TORONTO, Oct. 2 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) announced today that Oleoducto de los Llanos Orientales (ODL), the company that built and operates the oil pipeline that joins the Rubiales Field with the Ocensa Pipeline, completed a successful issue of debt securities on October 1, 2009 on the Colombian capital market. ODL is a special purpose vehicle in which Ecopetrol and Pacific Rubiales hold an equity participation of 65% and 35%, respectively. The pipeline runs 235 km from the Rubiales Field to the Monterrey Station. Total investment for the project is US$560 million, including financial costs.
The total amount issued to institutional investors was COP500 billion (equivalent to US$260 million). The securities have a maturity of 7 years with a coupon equivalent to the domestic Consumers Price Index plus 4.88%. The issue has been rated AAA by Fitch.
The investment bank Corficolombiana led the issue, and structured the electronic Dutch auction by which the bonds were allocated under the supervision of the Colombian stock exchange, Bolsa de Valores de Colombia. The issue was over-subscribed to Colombian institutional investors and includes a COP50 billion overallotment option.
Funds will be used to conclude the second phase of the pipeline project, enabling transport capacity to reach 160,000 barrels of oil per day starting January 2010. Funds will also be used to return capital to the partners in ODL, Ecopetrol and Pacific Rubiales Energy, which were advanced for the timely execution of the project. In addition, some of the funds will be used to expand the transport capacity of the pipeline to allow for the transportation of additional volumes from fields neighboring Rubiales: Quifa and Ocelote, as well as from other areas now under exploration.
On September 14, 2009, the President of Colombia Alvaro Uribe formally inaugurated the pipeline by starting the filling process which successfully ended on September 30, 2009, when the first barrel of oil from the Rubiales field arrived at Monterrey and then subsequently transferred into the OCENSA pipeline, marking the direct connection of the Rubiales Field with the Caribbean export port of Covenas.
The first phase of the project was financed with US$260 million of equity contributed by the partners (Ecopetrol and Pacific Rubiales) ending on December 2008; the second phase of the construction was financed by Grupo Aval, a syndicate of local banks formed in March 2009 with a contribution of US$200 million; and the third phase culminates with the issue announced today.
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 Quifa block 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 38,000 barrels of oil equivalent per day, with working interests in 32 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 April 1, 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.
SOURCE Pacific Rubiales Energy Corp.
For further information: For further information: Mr. Ronald Pantin, Chief Executive Officer and Director, Mr. Jose Francisco Arata, President and Director, (416) 362-7735; Ms. Belinda Labatte, (647) 428-7035