Pacific Rubiales Announces Filing of December 31, 2010 Reserves Information and 12.8% Growth in 2P Net Reserves as at February 28, 2011

Mar 11, 2011, 09:01 ET from Pacific Rubiales Energy Corp.

TORONTO, March 11 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) announced today that it has filed on SEDAR its Form 51-101 F1 "Statement of Reserves Data and Other Oil and Gas Information" as of December 31, 2010, as well as other associated forms.  In addition, as a result of the drilling of several successful wells that were commenced in 2010 but completed in early 2011, the Company has received an independent oil and gas reserve evaluation report as of February 28, 2011 (described in detail below), which indicates that the aggregate of the Company's net proved and probable reserves (2P reserves) has grown to a total of 316.44 million barrels of oil equivalent ("MMboe") as at February 28, 2011, signifying an increase of 12.8% when compared to December 31, 2009.

The 2010 year-end reserves numbers announced today and contained in the Form 51-101 F1 are derived from three separate independent oil and gas reserve evaluation reports:  (i) the report dated February, 2011, effective December 31, 2010, entitled "Reserves Certification Report for the Rubiales Field, Colombia" prepared by RPS Energy Canada Ltd. ("RPS"); (ii) the report dated February, 2011, effective December 31, 2010, entitled "Evaluation of the Proved & Probable Reserves of Pacific Rubiales Energy Corp. in La Creciente, Guaduas, Rio Ceibas, Abanico, Quifa Norte, Moriche, Puli, Guama and Buganviles Blocks in Colombia" prepared by Petrotech Engineering Ltd. ("Petrotech"); and (iii) the report dated February, 2011, effective December 31, 2010, entitled "Reserves Certification Report for the Quifa Field, South West Region, Colombia" prepared by RPS (collectively, the "2010 Reserves Reports").  As a result of recent successful results of the appraisal and development campaign in the south western region of the Quifa field ("Quifa SW") and the recently disclosed results of the Apamate well in the La Creciente Block ("Apamate"), the Company has included in this news release details from reserves reports prepared by Petrotech with respect to Quifa SW as of January 31, 2011 and Apamate as of February 28, 2011 (collectively, the "2011 Reserves Updates"), included as "Additional Information" in the Company's Form 51-101F1.  Each of the 2010 Reserves Reports and the 2011 Reserves Updates were prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and will be published on the Company's website on March 11, 2011.

The 2010 Reserves Reports and the 2011 Reserves Updates illustrate that the Company has not only replaced the volumes of reserves produced, which amounted to a net production of 21.23 MMboe, but the 2011 Reserves Updates also demonstrate that the Company increased the aggregate of its proved and probable reserves (2P) for its producing blocks by 35.86 MMboe. Thus, the reserve replacement ratio (RRR) amounts to 2.69 barrels of oil equivalent incorporated per barrel produced.

José Francisco Arata, President of the Company, commented: "The updated 12.8% growth in our proved and probable (2P) reserves demonstrates the appropriateness of our exploration strategy, not only replacing produced barrels, but we are adding production growth potential across our entire portfolio of assets. The increase demonstrates our ability to grow our reserve base year-over-year, which is the foundation for the continuous success of Pacific Rubiales. With current 2P reserves of 1.18 barrels per outstanding share, we believe we are providing shareholders with significant value on a per share basis and significant future upside. We continue to move toward our goal of producing 500,000 barrels of oil equivalent per day."

The recent successes from the drilling campaign in the CPE-6 Block could not be included in these reserves reports, as it is a Technical Evaluation Agreement. The Company expects to convert this Technical Evaluation Agreement into an E&P contract by the second quarter of 2011.  The Company continues executing its drilling program so as to further delineate the potential of this block which it believes to be the next large producing block in its portfolio.

Reserves Update as of February 28, 2011

Using the 2010 Reserves Reports and the 2011 Reserves Updates, the consolidation of the Company's net share of proved developed, proved undeveloped and probable reserves is as follows:

         
    2P Reserves 2009 Vs February 2011    
    Condensate, Light &  Medium   Heavy Oil   Associated & Non-Associated   Oil Equivalent   
    100% Gross Net   100% Gross Net   100% Gross Net   100 Gross Net
    (MMbbl) (MMbbl) (MMbbl)   (MMbbl) (MMbbl) (MMbbl)   (Bcf) (Bcf) (Bcf)    (MMboe) (MMboe) (MMboe)
                                 
2009 Reserves    13.66 7.59 6.47   545.92 247.23 204.40   472.43 449.82 418.22   638.32 329.79 280.58
                                 
Discoveries Reserves   0.00 0.00 0.00   44.41 19.94 18.49   58.14 58.14 54.45   54.61 30.13 28.04
                                 
Net  Additions   (5.67) (4.53) (3.59)   21.50 (0.29) 1.86   13.98 35.65 33.54   22.42 5.38 7.82
                                 
2010 Reserves Plus
2011 incorporations
  7.98 3.07 2.88   611.83 266.87 224.75   544.54 543.61 506.21   715.34 365.31 316.44
                                 
Production for period    1.72 0.57 0.51   47.10 20.88 16.85   25.26 23.91 22.06   53.25 25.64 21.23
                                 
Total Reserves
Additions
  (3.95) (3.96) (3.08)   113.01 40.52 37.20   97.37 117.70 110.04   130.28 61.15 57.09

Notes:

  1. Oil equivalent is calculated using a conversion factor of 5.7 Mbbl/boe.  Using a conversion factor of 6.0 Mbbl/boe, the 2009 Oil Equivalent is 329.79 MMboe Gross and 280.58 MMboe Net Reserves and the 2010 Oil Equivalent is 360.53 MMboe Gross and 312.01 MMboe Net Reserves, and production in 2010 was 25.43 MMboe Gross and 21.04 MMboe Net. Starting January 1, 2011, the Company incorporated the conversion rate used to express gas reserves volumes to boe in both 6,000 and 5,700 of per boe to meet the Canadian and local regulatory requirements of the Ministry of Mines in Colombia. 
  2. Production represents the twelve-month period ended December 31, 2010.

As at February 28, 2011, the total 2P net reserves of the Company increased by 35.86 MMboe compared to the year-end 2009 reserves and reached 316.44 MMboe. This is a 12.8% increase in 2P net reserves compared with the 2P reserves reported for year-end 2009. For the evaluated period, the Company produced 21.23 MMboe and incorporated 57.09 MMboe.

The estimates of reserves and future net revenues in this press release are based on forecast prices and costs (as set forth in each report noted above) and are estimates only.

Reserves are classified according to the degree of certainty associated with the estimates. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of the proved plus probable plus possible reserves.

2010 Reserves Reports

In 2010, the Company increased its production by 5,984,291 barrels and had a net production of 21.23 MMboe of oil and gas. The reserve replacement ratio, from exploration efforts only, incorporated approximately 1.4 barrels of oil for every barrel produced during 2010 not including the 2011 Reserves Updates with respect to Quifa SW (January 2011) and Apamate (February 2011).

The following table summarizes year-over-year proved plus probable (2P) reserve growth for the Rubiales-Piriri, Quifa, La Creciente, Guaduas, Rio Ceibas, Abanico, Moriche, Puli, Guama and Buganviles blocks:

     
  2P Reserves 2009 vs. 2010  
  Condensate, L&M Oil Heavy Oil Associated & Non-Associated Oil Equivalent @ 5.7 Mbbl/boe
  100% Gross Net 100% Gross Net 100% Gross Net 100% Gros Net
  (M M bbl) (M M bbl) (M M bbl) (M M bbl) (M M bbl) (M M bbl) (Bcf) (Bcf) (Bcf) (M M boe) (M M boe) (M M boe)
2009 Reserves 13.66 7.59 6.47 545.92 247.23 204.40 472.43 449.82 418.22 638.32 329.79 280.58
2010 Reserves 7.98 3.07 2.88 516.76 233.40 186.08 490.89 489.97 456.07 610.87 322.42 268.98
Net Reserve Additions (5.67) (4.52) (3.59) (29.16) (13.83) (18.32) 18.46 40.15 37.85 (27.45) (7.37) (11.60)
Production 1.72 0.57 0.51 47.10 20.88 16.85 25.26 23.91 22.06 53.25 25.64 21.23
Total Reserve Additions (3.95) (3.95) (3.08) 17.94 7.04 (1.47) 43.72 64.06 59.90 25.80 18.27 9.63

 Notes:

(1)  100% reserves are all reserves attributable to the field. The Company does not hold an entire interest in 100% reserves. See table and notes (2) and (3) below.
(2)  Gross reserves are the Company's share of the reserve before deduction of royalty payments.
(3)  Net reserves are the Company's share of the reserve after deduction of royalty payments.
(4)  MMbbl means million barrels.
(5)  Bcf means billion cubic feet.
(6)  Starting January 1, 2011, the Company incorporated the conversion rate used to express gas reserves volumes to boe in both 6,000 and 5,700 cf per boe to meet the Canadian and local regulatory requirements of the Ministry of Mines in Colombia. Accordingly, the 5,700 cf per boe factor was used to express the 2010 gas production shown in this table. For accounting purposes, the 6,000 cf per boe conversion rate continued to be used to keep consistency with the production reports in the previous quarters of 2010.  Starting in 2011, the 5,700 cf per boe factor will be consistently applied for accounting and reporting purposes in both Colombia and Canada.
(7)  Using a conversion factor of 6,000 cf per boe, the 2009 Oil Equivalent was 329.79 MMboe Gross and 280.58 MMboe Net Reserves and the 2010 Oil Equivalent was 318.13 MMboe Gross and 264.98 MMboe Net Reserves with a 2010 production of 25.43 MMboe Gross and 21.04 MMboe Net.

The report for the Rubiales-Piriri blocks dated February 2011, effective December 31, 2010, and entitled "Reserves Certification Report for the Rubiales Field, Colombia" and the report for Quifa SW dated February 2011, effective December 31, 2010, and entitled "Reserves Certification Report for the Quifa Field, South West Region, and Colombia" were each prepared by RPS. Petrotech prepared one reserves report entitled "Evaluation of the Proved & Probable Reserves of Pacific Rubiales Energy Corp. in La Creciente, Guaduas, Rio Ceibas, Abanico, Quifa Norte, Moriche, Puli, Guama and Buganviles Blocks in Colombia" with an effective date of December 31, 2010. The 2010 Reserves Reports were prepared in accordance with NI 51-101. A brief summary of each report and certain operational information is provided below. Each of the 2010 Reserves Reports will be published on the Company's website on March 11, 2011.

Rubiales-Piriri Block

In the Rubiales-Piriri blocks, RPS evaluated the Company's gross total proved reserves to be 165.5 MMbbl of heavy oil as at December 31, 2010.  This represents a 7.3% decrease compared to proved reserves of 178.6 MMbbl of heavy oil as at December 31, 2009 mainly attributable to the production accumulated during the year. The gross proved reserves as at December 31, 2010 are based on a production level of 210,000 barrels of heavy oil per day in the Rubiales Field. Gross reserves are the Company's share of the reserves before deduction of royalty payments. The Company's working interest is 40% in the Rubiales Block and 50% in the Piriri Block.  In 2010, the Rubiales Field produced 45.1 MMbbl of heavy oil before fuel consumption.  The Company's gross share of production in 2010 was 19.6 MMbbl before royalties and 15.7 MMbbl after royalties.

In the same reserves report, RPS evaluated the field gross reserves (3P) for the Rubiales-Piriri blocks to be 409.1 MMbbl (171.8 MMbbl Company's share), of which 408.6 MMbbl (171.6 MMbbl Company's share) are proved plus probable (2P) reserves and 394.1 MMbbl (165.5 MMbbl Company's share) are proved (1P) reserves.

The table below summarizes the reserves and net present value (NPV) discounted at 10% for the Rubiales-Piriri blocks for the year ended December 31, 2010 based on forecast prices and costs: 

       
  Field Reserves Working Interest Reserves NPV @ 10%
  100% Gross Net Before Tax
Reserve Category MMbbl MMbbl MMbbl MM$
Proved Producing 112.1 47.6 38.1 1,654.5
Proved Non-Prod. 36.3 15.6 12.5 390.4
Proved Undeveloped 245.7 102.3 81.8 2,643.8
Total Proved 394.1 165.5 132.4 4,688.7
Total Probable 14.5 6.1 4.9 148.6
Proved + Probable 408.6 171.6 137.3 4,837.3
Total Possible 0.5 0.2 0.2 3.1
Proved. + Prob. + Poss. 409.1 171.8 137.5 4,840.5
         

Notes:

(1)  Field Gross Reserves are all reserves attributable to the field. The Company does not hold an entire interest in field gross reserves. See notes (2) and (3) below.
(2)  Gross reserves are the Company's share of the reserves before deduction of royalty payments.
(3)  Net reserves are the Company's share of the reserves after deduction of royalty payments.
(4)  Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Quifa South West Region

In its other report, RPS evaluated the field reserves (3P) for the Quifa SW to be 69.1 MMbbl of which 41.4 MMbbl are the Company's gross share and 29.1 MMbbl are the Company's net share.

The table below summarizes the reserves and net present value (NPV) discounted at 10% for Quifa SW for the year ended December 31, 2010 based on forecast prices and costs:

Reserves Category Field Total
Gross Reserves
MMbbl
Meta Working
Interest Reserves
MMbbl
NPV @ 10%
$MM US
    Gross Net Before Tax After Tax
Proved          
     Developed Producing 16.6 10.0 7.1 247.8 180.9
     Undeveloped  29.9 17.9 12.5 204.2 156.5
Total Proved 46.6 27.9 19.7 452.0 337.4
Probable 12.7 7.6 5.3 129.0 96.1
Total Proved + Probable 59.3 35.6 24.9 581.0 433.5
Possible 9.8 5.9 4.0 111.6 82.7
Total Proved+Probable+Poss 69.1 41.4 29.0 692.6 516.2

Notes:

(1)  Field Gross Reserves are all reserves attributable to the field. The Company does not hold an entire interest in field gross reserves. See notes (2) and (3) below.
(2)  Gross reserves are the Company's share of the reserves before deduction of royalty payments.
(3)  Net reserves are the Company's share of the reserves after deduction of royalty payments.
(4)  Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

The Quifa Norte, La Creciente, Guaduas, Río Ceibas, Abanico, Moriche, Puli, Guama and Buganviles blocks

With the successful drilling of 45 wells during 2010 for these blocks, Petrotech evaluated the Company's gross total proved (1P) reserves as at December 31, 2010 for the Quifa Norte, La Creciente, Guaduas, Rio Ceibas, Abanico, Moriche, Puli, Guama and Buganviles blocks and RPS evaluated Quifa SW for a total of 93.181 MMboe and total probable reserves of 22.072 MMboe.  Additional exploration and appraisal wells are scheduled for the Company's 2011 exploration and drilling program.

Total gross proved plus probable reserves (2P) for Quifa Norte in particular were evaluated to be 21.70 MMbbl of oil as at December 31, 2010; of which 19.22 MMbbl were probable reserves and 2.40 MMbbl were proved (1P) reserves. The Company has a 70% working and a 60% production participation interest in the block.

A summary of the Company's share of proved developed producing, non-producing, undeveloped and probable reserves and future net revenue, discounted at 0%, 5%, 10%, 15%, and 20% before income tax, is as follows: 

                     

             
     L&M Crude Oil    Heavy Oil     Condensate    Non-Associated Gas    Associated Gas     BOE
   Gross  Net  Gross  Net  Gross  Net  Gross  Net  Gross  Net  Gross  Net
Reserve Category  (Mbbl)  (Mbbl)  (Mbbl)  (Mbbl)  (Mbbl) (Mbbl)  (Bcf) (Bcf)  (Bcf)  (Bcf)  (Mbbl)  (Mbbl)
Proved Producing 1,402 1,308 1,451 1,199 197 181 484.1 450.6 0.5 0.4 88,056 81,822
Proved Non-Prod. 66  62 411  332  -  -  -  -  0.1  0.1  494  408
Proved Undeveloped  451  428  3,591  3,224  0.2  0.2  3.0  2.9  0.3  0.3  4,632  4,199
Total Proved   1,918  1,799  5,453     4,755    197    181  487.1    453.5   0.9  0.8 93,181  86,429
Total Probable   951 903  20,774  19,050  0.1  0.1  1.5   1.4    0.5  0.4  22,072    20,271
Proved + Probable  2,869  2,702  26,227  23,805  197    181  488.6  454.9 1.4  1.2  115,253  106,700
                         

 

     

 
 
   

Before Tax NPV @    
   

 
 
0%
 
5%
 
10%
 
15%

20%
Reserve Category     (M$)
 
(M$)
 
(M$)   (M$)
 
(M$)

Proved Producing
 
2,929,377
 
1,791,422
 
1,222,044
 
907,192
 
716,898

Proved Non-Prod.
 
17,635
 
15,791
 
14,315
 
13,113

12,117

Proved Undeveloped
 
175,903
 
156,003
 
139,636
 
125,983

114,435

Total Proved
 
3,122,915
 
1,963,216
 
1,375,995
 
1,046,288

843,450

Total Probable
 
518,373
 
457,075
 
407,872
 
367,458

333,609

Proved + Probable
 
3,641,288
 
2,420,291
 
1,783,867
 
1,413,746

1,177,059

Notes:

(1)  Gross reserves are the Company's share of the reserves before deduction of royalty payments.
(2)  Net reserves are the Company's share of the reserves after deduction of royalty payments.

A summary of reserves information for each property evaluated in the Petrotech report is set out below:

               
         L&M Crude Oil    Heavy Oil      Condensate Non-Associated Gas Associated Gas BOE
     100% Gross Net   100% Gross Net 100% Gross   Net 100% Gross Net 100% Gross Net  100% Gross Net
Reserve Category Block (M bbl) (M bbl) (M bbl) (M bbl) (M bbl) (M bbl) (M bbl) (M bbl) (M bbl) (Bcf) (Bcf) (Bcf) (Bcf) (Bcf) (Bcf) (M boe) (M boe) (M boe)    
PDP La Creciente  -  -  -  -  -  - 196.8  196.8 181.1 484.1 450.6    450.6  - - 85,119 85,119 79,241
PDP Guaduas  -  -  - 1,299 1,177 941  -  -  -  -  -  - 0.3 0.3   0.2 1,348 1,221 977
PDP Rio Ceibas 519 142 113  -  -  -  -  -  -  -  -  -  -  -  - 519 142 113
PDP Abanico 3,675 1,245 1,183  -  -  -  -  -  -  -  -  - 0.7 0.2   0.2 3,794 1,285 1,221
PDP Moriche  -  -  - 646 274 257  -  -  -  -  -  -  -  -  646  274  257
PDP Puli B 31    15  12  -  -  -  -  -  -  -  -  -  -  -  -  31  15  12
Proved Developed Producing  4,225 1,402 1,308 1,945 1,451  1,199 197 197 181 484.1 484.1 450.6 1.0 0.5 0.4 91,457 88,056 81,822
PDNP Guaduas  -  -  -  427  386  309  -  -  -  -  -  -  0.1  0.1  0.1 443  401  321
PDNP Abanico  188  66  62  -  -  -  -  -  -  -  -  -  0.0 0.0  0.0  194  68 64
PDNP Buganviles - -  - 125 25 23  -  -  -  -  -  -  -  -  125  25 23
Proved Developed Non-Prod.  188  66  62 552   411  332  -  -  -  -  -  -   0.1 0.1   0.1  762  494  408
PUD Guaduas  -  -  -  1,175  1,064  852  -  -  -  -  -  - 0.3  0.2 0.2  1,219  1,105 884
PUD Abanico  998  451  428  -  -  -  -  -  -  -  -  -  0.2  0.1  0.1  1,030  465  442
PUD Quifa Norte  -  -  -  4,128  2,477  2,327  -  -  -  -  -  -  -  -  -  4,128  2,477 2,327
PUD Guama  -  -  -  -  -  -  0.2  0.2  0.2  3.0  3.0  2.9  -  -  535  535  501
PUD Buganviles  -  -  - 251  50  46  -  -  -  -  -  -  -  -  -  251  50  46
Proved Undeveloped 998 451 428 5,554 3,591 3,224 0 0 0 3.0 3.0 2.9 0.4 0.3 0.3 7,164 4,632 4,200
Total Proved  5,411 1,918 1,799 8,051 5,453 4,755 197 197 181 487.1 487.1 453.5 1.5 0.9 0.8 99,382 93,181 86,430
Probable Guaduas - - - 1,601 1,450 1,160 - - - - - - 0.3 0.3 0.2 1,661 1,505 1,204
Probable Abanico 2,376 951 903 - - - - - - - - - 0.4 0.2 0.2 2,453 982 933
Probable Quifa Norte - - - 38,741 19,221 17,795 - - - - - - - - - 38,741 19,221 17,795
Probable Guama - - - - - - 0.1 0.1 0.1 1.5 1.5 1.4 - - - 261 261 245
Probable Buganviles - - - 520 103 95 - - - - - - - - - 520 103 95
Total Probable 2,376 951 903 40,861 20,774 19,050 0 0 0 1.5 1.5 1.4 0.8 0.5 0.4 43,636 22,072 20,271
Total
Proved +
Probable
7,787 2,869 2,702 48,912 26,228 23,805 197 197 181 488.6 488.6 454.9 2.3 1.4 1.2 143,018 115,254 106,701

Notes:

(1)  100% reserves are all reserves attributable to the field. The Company does not hold an entire interest in 100% reserves. See table and notes (2) and (3) below.
(2)  Gross reserves are the Company's share of the reserves before deduction of royalty payments.
(3)  Net reserves are the Company's share of the reserves after deduction of royalty payments.

As at December 2010, the Company had the following working interests in each of the blocks evaluated in the Petrotech report:

Block - Field Name    Working Interest   Royalty Rate
La Creciente - La Creciente    100%    6.4 to 20% for gas
Dindal & Rio Seco - Guaduas      90.6%    20%
Rio Ceibas - Rio Ceibas      27.27%    20%
Abanico - Abanico and Abanico Norte   24.25 - 70%   5% for oil and 8% for gas
Quifa       60.0%    6 to 18.75% for heavy oil
Moriche      37.5 - 87%  6 to 18.75% for heavy oil
Puli - Puli-7 well       50.0%    20%
Guama       100%    6.4 to 20% for gas
Buganviles      19.875%   8%

2011 Reserves Reports

Quifa SW

In January 2011, the Company produced from Quifa SW an average gross of 30,714 barrels of oil per day and had a net production of 525,583 barrels of heavy oil. 

Petrotech prepared the reserves report entitled "Evaluation of the Proved & Probable Reserves of Pacific Rubiales Energy Corp. in the Quifa South West Block in Colombia" with an effective date of January 31, 2011. The report was prepared in accordance with NI 51-101. A brief summary of the report and certain operational information is provided below. The reserves report drafted by Petrotech will be published on the Company's website on March 11, 2011.

The following table summarizes proved plus probable (2P) reserves attributable to the Quifa SW Block as of January 31, 2011:


 

 

 

 

NPV of Future Net Revenue Before Tax in (M$) Discounted

 

 

Heavy Oil

 

 

 

  @

 

 

 

100%

Gross

Net

0%

5%

10%

15%

20%

Reserve Category

(Mbbl)

(Mbbl)

(Mbbl)

(M$)

(M$)

(M$)

(M$)

(M$)

Proved Producing

23,285

10,931

10,179

241,071

216,332

195,712

178,330

163,507

Proved Undeveloped

27,470

12,178

11,351

281,214

244,213

213,643

188,094

166,491

Total Proved

50,755

23,109

21,530

522,285

460,545

409,355

366,424

329,998

Total Probable

103,564

45,914

42,123

1,177,969

843,641

621,468

469,447

362,492

Proved + Probable

154,319

69,023

63,652

1,700,254

1,304,186

1,030,823

835,871

692,490

The above table illustrates an increase in Net 2P reserves of 57.948 MMbbl with respect the certified net reserves reported for December 31, 2010 and represents an increment of 76.7%. This increase in 2P reserves came from the 9 additional producing wells in Quifa SW in January 2011 as well as the successful step-out drilling campaign in the commercial area that allowed the extension of the reservoir 12,214 acres to the south.

Apamate Discovery

Petrotech prepared the reserves report entitled "Evaluation of the Interests of Pacific Rubiales Energy Corp. in the Apamate-1x discovery well within the La Creciente Block in the Lower Magdalena Valley Basin, Colombia" with an effective date of February 28, 2011. The reserves report was prepared in accordance with NI 51-101. A brief summary of the report and certain operational information is provided below. The reserves report drafted by Petrotech will be published on the Company's website on March 11, 2011.

A summary of the Company's net share of proved undeveloped and probable reserves and net share of the future net revenue, discounted at 0, 5, 10, 15, and 20% before income tax, is presented for February 28, 2011 as follows:

  Natural Gas Reserves Before Tax NPV discounted @
Reserve Category 100% Gross Net 0% 5% 10% 15% 20%
  (Bcf)  (Bcf)  (Bcf) (MM$) (MM$) (MM$) (MM$) (MM$)
                 
Proved Undeveloped   31.3   31.3   29.3   138.1   105.5   81.7   63.9  50.4
Total Proved   31.3   31.3  29.3  138.1  105.5   81.7   63.9  50.4
Total Probable   22.3  22.3 20.9  92.5 64.5 45.7 32.7 23.5
Total Proved + Probable  53.6   53.6  50.2  230.6  170  127.4  96.6 73.9

The Apamate 1X well is located just south of the La Creciente A field on the LCA-South prospect. The Apamate 1X well was spudded on December 1, 2010 and drilled to a total depth of 12,012 feet measured depth (11,993 feet true vertical depth and 11,487 feet true vertical depth sub-sea) on February 3, 2011. The Basal Porquero section was gun-perforated from 11,156 to 11,160 feet, 11,146 to 11,150 feet and 11,139 to 11,142 feet on February 22, 2011. The field data of the isochronal test resulted in a maximum production in excess of 24 MMscfgd with a choke of ½" and 3827 psi of well-head pressure. The prospect was identified based on a seismic inversion processing and the seismic anomaly can reach an area as large as 5266 acres. The Company is committed to drill two offset wells in the first and second quarter of 2011. Based on the initial isochronal test of the Apamate 1X well and the interpretation of the seismic data, both offset locations should encounter thicker pay sections.

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 and Piriri oil fields 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 approximately 85,000 barrels of oil equivalent per day, after royalties, with working interests in 40 blocks in Colombia, Peru and Guatemala. 

The Company's common shares trade on the Toronto Stock Exchange and La Bolsa de Valores de Colombia under the ticker symbols PRE and PREC, respectively. 

Boe may be misleading, particularly if used in isolation.The Company uses a boe conversion ratio of 5.7 Mcf: 1 bbl, which 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 press 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.

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 March 10, 2011 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.        

                                                           

SOURCE Pacific Rubiales Energy Corp.