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Transerv Energy (TSV) is pleased to advise it is set to realise a significant cash injection following the execution of a letter of intent (LOI) for a sale and farm-in agreement on the Alberta Joint Venture’s Duvernay Shale and Rock Creek acreage (TSV 34 per cent). The LOI has been signed with a well-credentialed Calgary petroleum exploration and production company, which provides the AJV with an industry experienced partner with strong capital support to develop the Duvernay and Rock Creek projects. Under the LOI, the investor will acquire an 80 per cent interest in 30 sections (19,200 acres) in the Duvernay and Rock Creek fairway for a total of C$20 million in cash. Transerv’s share of this will be C$6.8 million ($7m). The Joint Venture partners will also be free-carried through the first two wells drilled on the Duvernay. The first is a vertical well to be drilled in 2012 at an estimated cost of C$5 million. The second well, an optional horizontal well, is to be drilled during the 2013 drilling season with the AJV carried for the first C$15 million of expenditure. The Joint Venture’s total exposure to drilling costs above C$15m on the horizontal well is capped at $1m. In addition, the investor has agreed to fund its pro rata 80% share of a Rock Creek horizontal well within 2 years of execution of the LOI, or return the Rock Creek rights in the lands to the AJV.

Transerv Managing Director Stephen Keenihan said “The AJV partners decided to review their sale and farm- out options for these assets in light of the increasing prices being paid for exploration acreage in the region during 2011,” he said. “This transaction realises significant value while enabling the Joint Venture partners to maintain exposure to the region through its 20 per cent interest in 30 sections and 100 per cent interest in the remaining 111 sections. This transaction provides a strong platform for the Company to advance its exploration and development activities in Australia and Canada.”

Core Laboratories is a leading provider of proprietary and patented Reservoir Description, Production Enhancement, and Reservoir Management services. The primary objective of this project is to provide operators with measured geological, petrophysical, geomechanical, geochemical, and production properties of the Duvernay Shale in order to improve their formation evaluation and to optimize stimulation and production. Understanding the similarities and differences in the section on a regional basis is the key to successful exploration and exploitation. The resultant database will be an invaluable tool to operators in evaluating, comparing, and designing completion and stimulation methods for the Duvernay Shale.

www.transerv.com.au

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