TrueStar Petroleum Corporation

TrueStar Petroleum Corporation

July 21, 2005 15:59 ET

TrueStar Petroleum Corporation: Board Approves Financing and Date of AGM and Discloses Claim

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 21, 2005) - TrueStar Petroleum Corporation (TSX VENTURE:TPC) -


Long Term Financing

Charles A. Kohlhaas, Chairman, is pleased to announce that the Board has received a term sheet for a Credit Agreement with a bank to borrow up to US$6.5 million for the repayment of certain loans, the payment for the costs of acquiring an additional approximately 1,667 gross acres in the Barnett Shale, the drilling/completion of Barnett Shale development wells, and for working capital and general corporate purposes. It is anticipated that the Company would refinance this Credit Agreement with the same Lender under a more comprehensive term loan facility which would also accommodate funding of the Company's future development requirements on its Barnett properties, as well as other assets of interest and opportunity. This contemplated financing would replace the previously announced Bank of America Credit Facility.

The acreage acquired is primarily in Tarrant County. Management believes the additional acreage acquired in the Barnett Shale will allow the Company to participate in an additional approximately 12 to 15 well locations, significantly enhancing its current inventory of well locations.

Short Term Financing

The Company is also pleased to announce that the Board of Directors has approved entering into Loan financing agreements for up to US$500,000 for working capital and general corporate purposes. The Loans are payable, at the option of the holder, anytime after the Company secures bank financing. As part of the financing, holders of US$500,000 in Loans will receive 500,000 Warrants. Each Warrant will entitle the holder to purchase one share at a price of CDN$0.46 per share for one year from the Closing Date. The number of warrants for each Holder will be reduced or cancelled on a pro-rata basis if the Loan is reduced or paid out in the first year.

Annual General Meeting

The Company is pleased to announce that it plans to hold the Annual General Meeting of its shareholders during the week of November 28, 2005 at a place to be determined at a later date.

Statement of Claim

The Company advises that a Statement of Claim for collection of certain payments has been filed against the Company with the Ontario Supreme Court of Justice by Optima Services International, Ltd. ("Optima") and Balaton Group Inc. ("Balaton"). The Company denies the responsibility for these payments.

As Optima has made these allegations in earlier discussions, the Company has already accounted for these claims in its financial statements for the year ending December 31, 2004 and the three months ending March 31, 2005.

It is the opinion of the entire board and its legal advisers that the claims are without merit. The Company intends to defend itself vigorously against this claim.

About The Company

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). Current net wellhead production from its interests in Barnett Shale wells is approximately 5.5 million scf/day. 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. The Company is an oil and gas exploration and development company.


Robert E. Chamberlain, Jr., Director

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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