Petroamerica Announces Material Reserves Increase

CALGARY, Dec. 17, 2012 /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 a new evaluation of additional reserves in the Gacheta Formation, in the Las Maracas field (see table below).

2011 Year-end Reserves Summary
2011 Company Reserves (before royalty) Mbbl	Total Proved	Total Proved plus Probable	Total Proved plus Probable plus Possible
Light/Medium Oil	1,777	2,923	4,182
Heavy Oil	-	104	259
Total Company Working Interest	1,777	3,027	4,441
Gacheta Addition, effective September 30, 2012
Gacheta Addition as of September 30, 2012 (Company Share) Mbbl	Total Proved	Total Proved plus Probable	Total Proved plus Probable plus Possible
Gacheta Remaining (Light Oil)	1,390	2,355	3,652
Gacheta Produced as of September 30, 2012 (Light Oil)	76	76	76
Total Company Working Interest Addition	1,466	2,431	3,728

GLJ Petroleum Consultants Ltd. ("GLJ"), an independent qualified reserves evaluator, had initially prepared a report (dated March 22, 2012 and effective December 31, 2011) on the 2011 year-end reserves of the Company (the "2011 Report"), prepared in compliance with National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities) and in accordance with the definitions, standards and procedures of the COGE (Canadian Oil and Gas Evaluation) Handbook.

In the 2011 Report, for the Las Maracas Field, reserves were assigned only to the Mirador Formation. Subsequently, Petroamerica and its partners drilled the Las Maracas-3 and Las Maracas-4 wells, which have successfully proven and tested additional reserves in the Gacheta Formation, as well as further confirming the presence and areal distribution of the Mirador reserves in the Las Maracas Field.

On July 30, 2012, Petroamerica announced a discovery with its Las Maracas-3 well where the Gacheta tested 30 degree API oil at a rate of 1,491 barrels of oil per day ("bopd"). For the month of November 2012, the Las Maracas-3 well produced at an average daily rate of 2,048 bopd with 1.2% water cut and has produced a total of 257,578 barrels of oil from the Gacheta since production start-up on July 25, 2012. On September 17, 2012, Petroamerica announced a successful Gacheta test in its Las Maracas-4 well, which produced oil at a rate of 1,400 bopd. Las Maracas-4 has been producing since September 9, 2012 and has a cumulative production of more than 168,643 barrels of oil, at an average rate of 1,893 bopd with 3.8% water cut for the month of November 2012.

Considering the tests from the Gacheta at the Las Maracas-3 and 4 wells and additional production history, Petroamerica management sought an update to the 2011 Report for the Las Maracas Field.  GLJ has prepared a COGEH compliant update for the Las Maracas Field, effective September 30, 2012 and dated December 5, 2012, which incorporates the addition of the Gacheta reservoir. This report does not include results coming from the Las Maracas-5 and Las Maracas-6 wells.

The results from this update show remaining reserves as of September 30, 2012 of 4.711 million barrels gross lease, or 2.355 million barrels company working interest related to the Gacheta Formation discovery in the total proved plus probable category. The Gacheta Formation has produced 151,500 standard stock tank barrels ("STB") gross lease, or 75,750 STB working interest reserves. Therefore, the Gacheta discovery has added 2.431 million barrels of company working interest proved plus probable reserves that were not included in the 2011 Report.

The Gacheta reserves addition is equal to 80% of the total proved plus probable reserves disclosed by Petroamerica effective December 31, 2011.

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.  It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated 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 has production coming from two oil discoveries, one discovery to be appraised and developed, and has interests in a total of 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 additional 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.

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 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.

For further information:

Nelson Navarrete
President and CEO

Colin Wagner
CFO

Ralph Gillcrist
Executive Vice President Exploration & Business Development

Tel Bogota, Colombia: [phone]
Tel Calgary, Canada: [phone]
Email: [e-mail]
Web Page: www.PetroamericaOilCorp.com