PETROMANAS ENERGY INC. (TSXV-PMI $0.295); NOT RATED
SHELL FARMS IN ON BLOCKS 2 & 3
This morning, Petromanas announced that it has concluded an agreement with Royal Dutch Shell plc, pursuant to which
Shell will farm in on Blocks 2 & 3 in Albania, currently owned 100% by Petromanas. The two blocks cover approximately
852,000 acres and surround the Patos Marinza and Kuçova fields owned and operated by Bankers Petroleum Ltd.(TSXBNK
- Shell will earn a 50% interest in the two blocks in exchange for:
• Cash consideration of US$16.3 million. In the event that Petromanas
secures a partner for its other blocks (A, B, C & D), $11 million will be
refundable to Shell.
• Shell will carry 100% of capital costs up to $22.5 million during the first
exploration period. This period nominally expires in July 2012, although if
a well is spud prior to that time, it will be deemed part of the eligible
expenditures.
• If Shell and Petromanas elect to enter the second exploration period, Shell
will pay 100% of the costs of a second well. We believe this could be
between $6 and $23 million, depending on the prospect and drilling depth.
This is a very good deal for the Company. In Shell, it obviously has a sophisticated
and very capable operator, and it pretty much ensures that the July drilling
deadline will be met.

The Company considers all six of the evaluated prospects to be drill-ready. Shpiragu, in particular, is already a discovery.
Occidental Petroleum first drilled it in 2001, and encountered 37º oil from a fractured Eocene – Upper Cretaceous
limestone. The well flowed 400 Bbl/d on average, during testing. Development will likely require horizontal or at least
deviated drilling to achieve economic rates, but the risks of source rock, migration and seal have been substantially
eliminated.
The six prospects evaluated in this report were part of the fourteen that had been identified when the PSCs were originally
signed in 2007. Additional leads and prospects in all three PSC areas have since been identified, but were not included in
this report due to insufficient seismic data. Once the remaining prospects and new play concepts have been fully
evaluated, we expect that Petromanas’ (unrisked) exploration portfolio will have exposure to well over 1 billion BOE (P50)
with the potential for considerably higher than that.