Americas Petrogas Inc.
TSX VENTURE : BOE

Americas Petrogas Inc.

December 16, 2010 09:15 ET

Americas Petrogas Update on Argentina Activities

CALGARY, ALBERTA--(Marketwire - Dec. 16, 2010) - Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSX VENTURE:BOE) announces an update on recent activities in Argentina:

Medanito Sur

Earlier in 2010, the Company had drilled a sixth well, MS.s-1, originally licensed as a water disposal well. However, when the MS.s-1well was drilled, hydrocarbon shows and log responses led the Company to further study and reconsider this well's status. Consequently, the Company has decided to recomplete the MS.s-1 well, to convert it into a productive well, if the recompletion tests are positive. The EP.x-1 well, with its high water-cut, will now become the disposal well. The benefits to the Company of these changes include a possible increase of daily production and a reduction in water disposal costs.

Rinconada Norte

Rinconada Norte, where the Company has a 65% working interest, is immediately south and adjacent to Medanito Sur. This block is a geological extension of Medanito Sur (where all 6 wells have identified hydrocarbons). The Company intends to drill 3 wells in the first half of 2011. In so doing, the Company expects to increase its probability of finding oil in targets similar to those in Medanito Sur. This will be further facilitated with the current re-processing of the 3D seismic data previously acquired on Rinconada Norte. The new data will then be integrated with the Medanito Sur 3D seismic data to improve the interpretation to find drillable prospects over the two blocks, which combined, total 49,700 acres or 78 sections of land.

Los Toldos -- Exploratory Drilling

Beginning in August 2010 the Company drilled three consecutive medium depth Exploration wells – LF.x-1, LTN.x-1 and LTN.x-2 -- on its Los Toldos II Exploration block. These exploration wells satisfied the commitment for the first phase of exploration on the block. All three wells had oil and gas shows in several zones and were cased.

The La Flecha well, LF.x-1, produced 90 bopd and 155 bopd in short term tests from two zones in a shallow formation, the Rayoso, but subsequent tests showed substantial decline. This unexpected occurrence is currently under technical review to determine if any future corrective measures can be taken. Initial tests on the LTN.x-1 well resulted in uneconomic rates of production and based on similarity with LTN.x-1, the LTN.x-2 well was not tested. However, with the data obtained from the Rayoso zone in LF.x-1, a re-evaluation of the logs and petrophysics of the LTN.x-1 and LTN.x-2 wells is being done. This current re-evaluation will determine the feasibility of re-entering those two wells as well as the further potential of the LF.x-1 well.

Shale Gas, Shale Oil and Tight Gas Reservoirs Potential

Recently, major oil and gas companies with expertise in shale gas and tight gas exploration and production, have taken notice of the potential in the western region of the Neuquen basin for unconventional gas and unconventional oil plays, which generally involve higher risk but larger potential payoff. As recently as mid-November 2010, exploration concessions have been granted by government bodies to such major companies. Many of these concessions are nearby Americas Petrogas' western region blocks, such as Huacalera, Los Toldos I, II, III and IV blocks and the Loma Ranqueles block. Also within the general western region of the Neuquen basin is the Company's large Totoral, Yerba Buena and Bajada Colorada blocks (1,133,700 acres, 1771 sections or 49 Townships), which may offer good potential for conventional oil and gas as well as the possibility for tight gas, and unconventional shale oil and gas. Americas Petrogas is conducting its own studies as well as engaging independent geological, geophysical and engineering consultants with expertise in unconventional oil and gas plays. Gathering of this knowledge, combined with our close monitoring of the activities in this region, will help us to formulate strategic direction and evaluate opportunities.

About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in 16 blocks involving exploration, development and production. API has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen basin. For more information about Americas Petrogas, please visit www.americaspetrogas.com

About GrowMax Agri Corp.

GrowMax Agri Corp., a subsidiary of Americas Petrogas Inc., is developing a surface potash (and other minerals) brine reservoir and evaporite deposit at Bayovar in the Sechura Desert of Northwest Peru. Management, along with its partner/investor IFFCO, intends to build GrowMax into a potash and specialty fertilizers company. For more information about GrowMax Agri Corp., please visit www.growmaxagricorp.com

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. Such forward-looking statements, such as the intention to recomplete the MS.s-1 well, the conversion of the EP.x-1 well to a water disposal well, the expectation to drill 3 wells on Rinconada Norte in 2011, the potential associated with the LF.x-1 well, the potential associated with Huacalera, the Los Toldos blocks and Loma Ranqueles, the potential for conventional gas and unconventional shale gas and tight reservoirs in the Company's western region blocks, oil and gas reserves, the development of a surface potash (and other minerals) brine reservoir and evaporite deposit, and the building of a potash and specialty fertilizers company, 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. In particular, there is no assurance that the MS.s-1 well will be recompleted and, if completed will become a producing well, that the EP.x-1 well will be converted to a water disposal well, that any wells will be drilled on Rinconada Norte in 2011, that any of the Company's Los Toldos blocks or western region blocks will have any conventional or unconventional hydrocarbons, that a potash (and other minerals) brine reservoir and evaporite deposit will be developed and that a potash and specialty fertilizers business will be built. 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.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

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