UPDATE 1-Petrominerales shrs hit life-high on Colombian oil find

* Says oil well Candelilla-2 producing over 15,800 bopd

* Cases oil well Yenac-1 as potential oil source

* To start drilling for oil well Candelilla-3 this week
(Adds details, analyst’s comments, updates share movement)

By Ashutosh Joshi

BANGALORE, Feb 16 (BestGrowthStock) – Petrominerales Ltd (PMG.TO: )
shares rose 19 percent to hit a lifetime high Tuesday, a day
after the oil explorer said its Candelilla-2 oil well in
Colombia has started production, and it was casing another well
as a potential oil source.

The company, in which Petrobank Energy and Resources
(PBG.TO: ) has a majority stake, said the Candelilla-2 well was
producing over 15,800 barrels of oil per day (bopd), taking the
total production from two Candelilla wells to 27,000 bopd.

“Between the two wells that have been brought on production
in last six weeks, they have more than doubled the total
production of the company,” Clarus Securities analyst Kirk
Wilson said by phone.

With the addition of Candelilla-2, total company production
is now 43,800 bopd, Petrominerales said.

Petrominerales, which placed Candelilla-1 on production on
Dec. 31, said combined production from the two wells on
Guatiquia block was restricted to 27,000 bopd due to flow-line
limitations.

The company plans to install an additional flow-line later
this week to allow production to increase to the current
capacity of 30,000 barrels of fluid per day.

Petrominerales also said it was casing Yenac-1 well on
Casimena block in Llanos plains as a potential oil well. The
well will be first in Petrominerales’ 13-well exploration
program for Llanos plains.

Analyst Wilson said it will be important to see how quickly
these wells level out, as oil wells in the company’s Corcel
block had declined quickly from a very high initial production
rate.

At least two brokerages raised their price targets on the
oil explorer’s stock, and increased their production outlook
for the company for 2010 and 2011.

UBS raised its price target on the stock to C$30 from C$26,
while RBC raised its target to C$26 from C$24.

Petrominerales shares were up 13 percent, or C$3.15, at
C$26.55 in afternoon trade on the Toronto Stock Exchange. They
hit a life-high of C$27.85 earlier.

Stock Market Report

(Reporting by Ashutosh Joshi in Bangalore; Editing by Ratul
Ray Chaudhuri)

UPDATE 1-Petrominerales shrs hit life-high on Colombian oil find