January 10, 2011

TORONTO, Jan. 10 /PRNewswire/ – Pacific Rubiales Energy Corp. (TSX: PRE; BVC:
PREC) announced today an operational update on its production
activities, and guidance on its capital spending plan for 2011. As of
December 31, 2010, the Company’s gross production capacity stood at
220,000 barrels of oil equivalent per day (“boepd”), with a net
production of 84,000 boepd, a 75% increase in relation to the net exit
production of 2009 of 48,000 boepd. Exit production is approximately 8%
below Company projections and is a result of transportation issues
downstream of the field that are currently being resolved.

The Company s exploration portfolio currently covers 6,725,673 hectares
or 16,619,501 acres, and it remains the largest independent oil and gas
producer and explorer in Colombia, second only to the state-owned
Ecopetrol. The Company further expanded its portfolio in 2010 by adding
two blocks in the Republic of Guatemala and six in the Llanos-Putumayo
basins in Colombia.

The Company s fully funded capital budget for 2011 is estimated to be
US$1.12 billion with an estimated gross exit production of 265,000
boepd or 112,000 boepd net. The Company will continue pursuing its
strategy of production growth from its producing assets, but also
accelerating the addition of new reserves from its exploration assets
which will be released this quarter in an updated independent reserves

Mr. Ronald Pantin, Chief Executive Officer, commented: “The Company ends
2010 on the same high note in which it started. We are very pleased
with the performance of our producing assets, as they continue to
perform as planned. Also, the exploration efforts continue to be in
high gear, with over 28 exploratory and appraisal wells drilled and a
success rate of over 80% during the year. The primary focus for the
Company continues to be the ramping up of production capacity. We are
presently securing access to transportation capacity with the expansion
of the ODL pipeline, and our participation in the Oleoducto
Bicentenario de Colombia (“OBC”) project, the company that will build,
own and operate a new oil pipeline in Colombia (see press release dated
November 15, 2010). I feel confident that we will continue meeting our

During 2010, the Company drilled 42 producing wells and 17
exploration/appraisal wells at the Quifa field. This, together with the
completion of the Central Processing Facility (“CPF”) at Quifa, allowed
for the field’s production to reach its target of 30,000 bopd by the
end of 2010. In addition, the completion of CPF2 at the Rubiales field
raised production capacity to 170,000 bopd, which will be fully
realized as the expansion of OCENSA pipeline is completed in the next
few weeks.

This marks another record year for Pacific Rubiales, a result of a
concerted and sustained effort to build on the Company’s production
potential in tandem with its exploration portfolio, while ensuring it
has the capacity and commercialization strategy in place to move the
production at the well head to the end customer. 

Capital Expenditure Plan 

The Company’s capital expenditure strategy entails two main long-term
initiatives: (i) growth based upon discovering, developing and
producing new and existing reserves; and (ii) securing market access by
participating in key oil and gas transportation and port infrastructure
projects. For 2011, the Company has budgeted $340 million for
exploration activities as it enters into a more intensive phase of
effort in more than 26 of its blocks in Colombia, and begins operations
in Peru and Guatemala. The Company plans to invest $438 million in
production facilities, mainly at Quifa and Rubiales, as it ramps up
production in the Quifa field and continues to expand the fluid
handling capacities in the Rubiales field. The expansion of production
capacity in all of the fields calls for an investment of $139 million
in development drilling. Finally, the Company has earmarked $204
for projects such as STAR, IT investment and its investment in
the transport and port projects. In total, the investment budget for
2011 amounts to $1.12 billion.   

A detailed update on the Company’s exploration activity will be released
shortly as our partners in all the blocks finalize their internal
approval process. An updated and revised version of the investor
presentation (in particular, corrections in the investment plan) will
be posted on the Company s website at www.pacificrubiales.com.

Annual Meeting of Shareholders

In 2011, the Company will be holding its annual meeting of shareholders
on May 31, 2011, in Bogota, Colombia in both English and Spanish.

Debenture Adjustment

In 2010, the Company began paying a dividend to its shareholders by
paying a cash dividend in the aggregate amount of $25,000,000 (or
$0.094 per common share) for the quarter.  Under the indenture dated
August 28, 2008 that governs the 8% Convertible, Unsecured,
Subordinated Debentures of the Company (“Debentures”), the dividend
payment on December 16, 2010 triggered an adjustment to the conversion
rate applicable to the Debentures.  However, in accordance with the
provisions of the indenture, since the adjustment to the conversion
rate resulting from the dividend payment was less than 1%, the
adjustment was not to be made at the time, but instead will be carried
over to the time of any subsequent adjustment. 

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 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,

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. 

SOURCE Pacific Rubiales Energy Corp.

Source: newswire

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