Petrolifera Petroleum secures new oil pricing arrangement for Argentina; provides operations update

    CALGARY, June 10 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX)
announced today it has completed an agreement with the major purchaser of its
Argentinean crude oil sales volumes, whereby effective June 1, 2008 and
including May 2008 sales, which are settled in the subsequent month,
Petrolifera will now receive US$47 per barrel of Puesto Morales Medanito crude
oil. This represents an increase of approximately US$5.00 per barrel of crude
sold into the market. The agreement also anticipates a favored nations
provision and further timely adjustments in the event of changes to prevailing
export tax provisions in Argentina. The modification reflects the impact of
market forces as opposed to any legislative changes in the country.
    Furthermore, Petrolifera is scheduled to receive a significant cash
payment of a minimum of US$2.50 plus valued added tax ("IVA") for each of the
approximately 1.4 million barrels of crude oil which have been delivered to
the purchaser since late in 2007, until the new arrangement became effective
in 2008. This price improvement and payment for previously delivered crude oil
will positively impact on Petrolifera's reported revenue, cash flow and
liquidity for the remainder of 2008.
    Petrolifera continues to conduct drilling and testing operations in
Argentina. Current crude oil sales at Puesto Morales Norte exceed 8,000 bbl/d
and oil equivalent sales were 9,028 boe/d in April 2008, compared to
8,180 boe/d year to date in 2008 and approximately 32 percent above April 2007
sales of 6,450 boe/d. Readers are cautioned that all references to barrels of
oil equivalent (boe) are calculated on the basis of 6 mcf:1 bbl. Boes may be
misleading, particularly if used in isolation. This conversion is based on an
energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
    Sales and production increases during the balance of 2008 are anticipated
to be derived from the impact of the company's pressure maintenance program at
Puesto Morales Norte, anticipated to reach peak influence in the second half
of 2009. It is also anticipated that further production and consequent sales
increases will derive from continuing development drilling at Puesto Morales
Norte and from higher impact exploratory drilling at Puesto Morales Este,
Rinconada Norte, Vaca Mahuida and Gobernador Ayalla II, where in total up to
16 gross wells (approximately two new wells per month) are anticipated by year
    Petrolifera is currently testing the Sierras Blancas Formation in its
1082 well, a deviated exploratory test drilled under the Casa de Piedra water
reservoir resulting from the hydroelectric dam on the Rio Colorado. Based on
log analysis and shows while drilling, crude oil was indicated to be present
in the Sierras Blancas Formation and the deeper Punta Rosada Formation.
Despite encouraging indications, the Punta Rosada Formation will not be tested
due to hole conditions and evaluation will have to await follow-up drilling
activity. The 1082 well is situated approximately 1.25 kilometers southeast of
the known limits of the central structure at Puesto Morales Norte, where
prolific productivity and significant volumes of oil have been produced from a
number of wells, including 1012, 1013 and 1061. Depending upon test results,
the 1082 well will be completed and tied in to production facilities once the
evaluation is completed. Petrolifera has a 100 percent interest in Puesto
Morales Norte and the 1082 well.
    Petrolifera also reports that the PME x-1002 well, the second well
drilled on the Puesto Morales Este Block, has been completed as a new pool
Loma Montosa Zone 2 crude oil discovery. On test and after a frac, the well
flowed at a rate of 458 bbl/d of light gravity crude oil through a
20 millimeter choke. This well is approximately 3.5 kilometers north of the
PME x-1001 Loma Montosa natural gas well and five kilometers southeast of the
central lobe at Puesto Morales Norte. Drilling of this well completes the work
program negotiated in conjunction with the awarding of this block. Petrolifera
has a 100 percent interest in Puesto Morales Este Block and the PME x-1002
    In Colombia, Petrolifera is continuing to finalize its plans to drill two
exploratory wells on two separate prospects (La Pinta and Brillante) on its
onshore Sierra Nevada I License in the Lower Magdalena Basin. Subject to
finalizing rig availability and receipt of the drilling environmental impact
assessment ("EIA"), both of which are anticipated to be resolved in the near
term, Petrolifera's drilling could be underway on the first of two high impact
Colombian locations by mid-August 2008. Applications to convert the company's
other landholdings to license status have been submitted and await
governmental approval.
    In Peru, the seismic program over Block 107 has progressed favorably. As
anticipated, numerous sizeable leads and potential prospects have
materialized. As a result of this encouragement from the company's seismic
program, Petrolifera is in the process of negotiating another concession in
the region to complement its existing holdings. Further details will be
provided upon completion of negotiations.

    Petrolifera Petroleum Limited is a Calgary-based crude and natural gas
exploration and production company with significant operated interests in ten
blocks in Argentina, Colombia and Peru in South America. These blocks cover
approximately seven million acres. Current crude oil and natural gas
production is derived from the Puesto Morales/Rinconada Concession in the
Neuquén Basin onshore Argentina. The company's capital program for 2008 is
anticipated to reach $102 million, with increased expenditures in Colombia and
Peru compared to levels in 2007, as new exploration programs are presently
underway. Simultaneously, the company is maintaining an active and responsible
program in Argentina with a total of close to forty new wells likely to be
drilled by Petrolifera by year end 2008.

    Forward-Looking Information

    This press release contains forward-looking information, included but not
limited to future exploration and development opportunities, future drilling
plans, anticipated capital expenditures and anticipated increases in
production relating to the anticipated completion of the 1082 well and the
completion of the PME x-1002 well. Forward looking information is not based on
historical facts but rather on Management's expectations regarding the
company's future growth, results of operations, production, future capital and
other expenditures (including the amount, nature and sources of finding
thereof), competitive advantages, plans for and results of drilling activity,
environmental matters, business prospects and opportunities. Such forward
looking information reflects Management's current beliefs and assumptions and
is based on information currently available to Management. Forward looking
information involves significant known and unknown risks and uncertainties. A
number of factors could cause actual results to differ materially from the
results discussed in the forward looking information, including but not
limited to, risks associated with the oil and gas industry (e.g. operational
risks in development, exploration and production, delays or changes to 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 environment risks), the risk of commodity price and foreign exchange rate
fluctuations, the uncertainty associated with negotiating with foreign
governments and third parties located in foreign jurisdictions and the risk
associated with international activity. Additional risks and uncertainties are
described in the company's Annual Information Form which is filed on SEDAR at

    Forecast capital expenditures are based on Petrolifera's current budgets
and development plans which are subject to change based on commodity prices,
market conditions, drilling success and potential timing delays. Petrolifera's
capital budget has been prepared based upon anticipated costs for equipment
and services which are subject to fluctuation based upon market conditions and
availability. Additionally, forecast capital expenditures do not include
capital required to pursue future acquisitions. Anticipated production growth
is anticipated based on the proposed drilling program with a success rate
based upon historical drilling success, sustained productivity of new and
existing wells and the expected impact of the company's waterflood program.
Indicated flow rates from production testing are not necessarily indicative of
sustainable production rates for such wells. Actual production rates may vary
for the indicated flow rates based a number of factors including reservoir
pressure and quality, and completion techniques.

    Although the forward looking information contained herein is based upon
assumptions which Management believes to be reasonable, the company cannot
assure investors that actual results will be consistent with this forward
looking information. This forward looking information is made as of the date
hereof and the company assumes no obligation to update or revise this
information to reflect new events or circumstances, except as required by law.
Because of 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.

For further information:

For further information: Richard A Gusella, Executive Chairman,
Petrolifera Petroleum Limited, Phone: (403) 538-6202, Fax: (403) 538-6225,,

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