Primera Energy Resources Ltd.
TSX VENTURE : PTT

September 17, 2009 09:00 ET

Primera Energy Resources Ltd. and Primera Oil and Gas Limited Announce Farm-In Terms for Onshore Cory Moruga Block, Trinidad & Tobago

CALGARY, ALBERTA and PORT OF SPAIN, TRINIDAD & TOBAGO--(Marketwire - Sept. 17, 2009) - Primera Energy Resources Ltd. (TSX VENTURE:PTT) ("PERL"), Primera Oil and Gas Limited ("POGL") and Petro Andina Resources Inc. (TSX:PAR), indirectly through its wholly owned subsidiary, Petro Andina (Trinidad) Ltd. ("Petro Andina Trinidad"), are pleased to announce the terms of a farm-in ("Farm-In") by Petro Andina Trinidad into the Cory Moruga 'E' Block onshore in South Central Trinidad ("Moruga Block"). The Farm-In will result in the drilling of two exploration wells onshore Trinidad by the parties with the initial well scheduled to be spud and drilling prior to February 28, 2010.

The Farm-In

The Moruga Block is held pursuant to an Exploration and Production Licence ("Licence") awarded to POGL by the Republic of Trinidad and Tobago ("Trinidad") in August 2007. The Licence covers approximately 3,012 hectares and is currently held beneficially as to 25% by PERL and as to 75% by POGL who to date have proportionally expended a total of approximately US$10,000,000 on the Moruga Block primarily through the acquisition of 85 square km of full-fold 3-D seismic data over the Moruga Block and other Licence requirements.

Petro Andina Trinidad will earn a 50% working interest in the Moruga Block by paying 95% of all costs, to a maximum of US$13,300,000 for drilling and evaluating two exploration wells to a minimum depth of 3,200 meters. PERL will pay the remaining 5% to a maximum of US $700,000 for the drilling of the two exploration wells. Any amounts over the US$14,000,000 will be paid in accordance with the after-earned working interests of POGL - 33.8%; PERL - 16.2% and Petro Andina Trinidad - 50.0%.

In connection with the Farm-In, Petro Andina Trinidad will become the operator of the Licence. Petro Andina Trinidad is an approved operator with the Ministry of Energy and Energy Industries of the Republic of Trinidad through its participation in the Central Range Blocks in Trinidad.

The Farm-In and transfer of operatorship to Petro Andina Trinidad are subject to approval by the Ministry of Energy and Energy Industries and the Ministry of Finance of the Republic of Trinidad.

The Moruga Block

Significant progress has been made in evaluating the Moruga Block in South Central Trinidad. The parties have completed the interpretation of the required 85 square km of full-fold 3-D seismic over the block and several prospects have been mapped. The initial exploration location is an oil-prone exploration target called Green Hermit and is a multi-zone stratigraphic/structural trap of Herrera age sandstones adjacent to the Rock Dome high. The Moruga Block lies adjacent to, and on trend with a significant gas and condensate discovery in the Herrera Formation made by Aventura Energy in the Central Block in 2000. This discovery tested five separate intervals with a combined daily rate in excess of 60 million cubic feet of gas and approximately 2,000 barrels of condensate.

The Ministry of Energy and Energy Industries of the Republic of Trinidad has granted an extension for the spudding of the first well on the Moruga Block to February 28, 2010 and the parties are moving towards drilling the Green Hermit location during this timeframe. To date, the Certificate of Environmental Clearance has been obtained for the Block and the surface location of the first well, Green Hermit - 1, has been surveyed.

About PERL

PERL is a TSX Venture Exchange listed issuer which currently produces approximately 255 barrels of oil per day pursuant to a lease operatorship in South Central Trinidad, has a 25% entitlement to the Cory Moruga 'E' Block and a 10% entitlement to a Production Sharing Contract for onshore India block CB-ONN-2005/11. PERL also holds a 50% working interest in three sections of land in the Windfall area of west central Alberta, Canada. The prospect is a resource play targeting liquid rich gas that has significant potential and regional implications in the area for PERL.

PERL has an approximate working capital surplus of $1.25 million as at June 30, 2009 and approximately 44,015,768 common shares outstanding.

About POGL

POGL is a private Trinidad company which currently produces approximately 500 barrels of oil per day and which is affiliated with PERL as a result of them being directly or indirectly controlled by the same shareholder.

Statements in this press release may contain forward-looking information including expectations of future operations, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income and oil taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the issuer. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, or reservoir performance, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.

Neither the TSX or TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX and TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Primera Energy Resources Ltd.
    and Primera Oil and Gas Limited
    Patrick Acham
    Chief Executive Officer
    (868) 677-7253
    or
    Primera Energy Resources Ltd.
    Philip E. Collins
    Managing Director, Geology and Exploration,
    Western Canadian Sedimentary Basin of PERL
    (403) 532-5900
    or
    Primera Energy Resources Ltd.
    Gordon Harris
    Managing Director, Mergers and Acquisitions
    and Business Development of PERL
    (403) 532-5900