Dear Fellow Shareholders,                   

I am writing to give you an update on PetroWorth’s activities and an overview of our strategic plan.

At the outset, let me state that while we have made good progress over the past year and a half, our current stock price is not reflecting that progress. As you well know, stock markets around the world have been extraordinarily volatile, and PetroWorth is clearly not immune to that volatility. Nonetheless, we believe that by continuing to enhance the value of our properties through prudent exploration and resource quantification programs, both in-house and with strategic joint venture partners, our value will translate into an appreciated stock price.

New Brunswick

PetroWorth has 100% exploration and development rights to 129,000 acres in New Brunswick – 41,000 acres in the Rosevale block situated between the McCully natural gas field to the southwest and the Stoney Creek oil and gas field to the northeast; and 88,000 acres in the Sackville Basin located directly east of the Stoney Creek field. The rights to the Sackville Basin property were acquired in August 2007.

Based on extensive 2-D seismic data which PetroWorth acquired in 2005, the Company has drilled four wells on the Rosevale license – three wells immediately west of the Stoney Creek field and one well further down in the southwestern part of the property. Our discovery well, E-08 (Feenan #2), achieved a stabilized flow rate of about one million cubic feet per day of natural gas after frac stimulation. Another well, A-08 (Feenan #3), shows similar characteristics to the E-08 well and is now the subject of a  frac design program to realize the maximum potential of the formation and to gather data for further appraisal of the sands and shales under our leases. In all likelihood, given the availability of crews and equipment in the area, the frac at A-08 will not be conducted until next spring.

With regard to achieving commercial production on the Rosevale license, it is estimated that we need a couple more wells like E-08 in order to justify tying into the Maritimes & Northeast Pipeline.

It is important to point out that the exploration drilling program on the Rosevale license has gone a long way towards helping PetroWorth quantify the resource potential in both the Hiram Brook sands and the Frederick Brook shale. Based on the data obtained from our own wells and from some wells previously drilled on this property, our technical team has concluded that a significant area of the Rosevale license is indeed charged with natural gas.

We are currently conducting core and geochemical laboratory measurements of the shale samples gathered from the wells drilled on our Rosevale property. This is necessary to determine both the gas content and the producibility of the shale. Moreover, it will enable us to compare our shale characteristics with other commercial shale basins in North America. It is worth noting that the operators in these commercial shale basins achieved their success by taking a deliberate and systematic approach that involved proving the size and nature of the hydrocarbon resource before commencing full-fledged development activities. In this regard, I am particularly pleased to report that the data we’ve obtained thus far indicates the physical properties of our shale formation compare very favourably with these established commercial shale basins.  

In addition, the industry is beginning to recognize the tremendous shale gas opportunities onshore eastern Canada. For example, Corridor Resources, our nearest neighbour to the west of Rosevale, is planning a horizontal shale gas test this year as a follow-up to three vertical shale wells. In Nova Scotia, Triangle Petroleum is conducting drilling and completion tests in order to demonstrate the commercial viability of the same shale formation as the Frederick Brook.

This past July, PetroWorth was contacted by a major international oil and gas company who expressed interest in the shale gas opportunities on both our Rosevale and Sackville Basin properties. Following the signing of a confidentiality agreement, we have shared an enormous amount of information and data with the interested party, and made a full-day presentation to them. More recently, we have received similar interest in these properties from two more large oil and gas companies, and we are in the process of signing confidentiality agreements with them as well. In short, our exploration efforts at Rosevale have significantly enhanced the value of this property and have created serious interest from potential joint venture partners.

 Natural gas flaring at PetroWorth’s E-08 (Feenan #2) well in New Brunswick

Prince Edward Island

PetroWorth has 100% exploration and development rights to 444,000 acres of land on the eastern half of Prince Edward Island. We have acquired extensive seismic data on this property, including a 25,000-acre 3-D program, which indicates a good number of drill-ready targets. Corridor Resources recently elected not to proceed with a farm-in on our PEI licenses, which now allows PetroWorth to actively seek a new farm-in partner. We continue to believe that this property has tremendous deep gas potential.

PetroWorth recently acquired a 10% interest in Corridor Resources’ Green Gables license. Although the first two fracs at the Green Gables #3 well did not generate commercial production rates, the results have been encouraging and there are several additional zones still to be tested. This is very much a learning experience requiring patience and diligence. In time, we are confident that our technical experts will develop the right completion technique, which is critical to all successful tight gas plays in North America. Indeed, our technical team remains extremely buoyant about the Green Gables structure, which is estimated to have up to one trillion cubic feet of gas in place. The bottom line is that we expect to learn a great deal about the structure at Green Gables by participating at only 10% of the cost on this license. Most importantly, what we learn will be directly applicable to our own PEI properties where we have a 100% interest.

Cape Breton, Nova Scotia (The Lake Ainslie block)

PetroWorth has 100% exploration and development rights to 383,000 acres on the Lake Ainslie block in Cape Breton, Nova Scotia. The company recently received a one-year extension to its permit on this property, which means that the permit does not expire until July 2011. A 2-D seismic program planned for this past spring has been deferred until next spring in order to resolve some outstanding surface access issues.

Strategic Plan

Based on current market conditions, the need to preserve cash, and the intense interest the petroleum industry now has in shale gas opportunities, we have made the strategic decision to focus for the time being on attracting farm-in or joint venture partners for our New Brunswick and Prince Edward Island properties. We are also looking at a couple of opportunities to generate sustainable cash flow by acquiring production at a favourable cost or farming in on a low risk oil development play.   

As always, our focus is to increase value for our shareholders in the most cost effective and timely manner.

On behalf of the board of directors,

Neal Mednick
President