TORONTO, Sept. 7 /PRNewswire-FirstCall/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) today provided an operational update on its exploration assets in Colombia, Peru and Guatemala. The Company also announced that, as it continues to grow its operated production, it has reached a new production record of 242,000 barrels of oil equivalent per day.
Ronald Pantin, Chief Executive Officer of the Company, commented: "We are very pleased with the progress of all our activities. We continue reaching new production milestones, showing our ability to reach the challenging targets that we have set for ourselves. On the exploration front, we are in the midst of a very intensive campaign, which should pave the way for the addition of new reserves and support our challenging growth objectives. In addition, the premium prices that our heavy crude is being sold for also underline the robust value addition of our trading activities."
Since the publication of the Second Quarter results, the Company continues to see success in its exploration drilling campaign in Rubiales/Piriri, Quifa Southwest and Quifa North Fields, and in extending the resource base in these fields. At the present time, the Company has started exploratory drilling in the Topoyaco and Arauca Blocks, and the Colombian National Hydrocarbon Agency ("ANH") has approved the conversion of the Technical Evaluation Agreement ("TEA") of the CPE-6 Block into an Exploration and Production ("E&P") contract, opening the road for the exploratory campaign there.
These results will form the basis for updating the Company's certified resources and reserves, which the Company expects to issue before the end of September 2011.
Colombia Rubiales-Piriri Contracts
The Company is continuing its appraisal campaign in the eastern and southern buffer zones of the Rubiales and Piriri Contracts, and has drilled four appraisal wells: the Rub-362, drilled in the southern buffer zone of the Piriri Contract, and the Rub-403, Rub-557 and Rub-558ST1 wells, each of which was drilled in the eastern buffer zone of the Piriri Contract. These wells have been successful, with net pay thicknesses of between 10 and 19 feet, and are undergoing long term production tests. These successes will support the reserve certification for this area and they will be an integral part of the necessary documentation to request the extension of commerciality for this part of the Contract.
Additionally, the Company commenced drilling the Rub-551ST1 well in the Rubiales Buffer zone. Final depth is expected to be reached in the coming days. The well locations are shown in the map below:
http://files.newswire.ca/959/PacificRubialesFig1.pdf Quifa North
After receiving the required environmental permits, the Company continued the exploration campaign in prospects "Q" and "F" of Quifa North, and has drilled four wells: the Opalo-1 exploration, the Opalo-2 and Opalo-3 appraisal wells in prospect "Q" and the Ambar-4 appraisal well prospect "F".
The Opalo-1 exploration well was drilled in the "Q" prospect, and found the top of the Carbonera basal sands at 3,230 feet measured depth ("MD"), or 2,652 feet true vertical depth at sub-sea level ("TVDSS") and the oil-water contact ("OWC") at 3,264 feet MD, or 2,686 feet TVDSS, resulting in an oil column of 32 feet at the well with 30% average porosity. The Opalo-2 appraisal well was drilled at a distance of 4.1 km northeast of the Opalo-1 well, and found the top of the Carbonera basal sands at 3,206 feet MD, or 2,667 feet TVDSS and the OWC at 3,252 feet MD, or 2,713 feet TVDSS. The petrophysical evaluation showed 24 feet of net pay and 31% average porosity. The Opalo-3 appraisal well was drilled at a distance of 1.8 km northeast and 2.2 km southwest of the Opalo-1 and Opalo-2 wells, respectively. The top of the Carbonera Basal sands was found at 3,256 feet MD, or 2,661 feet TVDSS, and the OWC at 3,292 feet MD, or 2,697 feet TVDSS, and the well's petrophysical evaluation showed a net pay thickness of 26 feet with 31% porosity. The Ambar-4 was drilled at a distance of 700 m northeast from the previously drilled Quifa-26X stratigraphic well and at 5 km northeast from the Ambar-1 exploratory well. The well found the top of the Carbonera basal sands at 3,304 feet MD, or 2,633 feet TVDSS and the OWC at 3,326 feet MD, or 2,654 feet TVDSS. The petrophysical evaluation for the Ambar-4 well showed 15 feet of net pay with 31% average porosity.
These four successful wells are currently undergoing extended production tests. These results, along with the results of the previously drilled Quifa-6 and Jaspe-1ST2 and Jaspe-3 wells in prospect "A", confirm the hydrocarbon potential of this part of the block. In order to confirm the extension of these prospects, the Company plans to maintain the appraisal drilling campaign for Quifa North in the upcoming months, which includes 12 additional wells (including exploration, appraisal and stratigraphic). The following figure shows the well locations in Quifa North:
http://files.newswire.ca/959/PacificRubialesFig2.pdf Quifa South West
In the Quifa SW field, the Company continued the appraisal campaign and drilled five appraisal wells in prospects located in the areas corresponding to those previously referenced the "H", "E" "J" and "D" prospects. The Quifa-84X and Quifa-136ST wells were drilled to the northeast of prospect "H" and showed net pay thicknesses of 26 feet and 32 feet, respectively. The Quifa-113 well was drilled to the southwest of prospect "E" and showed 18 feet of net pay. The Quifa-141X well was drilled to the northeast of the DW-1 well in prospect "J" with 13 feet of net pay and the DW-2 well was drilled to the northern part of prospect "D" and showed 14 feet of net pay. This last well extended the prospect "D" to the north into the corridor between the alignment of prospects "D" and "E" and the alignments of prospects "K" and "L". These five appraisal wells successfully extended the production area of the Quifa southwest field to the northeast, southeast and southwest. The well locations in Quifa SW are shown in the map below:
http://files.newswire.ca/959/PacificRubialesFig3.pdf CPE-6 E&P Contract
On August 18, 2011, the Company received from the ANH the approval for the conversion of the northern part of the TEA into an E&P contract, with a total area of 240,000 hectares. The corresponding contract will be signed within the next two weeks. The minimum exploration commitments for a 36-month first exploration phase include the acquisition of 480 km of 2D seismic or 300 km2 of 3D seismic and one exploration well. This exploration campaign will start as soon as the parties sign the contract.
The Company holds a 50% working interest in this contract and will act as operator, with Talisman Energy Inc. holding the remaining 50%.
The Company recently started the acquisition of 300 km2 of 3D seismic in the northwestern part of the CPO-12 Block. This acquisition should be completed by the end of 2011.
In the Arauca Block and in the Torodoi-1X well, a production test was attempted in the Carbonera C-5 interval, but due to operational problems with cementation, the well was temporarily suspended and the rig was moved to drill the Vaco-1X well.
The Vaco-1X exploratory well was spudded on August 28, with the Mirador Formation as its main exploration objective, and the Carbonera C-5 as the secondary objective. Total Depth ("TD") is planned at 8663 feet MD (6546 feet TVDSS). The Vaco-1X well will be directionally drilled from the surface of the Torodoi-1X well location to the south, to test a separate structure in the Mirador and Carbonera Formations, where petrophysical evaluation in the Torodoi-1X well showed pay in Carbonera C-5 sands, as well as good residual oil shows in the Mirador Formation.
As part of the appraisal campaign for the Apamate-1X gas discovery, the Company is planning to spud the Apamate-2X appraisal well during the month of September. The well has an expected TD of approximately 11,300 feet MD.
The Capira-1X exploration well was drilled south of well ES-6 ST2, and reached TD at 9887 feet MD in the Cordoba Formation on July 5, 2011. Petrophysical evaluation showed 25 feet of net pay in the Cimarrona Formation. After a short swab attempt in open hole, no oil shows were observed and the well was suspended awaiting further G&G analysis.
On August 31, 2011, Trayectoria Oil & Gas, the operator for this block, spudded the Yaraqui-1X well in the central part of the Topoyaco Block. The well is planned to reach a total depth of 10,509 feet MD, or 9,402 feet true vertical depth ("TVD"), or 8,484 feet TVDSS, and is targeting the Cretaceous Villeta and Caballos formations, in a sub-thrust structure called prospect "D". This prospect is a sub-thrust structural trap that the Company believes is independent from previously drilled structures "B" and "C" in the block. Preliminary prospective resources (best estimate) are 51 MMboe. Also in the block, the Company is planning to develop an extensive evaluation plan of the discovery made at the Topoyaco 2 well on Prospect "C" in the Neme Member of the Rumiyaco Formation. Certified contingent resources for this discovery are estimated at 3.74 MMboe. The Company also plans to abandon the Topoyaco 1 well after drilling Yaraqui-1X.
The Company has requested the approval of the ANH to become the operator of the Topoyaco Block, which approval remains pending.
PERU Block 138
The Company is currently processing 559 km of 2D seismic data acquired as part of the exploration commitments for the second exploration period. Preliminary interpretation of this data suggests the presence of important structural leads at Cretaceous and Paleozoic stratigraphic levels in the central and eastern part of the block. The Company is currently assessing resources for these structures.
Geophysical and Remote Sensing Data Acquisition programs are in the contracting phase. Operations are expected to begin by November 2011.
The Company continues to build upon its development of its existing reserve base. As of August 31, 2011, the Rubiales field reached a record level of 184,738 barrels of oil per day of operated production, whereas the South Quifa Field also reached a record level of 40,104 barrels of oil per day of operated production, which makes for a joint production of 224,842 barrels of oil per day. When production from La Creciente gas field and the light and medium crude oil fields is added up, the Company's total gross production has surpassed the milestone of 242,000 barrels of oil equivalent per day, consolidating Pacific Rubiales' position as the largest private oil producer in Colombia.
The Company and Ecopetrol, S.A. have now executed all the necessary legal documentation to proceed with the STAR Pilot Project in the Quifa Block. This execution has now triggered the technical steps necessary to start operations of the project in the very immediate future.
The Company continues to take advantage of trading opportunities in a market that values heavy oils. The Company's Castilla volumes sold for September have yielded an average +$10.7/bbl premium to WTI, which represents significant value above this traditional crude price marker.
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 working interests in 45 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, 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 11, 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.
SOURCE Pacific Rubiales Energy Corp.