Attachment 1

ATTACHMENT 2

BUNDELLA 2WELL PROPOSAL

SHALENE MC CLURE RSG COREHOLE (CSG) EXPLORATION WELL

ROMA, QUEENSLANDPL8

Well Name: Bundella 2 Well Type: RSG Corehole (CSG)Licence: PL8 Joint Venture: Roma Latitude 26° 41’ 48.6” SEquity: Longitude: 149° 10’ 46.0” E

Seismic Reference: SP 175 onLine: CVVoting (%)

Santos Group 100 Ground Level: 302.24 mRotary Table: 302.24 mProposed Total Depth: 1100m (-797.76m SS)Rig: MDC 105Nearby Facilities:

Objectives / Fluid Contacts / Predicted Pay

Stratigraphic Prognosis (Subsurface M)

Primary Predicted NetPay/Porosity

Secondary Predicted NetPay/Porosity

Formation KB Depth Subsea Depth Thickness(M) (M) (M)

Wallumbilla Fm 0 302.24 80Juandah Coal Measures N/A Bungil 80 222.24 190Taroom Coal Measures N/A Mooga SS 270 32.24 100

Orallo Fm 370 -67.76 180Gubberamunda SS 550 -247.76 62Westbourne Fm 612 -309.76 73Weald SS 685 -382.76 5Springbok SS 690 -387.76 110Upper Juandah CoalMeasures 800 -497.76 50Proud SS 850 -547.76 10Lower Juandah CoalMeasures 860 -557.76 90Taroom Coal Measures 950 -647.76 130Eurombah Fm 1080 -777.76 20T.D. 1100 -797.76*Hutton 1120m

Formation Evaluation Hole Design / Drilling IssuesWireline Logging:

Top Base Specifications Well Class: CSG CoreholeSurf Cs TD AST-GR Hole Type:Surf Cs TD DLL-MLL-GR-Density-Neutron-TAC Sonic Hole Size Depth Casing Size

7-7/8“ 20 m 6-5/8”SWC’s: Nil 6“ 770m 4-1/2” US

HQ Core TD N/AMDT’s: Nil Drill Fluid:Velocity Survey: Nil Deviation Sub-Surface Targets:

Hole deviation to be kept within acceptable limits to intersect the coal measures within a 50 m radius.

Mudlogging:Two sets of ditch cuttings to be collected and bagged at 6 m intervals from surface to the top core point.

Other Information / Hazards:V low potential for minor overpressure in the Gubberamunda Fm (1-30psi). The formation used extensively (domestic and agricultural) in the northern Roma area and hence is generally depleted. No H2S gas expected.Predicted Flow Rate: Abandoned post testing

FormationTesting:

DST’s on penetration (notionally 4 intervals). Nearby Wells: Bundella 2 is ~0.67kms SW of Bundella 1.

Coring: HQ Wireline core (continuous) from ~ 770 to 1100m.

Remarks / Recommendations :Standard Santos procedures to be followed. All post-logging evaluation to be confirmed with CSG (Brisbane).APPROVED BY:Project LeaderShalene McClure

Santos CSG Eng:Paul Lane/ Mel Wilkinson

Operations GeologyAndy Pietsch / Mick Giuliano

Drilling EngineerJames Hinton

Bundella 2 Predicted Time V Depth Curve

0

200

400

600

800

1000

12000 5 10 15 20

DAYS FROM SPUD

Bundella 2

Yanalah 6

Washpool Creek 2

Treville Downs 1

DE

PTH

(m

)

Description Permit/JV Bundella 2 Exploration Corehole PL 8

EXECUTIVE SUMMARY

PRIMARY OBJECTIVEEvaluate the net coal content, gas content, permeability of the Walloon Coal Measures at a depth of ~750 to 1100m and develop a better geological understanding of the region surrounding Bundella 2

PROPOSAL

Bundella 2 is proposed as an exploration corehole, 7.5km south west and down dip of Washpool Creek 2. The primary aims for Bundella 2 are the Upper Juandah, Lower Juandah and Taroom Coal Measures of the Walloon Coal Measures. Through interpolation and extrapolation of well logs and seismic data from previous wells (e.g. Washpool Creek 2, Bundella 1) within PL8, it is expected that Bundella 2 will encounter approximately 9 to 10m of net coal through out the Walloon Coal Measures (800 to 1080m). As part of the appraisal process a detailed testing programme has been planned for Bundella 2 consisting of: gas content and coal content data acquisition, reservoir evaluation (DST’S) and will contribute to a better understanding of the geology of the area.

JUSTIFICATION

Bundella 2 will provide insight into the permeability, net coal and gas content of the Walloon Coal Measures at depths similar to Back Creek 6; currently only contingent resources have been booked in Back Creek 6 area. The demonstration of permeability, particularly below the Upper Juandah coals, in this region would significantly increase 3P reserves in the Bundella area.

Bundella 2 will essentially provide a location for an appraisal pilot program if successful.

PROJECT SCHEDULEBundella 2 is scheduled to be drilled upon completion of Paddyward 2 and is expected to commence drilling in mid July 2008. Bundella 2 is expected to take 16.5 days for completion; the first days of the programme will be focused on establishing a stabilised 4” well bore to a depth of approximately 690m (base of Weald Sandstone formation) prior to commencement of the coring phase. The remaining 13 days will be focused on HQ continuous coring to a depth of ~1100m, where coal samples from the Juandah CMs and Taroom CMs will be taken for desorption analysis. DST’s will also be conducted on penetration to determine formation permeability.

Walloon CM’s Overburden Depth Structure Map

INDIVIDUAL WELL PROGRAM: Bundella 2 (Rev 0)

This programme to be read in conjunction with the 2008 CSG Corehole Programme - Generic Drilling Programme (Rev 2), dated 8 April 2008.

Bundella 2

Location: Latitude - 26° 41' 48.6" SouthLongitude - 149° 10' 46.0" East

Ground Level: 302.24 m (GL Elevation at Bundella 2)

Closest Offset Well: Bundella 1 – 1.25

kms SW Landholder Details: N/A –

SANTOS Owned

Water Source for Mud & Cementing: Pleasant

Hills 21 Parthenium Status: CLEAN

Geology:

FORMATION Formation Top (TVD, metres below GL)

Pressure (psi) Equivalent Mud Weight (ppg)

Wallumbilla 0.0Bungil 80.0Mooga 270.0 406 8.81Orallo 370.0 527 8.35Guberamunda 550.0 795 8.47Westbourne 612.0 872 8.35Weald 685.0 1021 8.73Springbok 690.0 1027 8.72Upper Juandah Coal 800.0 1195 8.75Proud Sandstone 850.0 1268 8.74Lower Juandah Coal 860.0 1304 8.89Taroom Coal 950.0 1468 9.06Eurombah 1080.0 1596 8.66TD 1100.0 1631 8.69Hutton 1120.0 1649 8.63

* All depths referenced are metres

below GL. Anticipated Mud Weights:

6” Hole Section : The Mooga may require up to 9.2 ppg for 20 psi overpressure. The Westbourne to Springbok is expected to be depleted. KCl can be used to weight up the fluid. A minimum of 2% KCl must be kept in the system for inhibition.

HQ section: The cored section of the well down to the Taroom Coals is expected to be depleted therefore mud weights should be kept to a minimum. Prior to intersecting the Taroom Coal ensure the mud weight is at 9.2 ppg. A minimum of 2% KCl must be kept in the system at all times.

Well Construction:

Hole Size 8-1/2” 6” 96 mm 96 mm

Hole Section Conductor Surface PDC Drilled HQ Cored

Hole Depth 60m GL 760 m GL N/A 1100 m GL

Well Construction Notes:

1. Hole depths for Conductor and Surface Intervals are to be adjusted to suit respective casing tallies, on site.

2. The float shoe must be baker locked and the last 6 joints of casing must be tack welded.

3. TD of the HQ section must be not less than 10m above the top of the Hutton Formation which in this well is prognosed at 1120 m GL. Review and confirm final TD depth with Brisbane office once the top of the Eurombah Formation is found.

4. Casing Tallies are to be done for each string of casing run (refer Generic Well Programme)

Abandonment:

This well will be retained for possible conversion to a pressure monitoring well. The usual abandonment to 50 m inside the shoe is to be conducted however there are to be no surface cement plugs installed.

General Notes:

JSAs are to be conducted on all major operations, particularly related to nippling up and down BOPs and wellheads.

The 4 ½” casing is to be tack welded for the last 6 joints to the shoe. This is to be noted in the casing and cementing report and casing tally record.

All jobs to be pre-planned and required materials checked prior to the particular job being done.

Regular well control and other emergency drills are to be conducted – daily for each crew to start with.

Individual Well Programme – Bundella 2 Revision 0

760

770

780

790

UPJU

800

810

820

830

840

850

PROULOJU

860

870

880

890

900

910

920

930

940

TARO

Bundella 2: NOTIONAL DST PARAMETERS

NOTE: The prognosed depths are very uncertain in this region due to lack of offset wells and seismic data. As a result there could be greater error in depth prognoses and the section could vary significantly from offset logs.

The desired test properties for the DST’s at Bundella 2 are as follows:

Note the offset logs are from Bundella 1 (B1):Santos BUNDELLA 1

TD 2041.60m KB307.90m FORMATION

-20SPMV 100

0.2LL7

OHMM 2000

140

1

dt35US/F

hdenG/C3

40

3

coal0 1

DS

T

KB

DE

PTH

Potential DST #1 provided net coal is achieved – Parameters to be confirmed:

Interval: Upper Juandah (1st interval marked on offset well logs at 795 - 810m at B1 and prognosed at ~ 805 - 820m at B2) if net coal is greater than a total of 1.8m.

Cushion: 210m water cushion Pre-flow period: 10 mins Initial Shut-in Period: 50 minsMain Flow Period: 60 mins (regular pressure readings through the choke if there is presence of gas although not expected, notionally 1/8”)Main Shut-in: 300 minutesProposed Main Flow Test Type: Water is most likely but there is a small potential for gas so run through choke to estimate gas rate in case any gas present.

Potential DST #2 provided net coal is achieved – Parameters to be confirmed:

Interval: Lower Juandah (2nd interval marked on logs at 875 - 895m at B1 and prognosed at ~ 885 - 905m at B2) if net coal is greater than a total of 1.7m.

Water cushion: 230m Pre-flow period: 10 minsInitial Shut-in Period: 50 minsMain Flow Period: 90 mins (regular pressure readings through the choke if there is presence of gas although not expected)Main Shut-in: 360 minutesProposed Main Flow Test Type: Water is expected but run through choke to estimate gas rate in case any gas present – not likely to see much

960

970

980

990

1000

1010

1020

1030

1040

1050

1060

1070

EURO

pressure.

Santos BUNDELLA 1TD 2041.60m KB307.90m FORMATION

-20SPMV 100

0.2LL7

OHMM 2000

140

1

dt35US/F

hdenG/C3

40

3

coal0 1

Potential DST #3 provided net coal is achieved. Parameters to be confirmed:

Interval: Taroom Coal Measures (3rd interval marked on logs at 980 - 1005m at B1 and prognosed at ~ 990 - 1015m at B2) only if net coal is greater than a total of 1.8m.

Cushion: 250m water cushion Pre-flow period: 10 mins Initial Shut-in Period: 50 minsMain Flow Period: 90 mins (regular pressure readings through the choke if there is presence of gas although not expected)Main Shut-in: 390 minutesProposed Main Flow Test Type: Water is most likely but there is potential for gas expected but run through choke to estimate gas rate in case any gas present – not likely to see much pressure.

General Arrangements

BH Setup for all tests: Testing on penetration (although drill through a particular interval and straddle if uncertain on whether to test on initial penetration).

For any test interval that has > 2.5m of net coal let me know as the main flow period may need to be adjusted.

DS

T

KB

DE

PT

H

Any other unmarked interval that has greater than 2.2m of net coal within a 15m interval is to be tested on penetration. I will provide parameters but will be similar to those of the closest anticipated interval.

The final parameters for each test (other than DST1) will be forwarded following earlier test results if there are any changes. If there is any uncertainty please call.

Individual Well Programme – Bundella 2 Revision 0

EMERGENCY RESPONSE NUMBERS

Emergency Situation1 Dial 112 from a Mobile. Dial 000 from a Landline

Location Details:Well Name: Bundella 2

Co-ordinates: 26° 41' 48.6" South149° 10' 46.0" East

Directions to MDC Rig 105

From Roma:2 Zero odometer at “Big Rig” head east on Warrego

highway to Wallumbilla for 38.8km.3 Turn Right into Wallumbilla South Road and

travel for 13km to the Wallumbilla LNG plant .4 Turn right into the Bardalomey road travel for

600m.4 Turn left off the road and follow track along the

Santos Drilling Rep: 0437 653 809, fence and travel a further 1.4km to rig siteWayne Schefe: 0420386455Norm Rabig: 0439 816 416 5 All Turns Signposted “Mitchell Rig 105”.

Jim Hinton 0417 978 279Simon Hann 0400 656 886Gerard Norton: 0409 057 499Al MacDonald: 0402 910 010MDC 105 Rig Manager: 0428 131 072Peter Street 0429 473 340

Roma Hospital: 07 4624 2700 RFDS: 07 4654 1443Roma Ambulance: 07 4622 1202 Roma Police: 07 4622 9333

INTRODUCTION

This generic programme covers the general requirements and information common to the core holes to be drilled with Mitchell Rig 105 and Mitchell Rig 107 in the Roma Area in 2008.

Well specific requirements will be covered in an Individual Well Programme and montage for each well, which shall be read in conjunction with this Generic Drilling Programme.

GENERAL NOTES

Landholder Relations

In order to maintain good landholder relations and to minimize the disruption to the landholders due to our drilling operations, the following conditions as agreed with the landholders are to be strictly observed:

All fences, gates, tracks are to be left as they are found; No one is to venture off the designated access roads or lease area. The landholders

are happy for us to use the access roads but do not want anyone venturing into other areas of their property;

Jon Warby (Mob: 0427 695 125, Roma: (07) 4624 2125) is the contact for landowner issues;

Fire

Particular care should be taken to control possible ignition sources. Care should be taken when welding to ensure this does not start any fires and smoking should be confined to the designated smoking area on site.

In the event of any fire, notify the Landholder, Santos Roma and the local Fire Brigade immediately. These parties should also be notified before a DST test is conducted. Common contact phone numbers are contained in the telephone list attached as Appendix 2 to this generic program. Additional phone numbers for any particular well are included in the specific drilling programme for that well.

General

Please ensure compliance with the following general conditions for site entry.

Observe gate signs. Before opening a gate, note how it is fastened and refasten it exactly the same when

you close it. Stock can open carelessly closed gates. When traveling in convoy, wait at gates to ensure the following vehicle leaves it as it

was found. The driver of a vehicle which opens a gate is responsible to see that it is closed again.

Report any fence or gate needing repair to the Santos Rig Representative, regardless of where it is and if it was caused by Santos operations or not.

Report to the Santos Rig Representatives, sightings of any stray or distressed stock, obvious problems at water facilities, or any unusual circumstances which might be a concern to the landowner.

Drivers should be aware of the dust being produced by their vehicle. Limit speed to 20km/hr in close vicinity to homesteads, other stations buildings and farm facilities.

Observe the legal speed limit on public roads and responsible limits off road.

Leave no litter at all, even “biodegradable” items. Be careful of litter being blown out of the vehicle when opening doors to open gates. All vehicles should have a rubbish bag attached to the gear stick.

Notify the Field Supervisor or a client representative if any suspected Aboriginal sites, objects or remains are located. DO NOT DISTURB THE SITES.

Vehicles are to keep to approved tracks and roads only. There will be no touring, exploring, and in particular NO SHORTCUTS.

Night Driving is to be avoided where possible. Journey management procedures are to be strictly adhered to at all times.

Persons driving vehicle will be held responsible for gates, route taken, litter control, passenger safety and general incidents involving the vehicle.

Moving of Drilling Rigs and associated equipment by road is not permitted during the hours of darkness. Rigging up of drilling rigs is permitted in the hours of darkness provided a risk assessment is carried out and adequate lighting is available and used.

CAMPAIGN DESCRIPTION

The wells in this campaign will be continuously cored from approximately mid Springbok Sandstone formation (in most cases) to TD in the Eurombah formation.

The primary objectives are: To obtain cores from coal seams in the Juandah and Taroom Coal Measures to

determine extent and gas content of the coals To conduct DST's in these same formations to determine permeability.

Permeability estimates approaching those sufficient for commercial production, along with sufficient net coal would open deeper regions to 3P booking and further appraisal. The corehole exploration programme is required to obtain reservoir data for future field development plans and for the high grading of similar appraisal and development regions for future work.

Coal samples recovered from the cored section will be sealed for gas desorption by ACS Laboratories. Logging and DST’s will be conducted in the cored section by Precision Wireline Services and DST Australia, respectively.

The gas content and permeability information generated from each core-hole in this campaign will enable review for validity of the reservoir property estimates made in the contingent resource assessment which included coal to a subsurface depth cut-off of 1000m.

The coreholes will also indicate the potential for permeability in coals to depths in excess of 1000m. If permeability can be demonstrated at these depths this will assist in high-grading similar areas for future appraisal and possible development.

The campaign will be undertaken by Mitchell Drilling Contractors (MDC) using their UDR 1200 and UDR 1000 rigs (Rig #105 and Rig #107 respectively).

A 7” conductor pipe will be installed by the coring rig to approximately 60m in each well and the bradenhead, a mud cross (3K x 5K DSA), a single double-acting annular & a diverter nippled up.

The surface hole will be drilled through the Gubberamunda and overlying formations to section TD approximately 25m into the Westbourne Formation (depth as indicated in the specific Individual Well Programme). The surface casing will consist of MDC supplied 4 ½” SFJ threaded casing. This casing will be fully cemented to surface by Halliburton and a slip and seal unit with the slips removed set in the bradenhead. The annular BOP and mud cross will be used for the remainder of the drilling & coring operation and abandonment.

After drilling out the cement and surface casing shoe with a PDC bit, the production hole will be drilled 3m below the casing shoe and an LOT/FIT test undertaken. The PDC bit will then be used to drill to either 10m outside the casing shoe (so that the core barrel clears the casing before coring commences) or to a greater depth where the coring is not scheduled to start close to the casing shoe depth – refer the Individual Well Programme for the core point depth. The production hole will then be fully HQ cored to TD in the Eurombah formation – refer Individual Well Programme for TD depth.

Some of the coreholes will be plugged and suspended on completion of drilling and testing activities for possible future conversion to water bores while others will be fully abandoned

(Refer the Individual Well Programmes). It is not intended to remove the cellar following rig release hence once the rig is pulled clear of the cellar area and before activities are concluded at the site, the cellar covers should be installed so that the entire cellar is covered, and temporary fencing installed around the outside of the cellar.

For wells that are suspended pending water bore conversion, the cellar should not be removed / rehabilitated until the water bore conversion has been completed, or a decision made that conversion will not be undertaken. In the latter case, a surface cement plug shall be set to complete the requirements to fully abandon the well. For wells fully abandoned at the completion of the well, the cellar removal / rehabilitation can commence at any time after the rig has left the site.

All logs and reporting for the campaign are to be presented in meters.

SAFETY

All operations conducted in the course of drilling these wells shall be in accordance with the safety requirements specified in the following documents:

The Santos Drilling Operations Manual (DOM) Santos EQ Gas Safety Management Plan Mitchell Drilling Contractors Corehole Safety Management Plan Queensland Petroleum Regulations (2004) Queensland Petroleum & Gas (Production and Safety) Act (2004)

MDC Well Control Procedures for Coring Operations

The procedures listed in this programme form a guide for the drilling operations and may need to be modified, in consultation with the Santos Brisbane CSG office, as the work progresses.

If circumstances arise where there is a conflict between safety issues and the Generic and Individual Well Programmes, the Santos Rig Representative (in consultation with the Santos Drilling Engineer where possible) and the Mitchell Drilling Contractors Supervisor or relevant third party Supervisor should apply judgement, safety systems on site (JSA, Stepback, etc) and common sense to ensure that safe operations are undertaken as the priority.

Santos requires that all personnel involved in the drilling operations are adequately trained, supervised and experienced in the relevant operations. Qualifications and experience of key Contractor personnel (Rig Supervisor, Night Tourpusher (if used) & Drillers) are to be submitted for Santos review prior to rig start up.

All personnel stationed on site shall have completed the Santos Level 1 Induction. All personnel attending the site (including visitors and delivery personnel) shall have completed the Level 3 (Rig Site) Induction.

Weekly safety meetings, pre tour meetings and safety meetings prior to significant operations shall be held and documented. Such meetings shall also involve relevant third parties (e.g. Australian DST personnel, ACS Laboratories personnel, Geoconsult personnel, Halliburton, etc) where appropriate.

Prior to the spud of each well, the MDC Well Control Procedure shall be reviewed with the Drillers, MDC Supervisors & Santos Drilling Rig Representatives to ensure that the procedures are correct and fully understood. Well Control drills shall be run on every shift initially to ensure personnel are fully cognisant with requirements.

A JSA is to be conducted immediately before any work is conducted in the cellar. No entry is permitted to the cellar unless a gas test is conducted and the cellar is clear of gas.

EMERGENCY RESPONSE

Detailed emergency response procedures are documented in the MDC “Emergency Response Plan” for each rig. MDC as operator of the plant have control of safety on the rig sites and the Site Safety Manager will be the Mitchell Drilling Contractors Rig Supervisor at that site.

The Santos Wellsite Emergency Response Plan will also be used under the direction of the Santos Rig Representative for additional reporting requirements and support services as contained in the Santos plan.

A full list of Contact Numbers for the Santos Emergency Response Plan is attached to this programme as Appendix 2. Should a well location fall such that the Roma Emergency Services are not the closest to the wellsite, the contacts of the nearest Emergency Services shall be contained in the Individual Well Programme for that particular well.

In the event of an Emergency the protection of personnel is the over-riding priority. No attempt should be made to enter a designated emergency area.

ENVIRONMENT

All operations conducted in the course of drilling these wells shall be conducted in accordance with the relevant Santos environmental policies.

Parthenium

The individual well programmes will indicate the Parthenium status of the particular location. Where a well is located in an area that is free from Parthenium, it shall be a requirement that we do not bring any parthenium into the area.

In this case, all vehicles and equipment coming to the particular site are to be washed down and inspected if not already certified as clean. It is the responsibility of the individual contractors to ensure compliance to this requirement.

The washdown requirements apply to all vehicles whether they are operated by the Contractor, Santos, Service Companies, Delivery Vehicles, Trucking Contractors, Hot Shot Vehicles or Visitors. A copy of the Eastern Queensland Washdown Requirements is attached in this Generic Programme as Appendix 1.

Washdown Certification is to be arranged through Greg Jackson of Maranoa Oilfield Services (ph 0427 224 540 or email anne.jackson1@bigpond.com ). Failure to adhere to Santos procedures will be regarded as a serious breach and will result in the offending person or Company being asked to leave the site until compliance is demonstrated. For serious or repeat breaches, the person or Company may be banned from site.

WELL SUMMARY

General well information, predicted stratigraphy and well evaluation requirements will be as per the Well Data Summary Sheet attached to each Individual Well Programme.

Generically, Hole Sizes, Casing and Cementing requirements are as follows, however this may be varied by exception on a well by well basis subject where necessary, to the completion of a risk assessment (see notes below).

Hole Size 8-1/2” 6” 96 mm 96 mm

Hole Section Conductor Surface PDC Drilled HQ Cored

Hole Depth 60m ~20-30m into Westbourne Formation

(refer Individual Well Programme)

Core point as specified in Individual

Well Programme

If not specified then

~10m outside Surface Casing Shoe

In Eurombah Formation at

least 10m above top

Hutton Formation

Casing Size 7” BTC / SFJ 4-1/2” SFJthreaded line pipe N/A N/A

Setting Depth Approx 60m 1-2m above the

drilledsection TD

N/A N/A

Cementing Class A to Surface Class A (13.5

ppg) to Surface

N/A N/A

Subject to a risk assessment being carried out for the proposed change in a particular well, the following variations to the above are not considered major programme change items:

Reduction of the 7” casing shoe depth where a shallower than normal 4-1/2” casing shoe depth is being used, provided 4-1/2” casing is still being set below the top of the Westbourne formation

Increase in the 4-1/2” casing shoe depth into the Springbok formation to improve hole quality in the HQ cored section of the well.

No mud loggers are planned to be on site for these wells. The rig crew will collect, wash and place in samplex trays, one set of cuttings samples at 10 m intervals down to core point.

Wellsite geological services and monitoring of gas in the returns will be undertaken by ACS Laboratories or Geoconsult personnel (as notified for the

particular rig) who will be on site from core point to TD to process gas desorption of the cores gathered in each well. ACS / Geoconsult will provide a returns gas detector and provide a digital record of the background gas to Santos at the end of the well.

On-site geological core description will be provided by Geoconsult who, if on-site while drilling the surface hole, will confirm the casing setting point in the Westbourne formation.

Sampling and Core Handling Procedures for this Campaign are attached to this Generic Programme as Appendix 3.

DRILLING FLUID & CEMENTING WATER SOURCE

Water source for mixing drilling fluids and for cementing are expected to be sourced from the Coxon Creek Pilot wells or Pleasant Hills 21.

Exact water source for individual wells will be confirmed on the Individual Well Programme.

DRILLING FLUIDS

Mud materials are supplied by MDC at Santos cost. For control of costs all materials are to be noted on the tour sheet and confirmed by the Santos DRR. To ensure orderly management of chemicals charged to Santos, the Santos DRR shall count and record stock at the start of each well and monitor and record all incoming chemicals delivered to the site. On a daily basis, chemicals used shall be recorded on the IDS Daily Drilling Report.

Additions of mud materials are to be confirmed by the Santos DRR prior to the addition being made. Mud properties for the cored section are at the discretion of the Drilling Contractor in consultation with the Santos DRR.

A KCl polymer water based fluid will be used to control swelling clays and avoid washed out hole in the surface hole section. The Westbourne Formation was severely washed out in Blyth Creek 8.

Use of 2% KCl below the surface casing shoe is recommended to control any swelling clays that may be present in the remainder of the Westbourne Formation, and the Weald and Springbok Sandstones. Wireline logs on Pleasant Hills 25 and Mount Hope 2 showed severely washed out hole in the Springbok Sandstone. An improvement was seen on the wireline logs from Raslie 7 and Grafton Range 24, both of which were drilled with at least 2% KCl. It is also believed that rigorous control of circulation rates to avoid excessive uphole velocities, is critical to reducing or eliminating hole wash out over the Westbourne, Weald and Springbok Formations.

The use of polymers in the cored section should be avoided if possible. If polymers are used, Santos preference would be for short chain polymers to minimize formation damage.

CASING

7” BTC Conductor Casing Materials (including crossovers) will be supplied by Santos with the SFJ casing supplied by MDC at Santos cost. At the time of issue of this revision of the Generic Programme, 4-1/2” surface casing materials (with the exception of the crossover used with the float shoe) are supplied by MDC at Santos cost. From approximately the start of June 2008, Santos will supply the 4-1/2” SFJ casing.

For control of costs, all casing materials are to be noted on the tour sheet and confirmed by the Santos DRR.

CEMENTING

Cementing of the 7” conductor casing and for P&A operations will be conducted by the MDC rig crew. Cement materials for these operations are supplied by MDC at Santos cost. For control of costs, all materials are to be noted on the tour sheet and confirmed by the Santos DRR.

The 4-1/2” surface casing will be cemented by Halliburton, using a cementing head supplied by Santos. Halliburton will supply the cementing materials, float shoe and top cementing plug.

All normal safety procedures are to be used when cementing.

GENERAL DRILLING PROCEDURES

INTRODUCTION

This document outlines the various steps in the drilling operation. A separate document, the "Santos Onshore Australia Drilling Operations Manual (DOM)", summarizes the Santos General Operating and Well Control Procedures, drilling equipment and other procedures. This ‘Generic Drilling Program’ is to be read in conjunction with the above mentioned DOM, and the Individual Well Programme and Montage.

DRILLING SECTIONAL SUMMARY & PROCEDURES

Mobilisation

Mobilise rig. Rig crews to have completed Santos Level 1 Inductions on the internet before going to

the field, and for wells spudded post October 1, Heat Stress Training.

Pre-Spud A few days prior to the rig arrival on site, organize to have the water for mud mixing

trucked in from the source noted on the Individual Well Programme. The ground pits on the lease should be filled with this water before arrival of the rig on site, so that mud can be mixed while the rig is being rigged up.

Move rig to location and rig up. Ensure rig is leveled and centered over cellar. Note that a temporary steel cellar (1.5m x 2.25m x 1.80m deep) has been installed on the

location. Inspect rig and ensure rig is ready to spud. Remedy identified deficiencies. Complete rig pre-spud inspection form (DMS Form F199) and send to the Santos Drilling

Engineer ASAP. If there are any deficiencies do not spud well without authorization from the Santos Drilling Engineer.

Santos DRR to complete an emergency contact sheet for each location and send in to the Drilling Engineer in Brisbane.

Hold pre-spud safety meeting and hazard hunt. Racelog (Brett Gordon) will be providing Waste Removal Services and Industrial Rubbish

Bins. Contact Brett when bins require emptying. Refer Contact List in Appendix 2. A portaloo provided by MDC (at Santos cost) will be onsite.

Conductor Pipe

Drill 8-1/2” hole to approx 60m or as otherwise advised on the Individual Well Programme. Ensure that the drilling wellhead for the coring section is measured and that the correct space out for the 7” surface casing is calculated prior to running casing. Space out to allow 1-2m rathole below casing shoe and to land top of 7” BTC collar at 8” above the cellar floor. Santos DRR to complete a casing tally (DMS Form F132) for the conductor casing and submit to the Drilling Engineer prior to the casing being run.

Run 7” conductor comprising bottom joints to be 7” SFJ pipe, 7” BTC box to 7” SFJ pin crossover joint and top three joints of 7” BTC. Use landing joint to land pipe at required height to install drilling wellhead. Top of 7” casing coupling to be landed 1.55m below top of cellar (Ground Level)

Cement fully to surface. Conduct top up job if necessary.

6” Surface Hole

Hazards & General Notes The surface hole penetrates the Gubberamunda formation which is a regional

groundwater aquifer. For most areas it is not expected to be over-pressured (artesian) although the likelihood increases in wells located south of the Warrego highway as the natural ground elevation reduces. In wells where the ground level elevation is less than 270m, there is a high chance that the aquifer is artesian. Care should be taken to monitor returns from the well to ensure prompt action can be taken in the event that it is artesian. Ensure that sufficient KCl is onsite for use as a weighting material prior to drilling this section.

All drilling breaks in the surface hole section need to be flow checked and the mud weight increased as required. A diverter shall be installed prior to drilling this hole section although the rubber need not be installed unless artesian conditions are seen. Ensure that the well is static before pulling out of hole and nippling down the diverter to run the surface casing.

The Westbourne Formation provides an excellent casing seat, based on formation integrity tests conducted on coreholes in the region. Because in places only sparse offset well data is available, drill approx 25 m into the Westbourne Formation (but not more than 10m above the Weald Formation) before setting surface casing. Formation integrity tests conducted during the last coring campaign on Blyth Creek 8 and Grafton Range 24 yielded 18.3 ppg and 18.2 ppg EMW respectively without leak off, and in the current coring campaign Niella East 1, Raslie North 1 and Sawpit Creek 2 have yielded FIT's of 19.5+ ppg without leak-off, with the casing shoe in the Westbourne Formation.

Gas shows have been encountered on occasion in the Weald Sandstone regionally therefore it is important that the surface casing be set prior to penetrating into the Weald Sandstone UNLESS a specific risk assessment has been done to drill through to a Springbok Sandstone casing seat point in the particular well.

Operations WOC until cement is set. Back out landing joint. Nipple up Bradenhead and install drilling

wellhead and diverter (Refer Stack up Drawing attached as Appendix 4). Function test annular preventer. Pressure test wellhead to 200 psi against casing before

drilling out cement and plug. Santos DRR to complete a BOP Pressure Test Sheet (DMS Form F131) and submit to the Drilling Engineer.

Tally drillpipe to be used in the 6” hole section to ensure that hole depth at section TD can be accurately determined.

Drill section with 6” bit & BHA and spud mud. Do not reduce bit size without consulting Brisbane CSG Drilling Team.

Flow rates of ~70-80 gpm have proven to be sufficient for cuttings removal while also minimising hole washout in this section.

Prior to reaching TD in the 6” hole section, tally the casing for the casing run to ensure excessive 6” rathole is not drilled.

Flow check all drill breaks, and increase the mud weight if required. Drill to approximately 20-25 m past the top of the Westbourne Formation. Stop 6” hole at

least 10m above the prognosed top of the Weald Formation. Circulate bottoms up and confirm surface section TD is in the Westbourne Formation (claystone).

Santos DRR to complete a casing tally (DMS Form F132) for the surface casing, and cement calculations for the 4-1/2” casing cement job and submit to the Drilling Engineer prior to the casing being run. Space-out tally to be calculated with 4-1/2” shoe on bottom.

At surface hole TD, flow check to ensure hole is static, then wiper trip back to surface. Circulate hole clean, then repeat flow check to ensure hole is static. POOH for casing run.

4-1/2” Surface Casing

Hazards & General Notes Ensure that the drilling wellhead is measured and that the correct space out for the 4-1/2’’

surface casing is calculated prior to running casing.

Operations Hold pre job safety meeting. Rig up and run 4-1/2” float shoe with SFJ box to BTC pin, followed by 4-1/2”, 6mm WT,

API Line Pipe, Threaded SFJ surface casing. Do not attempt to Bakerlok the SFJ casing as this will make it difficult to make up the thread.

Make up final joint of 4-1/2” casing & wash down last joint to tag bottom of hole. Pull back to set casing shoe at 0.3 to 0.5m off bottom, ready to cement. Circulate at least 1-1/2 well volumes and install Santos corehole cement head with top wiper plug held in place.

Rig up and pressure test Halliburton cementing equipment. Use specified water (same as mud mixing water) for cement mixing. Pump cement using Halliburton cementing unit. Release top cement wiper plug and displace with water. Once preflush is seen at surface,

shut bottom annular, reduce displacement rate and take cement returns via the bradenhead outlet valves

Reduce pump rate when displaced quantity is within 1 bbl of the calculated displacement quantity. Slow pump the remainder of the displacement and pump to bump. Shut down pumps as soon as pressure rises when plug bumps on float shoe. Do not exceed 800 psi surface pressure when bumping the plug.

Bleed back to check that float shoe is holding. If float shoe is leaking, hold pressure on casing to avoid cement U tubing back into casing.

Thoroughly flush cement from bradenhead area by pumping water across the wellhead using the bradenhead valves and the side outlets on the lower annular preventer. Open bottom annular preventer and flush cement from 4-1/2” to 7” annulus to allow for easier setting of the slip and seal assembly, and recovery of the Bradenhead after the P & A operations are completed.

WOC until surface samples have set. Lift BOPs and rough cut the 4-1/2” casing approx 6” above the top of the bradenhead. Lay

out cut length. Remove the annular preventer and set down outside the cellar or on a properly

constructed frame spanning the cellar. Do not hang above the cellar. Final cut casing 4” above the top of the Bradenhead. Bevel inside of the cut casing to 45

degrees to simplify entry of the coring assembly into the 4-1/2” casing when coring. If necessary, clean any remaining cement from inside the bradenhead down to and

including inside the first casing coupling at cellar floor level. Install the seal assembly only. Do not install slip assembly (manual set). Wood Group to be called out to site to install/supervise installation of the seal assembly until crew are experienced in this task.

Re-install annular and connect up choke and kill lines to the mud cross. Install flowline including flowshow. Function test BOPs. Pressure test BOPs, casing, high pressure mud system, stabbing

valves / IBOP, and choke and kill systems (200psi low for 5 minutes / 1000psi high for 5 minutes). Where practicable, test ancillary items (check valve, choke manifold, stabbing valves, Kelly cock, IBOP, etc) off line to reduce the well time spent conducting pressure tests. Santos DRR to complete a BOP Pressure Test Sheet (DMS Form F131) and submit to the Drilling Engineer.

Email Casing/Cementing Report to Santos Drilling Engineer.

Test ESD's prior to drilling out 4 ½” casing – record results (ie shutdown time) on the Daily Drilling report.

96 mm PDC drilled hole to Core Point

Hazards & General Notes Ensure hole is kept full at all times and that the drilling assembly is pulled slowly at

first on trips to avoid swabbing the well. At any stage during tripping the rotary head can be made up and the well circulated to avoid/ stop any influx of gas.

Operations RIH with PDC bit on HSH pipe and tag cement wiper plug. Drill wiper plug and shoe track and 3 m of new formation using water initially and

converting over to production hole mud system while drilling the new formation. Perform Well Control Drill. Perform Formation Integrity Test to a maximum surface pressure equating to 20 ppg

EMW. Santos DRR to complete a Leak Off Test Sheet (DMS Form F214) and submit to the Drilling Engineer.

Flow rates of ~25-35 gpm have been sufficient in past wells to clear cuttings from the well while also minimising any washout. Returns can be measured using a bucket and stopwatch to approximate the flowrate to ensure the flow rate is within this range.

Drill ahead to the specified core commencement depth contained in the Individual Well Programme. If not specified, drill to a minimum of approximately 10m past the casing shoe or sufficient to clear the core barrel from the casing. This will reduce the risk of backing off the casing.

Circulate bottoms up and flow check. Trip drilling assembly out of hole (ensure hole is kept full at all times) and pick up HQ

coring assembly.

HQ Cored Hole to TD

Hazards & General Notes There is a potential to get a kick while coring through the target coals, either

related to gas in the coals or swabbing of the hole when pulling the inner barrel. All formations below the Westbourne may also have formation pressure that is slightly elevated above a normal water gradient. The Guiberson head should be used for pulling cores and pulling rate should be restricted to prevent swabbing. A sub shall be installed under the Guiberson wire line stripping head, with a valve and line from the pump to enable fluid to be pumped down the string for well control whilst retrieving cores. Ensure mud system is rigged up with a kill line outlet with hammer union, adjacent to the rig floor.

Ensure hole is kept full at all times by circulating into the annulus while pulling the inner barrel. The coring and testing assembly must be pulled slowly at first on trips to avoid swabbing the well. At any stage during tripping, the rotary head or the circulating sub can be made up and the well circulated to avoid/ stop any influx of gas.

Take care when running bits, core barrel and DST tools through the wellhead and into the 4-1/2” casing, to avoid damage when running in hole.

The Hutton formation is located below TD in each well. This formation is a conventional gas bearing formation in some areas of Eastern Queensland. Care should be taken therefore to confirm with the Brisbane CSG Team and the Santos Drilling Engineer, the required TD once the Wellsite Geologist has confirmed the depth of the top of the Eurombah Formation.

Operations RIH with HQ outer barrel and pipe to bottom. Run and seat the inner barrel (if not already

seated in the outer barrel when tripping in hole). Core ahead in HQ hole. An open hole drill stem test will be considered immediately after coring through the base

of any package of coal and carbonaceous shale that meets the testing criteria for the interval (to be supplied by the Brisbane Office). Approval to test will be obtained from the Brisbane CSG Team through the Santos Drilling Engineer.

Circulate hole clean then perform flow check to ensure well is static. Weight up with KCl if required to control an influx.

Trip coring assembly out of hole (ensure hole is kept full at all times). Based on experience, wiper trips are not required in normal circumstances. Pick up conventional slimhole drill stem test assembly under supervision of testing contractor. Check measurements with testing contractor to ensure correct interval is tested. DST tools will be run on HQ pipe and care should be taken to make sure that all tool joints are made up fully when running tools.

Run DST as per instructions from Brisbane CSG Team. NOTIFY LANDHOLDER AHEAD OF ANY DST TESTING. Complete DMS Forms F223, F250 & F500 for all DST’s. The Pre-DST Checklist (Form DMS F250) must be filled out and attached to the Permit for the job – reference to the checklist must be made on the Permit under “Associated Documents”.

If there is a requirement to test at night, there must adequate lighthing around the flare line and rig floor. This must be noted on the Permit and checked off prior to the commencement of testing.

After pulling packers free at end of test, pressure up to shear the pump out sub and circulate a minimum of one hole volume or until any signs of gassiness are removed from the well bore fluid.

Trip out with test assembly (ensure hole is kept full at all times). Break out test assembly and recover data from downhole gauges. Forward data to the

Project Leader and the Santos Drilling Engineer immediately. Brisbane CSG Team will check validity of test and advise if a re-test is required. Coring should re-commence as soon as DST tools are pulled from the hole and not be delayed while this decision is made, as any retest required will be done post logging.

Trip in with coring assembly and core ahead to next test point or TD. Once it is evident that the Eurombah Sandstone has been intersected and a logging rathole drilled below the Top Eurombah, the hole can be terminated. Take care not to drill excessive rathole and risk penetrating the Hutton formation which can, in places, be gas bearing.

At TD, make a wiper trip back to old hole if hole conditions dictate and POOH to run logs (ensure hole is kept full at all times).

Wash down and flush core pipe with fresh water when pulling out of hole, to remove KCl mud traces that may cause corrosion.

R/U and run wireline logs as per instructions from Santos Drilling Engineer. Rig down loggers. Send PDF version of Log #1 (Combo Run) ASAP from site to Project Team, Ops Geology

and the Drilling Engineer. If additional DST’s are to be run and hole conditions warrant, run a wiper trip and

condition the hole and mud. Run conventional DST’s as per instructions from Brisbane CSG Team. In some wells, the Project Team may require the well to be arilfited prior to conducting P

& A operations. The airlifting is to clear drilling fluid from the well and initiate flow of the natural formation water from the coals seams into the well. Once true formation fluids are seen, obtain a water sample for testing.

A separate procedure will be issued for wells which require airlifting, detailing the equipment and procedures to be used. This must be done under a JSA until an SWI has been formalised.

Proceed to P&A phase.

Abandonment

Hazards & General Notes All plugs to be set on a 30m (where possible) hi-vis pill (Min YP=50). Refer to Section 11 in the DOM for the Santos isolation philosophy. Use final formation top depths from core and / or wireline logs. Use integrated hole volume calculated from caliper on wireline log to calculate cement

volumes. Due to small hole size a continuous plug will be set rather than discrete 60 m plugs.

Operations RIH with the abandonment drillstring comprising HSH open ended pipe and NQ core pipe,

& set abandonment plugs as per the Individual Well Programme. Wash down and flush pipe with fresh water when pulling out of hole to remove KCl mud

traces that may cause corrosion. WOC and then tag shoe plug with 5 klbs. Shut annular and pressure test to 500 psi

surface pressure. POOH & lay down HSH / NQ pipe. Nipple down BOPs, recover seal assembly and remove Bradenhead (Unscrew where

possible otherwise cut off). E-Mail P&A Report (DMS Form F133) to Santos Drilling Engineer. When the condition of the used seal assembly has deteriorated it can be replaced with a new assembly from Wood Group. If bradenhead is cut off, return bradenhead to Wood Group for servicing and replacement of the buttress pin. If bradenhead is unscrewed, check thread to ensure it is OK to re-use on next well. If not return to Wood Group for redressing.

A surface cement plug will not necessarily be set in every well. This allows possible future conversion of some wells to water bores or to Gubberamunda aquifer pressure monitoring wells. Refer to the Individual Well Programme for advice on this. (A gamma ray log will be run to surface through casing at TD to provide depth correlation and sand identification for future perforation of the surface casing over the Gubberamunda Sandstone.) Where 7” / 4-1/2” annulus cement has slumped significantly, top up this annulus with cement at the same time as doing the surface plug.

Install suspension cap where required, install identification plate, and install covers over the entire cellar. Erect temporary fencing around the covered cellar and release rig.

After rig has moved to next location and lease has been cleared of all equipment, complete lease clean up form (DMS Form F136) including taking photos of the lease and the abandoned wellhead (casing stump).

ABANDONMENT PLUG PROGRAM – MINIMUM REQUIREMENT

PLUGS PURPOSE DEPTH

As Required Isolate Coal and Sandstone Intervals 4-1/2” Casing shoe – TDShoe Plug 4-1/2’’ Surface Casing Shoe Isolation 4-1/2” Casing shoe –

Base Gubberamunda Formation

Surface Plug (where required)

Surface seal exposed casings 0 - 10m

APPENDIX 1: WASHDOWN PROCEDURE FOR EQ

PURPOSE & APPLICATION:

To prevent the spread of Parthenium Weed during the course of our activities.

The objective of the washdown and inspection of vehicles, machinery & equipment is effective risk management. It cannot eliminate risk.

PROCEDURE:

Establish status of vehicle – either “Weed Free” or “Washdown Required”.

To be declared “Weed Free” a vehicle must:

In the case of commercial vehicles/equipment - Provide to the Inspector or Company Representative records of the most recent washdown and inspection report, locations that the vehicle has been subsequent to the washdown and a declaration from the respective company’s management, that each of these locations was free from declared weeds.

In the case of passenger vehicles – in the absence of a washdown inspection report, a declaration from the driver (if the owner) or the respective company management that the vehicle has never been to a declared weed infested area*. Hire or pool vehicles should either have a washdown inspection report supplied at pickup point or should go through a commercial car wash and retain the receipt.

Any exceptions to these conditions and the vehicle/equipment is deemed to be “Washdown Required”.

Washdown;Washdown should be carried out using the DNRM Cleandown Procedures as a guideline.Inspection must be carried out by a Santos nominated Inspector using the DNRM Inspection Procedures as a guideline.

*Infected areas can be determined by contacting Local Government Weed Officers, DNRM Land Protection Officers, or the DPI in the area of origin.

Santos Management reserves the right to demand a vehicle/equipment be washed down if there is any doubt with regard to its status. Refusal to wash down on demand or to provide the necessary evidence of status may result in access being denied to the site, and be regarded as a breach of contract.

APPENDIX 2: EMERGENCY PHONE NUMBERS

24 HOURS/DAY

Santos Roma Office (Business Hours) : (07) 4622 2400EQ Gas Superintendent (Business Hours) : (07) 4624 2110EQ Gas Superintendent (Mobile) : 0428 872 163

If unavailable and urgent assistance is required contact:

Ambulance/Fire :(Ask for Roma)

GSM digital mobile phone outside GSM network :coverage

000

112

Roma Hospital : (07) 4624 2700Roma Ambulance : (07) 4622 1202Roma Police : (07) 4622 9333Roma Fire Brigade (non fire calls) : (07) 4622 4139

CSG Field Operation Supervisor- Gerard Norton / Al MacDonald

Santos Moomba Drilling Superintendent(After hours 08 8675 6666 and ask for “Drilling Superintendent” pager)

(07) 4624 2132Gerard - 0409 057 499Al - 0402 910 010

: (08) 8678 49010414 681 151

Santos Wallumbilla Gas Plant : (07) 4623 4222

Royal Flying Doctor Service – (Charleville) Emergency Other Enquiries

: (07) 4654 1443: (07) 4654 1233

LIST OF CONTRACTORS

RIG CONTRACTOR: MITCHELL DRILLING CORPORATION

PTY LTD112 Ebbern St, Darra, QLD 4076 Contact: Phil Spence / Wayne McAlear

Tel: (07) 3363 7333Fax: (07) 3376 2806Mob: Phil: 0428 873 824

Wayne: 0429 481 621Email: p.spence@mitchelldrilling.com

w.mcalear@mitchelldrilling.com

PARTHENIUM WASHDOWNS & INSPECTIONS:

MARANOA OILFIELD SERVICESContact: Greg Jackson

Mob: 0427 224 540Email: anne.jackson1@bigpond.com

SURFACE CASING CEMENTING:

HALLIBURTON AUSTRALIAMitchell Rd, Roma, QLD 4455 Contact: Jim Williams

Tel: (07) 4622 4588Fax: (07) 4622 3674Mob: Email:

0458 458 184jim.williams2@halliburton.com

WIRELINE LOGGING:

PRECISION WIRELINE SERVICES7 Linton Street, Roma, QLD 4455 Contact: John Ferguson

Tel: (07) 4622 5303Fax: (07) 4622 5372Mob: 0427 118 921Email: john.ferguson@ap.weatherford.com

DST SERVICES:

DST AUSTRALIA PTY LTD169/175 Raglan Street, Roma, QLD 4455 Contact: Sue Thorne

Tel: (07) 4622 2655Fax: (07) 4622 1150Mob: 0427 691 050 or 0427 621 874Email: admin.mgr@ozdst.com

EARTHMOVING:

FLOWER EARTHMOVING“Garrabarra”, Roma, QLD 4455 Contact: Steve Flower

Tel: (07) 4626 8393Fax: (07) 4626 8125Mob: 0428 623 384

WASTE REMOVAL:

RACELOG PTY LTD53 Corfe St, Roma, QLD 4455 Contact: Brett Gordon

Tel: (07) 4622 5782Mob 1: 0427 221 367 (Brett)Mob 2: 0428 221 367 (John)Email 1: braca94@bigpond.net.au

COAL CORE ANALYSIS:ACS LABORATORIES PTY LTD8 Cox Road, Windsor, QLD 4030 Contact: Nick Cox

Tel: (07) 3357 1133Fax: (07) 3357 1100Mob: 0405 100 298Email: n.cox@acslabs.com.au

CORE DESCRIPTION AND / OR COAL CORE ANALYSIS:GEOCONSULT PTY LTD11/541 Boundary St, Spring Hill, QLD 4000 Contact: Warwick Smyth

Tel: (07) 3831 6122Fax: (07) 3831 6133Mob: 0417 604 707Email: wdsmyth@geoconsult.com.au

PHONE LIST

Office Fax Mobile / Sat Phone

SANTOSDrilling Engineer- Brendan Berry (07) 3228 6915 (07) 3228 6610 0418 742 473

Drilling Engineer– Jim Hinton (07) 3228 6912 (07) 3228 6610 0417 978 279

Drilling Engineer– Tim Meyer (07) 3228 6977 (07) 3228 6610 0400 716 151

Drilling Team Leader – CSG Drilling & Completions- Simon Hann

(07) 3228 6922 (07) 3228 6610 0400 656 886

Santos Roma Operations- Sam Klaas (07) 4622 2400 (07) 4624 2140 0428 872 163

Landholder Liaison- Jon Warby (07) 4624 2125 (07) 4624 2140 0427 695 125

Logistics Co-ordinator- Greg Smout (07) 3228 6664 (07) 3228 6610 0403 419 308

CSG Field Operation Supervisor- Gerard Norton / Al MacDonald (07) 4624 2132 (07) 4624 2140

Gerard - 0409057 499

Al - 0402 910010

Drilling Superintendent Moomba (08) 8678 4901 (08) 8224 7450 0414 681 151

RIG SITE CONTACT DETAILS

Santos Rig Rep Mitchell 105 Kevin Dau Norm Rabig

Email: MDC.105@santo

s.com

0437 653 809

Mitchell Rig 105 0428 131 072

Santos Rig Rep Mitchell 107 0488 507 235Email:

MDC.107@santos.com

0428 985 813

Mitchell Rig 107 0427 728 801

LANDOWNER CONTACT DETAILS

Normal contact with landholders will be conducted through Jon Warby at all times. Landholder contact details will however be provided in each Individual Well Programme for use in EMERGENCY SITUATIONS ONLY.

APPENDIX 3 - SAMPLE AND CORE HANDLING

Wellsite geologist services will be provided throughout the cored section of the well by ACS Laboratories or Geoconsult Pty Ltd who will set up a temporary gas laboratory onsite manned on a 24 hour basis to provide sampling and gas testing services. Selective sampling of coal core for desorption testing on site will be made.

Ditch Cuttings

Cuttings samples should be collected at every 10m in conductor hole, surface hole and 96mm hole (for hole sections not cored), for the purpose of picking casing points and satisfying regulatory requirements. The well will be continuously cored from the surface casing shoe or from the casing point specified on the Individual Well Programme, and no cuttings sample collection is required while coring (cuttings volumes will be very small). Any other cuttings samples as required may be taken at the discretion of the well site geologist.

The following procedure is to be undertaken with the cuttings samples for presentation in Samplex plastic sample boxes:

Label outside of Samplex box lid with well name. Label inside of lid opposite each compartment with the sample depth.

In this case 10m, 20m, 30m, etc Partly fill the sieve with the cuttings from the particular depth. Wash in a bucket of clean water to remove mud and fines. Carefully transfer a few spoonfuls of the cleaned cuttings into the

correct compartment of the Samplex box. Be careful not to spill into adjoining compartments. Fill each compartment approx 75% full.

Store Samplex box carefully so that it can be left with the lid open so the cuttings can dry.

Once samples are dry, close and secure the lid. Send cuttings sample boxes in to Roma at the end of the well with the

core boxes.

Core Samples

The time at the commencement of the recovery of each core should be recorded. Similarly the times at which the core reached surface, and the time at which each coal sample taken is sealed in a canister should also be recorded.

Upon recovery at surface any coal core will be oriented, cleaned and immediately assessed for sampling by the coal desorption analyst in consultation with the Santos Rig Representative or other nominated Santos personnel. A brief description of the sampled interval should be made and the sample placed in a desorption canister as soon as possible. All samples taken will be given a Santos sample number and recorded in a sample register.

All full size core samples are to be replaced by the appropriate length of core blocks. After the sample canister has been removed to the desorption laboratory on site, the remaining core will be cleaned and clearly marked by drawing a black or blue line with a red line to its right (looking up the length of core) along the length of the core. The depth shall be marked on the core every 20 cm (annotated every metre) and the current depth marked on a core block at the end of each core run. All recovered core and sample blocks will then be placed in core trays with the end of run markers. A log will be kept of the run number, depth drilled from - to, core cut (metres) and core recovered (metres), and checked and adjusted to be consistent with the Driller’s depth tally at each run. Photographs are to be taken of each core tray when appropriate light is available.

Fluid Samples from Drill Stem Testing

Gas samples of 500 - 1000 ml are required for analysis. In some cases no gas will migrate to surface. Use a gas sniffer to analyse the flow from the bubble hose during the pre and main flow. If a significant hydrocarbon content occurs a sample must be taken. A minimum of one sample, preferably at least two samples, will be collected under pressure in an evacuated steel cylinder (minimum 1500 psi). The cylinder will be labelled with: - well name, date, DST number, DST interval, formation, pressure, sample origin, time sample was taken and the reservoir and surface temperatures.

A water/filtrate sample is to be collected from the sample chamber when the test tools are brought to surface, as well as samples during reverse circulation immediately after returns are present (prior to returns from the testing water cushion).

Liquid from the sample chamber is to be collected in a 1 litre plastic bottle. Rinse all containers thoroughly with the fluid to be sampled before collecting the actual sample. Fill all plastic containers to the brim with sample. Screw cap down and at the same time squeeze some of the liquid out then tighten the cap. Wrap the cap tightly with tape. This procedure will provide a good seal and reduce bacterial putrefaction and oxidation.

Label all containers clearly, report and record all information about the samples collected. STORE SAMPLES IN A COOL PLACE AND SHIP AS SOON AS POSSIBLE FOR ANALYSIS. Water samples quickly change composition upon sitting, especially if they have been contaminated with mud. Thus for best results, samples should be sent for analysis immediately after collection. Contact the Brisbane CSG Team in reference to sample analysis for confirmation on which samples require analysis and those that can be discarded.

Other duties

The wellsite services provided will include:

the completion and issuing of daily and other reports (in electronic format) as necessary to nominated Santos staff and other persons;

maintaining a lithological log, including rock descriptions, of the strata penetrated from surface casing shoe to total depth; and

correlating well lithology with offset well logs and measuring sample net coal for the purposes of selecting DST intervals based on the guidelines to be provided by Santos for each potential test (when DSTs on penetration is desired).

Santos will provide pro-formas, schedules and guidelines for the reports.

Appendix 4 BOP Stack up Drawing

WELL NAME: Bundella 2WELL TYPE: CSM EXPLORATION COREHOLE

PERMIT LICENCE PL8RIG MDC 105

Metres MD LITHOLOGY TOPS & P WELL (RT) TARGETS & SCHEMATIC

TVD (m RT) A

LATITUDE: 26° 41' 48.6" S (pegged)

LONGITUDE: 149° 10' 46.0" E (pegged)

ELEVATION: GL - 302.24 m RT - 0 m

CASING &CEMENTING DRILLING FLUID

WELLEVALUATION DATA

100

200

300

400

500

Wallumbilla

Bungil

Mooga Sandstone

Orallo

80 m

270 m

370 m

8 1/2"

6"

7".

4-1/2"

CONDUCTOR

7" Welded Linepipe

Use fresh water for cementing 50% Excess

Cement to surface

SURFACE CASING

4-1/2", 6mm WT, API Line Pipe SFJ thread

Surface Casing Shoe @ +/- 760 m in Springbok Formation

Centralise casing as appropriate

Casing and wiper plug provided by Contractor

Casing shoe fabricated on site

WATER SOURCE

Coxon Creek dewatering

To be used for all cementing & drilling

fluids

CONDUCTOR

Water based fluid using bentonite or liquid polymer

depending on ground conditions

Add KCl if swelling clay encountered

All additions of chemicals to be discussed with

Santos DRR prior to doing.

SURFACE HOLE

KCl/Polymer water based fluid to control swelling clays

and minimise hole wash out

SURFACE HOLE

Mudlogging Cutting samples only Rig crew to

collect and bag two sets

at 10 m intervals

Surface hole BHST 80 deg F

PRODUCTION HOLE DRILLED SECTION

Mudlogging Cutting samples only Rig crew to

collect and bag two sets

at 10 m intervals

PRODUCTION HOLE CORED SECTION

Mudlogging Maintain Lithological

log

Set 7" Conductor at 60m

Install divertorfor surface hole section

BOPPressure Test

Annular only is to be used on 4-1/2" casing

Test to 200psi low / 1600 psi high

Drill 3 m new hole FIT to 1500 psi

surface pressureto give 20 ppg EMW

CORED HOLE

Objectives

Obtain cores inJuandah Coal Measures Taroom Coal Measures

600

700

800

900

1000

1100

1200

Gubberamunda Sandstone

Westbourne

Weald Sandstone

Springbok Sandstone

Upper Juandah CM

Proud Sandstone

Lower Juandah Coal Measures

Taroom Coal Measures

Eurombah

Hutton

550 m

612 m

685 m690 m

800 m

850 m860 m

950 m

1080 m

TD

1120 m

Shoe at

96mm

TD = 1100 m

760 m

Set casing 1-2m off bottom

Halliburton cementing13.5 ppg Class A w/ CaCl2 as req.

Cement to surface50% excess on gauge hole

Yield - 1.76 cu ft/sk, Water 9.31 gal/sk Approx 180 sacks (94 lb

/sack)

Displace with water until plug bumps

PLUG AND ABANDON

Well will be plugged andsuspended when finished

Plug locations and lengths across coal seams will be

advised prior to commencement of plugging operations.

Due to small hole size a continuous plug may be set

rather than discrete 60 m plugs

The Mooga may require up9.2 ppg to control pressure

2% KCl recommendedto control swelling clays in Westbourne Fm and

Weald Sst

All additions of chemicals to be discussed with

Santos DRR prior to doing.

PRODUCTION HOLE

Mud properties at the discretion of the

Contractor

2% KCl recommended to control swelling

clays in Springbok Sst

Additional KClif required to weight up

or control swelling clays Avoid polymer if possible

A mud weight of 9.2 ppg is required prior to drilling into

the Taroom Coals

All additions of chemicals to be discussed with

Santos DRR prior to doing

Gas monitoring

Core handling & desorption

ACS Labs to undertake

Coring

Core from ≈ 760 m to TD in HQ size

Wireline Logs

Surface Casing to TDRun 1:

DLL-MLL-GR-Density- Neutron

GR to surface through casing

Run 2:AST-GR

FMTnil

DSTUp to 4 intervals

tested on intersectionTesting criteria

for each interval will be

providedby Santos Brisbane

Target Tolerance

50m radius at TD at target level

No surveys to be taken while drilling

Borehole trajectory and bottom hole location

from AST log

Bottomhole Pressures

Gubberamunda 795 psigWestbourne 872 psig Weald Sst 1021 psig Springbok Sst 1027

psigU. Juandah CM 1195

psig Proud Sst 1268 psig

L. Juandah CM 1304 psig Taroom CM 1468 psig Eurombah 1596 psig

TD 1631 psig

Max surface pressure pressure of ~1270 psig

from gas saturated sandstone in basal

Taroom Coal Measures

1300TARGETS:Primary Secondary

No changes to the drilling programme can be made without the Programme Change Control form(DMS-F207) first being signed and sent to the rig.

For all sections account for all mud materials

used on daily tour sheet

Well Objectives:

Water Source:

BHST144 deg F

0.06 deg F / m

Juandah and Taroom Coal Measures

Coxon Creek dewatering

P & A PLUGSMinimum 60 m in length except surface plug

DRILLING HAZARDS: Artesian water in MoogaOver pressure in Taroom coals

Prepared By: Jim Hinton

Date: 10th July 2008