News & ASX Releases

Letter to Shareholders

December 7, 2007

Dear Shareholder,

In the six months since our Annual General Meeting in May, your companycontinues to progress bringing its first gas fields into production, and rapidlygrow its portfolio of new oil and gas projects.

Of particular note are the following:
  • Hydrodrilling has been contracted to drill Sillaro 2, Bezzecca 1 andFantuzza 1 starting April 2008. Sillaro 2 is a second production well,while Bezzecca 1 and Fantuzza 1 are the company’s first wells into twoimportant gas structures
  • We have signed contracts with Semat Spa, a leading Italian constructorof equipment for the petrochemical and hydropower industries, to buildthe surface plant for our Sillaro and Castello gas fields
  • The Ministry has made a Preliminary Award (subject to environmentalclearance) of the Production Concessions for Sillaro and Castello
  • New applications have been made for a gas storage field (in JV withStar Energy), as well as one off-shore and one on-shore gas licence
  • Bank of Scotland is to provide a A$34 million senior debt facility tofinance the construction costs of the first production fields and thefuture exploration and development program, including drilling.

As an interim update for investors we have enclosed a short brochure on thecompany “A success story unfolds” together with our September Quarterlyreport.

Yours sincerely
Michael Masterman
Chief Executive Officer

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