Interesting Information re DHT & VRSIndisputable Facts... • More oil remains in North American reservoirs than is expected to be produced from Saudi Arabia and Venezuela combined. • On average, only 15% of the “easy oil” is recovered from most medium and heavy crude oil reserves. • Production is low and Sweep Efficiency is minimal after the “easy oil” is extracted. • Tens of thousands of wells are capped due to low production, but 70% to 80% of the oil remains in the formation/reservoir. • In 1998, Steam Assisted Gravity Drainage -(SAGD) system was introduced in Canada to enhance production from Oil Sands and Heavy/Medium oil reservoirs. • Within two years, over $3.4 Billion in commercial ventures licencing the -SAGD system were in play in North America. • SAG-D system improved production and reservoir sweep efficiency by 15% to 20%. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ Petrostar takes the -SAGD system to another level with the patented Vertizontal Recovery System (VRS) and the -patentpending Down Hole Tool (DHT) ™ Vertizontal Recovery System (
www.vertizontalenergy.com) is a patented combination of both Vertical and strategically placed Horizontal well bores that can increase sweep efficiency and oil production by as much as 40%. ™ Opposite to the -SAGD system which uses “new” Horizontal well bores for steam injection and oil recovery, VRS utilizes existing Vertical well bores for recovery and one or more Horizontal wells for water injection. ™ SAG-D injects steam from the surface which creates heat loss the further the steam travels into the reservoir thereby reducing its efficiency. Petrostar’s proprietary DHT traverses back and forth through the Horizontal well bore heating as it goes eliminating heat loss and maximizing bottom hold pressure, sweep efficiency and production. ™ The DHT is controlled from the surface and can be digitally driven to each location within the reservoir where the Horizontal well bore intersects with the existing Vertical recovery wells creating optimum “Vertical” oil recovery. The DHT has a -subsurface operating range of 1,000 meters and can be transported easily by truck to any location. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS -Workover Program • Phase I commenced on October 8, 2006 under the supervision of PAJAK ENGINEERING Ltd., with the drilling of Vertical Stratigraphic well to a total depth of 575 meters, which was completed on October 13, 2006. > Drilling analysis indicates the pay zone in the McLaren formation is larger than originally anticipated. > Drilling, coring and logging has been conducted on McLaren and Waseca zones. > Potential for future work on Sparky zone will be explored. > Analysis of Waseca will be completed to give better indication of reserves in this zone. • Phase II - drilling of a Horizontal production well commenced on October 15, 2006 and was completed by October 20, 2006. > 1,200 meters will be drilled through the oil formation from -D166 to -A136 in an east to west direction. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS -Workover Program • Phase III –– drilling of a second Horizontal production starting at -A166 commenced on October 26, 2006. > Estimated completion of horizontal drilling is early November 06.20 > Once completed, HRZ production well will run 1,200 meters from an east to west direction. • Phase IV – conversion of Horizontal production to a Water Injection well. > Approval for conversion to injection well expected from Saskatchewan Industry Resource (SIR) sometime in -Q4.2006 • Phases I to IV forms the DUAL HORIZONTAL PRODUCTION ENHANCEMENT portion of the VRS -workover program. > Company is anticipating added production as result of second HRZ production well and sustained production once Production well is converted to Injection well. > Anticipated increased production will allow Petrostar to recover costs of drilling in a timely manner. *Source: Nick Baiton, P.Eng., Vertizontal Energy Corp.; Production increase will recede within the first year and thereafter in the absence of any other EOR programs. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS -Workover Program Phase V – drilling of Horizontal well between wells A9/6 to A12/6 resulting in production from existing vertical wells is targeted to take place in the first Quarter of 2007, subject to the Company’s ability to secure section of land south of current Maidstone property. > Analysis is being conducted to determine best case drilling program to position the Company in state of readiness. > Upon completion of Phase V, the VRS -Workover program will completed and results will validate the effectiveness of the patented technology. > Company will explore commercialization opportunities and develop commercialization model to take technology to market. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS Drilling Program Phase I : New Vertical “Stratigraphic” well drilled to depth of 575 meters through McLaren and Waseca formations. Phase II: Horizontal Production well drilled a distance of 1220 meters and total depth of 575 meters. Phase I – vertical Phase II – horizontal well drilled 1220 meters Drill to 575 meters “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS Drilling Program Phase III : -Reentry at -A166 to perforate the well in the Waseca formation and drilling of Horizontal Production well from -6.A16 Phase IV: Conversion to Water Injection well from Production well (SIR approval required). “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ VRS Drilling Program Phase V : Horizontal well drilled from -A96 to -A126, resulting in production from existing Vertical wells. VRS Drilling - ProgramAnticipated Results Water sweep from central water injection well, creating pressure, whereby oil is moved towards existing vertical wells, enhancing oil recovery. Proving Up the Potential of the Waseca Formation 1 - Re-entry at -A166 to perforate the well in the Waseca formation. 2 – Directional well from existing -A106 to new -6. D16 NEW WELL “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ Field Testing of DHT Technology • Patent pending filed in June 2006 for DHT Technology. • Petrostar has 75% royalty rights to DHT Technology. • DHT fabrication has been completed by -VALAXDELPRO of Delta, BC and SEBAND Mechanical Services of Red Deer, AB. • Field testing will commence on Well -A96 on Maidstone property in mid to late January, 2007 under the supervision of WESTERN PETROLEUM MANAGEMENT. • Abstract on DHT invention is that it will have the capability of being sent down an existing well bore and heated to temperature that is significant enough to generate steam and subsequently produce pressure underground, resulting in sweeping of oil to existing vertical wells to enhance oil production. • The field test will allow the Company to monitor the -insitu temperature and pressure created by the DHT. • Petrostar has expectations that the DHT will enhance oil production in its current Maidstone wells. • Additionally, Petrostar is exploring opportunities to test the DHT on other rd3party candidate wells. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ Executive Summary • 100% ownership of producing heavy/medium MAIDSTONE crude oil leases. • Over 5.2 million barrels of proven OOIP in McLaren formation and 2.0 million barrels of potential reserves in Waseca formation. • 20.5% ownership of patented Vertizontal Recovery System (VRS) and first company to utilize VRS and develop producing demonstration .model • A $3 Million VRS drilling and -“WorkOver Program” commenced in early October 2006. • 75% royalty rights to Down Hole Tool (DHT) technology. • Field testing of DHT to commence -midNovember 2006. • Resulting oil sweeps caused by pressure created by DHT expected to enhance oil recovery rates. • Long term, opportunities for -worldwide revenue streams from implementing and/or licensing of VRS and DHT Systems and Technology to domestic and global Heavy/Medium oil producers. “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ Corporate Information • Head Office: Suite 615 – 700 W. Pender St., Vancouver, BC, V6C 1G8 (604) -6623004, ext. 105 • Calgary: Suite 1602, 1078 – 6th Ave. SW, Calgary, AB, T2P 5N6; (403) -6954720 • President: Robert A. Sim; Directors: Thor Gauti, William Stafford, Sal Giantomaso, Eunho Lee • Technical Advisors: Nick Baiton P.Eng., Bob Conaty, Bernie Cabot PET, Steve Kneitl, Scott Heard • Shares Outstanding: 54,563,689 shares “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ Petrostar Partners – over 250 years of experience in the Oil and Gas Industry • Pajak Engineering Ltd. – Suite 300, Iveagh House, 707 – 7th Ave. SW, Calgary, AB, T2P 3H6,
www.pajakeng.com • Western Petroleum Management – Suite 305, 1228 Kensington Rd. NW, Calgary, AB, T2N 3P7,
www.westpetro.com • Vertizontal Energy Inc. – Suite 901, 825 – 8th Ave. SW, Calgary, AB, T2P 2T3,
www.vertizontalenergy.com • Seband Mechanical Services, Red Deer, AB, T4S 1J8 • The Nortek Group – Delpro/Valax/Deltek, 213 – 669 Ridley Place, Delta, BC, V3M 6Y9,
www.nortekgroup.net and
www.delpro.net • Fekete Associates Inc. – 2000 – 540 th 5Ave. SW, Calgary, AB, T2P 0M2,
www.fekete.com • Paddock Lindstrom & Associates – Suite 2000, 801 – 6th Ave. SW, Calgary, AB, T2P 3W2,
www.padlin.com “Focused on Technology to Enhance Oil Recovery”
www.petrostarpetroleum.caTSX-V: PEP; -OTCBB: PSCSF; Frankfurt: LMQ