TidBits:

[i]12 May 2005
Molopo Enters Large U.S. Gas Project

KEY POINTS:

• Molopo is partnering a US energy producer in an oil and gas project, with multiple targets in a petroleum producing region of Mason County, West Virginia, USA.

• First appraisal well expected to be drilled in the September quarter.

• Nearby infrastructure has enabled gas sales agreements to be negotiated

• Opportunity generated by Molopo's deals flow and technical expertise

• Continued emphasis on Australian gas projects

Coal bed methane ("CBM") gas producer, Molopo Australia Limited, is to move into the energy market in the United States following the completion of a series of agreements covering a large gas project in West Virginia.

The project contains multiple oil and gas targets in sandstones, shales and coals. Gas in the leases is currently being produced from the Ohio Shale zone.

The move - announced today by Melbourne-based Molopo (ASX code: "MPO") - is the Company's first in the US and adds to its producing and exploration interests in CBM projects in Queensland's Bowen Basin and the Gloucester Basin north of Newcastle in New South Wales.

Central to the US expansion is Molopo's success in generating more gas from coal seams by horizontal drilling as opposed to more conventional CBM fraccing methods.

Under an agreement with Dallas, Texas-based Foree International, Molopo will have a 50% interest in a producing petroleum lease in Mason County, West Virginia, with this lease having more than 8,000 acres. Foree has farmed into this lease through an agreement with Base Petroleum, the current holder of the lease. Base Petroleum has 37 wells producing oil and gas in the joint venture's leased area.

The Mason County region is a relatively mature oil and gas province in which hundreds of oil and gas wells have been drilled."While production from these existing wells and their surrounds is excluded from the farm-in, they clearly demonstrate the prospectivity of the area," Molopo's Managing Director, Mr. Stephen Mitchell said.

This arrangement leaves open to Molopo and Foree significant targets in the fractured Ohio Shale, and allows appraisal and development by Molopo-Foree of all the oil and gas potential of the Berea, Oriskany and Newburg Sandstones, and the coal bed methane prospectivity of the Freeport coal seams. In addition, the joint venture expects to add additional acreage in the vicinity.

"Although most current production in the leased area is gas from the Ohio Shale, all of the prospective formations produce hydrocarbons in West Virginia and surrounding states," Mr. Mitchell said.

"As wells in the region are typically low pressure with modest production rates, we are particularly interested in whether the horizontal drilling techniques employed in Australia will substantially increase gas delivery in the three main objectives, namely the shallow sands, shales and particularly coals."

The joint venture's first appraisal well is likely to be drilled in the September quarter.

"A substantial gas gathering and pipeline system currently serves the Mason County area, enabling any production wells from new discoveries to be quickly tied-in," Mr. Mitchell, said today.

"Gas in the region typically trades at a premium to average gas prices in the United States, which in turn are 3-4 times higher than prices received for gas in Australia," Mr Mitchell said.

"With our technological expertise and low entry cost into this JV, the United States expansion adds significant
upside for Molopo."

"Gas sales arrangements have been made with a local company, Base Petroleum Inc., which owns and operates existing gas infrastructure in the region, to take any initial production from the Molopo-Foree joint venture."

Mr Mitchell said the Mason County project fitted within Molopo's longer-term strategy of building a quality portfolio of
oil and gas assets where exploration risk was reduced by previous work or existing nearby production.

"While the development of our Australian projects