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22.09.11

Interim Results for the six months ended 30 June 2011


PetroLatina Energy Plc
(“PetroLatina” or the “Company”)

Interim Results for the six months ended 30 June 2011

PetroLatina (AIM: PELE), the independent oil and gas exploration, development and production company focused on Latin America, announces its unaudited interim results for the six months ended 30 June 2011.


Financial Highlights:

• Revenues increased by 51% to US$14.5 million (2010: US$9.6 million)

• Gross profit increased significantly to US$10.6 million* (2010: US$6.5 million*)

• EBITDA generation of US$3.6 million* (2010: US$2.2 million*)

• Basic and diluted EPS of US$(0.033) (2010: US$(0.043))

*Excluding DD&A of US$5.03m (2010: US$3.81m) and Impairment charges of US$Nil (2010: US$1.71m).


Operational Highlights:

• Average gross production rate, for all fields in which the Group holds an interest, for the period increased by approximately 32% to 2,249 barrels of oil per day (“bopd”) (2010: 1,699 bopd)

• Average net production rate attributable to the Group increased by approximately 28% to 975 bopd (2010: 760 bopd)

• Total gross production for all fields in which the Group holds an interest increased by approximately 32% to 407,093 barrels (“bbls”) (2010: 307,556 bbls)

• La Paloma block
o Well results to date and recent 3D seismic reprocessing studies were used to re-map the structure which, together with the results of recent simulation projects, has helped define the locations for two new development wells: Colon-4 and Colon-5.

• Querubin
o Querubin-1 well remains under a long term test and is producing at an average rate of 139 bopd.

• Tisquirama licence
o In spite of increasing Santa Lucia’s gross production rate by 12.8% to 404 bopd (2010: 358 bopd), the net production rate reduced slightly by approximately 2% to 50 bopd (2010: 51 bopd) reflecting a price premium adjustment.

• Midas block
o Stabilised production on the Chuira-1 well, which remains under a long-term test, at 32 bopd gross. Seismic reprocessing is currently being undertaken in Calgary by Arcis Corporation, and the results will help define future well locations. 78 square kilometres of 3D seismic has been acquired in relation to the Midas Centro 3D-2011 campaign and initial processing has begun to define a new exploratory prospect.

• Serafin
o Serafin-1 gas well is producing at an average rate of 4.3 million cubic feet of gas per day (“mmscf/d”), and remains under a 6 month long term test.

• Rio Zulia-Ayacucho (“RZA”) pipeline’s average throughput for the period increased by approximately 2.5% to 3,063 bopd (2010: 2,989 bopd).

Corporate Highlights:
• Conversion in full during the period of Tranches 1 and 2 of the loan notes held by Tribeca Oil and Gas Financing Inc. (“TOGF”).


Post Period End Highlights:

Operational

• Farm-out agreement entered into with Shell Exploration and Production Colombia GmbH (“Shell E&P Colombia”), an affiliate of the Royal Dutch Shell group of companies, in respect of the Company’s VMM-28 exploration block. The agreement remains subject to the approval of the Agencia Nacional de Hidrocarburos (“ANH”).
o Under the agreement, Shell E&P Colombia will obtain an 85% participating interest in the block. PetroLatina’s Colombian operating subsidiary will retain a 15% legal interest with an option to participate in the block on expiry of an agreed exclusivity period and reimbursement of its share of Shell E&P Colombia’s total sunk costs to the date of exercise of the option. Upon the potential future exercise of the option, PetroLatina shall pay, its share of the ongoing costs, expenses and liabilities associated with the block.
o PetroLatina will receive a total fee of US$15 million in cash, US$3 million was received on execution of the agreement and the balance of US$12 million is due on receipt of the requisite regulatory approval.
o Shell E&P Colombia will become operator of the contract and be granted exclusive operating rights for a period of 6 years or, if earlier, until Declaration of Commerciality (the “Exclusivity Period”).
o Shell E&P Colombia will pay for 100% of the costs, expenses and liabilities associated with the work obligations for the VMM-28 block during the Exclusivity Period.


Ongoing Work Programme

• At Midas
o Exploration activities involving the initial processing of 78km2 of 3D seismic data and the definition of a location for the drilling of one exploratory well.
o Development activities involving high technology geophysical studies: the reprocessing of 3D seismic data and the seismic attributes relating to Midas Norte, and Midas Sur, to define drilling locations for the Chuira-2 and Zoe-2 development wells.

• At La Paloma
o Exploration activities comprising the drilling of one exploratory well.
o Development activities comprising the drilling of the Colon-4 and Colon-5 development wells.

• At Putumayo
o Exploration activities involving completing the acquisition of an initial 104.8km of 2D seismic data followed by an additional 48km of 2D seismic data and the drilling of one exploratory well.

• At Tisquirama Association Contract - Tisquirama B
o Conducting simulation studies on the Los Angeles field and the drilling of one exploratory well (Tronos-1).

• At Tisquirama Association Contract - Tisquirama A
o Conducting simulation studies on the Santa Lucia field.


Luc Gerard, Executive Chairman of PetroLatina, commented:

“The Group has continued to improve its underlying financial performance during the first half of 2011.
The recent farm-out to Shell of the VMM-28 block, subject to ANH approval, together with various ongoing initiatives by the Group to efficiently allocate the cash flow generated from production to areas of the Group’s portfolio that will provide the fastest anticipated returns, is expected to provide further positive progress on both production and reserves for the remainder of this year.”

Enquiries:

PetroLatina Energy Plc
Juan Carlos Rodriguez, Chief Executive Officer
Tel: +57 (1) 627 95 10
Pawan Sharma, Executive Vice President - Corporate Affairs & CFO
Tel: +44 (0)20 7766 0075

Strand Hanson Limited
Simon Raggett / Matthew Chandler
Tel: +44 (0)20 7409 3494

Financial Dynamics
Ben Brewerton / Susan Quigley
Tel: +44 (0)20 7831 3113

A copy of PetroLatina’s interim financial statements is available from the Company’s registered office at 2nd Floor, Suite 2.3, Stanmore House, 29-30 St. James’s Street, London SW1A 1HB, registered company number 05173588 and is also available for download from the Company’s website at www.petrolatinaenergy.com.

Download Full Press Release & Interim Ac

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