Americas Petrogas Inc.

Americas Petrogas Inc.

November 30, 2009 21:45 ET

Americas Petrogas Announces Final Closing of Private Placement and Q3 2009 Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2009) - Americas Petrogas Inc. (TSX VENTURE:BOE)

Final Closing of Private Placement

Americas Petrogas Inc. (the "Company") (TSX VENTURE:BOE) is pleased to announce that it has completed the second and final closing of its previously announced 11,111,112 common share, $5,000,000 private placement. This final closing consisted of 1,111,112 shares at a price of $0.45 per share for aggregate proceeds of $500,000. Finders fees totaling $20,000 will be paid in respect of the issuance of 888,889 of these shares, which were purchased by a non-insider. Directors and officers participated in the remaining 222,223 shares pursuant to this closing for gross proceeds of $100,000. The shares are subject to a four month hold period under applicable securities laws commencing from the date of issuance.

As previously announced, the proceeds from the Offering will be used to satisfy the costs of the installation and commissioning of the production facilities at the Company's Medanito Sur block, to continue exploration work on the Company's potash project and for general working capital purposes.

Commenting on the private placement, Mr. Barclay Hambrook, President and CEO, stated "With the closing of the $5 million private placement, we are well positioned to carry ourselves through to production and positive operating cash flow from our Medanito Sur project and to continue our exploration plans for our potash, oil and gas activities."

Financial Results

Copies of the Company's consolidated financial statements and the related Management's Discussion and Analysis ("MD&A") for the quarter have been filed under the Company's profile at All amounts are in Canadian dollars unless otherwise stated.

September 30
For the three For the nine
months ended months ended
2009 2008 2009 2008
Revenue (interest income
only) $ 3,653 $ 124,619 $ 34,724 $ 295,592
Net Loss $ 699,520 $1,169,810 $2,788,163 $2,254,303
Loss per share, basic &
diluted $ 0.008 $ 0.013 $ 0.030 $ 0.028
Cash flows used in
operations $ 811,503 $ 393,911 $2,309,026 $1,084,087
Capital expenditures $1,032,342 $5,942,704 $3,474,328 $9,260,878

Sept. 30, 2009 December 31, 2008
Cash and cash equivalents $ 1,447,111 $ 7,701,196
Total current assets $ 1,596,830 $ 8,124,476
Total assets $39,685,792 $48,829,011
Total current liabilities $ 1,637,871 $ 1,598,777
Long-term debt Zero Zero
Total shareholders' equity $38,034,785 $47,216,385

Review of Q3 2009

The Company reported a net loss of $699,520 or $0.008 per share for the three months ended September 30, 2009 compared to a net loss of $1,169,810 or $0.013 per share for the same period in 2008. The decrease in net loss can be primarily attributed to: (a) a foreign exchange gain in 2009 compared to a foreign exchange loss in 2008, offset by (b) reduced interest income in 2009.

From a cash flow perspective, during the three months ended September 30, 2009, the Company had operating cash outflows totaling $811,503 (2008 - $393,911) due primarily to funding general and administrative expenses. Investing cash flows involved a net outflow of $1,112,432 (2008 - $7,280,089) attributable primarily to oil and gas activities. The Company had no financing activities in the current quarter but, as previously mentioned, the Company did complete a private placement of equity in the past several days.

The Company's balance sheet at September 30, 2009, compared to December 31, 2008, reflects the key changes described above, namely, a change in cash due to investing and operating activities and a change in deficit due to the net loss. The Company's reported property and equipment decreased, despite the additional capitalized costs in the current period, because of the sizeable strengthening of the Canadian dollar (reporting currency) compared to the U.S. dollar and the Argentinean Peso (functional currencies).

Medanito Sur

The Company is pleased to have received approval from the government of La Pampa province in support of its involvement in the Medanito Sur project and the Company looks forward to beginning production, as operator, on Medanito Sur in December. Initially, production is expected from the three originally-drilled exploration wells. During this third quarter, the Company drilled a 4th well on the Medanito Sur block. The well El Calden XS-4, was drilled to explore for hydrocarbons principally in the Base Centenario formation and was drilled to total depth of 1060 meters. The well also penetrated the Loma Montosa and Pre-Cuyano formations. After logging, the well was cased and cemented and is currently under evaluation for testing and completion. The XS-4 well is located approximately 400 metres from the discovery well El Calden X-1 which was drilled to 996 metres and flowed light sweet crude oil 34 degree with no water at a rate of 491 bopd from an 8 metre zone and 57 bopd from a second 8 metre zone.

Bayovar (Potash)

The Company is proceeding with its exploration activities on the concession. Data collection and analysis of the property is ongoing.

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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