Pacific Rubiales Closes C&C Energia Acquisition and Participating Interest in Block Z-1, and Announces 2012 Exit Production Above Targets

TORONTO, Jan. 2, 2013 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) is pleased to announce today that it closed the acquisition of C&C Energia Ltd. ("C&C Energia") by way of a plan of arrangement (the "Arrangement").  Pursuant to the Arrangement, a new exploration company, Platino Energy Corp. (TSXV: PZE) ("Platino") was formed.

With the completion of the Arrangement, Pacific Rubiales has acquired all of the issued and outstanding shares of C&C Energia and each share of C&C Energia has been exchanged for 0.3528 of a common share of Pacific Rubiales (approximately 22.8 million Pacific Rubiales common shares), Cdn.$0.001 cash and one common share of Platino.  Pacific Rubiales has retained a 5% equity interest in Platino.

Platino acquired C&C Energia's interests in the Coati, Andaquies, Morpho and Putumayo-8 blocks in Colombia and has also received cash from C&C Energia in the amount of approximately U.S.$88.5 million.

Ronald Pantin, Chief Executive Officer of the Company, commented: 

"With this acquisition, Pacific Rubiales adds four new development blocks to its Colombian production portfolio (Cravoviejo, Cachicamo, Pájaro Pinto, and Llanos-19 blocks), which are all in the prolific onshore Llanos basin and in close proximity to the Company's existing heavy oil production and infrastructure. 

"In addition, the Company is pleased to announce that the President of Peru has signed the Supreme Decree authorizing the ammendment recognizing Pacific Rubiales' acquisition of a 49% participating interest in the offshore Block Z-1 in Peru. 

"I am particularly pleased that we were able to close both acquisitions prior to year-end, which will allow the booking of reserves associated with these properties in our 2012 year-end reserves report. These assets add light oil production and reserves at attractive and accretive metrics and whose value can be increased through accelerated activity, transportation and marketing synergies in the case of the C&C assets, and development drilling in the case of Block Z-1."

"I am also able to report that the Company's 2012 exit production is expected to be in the range of 290 to 295 Mboe/d gross total field or approximately 115 Mboe/d net after royalty (excluding the C&C Energia volumes), approximately 16% above 2011 exit production, and surpassing our target of 280 to 285 Mboe/d (about 113 Mboe/d net after royalty)."

Pacific Rubiales' address is 333 Bay Street, Suite 1100, Toronto, Ontario, M5H 2R2. To obtain a copy of the report filed with the Canadian securities regulatory authorities relating to the acquisition of all of the issued and outstanding shares of C&C Energia, please contact the Company's Deputy General Counsel and Secretary, Michael Galego at (416) 362-7735 x234.  Prior to the Arrangement, Pacific Rubiales did not hold any shares of C&C Energia.

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.  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.

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 Pacific Rubiales believes, expects or anticipates will or may occur in the future are forward-looking statements. In particular, this press release contains forward looking-looking statements in respect to the anticipated benefits of the Arrangement.

By their nature, forward-looking statements are subject to a number of risks, uncertainties and assumptions, which could cause actual results or other expectations to differ materially from those anticipated. Certain of these risks are set out in more detail in the Company's annual information form dated March 14, 2012 which has been filed on SEDAR and can be accessed at www.sedar.com.

Factors that could cause actual results or events to differ materially from current expectations include, among other things:  financial risk of marketing reserves at an acceptable price given market conditions; volatility in market prices for oil and natural gas; delays in business operations, pipeline restrictions, blowouts; the risk of carrying out operations with minimal environmental impact; industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; uncertainties associated with partner plans and approvals; operational matters related to non-operated properties; increased competition for, among other things, capital, acquisitions of reserves and undeveloped lands; competition for and availability of qualified personnel or management; incorrect assessments of the value of acquisitions and exploration and development programs; unexpected geological, technical, drilling, construction and processing problems; availability of insurance; fluctuations in foreign exchange and interest rates; stock market volatility; failure to realize the anticipated benefits of acquisitions; general economic, market and business conditions; uncertainties associated with regulatory approvals; uncertainty of government policy changes; uncertainties associated with credit facilities and counterparty credit risk; and changes in income tax laws, tax laws, royalty rates and incentive programs relating to the oil and gas industry.

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, Pacific Rubiales 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 Pacific Rubiales 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.

Language

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

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.

Definitions

SOURCE Pacific Rubiales Energy Corp.