L&M Energy Secures Funding for Upcoming Taranaki Oil Well

1 June 2011

New Zealand Energy Corp. (“NZEC”) recently announced (copy attached) that they have entered into a Letter of Intent with AGL Upstream Gas (MOS) Pty Limited (“AGL”) to acquire AGL’s 50% interest in PEP 51151 (Alton).

LME is pleased to announce that they have entered into a conditional agreement with NZEC which provides LME a 100% freecarry in respect to expenses incurred in drilling the Talon1 exploration well within PEP 51151. In addition, in the event of a discovery, the agreement also provides for the funding of completion costs up to $500,000 with any costs beyond this shared on a 50:50 basis.

The LME share of expenditure being funded under the agreement is approximately NZ$1.75 million (including $250,000 of the completion costs). LME will retain its existing 50% interest in PEP 51151 but will transfer operatorship of the Joint Venture to NZEC.

By way of background, NZEC are currently in the process of an Initial Public Offering (“IPO”). NZEC currently holds two exploration permits in New Zealand (Eltham and Castlepoint) with a further two awaiting ministerial approval (Ranui and East Cape). New Zealand operations are undertaken by an experienced local team as well as Canadian personnel who are bringing Canadian expertise and technology to New Zealand.

Commenting on the deal, LME’s Chairman, Mr Geoff Loudon says “We are delighted that we could be involved with NZEC expanding their operations in New Zealand. We look forward to partnering with them, initially the Alton Joint Venture, and ultimately in other ventures”. The agreement with NZEC is conditional upon a number of factors including completion of due diligence, a final agreement being concluded with AGL and obtaining the New Zealand ministerial consents required.

ENDS

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