Target Energy - Australian petroleum exploration and production company.

Highway 71 Gas Discovery - (Target Energy 25% working interest)

Target announced on 31 August 2009, that agreement had been reached with J. Charles Hollimon ("Hollimon") of San Antonio, Texas to acquire a 25% working interest in the "Highway 71" gas and condensate prospect, scheduled for drilling in October 2009.

Highway 71 is situated approximately 100 kms west-southwest of Houston.

Drilling commenced on 26 October.

On 12 November, strong gas shows were noted while drilling through Cook Mountain sands, with wireline log and formation test data subsequently indicating the presence of approximately 9 metres of potential net gas pay within three zones.

Further potential commercial gas reservoirs have been identified in the deeper section of the well. It will be completed as a producer and is expected to be brought on-line in early 2010.

Wireline logging at the well`s total depth (4,125 metres) indicated the presence of approximately 11 metres of net gas pay in two zones - 4.9 metres in the Upper Wilcox sands and 6.4 metres of potential pay in the 1st Meek "B" sand.

A further 22.9 gross metres of possible pay has been identified in the 2nd Meek sand, with work ongoing to determine its prospectivity.

These pay zones are in addition to the approximate 9 metres of potential net gas pay announced on 12 November.

The prospect is mapped on Hollimon`s proprietary 3D seismic and is located in the vicinity of a number of producing oil and gas fields.