COLONIA ENERGY CORP.
TSX VENTURE : CLA

COLONIA ENERGY CORP.

November 27, 2006 13:19 ET

Colonia Updates Activity and Releases Third Quarter Financials

CALGARY, ALBERTA--(CCNMatthews - Nov. 27, 2006) -

(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 nine months ended September 30, 2006.

Production for the period averaged 28 barrels of oil equivalent, comprised of 39% oil and 61% gas and NGLs. Gross revenues totaled $434,240 and the net loss for the period was $163,583. After accounting for non-cash charges, cash flow from operations was $116,276. 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 third quarter of 2006, the Company conducted its first significant field operations with the drilling and completion of two successful light oil wells in the Florence area of southeastern Saskatchewan. The horizontal well at 5-1-1-1 W2M (Company working interest 45.0%) swab tested at rates of 85 barrels of oil per day at an 88% water cut. This well is expected to be placed on production near year-end 2006, pending regulatory approval of water disposal arrangements. The vertical well at 2-13-1-1 W2M (Company working interest 37.5%) commenced production in late November. Colonia has applied for Good Production Practice in order that the well will not be limited by it's current allowable of 40 barrels per day.

Two separate Horizontal Well Project applications for the Florence area are pending regulatory approval and will allow the Company to aggressively follow-up our initial success on adjacent acreage. Current plans call for the drilling of at least two wells over the next three months in the Florence South area, with working interests between 37.5% and 50.0%. Mineral rights have been acquired on several additional Mississippian prospects in the southeast area of the province, with initial drilling activity slated for the latter half of 2007.

In North Dakota, pooling discussions on the three most advanced prospects are commencing with partners. It is anticipated that field activity on the first of these low risk light oil prospects will commence in the first quarter of 2007. This abandoned well re-entry opportunity is expected to yield between 50 and 100 barrels per day, and the Company's working interest is approximately 65%. Immediately adjacent producers have produced 200,000 barrels of oil on average to date.

Subsequent to the quarter end, the TSX Venture Exchange granted the Company's application for a six month extension to the expiration date for 10,000,000 outstanding warrants. These warrants are priced at $0.20 each and were issued in conjunction with our $3,000,000 offering of units in the fall of 2005. Their new expiration date is May 31, 2007.

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