Pacific Rubiales Announces New Supply Agreements for La Creciente Natural Gas and a Production Update



    TORONTO, Jan. 29 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) is
providing an update of its natural gas sales from La Creciente Field located
in north eastern Colombia.

    Natural Gas Supply Agreements

    Since the discovery of La Creciente Field in early 2007, the company has
focused on developing a commercial strategy to service the domestic market
while concurrently exploring export opportunities in the region. For this
reason, the company organized a natural gas auction in December 2008, which
was ultimately cancelled due to the uncertain market conditions and volatility
in oil and gas pricing.
    As a result, Pacific Rubiales entered into bilateral negotiations with
interested bidders for the natural gas volumes on offer, and the company
entered into the following take or pay contracts, and interruptible contracts,
adding up to a total of 60 MMSCFD for the period 2009-2010:

    
    -------------------------------------------------------------------------
                                2009                         2010
    -------------------------------------------------------------------------
    Client            Quantity        Price        Quantity        Price
                      (MMBTUD)     (US$/MMBTU)     (MMBTUD)     (US$/MMBTU)
    -------------------------------------------------------------------------
    GECELCA(1)         34,807       RMP + 28%       45,000       RMP + 28%
    -------------------------------------------------------------------------
    PROELECTRICA(1)    14,000       RMP + 12%       14,000      RMP + $ 0.50
    -------------------------------------------------------------------------
    Interruptible
     Supply            11,193          RMP           1,000          4,98
    -------------------------------------------------------------------------
    TOTAL SALES        60,000       RMP + 19%       60,000       RMP + 24%
    -------------------------------------------------------------------------

    RMP: Colombian Regulated Market Price = US$4.975/MMBTU @
         Jan 28, 2009
    (1)  These contracts are take or pay
    

    The company will continue monitoring the market with the view that it can
explore longer term options as the energy markets stabilize and demand
strengthens.

    Production Update (as at January 27, 2009)

    The company also announces that production in the Rubiales/Piriri block
presently stands at 55,029 gross barrels of oil per day (bopd), or 20,642 bopd
net to the company, after royalties. Total production from all of the
Company's oil fields presently stands at 61,288 gross bopd or 22,632 bopd net.
The company also advises that La Creciente ramped up production to 38.95
MMSCFD. Pending the completion of planned maintenance by a major client, the
company expects the natural gas production to return to a level of 60 MMSCFD
during the first days of February.
    Ronald Pantin, the company's Chief Executive Officer, stated: "The
contracts signed for La Creciente natural gas demonstrate our ability to adapt
proactively to the uncertain conditions of today's energy market. On the
operational front, we continue delivering results to reach our mid-term
production objectives."

    Pacific Rubiales, a Canadian-based company and producer of natural gas
and heavy crude oil, owns 100 percent of Meta Petroleum Limited, 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
30,000 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
28, 2008 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.

    %SEDAR: 00007953E




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

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Pacific Rubiales Energy Corp.

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