TORONTO, Jan. 21 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE)
announced that it has discovered oil at its LISA-1 well located within the
Guasimo Block, in the Upper Magdalena Valley of Colombia. The company also
provided an update on operations across its current projects.
Ronald Pantin, the company's Chief Executive Officer, stated: "the
results announced today are evidence of how we continue to move forward in our
exploration activity while focusing on taking our production assets to their
full potential. This emphasizes our philosophy of reinforcing our present
opportunities during volatile times, while securing the future."
The exploratory well, LISA-1, is found at the top of the reservoir,
located in the Guadalupe Formation, at a depth of 4,726 feet measured depth
(MD), or 4020 feet true vertical depth at sub-sea level. The preliminary
petrophysical evaluation of the well logs indicated a total thickness of 64
feet and a net oil-pay zone of 30 feet with an average fracture-porosity of
16%. After a preliminary test where the well produced oil batches of 24.5
degrees API, the company decided to fracture the reservoir and it is now
conducting an extended production test. The company has a 100% working
interest in the Guasimo Block, which was acquired by the company at the time
of its acquisition of Kappa Resources.
At the Moriche Block, located in the Llanos Basin of Colombia, the
company completed the drilling of the Mauritia West 1 exploratory well to a
total of 10,234 feet MD. The top of the reservoir, the Mirador Formation, was
encountered at 10,010 feet MD. A total of 21 feet were perforated in the
interval 10,037 - 10,012 feet MD. Drill test results indicated non-commercial
quantities of hydrocarbons.
The exploratory well QUIFA-5 on Prospect E successfully completed its
term as a vertical producer on December 6, 2008. Since that date, the prospect
has been tested with different configurations resulting in average daily rates
of 220 barrels per day of oil of 13.4 degrees API, slightly higher than the
12.5 degrees API produced at the Rubiales field.
Management believes that the discovery at Prospect E is connected to the
Rubiales Field because the oil-water contact at the well is 26 feet deeper
than the deepest closing contour. This indicates that the trap is larger than
the individual structure at Prospect E. Additionally, the well exhibits the
same pressure regime as the Rubiales Field. As a result of this discovery, the
chances of finding oil at Prospects H and I are significantly increased. These
prospects are located halfway between Prospect E and the Rubiales Field. In
2009, the company plans to drill three additional exploratory wells at
Prospects H, I and A as well as appraise the discoveries on Prospects D
(RUB-147) and E (Quifa-5).
The Quifa Block is an exploratory block in which Meta Petroleum (a
wholly-owned subsidiary of Pacific Rubiales) holds a 70% working interest and
Ecopetrol S.A. holds a 30% working interest. Production shares from each
commercial field in the Quifa Block will be 40% for Ecopetrol and 60% for Meta
An exploratory well identified as RUB-148 was drilled between December 19
and 27, 2008, in the southeastern portion of the Rubiales Block in the "buffer
zone". This zone is a 5 kilometer strip that surrounds the Rubiales and Piriri
Blocks. The preliminary petrophysical information indicates a thickness of 31
feet gross with a net pay of 20 feet on the basal sandstones. This well
confirmed the extension of the Rubiales Field to the south-southeast.
Additionally, it provides strong evidence of the presence of hydrocarbons in
the contiguous southern region, where the company was recently awarded the
exploration block CPO-14. This exploration block is located approximately 3
kilometers from this well. The company is presently carrying out the required
steps to complete the well and prepare it for production.
2009 DRILLING PROGRAM
The company's gross drilling program for 2009 consists of 92 development
wells (18 vertical wells and 74 horizontal wells), 8 appraisal wells, 7
exploration wells and 7 injection wells, as follows:Rubiales: 63 development wells (14 vertical wells and 49 horizontal
wells), as well as 10 injection wells, for a total net capital
expenditure of US$ 68.7 million.
Medium/Light oil: 29 development wells (4 vertical wells and 25
horizontal wells), 8 appraisal wells and 1 injector well for a total net
capital expenditure of US$37.8 million.
Exploration drilling: 3 wells at Quifa, 1 well at Guama, 1 well at
Cicuco, 1 at Arrendajo and 1 well at Topoyaco, for a total net capital
expenditure of US$29 million.PRODUCTION LEVELS
The company also announced that the production level in the
Rubiales/Piriri block continues its upward trend, reaching a new level of
53,125 gross barrels of oil per day (bopd), or 19,105 bopd net to the company,
As a result, total production for Pacific Rubiales, as of January 19,
2008, including production from its other oil fields, has risen to 59,646.5
gross bopd or 21,188.33 net bopd. The company has also been producing 35.151
MMPCD of gas from La Creciente, which is expected to increase after a
temporary customer purchase cut is reversed in the next three weeks.
Pacific Rubiales, a Canadian-based company and producer of natural gas
and heavy crude oil, owns 100 percent of Meta Petroleum Limited, 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
30,000 barrels of oil equivalent per day (boepd), with working interests in 34
blocks in Colombia and Peru.
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
28, 2008 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.