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September 15, 2009

Company Offers Strategic Technical Service to Oil Industry
with Support from Province

St. John�s company petroforma inc. is establishing the only commercial laboratory in eastern Canada to provide detailed reservoir fluid analysis services to oil companies operating internationally and offshore Newfoundland and Labrador. The Provincial Government announced today a $500,000 contribution to assist the company.

"Through its experience, petroforma recognized that a service gap existed in this region that impacts the oil industry, and the company is stepping forward to offer a solution," said the Honourable Ross Wiseman, Minister of Business. "The reservoir fluid testing service conducted at petroforma�s lab fulfills an important need for oil companies and their clients, and will save them time and money. The presence of this service will be attractive not only to players in Newfoundland and Labrador, but also those operating in western Canada and other locations around the world. Our government�s assistance better enables the company to capitalize on this export potential."

Fluid analysis is a highly technical service that provides information that is integral to effectively managing petroleum reservoirs. Samples of crude oil and natural gas are taken regularly from offshore and onshore reservoirs to be analyzed to determine their make-up and behavioral properties. This information is required to evaluate reserves, develop optimum recovery plans, and determine quality and quantity of fluids. The results are often used to make important operating and capital investment decisions for production, as well as to set conditions for the purchase of commodities and payment of royalties. Samples taken offshore Newfoundland and Labrador have historically been sent for analysis to places such as Alberta, the United Kingdom, and Norway. Having petroforma�s facilities and services based in Newfoundland and Labrador will address this regional need by cutting down substantially on the time and costs associated with sending samples to labs elsewhere.

"With support from the Government of Newfoundland and Labrador, we now have the experienced human resources and specialized equipment to position ourselves to earn business from operators at home and around the world," said Michael Hanrahan, President of petroforma. "We would never have pursued this opportunity had the province not implemented an energy plan with a focus on building local capacity and then delivered on that plan. It is inspiring."

The company�s facilities provide the laboratory space and house specialized pressure, volume, and temperature (PVT) testing equipment required to carry out the fluid analyses. As the operation ramps up, petroforma plans to add nine new highly skilled positions including petroleum technologists, laboratory technicians, reservoir consultants and engineers, with an expected average annual salary of approximately $73,000.

"I am very pleased with today�s announcement," said Tom Osborne, MHA for St. John�s South. "It is another example of how the oil industry in this province is providing economic, business and skilled employment opportunities here at home, as well as the opportunity for local business to become world leaders in the industry."

With the continued advancement of petroleum developments, such as Hebron, White Rose expansion, Hibernia South, onshore exploration in western Newfoundland, and other exploration and development, there is an increased need for related services. In addition to capitalizing on this activity, petroforma is already pursuing export opportunities in other parts of Canada and internationally.

The province�s funding, a non-repayable contribution through the Oil and Gas Manufacturing and Services Export Development Fund (OGEDF), will allow the company to purchase essential equipment and offset start-up costs, and position itself to compete for export-based business.

"Our government is extremely pleased to support business opportunities such as this, which add to our province�s expanding supply and service capabilities and expertise, and further elevate our position as a global oil and gas leader," said Minister Wiseman.

Established in 2007 as a provincial Energy Plan initiative, the OGEDF is administered by the Department of Business and is designed to support oil and gas supply companies in the province to expand their markets through the export of services and products. Budget 2009: Building on Our Strong Foundation allocated $1.5 million for the fund this fiscal year.

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Photo: During a tour of petroforma's facility, Laboratory Supervisor Craig Ivany explains to Minister Wiseman how the company's specialized Pressure, Volume, Temperature (PVT) equipment works. This commercial laboratory is the only one in eastern Canada to conduct detailed reservoir fluid analysis for the petroleum industry.

Media contacts:

Mark King
Director of Communications
Department of Business
709-729-7628, 699-3454

Michael Hanrahan
petroforma inc.
709-726-9345, 749-0337

Donna Ivey
Communications Manager
Government Members Office
709-729-0898, 697-1424

2009 09 15                                                      11:10 a.m.

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