PetroMagdalena Continues Exploration Success with Another Discovery on the Cubiro Block

    




 TORONTO, Feb. 27, 2012 /CNW/ - PetroMagdalena Energy Corp. ,  provided an update today on its ongoing exploration program. 

 Luciano Biondi, Chief Executive Officer of the Company stated: "The  Llanos exploration program is continuing to build our production and  reserves, the latest discovery occurring at Cernicalo in the Cubiro  Block where we now have Upper Guadalupe sands on production and  potential in uphole in the C7 sands. With the growing success from our  exploration program we can begin to look for growth opportunities that  can be funded from our expanding cash flow." 

 CERNICALO DISCOVERY AT CUBIRO  

 PetroMagdalena has discovered a new field with the Cernicalo-1 ST, a  sidetrack of the Cernícalo 1 exploration well, which was drilled to  explore the prospectivity of the Carbonera Formation, located on  Polygon B of the Cubiro Block, where the Company holds a 70% working  interest. The Cernicalo-1ST well was perforated in two Upper Guadalupe  sands and it is currently being tested. In the last five hours, with an  electro-submersible pump at 23 Hz, the Guadalupe Formation has produced  an average of  530 bopd of 23.9 degrees API oil with 30% BS&W.  This  represents 371 bopd as PetroMagdalena's gross working interest share.  The activities in the Cernicalo 1 ST also include testing the Carbonera  C7. 

 The Cernicalo-1ST well was spudded on January 18, 2012, drilled to a  final depth of 6,845 feet MD and logged on January 28, 2012. The top of  the Carbonera C7 sand was found at a depth of 5,880 feet MD.  Petrophysical data show 13 feet of net pay in C7, with porosity of 24%  and hydrocarbon saturation of 50%; and 12 feet in Upper Guadalupe, with  porosity of 28% and oil saturation of 50%. Based on seismic  interpretations, the accumulation discovered by Cernicalo-1ST is a 1.5  km long structure, corresponding to the typical exploration play in the  Llanos Basin. The structure is on trend with the Barranquero field to  the north and Tijereto Sur-1X exploration well to the south.  

 EXPLORATION UPDATE 

 Santa Cruz Block, Catatumbo Basin: Santa Cruz -1X Exploration well 

 The Santa Cruz-1X well, located on the Santa Cruz Block in the Catatumbo  Basin in North Eastern Colombia, was drilled to the Middle Los Cuervos  Formation, reaching TD of 11,550 feet (MD), and finding a repeated  section of the Mirador Formation. Based on the petrophysical logs and  mud logging, a 7-inch production liner has been run in the well and  plans are in place to test several intervals in the Mirador and Los  Cuervos formations. Results from the testing program are expected  towards mid-March 2012. PetroMagdalena has a 70% working interest in  the Santa Cruz-1X well and is the operator of the Santa Cruz Block. 

 Cubiro Block, Llanos Basin: Tijereto Sur - 1X Exploration well 

 The Tijereto Sur-1X exploration well on the Cubiro Block has been  drilled to a TD of 6,926 feet (MD) and, based on the petrophysical log  data, 7-inch production casing has been run in the well to total depth  and work is ongoing to complete and production test the C7 Carbonera  Formation. Results from the completion and testing program are expected  by early March 2012. PetroMagdalena has a 70% working interest in the  Tijereto Sur-1X well and is the operator of the Cubiro Block. 

 Arrendajo Block, Llanos Basin: Arrendajo Norte - 1X Exploration well 

 The Arrendajo-1X well on the Arrendajo Block was drilled on February 9,  2012 to a TD of 6,298 feet (MD) and subsequently sidetracked to a TD of  7,343 feet. Petrophysical data do not show any prospective interval and  the well will be abandoned. 

 For location details on these wells, please refer to the Company's  investor presentation at www.petromagdalena.com. 

 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. 

 Glossary 




     _____________________________________________________________________
    |1P: Proven reserves              |G&A: General and Administrative    |
    |                                 |Expenses                           |
    |_________________________________|___________________________________|
    |2P: Proven + Probable reserves   |MMCF: Million Cubic Feet           |
    |_________________________________|___________________________________|
    |3P: Proven + Probable + Possible |MD: Measured Depth                 |
    |reserves                         |                                   |
    |_________________________________|___________________________________|
    |ANH: Agencia Nacional de         |MMBBLS: Million Barrels of Oil     |
    |Hidrocarburos                    |                                   |
    |_________________________________|___________________________________|
    |API: American Petroleum Institute|MMBTU: Millions British Thermal    |
    |                                 |Unit                               |
    |_________________________________|___________________________________|
    |BOE: Barrels of Oil Equivalent   |                                   |
    |_________________________________|___________________________________|
    |BOFD: Barrels of Fluid Per Day   |NPV: Net Present Value             |
    |_________________________________|___________________________________|
    |BOPD: Barrels of Oil Per Day     |PSI: Pounds per Square Inch. The   |
    |                                 |unit of pressure.                  |
    |_________________________________|___________________________________|
    |BOEPD: Barrels of Oil Equivalent |TD: Total Depth of the well        |
    |Per Day                          |                                   |
    |_________________________________|___________________________________|
    |BS&W: Basic Sediments and Water  |TVD: True Vertical Depth of the    |
    |                                 |well                               |
    |_________________________________|___________________________________|
    |E&PC: Exploration & Production   |TVDSS: True Vertical Depth Sub Sea |
    |Contract                         |                                   |
    |_________________________________|___________________________________|
    |ESP: Electric Submersible Pump   |WI: Working Interest               |
    |_________________________________|___________________________________|
    |FOB: Freight on Board            |WTI: West Texas Intermediate Oil   |
    |                                 |Price Index                        |
    |_________________________________|___________________________________|





   

PetroMagdalena Energy Corp.


CONTACT:  Michael DaviesChief Financial Officer(416) 360-7915Belinda LabatteInvestor Relations Representative(647) 436-2152 


    

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