TrueStar Petroleum Corporation

TrueStar Petroleum Corporation

September 09, 2005 10:23 ET

TrueStar Petroleum Corporation: Reserve Report, Financial Results and Other News

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 9, 2005) - TrueStar Petroleum Corporation (TSX VENTURE:TPC) -


Reserve Report

TrueStar Petroleum Corporation is pleased to announce that a new gas reserve evaluation for the Company's Barnett Shale assets reports a 37% increase of proved reserves from December 31, 2004 to August 1, 2005.

Robert E. Chamberlain, Jr., the Company's CEO stated, "This reserve report emphasizes the quality of the Company's assets in the Barnett Shale, which have substantial value relative to the Company's market capitalization. Although our development program was severely hampered by a lack of rig availability and capital during the first half of the year, the Company was nevertheless able to establish this growth."

Charles A. Kohlhaas, Chairman, added, "With this report we can move forward with our late-stage financing negotiations for development capital. In addition, the operator of the Barnett Shale assets has mitigated schedule risk substantially by buying and refurbishing a rig. This rig and a contract rig are now in the field aggressively re-activating the development program that is a key component of our growth strategy."

The reserve evaluation was prepared by Harper & Associates, Inc. of Fort Worth for the working interests of Trinity Barnett, LLC, a wholly-owned subsidiary of the Company, the same engineering firm that prepared the December 31, 2004 report. Revenue from estimated future production is based on the average wellhead gas and condensate prices for January thru May 2005. The gas price forecast is $7.00 per MMBTU for the life of the well. Proved Undeveloped reserves were estimated using 90-percentile well type curves as are used for Canadian reporting.

The Reserve Report states that the total proven gas reserves, across all categories, is 25.1 BCF, up approximately 37% from 18.3 BCF reported as of December 31, 2004. The total value of the reserves, based on future expected cumulative net income under these and other assumptions, discounted at 10%, is US$56.6 million. This reserve analysis does not include the additional acreage acquired in April 2005, but does include three wells that started production in the second quarter, 2005.

Financial Results for Quarter Ended June 30, 2005

The Company reported gas, natural gas liquids and crude oil sales of $1,942,290 for the quarter ended June 30, 2005, up approximately 53.8% from reported sales of $1,262,796 for the quarter ended March 31, 2005, due primarily to higher volumes of product and higher sales prices.

For the quarter ended June 30, 2005, the Company reported sales of 195,373 MCF of gas, 15,787 MCF of natural gas liquids, and 1,291 barrels of crude oil from Barnett Property production in the United States. The Company reported consolidated net loss for the quarter ended June 30, 2005 of $244,898, an improvement of $380,425 over the consolidated net loss of $635,323 reported for the quarter ended March 31, 2005. Cash flow from operations before net changes in non-cash working capital items relating to operations for the quarter ended June 30, 2005 was $482,040, a significant improvement over the $(37,850) reported for the quarter ended March 31, 2005.

Charles A. Kohlhaas said, "The Company's improvement quarter-to-quarter comes despite a halt in drilling operations due primarily to a lack of capital, lack of a rig, and other corporate distractions now involved in litigation. Management expects renewed access to capital will allow the Company to resume its business strategy and accelerate improvement over the near term."

Resignation of Director

On September 1, 2005, J. W. Rhea, IV tendered his resignation from the Board of Directors effective September 6, 2005 to pursue other interests. Mr. Rhea resigned as President and Chief Operating Officer of the Company on May 26, 2005. The Board of Directors had asked Mr. Rhea to remain on the Board through a transition period which has now come to its intended completion. The Board would like to take this opportunity to thank Mr. Rhea for his invaluable service and wish him success in his future endeavors. Mr. Rhea will continue to be available to provide assistance to the Company on a variety of issues on an as-needed basis.

Mining Assets

The Company has commenced the evaluation of its mining assets in California and Nevada to determine, from a variety of alternatives, the optimal course of action to maximize shareholder value in relation to those assets.

Investor Relations Contract

Through mutual agreement and understanding, the Investor Relations Services Contract with Nathan Hansen, dated June 3, 2005 (the "Agreement") has been terminated, effective immediately. Mr. Hansen will continue to provide his expertise and assistance to the Company on an as-needed basis.

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 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.


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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