TORONTO, May 8, 2013 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) announced today the release of its unaudited
consolidated financial results for the quarter ended March 31, 2013,
together with its Management Discussion and Analysis ("MD&A"). These
documents will be posted on the Company's website at www.pacificrubiales.com, SEDAR at www.sedar.com, the SIMEV website at www.superfinanciera.gov.co/web_valores/Simev, and the BOVESPA website at www.bmfbovespa.com.br/. All values in this release and the Company's financial disclosures are
in U.S.$, unless otherwise stated.
The Company scheduled a teleconference for investors and analysts on
Thursday, May 9, 2013 at 9:00 a.m. (Toronto time) to discuss the
Company's first quarter results. Analysts and interested investors are
invited to participate using the dial-in instructions provided at the
back of this news release.
First Quarter 2013 Overview and Highlights
-
Average net production after royalties was 127,889 boe/d, an 18%
increase compared to the fourth quarter last year, and an increase of
37% over the same period in 2012. This represents a record for the
Company and is at the high end of the annual production guidance.
-
Revenues were $1.3 billion, a 20% increase compared to the fourth
quarter last year, and a 35% increase over the same period in 2012.
-
EBITDA was $695 million, a 62% increase compared to the fourth quarter
last year, and a 28% increase over the same period in 2012. Also a
record quarter for the Company, driven by higher volumes of production
and sales, and supported by high price realizations.
-
Funds flow from operations (cash flow) was $506 million, a 119% increase
compared to the fourth quarter in 2012, and an increase of 29% over the
same period in 2012, which was a record quarter for the Company.
-
Net earnings were $121 million, a substantial increase of $145 million
compared to the loss of $24 million in the fourth quarter last year.
Net earnings in the quarter were down from $258 million in the same
period in 2012. Contributing to this decrease was an increase in
non-cash DD&A costs resulting from the higher volumes produced, the C&C
and PetroMagdalena acquisitions completed in 2012, and the continued
capex additions to the Rubiales field related to the 2016 contract life
of the field. Also contributing to this decrease was an increase in
total income taxes, primarily resulting from non-cash foreign exchange
effects on deferred income taxes.
-
Operating netbacks on combined crude oil and natural gas production of
$60.88/boe were 31% higher than the $46.44/boe recorded in the fourth
quarter, largely relating to the PAP arbitration decision at Quifa SW.
Operating netbacks in the quarter were down from the same period in
2012, largely a result of lower commodity prices and slightly higher
costs.
-
The Company achieved a $4.17/bbl reduction on its oil operating costs in
the first quarter compared to the fourth quarter last year, excluding
the overlift/underlift costs which were due to the financial provision
relating to the PAP arbitration decision at Quifa SW. The Company
continues to implement cost reduction projects and initiatives which
are expected to result in a structural reduction in its future
operating costs by approximately $8/boe on a pro-forma basis through
2013.
-
Issuance of $1 billion of senior unsecured notes at a rate of 5.125%
maturing in 2023. The proceeds of the financing are being used to
repay outstanding short-term debt, release the revolving credit
facility, while extending the Company's credit profile and
strengthening its overall capital structure.
-
A 55% growth in total certified Prospective Resources to 4.3 Bboe from
2.8 Bboe in 2011. Total Contingent Resources also grew to 168 MMboe
from 4 MMboe in 2011.
-
Important exploration discoveries, including two new light oil
discoveries in the Company's Cubiro and Arrendajo blocks in Colombia, a
significant natural gas and condensate discovery in the Guama block
also in Colombia, and a light oil discovery in the Kangaroo-1
exploration well drilled in the Santos Basin offshore Brazil.
-
The Company received an important environmental permit for the "Quifa
Hydrocarbon Exploitation Area", allowing for further production ramp-up
in the Quifa SW field and resumption in exploration drilling in the
Quifa East area.
-
In April, 2013, the Company filed a Notice of Intention with the Toronto
Stock Exchange (the "TSX") to commence a normal course issuer bid to
purchase up to a maximum of 31,075,887 common shares, which represents
10% of the public float of the Company as of April 26, 2013. Given the
strength of the Company's balance sheet, the Company is currently
evaluating methods by which to return value to shareholders, which
includes repurchasing shares and/or increasing the quarterly dividend.
Senior management is in the process of evaluating these alternatives
and will submit a proposal to the board of directors by the end of the
second quarter.
"I am very pleased by the Company's strong operational and financial
performance year-to-date", commented Ronald Pantin, Chief Executive
Officer of the Company. "Production and sales volumes are at record
levels and on track to achieve the high end of our annual production
guidance. The Company's financial performance metrics measured by cash
generated as EBITDA and funds flow from operations (cash flow) continue
to be robust and are growing. The Company's balance sheet is strong
and we continue to benefit from the market and trading advantages
currently enjoyed by Colombia heavy oil production, achieving a premium
to WTI pricing in the first quarter of almost $8/bbl on our total crude
oil production sales volumes.
"We have an active and exciting year of exploration and development
planned, with over 40 exploration and appraisal wells planned for the
year, and with over a third of these wells being potential high impact
wells in Colombia, Peru, Guatemala, Brazil and Papua New Guinea. Five
new exploration discoveries were made during the first quarter
including an oil discovery in the Kangaroo-1 exploration well in
offshore Brazil. In April, we spudded our first onshore exploration
well (Yahuish-1X well) in Block 138 in Peru, targeting a large
structure identified on seismic.
"Environmental permitting in Colombia is slower than anticipated but I
am pleased to see some improvements developing on that front and we
appreciate the efforts that the Autoridad Nacional de Licencias
Ambientales ("ANLA") has made to enhance and streamline the process to
speed up licenses for oil producers in Colombia. During the first
quarter, we received an important comprehensive permit for the further
exploration and development of the Quifa Hydrocarbon Exploitation Area
that will allow continued production ramp-up in the Quifa SW field and
resumption of exploration in the Quifa East area north of the Rubiales
field. We also received the necessary permits to increase oil
production in our Copa oil field Block.
¨The Company is in the process of implementing several cost saving
initiatives with respect to production, transportation and diluent
costs, which we expect to materialize throughout the year.
"The Company is building a new power transmission line connecting the
Rubiales and Quifa fields with Colombia's electric grid, supplying less
expensive power to run in-field operations, which is expected to be
operational in the third quarter of this year.
"In order to handle the increasing volumes of water produced in the
Rubiales and Quifa fields, the Company has initiated a project to treat
produced formation water from these fields and use it for an irrigation
project designed for agroforestry activity, starting up in the fourth
quarter of 2013.
"Our investments in the Bicentenario Pipeline will provide us with
approximately 40,000 bbl/d of additional pipeline egress starting in
the second half of this year, significantly reducing the current higher
costs associated with trucking oil production.
"The Company continues to actively invest in projects and infrastructure
in Colombia designed to support our growing production in the country.
These projects include our investments in Puerto Bahia, where we are
developing a new oil export terminal on the Colombian Caribbean coast,
which will improve our export capability and reduce inventory storage.
"A new diluent mixing station is also being constructed at Cusiana which
will lead to optimization and lower costs on the Company's expanding
heavy oil production, starting in the second quarter of this year. With
the acquisition and development of our own light crude assets, the
Company expects to see further cost reductions as a result of using our
own light oil crude production as diluent, instead of using imported
natural gasoline.
"We expect these and other projects and initiatives to result in a
significant structural change in our operating costs, targeting overall
reductions of approximately $8/bbl on a pro-forma basis during the
remainder of this year, consisting of a targeted $3 - $4/bbl reduction
in production costs, and a $3 - $5/bbl reduction in transportation and
diluent costs.
"Although it is early days, we are encouraged by the results we are
seeing in our STAR pilot project at Quifa SW. We have achieved
sustained ignition in the reservoir during the first quarter and we
will continue to evaluate this pilot project.
"A small scale LNG project is being built in alliance with Exmar NV,
which will enable the Company to more than double its gas production in
northern Colombia when it comes on stream in late 2014.
"Overall I am looking forward to a year of continued production growth,
improving cost structure and an exciting exploration program, as we
build for the long-term benefit of our shareholders and employees, the
leading E&P company focused in Latin America."
Financial Results
|
|
|
|
Financial Summary
|
|
|
2013
|
|
2012
|
|
Q1
|
|
Q4
|
|
Q1
|
Oil & Gas Sales Revenues ($ millions)
|
1,258.8
|
|
1,046.7
|
|
931.9
|
EBITDA ($ millions)1
|
694.7
|
|
429.0
|
|
542.2
|
EBITDA per share1
|
2.16
|
|
1.45
|
|
1.85
|
Funds Flow from Operations ($ millions)1
|
506.2
|
|
231.5
|
|
392.5
|
Funds Flow from Operations per share1
|
1.58
|
|
0.78
|
|
1.34
|
Adjusted Net Earnings (Losses) from Operations
($ millions)1
|
146.9
|
|
38.2
|
|
290.0
|
Adjusted Net Earnings (Losses) from Operations
per share1
|
0.46
|
|
0.13
|
|
0.99
|
Net Earnings (Losses) ($ millions)
|
121.8
|
|
(23.8)
|
|
258.4
|
Net Earnings (Losses) per share
|
0.38
|
|
(0.08)
|
|
0.88
|
Average shares outstanding - basic (millions)
|
321.3
|
|
294.6
|
|
292.4
|
1
|
The terms EBITDA, funds flow from operations, adjusted net earnings from
operations, are non-IFRS measures. Please see advisories and
reconciliations in the MD&A.
|
Production
|
|
|
Production Summary
|
|
|
|
|
2013
|
2012
|
|
|
Q1
|
|
Q4
|
|
Q1
|
Oil and Liquids (bbl/d)
|
|
|
|
|
|
|
Colombia
|
|
115,318
|
|
95,526
|
|
80,955
|
Peru
|
|
1,461
|
|
1,457
|
|
1,703
|
Total Oil and Liquids (bbl/d)
|
|
116,779
|
|
96,983
|
|
82,658
|
|
|
|
|
|
|
|
Natural Gas (boe/d)1
|
|
|
|
|
|
|
Colombia
|
|
11,110
|
|
11,166
|
|
10,915
|
Peru
|
|
-
|
|
-
|
|
-
|
Total Natural Gas (boe/d)
|
|
11,110
|
|
11,166
|
|
10,915
|
Total Equivalent (boe/d)
|
|
127,889
|
|
108,149
|
|
93,573
|
1
|
Colombian standard natural gas conversion ratio of 5.7 Mcf/bbl.
|
|
Additional production details are available in the MD&A.
|
The Company's total production net after royalty of 127,889 boe/d
increased 37% in the quarter compared to a year ago, driven by strong
growth in oil production from the Company's Rubiales and Quifa heavy
oil fields, and added volumes and growth in light oil production
resulting from the PetroMagdalena and C&C acquisitions completed in
July and December 2012, respectively.
Average net oil production after royalty from the Rubiales field
increased to 70,495 bbl/d from 57,555 bbl/d a year ago (up 22%), and
from the Quifa SW field to 25,435 bbl/d from 21,885 bbl/d (up 16%),
primarily due to environmental permits received in August 2012 allowing
for increased water injection. Production in the two fields increased
9% and 10% respectively in the current quarter compared to the fourth
quarter 2012. Additional production net after royalties of 2,026 bbl/d
in the quarter was contributed from the Cajua field, a new commercial
field development just to the north of Quifa SW.
Net after royalty, mostly light oil production from the PetroMagdalena
assets has grown to approximately 5.2 Mboe/d from less than 2.5 Mboe/d,
more than doubling through successful exploration and development
activity.
Revenues and costs associated with the Company's 49% participating
interest in production from Block Z-1 have been recognized in the
Company's financial results since December 12, 2012 as a result of the
approval by the applicable Peruvian authorities. The acquisition had
an effective date of January 1, 2012.
Production and Sales Volumes
|
|
|
Production to Total Sales Reconciliation
|
|
|
|
|
2013
|
|
2012
|
|
|
Q1
|
|
Q4
|
|
Q1
|
Net Production (boe/d)
|
|
|
|
|
|
|
Colombia
|
|
126,428
|
|
106,692
|
|
91,870
|
Peru
|
|
1,461
|
|
1,457
|
|
1,703
|
Total Net Production (boe/d)
|
|
127,889
|
|
108,149
|
|
93,573
|
|
|
|
|
|
|
|
Net Production Sold (boe/d)
|
|
|
|
|
|
|
Production Available for Sale (boe/d)1
|
|
127,889
|
|
107,071
|
|
91,870
|
Diluent Volumes (bbl/d)
|
|
9,607
|
|
9,671
|
|
8,549
|
Oil for Trading Volumes (bbl/d)
|
|
3,895
|
|
1,718
|
|
10,221
|
Inventory Balances and Other (boe/d)
|
|
2,259
|
|
1,681
|
|
(11,732)
|
Volumes Sold (boe/d)
|
|
143,650
|
|
120,141
|
|
98,908
|
1
|
Production available for sale includes all net production in Colombia
and the Company's 49% of net production from Block Z-1, Peru from
December 12, 2012.
|
|
Additional production and sales volume details are available in the
MD&A.
|
The Company produces and sells crude oil and natural gas. It also
purchases liquids and crude oil from third parties for use as diluents
to mix with its heavy oil production and for trading purposes, which
are included in the reported "volumes sold". Sales volumes are also
impacted by the relative movement in inventories during a reporting
period. Both revenues and costs are recognized on the respective
volumes sold during the period.
Production available for sale in the quarter increased to 127,889 boe/d
from 91,870 boe/d in the same period in 2012 (an increase of 39%), due
to rising production volumes in producing fields. Despite a 23% rise
in the Company's net heavy oil production from the Rubiales, Quifa SW
and Cajua oil fields, diluent volumes increased a smaller 12% from a
year ago, due to more purchases of natural gasoline rather than light
oil. Oil for trading volumes in the current quarter decreased to 3,895
bbl/d from 10,221 bbl/d, while inventory balances moved to a 2,259
bbl/d draw from an 11,732 boe/d build, in the same quarter a year ago.
Total volumes sold composed of production volumes available for sale,
diluent volumes added to heavy oil production, oil for trading volumes
and inventory balance changes, increased to 143,650 boe/d in the
current quarter from 98,908 boe/d a year ago (an increase of 45%).
Operating Netbacks and Sales Volumes
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas Production
Volumes and Netbacks
|
|
|
|
|
|
2013 Q1
|
2012 Q4
|
2012 Q4
|
|
Oil
|
Natural
Gas
|
Combined
|
Oil
|
Natural
Gas
|
Combined
|
Oil
|
Natural
Gas
|
Combined
|
Volumes Sold (boe/d)
|
128,641
|
11,114
|
139,755
|
107,392
|
11,031
|
118,423
|
77,829
|
10,858
|
88,687
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Natural
Gas Sales Price ($/boe)
|
102.06
|
40.26
|
97.14
|
99.83
|
43.80
|
94.61
|
110.96
|
41.45
|
102.45
|
|
|
|
|
|
|
|
|
|
|
Production Costs ($/boe)
|
12.89
|
4.49
|
12.22
|
14.78
|
6.61
|
14.02
|
9.42
|
2.59
|
8.58
|
Transportation Costs
($/boe)
|
15.66
|
0.05
|
14.42
|
14.57
|
0.01
|
13.22
|
13.47
|
0.06
|
11.83
|
Diluent Costs ($/boe)
|
9.32
|
-
|
8.58
|
8.52
|
-
|
7.72
|
13.99
|
-
|
12.27
|
Sub-Total Costs
($/boe)
|
37.87
|
4.54
|
35.22
|
37.87
|
6.62
|
34.96
|
36.88
|
2.65
|
32.68
|
Other Costs ($/boe)
|
0.68
|
2.91
|
0.86
|
5.14
|
2.99
|
4.94
|
(2.40)
|
2.28
|
(1.83)
|
Overlift/Underlift Costs
($/boe)
|
0.17
|
0.29
|
0.18
|
9.21
|
(0.89)
|
8.27
|
(2.45)
|
(0.04)
|
(2.16)
|
Total Costs ($/boe)
|
38.72
|
7.74
|
36.26
|
52.22
|
8.72
|
48.17
|
32.03
|
4.89
|
28.69
|
|
|
|
|
|
|
|
|
|
|
Operating Netback
($/boe)
|
63.34
|
32.52
|
60.88
|
47.61
|
35.08
|
46.44
|
78.93
|
36.56
|
73.76
|
Additional cost and netback details are available in the MD&A.
|
In a news release dated April 9, 2013, the Company disclosed plans for a
structural reduction in its operating costs on a pro-forma basis
starting in the second quarter of 2013 from a number of initiatives and
projects, including a new electrical transmission line supplying less
expensive energy, increased pipeline transportation replacing more
expensive trucking of crude oil, and efficiencies and optimizations
related to its diluent costs and supply.
|
|
|
|
Oil for Trading Volumes and Netbacks
|
|
|
|
|
2013
|
2012
|
|
|
Q1
|
Q4
|
Q1
|
Volumes Sold (bbl/d)
|
|
3,895
|
1,718
|
10,221
|
|
|
|
|
|
Sales Price ($/bbl)
|
|
105.24
|
100.66
|
112.94
|
Cost of Purchases ($/bbl)
|
|
101.55
|
96.99
|
109.31
|
Operating Netback ($/bbl)
|
|
3.69
|
3.67
|
3.63
|
Additional oil for trading details are available in the MD&A.
|
The Company also reports separately its netback on crude oil for trading
which was $3.69/bbl in the first quarter compared to $3.63/bbl in the
same period in 2012.
Exploration Update
The Company drilled eight exploration and appraisal wells during the
first quarter, resulting in five discoveries and three dry holes.
Colombia
On the Cubiro Block, the Company drilled and completed the Copa D-1
exploration well and the Copa A Norte-1 appraisal well encountering 27
feet and 25 feet of net pay respectively in Carbonera sand intervals.
The wells flowed 900 bbl/d and 770 bbl/d light 42° API oil,
respectively, on test.
The Company drilled the Yaguazo-1 exploration well, encountering 14 feet
of net pay in the C5 basal sand on a previously undrilled structure in
the Arrendajo Block. The well is currently being cased to allow for a
production test and the Company is planning on drilling a follow-up
appraisal well on the same structure.
On the Guama Block, the Company finished drilling the Manamo-1X
exploration well, encountering 251 feet of net pay which tested at a
maximum rate of 4.9 MMcf/d of natural gas with 296 bbl/d 54° API
condensate. The Company also started drilling the Capure-1X well on a
separate structure, which at the current date has intersected
approximately 23 feet of indicated natural gas and condensate pay in a
secondary zone.
On the CPO-12 Block, the Hayuelo-1X exploration well was drilled as part
of a three well commitment on the block. The well only encountered
minor hydrocarbon traces and was plugged and abandoned as a dry hole.
In the CPO-1 Block, the Altillo Oeste-1 exploration well was also
plugged and abandoned as a dry hole after failing to encounter
hydrocarbons.
On the Santa Cruz Block, the Company spudded the Phobos-1 exploration
well during the quarter. This well has multiple targets and is
expected to reach its total drilling depth during the second quarter
2013.
During the quarter, a 366 km2 3D seismic survey was completed in the northern portion of the CPE-6
Block, aimed at identifying new well locations in the Hamaca oil
prospect. Also, aeromagnetic and aerogravity surveys were initiated in
the COR-15 and COR-24 Blocks; and processing and interpretation of
recently acquired 2D and 3D seismic data in the Muisca, COR-15 and
Portofino Blocks is ongoing, all aimed at identifying future
exploration well locations.
Peru
On the offshore Block Z-1, the Company and its partner BPZ Energy
completed the acquisition of 429 km2 of 3D seismic data, which is currently being processed and interpreted
together with 1,143 km2 of previously acquired 3D seismic data.
On Block 138, the Company spudded the Yahuish-1X exploration well on
April 16, 2013. The well is expected to take 60 to 80 days to reach
total depth.
On Block 135, the Company continued with the acquisition of 789 km of 2D
seismic data, expected to be completed in the second quarter. In Block
116 a proposed exploration well, Fortuna-1X is expected to start
drilling during the second half of 2013.
Guatemala
On Blocks N-10-96 and O-10-96, a hyperspectral geophysical survey has
been completed and advance planning has been initiated for an
exploration well expected to be drilled in the second half of 2013.
Brazil
During the quarter, two exploration wells (Kangaroo-1 and Emu-1) were
drilled as part of a farm-in agreement covering five blocks in the
offshore Santos Basin. The Kangaroo-1 well encountered an 82 foot
gross (58 foot net pay) oil reservoir section in a down flank position
in an Eocene structure. The operator of the blocks, Karoon Gas is
planning to drill an appraisal well to the Kangaroo discovery later in
the year. The Emu-1 well failed to encounter pay zones and was plugged
and abandoned. The Company is participating in a third option well
(Bilby-1) which has resulted in an oil discovery in a late Cretaceous
reservoir interval as indicated from wireline logs and pressure and
fluid samples. Additional evaluation of the oil zone is ongoing, and
the well is expected to continue drilling to a total depth of
approximately 15,050 feet during May 2013.
First Quarter 2013 Conference call Details
The Company has scheduled a telephone conference call for investors and
analysts on Thursday, May 9, 2013 at 8:00 a.m. (Bogotá time), 9:00 a.m.
(Toronto time) and 10:00 a.m. (Rio de Janeiro time) to discuss the
Company's first quarter results. Participants will include Ronald
Pantin, Chief Executive Officer, José Francisco Arata, President, and
selected members of senior management. Pacific Rubiales expects to
release its first quarter results on Wednesday, May 8, 2013, after
market close.
The live conference call will be conducted in English with simultaneous
Spanish translation. The Company will post a presentation on the
Company's website prior to the call, which can be accessed at www.pacificrubiales.com.
Analysts and interested investors are invited to participate using the
dial-in numbers as follows:
Participant Number (International/Local):
|
(647) 427-7450
|
Participant Number (Toll free Colombia):
|
01-800-518-0661
|
Participant Number (Toll free North America):
|
(888) 231-8191
|
Conference ID (English Participants):
|
40205504
|
Conference ID (Spanish Participants):
|
40208313
|
The conference call will be webcast, which can be accessed through the
following link: http://www.pacificrubiales.com.co/investor-relations/webcast.html.
A replay of the call will be available until 23:59 pm (Toronto time),
May 23, 2013, which can be accessed as follows:
Encore Toll Free Dial-in Number:
|
1-855-859-2056
|
Local Dial-in-Number:
|
(416)-849-0833
|
Encore ID (English Participants):
|
40205504
|
Encore ID (Spanish Participants):
|
40208313
|
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 in the northwestern area of Colombia.
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 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, Peru, Guatemala, Brazil, Papua New
Guinea or Guyana; 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 14, 2012 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.
Translation
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.
Resources
Readers should give attention to the estimates of individual classes of
resources and appreciate the differing probabilities of recovery
associated with each class. Estimates of remaining recoverable
resources (unrisked) include Prospective Resources that have not been
adjusted for risk based on the chance of discovery or the chance of
development and Contingent Resources that have not been adjusted for
risk based on the chance of development. It is not an estimate of
volumes that may be recovered. Actual recovery is likely to be less and
may be substantially less or zero.
Prospective Resources are those quantities of oil and gas estimated to
be potentially recoverable from undiscovered accumulations. There is
no certainty that the Prospective Resources will be discovered. If
discovered, there is no certainty that it will be commercially viable
to produce any portion of the Prospective Resources. Application of any
geological and economic chance factor does not equate Prospective
Resources to Contingent Resources or reserves. In addition, the
following mutually exclusive Classification of Resources were used:
-
Low Estimate - This is considered to be a conservative estimate of the
quantity that will actually be recovered from the accumulation. This
term reflects a P90 confidence level where there is a 90% chance that a
successful discovery will be equal to more than this resources
estimate.
-
Best Estimate - This is considered to be the best estimate of the
quantity that will actually be recovered from the accumulation. This
term is a measure of central tendency of the uncertainty distribution
and in this case reflects a 50% confidence level where there is a 50%
chance that the successful discovery will be equal to or more than this
resources estimate.
-
High Estimate - This is considered to be an optimistic estimate of the
quantity that will actually be recovered from the accumulation. This
term reflects a P10 confidence level where there is a 10% chance that
the successful discovery will be equal to or more than this resources
estimate.
Contingent Resources are those quantities of petroleum estimated, as of
a given date, to be potentially recoverable from known accumulations
using established technology or technology under development, but which
are not currently considered to be commercially recoverable due to one
or more contingencies. Contingent Resources have an associated chance
of development (economic, regulatory, market and facility, corporate
commitment or political risks). The estimates herein have not been
risked for the chance of development. There is no certainty that the
Contingent Resources will be developed and, if they are developed,
there is no certainty as to the timing of such development or that it
will be commercially viable to produce any portion of the Contingent
Resources.
In this news release total volumes of resources have been expressed for
high case estimates, low case estimates and best case estimates for
both Contingent and Prospective Resources. These total volumes are
arithmetic sums of multiple estimates of Contingent and Prospective
Resources, as the case may be, which statistical principles indicate
may be misleading as to volumes that may actually be recovered. Readers
should give attention to the estimates of individual classes of
resources and appreciate the differing probabilities of recovery
associated with each class as explained in this section.
Definitions
Bcf
|
Billion cubic feet.
|
Bcfe
|
Billion cubic feet of natural gas equivalent.
|
bbl
|
Barrel of oil.
|
bbl/d
|
Barrel of oil per day.
|
boe
|
Barrel of oil equivalent. Boe's may be misleading, particularly if used
in isolation. The
Colombian standard is a boe conversion ratio of 5.7 Mcf:1 bbl and is
based on an energy
equivalency conversion method primarily applicable at the burner tip and
does not represent a
value equivalency at the wellhead.
|
boe/d
|
Barrel of oil equivalent per day.
|
Mbbl
|
Thousand barrels.
|
Mboe
|
Thousand barrels of oil equivalent.
|
MMbbl
|
Million barrels.
|
MMboe
|
Million barrels of oil equivalent.
|
Mcf
|
Thousand cubic feet.
|
WTI
|
West Texas Intermediate Crude Oil.
|
SOURCE Pacific Rubiales Energy Corp.