Junex inc.

Junex inc.

July 12, 2006 10:38 ET

Junex signs agreement with major US-based independent gas producer for evaluation of shale gas in Quebec

QUEBEC, July 12 - Junex Inc. (TSX-V: JNX) is pleased to
announce that it has entered into an agreement with a major US-based
independent gas producer regarding gas production capacity evaluation of
certain Utica shale strata on four permit blocks (143,395 acres) located
between Quebec City and Montreal and wholly owned by Junex.

The agreement provides that the partner may earn a working interest of
100% in the Becancour and Batiscan/Champlain permits, subject to a 5% gross
overriding royalty interest, convertible to a 15% working interest in favor of
Junex, and only in connection with Utica shale strata. This arrangement will
allow Junex to maintain all rights under these permits with respect all strata
above and below the Utica shale strata, including the overburden, the likes of
which has produced such gas fields as Pointe-du-Lac and Trenton-Black-River,
an abundant pool in New York State. In addition, all natural brine production
and Becancour underground natural gas stockage projects remain under Junex's
full control and unaffected by the deal, as these projects are located in
strata that are deeper than the Utica shale strata.

The agreement provides for an option period during which the partner will
proceed at its own cost with the coring and evaluation of Utica shale in the
Becancour No.8 Well currently being drilled by Junex. Upon receipt of coring
analysis by an accredited laboratory, the partner will have a period of 6
months to elect or exercise its option to spend a total of US$8 million in
exploration efforts over an ensuing period of 18 months.

"This is an exciting time for Junex since we have concluded two deals
this week with US-based partners. Today's agreement has been concluded with
one of the largest independent gas producers in the United States, whose
ability to develop unconventional natural gas projects is well established. We
are pleased to benefit from our partner's expertise in establishing our shale
gas projects which are relatively unknown in Canada but are gaining popularity
in the United States. This agreement, together with that announced earlier
this week with AMQUE, U.L.C., could lead to minimum investments of US$20
million on our properties located between Quebec City and Montreal over the
course of the next 3 years. We are very pleased with these two agreements
which allow Junex to add value to its properties while retaining important
rights with respect to very promising strata such as Trenton Black River or
the overburden", stated the president of Junex, Jean-Yves Lavoie, Eng.

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).

Contact Information

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

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