Mosser Dome Prospect, Montana

First Star acquired a 50% working interest in five infield wells to be drilled in the Mosser Dome and Blue Ridge fields, located in Yellowstone County, Montana.  Under the terms of the participation agreement, First Star agrees to pay $50,000 per well for the first two wells drilled on the property and $75,000 per well on the next three wells on leased lands totalling 1,040 acres.

In January, 2006, the first well, the Can Am #1 East Mosser well reached total depth of 988 feet.  A one day production test produced approximately 20 barrels of oil per day.  Production was suspended until further notice due to extremely cold weather conditions.  The well has been cased to the top of the Greybull formation at 985 feet and was completed as an open hole completion by drilling five feet into the pay zone.  Production testing will determine if the formation has been penetrated enough to encounter adequate permeability.  The operator, Antelope Resources Inc., has advised that no water has been encountered with the oil. 

The Company is currently constructing a new tank battery/treating facility on the property to be completed within a few weeks.  The battery will store oil for transport from this current well and all future wells to be drilled on the property.

Three separate oil shows were encountered during the drilling process.  The Muddy sand was encountered at 650 feet with 10 feet of sand that had good oil odour and florescence.  The Basal sand was encountered at 880 feet with a good oil show, good oil odour and florescence.  The primary target, the Greybull sandstone, (Mosser sand) was drilled into at 985 feet.  This zone continued until total depth of 990 feet was reached.  Good oil shows were observed with porosity increasing with depth. 

First Star acquired a 50% working interest in five infield wells to be drilled in the Mosser Dome and Blue Ridge fields, located in Yellowstone County, Montana.  Under the terms of the participation agreement, First Star agrees to pay $50,000 per well for the first two wells drilled on the property and $75,000 per well on the next three wells on leased lands totalling 1,040 acres.  First Star acquired its interest from Antelope Resources Inc. who will be the operator.  Antelope Resources Inc. will also pay for completion and tie-in costs on the first two wells.  All wells will be drilled to approximately 1,000’ feet. 

The Mosser Dome prospect is within the Mosser Dome field, which has produced approximately 456,000 barrels of oil since it was discovered in 1936.  Most production is from the Greybull formation which has an average net pay thickness of 28’ in the field area.  The Greybull Sandstone is regarded as the quartz-rich, lenticular unit below the Dakota Sandstone.  It was deposited by a large meandering stream on an alluvial plain.  Reservoir characteristics of the sand are excellent with an average porosity of 25% and permeability of about 2 darcys.  Previous wells in the area have produced from 20 to 100 barrels per day.  The Mosser Dome appears to be essentially a faulted half-dome.  The closing fault is a north-northeast trending normal fault which branches off of the Fromberg fault to the south.

The Mosser Dome drilling project is an infield drilling program with new wells being drilled on locations surrounded by or in very close proximity to producing oil wells.  Antelope Resources Inc. purchased the field with the belief that the field was compartmentized by faulting, thereby providing an opportunity to exploit possible virgin areas for development.   The Blue Ridge project appears to be a twin to the Mosser Dome.