Petrobras Reaches TD at Balay Well

Petroamerica announced that the Balay-2 ST1 well has reached a total depth of 15,084 feet (true vertical depth) and has been cased-off for an extensive testing program. The original objectives of the Balay-2 well were to appraise the Balay-1 Mirador Formation discovery (PTA press release, March 11, 2010) and to assess the hydrocarbon potential of deeper reservoirs (Barco, Guadalupe, Gacheta and Une Formations) which could not be properly evaluated in the Balay-1 well for operational reasons.

The Balay-2 ST1 well bore has been logged and a probable net oil pay thickness of 50 feet has been interpreted in the Upper Mirador, compared to the 20 feet of net oil pay encountered in Balay-1. Additionally, oil shows were observed whilst drilling the deeper reservoirs and these will be evaluated during testing.

The Balay-1 well has been on long-term test since July 14, 2010 and has produced from the Upper Mirador over 200,000 barrels of 28 degree API oil, under natural flow without water (0.2% basic sediment & water). The Balay-1 well is currently flowing 1,378 barrels of oil per day through a restricted 48/64" choke size.

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.