This significant placement with an as-yet-unnamed Australian institutional investor, believed to be Colonial, will result in excess of 10% of Sydney Gas' capital being held by a single cornerstone shareholder.

"This placement is opportune and strategic for Sydney Gas as we look to build upon the success of Stage I of the Camden Gas Project, develop Stage II, and begin work upon stand alone gas projects in Wyong and the Hunter," said Sydney Gas' chief executive officer, Dr Bruce Butcher.

"This cornerstone investor intends to work with Sydney Gas to ensure the full development of our various projects in the Sydney Basin."

Drillsearch Energy allotted the shares to the underwriters of its Share Purchase Plan (SPP) at $0.04 cents per share, the same terms that shares were previously offered to shareholders under the SPP.