TORONTO, Jan. 26, 2012 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today that it has entered into an agreement to receive common shares of PetroMagdalena Energy Corp. (TSXV: PMD) in satisfaction of certain debts owed to it in connection with the exploration program at the Topoyaco block. PetroMagdalena owes Pacific Rubiales approximately U.S. $6 million in connection with a cash call due to a subsidiary of Pacific Rubiales as at December 31, 2011.
The shares for debt agreement was negotiated at arms-length between the two parties on January 19, 2012, using a deemed share price of $1.25 per share. As such, PetroMagdalena will be issuing 4,826,600 (calculated using the Bank of Canada exchange rate at the close of January 19, 2012) common shares in settlement of the above-noted debt. The issuance of the common shares is subject to approval from the TSXV.
Upon issuance of the common shares in settlement of the debt, Pacific Rubiales will own 6,528,900 common shares in the capital of PetroMagdalena, representing 4.4% of its issued and outstanding common shares.
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 Rubiales and Piriri oil fields in the Llanos Basin in association with Ecopetrol, S.A., the Colombian national oil company, and 100 percent of Pacific Stratus Energy Corp. which operates the La Creciente natural gas field. 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 working interests in 46 blocks in Colombia, Peru and Guatemala.
The Company's Shares trade on the Toronto Stock Exchange and La Bolsa de Valores de Colombia under the ticker symbols PRE and PREC, respectively.
Cautionary Note Concerning Forward-Looking Information
This news release contains forward-looking information. All information, 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) is forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is 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 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 10, 2011 on SEDAR at www.sedar.com. Any forward-looking information 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 information, 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 information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
For further information:
Mr. Christopher (Chris) LeGallais
Sr. Vice President, Investor Relations
+1 (647) 295-3700
Ms. Carolina Escobar V
Corporate Manager, Investor Relations
+1 57 (1) 628-3970