First Star Resources Inc.
TSX VENTURE : FRS
FRANKFURT : F2U

January 29, 2007 09:30 ET

First Star Updates Mosser Dome Oil Field Acquisition

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 29, 2007) - Mr. Bill Wishart, President and CEO of First Star Resources Inc. (TSX VENTURE:FRS)(FWB:F2U) ("First Star"), is pleased to provide the following update on its acquisition of the Mosser Dome oil field in Montana. A field inspection relating to the purchase was recently completed confirming the number of equipped wells and the proper operating conditions of the production and processing facilities. As part of the acquisition process, First Star has assisted in upgrading the oil gathering system and processing facilities to increase throughput capacity. The oil field is located approximately 20 miles out of Billings, Montana. It is the only producing oil field in the region and is easily accessible by a gravel road.

The Company has paid its second deposit of US$150,000 towards acquiring the field. First Star has agreed to purchase the property for US$1,500,000 under payment terms as follows: First Star will pay to an initial deposit of US$150,000 upon signing the letter of intent followed by a second deposit of US$150,000 to be paid on or before January 10, 2007 and a third deposit of US$450,000 on or before February 1, 2007. Upon payment of the first US$750,000 on or before February 1, 2007, the First Star will have acquired a 50% interest in the property. The balance of the Purchase Price, being US$750,000 will be paid by First Star to the Vendor on or before May 30, 2007 completing 100% of the purchase. First Star will become the operator upon completing the purchase.

First Star has previously received TSX Venture Exchange approval for its letter of intent dated Nov. 2, 2006 between First Star Resources Inc. and Big Snowy Resources LP (the vendor) pursuant to which the company has an option to acquire up to a 100-per-cent interest of an 80-per-cent NRI interest in certain leases and assets in the Mosser Dome oil field in Montana.

The property consists of approximately 360 contiguous acres of oil and gas leases and the assets, including 21 producing oil wells from the Greybull sand. Current production is approximately 50 barrels per day. Also included in the purchase is an updated gathering system including separators, treaters, tank battery installations with assorted tanks and all other related equipment.

This offer is subject to First Star and Big Snowy entering into a mutually acceptable formal purchase and sale agreement on or before February 1, 2007.
The Company has engaged Petrotech Engineering Ltd. to evaluate the primary and secondary recovery potentials of all three formations as per guidelines under NI 51-101. Results will be released shortly.

First Star Resources Inc.

On behalf of the Board

Bill Wishart, Director

WARNING: The Company relies on litigation protection for "forward looking" statements. Actual results could differ materially from those described in the news release as a result of numerous factors, some of which are outside the control of the Company.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.

Contact Information

  • First Star Resources Inc.
    Bill Wishart
    (604) 609-0555 or Toll Free: 1-877-609-0555
    or
    First Star Resources Inc.
    Patrick Forseille, P.Geo.
    (604) 608-0300 or Toll Free: at 1-877-609-0555