TORONTO, Dec. 23, 2013 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE)
(BVC: PREC) (BOVESPA: PREB) announced today that it has reached an
agreement to sell its 5% interest and transportation rights in the
Oleoducto Central S.A. ("OCENSA") oil pipeline in Colombia for a total cash consideration of U.S.$385
million (the "Transaction") to a consortium led by Darby Private Equity ("Darby"), the private equity arm of Franklin Templeton. The investment will be
made by Darby's Fondo de Infraestructura de Transporte de Colombia ("FINTRA"). The OCENSA pipeline interest and transportation rights were acquired
from the Company's previously announced acquisition of Petrominerales
Ltd. ("Petrominerales"), which closed on November 28, 2013.
The transaction includes the sale of the 5% equity interest in the
OCENSA pipeline, along with the accompanying transportation capacity
rights, including current and future capacity expansions. The Company
has entered into a ten year agreement to secure transportation capacity
for a take-or-pay incremental charge in addition to the regulated
tariff on the pipeline. The transaction is expected to close in early
Ronald Pantin, the Company's Chief Executive Officer, commented:
"This transaction represents an attractive deal for both companies.
Darby will receive a steady and secure rate of return on its
investment. Pacific Rubiales will receive U.S.$385 million in cash,
which we will use to pay down the debt incurred by the Company in
connection with the Petrominerales acquisition, reducing the
acquisition cost to approximately Cdn.$1.2 billion and significantly
improving the acquisition metrics.
"In addition we have secured approximately 29 Mbbl/d of long-term
transportation capacity in the largest and most secure oil pipeline in
Colombia, which is very strategic to the Company's plans to increase
its heavy oil production out of the southern Llanos basin. Along with
our existing preferential capacity rights in the OCENSA pipeline and
our interests in the new Bicentenario oil pipeline, this additional
capacity in the OCENSA pipeline will largely eliminate our need for
major long-haul trucking and is expected to reduce our overall
transportation costs in the future."
Itaú BBA acted as sole financial advisor on this transaction.
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 Petrominerales Ltd, which
owns light and heavy oil assets in Colombia and oil and gas assets in
Peru, 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
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.
Darby Private Equity, a global emerging markets private equity fund
manager was founded in 1994. Darby is a wholly owned subsidiary of
Franklin Resources, Inc, (NYSE: BEN), a global investment management
organization operating as Franklin Templeton Investments. Franklin
Templeton Investments provides global and domestic investment
management solutions managed by its Franklin, Templeton, Mutual Series,
Fiduciary Trust, Darby and Bissett investment teams. The San Mateo,
CA-based company has more than 65 years of investment experience and
more than US$870 billion in assets under management as of November 30,
2013. For more information please visit franklintempleton.com.
FINTRA is a Colombian-based infrastructure fund managed by
Darby-Colpatria Capital S.A.S., a joint venture between Darby and Grupo
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; the impact of
environmental, aboriginal or other claims and the delays such claims
may cause in the expected development plans of the Company 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.
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
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.
Million Tons LNG
One million tons of LNG (Liquefied Natural Gas) is equivalent to 48 Bcf
or 1.36 billion
m3 of natural gas.
Company working interest production after deduction of royalties.
Total Field Production
100% of total field production before accounting for working interest
Company working interest production before deduction of royalties.
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.
PDF available at: http://stream1.newswire.ca/media/2013/12/23/20131223_C6404_DOC_EN_35228.pdf
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