Freestone Resources Inc. would like to address the progress made during the last quarter of 2007 and reveal the ongoing and future projects online for 2008. The officers and directors of Freestone have been diligently working on several diversified projects for the last several months, however due to obvious ethical concerns have been unable to publicize these works.
At this time, we can now discuss the exciting developments that have come through several months of due diligence and hard work. To date, Freestone Resources representatives have used Petrozene in over 30 down-hole well treatments and approximately 50 tank battery treatments with outstanding results. Through these treatments we have gained an invaluable and intimate knowledge into the factors affecting the use of this chemical and more importantly, its potential uses.
Our marketing strategy, as previously discussed, has been to show that we can use a "GREEN" technology to increase domestic oil production and increase production efficiency, by dispersing paraffin and asphaltene restrictions and build-ups. Research has also shown that Petrozene is also an anti-corrosive and can rid pipe of scale deposits and prevent future formations. This information has led to talks with a large oil and gas service company that wishes to use Petrozene in the pigging of existing pipelines, which would be a major contract. There are also three companies that are now in the research phase of using Petrozene in conjunction with other new technologies to increase oil recovery rates in several different conventional and non-conventional oil reservoirs. These cooperative projects have already spawned great contacts throughout the oil and gas sector and have put Freestone's name into greater circulation among the industry's elite.
Currently, Freestone representatives have just completed the down-hole treatment of approximately 20 shallow oil wells in the South Texas oil fields. The wells in these two leases averaged .25 to .5 BOPD before treatment. Two weeks post-treatment, these wells now average 3.5 BOPD per well. This has been confirmed with treatments in other South Texas wells, which exhibit the same type of asphaltene restrictions. After recording this increase, Freestone directors believe they can increase shareholder value by capitalizing on this information. To do this, Freestone will move from merely marketing Petrozene and acting as a chemical service company, to actually becoming more involved in oil production ownership.
Obviously, this is nothing new to Freestone, as we are currently producing the Carroll Unit #1 in Freestone County, Texas. With Petrozene utilization in the South Texas oil wells we are dealing with different types of formations and specific gravities of oil produced. We are targeting wells with large initial production, followed by a fast rate of decline due to the gravity of the oil and porosity of the formation. Leases purchased in this field with multiple well-bores, and optimal well characteristics, could yield 6 to 12 month ROIs. We have already proven these numbers to several investors and have currently entered into a verbal agreement with one such financier. This verbal agreement has been consummated with a large good-faith monetary exchange, and is now in the final construction phases, before binding contracts are signed. Obviously, names cannot at this time be disclosed, however, we can insure that the well-being and profitability of the company will be greatly enhanced by this relationship. This arrangement will not only yield needed capital for lease acquisitions, but will also allow Freestone access to invaluable resources within the financier's private companies. Upon the closing of this agreement, Freestone will be able to move forward in acquiring several leases we have been researching for the past 6 months, which fit the characteristics that are the most optimal for Petrozene treatment, thus yielding the greatest increase in production and increase in profits.
Finally, Freestone will reveal the independent lab results showing Petrozene's effect on oil viscosity. This is very exciting data which could potentially open huge markets to Freestone. These tests have been run twice already and are currently being replicated at a private petrochemical lab in Texas. We expect to have the final results in hand within 7 days and be able to summarize the results and explain the ramifications in full detail soon.
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