TORONTO, Nov. 4, 2013 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) is pleased to announce that it has received the environmental licences from the Colombian environmental authority, Autoridad Nacional de Licencias Ambientales ("ANLA"), required to advance its planned exploration and development activities in both the CPE-6 and Guama E&P blocks, located in Colombia.
The CPE-6 E&P block covers an area of approximately 593 thousand acres in the southern Llanos Basin and lies along the heavy oil trend approximately 70 kilometers southwest of the Company's operated Rubiales/Quifa SW giant oil field complex. Pacific Rubiales has a 50% working interest and is operator of the block. Talisman (Colombia) Oil and Gas Ltd., a wholly owned subsidiary of Talisman Energy Inc. (TSX: TLM) holds the remaining 50% working interest.
There have been twelve stratigraphic wells drilled on the CPE-6 block by the Company and its partner, plus an additional four wells previously drilled in the area, which confirm the presence of a significant hydrocarbon column in the Hamaca prospect. At year-end 2012, the Company booked certified net 2P reserves of 44.5 MMbbl (57.1 MMbbl gross) associated with the Hamaca prospect and working interest gross best case Prospective Resources of 137.1 MMbbl, associated with the Hamaca prospect and two additional leads in the CPE-6 block (see additional information provided below in: "Reserves and Resources").
The Guama block covers an area of approximately 184 thousand acres in the Lower Magdalena Valley Basin, approximately 100 kilometers east of the Company's La Creciente natural gas field in northern Colombia. Pacific Rubiales has a 100% working interest and is operator of the block.
The Company has made a number of significant natural gas discoveries on the block. At year-end 2012, the Company booked certified net 2P reserves of 34.2 MMboe (36.5 MMboe gross) and working interest gross best case Prospective Resources of 97.3 MMboe in the Guama block (see additional information provided below in: "Reserves and Resources").
Ronald Pantin, Chief Executive Officer of the Company, commented:
"We are pleased that the Colombian environmental authority has granted this licence which will provide such an important source of revenue for the Company, our partner and for Colombia, in the form of royalties, taxes and spin-off economic activity. We would like to again recognize the efforts that the ANLA has made to improve and streamline the licensing process for oil producers in Colombia and we look forward to working with them in the future.
"Receiving the environmental licence for the CPE-6 block is important to the Company and our partner as it will allow us to continue our exploration activities, production test wells, and advance the block to first production, expected next year. This block represents the first major step out for us from the Rubiales/Quifa SW field area and illustrates the repeatable and scalable nature of the Company's heavy oil strategy in Colombia, while also supporting the Company's plans to significantly increase its production over the next four years.
"It is important to understand that the CPE-6 licence is a 'global environmental licence' which will allow for exploration and future development on the block. For the remainder of 2013 the Company plans to drill one exploration well and obtain production flow tests from existing wells. Following this into 2014, the Company plans to drill up to 19 additional wells, including two exploration wells and 17 appraisal and development wells. The Company and our partner will begin activities as soon as logistical, partner and permit approvals allow.
"The Guama environmental licence allows us to advance this block into its development phase. It provides the Company with authorization to drill up to 20 development wells and the construction of production facilities. We have already made a number of important exploration discoveries on the block and expect it will provide additional natural gas feedstock for our strategic LNG export project, which is advancing to commercial start-up at the end of next year."
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.
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, 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.
Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 5.7 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. The estimated values disclosed in this news release do not represent fair market value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Reserves and Resources
The reserves associated with the CPE-6 and Guama blocks were certified by Petrotech in a report dated February, 28, 2013, effective December 31, 2012, entitled "Evaluation of the Proved & Probable Reserves of Pacific Rubiales Energy Corp. in 16 Blocks in Colombia and 1 Block Offshore, Peru for Year-Ending 2012". For further information, see the Company's Form 51-101 F1 - Statement of Reserves Data And Other Oil and Gas Information as of December 31, 2012 dated March 13, 2013. Additional details on the Guama block reserves are provided in the following table below:
|CPE 6 Block 2P Reserves|
|Heavy Oil (MMbbl)||57.1||44.5|
|Guama Block 2P Reserves|
|Natural Gas Liquids (MMbbl)||11.5||10.8|
|Natural Gas (Bcf)||142.5||133.4|
The Prospective Resources associated with the CPE-6 block (all heavy oil) and Guama block (natural gas liquids and natural gas) were certified by Petrotech in a report dated April 2, 2013, with an effective date of September 30, 2012, entitled "Resource Evaluation of the Interests of Pacific Rubiales Energy Corp. in 32 Exploration & Production Blocks in Colombia, Guatemala, Guyana, Papua New Guinea, Peru and Brazil". Additional details on the CPE-6 and Guama blocks Prospective Resources are provided in the following tables below:
|CPE-6 Block Prospective Resources|
|Prospect & Leads|| Best Case Gross
|Hamaca Prospect (MMbbl)||55.2|
|Two Leads (MMbbl)||81.9|
|Guama Block Prospective Resources|
|Leads||Resource Type|| Best Case Gross Unrisked
|Natural Gas Liquids (MMbbl)||18.6|
|Natural Gas (Bcf)||448.5|
|Total Equivalent (MMboe)||97.3|
Readers should give attention to the estimates of individual classes of resources and appreciate the differing probabilities of recovery associated with each class. Estimates of remaining recoverable resources (unrisked) include Prospective Resources that have not been adjusted for risk based on the chance of discovery or the chance of development and Contingent Resources that have not been adjusted for risk based on the chance of development. It is not an estimate of volumes that may be recovered. Actual recovery is likely to be less and may be substantially less or zero.
Prospective Resources are those quantities of oil and gas estimated to be potentially recoverable from undiscovered accumulations. There is no certainty that the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources. Application of any geological and economic chance factor does not equate Prospective Resources to Contingent Resources or reserves. In addition, the following mutually exclusive Classification of Resources were used:
- Low Estimate - This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P90 confidence level where there is a 90% chance that a successful discovery will be equal to more than this resources estimate.
- Best Estimate - This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. This term is a measure of central tendency of the uncertainty distribution and in this case reflects a 50% confidence level where there is a 50% chance that the successful discovery will be equal to or more than this resources estimate.
- High Estimate - This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. This term reflects a P10 confidence level where there is a 10% chance that the successful discovery will be equal to or more than this resources estimate.
Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources have an associated chance of development (economic, regulatory, market and facility, corporate commitment or political risks). The estimates herein have not been risked for the chance of development. There is no certainty that the Contingent Resources will be developed and, if they are developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the Contingent Resources.
In this news release total volumes of resources have been expressed for high case estimates, low case estimates and best case estimates for both Contingent and Prospective Resources. These total volumes are arithmetic sums of multiple estimates of Contingent and Prospective Resources, as the case may be, which statistical principles indicate may be misleading as to volumes that may actually be recovered. Readers should give attention to the estimates of individual classes of resources and appreciate the differing probabilities of recovery associated with each class as explained in this section.
|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.|
|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.
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