Target Energy Limited : Fairway Project Update

ASX Announcement

22 January 2014

Fairway Operations Update Corporate information

? Strong Oil flow at Sydney #2

? Wagga Wagga #1 well completion to follow Sydney #2

US focused oil and gas producer Target Energy Limited ("Target") is pleased to provide an operations update on its Fairway Project.

Sydney #2

Preliminary flow testing of the Fusselman section in Sydney #2 has yielded an oil flow rate of 75 BO in 19.5 hrs (equivalent to 92 BOPD). The oil was accompanied by a large amount of water (approx. 800 BW), which appears to be flowing from vertically extensive fractures. The well has been shut in following a polymer gel treatment to minimise the water flow, with flow testing set to resume on 25 January.

Wagga Wagga #1

Completion procedures at Wagga Wagga #1 will commence after the Sydney #2 program. Initial testing will be on the deeper Ellenburger and Fusselman/Devonian sections.
Target Managing Director Laurence Roe noted, "The testing at Sydney #2 has confirmed the presence of oil and of good reservoir conditions - both of which we expected. Before we bring the well into full production however, we will deal with that associated water. The polymer treatment should block off a good deal of the water flow and thus allow us to increase the relative volume of oil. The well is shut in now to allow the gel to set and we will resume testing at the end of the week.
"We will go straight to the completion of Wagga Wagga #1 after Sydney #2". ENDS

ASX Code: TEX

OTCQX Code: TEXQY

Board of Directors Chris Rowe, Chairman Laurence Roe, Managing Director

Stephen Mann, Director

Ralph Kehle, Chairman TELA (USA)

Rowan Caren, Company Secretary

ABN Number

73 119 160 360

Contact details

6 Richardson St, Suite 5

West Perth WA 6005

Tel: [phone]

1900 St James Place, Suite 425

Houston Tx 77056

USA

Tel: [phone]

E: [e-mail]

W: www.targetenergy.com.au www.targetenergyusa.com

Media Inquiries:

Australia Ross Dinsdale Business Development Manager (Perth)

[phone] office

[phone] mobile

[e-mail]

USA

Bradley Holmes

Target Investor Relations (Houston)

[phone] cell

[phone] direct

[e-mail]

TARGET ENERGY LIMITED Address 6 Richardson St (Suite 5), West Perth WA 6005

Mailing Address PO Box 140 West Perth WA 6872 ABN 73 119 160 360 | Ph [phone]

Fax [phone] | email [e-mail] | www.targetenergy.com.au

ASX Announcement

22 January 2014

For and on behalf of TARGET ENERGY LIMITED

Managing Director

NOTE: In accordance with ASX Listing Rules, any hydrocarbon reserves and/or drilling update information in this report has been reviewed and signed off by Mr. Laurence Roe, B Sc, Managing Director of Target Energy, who is a member of the Society of Exploration Geophysicists and has over 30 years' experience in the sector. He consents to that information in the form and context in

which it appears.

Well Reporting Summary
Name and Type of Well	Sydney #2, Step Out/Appraisal (Oil)
Well Location	Glasscock Co, Texas
Permit	NW/4 & E/2 S 188 Block 29 A? 170 W&NW Survey
TEX Working Interest	60%
Geological Rock Type	Fusselman Carbonate
Depth of Zones Tested	3040m
Type of Tests Undertaken	Preliminary Flow testing
Duration of Tests Undertaken	19.5 hours
Hydrocarbon Phases Recovered	75 Barrels of Oil (8.6%)
Other recovery	800 Barrels of Formation Water (91.4%)
Choke Size Used	Open
Flow Rates	92 BOPD
Number of Fracture Stimulations	Nil
Material Volumes of Non? Hydrocarbon Gases	Nil

TARGET ENERGY LIMITED Address 6 Richardson St (Suite 5), West Perth WA 6005

Mailing Address PO Box 140 West Perth WA 6872 ABN 73 119 160 360 | Ph [phone]

Fax [phone] | email [e-mail] | www.targetenergy.com.au