Mr. R.M. Loree reports

PETROSTAR SIGNS LETTER OF INTENT FOR ITS P&NG ASSETS

Petrostar Petroleum Corp. has executed a letter of intent with a private oil and gas producer to divest certain petroleum and natural gas assets.

Under the terms of the letter of intent, Petrostar and its subsidiaries will divest all interests in the Beaverhill Lake and Joarcam areas of Alberta, and its remaining Bakken interests for the nominal sum of $2-million in common equity of the purchasing company.

The asset sale is conditional on the purchasing company successfully completing its listing in the public market. In the event entry into the public market is not achieved, the assets will revert back to Petrostar and its subsidiaries.

All terms and conditions are also subject to regulatory and subsidiary approvals.

R.M. Loree, Petrostar's chief executive officer, stated: "This is an excellent opportunity for Petrostar to develop its petroleum and natural gas assets, and gain a positive equity position in another industry player. With the current focus of our mandate being the modular refineries, we can use this opportunity to lower our overhead and keep focus on our primary objectives."