GEN-2 DOWN HOLE TOOL TESTING AND FALL DRILL PROGRAM RIGHT ON SCHEDULE
As reported in the Company's news release on October 31, 2007, surface testing of the GEN-2 Down Hole Tool (GEN-2 DHT) was deemed an unequivocal success. In a closed laboratory environment, the GEN-2 DHT exceeded all metrics for temperature targets, steam generation and control mechanisms of the tool. The more powerful and efficient GEN-2 DHT has been delivered to Petrostar's Lloydminster, Alberta field office and will be deployed for field testing on the Company's Maidstone A15-6 well by the end of November 2007. The GEN-2 DHT will have the capability of reaching temperatures of 250 °C , a significant increase from 190 °C that was generated by the GEN-1 DHT and is designed to maintain and hold the temperature for a longer timeframe in the well bore allowing for greater steam and pressure to be produced. The target temperature of 250 °C of the GEN-2 DHT can be reached utilizing a 22-kilowatt generator, an improvement from the GEN-1 DHT that required a 66-kilowatt generator. Additionally, the GEN-1 DHT allowed water to run through it, resulting in scale build-up, and was deployed utilizing coiled tubing. The GEN-2 DHT's elements do not touch any fluids and is run down the well on its own cable, eliminating the potential for scale build-up and the need for other side operators, respectively. Even with these modifications, the GEN-1 DHT testing was considered a success, as production increased by upwards to 600% in the testing phase. As a result of the success of the GEN-1 DHT, the Company will continue to utilize it on its other wells to stimulate production.
Mr. J.A. (Sandy) Sprinkle, P. Eng., B.ED., Petrostar's newly hired Production Engineer, will oversee all aspects of the field testing of the GEN-2 DHT. He will be responsible for collection, analysis and dissemination of all relevant technical data, which will be critical components of commercializing the GEN-2 DHT. The data collected from testing of the GEN-1 DHT allowed the Company's electrical engineers at Valax Manufacturing to develop the GEN-2 DHT. In addition to overseeing field testing of the GEN-2 DHT, Mr. Sprinkle will be developing the Company's strategic plan for commercialization of this Enhanced Oil Recovery Technology. Though the goal of bringing the DHT to the market has tried the patience of management and shareholders alike, respecting the due process has been necessary and is very much in line with the Company's philosophy of reducing all stakeholders' exposure to risk in the development of its assets.
In other developments, the Company has completed drilling of Well A6-T6 to a depth of 516 metres into the Waseca formation on its Maidstone, SK property. Petrostar has also completed drilling of Well A0-15-049-24W3M on its newly acquired 160 acre Lashburn, SK property, which is located 24 kilometres to the west of the Maidstone, SK property to a depth of 545 metres into the Waseca formation. The Company is expecting results of the flow rates from these drilling activities shortly.
Lastly, as reported in the news release dated November 14, 2007, the Company has completed its joint venture with TRIGAS Ventures Ltd. o f Major, SK to acquire a 51% interest in leasehold 8-11-39-20W3M located in West–Central, Saskatchewan. The lease contains a non-producing well in C8-11-39-20W3M and is 40 acres in size allowing for the drilling of 3 additional wells on the property. The lease is located in a North-South trending channel which contains heavy oil in the McLaren Formation. The formation contains 7-9 ° gravity oil which is comparable to the heavy oil being produced in the tar sands of Fort McMurray, Alberta. The well will be the subject of Petrostar's GEN-2 DHT.
Share of Multi Billion Dollar Enhanced Oil Recovery Technology Field
Worldwide deposits of heavy hydrocarbons are estimated to total almost 5½ trillion barrels, and four-fifths of these deposits are in the Western Hemisphere (estimated as at year 2000 figures).
There is currently more oil 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 while the remaining oil is abandoned. In North America, tens of thousands of wells containing 70% to 80% of the original oil in place remaining in the formation/reservoir are currently capped due to their lack of economic viability and insufficient bottom hole pressure. In 1998, Steam Assisted Gravity Drainage (SAG-D) system was introduced in Canada to enhance production from Oil Sands and Heavy/Medium oil reservoirs, improving production and reservoir sweep efficiency by 15% to 20%. Within two years, over $3.4 Billion in commercial ventures licensing the SAG-D system were in play in North America.
Upon completion of the testing of GEN-1 and GEN-2 DHT, Petrostar will be in possession of adequate data to allow it to move forward with its marketing plan for the GEN-2 DHT. The potential commercialization of the DHT is substantial, as there is enormous quantities of original heavy oil in place that potentially can be recovered through enhanced oil recovery technologies.
Share Structure
Shares Issued (Outstanding): 74.8MM
Shares, Fully Diluted: 98.6MM
Market Capitalization: CAD$20.9MM
52 Week High: CAD.61
52 Week Low: CAD.11
Current Price: CAD.28
28-Day Trading Volume Avg.: 199,698 (since October 18, 2007)
All Data as of November 26, 2007
Special thanks to shareholders who have submitted photos to Petrostar Petroleum Corporation and onto chat lines. We welcome shareholder participation and welcome all shareholders, current and potential, and subscribers to visit the updated company website at www.petrostarpetroluem.ca and to contact Thor Gauti, Director of Corporate Communications for more information about the Company.
For more information, please contact:
PETROSTAR PETROLEUM CORPORATION
Suite 615 – 700 W. Pender St., Vancouver, BC, V6G 1G8; (604) 662-3004, ext. 105
www.petrostarpetroleum.ca
info@petrostarpetroleum.ca
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