The St-Jean Block

The St-Jean Block, composed of 6 contiguous permits, contains permits with similar geology but with different operators and ownership. For the sake of clarity and efficiency, the Block is divided into 3 distinct areas : a) the St-Jean West (2 permits); b) the St-Jean East (3 permits); c) the St-Jean North (1 permit).

a) The St-Jean West Property

The St-Jean West Property consists of 2 exploration permits covering 28,869 hectares situated about 30 km southeast of Montreal, immediately to the west of the Richelieu River and north of the U.S. border (New York State and Vermont).

The geology of these units is similar to the adjacent Dundee-Soulanges Property with the Beekmantown carbonates present at the surface. Gastem is operator and holds a 100% interest in the property, with Epsilon Energy Ltd. holding a 25% undivided participating interest in Gastem’s interest.

b) The St-Jean East Property

The St-Jean East Property consists of three exploration permits covering 50,668 hectares situated about 30 km southeast of Montreal, immediately to the west of the Richelieu River and north of the U.S. border (New York State and Vermont).

This block is situated in the southern part of the Utica Shale “fairway” in the St. Lawrence Lowlands. Gastem has a 50% interest and Joint Operatorship with Questerre Energy (50% WI). Epsilon Energy Ltd. has a 25% undivided participating interest in Gastem’s interest in the St-Jean East Property.

c) The St-Jean North Permit

Gastem holds a 20% working interest on the Questerre Energy operated 21,834 hectares (2005-PG-773) permit, referred to as St-Jean North (Figure 6). This permit is adjacent to the Gastem St-Jean East and West Properties.

In 2008, Gastem participated in the drilling and completion of the Questerre et al. St-Jean-de-Richelieu No.1 well, in order to test the potential of the Utica shale in the southern part of the ‘shale fairway’ in the St. Lawrence Lowlands. The well was drilled and operated by Questerre Energy to a total depth of 442m with a significant quantity of core taken in the Ordovician shales.

The partners ran a comprehensive suite of geophysical logs in the wellbore. The well was fracture stimulated in January 2009 with some gas produced to surface, but operation and climatological issues limited the effectiveness of the completion. The well is currently suspended pending further work.