Press release from PR Newswire
Pacific Rubiales Announces Closing of U.S.$400 Million Revolving Credit Facility and U.S.$300 Million Equivalent Colombian Peso Revolving Credit Faciltiy
Thursday, September 27, 2012
TORONTO, Sept. 27, 2012 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) announced today the closing of a U.S.$400 million revolving credit facility as well as a Colombia peso equivalent revolving credit facility in the amount of U.S.$300 million.
Ronald Pantin, Chief Executive Officer of the Company, commented: "These new credit facilities are a major step in our overall strategic business plan. The structure of these new facilities affords us significant advantages over our prior credit lines by increasing our operating flexibility and improving our liquidity. We are proud to report that we had a diverse global syndicate with twenty-three lenders from Canada, the United States, South America, England and Asia."
On September 13, 2012, the Company entered into a U.S.$400 million Revolving Credit and Guaranty Agreement (the "U.S. Dollar Facility") with a syndicate of international lenders and Bank of America, N.A., as administrative agent. Meta Petroleum Corp., Pacific Stratus Energy Colombia Corp., Pacific Stratus International Energy Ltd., and Rubiales Holdings Corp., each subsidiaries of Pacific Rubiales, are guarantors of the U.S. Dollar Facility.
On September 13, 2012, Meta Petroleum Corp. Colombia Branch and Pacific Stratus Energy Corp. Colombia Branch, entered into a Colombian peso equivalent of U.S.$300 million Revolving Credit Agreement as borrowers (Contrato de Crédito Rotativo Sindicado) (the "Colombian Peso Facility"), with a syndicate of Colombian lenders and Sociedad Fiduciaria Bogotá, S.A., as administrative agent. Pacific Rubiales, Pacific Stratus International Energy Ltd. and Rubiales Holdings Corp. are acting as guarantors of the Colombian Peso Facility.
The new credit facilities provide the Company with significant benefits, including: (i) extending the term of our U.S. Dollar Facility from two years to three years; (ii) a broader lender base, which now includes a syndicate of twenty-three lenders instead of eleven lenders; (iii) foreign exchange natural hedging; and (iv) income tax deductibility. The new credit facilities were oversubscribed by more than U.S.$300 million, which reflects lender confidence in the future of the Company and its improved liquidity position.
Proceeds under the U.S. Dollar Facility and the Colombian Peso Facility are available to: (i) repay obligations under its pre-existing U.S.$350 million Revolving Credit Agreement in the amount of U.S.$193 million (which following an advance on September 21, 2012 has been fully repaid and cancelled); and (ii) finance working capital needs, capital expenditures and other general corporate purposes of the Company and its subsidiaries.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as global coordinator and Joint Bookrunner of the U.S. Dollar Facility and as Joint Bookrunner and Structuring Agent of the of the Colombian Peso Facility. Corporación Financiera Colombiana S.A. acted as Joint Bookrunner of the U.S. Dollar Facility and Structuring Agent of the Colombian Peso Facility.
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.
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.
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.
SOURCE Pacific Rubiales Energy Corp.
For further information: <p> Christopher (Chris) LeGallais<br/> Sr. Vice President, Investor Relations<br/> +1 (647) 295-3700 </p> <p> <br/> Roberto Puente<br/> Sr. Manager, Investor Relations<br/> +57 (1) 511-2298 </p> <p> <br/> Javier Rodriguez<br/> Manager, Investor Relations<br/> +57 (1) 511-2319 </p>