Petrolifera Logs Oil Pay at Sierras Blancas Well

Petrolifera Petroleum says its 100 percent-owned RN.PM a-1013 well, situated on the Puesto Morales Block which comprises a portion of the Puesto Morales/Rinconada Concession onshore in the Neuquen Basin, Argentina, is being tested and is a significant Sierras Blancas crude oil well. On test through an 18 millimeter choke, the well has flowed at levels up to 3,100 bbl/d of light gravity crude oil with no water. Testing will continue using various choke sizes.

In the opinion of Petrolifera's management, the 1013 well, with estimated net pay of 20 meters, is one of the best wells drilled to date at Puesto Morales. Pressures are consistent with those achieved at the 1002 and 1012 wells. The 1013 well is expected to be completed and placed on production in the next several days.

The drilling rig used to drill the 1013 well is now on location at the RN.PM.a-1015 well. This well is currently drilling below 1,150 meters and should reach total depth some time over the upcoming weekend. The service rig now at 1013 will accordingly move to the 1015 location once the testing program at 1013 is completed and the well is placed on stream. This should further increase Petrolifera's current production of light gravity crude oil, which is presently running in the 9,200 bbl/d range.

A second drilling rig and second completion rig are anticipated to be available to Petrolifera during October 2006 for acceleration of its fourth quarter drilling campaign. This pace of drilling is expected to continue and be expanded with up to 50 wells in Argentina anticipated in 2007. This will include some shallow drilling for Sierras Blancas crude oil on the Rinconada Block, as well as development of some shallower Loma Montosa or Quintuco natural gas reserves in the Puesto Morales Block and continued development of the highly prolific Sierras Blancas and Punta Rosada Formations. Drilling on Block 107 in the Ucayali Basin, Peru is also anticipated for the fourth quarter 2007, as warranted by the results of planned seismic during the first half of the year.