Talon Energy Ltd. (Talon or the Company) announced that it has executed a binding Term Sheet with Triangle Energy (Global) Ltd. (Triangle), to farm into a 25% participating interest in Western Australian onshore Production Licence L7 and Exploration Permit EP 437, subject to the satisfactory outcome of due diligence by Talon. Triangle will be appointed Operator of the Joint Venture once established. As consideration for its 25% interest in L7 and EP 437, Talon will contribute ~AUD 1.9 million towards past expenditure on the recently acquired Bookara 3D seismic data, with AUD 1 million to be paid upon satisfaction of a number of Conditions Precedent customary for transactions of this type, including the execution of formal farm-in and joint operating agreements, with the balance of $0.9 million, plus interested accrued on the $0.9 million at 5% p.a. from the date of the Term Sheet, to be paid to Triangle prior to 1 September 2023 (Upfront Costs).

In addition to the Upfront Costs, Talon to fund the following exploration activities as part of its farm-in obligations: In respect to the 1st well on L7 (forecast to be drilled in 2024, at an estimated cost of $7.50 million): 50% of well costs, up to $3.75 million; and Should well costs exceed $7.50 million, Talon to fund 25% of the excess (being Talon's initial farm-in interest). In respect of the 2nd well drilled on L7 (forecast to be drilled in 2024, at an estimated cost of $7.50 million): 37.5% of well costs, up to $2.81 million; and Should the well costs exceed $7.50 million, Talon to fund 25% of the excess (being Talon's initial farm-in interest). In respect to the well to be drilled on EP 437 (forecast to be drilled in 2024, at an estimated cost of $3.0 million) 25% of actual well costs.

The above exploration wells will target the highly prospective Early Permian-aged reservoirs identified by the Bookara 3D seismic survey, which are analogous to recent discoveries in adjacent blocks, including Lockyer Deep, Waitsia, West Erregulla and South Erregulla. Talon has identified L7 and EP 437 as high-potential areas for hosting large gas fields and looks forward to working closely with Triangle to unlock the significant resource potential of these two permits. Details of the farm-in terms and prospectivity of the permits are provided in the attached Investor Presentation.

Talon will fund the initial $1 million upfront payment from existing working capital, with subsequent payments to be funded from cash flows generated from its 45% owned Walyering Gas Project. The cost of all exiting rehabilitation and restoration obligations for L7 and EP 437 are to be borne exclusively by Triangle.