The funds raised will be used to replace a significant portion of the internal funds utilized to complete the first stage of the acquisition of Petroleos del Norte S.A. ("PDN") on June 16, 2006.
Application has been made for the new ordinary shares to be admitted to trading on AIM and dealings are expected to commence on September 1, 2006.
The equity issue was led by Seymour Pierce.
Petroleos del Norte S.A. and Colombia
As noted in previous releases, PDN greatly enhances PetroLatina's asset base in Colombia and brings with it net production of 523 barrels of oil per day ("bopd") from three licenses situated in the Middle Magdalena Valley, proven and probable reserves of 6.9 million barrels (net to its interests), the revenue generating Rio Zulia - Ayucucho Pipeline and three additional exploration (technical evaluation) licenses.
More importantly, PetroLatina holds interests in two further exploration licenses in Colombia having the combined potential for recoverable reserves of up to 110 million barrels (76 million net to the Company). The licenses are known as "Midas" and "La Paloma" and are also situated in the Middle Magdalena Valley Basin adjacent to PDN producing fields.
The Company's current Colombian activities provide a secure and stable income stream and are self financing.
OPERATIONS UPDATE AND WORK-PROGRAM
Sarafina Gas Well - Within one of the PDN operated fields in Colombia, the Tisquirama acreage, is the Sarafina exploration gas well, abandoned in the 1970's after flowing more than 85 million square cubic feet ("mmscf") of clean dry gas. PetroLatina intend to re-enter this well before the end of 2006 and tie production into the nearby gas pipeline system through the construction of a 3.5 km new pipeline link. Early indications are that this well could produce at a minimum 6 mmscf per day.
Miidas and Paloma exploration licenses - Environmental assessments have commenced, a detailed seismic reprocessing program is under way and the Company is currently planning an extensive 2D seismic shoot in early 2007 to complement available reprocessed data.
Well 1X sidetrack was completed on schedule, experienced none of the problems encountered with well 3X and showed four potential hydrocarbon bearing intervals. Full testing of this well will commence in September.
Well 3X is currently shut in to build reservoir pressure.
Tortugas / Atzam – This project has been temporarily delayed following environmental work which uncovered Mayan ruins within the license area. PetroLatina is working with the Guatemalan Government to ensure that any work carried out does not interfere with the ruins. PetroLatina plans to work-over three wells within these license areas during the latter part of 2006.
Nicholas Gay, Chief Executive Officer, commented:
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