Petrolifera executes Colombia Magdalena contract with ANH and provides update
on reserve backed credit facility and La Pinta

CALGARY , Oct. 7 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) announced today that it has executed the Magdalena exploration contract with the Agencia Nacional de Hidrocarburos ("ANH") for the conversion of the Sierra Nevada II TEA into the Magdalena License, covering lands adjacent to the company's Sierra Nevada License in the Lower Magdalena Valley , onshore Colombia . The Magdalena License comprises approximately 595,000 acres that is considered to be mainly prospective for natural gas and natural gas liquids. The minimum work commitment associated with the Magdalena License for the initial 15 month phase is primarily 150km2 of 3D seismic. As required by ANH, Petrolifera has established and funded a USD$4.1MM trust, which in effect funds the assigned value of the initial work commitment of the License.

Separately, Petrolifera has reduced its outstanding debt under its reserve backed credit facility to US$60 million, as was agreed with the lending syndicate. The US$5 million reduction was funded from proceeds of the recently completed equity offering. Petrolifera anticipates it will further reduce the amounts outstanding under the reserve backed facility prior to the end of this year.

The company continues to evaluate its preferred option in respect of securing equipment and services to reenter and further test the La Pinta No. 1 well. This will likely include mobilization of a snubbing unit to the wellsite from the United States . While a final decision is anticipated shortly, issues to be resolved include timing, pricing and the suitability of alternative proposals, given the complicated and challenging nature of the La Pinta No. 1 wellbore, including overpressured down hole conditions and the apparent casing split which occurred during recent testing efforts.

Petrolifera Petroleum Limited is a Calgary-based crude oil and natural gas exploration and production company engaged in exploration and productions activities in Argentina , Colombia and Peru . Its common shares and warrants are listed for trading on the Toronto Stock Exchange under the symbol PDP and PDP.WT respectively.

Forward Looking Information

This press release contains forward looking information, including but not limited to future exploration activities, anticipated future reductions in Petrolifera's reserve backed credit facility and the planned testing of the La Pinta No. 1 well in Colombia . This information is based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially 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 third parties located in foreign jurisdictions and the risk associated with international activity. A final a decision with respect to the various alternatives for evaluating the La Pinta No. 1 well has not been made and is dependent on a number of factors including cost, timing and suitability of these alternatives. There can be no assurance that the testing of the La Pinta No. 1 well will confirm the discovery of commercial quantities of crude oil and natural gas or, if there is a commercial discovery, that Petrolifera will be able to realize such reserves as intended. Hydrocarbon shows and results of logs do not confirm the presence of commercial hydrocarbons. Additional risks and uncertainties are described in the company's Annual Information Form for the year ended December 31, 2008 which is filed on SEDAR at www.sedar.com. Due to the risks, uncertainties and assumptions inherent in forward looking information, prospective investors in the company's securities should not place undue reliance on this forward looking information. Readers should review the risk-factors set forth in the company's Annual Information Form, available at www.sedar.com, for a detailed description of the risks and uncertainties facing the company. Forward looking information contained in this press release is made as of the date hereof and is subject to change. The company assumes no obligation to revise or update forward looking information to reflect new circumstances, except as required by law.

For further information: Petrolifera Petroleum Limited, R.A. Gusella, Executive Chairman, [phone]; Or Gary D. Wine, President and Chief Operating Officer, [phone]; Or Kristen J. Bibby, Vice President Finance and Chief Financial Officer, [phone]; Fax: [phone], [email protected], www.petrolifera.ca