VANCOUVER, Nov. 21 /CNW/ - Petro Rubiales Energy Corp. (the "Company" or
"Petro Rubiales") is pleased to announce commencing November 21, 2007 the
Company will begin to implement a new operational and commercial scheme that
will allow the Company to generate a substantial increase in the market value
of crude oil production from the Company's Rubiales oil field in Colombia.
Management estimates an almost 100% increase of the netback.
The scheme devised by the senior management team of Petro Rubiales is
centered around the trucking of the Rubiales field production (12.5 degrees
API) to the Guaduas tank farm in the central region of Colombia. Once there,
the Rubiales crude will be diluted with light crude oil up to 18 degrees API
(pipeline grade). The diluted stream will then be injected into the pipeline
system that leads to the export terminal of Covenas on the Caribbean coast of
Colombia, as part of the Vasconia crude stream (Vasconia is a Colombian
25 degrees API commercial segregation). The operation will begin with a volume
of 4,000 barrels per day of diluted crude, depending on the quality of the
The Guaduas tank farm is owned by Pacific Stratus Energy Ltd., a Canadian
company which recently entered into an agreement to merge with Petro Rubiales
to create one of the largest independent E&P companies in Colombia (see news
release dated, November 12, 2007).
This new operation will significantly improve the net back of the
Rubiales crude as a result of two concurring effects. The first is a
significant reduction in current transportation costs as a result of shortened
trucking distance to the selling point (Guaduas tank farm), and the other
being a significant increase in value by directing the crude to the
international market, rather than to the local, domestic market. Management
expects that at today's oil prices, the barrels of oil handled through this
new arrangement will yield a value in excess of $60 per barrel, an almost
$24 per barrel of additional netback, as compared with present values.
Petro Rubiales is currently constructing new facilities nearby Guaduas.
Upon completion (expected within three months), the facilities will be able to
handle up to 20,000 barrels per day of diluted crude, enabling the whole of
Rubiales' net production (around 14,000 barrels per day) to go through
Guaduas, allowing the company to benefit from the improved values. This new
scheme, and the collaboration with Pacific Stratus, emphasizes the type of
synergies that will be possible when the merger between the two companies is
completed in the first quarter, 2008.
Petro Rubiales has embarked upon an aggressive strategy of increasing the
gross production capacity in the Rubiales field (from approximately 24,000 to
126,000 barrels of oil per day), as well as investing in transport facilities
to handle the Company's production goals. The Company anticipates constructing
a new pipeline with a capacity of 200,000 barrels per day (diluted crude) to
join the Rubiales field with the main pipeline system in Colombia, with flow
currently scheduled for Q3, 2009. The new pipeline will allow for all of the
Rubiales field production to be exported to the international market.
Petro Rubiales, a Canadian-based company and producer of heavy crude oil,
acquired a 100% percent interest in Rubiales Holdings Limited, owner of
100 percent of Meta Petroleum Limited, a Colombian oil and gas operator which
operates the Rubiales and Piriri oil fields in the Llanos Basin in association
with Ecopetrol S.A., the Colombian state-owned oil company. The Company is
focused on identifying opportunities primarily within the eastern Llanos Basin
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news release.
This press release contains forward-looking statements based on
assumptions, uncertainties and management's best estimates of future events.
Actual results may differ materially from those currently anticipated.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties. Important factors that could cause actual results to differ
materially from those expressed or implied by such forward looking statements
are detailed from time to time in the respective company's periodic reports
filed with the British Columbia Securities Commission and other regulatory
authorities. Neither company has the intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
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; Or visit: www.sedar.com or