Gastem Inc.

Gastem Inc.

June 07, 2007 14:12 ET

Gastem: Progress Report on Yamaska and General Update

MONTREAL, QUEBEC--(Marketwire - June 7, 2007) - Gastem (TSX VENTURE:GMR) is pleased to report on-going exploration and development activities.

St-Francois-du-Lac No1: Drilling is progressing at the St-Francois-du-Lac No1 well on the Yamaska property (St-Lawrence Lowlands). The well is now at 860 m and is on schedule in spite of significant gas shows. As previously stated, the objective is to drill to the Ordovician Utica Shales at 1,200 m depth in order to test for characteristics and production capacity. Intermediate casing will be set shortly and coring will be undertaken in the Utica. Target depth for the well is 1,800 m within the Trenton Black River formation and should be attained later next week. To date, no water has been encountered and all indicators are on line with expectations.

Gastem intends to return later to the 465 m level for testing where a substantial and maintained gas kick (about 7,000 kPa) was encountered in the fractured Lorraine shales. Gas from this interval produced a 2-3 m flare for several days until the drilling mud was weighted up to control gas flows. Gastem expects to encounter additional gas occurrences as drilling continues.

Site preparation for the proposed second well at St-Louis-de-Bonsecours has been completed.

Amber Bank, West Virginia : At present, all 24 wells in which the company has a participating interest have been drilled. Gastem expects that almost all of the wells to be tied in soon. Gastem obtained a 25% interest from Epsilon Energy equivalent to 8 to 12% interest in these wells (see March 30th press release).

Reserve estimates, production revenues and schedule are being prepared and are expected to be available in July as stated previously.

Dundee : A permit wide geochemical survey was completed across the Dundee Permit Block (St-Lawrence Lowlands) by Vista Geoscience of Denver, Colorado. Gastem has previously drilled several shallow wells in the area, with significant gas shows from the shallow Ordovician Theresa and Beauharnois carbonate formations establishing the presence of thermogenic gas with primary and secondary porosity in the area.

The Geochemical survey is designed to detect trace quantities of hydrocarbons trapped in the soil, along with the concentrations of certain elements associated with HDT structures. The survey comprises almost 600 individual sample points across the whole block and will effectively leak test any reservoir structures that may be present. Gas sample analysis data from the successful Gastem Dundee No1 well have been used to configure the geochemical sample processing method, therefore increasing the potential of identifying Ordovician age gas seeping into the topsoil.

Matapedia: Gastem has contracted Vista Geoscience to undertake a detailed geochemical survey in the Matapedia North Block (Gaspe Peninsula) following the Dundee Geochemical Survey. The Matapedia North survey comprises a total of 740 samples taken at a depth of 50cm and will samples will be analysed for traces of long chain hydrocarbons indicative of seeps from oil reservoirs. The survey is to take place on the part of the block situated to the north of the Sainte-Florence Fault in the heart of the Chik-Chok Mountains. The survey will tie in with several recent seismic surveys on the block and will measurably increase our understanding of the hydrocarbon potential in this relatively unexplored area.

The company is also looking at other production opportunities in West Virginia and Alberta.

Gastem (38,048,050 shares outstanding) is an independent oil and gas exploration company based in Montreal. The company holds exploration and storage rights to 3,135 km2 of land in the St. Lawrence Lowlands and the Gaspe Peninsula in Quebec as well as rights and interests in Alberta and West Virginia. In 2007, Gastem expects near term revenue from a participation in the Amber Bank shale gas project with Epsilon Energy in West Virginia.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.

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