Bandanna Energy Limited (ASX:BND) Successfully Completed Institutional Placement of Approximately A$76 Million

Brisbane, Dec 15, 2010 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND) ("Bandanna" or "Company") is pleased to announce that it has successfully completed the institutional placement ("Placement") announced on 14 December 2010. The Placement, raising approximately A$76 million, was priced at A$1.42 per share, an 11.6% discount to the 5 day VWAP ending 13 December 2010 and will result in the issue of 53,533,323 ordinary shares to participating investors.

Managing Director of Bandanna, Ray Shaw said that: "The strong support shown by a diverse group of new and high-quality institutional investors in this Placement demonstrates the significant level of interest in Bandanna Energy and its portfolio of emerging coal projects."

The proceeds raised from the Placement will be used by Bandanna for:

- Pro-rata funding for the development of essential export infrastructure, including for the financial close of Stage 1 at the Wiggins Island Coal Export Terminal. Bandanna has been allocated 4Mtpa of capacity as a preferred shipper at WICET;

- Funding ongoing exploration and development expenditures at Dingo West, the Golden Triangle projects (comprising Arcturus, Springsure Creek and Arcadia) and the South Galilee Project; and

- General working capital purposes.

Simultaneous with the Placement, an additional 5 million shares were sold to investors on behalf of two founding shareholders, Bruce Wood and Norman Zillman, at the Placement price.

Settlement of the above transactions is expected to occur on 20 December 2010, with new shares under the Placement to be allotted on 21 December 2010. New shares will rank pari passu with existing shares. Quotation of the new shares on ASX is scheduled to commence on 21 December 2010.

The new shares will be issued within Bandanna's existing placement capacity under ASX listing rule 7.1. Accordingly, Bandanna does not propose to seek shareholder approval in relation to the Placement.

Shares in Bandanna are expected to re-commence trading with effect from market open today.

UBS AG (NYSE:UBS), Australia Branch acted as lead manager, bookrunner and underwriter of the Placement. Intersuisse acted as a co-manager of the Placement.

Contact

Dr Ray Shaw Managing Director Bandanna Energy Limited Tel: +61-7-3041-4400 http://www.bandannaenergy.com.au