Petroamerica Announces 68% Year-on-Year 2P Reserves Increase and Provides an Operational Update

CALGARY, April 2, 2013 /CNW/ - Petroamerica Oil Corp. (TSX-V: PTA) ("Petroamerica" or the "Company"), a company focused on oil exploration and production in Colombia, is pleased to announce the results of its 2012 year-end independent reserves evaluation and provide an operational update of the Company's activities in Colombia (Note: all monetary values referenced are in United States dollars).

Company highlights include:

• Total Proved reserves growth of 80% from 1.777 million barrels of oil at year-end 2011 to 3.250 million barrels of oil at year-end 2012 (Company working interest).
• Total Proved plus Probable reserves growth of 68% from 3.027 million barrels of oil at year-end 2011 to 5.081 million barrels of oil at year-end 2012 (Company working interest).
• Total Proved plus Probable plus Possible reserves growth of 78% from 4.441 million barrels of oil at year-end 2011 to 7.924 million barrels of oil at year-end 2012 (Company working interest).
• Total Proved net present value ("NPV") before tax discounted at 10% of $141.5 million, or $0.24 per share based on 580,721,594 common shares currently outstanding.
• Total Proved plus Probable NPV before tax discounted at 10% of $205.6 million, or $0.35 per share based on 580,721,594 common shares currently outstanding.
• Total Proved plus Probable plus Possible NPV before tax discounted at 10% of $304.3 million or $0.52 per share based on 580,721,594 common shares currently outstanding⁽¹⁾.
• Company working interest production for the fourth quarter of 2012 averaged 3,247 barrels of oil per day ("bopd").
• Average total Company working interest production for the month of February 2013 of 4,669 bopd, compared to 4,232 bopd average for January 2013.
• Construction of the Las Maracas permanent production facility, which is more than two-thirds complete and on schedule to be operational sometime during the month of May 2013.
• Currently drilling or planning to drill 4 exploration wells and up to 7 appraisal and development wells in the remainder of 2013.

(1) All per share amounts do not factor in the dilutive effect of any outstanding warrants or options, or the effect of outstanding debt or cash balances on net asset value.

2012 Year-End Reserves

The Company's Colombian reserves were evaluated by independent qualified reserves evaluator, GLJ Petroleum Consultants Ltd. ("GLJ"), and the reserves summarized here are taken directly from the independent reserves report prepared by GLJ, dated March 20, 2013, with an effective date of December 31, 2012 (the "GLJ Report"). The GLJ Report was prepared in compliance with the National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities) and in accordance with the definitions, standards and procedures of COGE (Canadian Oil and Gas Evaluation) Handbook. A complete filing of the Company's reserves as required by NI 51-101 will be will be filed on SEDAR with the Company's Annual Information Form, which is expected to occur towards the end of April.

The following table presents a summary of the Company's oil reserves as of December 31, 2012.

2012 Year-End Reserves Summary

Reserves Category	December 31, 2011 (MBbl)	December 31, 2012 (MBbl)	Year-on-Year Increase
Total Proved	1,777	3,250	80%
Total Proved plus Probable	3,027	5,081	68%
Total Proved plus Probable plus Possible	4,441	7,924	78%
Note: Company working interest reserves, before royalty.

The following table presents a summary of the Company's net present values of future cash flows as of December 31, 2012.

2012 Year-End Reserves Net Present Value Summary

Reserves Category	December 31, 2011 (Millions $)	December 31, 2012 Millions $)	Year-on- Year Increase	December 31, 2012 NPV/share ($/share)
Total Proved	70.0	141.5	102%	$0.24
Total Proved plus Probable	123.0	205.6	67%	$0.35
Total Proved plus Probable plus Possible	187.0	304.3	63%	$0.52
Note: Net present values before tax discounted at 10%. NPV per share amounts are based on 580,721,594 Petroamerica common shares outstanding. All per share amounts do not factor in the dilutive effect of any outstanding warrants or options, or the effect of outstanding debt or cash balances on net asset value.

The oil price forecast used to calculate the net present values can be found on the GLJ website at www.gljpc.com.

2012 Year-End Reserves Reconciliation

Oil MBbls	Total Proved	Total Proved plus Probable	Total Proved plus Probable plus Possible
December 31, 2011	1,777	3,027	4,441
Technical Revisions	(594)	(1,276)	(1,824)
Exploration Discoveries	2,577	3,839	5,816
Production	(510)	(510)	(510)
December 31,2012	3,250	5,081	7,924
Note: Downward technical revisions are primarily associated with the Balay Field and the Mirador reservoir at the Las Maracas Field; reserve additions are primarily associated with extensions and discoveries in new reservoirs at the Las Maracas Field (Gacheta and Une Formations) and the La Casona discovery.

Reserves Discussion

All of the Company's oil reserves are located in the Llanos Basin of Colombia. Reserve additions for 2012, as evaluated by GLJ, were generated by exploration success in the deeper reservoir horizons of the Gacheta and Une Formations, at the Las Maracas Field on the Los Ocarros Block. Other reserve adds in 2012 came from the Mirador and Une reservoirs at the La Casona discovery on the El Eden Block and are based on the results of one well only.

The Company has seen a 2P (proved plus probable) year-on-year reserves growth of 68%, from 3.027 million barrels for year ending 2011 to 5.081 million barrels of oil for year ending 2012. In 2012, the Company replaced 403% of its 2012 production with new 2P reserve additions. On a per barrel basis, the calculated future net present value before tax, discounted at 10%, for the 2P (proved plus probable) reserves category is $47.24 per barrel.

98% of the 2P (proved plus probable) reserves are classified as light to medium oil and the GLJ report did not include any reserves associated with natural gas or natural gas liquids.

Operations Update

• Company working interest production for the fourth quarter of 2012 averaged 3,247 barrels of oil per day.
• February 2013 production averaged 4,669 bopd (Company working interest) compared to January average production of 4,232 bopd.
• The construction of the Las Maracas permanent production facility is more than two-thirds complete and is on schedule for commissioning by the end of May 2013. The field is expected to produce at a rate of approximately 8,500 bopd (gross) until the permanent facility becomes operational.
• As of March 1, 2013, the Company is marketing and transporting its own crude from the Las Maracas Field. It has entered into oil sales agreements that, looking forward, should improve the Company's netback at the Las Maracas Field through reduced transportation costs and improved contract pricing.
• A service rig is currently testing the Une and Gacheta reservoirs at the La Casona-1 well, and results are expected to be announced shortly. The operator is currently procuring production facilities for the La Casona field and plans to utilize the produced gas as a fuel source to generate power at the Kona and Las Maracas Fields. Oil production is expected to commence in the third quarter of 2013, during which time the La Casona-2 appraisal well is expected to be drilled.
• On the El Porton Block, where Petroamerica holds a 25% working interest, the Curiara-1 exploration well is currently drilling and has reached a depth of approximately 14,100 feet.
• A rig has been contracted to recommence development drilling at the Las Maracas Field, and consequently the Las Maracas-8 well was spud on March 24, 2013.  The Las Maracas 8 well, which is located in the northern part of the field, will be followed by the Las Maracas-9 well immediately thereafter.
• Petroamerica is currently drilling or planning to drill 4 exploration wells and up to 7 appraisal and development wells in the remainder of 2013.

Exploration and Appraisal Drilling in 2013

A summary of exploration and appraisal drilling expected to take place throughout the remainder of 2013 is provided below:

Prospect/Well	Well Type	Block	Working Interest	Timing
La Casona-1	Exploration	El Eden	40%	Testing
Curiara-1	Exploration	El Porton	25%	Drilling
La Guira-1	Exploration	Los Ocarros	50%	Q3 2013 Spud
Rumi-1 (Chiriguaro Este)	Exploration	El Eden	40%	Q3 2013 Spud
Malavar-1	Exploration	Llanos-10	50%	Q3 2013 Spud
La Casona-2	Appraisal	El Eden	40%	Q3 2013 Spud
Las Maracas-8	Appraisal	Los Ocarros	50%	Drilling

Definitions of Reserve Categories

"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual quantities recovered will exceed the estimated proved reserves.

"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

"Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves.  There is a 10% probability quantities actually recovered will equal or exceed the sum of the proved plus probable plus possible reserves.

About Petroamerica:

Petroamerica Oil Corp. is a junior oil and gas exploration and production company with activities in Colombia. Petroamerica produces more than 4,000 barrels of oil per day from two oil discoveries, has one new discovery under appraisal and has interests in seven exploration blocks, all located in Colombia's Llanos Basin. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA".

Forward Looking Information

This press release contains forward-looking statements. The use of any of the words "anticipate", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.

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 onstream;
• 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;
• possible reserves are those reserves that are less certain to be recovered than probable reserves.  There is a 10% probability that the quantities actually recovered will equal or exceed the sum or exceed the sum of proved plus probable plus possible reserves; 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; and
• changes in regulation or policy positions by governments with respect to the development of oil and gas resources or foreign ownership of natural resources.

This news release includes forward-looking statements related to the expected occurrences in relation to the properties and drilling activities identified, including expectations regarding the Company's plans with respect to drilling and completing wells and the related facilities and the expected associated production therefrom, the timing and expected results of drilling activities and the Company's exploration and development activities during fiscal 2013. A multitude of factors can cause actual events to differ significantly from any anticipated development and although Petroamerica believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. These forward looking statements are based upon assumptions that Petroamerica has made concerning the oil and gas industry in Colombia, the reliability of available data regarding the properties, and the continuing market for oil and gas and the other factors referenced herein. Neither Petroamerica nor any of its subsidiaries nor any of its officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors, nor do any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

Data obtained from the initial testing results at the wells identified in this press release, including barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The well test results obtained and disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance of the well or of expected production results for the Company in the future."

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.

The estimated net present values as presented do not represent the fair market value or net asset value of the Company.

The reserves estimates provided herein are estimates only.  Actual reserves may be greater than or less than the estimates provided.

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.

Nelson Navarrete
President and CEO

Colin Wagner
CFO

Ralph Gillcrist
COO, Executive Vice President

Tel Bogota, Colombia: [phone]
Tel Calgary, Canada: [phone]
Email: [email protected]
Web Page: www.PetroamericaOilCorp.com