Petrominerales Ltd.
TSX : PMG

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

Petrobank Energy and Resources Ltd.

November 29, 2009 23:44 ET

Petrominerales Plans Expanded 2010 Drilling Campaign

BOGOTA, COLOMBIA--(Marketwire - Nov. 29, 2009) - Petrominerales Ltd. ("Petrominerales" or the "Company")(TSX:PMG), a 67% owned subsidiary of Petrobank Energy and Resources Ltd. (TSX:PBG), is pleased to announce an expanded drilling program for 2010. The program will build on our 2009 exploration successes and will be fueled by our strong cash flows from our growing production base and industry leading operating netbacks. For further detail in connection with our operational update and 2010 capital plan, please refer to our most recent corporate presentation on our website at www.petrominerales.com.

2010 Activity Highlights:

- Two rig program in Corcel and Guatiquia targeting 14 wells.

- Full year drilling program at Neiva envisions 37 wells and 21 recompletions.

- Expanded exploration activity in Llanos Plains region includes up to 13 wells (10 at Mapache).

- Heavy oil blocks will be further evaluated with three additional exploration wells.

- 432 square kilometres of 3D seismic will evaluate three blocks including our Deep Llanos Block 31.

Operational Update and 2010 Plans

Guatiquia Block

The Percheron-1 well, our first exploration well on the Guatiquia Block, commenced drilling on September 30th and reached a total depth of 12,198 feet on October 27th. Well logs indicated 51 feet of potential net oil pay in the Lower Sand 1 zone and 25 feet of potential net pay in the Lower Sand 3. The well has been cased as a potential oil well and we are currently conducting a multi-zone testing program. Multiple testing of the Lower Sand 3 zones did not yield commercial hydrocarbons. Final test results are expected by year-end. The Guatiquia Block, covering 26,349 acres, is on trend and contiguous with the southwest portion of the Corcel Block.

Candelilla-1, our second exploration well on the Guatiquia Block, commenced drilling on November 9th and has reached intermediate casing point at 11,155 feet measured depth. Targeted depth is 12,285 feet. After drilling Candelilla-1, we plan to move the rig back to Corcel to continue our multi-year drilling program, starting with Corcel-C2.

Corcel Block and Blocks 25 & 31

At Corcel, we plan to have two drilling rigs operating on the block for the majority of 2010 to drill 14 wells through the end of the year. The first rig will initially focus on the central portion of the block, where we will drill six locations in 2010, including our first horizontal well at Boa-2, follow-up locations on the Corcel C, E and A structures, the first well on the G structure, and a well (Corcel T) targeting another new geological concept. The second rig will commence drilling new prospects identified from our 2008 Corcel northeast 3D seismic program. The first well will be the Amarillo prospect, which is expected to spud in late February 2010.

We are planning to make investments in facilities at Corcel that include expanded fluid handling capacity, water injection capability and optimization of the power facilities. The next expansion of our Corcel central processing facility will be sized for 180,000 barrels of fluid handling capacity per day. Once completed, it is expected that the optimization of the power infrastructure will reduce our power-related operating costs.

The final phase of our Monterrey offloading facility remains on-schedule for completion by year-end. In 2010, we have priority to deliver up to 20,000 barrels of oil per day ("bopd") to the facility. Monterrey is the closest offloading station to Corcel, 77 kilometers away, and has allowed us reduced our trucking costs for volumes delivered to this station to under $3.00 per barrel.

Blocks 25 and 31 are two contiguous blocks north of Corcel and on trend with the "super giant" Cusiana-Cupiagua fields. In October, we initiated our 354 km2 3D seismic acquisition program that will give us 3D seismic coverage over the entire Corcel Block and the adjacent, contiguous portion of Block 31. Our first exploratory wells on Block 31 are targeted for 2011. On Block 25 we have identified three prospects from reprocessing and interpretation of the existing 2D seismic database. In 2010 we plan to select our first exploration well location and expect to commence drilling operations early in 2011.

Llanos Plains (Casanare Este, Casimena, Castor, Mapache)

We have contracted an additional drilling rig for the Llanos Plains area where we plan to drill up to 13 exploration wells in 2010. We plan to drill one exploration well on each of the Casanare Este, Casimena, and Castor blocks. These wells will satisfy contractual exploration commitments. At Mapache, we are planning to drill 10 prospects identified from our 2009 3D seismic program. Applying a strategy similar to our successful operation at Corcel, we have positioned ourselves to commence commercial production immediately following exploration success at Mapache.

Heavy Oil Blocks (Rio Ariari, Chiguiro Este, Chiguiro Oeste)

We have a large, 818,650 acre land position in the southern Llanos Basin that consists of three blocks. At Rio Ariari, our first exploration well on the block, Rio Ariari-1, was drilled to a depth of 4,860 feet on November 7, 2009. During the drilling operations we conducted an open-hole test in the Upper Mirador formation where we encountered 16 degree API oil to surface. Testing of lower intervals in the well did not yield commercial hydrocarbons. During the initial production test over lower portion of the Upper Mirador formation, we have tested 10 degree API oil at a rate of 69 bopd over a 60-hour period from eight feet of perforations. The well is now shut in for a pressure build-up test which will help determine the potential productivity of the zone. Going forward, we plan to perforate and test 14 feet of the upper portion of the Upper Mirador and determine additional testing requirements based on evaluation of the data. We expect to have final results by mid-December. Following the testing program, we are planning to drill a step-out location to further define the Rio Ariari-1 prospect. To-date, we have identified 13 prospects and leads on the block and plan to drill two additional exploration wells in 2010.

At Chiguiro Este, we are planning a 78 square kilometre 3D seismic program to define a new play concept on the block. At Chiguiro Oeste, we plan to complete our testing program on the Chiguiro Oeste-1 well and drill one exploration well in 2010. These activities will satisfy exploration commitments on each of the blocks.

Neiva

On our Neiva block, we plan to drill up to 37 wells (15 targeting the Doima Chicoral zone and 22 focused on the Honda formation) and complete 21 workovers in 2010. To date in 2009, we have drilled 32 wells, 17 in the Doima Chicoral and 15 in the Honda formation.

Peru

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 commenced the acquisition of 150 km2 of 3D seismic and 50 kilometres of 2D seismic, which is likely to be completed early in 2010. Initial activities on the block included the reinterpretation of 1,200 kilometres of 2D seismic, which has confirmed a large structural feature, the La Colpa structure, originally tested by a well drilled on the block 20 years ago. Two other structural leads have also been identified from the existing reprocessed 2D seismic. In 2010, we plan to process and interpret the 3D seismic and complete civil works 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.

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 acres in the Ucayali Basin of Peru. Petrominerales is currently 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 capital projects and the results of operations. 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