LNG Energy Ltd.
TSX VENTURE : LNG

LNG Energy Ltd.

September 22, 2011 13:00 ET

LNG Energy Announces Closing of Farm in Transaction With TransAtlantic Petroleum

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 22, 2011) - LNG Energy Ltd. ("LNG") (TSX VENTURE:LNG) is pleased to announce that it has closed its previously announced farm-in transaction with TransAtlantic Worldwide Ltd., a wholly owned subsidiary of TransAtlantic Petroleum Ltd. (TSX:TNP)(NYSE Amex:TAT) ("TransAtlantic") to earn a 50% interest in a future production concession in northwest Bulgaria (the "Transaction").

Pursuant to the terms of the Transaction, LNG will initially fund up to US$7.5 million to immediately drill, core and test a 3,200 meter (approximately 10,500 foot) exploration well on the A-Lovech exploration license in Bulgaria targeting the Middle Jurassic Etropole shale formation. LNG previously advanced US$1.5 million of this US$7.5 million payment which was paid to TransAtlantic as a non-refundable deposit in respect of the Transaction.

As required in Bulgaria, on a successful result from this well, TransAtlantic's subsidiary, Direct Petroleum Bulgaria EOOD ("Direct Bulgaria"), will apply to the government of Bulgaria for a production concession (the "Etropole Concession"). The Etropole Concession is expected to cover an area up to 1,640 square kilometers (405,080 acres) for a term of up to 35 years.

Subject to certain conditions, including the issuance of the Etropole Concession, LNG will form a subsidiary in Bulgaria ("LNG Bulgaria") which will fund up to an additional US$12.5 million, of which US$7.5 million will be used to drill a second well or for other exploration activities on the Etropole Concession. In return, and subject to Bulgarian government approval, LNG Bulgaria will acquire a 50% undivided interest in the Etropole Concession.

The Etropole Formation, especially its organic-rich lower part (Stefanetz Member), is the targeted interval for a gas resource. This formation is the proven source rock for major oil and gas fields in northwestern Bulgaria. The Etropole formation is a thick, black organic rich source rock lying at depths ranging from less than 2,500 meters to greater than 5,000 meters; it shows appropriate maturity for gas generation and is also over-pressured throughout much of the region. The Etropole formation is calcareous in nature similar in characteristics to the Upper Jurassic Haynesville shale in the US.

The proximity to an established gas market, an existing gas pipeline infrastructure and gas prices of over $10/mcf make the Etropole play an economically attractive target. Significant gas shows were detected while drilling the Etropole formation in the most recently drilled well by Direct Bulgaria (Deventci R-1). Many older wells have also encountered shows while drilling in the play area. Given the rock properties of the Etropole, it is believed that it will respond favorably to modern completion and stimulation techniques and may yield significant economic gas resources.

LNG is a Canadian exploration and development company focused on developing oil and gas reserves in Papua New Guinea, Poland and the US. LNG holds a 100% interest in approximately 5.5 million acres of prospective oil and gas properties in Papua New Guinea. LNG has a 50% net interest in approximately 360,000 gross acres of prospective shales in Poland together with Realm Energy (BVI). LNG also has a 20% net interest in approximately 734,000 gross acres of prospective shales in Poland together with BNK Petroleum Inc., Sorgenia E&P S.p.A., and Rohol-Aufsuchungs Aktiengesellschaft. LNG shares trade on the TSX Venture Exchange under the symbol "LNG".

LNG ENERGY LTD.

Dave Afseth, President & CEO

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including with respect to the granting of the Etropole Concession by the Bulgarian government and the proposed well program in respect of the Etropole Concession. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management. Forward looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risks related to unsatisfactory results of due diligence, international operations and doing business in foreign jurisdictions, risks associated with the oil and gas industry and exploratory and development activities generally (e.g., operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, risks associated with equipment procurement and equipment failure), the risk of commodity price and foreign exchange rate fluctuations, risks related to future royalty rate changes, and risks and uncertainties associated with securing and maintaining necessary regulatory approvals, and counterparty risk related to the stability and viability of LNG's joint venture participants.

Shares Outstanding: 338,519,365

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.

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