News & Updates

Mr. Robert Sim reports

MAIDSTONE DRILLING PROGRAM COMPLETED PRIVATE PLACEMENT ANNOUNCED INCENTIVE OPTIONS PROPOSED

Petrostar Petroleum Corp.’s Ensign Tri-City rig No. 45 has now successfully completed the drilling of A16-6-48-23 W3M horizontal well to a length of 1,850 metres, terminating in the McLaren formation in a five-metre-thick, oil-saturated pay zone. Initially, this second well will be an oil producer and, in the future, it is planned to convert this well to water injection for the proposed pressure maintenance and enhanced recovery scheme. The two horizontal wells are being completed with production facilities to be initially produced to temporary battery facilities, with a permanent battery facility to be installed at the A16-6 location with oil emulsion treating, production/storage/shipping tanks, flow lines and a water injection station. Flow rates will be available in the near future. A third 1,250-metre McLaren horizontal wellbore is planned for the southern portion of the lease. This will be a vertizontal recovery system (VRS) well drilled from a surface location at A9-6- 48-23 W3M toward the west, adding horizontal legs to the existing A10-6, A11-6 and A12-6 wells that will capture considerable volumes of interwell oil reserves. The combination of the two parallel horizontal wellbores, one in the north and one in the south portion of the lease, together with the parallel horizontal injection well midway in between the horizontal producers, will improve sweep efficiency and thus recovery of the oil reserves. Water injection will increase the reservoir pressure resulting in increased production rates and recovery volumes from the two new horizontal and eight existing vertical wells.

The company also plans a non-brokered private placement unit offering for up to 5,000 units. Each unit will consist of 750 flow-through common shares and 250 non-flow-through common shares in the capital stock of the company, and 1,000 non-transferable share purchase warrants for a unit subscription price of $200 per unit. Each warrant will entitle the holder thereof to purchase one additional common share of the company, which will not be a flow-through share, for a period of two years following the date of completion of the offering at a price of 25 cents per warrant share in the first year and at a price of 35 cents per warrant share in the second year.

The company intends to grant a total of 2,345,000 incentive stock options to its officers, directors and consultants. The options proposed will be exercisable for a period of two to five years at a price of 20 cents per share and subject to required vesting periods.

We seek Safe Harbor.