Further update on the TWE CBM project arbitration procedure & summary of basis of the dispute

VANCOUVER, Oct. 23, 2013 /CNW/ -

The Company was advised today by TWE that following issuance to CNPC of notice of referral of the unresolved CBM lands dispute to arbitration, TWE has followed the required process by providing notice of selected arbitration procedure to CNPC. Such notice to CNPC is provided according to the terms and conditions of the PSC.

A summary of key points at issue, which TWE has sent to its shareholders simultaneously at the time of publication of this announcement, among others, is set out herein.

Reference is made to the announcements of the Company dated June 17 2013, September 9 2013 and October 15h relating to the unresolved dispute between TerraWest Energy Corp. ("TWE"), and China National Petroleum Corporation ("CNPC") regarding the coalbed methane ("CBM") fairway lands within the Liuhuanggou CBM production sharing contract ("PSC").

Following issuance to CNPC of notice of referral of the unresolved CBM lands dispute to arbitration, TWE has followed the required process by providing notice of selected arbitration procedure to CNPC. CNPC, in accordance with the terms and conditions of the PSC may respond with notice of its preferred procedure. In the event of a disagreement on procedure the terms and conditions of the PSC describe a default arbitration procedure to be followed, according to internationally-accepted due process.

A summary of key points at issue, which TWE has sent to its shareholders simultaneously at the time of publication of this announcement, among others, is set out below:

  1. Clarification on discrepancy of the CBM exploration area, including highly prospective CBM zones and fairway lands between the PSC and the renewed CBM exploration permits and investigation on reported unauthorized coal drilling activity within the PSC area and any land title mismanagement by CNPC;
  2. Dispute on CNPC's failure to certify two international independent expert reports on evaluations of CBM discovered resources and natural gas resources originally in place (OGIP) commissioned by TWE and provided to CNPC in support of application for extension of the exploration period of the PSC;
  3. Dispute on CNPC's failure to validate the capital expenditure incurred by TWE on the project as required by the PSC; and
  4. Dispute on CNPC's failure to cooperate to clarify the land status with relevant ministries.

Additionally, a search of the web-based data of the Ministry of Land and Resources of China suggests that other coal exploration and mining permits have been issued and/or earlier permits have been renewed and greatly expanded without required consents within the PSC area since 30 December 2005 (the date of the PSC) in contravention of Chinese law. In this regard, CNPC and its affiliates have failed to assist to monitor unauthorized issuances of such permits. The holders of illegal permits are to be provided notice of dispute and the relevant ministries will be provided notice.

TWE is a private British Columbia incorporated company, registered under the BC Business Corporations Act. The Company holds 22.28% interests in TWE. TWE holds a 47% interest in and is the operator of the Liuhuanggou CBM PSC located in the Junggar Basin of Xinjiang, China. CNPC holds the remaining 53% of the PSC according to the PSC Modification Agreement executed and approved by the Ministry of Commerce of the People's Republic of China in 2011.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Petromin Resources Ltd.

For further information:

PETROMIN RESOURCES LTD.

1120-1090 W. Pender Street

Vancouver, B.C. V6E 2N7

Telephone: (604) 682-8831       Fax: (604) 682-8683

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Petromin Resources Ltd.

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