drilling and production updates

CAMDEN GAS PROJECT
DRILLING AND PRODUCTION UPDATES
23 April 2007
Sydney Gas Ltd is pleased to advise that its active drilling campaign is continuing, both for production wells, whether vertical, directional or surface to in-seam (SIS), and for exploration coreholes in the greater Camden development.
The Camden Joint Venture completed drilling of vertical wells RB06 and EM23 on 30 March after reaching a total depth of approximately 642m and 688m respectively. RB06 and EM23 intersected the Bulli seam at depths of 586m and 630m. Both wells will be cased and cemented for fracture stimulation in May. Two other wells, EM25 (directional well) and EM33 (vertical well) which were spudded on 13 March and 2 April reached a Total Depth of 840m and 706m on 17 April and 16 April respectively. EM25 encountered Bulli and Balgownie seams at 770m and 781m while EM33 encountered Bulli and Balgownie seams at 654m and 669m. Rig 16 which drilled EM25 will
now drill EM24, a directional well. Rig 15 has completed the drilling of the surface hole for EM31, a conventional gas test well and Bulli seam completion on 21 April 2007.
The next frac program is scheduled to commence in early May 2007. It aims to fracture stimulate 12 wells before the end of this financial year. These wells will be put to production following the completion of the dewatering process.
The Managing Director of Sydney Gas, Dr Philip Moore, said that, “The Joint Venture plans to drill five boreholes to prove up additional gas reserves in Stages 3, 4 and 5 areas of the Camden Gas Project. So far, one corehole (Currans Hill 1) in the Stage 3 area has been completed after reaching a total depth of 1,069m and intersecting over 30m of gross thickness
of coal over seven primary coal seams. The second corehole (Badgerys Creek 1) located in the Stage 5 area was spudded on 10 April 2007 and on 17 April reached a depth of 301m.
This is consistent with our desire to add to reserves at Camden”.
Following corehole drilling, a reservoir characterisation study will be conducted over the respective coal seams to confirm primarily their gas content, gas composition and gas saturation values for delineating “high production fairway” with a view to optimise future
drilling.
Drilling of the fourth SIS well is scheduled for encement in early May. Dewatering of the three SIS wells that have been drilled earlier is progressing satisfactorily. It is expected that these wells will take a number of months to clean up prior to maximum gas production, which has been the characteristic historical performance at Camden. It is anticipated that the
application of this drilling technique will allow further commercial exploitation of gas reserves that would otherwise be difficult to access.
At present more than 13 TJ/day of gas is now being produced through the Camden Plant.
AGL Energy Limited is the operator of the Camden Gas Project in 50-50 joint venture with Sydney Gas Ltd.