Gastem partner completes 3 St. Lawrence lowlands wells

2009-02-24 09:29 EST - News Release

Mr. Raymond Savoie reports

GASTEM: REPORT ON YAMASKA WELLS BY OPERATOR

Gastem Inc.'s operating partner on the Yamaska permit, Canadian Forest Oil, presented in its 2008 financial and operational results, a brief project update on its work program on the Utica shale properties.

The update states: "Forest drilled and completed the first three horizontal Utica shale wells in Quebec's St. Lawrence lowlands, which were successfully cased and fracture stimulated in four stages, with rates ranging from 100 to 800 thousand cubic feet per day. Frac-load flowback was incomplete due to the lack of coiled tubing units in the area. Forest expects to continue to test its wells after the winter season is over.

Although sustained rates were not as high as anticipated, the tests have allowed Forest to identify the section of the shale it intends to target in future test wells. Each of the wells were tested in different sections of the Utica shale, with an objective of gathering data on productivity to allow optimization of future completions. Furthermore, Forest proved the ability to successfully drill the wells horizontally and pump multistage slickwater frac jobs without major operational issues."

Two of the three horizontal wells were drilled and completed on the Yamaska property at Saint-Francois and Saint-Louis, and are considered an important step forward in the validation of the Utica. Further testing work is currently being planned on Yamaska after this winter. As with any other new and developing shale play, it is to be expected that well productivity will improve with knowledge gained.

"The multistage frac results are very good, although flowback needs to be improved," said chairman and chief executive officer Raymond Savoie. "Gastem looks forward to continuing this initial horizontal well test program on Yamaska, with the aim of substantially improving deliverability."

On its recently acquired participation on the Saint-Hyacinthe permit, located to the southwest of Yamaska, Canbriam and Gastem are currently preparing a three-vertical-well program designed to test the Utica and Loraine shale sequences this summer and fall. Saint-Hyacinthe is contiguous and geologically analogous to Yamaska, and the location of the test wells is in the process of being selected to facilitate potential pipeline tie-ins.

Gastem's planned 2009 exploration program is fully financed from the company treasury, and has sufficient funds to carry exploration and development well into 2010.

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