Freestone Resources, Inc. Releases Carroll Unit # 1 Production Statistics

Fairfield, TX - The final 72-hour production evaluation of the Carroll Unit # 1 was completed November 4, 2006 after the initial flow-back period which began October 30, according to Freestone Resources. At current production levels and using today's prices, the Carroll Unit # 1 will produce an approximate net yearly profit of $1,040,688.00 for Freestone Resources shareholders, according to the company. However, oil and/or gas will eventually increase as the well is allowed to clean out over the extended flow-back period. Freestone has began negotiations with the contiguous mineral owners and has approximately 5000 acres available to lease and produce, and will diligently pursue this acreage over the following days, as verbal agreements with the mineral owners have already been made.

The well increased its oil production from 29 barrels of oil per day to an average of 39 barrels of oil per day. Water production dropped from 40 barrels of water per day to an average of 19 barrels of water per day. Natural gas production stabilized at an average of 270,000 MCF/day, while the wellhead pressure averaged about 300 PSI on an 18/64 inch choke with fluctuations from 200 PSI to over 2000 PSI.

Freestone Resources has employed a production consultant that is very experienced in the Freestone County gas play and has implemented a conservative production strategy for this well. Due to the depth and age of the well, its unique conformation, and the fact that it is still producing drilling fluids used in 1998, our consultant feels that an increased flow-back period would not only yield a more realistic gauging of the well potential, but would also allow Freestone Resources to begin generating an income stream immediately from oil sales.

The next step involved in producing the Carroll Unit # 1 involves the construction of a production pipeline for the sales of natural gas. Freestone Resources will purchase a gas separator unit, meter run, 900 feet of newly laid 4-inch production line, and the purchase of an unused 3900 foot, 4-inch production line from an adjacent well. The entire 4-inch pipeline will be approximately 4800 feet long and will connect into a 6-inch sales line. The pipeline from the Carroll Unit # 1 to the sales line will be wholly owned by Freestone, and may be used to produce other wells drilled in the future.

SOURCE: Freestone Resources, Inc.