Petroamerica Announces the Balay-2 ST1 Well Test Results Confirming the Significance of the Balay Discovery, Llanos Basin, Colombia

CALGARY, May 9 /CNW/ - Petroamerica Oil Corp. ("the Company") (TSXV: PTA) is pleased to announce that the Balay-2 ST1 appraisal well flowed from two perforated intervals in the Upper Mirador, 2,620 barrels of 26 degree API oil per day with 9.3% bulk sediment and water ("BS&W") that is probably mainly completion fluid, under electro-submersible pump. The Balay-2 ST1 well also defined a deeper oil-down-to in the Upper Mirador reservoir. Additionally, 145 barrels of heavy oil (13 degree API, waiting on laboratory confirmation) and water (10-16% BS&W) was recovered from the Barco Formation. No hydrocarbons were recovered from tests carried out in the Une and Gacheta reservoirs.

Nelson Navarrete, President and CEO, commented on the Balay-2 ST1 drilling result, "this is significant in terms of proving up recoverable oil volumes in the Balay structure, and more importantly, moving the project one step closer towards a commercial development."

The Balay discovery was announced on March 11, 2010 and the Balay-1 discovery well has been on long-term production test since July 14, 2010, producing more than 285,000 barrels of 28 degree API oil from the Upper Mirador Formation, with no measurable water (0.22% BS&W). The forward plan is to put the Balay-2 ST1 well on long-term test together with the Balay-1 well. A third well, Balay-3, is planned for the fourth quarter 2011 to appraise the northern extent of the Balay discovery.

Petroamerica Oil Corp., through its wholly owned subsidiary, Petroamerica International Corp., holds a 15% participating interest in the Balay block for which it received its approval from the ANH (Colombian National Hydrocarbon Agency) earlier this year. Petrobras is the operator with a 45% participating interest and the other partners are CEPSA COLOMBIA S.A. and Sorgenia, each holding a 30% and 10% participating interest, respectively.

ON BEHALF OF PETROAMERICA OIL CORP.

"Nelson Navarrete"

President and CEO

Forward-Looking Statement
This press release contains forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "planned" and similar expressions are intended to identify forward-looking statements.

The forward-looking statements are based on certain key expectations and assumptions made by Petroamerica, including, but not limited to:

  • oil and natural gas production levels;
  • prevailing commodity prices and exchange rates;
  • availability of labour and drilling equipment;
  • timing and amount of capital expenditures;
  • general economic and financial market conditions;
  • governmental approvals of contracts entered into with industry partners in relation to properties and operations;
  • government regulation in the areas of taxation, royalty rates and environmental protection;
  • production of new and existing wells and the timing of new wells coming on-stream;
  • the performance characteristics of oil and natural gas properties;
  • the size of oil and natural gas reserves or resources;
  • the ability to raise capital and to continually add to reserves and resources through exploration and development; and
  • the success of exploration and development activities.

Although Petroamerica believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Petroamerica can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this press release. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to:

  • volatility in market prices for oil and natural gas;
  • volatility in exchange rates;
  • liabilities inherent in oil and natural gas operations;
  • changes or fluctuations in production levels;
  • stock market volatility and market valuation of our stock;
  • uncertainties associated with estimating oil and natural gas reserves and resources;
  • competition for, among other things, capital, acquisitions of reserves and resources, undeveloped lands and skilled personnel;
  • incorrect assessments of the value of acquisitions and exploration and development programs;
  • geological, technical, drilling, production and processing problems;
  • changes in legislation, including changes in tax laws, royalty rates and incentive programs relating to the oil and natural gas industry
  • changes in regulation or policy positions by governments with respect to the development of oil and gas resources or foreign ownership of natural resources.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.  Petroamerica does not undertake any obligation to publicly update or revise any forward-looking statements other than as required under applicable securities laws.

Neither the 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.

SOURCE Petroamerica Oil Corp.

For further information:

Nelson Navarrete            Colin Wagner
President and CEO            CFO
Petroamerica Oil Corp.            Petroamerica Oil Corp.
Tel: 57-1-629-3534            Tel: 403-237-8300
Email: investorrelations@pta-oil.com          Email: investorrelations@pta-oil.com

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