Petrolifera Increases Production 60% in Neuquen Basin

Petrolifera Petroleum reports that its daily production from the Puesto Morales/Rinconada concession in the Neuquen Basin, Argentina has increased by approximately 60 percent to 3,273 bbl/d from recently recorded levels, which have been running in the general 2,000-2,200 bbl/d range.

The increase in the production rate follows completion of arrangements to have the additional volumes of light gravity crude oil treated at a third party treatment and processing plant before sale. A minor processing fee is paid to the third-party owner of the processing plant.

As with the company's recent base production, incremental volumes will be trucked to market until the company completes a new and expanded onsite treatment facility and the construction of a new six-inch pipeline, anticipated for completion on or about October 1, 2006. The material required for these new facilities and the required pipe and related instrumentation have been ordered and construction planning and design work is progressing favorably.

Petrolifera is also negotiating with another oil company to further augment its production and sales volumes. Further developments in this regard will be reported to shareholders when and if negotiations are finalized.

The incremental oil is presently being produced from the RN. PM.a-1010 development well and supplements volumes which are primarily being produced from the RN.PM.x-1003 well and to a minor extent from the old stripper wells in the Puesto Morales Sur field.

Petrolifera Petroleum Limited is a Calgary-based oil and natural gas exploration and production company with operations in Argentina and onshore Peru, where over 5 million acres of exploratory rights are held under two licenses in the Maranon and Ucayali Basins.