oil gas joint venture hoa terms

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35 Richardson Street West Perth WA 6005 Australia
PO Box 1440 West Perth WA 6872 Australia
Ph: +61 8 9211 1555 Fx: +61 8 9211 1500
ABN 25 009 121 644
Monitor enters into Farmout on Kyrgyz Oil and Gas Projects for funded
seismic, drilling and operations
Monitor Energy Limited is pleased to announce that it has signed a Heads of Agreement (HOA)
with Medina Group Ltd, (Medina) a Hong Kong registered Investment Company specialising in
the oil and gas sector. The Heads of Agreement requires Medina to spend up to US$13M on
exploration. The HOA forms the framework for the ensuing Joint Venture and Joint Venture
Operating Agreement which enables Monitor to move forward with exploration in the Kyrgyz
Republic licenses at no operational cost to the Company.
Key Points
• Medina will provide up to US$5M funding, exclusive of mobilisation and demobilisation, for
a seismic survey, to earn 80% equity in the Kyrgyz Republic licenses.
• Medina to fund up to US$8M funding for drilling of an exploration/production well
exclusive of mobilisation and demobilisation to earn an extra 5% equity, taking its total to
85% subject to a successful seismic outcome.
• Medina will fund mobilisation and demobilisation costs for seismic and drilling equipment
and supplies.
• Monitor Energy Limited will be free carried for all costs in relation to the Kyrgyz Operation
to commencement of production.
• Medina will pay all operational costs associated with management and administration of the
Kyrgyz operations from 1st January, 2008.
• Monitor Energy Limited will remain exploration operator for the Kyrgyz assets on behalf of
the Joint Venture.
Both parties are now working towards completion of a more formal, Joint Venture and Joint
Venture Operating Agreement, which is anticipated to be completed by late December, 2007.
About the Kyrgyz Projects
Monitor Energy Limited holds 100% of 5 oil and gas exploration licences, totalling 11,500kms²
in the east and central south of the Kyrgyz Republic.
These licences had minimal exploration during the Soviet era, with little or no exploration
conducted since the late 1980's.
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35 Richardson Street West Perth WA 6005 Australia
PO Box 1440 West Perth WA 6872 Australia
Ph: +61 8 9211 1555 Fx: +61 8 9211 1500
ABN 25 009 121 644
The southern licences, totalling 6,000kms² demonstrate a similar geological setting to the
extensive Tarim Basin (production 300,000bbl/day, 2006 figures), located approximately 200
kilometres to the south, in north western China.
The eastern onshore licences, Tyup and Kara Kol, have been subject to drilling during the Soviet
era which indicated oil and gas shows supporting the conditions for a valid petroleum system.
Similar geological conditions are seen in the adjacent Junggar Basin (reserves 63B? barrels,
2000 figures) in North West China.
The Issyk Kul licence encompasses a large proportion of Lake Issyk Kul. This licence is
currently the subject of a geological structural review by independent experts to identify shallow
opportunities in the shallower eastern portion. The license lies adjacent to the onshore blocks so
that it covers transition structures and play fairways.
Future Exploration
At present, Monitor Energy Limited has completed an extensive gravity survey over the onshore
licenses, with the aim of identifying focal areas for seismic acquisition next field season. The
Company is currently in discussion with seismic acquisition service providers for the 2008 field
season.
About Medina Group
Medina Group Ltd (Medina) is owned by private equity investors from North America, Europe
and Asia with a current focus on petroleum exploration and exploitation in Kyrgyzstan and
Australia.
Medina has recently been designated preferred tenderer in the latest bidding round in Queensland
the Department of Mines and Energy, picking up four Adavale Basin authority to prospect
concessions which carry work commitments of $21M over four years, subject to lodgment of
security payments and standard native title reviews.
About Monitor Energy Limited
Monitor Energy Limited is an Australian Stock Exchange listed company with principal business
in the energy sector, including oil, gas and uranium.
Monitor has a strong technical and management team with extensive international oil and gas
experience, which also brings to the Company a global network of contacts in the industry.
The Company has built a portfolio of oil and gas and uranium projects in the Kyrgyz Republic.
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35 Richardson Street West Perth WA 6005 Australia
PO Box 1440 West Perth WA 6872 Australia
Ph: +61 8 9211 1555 Fx: +61 8 9211 1500
ABN 25 009 121 644
The Company has a strong focus on acquiring oil and gas projects with near term production
potential in fields demonstrating current production. To this end, the Company is currently
reviewing opportunities in Central and South East Asia and other geomarkets to fit the company
profile.
For more information please contact the Company on +61 (8) 92111555.
Yours truly
Jon Roestenburg
Managing Director
Monitor Energy Ltd
26 November 2007