PACIFIC RUBIALES ENERGY ANNOUNCES EXPLORATION SUCCESS AT LA CRECIENTE BLOCK

TORONTO, Feb. 28 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) announced today the successful results of the Apamate-1X exploration well in the La Creciente Block, Lower Magdalena Basin, Colombia.

Ronald Pantin, CEO of the Company, commented: "The positive results of this well not only will add to our natural gas reserve base, but also reinforce the potential of the La Creciente block, opening the window to further exploration in the area."

The Apamate-1X well was drilled in the LCA-South prospect, located south of La Creciente "A" and La Creciente "D" gas fields. The well targeted gas in the Ciénaga de Oro Formation and was spudded on December 1, 2010, reaching total depth (TD) of 12,012 feet of measured depth (MD) in the pre-Oligocene Basement on February 3, 2011.

The well found what was initially correlated as the Ciénaga de Oro at 11,135 feet MD (10,611 feet TVDSS) in an 8½" hole, which showed 53 feet of a sandstone package with some interlayered siltstones that gas-kicked while conditioning for logging, which required gas flare. Open hole logs could not be run due to the hole instability and high pressure from the offending basal units.

The prospective interval is defined in what is now interpreted to be a sequence of on-lapping, gas-bearing sands, at the base of the Lower Porquero Formation. The petrophysical evaluation based on cased-hole logs, LWD, ditch cuttings and mud-logging data, shows average porosity and water saturation of 17% and 23% respectively, in a gross interval of 53 feet with a net-to-gross ratio around 70%.

The following intervals were gun-perforated for a production test:

During the initial test the well achieved a gas production in excess of 24 MMscfd with a well head flowing pressure of 3730 psig, restricted by the flow capacity of the test facilities.

The results from the isochronal test, conducted from February 24 to February 27, which consisted of 6 hour flowing periods followed by 6 hour shut in periods, are as follows:  

The results are very similar to the behavior of La Creciente A and D reservoirs and indicate that the size of the reservoir is very promising. Preparations are now underway to perform the extended test of the well. At the same time, the Company is making all the arrangements to begin the production facilities and the connecting line to the central facilities at La Creciente.

These findings at the well also confirm the stratigraphic nature of the prospect, and the post-drill maps associated with the gas sandstones from the seismic inversion show an acreage that goes from 1,124 acres as a minimum to a maximum upside around 5,266 acres and a gas-water contact that is yet to be established. During 2011, the Company plans to drill two additional appraisal wells 500 feet downdip of the Apamate-1 well where the seismic inversion exhibited the strongest anomalies.

The Company has already begun the work to expand the facilities at La Creciente to process up to 150 MMscfd in three modules of 50 MMscfd each, with a total investment for these expansion facilities of $42 million. The Company is also well advanced in the gas-export project to the Caribbean where a potential market of 330 to 380 MMscfd has been identified. For that, two different transport technologies are being analyzed: small scale LNG and compressed natural gas (CNG).

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. 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. 

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 12, 2010 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.

SOURCE Pacific Rubiales Energy Corp.