The proposed merger with Alto involves off-market takeover bids by LDR for all of Alto's ordinary shares.

Under the share offer, investors will receive 13 LDR shares for every one Alto share, as well as the option to subscribe for ordinary shares in Alto for 25c, which expire on January 31 2007.

"The merger of Alto and LDR will result in a significant change to the nature and scale of LDR's activities," Dimsey said in an earlier report.

"The proposed transaction will result in a company with a lower investment risk profile for LDR and Alto share and option-holders, and the management capability to reach a position of significant scale within a relatively short time frame."

The merged group will have emerging production, a fully funded drilling program and a significant and growing acreage portfolio, he said.

He added that Alto had planned a drilling program on LDR's West Virginia and Kentucky Projects over the next two months.

LDR says the merger will provide the combined company with:

· The right to earn interests in 69,850 acres in the Appalachian Basin – one of the most prolific natural gas regions in the US.

· In excess of 1000 potential well sites.

· Fully funded 26 well initial drilling program.

· Significant and growing acreage portfolio – several new projects currently under evaluation.

· Near term production – strong returns to be generated from current high gas prices.

· Experienced board and management team – technical, operations and capital markets.