Petrominerales Ltd.
TSX : PMG

Petrominerales Ltd.
Petrobank Energy and Resources Ltd.
TSX : PBG

Petrobank Energy and Resources Ltd.

December 20, 2009 23:58 ET

Petrominerales Cases Candelilla-1 Well and Re-Aligns Drilling Program to Immediately Spud Candelilla-2

BOGOTA, COLOMBIA--(Marketwire - Dec. 20, 2009) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG), a 67% owned subsidiary of Petrobank Energy and Resources Ltd. (TSX:PBG), is pleased to provide an update on recent exploration activities, highlighted by our decision to case Candelilla-1 as a potential oil well, the re-alignment of our drilling plans to incorporate the immediate drilling of Candelilla-2 and the testing of heavy oil at our Percheron-1 well.

Guatiquia Block

The Guatiquia Block, covering 26,349 acres, is on trend and contiguous with the southwest portion of the Corcel Block in the Llanos Basin.

The Percheron-1 well, our first exploration well on the Guatiquia Block, commenced drilling on September 30, 2009 and reached a total vertical depth of 12,196 feet on October 27, 2009. Well logs indicated potential net oil pay of 4 feet in the Guadalupe formation, 51 feet in the Lower Sand 1 and 25 feet in the Lower Sand 3. The upper portion of the Lower Sand 1 was tested with an electric submersible pump ("ESP") and produced 281 barrels of oil per day ("bopd") of 11 degree API oil at a 93% water-cut. The lower portion of the Lower Sand 1 was swab-tested and resulted in 11 bopd of 12 degree API oil at 98% water cut. Testing of the Lower Sand 3 zones did not yield commercial hydrocarbons. The remaining test program for the well includes testing the Guadalupe interval with an ESP and returning to the lower interval of the Lower Sand 1 zone to test with an ESP.

The Candelilla-1 well, our second exploration well on the Guatiquia Block, commenced drilling on November 9, 2009 and was drilled to a total vertical depth of 11,681 feet on December 16, 2009. Well logs indicate 97 feet of potential net oil pay in the Lower Sand 2 zone and 13 feet of potential net oil pay in the Upper Mirador. The well has now been cased as a potential oil well and we plan to conduct a multi-zone testing program with test results expected by the end of January. Initial interpretations indicate that the Lower Sand 1 zone is not geologically well developed at Candelilla. However, the presence of a thick and potentially hydrocarbon charged Lower Sand 2 zone demonstrates additional prospectivity on the Guatiquia block.

The drilling rig will now move to the Candelilla-2 location to drill a second well into the Candelilla structure before moving back to Corcel to continue our multi-year Corcel drilling program.

Rio Ariari

We have completed testing operations at our Rio Ariari-1 well, the first exploration well on the block. On November 29, 2009, we announced test results over the lower portion of the Upper Mirador formation, where we tested 10 degree API oil at a rate of 69 bopd over a 60-hour period from eight feet of perforations. After pressure build-up, total production capacity for this interval was estimated at 220 bopd. Subsequently, we tested an interval in the upper portion of the Upper Mirador, which resulted in non-commercial amounts of hydrocarbons. The drilling rig was moved to Rio Ariari-2, a step-out drilling location, to further evaluate the prospect. Drilling operations began at Rio Ariari-2 on December 20, 2009.

Seismic Programs

In October, we initiated our 354 km2 3D seismic acquisition program that will complete our 3D seismic coverage over the entire Corcel Block and the adjacent, contiguous portion of Block 31. Recording of this program is expected to begin in mid-January 2010. Our first exploratory wells on Block 31 are targeted for 2011.

Petrominerales has a 55 percent interest in the 2.6 million acre Block 126 in the Ucayali Basin of Peru. With our joint venture partner, we have completed the acquisition of 150 km2 of 3D seismic and the acquisition of 50 kilometres of 2D seismic is expected to be completed by year-end. In 2010, we plan to process and interpret the 3D seismic, select drilling locations and complete civil construction work so that we will be in a position to begin drilling operations on our first exploration well on the block in early 2011.

Petrominerales Ltd. is a Latin America-based exploration and production company producing oil in Colombia with 14 exploration blocks covering a total of 1.8 million acres in the Llanos and Putumayo Basins and 2.6 million gross acres in the Ucayali Basin of Peru. Petrominerales is 67% owned by Petrobank Energy and Resources Ltd. (TSX:PBG).

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to the timing of future drilling activities and results. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward- looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information

  • Petrominerales Ltd.
    John D. Wright
    President and Chief Executive Officer
    403.750.4400 or 011.571.629.2701
    or
    Petrominerales Ltd.
    Corey C. Ruttan
    Vice President Finance and Chief Financial Officer
    403.750.4400 or 011.571.629.2701
    or
    Petrominerales Ltd.
    Jack F. Scott
    Executive Vice President and Country Manager, Colombia
    403.750.4400 or 011.571.629.2701
    or
    Petrominerales Ltd.
    Kelly D. Sledz
    Finance Manager
    403.750.4400 or 011.571.629.2701
    Fax: 011.571.629.4723
    ir@petrominerales.com
    www.petrominerales.com