydrocarbansMinerals – in Victoria Includes CBM #####################################

SECTION 7

MATERIAL RISK FACTORS

The Shares offered under this Prospectus are speculative because of the inherent risks associated with CBM exploration, appraisal, development, production distribution and marketing. In addition, there are risks inherent in investing in the share market in general.

This Directors have considered and identified in this Section of the Prospectus some of the risks associated with investing in the Shares. The risks identified by the Directors are not exhaustive and potential investors should read this Prospectus in full and seek professional advice if they require further information on material risks in deciding whether to subscribe for shares.

The principal activities of Planet Gas to date have been limited to organisational activities, project acquisitions, project development and commencement of a drilling program, and accordingly, Planet Gas does not have a record of any revenue-producing operations. Consequently, there is a limited operating history upon which to base an assumption that Planet Gas will be able to successfully implement its business plans and it may not achieve its business goals.

7.1 EXPLORATION AND PRODUCTION RISKS

The business of CBM exploration, project development and production involves risks by its very nature. To prosper, it depends on the successful exploration appraisal and development of economic CBM reserves. Operations, such as design and construction of efficient recovery and processing facilities, competent operational and managerial performance and efficient distribution and marketing services are required to be successful. In particular, exploration is a speculative endeavour whilst production operations can be hampered by force majeure circumstances, engineering difficulties, cost overruns, inconsistent recovery rates and other unforeseen events.

The outcome of the exploration programs outlined in this Prospectus will affect the future performance of the Company and the Shares.

Once Planet Gas commences production, the production may be curtailed or shut-in for considerable periods of time due to any of the following factors:

3 a lack of market demand;
S government regulation;
© pipeline and processing interruptions;
1 production allocations;
® equipment or manpower shortages;
So diminished pipeline capacity; and
1 force majeure.

These curtailments may continue for a considerable period of time resulting in a material adverse effect on the results of operations and financial condition of Planet Gas.

The exploration for and production of natural gas involves certain operating hazards, such as:

well blowouts;
© craterinas:
· explosions;
© uncontrollable flows of natural gas or well fluids:
◎ fires:
S formations with abnormal pressures;
© pipeline ruptures or spills,
O pollution;
leases of toxic gas; and
© other environmental hazards and risks.

Any of these hazards could cause Planet Gas to suffer substantial losses if they occur. Planet Gas may also be liable for environmental damage caused by previous owners of the property Planet Gas holds. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could reduce or eliminate funds available for acquisitions, exploration and development or cause Planet Gas to suffer losses.

Exploratory drilling involves numerous risks, including the risk that Planet Gas will not find any commercially productive natural gas reservoirs. The cost of drilling, completing and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations, including:

@ unexpected drilling conditions;
© pressure or irregularities in formations;
© equipment failures or accidents;
@ adverse weather conditions;
© compliance with governmental requirements; and
Shortages or delays in the availability of drilling rigs and the delivery of equipment.

The future drilling activities of Planet Gas may not be successful, nor can Planet Gas be certain that its overall drilling success rate or its drilling success rate for activity within a particular area will not decline. Unsuccessful drilling activities could have a material adverse effect on the results of operations and financial condition. Also, Planet Gas may not be able to obtain any options or lease rights in potential drilling locations. Although Planet Gas has identified numerous potential drilling locations,

Planet Gas cannot be sure that it will ever drill them or that it will produce natural gas from them or any other potential drilling locations.

7.2 GAS MARKETING

The marketability of natural gas production depends in part on the availability, proximity and capacity of gas gathering and compression systems, pipelines and if necessary, processing facilities. Planet Gas is unable to guarantee, once production begins, that wells will not be shut in for significant periods of time due to the lack of capacity in existing pipelines or an interruption in transportation. Further, Planet Gas will not and cannot guarantee that any additional pipeline capacity required will be completed on a timely basis or that Planet Gas will be permitted to transport any volumes on these pipelines.

Depressed natural gas prices would affect the business. Future revenues, operating results, profitability, future rate of growth and the carrying value of the properties of Planet Gas depend heavily on prevailing market prices for natural gas. Any substantial or extended decline in the price of natural gas would have a material adverse effect on financial condition and results of operations. Various factors beyond the control of Planet Gas will affect prices of natural gas, including:

Supplies of natural gas;
© economic conditions;
@ marketability of production;
© consumer demand;
O the price, availability and acceptance of alternative fuels:
the availability of pipeline capacity;
weather conditions; and
© actions of federal, state, local and foreign authorities.

Hedging transactions may limit potential gains. To manage the exposure of Planet Gas to price risks in the marketing of natural gas, Planet Gas may enter into natural gas price hedging arrangements with respect to a portion of its production. While intended to reduce the effects of volatile natural gas prices, these arrangements may limit potential gains if natural gas prices were to rise substantially over the price established by the hedge. In addition, such transactions may expose Planet Gas to the risk of financial loss.

7.3 ACCESS TO LAND

Delays may be experienced in gaining access to land that is subject to a Planet Gas Tenement.

Several of the Planet Gas Tenements are at the Application stage only and access to land within the Tenement area is dependent upon the tenement being granted.

The Directors believe that the majority of the areas in which the Company wishes to carry out exploration activities are located on freehold lands covered by granted tenements, and therefore the Company should not experience significant delays in gaining access to those areas.

7.4 CULTURAL HERITAGE AND NATIVE TITLE

Delays may be experienced if evidence of native Australian and American occupation or heritage exists on any land to which the Company requires access.

When exercising a right or permission for access to any land Planet Gas will be required by law to act as not to disturb physical evidence of human occupation of pre-historic or historic significance without specific statutory permission.

The Company has not undertaken the research, investigations or enquiries which would be necessary to enable it to form an opinion as to whether any such evidence exists on any land covered by a Planet Gas tenement.

A report on the Australian tenements undertaken by Sean Sexton is included in Section 6 of this Prospectus.

That report indicates that native title claims presently affect land covered by the Planet Gas tenements.

The report indicates there are certain risks relating to Native Title and its impact upon the grant and management of the tenements. It may therefore impact on the business objectives of the Company. For further information on the risks of native title, Applicants should have reference to that report.

The Company has not undertaken cultural heritage or backaround land tenure searches as referred to in the Reports on Tenements in Section 6 of this Prospectus. Accordingly the Company is not able to proffer an opinion as to whether a claim for native title will be upheld or rejected over any particular parcel of land covered by a tenement.

Some of the tenements are over freehold land where native title has been extinguished and no claims have been made for native title. Reference should be had to the Reports on Tenements contained in Section 6 of this Prospectus.

7.5 TITLE

Planet Gas faces competition from other companies in the exploration and development of natural gas and for the acquisition of suitable leasehold interests. This competition could result in an increase in the costs to acquire leasehold interests and/or reduce the margins Planet Gas might achieve on sales of natural gas. Planet Gas competes with a number of companies that possess greater financial, marketing, personnel, and other resources than are available to Planet Gas. As consolidation continues in the Powder River Basin in the USA and the Gippsland, Otway, Eromanga, Willochra and the Gunnedah Basins of Australia, it is expected that leasehold acquisition costs will increase.

Some of Planet Gas' projects are under application and in the future the tenements may be subject to renewals and/or the shedding of area. The Directors are not aware of any reason why applications or renewals of the term of any tenements would not be granted. For further information on the issue of title refer to the Reports on Tenements in Section 6 of this Prospectus.

7.6 ENVIRONMENTAL IMPACT CONSTRAINTS

The Company's exploration and appraisal programs will, in general, be subject to approval by government authorities. Development of any CBM resources will be dependent on the project meeting environmental quidelines and gaining approvals by government authorities.

7.7 EXPLORATION AND APPRAISAL EXPENDITURE

Exploration and appraisal is a process subject to unforeseen contingencies. The exploration program must be flexible enough to respond to results obtained. The actual scope and cost of the exploration program may differ substantially from the proposals set out in this Prospectus. Financial failure or default by any future alliance or joint venture partner of the Company may require the Company to face unplanned expenditure or risk forfeiting interests in relevant tenements.

7.8 GENERAL ECONOMIC CLIMATE

Factors such as inflation, currency fluctuation, interest rates, changes to legislation, political decisions and industrial disruption have an impact on operating costs and on domestic gas prices. The Company's future income, asset values and Share price can be affected by these factors and, in particular, by the market price for any gas that the Company may produce and sell.

7.9 STOCKMARKET CONDITIONS

The market price of the Shares when quoted on ASX will be influenced by international and domestic factors affecting conditions in equity and financial markets. These factors may affect the prices for listed securities and the prices for the securities of petroleum exploration companies quoted on ASX, including Planet Gas,

7.10 FUNDING

Unless and until the Company develops or acquires income producing assets it will be dependent upon the funds raised by the issue and its ability to obtain future equity or debt funding to support exploration, evaluation and development of the properties in which it has an interest.

The Company's ability to raise further equity or debt, or to divest part of its interest in a project, and the terms of such transactions will vary according to a number of factors, including the success of exploration results and the future development of the projects, stock market conditions and prices for gas in the USA and Australian gas markets.

7.11 KYOTO PROTOCOL

The Kvoto Protocol to the United Nations Framework Convention on Climate Change was negotiated in December 1997 and aims to reduce emissions of greenhouse gases. The Protocol becomes legally binding once it is ratified by 55 countries, incorporating countries included in Annex I to the Convention (ie. Developed countries). These countries must account in total for at least 55 % of the total carbon dioxide emissions of the Annex I countries for 1990. To date, Australia and the USA have not yet ratified the Protocol.

The Protocol assigns to each Annex I country an entitlement to emit not more than a fixed quantity of greenhouse gases during a five year commitment period commencing in 2008. The entitlement is known as an "assigned amount". Australia's assigned amount is 108% of its 1990 emissions while the USA is assigned 93% of its 1990 emissions.

The Protocol covers the six main greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

The Protocol provides for reductions in emissions by carbon sinks (that is, processes or activities that remove greenhouse gases) resulting from direct human-induced land use change and forestry activities, limited to afforestation and reforestation.

The Company, as an emitter of greenhouse gases in the course of its exploration and, potentially, extraction activities, may face cost increases if the Protocol is implemented, or if the Australian or United States Governments implements a regime for carbon emissions in advance of the application of the Protocol. Such cost increases may be associated with the monitoring of the Company's carbon emissions, and measures taken by the Company to reduce its emissions or the purchase of carbon credits. As the regulatory regime has not yet been developed, and the timing is uncertain, the Company cannot assess what effect, if any, the introduction of an emission regime would have on the Company.

The implementation of restrictions on the emission of greenhouse gases may however impact favourably on the Company, in that CBM may obtain a cost advantage over other fuels. This cost advantage would arise if the production or combustion of CBM produces lower amounts of greenhouse gases than would be produced in the production or combustion of other fuels, such as coal.

ADDITIONAL INFORMATION

8.1 RIGHTS RELATING TO SHARES

For details of the rights attaching to the Shares, potential investors should refer to the Company's Constitution. A copy of the Constitution is available for inspection at the Company's registered office. The rights attaching to the shares are summarised below.

This summary does not purport to be exhaustive or to constitute a definitive statement of the rights and liabilities of shareholders.

Voting Rights

Members are entitled to notice of and to attend and vote at general meetings. Subject to any Shares which may in the future be issued with special or preferential rights (at present there are none), every Shareholder present in person or by proxy, attorney or representative has one vote on a show of hands, and, on a poll, has one vote for each fully paid Share.

Dividends

The Directors may declare a dividend to be paid to the Shareholders entitled to that dividend out of the profits of the Company.

Capitalisation of Profits

Subject to the Listing Rules, the Directors may capitalise and distribute any undistributed profits of the Company.

Issue of Shares

Without prejudice to any special rights conferred on the holders of any Shares or class of Shares (at present there are none) and subject to the Constitution, the Corporations Act and the Listing Rules, the Directors may issue Shares and other securities on such terms and conditions as the Directors think fit.

Transfer of Shares

A member may transfer Shares by a market transfer in accordance with any system recognised by the Listing Rules and effected in accordance with the SCH Business Rules or an instrument in writing in any usual form or in any other form approved by the Directors or recognised by the Corporations Act or the Listing Rules.

The Directors may decline to register a transfer in the circumstances so required or permitted under the Listing Rules or the SCH Business Rules, or if the transfer is not in a registerable form by giving written notice of refusal to the transferee and lodging broker.

Rights on Winding Up

The liquidator in a winding up may, with the sanction of a special resolution of members, divide among the members the whole or any part of the property of the Company and determine how the division is to be carried out as between the members or different classes of members.

Subject to any Shares which may in the future be issued with special or preferential rights (at present there are none), the surplus assets of the Company after winding up will be divided among the members in proportion to the number of Shares held by them subject to any amounts unpaid on the Shares.

8.2 DIRECTORS

The minimum number of Directors is 3 and the maximum is 10 unless the Company in a general meeting determines otherwise. A Director is not required to hold any Shares. At the Annual General Meeting one third of all Directors will retire from office and Director (excluding a Managing Director) must retire at least every three years.

The Directors' may exercise all powers of the Company as are required or permitted by the Corporations Act, the Listing Rules or the Constitution, to be exercised by the Company.

As at the date of this Prospectus no new Directors are proposed to be appointed.

Directors' Indemnity

To the extent permitted by law and without limiting the powers of the Company, the Company must indemnify each person who is and has been an officer of the Company against any liability which results from facts or circumstances relating to the person serving or having served in that capacity provided that it does not arise out of conduct involving a lack of good faith, for costs and expenses incurred by the person defending proceedings in which judgment is given in favour of the person or in which the person is acquitted or in connection with an application in which the Court grants relief to the person under the law.

8.3 LITIGATION

As at the date of this Prospectus, there is no litigation of any nature pending or threatened against or which may significantly affect the operations of the Company.

8.4 TAXATION OBLIGATIONS

The taxation obligations and the effects of participating in the Issue may vary depending on the circumstances of each individual Shareholder, the particular circumstances relating to their holdings of Shares and

the taxation laws applicable to Shareholders as resigents of different jurisdictions.

Shareholders who are in doubt as to their taxation position should seek professional advice. It is the responsibility of individual Applicants to inform themselves of their taxation position resulting from participation in the Issue.

8.5 CORPORATE GOVERNANCE

The Directors determine the strategic direction of the Company and monitor the business affairs on behalf of Shareholders. The Board is committed to the view that the maintenance of a properly informed market in accordance with the ASX continuous disclosure obligations is in the best interests of Shareholders.

The Board acknowledges and endorses the ASX Principles of Good Corporate Governance and the Best Practice Recommendations and proposes to enact and follow such of the best practice recommendations guidelines as is considered appropriate for the size of the Company, its development status and the attaining of its corporate and business objectives.

8.6 CASH COSTS OF THE ISSUE

The total expenses of the Issue and associated costs payable by the Company are estimated to be approximately $630,000 made up as follows:

Commissions to brokers	480,000
ASX/ASIC fees	40,000
Legal fees	15,000
Independent geologists fees	15.000
Prospectus preparation	10,000
Printing and associated costs	50,000
Marketing and postage	10,000
Miscellaneous expenses	10.000
	ุ หาก หาก

Commissions to Brokers

The Company will pay commissions for Applications bearing a stamp of a Member Organisation of the ASX and accepted by the Company. An amount of $480,000 has been allowed for in the budget (based upon the $12 million Offer).

Enquiries

Enquiries regarding this Prospectus should be directed to the Company on +61 2 9247 5112.

8.7 INTERESTS OF DIRECTORS

At the date of this Prospectus, the Directors and their related entities held the following relevant interests in the Company's Shares:

$3114882$ $9111$
	Infer
N A Seckold	22,875,002
A J McClure3,000,000	Nil
A J McDonaldNil	3,000,000
PJ Nightingale	3,000,000
BF Riederer4,000,000	Nil
N J Zillman	4,000,000

In addition, at the date of this Prospectus, the Directors and their related entities held the following relevant interests in the Company's convertible notes, each of which will convert to 6.25 Shares in accordance with the terms are set out in Section 9 of this Prospectus;

Director Internal Director Interest Related EntityHARRY COMMUNIST CONTROL
N A SeckoldNil	100,000
A J McClureNil	Nil
A J McDonaldNil	Nil
P J NightingaleNil	100,000
B F RiedererNil	Nil
N J ZillmanΝIΙ	Nil

There are currently no options over Shares in the Company on issue.

Directors' Remuneration

Under the Company's Constitution, the Directors are entitled to be paid such remuneration as is authorised by an ordinary resolution of the Company in general meeting (excluding remuneration of Managing or Executive Directors). The Directors are currently entitled to receive a maximum of $150,000 to be divided between them as Directors' fees.

If a Director undertakes any work additional to that usually required of Directors of a company similar to this Company, the Directors may decide to pay that Director additional remuneration which is not included in the above limits. Directors are also entitled to travelling expenses for or in connection with the Company's business. The remuneration of any Managing Director or Executive Director for his services shall be determined by the Directors.

It is proposed that Bruce Riederer will be an Executive Director heading exploration and development. A salary of $180,000 has been budgeted.

8.8 INTERESTS OF EXPERTS

No person named in this Prospectus as performing a function in a professional or other capacity in connection with the preparation or distribution of this Prospectus holds, or has at any time during the last two years held, any interest in:

® the formation or promotion of the Company;
@ property acquired or proposed to be acquired by the Company in connection with:
- the formation or promotion of the Company; or
- the offer of Shares under this Prospectus.

8.9 PAYMENTS OR BENEFITS TO EXPERTS

J.L. Obourn, Jr. & Co. has prepared the Land Report included in Section 6 of this Prospectus concerning Planet Gas' Wyoming, USA tenement holdings. In respect of this work the Company has agreed to pay US$5,000 for these services.

Sean Sexton has prepared the Solicitor's Report included in Section 6 of this Prospectus concerning Planet Gas' Australian tenement holdings. In respect of this work the Company has agreed to pay $5,000 plus disbursements for these services.

D. Keith Murray has prepared the Independent Geologist's Report included in Section 5 of this Prospectus concerning Planet Gas' Wyoming, USA tenements holdings. In respect of this work the Company has agreed to pay US$5,000 for these services.

G.P. and R.J. McDonagh have prepared the Independent Geologist's Report included in Section 5 of this Prospectus concerning Planet Gas' Australian tenements holdings. In respect of this work the Company has agreed to pay $5,000 for these services.

8.10 CONSENTS

The Directors have given their consent to the lodgment of this Prospectus with ASIC and have not withdrawn this consent prior to lodgment. The following persons have given, and have not before the lodgment of this Prospectus, withdrawn consents in the terms specified:

J.L. Obourn, Jr. & Co. has given consent to the inclusion of his Report on Tenements and statements based on this report in this Prospectus in the form and context in which they are included.

Sean Sexton has given his consent to the inclusion of his Report on Tenements and statements based on this report in this Prospectus in the form and context in which they are included.

D. Keith Murray has given consent to the inclusion of The Independent Geologist's Report, and the statements based on that report, in this Prospectus in the form and context in which they are included

G.P. and R.J. McDonagh has given consent to the inclusion of The Independent Geologist's Report, and the statements based on that report, in this Prospectus in the form and context in which they are included.

MATERIAL CONTRACTS

The summary which follows relates to contracts to which the Company, or one of its subsidiaries, is a party that may be material or otherwise may be relevant to a potential investor in the Company.

EL4500 and 4535 (Gippsland Basin) $\mathbf{I}$
Greenpower Share Acquisition Agreement А. dated 10 July 2002 ("Share Acquisition Agreement")

Under the Share Acquisition Agreement between Planet Gas and various parties unrelated to Planet Gas ("the Vendors"), Planet Gas purchased all of the issued shares in Greenpower Energy Pty Ltd from the Vendors.

The transactions under the Share Acquisition Agreement were completed in August 2002 excepting that the Vendors are entitled to be issued with the balance of the consideration consisting of Planet Gas shares to the value of $500,000. The number of shares is calculated by dividing that sum by:

The average trading price of the Planet Gas shares i) over the first five trading days immediately following the listing of those shares on ASX; or
The same price at which shares are offered to the $\mathsf{ii}$ public under a prospectus.

Planet Gas is entitled to choose whichever of those two methods it determines.

The Share Acquisition Agreement also provided for Planet Gas to enter into the Greenpower Royalty Deed (refer below) with the Vendors.

Greenpower Royalty Deed ("Royalty Deed") В.

The Rovalty Deed provides that a 2% Well Head Value rovalty will be paid on all coal bed methane produced from Exploration Licences numbered 4500 and 4535. Well Head Value is the value of coal bed methane or its products as sold, after deducting any State Royalty, all costs, direct and indirect, (other than capital costs) incurred in connection with the recovery, gathering, cleaning, compression, transportation and disposal of the CBM to the point of sale.

The royalty is payable throughout the term of any tenement licence or other form of title or right granted relating to Exploration Licences numbered 4500 and 4535.

EL4619 and 4620 (Gippstand Basin) $2.$

Koo Wee Rup Earn-In Agreement dated A. 24 June 2002 ("Earn-in Agreement")

Golden Signature NL ("Golden Signature") and Planet Gas entered into an Earn-in Agreement by which Planet Gas earned a 50% interest in each of EL4619 and 4620, by reimbursing Golden Signature one half of all of Golden Signature's direct expenses relating to EL4619 and 4620.

Thereafter the Parties were to continue in Joint Venture with Planet Gas having a right to earn a further 25% interest.

All of the rights under the Earn-In Agreement merged when the Koo Wee Rup Joint Venture Sale Agreement was signed (refer paragraph B).

Koo Wee Rup Joint Venture Sale Agreement В. dated 12 August 2003 ("Sale Agreement")

This Sale Agreement provided that Planet Gas would purchase the Joint Venture interest of Golden Signature under the Koo Wee Rup Earn-In Agreement by the replacement of bonds, reimbursement of expenses and the assumption of expenditure obligations by Planet Gas.

Ministerial approval to the transfer was granted in December 2003 and processing of the transfer is taking place.

ELA4368 and 4369 (Otway Basin) Heads of $\mathbf{3}$ Agreement dated 5 December 2003 ("Heads of Agreement")

Lynch Mining Pty Ltd ("LMPL") and Planet Gas entered into a binding Heads of Agreement by which Planet Gas has assumed the obligation and expense of administering on behalf of LMPL all of the requirements which are preconditions to the grant of the Tenements ELA 4368 and 4369. This will include native title matters.

Planet Gas will reimburse LMPL $100,000 and meet all of the costs, including the first year expenditure in order to earn a 100% interest in the Tenements.

PEL428 (Gunnedah Basin) Joint Operating 4. Agreement dated 15 November 2003 ("JOA")

Strike Oil NL ("Strike") and Davidson Consulting Pty Ltd ("Davidson") - a subsidiary of Planet Gas - signed a Letter of Offer and Acceptance on 16 October 2002 under which Davidson earned a 20% interest in PEL428.

The JOA was entered into to regulate the relationship between Strike and Davidson and to provide for the further exploration, appraisal, development and production of Petroleum under PEL428.

Strike is the operator under the JOA and the parties are required to contribute in proportion to their respective

percentage interests to all future expenditure. Subject to that contribution any product won or recovered under the JOA will be separately owned by the parties in those proportions.

The JOA provides for an adjustment of the proportions in the circumstances where sole risk exploration and development is undertaken or when one party elects not to proceed with its contributions.

The JOA remains in force until all joint property has been disposed of and whilst the licence remains in place.

5. Esponda Project Powder River Basin Leases (USA)

A. Oil Gas and Coalbed Methane Leases dated 21 December 2001

Pauper's Dream Company, a Nevada Corporation and wholly owned subsidiary of Planet Gas, entered into two Oil Gas and Coalbed Methane Leases ("the Leases") with Esponda Family Mineral Trust ("Lessor").

The Leases are over the areas referred to in the land title report of J.L. Obourn, Jnr. & Co. appearing in Section 6 of this Prospectus. The Lease area extends from surface to the base of the Lance Formation (refer to the report of D. Keith Murray in Section 5 of this Prospectus).

The Leases provide exclusivity to Pauper's Dream Company for the purposes of drilling, exploring, operating and producing oil, gas, including coal bed gases, liquid hydrocarbons and their respective constituent elements, casinghead gas or other gaseous substances produced from the leased area.

The term of each Lease is for five years and if, during that five year period gas is produced from the leased area or on acreage pooled or unitised with the leased area the Lease will continue whilst so ever gas is being produced. If gas is not then being produced the Lease will only continue if Pauper's Dream Company is then engaged in drilling, reworking or dewatering operations on the leased area and in which case it will continue whilst those operations are continuously prosecuted (with maximum 90 day rest periods). Pauper's Dream Company will have the first right to re-lease the areas covered by the current leases if within 6 months of the expiry of the leases the Lessor elects to lease the land to another Party.

Each Lease is a paid-up Lease and the Lessor will not be obliged to commence or continue operations during the initial five year term.

Pauper's Dream Company will pay the following royalties to Esponda Family Mineral Trust:

On oil 20% of all oil produced and sold from the $\alpha$ leased area:

b). On gas 20% of the net proceeds realised by Pauper's Dream Company from the sale at the well, including adjustments but such that any payment will be free and clear of all "costs of production" as defined in the Wyoming Royalty Payment Act;
On any product other than oil and gas 20% of the $\circ$ ) net proceeds realised from the sale at the well.

Pauper's Dream Company has the right to pool or unitise its interest under the Leases and to otherwise deal with its interests.

B. Surface and Damage Agreement dated 20 December 2001

By an Agreement between Pauper's Dream Company and Esponda Ranch Limited Partnership the Esponda Ranch Limited Partnership granted Pauper's Dream Company rights of access and use of the surface over the land referred to in the Leases.

The rights granted give access for drilling operating and production of oil, gas and coal bed methane wells from the surface to the base of the Lance Formation. The rights extend to the installation and operation of wells, roads, pipelines, power lines, pod sites, gathering systems and other facilities to be located on the Esponda Ranch Limited Partnership's land.

The rights continue whilstsoever the Leases continue. The rights granted are non-exclusive so as to protect the Esponda Ranch Limited Partnership's entitlement to use and have access through roads and the use of surfaces and sub-surfaces and in particular for farming and domestic waterlines.

Pauper's Dream Company will be required to make the following payments to the surface rights owner:

$\alpha$ US$1,000 for each stratigraphic test well drilled;
US$1,800 for each well: $b)$
US$1,000 per annum for each well which remains c) on site;
$d)$ For use of roads US$8 per rod for existing roads plus a further US$0.50 per rod for each well in excess of 10 wells operated:
$e)$ US$5 per rod for each gas pipeline beyond a pod or compressor facility installed by Pauper's Dream Company and US$2.50 per rod thereafter for each pipeline unless the pipelines are in the same ditch in which case a single payment is all that is required.

The Agreement regulates the installation of power lines, metering and compression sites, installation of facilities and access to them.

Upon completion of any project or part of a project the surface is to be returned to a like state in which it was found.

The Agreement covers all of the same areas referred to in the Leases.

Kennedy Oil - Farm-Out Agreement dated $C_{1}$ 1 June 2003

By way of Farm-Out Agreement between Pauper's Dream Company and Kennedy Oil, a Wyoming corporation, Kennedy Oil was granted exclusive rights by Pauper's Dream Company to earn an interest in a part of $the 1 0 0 0 0 0$

The Farm-Out Agreement refers to Contract Acreage Tracts I and II.

Tract I covers:

Township 48 North, Range 79 West, 6th P.M.

Section 9: E1/2

Section 10: W/2SE1/4 and

Section 11: N1/2.

Tract II covers:

Township 48 North, Range 79 West, 6th P.M.

Section 10: S1/2NE1/4, NE/4SE1/4

Section 11: SET/4SET/4 and

Section 15: NW1/4NE1/4, N1/2NW1/4.

For purposes of the Farm-Out Agreement Planet Gas commenced its arrangements as entitled to 100% of Tract I area and 50% of Tract II area.

By undertaking its work, Kennedy Oil is in the process of earning a 60% interest (of the Pauper's Dream Company's entitlement) in the Tract I area and a 50% interest (of the Pauper's Dream Company's entitlement) in the Tract II area.

Kennedy Oil is required to sole risk the drilling of a well for coal bed natural gas and drill to approximately 2,200 feet (670 metres) or a depth sufficient to test the "Big George" coal member of the Fort Union Formation.

Kennedy Oil in each instance is entitled to recoup, after payment of royalties to Esponda Family Mineral Trust, its entire costs of drilling, testing and completing the initial well, including its cost of operating the initial well. After recovery of that amount Pauper's Dream Company is entitled to revert to a 40% working interest or convert that 40% interest to a reserved Overriding Royalty Interest equal to 1.5% of gross product from the Fort Union Formation.

Pauper's Dream Company and Kennedy Oil will enter into an Operating Agreement to regulate their relationship and to provide for further exploration, appraisal, development and production. Kennedy Oil will be the Operator and will take responsibility for management.

Pauper's Dream Company and Kennedy Oil will then be required to contribute in proportion to their respective percentage interests to all future expenditure.

The Governing Law is that of the State of Wyoming, USA.

Lance Oil & Gas Company, Inc - Model Form D. Operating Agreement dated 1 January 2003

Adopting the American Association of Petroleum Landmen Form 610 - 1998 Model Form Operating Agreement, ("Operating Agreement") Lance Oil & Gas Company, Inc ("Lance Oil"), Williams Production RMT Company ("Williams") and Pauper's Dream Company have appointed Lance Oil to be Operator under the terms of the Operating Agreement. Lance Oil, Williams and Pauper's Dream Company each hold various percentage interests in the areas referred to below. The approximate interest held by Pauper's Dream Company expressed as a percentage is shown in brackets below.

Township 48 North, Range 79 West, 6th P.M.

Section 2: Lot 1, SE/4NE/4 (19.8%)

Section 2: Lot 2, SW/4NE/4 (24.7%)

Section 2: Lots 3, 4, S/2NW/4, S/2 (25%)

Section 11: E/2SE/4 (50%) and

Section 15: W/2NE/4 (50%)

Lance Oil and Williams own the balance of any percentage interest and such interests are also regulated under the Operating Agreement.

The Operating Agreement regulates the relationship between Lance Oil, Williams and Pauper's Dream Company in relation to the acreage covered by the Operating Agreement and provides for further exploration and development.

Lance Oil is appointed as Operator and the parties are required to contribute in proportion to their respective Percentage Interests to all future expenditure. Subject to that contribution any product won or recovered under the Operating Agreement will be separately owned by those parties in those proportions.

The Operating Agreement provides for an adjustment of the proportions in the circumstances where sole risk exploration and development was undertaken or when one party elects not to proceed with its contributions.

The Operating Agreement remains in force for the duration of the Leases.

The Governing Law is that of the State of Wyoming, USA.

Convertible Notes 6.

A. Convertible Note dated 24 December 2001 (Subseauently Varied) ("Colonial Convertible Note")

Colonial First State Investments Limited in its capacity as Trustee of the Colonial First State Wholesale Global Resources Fund ("Colonial") advanced $2,000,000 to Planet Gas and was issued 4,000,000 unsecured convertible notes having a principal amount of 50 cents each. The notes are convertible on the date upon which the Planet Gas Shares are listed on ASX.

If a listing of the Planet Gas shares on ASX, or other stock exchange, is not achieved by the Maturity Date of 8 April 2004 (or extended date) the whole of the principal amount ($2,000,000) will be repayable to Colonial.

The Convertible Note contains an undertaking that if repayment cannot be made that the Planet Gas leasehold interests in the Powder River Basin in USA will be sold to facilitate that repayment if necessary.

On the Conversion Date (date upon which Planet Gas Shares are listed on ASX) each convertible note having a principal amount of 50 cents will be convertible to Planet Gas shares having a value equivalent to $1.25 per note (being based upon the retail price of which shares are offered under the Prospectus) so that the $2,000,000 advanced will be convertible to $5,000,000 payable in Planet Gas shares (25,000,000 shares at 20 cents).

Other Convertible Notes - Various Dates B. ("Other Notes")

The sum of $500,000 has been advanced to Planet Gas on the basis of the Other Notes. The Other Notes are on identical terms to the Colonial Convertible Note in terms of the Maturity Date, Conversion Date and the conversion rate.

$\left|\frac{\xi_{\rm max}^2}{\delta \xi_{\rm max}^2} \frac{\xi_{\rm max}^2}{\xi_{\rm max}^2} \right| = \left|\frac{\xi_{\rm max}^2}{\xi_{\rm max}^2} \right| \left|\frac{\xi_{\rm max}^2}{\delta \xi_{\rm max}^2} \right| = \frac{1}{\delta \epsilon} \left|\frac{\xi_{\rm max}^2}{\delta \xi_{\rm max}^2} \right|$

DEFINITIONS, GLOSSARY AND CONVERSIONS

DEFINITIONS

AEST	means Australian Eastern Summer Time.
Applicant	means a person making an Application.
Application	means a valid Application made to subscribe for a specified number of Shares.
Application Form	means the Application Form provided with this Prospectus.
ASIC	means the Australian Securities & Investments Commission.
ASX	means Australian Stock Exchange Limited.
Board	means the Board of Directors of the Company.
CHESS	means Clearing House Electronic Sub-register System.
Closing Date	means T9 March 2004 being the last day by which Applications will be accepted, or suchother date as is determined by the Directors to be the closing date for the Issue.
Company or Planet Gas	means Planet Gas Limited ABN 46 098 952 035.
Constitution	means the Constitution of the Company.
Corporations Act	means the Corporations Act 2001 (Commonwealth).
Director	means a member of the Board of Directors of the Company.
Dollars or $	means the currency of Australia unless denoted otherwise.
EL.	means an Exploration Licence.
ELA	means an Exploration Licence Application.
Exposure Period	means the period of 7 days (or longer as ASIC may direct) from the date of lodgement ofthe Prospectus with ASIC.
Founder Shares	means 47,125,005 Shares issued to the founders of the Company.
Issue	means the issue of Shares under this Prospectus.
Listing Rules	means the official Listing Rules of the ASX.
Offer	means the offer of shares in Planet Gas Limited made under this Prospectus.
PEL	means an Exploration Licence.
PELA	means an Exploration Licence Application.
Planet Gas Tenements	means the Tenements in which Planet Gas holds or may earn an interest.
Project Vendor Shares	means Shares to be issued under the Greenpower Share Acquisition Agreement (Item 1,Section 9 of this Prospectus).
Prospectus	means this Prospectus dated 9 January 2004.
SCH	means ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532, being theSecurities Clearing House of ASX.

SCH Business Rules	means the business rules of the SCH.
Seed Capital Shares	means 44,875,000 Shares issued by the Company in consideration of providing projectacquisition and working capital to the Company.

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GLOSSARY

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adsorption	the attraction exerted by the surface of solid matter (coal) for a liquid or gas with whichthere is contact.
anticline	a fold in rocks in which the beds are convex upwards.
ash	the inorganic residue after burning coal.
barrel	a volumetric unit of measurement equivalent to 0.159 cubic metres or about 160 litres.
basin	a segment of the earth's crust that has down-warped and in which sedimentshave accumulated.
bbls	Barrels.
bblsd	barrels per day.
Bcf	billion cubic feet ( $10^9$ cubic feet).
bituminous	coal that contains between 15% and 20% volatile matter.
CBM	coal bed methane.
CI	contour interval.
cleat	a joint, or system of joints, along which coal fractures.
coal	a readily combustible rock formed by compaction and induration of plant remains.
coal bed methane	natural gas (mostly methane) contained within coals (CBM).
coal bed stimulation	artificially creating fractures within a coal bed around the well bore.
Cooper Basin	a sedimentary basin containing Carboniferous and Permian sediments in Queensland andSouth Australia.
core	a cylindrical piece of rock taken as a sample by a special hollow drill bit.
Cretaceous	a period of geological time between about 135 and 65 million years ago.
Eromanga Basin	a sedimentary basin containing Jurassic and Cretaceous sediments in Queensland,New South Wales and South Australia.
fracture	any break in a rock caused by mechanical stress.
gas blowout	gas flowing freely from a well.
Gippsland Basin	a sedimentary basin containing Tertiary and Cretaceous sediments in Victoria.
Gί	gigajoule (10 $^{\circ}$ joules).
gross hectares (acres)	the total area of interest including third party interests.
Gunnedah Basin	a sedimentary basin containing Permian, Triassic and Jurassic sediments inNew South Wales.
high volatile	coal with more than 31% of volatile matter analysed on a dry, mineral-matter-free basis.
hydrocarbon	an organic compound of carbon and hydrogen; includes oil, gas and condensate,commonly referred to as petroleum.
hydrostatic	pressure exerted by a fluid at rest.
isopach map	a map which represents the thickness of a unit (coal) by means of lines drawn throughpoints of equal thickness.

isotnerm	a graph aerived from measurements taken over time at a constant temperature.
Joule	unit of energy.
Jurassic	a period of geological time approximately 195 to 135 million years ago.
lignite	a brownish-black coal.
maceral	organic units that comprise coal.
Mcf	thousand cubic feet (10 3 cubic feet).
Mcfd	thousand cubic feet per day.
Мd	Millidarcy (permeability measurement).
methane	the lightest hydrocarbon gas; $CH4$ .
migrate	the movement of hydrocarbons through rocks.
MJ/kg	megajoules (10 6 joules) per kilogram.
MMcf	million cubic feet (10 6 cubic feet).
MMcfd	million cubic feet per day.
net hectares (acres)	the total area of interest less third party interests.
Otway Basin	a sedimentary basin containing Cretaceous and Tertiary sediments in Victoria andSouth Australia.
Permeability	the capacity of a rock (coal) to transmit a fluid.
Permian	a period of geological time between approximately 280 and 225 millions ago.
pore space	a small to minute space within a rock.
Porosity	the ability of a rock (coal) to contain fluid in interstices.
Powder River Basin	a sedimentary basin in the USA that has substantial production of CBM.
proximate coal analysis	the determination of compounds contained in coal.
Rank	a classification of coal based on the degree of heating and pressure undergone.
reserves	the volume of hydrocarbons contained in a trap or stored in coals.
reservoir	a rock unit containing a fluid (gas, oil or water) which can be produced from a well.
Scf/†	standard cubic feet per tonne.
Scf/ton	standard cubic feet per short (US) ton (1 Scf/ton = $1.1$ Scf/t).
Section	a 1/36 subdivision of a Township comprising 640 acres (259 hectares).
seismic survey	the gathering of data on the subsurface by a particular geophysical method which usesshock waves.
sub-bituminous	a black coal intermediate in rank between lignite and bituminous coal.
Tcf	trillion cubic feet (10 12 cubic feet).
Tonne	metric ton (1,000 kilograms).
Township	a USA land area identifier comprising 36 square miles (58.3 square kilometres).
Triassic	a period of geological time between approximately 225 and 195 million years ago.
vitrinite	an oxygen-rich maceral composed of humic matter.

计相连

a sedimentary basin containing Tertlary sediments in South Australia. Willochra Basin

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CONVERSIONS

Cubic metre	35.315 Cubic feet
Hectares	2.471 Acres
Joule	0.738 Foot pound force
Kilometre	$0.621$ Miles
Metre	3.280 Feet
Sauare kilometres	0.386 Square miles

DIRECTORS STATEMENT, AUTHORISATION AND CONSENT

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive. With respect to any statements made in the Prospectus other than by the Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making those statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn their consent before lodgement of this Prospectus.

Each Director has consented to the lodgement of this Prospectus with ASIC and has not withdrawn that consent.

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

This Prospectus has been signed by Norman A Seckold on behalf of the Directors in accordance with a resolution of the Directors.

Dated 9 January 2004.

Norman A Seckold Chairman

. . . . . . . . . . . . . . . . . . .

PLANET GAS LIMITED

ABN 46 098 952 035

SHARE OFFER APPLICATION FORM

This Application Form is important. If you are in doubt as to how to deal with it, please contact your stockbroker or professional adviser without delay. You should read the entire Prospectus carefully before completing the form.

Shares Applied for

No of Shares

SO.20

Price per Share

Must be a minimum of 10.000 Shares. Applications for more than 10,000 shares must be in multiples of 2,500 Shares.

Print your name here

Name of Applicant 1

Name of Applicant 2 or

Name of Applicant 3 or

Print your postal address here PO Box Number/Street Number/Street Name

Suburb/Town

Tax file number or ABN number

TFN of Applicant 1 TFN of Applicant 2

ABN of Applicant 1

ABN of Applicant 2

CHESS HIN (if applicable)

Cheque payment details

Please make your cheque payable to Planet Gas Limited - Share Issue Account Name of drawer of cheque Cheque No. BSB No. Amount AS Account No.

Total Amount Enclosed $

OFFER CLOSES 19 March 2004

State

Exemption Category

Post Code

Telephone Number

Broker Reference Stamp Only

Adviser Code

Total Application amount

S A.

Broker Code

Guide to Completing the Application Form

Enter the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares ($2,000). Applications for greater than 10,000 Shares must be in multiples of 2,500 Shares ($500).

Enter the amount of Application Monies. To calculate the amount, multiply the number of Shares applied for by the price per share.

Enter the full name you wish to appear on the register. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct forms of registrable name. Applications using the wrong form of name may be rejected. Clearing House Electronic Sub-Register System (CHESS) participants should complete their name and address in the same format as that are presently registered in the CHESS system

Enter your postal address for all correspondence. All communications to you from the Share Registry will be mailed to the address as shown. For joint Applicants, only one address can be entered.

Enter your Tax File Number (TFN) or exemption category or Australian Business Number (ABN). Collection of TFNs and ABNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application. However, If no TFN or ABN is quoted any dividends may be taxed at the highest marginal tax rate plus the Medicare Levy.

Planet Gas Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian. Stock Exchange Limited. In CHESS, the Company will operate an electronic CHESS subregister of shareholdings and an electronic issuer sponsored subregister of shareholdings. Together the two subregisters will make up the Company's principal register of shares. The Company will not be issuing certificates to applicants in respect of shares allotted.

If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold securities allotted to you under this Application in uncertificated form on the CHESS subregister, enter your CHESS HIN. Otherwise, leave the Section blank and on allotment, you will be sponsored by Planet Gas Limited and a Securityholder Reference Number (SRN) will be allocated to you.

Correct forms of Registrable name

Note that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of natural persons, companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each natural person. The name of the beneficial or any other registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable names below.

Payment

Make your cheque or bank draft payable to "Planet Gas Limited - Share Issue Account" in Australian currency and cross it "Not Negotiable". Your cheque or bank draft must be drawn on an Australian Bank.

Complete the cheque details in the boxes provided. The amount must agree with the amount shown in box "B".

Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected.

Pin (do not staple) your cheque(s) to the Application Form where indicated.

Enter your telephone number. This will assist us to contact ¶∰P you if there are any problems with your application.

BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THE APPLICATION RELATES. BY LODGING THE APPLICATION FORM, THE APPLICANT(S) AGREES THAT THIS APPLICATION IS FOR SHARES IN PLANET GAS LIMITED UPON AND SUBJECT TO THE TERMS OF THE PROSPECTUS WHICH HAS BEEN RECEIVED IN A COMPLETED AND UNALTERED FORM. AGREES TO TAKE ANY NUMBER OF SHARES EQUAL TO OR LESS THAN THE NUMBER OF SHARES SHOWN IN BOX A THAT MAY BE ALLOTTED TO THE APPLICANT(S) PURSUANT TO THE PROSPECTUS AND DECLARES THAT ALL DETAILS AND STATEMENTS MADE ARE COMPLETE AND ACCURATE. IT IS NOT NECESSARY TO SIGN THE APPLICATION FORM.

Lodgement of Applications

Return the Application Form with cheque(s) attached to:

Planet Gas Limited Level 8 261 George Street Sydney NSW 2000

Application Forms must be received at the office of Planet Gas Limited no later than 5.00 pm AEST on 19 March 2004.

Type of Investor	Correct Form	Samples of Incorrect Form
Individual• Use given names, not initials	John Alfred Smith	ัั ∖ .A Smith
Company• Use company title, not abbreviations	ABC Pty Ltd	ABC T R/LABC Co
Trusts• Use trustee(s) personal name(s),• Do not use the name of the trust	Janet Smith	Janet Smith Family Trust
Deceased Estates• Use executor(s) personal name(s),• Do not use the name of the deceased	Michael Smith$<$ Est John Smith A/C $>$	Estate of Late John Smith
Partnerships• Use partners' personal names,• Do not use the name of the partnership	John Smith and Michael Smith<john &="" a="" c="" smith="" son="">	John Smith & Son.
Clubs/Unincorporated Bodies/Business Names• Use office bearer(s) personal name(s),• Do not use the name of clubs etc.	Janet Smith	ABC Tennis Association
Superannuation Funds* Use hame of trustee of fund,• Do not use the name of the fund	John Smith Pty Ltdkouper hund Artus	John Smith Ph/ Ltd Superannuation Fund

PLANET GAS LIMITED

ABN 46 098 952 035

SHARE OFFER APPLICATION FORM

Shares Applied for

No of Shares

OFFER CLOSES 19 March 2004

Must be a minimum of 10,000 Shares. Applications for more than 10,000 shares must be in multiples of 2,500 Shares.

Price per Share

A $0.20

Print your name here Name of Applicant 1

Name of Applicant 2 or

Name of Applicant 3 or

Print your postal address here PO Box Number/Street Number/Street Name

Suburb/Town

一つ秋野県

Tax file number or ABN number TFN of Applicant 1 TFN of Applicant 2

ABN of Applicant 1

ABN of Applicant 2

CHESS HIN (if applicable)

Cheque payment details

Please make your cheque payable to Planet Gas Limited - Share Issue Account Name of drawer of cheque Cheque No. BSB No. Account No. Amount AS

Total Amount Enclosed $

State

Exemption Category

Post Code

Telephone Number

보입니

Total Application amount

S Д

Broker Code

Adviser Code

Guide to Completing the Application Form

Enter the amount of Application Monies. To calculate the $\lim_{\alpha\to 0}$ amount, multiply the number of Shares applied for by the price per share.

Enter your postal address for all correspondence. All communications to you from the Share Registry will be mailed to the address as shown. For joint Applicants, only one address can be entered.

Enter your Tax File Number (TFN) or exemption category or Australian Business Number (ABN). Collection of TFNs and ABNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application. However, if no TFN or ABN is quoted any dividends may be taxed at the highest marginal tax rate plus the Medicare Levy.

Planet Gas Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Comoration Pty Ltd. a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, the Company will operate an electronic CHESS subregister of shareholdings and an electronic issuer sponsored subregister of shareholdings. Together the two subregisters will make up the Company's principal register of shares. The Company will not be issuing certificates to applicants in respect of shares allotted.

Correct forms of Registrable name

Note that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of natural persons, companies or other legal entities acceptable to the Company. At least one full given name and the sumame is required for each natural person. The name of the beneficial or any other registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable names below.

Payment

Complete the cheque details in the boxes provided. The amount must agree with the amount shown in box "B"

Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected.

Pin (do not staple) your cheque(s) to the Application Form where indicated.

Enter your telephone number. This will assist us to contact you if there are any problems with your application.

BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THE APPLICATION RELATES. BY LODGING THE APPLICATION FORM, THE APPLICANT(S) AGREES THAT THIS APPLICATION IS FOR SHARES IN PLANET GAS LIMITED UPON AND SUBJECT TO THE TERMS OF THE PROSPECTUS WHICH HAS BEEN RECEIVED IN A COMPLETED AND UNALTERED FORM, AGREES TO TAKE ANY NUMBER OF SHARES EQUAL TO OR LESS THAN THE NUMBER OF SHARES SHOWN IN BOX A THAT MAY BE ALLOTTED TO THE APPLICANT(S) PURSUANT TO THE PROSPECTUS AND DECLARES THAT ALL DETAILS AND STATEMENTS MADE ARE COMPLETE AND ACCURATE. IT IS NOT NECESSARY TO SIGN THE APPLICATION FORM.

Lodgement of Applications

Return the Application Form with cheque(s) attached to:

Planet Gas Limited Level 8 261 George Street Sydney NSW 2000

Application Forms must be received at the office of Planet Gas Limited no later than 5.00 pm AEST on 19 March 2004.

Type of Investor	Correct Form	Samples of Incorrect Form
Individual• Use given names, not initials	John Alfred Smith	N.A Smith
Company· Use company title, not abbreviations	ABC Pty Ltd	ABC * R/LABC CO
Trusts· Use trustee(s) personal name(s),• Do not use the name of the trust	Janet Smith	Janet Smitt Family Trust
Deceased Estates· Use executor(s) personal name(s),. Do not use the name of the deceased	Michael Smith	Estate of Late John Smith,
Partnerships• Use partners' personal names,• Do not use the name of the partnership	John Smith and Michael Smith<john &="" a="" c="" smith="" son="">	John Smith & Son,
Clubs/Unincorporated Bodies/Business Names· Use office bearer(s) personal name(s),• Do not use the name of clubs etc.	Janet Smith	ABC Tennis Association
Superannuation Funds• Use name of trustee of fund,• Do not use the name of the fund	John Rmith Pty Ltd	joh∦ Smith Pty Ltd Superancuation Fund∿

a manara

ang pagpatan n

Martin Albert III.

Milliam St

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AI assistant

SKY METALS LIMITED — Capital/Financing Update 2004

65807_rns_2004-02-09_112d645a-52c2-430b-8140-8f6aa8ab1caa.pdf

MARKET RELEASE

TETA m)

LANET GAS LIMITED

DREGIORS ANNUAL

COMPANY SECRETARY

PRINCIPAL AND REGISTERED OFFICE

INDEPENDENT EXPERTS

REPORTS ON TENEMENTS

AUDITORS

HARE REGISTRY

Lodgement Date

16 January 2004

Applications Close

Intended Allotment Date

Intended Date of ASX Listing

CONTENTS

Definitions

Exposure Period

Date

Electronic/Paper Prospectus

Foreign Jurisdictions

Applications

Read Prospectus

Privacy

Lei lek rikum irie wazwandak

INVESTMENT HIGHLIGHTS

NECHONOMIC

SUMMARY OF THE OFFER

2.1 THE OFFER

2.2 PURPOSE OF THE OFFER AND USE OF FUNDS

2.3 CAPITAL STRUCTURE

2.4 HOW TO APPLY

2.5 INVESTOR ENQUIRIES

2.6 MINIMUM SUBSCRIPTION

2.7 STOCK EXCHANGE LISTING

2.8 CHESS

2.9 OVERSEAS INVESTORS

OVERVIEW OF PLANET GAS' PROJECTS

3.1 INTRODUCTION

3.2 CBM OVERVIEW

3.3 UNITED STATES AND AUSTRALIAN NATURAL GAS MARKETS

3.4 ESPONDA PROJECT, POWDER RIVER BASIN, WYOMING, USA

Introduction

Planet Gas Interests in the Powder River Basin

Figure 3.2. Powder River Basin Location

3.5 GIPPSLAND BASIN PROJECT, VICTORIA

Planet Gas Interests in the Gippsland Basin

Figure 3.4. Gippsland Basin Project Location

Exploration Licence 4500

Exploration Licence 4535

Exploration Licence 4619

Exploration Licence 4620

Development Overview

3.6 OTWAY BASIN PROJECT, VICTORIA

Planet Gas Interests in the Otway Basin

3.7 WILLOCHRA BASIN PROJECT, SOUTH AUSTRALIA

Planet Gas Interests in the Willochra Basin

3.8 EROMANGA BASIN PROJECT, SOUTH AUSTRALIA

Planet Gas Interests in the Eromanga Basin

3.9 GUNNEDAH BASIN PROJECT, NEW SOUTH WALES

Planet Gas Interests in the Gunnedah Basin

Figure 3.6. Gunnedah Basin Project Locations

OVERVIEW OF PLANET GAS

4.1 HISTORY AND PURPOSE

4.2 MANAGEMENT AND CONSULTANTS

4.3 BOARD OF DIRECTORS

Norman Alfred Seckold, Chairman

Anthony John McClure, Director

Director since 27 August 2003.

Anthony John McDonald, Director

Peter James Nightingale, Director, Chief Financial Officer and Company Secretary

Bruce Fullerton Riederer, Director of Exploration and Development

Norman Joseph Zillman, Director

4.4 CORPORATE STRUCTURE

4.5 FINANCIAL INFORMATION

4.6 BUSINESS OBJECTIVE AND WORKING CAPITAL

an stritt og en fa

SKY METALS LIMITED Capital/Financing Update 2004