Twoco Petroleums Ltd. Announces Asset Sale & Development Arrangement

Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) is pleased to
announce that it has entered into an arm's length definitive agreement (the
"Sale Agreement") to sell 70% of its working interests in the Company's Sparky
heavy oil property in the Warspite area of Alberta to an oil and gas investment
fund (the "Fund") based in Seoul, Republic of Korea, for cash consideration of
Cdn.$28 million. The sale is effective June 1, 2012 (the "Effective Date") and
is expected to close on or about October 17, 2012, subject to, among other
things, the finalization of the formation of the Fund by no later than October
12, 2012 and receipt of all necessary regulatory approvals. 


Pursuant to the Sale Agreement, Twoco and the Fund (or a Canadian entity to be
established by the Fund, such entity and the Fund, collectively, the
"Purchaser") will, at the closing of the sale, also enter into a net revenue
guarantee and transfer agreement (the "Net Revenue Agreement") providing for,
among other things, a development drilling program in respect of Twoco's Sparky
heavy oil property and a net revenue guarantee in favour of the Purchaser.
Pursuant to the Net Revenue Agreement, the Purchaser will agree to fund its 70%
share of a ten (10) well development drilling program to be completed within one
year of closing of the sale. The Purchaser's share of the development drilling
program is expected to be approximately Cdn.$10 million.  


Sale Agreement 

Pursuant to the Sale Agreement, the Purchaser will acquire seventy percent (70%)
of Twoco's working interests in the Company's Sparky heavy oil property in the
Warspite area of Alberta, including Twoco's working interests in its existing 5
producing horizontal oil wells, related tangible equipment, pipelines and
miscellaneous interests for total cash consideration of Cdn.$28 million, subject
to normal adjustments as of the Effective Date. 


Twoco's working interests in its Sparky heavy oil property range between
ninety-six and one-half percent (96.5%) and one hundred percent (100%). The
Company's current production from the heavy oil property is approximately 150
barrels per day of oil and natural gas liquids. Following the closing, Twoco
will remain as the operator of the Sparky heavy oil property pursuant to an
industry standard joint operating agreement.


Twoco intends to use the estimated net proceeds of Cdn.$26.2 million realized
from the sale, after the payment of fees and transaction costs, to reduce its
existing bank debt, provide for the letter of credit described below and to fund
its share of future development drilling costs on the Sparky heavy oil property.


Net Revenue Agreement and Development Arrangement

Pursuant to the Net Revenue Agreement, Twoco will, within one (1) year of the
date of the closing, propose and use its best commercial efforts to drill and
complete or abandon a minimum of ten (10) wells on the Sparky heavy oil property
(each a "Commitment Well"). The Purchaser shall agree to participate in each of
the Commitment Wells for its working interest share of the costs associated with
each such well. The Purchaser's share of such costs is expected to be
approximately Cdn.$10 million in total. The Purchaser shall grant reasonable
extensions to the satisfaction of Twoco's obligations with respect to the
Commitment Wells if such extension is required due to surface access, rig
availability and/or government approvals.


Twoco will agree in the Net Revenue Agreement that the Purchaser should receive
Cdn.$38 million of Net Revenue, as defined in the Net Revenue Agreement, from
the Purchaser's working interests in the heavy oil property within seven (7)
years of the date of the closing ("Investment Recovery Date"). In the event that
the Purchaser has received less than this amount as of the Investment Recovery
Date, Twoco will be liable for and shall pay the Purchaser an amount equal to
twenty percent (20%) of the difference between the amount of Net Revenue
actually received by the Purchaser and Cdn.$38 million ("Guaranteed
Obligation"). To guarantee Twoco's payment of the Guaranteed Obligation, Twoco
concurrently with the execution of the Net Revenue Agreement will deliver to the
Purchaser, an irrevocable letter of credit in the amount of Cdn.$7.6 million
("Letter of Credit") in form and substance acceptable to the Purchaser (acting
reasonably). In the event that Twoco becomes liable to the Purchaser for the
Guaranteed Obligation, the Purchaser shall be entitled to draw upon the Letter
of Credit for an amount equal to the Guaranteed Obligation. In the event that
prior to the Investment Recovery Date, the Purchaser has received Net Revenue
from the heavy oil property in excess of Cdn.$30.4 million, Twoco shall be
entitled to reduce the amount of the Letter of Credit by the amount that the Net
Revenue received by the Purchaser exceeds Cdn.$30.4 million. 


If at any point after the Effective Date, the Net Revenue realized by the
Purchaser from the Sparky heavy oil property is greater than the amount of
Cdn.$38 million plus an internal rate of return of eight percent (8%), the
Purchaser shall thereafter pay to Twoco, within 60 days of the end of the
applicable calendar quarter, thirty percent (30%) of the Purchaser's Net Revenue
attributable to such calendar quarter which is in excess of such amount and such
internal rate of return. 


Forward-Looking Statements: 

Certain information set forth in this news release contains forward-looking
statements or information ("forward-looking statements"), including statements
regarding the timing of the drilling of the Commitment Wells, the Net Revenue to
be received from the Sparky heavy oil property by the Purchaser and payments of
excess Net Revenue to Twoco. By their nature, forward-looking statements are
subject to numerous risks and uncertainties, some of which are beyond Twoco's
control, including the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency fluctuations, imprecision
of reserve estimates, environmental risks, operational risks in exploration and
development, competition from other industry participants, the lack of
availability of qualified personnel or management, stock market volatility and
the ability to access sufficient capital from internal and external sources.
Although Twoco believes that the expectations in our forward-looking statements
are reasonable, our forward-looking statements have been based on factors and
assumptions concerning future events which may prove to be inaccurate. Those
factors and assumptions are based upon currently available information. Such
statements are subject to known and unknown risks, uncertainties and other
factors that could influence actual results or events and cause actual results
or events to differ materially from those stated, anticipated or implied in the
forward-looking statements. As such, readers are cautioned not to place undue
reliance on the forward-looking statements, as no assurance can be provided as
to future results, levels of activity or achievements. The risks, uncertainties,
material assumptions and other factors that could affect actual results are
discussed in our Annual Information Form and other documents available at
www.sedar.com. Furthermore, the forward-looking statements contained in this
document are made as of the date of this document and, except as required by
applicable law, Twoco does not undertake any obligation to publicly update or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this cautionary statement.
This news release shall not constitute an offer to sell or the solicitation of
any offer to buy securities in any jurisdiction.