July 8, 2008

Dear Shareholders,

As I begin these letters, I always comment that they might include some forward looking statements. 

Generally, letters a Chairman writes to the shareholders are designed to promote the optimistic side of the company.  Rest assured that we, as a Management Team, are working diligently to evaluate and put together those prospects that will enable the company to grow.

The Coal Gas efforts in China, the efforts in Guatemala and areas within the United States are among those areas we’re evaluating.  It is our feeling that even with our fragile financial condition, we have not lost sight nor lost the opportunity to build a successful organization.

At this point, I would like to comment on our current situation.

On July 4, 2008 TrueStar Petroleum Corporation was issued a cease trade order.  In summary, it was issued as we have yet to finalize and file certain financial information…nothing more.  The obvious question is "why not?"  To go into every reason would take some time and individually, each seems pretty innocuous.  However, aggregated they are analogous to a ‘death by a thousand paper cuts’.

If there’s one common thread, however, it’s the involuntary Bankruptcy actions filed in August 2007.  It took four-months to have the action filed against the TrueStar Petroleum dismissed.  During this time, attempts to raise working capital were hampered by the cloud of impending bankruptcy.  By the time the involuntary petition was dismissed, it made more economic sense for people to acquire our stock at the market price than at the minimum price allowable for a private placement of $0.05/share.

There were two Bankruptcy actions filed against the subsidiary, TrueStar Barnett, LLC.  We had filed a voluntary petition in Denver and an involuntary petition was filed in Dallas.  After a six-week venue "discussion" we agreed that the case would be heard in Dallas. The result?  What initially was thought to be a filing to allow TrueStar to "catch its breath" and refocus was two-months behind from the start.

In retrospect, the move to the Dallas Court was the correct decision, although not for the reasons everyone thought.  In Dallas, we were assigned a Judge who allowed us to conduct the sale in a manner as close to a typical oilfield sale as possible, while still staying within the guidelines of the Court.  Her seemingly small move allowed us to realize enough proceeds to pay 100% of the secured creditors and still have a volume of money to pay the unsecured creditors.  The actual amount the unsecured creditors receive will depend on how much money the Estate must spend to have the "bogus" claims dismissed.

When will we resume trading? At this point, I can’t give an exact date, but rest assured that it will be quickly as possible as we work to satisfy the requirements outlined by the British Columbia Securities Commission (BCSC).

How am I looking at this?  It is, without a doubt, a major inconvenience.  However, if you look back at what we, as a company, have survived during the past year and a half, we’ve bounced back from some fairly serious issues:

In the late spring of 2007, our bank ceased funding all activities.  Not only were there no funds available for capital projects, but there was no overhead money coming our way.  They swept all of the revenue from the properties, by agreement, so we had virtually no say in the action.

Mid July, Westar Oil Company allegedly purchased approximately 20% of our stock.  The distractions this caused our stakeholders were tremendous.  We refused to cave to demands to have the Board resign and turn over control of the company to Westar management.  An impromptu telephone conference call was held, at Westar’s initiation, that voted me (and the Board at that time) ‘off of the island’.  Again, we refused to acquiesce to Westar’s pressure knowing that they had done this before with serious litigious results.

It was during this time that we were forced to suspend a Corporate Officer and as the bank had quit funding our development program we were unable to meet, among other items, the production requirements established in the December 2006 agreement.  We therefore went into a covenant default on our loan.

In mid August, we were issued a foreclosure notice on our Barnett Shale properties.  After considerable work, the Board elected to seek protection under the Chapter 11 laws in the United States.  It was unfortunate that a company elected to file an involuntary petition at the same time.

While this was happening, our Board of Directors (excluding me) resigned.  Although coincidental to the Bankruptcy filing, each of these gentlemen had been giving up so much of their time to TrueStar that their own businesses were suffering.

In September, we asked for a 10-day halt to our trading.  Although many figured that this, plus the Bankruptcy was a kiss of death, we came back…again something we plan to do here.

Now discussing the positives, know that the best place to look at a summary of our projects is via our website.  We will announce, via an operational update, news on each as it becomes available.

The following discussion shows some intangible positives that support the projects listed in our website.

I was recently asked why I didn’t take some of our potential to a new company that doesn’t have the baggage TrueStar appears to have.  As I looked at the "baggage" and weighed it against the impending success that the company might achieve, I was amazed at how far the upside outweighs the issues from a potential growth standpoint.  (Although some of the "issues" at this point appear pretty formidable).

Some of the people that make up the TrueStar family are amazing.  Cindy Newton, in our Vancouver office, has the strongest command of Canadian regulatory issues of anyone I’ve worked with.  I can only imagine how much easier my life would have been at Ultra Petroleum (during the ugly days) had I had a resource like her.  Her legacy knowledge of the company has created the stable base that we are able to build from.

Brett Cunningham has raised the bar for our Business Development activities.  Many years ago, Brett was a two sport letterman (football and baseball) in college.  He has brought a competitive attitude to the company that fits extremely well with the philosophy we’d begun in January 2007.  He went through college, however, on one of the most prestigious academic scholarships available.  His former work with a division of the Chinese National Petroleum Corporation has allowed relationships to be forged that are aiding us in our new CBM effort in that country.

Our primary outsourcing partners, Ms. Pretty in Vancouver and Mr. Newbury, in Denver, compliment our efforts in our accounting.  They each have keen knowledge of how the U.S. and Canadian accounting systems can be integrated which is essential to Management having the tools to make informed decisions.

A step away, our attorneys, auditors and accountants, Lang Michener, BDO Dunwoody, and Quinn and Associates work in concert to make sure we are doing the correct things as we grow.

Note that I would be remiss if I didn’t mention the BCSC and TSX Venture Exchange.  Seemingly unlikely partners, know that these two groups were there every step of the way as we went through the "Westar Saga" last summer.  When they say they are there to support small companies and protect the shareholders, it is in fact true.  I have since learned those are not empty statements.

In reviewing the potential outlined on our website, and the people engaged to perform, it is easy to see why dealing with the "baggage" will, in a short period of time, seem somewhat insignificant as TrueStar works to emerge from our current situation.

I again want to thank you for your support as we work to build shareholder value in TrueStar Petroleum Corporation.

Regards,

Dick Shuster
Chairman & CEO