announcement!

24th June, 2005
PROGRESS REPORT
GAS PRODUCTION – STEADY INCREASE
GUNNEDAH BASIN CSG PROJECT
Eastern Star Gas Limited, the operator of the PEL 238 Gunnedah Basin Coal Seam Gas Joint Venture, is
pleased to announce that continuous test production from 5 wells within the Bohena Project Area has seen
gradually increasing rates of gas production and decreasing rates of water production. All wells are performing
as normal, unconfined (isolated), coal seam gas wells during the early stages of de-watering (formation pressure
reduction). Aggregate production from the 5 producing wells is 298,000 cubic feet/day. Water and coal seam
gas production rates measured to date support the presence of a significant commercial accumulation of coal
seam gas within the Bohena Project Area.
Development Update: the Joint Venture now has a total of 5 wells in continuous test production and these
wells are continuing to show increases in gas production in line with the reservoir simulation model and the
development plan. The sixth production well Bohena-4L, which is a horizontal completion, is off-line for
remedial work.
Future Program: the PEL 238 Coal Seam Gas Joint Venture partners will meet in mid-July to finalise the 2005
Work Program and Budget which will likely be implemented in the second half of 2005. It is intended that gas
produced during the test production period will be supplied to the Wilga Park Power Station for conversion into
electricity. The goal of the test production is to demonstrate commercial gas flow rates on a per well basis
within a reasonable period of time and achieve an early upgrade of the existing possible reserves (3P) into
proven (1P) and probable reserves (2P). The 1P-2P reserves certification will enable gas sales contracts to be
completed for the coal seam gas produced from the Bohena Project Area.
About the Gunnedah Basin Gas Project (Coal Seam Gas Joint Venture)
“Delivering Gas Independence to NSW”
The Project is located in Petroleum Exploration Licence 238 between Narrabri and Gunnedah in New South
Wales covering 9,100 kms² of the Gunnedah Basin. The PEL contains one of the largest onshore natural gas
accumulations in Australia alone totaling 17,000 PJ (17 TCF) of gas-in-place within the two coal seams that are
over 10 metres thick in each of two coal bearing formations. The Bohena Project Area covers 260 kms² within
PEL 238 and contains up to 3,700 PJ (3.7 trillion cubic feet) gas in place within coal seams of the Late Permian
Black Jack Formation and the Early Permian Maules Creek Formation. The Project is managed by Eastern Star
Gas Limited and is owned by the Gunnedah Basin Gas Project (Coal Seam Gas) Joint Venture comprising:
Eastern Star Gas Limited (ASX: ESG) – 25% increasing up to 32.5%
Hillgrove Resources Limited (ASX: HGO) – 25% increasing up to 32.5%
Gastar Exploration Limited (TSX: YGA & OTHER OTC: GSREF.PK) – 50% decreasing to 35%