Petromin Resources Ltd. - Greatly increased gas content combined with very thick coal in two formations confirmed in initial results of 2009 CBM drilling
Petromin Resources Ltd. - Greatly increased gas content combined with very thick coal in two formations confirmed in initial results of 2009 CBM drilling

Wednesday, 26 May 2010

Petromin Resources Ltd. (TSX.V: PTR) ("Petromin" or the "Company") is pleased to announce that Terrawest Energy Corp. ("TWE") has reported positive results of gas desorption testing of drill core samples from its Liuhuanggou CBM Project in Xinjiang, China.

As previously reported, the 2009 drilling program included testing coal drill core samples taken from both the Xishanuyao ("J2X") and Badaowan ("J1B") formations.

Well LHG 09-03 was drilled to total depth of 726 meters ("m") and intersected over 50m (165 feet) of J2X coal. Coalbed methane ("CBM") desorption testing was initiated as planned and the results indicate the J2X to have greater gas content than previously anticipated. Gas content as calculated to the end of March 2010 ranges from a minimum value of 30.08 standard cubic feet ("scf")/ton ("t") to a maximum of 268.69 scf/t. The readings confirm the final desorption results from well LHG 08-01 which had shown higher gas content results for the J2X particularly the upper 4-5 and 9-10 seams where desorption results of 53.62 to 199.92 scf/t and 53.74 to 243.32 scf/t, respectively, were measured. The gas content results for the J2X are especially encouraging when combined with the thickness of the coal seams. J2X net coal seam thickness has been calculated to average 25.74m (85 feet). Net thickness is calculated by correcting intersected thickness for formation dip and observed mineral partings.

The initial gas desorption results for the J2X from 2006 exploration drilling had ranged to a maximum of 100scf/t in wells LHG 06-01 and LHG 06-02.

Desorption results for J1B coal samples taken from wells LHG 09-01 (749m total depth) and LHG 09-02 (844m total depth) indicate the J1B coal to be generally higher in gas content than the J2X as test results are reported to range from 105.98 to 335.43 scf/t and 86.74 to 350.49 scf/t, from the two wells respectively. The multiple J1B coal seams have an average net aggregate thickness of 19.15m (63.2 feet).

Each of the two target formations represents a viable CBM prospect on a stand-alone basis. Taken together, the total average net thickness of the two coal seam packages (44.9m or 148.7 feet) and the latest gas content results represent a unique CBM prospect in the world when compared with major CBM producing or exploration basins. Reported gas contents and seam thicknesses are for coal only and do not include other formation rocks or coal seam surrounding rocks which were sampled and analyzed separately. These other rocks including shale are being analyzed at labs in North America.

CBM desorption testing of the coal samples was completed by the Laboratory of the Xinjiang Coal Bureau in Urumqi, Xinjiang, China under the guidance of Norwest Corporation of Calgary, Canada. Norwest Corporation designed and supervised the drilling and coal drill core sampling program and provided the gas content figures reported herein to TWE. Norwest also conducted the sampling and preparation of samples of other rocks including shale.

(A comparison of net coal thickness, production well spacing and gas content between Junggar Basin and other major CBM producing basins around the world is presented below.)

                  (Comparison of CBM Reservoir Characteristics of
                  Junggar Basin and Major Producing Basins)

                                                Typical  Typical    Annual
                                      Typical     Well     Gas       Basin
                                      Net Coal  Spacing  Content   Production
       Basin  Formations Description    (m)     (Acres)  (scf/t)    (2006)
     San Juan  Fruitland  Bituminous    20-25    320      430        1 Tcf
       USA                   Coal
      Black    Pottsville Bituminous     8-10     80      350       127 Bcf
     Warrior                 Coal
    Piceance   Williams   Bituminous    20-25   60-80     750        4 Bcf
       USA       Fork        Coal
      Raton     Raton,    Bituminous      10     160      350       105 Bcf
       USA     Vermejo       Coal
      Western  Horseshoe  Sub-bit/low   10-15     80       60     323 Bcf*
     Canadian    Canyon    Vol Bit C
      Surat    Walloon   Bituminous       20     160    125-350 Not available
    Australia               Coal
      Kutai    Pranget      Sub-          20     tbd      50+      Not in
    Indonesia            bituminous                      (est)   commercial
                            Coal                                 production
    TWE Liuhuanggou Project under the PSC
     Junggar  Xishanyao Sub-bit/low     25.74   80-160  30-269
    Xinjiang   (J2X)     Vol Bit C           (Potential)
              Badaowan  Sub-bit/low     19.15   80-160  50-350
               (J1B)     Vol Bit C           (Potential)
              J2X+J1B                    44.9   80-160  30-350

Sources: US GRI, 2004; Stevens, S. "Indonesia Coalbed Methane Indicators and Basin Evaluation", 2004; Robert W. Day, Coal seam gas booms in eastern Australia, June 2009


TWE holds a 47% interest in the Liuhuanggou Production Sharing Contract (PSC) executed in December 2005 with China United Coalbed Methane (53%). TWE is operator of the PSC, which cover 653 sq km (255 sq miles or 163,200 acres). Administration of the PSC has passed to PetroChina Coalbed Methane Company Ltd. The PSC defines CBM as all gas mainly consisting of methane (CH4) in four named geologic formations of Jurassic age to a depth of 1500 meters (4950 feet).

About Petromin Resources Ltd.

Petromin is progressive international petroleum and natural gas exploration and Production Company listed Tier 1 on the TSX Venture Exchange. 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. Petromin currently owns a 30% interest in TWE and provides professional services under the terms of a management contract with TWE.

On Behalf of the Board of Directors

Dr. A Ross Gorrell

Co-Chairman and President

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