Petroamerica to Farm-Out Los Ocarros Block

- Petroamerica to Farm-Out Los Ocarros Block

Petroamerica has entered into a farm-in agreement with Parex Resources Colombia Ltd. Sucursal ("Parex") to farm-out 50% of its working interest in the Los Ocarros block (the "Farmout"). Petroamerica's 50% working interest in the Los Ocarros block is derived from a farmout with Talisman (Colombia) Oil & Gas Ltd. ("Talisman"), which was announced on January 4, 2011.

As a consequence of the Farmout, Petroamerica and Parex have agreed to fund an exclusive operation to drill a sidetrack well to the Las Maracas-2 exploration well. The Farmout requires that Parex pay the first US $7.0 million of costs associated with the sidetrack well, after which Parex and Petroamerica will each bear 50% of any additional costs relating to the exclusive operation. Petroamerica and Parex will share equally any of the non-consenting party's working interest that becomes available as a result of the exclusive operation.

The Las Maracas-2 well reached a total depth of 13,100 feet and was found to be on the edge of structural closure with minor hydrocarbon shows encountered in the Mirador and Gacheta reservoirs. Petroamerica interprets a transition zone from oil to water on wireline logs in the uppermost part of the Mirador reservoir. The deeper part of the well has been plugged back and the well is currently being sidetracked to test the closure in a structurally higher position, at an estimated true vertical depth of around 11,000 feet for the Mirador reservoir.

Nelson Navarrete, CEO and President of Petroamerica commented "given Parex's operational experience in the immediate vicinity on Block LLA-16 and the Kona Field, this is a very positive development to have them as a partner with Petroamerica in this exclusive operation".

The transfer of Petroamerica's 50% working interest pursuant to the Talisman farmout remains subject to approval by the Colombian National Hydrocarbon Regulatory Authority (the "ANH"), and the subsequent transfer of 50% of such working interest (net 25%) to Parex is subject to approval by both the ANH and the operator of the block.

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Petroamerica Confirms Significance of Balay-2 Well

Petroamerica Confirms Significance of Balay-2 Well

Monday, May 09, 2011
Petroamerica Oil Corp.

Petroamerica Oil Corp. is pleased to announce that the Balay-2 ST1 appraisal well flowed from two perforated intervals in the Upper Mirador, 2,620 barrels of 26 degree API oil per day with 9.3% bulk sediment and water ("BS&W") that is probably mainly completion fluid, under electro-submersible pump. The Balay-2 ST1 well also defined a deeper oil-down-to in the Upper Mirador reservoir. Additionally, 145 barrels of heavy oil (13 degree API, waiting on laboratory confirmation) and water (10-16% BS&W) was recovered from the Barco Formation. No hydrocarbons were recovered from tests carried out in the Une and Gacheta reservoirs.

Nelson Navarrete, President and CEO, commented on the Balay-2 ST1 drilling result, "this is significant in terms of proving up recoverable oil volumes in the Balay structure, and more importantly, moving the project one step closer towards a commercial development."

The Balay discovery was announced on March 11, 2010 and the Balay-1 discovery well has been on long-term production test since July 14, 2010, producing more than 285,000 barrels of 28 degree API oil from the Upper Mirador Formation, with no measurable water (0.22% BS&W). The forward plan is to put the Balay-2 ST1 well on long-term test together with the Balay-1 well. A third well, Balay-3, is planned for the fourth quarter 2011 to appraise the northern extent of the Balay discovery.

Petroamerica Oil Corp., through its wholly owned subsidiary, Petroamerica International Corp., holds a 15% participating interest in the Balay block for which it received its approval from the ANH (Colombian National Hydrocarbon Agency) earlier this year. Petrobras is the operator with a 45% participating interest and the other partners are CEPSA COLOMBIA S.A. and Sorgenia, each holding a 30% and 10% participating interest, respectively.

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Drilling Commenced at Petroamerica's Las Maracas Well

Drilling Commenced at Petroamerica's Las Maracas Well

Friday, April 29, 2011
Petroamerica Oil Corp.

Petroamerica announced the April 27, 2011 spud of the Las Maracas-2 exploration well in the Los Ocarros Block, situated in the Llanos Basin of Colombia. The Las Maracas-2 well is targeting the Carbonera C7, Mirador and Une reservoir formations in a fault trap defined by 3D seismic. The well will be directionally drilled by the Parker 268 drilling rig and is expected to reach its total depth of 13,100 feet (measured depth) by end June, 2011.

The Company, pursuant to a Farmin Agreement with Talisman Oil & Gas Colombia Limited, is entitled to a 50% participating interest in the Los Ocarros Block, subject to the approval of the National Hydrocarbon Agency (ANH) and the operator of the block, Cepsa Colombia S.A., a subsidiary of the Cepsa Group.