Update on TWE International Arbitration

VANCOUVER, March 31, 2015 /CNW/ -

Dr. Ross Gorrell reports,

TerraWest Energy Corp. ("TWE") has advised its shareholders that pursuant to the international arbitration proceedings ("Arbitration") initiated against China National Petroleum Corporation ("CNPC") and PetroChina Company Limited (PetroChina") ( together "Respondents") counsel for TWE, the law firm of Winston and Strawn formally submitted TWE's Statement of Claim to the Arbitration Tribunal ("Tribunal") on March 27, 2015.

The Statement of Claim outlines TWE's arbitration case and describes the various contractual breaches and mismanagements over time by the Respondents. According to the Arbitration procedures the Respondents have a period of time to receive and study the Statement of Claim and will be expected to provide a formal response statement within a deadline established by the Tribunal. The statement of claim seeks US$1.8 billion in damages.

Previously both TWE and Respondents had named their arbitrators and the two persons selected a third to act as chair of the tribunal. The arbitration tribunal is acting according to the rules of the United Nations Commission on International Trade Law (2010) ("UNCITRAL") and among other things will in due course determine the site and venue for arbitration proceedings.

Background of the Project

TerraWest Energy Corp. (''TWE''), is a private company incorporated in British Columbia in 2003. Petromin Resources Ltd. ("Company" or "PTR") invested in TWE through private placement in 2007 and holds 73,333,334 common shares and 700,000 preferred shares representing 17.29% of the undiluted capital stock of TWE (13.40% of the fully diluted ).

TWE was incorporated by various parties to pursue coalbed methane ("CBM") exploration and development in Peoples Republic of China ("China") and following extensive review of geological and technical data of northwestern China focused its activities in the southern Junggar Basin of Xinjiang, China.

At the time, China United Coalbed Methane Corp., Ltd. ("CUCBM") held the exclusive right to cooperate with foreign parties in CBM exploration and development in China according to the China Petroleum Law. CUCBM was owned 50/50 by China National Coal Corp. and PetroChina Company Ltd. ("PetroChina"), two China state-owned corporations.

TWE secured a thirty year Production Sharing Contract ("PSC") with CUCBM in late 2005 covering 653.518 sq km (252 sq miles) in the Liuhuanggou area of the southern Junggar Basin. The PSC was held as to 47% TWE and 53% CUCBM and officially came into effect on March 1, 2006 after receiving approval of the Ministry of Commerce of the PRC (''MOC''). The PSC references a five year exploration period which will be extended under certain terms and conditions and a twenty year production period.

TWE was a first mover in CBM in the Liuhuanggou area of the southern Junggar Basin which was targeted by TWE because in the early 2000's it combined the favourable features of:

• extensive coal resources in relatively thick seams;
• operating gas transportation infrastructure with expansion planned;
• growing local gas markets within larger, growing, national gas market;
• trend toward deregulated gas pricing;
• near urban area; and,
• supportive government economic and development policies.

Under the terms of the PSC TWE was named operator and was responsible for all exploration expenditures. Commercial CBM was to be developed by pro rata capital investment and the parties would share gas production pro rata after operating cost recovery, TWE's exploration cost recovery and pro rata development cost recovery.

During the initial five (5) year exploration period TWE successfully confirmed the gas potential of the PSC area and as previously disclosed, issued two independent reports on gas resources. TWE reported NI51-101 Discovered Gas Initially in Place and Contingent Resources for a certain area of the PSC from a March 2010 report by Norwest Corporation. TWE reported Society of Petroleum Engineers Framework of Resource Management System (SME PRMS) Original Gas in Place and Unrisked Gross Prospective Resources for a larger area of the PSC, from an October 2011 report by Netherland Sewall and Associates.

TWE also reported Chinese reporting standard CBM resources and reserves from a report by Norwest Corporation in June 2012 which converted the previously estimated NI51-101 figures to the Chinese standard.

Note: see PTR news releases of 21 June 2010, 12 October 2011 and 23 August 2012 in the Appendices.

Based on the extensive resource potential supported by the independent evaluations TWE made formal application for extension of the PSC exploration period in November 2011 following exchanges of correspondence and discussions with the its Chinese partner.

As previously disclosed, TWE was advised during the 2008-2009 time period that PetroChina planned to sell out of CUCBM and CUCBM would transfer its rights and obligations in various PSC's including Liuhuanggou to PetroChina. PetroChina effectively took over administration of the PSC in late 2008 but the transfer was not confirmed until a June 2011 agreement ("Modification Agreement") between TWE, CUCBM and CNPC. The Modification Agreement novated CNPC into the PSC and transferred CUCBM's rights and obligations to CNPC, which apart from retaining part of its own management and regulatory functions, further transferred its rights and obligations to PetroChina, a subsidiary of CNPC. In the Modification Agreement all original terms and conditions of the PSC are confirmed and CNPC also guarantees the performance of the obligations it assigned to PetroChina.

The Dispute

There are two categories of matters under dispute. Firstly the unilateral, undisclosed and unwarranted reduction of the exploration area covered by the PSC. Secondly, failure to act to prevent and restrict unauthorized and illegal exploration drilling and coal mining within the PSC area. TWE is asserting that actions or non-actions that led to the dispute are breaches of the PSC and breaches of law that have resulted in damage to TWE.

Firstly, TWE became aware of a discrepancy between the stated area (653.518 sq km or 252 sq miles) of its exploration rights under the terms and conditions of the PSC and the area referenced in the related CBM exploration permit issued by the PRC Ministry of Land and Resources to CNPC and naming TWE as the foreign contractor.

The discrepancy was noted informally and TWE subsequently repeatedly requested formal clarification from CNPC (hereinafter together with PetroChina referenced as "Respondents") which has the obligation for the renewal of permits required to support the CBM operations of the PSC.

Secondly, Furthermore TWE had noted from time to time unauthorized coal drilling within the PSC as well as increased coal mining activity including re-opening of previously closed coal mines and opening of new coal mines. China regulations specifically prohibit new exploration drilling or mining in areas where mineral (or hydrocarbon) rights have already been issued. It is illegal for new permits for resource exploration and development to be issued on top of existing permits.

TWE repeatedly noted these activities to Respondents and sought assistance to protect TWE's rights under the PSC, to no avail.

The matter between TWE and Respondents was disclosed in the Company's announcements dated 17 June 2013, 9 September 2013, 15 October and 23 October 2013, wherein it was noted TWE sought clarification and response on the following matters before continuing planned exploration activities in the CBM project:

1. clarification on discrepancy of the CBM exploration area relating to its exploration rights, including highly prospective CBM zones and fairway lands, between the PSC and the renewed CBM exploration permits and investigation on reported unauthorised coal drilling activity within the Contract Area and any land title mismanagement by CNPC;
2. dispute on Respondent's failure to certify two international independent expert reports on evaluations of CBM discovered resources and natural gas resources originally in place (OGIP) commissioned by TWE and provided to Respondent's in support of the application for extension of the exploration period of the PSC;
3. dispute on Respondent's failure to validate the capital expenditure incurred by TWE on the project as required by the PSC; and,
4. dispute on Respondent's failure to cooperate to clarify the land status with relevant ministries.

Furthermore as previously disclosed, TWE formally declared a dispute with Respondents and provided notice of intent to file for arbitration according to the terms and conditions of the PSC. Respondents did not ever provide any clarification or response to the above points,

The significant administrative matters relating to unauthorised coal drilling and mining were initially considered to be standalone matters that subsequently appear potentially related to the land title mismanagement by Respondents and hence became included in TWE's dispute with Respondents.

A search of the web-based data of the Ministry of Land and Resources of China suggests that new coal exploration and mining permits have been issued and/or earlier permits have been renewed and greatly expanded without required consents within the PSC area since 30 December 2005 (the date of execution of the PSC) in contravention of Chinese law. In this regard, Respondents have failed to assist to monitor or prevent unauthorised issuances of such permits despite TWE's multiple notices referencing the activities.

In early 2014 TWE engaged international arbitration counsel to assist the resolution or prosecution of the dispute. TWE issued notices relating to the unresolved CBM lands dispute including formal notice of dispute and arbitration to Respondents, and has followed the required process by providing notice of selected arbitration procedure to Respondents.

Notice to Terminate the PSC & Formal Notice of Arbitration
As disclosed in the Company announcement of 7 July 2014, on 3 July 2014 TWE issued to Respondents a notice to terminate the PSC (''Termination''). As advised by counsel, TWE issued the Termination because the breaches of the PSC made the project no longer financially or operationally viable; breaches including but not limited to the breakdown in the relationship between TWE and Respondents, the reduction in the CBM exploration area as described above and the scale of new coal mining activities.

All disputes and arbitration survive termination according to the terms and conditions of the PSC.

The Company announcement also disclosed that on 4 July 2014, TWE formally served a notice of arbitration on Respondents relating to the Dispute, seeking an award of damages as compensation for the losses caused by Respondent's breaches of the PSC, together with declaratory relief, costs and interest. The formal notice of arbitration initiated the international arbitration process.

In the event of a disagreement on procedure, the terms and conditions of the PSC describe a default arbitration procedure to be followed, according to internationally-accepted due process. Such default procedure is in effect and the arbitration is following the rules set out by UNCITRAL.

As required by the process TWE and Respondents each nominated one arbitrator according to the rules and the two named persons selected a third person to chair the arbitration tribunal ("Tribunal").

The Tribunal initiated procedures in the fourth quarter of 2014 and Respondents eventually filed a response to TWE's Notice of Arbitration. As noted, TWE submitted its Statement of Claim to the Tribunal on March 27, 2015.

Appendix 1
PTR News Release of August 23, 2012

UPDATES ON THE LIUHUANGGOU CBM PROJECT

Petromin Resources ltd. is pleased to announce that TerraWest Energy Corp. ("TWE") has issued a new report on coalbed methane ("CBM") resources at its Liuhuanggou CBM project in Xinjiang, China.

TWE has previously issued two independent assessments of natural gas resources at the Liuhuanggou project. The first report ("Norwest Report"), prepared by Norwest Corporation ("Norwest") of Calgary, Canada, details of which have been disclosed in the circular of the Company dated 9 December 2010, focused on one area of the Liuhuanggou project area where drilling is sufficient to estimate CBM resources in place, discovered CBM resources and higher level CBM Contingent Resources according to reporting standard National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) and Canadian Oil and Gas Evaluation Handbook.

The Norwest Report provided an estimate of Discovered CBM gas initially in place ("Discovered GIIP") which ranges from (Low) 70.00 to (High) 514.07 billion cubic feet ("BCF") with a Best estimate of 147.43 BCF for the evaluation area.

The second report ("NSAI Report") prepared by Netherland, Sewell and Associates, Inc. of Houston, the United States of America, details of which have been disclosed in the announcement of the Company dated 10 October 2011, evaluated the remainder of the project area and estimated CBM resources in place as well as natural gas resources in place in accordance with the Petroleum Resources Management System (PRMS) standard developed by the Society of Petroleum Engineers (SPE) of the United States of America. The NSAI Report provided an estimate of undiscovered original gas-in-place (OGIP) which ranges from (Low) 7.179 to (High) 19.185 trillion cubic feet ("TCF") with a Best estimate of 11.825 TCF for the evaluation area.

The new report, also prepared by Norwest converts the CBM Discovered GIIP and Contingent Resources as previously estimated by Norwest to CBM categories according to China national reporting standard, CBM Resources / Reserves Specification DZ/T 0216 – 2010. Such conversion is another step in the process of outlining development areas and ultimately the determination of commercially recoverable CBM reserves. Of particular note, Norwest's estimate of (High) Contingent Resources totaling 244.18 Bcf may be classified as Probable Recoverable Reserves in China.

Summary of conversion to China standard classification:

CBM Resources / Reserves Conversion
National  Instrument 51-101	China's  CBM Specification
Discovered GIIP  Best Estimate	Proved Original Coalbed Methane In Place
147.43 BCF	147.43 BCF
Discovered GIIP  Inferred Resource Estimate	Probable Original Coalbed Methane In Place
366.64 BCF	366.64 BCF
Contingent Resource High Estimate	Probable Recoverable Reserve
244.18 BCF	244.18 BCF

The report by Norwest is their expert opinion of the CBM resource estimates according to the China standard. The Norwest opinion estimates have not been certified by relevant Chinese authorities and such certification is expected to follow in due course after review by such authorities.

The evaluation area which holds the DZ/T 0216 – 2010 Probable Recoverable Reserves / NI51-101 CBM Contingent Resources is the most likely area of initial commercial development since it represents the area of Discovered CBM Resources and holds the highest level estimates at this time.

Appendix 2
PTR News Release of October 12, 2011

VERY SIGNIFICANT INCREASE IN LIUHUANGGOU GAS RESOURCES

TerraWest Energy Corp. ("TWE") has achieved a significant milestone in its development with the results of an independent engineering report ("NSAI Report") prepared by Netherland, Sewell & Associates, Inc. ("NSAI") updating estimates for the total Undiscovered Original Gas-in-Place ("OGIP") in the Liuhuanggou CBM PSC area situated in Xinjiang, the People's Republic of China ("China"). The Liuhuanggou PSC area covers approximately 653 square kilometres (255 square miles; 163,200 acres) and is located adjacent to the capital city of Urumqi, Xinjiang.

This announcement is made further to the Company's announcement on Discovered Coalbed Methane ("CBM") Resources and CBM Contingent Resources issued on 21 June 2010 as NSAI has completed an assessment of all natural gas resources within the Liuhuanggou PSC area additional to Discovered CBM Resources reported in the previously evaluated area ("TWE's discovered CBM area").

The updating NSAI Report covers the Xishanyao (J2X) and Badaowan (J1B) target coal seams outside TWE's discovered CBM area as well as other prospective zones in these formations within the Liuhuanggou PSC on a 100% (gross) basis and concludes with OGIP estimates for the Liuhuanggou PSC as follows:

• Grand total Best Estimate OGIP of 11.825 Trillion cubic feet ("Tcf") of natural gas; and,
• Grand total OGIP Low Estimate of 7.179 Tcf; and a High Estimate of 19.185 Tcf.

The major portion of the estimated values is contained in shale underlying a significant area of the PSC which underscores the great potential and significant merit of the area as an exploration and development target.

The results of the current resource evaluation provide a significant increase in the Company's independently evaluated resource potential at Liuhuanggou and are a major milestone and a next step in unlocking substantial value as the Company moves forward to commercialise its natural gas position. Previously the Company had indications that CBM resources as defined in the PSC greatly exceed the potential resources in coal seams alone. Such indications now prove to be true and the Jurassic formations within the Liuhuanggou PSC area are seen to be potentially prolific, based on the prospective resource estimates.

"With gas prices increasing in China, local markets expanding and large-scale trans-national infrastructure already in place at Liuhuanggou, the expanding project scope now indicates that the two target formations identified by TWE have vast potential. Prospective gas pay in multiple zones provides further support to move the project towards commercialisation", said Mr. Chan Wing Him Kenny, the Co-Chairman and Director of the Company.

The estimates in the NSAI Report were prepared in accordance with the definitions and guidelines set forth in the Petroleum Resource Management System ("PRMS"), 2007. PRMS was prepared by the Society of Petroleum Engineers (SPE) and jointly sponsored by World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG), Society of Petroleum Evaluation Engineers (SPEE) and the Society of Exploration Geophysicists (SEG)and is referenced as SPE-PRMS. The OGIP volumes are defined as those quantities of gas estimated, as of a given date, to be contained in known accumulations prior to production, plus those estimated quantities in accumulations yet to be discovered, and do not indicate the level of reserves or resources that may be ultimately produced. The OGIP volumes shown in the NSAI Report are estimates only and should not be construed as exact quantities. Readers are urged to read the report in its entirety as posted on the Company's website at www.enviro-energy.com.hk.

Netherland, Sewell & Associates, Inc.

NSAI provides integrated consulting services encompassing geophysics, geology, petrophysics, engineering, reservoir modeling and economics. NSAI has performed geophysical, geologic and engineering studies of reservoirs around the globe – from the North Sea to South America, from the North Slope to South Florida, and from West Africa to the Middle East and Indonesia – for leading major integrated petroleum companies, both small and large independent oil and gas companies, and various financial institutions and government agencies. For more information about NSAI, please visit their website at www.netherlandsewell.com.

Highlights of the Resource Estimate

The Liuhuanggou PSC defines CBM as all gas in four named formations of Jurassic Age:

• OGIP estimated by NSAI in shale in the Badaowan (J1B) (low to high estimate) 6.658 Tcf to 10.503 Tcf to 16.961 Tcf and Unrisked gross prospective gas resources (low to high) 0.499 Tcf to 1.512 Tcf to 3.200 Tcf;
• OGIP found in tight sand (low to high estimate) 0.267 Tcf to 0.809 Tcf to 1.441 Tcf and Unrisked gross prospective gas resources (low to high) 0.061 Tcf to 0.229 Tcf to 0.610 Tcf; and,
• OGIP in coal seams (low to high estimate) 253.8 Billion cubic feet ("Bcf") to 512.8 Bcf to 783.2 Bcf and Unrisked gross prospective gas resources (low to high) 19.5 Bcf to 93.1 Bcf to 310.9 Bcf.

NSAI evaluation results are summarised in tabular form below:

BCF	Undiscovered OGIP				Unrisked Prospective Resources
	Low	Best	High		Low	Best	High
	Estimate	Estimate	Estimate		Estimate	Estimate	Estimate
CBM
4-5 Seams	77	115	159		9	24	71
9-10 Seams	55	109	164		2	17	55
14-15 Seams	53	184	316		0.2	28	121
J1B	70	105	144		8	24	64
Total CBM	254	513	783		20	93	311
J1B Shale Gas	6,658	10,503	16,961		499	1,512	3,200
J1B Tight Gas	267	809	1,441		61	229	610
Grand Total	7,179	11,825	19,185		580	1,834	4,121

Figures represent 100% Liuhuanggou PSC; TWE's share is 47% pursuant to the PSC.

 The Company intends to proceed to development in a phased approach as TWE works to complete the required steps to move natural gas resources from Prospective to Contingent Resources and then to Reserves. It is TWE's intention to develop the PSC area in a number of phases, with the initial phase likely to consist of additional pilot wells in the TWE's discovered CBM area. Subsequent phases of development will focus on expanding development in the larger prospective area.

The Company previously reported Discovered OGIP and Contingent Resources. In determining the current resources, NSAI has classified the natural gas as Undiscovered OGIP and Unrisked Gross Prospective Resources, the difference between Contingent Resources and these categories being:

• Contingent Resources are associated with TWE's discovered CBM area, the area of current development focus, and would be expected to mature to Reserves in phases as development plans for that phase are matured supported by successful pilot test results; and
• Prospective Resources either lie beyond TWE's discovered CBM area or in the case of shale and tight sand were not included in the previous evaluation.

Appendix 3
PTR News Release of June 21, 2010

TWE Issues NI 51-101 compliant CBM Contingent Resource and Discovered Gas Initially in Place (GIIP) estimate for Liuhuanggou Project

Petromin Resources Ltd. (TSX.V: PTR) ("Petromin") is pleased to announce that Terrawest Energy Corp. ("TWE") has reported that a NI 51-101 and Canadian Oil & Gas Evaluation (COGE) Handbook compliant evaluation report on the CBM resources has been completed for a portion of its Liuhuanggou Project lands in Xinjiang, China. The report was completed by Norwest Corporation.

The Report provides an estimate of CBM Contingent Resources which ranges from (Low) 31.29 to (High) 244.18 billion cubic feet ("Bcf") with a Best estimate of 68.26 Bcf for the evaluation area.

Contingent Resources are the estimated recoverable of the estimated gas initially in place ("GIIP") and a recovery factor of 46.3% was used in the evaluation, taking into account the differing recovery estimates for different individual coal seams. GIIP ranges from (Low) 70.00 to (High) 514.07 billion cubic feet ("Bcf") with a Best estimate of 147.43 Bcf for the evaluation area.

Based on the best estimate area for each of the Jurassic Xishanyao ("J2X") formation and the Jurassic Badaowan ("J1B") formation, the Contingent Resources represent 4.63 Bcf/section and an additional 8.71 Bcf/section for the J1B for an aggregate 13.34 Bcf/section. The GIIP represents 10.3 Bcf/section for the J2X alone and an additional 16.4 Bcf/section for the J1B for an aggregate 26.7 Bcf/section. (A section is a square mile.)

The Report focuses on 13.59 sections (8698 acres) or 5.36% of the 255 section (163,200 acre) production sharing contract ("PSC") area for its best estimate of GIIP. Of the total area, 12.29 sections (7,865 acres) relate to the J2X coal seams and 1.3 sections (832 acres) relate to the J1B coal seams. The evaluation area is only a small portion of the total PSC area since CBM exploration drilling is supported by existing coal exploration drilling in the target coal seams within that area. Such coal exploration drilling data is required to meet the NI 51-101 standard of resource reporting and is also available for substantial additional portions of the PSC which is an active coal mining area that has been previously extensively drilled for coal resource studies.

The report completed by Norwest Corporation was authored by Geoff Jordan, P. Geol, Qualified Person.

As previously reported, TWE also successfully completed a gas flow test within the evaluation area, during which CBM was produced from the J2X and flared.

The results clearly indicate the CBM potential of the two target coal seam packages, the Jurassic J2X and J1B, when taken together. The Liuhuanggou Project lands are unique in offering on the one hand a sequence of a few coal seams with great total thickness (3 main seams up to 50m total intersected thickness) in the J2X and on the other hand a sequence of 20-30 thinner coal seams in the J1B with aggregate gross thickness of over 25m.

Discovered Gas Initially-In-Place ("GIIP", equivalent to discovered resources) is that quantity of natural gas that is estimated, as of a given date, to be contained in known accumulations prior to production. Contingent Resources are those quantities of natural gas estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates. The COGE Handbook requires that the range of values, "Low", "Best" and "High" be shown in the evaluation results

There is no certainty that it will be commercially viable to produce any portion of the resources referenced in this release.

This gas resource estimate does not include rocks, including carbonaceous mudstone or shale, surrounding the coal seams used in the NI 51-101 compliant calculations. The gas content and thickness of these rocks has been analyzed separately and any gas resources will be additional to the CBM in coal seams.

The Liuhuanggou Project lands are located adjacent to Urumqi, the capital city of Xinjiang, China. The area is served by existing gas pipeline infrastructure including the Wu-Shan pipeline which links Urumqi to the 1st West-East pipeline and the 2nd West-East ("WE2") pipeline which runs from the western boundary of Xinjiang to Guangdong in southeast China. WE2 runs across the Liuhuanggou Project lands.

TWE holds a 47% interest in the PSC which was executed on 30 December 2005 with China United Coalbed Methane Corporation Limited and is currently administered by PetroChina Coalbed Methane Company Limited (PCCBM). The PSC defines CBM as all gas mainly consisting of methane (CH4) stored in four named geological formations of Jurassic age to a depth of 1,500m.

The central government of China recently introduced a new economic development policy for Xinjiang which will see substantial increases in infrastructure construction and other steps to accelerate economic development, including energy resource development. The specific regional focus of the economic policy is considered unprecedented in China.

In a second announcement intended to stimulate natural gas exploration, development and production within the country the central government of China increased natural gas prices across the board by 25% effective 1 June 2010.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Petromin Resources Ltd.

PETROMIN RESOURCES LTD., 1120-1090 W. Pender Street, Vancouver, B.C. V6E 2N7, Telephone: [phone], Fax: [phone]