Pacific Stratus Obtains Environmental License at La Creciente

Pacific Stratus Energy has obtained the Global Environmental Production License at the La Creciente Block in the Lower Magdalena Valley of Colombia. This license covers all future drilling locations and infrastructure to bring the block into full production.

Jose Francisco Arata, CEO of Pacific Stratus Energy stated: "This is a very significant step in our quest to develop La Creciente because it allows us to fast track the construction of the required infrastructure to connect the wells to the existing Guepaje-Corozal pipeline and accelerate our production and sales of gas. We are planning an auction at the end of July to sell our early gas production from LC-1 and LC-2."

The company has also awarded a contract for the environmental studies necessary to build an additional pipeline to transport the full block production to the Caribbean ports of Cartagena and Covenas. These studies will be completed within 90 days, permits should be obtained by year-end and the pipeline could be ready to transport full block production in the second half of 2008.

Drilling at La Creciente-2 (LC-2) reached the stratigraphic top of the Cienaga de Oro Formation at the expected depth of 11,025 feet and encountered total gas readings of 22,980 parts per million (ppm) at 10,930 feet and 25,436 ppm at 10,956 feet, similar to those recorded at LC-1. The company has experienced operational delays during drilling that caused instability of the lower portion of the borehole within the shales of the Porquero formation. To safeguard the operation, it was decided to side track this portion of the well starting below the last casing point at 7,326 feet. Drilling is currently at 10,400 feet through the Porquero formation and as soon the top of the Cienaga de Oro Formation is reached, a 7-inch casing will be run and cemented to protect the borehole walls.

In order to accelerate the development of "Prospect A" and the exploration of the other prospects at La Creciente, the company recently contracted a second rig, the Saxon 133, for a period of one year. This rig is moving to the LC-3 location and will spud by the end of July 2007.

Extended production tests and initial sales of Mauritia crude at its recently drilled Mauritia Norte-1 discovery Well (MN-1) have commenced and the company will issue a further update once the results are known.