TORONTO, Sept. 18, 2013 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) announced today that it has received
independent reports relating to the progress of its proprietary
Synchronized Thermal Additional Recovery ("STAR") enhanced oil recovery
pilot project in the Quifa SW heavy oil field. The reports include
estimates of the Original Oil In Place ("OOIP") for the project, which
combined with the accumulated production from the area since the
inception of the project, allows the Company to estimate that at least
a doubling of the recovery factor has been achieved from commencement
of air injection in February, 2013 to date.
Ronald Pantin, Chief Executive Officer of the Company, commented:
"The estimates from the independent engineers of the OOIP and the
drainage areas that will be affected by the pilot test area, the
cumulative oil volumes produced to date and the sustained thermal
ignition of the reservoir and successful synchronization of the
producing pilot wells, have led Pacific Rubiales to estimate at least a
potential doubling the recovery factor can be achieved by STAR. These
results represent an important inflection point in the path to
successful commercial application of STAR in one of Colombia's most
important heavy oil fields.
"Based on these results, the Company is planning on converting two
contiguous well clusters in the pilot test area, which are currently
producing on primary flow, to STAR before the end of 2013.
Additionally, the Company has initiated planning for full commercial
rollout of STAR in the Quifa SW field beginning in 2014.
"We believe that the success of STAR has important implications beyond
the Quifa SW field because more than 75% of Colombia's total oil
production growth since 2004 has come from heavy oil, with the majority
of that coming from the Company operated Rubiales and Quifa fields,
producing under primary recovery flow methods only. The success of STAR
also provides an important launching pad for the future of the Rubiales
field, currently under evaluation."
The Quifa SW field is located just southwest of and adjacent to the
Company's Rubiales field, the largest producing oil field in Colombia
today. According to the year-end 2012 reserve report from the Company's
external engineering firm, this field has an estimated OOIP of 1.331
Bbbl which covers a total field area of approximately 44 thousand gross
acres with net pay thickness greater than 10 feet. During the first
half of 2013, the field produced oil at a rate of 54.4 Mbbl/d gross
total field (24.4 Mbbl/d net after royalties). The Quifa SW field is
currently producing under primary recovery techniques resulting in a
recovery factor ("RF") of approximately 14%. As of year-end 2012, the
Company had 73.1 MMbbl of net 2P reserves at Quifa SW, representing
approximately 21% of its total net 2P certified oil and liquids
reserves base in Colombia. Pacific Rubiales has a 60% working interest
and is operator of the field, while Ecopetrol, S.A. holds the remaining
interest. The Quifa contract was signed in December of 2003 and expires
in December of 2031.
The Company has received technical reports analyzing the progress of the
STAR pilot project from three independent engineering firms: Hot-Tec
Energy Inc. ("Hot-Tec"), RPS Energy Canada Ltd. ("RPS") and GLJ
Petroleum Consultants Ltd. ("GLJ") which have provided professional
opinions on the STAR Pilot project performance to date.
The drainage areas and OOIP that will be affected by the STAR Pilot
project were estimated by these three firms, depending on their
particular assumptions, as follows:
Hot-Tec: 1.62 MMbbl, for a drainage area of 50 acres
RPS: 1.86 MMbbl, for a drainage area of 85 acres
GLJ: 1.78 MMbbl, for a drainage area of 80 acres
Given that the cumulative production from the project, as a result of
primary recovery, steam and nitrogen injection and in-situ combustion,
is approximately 506 Mbbl to date, it is possible to calculate that the
range of RF attributable to the Project is 27.1% - 31.2%, which at
least doubles the RF estimated for the rest of the field, producing
under primary recovery.
The Company considers these RF results as preliminary and expects them
to further increase as the production in the STAR pilot project area
continues as planned for at least a few more months.
Additional highlights from each of the reports include:
The Quifa SW field's In-Situ Combustion Project is an unqualified
success. With more than 200 in-situ combustion field tests, Hot-Tec
regards this as the best engineered and best planned project with real
time monitoring and control capabilities as well as the ability to
safely handle H2S in processing facilities.
In-situ combustion is the process of choice in Quifa, which is an oil
field with a strong water drive.
The incremental oil recovery in Quifa SW would have been higher still
under normal operational conditions without rate or time constraints.
It has been clearly demonstrated that the Quifa SW crude responds
positively to oxidation (through air injection) and is a good candidate
for in-situ combustion.
The field performance parameters are in good agreement with those
derived from laboratory tests.
The principal reason for success in the application of the STAR
technology is the use of synchronization for identifying and correcting
the combustion front position.
Massive expansion of the STAR pilot project by drilling new injectors
and producers, and inclusion of existing wells should be done soon to
capture the gas and oil leaving the current unconfined pattern, and
increasing the combustion efficiency.
The STAR pilot project has established incremental oil mobility and
recovery by thermal stimulation by in-situ combustion.
Based on the range of OIIP and EUR (Estimated Ultimate Recovery)
estimates, RPS calculates a range of potential incremental recovery
factor due to thermal recovery by in-situ combustion process of from 26
% to 44 % OIIP.
Once injection of gases started, water cuts ceased increasing and
conversely oil cut ceased decreasing.
Hot-Tec Energy Inc. is a private company affiliated with members of the
In-Situ Combustion Research Group, Department of Chemical and Petroleum
Engineering, Schulich School of Engineering, University of Calgary. The
In Situ Combustion Research Group is recognized as a global leader in
the application of in-situ combustion recovery processes.
RPS Energy Canada Ltd. is a part of RPS Group Plc, providing advice upon
the exploration and production of oil & gas and other natural
resources. RPS is a leading consultancy providing support and advice on
the development of natural energy resources across the complete asset
life cycle, and is the independent engineer that has certified the
Quifa SW reserves for Pacific Rubiales in the past.
GLJ Petroleum Consultants Ltd. is a premier oil and gas resource
consulting firm located in Calgary, Alberta, Canada, and was engaged by
Hot-Tec Energy Inc. to analyse the pre-air injection behaviour of the
Pacific Rubiales, a Canadian company and producer of natural gas and
crude oil, owns 100% of Meta Petroleum Corp., which operates the
Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin, and
100% of Pacific Stratus Energy Colombia Corp., which operates the La
Creciente natural gas field in the northwestern area of Colombia.
Pacific Rubiales has also acquired 100% of PetroMagdalena Energy Corp.,
which owns light oil assets in Colombia, and 100% of C&C Energia Ltd.,
which owns light oil assets in the Llanos Basin. In addition, the
Company has a diversified portfolio of assets beyond Colombia, which
includes producing and exploration assets in Peru, Guatemala, Brazil,
Guyana and Papua New Guinea.
The Company's common shares trade on the Toronto Stock Exchange and La
Bolsa de Valores de Colombia and as Brazilian Depositary Receipts on
Brazil's Bolsa de Valores Mercadorias e Futuros under the ticker
symbols PRE, PREC, and PREB, respectively.
Cautionary Note Concerning Forward-Looking Statements
This news 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, Peru, Brazil, Papua New
Guinea and Guyana; 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 13, 2013 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.
In addition, reported production levels may not be reflective of
sustainable production rates and future production rates may differ
materially from the production rates reflected in this news release due
to, among other factors, difficulties or interruptions encountered
during the production of hydrocarbons.
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. The estimated values
disclosed in this news release do not represent fair market value. The
estimates of reserves and future net revenue for individual properties
may not reflect the same confidence level as estimates of reserves and
future net revenue for all properties, due to the effects of
This news release was prepared in the English language and subsequently
translated into Spanish and Portuguese. In the case of any differences
between the English version and its translated counterparts, the
English document should be treated as the governing version.
Billion cubic feet.
Billion cubic feet of natural gas equivalent.
Barrel of oil.
Barrel of oil per day.
Barrel of oil equivalent. Boe's may be misleading, particularly if used
in isolation. The Colombian standard is a boe conversion ratio of 5.7
Mcf:1 bbl and is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Barrel of oil equivalent per day.
Thousand barrels of oil equivalent.
Million barrels of oil equivalent.
Thousand cubic feet.
West Texas Intermediate Crude Oil.
SOURCE: Pacific Rubiales Energy Corp.
For further information:
Christopher (Chris) LeGallais
Sr. Vice President, Investor Relations
+1 (647) 295-3700
Sr. Manager, Investor Relations
+57 (1) 511-2298
Manager, Investor Relations
+1 (416) 362-7735