RedStar Oil & Gas Inc.

RedStar Oil & Gas Inc.

March 28, 2006 13:28 ET

RedStar Oil & Gas Inc. Increases Production to 1,800 BOED and Announces $2.1 Million Seismic Sale

CALGARY, ALBERTA--(CCNMatthews - March 28, 2006) -

Not for distribution to U.S. newswire services or for dissemination in the United States of America.

CALGARY, ALBERTA--(CCNMatthews - March 28, 2006) - RedStar Oil & Gas Inc. (TSX VENTURE:RED) (TSX VENTURE:RED.NV) ("RedStar" or the "Company") is pleased to provide the following update.


- RedStar increases its production rates to 1,800BOE/D (10.8 mmcf/d);

- An additional 5 net wells are in the process of being completed and tied in for production; and the

- Completion of a $2.24 ($2.1 net) million dollar seismic sale ($72,000/square mile).

RedStar has enjoyed record growth as it continues to add to its production base. With the addition of 4.0 net successful natural gas wells the Company is currently producing approximately 1,800 BOE/D. Looking ahead, the Company has 5.0 additional net wells remaining to be completed and tied-in which will further add to production from its recent winter drilling program. RedStar is successfully executing its business plan and looks to exit 2006 between 2,100 BOE/D and 2,500 BOE/D.

RedStar's first quarter 2006 operations will provide the majority of its reserve additions. With several new pools identified the Company will complete a reserves update and evaluation, which will be finalized once the winter operations are complete.

RedStar is also pleased to announce today that it has completed the sale of a portion of its Cutbank 3-D seismic data to another oil & gas producer. Approximately 31.2 square miles of the data was sold for gross proceeds of $2.24 million ($72,000 per square mile), approximately $1.85 million net cash, after transaction fees, will be available to be redeployed within the Company. RedStar continues to have the proprietary ownership of the 3-D seismic totaling approximately 400 square miles at the Cutbank Ridge area. The seismic shoot was a joint venture initiative with a large independent producer.

Cautionary Statements

Certain information set forth in this document, including management's assessment of future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond this party's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Actual results, performance or achievement could differ from those expressed in, or implied by, these forward-looking statements, and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits will be derived there from. RedStar disclaims any intention or obligation to update or revise any forward-looking statements that are a result of new information, future events, or otherwise.

Per barrel of oil equivalent amounts have been calculated using a conversion of six thousand cubic feet of natural gas to one barrel of oil equivalent (6:1). (Barrel of oil equivalents (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf:1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.)

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

Contact Information

  • RedStar Oil & Gas Inc.
    Chester J.R. Krala
    (403) 262-3130