sweet kate has been plugged and abandoned

18th May, 2008
KATE-1
ONSHORE, CANTERBURY BASIN, NZ
Gas2Grid Limited (“GGX”) announces that their exploration wildcat well, Kate-1, has been drilled to a total depth of 1,112 metres and the well has also been electric logged without any significant hydrocarbon indications. The well has now been plugged and abandoned.
Although Kate-1 did not discover any hydrocarbons the technical data gathered by this well is important for evaluation of additional hydrocarbon prospectivity within the onshore part of the licence. In particular, a substantial thickness of very high porosity sandstone reservoir section (about 70m with porosity in the range of 30%) was intersected within the main target, the Broken River Formation and also shale samples within this same formation exhibited hydrocarbon fluorescence and may prove to be a hydrocarbon source rock.
The next stage of exploration and prospect evaluation within this licence will be to incorporate the new technical data gathered by drilling Kate-1 including additional geochemical analysis of shale samples to assess oil source potential and maturity. While Kate-1, as a dry hole condemns the specific location of the well, in light of these positive factors the prospectivity of the wider permit area has in no way been eliminated.
Kate-1 was located within the northern part of the onshore Canterbury Basin, South Island, NZ, approximately 60 kms north of the city of Christchurch. Kate-1 was drilled on a surface anticline that has been mapped in the subsurface using seismic data acquired in 2006.
BACKGROUND: GGX announced in 2007 that it had entered into an agreement with a privately owned NZ company, Green Gate Limited, to farmin to the onshore portion of PEP 38260 located in the north Canterbury Basin. Under the terms of that original agreement and subsequent amendments GGX has paid $1.2 million towards the drilling of Kate-1 and in return shall acquire an undivided 40% interest in the onshore portion of PEP 38260, covering an area of 2,429 square kilometres. GGX has also paid $600,000 cash in order to acquire another 15% interest in the onshore portion of PEP 38260 (total 55%). Execution of the agreements covering the farmin was completed in early 2008.
Dennis Morton: Managing Director Phone: 0412 995 696 (+61-412 995 696 from overseas)
David King: Non-Executive Director Phone: 0414 292 934 (+61-414 292 934 from overseas)