Americas Petrogas Inc.
TSX VENTURE : BOE

Americas Petrogas Inc.

January 28, 2010 09:00 ET

Americas Petrogas Acquires Interest in Vaca Mahuida

CALGARY, ALBERTA--(Marketwire - Jan. 28, 2010) - Americas Petrogas Inc. ("Americas Petrogas") (TSX VENTURE:BOE) is pleased to announce that its wholly-owned Argentinean subsidiary has entered into a farm-in agreement with a subsidiary of Petrolifera Petroleum Limited ("Petrolifera") (TSX:PDP) to acquire a 25% working interest in Petrolifera's 253,000 acre (approximately 1,025 square kilometers) Vaca Mahuida block in the province of Rio Negro, Argentina. The Vaca Mahuida block is located south of Medanito Sur block operated by Americas Petrogas, in Argentina's Neuquen Basin.

Americas Petrogas has agreed to incur a share of the costs of the remaining exploration activities needed to fulfill the committed working units during the first exploration period, under the exploration permit granted to Petrolifera, which expires on May 31, 2010. The exploration activities and commitments in which Americas Petrogas will participate include drilling four exploratory wells (depths ranging from 1,000 to 1,500 metres), reimbursing the back-costs of the exploratory well VM-2014, and payment to the government of any outstanding amount for the work units that may not be fulfilled at the end of the first exploration period. The estimated cost of the exploration activities and commitments undertaken by Americas Petrogas totals US$4.0 million. The agreement is subject to board approval.

Exploratory well VM-2014, which has already been drilled and cased by Petrolifera, encountered a number of zones of interest, including some oil shows in side wall cores, and is currently under evaluation for testing and completion in the near future.

Americas Petrogas is considering various financing alternatives for this project including joint efforts with partner Serrante S.A. that is also farming-in to Vaca Mahuida block for a 25% working interest.

Under current arrangements, Vaca Mahuida block would be owned 25% by Petrolifera, 25% by Brownstone Ventures Inc., 25% by Americas Petrogas, and 25% by Serrante S.A.

After the first exploration period, expected to end by May 31, 2010, the parties will share the costs associated with the Vaca Mahuida block in proportion to each party's respective working interest.

Speaking about this latest agreement, Mr. Guimar Vaca Coca, Americas Petrogas Argentina S.A.'s Managing Director, said "This is a significant and important step to expand Americas Petrogas' presence in the northeast platform of the Neuquen basin. We believe that Vaca Mahuida's acreage offers great exploration opportunities with significant upside potential in a similar geological environment as the oil fields discovered in the nearby Medanito Sur block."

Vaca Coca added, "We are also convinced that the technical experience and deep knowledge of this region of our team will be an excellent complement to Petrolifera's expertise."

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels and timing of activity and achievements to differ materially from those expressed or implied by such information.

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