Firesteel affiliate confirms 1.4 billion barrels of original bitumen in place on its oil sands properties



    Trading Symbol: FTR - TSX: V

    VANCOUVER, Jan. 28 /CNW/ - Mr. Walter Wakula, President and CEO of
Firesteel Resources Inc. ("Firesteel" or the "Company"), and Chairman of the
Board of Blacksteel Oil Sands Inc. ("Blacksteel") is pleased to announce that
Firesteel's affiliated company Blacksteel has received the results of an oil
resource report on its oil sands properties as prepared by the independent
qualified reserves evaluation firm DeGolyer and MacNaughton Canada Limited
("D&M"). Blacksteel has rights to a 100 percent working interest in
14,080 acres (5,632 Hectares ("Ha")) of oil sands properties in the Peace
River area of northern Alberta under a letter of intent ("LOI") between
Blacksteel, Firesteel and two private equity groups (the "Properties"). See
news release dated September 13, 2007. D&M has evaluated these oil sands
Properties and has reported an estimated 1.4 billion barrels of original
bitumen in place ("OBIP" as defined in Note 1 below). The D&M Report was
prepared using assumptions and methodology guidelines outlined in the Canadian
Oil and Gas Evaluation Handbook ("COGE Handbook") and in accordance with
National Instrument 51-101 ("NI 51-101"), Standards for Disclosure for Oil and
Gas Activity.
    Of the 1.4 billion barrels of OBIP estimated by D&M, 221.6 million
barrels were estimated for a 100 percent working interest in the Raven
Property, a 3,200 acre (1,280 Ha) block located approximately 25 km northeast
of the town of Peace River in an area known to contain oil sands reserves. The
property is adjacent to Shell Canada Limited's ("Shell") Carmon Creek
principal development area which surrounds Raven on the east, south and west
sides. Shell's Carmon Creek project in this area has produced 12,500 barrels
of bitumen per day ("bbl/d") with plans currently submitted to regulatory
authorities to increase this production to 100,000 bbl/d at peak production
over a 40 year project life. (excerpt from Shell's December 2006 Application
for Approval of the Carmon Creek Project - Volume 1: Project Description -
Executive Summary) Shell's application to the Alberta Energy and Utilities
Board includes a thermal development footprint with well pads proposed within
two kilometers east of Blacksteel's Raven boundary.
    On these Raven leases Blacksteel seeks to exploit the oil sands in the
Bluesky Formation which is the main bitumen bearing reservoir in the area. The
Bluesky varies in thickness from 5 to 15 meters with average thickness of
about 11 meters on the Raven property. Of the 221.6 million barrels of OBIP on
the Raven property, D&M provided a best estimate of 29.8 million barrels of
recoverable contingent resources (as defined in Note 2 below). The best
estimate means that there is at least a 50 percent probability that, assuming
the accumulation is discovered and developed, the quantities actually
recovered will equal or exceed the best estimate. Significant factors relevant
to the estimate are representations of porosity, petroleum saturation, net
hydrocarbon thickness, recovery efficiencies, fluid properties and produceable
area of the accumulation. There is no certainty that it will be commercially
viable to produce any portion of the resource. The contingencies which
currently prevent the classification of the resources as reserves are the lack
of commerciality due to unkown economic, cost and market conditions,
insufficient development drilling, and additional well data and seismic
information. Though there is currently no production on the Raven property,
Blacksteel has plans to drill test wells on these leases in the hopes of
achieving production on this project. However, there are no assurances that
any production will be achieved.
    The remaining 1,131 million barrels of OBIP (see Note 1) estimated by D&M
were for a 100 percent working interest in the Cadotte property, which is also
known as the Whitemud Project, a 10,880 acre (4,352 Ha) block located about
35 km north of the town of Peace River, Alberta in Township 87, Range 21, W5M.
This property is adjacent to lands owned by a private operator who has just
completed drilling a test well about 1.6 km north of this block. D&M was not
able to assign a contingent resource estimate to this property primarily due
to insufficient well control in this area, the resulting lack of likely
reservoir characteristics and due to the difficulty of estimating capital
costs at this time for development and production of a carbonate deposit.
Blacksteel plans to drill two test wells this year in this area to better
delineate and characterize this resource. Delineation is required to heighten
the recoverable characteristics of the resource and to determine production
methods. There is no certainty that any portion of the resources will be
discovered. If discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources.
    Under terms of the LOI Firesteel shall receive common shares of
Blacksteel in exchange for its Raven area oil sands leases covering
1,920 acres (768 Ha). A purchase and sale agreement is currently being
negotiated under which Firesteel estimates it will be issued about 4.7 million
shares of Blacksteel for the leases. A news release will be issued with
further details when this agreement is concluded.
    In announcing the D&M resource estimates Mr. Wakula said, "We are
absolutely thrilled with this news. The 1.4 billion barrels of OBIP as
determined by D&M exceeds our internal management estimates of oil potential
in these properties and provides further confirmation for Firesteel's strategy
for investment in the oil sands business. We eagerly look forward to drilling
on these properties to better delineate and characterize this resource."

    
    Note 1:   Original bitumen in place ("OBIP") is defined as those
              quantities of bitumen estimated to exist originally in
              naturally occurring accumulations. They are those quantities
              estimated on a given date to be remaining in known
              accumulations plus those quantities in accumulations yet to be
              discovered. However, the reader is cautioned that this does not
              represent recoverable volumes.

    Note 2:   Contingent resources are those quantities of petroleum
              estimated as of a given date, to be potentially commercially
              recoverable from known accumulations by application of
              development projects, but which are not currently considered to
              be recoverable due to one or more contingencies.
    

    Firesteel is a junior exploration company which explores for and develops
quality precious and base metal prospects in British Columbia, the NWT and
Mexico. Firesteel has recently been actively drilling and trenching on its
Copper Creek property in northern British Columbia with strong indications of
copper and gold mineralization. Firesteel has entered the oil sands business
through its purchase of oil sands leases in the Peace River Area of Alberta
and through its shareholdings in Blacksteel.

    ON BEHALF OF THE BOARD OF DIRECTORS OF
    FIRESTEEL RE

SOURCES INC. "Walter Wakula" ------------------------ Walter Wakula, President and CEO The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Advisory Regarding Forward Looking Statements This news release contains forward-looking statements which include, but are not limited to: statements regarding future drilling, expectations for exploration prospects, as well as operations plans, outlook, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although Firesteel believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Company may be affected by a variety of variables and risks associated with mineral and oil and gas exploration, production and transportation, such as loss of market, volatility of commodity prices, currency fluctuations, imprecision of resource and reserve estimates, environmental risks, competition from other producers, ability to access sufficient debt and equity capital from internal and external sources, ability to generate sufficient cash flow from operations to meet its current and future obligations, and risks associated with existing and potential future lawsuits and regulatory actions made against the Company; as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise. %SEDAR: 00004336E

For further information:

For further information: please contact us at (604) 669-5768,
1-888-669-5768, or visit our web site at www.firesteelresources.com

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