reserves upgrade imminent

Eastern Star Gas Limited advises that Netherland, Sewell & Associates, Inc. is well advanced in its independent
review of gas reserves for the Narrabri coal seam gas project in northern NSW. An upgrade announcement
regarding Proven and Probable gas reserves for the project is expected before the end of the month.


Project background:

The Narrabri coal seam gas project is located in Petroleum Exploration Licence 238, which surrounds Narrabri
and covers an area of 9,100 km². About two-thirds of PEL 238 is underlain by coal that contains one of the
largest onshore natural gas accumulations in Australia, alone totalling 17,000 PJ (17 TCF) of gas-in-place.

Within PEL 238, Eastern Star Gas presently operates a three well coal seam gas production pilot at Bohena and
a nine well pilot at Bibblewindi.

On the basis of the production pilots, which represent less than one percent of the area underlain by coal, 2P gas reserves totalling 59 Petajoules (includes 21 PJ of 1P reserves) have already been independently certified.

Eastern Star Gas manages and operates the Narrabri coal seam gas project on behalf of a Joint Venture. Eastern
Star Gas holds 65% of the Joint Venture with the remaining 35% held by Gastar Exploration Ltd.


David Casey
Managing Director