NEWSROOM

TORONTO, March 17 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) reiterated today details with respect to the association contract between the Company and Ecopetrol, S.A. (the "Quifa Contract").  As previously disclosed by the Company in the reserves reports entitled "Evaluation of the Interests of Petro Rubiales Energy Corp. in the Quifa Block in Llanos Basin, Colombia" effective September 30, 2007 and "Evaluation of the Interests of Pacific Stratus Energy Ltd. in the Quifa Block in Llanos Basin, Colombia" effective September 30, 2007 (collectively, the "2007 Reserves Reports"), the Quifa Contract contains  a variable volume participation clause that is a function of the variability of the price of oil.

Under the terms of the Quifa Contract, capital costs and operational expenses must be borne 70% by the Company and 30% by Ecopetrol.  The Company holds a 60% participation interest in the production from the Quifa block less:  (i) the applicable government royalty; and (ii) any additional participation percentage attributable to Ecopetrol when the cumulative production of each commercial field in the Quifa block, including the volume corresponding to royalties, exceeds five million barrels of liquid hydrocarbons.

As previously disclosed in the 2007 Reserves Reports, the additional participation percentage for Ecopetrol is calculated based on the following formula (the "PAP Formula"):

PAP =  [ P - Po ]    x 30%
P

Where:  

PAP = Additional participation percentage in production for Ecopetrol.

P = For liquid hydrocarbons, is the simple arithmetic average price per barrel of "West Texas Intermediate" (WTI) marker crude oil in U.S. dollars per barrel.  This average price is for the relevant calendar month, whose specifications and quotations are published in media of recognized international prestige.  For gaseous hydrocarbons, it is the simple arithmetical average price for "U.S. Gulf Coast Henry Hub" marker natural gas in U.S. dollars per MMbtu.  This average price is for the relevant calendar month whose specifications and quotations are published in media or recognized international prestige.

Po = For liquid hydrocarbons, the base price of the market crude oil, expressed in U.S. dollars per barrel as indicated in the table below:
 

(Note:  For calculations purposes, Po should be expressed in current money terms using the US department of Labor Producer Price Index - PPI.)

The PAP Formula may also be triggered in respect of gaseous hydrocarbons five years after the start of production of a gas field declared commercial; however, the Company does not currently expect the Quifa block to yield significant gas resources.

Ronald Pantin, Chief Executive Officer of the Company, commented: "We continue to have a clear objective in the Quifa block, as well as in the rest of our blocks, which is to increase our reserves base in order to guarantee continuous growth. The Company is planning to undertake a reserves update after receipt of all environmental licenses in Quifa North, necessary to continue the Company's exploratory drilling campaign and to test the stratigraphic wells already drilled.  In addition, with the conversion of the CPE-6 Technical Evaluation Contract, we will be able to further elaborate upon the reserves results and the drilling results of these exploratory campaigns as they become available."

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 6 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.