2010 FIELD PROGRAM AND INITIATION OF PILOT CBM PRODUCTION PROGRAM FOR LIUHUANGGOU PROJECT
Monday, 27 September 2010
Vancouver, B.C. September 27, 2010 – The board (“Board”) of directors (“Directors”) of Petromin Resources Ltd. (“Company”) is pleased to announce that TerraWest Energy Corp. (“TWE”), reports approval of the 2010 field program and the initiation of work for the Liuhuanggou Project (“2010 Program”).
The Liuhuanggou Project, covering 653 square kilometers (255 square miles; 163,200 acres) in the southern Junggar basin of Xinjiang, the People’s Republic of China (“China”) operates under the a production sharing contract (“PSC”) dated 30 December 2005 entered into between TWE and China United Coalbed Methane Corporation Limited (“CUCBM”).
The 2010 Program involves drilling and production testing of up to ten (10) pilot production wells. The wells are planned to produce coalbed methane (“CBM”) from target coal seams as well as natural gas from shale. TWE has completed the engineering design for well completions and expects to perforate and fracture (stimulate) target formations as part of the program. TWE will also initiate pilot testing at two (2) locations drilled previously. The LHG 08-01 and 08-03 wells are ready for testing and it is expected that the work will begin immediately. Pilot production will test large-scale production rates en route to full commercial development of the PSC area.
TWE holds the first and to date only fully approved CBM PSC in Xinjiang which is considered to be among the most attractive CBM exploration areas in the world based on known coal resources and regional economic development plans of the central government of China. The 2010 Program will be the first CBM pilot production under a production-sharing contract in western China.
Drilling contractors in China have been arranged and are mobilizing to the site at this time. In addition, service providers are arranging for the delivery of service rigs and associated equipment to initiate well testing at the two (2) existing wells. The Company has professionals in Xinjiang at present preparing for the program.
The 2010 Program was approved by the board of directors of TWE and subsequently approved by the joint management committee for the Liuhuanggou Project. The joint management committee includes executives from both TWE and PetroChina Coalbed Methane Company Ltd. (“PCCBM”).
As at the date hereof, the Company holds approximately 27.49% of the current issued shares of TWE and provides professional services under the terms of management agreement with TWE. TWE holds a 47% interest in the PSC with CUCBM holding 53%. TWE operates and PCCBM administers the PSC. Under the terms of the PSC, CBM is defined as all gas stored in four (4) named geologic formations of Jurassic age to a depth of 1,500 meters.
China is actively encouraging the development of CBM and other unconventional natural gas and has put various policies in place to encourage investment and development of resources. The central government of China has also announced an aggressive policy of economic and energy development for the region of Xinjiang.
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.
By Order of the Board
PETROMIN RESOURCES LTD
A. Ross Gorrell
Co-Chairman and Chief Executive Officer