Petrolifera provides operational update, comments on recently proposed changes to Argentina export tax



    
    -   New Sierras Blancas natural gas discovery at 1050 well
    -   New pool Loma Montosa crude oil discovery at 1006 well
    -   New zone flowing light crude oil at 1028 well
    

    CALGARY, Nov. 19 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX)
announced today that it has made a Sierras Blancas natural gas discovery on
its Puesto Morales Concession in the Neuquén Basin, Argentina; has made a new
pool crude oil discovery in the Loma Montosa Formation on the Block at its
1006 well; and has completed a new zone in the Centenario Formation in its
1028 well which flowed light crude oil at 410 bbl/d.
    The 1050 well, situated southwest of the northern lobe on the Puesto
Morales Block in Argentina, tested natural gas with condensate through an 8 mm
choke at a rate of approximately 2.4 mmcf/d with 14 bbl/d of condensate,
increasing to 6.5 mmcf/d with 37 bbl/d of condensate through a 16 mm choke.
The calculated absolute open flow (AOF) was 7.5 mmcf/d with some reservoir
constraints indicated. The well will be tied into the company's new high
pressure natural gas line in the next several weeks.
    The 1006 well, situated in proximity to the La Ramona well, which was the
first modern well drilled on the block several years ago, recently flowed
light gravity crude oil at a rate of 350 bbl/d from zone LM9 in the Loma
Montosa Formation. Results were obtained after a frac of the zone, and proved
up the presence and productivity of this zone, which to date had only been
completed in structurally higher positions for natural gas. Follow up drilling
and testing is underway at other nearby locations.
    The company also recently completed a new upper zone in the Centenario
Formation in the 1028 well, located on the eastern edge of the Puesto Morales
Block. This was undertaken after the initial productive zone started to
produce at higher water cuts; the new zone has commenced flowing light gravity
crude oil at a rate of 410 bbl/d.
    Petrolifera continues to drill actively in Argentina with four rigs and
four service rigs operating on its Puesto Morales/Rinconada Concession.
Seismic acquisition has commenced on the company's Gobernador Ayala II
concession in La Pampa Province, Argentina. Additional 3D seismic programs are
scheduled early next year on the Vaca Mahuida and Puesto Guevara Concessions
in the Province of Rio Negro. The company's new field facilities are
anticipated to be completed shortly, including the water treatment plant,
initiation of the planned waterflood at the northern and central lobe and
commencement of deliveries of high pressure natural gas through the new
pipeline built from Puesto Morales to Medanito. Petrolifera anticipates that
by year end it will have invested over C$90 million during 2007 in Argentina
and has established a preliminary budget of C$76 million for 2008.
    Recently, the Government of Argentina introduced an increase in the
export tax for crude oil and refined products which has the effect of setting
a limit on the realizable price for crude oil sold within the country. While
the tax on crude oil exports raises little in the way of revenue for the
state, it does result in a subsidy for consumers. The company is still
analyzing the full impact of the increased tax, which appears to set a ceiling
of approximately US$42 on the price of a barrel of light crude oil. With
assumed sales of 10,000 bbl/d, after taking into account the lower income
taxes which would be payable to the government and lower royalties which would
be payable to the host Provinces due to the price reduction, it appears there
would be an approximate eight percent reduction in the company's cash flow
from operations before changes in working capital ("cash flow") at these
assumed sales levels, referencing the current level of actual selling prices
and netbacks which have been achieved by Petrolifera thus far in 2007.
Accordingly, Petrolifera will be reexamining its previously announced capital
budget to determine which, if any, of its anticipated 2008 Argentinean
projects will have to be deferred or eliminated due to the lower level of
anticipated cash flow relative to its actual and forecast sales levels
anticipated to be achievable during the year.
    In Peru, progress continues on the company's 2D seismic acquisition on
Ucayali Block 107. The program continues on schedule with completion still
anticipated for late February to early March 2008. Work continues on securing
EIA approval for the Maranon Block 106 program. Efforts are also progressing
with respect to securing a heli-transportable rig capable of drilling to
approximately 14,000 feet for the first of several anticipated wells during
the latter half of 2008 and into 2009.
    Work on the Colombian blocks primarily consists of ongoing evaluation of
all available technical data in preparation for geophysical activity in 2008
and for drilling on the Sierra Nevada I license in the second half of next
year.

    Petrolifera Petroleum Limited is a public Canadian crude oil and natural
gas company engaged in exploration, development, production and sales of crude
oil and natural gas in Argentina, while advancing its exploration plans in
both Colombia and Peru, where it holds extensive and prospective acreage. This
balanced and diversified exposure mitigates the company's overall risk
profile. The company's common shares are listed for trading on the Toronto
Stock Exchange under the symbol PDP.

    FORWARD LOOKING STATEMENTS - This press release contains "forward-looking
information", including but not limited to future drilling plans, anticipated
capital expenditures, forecast production and estimated flow rates and the
anticipated impact on the company of proposed increases in export taxes for
crude oil and refined products. These statements are based on current
expectations that involve a number of risks and uncertainties, which could
cause actual results to differ materially from those anticipated. These risks
include, but are not limited to risks associated with the oil and gas industry
(e.g. operational risks in development, exploration and production, delays or
changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections in relation to production, costs and expenses and
health, safety and environmental risks), the risk of commodity price and
foreign exchange rate fluctuations, the uncertainty associated with
negotiating with foreign governments and risk associated with international
activity. Additional risks and uncertainties are described in the company's
Annual Information Form which is filed on SEDAR at www.sedar.com.
    There can be no assurance that the flow rates of newly drilled wells will
result in stabilized production at these levels. Additionally, the impact of
increases in export taxes on crude oil and refined products are estimates only
and are subject to change. Due to the risks, uncertainties and assumptions
inherent in forward-looking information, prospective investors in the
company's securities should not place undue reliance on this forward-looking
information. Forward looking information contained in this press release are
made as of the date hereof and are subject to change. The company assumes no
obligation to revise or update forward looking statements to reflect new
circumstances, except as required by law.





For further information:

For further information: R. A.Gusella, Executive Chairman, Petrolifera
Petroleum Limited, Phone (403) 538-6202, Fax (403) 538-6225,
inquiries@petrolifera.ca; www.petrolifera.ca

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PETROLIFERA PETROLEUM LIMITED

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