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Important Notes
1. A Production Sharing Contract (PSC) between CBM Asia, its partners and the Indonesian Government executed for Kutai West gives CBM Asia and its partners the right to explore for coalbed methane. If a commercial discovery is made, CBM Asia and its partners have the right to develop and produce from Kutai West. CBM Asia holds an 18% participating interest in the Kutai West PSC.2. The above prospective resources have been estimated using probabilistic methods and are dependent on a CBM discovery being made. If a discovery is made and development undertaken, the probability that the recoverable volumes will equal or exceed the unrisked estimated amounts is 90% for the low estimate, 50% for the best estimate, and 10% for the high estimate.3. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. The chance of commerciality is the product of these two risk components. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. Prospective gas resources are undiscovered resources and represent exploration opportunities and quantify the development potential in the event a petroleum discovery is made and should not be construed as reserves or contingent resources.4. Unrisked prospective resources for CBM prospects are estimated ranges of recoverable gas volumes assuming their discovery and development and are based on estimated ranges of in-place volumes. Geologic risking of prospective resources addresses the probability of success for the discovery of a significant quantity of potentially moveable petroleum; this risk analysis is conducted independent of estimations of petroleum volumes. For CBM prospects, principal geologic risk elements include coal quantity, gas content, and coal permeability. Development risking of prospective resources for CBM accumulations should include consideration of whether the entire area addressed by the assessment can and will be developed; this component is generally unique to CBM prospects because of the thickness and areal extent and wide variability in rock, gas content, and production characteristics across that areal extent. For CBM prospects, principal development risk elements are reservoir quality across the evaluated acreage, development and application of technology needed to commercially produce the acreage, the ability to depressure the reservoir over a reasonable period of time, project commercial conditions (financial, marketing, legal, social, and governmental factors), and a reasonable expectation of a commitment to develop the acreage.Geologic and development risk factors for the Kutai West PSC are shown inthe following table: Prob- Probab- Overall ability ility Probab- of of ility of Discovery Disco- Development Develop- Commer- Risk Factor very Risk Factors ment ciality (Percent) (Percent) (Percent) (Percent) (Percent) Coal GasCoal Gas Perm- Produc- EconomicQuantity Content eability ibility Recovery----------------------------------------------------------------------------100 100 80 80 70 90 63 505. For a further discussion of the risks and uncertainties associated with the recovery of unrisked prospective resources and other significant factors relevant to the above estimates, please refer directly to NSAI's technical report entitled "Estimates of Prospective Resources to the CBM Asia Development Corporation Interest in Certain Coalbed Methane Properties located in the Kutai West Block Kutai Basin, Indonesia as of December 31, 2012" filed on SEDAR at www.sedar.com and posted on the Company's website at www.cbmasia.ca.
