Gastem Inc.

Gastem Inc.

September 29, 2009 17:26 ET

Gastem Signs New Agreement for New York State Properties

MONTREAL, QUEBEC--(Marketwire - Sept. 29, 2009) - Gastem is pleased to announce that it has signed a final Amendment to the New York Participation Agreement of January 2008 between Gastem USA Inc. and Utica Energy LLC. The purpose of this agreement is to modify Gastem's earn-in rights, duties and obligations to certain leasehold assets held by Utica Energy through its managing member, Covalent Energy, in New York State as stated in the terms of the Letter of Intent dated August 12, 2009.

As previously announced, (see August 13th 2009 press release), Gastem and its wholly owned subsidiary, Gastem USA, will pay $35,000 USD, drill and complete a key exploratory vertical well (i.e., the Ross No. 1) and provide 3,500,000 common shares of Gastem stock vested over a period of six months, subject to regulatory approval, to Utica Energy. Gastem will pay 100% of the drilling and completion of the first well. Upon Gastem completing all of the above, Gastem will have acquired an 80% interest in the 34,150 acres, which includes recently obtained leases. Utica Energy will retain a 2% ORRI in existing leases and in new leases within the area of mutual interest in New York State. Utica Energy also retains participation rights to a 20% working interest in new land acquisitions within the area of mutual interest.

This Amendment to the New York Participation Agreement also governs the conduct of drilling, completion, and stimulation, and testing operation for the earn-in well, Ross No. 1 and the execution of an AAPL Model Form 610 (1989) Joint Venture Agreement. The Ross No. 1 well was spud September 16th in Otsego County and Gastem is the operator.

Gastem (61,044,000 shares outstanding) is an independent oil and gas exploration and development company based in Montreal. The company holds exploration and storage permits and rights to 3,135 km2 in the St. Lawrence Lowlands, the Gaspe Peninsula and the Magdalen Islands in Quebec as well as rights and interests in New York State and in Appalachia.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information