NEWSROOM

TORONTO, Nov. 8 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) is pleased to announce the launch of a broadening of its comprehensive growth strategy, reinforcing its emphasis on growth in the E&P sector, charting a new path into the broader energy sector, and complementing the mounting importance of the Company's activities in Latin America.

Over the past three years, the Company has pursued a relentless and successful growth strategy in the oil and gas sector in Colombia through acquisitions and organic growth. The technical competency and leadership of the Company, coupled with the opportunities that it has been able to tap into, has allowed it to become, in a short amount of time, the second largest oil and gas operator in Colombia.

The continued growth of the Company, and in particular the projected increase in its production of heavy oil, presents special challenges, not only in upstream operations, but also with respect to the secure and stable access to profitable markets. As the Company grows and strengthens its position as the most actively traded oil and gas stock in Colombia, it has to manage a more complex operating environment and an array of new external challenges and actors.

This new competitive landscape calls for downstream market integration and also a more substantive integration into the host countries in which it operates.

The strategic review process announced today has three major components: (i) growth based upon discovering, developing and producing new and existing reserves; (ii) securing market access by participating in key oil and gas transportation and port infrastructure projects; and (iii) integrating downstream assets in the value chain while strengthening the links with stakeholders in the host countries.

Ronald Pantin, Chief Executive Officer of the Company commented: "This new adaptive strategy seeks primarily to mitigate the inherent volatility in the oil and gas commodities market. It will allow us to start exploring a wider spectrum of opportunities in the energy sector, from our present secure base in the upstream market, while opening what we believe are new windows of opportunity, with the right balance between access to markets, capital cost and strategic control. The integration strategy that has been unveiled by the Company responds to clear business objectives, within the framework of minimizing risks and cash outlays but allowing for strategic positioning and control. It also responds to the growing need to establish stronger links with the host countries and their economic development, their government, and the social forces in the areas where we operate."

Oil & Gas Growth

The Company continues to strive to create the greatest possible value from its portfolio of assets. The Rubiales Field continues to be the center of the short term strategy and the objective of reaching a gross production of 170,000 bbl/d by year-end is now within sight. The neighbouring Quifa Block has begun to reach its early promise, with a target of 30,000 bbl/d gross for year-end and 60,000 bbl/d gross by the end of 2011 and assures the Company of continued production well into the future. The Company also expects STAR, the Company's secondary recovery project, to add a significant amount of reserves in the Rubiales Field and the rest of our heavy oil blocks as it progresses.

The recent successes in Block CPE-6 have begun to confirm the Company's view that its exploration blocks adjacent to the Rubiales Field hold important promise. A longer term view of the portfolio has Arauca, CPO-1, Guama, Topoyaco and other areas as its main focus. These assets will continue to be the subject of sustained efforts by the Company in the months to come. The recently announced entry into the Republic of Guatemala and the commencement of operations in Peru also falls within this search for growth while diversifying the Company's resource base.

Thus, E&P will remain the main focus of investment and activities for the Company, moving it towards a gross production of 500,000 bbl/d in the next few years.

Infrastructure Projects

As production grows in all basins of Colombia, transportation infrastructure limitations may impact the development of new fields. The Company has so far secured the transportation of its production needs through its participation in the ODL pipeline and by purchasing transportation rights in the OCENSA pipeline. With a view to future growth, and securing access to increasing volumes, the Company will have a significant participation in the "Bicentennial Pipeline Project", together with Ecopetrol and other oil players in Colombia. This pipeline project has the potential to be the cornerstone of future oil transportation in Colombia as it will open up communication lines between new production areas and export ports.

As a continuation of this strategy, the Company anticipates acquiring a stake in a private venture called Pacific Infrastructure Inc., which, among other projects, is developing a new crude oil and products terminal and port in Cartagena, as well as a new pipeline that will link Covenas with Cartagena in the Caribbean region. With a small investment the Company will secure alternative storage and port capacity for both its imports and growing exports.

Vertical Downstream Integration

As heavy oil production grows and the competition for deep conversion refining capacity hardens regionally, the Company will move into mitigating the volatility in netbacks by accessing deep conversion refining capacity through long term processing deals. This in turn will result in the need to start trading further down the value chain. However, the Company does not envisage buying refinery assets.

The vertical downstream integration strategy will be two-pronged. Firstly, the Company will make an investment in a new venture named CI Pacific Fuels S.A. that will initially focus on developing the bunker market within Colombia that it is already supplying, as well as the supply of finished products to the wholesale market. The Company believes that this is the best way to start building a presence in the downstream market.

Moving into the downstream production chain is but the first step, and with a minimum capital contribution will serve to eventually leverage the Company's brand within the Colombian market.

Secondly, the Company has decided to participate in the development of asphaltite and coal assets through its equity participation in a company called Pacific Coal, S.A. The asphaltite resources, in particular, will afford the Company the access to large and very profitable markets for exports and domestic needs as Colombia tackles its burgeoning need to expand its road infrastructure as well as service other industrial uses that arise in a growing economy. This market lends itself to the Company's core competencies as asphaltite is principally another form of extra-heavy hydrocarbons.

This downstream integration strategy is also an important piece in fulfilling the need for the Company to gain a larger and more integrated presence in the Colombian market, particularly as it becomes the most important heavy oil producer in Colombia.

Alternative Fuels and Social Responsibility

As the E&P activity of the Company continues to move into isolated areas with little or no other economic activity it faces special situations such as local and migratory populations expecting to see the quality of their lives improve due to the oil activity. Such social forces cannot and should not be ignored and have to be approached with a long term perspective if the E&P activity is to be sustainable.

Two converging forces have to be addressed. First, the Company needs to promote economic activity that can create sustainable, long term employment beyond the horizon of the E&P activity; and second, it needs to continue to ensure that the Company maintains its core competencies with a view to continuing to deliver shareholder value.

An example of the Company's latest social initiatives can be found in the area of the Rubiales Field where the Company is heavily promoting the planting of large plots of land, otherwise not used, with crops that will be directed towards the production of biofuels, which can then be combined with the downstream integration strategy already described.

This project, like many other future social projects, will be completed with the participation of private investors who possess the right technical and market expertise with to create a belt of prosperity in and around the operating areas. This will promote multi-faceted benefits for the Company, its stakeholders and the broader community. The alternative economic activity generated will demand services and living infrastructure that will have natural synergies with the increasing needs originated from the growing E&P activity.

The Company maintains a strong belief that social responsibility is principally about generating opportunities for communities to thrive on their own rather than just enjoying the direct benefits from the oil and gas industry.

Summary

Each of the pieces of this new strategic initiative has its own timing and structure and the Company will furnish specific details of each particular one as they develop.

These strategies are designed to be synergistic. The Company's managerial, technical and financial expertise within the context of a wider hydrocarbon market will combine to secure a path for the Company as it aims to keep growing. The goal is to secure market access and to develop harmonious relationships within the social and economic environment in its host countries, as the focus in finding and developing new oil and gas reserves intensifies.

The investment required for all these initiatives is very small, with the exception of the E&P capital expenditures and Bicentennial Pipeline project. The latter will have its own financing through a SPV project financing structure. The Company will cover its entire expansion plan with its own cash flow, and at this time does not see the need for more debt or equity financing.

The Company will provide a review of this strategy and its third quarter results on November 10, 2010. Details on the time and dial-in will be provided in the earnings released targeted for release on November 9, 2010.

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 at 65,000 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.