Petrolifera Provides Drilling and Testing Update

Petrolifera Petroleum reported that following the perforation of the upper portion of the Sierras Blancas Formation in the RN. PM. a-1061 well, situated on the western perimeter of the central pool of the Puesto Morales Block in the Neuquén Basin onshore Argentina, light gravity crude oil flowed on test at a calculated rate of 2,000 bbl/d though an 18-millimeter choke. It will be recalled that, on an earlier test, the well had flowed at a rate of 1,490 bbl/d through the same-sized choke, from perforations in the lower portion of the oil-bearing Sierras Blancas Formation, which was calculated to be 17 meters thick, based on log analysis. Yesterday, August 13, 2007, the well flowed and produced through the same-sized 18-millimeter choke at a rate of 1,324 bbl/d, with no water. Petrolifera's total production for the day exceeded 8,200 boe/d.

Currently, the 1033 and 1042 wells on the Puesto Morales Block have been drilled and logged and await testing. Both wells are indicated multi-zone hydrocarbon discoveries based on drilling and log analysis and are situated on the northern lobe east and northeast of the prolific 1027 well, which tested approximately 2,400 bbl/d from the Sierras Blancas Formation and is now onstream producing at approximately 1,000 bbl/d. Also, as previously announced testing of the uphole Centenario Formation in the 1027 well was deferred, due to the high productivity of the Sierras Blancas Formation in the well, although the well yielded oil from that zone to the mud pits while drilling; this zone will be evaluated later this year through the drilling of a shallow twin well or wells.

The company's service rig has now been moved and is currently on location testing various zones in the Centenario Formation in the 1018 well. This completion rig will return to test both 1033 and 1042 wells, once the testing program at 1018 is completed. Drilling is also underway at the 1044 well on the northern lobe at Puesto Morales. Petrolifera anticipates having three rigs available for drilling on the Puesto Morales Block until year-end 2007, with two completion rigs available on the Block from mid-October onwards. It is anticipated the Quintana Rig No. 13 will be available by late September 2006 for directional drilling at Puesto Morales and will replace the Nabors No. 832 rig, which has been on loan from another company active in the region and is due to be returned once the Q13 rig is on location.

At Rinconada, the 1006 well, which is an approximate two kilometer stepout to the 1001 discovery well, which on test flowed light oil to the surface at rates of approximately 700 bbl/d, has been cased as an indicated Sierras Blancas oil well. This is the third consecutive indicated success in the Rinconada program, which anticipates up to 19 wells to be drilled prior to year-end. The 1006 well will be tested later upon the early September arrival of a second service or completion rig, which will assist Petrolifera in meeting its objectives of drilling, testing and completing approximately 55 wells in Argentina by year end. A second drilling rig (Pride) is anticipated to arrive at Rinconada by mid-September 2007.

The company is also evaluating contracting a sixth rig to concentrate on exploratory drilling in the region.

Elsewhere, in Peru the company has just received its Environmental Impact Assessment ("EIA") certificate for Ucayali Block 107. As a result, the company is now in a position to commence its planned 800-kilometer seismic program. Seismic crews are at the staging area and will commence the program over this prospective Block as soon as it is practical. This is a large program on this jungle block and results will assist in determining drillable locations for 2008. The Ucayali Block is on trend with the giant Camisea natural gas and natural gas liquids field and exhibits the potential for both crude oil and natural gas prospects to be developed for further evaluation next year.