TrueStar, Petron Team Up on Guatemalan Project

TrueStar Petroleum Corp. has formed a joint venture with Petron Resources, LP, an independent, Texas based, oil and gas exploration company, to explore and develop the PSC 4-93 license area in Guatemala.

PSC 4-93 is a highly prospective 554,000-acre land package located in the central region of the country, close to existing producing fields and pipeline infrastructure.

"PSC 4-93 is a significant opportunity, especially for a junior oil and gas company, to exploit a potentially world-class producing asset," said Dick Shuster, President and CEO of TrueStar Petroleum. "With peace, good governance and contractual law restored, now is the time to refocus our efforts in Guatemala. This region, which is well serviced by infrastructure, is an extension of the Peten Basin, Mexico's primary producing region."

Under the terms of the agreement, Petron will provide $11 million in funding for seismic and drilling commitments in exchange for an interest in the prospect.

Previous Work at PSC 4-93 Will Help with Planned Exploration

In 1981, the San Diego exploratory well discovered oil in the Coban Formation between 7,000 and 8,000 feet. Approximately 145,000 barrels were produced from this well during various tests. The oil was found to be 36 degrees API and free of contaminants. An internal estimate for potential reserves was calculated but that estimate does not meet currently acceptable regulatory reporting standards for proven reserves.

As such, new exploratory wells will be drilled, the first to twin the initial well. The license includes 200 line miles of seismic data that has identified other suitable targets. TrueStar has analyzed this data and, as a result, expects to put further exploratory wells into the San Diego structure. Additionally, the data reveals the likely existence of two other structures; these structures will be priority targets.

The wells are forecast to be drilled to a depth of approximately 9,000 feet at an approximate cost of US$4.0 million per well. In spite of increased drilling worldwide, rigs and crews are available. Pipelines with a capacity of approximately 60,000 bpd cross TrueStar's property; additionally a 30,000 bpd pumping station is located on the license area.

It is anticipated that final documentation for the project will be completed by the end of April and field level activities will commence in the third quarter of 2007.

"The ability to leverage the 4-93 License with the technical expertise of Petron will create a very strong project for both companies," said Shuster.

Recent meetings with various parties within the Guatemalan government agree that this is a project that will be beneficial to the country as it will mean additional revenue for the country and jobs for the people of Guatemala.

TrueStar Petroleum Corporation is an oil and gas exploration, development, and production company. TrueStar has interests in 33 producing gas wells in the Barnett Shale gas play in Texas and a 10% interest in a license for oil and gas development on 554,000 acres in Guatemala, and is waiting the reassignment of the remaining 90% interest in the 554,000-acre License. Working interest partners in Texas include publicly listed Devon Energy, Carrizo Oil & Gas, and EnCana.