Junex inc.

Junex inc.

July 10, 2006 16:01 ET

Junex and AMQUE sign an agreement for hydrocarbon exploration in Québec

QUEBEC, July 10 - Junex Inc. (JNX - TSXV) and AMQUE, U.L.C.
announced today the signing of an agreement leading to the investment of up to
US$12 Million over the course of three years for oil and gas exploration in
the province of Québec under permits held by Junex in the Lower St-Lawrence.
The two companies had previously signed a letter of intent and a term sheet
(see press releases dated October 5, 2005 and February 2, 2006).

The final agreement reflects the terms and conditions already disclosed
except that the parties have agreed to take out of the venture the exploration
permits in the Gaspé area and define the minimum investment to be made by
AMQUE at US$12 M. Therefore, the five blocks of permits situated in the Lower
St-Lawrence, essentially between Montréal and Québec, are included in the
final agreement.

"The partnership with AMQUE fits perfectly with our business strategy
which is to explore for and produce oil and natural gas reserves in Québec;
adding tremendous value to our natural resource base while reducing our
exploration risk by way of this partnership and the complimentary activities
generating cash flow for Junex. The executives of AMQUE have developed and
produced significant petroleum reserves in the United States and we are
convinced that their expertise is an important asset in the potential
discovery of petroleum reserves under our permits in the Lower St-Lawrence. We
will continue to deploy our own capital for exploration purposes on our other
projects in the Gaspé, Bécancour and the Batiscan/Champlain regions which are
not covered by this agreement", indicated the President of Junex,
Jean-Yves Lavoie, Eng.

"The executives of AMQUE have a wide range of experience with both major
and independent petroleum companies related to exploration and production
projects in the petroleum basins of the United States. We also rely on our
proven experience in both conventional and unconventional projects, such as
shale gas, in the Michigan Basin and conventional operations in the Illinois
Basin. We believe our scientific competencies and our business networks in the
oil and gas industry will allow us to lead a winning exploration program in
Québec", added Dennis Swager, President of AMQUE.

AMQUE will earn 100% interest on the four blocks of permits totaling
approximately 500,000 acres once they fulfill the terms of this agreement.
Junex will be entitled to a 5% overriding royalty on any production of
hydrocarbons from the permit areas, and will maintain an option to convert
their overriding royalty to a 15% working interest. In addition, AMQUE will
have the right to earn a 60% working interest (the remaining 40% held by
Junex) on the fifth block of permits covering approximately 200,000 acres (a
map of the permits affected by the agreement is available on Junex's website:

The agreement further provides that AMQUE must invest a minimum of
US$1.2 million dollars in exploration evaluation during the next 15 months.
AMQUE will then have the option to invest an additional minimum of
US$10.8 million over the course of the following 21 months to earn its
interest in the properties. If AMQUE does not exercise the option or does not
invest the minimum capital requirement during the term of the agreement, it
will not earn its full interest in the Junex permits. In addition, AMQUE is
obligated to invest a minimum of US$1 million on each of the five blocks of
permits in order to earn its interest therein. The agreement also provides
that AMQUE will have a right of first refusal on any exploration projects in
the St-Simon area. It is also anticipated that the parties will work on
additional joint exploration projects throughout the region on a project-by-
project basis.
The permits held by Junex in the Batiscan, Champlain, Nicolet and
Bécancour areas are completely excluded from this agreement as well as all
activities related to the exploration, exploitation and production of natural

About Junex

Junex holds exploration rights on more than 4 million acres of land
located in the Appalachian basin in the province of Québec. Recent major
discoveries in the United States and Eastern Canada have stimulated
exploration in Québec, which is located in a favourable geological setting for
oil and gas discovery. Junex's strategy is to reduce exploration risks by
entering into partnerships with other exploration companies. In parallel to
its exploration efforts, Junex's goal is to achieve positive cash flows from
its natural brine and drillings services operations. Junex also holds
approximately a 12% interest in Petrolia (PEA : TSXV) and a 5.4% interest in
Gastem (GMR : TSXV).


AMQUE has been created to initiate and execute a joint venture program
with Junex. The executives of AMQUE are Mr. Dennis Swager, President of Team
Energy, Mr. James Morabito, President of Agmen Resources, and Mr. Dale Perdue,
President of Mid-Central Investments Inc. Mr. Swager has significant
experience as an operator of oil and gas properties and as a manager of
upstream oil and gas projects, in U.S. oil-producing basins having worked for
companies such as Marathon Oil Company, Chevron, USA and Team Energy.
Mr. Morabito has been involved in the management and development of oil and
gas projects particularly in the area of fractured carbonate reservoirs
(Trenton-Black River) and unconventional black shale plays in Eastern North
America since 1986 having worked as an asset manager for MCNIC, independent
energy companies and AMGEN. Mr. Perdue has been actively involved in the oil
and gas business since 1973. Mid-Central Investments, Inc. is currently active
in unconventional gas plays as well as multiple conventional oil and gas
projects throughout North America. AMQUE also holds licenses on an additional
two million acres located in the Lower St-Lawrence and Gaspé region which is
not subject to this agreement. However, Junex is entitled to a 5% overriding
royalty on any production of hydrocarbons from these permit areas with an
option to convert their overriding royalty to a 15% working interest.

Contact Information

  • Junex:
    Mr. Jean-Yves Lavoie, President
    (418) 654-9661

    Mr. Dave Pépin, Corporate Affairs
    (418) 654-9661

    AMQUE: Mr. Dennis Swager, President
    (618) 943-1010