Last updated on April 21, 2014 at 1:20 EDT

Pacific Rubiales expands investment in Guyana offshore oil play

May 28, 2012

TORONTO, May 28, 2012 /PRNewswire/ – Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) is pleased to announce that it has agreed to
purchase 85,714,285 units of CGX Energy Inc. (TSX-V: OYL) (“CGX”) at a
price of C$0.35 per unit for an aggregate investment of C$30 million.
At the same time, the Company has entered into a technical services
agreement with CGX whereby Pacific Rubiales will provide technical
assistance to CGX in respect of its operations. In addition the Company
will have an option to participate in each of the next wholly owned
commitment wells to be drilled on the Corentyne and Annex offshore
Petroleum Production Licences (“PPL”), in Guyana, by funding 50% of the
exploration well costs and certain seismic costs, in exchange for a 33%
interest in the respective PPL’s.

Ronald Pantin, Chief Executive Officer of the Company, commented: “This
is a great opportunity for the Company to expand its investment in the
highly prospective offshore Guyana oil play. Through our ownership in
CGX, the technical services agreement and a direct earning option, the
Company will be participating in an exploration campaign in an offshore
basin with analogous geology to West Africa and Brazil. We are looking
forward to working with the management of CGX on realizing the
potential of offshore Guyana. This investment is strategic to the
Company’s objective of being the leading Latin American independent
explorer and producer of hydrocarbons.”

The purchase of the units is being accomplished by way of a private
placement offering by CGX. Each unit will consist of one common share
of CGX plus one half of one common share warrant. Each warrant will
entitle the Company to purchase one additional common share of CGX at
an exercise price of C$0.60 within an 18 month period following
issuance of the units. The units are expected to be issued within a
week following the required TSX Venture Exchange and CGX shareholder

Pacific Rubiales currently owns 58.7 million shares of CGX, which were
acquired by the Company through a bought deal financing that closed in
October 2011. Upon issuance of the units, the Company will hold
approximately 35% of the issued and outstanding common shares of CGX on
a non-fully diluted basis. The Company will also be entitled to
nominate up to three directors to serve on CGX’s board of directors.

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, Piriri and Quifa
oil fields in the Llanos Basin in association with Ecopetrol, S.A., the
Colombian national oil company, and 100 percent of Pacific Stratus
Energy Corp. which operates the La Creciente natural gas field. 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 working interests in 43 blocks
in Colombia, Peru and Guatemala. The Company’s common shares trade on
the Toronto Stock Exchange and La Bolsa de Valores de Colombia and as
Brazilian Depositary Receipts on Brazil’s Bolsa de Valores Mercadorias
e Futuros
under the ticker symbols PRE, PREC, and PREB, respectively.

CGX is a Canadian oil and gas exploration company that holds four licenses
in the Guyana Suriname basin, a frontier basin in South America with a
proven hydrocarbon system and highly prospective deep water plays that
can be drilled in shallow water. The United States Geological Survey
(USGS) has identified the Guyana Suriname basin as having the second
highest resource potential among unexplored oil basins in the world.
The common shares of CGX trade on the TSX Venture Exchange under the
symbol OYL.


Cautionary Note Concerning Forward-Looking Statements

This news 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 14, 2012 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 an accordingly undue reliance should not be put on such
statements due to the inherent uncertainty therein.

SOURCE Pacific Rubiales Energy Corp.

Source: PR Newswire