Petrominerales to Case Amarillo-1 as Potential Oil Well

Petrominerales, a 66% owned subsidiary of Petrobank, announced that Amarillo-1 will be cased as a potential oil well.

Amarillo-1 is the first well to be drilled on our 10-well Corcel Northeast exploration drilling program. The well began drilling operations on June 10, 2010 and reached total measured depth of 13,457 feet on July 27. Well logs indicate a total of 46 feet of potential net oil pay in the Guadalupe formation. The Lower Sand 1 zone indicated an anomalous well log response and compelling hydrocarbon indications during drilling. The well will be cased and the drilling rig will be mobilized to the Arion-1 location to spud this well by mid-August. Amarillo-1 will be tested with the completion rig, starting with the Lower Sand 1 formation. Initial test results are expected in August.

Central Llanos Exploration Update, Mapache Block

The fourth well of our central Llanos exploration program, Mapana-1 on our Mapache Block, reached total measured depth of 8,220 feet on May 27, 2010. Well logs indicated potential net oil pay of 25 feet, consisting of 16 feet in the Carbonera C7 sands and nine feet in Guadalupe formation. To-date, we have completed testing three of four intervals in the Guadalupe, Mirador and Carbonera C7 formations. The test results indicate that the Carbonera C7, Guadalupe and Mirador sands were wet. A fourth interval in the Carbonera C7 remains to be tested, but the interval would require remedial cement work. The well has been suspended and the rig will move to Manzanillo-1 to initiate the testing program.

Production Update

Production to-date during the month of July averaged over 35,500 barrels of oil per day ("bopd"). Production was affected by certain Corcel wells being restricted or shut-in due to temporary limitations in our water disposal capacity. We have installed additional water disposal facilities and have started bringing shut-in production back on stream, and in addition, we have turned on the electric submersible pump in the Candelilla-1 well. As a result, current production is now over 38,000 bopd, and we expect to bring the remaining restricted production of approximately 2,000 bopd back on-line in early August.