NEWS RELEASENEWS RELEASE PAGE
Headline: Petrostar Petroleum Corporation: Project Updates...
Symbol: PEP
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 12, 2007) - Petrostar Petroleum Corporation (TSX VENTURE:PEP)(FRANKFURT:LMQ)(the "Company") is pleased to announce it has completed the milling and fabrication of the mechanical components of its patent-pending enhanced oil recovery system technology, the DOWN HOLE TOOL (DHT) unit. This is the finalized model which has received all requisite mechanical and electrical certification that will be field tested in the second quarter of 2007. The DHT will be forwarded to Red Deer, Alberta to Sanjel Inc., a coil tubing Service Company, for pigging the armored cable through coil tubing and upon completions will be delivered to the Company's Maidstone, Saskatchewan lease for field testing to begin. The DHT is scheduled to be shipped to Red Deer by the third week of March and on location at the Company's Maidstone lease by early April. The field testing will be managed by Western Petroleum Management and will commence as soon as possible in the second quarter. The specific date of field testing will be contingent on weather conditions.
This specialized equipment consists of components of a down hole tool (DHT) that has been designed and engineered to enhance the recovery of heavy oil. When used in conjunction with its related system components, (control unit, firerod, armored cable and connectors) will produce heat and in turn steam, which will stimulate the pay zone of an existing or newly drilled well. The tool (DHT) will have the ability to carry out this stimulation procedure anywhere in the vertical and horizontal bore of the well being treated. The delivery and control of the DHT will allow for pinpoint accuracy as to where the steam generation will take place anywhere in the well, vertical and horizontal.
The DHT is an electronically controlled and operated unit that will be supplied adequate voltage to sustain a desired temperature in order to attain the effect required to carry out the stimulation process. The firerod component will respond to control panel assembly inputs and signals. The power generation unit will supply the power required to operate the panel electronic controller and amperage load as a result of the firerod and conductor demands.
When attached to the delivery tool (coil tubing) and placed in the well at the appropriate location the DHT can then be energized. Existing and/or injected water can be placed in the formation. The energized DHT will allow for the water to come in contact with the steam generating firerod through a system of louvers machined in the tool main body. The process, DHT and, controls will all work together over a certain time to achieve the desired effect for the well being treated. The DHT is a main component of the overall process but does not work alone. The "service" can only be carried out with all components linked and delivered by an experienced tool delivery team using the appropriate service line equipment.
The Company has been informed by its consultant, Fekete Associates Inc. that preliminary approval has been given to its proposed ERS (Enhanced Recovery System) by the Saskatchewan Industry and Resources with formal approvals expected shortly. In conventional vertical and horizontal wells, stimulation techniques are used to improve recovery, however, a large portion of the reserves is never recovered under primary depletion and conventional water flood schemes. The Company intends to test and utilize stimulation and enhanced recovery technique that will integrate the application of existing technology with the innovative ERS developed by the Company which should substantially increase production and recovery volumes due to the increase in the reservoir pressure.
Petrostar will now be permitted to proceed with converting the 1A16-6 HRZ Production Well into a Water Injection Well and has purchased the necessary equipment to implement the change-over. The Company will drill a third HRZ well that will run along the southern border of its Maidstone property at a total depth of approximately 575 meters in depth and run approximately 1100 meters in length to the 100 meter set back from it's western lease boundary. This effectively fences the property at both the North and South lease boundaries which will contain all the increased production and recovery volumes due to the increase in the reservoir pressure. Completion of the third well and final phase will constitute the implementation of the patented Vertizontal Recovery System (VRS(R)) production system which has the potential to also significantly increase daily oil production. The VRS(R) System referred to here is a patented and trademarked drilling and production method that utilizes existing industry techniques that have been developed over the past several years. Production fluids from the reservoir are routed into the horizontal well bore and in the opposite direction as they would be routed in the well bore of a conventional horizontal well. From the well bore the fluids migrate towards an existing or newly drilled vertical well in close proximity of the horizontal well bore recovery by conventional methods. The target date for completion of the VRS(R) is for the third quarter of 2007.
Once tested and proven, Petrostar intends to engage in commercialization of the DHT and VRS(R) technology. There has been considerable interest for the company's Enhanced Oil Recovery technologies, which when proven provides a significant potential to assist in addressing the issue of heavy oil recovery as nearly 85% of existing North American heavy oil reserves are shut-in, suspended or marginally commercial due to pressure, drive and gravity(API degrees) issues. The DHT in particular, as developed by Petrostar, maybe the optimal technology to potentially provide the solution to enhance the production of heavy oil that currently is difficult to extract.
ON BEHALF OF THE BOARD OF DIRECTORS
(Signed)
Robert A. Sim, Director
This press release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of failure to complete the proposed financing, failure to obtain necessary regulatory or shareholder approvals, exploration and other risk factors beyond its control and actual results may differ materially from the expected results.