Bandanna Energy Limited (ASX:BND) Quarterly Report For The Period Ending 30 September 2009

Brisbane, Nov 2, 2009 AEST (ABN Newswire) - The following activities have been conducted by, or on behalf of, the Company and its wholly-owned subsidiaries ("Bandanna") during the three months 1 July to 30 September 2009 ("Reporting Period").

EXPLORATION ACTIVITIES

During the Reporting Period, the Company operated a number of coal activities as well as oil and gas exploration activities.

Coal Exploration

Arcturus - EPC 1221

During the Reporting Period, Springsure Creek Coal Pty Ltd (a wholly owned subsidiary of Bandanna Energy Limited) continued coal exploration within Arcturus where the main target is the Pollux seam. The tenement is located approximately 19km from the Blackwater-Rolleston rail line. During the Reporting Period, 6 core holes and 8 open holes, totalling approximately 1,484 metres and including approximately 149 metres of cored holes, were drilled by Springsure Creek Coal Pty Ltd. Bandanna holds a 100% interest in this project and is the Operator.

The current drilling program is of an exploratory nature designed to delineate a potentially shallow thermal resource which may be suitable for future mining by open cut methods.

Bandanna announced on 7 August 2009 that it had engaged an independent consulting group to undertake a Concept Study for the development of its Arcturus Project as a potential open cut thermal mine. The Concept Study is expected to take 3 to 4 months to complete and will be a precursor to any future feasibility studies.

Alpha Project - EPCs 1048, 1049, 1179 and 1180

During the Reporting Period, EPC1048 had a Partial Relinquishment for 46 sub blocks submitted. Relief from partial relinquishment in EPC1049 was also submitted during the Reporting Period.

Dingo West EPC 881

During the Reporting Period, 3 chip holes and 3 core holes were drilled, totalling approximately 808 metres, including 75 metres of cored hole.

Bandanna holds a 100% interest in this project and is now the operator.

The tenement is subject to on-going exploration designed at providing details of coal continuity and quality.

Arcadia EPC 892 and 1204

No physical work was conducted within the Reporting Period, however 33 Sub Blocks were partially relinquished within EPC892. In addition to this an application was made for the merger of EPC892 & EPC1204 into a single tenement - EPCA 1742. Both EPC 892 and 1204 are held by Arcadia Coal Pty Ltd, which is a wholly-owned subsidiary of Bandanna.

Conventional Oil and Gas Exploration

ATP - 539P, QLD (Enterprise earning 50%)

Following the plugging and abandonment of the Planet Downs-1 well on 7th March 2009 no further field work was undertaken during the Reporting Period. The well log results are being reviewed as part of a reassessment of the Curalle Anticline's prospectivity prior to developing a forward exploration program for the permit.

PEL - 100, SA

During the Reporting Period, production from the Cleansweep-1 well was suspended. The Joint Venture is currently looking at options for the Cleansweep field which includes a possible Retention Licence Application.

PEL - 106 - Udacha Block

During the Reporting Period, the Operator Beach Petroleum Limited made application on behalf of the Joint Venture for two Retention Licences comprising the Udacha Block, across respective portions of PELs 106 and 91. There was no field work conducted.

Other Areas

No other field work was conducted during the Reporting Period.

FUTURE ACTIVITIES

The Company intends to focus its coal exploration operational activities on the Arcturus, Dingo West and Springsure Creek project areas. Drilling will also be undertaken in the Company's 100% held Fernlee (EPC 1103), Fernlee North (EPC 1185), Gemini (EPC 1131) and Denison (EPC 1140) tenements. AMCI will continue to operate activities within the Alpha Project area.

CORPORATE ACTIVITIES

Bandanna advised the market that 59,871,803 shares were released from escrow on 26 September 2009, increasing the ordinary shares on issue from 30,305,137 to 90,176,940.

Bandanna announced on 24 September 2009 that it had entered into a share subscription agreement ('Subscription Agreement') with the Korean based SAMTAN Aures Pty Ltd, a wholly owned subsidiary of SAMTAN Co., Ltd ('SAMTAN') to issue 37,532,016 fully paid ordinary shares to SAMTAN, [equating to 10.0% of Bandanna's fully diluted shares on issue post placement] at an issue price of A$0.60 per share, raising A$22.5 million. All conditions precedent to the transaction have been satisfied and the transaction was completed on 27 October 2009.

There were no other corporate activities during the Reporting Period.

For the complete Bandanna Energy Quarterly Report for the period ending 30 September 2009, please click the link below:

http://www.abnnewswire.net/media/en/docs/61674-ASX-BND-175082.pdf

Contact

Dr Ray Shaw Managing Director Tel: +61-7-3041-4400 Fax: +61-7-3041-4444