CHICAGO, Feb. 25, 2004 (PRIMEZONE) -- American Stellar Energy, Inc. (AMRS-NQB-PS) is pleased to confirm that an agreement to develop the Corsicana Oil & Gas project has now been signed with Armen Energy Corp., the project operator. In addition, the funding for Phase 1, which initiates the development of the Corsicana Project, has been received and the permitting process will now be commenced. It is expected that this process will take 2 to 3 weeks, allowing for drilling to commence shortly after the permit is secured.
The initial well is 3,600 feet, in good position to test three target zones, 2 exploratory and one development. The two exploratory zones are the Woodbine (3,000 ft deep) and Wolfe City (2,000 ft deep) sands. If these zones are found to be prolific, wells in the Woodbine or Wolfe City could produce from 50,000 to 150,000 barrels of oil (bbl) per well, over the life of the well. The development zone is a known oil bearing zone, the Pecan Gap (1,700 ft deep).
Pecan Gap completion is applying modern fracturing completion to an old tight oil zone which has flowed oil naturally in the 1950's with initial production rates from 76 bbl/day to 2 bbl/day from numerous wells surrounding the location and on the prospect acreage.
Using modern completion and stimulation technologies one can expect at least a two to four fold increase of initial production rates, as compared to naturally flowing oil, in the Pecan Gap oil zone. Expected potential production from a successful well is estimated at 15 to 40 bbl/day, per well, from the Pecan Gap zone, with an above average chance of success to complete and produce oil.
If any of the three potential zones are successful, 20 to 50 addition wells could be drilled on the existing acreage. American Stellar Energy intends to fully develop its interests in this prospect.
Financial statements for the period ending December 31, 2003 have been delivered to the company accountants for review, prior to being forwarded to the company auditors. The completion of filings of 10-Q's for 2002 and 2003 and a 10-K for 2002 is expected over the course of the next few weeks and the 10-K for 2003 would therefore be filed in this quarter. The Company has been in contact with a corporate sponsor accordingly, to prepare an application for reinstatement to the OTCBB.
Shareholders will be pleased to hear that an article on the company was included in the latest issue of the Struther's Micro-Cap Report, an independent newsletter covering small mining and energy companies. Struther's complete report may be viewed at the following link: www.playstocks.net/Feb0-3amrs.htm .
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.