Transform Equity

completed

Transform Exploration was founded in March 2012 by senior members of the former Woodside Petroleum Ltd. management team. Transform Exploration’s principal area of focus is oil and gas exploration within the island of Papua. The company is staffed by ten full time employees and an additional four part-time or contract staff. On July 8th, 2014, Transform Exploration formally took control of its first operated exploration licenses in PNG following the acquisition of Eaglewood Energy.IFC is proposing to complete an early equity placement of up to AU$21.5m in Transform Exploration to support the company’s exploration activities in PNG, namely:i) One potential exploration well;ii) Ongoing overheads and operational expenditure up to 2016, including employment expenses, Eaglewood Energy’s overhead costs, legal and professional services fees and provision of office space.Transform Exploration’s PNG licenses are situated in the center of the island of New Guinea, some 30–80km east of the land border that separates PNG from Indonesia. These licenses lie within the Kiunga Rural Local Level Government area of the North Fly District of Western Province and the Nomad Rural Local Level Government of the province’s Middle Fly District. Whilst the North Fly District regional administrative town, Kiunga, benefits from an airport and river port which can be reached by the navigable Fly River, the areas remain relatively remote and sparsely populated. Over the past century, the area has attracted petroleum exploration activity, though this resource has remained undeveloped until now due to technical and geographic constraints.Operated Licenses:PETROLEUM PROSPECTING LICENCE ("PPL") 259: PPL 259 is covered by approximately 2,000 km of vintage 2D seismic along with 185 km of recently acquired 2D seismic, shot in 2012 and 2013 by Eaglewood Energy prior to Transform Exploration’s acquisition. PPL 259 presents two opportunities of immediate focus, namely the Nama and Malisa prospect areas in the north of the permit.PETROLEUM RETENTION LICENCE (“PRL”) 28: In 2011 Eaglewood Energy participated in the discovery of the Ubuntu gas condensate field in PRL 28. Following Transform Exploration’s acquisition of Eaglewood the company currently holds a 40% operated interest in the 2C resource of 100 Bcf and 3.6 MMbbl of condensate (gross). SOUTHEAST PAPUA (“SEP”) PRODUCTION SHARING CONTRACT (“PSC”) – Following a public tender exercise, Transform Exploration expects to be notified as the successful bidder for the SEP PSC by end 2014. The PSC covers an area of approximately 8,765km2. This offer remains subject to the satisfactory negotiation of PSC terms with the Indonesian regulator SKK Migas. The official award is anticipated to occur in May 2015. Transform will hold a 94% interest in the contract area. The PSC emerged from the South East West Papua (SEWP) Joint Study Agreement (“JSA”) which covered an area in Indonesian Papua of 37,834 km2. Transform Exploration undertook remote sensing data capture (aerogravity and aeromagnetic surveying) with over 18,866 km of flight lines completed in July 2013. All of the work required to fulfil the JSA obligations was complete during 2013. The region is virtually unexplored with only two wells having been drilled within the JSA license area by Shell during the 1950’s. There is also very limited regional 2D seismic acquired by Conoco in the 1980’s on land and along the two major rivers. The primary work commitment within the initial three year term of the Production Sharing Contract will be to undertake a new, river-based, seismic survey.Non-operated and disposal licenses: Transform Exploration holds a 50% non-operated holding in PPL 430, a license that abuts PPL 259 to the south. The license commitment comprises primarily of desktop work, seismic reprocessing and minimal seismic acquisition (20 km) to be carried out by July 2015, with Horizon Oil Ltd. (“Horizon”) acting as the operating partner.