Santa Maria Petroleum Inc.

Santa Maria Petroleum Inc.

February 26, 2013 16:59 ET

Santa Maria Petroleum Spuds Calacho #1 Well, Llanos Basin, Colombia

TORONTO, ONTARIO--(Marketwire - Feb. 26, 2013) - Santa Maria Petroleum Inc. (TSX VENTURE:SMQ) ("Santa Maria" or the "Company") has been informed by Omega Energy Colombia, the operator of Llanos 21 block in the Llanos basin in Colombia, that it has commenced drilling the Calacho No. 1 well. The Calacho well is the first well of a planned two well drilling program on the block.

The Calacho well is being drilled to a planned total depth of 7,000 feet. Drilling of the Calacho well is expected to take approximately 30 days. The Calacho well is programmed to test the hydrocarbon potential of the C7 and Une formations. The gross budget for drilling and testing of the well is approximately $4.5-million (U.S.).

The Rocamao No. 1 well is the second planned well in the drilling program on the block and is expected to be drilled to a planned total depth of 6,900 feet. Drilling of the Rocamao well is expected to take approximately 30 days. The Rocamao well is also programmed to test the hydrocarbon potential of the C7 and Une formations. The gross budget for drilling and testing the Rocamao well is approximately $5.1-million (U.S.).

Under the terms of the original farm-in agreement, Santa Maria was to pay 50% of the costs of the two wells in exchange for an income production participation of 35%. Under a new arrangement agreed to in the spring of 2012, Santa Maria will pay a maximum of $3,875,000 towards the costs of the two wells, of which, $2,000,000 has been paid. Following the completion of the wells and payment of the remaining $1,875,000, Santa Maria will then have the option to: a) waive any right to an income production participation going forward and have no further financial obligations; or b) retain a 24.75% income production participation in the block by reimbursing Omega Energy Colombia for the difference between the costs of the two wells and the amounts already contributed to Omega prior to exercising the option.

About Santa Maria Petroleum Inc.

Santa Maria is a junior oil and gas company with private participating interests in 4 blocks in the Llanos Basin of Colombia.

Cautionary Statements

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (together, "forward-looking information"). The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", "should" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information concerning the drilling of the Calacho well and the Rocamao well and the associated costs and timing thereof. The forward-looking information is based on certain key expectations and assumptions made by Santa Maria, including expectations and assumptions concerning the operational results in Colombia. Although Santa Maria believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Santa Maria can give no assurance that they will prove to be correct.

Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the inherent risks involved in the exploration and development of oil and gas properties, the uncertainties involved in interpreting drilling results and other geological data, uncertainties relating to fluctuating oil and gas prices, the possibility of cost overruns or unanticipated costs and expenses and other factors including unforeseen delays. Anticipated exploration and development plans relating to Santa Maria's properties are subject to change.

The foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information contained in this press release is made as of the date hereof and Santa Maria undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.


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