Partial relinquishment report on EL 24900 for period ending 9 August 2010

Abstract

Tri-Star has studied a wide area of the western and southern portion of the Pedirka Basin to establish the geological framework of the Purni Formation coats and ironstones. To date, Tri-Star has reviewed an unconventional seismic acquisition program, fully reprocessed the results from the program and investigated information from available well logs and water well reports in the western Pedirka Basin. Tri-Star has further conducted extensive geological field mapping, surface sampling and lab analysis and designed a new seismic and drilling program for the Project Area. In addition, Tri-Star conducted studies of the reprocessed sections of seismic gathered on the eastern edge of the basin. The seismic data was acquired by an Australia Company, Vetseis Pty Ltd, during Tri-Star's exploration program over other tenures in the Pedirka Basin Project in February 2009. This program was the first seismic survey conducted over the northwestern part of the Pedirka Basin. There is some available seismic data over this tenure, as seismic lines TR 2, TR 3, TR 4, TR 5 and TR 14 overly EL 24900. No seismic lines, however, overlay the relinquished area of EL 24900. There is currently no petroleum well data over EL 24900. Tri-Star initially applied for EL 24900 on the basis of its understanding of the surface geology and designed a staged work program to confirm Tri-Star's geological concept of the remote area and explore for commercial Purni coats. EL 24900 is generally covered with outcrops of the Carboniferous Langra sandstone, Horseshoe Bend shale, Jurassic De Souza sandstone, and the Permian/Carboniferous Crown Point Formation. Tri-Star's target formation was, and continues to be, the Early Permian Purni Formation, as this is the only coat-bearing formation in the Pedirka Basin. Since the Crown Point Formation outcrops should be stratigraphically adjacent to the Purni Formation, areas containing these outcrops may contain shallow subsurface Purni coal Formations. This was the exploration rationale for EL 24900 as Tri-Star commenced its work programs in the Project Area. White Tri-Star's fundamental objectives and rationale have not changed, the exploration results from the fourth term have vastly expanded the scope and potential for this region. The discovery of Permian ironstones at the surface are encouraging indicators that justify expanded fieldwork activities. Tri-Star is committed to progressing exploration activities to resolve the encountered technical and interpretative obstacles. As the Purni Formation outcrops appear to terminate to the east or northeast of EL 24900 and because the seismic results show a decreasing thickness as the Purni comes updip out of the basin, Tri-Star has concluded that the Purni Formation likely does not extend to one of the western-most points covered by EL 24900. Therefore, Tri-Star has decided to relinquish the 7 sub-bocks from EL 24900. Tri-Star has retained the most prospective 458 sub-bocks, as these remaining sub-bocks are closer to the potential economic zone.