overview

OVERVIEW(RWE Aust Business News)
********

Eastern Corporation Ltd (ASX:ECU) encountered renewed market
confidence last week after its 68 per cent-owned Galilee Energy Ltd
received a $37 million investment from the astute industry leader AGL
Energy Ltd (ASX:AGK).
AGL is putting its money on a coal seam gas (CSG) production
pilot and exploration and appraisal program with Beaconsfield Energy
Development Pty Ltd and Capricorn Energy Pty Ltd, wholly owned
subsidiaries of Galilee Energy, in Queensland's Galilee Basin.
Galilee Energy holds two tenements covering approximately 10,000
square kilometres in the Galilee Basin - ATP 529P held through
Beaconsfield and Capricorn and ATP 799P held directly.
The farm-in agreement will see AGL acquire 50 per cent ATP 529P
in the Galilee Basin for an expenditure of $37 million.
The agreement is subject to Government approval for the transfer
of the farm-in interest and confirmation that the conditions imposed on
the ATP do not vary materially to those that currently exist.
Under the terms of the farm-in, AGL will be the operator of the
joint venture under a joint operating agreement.
Stage 1 of the program will involve the Rodney Creek production
pilot in ATP 529P and Stage 2 of the program will involve an exploration
and appraisal work program.
The parties have also entered into a 10-year gas marketing
agreement.
AGL will lead the two stage program under the joint operating
agreement executed this month.
Work on Stage 1 of the program is expected to commence before
November.
Galilee Energy chairman Rino Camarri said that the agreement with
AGL was an excellent outcome for shareholders.
"AGL is providing the capital to build on Galilee Energy's
exploration and test work," he said.
"As a major integrated energy company, AGL brings to the project
its expertise in exploration, development, production and marketing.
" With AGL engaged in ATP 529P, Galilee Energy will now focus on
capital raising to fund further exploration and development in 799P," Mr
Camarri added.
As previously reported, consultants JR Holland & Associates
concluded, in a preliminary Exploration & Well Completion Report for the
Rodney Creek 8 well in ATP 529P, that:
* The gas resource is substantial;
* Is characterised by 24 net metres of gassy coal measures
(considered thick enough to enable coal seam gas production);
* Coal seams are dull, low in ash and exhibit strong cleating
(fracturing); and
* Gas composition is of pipeline quality with 97-98 per cent
methane.
The gas in place in ATP 529P and ATP 799P, as currently held, is
estimated to be greater than 20 TCF, based on the observed coal
thicknesses and the measured gas contents of the coals in Rodney Creek 8.
ATP 529P is located 80 km northwest of Barcaldine where a gas
power station is fed by a pipeline linked to Moomba and Brisbane.
AGL managing director Michael Fraser said that the farm-in
agreement builds on AGL's stated strategy to grow gas reserves through
targeted exploration and appraisal drilling.
"The two stage program (production pilot and
exploration/appraisal) provides an appropriate balance for AGL between
investment size, probability of success and overall valuation metrics and
presents an opportunity for AGL to capture additional profit pools in its
overall value chain.
"This is an excellent transaction for Galilee Energy and also for
ECU, its major shareholder, as it provides certainty for the next stage
of development to prove up reserves, and provides a joint venture partner
in AGL who has the capabilities to develop and commercialise gas
discovered in the Galilee Basin," Mr Fraser declared.

SHARE PRICE MOVEMENTS
*********************

Shares of Eastern Corporation jumped 10.5c to 38c on Friday after
the AGL investment news. Rolling high for the year is 41c and low 10.5c.
The company has 71.7 million shares on issue with a market cap of $27.7
million.
AGL will fund the first production testing on Eastern's group.
Eastern drilled a successful exploration well last year, but has
yet to determine flow rates it could achieve.
ECU managing director Campbell Smith said the agreement with AGL
was an important development in ECU's strategy of building a significant
energy company.
"We welcome the association with AGL," he said.
"A large and experienced integrated energy company, AGL brings
both capital and expertise in gas exploration, development, production
and marketing.
"ECU is well positioned with coal seam gas assets in the Galilee
Basin through its major shareholding in Galilee Energy.
"As well as ATP 529P, we have a similar interest in ATP 799P also
through Galilee Energy.
"With AGL engaged in ATP 529P, Galilee Energy has advised that it
will now focus on capital raising to fund further exploration and
development in ATP 799P," Mr Smith said.
Eastern business development manager Sam Aarons told the SMH that
the coal seams in the Galilee were deeper and a bit further from
pipelines that those in the Surat and Bowen basins.
Eastern is excited by these developments because it is
significantly under-explored.

BACKGROUNDS
***********

Eastern Corporation
-------------------

Eastern Corporation, formerly Eastern Gold NL was listed on the
Australian Stock Exchange on February 15, 1996.
Eastern's strategy is to grow as a broad-based energy company by
developing its CSG in the Galilee Basin and mining coal at Cascade and
Takitimu in New Zealand.
Eastern provides investors and potential joint venture partners
with good value entry into coal seam gas.
The company's Galilee Energy project (Eastern 67 per cent)
presents opportunities in the rapidly emerging CSG industry in Queensland
as the company moves towards reserves certification for its central
Queensland project.
In coal, Eastern is now established as a significant producer in
New Zealand, supplying a range of domestic industrial applications
following the company's acquisition of two operating coal mines and a
coal blending and distribution facility.
Eastern emerged as a New Zealand coal producer in June 2005 by
acquiring the operating Cascade open cut coal mine near Westport on the
South Island of New Zealand.
In September 2006 Eastern acquired a second New Zealand coal
mine, the Takitimu mine in the Ohai/Nightcaps area in the far south of
the South Island.
Also in September 2006 Eastern acquired a coal blending and
distribution facility (Eastern Coal Supplies Ltd) at Timaru, on the
central east coast, approximately mid way between the Cascade and
Takitimu coal mines.
In March 2007 Eastern was awarded the contract for coal supply to
Fonterra's Clandeboyne plant on the South Island.
In July 2007 Eastern recommenced exploration at the Galilee coal
seam gas prospect, drilling the Rodney Creek 8 well.
In early 2008 the company was sufficiently encouraged by the
results from the Rodney Creek 8 drilling to devise a further program
comprising a five-spot production pilot and four appraisal wells in the
Rodney Creek area.
Eastern is pursuing further acquisitions in Australia and New
Zealand as it focuses on growth.

About Galilee Energy
--------------------

It is not a publicly listed company, with only 25 shareholders of
which the major stakeholder is Eastern Corporation Ltd.
Galilee Energy has been engaged in coal seam gas exploration in
the Galilee Basin in central Queensland since 1999.
The company holds two tenements in the basin; ATP 529P and 799P.
ATP 529P is held through Galilee's wholly owned subsidiaries,
Capricorn Energy Ltd and Beaconsfield Energy Development Pty Ltd.
Both tenements cover an area of approximately 10,000 square
kilometres.
Eastern Corporation originally acquired 51 per cent of Galilee in
2003 and has subsequently increased its stake to the present 68 per cent.

About AGL Energy
----------------

AGL is one of Australia's leading integrated energy companies and
is taking action toward creating a sustainable energy future for its
investors, communities and customers.
Drawing on over 170 years of experience, AGL operates retail and
merchant energy businesses, power generation assets and an upstream gas
portfolio.
It has Australia's largest retail energy and dual fuel customer
base.
AGL has a diverse power generation portfolio including base,
peaking and intermediate generation plants, spread across traditional
thermal generation as well as renewable sources including hydro, wind,
landfill gas and biomass.
AGL is Australia's largest private owner and operator of
renewable energy assets and is looking to further expand this position by
exploring a suite of low emission and renewable energy generation
development opportunities.