Bayan Joint Venture: Feasibility Agreed; Scope Of Project Increased To 5 Million Tonnes: Bayan Offtake Increased To US$215 Million

Sydney, Sept 22, 2006 (ABN Newswire) - The Directors of White Energy are pleased to announce that the Company has passed a key milestone in its joint venture with PT Bayan Resources and also substantially improved the fundamental terms of the joint venture.

The Bayan Resources Group is the eighth largest coal miner in Indonesia. Bayan through its affiliates has the right to mine and operate various coal mines in East Kalimantan. Bayan and White Energy are exploiting the CSIRO developed patented briquetting process which White's wholly owned subsidiary, Binderless Coal Briquetting Company Pty Ltd, has licensed exclusively on a worldwide basis. The patented coal technology processes relatively poor quality coal into higher quality, more environmentally friendly coal with significant benefits to the sale price that can be achieved for the coal while also realising significant cost benefits at both the transportation and processing levels.

After a detailed review of the financial feasibility study the parties have confirmed they will proceed with the joint venture and immediately commence implementation work on the plant.

In addition, the underlying terms of the joint venture with Bayan have been significantly improved in that the parties have agreed to:

- increase the size and scope of the project from an annual output of 3 million tonnes of upgraded coal to 5 million tonnes;

- increase Bayan's annual offtake obligation of upgraded coal from 500,000 tonnes per annum to 1.5 million tonnes per annum. This five year commitment equates to an offtake obligation on Bayan of approximately US$215 million (after allowing for the rolling commissioning of each 1 million tonne module over the period).

The joint venture is owned 51% by White's and 49% by Bayan. An initial module will be built with production capacity of 1 million tonnes per annum. Once this module has demonstrated proven capacity, modules able to process a further 4 million tonnes per annum will be added, taking total production to 5 million tonnes per annum.

In addition to its entitlement to a share of profits from its equity in the joint venture with Bayan, White's will also generate a number of upfront and recurring revenue streams from the project.

The Directors also advise that the Company is currently in discussions with a number of parties in relation to similar opportunities. The Company will continue to keep Shareholders advised of progress.