COLONIA ENERGY CORP.
TSX VENTURE : CLA

COLONIA ENERGY CORP.

August 28, 2007 12:34 ET

Colonia Announces Second Quarter Financials and Updates Activity

CALGARY, ALBERTA--(Marketwire - Aug. 28, 2007) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

COLONIA ENERGY CORP. (the "Company") (TSX VENTURE:CLA) released today its unaudited financial statements for the three and six month periods ended June 30, 2007.

Production for the six month period averaged 45 barrels of oil equivalent, comprised of 65% oil and 35% gas and NGLs. Gross revenues totaled $498,583 and the net loss for the period was $87,714. After accounting for non-cash charges, cash flow from operations was $139,239. The complete financial statements may be viewed on SEDAR at www.sedar.com.

The Company is also pleased to present an update of its recent and upcoming activities.

In the second quarter of 2007, the Company drilled and cased a horizontal Midale oilwell in its core area of Florence South in southeast Saskatchewan. Subsequent to the quarter end, the well was completed and equipped and has indicated production capability in excess of 100 barrels of oil per day. Colonia's working interest in this well and the original vertical new field wildcat discovery well is 37.5%. Current Company production is 115 BOE per day.

A follow-up horizontal well in the Florence South area is expected to spud in late August and Colonia's working interest is 50%. This operation if successful, together with currently pending area solution gas conservation, will permit the Company's production to reach approximately 200 BOE per day in the third quarter, exceeding its budgeted 2007 exit target rates of 170 BOE per day. In addition, the Company expects to carry out operations on at least one gas prospect in Alberta and one oil prospect in North Dakota prior to year-end that have potential to add a further 100 BOE per day to Colonia's interest.

BOE Presentation - The term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in this report are derived by converting gas to oil in the ratio of six mcf of gas to one bbl of oil.

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

Contact Information

  • Colonia Energy Corp.
    Donald Campbell
    (403) 540-2003