Eastern Star Gas (ESG)

Shares / Stock Code

ESG

Stock Exchange / Sharemarket

ax

Eastern Star Gas (ESG) is a conventional and coalbed methane gas explorer and producer with operations primarily held in New South Wales and Victoria. ESG supplies gas to the NSW and potentially Eastern Australian and global LNG markets. Eastern Star Gas was listed on the Australian Stock Exchange on February 8, 2001 with a market capitalisation of A$16 million. Its headquarters is located in Sydney.

The Company’s principal asset is Coonarah Gas Field. The gas produced from Coonarah Gas Field is supplied to the Company’s Wilga Park Power Station. Wilga Park Power Station produces and supplies electricity to Country Energy under a 10-year power purchase contract. ESG also continued gas exploration with a focus on coal seam gas production pilots. During fiscal 2008, Eastern Star Gas divested all its conventional gas exploration licenses, with the listing of Orion Petroleum Limited on 10 December, 2007, while keeping its PEL 238 exploration license. ESG holds a 23.1% interest in Orion Petroleum Limited.

In 2007, Eastern Star Gas secured its first independently certified CSG reserves. ESG is currently focused on the development of the CSG resource of the Gunnedah Basin in NSW. It owns a 65% interest in the Narrabri Coal Seam Gas Project which is situated in PEL 238 next to the township of Narrabri. ESG is undertaking a 20 well corehole exploration and evaluation operation at PEL 238 during 2008 and 2009 including the completion of 4 multi-lateral production pilot wells at Bibblewindi and Dewhurst.

Eastern Star Gas History

The Company was created in August 2000 with a focus on exploring, developing and producing conventional natural gas and coal seam gas reserves in eastern Australia. It listed on the ASX 2001 with a market capitalisation of A$16 million. At the time of its establishment the Company had interests in six exploration licences and two licence applications in Victoria and NSW, with operations in brown-coal gas plays in eastern Otway Basins in Victoria. Later ESG changed its focus to become an explorer and developer in NSW with the acquisition of several exploration licenses.

In December 2002, ESG and Hillgrove Resources Limited, its joint venture partner acquired 100% of the conventional gas interest in PEL 238 located in the Gunnedah Basin. In October 2003, ESG acquired 65% of the CSG interest in the same prospect, with remaining 35% interest owned by its North American-based JV partner Gastar. Hillgrove currently holds 20.7% stake in ESG. In January 2003 conventional gas resources of 11.3 PJ were certified at the Coonarah Gas Field within the exploration license PEL 238. The Company built a 10 MW gas-fired Wilga Park Power Station for the purpose of commercialising this resource. ESG drilled two wells at its three well Bohena CSG project during 1998/99 and drilled the third well in 2004 which was deepened in 2006. ESG undertook drilling operations at its nine well Bibblewindi CSG project in March 2006.