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Press release from PR Newswire

Pacific Rubiales Receives Water Injection Licence for the Rubiales Oil Field, Allowing for an Increase in Oil Production

Wednesday, August 08, 2012

Pacific Rubiales Receives Water Injection Licence for the Rubiales Oil Field, Allowing for an Increase in Oil Production21:59 EDT Wednesday, August 08, 2012 TORONTO, Aug. 8, 2012 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) is pleased to announce that it has received the environmental license from the Autoridad Nacional de Licencias Ambientales ("ANLA") required to increase water injection by an additional 400,000 bbl/d at its Rubiales onshore oil field in the Llanos basin in eastern Colombia. The Rubiales heavy oil field is the single largest producing oil field in Colombia today, with over 165 Mbbl/d average total gross field production in 2011. Pacific Rubiales has an approximate 41.8% gross working interest and is operator of the field. The Colombia national oil company Ecopetrol SA ("Ecopetrol") holds the remainder of the working interest. Ronald Pantin, Chief Executive Officer of the Company, commented: "Receiving the water injection licence is crucial as it will allow us to increase total oil production in the giant Rubiales field to a target level of 190 Mbbl/d by the end of this year, up from 172 Mbbl/d during the first half of the year. We have pre-built the necessary water injection facilities and have oil behind pipe, which will allow us to increase oil production relatively quickly. We are pleased that the Colombian environmental authority has been able to grant this licence which provides such an important revenue source for the Company, our partner Ecopetrol and for the country through its share from royalties, taxes and spin-off economic activity. We also recognize the efforts the ANLA has made to enhance and streamline the process to speed up licenses for oil producers in Colombia. We look forward to working with them in obtaining additional licenses required for the construction of producing facilities at the Quifa North oil field, additional water injection at the Rubilas and Quifa SW fields, and with respect to exploration of the Company's new oil discoveries, prospects and leads on the CPE-6 E&P block to the southwest of the Rubiales field." In addition to the water injection license just received, the Company is expecting to obtain commerciality approval for the development of the Quifa North oil field from its partner Ecopetrol, and the environmental exploration license from the ANLA required to commence its planned exploration program on the CPE-6 E&P block, in the third quarter of 2012. Pacific Rubiales, a Canadian-based company and producer of natural gas and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a Colombian oil operator which operates the Rubiales, Piriri and Quifa oil fields in the Llanos Basin in association with Ecopetrol, S.A., the Colombian national oil company, and 100 percent of Pacific Stratus Energy Corp. which operates the La Creciente natural gas field. The Company is focused on identifying opportunities primarily within the eastern Llanos Basin of Colombia as well as in other areas in Colombia and northern Peru. Pacific Rubiales has working interests in 43 blocks in Colombia, Peru and Guatemala. The Company's common shares trade on the Toronto Stock Exchange and La Bolsa de Valores de Colombia and as Brazilian Depositary Receipts on Brazil's Bolsa de Valores Mercadorias e Futuros under the ticker symbols PRE, PREC, and PREB, respectively. Advisories Cautionary Note Concerning Forward-Looking Statements This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow and costs, reserve and resource estimates, potential resources and reserves and the Company's exploration and development plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions; failure to establish estimated resources or reserves; fluctuations in petroleum prices and currency exchange rates; inflation; changes in equity markets; political developments in Colombia, Guatemala or Peru; changes to regulations affecting the Company's activities; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 14, 2012 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. In addition, reported production levels may not be reflective of sustainable production rates and future production rates may differ materially from the production rates reflected in this press release due to, among other factors, difficulties or interruptions encountered during the production of hydrocarbons. Boe Conversion Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 5.7 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The estimated values disclosed in this news release do not represent fair market value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Definitions  Bcf Billion cubic feet. Bcfe Billion cubic feet of natural gas equivalent. bbl Barrel of oil. bbl/d Barrel of oil per day. boe Barrel of oil equivalent. Boe's may be misleading, particularly if used in isolation. The Colombian standard is a boe conversion ratio of 5.7 Mcf:1 bbl and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. boe/d Barrel of oil equivalent per day. Mbbl Thousand barrels. Mboe Thousand barrels of oil equivalent. MMbbl Million barrels. MMboe Million barrels of oil equivalent. Mcf Thousand cubic feet. MMcf Million cubic feet. MMcf/d Million cubic feet per day. Tcf Trillion cubic feet. WTI West Texas Intermediate Crude Oil.   SOURCE Pacific Rubiales Energy Corp.For further information: <p> </p> <p> Christopher (Chris) LeGallais<br/> Sr. Vice President, Investor Relations<br/> +1 (647) 295-3700 </p> <p> Javier Rodriguez<br/> Manager Investor Relations<br/> +57 (1) 511-2319 </p>