NEWSROOM

TORONTO, Aug. 9, 2011 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today the release of its unaudited consolidated financial results for the quarter ended June 30, 2011, together with its Management Discussion and Analysis ("MD&A") for the corresponding period. These documents will be posted on the Company's website at www.pacificrubiales.com and SEDAR at www.sedar.com.

Ronald Pantin, Chief Executive Officer of the Company, commented: "The second quarter was an exceptional quarter for the Company. With average net production, after royalties, of 88,092 boe/d, the Company grew its share of operated production by 60% compared to the same period last year, primarily through increased production at the Rubiales, Quifa and La Creciente fields. The Company increased revenues by 168% to $957.5 million and EBITDA increased to $558 million, an increase of 181% from the same period last year. With a doubling of EBITDA this quarter, the Company is very well positioned for the remainder of 2011, and through the 2012 financial year. It is also demonstrating the ability to self-fund its prolific exploration portfolio in Colombia, the largest exploration portfolio in Colombia after the state-owned oil company, as well as in Peru and Guatemala."

Pacific Rubiales has a current gross production of approximately 235,000 boe/d, including natural gas and light and medium oil fields, with interests in 40 blocks in Colombia, 2 blocks in Guatemala and 3 blocks in Peru, totaling approximately 12,562,597 net acres. During the second quarter of 2011, the Company continued its exploration drilling campaign in the Rubiales-Piriri, Quifa, CPE-6, Abanico and Dindal-Rio Seco Blocks for a total of 13 wells drilled during this period and a success rate of 92%.

Management will hold a live conference call in English with simultaneous Spanish translation on Wednesday August 10, 2011, to discuss the Company's financial results beginning at 8:00 am (EDT) / 7:00 am (Bogotá time).

The Company will post a presentation on the web site prior to the call, it can be accessed at www.pacificrubiales.com.

Analysts and interested investors are invited to participate as follows:

Participant Number (International/Local): (647) 427-7450

Participant Number (Toll free Colombia): 01-800-518-0661

Participant Number (Toll free North America): 1-888-231-8191

Conference ID (English Participants): 89077832
Conference ID (Spanish Participants): 89110913

A replay of the call will be available until 23:59 pm (EST), August 24, 2011, which can be accessed as follows:

Encore Toll Free Dial-in Number: 1-855-859-2056

Encore Local Dial-in-Number:  416-849-0833

Encore ID (English Participants):  89077832
Encore ID (Spanish Participants): 89110913

Financial Summary

A summary of the financial results for the three and six months ended June 30, 2011 follows:

Operating Netback Crude Oil and Gas:

Milestones

During the second quarter of 2011, the Company continued the trend of outstanding production growth and exploration success, leveraging its technical know-how and operational expertise for rapid growth. The results for this period underline the strength of the Company's operational activity and its capacity to steadfastly increase production, as well as management's commitment to deliver robust financial results. Management is focused on achieving challenging operational goals, while pursuing an ambitious exploration and production investment program, under the umbrella of the Company's paramount strategic focus: Growth.

Set out below are the highlights of the Company's second quarter performance:

• Strong financial results. Second quarter confirmed the capacity of the Company to deliver strong financial results, reflected by a significant increase in production and improvements in realized prices.  Consolidated net earnings for the second quarter of 2011 were $349.4 million, or $1.30 per common share, compared with net earnings of $14.4 million for the second quarter of 2010, or $0.05 per common share. Adjusted net earnings for the second quarter of 2011 were $266.7 million, compared to $49.9 million in the second quarter of 2010. Revenue increased 168% to $957.5 million compared to $356.8 million in the same period in 2010.
   
• EBITDA doubled resulting in significant funds generation. EBITDA for the second quarter of 2011 totaled $558.3 million, a significant increase of 181% as compared to EBITDA for the previous year's second quarter of $198.6 million. EBITDA for the second quarter of 2011 represents a 58% margin in comparison to total revenues for the period. Funds flow from operations increased to $400.2 million in the second quarter of 2011, compared to $148.4 million in the second quarter of 2010.
   
• Production continues to grow. Average gross production in the second quarter of 2011 was 221,896 boe/d, 88,092 boe/d net after royalties and field consumption, 60% higher than in the same period of 2010 and is the result of the production from more than 43 new development wells, mainly in the Rubiales and Quifa fields.
   
• Continued focus on exploratory activities with a success rate of 92%. During the second quarter, the Company drilled 13 exploratory wells and acquired 772 km of 2D seismic with a total net investment of $117.2 million.
   
• Significant improvement in operating netbacks. Crude oil operating netback during the second quarter of 2011 was $64.32/bbl, 50% higher in comparison to the same period in 2010, due to higher realized prices. Natural gas operating netback was $27.31/boe, 70% higher in comparison to the same period of 2010, also due to higher realized prices.
   
• Continued development of capital expenditure program.  Capital expenditures during the quarter ended June 30, 2011 totaled a net amount of $307.7 million (2010 - $134.7 million), of which $109 million were invested in the expansion and construction of production infrastructure; $117.2 million were invested in exploratory activities; $50 million were invested in production drilling activities; and $31.5 million were invested in other projects.
   
• Environmental permits for Quifa.  In June 2011, the Ministry of the Environment of Colombia granted the required environmental permits for Quifa Southwest and Quifa North which allow the Company to continue its development drilling campaign in Quifa Southwest and to proceed with its exploration drilling campaign in Quifa North.
   
• Maurel & Prom. On May 6, 2011, the Company acquired a 49.9999% interest in Maurel and Prom Colombia B.V. ("Maurel & Prom") from Les Establissments Maurel & Prom, for cash consideration of $63.4 million and subject to certain exploratory commitments. Maurel & Prom holds interests in five exploration blocks located onshore in Colombia.
   
• Standard & Poor's raised the Company's credit rating. On July 6, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Pacific Rubiales to "BB" from "BB-". They also raised their rating on Pacific Rubiales' $450 million senior unsecured notes due 2016 to "BB". Standard & Poor's also indicated that the Company's outlook is stable.
   
• Operational update in the Arauca Block. On July 18, 2011, the Company announced an operational update for the Arauca Block, where the Company drilled the TORODOI-1X exploratory well, the first of two exploratory wells planned for 2011 in the Arauca Block.  This well is currently being tested.
   
• Cash dividend paid to shareholders on June 30, 2011. On June 13, 2011, the Company announced a cash dividend in the aggregate of $25 million, or $0.093 per common share.  The dividend was paid on June 30, 2011 to shareholders of record as of June 17, 2011; the ex-dividend date in Canada was June 15, 2011.  Despite the current global economic uncertainty in the marketplace, as a result of the Company's strong balance sheet and cash flow, the Company intends to continue the quarterly dividend policy subject to formal approval from the board of directors.

More details on the Company's operational and exploration activities can be found in the MD&A.

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 10, 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.