CBM Asia Development Corp : CBM Asia Announces Heads of Agreement to acquire Prospective Coalbed Methane PSC in Kalimantan, Indonesia

CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX.V: TCF) (US: CBMDF) (FWB: IY2) announces that it has signed a Heads of Agreement ("Agreement") with PT Tranaco Utama ("Tranaco"), a private Indonesian company that holds the first rights to undertake a production sharing contract ("PSC") for a 1,500 square kilometre coalbed methane block in Kalimantan, Indonesia.

Under the terms of the Agreement, CBM Asia has the right to acquire 80% participation interest in the proposed coalbed methane PSC and be appointed operator (with Tranaco to hold the remaining 20% participation interest) in consideration for reimbursing Tranaco's sunk costs and paying any signing bonus to the Indonesian government upon the award of a PSC. On January 18, 2012, CBM Asia and Tranaco submitted a proposal to the Director General of Oil and Gas ("Migas") to approve the award of a coalbed methane PSC through the Direct Offer Mechanism under Ministerial Regulation of the Department of Energy and Mineral Resources. The proposal is based on a Joint Evaluation Study undertaken by Tranaco in 2011.

"This Agreement represents the advancement of our business strategy to materially expand our land position in Indonesia where, in 2011, we acquired a 70% participating interest and operatorship in the Bentian Besar CBM PSC and the Hulu CBM PSC," commented Mr. Alan T. Charuk, CBM Asia's CEO and President, "There are a number of coalbed methane PSCs in proximity to the block area operated by Exxon Mobil and BP."

ABOUT CBM ASIA DEVELOPMENT CORP.

CBM Asia Development Corp. is a Canadian-based unconventional gas company with significant coalbed methane ("CBM") exploration and development opportunities in Indonesia. The Company holds various participating interests in four production sharing contracts (each a "PSC") for CBM in Indonesia. Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country's natural gas reserves (Stevens and Hadiyanto, 2004). Since 2008 a total of 39 CBM PSCs have been granted by the Government of Indonesia, representing exploration commitments of over US$100 million during the next 3 years. In addition to CBM Asia, other companies active in CBM exploration in Indonesia include BP, Dart Energy, ENI, ExxonMobil, Medco, Santos, and TOTAL. BP, ENI, and the Indonesian government have confirmed that commercial CBM production started in March 2011 from the Sanga-Sanga PSC and is being exported from the Bontang LNG facility. The Company trades on the TSX Venture Exchange under the symbol "TCF". www.cbmasia.ca

ON BEHALF OF CBM ASIA DEVELOPMENT CORP.

"Alan T. Charuk"

President & CEO

For further information on CBM Asia Development Corp., please contact Alan Charuk at [phone], or [phone], email [e-mail] or visit our website at www.cbmasia.ca.

For investor relations contact: Micro Cap et al at 1 877 642 7622, or [e-mail]

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CBM ASIA DEVELOPMENT CORP.

404-815 Hornby Street Vancouver, BC, V6Z 2E6

T.604.684.2340 F.604.684.2474 TF.866.504.4755

www.cbmasia.ca

This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. See "Risks and Uncertainties" in the Company's annual MD&A dated April 27, 2011 available on SEDAR at www.sedar.com These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation. This news release does not constitute an offer to sell securities and the Company is not soliciting an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

CBM Asia Development Corp.
Alan Charuk
[phone]
[phone]
[e-mail]
www.cbmasia.ca
or
Micro Cap et al
1 877 642 7622
[e-mail]