Pacific Rubiales Updates Reserves 2P Net Reserves at a Historical High of 350 millions of Barrels of Oil Equivalent

Oct 03, 2011, 18:10 ET from Pacific Rubiales Energy Corp.

TORONTO, Oct. 3, 2011 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) announced today that it has received independent reserves evaluation reports for the Rubiales-Piriri, Quifa and Sabanero Blocks, located in the Llanos Basin, Colombia. As a result of these reports, the Company's net proved and probable reserves (2P) have grown to a total of 350 million barrels of oil equivalent ("MMboe") as of the evaluation dates, a gross increase of 15.2% (without deducting production for the period) when compared to the reserves reports dated February 28, 2011 (effective December 31, 2010); or an increase of 10.5% if compared against the total reserves additions (after deducting production for the period).

Ronald Pantin, the Chief Executive Officer of the Company, commented: "We are very pleased with this increase in our reserves. On the one hand, we continue adding to our reserves base as a result of an exploration campaign to which we have given a lot of thought and effort. On the other hand, it is worth noting that the Quifa and Sabanero Blocks are beginning to emerge as significant parts of our future, amounting already to 126.3 MMboe, 36% of our reserves base, a volume of reserves equivalent to the Rubiales field. This is no doubt a very important milestone."

The reserves reports for the Rubiales-Piriri and for the Quifa Southwest Field were carried out by RPS Energy ("RPS") as at June 30, 2011, while the reserves report for the Quifa North and Sabanero Blocks was prepared by Petrotech Engineering Ltd. ("Petrotech") as at September 15, 2011. These new updated certifications incorporate the results of successful exploratory, appraisal and stratigraphic wells drilled during the current year on these blocks.

Total 2P reserves additions were 48 MMboe, evidencing that the Company not only has replaced the volume of reserves produced during this period, which amounted to a net production of 14.7 MMboe, but has also increased the aggregate of its 2P reserves for its producing blocks by 33.3 MMboe.  Thus, the total reserves replacement ratio ("RRR") in the period amounts to 3.3 barrels of oil equivalent additions per barrel produced.

The following table summarizes the 2P reserves growth for the Company, including the additional 2P reserves for the Rubiales-Piriri, Quifa Southwest, Quifa North and Sabanero blocks:

PRE Reserves at June 30, 2011 
               
     P1  P2 2P      
FIELD   100% Gross Net Share 100% Gross Net Share 100% Gross Net Share   HYDROCARBON TYPE REMARKS
    MMboe MMboe MMboe MMboe MMboe MMboe MMboe MMboe MMboe      
Rublales   370.60 157.00 125.60 13.20 6.10 4.90 383.80 163.10 130.50   HEAVY OIL RPS at June 30, 2011
Quifa SW   124.80 74.88 58.20 30.40 18.20 14.30 155.20 93.08 72.50   HEAVY OIL RPS at June 30, 2011
La Creciente   83.26 83.26 77.49 - - - 83.26 83.26 77.49   GAS & CONDESATE  
Abanico Main   3.09 0.76 0.73 1.37 0.34 0.32 4.46 1.10 1.05   L&M OIL & ASSOCIATED GAS  
Abanlco Norte   1.54 0.95 0.90 1.08 0.64 0.61 2.62 1.59 1.51   L&M OIL & ASSOCIATED GAS  
Rio Ceibas   0.19 0.05 0.04 - - - 0.19 0.05 0.04   L&M OIL & ASSOCIATED GAS  
Guaduas   2.89 2.57 2.06 1.66 1.50 1.20 4.55 4.07 3.26   L&M OIL & ASSOCIATED GAS  Petrotech at December 31, 2010 less production at June 30, 2011
Pull   0.02 0.01 0.01 - - - 0.02 0.01 0.01   L&M OIL  
Morlche   0.60 0.25 0.24 - - - 0.60 0.25 0.24   HEAVY OIL  
Guama   0.54 0.54 0.50 0.26 0.26 0.24 0.80 0.80 0.75   GAS & CONDESATE  
Buganvlles   0.38 0.08 0.07 0.52 0.10 0.10 0.90 0.18 0.16   HEAVY OIL  
                           
A pa mate   5.47 5.47 5 .12 3.91 3 .91 3 .67 9.38 9.38 8.79   GAS Petrotech at February 28, 2011
                          less production at June 30, 2011
                           
Quifa Norte   4.13 2.48 2.2C 77.37 46.42 38.08 81.50 48.90 40.29   HEAVY OIL Petrotech. September 15, 2011
Sabanero         31.40 15.67 13.15 31.40 15.67 13.15   HEAVY OIL Petrotech. September 15, 2011
SEPT. 2011   597 328 273 161 93 77 759 421 350      
                           
Feb. 2011   550 287 245 166 78 71 715 365 316   RRR, lBolnc./Bl prod.)s= 3.26
                           
Difference   48 41 28 (4) 15 6 43 56 33   RRR (Bo Inc./BI prod.)5= 2.26
                           
Produced   37 18 15 Total reserve incorporation 80 74 48      
                           

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.
(4)      MMboe means million barrels of oil equivalent. Barrels of oil equivalent (Boe) may be misleading, particularly if used in isolation. A Boe conversion ratio of 5.7 thousand cubic feet: 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
(5)      RRRt and RRRn refer to Reserves replacement ratio total and net, respectively.

The reports for the Rubiales-Pirirí blocks and for Quifa southwest field, dated September 15, 2011, effective June 30, 2011 and entitled "Reserves Certification Report for the Rubiales Field, Colombia" and "Reserves Certification Report for the Quifa Field, South-West Region Colombia", respectively, were prepared by RPS in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). The report in respect of the Quifa Norte and Sabanero blocks dated September 28 and 29, 2011, respectively, effective as of September 15, 2011, and entitled "Evaluation of the Interests of Pacific Rubiales Energy Corp. in the proved and probable reserves update of the Quifa Norte, in the Eastern Llanos Basin, Colombia", and the report entitled "Evaluation of the Interests of Pacific Rubiales Energy Corp. in the probable reserves in the Sabanero Block in the Eastern Llanos Basin, Colombia" respectively, were prepared by Petrotech in accordance with NI 51-101. A brief summary of each report and certain operational information is provided below.

Rubiales-Piriri

In the Rubiales-Piriri blocks, RPS estimated the Company's gross total 2P reserves to be 163.1 MMbbl as at June 30, 2011.  This represents a decrease of 5% compared to gross total 2P reserves of 171.6 MMbbl as at December 31, 2010.  This decrease of reserves is the natural consequence of a total gross field production of 28.5 MMbbl including fuel consumption (158,557 bbl/d) in the Rubiales Field during the first half of 2011, following the existing business plan. The Company's working interest is 40% in the Rubiales Block and 50% in the Piriri Block.   The Company's gross share of production during the first half of 2011 was 12.0 MMbbl before royalties and net production of 9.6 MMbbl after royalties.

In the same reserves report, RPS estimated the 100% field reserves (3P) for the Rubiales-Piriri blocks to be 385.1 MMbbl, of which 370.6 MMbbl are proved (1P) reserves and 383.8 MMbbl are proved plus probable reserves (2P). The table below summarizes the reserves for the Rubiales-Pirirí blocks at June 30, 2011 based on forecast prices and costs:

 
Rubiales Field
  Heavy Oil Reserves
Reserves Category 100% Gross Net Share
  MMbbl MMbbl MMbbl
Proved      
     Developed Producing 119.3 49.2 39.3
     Developed Non - Producing 27.7 11.6 9.2
     Undeveloped 223.6 96.3 77.0
Total Proved 370.6 157.0 125.6
Probable 13.2 6.1 4.9
Total Proved + Probable 383.8 163.1 130.5
Possible 1.3 0.6 0.4
Total Pvd+ Prob+ Poss 385.0 163.6 130.9
       

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.
(5)      MMbbl means million barrels of oil.

Quifa Southwest Field

After the successful appraisal and development drilling of 30 wells during the first half of 2011, RPS estimated the Company's gross total proved (1P) reserves as at June 30, 2011 for the Quifa Southwest Field to be 74.9 MMbbl, and gross proved plus probable (2P) reserves to be 93.1 MMbbl. The Company has a 60% working interest in the block. Between February 1 and June 30, 2011, the Quifa Southwest Field produced 5.4 MMbbl barrels of heavy oil (including fuel consumption).  The Company's gross share of production during the first half of 2011 was 3.2 MMbbl barrels before royalties and the net production was 3.0 MMbl barrels after windfall profit (PAP) and royalties are accounted for.

For Quifa Southwest Field, a summary of the Company's net share of proved developed producing, non-producing, undeveloped and probable reserves is as follows:

 
Quifa SW Field
  Heavy Oil Reserves
Reserves Category 100% Gross Net Share
  MMbbl MMbbl MMbbl
Proved      
     Developed Producing 40.4 24.2 18.8
     Developed Non - Producing 1.1 0.7 0.5
     Undeveloped 83.3 50.0 38.9
Total Proved 124.8 74.9 58.2
Probable 30.4 18.2 14.3
Total Proved + Probable 155.2 93.1 72.5
Possible 21.0 12.6 10.0
Total Pvd+ Prob+ Poss 176.2 105.7 82.5
       

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 and PAP payments.
(3)      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.
(4)      MMbbl means million barrels of oil.

Quifa Norte Block

As a result of the successful drilling campaign of 11 wells including exploration, stratigraphic and appraisal wells in Quifa Norte from February 1 to September 15, 2011, Petrotech estimated the Company's gross total proved (1P) reserves as at September 15, 2011 to be 2.5 MMbbl and probable reserves to be 46.4 MMbbl.  The Company's total gross proved plus probable (2P) reserves for the Quifa Norte block were estimated to be 48.9 MMbbl, and 40.3 MMbbl net of royalties and windfall profit (PAP) as at September 15, 2011. The Company holds a 60% working interest in the block.

A summary of the Company's net share of proved undeveloped and probable reserves is as follows: 

 
Quifa Norte
  Heavy Oil Reserves
Reserves Category 100% Gross Net Share
  MMbbl MMbbl MMbbl
Proved undeveloped 4.1 2.5 2.2
Total Proved 4.1 2.5 2.2
Probable Undeveloped 77.4 46.4 38.1
Total Proved + Probable 81.5 48.9 40.3
       

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 and PAP payments.
(3)      MMbbl means million barrels of oil.

Sabanero Block

The reserves report of the Sabanero block is based on the results of the previous exploration campaign developed by Maurel et Prom in the block, as well as the results obtained in the last stratigraphic well drilled during August 2011. The Company has a 49.9% working interest in Maurel & Prom Colombia, which holds 100% of the block and serves as the operator. Petrotech evaluated the Company's gross total probable (2P) reserves as at September 15, 2011 to be 15.7 MMbbl.

A summary of the Company's net share of bookable proved undeveloped and probable reserves is as follows:

 
Sabanero Block
  Heavy Oil Reserves
Reserves Category 100% Gross Net Share
  MMbbl MMbbl MMbbl
Probable - Sabanero 24.2 12.1 9.9
Probable  - Sabanero SE 7.2 3.6 3.2
Total  Probable 31.4 15.7 13.2
       

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.
(3)      MMbbl means million barrels of oil.

The estimates of reserves and future net revenues in this 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. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

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, northern Peru and Guatemala.  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.