Last updated: Wednesday, December 9, 2009

TG World Energy Corporation’s indirect interests in oil and gas properties and prospects located in Alaska are held by its wholly-owned subsidiary, TG World Energy Inc. (“TG Alaska”). The Central North Slope of Alaska is one of the major petroleum provinces of the world, with over 23 billion barrels of oil discovered to date. This figure does not include the 37 billion barrels of heavy oil just beginning to be exploited, or the 35 trillion cubic feet of gas reserves yet to be developed. 245,000 total acres clustered in three main prospect areas located on the Alaska North Slope between the National Petroleum Reserve Alaska and the Arctic National Wildlife Reserve Focusing on oil exploration close to existing infrastructure and existing small field development 25 – 35% working interests North Shore #1 discovery – Re-entered and completed Ivishak formation flowed on test at 2,092 bopd of 34° API oil Sag River formation flow rate estimated at 500-1,000 bopd Beechey Point Development Unit, covering the Gwydyr Bay property, approved in 2009 Tofkat #1 oil discovery – Plugged and abandoned Two appraisal sidetracks drilled to establish reservoir boundaries 225 square miles of proprietary 3-D seismic being interpreted

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Central North Slope Alaska

On March 18, 2006, TG Alaska entered into a Joint Venture (“JV”) agreement on Alaska’s North Slope with Brooks Range Petroleum Corp. (“BRPC”), a wholly owned subsidiary of the Alaska Venture Capital Group, LLC (“AVCG”). The other partners of the JV are Ramshorn Investments Inc. (a subsidiary of Nabors Drilling) and Dana Petroleum PLC.  The JV holds leases in three geographical areas on the North Slope of Alaska: (1) Gwydyr Bay, (2) Tofkat and (3) South Thompson.

Gwydyr Bay

35% working interest in 53,000 acres 130 square mile 3-D seismic survey completed over prospect area North Shore #1 tests 34 degree API oil at 2,092 bopd Satellite prospects are drillable from the North Shore #1 pad Pete’s Wicked - Ivishak oil reserves similar to North Shore #1 Up to three exploration wells  planned for the 2010-2011 winter drilling season

The North Shore #1 well, located in the Gwydyr Bay prospect area, was drilled and cased during the 2006/2007 winter program and re-entered in January 2008. During this time the Ivishak and Sag River formations were perforated and completed behind sliding sleeves. The Ivishak formation was successfully tested and flowed oil for 16 hours. The final five hours of testing recorded a stable oil flow rate of 2,092 barrels of oil per day (“bopd”) from a 22 foot interval of completion perforations. The testing of the Sag River formation has not yet been completed due to operational difficulties. Coiled tubing separated and became trapped in the casing and a full production test was not possible due to restricted access to the perforated section of the Sag River formation. A limited flow and pressure build-up test program resulted in an estimated oil flow rate of 2 barrels/hour. Pressure transient analysis and several step-rate pump-in tests indicate that the 22 foot interval of completion perforations was severely damaged. Predicted test rates with no damages to the perforations were calculated to be 500 to 1,000 bopd, consistent with Prudhoe Bay Field wells productive from this zone. The well was suspended after recovery of 700 feet of the tubing, leaving several thousand feet of coiled tubing in the hole. TG Alaska has a 35% working interest in the area and paid 35% of the well costs.

In 2007 the JV drilled the Sak River #1 well, which is located in the Gwydyr Bay prospect area.  The well was drilled to a total depth of 11,306 feet, but was determined dry and activity was suspended.  TG Alaska has a 35% working interest in the area and paid 50% of the well costs.  A new 3-D seismic program was acquired in the same season that Sak River-1 was drilled. Interpretation of this data using Amplitude Variation with Offset (AVO) identified a nearby, but separate exploration prospect.

The Gwydyr Bay Prospect Area is adjacent to the Prudhoe Bay and the Kuparuk River production units. These two units are the first and third largest oil fields in the United States. The play concept is to explore for smaller pools of oil within the same sandstone reservoirs that are productive in the adjacent fields – the Triassic age Ivishak and the Cretaceous age Kuparuk sandstones. TG Alaska has a 35% working interest in the Gwydyr Bay prospect area.

In September 2009 the JV received approval from the Department of Natural Resources in Alaska for its Beechey Point Unit application.  The Beechey Point Unit establishes a plan of development for twenty-five leases comprising a total of 53,000 acres over the Gwydyr Bay area.

Tofkat #1

25% working interest in 109,687 acres (Tofkat and contiguous on-trend leases) Tofkat #1 Kuparuk oil discovery drilled in 2007/2008 winter season Two appraisal sidetracks drilled to establish reservoir boundaries Completing data processing and interpretation of 225 square mile 3D seismic The JV will continue to add to the land position at Tofkat and will assess prospects for potential drilling in the 2011 winter season

In February 2008, the JV drilled the Tofkat #1 exploratory well, the first of three wells drilled on the Tofkat prospect area. The initial well encountered ten feet of gross and six feet of net oil pay in the Kuparuk formation based on wireline log interpretation and supported by light oil samples recovered with Modular formation Dynamic Tester (“MDT”). Three shallower intervals also recovered oil from MDT, but were interpreted as tight reservoirs based on wireline logs. Two offset appraisal wells, Tofkat #1a and Tofkat #1b, were drilled out of the base of the discovery well’s surface casing to bottomhole locations to the southeast and northwest of the discovery well, but the Kuparuk formation was tight in both of these wells. The initial wellbore was plugged back and abandoned without production testing. Under the terms of the JV agreement, TG Alaska paid 35.7% of each of the well costs for its 25% working interest in the complete Tofkat prospect area.

In 2008, the JV acquired 225 square miles of 3-D seismic data over all of its lease holdings in the Tofkat prospect area and extending to contiguous JV leases to the north and south. TG Alaska paid 25% of the survey costs.  The seismic data is currently being analyzed by the JV.  Prospect maturation will be based on AVO analysis – looking for thicker and better reservoir quality locations for those sands that were oil bearing in Tofkat #1.

South Thomson Prospect Area

25% working interest in 89,930 acres 130 square mile 3-D seismic survey planned The JV will assess further seismic at South Thompson in the 2011 winters season

Petroleum Production Tax Credits

Under the terms of the Alaska Oil and Gas Petroleum Production Tax (“PPT”) Credit program, TG Alaska is entitled to credits in the amount of 45–65% of its Qualified Exploration Expenditures (“QEE”). The credits are issued in the form of transferable credit certificates that can be either sold back to the State of Alaska for full value, or transferred to other parties who can utilize them, usually at a negotiated discount.  Credits payable by the State of Alaska are dependent on a forward spend program - by TG Alaska - on oil and gas development and exploration.  TG Alaska’s practice has been to realize full value of the credits from the State.  In its consolidated financial statements, the Company records credits for which there is strong evidence of collection, such as receipt by TG Alaska of the Government’s tax credit certificates.