an introduction to european gas ltd, page-42

re: granting of lorraine sud permit NEWS RELEASE
8 December 2006
GRANTING OF LORRAINE SUD PERMIT
LORRAINE, FRANCE
HIGHLIGHTS
Granting of the Lorraine Sud permit covering 528 km2.
The granting more than doubles holdings in the Lorraine Basin to 988 km2.
The permit adjoins the company’s Lorraine permit and Gas in Place resource areas.
Initial work programs to commence in first half 2007.

GRANTING
European Gas Limited (“European Gas”) is pleased to announce that the French Government has formally granted the Lorraine Sud permit located in north eastern France.
The permit covers 528 square kilometres (km2) of the Lorraine Basin and includes rights to all hydrocarbons including coal bed methane (“CBM”). The permit is granted for a period of five years
and is renewable.
Lorraine Sud lies immediately to the south of the company’s Lorraine permit and covers the southern extension of the Lorraine Basin (see Fig 1). The granting has increased the company’s holding to 988 km2.
Previous work, predominantly in relation to coal exploration including drilling and extensive seismic coverage, has confirmed that the two principal anticlines Merlebach and Alsting continue into the Lorraine Sud permit.

These anticlines are the primary CBM targets with potentially enhanced technical attributes within the Westphalien C and D coal measures. Elsewhere within the Lorraine Sud permit, there is also
considerable CBM potential outside of these anticlinal structures.
Importantly, the Lorraine Sud permit covers the immediate southern extensions to the current Gas in Place resource areas at Saint Avold and Alsting located in the Lorraine permit. To date, this resource
totals 28.1 billion cubic metres (991.2 billion cubic feet) within approximately 7% of the company’s permit areas.

Lorraine Sud forms part of the Lorraine joint venture where European Gas holds a 75% interest and is the operator. Heritage Petroleum Plc holds the remaining 25% interest.

PROGRAM
The initial work program in the first half of calendar 2007 will comprise data assembly and analysis with particular emphasis on the immediate extensions to the current resource areas of Saint Avold and Alsting.
This work will be directed towards establishing sites for CBM stratigraphic core drilling to obtain accurate information about the coals including gas content, permeability, hydrogeologic regime, etc. The program will be aligned to the 2007 development program at Saint Avold and Alsting immediately to the north in the Lorraine permit.
Figure 1. Lorraine Sud Location

ABOUT EUROPEAN GAS LIMITED
European Gas Limited is a hydrocarbon explorer/developer with projects in western Europe. The strategy of the company is to develop Coal Bed Methane and Coal Mine Methane projects, in particular, in France where the company holds a significant competitive advantage with major holdings under licence.
The European natural gas market is substantial with advanced infrastructure, including extensive pipeline networks and a free and open market.

For further information please contact:
Anthony McClure (Director) Alan Flavelle (Director)
Corporate Technical
(+33) 1 53 43 94 41 (+61 8) 9330 8876
or refer to the European Gas Limited web-site: www.europeangas.fr.
COMPLIANCE STATEMENT

The technical information quoted in this announcement has been compiled by Mr. Alan Flavelle and geoscientists under his supervision. Mr Flavelle is a Fellow of the Australasian Institute of Mining and Metallurgy and is a member of the Society of Petroleum Engineers. Mr Flavelle has consented to the inclusion in this report of the matters based on their information in the form and context in which it appears.

http://sa.iguana2.com/cache/2d651e2a2533d55e84b41f22b7c60ff3/ASX-EPG-345164.pdf