TORONTO, March 28, 2012 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) is pleased to announce that it has agreed to purchase up to 140 million common shares in the capital of Pacific Infrastructure Inc. at a price of U.S.$1.00 per share for an aggregate investment of up to U.S.$140 million (the "Subscription"). Pursuant to the terms of the letter of intent entered into between the Company and Pacific Infrastructure (the "Letter of Intent"), the Company has agreed to fund the Subscription in tranches of at least U.S.$20 million for working capital purposes over the next twelve months. Pacific Infrastructure is a private Panama-based company developing a new crude oil and products terminal and port in Cartagena as well as a new pipeline that will link Coveñas with Cartagena.
Ronald Pantin, Chief Executive Officer of the Company, commented: "With this investment into one of Colombia's only newly developing ports, Pacific Rubiales moves one step closer to increasing its oil storage and export capacity at a meaningful reduction to current cost. With the Company planning to double its oil production over the next five years, the investment is very strategic to our future growth plans."
As a result of funding the first tranche of the Subscription, the Company currently holds 61,488,415 common shares in the capital Pacific Infrastructure, representing approximately 30% of the issued and outstanding shares. To date, the Company has invested approximately U.S.$38 million in Pacific Infrastructure. Under the term of the Letter of Intent, Ronald Pantin will sit on the board of directors of Pacific Infrastructure as the Company's nominee for as long as the Company holds 10% of the issued and outstanding common shares in the capital of Pacific Infrastructure.
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, Piriri and Quifa 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 43 blocks in Colombia, Peru and Guatemala.
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.
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, 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 14, 2012 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.
For further information:
Christopher (Chris) LeGallais
Sr. Vice President, Investor Relations
+1 (647) 295-3700
Carolina Escobar V
Corporate Manager Investor Relations
+57 (1) 628-3970