Premium Adds 3 Lines of Seismic Data on its Boyne Lake Discovery

Premium Petroleum has acquired an additional 3 lines of seismic data totaling 20.47kms (12.71 miles) in length, on lands on or adjacent to the discovery well on its Boyne Lake Flowing Oil Sands Discovery. The company now has acquired 13 lines of seismic totaling approximately 51.47 kilometers (32 miles) in length.

Seismic utilizes sonic imaging technology. The objective of the seismic acquisition program is to create a picture of the geologic structure, which emerges from the processing, and interpretation of the seismic data. It becomes particularly meaningful when the seismic picture collaborates with geologic mapping. This collaborating evidence provides a powerful tool in determining anomalies and optimum drill location(s) within those anomalies. Therefore, seismic becomes an important guide or tool in the acquisition of additional lands.

Premium now owns 19 sections (12,160 acres) of Crown Oil Sand licenses; with original terms of 15 years, contiguous to or in the vicinity of the Boyne Lake Flowing Oil Sands discovery.

Management was anticipating that the primary target "Upper Grand Rapids" zone would contain natural gas reserves, similar to nearby wells. This zone was perforated, and gas was absent so a temporary cap was placed on the well. After 5 or 6 days the well was checked again, only to discover approximately 250 meters (800 foot) head of oil was present in the well bore - evidence that Oil Sands had been encountered, and that it was Flowing Oil Sands. In accordance with Alberta Energy's designation, the project is categorized Oil Sands; located in the southern part of the Cold Lake Oil Sands district.

The significance of Flowing Oil Sands is that expensive mining and recovery methods are unnecessary, as conventional pumping methods can be used for recovery of the oil.

As no one else in the area is producing oil from this Upper Grand Rapids zone, we have made a New Pool Discovery.

Management continues analysis for the optimal drilling program to exploit the pool. It is anticipated that horizontal drilling technology will be utilized, and according to our in-house engineering calculations, could result in production rates ranging from 100 to 120 b/d.

Boyne Lake Flowing Oil Sands Prospect is located approximately 100 kilometers (62 miles) northeast of Edmonton in the Province of Alberta, Canada.