Pacific Rubiales Announces Financial Results for the Year Ended December 31, 2008



    TORONTO, April 1 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE)
announced today the release of its audited consolidated financial results for
the year ended December 31, 2008, together with its Management's Discussion
and Analysis, Annual Information Form and its 2008 Statement of Reserves, Form
51-101F1.
    These documents will be available on the company's website and SEDAR.
    The company's senior management will discuss the company's financial
results during a conference call scheduled for Thursday, April 2, 2009, at
4:15pm Eastern Daylight Time (EDT).

    
    Call-in details are as follows:

    Toronto & International: 416-644-3420

    North America: 1-800-591-7539

    2008 Results Summary (Figures in US$ unless otherwise stated)

    -   The company completed the acquisitions of Pacific Stratus Energy
        Corp. and Kappa Energy Holdings Ltd.

    -   On March 3 2009, the company announced the independently certified
        Statement of Reserves Data and Other Oil and Gas Information for all
        of the Company's assets. The gross working interest proved plus
        probable (2P) reserves are estimated to be 247 mmbbl of oil
        equivalent. Proven reserves increased 50%, from 136 mmbbl at the end
        of 2007, to 204 mmbbl at the end of 2008. These reserves represent
        approximately one barrel of net proven reserves, (P1) per outstanding
        share.

    -   During 2008, the company was the most dynamic E&P operating in
        Colombia as it demonstrated the highest growth in operated production
        of any company in the region, totaling an increase of 36,571 boe/d
        from January to December from all the fields it operates, both oil
        and gas. This growth in operated production came as a result of
        acquisitions (8,673 boe/d) and development of assets (27,898 boe/d).

    -   In the course of the year the company drilled 12 exploratory wells
        and acquired 355 km of 2D seismic and 290 km(2) of 3D seismic work
        for a total expenditure of $71.7 million. The drilling campaign had a
        75% success ratio, adding 24.2 million boe of new 2P reserves at a
        cost of $3.00/ bbl.

    -   On January 2, 2008, the company announced that it had signed a
        memorandum of understanding with Ecopetrol S.A. for the construction
        and operation of the Rubiales-Monterrey Pipeline, through a special
        purpose vehicle, Oleoducto de los Llanos Orientales ("ODL"), owned
        65% by Ecopetrol and 35% by Pacific Rubiales. On completion, the
        235 km pipeline will have a capacity of 170.000 bbl/d and will
        connect the Rubiales oil field to Covenas, the export terminal for
        the Colombian pipeline system. On March 12, 2009, the company
        announced that ODL signed a debt facility agreement with AVAL, a
        Colombian financial group, for approximately US$200 million (to be
        disbursed in Colombian currency) to finance the construction of this
        pipeline. By the end of March 2009 overall progress of the project
        stood at 60%.

    -   In April 2008 a new blending facility at Guaduas (PF2) was put into
        operation, allowing the company to export 100% of its share of the
        Rubiales heavy oil production, and significantly increasing the
        netback per barrel, almost doubling it for the year. As a result, the
        company has become a player in the international market, in
        particular in the medium/heavy oil segment.

    -   The company consolidated its position as an important player in the
        commercialization of natural gas in the Colombian domestic market,
        achieving average sales of approximately 33 mmbtu/day at a price of
        $5.42/mmbtu, which represents an estimated premium of $2.00 above the
        average market price.

    -   On August 28, 2008 the company issued $224.9 million (C$240 million)
        of convertible secured subordinated debentures due August 29, 2013
        and convertible into common shares of the company at C$13.00 per
        share. The debentures bear interest at 8% annually and are payable on
        June 30 and December 31. The company used a portion of the net
        proceeds to pay for the acquisition of Kappa.

    -   Revenues increased over the previous year to $579.1 million from
        $80.4 million in 2007 primarily due to increased production, higher
        realized crude oil prices in 2008 and the acquisitions of Pacific
        Stratus and Kappa in January and September 2008, respectively.

    -   EBITDA amounted to $300.8 million, which represented a seven-fold
        increase to the 2007 figure of $45.4 million. EBITDA from
        international sales represented 75% of this amount, while EBITDA from
        gas and domestic sales contributed 15% and 10%, respectively.

    -   Capital expenditures in 2008 totaled $296.3 million of which
        $71.7 million went into exploration activities; $134 million was
        invested in the expansion and construction of infrastructure and
        $90.6 million in production drilling activities.

    -   On May 9, 2008, the company consolidated its common shares on a
        1:6 basis by issuing one common share for every six common shares
        outstanding.

    -   During 2008, the company reinforced the internal audit function
        pursuant to National Instrument 52-109. As a result of the evaluation
        of the design effectiveness and operating effectiveness of ICFR
        (Internal Controls over Financial Reporting) the company identified,
        assessed, and tested 413 controls, which cover all of the company's
        processes with an impact on financial statements. The company
        concluded there are opportunities to improve controls in certain
        areas, which are disclosed in full in the Management's Discussion and
        Analysis.
    

    In completing the 2008 consolidated financial statements and as part of
the internal audit function identified above, the company determined that net
income was overstated in the previous year, as a result of accounting for a
special tax deduction associated with certain development expenditures
incurred in Colombia. The accounting for this matter affected the Company's
annual 2007 audited consolidated financial statements and each of the 2008
interim consolidated financial statements previously reported and affects only
non-cash items. As a result, the Company's 2007 annual consolidated financial
statements for the year ended December 31, 2007, and each of the 2008 interim
financial statements have been restated to correct for this accounting matter.
    On March 31, 2009, the company announced it received credit approvals for
commitments totaling US$100 million under a previously announced senior
secured revolving credit facility of up to US$250 million, consisting of US$50
million commitments from each of BNP Paribas and Davivienda Financial Group,
lead arrangers for the facility. This commitment ensures that the capital
expenditure program for the company is fully funded at an average WTI price of
45 US$ per barrel.
    Ronald Pantin, Chief Executive Officer, commented: "I am pleased that we
have recorded outstanding financial results in the first year that Pacific
Rubiales is operating as a fully integrated company, with a strong and growing
diversified portfolio of oil and gas assets. In one year, we increased
revenues from $80 million to $579 million, largely driven from a rapidly
growing production profile. The company has clearly shown its ability to
leverage the talents of its combined workforce toward clear and focused
objectives."

    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 a current net production of approximately 34,000
barrels of oil equivalent per day, with working interests in 34 blocks in
Colombia and Peru.

    Boe may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 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 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
31, 2009 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.





For further information:

For further information: Mr. Ronald Pantin, Chief Executive Officer and
Director, Mr. Jose Francisco Arata, President and Director, (416) 362-7735;
Belinda Labatte, (647) 436-2152

Organization Profile

Pacific Rubiales Energy Corp.

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