AEM: Wailawi oil and gas project legal binding agreements

(14 August 2012) -- Artist & Entertainment Group Limited (AEM) is pleased to announce that, after protracted negotiations, the Co-Operation Agreement between BPMIGAS, the Indonesian upstream oil and gas regulatory authority, and Perusda Benuo Taka (Perusda), the local government authority under the jurisdiction of the East Kalimantan Panajam Paser Utara Regency Government, has been approved by the Indonesian Minister for Energy and Minerals. The Co-Operation Agreement will have an initial term of fifteen (15) years.

In addition, P.T. Centrenergy (Centrenergy), a company beneficially owned by Union Pacific Trading Pty Limited (UPT), has entered into a legally binding heads of agreement with Perusda pursuant to which Perusda has agreed, to either:

? Create a joint venture company with Perusda and Centrenergy as the shareholders. This joint venture company will hold Perusda?s participating interest in the Co-Operation Agreement for the benefit of Perusda and Centrenergy. Centrenergy will receive the larger revenue share; or

? Transfer a majority share of its participating interest in the Co-Operation Agreement to Centrenergy.

AEM has now entered into additional legally binding agreements to acquire Centrenergy. In consideration for acquiring Centrenergy and in respect of UPT?s facilitation of this transacton, AEM has agreed to issue shares to UPT valued in aggregate at an amount to be determined by an independent valuer. The issue of the shares in AEM to UPT is subject to a number of conditions precedent, including shareholders approving various resolutions to satisfy Australian regulatory requirements, AEM satisfying the requirements of Chapters 1 and 2 of the ASX listing rules including the completion of a capital raising pursuant to a prospectus and the satisfaction of any other Australian and Indonesian regulatory requirement regarding the transfer of the share capital in Centrenergy to AEM and the issue of AEM shares to UPT. (ends)