August 26, 2009 18:40 ET

Colonia Energy Corp. Reports Profitable Second Quarter

CALGARY, ALBERTA--(Marketwire - Aug. 26, 2009) -


COLONIA ENERGY CORP. ("Colonia" or, the "Company") (TSX VENTURE:CLA) released today its unaudited financial statements for the three and six month periods ended June 30, 2009.

Colonia is pleased to report an improved second quarter 2009 with increases in production rates, gross revenue, cash flow and net earnings as compared to the first quarter of 2009.

Production for the quarter averaged 157 BOE per day, 13% higher than the prior quarter. Revenues after royalties increased 35% to $630,000, and cash flow was up 42% to $393,000. Quarterly net earnings were $13,000 versus a loss of $41,000 in the previous quarter. The Company's working capital at the end of the current quarter stands at $647,000, up $107,000 on the quarter and our bank line of credit of $1,588,000 remains fully undrawn.

Colonia continues to build its prospect inventory and is currently working to complete land acquisitions in order to commence field operations on several relatively low risk impact prospects with the potential to net the Company between 50 and 200 BOE per day. With second quarter oil prices recovering some 32% over the first quarter of 2009 and current narrow differentials, Colonia has expanded its focus to include west central Saskatchewan Mannville and Bakken heavy oil targets augmenting its inventory of southeast Saskatchewan Bakken and Midale light oil prospects.


This news release contains forward looking statements which may include assumptions related to the Company's drilling success, production, capital expenditures and cash flow. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to vary from those anticipated.

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.

Neither 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 this release.

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