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Press release from Marketwire

Petrominerales Proved Plus Probable Reserves Additions Replace 153% of 2010 Production

Sunday, February 27, 2011

Petrominerales Proved Plus Probable Reserves Additions Replace 153% of 2010 Production22:37 EST Sunday, February 27, 2011CALGARY, ALBERTA--(Marketwire - Feb. 27, 2011) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG) is pleased to report proved plus probable reserves of over 60 million barrels of oil as at December 31, 2010 (as determined by our independent reserves evaluators DeGolyer and MacNaughton ("D&M")), replacing 2010 production by 153%. HIGHLIGHTS2010 production averaged 37,027 barrels of oil per day ("bopd"), a 66 percent increase over 2009. Proved developed producing reserve additions replaced production by 163 percent, total proved reserve additions replaced production by 159 percent and proved plus probable reserve additions replaced 153 percent of production. Proved developed producing reserves increased 46 percent to 27.1 million barrels, total proved reserves increased 22 percent to 44.0 million barrels of oil and proved plus probable reserves increased by 13 percent to 60.2 million barrels of oil. Total proved plus probable NPV 10 (before tax) is US$2.5 billion. Based on unaudited capital expenditures of US$506.4 million, total proved and proved plus probable finding and development costs ("F&D") are $30.73 per barrel and $32.60 per barrel in 2010, respectively, including changes in future development costs. These F&D costs include $78.9 million (2009 - $53 million) of exploration costs incurred on exploration acreage not evaluated by D&M (Heavy Oil acreage, Peru and other 3D seismic costs). Factoring out the exploration costs on property not evaluated by D&M, the 2010 F&D costs for total proved reserves would have been $27.06 per barrel and $28.78 per barrel for total proved plus probable reserves. D&M completed an evaluation effective as at December 31, 2010 of the Company's Orito and Neiva properties and portions of four of the Company's 15 exploration blocks, Corcel, Guatiquia, Castor and Casimena. D&M's report did not include any evaluation of the Company's drilling prospects or remaining 1.7 million net acres of exploration land in Colombia or 5.4 million net acres in Peru. All reserves stated herein are based on forecast prices and costs and are Company interest gross reserves (before deducting royalties).Company Gross Reserves Reconciliation (MBBL)Proved Developed ProducingTotal ProvedProved Plus ProbableDecember 31, 2009 Reserves18,53335,98753,1072010 Production(13,517)(13,517)(13,517)Net Additions22,05921,51620,632December 31, 2010 Reserves27,07543,98660,222Year over year increase in reserves46%22%13%Production replacement163%159%153%Net Present Value of Future Net Revenue Before Tax (US$ Millions)(1)0%8%10%Proved Developed Producing1,4711,2481,204Total Proved2,4111,9401,849Proved Plus Probable3,3442,6502,517Using forecast prices and costs.Net Present Value of Future Net Revenue After Tax (US$ Millions)(1)0%8%10%Proved Developed Producing1,167987951Total Proved1,8391,4751,405Proved Plus Probable2,4811,9621,861Using forecast prices and costs.RESERVES INFORMATION BY AREADeep LlanosOritoNeivaCentral LlanosTotalProved Developed17,1402,3795,5042,05227,075Proved Undeveloped4,4767,0522,9262,45716,911Total Proved21,6169,4318,4304,50943,986Probable Undeveloped6,8454,5701,5363,28516,236Proved Plus Probable28,46114,0019,9667,79460,222The proved undeveloped reserves include the following:Two wells in the Deep Llanos (Candelilla-5 and Yatay-2); Two wells in the Central Llanos (Yenac-3 and Capybara-2); 26 wells at Neiva; and 21 wells at Orito. The probable undeveloped reserves include the following:One well in the Deep Llanos (Corcel-A3 side-track); Three wells in the Central Llanos (Yenac-4, Yenac-5 and Yenac-6); 9 wells at Neiva; and 6 wells at Orito. Future Net Revenue, Undiscounted, Forecast Prices and Costs (US$ Millions)Revenue RoyaltyOperating CostsDevelopment CostsFuture Net Revenue Before TaxesIncome TaxesFuture Net Revenue After TaxesTotal Proved3,649 433446359 2,411 572 1,839 Proved Plus Probable5,0116295774613,3448632,481The reserves and future net revenue were determined using the following price assumptions:WTI@CUSHINGYEAR$US/BBL2011 88.002012 90.78 2013 93.64 2014 96.57 2015 99.58 Thereafter+2% per yearFinding and Development Costs(1)Petrominerales' all-in 2010 F&D costs of $30.73 per barrel for total proved reserves and $32.60 per barrel for total proved plus probable reserves include $78.9 million (2009 - $53 million) of exploration costs incurred on exploration acreage not evaluated by D&M (Heavy Oil acreage, Peru and other 3D seismic). Factoring out the exploration costs on property not evaluated by D&M, the 2010 F&D costs for total proved reserves would have been $27.06 per barrel and $28.78 per barrel for total proved plus probable reserves.20102009Three-Year AverageCapital expenditures (US$ Millions) 506 281 1,055Change in future costs to develop (US$ Millions)Total Proved155 70 171 Proved plus probable167 6078 Total costs (US$ Millions)Total Proved 661 351 1,226 Proved plus probable 673 341 1,133 Net reserve additions (MBBL)Total Proved21,516 18,975 49,083 Proved plus probable20,632 24,420 48,938 F&D costs (US$ per BBL)Total Proved 30.73 18.51 24.98 Proved plus probable 32.60 13.98 23.14 The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. The total undiscounted future development costs included in the December 31, 2010 D&M report was $359 million (2009 - $204 million) for total proved reserves and $461 million (2009 - $295 million) for proved plus probable reserves. The disclosures required in accordance with National Instrument 51-101 of the Canadian Securities Administrators will be available in the Company's Annual Information Form to be filed on the SEDAR website at www.sedar.com in mid- March. Estimated values of future net revenue disclosed in this press release do not represent fair market values.INVESTOR CONFERENCE CALLManagement of Petrominerales will be holding a conference call for investors, financial analysts, media and any interested persons on Thursday, March 3, 2011 9:00 a.m. (Mountain time) (11:00 a.m. Eastern Time) to discuss our 2010 year-end financial and operating results. We expect to issue our fourth quarter and year-end financial results along with an operational update in advance of the call. The investor conference call details are as follows:Live call dial-in numbers: 416-340-8527 / 877-240-9772 Replay dial-in numbers: 905-694-9451 / 800-408-3053 Replay pass code: 8167532The live audio webcast link is: http://events.digitalmedia.telus.com/petrominerales/030311/index.php.About PetromineralesPetrominerales is a Latin America-based exploration and production company producing oil in Colombia with 15 exploration blocks covering a total of 2.0 million acres in the Llanos and Putumayo Basins and five exploration blocks in Peru covering a total of 9.5 million gross (5.4 million net) acres in the Ucayali and Titicaca Basins.Forward-Looking Statements.Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to the Company's future exploration and development activities, future transportation capacity in the Llanos basin, future production estimates, timing for bringing wells on production and the Company's reserves. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the availability of capital, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability; availability of transportation, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.FOR FURTHER INFORMATION PLEASE CONTACT: Corey C. RuttanPetrominerales Ltd.President and Chief Executive Officer403.750.4400 or 011.571.629.2701ORJack F. ScottPetrominerales Ltd.Chief Operating Officer403.750.4400 or 011.571.629.2701ORKelly D. SledzPetrominerales Ltd.Chief Financial Officer403.750.4400 or 011.571.629.2701ORJohn D. WrightPetrominerales Ltd.Chairman and Strategic Advisor403.750.4400 or 011.571.629.2701ir@petrominerales.comwww.petrominerales.com