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  WellStar Energy Corp. has identified a high reward play concept (Virgo Zama), with the opportunity for low cost reserve addition and high productivity wells in a recompletion and drilling situation. Virgo Zama has substantial land available for growth and development and significant infrastructure in place. In the mid 1960's the "Zama/Virgo" pinnacle reef play was discovered. The area was characterized by smaller sized reefs with very thick pay sections. Many of the historic and producing wells have produced in excess of one million barrels of oil. The smaller Virgo-Zama wells originally drilled employed the 2-D seismic technology available at that time. The wells were difficult to spot and even more difficult to center on the crest or apex of the reef where the thickest oil pay would be encountered. Many wells missed the crest and "sideswiped" the reef down the flank. Utilizing 3-D seismic technologies in later years, fewer crestal misses occurred, but much of the basin was previously developed. In the present day, many low-risk opportunities exist to re-drill wells and get structurally higher on the pinnacle reef, thus draining the unproduced oil (drain "attic oil" left behind). Drill Location 13-22 In January, 2006, production commenced on WellStar's first well, 13-22-114-6 W6M. The well was re-entered and successfully completed. A production battery with the design capability of 2000 b/d of fluid was constructed. Production commenced with the well flowing clean oil at an initial rate of 190 barrels per day (net 95 b/d), on 6 mm choke at an average flowing wellhead pressure of 2200 kPa (g). After the installation of a pumpjack and bottom hole pump in March/April, the first well is back on production. The well has averaged 154 barrels per day of fluid in 9 days of production, with approximately 20% water cut (approximately 62 bopd net to the Company). The Company's cost to re-enter and complete this well total approximately $885,500 to July 31, 2006. WellStar's interest in 13-22 is 50% Before Pay Out ("BPO") and 32.5 % After Pay Out ("APO") subject to Crown and farmor royalties ranging from 5% to 22.5%. The Virgo-Zama area has been a prolific producer of oil and gas from Devonian Keg River reefs. The four prospects are all define by 3D seismic and all proposed wells offset former producers in existing pools. Drill Location 12-22 In May 2006 the Company successfully re-entered and drilled its second well, 102/12-22-114-6 W6M. This well is the second well on the lease of which the Company's interest is 50% BPO and 32.5 % APO, with 17.5% subject to a Gross Over-riding Royalty of 15% on gas and a Sliding Scale (1/23, 5%-15%) royalty on oil. In July 2006 this well was completed. The well was equipped with production equipment and began production. The well was swabbed and tested over a six day period for a total of 48 hours and produced 80 m3 of oil. This corresponds to a swab rate of 35.4 m3 per day or 222 bopd. Stabilized production rates are expected to be approximately 50% of the swab rate. The Company's costs to re-enter, drill and complete this well, total approximately $1,278,320 to July 31, 2006. The Virgo-Zama area has been a prolific producer of oil and gas from Devonian Keg River reefs. The four prospects are all define by 3D seismic and all proposed wells offset former producers in existing pools. Drill Location 7-22 The Company's third well, 102/7-22-115-5 W6M, was drilled and cased in early June, with production commencing in late August 2006. The Company's interest is 75% BPO, and 48.75% APO, subject to a Gross Overriding Royalty of 15% on gas and a Sliding Scale (1/23, 5%-15%) royalty on oil. The re-drilled well targeted the Keg River Formation, 70 meters north-west of the original well and encountered and undrained oil reservoir at the new location. Production to September 3, 2006 has averaged 90 barrels per day oil from 169 barrels per day of fluid. The Company's costs to drill and complete this well to July 31, 2006 total approximately $947,810. The Virgo-Zama area has been a prolific producer of oil and gas from Devonian Keg River reefs. The four prospects are all define by 3D seismic and all proposed wells offset former producers in existing pools. Photos
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