Brisbane, May 13, 2008 (ABN Newswire) - Queensland Gas Company Limited (ASX:QGC)(PINK:QGSCF) Announce the drilling report as at 6:00 AM May 12, 2008.


Kenya East #4

Spud Date: 30 April 2008

Rig Release Date: 9 May 2008

Permit ATP 648P in which QGC holds a 55% interest, BG International holds 13.75% interest and Origin Energy CSG holds 31.25% interest.

Location: Latitude: 27o 03' 11" S Longitude: 150o 30' 36" E

Rig: Ensign International Energy Services Rig #34

Objective: Kenya East #4 is part of an extended exploration program designed to adequately evaluate the CSG potential in ATP 648P. The well is designed to investigate the net coal of the Juandah and Taroom Coal Measures and Tangalooma Sandstone and test the production capability of the Walloon Subgroup.

Kenya East #4 reached a total depth of 845.0m after intersecting 31.6m of coal in the Juandah and Taroom Coal Measures and Tangalooma Sandstone.

After wireline logging, a number of Drill Stem Tests will be conducted to evaluate the permeability of the Juandah and Taroom Coal Measures seams. After testing the Juandah and Taroom Coal Measures and Tangalooma Sandstone will be underreamed and 7" pre-perforated casing set across the Walloon Subgroup with a Juandah Coal Measures completion.

Current Operations: The well is suspended awaiting arrival of a workover rig.

Jen #3

Permit ATP 648P in which QGC holds a 55% interest, BG International holds 13.75% interest and Origin Energy CSG holds 31.25% interest.

Location: Latitude: 27o 15' 45" S Longitude: 150o 57' 11" E

Rig: Ensign International Energy Services Rig #34

Objective: Jen #3 is part of an extended exploration/appraisal program designed to adequately evaluate the CSG potential of ATP 648P. The well is designed to investigate the net coal of the Juandah and Taroom Coal Measures and Tangalooma Sandstone and test the production capability of the Walloon Subgroup.

After wireline logging, all significant seams in the Juandah and Taroom Coal Measures and Tangalooma Sandstone will underreamed and 7" pre-perforated casing set across the Walloon Subgroup.

Current Operations: The rig is currently moving to the location.

Ross #1

Spud Date: 8 May 2008

Permit ATP 651P in which QGC holds a 68% interest, BG International holds 17% interest and Lucas Energy holds 15% interest.

Location: Latitude: 26o 16' 25" S Longitude: 149o 37' 10" E

Rig: Des Caling Rig #2

Objective: Ross #1 is part of an extended exploration program designed to adequately evaluate the CSG potential in ATP 651P. The well is designed to investigate the net coal of the Juandah and Taroom Coal Measures and Tangalooma Sandstone and test the production capability of the Juandah Coal Measures.

Ross #1 reached a total depth of 909.6m after intersecting 28.0m of coal in the Juandah and Taroom Coal Measures and Tangalooma Sandstone.

After wireline logging, a number of Drill Stem Tests will be conducted to evaluate the permeability of the Juandah and Taroom Coal Measures seams. After testing all significant seams in the Juandah and Taroom Coal Measures and Tangalooma Sandstone will underreamed and 7" pre-perforated casing set across the Juandah Coal Measures.

Current Operations: The rig is currently setting up to conduct the first DST.

Company Profile

Queensland Gas Company is a rapidly-evolving integrated energy business strategically positioned to meet rising demand for its abundant coal seam gas, cleaner power and ample water.

Since listing on the Australian Stock Exchange in 2000 QGC has become Australia's leading coal seam gas producer, Queensland's third largest company, and an award-winning business noted for nimble and innovative action.

QGC's world-class reserves in the Surat Basin are projected to supply around 20 per cent of the Queensland domestic gas market in 2009.

QGC's strengths are underpinned by Queensland Government policy, firm long-term contracts, Australia's move to cleaner, more efficient fuel sources, and the advent of a national carbon trading scheme.

The qualities and depth of QGC's assets and management have been recognised by Britain's BG Group (formerly British Gas), a global energy company seeking to partner with QGC to export gas to higher value overseas markets. In February 2008 QGC and BG Group announced a joint commitment of about $8 billion to enable the annual export of 3-4 million tonnes of liquefied natural gas (LNG) for 20 years. In April 2008 QGC received $664 million from BG Group as part of the transaction.

The LNG project involves targeting more than 7,000 petajoules (PJ) of 2P (proved and probable) gas reserves, construction of a 380 kilometre pipeline to the city of Gladstone, development of an LNG terminal, and several thousand new jobs.

Next year QGC will join the National Electricity Market. In February 2009 QGC will start supplying gas to QGC's new Condamine Power Station, which will produce 140 megawatts of electricity with minimal greenhouse emissions.

QGC invests in applications for large volumes of water yielded during the release of coal seam gas. The water has the potential to help drought-affected communities, towns and farms in the Surat Basin.

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