TALON ENERGY LTD

Talon Energy Ltd is a gas exploration company focused on coal seam gas (CSG) projects in Mongolia. Talon has a 33% interest in the Gurvantes XXXV CSG project located in the South Gobi basin of Mongolia. The 8,400 sq km project is a joint venture between Talon and TMK Energy Ltd, which holds the remaining 67% interest.

The Gurvantes XXXV project is at the exploration and appraisal stage. In its maiden exploration campaign, Talon drilled three successful pilot production wells that continue to produce gas. An independent resource certification by NSAI estimated a best estimate contingent resource of 1,214 Bcf of gas (2C) for the project. Additional exploration is underway to appraise the scale of the resource.

Talon also recently executed a binding agreement to divest its interest in Gurvantes XXXV to TMK Energy. If approved, Talon shareholders would receive TMK shares and options implying a value of around $0.02 per Talon share where the transaction would consolidate project ownership under TMK Energy.