Gastem Inc.

Gastem Inc.

September 24, 2007 13:30 ET

Gastem to Drill Joly for Gas and Storage

MONTREAL, QUEBEC--(Marketwire - Sept. 24, 2007) - Gastem (TSX VENTURE:GMR) is pleased to announce that it has signed a farm-in agreement with Intragaz on the Joly Property, 50 km South West of Quebec City. According to the terms of the agreement, Gastem has the option to drill a first well before December 1st 2007 and the second well before December 1st 2008 in order to earn a 50% interest in the production of natural gas and a 49% in the operation of gas storage on two Intragaz permits (2002PG669 and 2005PG788) totaling some 140 km2. Both wells have target depths of approximately 1,200 meters.

The Joly area of the St-Lawrence Lowlands Cambrian-Ordovician basin is considered highly prospective for natural gas production and underground storage. Joly is directly adjacent to the existing St-Flavien gas field and storage facility operated by Intragaz. The current Joly prospect was identified by Intragaz following integration of the 2005 seismic interpretation to the existing data set, and the two proposed wells aim to further define the prospectivity of the target structure, a gas cap within the toe of a thrusted carbonate platform sheet. Within this thrusted sheet, the main objective is a distal carbonates facies composed of very porous oolitic limestone levels.

Gastem is enthusiastic about partnering in this new venture with Intragaz, the established mid stream player in the natural gas industry in Quebec. Gastem, the operator, will proceed rapidly to prepare the drilling of the first well which, at present, it expects to spud in mid-October.

Gastem (40,681,255 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 on 24 wells. Other projects are also being developed.

On its St Lawrence Lowlands Yamaska permits, Gastem drilled two wells this summer in order to further evaluate and validate the prospectivity of the Ordovician Utica shales. This work program was undertaken with a major US producer. At present, the company is waiting for core analysis and other test results from laboratories which will aid in the design of completion and future development of our permits.

Intragaz is a partnership between Gaz Metro and Gaz de France that specializes in the research, development and operation of underground natural gas storage facilities in Quebec. It operates the only two such facilities in Quebec, Pointe du Lac and St Flavien for a total storage capacity of 5 bcf.

Paul Laroche, P.Eng, Geo., author of an evaluation report of the Joly structure for Gastem is the qualified person responsible for the preparation of the Yamaska technical information of the present release.

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

Contact Information

  • Gastem Inc.
    Raymond Savoie or Marc-Andre Lavoie