Western Standard Energy Corp. has received confirmation from its operating partner Coastal Petroleum Co. that operations have been completed on the Federal 1-19 test well within the Starbuck East shallow gas prospect in Valley County, Montana. Western Standard has a 100% working interest in the well, with Coastal Petroleum Co., who has a 20% back-in working interest after payout.

Coastal Petroleum Co., in its report to Western Standard, dated November 5, 2008, states that the results of the well did not confirm commercial gas in either target formation, the Eagle or the Judith River, and recommends that no further operations be carried out. Including the initial drilling operation in October 2007, Western Standard has invested close to $500,000 in the Federal 1-19 well.

Commenting on the results of the most recent operations, which were intended to test the well in order to determine its commercial potential, Dan Bauer, President and Chief Executive Officer of Western Standard Energy Corp., stated, “This is a very disappointing result for the Company and no doubt, for its shareholders. Our management and advisors are now in the process of examining all of the data we have and are evaluating the Company’s future participation in the Starbuck East prospect.”

Western Standard now has 30 days to exercise its option to purchase a 50% interest in the approximately 37,000 acres (the “shallow gas assembly”) near the well location. The cost to exercise the option would be $1,000,000, payable in $200,000 instalments based on certain milestones related to permitting and drilling step-out wells.

Tags: Coastal Petroleum Company, Western Standard Energy Corp.