EP 453, onshore Canning Basin, Western Australia (100%)

Titleholders: Gas2Grid Limited - 100%

Status:Native Title Access Agreement Executed; Licence issued January, 2007

Commitment:
Year 1 (2007) - $100,000 of technical studies
Year 2 (2008) - $300,000 seismic or 1 well
Year 3 (2009) - $300,000 seismic or 1 well
Year 4 (2010) - $100,000 of technical studies

In March, 2008 GGX Directors announced that, subject to Ministerial approval, GGX had acquired a 100% interest in Western Australian petroleum exploration licence EP 453, located onshore in the Canning Basin, Western Australia. The financial consideration for the acquisition was 6 million fully paid ordinary shares in the Company and the assumption of existing royalties to the vendors of 3%.

EXPLORATION HISTORY
EP 453 is a highly prospective licence with both oil and gas targets in Late Devonian age carbonate, pinnacle reefs and Late Devonian age, marine sandstone reservoirs. A number of pinnacle reef prospects have been mapped on existing seismic data and only two wells have previously been drilled (during the 1980s) within this region targeting these reefs. Neither of the two wells intersected reservoir quality limestone. The prospectivity of the Devonian age sandstone reservoirs is evidenced by the fact that the only well drilled within the area in recent history, Chestnut-1 (1994), intersected a shallow (1,350 metres - depth) 8 metre thick sandstone reservoir interpreted from logs to be hydrocarbon bearing, although the interval was not tested. A deeper (1,800 metres - depth) sandstone reservoir is hydrocarbon bearing but has relatively poor reservoir parameters and on a drillstem test flowed gas to surface at a rate too small to measure with no produced water. These two sandstone reservoirs were deposited in a submarine fan complex and reservoir quality should improve in the direction of their depositional source (proximal area).

EP 453 enjoys the benefit of an executed Native Title and Heritage Protection Agreement with Kimberley Land Council on behalf of three claimant groups, which took many years to negotiate. The acquisition of this 100% working interest will facilitate the Company attracting a farm-in partner to participate in future exploration, enabling the Company to benefit from any farm-in premium in such a transaction.

The Company has been successful in acquiring all existing seismic field and support data from the Western Australian Government.

The EP 453 licence conditions have been varied with the combination of the Year 2 and 3 commitments resulting in the requirement to acquire 200 kms new seismic data by 17th January, 2010.

The Company has finished reprocessing all seismic data previously acquired over prospects and leads located within EP 453. These reprocessed data have also been interpreted and target horizons mapped generating drilling prospects without the need for new seismic acquisition. The Company will now attempt to farmout these drilling prospects with a possibility that drilling could commence as early as the 2010 dry season (April-November), subject to requisite approvals and funded being provided by farmin partner/s.

EP 453 is a highly prospective licence with both oil and gas targets in Late Devonian-age carbonate, pinnacle reefs and Devonian sandstone reservoirs. A number of pinnacle reef prospects have been mapped on existing seismic data. Only two wells have previously been drilled (during the 1980s) within EP 453 and surrounding areas targeting these reefs. In addition, the prospectivity of Devonian sandstone reservoirs is evidenced by the fact that the only well drilled within EP 453 and the surrounding area in recent history, Chestnut-1 (1994), intersected a shallow (depth ca 1,350 metres) 8 metre thick sandstone reservoir interpreted from logs to be hydrocarbon bearing, although the interval was not tested. A deeper (1,800 metres) sandstone reservoir is hydrocarbon bearing but has relatively poor reservoir parameters and on a drillstem test flowed gas to surface at a rate too small to measure with no produced water. These two sandstone reservoirs were deposited in a submarine fan complex and reservoir quality should improve in the direction of their depositional source (proximal area).