Monthly Status Report - December 2005The first stage of the...

Monthly Status Report - December 2005

The first stage of the Berwyndale South Project is currently 49% complete, on budget and on
track to deliver first gas to CS Energy by 1 April 2006. QGC has a 10-year contract with
CS Energy to supply 4 petajoules (PJ) of gas a year from Berwyndale South, with first
deliveries no later than 31 July 2006; and another 10 year contract to supply 4PJ of gas per
year from Berwyndale South to Braemar Power Partners commencing 1 October 2006. There
is provision to provide early gas under both contracts.

Monthly Reporting
QGC is committed to keeping the market informed of progress on its operations. In line with this
commitment, QGC will provide a status report to the market on the first Monday of each month
during the development and commissioning of the Berwyndale South Gasfield in Queensland’s
Surat Basin.
DRILLING
Despite heavy rain in the region, the drilling program is currently on schedule with 10 of 25
wells drilled and 4 wells completed. During the planning phase, QGC took the precautionary
measure of ensuring all well sites had all-weather access. This proved for the drilling program
as the Surat Basin experienced the wettest October since 1972.
QGC has achieved an average drilling cycle of 6.5 days per well and is working to reduce it to 5
days per well. Figure 1 shows the reduction in drilling time for the first six development wells at
Berwyndale South.

PRODUCTION
Four wells are currently on-line and flowing gas. These flow rates are well above the Banker’s
Case proportions for the project and point to lower development costs. (Figure 2 shows the
conservative Banker’s Case compared with current gas flows from the wells on production).
Two of the wells (#36 and #37) were completed using an all-Walloon completion technique
which accesses all six of the Juandah and Taroom coal seams. These are the first two wells at
Berwyndale South to have been completed in this manner and the resulting gas flow rates have
exceeded expectations. Berwyndale South #36 has improved gas production to a weekly
average of 199,000 cfd, and Berwyndale South #37 is producing at a weekly average of
126,000 cfd.
By achieving higher than expected gas flow rates and successfully extracting gas from all
target seams in each well, QGC expects to reduce development costs by 10 to 20%, because
fewer wells will be needed to produce the required gas.

FIELD GATHERING
Work on the field gathering system is well ahead of schedule. This work has involved some
2,000 welds over a period of 3 months. Welding on the water gathering pipelines is
substantially complete and welding on the gas gathering pipe is expected to be complete at the
end of this week. The remaining work on the field gathering system involves digging in the
pipework.
Reverse osmosis trial
Equipment for the 10-week reverse osmosis trial was delivered to site on 30 November 2005
and is now operational. Subject to the results of this trial and the availability of Federal
Government funding, a full scale reverse osmosis plant will be installed at Berwyndale South to
supply Chinchilla Shire Council with 1,000 megalitres of drinking water per year.

CENTRAL TRANSPORTATION INFRASTRUCTURE
Screw compressors
Three screw compressors arrived in Brisbane on Sunday 27 November 2005 and were
delivered to site the following day. The compressors and their respective coolers were set in
place on Tuesday 29 November 2005 using two 80 tonne cranes. The lifts had been planned to
take two days but were accomplished over one day.

Reciprocating compressors
The first two reciprocating compressors are between Panama and Brisbane. This shipment is
expected to arrive in Brisbane on 18 December 2005. The third compressor (which will service
the Braemar contract) has been shipped from Galveston, Texas to Manzanillo, Panama on 27
November 2005 (USA time), arriving in Australia on 2 January 2006.
TEG Dehydration Units
In Canada, Moody International and Transera are progressing final inspection of TEG
Dehydration Units prior to shipment. The units are expected to arrive in Australia on 15 January
2006.

Windibri Pipeline
The pipeline crew has been mobilised for the Windibri Export Pipeline, which will link
Berwyndale South with the Roma to Brisbane Gas Pipeline. Pipe has been shipped by train to
Brisbane and deliveries to site will commence today.
The pipeline contractor commenced Right of Way clearing on Tuesday 22 November 2005.
Approximately 9 kilometres of the route had been cleared by Sunday 27 November 2005. The
contractor is now preparing for delivery of the pipeline to site and installation. (A map showing
the route of the Export Pipeline is included as Figure 3)
The alignment survey for the trunkline which will connect the screw compressors to the main
plant was completed and the design progressing.

MYALL CREEK EAST
In late November, Origin Energy announced large commercial gas flows from Basal Rewan
Sandstone in Myall Creek #1. QGC has a 50% interest in the adjacent Block 2656
approximately 4km northeast of the Myall Creek Gasfield and 7km northeast of the Churchie
Gasfield.
QGC and joint venturer Origin Energy drilled Myall Creek East #1 in September 2003 but there
remains some doubt about the status of this hole which was plugged. The parties have been
considering drilling a second hole in the vicinity of Myall Creek East #1.
The recent drilling success at Myall Creek has raised the expectations for the Myall East area
as well. Gas from this area could be readily connected to the existing gathering, infrastructure
and major trunkline systems.