Petrominerales Ltd.
TSX : PMG

Petrominerales Ltd.
Petrobank Energy and Resources Ltd.
TSX : PBG

Petrobank Energy and Resources Ltd.

April 27, 2009 00:01 ET

Petrominerales Corcel-D3 Well Produces 8,400 bopd

BOGOTA, COLOMBIA--(Marketwire - April 27, 2009) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG), a 76.8% owned subsidiary of Petrobank Energy and Resources Ltd. ("Petrobank") (TSX:PBG), is pleased to announce that our Corcel-D3 well is producing 8,400 barrels of 27.5 degree API oil per day, at a 23% water cut, from 31 feet of high quality sand, following a successful completion in the Mirador formation. The upper Guadalupe zone was also swab tested at 400 barrels of oil per day ("bopd") of 18.8 API oil with a 10% water cut at low drawdown. We estimate that this zone could produce at rates greater than of 1,000 bopd with a properly sized electric submersible pump. We temporarily suspended the upper Guadalupe zone to produce the highly productive Mirador zone. Both the lower Guadalupe and Lower Sand intervals tested wet after an extended evaluation.

OPERATIONAL UPDATE

Current Production

Production averaged 21,771 bopd in the first quarter of 2009 compared to 8,635 bopd in the first quarter of 2008 and 15,344 bopd in the fourth quarter of 2008, increases of 152% and 42%, respectively. With the Corcel-D3 well on production and continued success at Neiva, the Company is currently producing more than 28,000 bopd with an additional 530 bopd currently off-line at Orito.

Corcel

Following a sidetrack operation, we have run intermediate casing to the top of the Mirador formation in our Corcel-E1 well and expect to have the zones of interest logged by the end of April. The next well in our multi-well Corcel drilling program, Corcel-F1, will spud in mid-May.

Construction on our Monterrey offloading facility is now 65% complete. Early start-up of approximately 11,000 bopd delivery capacity is planned for mid-May and the final capacity of 20,000 bopd will be available early in the third quarter of this year. The facility will be the closest offloading station to Corcel, 77 kilometers away, and will reduce our trucking costs by up to $6.00/bbl for volumes delivered to Monterrey.

The Corcel central processing facility is currently capable of handling 70,000 barrels of fluid per day. An upgrade to 140,000 barrels of fluid per day is expected to be completed in the third quarter of this year.

Mapache

On our Mapache block, both Mapache-1 and Mapache-2, renamed Marisol-1, are tied into to production facilities and on production at a combined rate of over 2,000 bopd.

Neiva

On our Nevia block, we have drilled 16 new wells, 13 to the Doima Chicoral and three to the Honda formation as part of our multi-well development drilling program. Eleven wells have been completed and are on production, three in the Honda and eight in the Doima Chicoral. Nevia production averaged 1,205 bopd in March and we are currently producing 2,055 bopd, more than four times our average in 2008. The increase reflects the effectiveness of our innovative multi-stage fracture stimulation program, now being used to complete these wells. We plan to drill an additional 6 to 15 wells at Neiva in 2009 and we have further identified 25 existing wells as recompletion candidates for our multi-stage fracture stimulation technique.

Orito

On our Orito block, production has continued to ramp up following the resolution of the general strike in the Putumayo province and averaged 2,676 bopd in the first quarter. Orito production is now 3,400 bopd, excluding approximately 530 bopd of shut-in production. We anticipate that all shut-in production will be restored by the end of May. We have recently temporarily suspended our Orito development drilling program after the successful completion of the Orito-170 and Orito-171 wells, as part of our strategy to refocus capital deployment to the highest value-add areas of our portfolio during this period of lower commodity prices.

Exploration

We have initiated the acquisition of a further 400 square kilometres of 3D seismic. At Mapache we have finished acquiring 91 square kilometres of 3D seismic to the south, on-trend with our initial discoveries. At Castor and Casanare Este, we are currently in the field acquiring 196 square kilometres of 3D seismic, with the Casimena and Rio Ariari seismic acquisition programs to follow. The last of these programs is expected to be completed during the third quarter of 2009. The 3D seismic programs are expected to better define previously identified leads and structures derived from our existing seismic data set, and will satisfy our current phase commitments on these blocks.

Our three-well heavy oil exploration drilling program is on schedule to commence in May 2009, with one well to be drilled on each of the Chiguiro Este, Chiguiro Oeste and Rio Ariari blocks.

On our Guatiquia Block, immediately southwest of Corcel, the first of our recently expanded, two-well exploration drilling program is expected to spud in July 2009. These wells will target two separate prospects identified from 3D seismic and will satisfy both our 2009 and 2010 work commitments.

Late in 2008, we were granted two contiguous blocks north of Corcel, Blocks 25 and 31, on-trend with the "super giant" Cusiana-Cupiagua fields. We are currently reprocessing the existing 2D seismic grid from which several preliminary leads have been identified. The first phase of these contracts has a term of 36 months, and our work commitments include acquiring 3D seismic and drilling exploration wells on both properties. In 2009, we will conduct our environmental studies with plans to commence our exploration program in early 2010.

Last November, Petrominerales also acquired a 55 percent interest in the 2.6 million acre Block 126 in the Ucayali Basin of Peru. The block's first phase commitments included the reinterpretation of 1,200 kilometres of 2D seismic, which has been completed and confirmed the presence of a large anomaly, the La Colpa structure, which was encountered by a well drilled on the block 20 years ago. Initially, three other structural leads have also been identified from the existing reprocessed 2D seismic. The next exploration phase will include the acquisition of 150 square kilometres of 3D seismic and 50 kilometres of 2D seismic, which is likely to commence later this year or in early 2010. An Environmental Impact Assessment has been submitted to the Peruvian government and a public consultation was completed in February 2009. Approval for the seismic program is expected in the second quarter of this year. The first exploration well on the block could be drilled in late 2010.

Petrominerales Ltd.

Petrominerales Ltd. is a Latin American-based exploration and production Company producing oil in Colombia with 16 exploration blocks covering a total of 1.9 million acres in the Llanos and Putumayo Basins and 2.6 million acres in the Ucayali Basin of Peru. Petrominerales is 76.8% owned by Petrobank (TSX:PBG).

Forward-Looking Statements

Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to the timing of capital projects and the results of operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information

  • Petrominerales Ltd.
    John D. Wright
    President and Chief Executive Officer
    (403) 750-4400 or 011 571 629 2701
    or
    Petrominerales Ltd.
    Corey C. Ruttan
    Vice-President Finance and Chief Financial Officer
    (403) 750-4400 or 011 571 629 2701
    or
    Petrominerales Ltd.
    Jack F. Scott
    Executive Vice-President and Colombian Country Manager
    (403) 750-4400 or 011 571 629 2701
    or
    Petrominerales Ltd.
    Calle 113 No. 7-45, Torre B Oficina 1506
    Bogota, Colombia
    (403) 750-4400 or 011 571 629 2701