ATP 701P

FINAL

REPORT

END OF TENURE – 1 DECEMBER 2004

Origin Energy CSG Limited ABN 68

001 646 331Ground Floor, South Court, John Oxley Centre

339 Coronation DriveMILTON QLD 4064

December 2004O:\COMMON\701\ADMIN\701-TENURE END RPT-DEC2004.doc

SUMMARY

Origin Energy CSG Limited, as the title holder of ATP 701P, hereby surrenders the tenure with effect from 1 December 2004. The tenure area comprises of seventy- one sub-blocks within six graticule blocks including blocks 1645, 1646, 1647, 1717, 1718 and 1719 (Charleville Sheet). This document constitutes the final report for the graticule blocks remaining within the tenure area. The total area covered by the tenure is now captured under PL 204, which was granted by the Queensland Department of Natural Resources and Mines (QDNRM) on 18 December 2003. ATP 701P was granted primarily for coal seam gas (CSG) exploration.

No authorised activities occurred within the area of the tenure during the 18 day period prior to the grant of PL 204 over the entirety of the authority.

CONTENTS

1. INTRODUCTION....................................................................21.1 Tenure.............................................................................................21.2 History of ATP 702P.........................................................................21.3 Work Undertaken.............................................................................31.4 General Information.........................................................................3

2. EXPLORATION.................................................................42.1 Rationale.........................................................................................42.2 Drilling.............................................................................................42.3 Seismic............................................................................................43.1 Regional Geology.............................................................................53.2 Local Geological Setting..................................................................63.3 Play Types.......................................................................................7

4. CONCLUSIONS................................................................9

FIGURES1. Location of ATP 702P2. Top Coal – Depth Structure Map

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1. INTRODUCTION

1.1 TenureOrigin Energy CSG Limited (Origin), as the title holder of ATP 701P, hereby surrenders the tenure with effect from 1 December 2004. The tenure area comprises of seventy-one sub-blocks within six graticule blocks including blocks 1645, 1646, 1647, 1717, 1718 and 1719 (Charleville Sheet). This document constitutes the final report for the graticule blocks remaining within the tenure area. The total area covered by the tenure is now captured under PL 204, which was granted by the Queensland Department of Natural Resources and Mines (QDNRM) on 18 December 2004. ATP 701P was granted primarily for coal seam gas (CSG) exploration.

1.2 History of ATP 701PATP 701P was originally granted to Tri-Star Petroleum Company (50%) and Transfield CSM Pty Ltd (50%) commencing 23 January 2001. The tenure consisted seventy-one sub-blocks, which were conditionally surrendered from of ATP 592P, also owned and operated by Tri-Star Petroleum Company.

On 22 February 2002, Oil Company of Australia Ltd (OCA), now Origin Energy CSG Ltd, entered into an agreement with Tri-Star to assume the holding and operatorship of certain tenures, which included ATP 701P. OCA simultaneously acquired Transfield CSM Pty Ltd from Transfield Holdings Pty Ltd via an agreement effective 1 January 2002.

On 15 January 2003, OCA applied for a petroleum lease covering 100% of ATP 701P. By late 2003 the application for PL 204 had not been granted and OCA subsequently renewed the tenure for a one year term, commencing 1 December 2003, to allow for sufficient time for the application to be processed. On 18 December 2003, PL 204 was granted by QDNRM. The total area covered by ATP 701P is now captured under PL 204.

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1.3 Work Undertaken

No work was undertaken within the area of the tenure prior to the grant of PL 204 over the entire area of the authority.

1.4 General Information

ATP 701P is located within the south central portion of the Bowen Basin in central Queensland. Major towns near the permit include Roma and Injune to the south and west respectively and Wandoan to the east. No major infrastructure or cultural features are located within the permit.

The following topographic map sheets cover ATP 701P:

Scale Sheet Name Sheet Number

1: 1,000,000 Charleville SG 551: 250,000 Taroom SG 55-81: 100,000 Hornet Bank 8746

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2. EXPLORATION2.1 Rationale

The exploration rationale initially adopted for ATP 701P was to explore for coal seam gas resources in thick coals within the Bandanna Coal Measures.

2.2 DrillingDrilling activities within the tenure have not been reviewed for the purposes of this surrender.

2.3 SeismicSeismic acquisition activities within the tenure have not been reviewed for the purposes of this surrender.

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3. GEOLOGY

3.1 Regional Geology

The Bowen Basin is a north-south trending, retroarc foreland basin containing sediments of early Permian to mid Triassic age. The sequence accumulated in terrestrial and shallow marine environments and reaches a maximum thickness of 10 km. Westward trending subduction produced a volcanic arc to the east of the Australian craton and gave rise to a north-south trending structural fabric in the Bowen Basin. This generally compressive history lessens in intensity towards the west.

The stratigraphic development of the Bowen Basin is best described in broad terms as a series of three separate tectonic phases that gave rise to packages of sediments that accumulated under similar regional conditions. Phase 1 is characterised by limited crustal extension which gave rise to a series of north-south trending graben and half-graben. During this phase, areally restricted Early Permian deposition occurred in the Denison Trough with sediment sourced from the craton to the west accumulating in alluvial, lacustrine and peat mire environments. Volcanics and associated sediments accumulated in the eastern part of the Bowen Basin (Camboon Volcanics). During the latter part of this phase limited marine incursion occurred.

A second phase, during the Early Permian and early Late Permian, was initiated by the onset of crustal cooling and passive sag that gave rise to marine transgression and more widespread sediment accumulation. Along the western margin of the Basin coastal plain environments developed, and for long periods were dominated by peat mire environments. Offshore marine shelf sediments accumulated in the east.

Phase 3, in the Late Permian, saw the resurgence of subduction accompanied by the reactivation of the eastern volcanic arc and compression towards the west. Thrust loading gave rise to more rapid subsidence on the eastern side of the basin imposing an east-west cross-sectional asymmetry. During this phase, quartz-lithic sediment sourced from the craton to the west was overrun by volcanolithic sediment from

O:\COMMON\701\ADMIN\701-TENURE END RPT-the arc to the east. Alluvial plain environments prograded from the

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The Late Permian coals within the Comet Ridge were deposited during the thermal sag phase of the Bowen Basin’s tectonic history, when rapid regional subsidence allowed the basin-wide development of peat forming environments. The resulting Permian coals are laterally extensive and can be traced throughout the subsurface

north to cover the whole basin and establish an axial sediment dispersal pattern. During the early part of this phase coal measure accumulation was basin wide (Baralaba Coal Measures). As the the basin filled the waterlogged environments that allowed peat accumulation were replaced by well drained conditions during the Triassic, causing sediment oxidation and the end of thick peat accumulation.

Sedimentation during the Triassic continued in alluvial plain environments with sediment predominantly arc-derived and with episodic volcanic activity. Large volumes of craton derived quartz rich sediment accumulated in the Middle Triassic. Lower energy conditions prevailed during the accumulation of the youngest preserved unit of the Bowen Basin, the Moolayember Formation, which is interpreted as a lacustrine deposit.

The climax of the Hunter-Bowen Orogeny in Middle to early Late Triassic (Norian) times saw the cessation of sedimentation in the Bowen Basin and the start of a WSW directed compressive event and local erosion. Widespread sediment accumulation resumed in latest Triassic (Rhaetian) to early Jurassic times with the development of the Surat Basin, which overlies the southern Bowen Basin. Depositional environments were predominantly alluvial with a slow, steady subsidence regime controlled by crustal cooling (eg. Precipice Sandstone).

3.2 Local Geological Setting

ATP 701P occupies the western limb of the Taroom Trough with the permit area capturing the southern axis of the Comet Ridge (Figure 1). The Comet

O:\COMMON\701\ADMIN\701-TENURE END RPT-Ridge refers to the elongate N-S trending basement high that separates the two depocentres of the Bowen Basin, the Denison and Taroom troughs.

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The Late Permian coals within the Comet Ridge were deposited during the thermal sag phase of the Bowen Basin’s tectonic history, when rapid regional subsidence allowed the basin-wide development of peat forming environments. The resulting Permian coals are laterally extensive and can be traced throughout the subsurface

and Baralaba Coal Measures to the north and west respectively and are a very important source of coal seam gas elsewhere in the Bowen Basin.

Drilling within the Comet Ridge has established the presence of a relatively thin veneer of Early to Middle Jurassic sediments of the Surat Basin sequence unconformably overlying a variable thickness of Middle Triassic to Late Permian Bowen Basin sediments. The Jurassic strata are known to dip regionally towards the southwest and into the depocentre of the Surat Basin, however tilting has been very minor. The Triassic and Permian strata of the underlying Bowen Basin sequence deepen much more rapidly towards the east and into the Taroom Trough. These two sediment packages are separated by the Base Jurassic erosional unconformity, which corresponds to the base of the Precipice Sandstone. This unconformity truncates the Bandanna coals along the southwest edge of the Comet Ridge, to the west of ATP 701P.

In a broad sense the dominant structural features within the local permit area can be characterised by an episodic history of deformation, which has been driven by a compressive tectonic regime. Compression associated with foreland thrust loading during the Early to Middle Triassic was responsible for the closure of the Bowen Basin during the early Late Triassic and lead to uplift and erosion of the Bandanna Formation along the crest of the Comet Ridge. Subsequent compressional folding and faulting in the Middle Cretaceous has accentuated earlier formed features and initiated an extended period of non-deposition and sub-areal erosion that continues today.

3.3 Play Types

1) Coal seam gas is considered to be the primary target within ATP 701P. The prevalence of thick, widespread, low ash coal seams in the upper Bandanna Formation make the unit highly prospective for coal seam gas exploration. The coal bearing strata of the lower Bandanna Formation, otherwise termed as the Kaloola Member equivalent, are much less prospective for coal seam gas because these seams tend to be comprised of thin plies of high ash coal separated by numerous tuffaceous clay partings.

O:\COMMON\701\ADMIN\701-TENURE END RPT-Structural traps are not a prerequisite for a coal seam gas

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prospect but can create highly productive “gas caps” and replenish highly permeable, but potentially depleted shallow coals. A depth of approximately 1000m is widely accepted as a maximum depth for economic coal seam gas exploitation. This is governed by decreasing permeability and increasing drilling and completion costs with increasing depth. At depths shallower than a few hundred metres the risk of coals being depleted of methane increases.

2) Sandstones within the Permo-Triassic sequence on the Comet Ridge are generally considered to be of low conventional prospectivity. The ATP 701P area is structurally uncomplicated and thus a lack of significant structural and/or stratigraphic traps within the region is considered to be the main risk involved in a conventional hydrocarbon play. No major stratigraphic or structural traps are currently recognised within the tenure area.

4) Sandstones within the Jurassic sequence provide suitable reservoir quality. However, the shallow depth of burial and potential for flushing of hydrocarbons by fresh water, combined with the absence of traps generally makes them unprospective.

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4. CONCLUSIONS

Origin Energy CSG Ltd, as operator of ATP 701P, hereby surrenders the tenure with effect from 1 December 2004.

The total area covered by ATP 701P is now captured under PL 204, which was granted by the QDNRM on 18 December 2004.