TORONTO, Nov. 5, 2013 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) and Gazprom Marketing & Trading Limited ("GM&T") are pleased to announce the execution of a Heads of Agreement ("HOA") for the negotiation of a five year Sale and Purchase Agreement ("SPA") for approximately 0.5 million tons per year of liquefied natural gas ("LNG") FOB Colombia (Caribbean Sea) beginning in the second quarter of 2015. The HOA includes the key commercial terms of the SPA, which the companies will negotiate on an exclusive basis within the next nine months. As agreed under the HOA, Pacific Rubiales will procure an LNG Floating Storage Unit ("FSU") of a minimum size of 138,000 m3.
Pacific Rubiales will source the feed gas for this project from its La Creciente Field in northern Colombia and is in the process of building an 88 kilometer, 18" diameter pipeline to the offshore floating liquefaction barge, which is currently under construction by Shanghai-based Wison (Nantong) Heavy Industry Co., Ltd, a subsidiary of the Wison Group.
Ronald Pantin, Chief Executive Officer of Pacific Rubiales, commented:
"The execution of this agreement is very positive for us as it underpins the commercial start-up of the world's first operational floating LNG production unit at a pricing formula linked to international crude oil markets."
Vitaly Vasiliev, Chief Executive Officer of GM&T, commented:
"We are very excited by this partnership with Pacific Rubiales which complements Gazprom's expanding LNG portfolio. We are pleased to bring the commercial and shipping solutions to what will be the world's first floating LNG liquefaction plant in operation."
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.
Pacific Rubiales' 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.
Gazprom Marketing & Trading Limited ("GM&T") is a UK-registered wholly-owned subsidiary of OAO Gazprom ("Gazprom"), the world's largest gas company by asset base, accounting for 18% of the world's total natural gas reserves and about 15% of the world's total natural gas production. GM&T is headquartered in London and was established in 1999 to optimise Gazprom's energy commodity assets and downstream expansion through its global marketing and trading network. GM&T and its subsidiaries and branches in the USA, Singapore, France, Germany, UK and Switzerland employ around 1,000 people and operate in numerous international markets in energy commodities including LNG, natural gas, power, oil and oil products, carbon, LPG and renewables.
Pacific Rubiales' Advisories
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, Peru, Guatemala, Brazil, Papua New Guinea or 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 press release due to, among other factors, difficulties or interruptions encountered during the production of hydrocarbons.
|Bcf||Billion cubic feet.|
|Bcfe||Billion cubic feet of natural gas equivalent.|
|bbl||Barrel of oil.|
|bbl/d||Barrel of oil per day.|
|boe|| 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.
|boe/d||Barrel of oil equivalent per day.|
|Mboe||Thousand barrels of oil equivalent.|
|MMboe||Million barrels of oil equivalent.|
|Mcf||Thousand cubic feet.|
|MMcf||Million cubic feet.|
|MMcf/d||Million cubic feet per day.|
|Tcf||Trillion cubic feet.|
|m3||Cubic meters (one cubic meter of natural gas is equivalent to 35.3 cubic feet).|
|Million Tons LNG||One million tons of LNG (Liquefied Natural Gas) is equivalent to 48 Bcf or 1.36 billion m3 of natural gas.|
|WTI||West Texas Intermediate Crude Oil.|
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.
Image with caption: "LNG Floating Storage Unit (CNW Group/Pacific Rubiales Energy Corp.)". Image available at: http://photos.newswire.ca/images/download/20131105_C9518_PHOTO_EN_32828.jpg
SOURCE: Pacific Rubiales Energy Corp.
For further information:
FOR FURTHER INFORMATION REGARDING PACIFIC RUBIALES CONTACT
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
FOR FURTHER INFORMATION REGARDING GM&T CONTACT
Executive Director - LNG, Shipping & Logistics, Clean Energy
+44(0)207 756 0690
Senior External Communications Advisor
+44 (0)207 756 0820