GlobeStar Therapeutics Corp (GSTC)

[Voices of Reason]

While we are waiting on news from the company, let's take a look at the actual production for their Cedar Creek 35-5 well located in Alabama. From the press release in January, they touted that the well was producing "right in line with the Company's expectations" at "223 barrels of oil and 220 thousand cubic feet of gas daily with no water. Reserve estimates range from 400,000 to 800,000 barrels of oil.": http://www.dailyfinance.com/2013/01/24/fttn-releases-positive-new-production-report/

Looking at following link for the actual reported production, we notice that the above statement is generally true in January, (although the gas production appeared much less at about 12 MCFD): Cedar Creek 35-5 Production report

With this much data, we can now calculate the ultimate reserves for the well, using the equations found here: http://www.petrobjects.com/downloads/Petroleum%20Reservoirs%20Estimation%20Methods/Reserve%20Estimation%20Methods_03_DeclineCurve.pdf

Without boring you with the math, the well is on a fairly steep decline, starting off at 414 BOPD in September 2012, and is currently (March 2013) producting 118 BOPD. By the end of the first year, it is estimated that the well will be producing approximately 24 BOPD, for a first year cumulative production of about 50,264 bbls. Unfortunately, due to the steep decline in production, the following year will be about 3100 bbls in total. At that point, the well will be a candidate for either a workover, or plug and abandonment, with a final cumulative production of about 55,000 bbls - well short of the 400-800,000 bbls touted above.

Still, a nice bit of production out of this first asset for the company - doing some generous math on the ultimate reserves: 60,000 bbls** x $100/bbl x 1% net revenue interest = $60,000 less nominal operating costs and massive G&A costs ($224,289 for the last 6 months).

**Includes value of natural gas equivalents

Interesting to note that FTTN claims the reserves are evaluated at $124,523 in the latest financials. It will be interesting to see the next set of financials if FTTN re-evaluates their reserves.