NEWSROOM

    TORONTO, June 16 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PEG)
announced that it has executed, in conjunction with Ecopetrol, S.A. and on a
several basis, a mandate letter with WestLB AG, New York Branch, for
structuring and underwriting the financing of the construction of the
"Oleoducto de los Llanos Orientales" Pipeline.
    Under the terms of the letter, WestLB will structure and underwrite up to
US$329 million in acquisition financing for a holding company incorporated in
Panama, to be owned 35% by Pacific Rubiales and 65% by Ecopetrol, for the
purpose of acquiring all of the outstanding share capital of, and any future
issuances of share capital of, "Oleoducto de los Llanos Orientales S.A."
(ODL), a special purpose vehicle organized specifically for the pipeline
project. ODL will utilize the proceeds from the sale of its share capital to
fund the construction of the proposed pipeline. The execution of this mandate
paves the way for the continued development of the project, for which
engineering and procurement is already well advanced.
    The ODL pipeline, which will be 235 kilometers in length and 24 inches in
diameter, will connect the Rubiales oil field to the Monterrey Station in the
Casanare Province of Colombia and will have an initial estimated transport
capacity of 170,000 barrels of oil per day. Additional financing for up to
US$61 million may also be provided for a separate 26 kilometer branch, to be
owned by Pacific Rubiales, connecting to the Cusiana Station, also situated in
the Casanare Province of Colombia.
    This pipeline project is a key element of the company's master plan for
the expansion of the Rubiales oil field, and should allow the company to
develop the field to its maximum potential by 2010. In addition, it is
anticipated that when the pipeline commences operations, it will also
encourage the future development of Colombia's Llanos Basin, regarded by the
Colombian government as one of the most prospective areas for heavy oil
exploration in the country.
    Endeavour Financial International Corporation is acting as exclusive
financial advisor to Pacific Rubiales and ODL.

    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
21,000 barrels of oil equivalent per day, with working interests in the
Rubiales, Piriri and Quifa concessions and the Caguan, Dindal, Rio Seco, Puli
B, La Creciente, Moriche, Guama, Arauca, Tacacho and Jagueyes blocks in
Colombia and blocks 135, 137 and 138 in Peru.

    %SEDAR: 00007953E