Brownstone Closes Piceance-Uinta Basin Purchase and Begins Operations

Brownstone Ventures has successfully concluded the purchase of interests in 267 oil and gas leases covering 254,068 net acres (397 sections of land) in the Piceance and Uinta Basins of Western Colorado and Eastern Utah at a total cost to Brownstone of US$6,770,923 in cash and the issuance of 2,606,767 common shares, issued to Retamco Operating Inc. In addition, Brownstone has paid to Dejour Enterprises Ltd. a finder's fee of 89,662 common shares and has granted Dejour a 2.5% back-in right, which, upon well payout, on a well-by-well basis, will reduce Brownstone's to 10% on a 77.5% net revenue interest.

The Acquisition

The project consists of two project types. The "Natural Gas Resource" project is a well defined stratigraphic gas resource, covering 188,422 net acres containing low geologic risk natural gas assets plus the opportunity for deeper Jurassic reserves. The second project is a massive deep "Overthrust Oil" project covering 65,646 net acres in the Northern Piceance/Uinta Basins with a high reward potential and commensurate risk. According to Retamco, the project has prospective resource estimates of 2 billion barrels of oil, and is directly analogous to the Rangeley field located immediately adjacent, having produced over 1 billion barrels to date.

Brownstone now owns a 10% net working interest in the Natural Gas Resource project and a 10% net working interest in the Overthrust Oil project. Leasehold acreage NRI is 80%, subject to the back-in right described above Brownstone will pay an unpromoted proportionate share of all exploration expenses including seismic, drilling, completion or abandonment and equipping.

Agreements are currently being finalized to include an additional partner, with significant Piceance Basin operating capability.

The Program

Brownstone, Dejour and Retamco are currently conducting a systematic geologic and operational review of the properties with the intent of scaling up a continuous drilling program that includes utilizing up to 4 rigs capable of drilling 36-40 wells per year and with an annual capital budget approximating USD$40,000,000. Drilling is estimated to commence in Q4, 2006.

Recent Piceance Basin Land Activity

In February 2006, Berry Petroleum Company ("BRY":NYSE) announced that it had completed the acquisition of a 50% working interest in natural gas assets in the Grand Valley field in the Piceance Basin for approximately USD$159 million for 6,314 gross acres. In June 2006, Berry Petroleum announced a deal with EnCana Oil & Gas (USA) Inc. ("ECA":NYSE), to jointly develop a portion of EnCana's North Parachute Ranch property in the Piceance Basin. Berry will fund the drilling of 90 natural gas wells on EnCana's valley lands and will acquire 4,300 gross acres elsewhere in the North Parachute Ranch property with a working interest of 95% and a net revenue interest of 79%.

In July 2006, Marathon Oil ("MRO":NYSE) announced the purchase of 8700 acres in the Piceance Basin, with no production, for USD$354 million (USD$41,000/ acre).

Also in July 2006, Galaxy Energy Inc. ("GAX":AMEX) announced the sale of a 25% working interest in 6000 acres (USD$ 33,333/acre) with only 3 producing wells for USD$50,000,000.

These transactions strongly endorse the values paid by Brownstone and its partners (USD$400/ acre) for their 254,000 net acres of Basin holdings. With natural gas prices on the rebound to USD$7.50/mcf from recent lows, the potential for upward revaluation of these holdings continues to be self-evident.

About Brownstone - Brownstone Ventures Inc. ("Brownstone") is a Canadian based, energy focused investment company with equity investments in uranium (through its holdings in Mega Uranium Ltd.) and oil & gas. As well, Brownstone has direct interests in oil and gas exploration projects.


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