PetroMagdalena Completes Shares for Debt Issuance

    




 TORONTO, May 29, 2012 /CNW/ - PetroMagdalena Energy Corp.   announced today that it has received TSX Venture Exchange approval of  its previously announced proposed issuance of shares to settle certain  debt owed to Pacific Rubiales Energy Corp. in connection with the  exploration program at the Topoyaco and Las Quinchas blocks (see press  release dated May 14, 2012). 

 The Company confirms that it has issued 2,124,616 shares in the capital  of the Company at a deemed price of CA$1.29 per share in order to  settle a debt of approximately US$2.7 million owed to Pacific Rubiales  in connection with cash calls as at March 31, 2012 for the Topoyaco and  Las Quinchas blocks. After this issuance, the current issued and  outstanding number of common shares in the capital of the Company is  149,241,520. 

 The Company also announces that it has issued 85,000 options to its most  recently appointed director, Mr. Nelson Ortiz, at an exercise price of  CA$2.10 with an expiry date of March 30, 2017, which options vested  immediately upon grant. 

 PetroMagdalena is a Canadian-based oil and gas exploration and  production company, with working interests in 19 properties in five basins in Colombia. Further information can be  obtained by visiting our website at www.petromagdalena.com. 

 All monetary amounts in U.S. dollars unless otherwise stated. This news  release contains certain "forward-looking statements" and  "forward-looking information" under applicable Canadian securities laws  concerning the business, operations and financial performance and  condition of PetroMagdalena. Forward-looking statements and  forward-looking information include, but are not limited to, statements  with respect to estimated production and reserve life of the various  oil and gas projects of PetroMagdalena; the estimation of oil and gas  reserves; the realization of oil and gas reserve estimates; the timing  and amount of estimated future production; costs of production; success  of exploration activities; and currency exchange rate fluctuations.  Except for statements of historical fact relating to the company,  certain information contained herein constitutes forward-looking  statements. Forward-looking statements are frequently characterized by  words such as "plan," "expect," "project," "intend," "believe,"  "anticipate", "estimate" and other similar words, or statements that  certain events or conditions "may" or "will" occur. Forward-looking  statements are based on the opinions and estimates of management at the  date the statements are made, and are based on a number of assumptions  and subject to a variety of risks and uncertainties and other factors  that could cause actual events or results to differ materially from  those projected in the forward-looking statements. Many of these  assumptions are based on factors and events that are not within the  control of PetroMagdalena and there is no assurance they will prove to  be correct. Factors that could cause actual results to vary materially  from results anticipated by such forward-looking statements include  changes in market conditions, risks relating to international  operations, fluctuating oil and gas prices and currency exchange rates,  changes in project parameters, the possibility of project cost overruns  or unanticipated costs and expenses, labour disputes and other risks of  the oil and gas industry, failure of plant, equipment or processes to  operate as anticipated. Although PetroMagdalena has attempted to  identify important factors that could cause actual actions, events or  results to differ materially from those described in forward-looking  statements, there may be other factors that cause actions, events or  results not to be anticipated, estimated or intended. There can be no  assurance that forward-looking statements will prove to be accurate, as  actual results and future events could differ materially from those  anticipated in such statements. PetroMagdalena undertakes no obligation  to update forward-looking statements if circumstances or management's  estimates or opinions should change except as required by applicable  securities laws. The reader is cautioned not to place undue reliance on  forward-looking statements.  

 Statements concerning oil and gas reserve estimates may also be deemed  to constitute forward-looking statements to the extent they involve  estimates of the oil and gas that will be encountered if the property  is developed. Boe may be misleading, particularly if used in isolation.  A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency  conversion method primarily applicable at the burner tip and does not  represent a value equivalency at the wellhead. Estimated values of  future net revenue disclosed do not represent fair market value. 

 Neither 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 news  release. 

PetroMagdalena Energy Corp.


CONTACT:  Peter VolkGeneral Counsel and Secretary(416) 360-7915Belinda LabatteInvestor Relations Representative(647) 436-2152 


    

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