Ann: Great Southern Gas Limited Withdrawal , page-35

I feel they did not have the required money to put up front and had to pay CTP



They would not have the money to explore tight gas frac/horizontal/etc


INTRODUCTION

Great Southern Gas (GSG) will specialise in the exploration and production of nonconventional resources, which include coal bed methane (CBM) and tight gas. In eastern
Australia CBM emerged from humble beginnings in 2001 to become the dominant gas
supply source for Queensland.

Refer graph alongside.
The directors and management of GSG have extensive experience in CBM. The
Executive Chairman, Rohan Gillespie, was formerly Vice President and Chief Operating
Officer of BHP Billiton?s CBM business, which included the major CBM Moranbah Gas
Project in Queensland.

Great Southern Gas Limited (GSG) has agreed in-principle to two farm-in agreements; one with
Central Petroleum Limited (CTP) and Petroleum Exploration Australia Limited (PXA), and the
other with Rawson Resources Limited (RAW). The near term earn-in commitment is modest but
has significant option value in what could be a major new hydrocarbon province for Australia.

Central Petroleum and PXA Farm-in: In February 2008 PXA executed a farm-in agreement
with CTP to earn a 20% interest in all CTP permits. PXA is required to contribute 40% of agreed
work programs in each permit, to earn the 20% interest. CTP is the Operator.PXA has agreed
in principle to assign a portion of its farm-in rights to GSG.


PXA will retain rights to conventional
resources (oil, gas)

while GSG will assume PXA?s non-conventional resources (CBM and tight
gas) rights, committing to contribute 40% of agreed work programs for non-conventional
resources to earn the 20% interest.

In return, PXA will receive a 1.5% royalty for nonconventional gas sold by GSG from the permits


Rawson Farm-in: Rawson has agreed in principle to assign 100% of the rights to the nonconventional resources (CBM and tight gas) in the northern portion of EP 97 to GSG for an
initial 33.33% interest in GSG plus a 3% royalty.

The area comprises over 3000 km2 and forms
part of the prospective Pedirka Basin as outlined above. GSG is Operator for this northern
portion

http://www.mpsecurities.com.au/Publications/2008/Great%20Southern%20Gas%20Term%20Sheet%20April%202008.pdf


Now this is the agreed farm-in in 2009


Energy Infrastructure Limited/Great Southern Gas Limited EPA 130
On 9 August 2009, Energy Infrastructure Limited (EIR) and the Company reached agreement on the
terms of the farm-out by the Company of a 25% participating interest in the yet to be granted EPA
130.

The agreed terms include the Company remaining as Operator, ongoing premium reserve
payments to the Company of $10,000,000 per potential discovery tranche of 3P reserves of one
trillion cubic feet of gas or oil equivalent and a 60% for 25% ?promote? on the costs of initial
exploration including the first 3 wells and the first $3 million of seismic. The agreement was subject to
Board approval of final documentation and subject to the grant of the permit application. EIR is an
unlisted public company headed up by Mr Rohan Gillespie, a former BHPB executive and under the
terms agreed,


EIR could have nominated another company in place of itself in the proposed formal
agreement.

The Company was since advised by Great Southern Gas Limited, (GSG), an existing
farmin participant in EPA 130 headed up by Rohan Gillespie, that GSG was exercising its pre-emptive
rights over the EIR offer and on 3 December 2009,


a formal farmout agreement with GSG and Merlin
Energy Pty Ltd (one of the Company?s wholly owned subsidiaries) was executed.

This means that if
GSG contribute fully to their obligations as a Joint Venture participant, then GSG will fund 100% of the
farmin phase of 3 wells and $3 million of seismic in this permit, subject to the successful grant of the
permit.

no mon no fun?