Junex inc.

Junex inc.

September 08, 2005 08:00 ET

Junex annouces beginning of St-Simon drilling

QUEBEC CITY, Sept. 8 - Junex (JNX : TSXV) announces the
beginning of the final phase of the St. Simon natural gas exploration drilling
and the signature of a farm-out agreement with Pétrolia (PEA : TSXV) on this
project located 15 km west of St. Hyacinthe in the province of Québec.

The St. Simon project consists of re-entering a hole originally drilled
by Shell in 1969 to drill a window in the casing (140 mm.) at a depth of
approximately 2,380 meters. Drilling of the window began this morning with the
purpose being the deviation of the well in order to reach the target zone
tested by Shell in 1969. This sedimentary zone is located into the Beekmantown
dolomite, the same geological zone which has produced the St. Flavien gas

"Shell's well had encountered the presence of natural gas but no
commercial production was initiated at that time. Today's economical (stronger
natural gas price) and technical context (a pipeline now in operation at only
2.5 km from the well) combined with a new understanding of the geology,
convinced Junex to re-enter this well in order to test its commercial
production capacity and to evaluate the potential extension of the trap which
could potentially contain 100 Bcf of gas, according to our internal studies"
commented Mr. Jean-Yves Lavoie, P. Eng., President of Junex.

If the target zone is reached during the drilling, the partners of the
project will initiate a production test which will be completed in the coming

Farm-out agreement with Pétrolia

Junex has signed a farm-out agreement with Pétrolia on the St. Simon
project. In accordance with this agreement, Petrolia will receive a 10%
interest in the Shell St. Simon well currently under drilling and an option to
acquire a 10% interest into the production and development phase of this
project in case of a gas discovery. Junex received a $100,000 cash

"In all of its projects, Junex's strategy consists of carefully managing
the exploration risks. This deal with Petrolia, combined with the fact that
the drilling operation is run by our wholly own subsidiary Foragaz which
allows us to better control the cost of the drilling, is in line with our
strategy of diversifying the risks" commented Mr. Lavoie.

The partners in the St. Simon project are: Junex (80%), Gastem (10%) and
Pétrolia (10%).

About Junex

Active in the natural resources sector, Junex is a unique company in
Quebec since it is the only natural brine and natural gas producer in the
Province. In parallel to its production activities, located in the Bécancour
area (brine) and in Gaspé (natural gas), Junex continues its efforts to
develop a natural gas underground storage facility beneath the Bécancour
industrial park. With more than 4 million acres under exploration permit in
Quebec (including the permits held by Petrolia on which Junex holds a 50%
interest in future production), Junex is also the leading oil and gas producer
and explorer in the province. Junex also holds a 19% interest in the stock of
Petrolia (PEA : TSX Venture).

The TSX Venture Exchange has neither approved nor disapproved the
information contained herein.
%SEDAR: 00015378EF

Contact Information

  • Mr. Jean-Yves Lavoie, P. Eng.,
    Junex Inc.,
    (418) 654-9661;

    Mr Dave Pépin,
    Corporate affairs,
    Junex Inc.,
    (418) 654-9661