Gastem Inc.

Gastem Inc.

May 07, 2007 13:32 ET

Gastem to Drill Two Wells on its Yamaska Property

MONTREAL, QUEBEC--(CCNMatthews - May 7, 2007) - Gastem (TSX VENTURE:GMR) is pleased to announce that site preparation for the Gastem Saint-Francois-du-Lac No. 1 well is now completed with spudding scheduled later this month. On May 15th, the spring thaw road ban is expected to be lifted and the contracted Precision Drilling rig should be moved to the site shortly after.

The Gastem Saint-Francois-du-Lac No. 1 well is the first of two wells to be drilled back-to-back by Gastem on the company's 470 km2 Yamaska Property. It will be a vertical well through the Ordovician shale formations with the Utica Shale as a primary target. Gastem intends to drill into the Trenton-Black River Formations for conventional gas reservoir and storage reservoir potential. Proposed target depth is 1,800 meters. As per the February 2007 farm-in agreement, Gastem's partner, a major US independent, may undertake testing, fracturing and horizontal drilling as well as completion of the Utica shale Formations for both wells. Site preparation for the second well should begin on May 20th.

Shale gas production in North America has previously been focused on Devonian and younger shales. The older (Late Ordovician) Utica Shale is now receiving increased attention and is considered the next prospective shale gas play in the Appalachian basin (New York State and the Quebec Province). The Utica consists of thick, calcareous black shales deposited in a foreland basin during the Taconian Orogeny. It is known as a source rock and has yielded numerous gas shows in fractured intervals in previous wells in Quebec. Results of core and log analysis will help assess the shale gas potential of the Utica in the area and define the petrophysical properties of the rock, thus facilitating future programs and possible production.

Gastem (TSX-Vx; 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 has prospects for near term revenue from a participation in the Amber Bank shale gas project with Epsilon Energy in West Virginia.

Epsilon Energy is a private gas exploration company with present production estimated at some 1,700 mmcf in 2007 from the Appalachian Basin. It may soon be listed on the Toronto Stock Exchange.

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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