Tellus Resources Ltd and its wholly owned subsidiary PNC AUST Pty Ltd announce that they have agreed to a farmout arrangement with Senex Energy Limited in its PEL 105 tenement in the Cooper Basin, South Australia. The terms of the deal are summarised as:

1. Upon signing of the legally binding HOA, PNC transfers a 50% interest in PEL 105 to Senex. The transfer is subject to Ministerial approval as well as both parties completing all the terms of the HOA summarised below.

2. PNC continues with preparations to commence the drilling of Pirie 1. PNC cash calls Senex for $3.5M to contribute to the costs of drilling Pirie in two equal tranches as follows:

Tranche 1 : $1.75M prior to spudding Pirie 1 (expected in 5 days) Tranche 2 : $1.75M 25 days after spud. 3. Following the rig release on Pirie 1 well operated by PNC, PNC will transfer operatorship of the Permit to Senex.

Tags: Senex Energy Limited, Tellus Resources Ltd