Petroamerica Provides an Update of its Drilling and Testing Activities in Colombia

CALGARY, Jan. 24, 2013 /CNW/ - Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), a junior oil and gas company operating in Colombia is pleased to provide an update of certain drilling and testing results from its wells in Colombia. The Company is currently participating in three wells for which results have recently become available: the Las Maracas-7 appraisal well on the Las Maracas Field, Los Ocarros Block, the Balay-4 appraisal well on the Balay Block, and the Altillo Oeste-1 exploration well on the CPO-1 Block.

The Las Maracas-7 well has successfully confirmed the southern extension of the Las Maracas Field. It was drilled 400m south from the Las Maracas-6 well, and encountered potential net oil pay in the Mirador, main Gacheta and basal Gacheta sands. The well was cased-off and is expected to be completed as a Gacheta producer using a work over rig. The Tuscany 109 rig used to drill the Las Maracas-7 well is currently drilling a water disposal well down to the Carbonera C1 formation following which the rig is expected to move off location. Drilling activity on the field is expected to recommence during the second quarter of this year. The field is currently producing approximately 8,500 barrels of oil per day ("bopd") gross with a total field water cut of less than 2%, and it is anticipated that production will remain at these levels until the permanent production facility becomes operational sometime during the second quarter of this year.

The Balay-4 well has reached its total depth, is cased-off and is currently undergoing testing with plans to bring this well on as a commercial producer using an electro-submersible pump. The principal objective, the Upper Mirador sand producing at Balay-1 and Balay-2, tested at stabilized flow rates of approximately 544 bopd of light oil (28 degree API) under natural flow during the last six hours of a 48-hour test, and a maximum flow rate of 1,173 bopd. The total water cut at the end of the test was around 20% with the well still cleaning up. The top of the producing Mirador formation came in 45 feet higher than expected, and 25 feet higher than the nearest well, Balay-1. Further testing and drilling will be required to determine the full southern extent of the Balay Field. A test from the Une formation recovered 435 barrels of fluid per day of which 47 bopd were 33.5 degree API light oil (89% water cut) and a test from the Lower Mirador formation recovered mostly water with only minor amounts of oil.

On the CPO-1 Block, the Altillo Oeste-1 well has been plugged and abandoned after encountering only minor oil shows in the primary reservoir objective. The Company believes that the trap integrity was compromised by the fault not forming an effective seal.  The results of the Altillo Oeste-1 well does not downgrade the remaining prospectivity on the block and Petroamerica and its partner Meta Petroleum Corp. are considering the possibility to enter into the second phase of the contract and drill another exploration well on the block at the end of 2013.  Petroamerica acquired its participating interest in this block through a farmout agreement with Meta Petroleum Corp. and Petroamerica´s participation in this block is subject to approval by the Colombian National Hydrocarbon Agency (ANH).

Petroamerica holds a 50% participating interest in the Los Ocarros Block where the Las Maracas Field is located, 15% in the Balay Block where the Balay field is located and 50% in the CPO-1 Block.

About Petroamerica:

Petroamerica Oil Corp. is a junior oil and gas exploration and production company with activities in Colombia. Petroamerica produces approximately 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 Statement

This news release includes forward-looking statements related to the expected occurrences in relation to the properties and drilling activities identified. 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.  Risk factors may include the uncertainty of conducting operations under a foreign regime, the availability of labour and equipment, the fluctuating price of oil and gas, and Petroamerica's dependence upon other participants in the property areas.  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.

Although the Company believes that the expectations represented by the forward-looking statements contained herein are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Data obtained from the initial testing results at the well 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.

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