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Pacific Rubiales announces significant positive revision to its Statement of Reserves Data

TORONTO, March 21, 2014 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) announced today that the Company has filed a revision to its Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information as of December 31, 2013, which was originally filed on March 13, 2014 (the "Revised F1 Report").

The reason the Revised F1 Report has been filed by the Company is that on March 21, 2014 the Company received the following revised reserves reports from RPS Energy Canada Ltd. ("RPS"):  (i) the report dated March 21, 2014, effective December 31, 2013, entitled "Reserves Certification Report for the Rubiales Field, Colombia" and (ii) the report dated March 21, 2014, effective December 31, 2013, entitled "Reserves Certification Report, Year End 2013, Quifa Field, South West Region, Colombia" which indicated that the corrections described below needed to be made to the Company's Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information as of December 31, 2013.

The Revised F1 Report incorporates corrections to the Company's disclosure of net present value of future net revenue (forecast case), additional information concerning future net revenue (forecast case) and future development costs in order to account for an error in calculating diluent costs associated with the Rubiales and Quifa SW Fields.  The Revised F1 Report also corrects net reserves calculations at the Quifa SW Field to properly account for diluent costs of the project and the allocation of diluent costs and volumes in the calculations of net revenue interest and Additional Participation on Production ("PAP") due to Ecopetrol, S.A. RPS has recognized that these revisions were necessary due to a discrepancy in their analysis and has worked with the Company to put in place these revisions.

The Revised F1 Report discloses, in respect of the net present value of future net revenue (forecast case), an increase in the undiscounted present value of future net revenue after deducting future income taxes of U.S.$1.6 billion, bringing the undiscounted present value of future net revenue after deducting future income taxes to U.S.$18.5 billion.  The 5%, 10%, 15% and 20% discounted rates for present value of future net revenue after deducting future income taxes are amended as follows:  5% increases to U.S.$13.5 billion from U.S.$12.0 billion,  10%  increases to U.S.$10.5 billion from U.S.$9.1 billion, 15%  increases to U.S.$8.5 billion from U.S.$7.2 billion and 20% increases to U.S.$7.1 billion from U.S.$5.8 billion.  In addition, the Revised F1 Report includes a decrease of 5.9 MMbbl of Total Proved plus Probable net after royalties reserves at the Quifa SW Field which has resulted in the adjustment of the Company's total Total Proved plus Probable net after royalties reserves to 613.3 MMboe from 619.2 MMboe.

Readers are directed to the full Revised F1 Report which is available at www.sedar.com and on the Company's website at www.pacificrubiales.com.

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 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.

Advisories

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, 2014 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.

The recovery and reserves estimates of crude oil and natural gas reserves provided in this news release taken from the independent reserve reports are estimates only, and there is no guarantee that the estimated reserves will be recovered.  Actual crude oil and natural gas reserves may eventually be greater than or less than the estimates provided. 

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.

Translation

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.

Boe Conversion

The term "boe" is used in this news release. Boe may be misleading, particularly if used in isolation. Aboe 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 Company's natural gas reserves are contained in the La Creciente, Guama and other bocks in Colombia as well as in the Piedera Redonda field in Block Z-1, Peru. For all natural gas reserves in Colombia, boe's have been expressed using the Colombian conversion standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of Mines and Energy, and for all natural gas reserves in Peru, boe's have been expressed using the Peruvian conversion standard of 5.626 Mcf: 1 bbl required by Perupetro S.A. If a conversion standard of 6.0 Mcf: 1 bbl was used for all of the Company's natural gas reserves,this would result in a reduction in the Company's net P1 and 2P reserves of approximately 4.9 and 6.9 MMboe, respectively.

Definitions 

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.
Mbbl Thousand barrels.
Mboe Thousand barrels of oil equivalent.
MMbbl Million barrels.
MMboe Million barrels of oil equivalent.
Mcf Thousand cubic feet.
WTI West Texas Intermediate Crude Oil.

 


SOURCE Pacific Rubiales Energy Corp.

PDF available at: http://stream1.newswire.ca/media/2014/03/21/20140321_C6609_DOC_EN_38247.pdf

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