Petrolifera Petroleum provides operations update

Petrolifera Petroleum Limited announced that drilling operations are underway at the RN. PM. a-1014 well, situated approximately one-half mile northeast of the RN. PM. a-1011 well on the Puesto Morales block, which comprises part of the Puesto Morales/Rinconada Concession in the Neuquã©n Basin, onshore Argentina. The drilling rig arrived on location approximately four days ago.

Once drilling operations are completed at this well, the drilling rig is scheduled to go to the proposed RN. PM. a-1024 location, situated southeast of the prolific 1013 well. Thereafter, current plans call for the rig to move to the RN. PM. x-1019 location, approximately two miles east southeast of the 1014 location.

Testing of the 1015 well, which was cased last week, was delayed due to minor mechanical problems associated with the completion rig. These have now been resolved and testing should be underway in the near future.

A second completion rig, secured under a long-term renewable contract to Petrolifera, is currently en route to Argentina and a second drilling rig, also under long-term contract, is scheduled to arrive during October 2006. This should enable Petrolifera to accelerate its ongoing evaluation program.

Petrolifera Petroleum Limited is a public Canadian oil and natural gas exploration and production company engaged in active programs in the Neuquã©n Basin, Argentina and in the Maranon and Ucayali Basins in Peru. Current production is slightly in excess of 10,000 bbl/d of light crude oil and modest volumes of natural gas in Argentina and close to one million barrels have now been produced from new wells on the Puesto Morales block during 2006 year-to-date. The company has completed the drilling of three wells in an anticipated 20 well program to be drilled in the balance of 2006 in Argentina. The fourth well is presently drilling. It is anticipated this program will be significantly expanded in 2007 and initial drilling is also anticipated in Peru in late 2007.

This press release contains forward-looking statements, including but not limited to a planned drilling program and planned revisions to previously-issued guidance. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the company’s securities should not place undue reliance on these forward-looking statements.

For further information

Richard A Gusella, Executive Chairman, Petrolifera Petroleum Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@petrolifera.ca, www.petrolifera.ca

Source: Petrolifera Petroleum Limited