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Press release from PR Newswire

Pacific Rubiales Receives Commerciality Approval for the Cajua Oil Field at Quifa North in Colombia, Allowing for an Increase in Oil Production

Thursday, August 16, 2012

Pacific Rubiales Receives Commerciality Approval for the Cajua Oil Field at Quifa North in Colombia, Allowing for an Increase in Oil Production09:00 EDT Thursday, August 16, 2012 TORONTO, Aug. 16, 2012 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) is pleased to announce that its 100% owned affiliate Meta Petroleum Corp, acting as operator of the Quifa Association Contract, has received commerciality approval from the Quifa Association Executive Committee, for a portion of the Quifa North block, to be called the "Cajua field". The Cajua field covers an area of approximately 38,000 acres and lies 20 kilometers north of the Rubiales field, and approximately 30 kilometers northeast of the Quifa SW field, which currently produce at a rate of over 173 Mbbl/d and 48 Mbbl/d respectively (total gross field production). The Company operates all three fields with an approximate 41.8% gross working interest in Rubiales and 60% gross working interest in both the Quifa SW and the Cajua fields, while Ecopetrol SA holds the remainder of the working interest. Ronald Pantin, Chief Executive Officer of the Company, commented: "Receiving the commerciality approval for the Cajua field will allow the Company to move to full development phase and increase production from the field to a target level of 10 Mbbl/d by the end of this year, and an expected plateau rate of 15 Mbbl/d (total gross field production). Current exploration activity in the Quifa North block will shift to the almost 240,000 gross acres remaining in the block where the Company has significant certified undeveloped 2P reserves and resources in additional undrilled prospects and leads." The Company has sufficient capacity at its existing Quifa SW oil field facilities to handle the expected increase in volumes coming from the Cajua field. 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>