November 26, 2008 17:07 ET

Colonia Reports Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2008) -


COLONIA ENERGY CORP. ("Colonia" or, the "Company") (TSX VENTURE:CLA) released today its un-audited financial statements for the three and nine month periods ended September 30, 2008.

Colonia showed continuing growth in the quarter ended September 30, 2008 in comparison to the corresponding quarter one year ago. Quarterly production grew by 75% to 172 BOE per day, oil and gas revenues increased 160% to over $1,771,000, cash flow rose 155% to $1,070,000, and earnings jumped more than five fold to $570,000.

The Company focuses almost exclusively in the Williston Basin where its production is comprised entirely of light, 40 degree API gravity sweet crude oil and related solution gas. Colonia's production is pipeline connected to Company owned and operated central battery and saltwater disposal facilities, leading to cost efficient operations. Average revenue for the third quarter was virtually identical to that received in the second quarter of 2008 at just over $110 per BOE. Colonia's average field netback for the most recent two quarters was $85.16 per BOE. These metrics compare to the third quarter 2007 revenue of $75.34 per BOE and corresponding field netback of $51.86 per BOE. The high revenue and field netbacks on a per BOE basis allow the Company to withstand large commodity price fluctuations while maintaining a robust cash flow.

In September, the Company equipped its 45% working interest well in the Florence South area at 4-1-1-1 W2M for an extended production test. The test confirmed the well's capability at 40 - 45 barrels of oil per day and pipeline tie-in operations to the Company's central battery facilities are currently underway.

Throughout the third quarter of 2008, the Company continued its leasing activities in southeastern Saskatchewan, focusing on acreage prospective for Midale and Bakken production. Colonia's leasing efforts for Bakken potential have resulted in a meaningful acreage position in very prospective areas.

The Company has developed several Midale prospects in southeastern Saskatchewan and is proceeding to mature them to a drill ready stage. We expect that the first of these plays will be drilled prior to spring breakup 2009 and look forward to reporting on our results at that time.

Colonia enters the fourth quarter of 2008 with a strong balance sheet having no debt, an available bank line of $2,000,000 and working capital of $1,176,000. In addition to growth through the drill bit, the Company continues to evaluate asset acquisitions and corporate combination opportunities that are increasingly coming available.

Additional information on Colonia Energy Corp. may be viewed on SEDAR at


This news release contains forward looking statements which may include assumptions related to the Company's drilling success, production, capital expenditures and cash flow. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to vary from those anticipated.

BOE Presentation - The term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in this report are derived by converting gas to oil in the ratio of six mcf of gas to one bbl of oil.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.

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