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PETROLEUM PROPERTY FOR SALE

� 500 Million Barrel potential reserve plus natural gas.

� One of the 18 Principal Oil Shale Deposits in Canada – see Geological Survey of Canada (page 12).

� Unique Queen Victoria (1893) Crown Land Grant.

� Privately Owned Oil and Gas Property Rights. NO Royalties!

� New Oil Extraction Technology Offers Lower Costs.

o The Calgary Athabasca Oil Corp. (PetroChina) announces success using electricity to heat bitumen "in situ" to extract oil at 1/2 the cost, Financial Post, 27 July 2012.

� Protected Deep Harbour That Never Freezes in Shields Bay, Rennell Sound, Graham Island, British Columbia.

� Direct Safe Access to International Shipping Lanes & World Markets.

� $20 Million Canadian - Purchaser’s Lawyer to Vendor’s Lawyer.

2New “In Situ” oil extraction technology (minimum footprint ground conversion) offers breakthrough possibilities at low cost and without mining.

� Direct Safe Access to International Shipping Lanes and World Markets.

3Lot 30 & 31 Property Overview

South view of Lot 31 near Lot 30 boundary showing logging roads & Shields Bay (photo 1994), the only sheltered deep water harbour on west coast of Graham Island.

Lot 30 & 31, Rennell Sound, Shields Bay, Graham Island, BC has direct safe access to International shipping lanes and world markets.

4Examples of Single Point Mooring Buoys for simple, rapid, low cost loading of oil

while eliminating costly docks.

Oil could be pumped directly to ships at anchor. Work crews could also be housed afloat making for rapid set up and flexible operations. First class industrial labour is available locally on Graham Island due to decline in the local forestry industry.

Only drill holes and piping need to be ashore creating a very small environmental footprint on this already logged off land.

5Background

These freeholds constitute the only privately owned historic undersurface rights of this type on the entire west coast of the Queen Charlotte Islands. This location is the only deep harbour on Graham Island, being Canada’s farthest west coast. These particular Land Grants were issued as a land base for a coal port to serve British interests in the late 1800s. More than 55 years ago, I.M. Sherwin observed gas bubbling into intertidal pools, and oil shale was exposed in rock falls and creek bottoms. For this reason, the owner while selling the surface rights of the 1893 Queen Victoria Land Grants for logging purposes, was careful to specifically retain the subsurface mineral rights. By reason of the old Victorian Land Grant of 18 Jan. 1893, these included subsurface oil, gas and oil shale. The I. M. Sherwin’s subsurface rights reservation was entered into the Land Registry at the BC Court House in Prince Rupert, under register endorsement document 12615-d. This reservation was clearly acknowledged under the Department of Mines and Petroleum Resources, Petroleum and Natural Gas Act 1965, when an exploration permit No. 2710 (now expired) for adjacent lands to the south was issued to Intercoastal Resources on 5 Jan.1978 for all oil sand, oil shale and its products. The Intercoastal permit specifically noted that all petroleum rights under Lot 30 and 31 were not available as it was the private property of I. M. Sherwin per document 12615-D. This unique deep natural harbour provides safe direct access to the international ocean shipping lanes to China and beyond without the need to navigate the inshore archipelago of islands and inlets typical of the inside passage of the B.C. coast. Navigation safety issues are a prime source of conflict for the proposed new pipeline to Kitimat, BC to transport and ship Canada’s huge Alberta oil sands production to Asian markets. Rennell Sound harbour could be a strategic location to process production of safe lateral drilling of the oil and gas formations beneath the shallow (75m) sea separating Graham Island from the mainland that is estimated by Government Reports to contain 9.8 billion barrels of oil and 25.9 trillion cubic ft. of gas.

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Petroleum Property for Sale New “In Situ” oil extraction technology offers breakthrough possibilities. Lot 30 & 31 subsurface rights are for sale for $20M Canadian Dollars, refer to Reasons for Sale (page 27) and Conditions of Sale (page 28). This property is simple to inspect, refer to Appendix 4: Travel Logistics.

Summaries: Appendix 1 summarizes new “In Situ” oil extraction technologies, which if applied to this property, could render it a high quality petroleum resource. This also describes the owner’s estimates for opportunity for profit and comparisons with past oil shale sales, (see page 7 to 9). Appendix 2 summarizes government reports including 1920 workings and more recent drill hole that describe 85 to 500 meters (300 to 1600 feet) thick surface layers of oil shale/bitumen. Also, the Geological Survey of Canada describes this oil shale area and its high probability of oil and gas underlying the area. Unusually large amount of Geological Survey of Canada, BC government, and private data regarding this property is provided, (see page 10-19). Appendix 3 provides copies of Title and the original Crown Grants and other information about the property that is 251 hectares (620 acres), and the eastern property boundary is 3.2 km (two miles), (see page 20 to 25). Appendix 4 provides a synopsis of property inspection Travel Logistics. (See page 26). Appendix 5 provides Mr. I. M. Sherwin’s Technical Representative. (See page 26). Appendix 6 provides Reasons for Sale. (See page 27). Appendix 7 provides Conditions of Sale. (See page 28).

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Appendix 1: Evolution of New “In Situ” Technology & Commentary

New developments in oil shale extraction technology offer new and profitable possibilities for recovery of petroleum products in an environmentally safe manner.

Since the oil shale is found at the surface of Lot 30 and 31 and is situated on a harbour, it could be mined and bulk shipped to any country in the Pacific Rim or beyond by reason of the low cost per ton of ocean shipping.

Open Pit Mining Process - Old Russian Technology (1990s) The Russian ‘UTT’ 3000 units such as those installed in Narva, Estonia reportedly processed 3340 tonnes of oil shale per day at a cost of $14 to $17US per barrel. This operation was presented in the “New Developments in Oil Shale Technology” Conference in Denver, Colorado, USA in October 2006 by Professor E. P. Volkov of the Power Engineering Institute, Moscow. An important feature is that they captured, what were formerly released as harmful pollutants, and converted them into valuable and profitable resources. Once installed, these units produce oil revenue almost immediately. See conference summary, www.newshaleoiltech.com/New_Dev_OilShale_Technology.pdf

1970s – Old USA Technology Exxon, Chevron, and Shell were encouraged by the US government into an expensive expansion of the process described above but were situated in dry desert environs without sufficient water resources. In addition, the high cost and uncertainty of creating deep underground ice dams around their oil shale deposits was problematic in attempts to protect vital water aquifers that supply water for a large portion of the American grain industry. As a result, these efforts failed, and extracting oil from oil shale received an undeserved poor reputation.

In Ground Conversion (IGC)’ – a “New In Situ Technology”. However, almost fifty years ago, Sweden pioneered and tested a method of heating oil shale in the ground that would work on a small or incremental scale and was very environmentally friendly. This led to a new technology of “In Situ” ‘In Ground Conversion’ (IGC) extraction.

Royal Dutch Shell’s Dr. T. O’Conner described a breakthrough in IGC in his testimony before the U.S. Congress during the summer of 2011. More than two decades ago, Shell began laboratory and field research on improvements on IGC extraction of the bitumen in oil shale into high quality oil without the need to mine. By simply drilling and inserting heating elements and raising the ground temperature for a period (3 years), at temperatures of 325 C., which resulted in conversion into high-grade oil that is pumped to the surface. Shell is proceeding modestly at its Mahogany Ridge Project and its release of information, perhaps prudently, while it ties up rights or property. The target is to produce oil at $30

8barrel or less in comparison to Arctic oil and deep-water oil that costs $60 barrel. Also see commentary at http://uk.answers.yahoo.com/question/index?qid=20110901172816AA9J2ee

Exxon Mobile’s Electrofrac Process appears to add the spectacular potential of fracking to oil shale by injecting 20/40 mesh calcined coke. The coke is the electrical heating power conductant which can exploit natural or manmade fractures vertically, horizontally or any variant large or small and requiring no anode recovery. Once fracked, the high-grade oil is recovered by its natural expansion into well drainage and pumped to surface in the usual fashion. This system could cope with a wide variety of deposits, and although no estimate of cost per barrel is given, the potential appears to favour a very low cost per barrel. “Exxon Mobile’s Electrofrac Process for In Situ Oil Shale Conversion” can be reviewed at http://www.newshaleoiltech.com/ExxonMobiles_Electrofrac.pdf

Ground Fuel Cell (GFC) Process The Independent Energy Partners appear to have created a carefully designed and radical advance in situ extraction producing the highest grade oil requiring no further refining and with “no ends”. The basic principal is by combining a fuel cell with the heating probe. The problems of power losses in transmission, unnecessary heating, and flexibility of application of power appear to have been resolved. This approach would appear to be unique to the industry. This provides an incremental build out of GFC installations tailored to the oil shale deposit. See “Geothermic Fuel Cells” by M. Savage, V.P. Technology Development, Independent Energy Partners http://www.newshaleoiltech.com/Geothermic_Fuel_Cells.pdf

Thermionic Extraction Process (Raytheon/Schumberger) Raytheon was a major designer and manufacturer of low power thermionic devices, vacuum tubes etc. prior to WWII. When the top secret English invention the Magnetron, the first device capable of generating large microwave power for radar application was rushed to the then, still neutral, America, Raytheon was one of a group of American companies that were engaged in its secret manufacture. (The microwave oven is a peacetime outcome.) Raytheon subsequently applied microwave technology to oil shale and reportedly obtained a 5 to 1 energy yield and shortened the process time from what was 3 years down to 1 to 2 months!

Electromagnetic radiation is highly controllable, as to power, frequency, and by both spacing of radiators and the phasing of their feeds. This offers flexibility in application of power to enhance the raising of temperature for rapid conversion of oil in oil shale to very high grade. Raytheon has made no public announcement in these results. The reported takeover of Raytheon's expertise by Schumberger, an authority in practical oil field management, suggests this could be a breakthrough in oil shale mining.

9Summary: The new in situ oil extraction technologies appear to be applicable to extract the under surface oil from Lot 30 and 31 and vicinity. It may be possible to use high power ground penetration radar to identify very high-grade zones for selective and highly profitable “in situ” oil extraction. The advent of in situ extraction was a factor in recent billion dollar purchases of a small portion of the Canadian Tar Sands in Alberta that, not too long ago, were considered worthless.

Oil Extraction Cost Estimates and Commentary

The costs of in situ extraction of oil as previously described ranged from a low of $14 per barrel to the Royal Dutch Shell high of $30 per barrel. This higher cost was likely caused by the fact that their high dry desert oil shale deposit lacks water and was in a location where it was a direct hazard to the Ogallala underground aquifer water resource that provides irrigation water for much of the U.S. plain states. This required Shell to create a huge underground frozen dam to protect the vital aquifer. With very heavy rainfall and no agriculture concerns, clearly, no such costly problems are present in the uninhabited Lot 30 & 31 property area.

At the present price of oil $100 per barrel and using the highest In Situ production cost of $30 per barrel and the lowest estimate of the volume of shale oil on Lot 30 & 31, an estimate of 0.5 billion barrels (500 million barrels) the margin for retirement of capital and profit is $35 billion dollars.

If the Independent Energy Partners modular Ground Fuel Cell (page 8) could be employed selectively on only one tenth of Lot 30 & 31 (the richest parts), the margin for retirement of capital and profit at $30 dollars per barrel production cost would still be over $ 3.5 billion dollars.

Ground Fuel Cell technology also produces the highest-grade oil ready to be pumped into a ship safely anchored in Rennell Sound and only 8 days steaming time to Asian ports. Such oil would command the highest world market prices now $25 per barrel more than the “Cushing” U.S. settlement price.

Should the entire surrounding deposit become available in future, the total would conservatively be many billions of dollars.

Exposures of Bitumen Strata on Lot 30 & 31 and Commentary:

The oil shale strata on Lot 30 & 31 dips to the east, and for the requirements of logging in the 1970s, it was necessary to blast and cut roads to the west, which, for the first time, exposed the oil shale for easy inspection. In addition, cat and skidder roads opened up fresh new exposures throughout the property and the surrounding area. With the new exposures and a test Ghost Creek drill site, Wright Engineering (Harold M. Wright, Mining Hall of Fame) indicated in the Vancouver Sun in 1975 the possibility of two to three billion barrels of oil in the

10Kunga shale formation in this area (approximately ¼ would appear to be within Lot 30 and 31 which would be 500 to 750 million barrels).

The 1970s oil crisis resulted in the major oil producers, Amoco, Shell, Gulf Oil and Standard Oil and others to begin buying up oil shale leases. The Vancouver Province newspaper reported on 10 April 1975 that at Rifle, Colorado, Gulf Oil Corp. and Standard Oil paid $210 million for 5000 acres of oil shale despite 1000 feet of overburden and no water. This equates to $42,000 per acre that, in today’s dollars, is $135,000 per acre).

The 1970s oil crisis also prompted the Canadian government to re-examine known Canadian deposits of oil shale referenced in Appendix 2. More importantly, the oil shale within Lot 30 and 31 was determined by government inspections of the new exposures created by heavy logging equipment.

In the 1981, government report entitled "Geology of the Shale Deposits of Canada", Rennell Sound is shown on map page 118 (page13 of this document). The report map notes the Kunga Formation contains 17 gallons per ton high grade. Lot 30 and 31 is clearly the key to this entire surrounding deposit and fronts right on the harbour.

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Appendix 2: Geological Survey of Canada & Other Historical Reports

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GSC, Macauley (1981) “Geology of the Oil Shale Deposits of Canada”, Fig. 28 identifies the area of the property (Lot 30 & 31) on page 118, and indicates the Kunga Formation contains 17 gallons per ton high grade in this area.

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Note from Vendor: This 1975 drill hole intersecting 242 m (800 ft) of oil shale bitumen is the thick Kunga layer which overlays this entire area including Lot 30 & 31. This drill hole is 10.5km (6.5 miles) northeast of Lot 30 & 31.

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Petroleum Resources Potential of Sedimentary Basins of the Pacific Margin of Canada by Hannigan et al., Geological Survey of Canada - downloadable pdf #16. http://geopub.rncan.gc.ca/moreinfo_e.php?id=209925&_h=osadetz

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Appendix 3: Property Title and 1893 Crown Grants

The Supreme Court of Canada confirmed (in a 5 to 0 decision) that mineral rights, such as those retained by I. M. Sherwin under 50950-I, also include gas in all its forms. Reference, CPR, BP, Amoco, Petro-Canada, Imperial Oil, Sunco Energy, vs. 85 owners of surface rights only. Supreme Court of Canada, July 2004.

21The previous page is the BC Government Certificate of Encumbrance showing reservation of minerals in favour of Ian Malcolm Sherwin under endorsement 12615-D (30 December, 1955) contained in 50950-I.

It should be noted that Ian Malcolm Sherwin’s ownership of the minerals is a 7/8 interest by reason of the forfeiture to the crown of a 1/8 tenant in common interest for non payment of taxes during the Great Depression. It is important to differentiate the ownership from any form of royalty or reservation since the law as applying to reasonable resolution of tenants in common applies in this case and the Crown by custom follows this path. This precedent was followed recently in regard to the surface rights where by the surface right north boundary was moved southerly such that the surface right held privately was reduced by 1/8th and the Crown relinquished its 1/8 tenant in common interest. These simplified matters for both sides. The Ian Malcolm Sherwin under-surface rights are now 7/8 of the entire original Lot 30 and 31, as Mr. Sherwin did not request a similar simplification by reason that the original field notes of the first owners dated 29 August 1893, suggested this might be a rich area for exploration for gas and oil. (Refer to the original owner’s notes (Robertson) which follow. With the exception of Lot 30 and 31, all the land fronting on Rennell Sound and Shields Bay is Provincial government owned forest industrial lands almost all recently logged off. For higher industrial use, the Provincial government will consider leasing portions. In Canada, there are well-established legal processes to fairly compensate for damage to surface owners’ properties. Often, it is more convenient to purchase surface rights. Note in the following copies of the Land Grants, the provision for public roads. The surface rights of Lot 30 and 31 may be purchased from the present elderly German owner who has an attorney in Vancouver, BC who is familiar with the property and its mineral rights. (Mr. Tutty may be able to assist in making contact if this is desirable.)

22CROWN LANDS GRANT – LOT 30

23CROWN LANDS GRANT – LOT 31

24LOT 30 Crown Grant Map

LOT 31 Crown Grant Map

25The original field notes of the first owners date 29 August 1893, suggested this might be a rich area for exploration for petroleum products. The appended 1893 Robertson field notes state, “Willie and I started out this morning in our canoe and in our cruise went by the north end of Shields Island and in the main channel and found the rock to be a mixture of limestone slate and what looked like gypsum+found gas bubbling out of the rock in two places”

The 1893 Field Notes reporting discovery of natural gas, (Robertson Family Archives).

Mr. Sherwin, more than ½ century later, also found gas bubbling up in the pools in the intertidal zone, especially at the north end of his property.

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Appendix 4: Travel Logistics This property and it’s surface oil shale deposit is simple to inspect as one can charter a helicopter that can land on roads or clearings as well as survey the entire Lot 30 and 31. Contact Helijet Helicopters at 1-877-569-4354, Sandspit Government Airport (YZP). A helicopter charter can transport a geologist to inspect the property in 0.6 hours flying time (~50 km) that will cost approximately $2000 return trip (capacity 4 passengers plus pilot). Air Canada provides jet service Vancouver to Sandspit twice daily. Accommodation is available in Sandspit and can be arranged by calling 1 250 637-2233.

Appendix 5: Mr. I.M. Sherwin’s Technical Representative Mr. Ian M. Sherwin has absolute trust in Mr. Brian D. Tutty to assist interested parties in navigating the technical research available from government sources in regard to this property. Mr. Tutty will be making contact with potential purchasers and distributing this information package on behalf of I. M. Sherwin. Mr. Tutty can be reached at the following:

Mr. Brian D. Tutty, 1611 Fawcett Road, Nanaimo, BC, Canada V9X 1P2 Office (250) 722-4647, Fax (250) 722-2284, Cell (250) 713-8474 briantutty@shaw.ca

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Appendix 6: Reasons For Sale The reason for sale of Lot 30 & 31 is simply the age of the owner who is in excellent health but well over 80. Mr. Sherwin has followed oil shale developments closely and has had detailed discussions with geologists and technologists about his property.

The independent public documents recited herein appear to indicate a SURFACE deposit of oil shale bitumen in the order of 500 million barrels or more, plus gas. There are also undeveloped high-head hydro-electric sites nearby.

This property is unique in that it has the prospect of being operated independently and equally profitably on a small or larger scale owing to the flexibility of the new 'in situ' oil shale technology which essentially is capable of refining the oil underground leaving the contaminants where nature originally placed them, while oil is piped directly to the ocean going ships in the adjacent a deep, safe harbour providing direct access to the worlds best markets. These rights are royalty free and with no Cushing discount adds $40 dollars or more to the profit per barrel over oil recovered from the Alberta oil sands.

This suggests these new technologies have the ability to operate profitably in small stages with minimum costs in start up. The ground fuel cell modules seem particularly applicable with the possibility that even one tenth of the estimate of the contained shale oil if extracted might yield a return on capital/profit of $3.5 billion dollars suggests these new technologies and this ideally situated deposit are worth careful consideration, inspection and action. Of course, alternatively, this property might simply be held for the long term as oil demand increases.

A cash price of $20 million Canadian dollars, not as a bonus bid, but for total purchase of all under-surface rights including oil shale, oil and gas on a sheltered deep ocean harbour. Lot 30 & 31 could prove to a spectacular purchase.

(1) Addendum: The above $20M cash price is only FOUR CENTS per estimated 500 million contingent resource barrels and is clearly reasonable for outright purchase. Compare this to the ONE DOLLAR per contingent barrel agreed to between PetroChina and new start-up Athabasca Oil Sands Corp. which contingent resource will be at the end of long limiting pipelines and not having a direct low cost sea access to China. Financial Post, 4 Oct. 2011.

(2) Addendum: PetroChina has exercised the above ONE DOLLAR per contingent barrel agreement for $680M cash, Financial Post, 4 Jan. 2012.

(3) Addendum: The Calgary Athabasca Oil Corp. (PetroChina) see above announces success using electricity to heat bitumen "in situ" to extract oil at 1/2 the Cost, Financial Post 27 July 2012.

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Appendix 7: Conditions of Sale The information provided here by I. M. Sherwin is solely for the purpose of helping would-be purchasers do their own investigation of the property and ascertain its prospects. The information provided is to the best of his knowledge and belief, correct and true. Prospective purchasers must make their own independent investigations. Mr. I. M. Sherwin’s sole guarantee is that he has made no assignment, or any other diminution of his rights to the under surface of Lot 30 and 31 as registered in his name at the provincial government Land Registry at the Court House in Prince Rupert, BC under document no 12615-D. The provincial government guarantees registered title in BC under a proven system originally devised by Sir Robert Torrens during the reign of Queen Victoria over a century ago. This is not an auction. Sale will be to the first party meeting the terms of offer as expressed on this page. No conditional transactions will be entertained. The lawyer of the intending purchaser who first submits a simple full price tender of twenty million dollars in Canadian funds in a form and substance acceptable to the lawyer representing I. M. Sherwin will be the successful buyer.

The lawyer representing I. M. Sherwin for the tender process is: Mr. Vincent P. Reilly, QC. Pearlman Lindholm, Shoal Point at Fisherman’s Wharf, 201-19 Dallas Road, Victoria, BC, Canada V8V 5A6 Office (250) 388-4433 Fax (250) 388-5856 vreilly@pearlmanlindholm.com