TrueStar Petroleum Corporation

TrueStar Petroleum Corporation

October 05, 2005 15:05 ET

TrueStar Announces Three New Horizontal Wells

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 5, 2005) - TrueStar Petroleum Corporation (TSX VENTURE:TPC) -


Management is pleased to announce the resumption of its drilling activity in the Barnett Shale with participation in three new horizontal wells.

TrueStar Petroleum Corporation ("TrueStar") has closed on US$2.25 million in short term debt financing with Macquarie Bank Limited. The proceeds will pay drilling costs associated with the three new horizontal wells in the Barnett Shale, certain maintenance costs associated with mining assets, certain outstanding payables and other working capital purposes. "While arranging a long term financing solution, an opportunity arose to recapture significant interests in three new horizontal wells already drilled or proposed in the Barnett Shale. Macquarie Bank Limited was able to provide quick access to short term capital to take advantage of this opportunity. This renewed access to capital, backed by longer-term funds, allows TrueStar to resume its business strategy and should accelerate our financial performance in the near term," said Robert E. Chamberlain, Jr., CEO and CFO of TrueStar. The Company expects to close on a much larger, comprehensive long term credit facility in the near term to finance further development of its Barnett Shale assets. "Our development program can now resume, and Truestar can realize the value of its Barnett Shale assets," commented Charles A. Kohlhaas, Chairman of TrueStar. This is a significant milestone event for the Company as management begins to escape the problems created by a lack of capital in the past. "With access to development capital, the Company intends to aggressively add to its inventory of horizontal wells in the Barnett Shale. The current spread between finding and development costs for natural gas in the Barnett Shale and market prices is compelling," added Mr. Chamberlain.

TrueStar will retain an approximately 55.00% working interest in the Prairie Meadows #1H horizontal well (Tarrant County, Texas); an approximately 41.29% working interest in the Cates Partners #2H horizontal well (Denton County, Texas); and an approximately 43.75% working interest in the Hennessey #1H horizontal well (Tarrant County, Texas); subject to the right of Eagle Oil & Gas Co. to participate on a non-promoted, non-carried basis as an approximately 6.66% working interest owner in the Hennessey #1H horizontal well (If Eagle elects to participate in the Hennessey #1 horizontal well, our working interest participation would drop from approximately 43.75% to approximately 37.09%). The Prairie Meadows #1H and the Cates Partners #2H horizontal wells have been drilled and are awaiting fracture stimulation and completion. The Hennessey #1H horizontal well is expected to begin drilling next week.

Mining Assets

A portion of the proceeds of the short term financing is expected to be used to maintain the value of TrueStar's mining assets which are currently under review by an independent third-party consultant. Management will announce its intentions with respect to these assets after final recommendations from the consultant have been reviewed by the Board of Directors.

About TrueStar

The Company's focus is on the efficient development of hydrocarbons in North and Central America while maintaining high standards of environmental responsibility. TrueStar now has interests in 27 producing natural gas wells (19 vertical and 8 horizontal). Working interest partners involved in the Company's various acreage holdings include publicly-listed Devon Energy (NYSE:DVN) and Carrizo Oil &Gas (NASDAQ NM:CRZO), along with other privately-held entities. TrueStar Petroleum Corporation is an oil and gas exploration and development company.

About Macquarie Bank Limited

Macquarie Bank Limited was established in 1969 and is a bank incorporated under the laws of Australia. Macquarie has reported successive years of record profits and growth since 1992, and now employs over 6,800 people in 23 countries. Macquarie leads, arranges and places billions of dollars of finance through the capital markets, bridging arrangements, long and short-term underwritings, bank syndications, subordinated debt placements and other arrangements and financings. The bank is an arranger of and participant in property financing transactions, infrastructure, resource projects, corporate and structured finance. They have leasing arrangements that fund a multitude of asset classes and lend as a principal in many areas.


Charles A. Kohlhaas, Chairman of the Board

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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