Troy Energy Corp. Announces Execution of Formal Farmout Agreement and up to $12,600,000 Non-Brokered Financing

Troy Energy Corp. (the "Corporation" or "Troy") (NEX BOARD:TEG.H) is pleased to
announce that is has executed a formal agreement in connection with its
previously announced farm-in in respect of Guatemala Production Sharing
Agreement 4-93 (the "Production Sharing Agreement"), an oil and gas production
sharing agreement covering approximately 174,000 hectares in the South Peten
Basin of Guatemala (such lands are referred to as the "License Lands" and the
foregoing is collectively referred to as the "Transaction") (for further
details, please refer to the Corporation's press release dated July 26, 2012).
Whereas the binding letter of intent in respect of the Transaction (the "LOI")
was entered into between Troy and Coban Petroleum Ltd. ("Coban"), a private
Alberta corporation, the formal farmout agreement has been entered into among
Troy, Coban, Ceiba Petroleo S.A. ("Ceiba"), a private Guatemalan corporation
that is is a party to the Production Sharing Agreement, and Truestar Petroleum
Corporation ("Truestar"), a British Columbia corporation that is Ceiba's parent
company. Other than adding Ceiba and Truestar to the agreement (with Ceiba, as
farmor, farming out a portion of its rights, entitlements, interests and
obligations in and to the Production Sharing Agreement), the conditions,
interests earned and commercial terms remain largely consistent with the binding
LOI. The formal farmout agreement, which is dated October 9, 2012 (the "Farmout
Agreement"), varies from the LOI in that each of Troy, Coban and Truestar will,
respectively, earn working interests in the License Lands and Production Sharing
Agreement via Ceiba.


The Farmout is comprised of two phases. In phase one, Troy will fund a two-well
program which includes the re-entry and workover of a previously producing well.
In exchange for settling various payments upon closing of approximately
USD$2,700,000, funding 100% of the costs of the workover to a maximum of
USD$750,000 and the first new well to a maximum of $3,600,000, Troy will earn a
92% before payout working interest (converting to a 63.75% working interest
after payout) in these wells. In phase two, Troy will fund an additional new
well to a maximum of $3,600,000 and earn a 92% before payout working interest
(converting to a 63.75% working interest after payout) in this well and will
have deemed to earn 63.75% in all future production from the License Lands.
Coban has been nominated as the operator for phases one and two. Operations
subsequent to completion of phase two (including future well and drilling
commitments) will be governed by 2007 Canadian Association of Petroleum Landmen
(CAPL) and will be based on independent elections to participate on a
well-by-well basis. 


As a condition to the Farmout Agreement and subject to approval from the TSX
Venture Exchange (the "TSXV"), Troy intends to carry out a non-brokered private
placement of between USD$10,000,000 and USD$12,600,000 (the "Financing"). The
Financing will consist of no less than 16,666,666 units and no more than
21,000,000 units of the Company (each, a "Unit"), at a price of CDN$0.60 per
Unit. Each Unit will consist of one common share of the Company (each, a "Common
Share") along with one-half of one Common Share purchase warrant. Each full
warrant may be exercised for one additional Common Share at a price of CND$1.00
for a period of two years from the closing of the Financing.


The Financing is expected to close concurrently with the closing of the
Transaction, which shall occur no later than January 6, 2013. The proceeds from
the Financing will be used for payment of various costs pertaining to the
Production Sharing Agreement, including approximately $2,700,000 that is payable
upon closing of the Transaction, US$750,000 for the Workover, USD$3,600,000 for
the first well and for general working capital purposes. It is expected that
consulting fees in the amount of up to $500,000 will be paid upon closing of the
Transaction, with such fees being paid via the issuance of Common Shares at a
price equal to the offering price under the Financing.


The Production Sharing Agreement covers an area of approximately 174,000
hectares in the South Peten Basin in central Guatemala. It is limestone rich in
organic carbon as well as Jurassic aged sediment. It has previously had seismic
work and one exploration oil well drilled, which last produced in July 1988.
Political unrest in the region prompted the shut-in of the well and a cessation
of all development activities. There are roads, pipe lines and full
infrastructure throughout the Licence Lands.  


The Corporation will be filing materials with the TSX Venture Exchange (the
"TSX-V") requesting reactivation as a Tier 2 Oil & Gas Issuer on the TSX-V.
Completion of this Transaction is subject to a number of conditions, including,
but not limited to: satisfaction of the continued listing requirements of the
TSX-V; TSX-V approval of the reactivation of the Corporation as a Tier 2 Oil &
Gas Issuer; receipt of all required third party consents; completion of the
Financing; receipt of a report completed in accordance with National Instrument
51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101");
receipt of a title opinion in respect of the Production Sharing Agreement and
the License Lands; submission of Personal Information Forms and completion of
standard background searches to the satisfaction of the TSX-V for all Insiders;
and the approval of the board of directors of Troy, Coban, Truestar and Ceiba.
There is no assurance that these conditions will be satisfied. The proposed
Transaction is not a "non-arm's length transaction" and, as such, shareholder
approval is not expected to be required. 


It is expected that trading in the Corporation's Common Shares will remain
halted until such time as the the Financing and the Transaction have been
completed and the Corporation's listing has been graduated from the NEX to the
TSX-V and the Corporation has been reinstated as a Tier 2 Oil & Gas Issuer on
the TSX-V. 


Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain
information contained herein constitutes forward-looking statements.
Forward-looking statements are based on the opinions and estimates of management
at the date the statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or results to
differ materially from those projected in the forward-looking statements. The
Corporation undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change. The reader is
cautioned not to place undue reliance on forward-looking statements.