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Press release from PR Newswire

Pacific Rubiales delivers record production, sales volumes, EBITDA and funds flow from operations, in the first quarter

Thursday, May 09, 2013

Pacific Rubiales delivers record production, sales volumes, EBITDA and funds flow from operations, in the first quarter

02:14 EDT Thursday, May 09, 2013

TORONTO, May 8, 2013 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) announced today the release of its unaudited consolidated financial results for the quarter ended March 31, 2013, together with its Management Discussion and Analysis ("MD&A"). These documents will be posted on the Company's website at www.pacificrubiales.com, SEDAR at www.sedar.com, the SIMEV website at www.superfinanciera.gov.co/web_valores/Simev, and the BOVESPA website at www.bmfbovespa.com.br/. All values in this release and the Company's financial disclosures are in U.S.$, unless otherwise stated.

The Company scheduled a teleconference for investors and analysts on Thursday, May 9, 2013 at 9:00 a.m. (Toronto time) to discuss the Company's first quarter results. Analysts and interested investors are invited to participate using the dial-in instructions provided at the back of this news release.

First Quarter 2013 Overview and Highlights

  • Average net production after royalties was 127,889 boe/d, an 18% increase compared to the fourth quarter last year, and an increase of 37% over the same period in 2012.  This represents a record for the Company and is at the high end of the annual production guidance. 
  • Revenues were $1.3 billion, a 20% increase compared to the fourth quarter last year, and a 35% increase over the same period in 2012.
  • EBITDA was $695 million, a 62% increase compared to the fourth quarter last year, and a 28% increase over the same period in 2012.  Also a record quarter for the Company, driven by higher volumes of production and sales, and supported by high price realizations.
  • Funds flow from operations (cash flow) was $506 million, a 119% increase compared to the fourth quarter in 2012, and an increase of 29% over the same period in 2012,  which was a record quarter for the Company.
  • Net earnings were $121 million, a substantial increase of $145 million compared to the loss of $24 million in the fourth quarter last year. Net earnings in the quarter were down from $258 million in the same period in 2012.  Contributing to this decrease was an increase in non-cash DD&A costs resulting from the higher volumes produced, the C&C and PetroMagdalena acquisitions completed in 2012, and the continued capex additions to the Rubiales field related to the 2016 contract life of the field.  Also contributing to this decrease was an increase in total income taxes, primarily resulting from non-cash foreign exchange effects on deferred income taxes.
  • Operating netbacks on combined crude oil and natural gas production of $60.88/boe were 31% higher than the $46.44/boe recorded in the fourth quarter, largely relating to the PAP arbitration decision at Quifa SW.  Operating netbacks in the quarter were down from the same period in 2012,  largely a result of lower commodity prices and slightly higher costs. 
  • The Company achieved a $4.17/bbl reduction on its oil operating costs in the first quarter compared to the fourth quarter last year, excluding the overlift/underlift costs which were due to the financial provision relating to the PAP arbitration decision at Quifa SW.  The Company continues to implement cost reduction projects and initiatives which are expected to result in a structural reduction in its future operating costs by approximately $8/boe on a pro-forma basis through 2013.
  • Issuance of $1 billion of senior unsecured notes at a rate of 5.125% maturing in 2023.  The proceeds of the financing are being used to repay outstanding short-term debt, release the revolving credit facility, while extending the Company's credit profile and strengthening its overall capital structure.
  • A 55% growth in total certified Prospective Resources to 4.3 Bboe from 2.8 Bboe in 2011.  Total Contingent Resources also grew to 168 MMboe from 4 MMboe in 2011.
  • Important exploration discoveries, including two new light oil discoveries in the Company's Cubiro and Arrendajo blocks in Colombia, a significant natural gas and condensate discovery in the Guama block also in Colombia, and a light oil discovery in the Kangaroo-1 exploration well drilled in the Santos Basin offshore Brazil.
  • The Company received an important environmental permit for the "Quifa Hydrocarbon Exploitation Area", allowing for further production ramp-up in the Quifa SW field and resumption in exploration drilling in the Quifa East area.
  • In April, 2013, the Company filed a Notice of Intention with the Toronto Stock Exchange (the "TSX") to commence a normal course issuer bid to purchase up to a maximum of 31,075,887 common shares, which represents 10% of the public float of the Company as of April 26, 2013.  Given the strength of the Company's balance sheet, the Company is currently evaluating methods by which to return value to shareholders, which includes repurchasing shares and/or increasing the quarterly dividend.  Senior management is in the process of evaluating these alternatives and will submit a proposal to the board of directors by the end of the second quarter.

"I am very pleased by the Company's strong operational and financial performance year-to-date", commented Ronald Pantin, Chief Executive Officer of the Company.  "Production and sales volumes are at record levels and on track to achieve the high end of our annual production guidance.  The Company's financial performance metrics measured by cash generated as EBITDA and funds flow from operations (cash flow) continue to be robust and are growing.  The Company's balance sheet is strong and we continue to benefit from the market and trading advantages currently enjoyed by Colombia heavy oil production, achieving a premium to WTI pricing in the first quarter of almost $8/bbl on our total crude oil production sales volumes.

"We have an active and exciting year of exploration and development planned, with over 40 exploration and appraisal wells planned for the year, and with over a third of these wells being potential high impact wells in Colombia, Peru, Guatemala, Brazil and Papua New Guinea.  Five new exploration discoveries were made during the first quarter including an oil discovery in the Kangaroo-1 exploration well in offshore Brazil.  In April, we spudded our first onshore exploration well (Yahuish-1X well) in Block 138 in Peru, targeting a large structure identified on seismic.

"Environmental permitting in Colombia is slower than anticipated but I am pleased to see some improvements developing on that front and we appreciate the efforts that the Autoridad Nacional de Licencias Ambientales ("ANLA") has made to enhance and streamline the process to speed up licenses for oil producers in Colombia.  During the first quarter, we received an important comprehensive permit for the further exploration and development of the Quifa Hydrocarbon Exploitation Area that will allow continued production ramp-up in the Quifa SW field and resumption of exploration in the Quifa East area north of the Rubiales field.  We also received the necessary permits to increase oil production in our Copa oil field Block.

¨The Company is in the process of implementing several cost saving initiatives with respect to production, transportation and diluent costs, which we expect to materialize throughout the year.

"The Company is building a new power transmission line connecting the Rubiales and Quifa fields with Colombia's electric grid, supplying less expensive power to run in-field operations, which is expected to be operational in the third quarter of this year.

"In order to handle the increasing volumes of water produced in the Rubiales and Quifa fields, the Company has initiated a project to treat produced formation water from these fields and use it for an irrigation project designed for agroforestry activity, starting up in the fourth quarter of 2013. 

"Our investments in the Bicentenario Pipeline will provide us with approximately 40,000 bbl/d of additional pipeline egress starting in the second half of this year, significantly reducing the current higher costs associated with trucking oil production.

"The Company continues to actively invest in projects and infrastructure in Colombia designed to support our growing production in the country.  These projects include our investments in Puerto Bahia, where we are developing a new oil export terminal on the Colombian Caribbean coast, which will improve our export capability and reduce inventory storage.

"A new diluent mixing station is also being constructed at Cusiana which will lead to optimization and lower costs on the Company's expanding heavy oil production, starting in the second quarter of this year. With the acquisition and development of our own light crude assets, the Company expects to see further cost reductions as a result of using our own light oil crude production as diluent, instead of using imported natural gasoline.

"We expect these and other projects and initiatives to result in a significant structural change in our operating costs, targeting overall reductions of approximately $8/bbl on a pro-forma basis during the remainder of this year, consisting of a targeted $3 - $4/bbl reduction in production costs, and a $3 - $5/bbl reduction in transportation and diluent costs.

"Although it is early days, we are encouraged by the results we are seeing in our STAR pilot project at Quifa SW.  We have achieved sustained ignition in the reservoir during the first quarter and we will continue to evaluate this pilot project.

"A small scale LNG project is being built in alliance with Exmar NV, which will enable the Company to more than double its gas production in northern Colombia when it comes on stream in late 2014.

"Overall I am looking forward to a year of continued production growth, improving cost structure and an exciting exploration program, as we build for the long-term benefit of our shareholders and employees, the leading E&P company focused in Latin America."

Financial Results

       
Financial Summary  
  2013   2012
  Q1   Q4   Q1
Oil & Gas Sales Revenues ($ millions) 1,258.8   1,046.7   931.9
EBITDA ($ millions)1 694.7   429.0   542.2
EBITDA per share1 2.16   1.45   1.85
Funds Flow from Operations ($ millions)1 506.2   231.5   392.5
Funds Flow from Operations per share1 1.58   0.78   1.34
Adjusted Net Earnings (Losses) from Operations ($ millions)1 146.9   38.2   290.0
Adjusted Net Earnings (Losses) from Operations per share1 0.46   0.13   0.99
Net Earnings (Losses) ($ millions) 121.8   (23.8)   258.4
Net Earnings (Losses) per share 0.38   (0.08)   0.88
Average shares outstanding - basic (millions) 321.3   294.6   292.4

1 The terms EBITDA, funds flow from operations, adjusted net earnings from operations, are non-IFRS measures. Please see advisories and reconciliations in the MD&A.

Production

     
Production Summary    
    2013 2012
    Q1   Q4   Q1
Oil and Liquids (bbl/d)            
Colombia   115,318   95,526   80,955
Peru   1,461   1,457   1,703
Total Oil and Liquids (bbl/d)   116,779   96,983   82,658
             
Natural Gas (boe/d)1            
Colombia   11,110   11,166   10,915
Peru   -   -   -
Total Natural Gas (boe/d)   11,110   11,166   10,915
Total Equivalent (boe/d)   127,889   108,149   93,573

1 Colombian standard natural gas conversion ratio of 5.7 Mcf/bbl.
  Additional production details are available in the MD&A.

The Company's total production net after royalty of 127,889 boe/d increased 37% in the quarter compared to a year ago, driven by strong growth in oil production from the Company's Rubiales and Quifa heavy oil fields, and added volumes and growth in light oil production resulting from the PetroMagdalena and C&C acquisitions completed in July and December 2012, respectively.

Average net oil production after royalty from the Rubiales field increased to 70,495 bbl/d from 57,555 bbl/d a year ago (up 22%), and from the Quifa SW field to 25,435 bbl/d from 21,885 bbl/d (up 16%), primarily due to environmental permits received in August 2012 allowing for increased water injection.  Production in the two fields increased 9% and 10% respectively in the current quarter compared to the fourth quarter 2012.  Additional production net after royalties of 2,026 bbl/d in the quarter was contributed from the Cajua field, a new commercial field development just to the north of Quifa SW.

Net after royalty, mostly light oil production from the PetroMagdalena assets has grown to approximately 5.2 Mboe/d from less than 2.5 Mboe/d, more than doubling through successful exploration and development activity.

Revenues and costs associated with the Company's 49% participating interest in production from Block Z-1 have been recognized in the Company's financial results since December 12, 2012 as a result of the approval by the applicable Peruvian authorities.  The acquisition had an effective date of January 1, 2012.

Production and Sales Volumes

     
Production to Total Sales Reconciliation    
    2013   2012
    Q1   Q4   Q1
Net Production (boe/d)            
Colombia   126,428   106,692   91,870
Peru   1,461   1,457   1,703
Total Net Production (boe/d)   127,889   108,149   93,573
             
Net Production Sold (boe/d)            
Production Available for Sale (boe/d)1   127,889   107,071   91,870
Diluent Volumes (bbl/d)   9,607   9,671   8,549
Oil for Trading Volumes (bbl/d)   3,895   1,718   10,221
Inventory Balances and Other (boe/d)   2,259   1,681   (11,732)
Volumes Sold (boe/d)   143,650   120,141   98,908
1 Production available for sale includes all net production in Colombia and the Company's 49% of net production from Block Z-1, Peru from December 12, 2012.
  Additional production and sales volume details are available in the MD&A.

The Company produces and sells crude oil and natural gas. It also purchases liquids and crude oil from third parties for use as diluents to mix with its heavy oil production and for trading purposes, which are included in the reported "volumes sold".  Sales volumes are also impacted by the relative movement in inventories during a reporting period.  Both revenues and costs are recognized on the respective volumes sold during the period.

Production available for sale in the quarter increased to 127,889 boe/d from 91,870 boe/d in the same period in 2012 (an increase of 39%), due to rising production volumes in producing fields.  Despite a 23% rise in the Company's net heavy oil production from the Rubiales, Quifa SW and Cajua oil fields, diluent volumes increased a smaller 12% from a year ago, due to more purchases of natural gasoline rather than light oil.  Oil for trading volumes in the current quarter decreased to 3,895 bbl/d from 10,221 bbl/d, while inventory balances moved to a 2,259 bbl/d draw from an 11,732 boe/d build, in the same quarter a year ago.

Total volumes sold composed of production volumes available for sale, diluent volumes added to heavy oil production, oil for trading volumes and inventory balance changes, increased to 143,650 boe/d in the current quarter from 98,908 boe/d a year ago (an increase of 45%).

Operating Netbacks and Sales Volumes

                       
Oil and Gas Production  Volumes and Netbacks        
  2013 Q1 2012 Q4 2012 Q4
  Oil Natural Gas Combined Oil Natural Gas Combined Oil Natural Gas Combined
Volumes Sold (boe/d) 128,641 11,114 139,755 107,392 11,031 118,423 77,829 10,858 88,687
                   
Crude Oil and Natural Gas Sales Price ($/boe) 102.06 40.26 97.14 99.83 43.80 94.61 110.96 41.45 102.45
                   
Production Costs ($/boe) 12.89 4.49 12.22 14.78 6.61 14.02 9.42 2.59 8.58
Transportation Costs ($/boe) 15.66 0.05 14.42 14.57 0.01 13.22 13.47 0.06 11.83
Diluent Costs ($/boe) 9.32 - 8.58 8.52 - 7.72 13.99 - 12.27
Sub-Total Costs ($/boe) 37.87 4.54 35.22 37.87 6.62 34.96 36.88 2.65 32.68
Other Costs ($/boe) 0.68 2.91 0.86 5.14 2.99 4.94 (2.40) 2.28 (1.83)
Overlift/Underlift Costs ($/boe) 0.17 0.29 0.18 9.21 (0.89) 8.27 (2.45) (0.04) (2.16)
Total Costs ($/boe) 38.72 7.74 36.26 52.22 8.72 48.17 32.03 4.89 28.69
                   
Operating Netback ($/boe) 63.34 32.52 60.88 47.61 35.08 46.44 78.93 36.56 73.76
Additional cost and netback details are available in the MD&A.

In a news release dated April 9, 2013, the Company disclosed plans for a structural reduction in its operating costs on a pro-forma basis starting in the second quarter of 2013 from a number of initiatives and projects, including a new electrical transmission line supplying less expensive energy, increased pipeline transportation replacing more expensive trucking of crude oil, and efficiencies and optimizations related to its diluent costs and supply.

       
Oil for Trading Volumes and Netbacks    
    2013 2012
    Q1 Q4 Q1
Volumes Sold (bbl/d)   3,895 1,718 10,221
         
Sales Price ($/bbl)   105.24 100.66 112.94
Cost of Purchases ($/bbl)   101.55 96.99 109.31
Operating Netback ($/bbl)   3.69 3.67 3.63
Additional oil for trading details are available in the MD&A.

The Company also reports separately its netback on crude oil for trading which was $3.69/bbl in the first quarter compared to $3.63/bbl in the same period in 2012.

Exploration Update

The Company drilled eight exploration and appraisal wells during the first quarter, resulting in five discoveries and three dry holes.

Colombia

On the Cubiro Block, the Company drilled and completed the Copa D-1 exploration well and the Copa A Norte-1 appraisal well encountering 27 feet and 25 feet of net pay respectively in Carbonera sand intervals.  The wells flowed 900 bbl/d and 770 bbl/d light 42° API oil, respectively, on test.

The Company drilled the Yaguazo-1 exploration well, encountering 14 feet of net pay in the C5 basal sand on a previously undrilled structure in the Arrendajo Block.  The well is currently being cased to allow for a production test and the Company is planning on drilling a follow-up appraisal well on the same structure.

On the Guama Block, the Company finished drilling the Manamo-1X exploration well, encountering 251 feet of net pay which tested at a maximum rate of 4.9 MMcf/d of natural gas with 296 bbl/d 54° API condensate.  The Company also started drilling the Capure-1X well on a separate structure, which at the current date has intersected approximately 23 feet of indicated natural gas and condensate pay in a secondary zone.

On the CPO-12 Block, the Hayuelo-1X exploration well was drilled as part of a three well commitment on the block.  The well only encountered minor hydrocarbon traces and was plugged and abandoned as a dry hole.  In the CPO-1 Block, the Altillo Oeste-1 exploration well was also plugged and abandoned as a dry hole after failing to encounter hydrocarbons.

On the Santa Cruz Block, the Company spudded the Phobos-1 exploration well during the quarter.  This well has multiple targets and is expected to reach its total drilling depth during the second quarter 2013.

During the quarter, a 366 km2 3D seismic survey was completed in the northern portion of the CPE-6 Block, aimed at identifying new well locations in the Hamaca oil prospect.  Also, aeromagnetic and aerogravity surveys were initiated in the COR-15 and COR-24 Blocks; and processing and interpretation of recently acquired 2D and 3D seismic data in the Muisca, COR-15 and Portofino Blocks is ongoing, all aimed at identifying future exploration well locations.

Peru

On the offshore Block Z-1, the Company and its partner BPZ Energy completed the acquisition of 429 km2 of 3D seismic data, which is currently being processed and interpreted together with 1,143 km2 of previously acquired 3D seismic data.

On Block 138, the Company spudded the Yahuish-1X exploration well on April 16, 2013.  The well is expected to take 60 to 80 days to reach total depth.

On Block 135, the Company continued with the acquisition of 789 km of 2D seismic data, expected to be completed in the second quarter.  In Block 116 a proposed exploration well, Fortuna-1X is expected to start drilling during the second half of 2013.

Guatemala

On Blocks N-10-96 and O-10-96, a hyperspectral geophysical survey has been completed and advance planning has been initiated for an exploration well expected to be drilled in the second half of 2013.

Brazil

During the quarter, two exploration wells (Kangaroo-1 and Emu-1) were drilled as part of a farm-in agreement covering five blocks in the offshore Santos Basin.  The Kangaroo-1 well encountered an 82 foot gross (58 foot net pay) oil reservoir section in a down flank position in an Eocene structure.  The operator of the blocks, Karoon Gas is planning to drill an appraisal well to the Kangaroo discovery later in the year. The Emu-1 well failed to encounter pay zones and was plugged and abandoned.  The Company is participating in a third option well (Bilby-1) which has resulted in an oil discovery in a late Cretaceous reservoir interval as indicated from wireline logs and pressure and fluid samples.  Additional evaluation of the oil zone is ongoing, and the well is expected to continue drilling to a total depth of approximately 15,050 feet during May 2013.

First Quarter 2013 Conference call Details

The Company has scheduled a telephone conference call for investors and analysts on Thursday, May 9, 2013 at 8:00 a.m. (Bogotá time), 9:00 a.m. (Toronto time) and 10:00 a.m. (Rio de Janeiro time) to discuss the Company's first quarter results.  Participants will include Ronald Pantin, Chief Executive Officer, José Francisco Arata, President, and selected members of senior management.  Pacific Rubiales expects to release its first quarter results on Wednesday, May 8, 2013, after market close.

The live conference call will be conducted in English with simultaneous Spanish translation.  The Company will post a presentation on the Company's website prior to the call, which can be accessed at www.pacificrubiales.com.

Analysts and interested investors are invited to participate using the dial-in numbers as follows:

Participant Number (International/Local):   (647) 427-7450
Participant Number (Toll free Colombia):   01-800-518-0661
Participant Number (Toll free North America):   (888) 231-8191
Conference ID (English Participants):    40205504
Conference ID (Spanish Participants):    40208313

The conference call will be webcast, which can be accessed through the following link: http://www.pacificrubiales.com.co/investor-relations/webcast.html.

A replay of the call will be available until 23:59 pm (Toronto time), May 23, 2013, which can be accessed as follows:

Encore Toll Free Dial-in Number: 1-855-859-2056
Local Dial-in-Number:   (416)-849-0833
Encore ID (English Participants):   40205504
Encore ID (Spanish Participants):  40208313

Pacific Rubiales, a Canadian company and producer of natural gas and crude oil, owns 100% of Meta Petroleum Corp., which operates the Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin, and 100% of Pacific Stratus Energy Colombia Corp., which operates the La Creciente natural gas field in the northwestern area of Colombia.  Pacific Rubiales has also acquired 100% of PetroMagdalena Energy Corp., which owns light oil assets in Colombia, and 100% of C&C Energia Ltd., which owns light oil assets in the Llanos Basin.  In addition, the Company has a diversified portfolio of assets beyond Colombia, which includes producing and exploration assets in Peru, Guatemala, Brazil, Guyana and Papua New Guinea.

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, Peru, Guatemala, Brazil, Papua New Guinea or Guyana; 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.

Translation

This news release was prepared in the English language and subsequently translated into Spanish and Portuguese. In the case of any differences between the English version and its translated counterparts, the English document should be treated as the governing version.

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.

Resources

Readers should give attention to the estimates of individual classes of resources and appreciate the differing probabilities of recovery associated with each class. Estimates of remaining recoverable resources (unrisked) include Prospective Resources that have not been adjusted for risk based on the chance of discovery or the chance of development and Contingent Resources that have not been adjusted for risk based on the chance of development. It is not an estimate of volumes that may be recovered. Actual recovery is likely to be less and may be substantially less or zero.

Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations.  There is no certainty that the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources. Application of any geological and economic chance factor does not equate Prospective Resources to Contingent Resources or reserves. In addition, the following mutually exclusive Classification of Resources were used: 

  • Low Estimate - This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be equal to more than this resources estimate.
  • Best Estimate - This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where there is a 50% chance that the successful discovery will be equal to or more than this resources estimate.
  • High Estimate - This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be equal to or more than this resources estimate. 

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources have an associated chance of development (economic, regulatory, market and facility, corporate commitment or political risks). The estimates herein have not been risked for the chance of development. There is no certainty that the Contingent Resources will be developed and, if they are developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the Contingent Resources.

In this news release total volumes of resources have been expressed for high case estimates, low case estimates and best case estimates for both Contingent and Prospective Resources.  These total volumes are arithmetic sums of multiple estimates of Contingent and Prospective Resources, as the case may be, which statistical principles indicate may be misleading as to volumes that may actually be recovered. Readers should give attention to the estimates of individual classes of resources and appreciate the differing probabilities of recovery associated with each class as explained in this section.

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.
WTI West Texas Intermediate Crude Oil.

 

 

 

 

 

 

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> Roberto Puente<br/> Sr. Manager, Investor Relations<br/> +57 (1) 511-2298 </p> <p> Javier Rodriguez<br/> Manager, Investor Relations<br/> +57 (1) 511-2319 </p>

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