Last updated: Thursday, December 23, 2010

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.  Key attributes of the project are: 217,000 total acres clustered in four 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 20 – 35% working interests

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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 operator Brooks Range Petroleum Corp. ("BRPC") and partners Alaska Venture Capital Group LLC ("AVCG"), Brooks Range Development Corp. and Ramshorn Investments Inc. The JV holds leases in four geographical areas on the North Slope of Alaska: North Tarn, Tofkat, South Thomson and the Beechey Point Unit ("BPU").

North Tarn (20% farm-in) 20% farm-in interest Drill target for 2010 – 2011 winter drilling season Two prospective zones identified through 3-D seismic data Adjacent  and analogous to the Kuparuk Field Unit

In January 2010, the JV executed a Lease Acquisition and Participation Agreement with Eni Petroleum US LLC that covers six leases on the Alaska North Slope known as North Tarn. The North Tarn leases are located contiguous to the west side of the Kuparuk Field Unit, one of the largest producing oil fields on the North Slope of Alaska.

The North Tarn exploration prospect is based on the mapping of 3-D seismic data. There are two prospective reservoir zones, both productive in the adjacent Kuparuk Field Unit, that will be tested by the well. The exploration well is to be drilled prior to the end of the 2010-2011 winter drilling season with drilling depth estimated at approximately 6,500 feet. TG Alaska will pay a 35.7% interest in the first well to earn a 20% interest in the leases. The well will be the second and final promote well for TG Alaska under an agreement in 2009 with BRPC/AVCG.

Tofkat (25% working interest)

• 25% working interest in 95,100 acres (Tofkat and contiguous on-trend leases)
  
  
• Tofkat #1 Kuparuk oil discovery drilled in 2007/2008 winter season
  
  
• 225 square mile 3-D seismic
  
  
• The JV will continue to add to the land position at Tofkat and will assess prospects for potential drilling
  

In 2008, the JV drilled the Tofkat #1 exploratory well. The 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 by the modular formation dynamic tester. Two offset drilling targets were also drilled, but were unsuccessful. The initial wellbore was plugged back and abandoned without production testing.

Since this time, the JV has shot approximately 225 km² of seismic in the Tofkat area. The seismic was unable to map the Tofkat #1 oil play as the reservoir was too thin. Additional analysis of the Kuparuk prospect at Tofkat #1 is ongoing in an attempt to determine the commerciality of this oil play. The JV has added to its land position around Tofkat and is in the process of identifying additional targets.

South Thomson Prospect Area (25% working interest)

25% working interest in 89,795 acres 130 square mile 3-D seismic survey being considered The JV will assess further seismic at South Thompson in the 2010-2011 winter season

TG Alaska holds a 25% interest in the JV's 56,327 square kilometre acreage position in the South Thomson area of Alaska. South Thomson sits on the North-east corner of the North Slope of Alaska, immediately south of the Point Thomson Field being explored by Exxon-Mobil. The JV intends to acquire additional 2-D seismic on the South Thomson lands to further develop its strategy in the area.

The JV continues to monitor exploratory activity that is currently underway at the Point Thomson Field. It is also encouraged by recent successes at the Badami Unit oil play that sits adjacent to the JV's acreage at South Thomson.

Beechey Point Unit (formerly Gwydyr Bay, 35% working interest)

35% working interest in 35,000 gross acres 130 square mile 3-D seismic survey completed over prospect area North Shore #1 discovery tests 34 degree API oil at 2,092 bopd TG World retains net profit interest in North Shore #1 Relinquished lands due to unsuccessful drilling Analysis of remaining acres for future development ongoing

In September 2009, the JV received approval from the Department of Natural Resources in Alaska for its BPU application, establishing a plan of development for twenty-five leases comprising a total of 53,000 acres in the Gwydyr Bay area. TG Alaska holds a 35% interest in the BPU.

An Agreement with AVCG/BRPC established a framework for BPU drilling activities for the 2009/2010 Alaska drilling season. The 2009/2010 work plan and budget called for the drilling of two wells in the BPU: Sak River #1a and North Shore #3.

In January 2010, the Sak River #1a exploration well was drilled by the JV. The well did not encounter hydrocarbons and was suspended and deemed unsuccessful. At this point, TG Alaska elected not to participate in the North Shore #3 well and relinquished its interest in the Sak River and North Shore drilling blocks along with Sections 10, 15 and 16 of Township 12 North, Range 13 East, all within the BPU as per the Agreement. TG Alaska paid 45.7% of the drilling, completion and testing costs of the Sak River #1a well to earn its 35% equity interest. This well was the first of a two well promote program for TG Alaska under the Agreement. TG Alaska will retain a net profit interest in the North Shore #1 well and the Sak River #1a well in the BPU.

Subsequent to the relinquishment of certain interests in the BPU, TG Alaska holds an interest in approximately 35,000 gross acres in the Gwyder Bay area that are still deemed prospective. The JV continues to assess the area for future development potential.

Petroleum Production Tax Credits

Under the terms of the Alaska Oil and Gas Petroleum Production Tax Credit program, TG Alaska is entitled to credits in the amount of 45% to 65% of its Qualified Exploration Expenditures. 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 TG Alaska's forward spend program 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.