Petrolifera Flow Tests RN.PM.x-1004 Well in Argentina

Petrolifera Petroleum Limited reports that the RN.PM.x-1004 well has flowed crude oil on test from the Sierras Blancas Formation. The well was swabbed in at just after 9:00 PM Argentina time on December 3, 2005 and within one hour was flowing 99 percent oil at a calculated extrapolated rate of 542 bbl/d. Subsequently on December 4, 2005 the flow rate of the well was tested through various choke sizes from 6:15 AM until 5:00 PM Argentina time and during the test interval flowed 100 percent crude oil at extrapolated calculated rates ranging between a high of 940 bbl/d through a one-half inch choke (one hour test) to a low of 457 bbl/d through a one-inch choke (nine hour test). Investors, prospective investors and shareholders are cautioned and advised that there is risk associated with test results of limited duration and that there can be no assurance that the well will produce at the rates indicated by the test results. The rates reported are not stabilized flow rates and management is of the opinion that it is more likely than not that stabilized rates, when established, would probably be closer to the lower end of the extrapolated calculated rates.

The 1004 well was designed to test the lower of two related structural culminations, with the other higher culmination being that associated with the RN.PM.x-1003 well reported upon last week. Management is pleased with the results of the testing of both wells. The 1004 well will likely be placed onstream during the upcoming week upon the arrival of additional storage tanks, which is being arranged, and if suitable arrangements can be made with a third party to treat the crude oil offsite. There is no assurance these arrangements can be made.

The 1003 well commenced production on December 3, 2005, initially solely from the Punta Rosada Formation, at a rate of approximately 380 bbl/d through a one-quarter inch choke. Upon the arrival of a new storage tank on December 5, 2005, production from the Sierras Blancas Formation will also be initiated, with the well expected to be produced from the two zones combined at initial restricted rates of 1,200 bbl/d due to the previously-identified short-run treatment limitations.

Upon completion of the testing operations at the 1004 well and the subsequent installation of a production string, the service rig being utilized to test and complete the drilled wells will move to RN.PM.X-1002, the first well drilled in the 2005 program. Once the 1002 well is tested and completed for production, Petrolifera expects the service rig will then be moved to the RN.PM.x-1010 location, which is an easterly offset to the 1003 well, if warranted by drilling and logging results.

Thereafter, again if warranted by drilling and logging, the service rig will likely move to either RN.PM.x-1011, which well will be drilled after the 1010 well, or to the RN.PM.x-1005 well, if the 1011 offset well is not yet ready to test, followed then by testing at the 1011 well.

The 1005 well has reached total depth and encountered two interesting zones with encouraging oil shows in the Quintuco Formation, which was the primary objective of this particular well. The well will be logged and cased, if warranted following log analysis and then tested either after the 1010 well or the 1011 well, depending upon the completion date of the 1011 well.

As indicated, the drilling rig which is presently at the 1005 location will proceed to the 1010 location east of the 1003 discovery well and then to the 1011 location offsetting the 1003 well to the west. Thereafter, the destination will be determined by test results and the continuing availability of the rig, which is presently scheduled to be returned to another operator in early 2006.

Petrolifera intends to secure as much well data and test data and bring onstream as much production as it is able to in the period between now and year end, while it continues to assess its overall facilities and transportation requirements. The company is very pleased with the results to date but will defer sizing permanent installations until the productive potential of the area is more clearly established.