Junex inc.

Junex inc.

October 18, 2006 13:13 ET

Junex and Gestion Bernard Lemaire are drilling a fourth well on the Galt region

MONTREAL, Oct. 18 - Junex (JNX : TSXV), and its partner
Gestion Bernard Lemaire announce that the Junex-Lemaire-Baillargeon No. 1
well, located south of Mount Galt about 20 kilometres from the city of Gaspé,
has reached a depth of 1,500 meters.

Oil and gas shows were encountered during the drilling of the well and
subsequent drillstem tests identified two zones with oil and gas shows at
1,345 meters and 1,445 meters. Due to these positive results, the partners
plan to case the well down to a depth of 1,300 meters that will permit the
deepening of the well to a depth of about 1,700 meters. The goal of these
operations is to evaluate a greater thickness of the lower zone of interest.
Casing and cementing operations will commence within the next two weeks after
which drilling operations will resume.

The Baillargeon No. 1 well is located at the intersection of faults where
a maximum of secondary porosity could have been generated. The geological
objective of this well is to test postulated dolomitic breccias within
Devonian-aged limestones below a depth of 1,150 meters. The integration of
current drilling results with seismic data and aeromagnetic data permitted
Junex's technical team to interpret that other potential zones of interest,
similar to those identified at 1,345 and 1,445 meters, might have been
developed deeper at this location. Evaluations presently underway will be
useful in better characterizing the zones of interest already identified.

Junex and Gestion Bernard Lemaire are equal partners in the Galt
exploration permit that covers a total area of 16,803 acres. In the past few
years, approximately 50 line-kilometers of seismic data have been acquired and
three deep wells have been drilled in this area. The Galt No. 1 (natural gas)
and Galt No. 3 (natural gas and oil) wells both produce small quantities of
hydrocarbons. The drilling of this fourth well in the Galt area was based upon
Junex's geological model that integrated all the data obtained until present
from the previous wells.

Nicolet property

Junex also announces that a lawsuit has been instituted against it by
Fairlady Energy Inc. before the Québec Superior Court. In its action, Fairlady
is seeking the return of the Nicolet property and $100,000 in damages. At this
preliminary stage, Junex's defence has not been filed with the court. Junex
considers the action by Fairlady to be ill founded in fact and in law and
intends to defend the action vigorously.

The Nicolet property is the subject of a joint venture agreement entered
into between Junex and Fairlady in December 2001, whereby Junex acquired
Fairlady's interest in three oil and gas permits. Junex does not count the
Nicolet property as one of its major properties since it is only 22,000
hectares in areal extent (1.4%) compared to more than 1.6 million hectares
where the company holds some rights. Moreover, Junex is not currently carrying
out material operations on the Nicolet property and the property is not among
Junex's properties subject to the two separate agreements with U.S.-based
companies as announced by Junex in July 2006.

Contact Information

  • JUNEX:
    Jean-Yves Lavoie, P. Eng.
    (418) 654-9661

    Dave Pépin
    Vice-president Corporate Affairs
    (418) 654-9661