CHICAGO, March 30, 2004 (PRIMEZONE) -- American Stellar Energy (Pink Sheets:AMRS): In a recent report obtained from Armen Energy on the Corsicana complex, Jerry Witte states, "About 3.5 miles south of the acreage, there have been several wells recently drilled for the Pecan Gap and completed with excellent oil rates. The wells were drilled and completed in 2001 to 2003 using modern sand and acid fracs and had initial production rates of 21, 60 and 80 BOPD from the Pecan Gap. The Pecan Gap they completed looks almost identical to the Pecan Gap under our acreage. I think this just shows that using modern completion and stimulation techniques we can expect good production rates from the Pecan Gap in our wells.
"The few wells completed in the Pecan Gap sand on our acreage in the 1950's, are indicative of a tight fractured formation. Initial production ranged from 76 BOPD to 8, 7, 6, 3, 1 and wells not completed because the formation appeared too tight for existing 1950's stimulation technology, is indicative of fractured rock. It was a hit or miss whether a vertical well would intersect a fracture and have high production rates, or miss the fractures and have low rates.
"Also, it appears all of the wells completed in the Pecan Gap were slim-hole completions. A slim-hole completion uses small diameter pipe (2.5 inches) to case the well and 1 inch production pipe within the casing, to complete the well. While typical of a shallow 1950 completion, this type of completion is very inefficient and has no room for error. Because of the lack of room, any mechanical problem associated with the completion was ignored or the well was junked.
"In addition, a promising new technology is available that will be used to stimulate and fracture the Pecan Gap in our wells. This technology called the GasGun(TM) is very cost effective and should maximize the chance of our wells to recover all the oil possible in a timely manner. This is a relatively new stimulation technology that uses a rapid high pulse of pressure in creating multiple radial fractures 10 to 100 feet from the well bore. This stimulation technology has been on the market since 1998 and is an offshoot product of solid fuel rocket research. The technology has been successfully used primarily in tight formations at shallow depth in the Appalachian and Illinois oil fields.
"The stimulation is cost effective, and generally shows a 400% to 2000% increase in initial production and continuation of high production rates, months after the stimulation. The development portion of our well, the Pecan Gap is perfectly suited for the GasGun. The formation is hard limy sand, oil filled, having good porosity (20 to 25% of the rock is fluid filled) but having low permeability, the connectivity between the oil filled pores."
Mr. Witte further stated, "I believe the GasGun technology will provide an excellent solution to stimulate the Pecan Gap formation within our acreage. The formation is oil filled, ranging from ten to twenty feet in thickness, and fractures exist within the formation."
Additional GasGun information and results of field tests can be seen at their web site www.TheGasGun.com.