Pacific Rubiales Announces Successful Completion of the First Phase of Early
Warrant Exercise Transaction for Gross Proceeds of CAD$273 million

TORONTO, Jan. 21 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today the successful completion of the first phase of the early warrant exercise transaction commenced on December 14, 2009. As of 5:00 p.m (Eastern Time) on January 20, 2010 (the last day of the early exercise period allowing warrantholders to exercise their warrants at the reduced exercise price of $6.30), a total of 43,297,309 warrants have been exercised, representing a 97.8% take up rate, for gross proceeds of approximately $273 million to the company. As greater than the required 66 2/3% of the warrants outstanding as of the commencement of the transaction were exercised pursuant to the first phase, the company is proceeding with the squeeze out of all remaining warrants (the "Warrant Exchange"). The warrants (TSX: PRE.WT) have been halted from trading and are being delisted from the Toronto Stock Exchange effective the end of the trading day today.

Each warrant that had not been exercised as of 5:00 p.m. (Toronto time) on Wednesday, January 20, 2010 (except as described below under "U.S. Warrantholder) is deemed to have been automatically exchanged, without any further action on the part of the holder, for the payment by the company to the holder of $0.75 per warrant (the "Exchange Payment") plus the issuance of such number of common shares of the company (the "Exchange Shares") equal to the number of warrants held by the individual warrantholder multiplied by (A) the volume weighted average trading price of the common shares of the company on the Toronto Stock Exchange for the five trading days immediately prior to January 20, 2010 (the "Market Price") minus (B) $7.80, divided by (C) the Market Price. No fractional common shares will be issued. Certificates evidencing the Exchange Shares and cheques evidencing the Exchange Payments will be mailed to each eligible holder at the address specified in the register of warrantholders maintained by Equity Transfer & Trust Company within the next seven business days.

U.S. Warrantholders

The common shares being issued pursuant to the exchange of the warrants have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and any applicable state securities laws or an exemption therefrom is available. A U.S. warrantholder is not eligible to have their warrants exercised pursuant to the Warrant Exchange, unless such person has provided to the company either (i) a written certification that the holder is an "Institutional Accredited Investor" (an "Accredited Investor", as defined in Rule 501(a) of Regulation D under the U.S. Securities Act, that satisfies the requirements of Rule 501(a)(1), (2), (3) or (7)) and delivered the subscription form and representation letter as required under section 3.7 of the warrant indenture to the company to have its warrants exchanged for the Exchange Payment and Exchange Shares, or (ii) a written opinion of counsel of recognized standing in form and substance satisfactory to the company to the effect that an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available for the issuance of the common shares issuable on exchange of the warrants. Any U.S. warrantholder who is not in compliance with such requirements is not permitted to have their warrants exchanged and receive the Exchange Payments and Exchange Shares, respectively, and their warrants will remain outstanding following the completion of the Warrant Exchange phase of the transaction.

No common shares will be exchanged for warrants beneficially owned by a warrantholder (A) who is in the United States, or (B) who is a U.S. Person or who holds a warrant for the account or benefit of a U.S. Person or a person in the United States.

GMP Securities L.P. and RBC Dominion Securities Inc. have acted as financial advisors to the Company with respect to the transaction.

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 Quifa Block in the Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company. 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 a current net production of over 52,582 barrels of oil equivalent per day (after royalties), with working interests in 32 blocks in Colombia and Peru.

Information in this press release expressed in barrels of oil equivalent (boes) is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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 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 April 1, 2009 filed on SEDAR at 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.

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SOURCE Pacific Rubiales Energy Corp.

For further information: For further information: Mr. Ronald Pantin, Chief Executive Officer and Director, Mr. Jose Francisco Arata, President and Director, (416) 362-7735; Ms. Belinda Labatte, (647) 428-7035

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Pacific Rubiales Energy Corp.

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