Primeline Energy Holdings Inc. ("Primeline" or the "Company") (TSX VENTURE:PEH)
is pleased to announce that China National Offshore Oil Corporation ("CNOOC")
has signed a Framework Agreement ("Framework Agreement") for the sale and
purchase of natural gas from the LS 36-1 gas field with Zhejiang Natural Gas
Development Co. Ltd. ("Zhejiang Gas").


Previously, CNOOC and Zhejiang Gas signed a Gas Sale Agreement In Principle
("Agreement In Principle") which defined the general terms on which Zhejiang Gas
agreed to purchase the future production of natural gas from the LS 36-1 gas
field, including the quality of the gas, take-or-pay principles, base price,
annual quantity and delivery schedule. During the past year, whilst Primeline
and CNOOC were preparing the LS 36-1 Overall Development Program ("ODP"),
Primeline, CNOOC and Zhejiang Gas continued their negotiations of the detailed
terms of the gas sale for incorporation in a more formal Framework Agreement.
Primeline has received notification today that the Framework Agreement signed by
Zhejiang Gas dated as of 7th July 2010 was received by CNOOC on July 15, 2010.
The commercial terms are substantially the same as the Agreement in Principle
but the Framework Agreement contains various detailed terms, including the
delivery point, delivery planning and schedule, determination of final delivery
gas price and payment terms, which had not previously been confirmed in the
Agreement in Principle. The Framework Agreement is sufficient for the purposes
of obtaining government approval and project financing for the development. 


During the development of the production facility, when further supply and
production details are confirmed, CNOOC and Primeline will negotiate further
details of the gas sale and it is anticipated that the Framework Agreement will
in due course be replaced by a final gas sale contract. 


In signing the Framework Agreement, CNOOC acted on its own behalf and on behalf
of Primeline and Primeline Petroleum ("PPC"). CNOOC has previously entered into
a separate agreement with Primeline and PPC confirming that Primeline's and
PPC's share of the gas (being 36.75% and 12.25% respectively) from the LS 36-1
gas field will be sold through CNOOC on the same terms as the Framework
Agreement. As announced on 6th July, with the ratification of the Supplemental
Development Agreement between Primeline and CNOOC by the Chinese central
government, CNOOC has a 51% interest in and is the operator for the development
and production of the LS 36-1 gas field. CNOOC, Primeline and PPC will pay their
share of the development costs pro-rata to their participating interests in the
LS 36-1 gas field development. 


In the meantime, Primeline is continuing its post-well evaluation work following
the completion of the LS 35-3-1 discovery well. 


About Primeline Energy Holdings Inc.

Primeline is an exploration and development company focusing exclusively on
China resources to become a major supplier of gas and oil to the East China
market. Primeline has a 75% Contractor's interest and is the operator for
exploration in the Petroleum Contract with CNOOC for Block 25/34, an offshore
exploration area of 5,221 km2 in the East China Sea. Primeline also has a 36.75%
interest in the LS 36-1 gas field in Block 25/34 which is being developed by
Primeline together with CNOOC (acting as Operator for the development) and PPC.
CNOOC is proceeding with the preparation of the development and Primeline is
leading the exploration effort currently focused on the prospects in the 3D
seismic data area where a number of high potential prospects near the LS 36-1
development have been mapped and where the new LS 35-3-1 discovery is located.
The new LS 35-3-1 discovery and previously drilled wells in and around Block
25/34 indicate that there is significant hydrocarbon potential in the remainder
of the Block. Shares of the Company are listed for trading on the TSX Venture
Exchange under the symbol PEH.


ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC.

Ming Wang, Chief Executive Officer

Please visit the Company's website at www.pehi.com. Should you wish to receive
Company news via email, please email robin@chfir.com and specify "Primeline
Energy" in the subject line.


Some of the statements in this news release contain forward-looking information,
which involves inherent risk and uncertainty affecting the business of
Primeline. These statements relate to the results of exploration, and
Primeline's expectation that it will be able to conclude a final gas sale
agreement with Zhejiang Gas. They are based on an assumption that negotiations
for such an agreement can be successfully concluded with Zhejiang Gas. It is
possible such negotiations may not be successfully concluded. If they are not,
Primeline will be unable to sell production from the LS 36-1 gas field to
Zhejiang Gas, and be unable to proceed with the development. If funding is not
sufficient or governmental approvals are not obtained, the Company may be unable
to develop the gas field. Exploration for oil and gas is subject to the inherent
risk that it will not result in a commercial discovery.