Frequently Asked Questions

Petrolifera is focused on each of its areas for different reasons and with different timelines. The near term focus in terms of field activities is on our assets in Colombia. Our large-scale exploration focus for potential long-term future growth remains with our blocks in Peru . Our existing production base is exclusively from our properties in Argentina, which are considered as being at a more mature phase in their life cycle.

(answer last updated April 2010)

High impact drilling is occurring in Colombia in 2010. Petrolifera spudded the Brillante SE 1X exploratory well, on the Sierra Nevada License, in Colombia on February 16, 2010. The well has reached projected total depth of 9,500 feet. The well is considered prospective for natural gas and natural gas liquids.

As of mid-April 2010, Petrolifera is also planning future tests of upper zones in the La Pinta 1X well, also in Colombia. Latest updates on results can be found in recent news releases or in the most recent company presentation. Petrolifera owns a 100 percent interest in these projects.

Petrolifera also plans to drill up to four infill wells at Puesto Morales in Argentina as well as a water injector. Also in Argentina we plan to drill up to six exploration wells on our Vaca Mahuida and Puesto Guevara Licenses.

Refer to Forward Looking Information disclaimer.

(answer last updated April 2010)

Pricing controls continue to be in place in Argentina. Petrolifera’s average selling prices for 2009 were $49.47 per barrel for crude oil and natural gas liquid and $2.81 per thousand cubic feet (mcf) for natural gas. On a combined basis, average selling prices in 2009 equated to $44.00 per barrel of oil equivalent (boe). Current crude oil sales prices exceed U.S. $50.00 per barrel.

Corporate netbacks on Petrolifera’s production in 2009 was $25.66 per boe. Corporate netbacks are non-GAAP measures. Refer to Petrolifera's Management's Discussion and Analysis for the year ended December 31, 2009 for a reconciliation of netbacks to net earnings (loss).

(answer last updated April 2010)

To date, Petrolifera has not experienced any serious security issues in Colombia. The Colombian operations of the company are managed by Colombian nationals on staff who know and understand the surrounding people and the country. We are bipartisan and do not get involved in any ongoing disputes between various groups in Colombia. Regardless, Petrolifera does take security controls seriously in order to ensure the health and safety of our employees and those of joint venturers. Petrolifera utilizes security contractors and staff, while communicating with local law enforcement agencies as appropriate and the company strictly controls access to its worksites.

(answer last updated March 2010)

Pricing in Argentina is influenced by the Government of Argentina. Royalties in Argentina are calculated at approximately 12-14% for the Puesto Morales block where the majority of our production is located and equated to $6.31 per boe in 2009.

In Colombia, favourable fiscal terms and infrastructure are in place whereby there are no governmental pricing restrictions that apply so that Petrolifera expects to receive world pricing for crude oil and market pricing for natural gas production. Royalties in Colombia are based on a sliding scale ranging from 8% to 25% depending on production levels.

In Peru, favourable fiscal terms are also in place whereby Petrolifera expects to recieve world pricing for crude oil and market pricing for natural gas production. Royalties in Peru for the two original blocks (Block 107 and Block 106) are based on a sliding scale ranging from 5% to 20% again depending on production levels.

(answer last updated April 2010)