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Americas Petrogas Inc.: Americas Petrogas Announces Q2 2009 Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 31, 2009) -

JUNE 30, 2009 FINANCIAL AND OPERATING HIGHLIGHTS

Americas Petrogas Inc. (the "Company") (TSX VENTURE:BOE) announces its financial results for the period ended June 30, 2009. Copies of the Company's consolidated financial statements for the period ended June 30, 2009 and the related Management's Discussion and Analysis ("MD&A") for the quarter have been filed under the Company's profile at [ www.sedar.com ]. All amounts are in Canadian dollars unless otherwise stated.

Results (June 30)
 For the three months For the six months
 ended ended
 ------------------------------------------------
 2009 2008 2009 2008
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Revenue (interest income
 only) $ 10,055 $ 68,227 $ 31,071 $ 170,974
Net Loss $ 587,074 $ 744,940 $ 2,088,644 $ 1,084,493
Loss per share, basic &
 diluted $ 0.006 $ 0.010 $ 0.023 $ 0.015
Cash flows used in
 operations $ 744,999 $ 496,723 $ 1,497,523 $ 690,176
Capital expenditures $ 1,115,099 $ 1,693,341 $ 2,441,987 $ 3,318,174


 June 30, 2009 December 31, 2008
 ------------------------------------------------
Cash and cash equivalents $ 3,430,637 $ 7,701,196
Working capital $ 2,627,979 $ 6,525,699
Total assets $ 43,149,949 $ 48,829,011
Long-term debt Zero Zero
Total shareholders equity $ 42,210,921 $ 47,216,385

Review of Q2 2009

The Company reported a net loss of $587,074 or $0.006 per share for the three months ended June 30, 2009 compared to a net loss of $744,940 or $0.010 per share for the same period in 2008. The decrease in net loss can be primarily attributed to: (a) a foreign exchange gain in 2009 compared to a foreign exchange loss in 2008, offset by (b) reduced interest income in 2009, and (c) higher general and administration expenses in 2009.

From a cash flow perspective, during the three months ended June 30, 2009, the Company had operating cash outflows totaling $744,999 (2008 - $496,723) due primarily to funding general and administrative expenses. Investing cash flows involved a net outflow of $1,088,016 (2008 - $967,982) attributable primarily to the mining, oil and gas activities. The majority of those expenditures were attributable to further costs associated with seismic data interpretation on Totoral-Yerba Buena and Los Toldos II, property access and retention costs on its various Argentinean properties and continuing investment in the Bayovar potash project. The Company had no financing activities in the current quarter.

The Company's balance sheet at June 30, 2009, compared to December 31, 2008, reflects the key changes described above, namely, reductions in the cash and cash equivalents from operating and investing activities and an increase in deficit due to the net loss. The Company's reported property and equipment decreased, despite the additional capitalized costs in the current period, because of the sizeable strengthening of the Canadian dollar (reporting currency) compared to the U.S. dollar and the Argentinean Peso (functional currencies).

Medanito Sur

The Company is pleased to have received approval from the government of La Pampa province in support of its involvement and operatorship in the Medanito Sur project. The three joint venture partners must sign a public deed in September in order to validate this decree, which process is ongoing. In addition, the Company is in the process of applying for an "exploitation" licence for the areas surrounding the discoveries established by its three previously drilled exploration wells. Receipt of the exploitation licences is subject to government approvals. Until the exploitation licences are granted, the Company can produce from those three wells under its existing exploration permits but at a royalty rate which is 10.5% higher than under an exploitation licence. In the meantime, the Company is continuing with the installation of production and gathering facilities on its Medanito Sur concession which facilities are expected to be completed by October 2009.

Bayovar (Potash Mining)

In respect of the Company's interest in the potash brine reservoirs and evaporite deposit located in northern Peru, the Company signed an agreement with the Community Foundation of San Martin de Sechura that permits Americas the unconditional right of surface access. With the signing of the surface rights agreement, all of the requirements contemplated in Americas' 2008 option agreement with ProInversion to be able to acquire the Bayovar potash brine concession have been satisfied.

The Company is proceeding with its investments in the concession. Data collection and analysis of the potash property is ongoing with drilling activities expected to begin by early 4th quarter. An initial brine laboratory has been built for ongoing testing of brines and simulation of the evaporation process. As well, Americas has engaged an engineering company from Germany to perform a preliminary brine resources assessment study, which would ultimately lead to a report that is compliant with National Instrument 43-101.

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels and timing of activity and achievements to differ materially from those expressed or implied by such information.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.