WellStar Energy Corp.
TSX VENTURE : WSE
FRANKFURT : W6V1

WellStar Energy Corp.

October 11, 2006 11:04 ET

WellStar Announces Production Status

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 11, 2006) - WellStar Energy Corp. (the "Company") (TSX VENTURE:WST)(FWB:W6V) announce today the current status of the Company's Virgo/Zama Oil and Gas project located in Alberta, British Columbia, as reported by project operator Warburg Resources.

The Company has the right to earn a 50% interest BPO and a 32.5% interest APO, in three properties, and a 45% and 30% interest in a fourth property ranging from 5% to 22.5%. In June 2006, WellStar has assumed a partners' interest (25% BPO and 16.25% APO) in the third well, 102/7-22-115-5 W6M, increasing WellStar's interest in the third well to 75% Before Pay Out, and 48.75% After Pay Out. The wells are subject to a Gross Overriding Royalty of 15% on gas and a Sliding Scale (1/23, 5% -15%) royalty on oil.

Well #1 - 13-22-114-6 W6M, commenced production in January 2006. The well was re-entered and successfully completed. A production battery with the design capability of 2000 b/d of fluid was constructed. Production commenced with the well flowing clean oil at an initial rate of 190 barrels per day (net 95 b/d), on 6 mm choke at an average flowing wellhead pressure of 2200 kPa.

After the installation of a pumpjack and bottom hole pump in March/April, the first well is back on production. The well has stabilized at approximately 110 barrels of fluid per day at 60% water cut (approximately 42 bopd net to the Company).

Well #2 - 102/12-22-114-6 W6M, was successfully re-entered and drilled in May 2006. This well is the second well on the lease of which the Company's interest is 50%, with 17.5% subject to a Gross Over-riding Royalty of 15% on gas and a Sliding Scale (1/23, 5%-15%) royalty on oil. In July 2006 this well was completed. The well was equipped with production equipment and began production on July 26. The well was swabbed and tested over a six day period for a total of 48 hours and produced 80 m3 of oil. This corresponds to a swab rate of 35.4 m3 per day or 222 bopd. Initial production rates of 110 bopd (clean) have not maintained. The well is believed to have an inflow restriction and will be re-worked as soon as practical.

Well #3 - 102/7-22-115-5 W6M, was drilled and cased in June, with production commencing in late August 2006. The Company's interest is 75% Before Pay Out ("BPO"), and 48.75% After Pay Out ("APO"), subject to a Gross Overriding Royalty of 15% on gas and a Sliding Scale (1/23, 5%-15%) royalty on oil.

The re-drilled well targeted the Keg River Formation, 70 meters north-west of the original well and encountered and undrained oil reservoir at the new location. Net production to WellStar to September 3, 2006 has averaged 90 barrels per day oil from 169 barrels per day of fluid.

For the second quarter ended July 31, 2006, the Company had the following oil production from Well #1 and #2;

Net Oil Production (before Royalties) 2913 bbls

Daily Oil Production (before Royalties) 32 bopd

The daily rate reflects the startup of the wells late in the quarter and downtime due to the installation of production related equipment. Operational days on production are expected to increase for the third quarter, as all three wells are in production. When the proposed work-over on 12-22 is completed we expect full production for all three wells.

Preparations are currently underway to drill two additional wells at the project by year-end 2006.

On Behalf of the Board of Directors

Andrew H. Rees, President, CEO

This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the corporations control which may cause actual results, performance or achievements of the corporation's to be materially different from the results, performance or expectation implied by these forward looking statements.

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

Contact Information

  • WellStar Energy Corp.
    Andrew H. Rees
    President, CEO
    (604) 682-3737
    (604) 629-0688 (FAX)
    Website: www.wellstarenergy.com