TORONTO, Sept. 8, 2011 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC) announced today a cash dividend in the aggregate amount of
US$25,000,000, which translates to US$0.093 per common share. The
dividend is payable on September 30, 2011 to shareholders of record as
of September 20, 2011. The ex-dividend date is September 16, 2011. For
shareholders trading on the Colombian stock exchange, the peso
equivalency shall be calculated based on the exchange rate as certified
by the "Superintendencia Financiera de Colombia" (the "SFC") on the date of monetization and will be published on the SIMEV
website at the proper time.
Subject to approval from the Board of Directors, the Company expects to
continue paying a dividend on a quarterly basis, with such decision
being determined based on funds from operations, earnings, financial
requirements, commodity price levels, legal requirements and other
conditions existing in the future. This policy will continue to be
reviewed by the Board of Directors, as needed, from time to time.
Future dividends on Pacific Rubiales common shares are not guaranteed.
The Company intends to designate all dividends as "eligible dividends"
for purposes of the Income Tax Act (Canada) unless a notification of change is otherwise posted on the
Company's website and www.sedar.com. Provided designation is made, the dividend will be considered an
"eligible dividend" for tax purposes. An eligible dividend received by
a Canadian resident individual shareholder is entitled to the enhanced
dividend tax credit.
The information in this release is not intended to be an exhaustive
discussion of all possible income tax consequences and considerations,
but a general guideline. It is not intended to be legal or tax advice
to any particular investor or potential investor. Investors or
potential investors should consult their own tax advisors as to their
particular tax consequences and reporting obligations.
The following information is provided for general information only.
Investors are encouraged to seek advice from a qualified tax advisor in
their country of residence to obtain guidance with respect to
appropriate tax treatment of their distributions.
For Canadian Residents
For Canadian income tax purposes, the dividend paid to shareholders of
Pacific Rubiales will be a taxable dividend. In the case of a
shareholder who is an individual resident in Canada, dividends will be
subject to the gross-up and credit rules contained in the Income Tax Act (Canada), and, in the case of a shareholder that is a "private
corporation" or a "subject corporation" (both as defined in the Income Tax Act (Canada)), a refundable tax will apply to the amount of the dividend.
Shareholders should contact their tax advisor or their local office of
the Canada Revenue Agency with respect to any questions regarding the
taxation of eligible dividends.
For Colombian Residents
Dividends paid to residents of Colombia will be subject to a Canadian
25% withholding tax on 100% of the gross distribution. Under Colombian
tax rules, dividends will be subject to tax. Generally a corporation
resident in Colombia is subject to tax at 33% of net income and
individuals are subject to tax based on a progressive table as
applicable. Amounts paid as foreign taxes may be eligible for a
foreign tax credit in Colombia. For a more detailed discussion on the
logistics and tax implications, shareholders should contact their tax
advisor or their local office of the Colombian tax agency (DIAN), with
respect to any questions regarding the taxation of these dividends or
the application of foreign tax credits. In addition, they should
consult the dividend circular that will be made available on the SIMEV.
For U.S. Residents
Subject to various U.S. statutory holding period requirements,
distributions made by the Company out of its current or accumulated
"earnings and profits" may be considered "qualified dividend income" as
defined under U.S. tax law, and thus may be taxed at the reduced tax
rates applicable to long term capital gains, provided that the Company
has the status of a "qualified foreign corporation" for the year ended
December 31, 2011. These reduced rates may not be available to
shareholders of the Company other than U.S. resident individuals. In
addition, distributions in excess of the Company's current or
accumulated "earnings and profits" may reduce the U.S. tax basis of the
shareholder's shares of the Company.
Pursuant to the Canada - U.S. Tax Treaty, dividends paid to residents of
the United States may be subject to a 15% withholding tax on 100% of
the gross distribution. Amounts paid for foreign taxes may be eligible
for either a deduction for foreign taxes or a foreign tax credit in the
United States; both the deduction and credit for foreign taxes are
subject to numerous limitations imposed by U.S. tax law which are not
discussed in this summary.
Shareholders should contact their tax advisor or their local office of
the Internal Revenue Service with respect to any questions regarding
the taxation of such dividend distributions.
In 2010, the Company began paying a dividend to its shareholders by
paying a quarterly cash dividend in the aggregate amount of
approximately US$25,000,000 (or US$0.093 per common share). Under the
indenture dated August 28, 2008 (the "Indenture') that governs the 8% Convertible, Unsecured, Subordinated Debentures
of the Company (the "Debentures"), the proposed dividend payment on or about September 30, 2011 will
trigger an adjustment to the conversion rate applicable (the "Conversion Rate") to the Debentures. Similarly, the dividend payments made on December
16, 2010, March 29, 2011 and June 30, 2011 also triggered an adjustment
to the Conversion Rate (collectively, the "Previous Dividend Payments").
In accordance with the provisions of the Indenture, since the cumulative
adjustment to the Conversion Rate resulting from the Previous Dividend
Payments was less than 1%, to date an adjustment to the Conversion Rate
has not occurred. However, the cumulative adjustment as a result of
the Previous Dividend Payments and the proposed dividend payment on or
about September 30, 2011 will require an adjustment to the Conversion
Rate. In accordance with the terms of the Indenture, holders of
Debentures shall receive a notice of adjustment setting out the details
of the adjustment.
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 and Piriri oil
fields in the Llanos Basin in association with Ecopetrol, S.A., the
Colombian national oil company. 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 45 blocks
in Colombia, Peru and Guatemala.
The Company's common shares trade on the Toronto Stock Exchange and La
Bolsa de Valores de Colombia under the ticker symbols PRE and PREC, respectively.
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.
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 11, 2011 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:
Mr. Ronald Pantin
Chief Executive Officer and Director
Mr. José Francisco Arata
President and Director
Sr. Vice President, Investor Relations
Ms. Carolina Escobar V
Investor Relations, Colombia
(57 1) 628-3970