The conventional petroleum exploration/appraisal program will comprise 200 kilometres of seismic data acquisition and two new exploration wells as well as the drilling of a Bohena appraisal/development well.

In addition to the Coonarah Gas Field, currently under development, the company says the identified conventional petroleum leads and prospects within PEL 238 are estimated to contain 1.4 TCF of unrisked gas in place. The 2004 work program will attempt to bring some of this gas into the proven and probable reserve categories.

Eastern Star is also kicking off its NSW coal seam gas (CSG) program (ESG 32.5%) which will focus on gas reserve development in the 215 square kilometre Bohena Coal Seam Gas Project area, where nine CSG evaluation wells have already been drilled and produced gas from the Early Permian Maules Creek Formation coals.

These same coals will be targeted in the 2004 program by the drilling of one horizontal well completion; the drilling and fracture stimulation of four new vertical wells; and the fracture stimulation of the existing Bibblewindi-1 well.

In addition to the work on the Maules Creek coals, the company will also conduct a fracture stimulation of the similarly developed Late Permian Hoskisson coal seam in the previously drilled Bohena-6H well.

The horizontal well and all the stimulated CSG wells will be placed in test production as soon as practical after completion. It is expected that the CSG drilling program will be commence in the middle of this year and that a minimum six months of continued test gas production will be required before gas reserves can be independently accredited.

Gastar Exploration has previously reported 3P coal seam gas reserves of 8.7 TCF within PEL 238. The CSG work program is designed to convert some of the gas reserves and resources into the 1P and 2P reserve categories so that long term contracts can be negotiated for gas sales both within the region and also into the Hunter Valley and Newcastle markets.

Eastern Star believes that the PEL 238 CSG program is more advanced than a number of similar projects due to the existence of two sets of coal measures overlying each other, although separated by a marine shale sequence, as well as the thickness of individual coals within both these formations (3-15 metres). The coals are also fully gas saturated, over-pressured, highly fractured and responding well to fracture stimulation.