BrazAlta Resources Corp.
TSX VENTURE : BRX

BrazAlta Resources Corp.

September 16, 2008 10:44 ET

BrazAlta Resources Corp. and Canacol Energy Inc. Provide Operational Update of the Capella-1 Exploration Well, Colombia

CALGARY, ALBERTA--(Marketwire - Sept. 16, 2008) - BrazAlta Resources Corp. (TSX VENTURE:BRX) ("BrazAlta") and Canacol Energy Inc. ("Canacol") are pleased to provide the following operational update for Canacol's Capella-1 exploration well located on the Ombu E&P Contract in Colombia.

Drilling of the Capella-1 exploration well commenced on July 10, 2008 and reached a total depth of 3,802 feet on July 30, 2008. Hydrocarbon shows were encountered while drilling the target Mirador formation. After analysis of the wireline logs, the borehole was isolated with a cement plug set at 3,420 feet, and casing run to a depth of 3,303 feet. Based on the wireline log interpretation, and the oil shows recorded while drilling, a total of 189 feet of potential hydrocarbon pay was encountered within the Mirador formation.

Flow testing of the lower 117 foot open-hole section was achieved using a progressive cavity mechanical pump. During five days of testing this interval produced at a stabilized rate of approximately 155 barrels per day of 10.5 degree API gravity oil with a decreasing water cut of 15% at the end of the test. Approximately 1000 barrels of drilling fluids were lost into this section, and the majority of the water produced during the production test is interpreted to be filtrate lost to the formation during the drilling process. The lower open hole section was subsequently isolated with a retrievable bridge plug so that it may be re-entered later.

The upper 72 foot cased hole section was then perforated and flow tested, also using a progressive cavity mechanical pump operating at a reduced rate to avoid the potential inflow of solids from these higher porosity sandstones. Over the course of four days production stabilized at a rate of approximately 85 barrels per day of 10.5 degree API gravity oil with only traces of water.

Upon completion of this initial testing the rig will be demobilized from the well site. A longer term production test will then be conducted for a period of up to six months which may involve the use of alternative pump configurations and cyclic steam injection.

The operator, Emerald Energy Plc., has notified the National Hydrocarbon Agency of Colombia of the results this discovery. Following these encouraging results, the operator and Canacol will drill the Capella-2 well approximately 1.3 kilometers from the Capella-1 discovery well. Drilling of the Capella-2 well will commence once the rig has been mobilized to the location and the well is expected to take up to three months to drill, evaluate and flow test. Total cost anticipated for this operation is $3.8 MM.

Charle Gamba, President and CEO of Canacol, said "We are very pleased to have met with success on our very first exploration project in Colombia. The Capella-1 well proves a significant accumulation of conventional heavy oil resource with combined cold flow production rates of 240 barrels of oil per day from this vertical well."

Canacol is paying the cost of drilling, evaluating, and testing the Capella-1 well, including the longer term production testing, to earn a 10% interest in the Ombu E&P Contract, subject to the approval of the ANH, the National Hydrocarbon Agency of Colombia, under the farm-in agreement announced on July 14, 2008. Total anticipated cost associated with this operation is $4.9 MM, which includes the cost of drilling rig mobilization. Canacol has the option to increase its working interest in the block to a total of 30% in consideration for funding up to 14 appraisal and development wells and the acquisition of 2D and 3D development seismic programs.

As per BrazAlta's previous press release of September 3, 2008, BrazAlta and Canacol have executed a definitive amalgamation agreement, and as part of this agreement BrazAlta has funded the participation in the Capella-1 well subject to certain terms and conditions. It is expected that the amalgamation will be completed on September 29, 2008 pending certain conditions to close including Canacol shareholder approval.

Cautionary Language and Conditions

Information in this release related to Canacol has been provided by Canacol to BrazAlta and has not been independently confirmed by BrazAlta.

BrazAlta is a publicly traded Canadian based international oil and gas corporation with operations in Brazil, Northern Ireland and Canada.

This press release may contain statements within the meaning of safe harbour provisions as defined under US Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation. A barrel of oil equivalent (boe) is derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil and may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead, especially in various international jurisdictions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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