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TerraWest successfully drills two wells and identifies additional CBM targets on its China CBM lands
 
TerraWest successfully drills two wells and identifies additional CBM targets on its China CBM lands

Wednesday, 11 February 2009

TSX.V Symbol: PTR

    VANCOUVER, Feb. 11 /CNW/ - Further to our October 14, 2008 news release,
TerraWest Energy Corp. ("TWE") is pleased to announce it has successfully
drilled two large diameter CBM wells on its Liuhuanggou lands in NW China.


    The objectives of the two well program were to:

    -  Drill and log to 800 meters and complete a permeability test on the
       Jurassic J2X coal formation;
    -  Initiate production testing (gas flow testing) of the J2X;
    -  Drill, log and case to 1500 meters to complete a stratigraphy test and
       ascertain the depth of the deeper, unexplored coal formations;
    -  Sample deeper coal formations for gas content analysis; and
    -  Consider completion options for the cased wells.
 

    Well LHG 08-1 was drilled to approximately 800 meters, cased to the top
of the thick J2X coal seam and an injection falloff test completed to test
coal permeability. A small scale production test was initiated on the 30 meter
open hole section of the J2X and was operated for several days before shutting
down due to winter conditions. Production testing will resume in the spring of
2009.

    The LHG 08-03 well was drilled, logged and cased to 1500 meters. As
planned, the well intersected additional targeted formations with multiple
coal seams. Samples were taken from both the J2X and the intersected deeper
formations and will be analyzed for gas content over the next few months.

    TWE will be evaluating the data from these two test wells during the
winter period in preparation for the 2009 program.

    The Production Sharing Contract dated December 30, 2005 ("PSC") is
jointly owned by TWE with a 47% interest and China United Coalbed Methane Corp
with 53%, covering 655 square kilometers (255 square miles), bordering the
city limits of Urumqi, in the province of Xinjiang. The PSC is located on an
existing petroleum and natural gas lease held by PetroChina Company Limited.

    The city of Urumqi has recently completed its gas pipeline infrastructure
for residential use of natural gas and has indicated to TWE that it does not
have enough gas to fill its needs and would welcome any opportunity to secure
any long term supply when available.

    Also the second transnational West East pipeline currently under
construction runs through the area covered by the PSC, and the Chinese
Government favors and encourages the production of CBM gas by giving CBM
natural gas producers: 1) preferential pipeline access over conventional gas;
2) a price subsidy of approximately US$1.00 per thousand cubic feet (mcf) for
gas sold; and 3) a value added tax rate reduction and rebate on production as
well as a corporate tax exemption for a certain period. The Chinese Government
has deregulated CBM natural gas such that producers have the right to
negotiate their own contracts and sell produced gas directly to end users.

    Petromin Resources Ltd. is a major shareholder in TWE and provides
professional services under the terms of a management agreement with TWE.


On behalf of the Board of Directors

Dr. Ross Gorrell

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