Pacific Stratus to Acquire Producing Assets in Colombia

Pacific Stratus Energy has signed a definitive share purchase agreement with Empresa Nacional del Petroleo, the national oil company of Chile, to acquire certain interests owned in Colombia by its wholly owned subsidiary, ENAP Sipetrol S.A. for cash consideration of US$60.2 million, subject to certain adjustments.

Sipetrol has interests in several blocks and producing oil fields in central Colombia along with working interests in two significant oil pipelines. These include a 90.6% interest in the Dindal and Rio Seco Blocks, and a 27.27% interest in the Caguan Block. The Sipetrol assets currently produce 7,200 barrels of oil equivalents per day (boe/d) (3,000 boe/d net to Pacific Stratus) of high-netback crude oil from the Guaduas and Rio Ceibas fields. The transaction, which is subject to financing and regulatory approval, is expected to close in June 2006.

Sprott Securities Inc. has been retained by Pacific Stratus as financial advisor on this transaction and related financing.

Pacific Stratus already owns interests in the Doima block and Ortega-Pacande oil fields, as well as in the La Creciente, Moriche and Puli-B exploration blocks in Colombia. The company is focused on identifying acquisition opportunities primarily within the upstream Sub Andean basins, initially in Colombia.