good news for a change

CS ENERGY AND MOSAIC MAINTAIN FIVE YEAR GAS AGREEMENT

Following some delay in developing the new Waggamba field, CS Energy will continue to buy gas from Mosaic Oil over the next five years under a variation to the original Gas Supply Agreement.

Dr Brady CEO remarks:"CS Energy and Mosaic have worked hard over the last two weeks when it was realised that there were difficulties developing the Waggamba field on schedule".

"The result will allow Mosaic not only to proceed with the Waggamba development but also to re-enter or apply advanced recovery techniques to old gas wells in the Silver Springs area or drill new wells knowing that there is an immediate Buyer."

Mosaic Oil N.L. will still deliver the first parcel of gas under the contract as originally planned. This parcel of 1PJ is being delivered now and should be completed by July 2005.

The Waggamba pipeline connection will proceed and is expected to be fully operational in March 2005. The pipeline is completed apart from some surface works.

Pre-conditions which required supply of 8.2 TJ per day by 1st April 2005 have been waived.

Mosaic will on a best endeavours basis supply to CS Energy all gas from the present Waggamba 2 and 3 wells and from any further Waggamba wells drilled by Mosaic until Waggamba’s annual output exceeds 3PJ per year.

In the interim, to supplement supply from the Waggamba field, Mosaic will provide gas to CS Energy from the Silver Springs area within Production Licences 15, 16, 48, 49 and 66.

The amount that can be provided to CS Energy from the Silver Springs area over the next five years will be based on Mosaic’s nominations and ability to deliver and can range up to a combined Silver Springs- Waggamba output of 8.2 TJ per day. Silver Springs gas for CS Energy will rank immediately after Mosaic's commitments to present customers and prior to any commitments to new customers from this area.

The Mosaic-CS Energy Gas Supply Agreement, as varied, is for five years up to 31st March 2010.