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TORONTO, Nov. 10 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) announced today that it has successfully closed an offering of U.S. $450 million in notes at a rate of 8.75%. The Senior Unsecured Notes ("Notes") due 2016 were issued at a price of 99.09% of the principal amount, for aggregate net proceeds to the company of approximately U.S.$442 million, after taking into account discounts, commissions and expenses of the offering. The net proceeds from the sale of the Notes will be used by the company to (i) repay U.S.$250 million, equal to the entire principal outstanding, plus accrued interest, under its RBL Facility held with BNP Paribas, Calyon, Banco Davivienda S.A., Banco Davivienda, Banco De Bogota, Bancolombia, Banco De Occidente and WestLB AG, and (ii) for general corporate purposes. The Notes have been assigned ratings of BB- (Stable Outlook) by Fitch Ratings and B+ (Positive Outlook) by Standard & Poor's Corporation.
The Notes were placed through a syndicate of underwriters, led by Banc of America Securities LLC, as Global Coordinators, and, together with Citigroup Global Markets Inc, as Joint Book-running Managers, and included GMP Securities L.P., RBC Capital Markets Corporation and BNP Paribas Securities Corp., as Co-Managers. The Notes were placed with Qualified Institutional Buyers in the United States pursuant to the registration exemptions provided by Rule 144A of the Securities Act of 1933, and on a private placement basis in certain provinces of Canada, as well as internationally as permitted by applicable securities laws in such jurisdictions.
Ronald Pantin, the company's Chief Executive Officer commented, "We are extremely pleased with the success of this offering. The order book for the offering, the first international public offering of debt securities by the company, was approximately 3.4 times oversubscribed with broad participation from 110 investors and important demand from investors in the United States, Canada, Latin America (including Colombia), Europe and Asia, thereby demonstrating the confidence of international investors in Pacific Rubiales and its business model. Together with the anticipated proceeds from the previously announced early conversion of our outstanding warrants, this offering not only allows the company to refinance its debt on substantially less onerous terms, but also ensures that our recently expanded capital expenditure plan is fully funded. This adds additional confidence to our production goal of 225,000 boe per day by the end of 2010."
The Notes are direct, unsecured senior obligations of Pacific Rubiales and rank equal in right of payment with all of its existing and future senior unsecured debt. The company will redeem a portion of the principal of the Notes in each of 2014, 2015 and 2016 (November 10, 2014 (33.33%); November 10, 2015 (33.33%); and November 10, 2016 (33.34%)). The company may, at its option at any time, redeem the Notes, in whole but not in part, at the greater of (i) 100% of their principal amount plus accrued interest and additional amounts, if any, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest and additional amounts, if any, on the Notes, discounted to the date of redemption at the applicable treasury rate plus 75 basis points.
The company has applied to the Luxembourg Stock Exchange to admit the Notes for listing on the Official List of the Luxembourg Stock Exchange and to trade the Notes on its Euro MTF market.
The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities.
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 43,000 barrels of oil equivalent per day, 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 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.
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