Bandanna Energy (ASX:BND) Quarterly Activities Report for Period Ending 31 December 2009

Brisbane, Jan 26, 2010 AEST (ABN Newswire) - The following activities have been conducted by, or on behalf of, Bandanna Energy Limited (ASX:BND) and its wholly-owned subsidiaries ("Bandanna") during the three months 1 October to 31 December 2009 ("Reporting Period").

1. EXPLORATION ACTIVITIES

During the Reporting Period, the Company operated a number of coal activities as well as oil and gas exploration activities.

1.1 Coal Exploration Arcturus - EPC 1221

During the Reporting Period, Springsure Creek Coal Pty Ltd (a wholly owned subsidiary of Bandanna Energy Limited) continued the concept study for Arcturus where the main target is the Pollux seam.

The tenement is located approximately 19km from the Blackwater-Rolleston rail line. Bandanna holds a 100% interest in this project and is the operator.

The current program is designed to increase confidence for a shallow thermal resource which may be suitable for mining by open cut methods.

Bandanna announced on 7 August 2009 that it had engaged an independent consulting group to undertake a Concept Study for the development of its Arcturus Project as a potential open cut thermal mine. The Concept Study is expected to be completed early 2010 and will be a precursor to any future feasibility studies.

Alpha Project - EPCs 1048, 1049, 1179 and 1180

During the reporting period 17 drill holes, totalling 1339m, were drilled to better define the sub crop limit of the D1 seam. An additional 14 holes are planned in this program which should be completed in March 2010. A Concept Study was undertaken during the Reporting Period and the Operator is assessing the findings prior making recommendations for the next phase of drilling and technical investigation.

AMCI is the manager of this Project and can earn up to 50% interest by funding in $25M as exploration.

Dingo West EPC 881

During the Reporting Period, 1 chip and 1 core hole were drilled for a total meterage of approximately 320 metres including 16.95 metres of core. In addition, 26km of 2D seismic was acquired with a further 18km of seismic to be completed in February 2010. Additional drilling is planned during the first or second quarter of 2010 targeting areas identified by the seismic survey as having open cut potential.

Bandanna holds a 100% interest in this project and is the operator.

Arcadia EPC 1742

No field work was conducted during the reporting period. An application for conditional surrender of EPC892 & EPC1204 with the creation of EPC1742 was granted on 5 November 2009. The new tenement unifies the previous tenements and will simplify future work and administration requirements.

This tenement is held by Arcadia Coal Pty Ltd, which is a wholly-owned subsidiary of Bandanna.

Gemini EPC 1131

During the Reporting Period, 1 chip hole was commenced. By the end of the Reporting Period a total depth of 536.5m had been reached. This hole is now at coring depth which should be completed late January 2010. The expected target seams are the Aries, Castor and the Pollux seams.

This tenement is held by Springsure Creek Coal Pty Ltd, which is a wholly-owned subsidiary of Bandanna.

Springsure Creek EPC 891

During the Reporting Period, 1 core hole was drilled to a depth of approximately 114 metres. This hole is now at casing depth and should be completed in January 2010. The target seam is the Aries 2 seam. An additional 42 holes are planned for this tenement and it is anticipated that these holes will be completed before the end of 2010.

This tenement is held by Springsure Creek Coal Pty Ltd, which is a wholly-owned subsidiary of Bandanna.

Fernlee EPC 1103

During the Reporting Period, 3 open holes, one re-drill and two water bores were drilled totalling approximately 1,083.5 metres. Two coal seams were intersected in one of the drilled holes.

Bandanna is currently reviewing the drilling data prior to planning further exploration by the end of 2010.

This tenement is held by Springsure Creek Coal Pty Ltd, which is a wholly-owned subsidiary of Bandanna.

Other Areas

No other field work was conducted during the Reporting Period.

1.2 Conventional Oil & Gas Exploration

During the reporting period, Bandanna started the approval process for a passive-transient electromagnetic aerial survey (P-TEM) designed to trial this technology within its permits in the northern Cooper-Eromanga Basin region. This proof-of-concept trial is proposed for acquisition in the area of PEL 88, ATP 549P (W) and ATP 539P. In addition, P-TEM signatures for known accumulations in the survey area will be obtained. The survey totals 500 nautical miles and will extend into the licence areas to tie dry holes and selected prospects. This trial will be concluded during the first quarter of 2010.

PEL88, SA

During the reporting period, Bandanna has commenced a prospectivity review of PEL88. This includes remapping of the existing 2D seismic and evaluation of reserve potential. This work is being carried out in conjunction with the P-TEM survey.

Other Areas

No other field work has been carried out during the reporting period.

2. FUTURE ACTIVITIES

The Company intends to focus its coal exploration activities on the Arcturus, Dingo West and Springsure Creek project areas with ongoing exploration.

3. INFRASTRUCTURE

Wiggins Island Coal Export Terminal - Gladstone

During the reporting period, Wiggins Island Coal Export Terminal ('WICET') announced the go ahead for the next phase of development of the terminal at the Port of Gladstone following the execution of the Framework Deed with the Queensland Government and Gladstone Ports Corporation. WICET has advised that it is working towards a financial close in July 2010 which would see initial port operations from Stage 1 in mid 2013. The new terminal will have an ultimate capacity of around 70 Mtpa for export coal.

Bandanna is one of 18 consortium members of WICET, which has been working with the Queensland Government and Gladstone Ports Corporation in relation to the development of the new terminal.

4. CORPORATE ACTIVITES

During the reporting period, Bandanna announced to the market that all conditions precedent to the Share Sale Agreement ('Subscription Agreement') with SAMTAN Co., Ltd ('SAMTAN') had been satisfied and the transaction completed on 27 October 2009. The Subscription Agreement resulted in the issue of 37,532,016 fully paid ordinary shares to SAMTAN, raising $22.5 million.

There were no other corporate activities during the Reporting Period.

For the full Quarterly Report, view at the following link:
http://www.abnnewswire.net/media/en/docs/62144-ASX-BND-176498.pdf

Contact

Dr Ray Shaw Managing Director Tel: +61-7-3041-4400 Fax: +61-7-3041-4444