Primeline Provides an Update on the LS36-1 Gas Field, Secures Additional Working Capital and Postpones Convertible Bonds

October 10th, 2013
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Primeline Energy Holdings Inc. (“Primeline” or the “Company”) (TSXV: PEH) is pleased to announce an update of progress on the LS36-1 gas field and to provide information on its financing arrangements.

The LS36-1 gas field development is progressing well with CNOOC, as operator, having completed about 95% of the development work. The remaining development work to be completed is the commissioning of the facility and final connection to the provincial gas grid followed by trial production. The current planned first gas date is in early 2014.

In view of the progress made on the development and the relatively short time to first gas, the Company has decided not to proceed with the previously announced Convertible Bonds issue at this time. In the meantime, the Company has secured an additional interest free working capital loan from its Chairman who has also agreed to convert part of his existing loan into shares.

In June 2013 the Company entered into a term sheet with GEMS with regard to a $15 million Convertible Bonds issue to fund working capital and planned 3D seismic acquisition. The Convertible Bonds were intended to bridge the funding gap to first gas production from the LS36-1 gas field. At that time, Victor Hwang, Chairman, President and majority shareholder, also agreed to convert his interest free loan to the Company, which had been accumulated since 2011 and then amounted to approximately US$6,700,000, into bonds having substantially the same terms as the GEMS’ Convertible Bonds. Since that time, Mr. Hwang has made additional advances of approximately US$1,203,846 to the Company on an interest free basis.

With the decision not to proceed with the Convertible Bonds, Mr Hwang has confirmed that he will continue to provide support for the Company. To this end, Mr. Hwang has agreed to convert US$5,000,000 (equivalent to C$5,185,000 at the agreed exchange rate of $1US/$1.037C$) of his existing debt of US$7.853,846 into shares at C$0.55 per share, which will result in the issue of 9,427,272 shares, and grant a new loan facility under which US$2,853,536 of the existing loan which will not be converted will remain outstanding.

The conversion of the US$5,000,000 into shares is subject to TSX Venture Exchange acceptance and is expected to be completed shortly. The conversion price, represents a 22% premium to the 12 month trailing volume weighted average price, and 10% premium to the share price on the day prior to this announcement.

There will be an undrawn facility of US$2,146,000 under the new facility. The facility is available for drawdown at any time up to 31st July, 2015, is interest free and is repayable on demand given after 31st July, 2015. This facility is intended to give the Company sufficient time to work with CNOOC to complete the final development work for its LS36-1 gas field and secure all regulatory approvals for development and production in order to supply gas to the Zhejiang provincial grid. At that time the Board believes the Company will be in a significantly better position to raise equity or bond finance to fund further exploration.

Dr. Ming Wang, Chief Executive Officer commented “We are making good progress on the LS36-1 gas field in line with our expectations. We are delighted to have secured such favourable financial support from Mr. Hwang, who has provided generous support to the Company since May 2011 and has demonstrated his confidence in the future of the Company. I look forward to updating shareholders on further progress in the months ahead”

About Primeline Energy Holdings Inc.

Primeline is an exploration and development company focusing exclusively on China resources to become a major supplier of gas and oil to the East China market. Primeline has a 75% Contractor’s interest in and is the operator of the petroleum contract with CNOOC for Block 33/07 (5,877 sq km) in the East China Sea and a 36.75% interest in the LS36-1 gas field in Block 25/34 which is being developed by CNOOC Limited (acting as Operator for the development) together with Primeline and Primeline Petroleum Corp. (“PPC”). Shares of the Company are listed for trading on the TSX Venture Exchange under the symbol PEH.


Ming Wang
Chief Executive Officer


Primeline Energy Holdings Inc.
Dr. Ming Wang
Phone: +44 207.499.8888
Fax: +44 207.499.2288
Toll Free: 1.877.818.0688
CHF Investor Relations
Robin Cook
Senior Account Manager
Phone: +1 416.868.1079 ext. 228
Fax: +1 416.868.6198

Please visit the Company’s website at Should you wish to receive Company news via email, please email and specify “Primeline Energy” in the subject line.

Forward-Looking Statements
Some of the statements in this news release contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Primeline. These statements relate to Primeline’s expectation that the LS36-1 development will come into production in early 2014, and that the new loan facility to be extended by Mr. Hwang will be sufficient to meet the Company’s working capital needs for securing all regulatory approvals for production. Although the statements are based on assumptions management believes to be reasonable, actual results may vary from those anticipated in such statements. First gas from the LS 36-1 Gas Field may be delayed for technical or other reasons, and the Company’s working capital needs for final production approval may be materially larger. If first gas is delayed or if the Company’s working capital needs are materially larger, the Company is likely to require additional working capital financing before the LS 36-1 Gas Field comes into production. There can be no assurance any such additional working capital financing will be available to the Company.

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.