1/5/2011 8:42:42 AM - Market Wire
BOGOTA, COLOMBIA, Jan 5, 2011 (Marketwire via COMTEX News Network) --
Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG), is pleased to provide an operational update highlighted by our Yatay-1 exploration well producing 10,440 barrels of 43 degree API light oil per day ("bopd") under natural flow.
Deep Llanos - Corcel, Guatiquia and South Block 31, Llanos Basin
The Yatay-1 well, on the Guatiquia Block, commenced drilling on November 19, 2010 and was directionally drilled to a total depth of 12,000 feet. Well logs indicate 114 feet of potential net oil pay in the Lower Sand-3 formation, and 17 feet of potential net oil pay in the Guadalupe formation. An electrical submersible pump was installed in the well after perforating a ten foot section at the top of the Lower Sand-3 formation. Over the last 17 hours the well has produced on natural flow through a one inch choke, at a rate of 10,440 bopd with less than a 0.1% watercut. We are currently evaluating the potential for additional Yatay follow up locations incorporating these well results and the recently completed Guatiquia 3D seismic acquisition program. Yatay-1 is the first well into a new, seismically defined, structure located down dip from the Candelilla structure and across the bounding Candelilla fault. The Candelilla structure produced over 7.3 million barrels of light oil in 2010 from the Lower Sand-3 and Guadalupe formations. Following completion operations at Yatay-1 the drilling rig will move to the Candelilla-5 location targeting the Guadalupe formation that is currently producing in Candelilla-4.
We currently have two wells drilling on the Corcel Block, Cardenal-1 and Celeste-1. These wells commenced drilling on December 6 and December 9, 2010, respectively. We expect to have results from both wells by the end of January.
Central Llanos Blocks (Casimena, Castor, Casanare Este, Mapache)
We began drilling operations on our Yenac-3 well on December 27, 2010. This is the third well to be drilled on our Yenac discovery. In addition, we are currently conducting a multi-zone test of our Mantis-1 well. Mantis-1 targeted a separately defined geological structure approximately one kilometre northeast of Yenac. Well logs from Mantis-1 indicated over 90 feet of potential net oil pay. The well has tested trace amounts of heavy oil from the first three intervals in the Lower Mirador formation. Testing operations will now continue in the Upper Mirador formation which is the main productive horizon in the Yenac-1 and 2 wells. Testing of three Upper Mirador intervals in Mantis-1 is expected to be completed by the end of January.
Llanos Basin Heavy Oil Blocks (Rio Ariari, Chiguiro Oeste, Chiguiro Este)
On December 2, 2010, we began drilling operations on Borugo-1, the next exploration well of our planned nine-well program on our Rio Ariari Block. Borugo-1 reached a total depth of 5,260 feet on December 20, 2010. Well logs indicate 35 feet of potential net oil pay in the Mirador formation. Borugo is testing a different play concept, distinct from our Mochelo-1 and Rio Ariari-1 discovery wells. We have cased the well and expect to have further results by the end of January.
Production Update
Total Company production averaged 34,807 bopd during the month of December, and 33,222 bopd during the fourth quarter of 2010.
Since December 20, 2010, production has been affected due to transportation and offloading capacity limitations being experienced in the Llanos Basin. The limitations are mainly a result of increased production in the country, restrictions in trucking capacity, road restrictions over the holiday season, and the OCENSA pipeline system being offline for maintenance for three days. Consequently, we have over 5,000 bopd of production that we expect to bring back on-line during the month of January, plus the additions from Yatay-1.
Petrominerales Ltd.
Petrominerales Ltd. is a Latin America-based exploration and production company producing oil in Colombia with 15 exploration blocks covering a total of 2.0 million acres in the Llanos and Putumayo Basins and five exploration blocks in Peru covering a total of 9.5 million gross (5.4 million net) acres in the Ucayali and Titicaca Basins.
Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to the timing of capital projects and the future development of our oil and gas assets, including anticipated drilling and completion activities, and statements relating to future production rates and our anticipated ability to bring certain oil production on-line. The forward looking information is based on key expectations and assumptions made by Petrominerales, including assumptions concerning the success of future drilling and completion activities, the performance of new and existing wells, availability of transportation capacity for our oil production, prevailing commodity prices, availability of labour and services, receipt of required permits and regulatory approvals and performance of expected activities by industry partners. 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. A discussion of those risks and uncertainties can be found in the Company's Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices and the cost of services and materials; the results of exploration and development drilling, recompletions and related activities; availability of drilling equipment and personnel; 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 our control. 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.
SOURCE: Petrominerales Ltd.

Petrominerales Ltd.
Corey C. Ruttan
President and Chief Executive Officer
403.750.4400 or 011.571.629.2701
Petrominerales Ltd.
Jack F. Scott
Chief Operating Officer
403.750.4400 or 011.571.629.2701
Petrominerales Ltd.
Kelly D. Sledz
Chief Financial Officer
403.750.4400 or 011.571.629.2701
Petrominerales Ltd.
John D. Wright
Chairman of the Board and Strategic Advisor
403.750.4400 or 011.571.629.2701
[email protected]
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