Silver Star Updates Corporate Accomplishments
LOS ANGELES, CA, Oct. 13, 2004 (MARKET WIRE via COMTEX) -- Silver Star Energy,
Inc. (OTC BB: SVSE) today reports on the recent accomplishments that have been
achieved by the Company. The exploration and development of oil and natural gas
reserves throughout western North America undertaken by Silver Star by the
development of high quality and low risk oil and gas prospects has been ongoing
since January 2004. Silver Star has achieved success through key strategic
alliance partnerships as well as experienced oil and gas professionals in both
Canada and the U.S.
Silver Star and partners have been developing the North Franklin Project and the
tie-in of the "Archer-Whitney #1" natural gas well that is now a near-term
commercial gas producer. The North Franklin Project and the underlying newly
discovered Winters gas reservoir contains the "Archer-Whitney # 1" well. Once
shortly connected to pipeline, Silver Star will be in a cash flow positive
situation and a commercial gas producer. The natural gas pipeline and ultimate
tie-in and connection of the Archer-Whitney #1 gas well to pipeline at the North
Franklin Project continues to progress. The Company still expects the physical
excavation of the pipeline and installation to take several weeks. Following
construction, the Archer-Whiney #1 well will be tied in and gas production will
commence. Silver Star will immediately announce details at tie-in of the well.
As previously announced, a contract is in place with a natural gas purchaser.
Once connection and tie-in is completed, the well will be evaluated as to
I.P.R.'s (Initial Production Rates). Silver Star is optimistic that gas flow
rates will be similar to area analog gas fields and that 5,000 mcf/day is a
realistic target.
Silver Star continues to work closely with the operator and the generators of
the play as to future well locations, reserve estimations and overall reservoir
engineering as we move closer to the commencement of commercial gas production.
In the Sacramento Basin region, gas pricing is based on PG&E-Citygate prices
that have consistently been at levels between $6.00 and $7.00 per mcf. With gas
prices being notoriously low over the summer, Silver Star expects pricing to
rise through the upcoming fall and winter months. When the gas reserves are
established at North Franklin, Silver Star will be able to take advantage of
additional sources of financing such as bank loans on "proven undeveloped"
reserves. This will give the Company more flexibility in the financing of future
endeavors.
Silver Star has prioritized the North Franklin Project as it will bring the
Company the quickest return of cash flow. In Alberta, the Company is continuing
to work with TransAction Oil and Gas Ventures that has engineered, prepared and
sent to Silver Star an A.F.E. for a "fracture stimulation" program at Evi.
Silver Star anticipates the implementation of this recommended program shortly
and remain convinced that the "7-11" well will be a commercially viable oil
well.
The Company has recently been informed by Transaction that the Alberta
Government has granted the Company on EVI lands SE 1/4 11-87-11W5M that surround
and include the 7-11 well a "continue indefinitely" pursuant to Section 15 of
the P & NG Tenure Regulation. This means the well and lands are "held by
production" to the base of the Slave Point formation.
Silver Star is pleased with this newly granted status and the validation by
Alberta Energy that production now holds the Evi lease for Silver Star in
perpetuity. As the Company has reported, the fracture stimulation program
designed and engineered by Transaction for the 7-11 well is scheduled to begin
within 45 days, prior to the onset of winter conditions in the Peach Arch
region.
As reported last month, Silver Star has begun the development program on the
Joarcam Project, located southeast of Edmonton, Alberta. With the Energy
Conservation Board of Alberta having classified the Joarcam "4-27" well as a
Viking "C" pool producer and a previously untapped reservoir, this new discovery
status of the Joarcam lands reinforces the potential of Joarcam as a low risk
development property with oil at a shallow depth and with a short payback period
and long life reserves.
Silver Star and TransAction have developed A.F.E.'s on two well locations. These
have been engineered, surveyed, permitted and licenses for the wells are
pending. The drilling program at Joarcam is planned for the Q4 exploration
program and Silver Star is committed to the drilling and completing a minimum of
two wells by year-end. With $50 per barrel oil, the profitability of the Joarcam
light crude production increases making the economics very attractive. With up
to 16 well locations that can ultimately be drilled at Joarcam, it is
anticipated that the field could produce 500 barrels of oil per day (bbls/d) if
fully developed.
The Company recently executed acquisition and joint operating agreements on five
(5) natural gas prospects in California. Silver Star has joined in an
exploration project on these prospects located throughout the Sacramento Basin.
Silver Star is a 7.5% carried working interest on four of the prospects and has
acquired a 25% carried working interest in the fifth. Silver Star, under the
terms of the agreements is carried through the drilling and completion of the
first well on each of the five prospects. These acquisitions by Silver Star are
the culmination of many months of work by the Company and partners. The
cumulative potential natural gas reserves in the five newly acquired prospects
are in excess of 100 Bcf. Gas. Each separate gas play has been chosen as a
moderate risk, high probability of success gas target with good quality seismic
anomalies in known gas producing formations. There is 3D Seismic information,
good geological control and analog fields spread throughout the basin. The
drilling of the first prospect is targeted in Q4 (weather dependent).
Of significance to Silver Star is that the Company is carried on all costs
related to the prospect through the licensing, permitting, drilling and
completion of the first well on each project. In the event of a successful gas
well being drilled, Silver Star would then, following testing and completion be
responsible for the working interest costs of well tie-in and pipeline. Silver
Star would also then be a working interest participant on any additional gas
wells drilled.
To-date, Silver Star has raised sufficient capital to fully fund oil and gas
exploration projects in Alberta and California. Silver Star relies on the
expertise of the Company's management, strategic alliance partners and industry
consultants to ensure the authenticity of its reporting. The disclosure of
Company activities via news releases is fully reviewed by Silver Star's
corporate attorney, legal counsel and third party engineers prior to
dissemination. All statements regarding oil and gas reserves are from arms
length, third party reservoir engineers.
Silver Star is committed to increasing shareholder wealth through development of
quality oil and gas properties. The Company is committed to "growth by the drill
bit," so that the projects we acquire offer realistic returns in the short-term,
along with long-life oil and gas reserve potential.
ON BEHALF OF THE BOARD
Silver Star Energy.
"Robert McIntosh"
Robert McIntosh-President
To find out more about Silver Star Energy, Inc. (OTC BB: SVSE), visit our
website at silverstarenergy.com
Corporate Information:
1-888-803-SVSE (7873)
Investor News: Long Communications 1-866-739-6727
Silver Star Energy, Inc.
SOURCE: Silver Star Energy, Inc.
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