Dart Energy Limited (ASX:DTE) Coal Bed Methane Joint Venture In India With Electrosteel (BOM:500128)

Brisbane, Mar 31, 2011 AEST (ABN Newswire) - Dart Energy Limited (ASX:DTE) has entered into a joint venture agreement (JV) with Electrosteel Castings Ltd (Electrosteel) (BOM:500128), for the production and sale of coal bed methane (CBM) from Electrosteel's coal mine licence area in Parbatpur, India.

The JV will have exclusive rights to produce CBM from the 8.8 sq km Parbatpur coal mine licence area which is currently owned and operated by Electrosteel. Dart will own a 30% equity stake in the JV and act as operator while Electrosteel will hold the remaining 70% stake. Electrosteel's Parbatbur mine is located in the Jharia Basin within the coal rich state of Jharkhand in eastern India.

Geological studies on the Parbatpur mine have identified eighteen coal seams in the Barakar Formation with a cumulative thickness of over 80 metres at depths between 200 and 1,100 metres. The Parbatpur coal seams have high gas content and gas saturation close to 100%, requiring extraction of the CBM ahead of mining for regulatory and mine safety purposes.

Dart has commissioned an independent evaluation of the resources on the Electrosteel mining licence area from Netherland, Sewell and Associates Inc (NSAI). As a result of the evaluation, NSAI have estimated:

- Best Estimate Gas-in-Place resource (gross): 168 BCF

- Gross Contingent Resources (2C): 62 BCF

- Gross Prospective Resources (Best Estimate): 50 BCF

Dart and Electrosteel will fund the costs of gas extraction and share the economic benefits in proportion to their respective participating interests. Dart will act as operator of the JV. Dart and Electrosteel have agreed an initial appraisal program of two core holes and six pilot wells in 2011, to be followed by a well development programme that is expected to include over 30 wells in the following years. Given the high gas contents and coal thicknesses, a vertical well completion technology is intended. Dart's capital contribution is estimated around US$2 million in 2011 and a further US$10 million to cover subsequent development expenditure. Dart expects to ultimately achieve an annual field production of approximately 3 Bcf when all wells have been completed.

Dart anticipates first gas from the pilot wells in late 2011. Any produced gas can be sold immediately giving potential for first gas sales as early as January 2012. In a bid to maximise early access to domestic gas markets Dart and Electrosteel are already in advanced discussions with domestic Compressed Natural Gas players about potential gas off-take contracts. Dart's joint venture partner, Electrosteel, has the option to ultimately acquire produced gas for use at Electrosteel's nearby steel plant.

Announcing the Joint Venture, Dart Chief Executive Officer and Managing Director, Mr Simon Potter said:

"The Parbatpur mine project is an attractive niche opportunity for Dart in India - it allows us to achieve accelerated production, demonstrate the ability to complete projects in India and deliver near-term gas sales in a supply constrained market. The project also marks the beginning of a relationship with Electrosteel and opens up future coal mine related opportunities for Dart across India".

About Electrosteel

Electrosteel is one of India's largest manufacturers of ductile iron pipes and fittings and a provider of water infrastructure solutions. Electrosteel owns and operates the Parbatpur coal mine. supplying coal for its manufacturing facilities. The company is listed on the Bombay Stock Exchange, India.

Contact

Mr Simon Potter CEO and Managing Director Tel: +65-6508-9840 Mr Shaun Scott Executive Director Tel: +61-7-3149-2100 Mr Eytan Uliel Chief Commercial Officer Tel: +65-6508-9840 http://www.dartenergy.com.au