ALBERTA JOINT VENTURE – DUVERNAY SHALE

The Alberta Joint Venture (AJV), in which Transerv holds a 34 per cent stake through Woma Energy, mandated Macquarie Tristone in August 2011 for a possible farmout and/or partial sale of its extensive petroleum exploration interests in Alberta, Canada, including the Duvernay Shale. The other partners are Mako Energy Limited (50%) and Kilgore Oil and Gas Limited (16%).

The AJV’s exploration interests extend from the shallower Rock Creek interval down through deeper intervals to the highly prospective Duvernay Shale. The Duvernay has hosted several significant liquids-rich, shale gas discoveries in the region in recent months, resulting in a significant increase in demand for this acreage.

The strategy to seek early monetisation of the Duvernay Shale rights has been prompted by the soaring price of exploration acreage in the region, where the AJV has land holdings with Duvernay Shale rights totalling 128.28 sections and with Rock Creek rights totalling 132.28 sections with rights to the deep intervals. Land holdings held by the AJV within the Duvernay Shale and Rock Creek fairway now total 141.53 gross sections. Transerv paid an average of $200/ha over the past nine months for its acreage compared with an average price of over $5,000/ha paid for surrounding acreage at recent monthly auctions of Crown Land.

In light of the valuations being placed on the surrounding exploration acreage, the AJV considered it commercially prudent to evaluate the possibility of a farmout/sale of its Rock Creek and Duvernay Shale rights. Transerv believes it could realise a significant cash injection from a partial sale, together with a free-carried interest in the retained acreage.

GENESEE

Through its 100% owned Canadian subsidiary, Woma Energy, Transerv continues to add new lands to its Canadian portfolio. To date, the company has obtained rights to a further 44 sections in Alberta and Saskatchewan. The lands are targeting shallow, low risk oil and gas plays which are productive throughout the area. The exploration plans for these areas are still at an early stage and are expected to comprise the purchase of existing seismic data and the re-entry/redrill of a number of wells which have been shown to have penetrated oil or gas bearing strata.