NEWSROOM

TORONTO, Feb. 3 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today an operational update on its exploration portfolio in Colombia, Peru and Guatemala.

Ronald Pantin, Chief Executive Officer of the Company, commented: "Within the context of our exploration growth strategy, the ongoing and continuous success at CPE-6 and Quifa underlie our belief in the potential of the Llanos Basin in Colombia.  These exploration projects, in addition to the enormous potential of our entire exploration portfolio, pave the way toward our four to five year target of 500,000 boepd of gross production."

COLOMBIA 

LLANOS BASIN 

CPE-6 Block

The Company continues its exploration campaign in the Guairuro prospect drilling the Guairuro-3, Guairuro-4 and Guairuro-5 stratigraphic wells in the north-western part of the CPE-6 Block.

The Guairuro-3 well, drilled at a distance of 13 km west of Guairuro-1, reached a total depth of 2,523 feet true vertical depth below sea level ("TVDSS"), and found the top of the C-7 interval of the Carbonera Formation at 2,408 feet TVDSS, and the top of the Paleozoic Basement at 2,451 feet TVDSS. The Guairuro-4 well, drilled at a distance of 15.1 km south of Guairuro-2, reached a total depth of 2,486 feet TVDSS, and found the top of the C-7 interval of the Carbonera Formation at 2,185 feet TVDSS, and the top of the Paleozoic Basement at 2,402 feet TVDSS. The Guairuro-5 well was drilled 5.7 km and 7.5  km northeast of the Guairuro-1 and Guairuro-2 wells, respectively, and reached a total depth of 2,592 feet TVDSS, finding the top of the C-7 Interval at 2,328 feet TVDSS, and the Paleozoic Basement at 2,533 feet TVDSS.   

Similar to the previously drilled Guairuro-1 and 2 stratigraphic wells, the Guairuro-3, 4 and 5 wells were drilled with a 6 1/8" slim design, and were continuously cored along the Carbonera C-7 interval. Total core recovery was 147.3 feet (73.7%), 143.9 feet (71.9%) and 41 feet (51%) in the Guairuro-3, 4 and 5 wells, respectively, for a total cored section of 280 feet.  All the wells showed significant oil impregnations, close to 30 feet at each well in all the cored intervals within the C-7 interval.  The C-7 interval also showed high shale content. The basal unit was not observed in the Guairuro-3 and 4 wells, and in the Guairuro-5 well it was very thin. Therefore, it is interpreted that this basal unit pinched-out east of the Guairuro-3 well, north of the Guairuro-4 well and east-northeast of the Guairuro-5 well, but very close to the wells' locations. The core description showed the presence of fine to very fine oil-impregnated sands, with intercalations of shales and siltstones. Because of this shale content in the Guairuro-3 well, the petrophysical evaluation only indicated 6.5 feet of net pay.  The Guairuro-4 well did not indicate net pay zones in these intervals; and the Guairuro-5 well exhibited 14 feet of net pay and an oil-water contact at 2,433 feet TVDSS. Aside from the shale facies characteristics that the C-7 interval showed at the Guairuro-4 well, the presence of a normal fault located immediately to the north of its location could also restrict the hydrocarbon charge to this part of the prospect and oil may have spilled further south to where the C-7 interval pinches-out.   The presence of oil in the three wells, in the shaly sandstones of the C-7 interval, is evidence that the petroleum system reached the area where these wells are located, and furthermore, may indicate that the boundary of the prospect may be located to the west, south and northeast, and possibly close to the location of the three wells. 

With the information obtained from these three wells, a minimum preliminary area of 63,000 acres for the prospect has been estimated with a trap size extended an additional 6, 9 and 7.5 km to the south, west, and northeast, respectively, of the previously drilled wells. The Company is also preparing to drill the last well of this initial campaign, the Guairuro-6 well, 10 km south of the Guairuro-4 well, so as to fulfil its contractual commitment with the Colombian National Hydrocarbon Agency (the "ANH") and to evaluate a possible reservoir compartmentalization of the pay units, as well as the south-headed oil-spilling from the location of the Guairuro-4 well. With the upcoming drilling of the Guairuro-6 well, the Company will complete its commitments under the Technical Evaluation Agreement ("TEA") phase of the CPE- 6 contract.

In the north zone of the Guairuro prospect, a total of 9 wells have been drilled to date, and in each well we have had reliable evidence that the petroleum system worked for this area and that the oil was able to migrate and to load an area as vast as 63,000 acres or more. These results reaffirm the petroleum potential of the CPE-6 Block, and the Company's belief that in the next exploration phase the CPE-6 Block will prove to be one of the most significant oil finds in the Llanos Basin of Colombia.

The Company is currently preparing all the technical documentation and permits to start an exploration/appraisal campaign to further delineate this oil accumulation with exploratory, appraisal and stratigraphic wells that will be drilled in the second half of 2011, subject to obtaining the appropriate licenses.

The CPE-6 Block is a TEA awarded by the Company in 2008 with the ANH, in which Meta Petroleum Ltd. (a wholly-owned subsidiary of the Company) is the operator and holds a 50% working interest and Talisman Energy Inc. holds the remaining 50%. 

Quifa Block  

As a continuation of its exploration/delineation campaign in prospects "A", "F" and "Q" in the Quifa Block, located in the northern part of the block, the Company drilled four wells: (i) the Jaspe-1 ST2 appraisal well in prospect "A" (ii) the Jaspe-3 stratigraphic well in prospect "A" (iii) the Ambar-1 exploratory well in prospect "F" and (iv) the Ambar-3 stratigraphic well, also in prospect "F".   

The Jaspe-1 ST-2 appraisal well was drilled as a deviated well from the surface location of the Quifa-6 well on prospect "A" and slanted 60 degrees to the northeast. The well found the top of the Carbonera basal sands at 2,722 feet TVDSS, and the petrophysical evaluation identified a total of 19 feet of net pay, 13 feet with 31% porosity at the basal sand unit and 6 feet with 30% porosity in the Carbonera Intermediate sandstones, and an oil-water contact at 2,744 feet TVDSS. This interval at the Carbonera Intermediate Unit is considered a new objective in the prospectivity of Quifa North. The well is being readied for a long-term production test.

The Jaspe-3 stratigraphic well was drilled in prospect "A" at a distance of 6.2 km and 7.5 km northeast of the Jaspe-1 ST-2 and Quifa-6 wells, respectively. The Jaspe-3 was a deviated well, drilled at an angle of 30 degrees from a surface location and reaching a total depth of  3,057 feet TVDSS and reaching the top of the Carbonera basal sands at 2,706 feet TVDSS and the top of the Paleozoic at 3,006 feet TVDSS. The petrophysical evaluation of the well showed  29 feet of net pay at the interval, an average porosity of 31%, and the oil water contact at 2,746 feet TVDSS, 2 feet deeper than Jaspe-1 ST-2 well. These results confirm the extension of the "A" prospect to the northeast part of the Quifa Block and may extend the prospect 4.5 km in the same direction. 

The Ambar-1 exploratory well, in prospect "F", was drilled as a deviated well from a surface location at a distance of 4.2 km southwest of the Quifa-26X stratigraphic well. The well found the top of the Carbonera basal sands at 2,556 feet TVDSS and the Paleozoic Basement at 2,716 feet TVDSS. The petrophysical evaluation of the well indicates a hydrocarbon column of 33 feet of sandstones and siltstones, with 16 feet of net pay and 35% average porosity, and the oil-water contact at 2,589 feet TVDSS. This well is also in the process of being ready for a long-term production test.  

The Ambar-3 stratigraphic well was also drilled in prospect "F", at a distance of 3.2 km southwest of the Ambar-1 well.  The Ambar-3 reached a total depth of 2,819 feet TVDSS and found the top of the Carbonera basal sands at 2,540 feet TVDSS and the top of the Paleozoic at 2,686 feet TVDSS. The basal sand unit at the well showed high shale content, resulting in only 2 feet of net pay at the interval and an oil-water contact at 2,552 feet TVDSS. This shale content in the basal sands is interpreted as being associated with flood plain shaly facies that develop close to the deposition of channel sandstones facies, but with restricted geographical extent. The presence of shale at this location should not be interpreted as a regional facies change, but as a local shale development. The Company is planning to review the geological interpretation of this area in order to plan additional wells which help to understand those facies changes in the western reaches of prospect F.

As of today, in the northern part of the Quifa Block, the Company has drilled 6 wells showing commercial hydrocarbon columns: (i) Quifa-6; (ii) Quifa-24X; (iii) Quifa-26X; (iv) Jaspe-1 ST-2; (v) Jaspe-3; and (vi) Ambar-1. Thus far, the exploratory success of the campaign reaffirms the large scale hydrocarbon potential of this part of the Quifa Block, where the Company has already certified 251 mmbo certified gross resources (see the Company's press release dated April 26, 2010). In order to convert these resources into 2P reserves, the Company plans to drill seven additional exploratory/appraisal and stratigraphic wells in this part of the Quifa Block during the first quarter of 2011. The Company is already moving a rig to drill the Zircon-1 location and the Jaspe-2 location. In addition, as part of the exploratory activity in the Quifa Block, the Company has completed 294 km of additional 2D seismic in the furthermost northern and eastern parts of the block, which will aid in the evaluation of the prospectivity of these two areas. The results of the exploration campaign have ensured the petroleum potential of the northern part of the Quifa Block, where the Company is making the necessary investments to allow for large scale production of between 20,000 to 30,000 barrels of oil per day ("bopd") by the end of 2011. 

The Quifa Block is an exploratory block in which Meta Petroleum (a wholly-owned subsidiary of the Company) holds a 70% working interest and Ecopetrol holds a 30% working interest. Production shares from each commercial field in the Quifa Block will be split 40% for Ecopetrol and 60% for Meta Petroleum. 

LOWER AND UPPER MAGDALENA BASINS 

La Creciente Block  

In the LCA-south prospect, located in the southern part of La Creciente "A" and the La Creciente "D" gas fields, the exploratory well Apamate-1X spudded on December 1, 2010. The well is targeting gas in Ciénaga de Oro sands with an estimated total depth of 12,170 feet measured depth ("MD"). The well reached 11,200 MD at the top of Ciénaga de Oro Formation. While performing a hole-conditioning trip at the bottom of the 8½" hole and before running the 7" liner, a gas kick was observed, forcing the Company to flare gas until the well was controlled. The liner was set at 11,195 feet and the Company decided to drill the Upper Ciénaga de Oro sandstones up to 11,330 feet and perform an open-hole DST to this section. The well flowed water with no traces of gas. It is believed that the units that flowed gas while drilling the Lower Porquero section are behind the 7" liner and will be perforated and tested at a later stage. The Company is currently preparing the well to drill further down and evaluate the Lower Ciénaga de Oro Formation.

The La Creciente Block is an E&P contract in the Lower Magdalena Basin, in which the Company holds a 100% working interest.

Buganviles Block

In the Buganviles Block, the Company has continued its exploratory activity by performing a production test on the Visure-1X exploratory well, and by drilling the Tuqueque-1X exploratory well.

In the Tuqueque prospect, located in the northern part of the Buganviles Block, the Tuqueque-1X exploratory well spudded on November 4, 2010, with the Cretaceous limestones of the Caballos Formation as the main exploratory target. After a tie-in between a vertical seismic profile in the well, and the available 2D seismic data, the estimated final depth of the objective  was revised from 7,600 feet to 11,300 feet MD, and the new depth for the Caballos Formation was estimated at approximately 10,600 feet. The well is currently drilling an 8½" hole at the depth of 9,303 feet MD in the Villeta Group (Tetuan Formation). The preliminary petrophysical evaluation in the upper part of the well showed two additional prospective intervals in the upper levels: (i) the Monserrate Formation, with 31 feet of indicated net pay; and (ii) the El Cobre Formation, with 9 feet of indicated net pay.  

The results of the Visure-1X well, drilled in the Visure prospect, located in the southern part of the Buganviles Block, were released in November 4, 2010. The well was tested in the Lower Guadalupe Formation, resulting in a stabilized average production rate of 46 bbl/d with 14 barrels of water per day. Oil gravity was 15.6 API. The Visure-1X well has now been suspended and the drilling rig released pending evaluation of this production testing. Different production techniques will be evaluated based on the production test analysis to economically produce the significant oil in place encountered in the Lower Guadalupe Formation. Depending on the results, the Company will consider a possible test in the Upper Guadalupe and Barzalosa Formations.

The Buganviles Block is an Association Contract with Ecopetrol, located in the Upper Magdalena Basin.  Pacific Stratus Energy (a wholly-owned subsidiary of Pacific Rubiales) holds a 19.875% participation in the prospect where the Tuqueque-1X well is being drilled. The remaining interest is held by Petrodorado Energy Ltd. (TSXV: PDQ) and Loon Energy Corporation (TSXV: LNE).  

PUTUMAYO BASIN 

Topoyaco Block  

The Topoyaco 2 well, in the Topoyaco Block, has been suspended after re-evaluating the well with a higher capacity Electro-Submersible Pump ("ESP") in the upper Villeta N-sands, which the operator now believes could be a sandy facies known in other areas of the Putumayo foothills as the Neme member of the younger Rumiyaco formation. This new test was performed in order to establish the true production potential of the well, which was tested originally with a lower-capacity ESP and resulted in very erratic oil and water production rates. The well is now suspended, awaiting a resource and economic evaluation in order to take a final decision. The exploration campaign in this block will continue during 2011, and the Company is performing all the necessary steps to drill what it is believed to be the largest and deepest prospect of the block, Prospect D, which has been certified with 46.907 mmbo of prospective resource (best estimate) (see Alange Energy Corp.'s press release dated November 16, 2010).

The Topoyaco Block, located in the Putumayo foothills, is an E&P contract where the Company holds a 50% working interest and Alange Energy holds the other 50% and acts as operator.  Given the importance of the next phase of the Topoyaco exploration program, Alange Energy agreed to transfer control of the operatorship of the block to Pacific Rubiales (as announced by Alange Energy on January 19, 2011).  Transfer of control leverages the Company's extensive technical capabilities in Colombia and its financial capacity to operate the joint venture.

PERU 

Exploration activities started in Block 138, located in the Ucayali Basin, on December 9, 2010. The acquisition of 537 km of a 2D seismic program will allow the definition of the main structural trends in the block and should provide confirmation of the presence of several structural leads, which were identified from three previously acquired regional seismic lines. The Company expects to finish the seismic acquisition by April 2011 and will then proceed with processing and interpretation. 

The Block 138 is an E&P contract in the Ucayali basin in northern Peru, in which the Company holds 55% working interest. There is no exploration activity taking place on this block at this time.  Petrodorado Energy holds the remaining 45%.   

GUATEMALA 

In October 6, 2010, the Company entered into a farm-in agreement with respect to "A-7-98", which corresponds to the area known as "A-7-98" and which is made up of the "N-10-96" and "O-10-96" blocks in Guatemala, securing a 55% working interest and the operatorship of the area. The remaining working interest is held by Compañía Petrolera del Atlántico, which is owned by Flamingo Energy Investment (BVI) Ltd. and CHx Guatemala Limitada. 

During 2010, the Company started field activities aimed at identifying such aspects as: (i) logistics; (ii) access and design of future geologic and geophysical field work; (iii) availability of drilling and seismic acquisition companies in Guatemala; and (iv) environmental permits and other support related areas. All these activities will help in the establishment of the exploratory program that will be submitted for approval in the first quarter of 2011.

The exploratory activities for 2011 in Guatemala will include: seismic reprocessing of 300 km of 2D seismic; acquisition and processing of additional 300 km of 2D seismic; 6,800 km of aero-magnetic and aero-gravimetric data; 6,600 km² of remote perception surveys; a surface geology campaign (including samples analysis); and the beginning of an integrated geological interpretation to define exploratory prospect locations to be drilled in 2012.    

The Company's exploration program for 2011 is budgeted at $340 million and includes exploration across 26 blocks, in which 20 exploratory wells will be drilled, 36 appraisal wells and 3 stratigraphic wells.  In addition, 539 km of 2D seismic and 440m² of 3D seismic is planned during the year.  

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 a current net production in excess of 84,000 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 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 12, 2010 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.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.  Prospective resources have both an associated chance of discovery and a chance of development.  Prospective resources are further subdivided in accordance with the level of certainty associated with recoverable estimates, assuming their discovery and development, and may be sub-classified based on project maturity.  There is no certainty that any portion of the resources will be discovered.  If discovered, and they would be technically and economically viable to recover; there is no certainty that the prospective resource will be discovered.  If discovered, there is no certainty that any discovery will be technically or economically viable to produce any portion of the resources.