Queensland Bowen Basin Permits:

ATP758P, ATP759P (Click on figure to the right) These two granted tenements together cover over 13,000 km2 The Company considers these tenements to be prospective for the following reasons:

• The area is well established to be rich in both coal and CSG
• The permits are adjacent to established, commercial CSG projects (eg. Moranbah Gas Project, Fairview, Spring Gully, Moura)
• Mapping of the Blackwater Group shows good prospectivity over large areas in the western regions of both ATP759P and ATP758P
• The CSG-prospective Duaringa Basin is almost entirely covered by the permits
• Infrastructure and markets are established and developing

Queensland Bowen Basin Tenements: ATP756P(Application), ATP806P, and ATP831P

The ATP756P (Application) , ATP806P, and ATP831P tenements cover a total area of 4,900 km2. In addition to the reasons given above, the Company believes these tenements to be prospective for the following reasons: (click on figure below)

• The synergy between tenements ATP806P and ATP831P, together with the granted permit ATP758P, constitute a substantial and promising area for the exploration of CSG.
• These tenements have a large number of existing exploration holes, with good expected seam thickness and gas content
• Prospective drilling areas have been identified, both by Origin Energy (2003) and more recently by Pure Energy.

The Company has been named preferred bidder for permit ATP852P(A).The permit block covers an area of approximately 1050 km2 of highly prospective acreage, and has been acquired primarily as a coal seam gas exploration permit.

The permit moves Pure Energy into the Walloon CSG Play Fairway which is proven to be productive and prolific in nearby fields and close to existing infrastructure and markets.

The Company believes the permit has excellent potential for exploration, appraisal and development of CSG, given the following factors.

• ATP852P lies directly between, and only 30 kilometers from, two prolific CSG fields that produce gas from the Permian Bandanna Formation of the Bowen Basin. These fields are the Fairview – Spring Gully field to the northwest and Scotia – Peat field to the south east (click on figure below)
• Within ATP852P the prospective Coals are contained in the Jurassic Walloon Subgroup of the overlying Surat Basin. These same coals are currently being put into production at Berwyndale South and Argyle (operated by Queensland Gas Company) and Kogan North, Daandine and Tipton West (operated by Arrow Energy)
• Existing wells and seismic coverage are sufficient for the Company to proceed directly to exploration drilling, once the permit is granted, expected in the first quarter of 2007.
• Coal seams are known to be well developed in both the Juandah and Taroom Coal Measures (CM). Nett coal thickness is expected to range from 15 to 30m, and the seams are known to contain commercial gas contents within the Walloon Play Fairway
• The Company intends to drill and test three core holes and if these wells are successful, the Company plans to move rapidly into a pilot testing programme, in order to establish commercial viability and to certify reserves

Pure Energy will hold 100% interest in both the CSG and conventional rights in this permit.

ARROW ENERGY NL (ARROW) FARMINS

On the 12 October 2006 Arrow announced its election to farmin to the CSG rights of tenement ATP 759P

Under the Farmin Agreement, Arrow has an option to earn up to 50% interest in the CSG rights in the tenement. Arrow must spend a minimum $400,000 in the first year of the agreement for which Arrow will be entitled to a 15% interest. A further 15% interest may be earned by Arrow spending a further $850,000 during the second year of the agreement and a final 20% (total 50%) interest by spending an additional $200,000 during the third year of the agreement.

On the 7 December 2006 Arrow announced its election to farmin to the CSG rights of tenement ATP 831P

Under the Farmin Agreement, Arrow has an option to earn up to 50% interest in the CSG rights in the tenement.

Arrow must spend a minimum $500,000 in the first year of the agreement for which Arrow will be entitled to a 15% interest. A further 15% interest may be earned by Arrow spending a further $700,000 during the second year of the agreement and a final 20% (total 50%) interest by spending an additional $800,000 during the third year of the agreement.