Canda Quebec, Canada (100% Interest) On 30th January 2008, Molopo acquired the exploration rights to 1.83 million acres of land in Quebec. This area was subsequently increased to 2.1 million acres in June. The area is considered to be prospective for both conventional gas in the Potsdam, Beekmantown and Trenton Blackriver formations as well as for shale gas in the Utica and Lorraine shales. Shale gas, while relatively unknown in Australia, already supplies 5% of the North American gas market demand. This volume equates to 1.25 Tscf per annum of supply or roughly twice the total Australian domestic gas market. Subsequent to Molopo’s acquisition, Forest Oil announced encouraging results from its first vertical fracced wells in the Utica shales, reporting gas flow rates up to 1,000,000 scf/d. It was estimated that the shale gas recovery potential over Forest’s net 276,000 acres was some 4.1 Tscf. Talisman who hold 760,000 acres in the basin have announced a GIP potential of some 48 Tscf for their area. Both companies are planning vertical fracced and horizontal fracced shale gas test wells in 2008. Molopo has almost completed its initial assessment of the overall area with respect to conventional and un-conventional potential. Seismic acquisition is planned for later in the year with initial exploration drilling expected in 2009. While the prospectivity of the Molopo acreage is expected to vary as a significant holding is located in the relatively untested fold belt play, Molopo estimates (based on current data) that approximately 350,000-400,000 acres has shale gas prospectivity. A number of companies have approached Molopo with expressions of interest in participating in part or all of the exploration acreage. It is anticipated that a series of farm-outs will be possible over parts of the acreage. Quebec Project Area   Quebec Project Area Top