TORONTO, Sept. 7, 2011 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC) today provided an operational update on its exploration
assets in Colombia, Peru and Guatemala. The Company also announced
that, as it continues to grow its operated production, it has reached a
new production record of 242,000 barrels of oil equivalent per day.
Ronald Pantin, Chief Executive Officer of the Company, commented: "We
are very pleased with the progress of all our activities. We continue
reaching new production milestones, showing our ability to reach the
challenging targets that we have set for ourselves. On the exploration
front, we are in the midst of a very intensive campaign, which should
pave the way for the addition of new reserves and support our
challenging growth objectives. In addition, the premium prices that our
heavy crude is being sold for also underline the robust value addition
of our trading activities."
Since the publication of the Second Quarter results, the Company
continues to see success in its exploration drilling campaign in
Rubiales/Piriri, Quifa Southwest and Quifa North Fields, and in
extending the resource base in these fields. At the present time, the
Company has started exploratory drilling in the Topoyaco and Arauca
Blocks, and the Colombian National Hydrocarbon Agency ("ANH") has approved the conversion of the Technical Evaluation Agreement ("TEA") of the CPE-6 Block into an Exploration and Production ("E&P") contract, opening the road for the exploratory campaign there.
These results will form the basis for updating the Company's certified
resources and reserves, which the Company expects to issue before the
end of September 2011.
The Company is continuing its appraisal campaign in the eastern and
southern buffer zones of the Rubiales and Piriri Contracts, and has
drilled four appraisal wells: the Rub-362, drilled in the southern
buffer zone of the Piriri Contract, and the Rub-403, Rub-557 and
Rub-558ST1 wells, each of which was drilled in the eastern buffer zone
of the Piriri Contract. These wells have been successful, with net pay
thicknesses of between 10 and 19 feet, and are undergoing long term
production tests. These successes will support the reserve
certification for this area and they will be an integral part of the
necessary documentation to request the extension of commerciality for
this part of the Contract.
Additionally, the Company commenced drilling the Rub-551ST1 well in the
Rubiales Buffer zone. Final depth is expected to be reached in the
coming days. The well locations are shown in the map below:
After receiving the required environmental permits, the Company
continued the exploration campaign in prospects "Q" and "F" of Quifa
North, and has drilled four wells: the Opalo-1 exploration, the Opalo-2
and Opalo-3 appraisal wells in prospect "Q" and the Ambar-4 appraisal
well prospect "F".
The Opalo-1 exploration well was drilled in the "Q" prospect, and found
the top of the Carbonera basal sands at 3,230 feet measured depth ("MD"), or 2,652 feet true vertical depth at sub-sea level ("TVDSS") and the oil-water contact ("OWC") at 3,264 feet MD, or 2,686 feet TVDSS, resulting in an oil column of
32 feet at the well with 30% average porosity. The Opalo-2 appraisal
well was drilled at a distance of 4.1 km northeast of the Opalo-1 well,
and found the top of the Carbonera basal sands at 3,206 feet MD, or
2,667 feet TVDSS and the OWC at 3,252 feet MD, or 2,713 feet TVDSS. The
petrophysical evaluation showed 24 feet of net pay and 31% average
porosity. The Opalo-3 appraisal well was drilled at a distance of 1.8
km northeast and 2.2 km southwest of the Opalo-1 and Opalo-2 wells,
respectively. The top of the Carbonera Basal sands was found at 3,256
feet MD, or 2,661 feet TVDSS, and the OWC at 3,292 feet MD, or 2,697
feet TVDSS, and the well's petrophysical evaluation showed a net pay
thickness of 26 feet with 31% porosity. The Ambar-4 was drilled at a
distance of 700 m northeast from the previously drilled Quifa-26X
stratigraphic well and at 5 km northeast from the Ambar-1 exploratory
well. The well found the top of the Carbonera basal sands at 3,304 feet
MD, or 2,633 feet TVDSS and the OWC at 3,326 feet MD, or 2,654 feet
TVDSS. The petrophysical evaluation for the Ambar-4 well showed 15 feet
of net pay with 31% average porosity.
These four successful wells are currently undergoing extended production
tests. These results, along with the results of the previously drilled
Quifa-6 and Jaspe-1ST2 and Jaspe-3 wells in prospect "A", confirm the
hydrocarbon potential of this part of the block. In order to confirm
the extension of these prospects, the Company plans to maintain the
appraisal drilling campaign for Quifa North in the upcoming months,
which includes 12 additional wells (including exploration, appraisal
and stratigraphic). The following figure shows the well locations in
Quifa South West
In the Quifa SW field, the Company continued the appraisal campaign and
drilled five appraisal wells in prospects located in the areas
corresponding to those previously referenced the "H", "E" "J" and "D"
prospects. The Quifa-84X and Quifa-136ST wells were drilled to the
northeast of prospect "H" and showed net pay thicknesses of 26 feet and
32 feet, respectively. The Quifa-113 well was drilled to the southwest
of prospect "E" and showed 18 feet of net pay. The Quifa-141X well was
drilled to the northeast of the DW-1 well in prospect "J" with 13 feet
of net pay and the DW-2 well was drilled to the northern part of
prospect "D" and showed 14 feet of net pay. This last well extended
the prospect "D" to the north into the corridor between the alignment
of prospects "D" and "E" and the alignments of prospects "K" and "L".
These five appraisal wells successfully extended the production area of
the Quifa southwest field to the northeast, southeast and southwest.
The well locations in Quifa SW are shown in the map below:
CPE-6 E&P Contract
On August 18, 2011, the Company received from the ANH the approval for
the conversion of the northern part of the TEA into an E&P contract,
with a total area of 240,000,000 hectares. The corresponding contract
will be signed within the next two weeks. The minimum exploration
commitments for a 36-month first exploration phase include the
acquisition of 480 km of 2D seismic or 300 km2 of 3D seismic and one exploration well. This exploration campaign will
start as soon as the parties sign the contract.
The Company holds a 50% working interest in this contract and will act
as operator, with Talisman Energy Inc. holding the remaining 50%.
The Company recently started the acquisition of 300 km2 of 3D seismic in the northwestern part of the CPO-12 Block. This
acquisition should be completed by the end of 2011.
In the Arauca Block and in the Torodoi-1X well, a production test was
attempted in the Carbonera C-5 interval, but due to operational
problems with cementation, the well was temporarily suspended and the
rig was moved to drill the Vaco-1X well.
The Vaco-1X exploratory well was spudded on August 28, with the Mirador
Formation as its main exploration objective, and the Carbonera C-5 as
the secondary objective. Total Depth ("TD") is planned at 8663 feet MD (6546 feet TVDSS). The Vaco-1X well will
be directionally drilled from the surface of the Torodoi-1X well
location to the south, to test a separate structure in the Mirador and
Carbonera Formations, where petrophysical evaluation in the Torodoi-1X
well showed pay in Carbonera C-5 sands, as well as good residual oil
shows in the Mirador Formation.
As part of the appraisal campaign for the Apamate-1X gas discovery, the
Company is planning to spud the Apamate-2X appraisal well during the
month of September. The well has an expected TD of approximately 11,300
The Capira-1X exploration well was drilled south of well ES-6 ST2, and
reached TD at 9887 feet MD in the Cordoba Formation on July 5, 2011.
Petrophysical evaluation showed 25 feet of net pay in the Cimarrona
Formation. After a short swab attempt in open hole, no oil shows were
observed and the well was suspended awaiting further G&G analysis.
On August 31, 2011, Trayectoria Oil & Gas, the operator for this block,
spudded the Yaraqui-1X well in the central part of the Topoyaco Block.
The well is planned to reach a total depth of 10,509 feet MD, or 9,402
feet true vertical depth ("TVD"), or 8,484 feet TVDSS, and is targeting the Cretaceous Villeta and
Caballos formations, in a sub-thrust structure called prospect "D".
This prospect is a sub-thrust structural trap that the Company believes
is independent from previously drilled structures "B" and "C" in the
block. Preliminary prospective resources (best estimate) are 51
MMboe. Also in the block, the Company is planning to develop an
extensive evaluation plan of the discovery made at the Topoyaco 2 well
on Prospect "C" in the Neme Member of the Rumiyaco Formation. Certified
contingent resources for this discovery are estimated at 3.74 MMboe.
The Company also plans to abandon the Topoyaco 1 well after drilling
The Company has requested the approval of the ANH to become the operator
of the Topoyaco Block, which approval remains pending.
The Company is currently processing 559 km of 2D seismic data acquired
as part of the exploration commitments for the second exploration
period. Preliminary interpretation of this data suggests the presence
of important structural leads at Cretaceous and Paleozoic stratigraphic
levels in the central and eastern part of the block. The Company is
currently assessing resources for these structures.
Geophysical and Remote Sensing Data Acquisition programs are in the
contracting phase. Operations are expected to begin by November 2011.
The Company continues to build upon its development of its existing
reserve base. As of August 31, 2011, the Rubiales field reached a
record level of 184,738 barrels of oil per day of operated production,
whereas the South Quifa Field also reached a record level of 40,104
barrels of oil per day of operated production, which makes for a joint
production of 224,842 barrels of oil per day. When production from La
Creciente gas field and the light and medium crude oil fields is added
up, the Company's total gross production has surpassed the milestone of
242,000 barrels of oil equivalent per day, consolidating Pacific
Rubiales' position as the largest private oil producer in Colombia.
The Company and Ecopetrol, S.A. have now executed all the necessary
legal documentation to proceed with the STAR Pilot Project in the Quifa
Block. This execution has now triggered the technical steps necessary
to start operations of the project in the very immediate future.
The Company continues to take advantage of trading opportunities in a
market that values heavy oils. The Company's Castilla volumes sold for
September have yielded an average +$10.7/bbl premium to WTI, which
represents significant value above this traditional crude price marker.
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