American Liberty Petroleum Sees Promise at Paradise Well

American Liberty Petroleum on Tuesday provided background information on the Company's acquisition of the Paradise 2-12 well located in Gabbs Valley, Nye County, Nevada, and of American Liberty's subsequent well completion efforts.

The well is situated on the Cobble Cuesta structure, a 12 mile by 5 mile faulted anticline that appears to be positioned to receive oil migrated from deeper areas in the eastern part of Gabbs Valley.

"We are fortunate to have acquired the Paradise 2-12 well asset within such a promising region. The presence of oil that we have seen coming from the well has spurred us on to maximize on the potential value of both this asset and the sizeable anticline that lies beneath it."

The Paradise 2-12 well was initially drilled in the fall of 2010 before the Company had acquired any ownership of the asset. The well reached a total depth of 4,248 feet into the Tertiary Esmeralda Formation within the 26,000-acre Cobble Cuesta structure in the northwest part of Gabbs Valley. A report by Alfred H. Pekarek, Ph.D., Geologist, from January 2008 estimated the Cobble Cuesta structure represents reserves of 4+ billion barrels of oil based on reservoir and production data from producing Nevada oil fields.

The Paradise 2-12 well indicated live oil at several zones from mud logs. Of the two drill stem tests (DSTs) run during the drilling, DST No. 2 (3,695 feet to 3,786 feet) recovered oil and confirmed pressures and permeability. Based on these tests, the BLM determined the well was capable of commercial production, and consequently extended the lease to allow for further completion efforts.

American Liberty Petroleum, through a joint venture agreement ("the JV") with Cortez Exploration LLC and Desert Discoveries LLC, thereafter acquired all rights to the 3,840-acre Cortez lease (BLM Lease number NVN-59901) and the two wells located on it; the Company has a 60 percent Working Interest and a 48 percent Net Revenue Interest in the lease.

On August 1, 2011, Independence Drilling LLC, the designated operator for the JV, obtained all the necessary permits and commenced a completion program on the Paradise 2-12 well. The results of this work showed a fluid level test of 3,100 feet of oil and water in the well bore above the perforation zone of 3,700 feet - 3,782 feet. A completion rig was brought to the site and swabbing produced a total of 97 barrels (bbls) of fluid consisting of a paraffinic 19.5 API gravity oil and water. Based on this inflow data, American Liberty concluded the well warranted further completion and pumping operation activities in order to fully determine its potential to commercially produce oil.

"We are fortunate to have acquired the Paradise 2-12 well asset within such a promising region. The presence of oil that we have seen coming from the well has spurred us on to maximize on the potential value of both this asset and the sizeable anticline that lies beneath it," said American Liberty Petroleum's President Alvaro Vollmers.

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American Liberty Petroleum Sees Promise at Paradise Well