Gastem announced that 3 drill permits for vertical wells were granted by the New York authorities to partner Covalent Energy, now called Utica Energy. Gastem USA, a wholly owned subsidiary of Gastem, plans to proceed with the drill program with the objective of evaluating the Utica Shale potential on land in the southern area of the State.
Gastem USA is presently reviewing the drill program prepared last year and expects that it will start drilling the first well as soon as possible. Besides evaluating Utica Shale potential, the company intends to also core the Marcellus and log the full vertical interval including the Oneida formation. Pipelines and related infrastructures are in immediate proximity. Studies compiled by our experienced Utica Geology Team on both successful Utica Energy test wells drilled in 2007 along with related area shale characteristics cumulated over the past year have to date confirmed the potential of the area.
As a result of the on-going permitting review by authorities in New York State and general market conditions, Gastem USA and Utica Energy are presently discussing modifications to the February 2008 Agreement. A revised agreement is expected to be completed shortly.
All Gastem operations in Appalachia are owned, administered and directed by Gastem USA, a wholly owned subsidiary of Gastem.
Gastem Chairman and CEO, Raymond Savoie, commented, "We anticipate the initial drill program will clearly establish favorable economic conditions from multiple pay zones in the column we are targeting. We look forward to initiating our drill program on the first well as soon as possible."
Gastem (61,044,000 shares outstanding) is an independent oil and gas exploration and development company based in Montreal. The company holds exploration and storage permits and rights to 3,135 km2 of land in the St. Lawrence Lowlands, the Gaspe Peninsula and the Magdalen Islands in Quebec as well as rights and interests in New York State and in Appalachia.
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