CORPORATE UPDATEPETROSTAR PETROLEUM’S OIL RECOVERY DHT TECHNOLOGY
RECORDS IMPRESSIVE INCREASES IN PRODUCTION.
September 19, 2007
INTRODUCTION
In May of 2007 Petrostar Petroleum started testing its Down Hole Tool (DHT) at its heavy oil project located in Maidstone, Saskatchewan. The Company is pleased to report the series of test results reported have been nothing less than spectacular. Test Results reported on July, 24th, August 11th and September 10th reflected increases in production in the test wells of 600%,598% and 479% respectively.
The individual news releases relating to the above noted test results and daily production increases are available at www.SEDAR.com.
The DHT is designed to recover oil that would have not normally been recoverable due to pressure reduction over time in the producing formation. The recovery results are due to the effect of the heat and pressure that the DHT produces as a residual of the initial heat and pressure build up in the well. As the DHT operates, the heating of the fluids in the well-bore has the effect of releasing gas in suspension that then migrates through the various channels and reservoir openings to pressurize the formation and subsequently increase production in the well or wells in the vicinity.
The success Petrostar Petroleum is having has resulted in a number of initiatives being implemented by the Company to maximize the benefits the Down Hole Tool Technology can provide. The initiatives include the acquisition of oil properties and the purchase of New Generation Down Hole Tools.
NEW GENERATION DOWN HOLE TOOL DELIVERIES ARE ANTICIPATED IN OCTOBER
The results of the tests up to September 10, 2007 have exceeded expectations. As a result the Company has on order eight more powerful new generation Down Hole Tools. The deliveries of DHT’s are scheduled to start next month.
It is expected that with deployment of the next generation DHT these results may be exceeded and more importantly maintained during production as the DHT will operate at temperatures of up to 250 º C .. As an additional benefit the DHT may be deployed and remain underground without a production interruption. This makes the economics of acquiring and operating the DHT very attractive. The DHT technology may also aid in higher recovery factors in marginal producing fields and with the current price of oil, the DHT will become an even more viable production tool. The New Generation Down Hole Tools will be used to further increase oil production at the project in Maidstone, Saskatchewan and at other oil properties the Company will be acquiring.
JOINT VENTURE: LETTER OF INTENT SIGNED WITH TRIGAS VENTURES TO ACQUIRE A 51% INTEREST IN LEASE AND WELL
As part of the initiative being taken by the Company to maximize Oil production, the Company has signed a Letter of Intent with Trigas Ventures Ltd of Major, Saskatchewan.
The proposed acquisition is to acquire a 51% interest in leasehold 8-11-39-20W3M, a non- producing well, located in West Central, Saskatchewan. The property is 40 acres in size allowing for the drilling of three additional wells on the property.
The lease is located in a North-South trending channel which contains heavy oil in the McLaren Formation. The New 2nd Generation Down Hole Tool will be used to re-enter the Well and drilling is expected to start next month.
The geological formations in this area are similar to those in Fort McMurray. The results of the proposed testing could have some very positive ramifications for the Oil Industry as the area has an abundance of undeveloped heavy oil reserves. Petrostar is very optimistic of recovering substantially large amounts of previously unrecoverable Oil with the use of its DHT Technology.
REVENUE ALERT AND PROJECTIONS
There is absolutely no doubt that the Down Hole Tool is having a very favorable impact on the Revenues Petrostar is generating.
The Company is currently producing on average in excess of 100 Barrels of Oil a day from its Maidstone Wells. Based on current oil prices for heavy oil of $50 a barrel, Petrostar is currently generating significant daily revenues which will translate to a potential for the production income for the year to be in excess of $1 million dollars.
These projections clearly illustrate the type of growth the Company is anticipating over the coming months, with Eight 2nd generation Down Hole Tools in operation, compared to the One prototype DHT that has been in use, since the testing started in May 2007.
CLOSING REMARKS
Management of Petrostar is very encouraged with the developments that have occurred since the DHT Testing started in May 2007. With the addition of eight 2nd Generation Down Hole Tools, the Company is confident oil production and revenues will both increase significantly. The Company’s added objective of commercializing the Down Hole Tool could also become a reality, as Petrostar’s progress and achievements are both being closely monitored by the Oil Industry.
For more detailed information it is suggested that Investors visit the Company Website located at www.petrostarpetroleum.ca
On behalf of the Board of Directors
“Robert A. Sim”
ROBERT A. SIM
President, Director
Safe Harbor Statement and Disclaimer:
This Press Release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words “expects", "projects", "plans", and certain of the other foregoing statements may be deemed forward-looking statements. Although Petrostar Petroleum Corporation believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the development and production of oil wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of production operations; risks with respect to oil prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil prices and other risk factors.