Flair Petroleum Corporation
PINK SHEETS : FPMC

Flair Petroleum Corporation

October 01, 2007 13:29 ET

Flair Petroleum Corporation Agrees Letter of Intent Granting It Option to Acquire 20% Working Interest in Major California Heavy Oil Project

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2007) - Flair Petroleum Corporation (PINK SHEETS:FPMC) is pleased to report is has executed a Letter of Intent with experienced operators in the development of Heavy Oil resources, providing it with the option to acquire a 20% working interest in a major California heavy oil project with considerable Oil in Place in an area with developed infrastructure of oil pipelines, heavy oil refineries and excellent industry service company support. The estimated Oil In Place reserves in the lease area exceed 1 billion barrels. The exclusive option to participate in the venture is exercisable by Flair within the next 60 days.

Under the terms and conditions of the LOI, the parties have entered into confidential substantive negotiations for the completion of definitive Joint Venture and Operating Agreements among the working interest partners. These final negotiations are expected to be concluded within the next 90 days.

Heavy oil was discovered in California before the year 1900 and current production of approximately 400,000 barrels of heavy oil per day represents about half of the present California crude oil production. Original total reserve of California heavy oil resource of 77 billion barrels has a remaining reserve of over 62 billion barrels to be developed using improved methods of recovering heavy oil. Many reservoirs have over 90% of the original oil in-place remaining to be developed with modern oil recovery systems. Market prices for California heavy oil have averaged $60 per barrel in 2006 and represent a strategic energy supply for the USA.

This news release includes forward-looking statements that reflect Flair Petroleum Corporation's current expectations about its future results, performance, prospects and opportunities. Flair Petroleum Corporation has tried to identify these forward-looking statements by using words and phrases such as "may", "will", "expects", "anticipates", "believes", "intends", "estimates", "should", "typical", "we are confident" or similar expressions. These forward- looking statements are based on information currently available to Flair Petroleum Corporation and are subject to a number of risks, uncertainties and other factors that could cause the corporation's actual results, performance, prospects of opportunities in the remainder of 2007 and beyond, to differ materially from those expressed in, or implied by, these forward-looking statements.

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