PetroMagdalena Energy Corp : PetroMagdalena Announces Filing of Third Quarter 2011 Results

TORONTO, Nov. 29, 2011 /CNW/ - PetroMagdalena Energy Corp. (TSXV: PMD) has filed today its interim condensed consolidated financial statements for the three and nine months ended September 30, 2011, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period. These documents will be posted on the Company's website at .

Luciano Biondi, the Company's Chief Executive Officer, stated: "we are very encouraged by the continuing operational and financial improvements evidenced in our third quarter results. As we carry our exploration and development program into the fourth quarter, we are setting the stage to exit 2011 on a significantly more solid foundation upon which we can continue to build our production and reserve growth in 2012. Our preliminary investment programs for 2012 stay the course we have established this past year, leveraging our successes in our core oil assets and creating value in our other properties through our strategic partnerships."

Financial and Operating Summary

A summary of the financial and operating results for the three and nine months ended September 30, 2011 is as follows:

Third Quarter Highlights

• Reserves: Three new discoveries in the third quarter of 2011 were the key driver behind a 5.0 MMbbls, or 86%, increase in 2P oil reserves at Cubiro as per the September 30, 2011 Petrotech report compared with December 31, 2010 report.
• Production: The Company remains on track to meet its production guidance for 2011. Fuelled by the discoveries at Cubiro, the Company's gross share of production for the month of September averaged 3,248 barrels oil-equivalent per day ("boed"), up 37% from the December 2010 monthly average rate of 2,374 boed.
• Revenues: The shift in Cubiro's deliveries to Guaduas to take advantage of Vasconia pricing for light-medium oil combined with production growth increased revenues in the third quarter to $21.3 million, or 62% higher than the same period a year ago. 
• Operating netback: The Company reported its third consecutive quarter of improving its operating netback, which averaged $55.11 per boe in the third quarter of 2011.
• G&A expenses: The cost savings initiatives implemented in the first quarter of 2011 have resulted in two consecutive quarters of reduced G&A expenses. Combined with the Company's production growth, G&A per boe decreased by 42% to approximately $13 per boe sold in the third quarter of 2011 compared with the same period a year ago.
• Liquidity: The Company has taken steps to strengthen its balance sheet in 2011. Cash at September 30, 2011 stood at $12.3 million and the working capital deficit has been reduced by $44 million since December 31, 2010.
• Value creation: The Company continues to take action to develop its portfolio and to reduce its risk through joint venture relationships. During the third quarter the Company announced a strategic partnership with YPF S.A. to farm-out a portion of its interests in Carbonera and Catguas and to explore further business opportunities with respect to several of its other properties. Subsequent to September 30, 2011, the Company also announced a farm-out arrangement with respect to its Santa Cruz exploration property and a farm-in to give the Company a control position in the Arrendajo exploration property. All of these farm-out/ farm-in arrangements are subject to ANH approval.

The net loss for the third quarter of 2011 includes a $15.2 million non-cash write-off under successful efforts accounting of costs associated with the Paramito-1 exploration well drilled at the Carbonera block in 2009. After completing its evaluation of test results to-date, the Company has decided not to proceed with this well.

Management will hold a conference call on Wednesday, November 30, 2011 at 9:00 a.m. (Eastern Time) to discuss the third quarter results. Analysts and interested investors are invited to participate as follows:

A playback of this conference call will be available by dialling 416-849-0833 or 1-855-859-2056 (toll free) with the above conference ID number until December 14, 2011.

PetroMagdalena is a Canadian-based oil and gas exploration and production company, with working interests in19 properties in five basins in Colombia. Further information can be obtained by visiting our website at .

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