PetroMagdalena announces 1,114 bopd Copa A Sur-1 production test and provides operational update

TORONTO, Oct. 31, 2011 /PRNewswire/ - PetroMagdalena Energy Corp. (TSXV: PMD) is pleased to provide an operational update highlighting that the Copa A Sur-1 well has produced 1,114 barrels of oil per day ("bopd") of 38.4 degrees API light oil on natural flow over 75 flowing hours during a 4-day production test period with only 1.5% water cut and a stable 350 psi wellhead flowing pressure. This represents a gross (before royalties) working interest share of 636 bopd to the Company.

The Copa A Sur-1 well logs indicate 12 feet of net oil pay in two C7 sand layers.  The well was spudded on September 16, 2011 and directionally drilled to a total depth of 7,572 feet measured depth ("MD").  The production test was conducted only on the C7 formation. After an extended well test has been completed, there are plans to then test two C5 sands with log indicated net oil pay of 21 feet and then the 24 feet of log indicated net oil pay in two C3 sands.

The Company holds a 57% working interest in the newly discovered Copa A Sur light oil field located in Polygon C of PetroMagdalena's Cubiro Block in the Llanos Basin.  Based on 3D seismic, the Copa A Sur field is 1.4-kilometre long with an estimated closure of 216 acres. The Copa A Sur structure is located 2.7 kilometres to the south of the Company's Copa Field, and immediately north of the recent discovery of Copa B, all of them part of the Copa trend. The Copa trend includes additional structures to be drilled targeting the prospective sands of Carbonera C7, C5 and C3.

Luciano Biondi, Chief Executive Officer of PetroMagdalena stated, "I am very excited as this is the third successful exploratory well we have drilled in a row,  having a direct impact on our bottom line and significantly improving the potential of the remaining exploration acreage on the Copa trend in the Cubiro block, our core producing asset in Colombia."

Operations Update

The Company is currently drilling the first development well, Petirrojo-3, in Polygon B of Cubiro and has a workover rig on the Copa B-1 well in Polygon C conducting a re-completion, after the electro-submersible pump stopped working on October 20, 2011. This is expected to add an additional 6-foot net pay sand that was not included in the initial test. Copa B-1 is expected to be back on production in approximately 10 days.

The Company is now mobilizing the Petrex-22 rig to the Santa Cruz-1 exploration well location and expects to spud the well before the end of November 2011.

The Company is pleased to announce that the operating partner, Pacific Rubiales Energy Corp., is drilling the Yaraqui-1X exploration well on the Topoyaco block and is currently drilling at approximately 8,300 feet MD and plans to run intermediate casing once it reaches 8,500 feet MD. The well is planned to reach a total depth of 10,509 feet MD, or 9,402 feet true vertical depth (TVD), or 8,484 feet true vertical depth sub sea (TVDSS) and is targeting the Cretaceous Villeta and Caballos formations in a sub-thrust structure called Prospect "D".

Production Update

The Company's gross share of production for the third quarter of 2011 averaged 2,708 barrels oil-equivalent per day ("boed"), up 12.4% from the second quarter of 2011. For the month of September 2011, the Company's gross share of production averaged 3,248 boed, reflecting the positive impact of the previously announced discoveries at Petirrojo-1 and Copa B-1 in the Cubiro block. Cubiro represented 78.4% of total production in the month of September.

PetroMagdalena is a Canadian-based oil and gas exploration and production company, with working interests in 19 properties in five basins in Colombia. Further information can be obtained by visiting our website at www.petromagdalena.com.

All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of PetroMagdalena. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of PetroMagdalena; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of PetroMagdalena and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated. Although PetroMagdalena has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. PetroMagdalena undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE PetroMagdalena Energy Corp.