TORONTO, Jan. 30, 2013 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) announced today that a wireline evaluation program has confirmed the previously announced light oil discovery in the Kangaroo-1 exploration well on block S-M-1101, in the Santos basin, offshore Brazil. The well was drilled as part of an agreement announced by the Company on September 18, 2012, as a minimum work commitment for both the S-M-1101 and S-M-1165 blocks, where the Company holds a 35% participating interest (subject to approval by Brazil's Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP)).
As announced in an operational update news release today by the operator of the blocks, Karoon Gas Australia Ltd. (ASX: KAR), (see Karoon website: www.karoongas.com.au), the wireline evaluation of the Eocene discovery zone in the Kangaroo-1 well, including petrophysical logs, core samples, fluid samples and flow tests all conducted on wireline, is nearing completion.
The wireline data confirms a 25 meter (gross) light oil column sitting above a well-defined oil water contact in the well. Multiple oil samples measuring 42 degree API were recovered to surface from two separate intervals in the zone. Petrophysical well logs indicate porosities in the 25 to 32% range, and permeabilities of 100 to 300 millidarcies have been determined from pressure flow tests. Multiple wireline core samples collected across the zone and to be analyzed in a laboratory will provide additional measurements of the reservoir zone's porosity and permeability characteristics.
"Although not the primary objective, this is an exciting discovery in our first exploration well drilled on the Karoon blocks in Brazil", commented Ronald Pantin, Chief Executive Officer of Pacific Rubiales. "At this stage we believe that the wireline testing and evaluation indicates that the Kangaroo-1 Eocene reservoir is of good quality, has the potential to flow light oil at commercial rates, and we feel very comfortable that this is a significant discovery. We are proceeding with plans to drill an appraisal well to further delineate the extent of the Kangaroo reservoir. In addition, the discovery of an oil bearing reservoir and an effective trap in the Eocene de-risks other undrilled Eocene structures identified on the Karoon blocks."
When the current wireline operations are completed, the operator will relocate the rig to drill the Emu-1 exploration well to evaluate blocks S-M-1102 and S-M-1037, where the Company also holds a 35% participating interest (also subject to approval by the ANP).
Karoon is currently working to acquire a second rig to drill an appraisal well (Kangaroo-2) at a more optimal up-dip location for full reservoir and production testing of the discovery. The appraisal well would expect to penetrate a larger hydrocarbon column at the crest of the structure where the gross reservoir section could be as thick as 350 meters and contain sandstone packages with better petrophysical characteristics.
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 news 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.
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 news release due to, among other factors, difficulties or interruptions encountered during the production of hydrocarbons.
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.