lodgement of open briefing

Here are details from the briefing:
"Title: Open Briefing®. Eastern Star Gas. CSG Farm-in Opportunity
Record of interview:
corporatefile.com.au
Eastern Star Gas (ASX code: ESG) announced an agreement with Orion
Petroleum to farm-in to coal seam gas exploration acreage in the Bowen, Surat
and northern Gunnedah Basins. Can you explain these farm-ins in the context
of your broader growth strategy?
MD David Casey
The Orion farm-in represents an excellent fit with ESG’s growth strategy,
allowing an ability to significantly grow our exploration acreage position and
resource base in an area adjoining one of our key assets. This opportunity will
allow for any exploration success in these farm-in areas to be quickly
commercialised and jointly developed with our PEL238 programme.
corporatefile.com.au
Can you provide more details on this agreement with Orion Petroleum? What
conditions need to be met for it to proceed?
MD David Casey
The farm-in requires three coreholes to be drilled; one in each of the PELs 6,
426 and 427 plus 100 km of seismic acquisition in PEL6. ESG will earn a
40% working interest in PEL426 and a 50% interest in the remaining two
permits, PEL6 and 427.
Drilling a further corehole in PEL6 will earn a further 25% interest in this
permit. ESG will operate the farm-in and is expected to complete Stage 1 of
this farm-in by the end of the calendar year.

corporatefile.com.au
How confident are you on the prospectivity for gas? What exploration
techniques have ESG used to conclude that the farm-in could contain a highside
prospective gas resource of 3,500 Bcf? How have you targeted these three
coreholes?
COO Peter Lansom
There has been a detailed geological and engineering review of all the corehole
and seismic data in the permits. This has shown considerable resource
potential in all three permits in coals slightly younger than those targeted in
ESG’s PEL238 permit.
In particular, the permits contain a large potential resource in the Walloons
coal measures, a prolific CSG target in Queensland’s Surat Basin acreage.
corporatefile.com.au
If the drilling program proves successful, how and where will the gas be
monetised?
MD David Casey
The success of the drilling programme will, in the first instance, result in the
identification of a prospective gas resource. Although further work, including
pilot production of gas, will be required to upgrade the resource to a reserve,
early success with the drilling programme will nonetheless strengthen the
foundation upon which our gas marketing effort is based.
Looking to the future, we are pursuing a portfolio of market opportunities that
we envisage being developed in a staged manner. The opportunities include
use of gas in, and expansion of, the Wilga Park Power Station; supply of gas
into the NSW gas market, using arrangements we have entered into with the
APA Group; and supply of gas for electricity generation.
In addition, we are investigating some particularly large scale and high value
opportunities that will allow us to realise the full potential of our gas portfolio.
An exciting aspect of the new acreage is that, on one hand, it reinforces our
Narrabri CSG Project so, with modest pipeline infrastructure extensions, gas
could be used to supplement the supply into NSW. On the other hand, the
acreage also extends to the Queensland border, so gas could also potentially be
monetised through that state.
corporatefile.com.au
ESG entered into a Heads of Agreement with APA Group to investigate
options for early gas delivery into the NSW gas markets. What specific
options is ESG investigating? Can you comment on the broad timeframe for
early gas delivery?
MD David Casey
The first option to be investigated is the relatively simple development of a gas
pipeline lateral to connect the Narrabri CSG Project with the Central Ranges
Gas Pipeline, which APA now owns. This would allow gas to be easily
delivered to anywhere in NSW, or even Victoria. APA has already committed

to front-end engineering and design work for the pipeline, so gas could
conceivably be delivered into the NSW gas market within 18 to 24 months.
During the front-end work phase, we will also be looking for opportunities to
upsize the new pipeline to cater for future loads. ESG will endeavour to take
advantage of these opportunities and have them advanced before a final
commitment to purchase pipe material is made.
corporatefile.com.au
Can you provide an update on the MOUs with Babcock & Brown Power in
light of recent announcements?
MD David Casey
From our perspective, it is business as usual for Babcock & Brown. NSW
needs around 300 to 350 MW of new electricity generation to be installed
annually, environmental imperatives mean gas is the fuel of choice, and we are
on the cusp of having reserves in place to meet ESG’s initial market
requirements. Babcock & Brown is pursuing quality development
opportunities, and its proposed power station development is one of them.
corporatefile.com.au
Can you provide an update on PEL 238 corehole appraisal program?
COO Peter Lansom
To date we have just completed drilling our fourth hole in the programme,
Dewhurst 7. The programme has been very successful, confirming the new
geological model and areal extent across the Dewhurst prospect of thick
Bohena Coal Seam development with good coal quality, permeability and gas
content. Dewhurst 7 reached total depth yesterday and wireline logs show a
Bohena coal thickness of 22 metres which is another excellent result and the
thickest intersection of Bohena coal to date. The corehole rig will then move
to Dewhurst 5 before moving north to evaluate the Edgeroi and Blue Hills
prospects.
In addition to the ongoing corehole programme we also envisage the 2008
Seismic Acquisition programme will commence within the coming days. This
is an important part of the 2008 PEL238 Exploration Programme and will
assist to further delineate the structure and thickness of coal development in
the Dewhurst, Yallambee and Turrawan prospects.
corporatefile.com.au
What is the status of the Lateral Programme?
COO Peter Lansom
We are pleased to advise that the Schramm TXD rig has arrived in the country
and is currently undergoing final fit-out before mobilising to site. While this
does represent a delay to our expected start date, AJ Lucas, the drilling
contractor, has offered to provide additional rigs to get the programme back on
schedule if required. At this stage we do not see this as a requirement given
the capacity and capability of the TXD rig to make up for the lost time and we
expect to spud the first well of this programme in late September or early
October.

corporatefile.com.au
Thank you Peter and David."