Wednesday, June 10th, 2015 - Waterbrooks Consultants Pte Ltd

SINGAPORE, June 9, 2015 - (ACN Newswire) - Loyz Energy Limited ("Loyz Energy" and together with its subsidiaries, the "Group"), a fast-growing Singapore-based upstream energy group today announced that it had, on 8 June 2015, entered into a binding memorandum of understanding (the "MOU") for the acquisition of Primeline Energy Holdings, Inc. ("PEH", and together with its subsidiaries, the "Target Group") by way of a scheme of arrangement for a consideration ("Consideration") of approximately S$197.0 million (the "Proposed Acquisition").

- Target Group's key asset is a developed and producing China offshore gas field operated by its partner CNOOC

- Gas offtake agreement between CNOOC and Zhejiang Provincial Gas Development Co

- Proposed acquisition expected to significantly boost Loyz Energy's reserves

- Loyz Energy intends to seek a transfer to the Main Board of SGX-ST upon completion of the proposed acquisition

PEH (www.primelineenergy.com), a company listed on TSX Venture Exchange in Canada ("TSX-V"), is an independent oil and gas exploration and production company focusing exclusively on upstream opportunities in China. The Target Group owns exploration and development rights in the East China Sea, China, via two petroleum contracts, namely (a) Block 25/34 and (b) Block 33/07. As at the date of the MOU, Mr Victor Hwang Yiou Hwa ("Mr Hwang") holds, directly and indirectly, approximately 60.1% of the issued and paid-up share capital of PEH with the remaining 39.9% held by minority shareholders.

Details of Target Assets

Block 25/34 covers a total area of 84.7km2 in the Lishui Basin in the East China Sea in which LS36-1, a producing gas field is situated. The gas field lies in close proximity to Zhejiang Province which has an estimated population of 50 million.

Assuming the completion of the acquisition by PEH of Prime Petroleum Corporation from Mr Hwang ("PPC Acquisition"), the Target Group will own 49% and China National Offshore Oil Company ("CNOOC") will own 51% respectively of Block 25/34. CNOOC is the operator of Block 25/34. Based on the July 2014 report from McDaniel & Associates Consultants Ltd. ("McDaniel", and its report, the "Report") 1, the estimated gross reserves for Block 25/34 are approximately 52,148 MMCF2 (1P - proved reserves), 68,088 MMCF (2P - proved and probable reserves) and 87,518 MMCF (3P - proved, probable and possible reserves) as of 31 March 2014.

CNOOC and Zhejiang Provincial Gas Development Co had, in October 2014, entered into a gas offtake agreement ("Gas Sale Agreement") at approximately US$14.50/MCF (thousand standard cubic feet).

Based on the terms of the Gas Sale Agreement and McDaniel's view of the sale price in the Report, together with the development costs spent to date and commercial arrangements made by PEH, as of 1 January 2015, the estimated net present value after tax (at a discount rate of 10%) for the 49% stake in the LS36-1 field (assuming the completion of the PPC Acquisition) is approximately US$294 million (2P - proved and probable reserves).

Block 33/07 is a much larger offshore area of approximately 5,877km2 and is currently in the exploration phase. According to the Report, the high estimated gross prospective resources are approximately 1,093.7 MMCF. CNOOC has the right to participate in up to 51% of the development and PEH is currently the operator for Block 33/07.

Commenting on the Proposed Acquisition, Managing Director of Loyz Energy, Mr. Adrian Lee said, "The Proposed Acquisition will allow the Group's business scale, profits, cashflow from operations and net asset value to increase. This is expected to provide the Group with easier access to financing from financial institutions as well as debt and equity capital markets. This will in turn provide the Group with balance sheet flexibility to fund future value accretive acquisitions. The Proposed Acquisition, if completed, will also result in an increase in the Company's market capitalisation, which will potentially widen its investor base and may lead to an overall increase in investors' interest and trading of the ordinary shares in the Company. Existing shareholders of PEH include Fidelity Worldwide, with an approximate 10% stake currently."

Consideration for the Proposed Acquisition

The Consideration shall be approximately C$180.5 million (approximately S$197.0 million). The Consideration was arrived at on a willing-buyer, willing-seller basis and on arm's length basis, taking into account, among others, the indicative valuation of the Target Group (taking into account, among others, the Report) and the Group. Based on the Report, as of 1 January 2015, the net present value after tax (at a discount rate of 10%) for the 49% stake in the LS36-1 field (assuming the completion of the PPC Acquisition) is approximately US$294 million (2P - proved and probable reserves).

The Consideration shall be satisfied entirely by the issue of 1,790,930,143 new ordinary shares in the capital of the Company at an issue price of S$0.11 per share, subject to the necessary regulatory and shareholders' approvals.

Upon completion of the Proposed Acquisition, the Group intends to seek a transfer of its listing from Catalist to the Main Board of SGX-ST, subject to the necessary regulatory and shareholders' approvals.

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This press release is to be read in conjunction with the Company's announcement on the Proposed Acquisition [http://bit.ly/1f0km81] posted on the SGX website on 9 June 2015.

Primeline Energy Corporate Presentation June 2015: http://bit.ly/1BWcpFP.

 About Loyz Energy Limited

 Home-grown Loyz Energy Limited ("Loyz Energy" or the "Group"; SGX:594, SGX:LOYZ) is fast establishing itself as an independent exploration and production ("E&P") energy company in the Asia-Pacific. Loyz Energy is working to build a balanced portfolio of prime, producing oil and gas concessions, which will generate a steady earnings stream to gird up its balance sheet, as well as exploration assets that will drive long-term growth. In addition, Loyz Energy will seek drilling partnerships to reduce risks at the exploration and development stages.

The Group has begun to acquire producing assets. In March 2014, it purchased a 20% stake in three producing concessions in Thailand. It intends to selectively add more such assets, as the ensuing cashflows will enable Loyz Energy to step up the pace of development at its concessions in the Asia-Pacific. Within its balanced portfolio, Loyz Energy, through wholly owned Loyz Oil Pte Ltd, also owns two petroleum exploration permits ("PEPs") - one for New Zealand's Taranaki Basin and the other for an area off the coast of Victoria in Australia - a petroleum service contract for Area 14 in the East Palawan Basin, off the Philippines. For more information, please see www.loyzenergy.com. 

Contact:

Waterbrooks Consultants Pte Ltd
Tel: +65 6100 2228

Ms. Rosalina Soh
Mobile: +65 9677-6683
Email: [email protected]

Mr. Ng Tian Khean
Mobile: +65 9640-2808
Email: [email protected]

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Ms. Rosalina Soh

P: +65 6100 2228
M: +65 9677 6683
W: www.loyzenergy.com

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