TerraWest Energy Corp. Provides Project Update & Favorable Results of Laboratory Tests
TerraWest Energy Corp. Provides Project Update & Favorable Results of Laboratory Tests

Monday, 16 November 2009

Petromin Resources Ltd. ("Petromin") (TSX.V:PTR): Petromin is pleased to announce that TerraWest Energy Corp. (TWE) has provided an update on its coalbed methane exploration activities at the Liuhuanggou Project in Xinjiang, P.R. China.

The Company has received the results of analysis of samples taken during drilling in late 2008. As previously reported, well LHG 08-03 intersected approximately 350m of Jurassic Badaowan (J1B) formation including a gas-bearing interval of approximately 170m before reaching total depth of 1500m. Samples were taken from the drill cuttings produced while drilling the well from depths of 1218-1445m and initially placed in special canisters for analysis of desorbed gas content. These tests were conducted in the city of Urumqi by Xinjiang Coal Geological Bureau Laboratory. Samples were then sent to The Lab Unit of the Exploration and Development Research Institute of Xinjiang Oil Company located in Karamay, Xinjiang where they were further analyzed for Total Organic Carbon (TOC) content and mineral composition, which are key characteristics of gas-bearing formations. TOC represents the total amount of material available to convert to hydrocarbons in the rock and exerts a strong influence on the adsorption capacity of the rock.

Results of the lab tests indicate TOC in J1B samples ranging from 0.9 to 11% with five of the samples ranging from 4.30 to 11.03%. The mean TOC level in samples is 4.47%. These are considered very positive analysis results.

TOC is a fundamental attribute of gas-bearing formations and is a measure of present-day organic richness. Values in producing North American basins vary, typically ranging from 1-10%. TOC in the prodigious, gas-producing Fort Worth Basin in Texas, USA is reported as variable with an average of 4.5%.

    Comparable Gas Basin TOC data:

    Natural Gas                             Total Organic             Quartz
    Producing Basin                  Age    Content (TOC)%              (Si)%
    Barnett . Fort Worth   Mississippian          1.0-4.5    greater than 50
    Ohio - Appalachian          Devonian          0.5-2.0              40-50
    Marcellus -
    Appalachian                 Devonian         3.0-10.0    greater than 40
    Lewis . San Juan          Cretaceous          0.5-2.5    greater than 40
    Fayetteville -
    Arkoma                 Mississippian          4.0-9.5    greater than 40
    Antrim - Michigan           Devonian         0.5-20.0              40-50
    Utica - Appalachian       Ordovician          1.0-3.1    greater than 40
    Badaowan - Junggar          Jurassic         1.0-11.0              40-50
    Canaccord Adams Inc., 2008; Canadian Society for Unconventional Gas,
    2009; AJM consultants 2009; Energy Resources Conservation Board/Alberta
    Geological Survey 2009.


Mineral composition is important in assessing the porosity of gas bearing rocks, as well as the brittleness, which affects the propensity for fracturing and stimulation of the reservoir prior to production. The mineral composition analysis of the J1B samples show quartz content of 36.59% to 53.85% with a mean value of 43.26% and a median value of 40.97%. Calcite and dolomite, which contribute to brittleness, have mean values of 3.80% and 2.05% respectively. Clay content which affects porosity and adsorption capacity of the rock, ranges from 9.58% to 17.87% with a mean of 12.18%. The Liuhuanggou J1B analysis results are encouraging in this regard.

The J1B formation represents a unique hydrocarbon opportunity because it is potentially both a hydrocarbon source rock and a reservoir. The Junggar Basin is similar to producing basins in other regions where gas is generated and stored in formations in three ways: as adsorbed gas on the microscopic organic matter; as free gas in the pore space and coal cleats and as free gas along fractures in the surrounding rock.

TWE is continuing with the 2009 exploration program and further drilling and sampling activities have been initiated.

On October 5, 2009, the drilling contractor spudded well LHG 09-01, well LHG 09-02 on October 7, 2009 and well LHG 09-03 on October 13, 2009 at locations identified during the geological reconnaissance survey completed in June 2009. The wells will each have a total depth of up to 850 meters along with a full program of core sampling and analysis.

Project management of the drilling and sampling is provided by Norwest Corporation of Calgary, Canada supported by local professionals and technicians. All drilling and support services are provided by local Xinjiang contractors.

As previously reported, TWE has also continued a gas flow test started in late 2008 and has also initiated pre-piloting engineering in the form of completion designs for both the J1B and J2X formations.

TWE holds a 47% interest with China United Coalbed Methane Corp., Ltd. holding 53% in the Liuhuanggou Production Sharing Contract (PSC), the administration of which has recently been passed to PetroChina Coalbed Methane Company Ltd. Under the terms of the PSC TWE has the right to explore for, develop, produce and sell coalbed methane which is defined as gas stored in certain named Jurassic-age geological formations to a depth of 1500m.

About Petromin Resources Ltd.

Petromin Resources is a progressive international petroleum and natural gas exploration and production company listed Tier 1 on the TSX Venture Exchange. Petromin is a major shareholder in TWE and provides professional services under the terms of a management agreement with TWE.

Petromin was ranked 24th of the Top 100 Fastest Growing Companies in BC by Business in Vancouver in 2009 based on a 704% revenue increase over the past 4 years.


On behaf of the Board of Directors,

A. Ross Gorrell

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