Sydney Gas Presentation 2004 (ASX Code: SGL)

1. Sydney Gas Presentation2004(ASX Code: SGL) Domenic Martino, Executive Chairman & Steve McNally, Chief Operating Officer

2. What is Coal Seam Methane? • Natural gas is found in most coal deposits • Process by which plant material is converted to coal over millions of years • Methane contained within the coal seam where it is absorbed or attached to the coal

3. What is Coal Seam Methane? • Clean burning fuel more environmentally friendly than oil, coal or even conventional natural gas • Contains few, if any, impurities and therefore requires minimal processing • Coal seam methane (also known as coalbed methane) is natural gas extracted from coal

4. CSM – High Growth Industry Worldwide • Proven technology • CSM represents +10% of US’ gas consumption • CSM represents +25% of Queensland’s gas consumption • SGL has arguably world’s largest CSM acreage controlled by single company

5. The Growth of US Coalbed Gas Production • Current coalbed gas production represents approx 10% of annual US natural gas production (2002) • Over 18,000 producing coalbed methane wells in 12 states across the US Source: GTI Gas Resource Database, GTI-01/0136, EIA, Various Public Records

6. Sydney Gas at a Glance • NSW’s first commercial gas producer from 6 million acre province in the Sydney Basin • NSW project of “State Significance” • Long-term sales contracts with AGL for sales in excess of $450 million • $100 million in funding raised in past 12 months or so via equity, convertible notes and project finance • Opportunity to become a major gas producer with unrivalled proximity to Australia’s largest energy markets

7. Sydney Gas Stock Snapshot • Ordinary shares on issue 236m • Convertible notes 53m • SGLG exp April 2006 • SGLGA exp June 2006 • 12 month trading range $0.23-$0.99 • Current market cap (undiluted) $200m approx. Board Members • Domenic Martino, Chairman; Dr Bruce Butcher, CEO and MD; • Bob Carroll (ex-Woodside CFO); John Castleman; Artur Birkner; • Bruce McKay (ex-Production Manager (Aust) Esso, Chairman AWE).

8. World-class Resource • Estimates of gas in place: • Amoco – 214 TCF • University of Sydney – 130 TCF • SGL – 107 TCF • Potentially 44 TCF in Sydney Basin • By comparison, the North-West Shelf has reserves of 33 TCF • SGL is working to prove up 1 – 2 TCF from each of three project areas Camden, Wyong and Hunter over the next 5–10 years

9. Reserve Categories • Proved Reserves – 90% probability will produce amount equal to or more than predicted. • Probable – 50% probability will produce amount equal to or more than predicted. • Possible – 10% probability will produce amount equal to or more than predicted.

10. PELs 2, 4, 5, 267 and 441, and acreage position • Sydney Gas has a dominant acreage position over Sydney Basin • Hundreds of millions of dollars spent on exploration in Sydney Basin. That data is being accessed by SGL for reprocessing, thus reducing expenditure and lead times

11. Coal Seam Methane Exploration on SGL’s Licences

12. Developing the High Production FairwayUS experience - Powder River Basin Anderson/Canyon & Equivalents MONTANA WYOMING Anderson/Canyon Cook/Wall-Phase 2 Development Sheridan Gillette Buffalo Area of Intense Phase 1 CBM Development Basin Syncline • Similar size to Sydney Basin, but numerous operators and working interest owners • Developed 5 High Production Fairways WYOMING Big George Wyodak 10 miles Douglas Source: NSAI

13. High Production Fairway • High production fairway delineated in Camden gives confidence of high drilling success rates • Wells already drilled within high production fairway at Camden are producing at rates above business model rates and industry expectation • High production fairways being established in Wyong and Hunter Valley • Production wells currently being drilled in Wyong for this purpose • Future expansion within Sydney Basin driven by high production fairway approach and the out-performance it has delivered to date

14. Camden • Rapidly expanding production, based on delineation of the high production fairway • Producing and selling gas to AGL since May 2001 • Operations adjacent to major pipelines linking the Eastern States of Australia • First 100 wells should produce initial gas sales of $30-$35 million pa • 300 well project should produce initial gas sales of $100 million pa

15. Typical Bulli Production Profile Water bbl/day Gas mcf/day

16. Wyong Completed • Geological modeling • Core hole drilling • Full suit geophysical logging and geological log • Gas desorption test and geochemical analyses on gas and coal samples • In-situ permeability and stress testing • Field geology • Preliminary fracture distribution analysis

17. Hunter Valley • NSW Government funded feasibility study complete for 100 km2 (24,980 acres) area • Resource of 673 BCF identified, including 424 BCF of gas recoverable • Five coal seams to be targeted for the commercial production of gas • High demand for gas in the Singleton - Muswellbrook and Newcastle regions. Region is currently significantly undersupplied with gas • Pilot project to commence calendar 2004 • Electricity generation option being modeled

18. Risk Management

19. Risk Management

20. Risk Management

21. Financial Perspectives • Strong focus on shareholder returns • Operationally cash flow positive from current Camden 100 well program at full production • First 100 wells – should produce initial revenues of $30-$35 million pa • Each 300 well project – should produce initial revenues of around $100 million pa • Costs per gigajoule for Camden Gas Project around $1.50 including amortisation of capital costs and finance expenses • A targeted capital management program to fund ramp up of gas production via mix of equity, debt and hybrid funding • New opportunities to include Wyong and Hunter Valley projects