Botala Energy Ltd. to provide an update on its technical progress at its 100% owned Serowe CBM Project. The initial results of the ongoing gas desorption testing are promising. The gas desorption testing is a three-stage programme designed to determine the amount of gas held within a gram of coal and the coals' ability to release the gas under flowing conditions in production.

The testing programme includes dril ing and taking core samples of the coal seams from the Serowe 3-4 wel. The core samples are then placed in a water bath, the temperature of the water bath is maintained at a constant temperature to replicate underground conditions. Once in the water bath the coals undergo the following 3 stages of testing: Stage 1 Lost gas (Called Q1): Gas pressures are measured every minute within the first 15 minutes, this initial data is used to predict the amount of gas which may have been lost in the process of dril ing and handling.

Stage 2 - Desorpable gas (called Q2): A slow desorption process measuring gas pressures daily over a 4- month period. Stage 3 - Crushed gas (called Q3): Core samples sent to a lab are crushed, the amount of gas produced is measured, this general y adds 10-20% more gas volume to the total gas content. The total gas content (QT) is calculated as the sum of first quarter, second quarter, and third quarter.

Since starting the desorption testing the combined first quarter and second quarter gas values are approximately 2.0 scc/g over 61 days. The second quarter pressure measurements continue to increase and may have the potential to exceed the target rate of 2.4 scc/g which was used previously in the certification process. Botala considers this target threshold may be exceeded based on the results to date.

Exceeding this threshold would provide an increase in the potential gas volumes within the acreage.