PetroMagdalena provides additional reserves breakdown

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Apr 11, 2012, 08:53 ET

TORONTO, April 11, 2012 /PRNewswire/ - Further to the release of PetroMagdalena Energy Corp's (TSXV: PMD) financial results yesterday, the Company wishes to provide additional information on its reserves, which are based on an independent reserve and resource assessment report prepared by Petrotech Engineering Ltd. ("Petrotech") following all industry standard procedures and in conformity to the COGE guidelines, as reported in the Company's NI 51-101 Form F1, filed on SEDAR at www.sedar.com and available on the Company's website at www.petromagdalena.com. The additional information is summarized in the tables below:

Summary Table 1 - Proved and Probable Reserves
Effective Date December 31, 2011
Reserve Category by Block		L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids			Before Tax Net Present Values (in $U.S.)
		L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids			Before Tax Net Present Values (in $U.S.)
		100%	Gross	Net	100%	Gross	Net	100%	Gross	Net	0%	5%	10%	15%	20%
		(Mbbl)	(Mbbl)	(Mbbl)	(MMcf)	(MMcf)	(MMcf)	(Mbbl)	(Mbbl)	(Mbbl)	(M$)	(M$)	(M$)	(M$)	(M$)
Proved Producing
	Yamu	1,481	148	136							5,080	4,680	4,333	4,045	3,801
	Cubiro	3,168	2,015	1,854							113,105	103,778	96,249	90,056	84,868
	La Punta	3,494	181	167							9,391	8,231	7,767	7,352	6,981
Total PDP		8,144	2,344	2,157	0	0	0	0	0	0	127,576	116,689	108,349	101,453	95,650
Proved Non-Prod.
	Cubiro	260	149	137							6,362	5,080	4,149	3,456	2,926
	Mecaya	440	189	174							11,917	10,373	9,111	8,067	7,193
	Rio Magdalena	243	95	87	5,299	2,077	1,944	313	123	113	13,252	10,427	8,314	6,701	5,448
Total PDNP		943	433	398	5,299	2,077	1,944	313	123	113	31,531	25,880	21,574	18,224	15,567
Proved Undeveloped
	Yamu	957	96	88							2,354	1,892	1,552	1,295	1,097
	Cubiro	5,715	3,398	3,127							163,758	140,931	123,327	109,416	98,178
	Mecaya	880	378	348							19,341	16,192	13,686	11,668	10,024
	Rio Magdalena	243	95	87	7,200	2,823	2,642	426	167	154	-9,171	-9,270	-9,274	-9,215	-9,117
Total PUD		7,795	3,968	3,650	7,200	2,823	2,642	426	167	154	176,282	149,745	129,291	113,164	100,182
Total Proved		16,882	6,745	6,205	12,499	4,900	4,586	739	290	266	335,389	292,314	259,214	232,841	211,399
Probable
	Carbonera				22,384.40	22,384.40	20,951.80	369.9	369.9	340.3	65,241	45,915	33,083	24,262	18,006
	Cubiro	9,543.80	5,870.10	5,402.20							248,098	194,549	158,919	133,787	115,216
	La Punta	602.9	33	30.3							1,021	606	68	-346	-671
	Mecaya	882.8	379.6	349.2							18,630	15,157	12,469	10,360	8,685
	Rio Magdalena	651.5	255.4	234.9	63,700.50	24,970.60	23,372.50	5,216.60	2,044.90	1,881.30	192,104	116,756	75,232	50,805	35,545
Total Probable		11,681	6,538	6,017	86,085	47,355	44,324	5,587	2,415	2,222	525,094	372,983	279,771	218,868	176,781
Total Proved + Probable		28,563	13,283	12,222	98,584	52,255	48,911	6,325	2,704	2,488	860,483	665,297	538,985	451,709	388,180


Table 2 - Total Proved and Probable Reserves by Block
Effective Date December 31, 2011
Dec 31, 2011 Reserve Category By Block	L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids			Before Tax Net Present Values (in $U.S.)
	L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids			Before Tax Net Present Values (in $U.S.)
	100%	Gross	Net	100%	Gross	Net	100%	Gross	Net	0%	5%	10%	15%	20%
	(Mbbl)	(Mbbl)	(Mbbl)	(MMcf)	(MMcf)	(MMcf)	(Mbbl)	(Mbbl)	(Mbbl)	(M$)	(M$)	(M$)	(M$)	(M$)
Yamu	2,439	244	224							7,434	6,572	5,885	5,340	5,898
Cubiro	18,687	11,432	10,520							531,323	444,338	382,644	336,715	301,188
La Punta	4,097	214	197							10,412	8,837	7,835	7,006	6,310
Mecaya	2,203	947	872							49,888	41,722	35,266	30,095	25,902
Rio Mag	1,137	446	410	76,200	29,870	27,959	5,955	2,335	2,148	196,185	117,913	74,272	48,291	31,876
Carbonera				22,384	22,384	20,952	370	370	340	65,241	45,915	33,083	24,262	18,006
Total 2P	28,563	13,283	12,222	98,584	52,255	48,911	6,325	2,704	2,488	860,483	665,297	538,985	451,709	389,180


Table 3 - Total Proved and Probable Oil Equivalent Reserves
Effective Date December 31, 2011
Total Proved and Probable Reserves By Block and BOE	L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids
	L&M Crude Oil			Non-Associated Gas			Natural Gas Liquids
	100%	Gross	Net	100%	Gross	Net	100%	Gross	Net
	(Mbbl)	(Mbbl)	(Mbbl)	(Mboe)	(Mboe)	(Mboe)	(Mboe)	(Mboe)	(Mboe)
Yamu	2,439	244	224
Cubiro	18,687	11,432	10,520
La Punta	4,097	214	197
Mecaya	2,203	947	872
Rio Mag	1,137	446	410	12,700	4,978	4,660	5,955	2,335	2,148
Carbonera				3,731	3,731	3,492	370	370	340
Total 2P (BOE)	28,563	13,283	12,222	16,431	8,709	8,152	6,325	2,704	2,488
Total Proved and Probable Reserves By Block and BOE	Barrels Oil Equivalent
	Barrels Oil Equivalent
	100%	Gross	Net
	(Mboe)	(Mboe)	(Mboe)
Yamu	2,439	244	224
Cubiro	18,687	11,432	10,520
La Punta	4,097	214	197
Mecaya	2,203	947	872
Rio Mag	19,792	7,758	7,217
Carbonera	4,101	4,101	3,832
Total 2P (BOE)	51,318	24,697	22,862

Notes to Table 1, Table 2 and Table 3:

(1)		The tables use the definition of reserves category and follows the guidelines from the Canadian Oil and Gas Evaluation (COGE) Handbook. The net cash flow is calculated at forecast prices and escalated cost on the reserves to all future time and after deduction of the capital costs and royalties but before deduction of income tax. All cash flow data is in U.S. dollars.
(2)		Additions may not add up due to computer rounding of the decimal places. The December 31, 2011 oil price closed at $98.83 per barrel for the West Texas Intermediate crude oil, at $103.11 per barrel for the Vasconia crude oil. The forecast prices are escalated using the NYMEX futures on the average of the monthly settlement prices to 2017 and then escalated at 2% per year thereafter (see Forecast Oil and Gas Prices section, in the filed Form F1). The gross reserve is the Company's share of production before royalties and the net reserve in the Company's share of production after deduction of royalties. The royalties on the oil are paid in kind and in cash if applicable.
(3)		The estimated net present values do not represent a fair market value. The abandonment costs of the wells have been incorporated at the end of the economic life. In reviewing the reserve estimates, it should be understood that there are inherent uncertainties and limitations with both the database available for analysis and the interpretation of such engineering and geological data. The judgments used in assessing the reserve are considered reasonable given the historical data on well performances and the knowledge of the property reviewed.

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.

Glossary

1P: Proven reserves	G&A: General and Administrative Expenses
2P: Proven + Probable reserves	MMCF: Million Cubic Feet
3P: Proven + Probable + Possible reserves	MD: Measured Depth
ANH: Agencia Nacional de Hidrocarburos	MMBBLS: Million Barrels of Oil
API: American Petroleum Institute	MMBTU: Millions British Thermal Unit
BOE: Barrels of Oil Equivalent
BOFD: Barrels of Fluid Per Day	NPV: Net Present Value
BOPD: Barrels of Oil Per Day	PSI: Pounds per Square Inch. The unit of pressure.
BOEPD: Barrels of Oil Equivalent Per Day	TD: Total Depth of the well
BS&W: Basic Sediments and Water	TVD: True Vertical Depth of the well
E&PC: Exploration & Production Contract	TVDSS: True Vertical Depth Sub Sea
ESP: Electric Submersible Pump	WI: Working Interest
FOB: Freight on Board	WTI: West Texas Intermediate Oil Price Index