PEH Primeline Energy Holdings Inc

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES, OR DISSEMINATION IN THE UNITED
STATES 


Primeline Energy Holdings Inc. ("Primeline" or the "Company") (TSX VENTURE:PEH)
today announced that its wholly owned subsidiary, Primeline Energy Operations
International Ltd. ("PEOIL") has entered into a turnkey contract for a 600sq km
3D seismic survey ("the Survey") as part of its rolling development and
exploration program. A brokered private placement is proposed to fund the
Company's share of the cost of the Survey.


PEOIL has entered into an agreement dated 13th December 2013 (the Turnkey
Contract") with China Oilfield Services Ltd. ("COSL") under which COSL agreed to
carry out the acquisition and processing of data for the Survey on a turnkey
basis for Primeline.


Under the Turnkey Contract, COSL will complete the acquisition of 3D seismic
data over 600sq km. in Block 33/07 using 3D seismic survey vessel, Hai Yang
Shiyan 718. The Survey will commence once the vessel is released from its annual
maintenance, which is expected to be sometime around the end of January 2014.
The Survey is expected to be completed by mid-April 2014. Following completion
of the Survey, COSL will also be responsible for processing the data acquired.
COSL will supply all necessary equipment, services and personnel for the Survey.



COSL is the leading integrated oilfield services provider in offshore China and
is listed on the Hong Kong (2883:HK) and Shanghai Stock Exchanges. 


Primeline has existing 3D seismic data covering the LS 36-1 gas field
development and its surrounding prospects. The area to be surveyed is located to
the north of and adjacent to this existing 3D seismic data area. The Survey is
intended to provide better definition of the prospect leads that have been
identified in the survey area using 2D data in order to generate more drillable
prospects. Completion of the Survey will satisfy part of Primeline's work
commitment under Petroleum Contract 33/07, which requires a 600sq km seismic
survey and two exploration wells in the first Exploration phase, which ends on
31st October 2015.


Based on the Turnkey Contract, the cost of the Survey is expected to be
approximately US$7.6 million and the cost of processing the data is expected to
be US$580,000. The cost of the Survey will be borne by Primeline and Primeline
Petroleum Corporation, a company 100% owned by Primeline's Chairman and majority
shareholder Mr. Victor Hwang, in the proportions 75/25, representing their
respective interests in Petroleum Contract 33/07. Accordingly, the net cost to
Primeline is expected to be US$5.7 million for the Survey and US$435,000 for the
data processing.


Prior to its execution, Primeline obtained confirmation from Mr. Hwang that he
would underwrite the cost of the Survey in order to enable Primeline to enter
into the Turnkey Contract. Primeline is planning to raise the funds required for
its share of the costs of the Survey pursuant to the private placement referred
to below.


Private Placement

Primeline has entered into an engagement letter for a brokered private placement
(the "Private Placement") of up to 12,727,273 units ("Units") at $0.55 per Unit
on a best efforts basis with D&D Securities Inc. (the "Agent"). Each Unit will
consist of one common share and one-half of one warrant (a "Warrant"). One whole
Warrant will be exercisable to purchase a common share at a price of $0.90 per
share for two years from the date of issue. Primeline will have the right to
accelerate expiry of the Warrants if the volume weighted average closing price
of the common shares on the TSX Venture Exchange exceeds $1.35 per share for 10
consecutive trading days by giving notice, whereupon the Warrants will expire 30
days from the date of notice. The Agent will be the lead agent for the Private
Placement and additional co-agents may be added. The Agent will be paid a cash
commission of 7% of the gross proceeds of the Private Placement and will be
issued Agents' Warrants exercisable to purchase a number of common shares equal
to 8% of the number of Units sold at a price of $0.55 per share for two years
from the date of issue. The Private Placement is subject to TSX Venture Exchange
acceptance and execution of a formal agency agreement.


Development Progress 

The LS36-1 gas field development is progressing well with CNOOC Limited, as
operator, having completed about 95% of the development work. The remaining
development work to be completed is the construction of the final onshore
section of 3 km of the gas sales pipeline, commissioning of the facility and
final connection to the provincial gas grid followed by trial production. The
current planned first gas date is in the first half of 2014. 


The development establishes gas infrastructure in the southern East China Sea
basin and secures access to the dynamic gas market in East China. In order to
build on the foundation provided by this infrastructure, Primeline and CNOOC are
implementing a rolling development strategy in order to exploit the additional
reserves in the basin which can then be delivered to market using the existing
facilities. The Survey is the first step in the step-out exploration program
planned to be executed as part of this strategy.


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 (5,877sq 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 Corporation. Shares of Primeline are
listed for trading on the TSX Venture Exchange under the symbol PEH.


ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC.

Ming Wang, Chief Executive Officer

Please visit the Company's website at www.pehi.com. should you wish to receive
Company news via email, please email bren@chfir.com 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 the time in which the Hai Yang Shiyan 718
is expected to become available, the costs of the Survey and the related data
processing and Primeline's expectation that funding arrangements will be
completed. They are based on assumptions that the Turnkey Contract will be
completed on a timely basis and within the expected costs and that funding
arrangements can be completed. The Turnkey Contract may not be completed on a
timely basis, costs may exceed those expected and it may not be possible to
complete funding arrangements.. Exploration for oil and gas is subject to the
inherent risk that it will not result in a commercial discovery.


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. 


FOR FURTHER INFORMATION PLEASE CONTACT: 
Primeline Energy Holdings Inc.
Dr. Ming Wang
CEO
+44 207.499.8888
+44 207.499.2288 or Toll Free: 1.877.818.0688 (FAX)
IR@pehi.com
www.pehi.com


CHF Investor Relations
Robin Cook
Senior Account Manager
+1 416.868.1079 ext 228
+1 416.868.6198 (FAX)
robin@chfir.com


VSA CAPITAL LIMITED
Andrew Raca
Head of Corporate Finance
+44 203 005 5000
ARaca@vsacapital.com

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