Transeuro Energy Corp.
TSX VENTURE : TSU

Transeuro Energy Corp.

July 11, 2005 17:29 ET

Transeuro Enters into Letter of Intent to Farm-In on Petroleum Prospecting Licences 257 and 258 in Papua New Guinea

VANCOUVER, British Columbia--(CCNMatthews - Jul 11, 2005) -

Mr. Edward Farrauto, President and CEO of Transeuro Energy Corp. (the "Company", "Transeuro") (TSX VENTURE:TSU) is pleased to announce Transeuro has entered into a letter of intent to acquire a 97.5% interest from Grey Creek Petroleum Inc Limited ("Grey Creek") in Petroleum Prospecting Licences 257 and 258 (collectively, the "Licences") issued by the Independent State of Papua New Guinea to Grey Creek.

Grey Creek will grant to Transeuro the option (the "Farm-in Option") to acquire a 97.5% legal and beneficial interest in the Licences. The Farm-in Option may be exercised by Transeuro by expending, on behalf of Grey Creek, all of Grey Creek's remaining work expenditure obligations as set out in each of the respective Licences and by taking all steps necessary to maintain the Licences in good standing (collectively, the "Farm-in Expenditures"). The Farm-in Expenditures of US$2,200,000 will be incurred by November 2006 in accordance with and at the times required by the terms and conditions of the Licences. Transeuro will issue 600,000 common shares to Grey Creek as consideration for the Farm-in Option. Grey Creek will also grant to Transeuro an additional option (the "Final Option") to acquire the remaining 2.5% legal and beneficial interest in the Licences. The Final Option may be exercised by Transeuro by paying the sum of $1.00 to GreyCreek at any time following October 2006 provided that Transeuro has paid the Farm-in Expenditures. In addition the Company will pay a finders fee of 45,000 common shares. The common shares will be subject to a minimum four month hold period.

Prospecting Licence 257 covers an area of approximately 1,700,000 acres in the Cape Vogel Basin area of Papua New Guinea. Prospecting Licence 258 covers an area of approximately 1,000,000 acres in the North Niugini Basin of the Sepik area of Papua New Guinea. Including the previously announced Prospecting Licence acquisitions in Papua New Guinea (see News Release dated February 11, 2005), Transeuro now controls over 4,240,000 million acres in Papua New Guinea where other operators have reserves in place totalling 15 trillion cubic feet of natural gas and present daily production of approximately 50,000 barrels of sweet crude.

Completion of the transaction is subject to TSX Venture Exchange acceptance and approval by the board of directors of Transeuro.

Contact Information