Ann: Third Quarter - Activities Report , page-12

This is a continuation of my pevious post.

If the conventional gas field and prospect targets shown on Slide 10 of the recent present are proven to be comercial then MEL has a potentially great future.

If some or all of those targets are locally connected then MEL has potentialy an even more bright future and David Johnson's statement of a major conventional gas find might indeed be prescient.

The following is why I think that select conventional gas field and prospect targets in PEL 16, 13 and 426 might at least be locally connected and possibly regionally connected:

# The regional geology is a basin (as in the Clarence Morton) and the rocks are sedimentary. Within a sedimentary basin, rocks that occur at depth mid basin generally outcrop or subcrop at higher levels around the basin perimeter.

# The various sedimentary layers/strata within a basin dip, curve and undulate due to stress induced folding and faulting.

# The 20 or so conventional gas targets identified to date by MEL could be localised "concave downwards" bedding undulations acting to contain/trap gas migrating upwards from deeper coal measures. These would be structual traps.

# The predominant geology below the Walloon Coal Measures extending 1-1.5km down to the Ipswich Coal Measures is sandstone and some conglomerate, which due to relatively coarse grain size are typically porous. With stress induced repetitive joint sets effectively "cutting" through these porous rocks there is "connectivity" that can extends kms to 10's of kms.

# The Walloon and Ipswich Coal Measures most likely contain beds and interbeds of finer grained less permeable siltstones and mudstones, with the overlying Walloon Coal Measures then acting to confine gas within sandstone/conglomerate pores/joints that has slowly migrated upwards from the deeper Ipswich Coal Measures. Combined with a basin geology, this would be a regionally extensive stratigraphic trap.

I suspect MEL are for now conservatively reporting localised conventional gas field/prospect structural trap targets but are considering the possibility that there may be a more extensive stratigraphic trap. If the latter is shown to have merit, imo a substantial partner is going to be required and I suspect this is what selling up to 50% of PEL 16 is all about.

Cheers
Dex