From the NO Vote - Please read on

This email is to encourage all Metgasco shareholders who are opposed to the proposed settlement with the NSW Government to ensure that you have properly lodged your vote.

To be effective your vote must be received by Computershare no later than midday Eastern Daylight Saving Time Monday 14 December 2015.

By far the easiest way to lodge your votes and proxies is online through www.investorvote.com.au

To vote on line you require the following three pieces of information: -

·The Control Number for the vote. For the Disposal of Company’s assets this is 188369.

·Your Shareholder Reference Number (SRN) or Holder Identification Number (HIN), and

·The postcode for the registered address of your holding.

More detail on how you do this is provided later in this email.

Even if you normally choose to receive your shareholder communications by mail, you will find on line by far the easiest and most certain way to lodge your vote. Lodgement by mail or fax remains acceptable provided you ensure you meet the lodgement times and submission requirements specified in the Notices of Meeting.

If you have any trouble at all in submitting your vote, please contact us at this email address and we may be able to help. You can also seek assistance from Computershare on 1300 850 505, or from outside Australia, on +613 9415 4000.

We ask you to encourage any other shareholders who are concerned by the proposed settlement to also lodge their votes. The votes from all shareholders, no matter how small their holdings, will be critical in determining the long term outcome for Metgasco.

Please note that voting on disposal of the Company’s assets and the AGM resolutions are separate votes. If you wish to vote for all the resolutions presented at the meeting on December 16, you will need to complete two separate votes.

In case you have not already seen it, the following media article may be of interest: -

http://www.smh.com.au/business/ener...-25m-nsw-settlement-deal-20151207-glhwbx.html

In it the Chairman is reported to have said “The board remains confident of a positive 'yes' outcome, and whilst we understand the emotion of some shareholders at what is a very disappointing outcome as regards to development of gas in New South Wales that emotion is clouding the situation."

Emotion has no part in our opposition to the settlement and we remain convinced that the proposed offer from the NSW Government is wholly inadequate and should be rejected.

It needs to be remembered that an unchallenged judgement in the Supreme Court of NSW has already found that a decision by the NSW Government in purporting to suspend the drilling of the Rosella well was unlawful. And the NSW Government has wilfully stalled proper restitution for this default which occurred in May 2014.

In a release to the ASX on November 10, the Company confidently asserted: -

“We wish to advise that three of Metgasco’s top shareholders, who together control more than 18% of the issued shares, have advised that they support the Board’s recommendation.”

Less than three days later on 13 November, EPW, the Company’s major shareholder representing 12.9% of the issued capital, disposed of its complete holding at a substantial loss, estimated to be in excess of $8.5 million.

The Company has not provided shareholders with even the most cursory analysis of the value of the Company’s assets. In addition they have provided only limited information on the proposed Deed with the NSW Government, completely lacking in key details.

They have provided absolutely no surety with regards to the ongoing business of the Company post the proposed settlement and have apparently rushed this process to fit a timetable which suits the NSW Government.

Many of the Board and management are the same as those who announced on 30 October 2012 that the Company had raised $20.6 million from shareholders giving it a total of $30.6 million in cash to pursue the development of CSG and conventional gas in NSW. Now after only drilling two very simple CSG chip holes, both of which confirmed and expanded the Company’s CSG resource, the Company is recommending abandoning the area and all its assets entirely.

Even on the Company’s own preferred numbers the Enterprise Value of the Company immediately prior to announcement of the proposed settlement was approximately $13.4 million.

The Company has advised “The fixed settlement sum of $25 million to be received from the NSW Government will be assessable to Metgasco Limited (“Metgasco”) for tax purposes in the year ending 30 June 2016 in accordance with the Income Tax Assessment Act 1997.” And while tax is not likely to be payable because of the Company’s carried forward tax losses, this represents a nett loss to the Company of $7.5 million related to future carried forward tax losses.

In addition the Company has provided no indication as to whether the proposed Deed of Settlement will be subject to, or exempt from, stamp duty within NSW.

Therefore at most, the proposed settlement appears to represent an additional $4 million over the Company’s market valuation prior to the announcement of the settlement. This represents a very cheap exit for the NSW Government which has already been found to have acted unlawfully and represents appalling value for shareholders.

How to Vote On Line to Reject the Settlement

As noted above the easiest way to lodge you vote is on line at www.investorvote.com.au

Again the three bits of information needed are: -

·Control Number 188369.

·Your SRN or HIN. This must be 10 digits. If the number you have is not ten, try adding zeros to the front of the number to give 10 digits. It must be proceed by an X or I depending on whether your holding is a broker sponsored holding (X) or an issuer sponsored holding (I).

·The postcode for the registered address of your holding.

You will be required to step through a number of screens before you can submit your vote. On or about the eighth screen you will be asked to “Appoint a Proxy” as Step 1 of your vote.

If you are not proposing to be at the meeting DO NOTleave this blank, DO NOT put in your own name. Tick the box “Other Appointee” and fill in your nominated proxy. If you wish you can nominate John Vaughanwho is supporting the No vote.

Then select “Continue” to proceed to the next screen where you can actually make your vote.

Then step through the remaining screens to complete the process to ensure your vote is properly recorded.

NOTE: If you wish to ensure that you continue to receive shareholder communications from the Company by mail, DO NOT provide an email address at any time during the on line voting process. The online voting process actually asks for an email address in two different screens and you can safely provide your address in the last window as a means of receiving a confirmation of your vote. But if you have any concerns at all, it is not necessary to provide any email address to satisfactorily complete your vote.

When you have completed your vote successfully, the final screen will give you confirmation of your vote. Check it to ensure that it reflects your intentions. If not, go back to the beginning and restart the process. You can go through the process multiple times and continue to change your vote up until midday Eastern Daylight Saving Time Monday 14 December 2015.

If you wish to also vote for the four resolutions at the AGM you can proceed and complete this separate vote.

The process is very similar but you will need to relog into www.investorvote.com.au  and use Control Number 188327. However you should find the rest of the process very similar.


Thank you for your support, this is a critical vote for the future of Metgasco. Please share this email.