Petromanas Energy has entered into a definitive agreement with KCA Deutag to secure a drilling rig for use in its 2012 drilling program.

The initial contract is valued at approximately $14 million and has an initial term of 270 days. The Company may, at its option, extend the contract for two additional periods of 180 days. Under the terms of the agreement, the rig is expected to be mobilized to Albania in the first quarter of 2012.

"Securing a drilling rig from a trusted industry leader like KCA Deutag is an important milestone on the path to initiating our planned 2012 drilling program," said Mr. Glenn McNamara, CEO of Petromanas. "We believe this rig will allow us to drill all three of our wells planned for 2012 without the need to incur the cost and logistical effort of sourcing and mobilizing a second rig. In addition, we continue to make progress on an array of other activities necessary to spud multiple wells in 2012, including permitting and the sourcing of other related products and services. We appreciate the tremendous support we have received from the Government of Albania in advancing these efforts."

Petromanas has sourced rig T-46, a triple, heavy land rig with a 2,000 horsepower rating, capable of reaching depths of approximately 22,966 feet (7,000 meters). The rig was designed for mobility, flexibility and to employ a high degree of mechanization. It has recently been operating in Western Europe and has an outstanding safety record.

Petromanas has identified final drilling locations and is in the process of completing the site design at its three initial prospects. With the assistance of a third party consultant, the Company has also completed the necessary environmental work on those blocks and expects to receive environmental permits before year-end for the first two drilling locations. Upon receipt of the environmental permits, the Company will apply for the required civil construction permits so that it can begin construction of access roads and well sites.

The first well the Company expects to drill is at the Jubani prospect located in Block A. The well is expected to spud in the first quarter of 2012 and take approximately 50 to 70 days to drill. The Company expects to spud its second well at the Shpiragu prospect in mid-2012 and the third well at its Papri prospect late in 2012.

Joint Venture

With respect to the Company's ongoing Joint Venture initiative, the bidding process has closed and management has reviewed and clarified the received bids. Discussions are underway with prospective partners with the goal of concluding a definitive Joint Venture agreement or agreements.

Tags: Petromanas Energy Inc.