Burragorang Region

Apex Energy NL controls a Burragorang region Petroleum Exploration License (PEL), PEL 454. The area is South West of Sydney. PEL 454 encompasses nine abandoned coal mines in the area and some additional areas. CCL740 is a current operating coal lease which was excised from PEL 454. CCL740 (see plans below) is controlled by Burragorang Valley Coal Pty Ltd; a wholly owned subsidiary of Sada Services Pty Ltd. Apex has signed a Joint Venture agreement (JV) with Sada Services for the exploitation of gas from CCL740. This JV allows Apex access to all areas pertaining to all eight abandoned mines and the coal seams below these mines. Only the Bulli seam was exploited in these mines except for a very small expedition into the American Creek Seam which was discontinued at an early stage of development.

Apex intends to commence an exploration program for the area during 2010.

The nine abandoned mines are:

Valley Number 1
Valley Number 2
Valley Number 3
Wollondilly Colliery
Nattai Colliery
Brimstone Colliery
Brimstone Colliery #2
Nattai - Bulli Colliery
Oakdale Colliery

Apex has quantified an initial large methane gas resource of 2.5TJ Gas in Place (GIP) for all its area of influence, for which MHA Petroleum Consultants, Inc of Denver has issued a Reserve/Resource Statement.

MHA has certified Burragorang Gas in Place resources of 1,639 billion cubic feet (Bcf) from approximately 4.5 billion tonnes of coal contained within the Illawarra coal formation.

Burragorang Region (PEL 454)

The plan below shows the Burragorang region and five of the eight mines within. All these coal mines are abandoned and all have extensive goaf systems. All the gas within this area is classified as "contingent" at present (January 2010) and further work is required to define the resource. It is planned to commence an exploration drilling approval program in 2010. This will detail the drilling of a series of core holes to the base of the Woonona Seam. Digital Magnetic Telluric survey data acquired in 2008 by Apex, past records from the Department of Primary Industries (now Industry & Investment NSW) and core data taken by Apex will enable the resource to be considered for upgrade to reserve status.

A substantial portion of PEL 454 is excluded via an operating coal lease CCL 740 although Apex has an agreement with the operator of this lease, Burragorang Valley Coal Pty Ltd.

The potential for goaf-gas within abandoned colliery workings in the Illawarra area has been demonstrated by the completion of the Darkes Forest No.1 well which tapped the Darkes Forest goaf. This well has been flow-tested at 1.2MMscf/day of gas comprising 80% methane, and is currently shut-in until sufficient additional gas resources are available to fuel a gas utilisation strategy.