Petrostar Petroleum Corporation

Petrostar Petroleum Corporation

October 14, 2005 14:02 ET

Petrostar Petroleum Corp./Maidstone Project Update : Financing for Major Development Program Proposed

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 14, 2005) - The Company (TSX VENTURE:PSC) has completed the initial work-over of the previously suspended Maidstone15-06-48-23 W3M well as scheduled . The completion involved perforating the McLaren Sand, installing artificial lift equipment and surface production facilities. Load fluids have been recovered and initial production rates are in the order of 60-65 barrels per day ("BOPD"). The well, drilled on 40 acre spacing, allows the Company to re-designate approximately one-half million barrels of original-oil-in place ("OOIP") in the production spacing unit from "proved non-producing" category to "proved producing". A second suspended well, 9-6-48-23 W3M, drilled on 40-acre spacing is scheduled for a similar completion program and equipment is being assembled to perform the operation. This well is also expected to produce oil from the McLaren Sand and, if successful, will further increase the proved producing reserves and daily oil production. Should production rates from this well not meet expected targets, consideration will be given to utilizing the well for water disposal/injection to alleviate reservoir pressure decline and reduce operating costs for disposal of water production from Company wells. Produced water is presently being trucked and disposed in off-lease injection wells owned by others.

The Company plans to issue, through a non-brokered private placement, up to 6.000,000 units (the "Units") of the Company at a price of $0.20 per Unit for a total of $ 1,200,000. Each Unit consisting of one common flow through share (a "Flow Through Share") in the capital of the Company and one non-transferable share purchase warrant. Each full warrant will entitle the holder thereof to purchase one additional common share of the Company for a period of two years following the closing date at a price of $0.25 per share in the first year and $ .30 per share in the second year. The placement is expected to close mid November and the funds available to proceed and complete the planned work program on or before mid December. The private placement is subject to the acceptance of the TSX Venture Exchange and all shares issued thereunder will be subject to a 4-month hold period.

The funds are being raised to proceed with further development of the Maidstone project that will involve the drilling the first of two horizontal wells at a cost of approximately $ 1,100,000 per well. The proposed program is intended to recover significant additional volumes of oil from the reservoir. Two 1,200 meter (3,640 foot) parallel well bores ("Vertizontal® wells") are planned within the pay zone, each interconnecting four existing vertical producing wells. It is planned to drill a horizontal injection well midway between and parallel to the two Vertizontal® producing wells for injection and pressure maintenance. The Vertizontal® System referred to here is a patented drilling and production method that utilizes existing industry techniques that have been developed over the past few years. Production fluids are routed in the opposite direction in the horizontal well bore to existing or newly drilled vertical wells. The McLaren Sand is considered to be ideal for the application of this technique that results in improved reservoir sweep efficiency with a corresponding improved recovery. It is estimated that approximately 2.28 million barrels or 41 % of the OOIP will be recovered utilizing horizontal well bores in this manner.

The Company property is located near Maidstone in west central Saskatchewan. The property has been on continuous production since discovery in1979 with 300,000 barrels of oil or 5.4% of the estimated 5.52 million barrels of OOIP having been recovered. There are approximately 100 wells producing from the McLaren Sand in the area.

For additional information on the Maidstone Project, potential reserves and other details of the NI 51-101 Report on file, go to under Petrostar Petroleum Corporation or to the Company's website at


(Signed) "Robert A. Sim"

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

This press release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of failure to complete the proposed financing, failure to obtain necessary regulatory or shareholder approvals, exploration and other risk factors beyond its control and actual results may differ materially from the expected results

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