re: Ann: Letter Of Intent Executed for Pathfi... From Proactive...

re: Ann: Letter Of Intent Executed for Pathfi... From Proactive Investors:

AUSTIN EXPLORATION
www.austinexploration.com.au/

Austin Exploration (ASX: AKK) is an oil and gas development company with assets in Australia and the United States.

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Austin Exploration farming out stake in Colorado oil project
Monday, April 29, 2013 by Bevis Yeo


Austin Exploration (ASX: AKK) has signed a non-binding Letter Of Intent to farm-out 30% of its Pathfinder Niobrara oil project in Fremont County, Colorado.

In return, Austin will be carried for 100% of the drilling costs of the next two horizontal wells capped at a total of US$12 million.

Austin will pay for drilling costs that exceed US$6 million per well and will both retain a 55% interest in the 11,500 acre project and remain as operator.

Both companies have now entered into a 90 day exclusivity period to complete the second and final phase of due diligence.

Pathfinder Niobrara

Austin is the first company to successfully drill through the highly fractured and problematic Pierre formation and drill a horizontal well into the Niobrara formation in the Florence Field.

It Pathfinder C11-12 Hz-1 well was successfully fracture stimulated with 16 frac stages over a 4,100 feet horizontal leg and produced over 403 barrels of oil equivalent per day naturally to surface on 13 March 2013.

This well is currently in the next phase of production testing with pumping expected to achieve consistent and steady production.

Additional, the spacing at the Pathfinder Niobrara allows for at least 100 horizontal wells.

Austin had a cash balance of $4.02 million as of 31 December 2012 and is looking to raise up to $8 million through a Share Purchase Plan offering existing shareholders new shares priced at $0.016 each.