For the three and nine months ended September 30, 2007
VANCOUVER, Nov. 16 /CNW/ - Petro Rubiales Energy Corp. (the 'Company')
(TSX.V: PEG) (formerly Consolidated AGX Resources Corp.), a Canadian-based
company and producer of heavy crude oil, is pleased to report the Company's
unaudited interim financial results for the three and nine months periods
ended September 30, 2007. All amounts are presented in United States dollars,
unless otherwise noted.
On July 12, 2007, the Company closed a $421 million brokered private
placement of 517,650,000 units at a price of C$0.85 per unit. GMP Securities
L.P., Canaccord Adams Inc., Orion Securities Inc. and Fraser Mackenzie Limited
acted as the agents in the private placement.
On July 16, 2007, the Company completed the acquisition of 75% of the
outstanding shares of Rubiales Holdings Limited ("Rubiales"), which holds a
50% indirect interest in certain hydrocarbon concessions named Rubiales,
Piriri and Quifa, for the exploration and exploitation of hydrocarbons in the
Llanos Basin in Colombia. The purchase price amounted $264 million.
On August 2, 2007, the Company announced the completion of well RB64
located within the Rubiales Oil Field of the Llanos Basin, which tested at a
record 3,600 gross barrels per day. Gross production increased to
approximately 21,000 gross barrels per day.
On August 20, 2007, the Company completed the acquisition of Major
International Oil S.A ("MIO"). The purchase price amounted $0.4 million. MIO
brings the Company the right to earn up to a 50% interest in any exploration
and production contract over an area in the Arauca Department, Llanos Basin,
Colombia, by incurring $10.5 million in exploration activities in the area.
On August 28, 2007, the Company was invited by the Colombian Hydrocarbons
National Agency to participate in bidding for new heavy oil blocks in the
Llanos Orientales Basin of Colombia, considered one of the most prospective
hydrocarbon sectors of the Andean area.
On September 25, 2007, the Company contributed 0.5% of the gross proceeds
raised on the above mentioned private placement to the Clinton/Giustra
Sustainable Growth Initiative toward social and economic development projects
On October 19, 2007 the Company entered into an agreement to acquire the
remaining 25% of the outstanding shares of Rubiales. Consideration for the
acquisition is $10 million in cash, plus 85 million common shares of the
At October 22, 2007 the Company announced that production reached more
than 23,000 gross (8,000 net) barrels of heavy crude oil per day from its
Rubiales and Piriri association contracts in Colombia.
On November 12, 2007 the Company announced that it had entered into an
agreement with Pacific Stratus Energy Ltd. (TSX: PSE) ("Pacific") by which the
Company will combine with Pacific through a court-approved plan of arrangement
and Pacific will become a wholly owned subsidiary of the Company. It is
anticipated that the transaction will be concluded in the first quarter of
Commenting on the Company's interim financial results for the period,
Ronald Pantin, President and Chief Executive Officer, said "We successfully
closed the private placement, and concluded the acquisition of Rubiales and
Major International Oil S.A. during the period. We have increased gross oil
production to our current level of approximately 24,000 gross barrels per day
from 18,500 gross barrels per day. We are expecting our first sale of trucked
oil to reach the international market before year end and we have recently
increased our fleet of trucks as a major step in achieving our 40,000 gross
barrels of oil per day production target for 2008. In respect to exploration,
we have acquired the right to earn an interest in the Arauca block and we are
participating in a bid for new heavy oil blocks in the Llanos Basin, Colombia.
Subsequent to the end of the period, we entered into an agreement to acquire
the remaining 25% ownership of Rubiales and announced the merger with Pacific.
The merger will help create one of the largest oil and gas production and
development companies in Colombia. With positive cash flow from operations and
a cash position of $168 million as at September 30, 2007 we are well
positioned to commence our development plan to bring production to 126,000
barrels per day over the remaining life of the Piriri and Rubiales
concessions. A new pipeline between the Rubiales field and the main pipeline
system in Colombia will allow for the production to be exported to the
Financial Results of Operations
The results for the three month period ended September 30, 2007 include
Rubiales' operating results from the date of acquisition. That is from July 17
to September 30, 2007.
During the three months ended September 30, 2007 all production and sales
comes from the Piriri and Rubiales association contracts. The Company's
revenue from sales of crude oil during the third quarter of 2007 was $26,519,
operating expenses amounted to $12,275, depreciation and amortization was
$2,709, general and administrative expenses were $832 and stock based
compensation was $4,914. After the deduction of foreign exchange loss of $517
and interest expense of $491 and adding interest income of $1,580, the net
income before tax and non-controlling interest amounted $6,361. Net income for
the three month period ended September 30, 2007 amounted to $2,690 ($0.00 per
Net cash provided by operating activities during the three months period
ended September 30, 2007 was $21 million, and was generated from the sales of
crude oil into the domestic market in Colombia.
As at September 30, 2007 the Company had cash position of approximately
$168 million that will be used primarily to fund capital expenditure and
working capital needs.
Capital Expenditure Update
The Company has a substantial plan of development to bring the current
gross productive capacity to more than 126,000 barrels per day over the
remaining life of the Piriri and Rubiales concessions which expire on July,
2016 and to increase transportation capacity, by way of pipeline, to 200,000
gross barrels per day.
Significant capital expenditure is needed to execute the plan, which
includes drilling over 348 wells (primarily horizontal) at a rate of
approximately 50 wells per year and to build a 215 km and 30 inch pipeline to
take the increased production from Rubiales oil field to Cusiana station in
Colombia, where it will be sold on the international market. Upon completion
of the pipeline, the Company will likely connect with the main pipeline system
in Colombia, where currently, capacity exists.
The construction of the pipeline, of which the Company will have a
significant ownership interest, involves an approximate cost of $437 million
gross. All the environmental permits are in place, and the Company expects
first flow from the pipeline to be in the third quarter of 2009. The Pipeline
Project partners are considering options to finance their portions of the
project costs, which will include a combination of existing cash on hand, cash
flow from operations and the acquisition of additional debt.
Other significant capital expenditure items include construction of
production facilities and equipment and field infrastructure including airport
On behalf of Petro Rubiales Energy Corp.
President and Chief Executive Officer
To view the full financial statements for the interim period ended
September 30, 2007, please visit www.sedar.com or www.petrorubiales.com.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. The
foregoing information may contain forward-looking statements relating to
the future performance of Petro Rubiales Energy Corp. Forward-looking
statements, specifically those concerning future performance, are subject
to certain risks and uncertainties, and actual results may differ
materially. These risks and uncertainties are detailed from time to time
in the Company's filings with the appropriate securities commissions.
For further information:
For further information: Mr. Ronald Pantin, Chief Executive Officer and
Director, Tel: (604) 688-9180; Dr. Sally Eyre, Senior Vice President,
Corporate Development, (604) 688-9180