CH4 has significant reserves and resources throughout its exploration and production leases, which exceed 7,000km2 in Central Queensland, with gas-in-place estimated at 12,000 PJ.

Current demand for gas in Queensland is 100PJ per annum, with demand forecast to increase to up to 250PJ per annum within 15 years, driven by the significant growth occurring in North Queensland.

CH4 has long-term supply contracts, and is strategically located in close proximity to the growing industrial region of North Queensland. Coal seam gas currently supplies more than 25% of Queensland's natural gas supply.

The Chairman of CH4, John Reynolds, said CH4 is well placed to capitalise on the changing dynamics of the Queensland gas market where future demand is forecast to exceed traditional sources of gas supply.

CH4's first significant production project-the Moranbah Gas Project-is a 50:50 joint venture with BHP Billiton. The Moranbah Gas Project holds a 15 year contract to supply up to 290 PJ of Gas to Enertrade, a Queensland Government owned corporation.

The Moranbah Gas Project, currently under construction, is on track for commissioning later this year with first commercial gas to be delivered in early 2005.

"CH4 has forged relationships with leading organisations including BHP Billiton, Enertrade and the Worley Group to develop the Moranbah Gas Project. The Project is expected to be the only significant supplier of natural gas to the Townsville market, which is forecast to be a key growth region in the Queensland gas market over the next 20 years," Mr Reynolds said.

The managing director and CEO of CH4, Louis Rozman, said the company's core strategy is to increase contracted gas sales to the Townsville market and to expand into the Gladstone and Rockhampton industrial regions, positioning the company to supply gas to the two fastest growing industrial regions in Australia.

"We are committed to a targeted drilling program to define further reserves and have recently applied for and been offered additional exploration permits which will be the focus of our next phase of exploration," he said.

The offer of 30 million Shares at $1.25 per share is fully underwritten by Macquarie Equity Capital Markets Limited. The Offer will open on 4 March 2004 and is scheduled to close on 19 March 2004, with trading expected to commence on the ASX on 2 April 2004. Applications for shares can only be made on the Application Form accompanying the Prospectus dated 20 February 2004.

CH4's existing shareholders will retain a majority shareholding in the company at the completion of the IPO.

The proceeds of the IPO will be used to fund capital expenditure and development of the Moranbah Gas Project and other tenements over which CH4 holds exploration rights, fund the repayment of bridging finance, and buy back a proportion of Ordinary Shares held by the existing shareholders.