COLONIA ENERGY CORP.
TSX VENTURE : CLA

COLONIA ENERGY CORP.

May 29, 2006 18:38 ET

Colonia Announces First Quarter Financials and Updates Activity

CALGARY, ALBERTA--(CCNMatthews - May 29, 2006) -

(Not for dissemination in the United States of America)

COLONIA ENERGY CORP. (TSX VENTURE:CLA) (the "Company") released today its unaudited financial statements for the first quarter ended March 31, 2006

Production for the period averaged 32 barrels of oil equivalent, comprised of 45% oil and 55% gas and NGLs. Gross revenues totaled $170,090 and net loss for the period was $38,343. After accounting for non-cash charges, cash flow from operations was $48,010. The complete financial statements may be viewed on SEDAR at www.sedar.com.

The Company is also pleased to provide an update of its recent activities.

In March of 2006, the Company participated for a 10 % working interest in the drilling of a seismically defined 750m Paleozoic test in the Botha-Mega area of NW Alberta. The well was cased as a potential gas well earning the Company a 10% interest in 10 contiguous sections of land subject to a non-convertible overriding royalty to the farmor. Completion of the well and potential future development drilling is planned for later in the year on this winter access only area.

The Company has secured a deal from a private operator on a Midale light oil prospect in S.E. Saskatchewan and is currently licensing two horizontal locations on this prospect. The wells directly offset and are up-dip from two recently drilled horizontal wells which have produced up to 75 bopd each. Drilling operations are planned for the second quarter with the company participating for up to a 45% working interest. The Company is currently acquiring additional lands in the area on internally generated prospects and plans to drill up to two vertical 37.5 % working interest Frobisher tests mid-year.

In North Dakota, the company acquired working interests ranging from 16.5% to 100% in four separate quarter sections on a Mission Canyon light oil prospect. A seismic review and drilling option proposal has been sent to the offsetting landholder which if accepted could lead to the drilling of multiple horizontal wells on a rolling option basis over the farmor's significant land spread. On a second light oil prospect, also in North Dakota, the Company has made a farm-in offer to drill a horizontal well immediately up-dip from four vertical producers that have yielded an average recovery of 225,000 barrels of light oil per well to date.

The Company has expanded its exploration efforts with the hiring of one contract geologist and gained a right of first refusal on prospects developed by a private independent consulting geologist. The Company is actively seeking asset acquisitions with stable production and exploitation potential and will continue to expand its prospect inventory in Alberta, Saskatchewan and North Dakota.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially.

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

Contact Information

  • Colonia Energy Corp.
    Donald Campbell
    CEO
    (403) 663-9849
    or
    Colonia Energy Corp.
    George Bowley
    COO
    (403) 663-9849