Target Energy : Shepard's Channel Operations Update

ASX Announcement

13 March 2012

Corporate information

ASX Code TEX

The Company is pleased to provide the following operations update. All reported TEXOB depths are measured depths below the Rotary Table (RT) on the rig floor.

Shepard's Channel Prospect, Lafourche Parish, Louisiana Target WI: 10.33%

Operations at the Shepard's Channel prospect recommenced on 11 March 2012, following the mobilisation of the Key Energy Services Rig #66 to the well site.

Report Date:Current Depth:

7:00 pm 12/03/12 (Western Aust Standard Time) / 6:00 am 12/03/12 (USA Central Daylight Time)

1,605 metres RT.

Progress:

Mobilise Rig #66 to well site; rig up. Presently running back in the hole.

Gas shows were previously encountered while drilling in the open hole. The rig will now work to recover the stuck drill pipe, then drill to the original Total Depth of the well at 4,020 m. A 5 inch liner will then be run over the open hole.

It is estimated that these operations may take up to 21 days, with testing commencing immediately thereafter.

The Shepard's Channel prospect has potential to hold up to 200 Bcf of recoverable gas with 12 million barrels of associated oil / condensate.

ENDSFor and on behalf of TARGET ENERGY LIMITED

Laurence Roe Managing Director

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] | [e-mail] | www.targetenergy.com.au

Board of Directors

Chris Rowe, Chairman

Laurence Roe, Managing Director Graham Riley, 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]

Overview of activities

Target is exploring and producing a suite of highly prospective oil and gas projects in the USA.

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 at over 30 years' experience in the sector. He consents to that information in the form and context in which it appears.