TORONTO,
Dec. 17, 2014 /PRNewswire/ - Pacific
Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB)
announced today that it has executed definitive agreements with the
International Financial Corporation ("IFC"), a member of the
World Bank Group, the IFC Global Infrastructure Fund ("GIF"
managed by the IFC Asset Management Company LLC) and a consortium
of investors, whereby it has agreed to sell approximately 43%
of its interest in Pacific Midstream Ltd. ("Pacific
Midstream"), which holds certain of the Company's pipeline and
power transmission assets, for a total consideration of
U.S.$320 million.
The agreements will provide the Company with
U.S.$240 million in cash, which will
be received by year-end. In addition, Pacific Midstream will
receive U.S.$80 million in the first
quarter of 2015, plus a commitment for an additional
U.S.$60 million in cash to develop
future infrastructure projects.
Ronald Pantin,
Chief Executive Officer of the Company, commented:
"We are pleased to announce this sale,
which will significantly improve our cash position and provide
additional flexibility as we enter into an uncertain oil price
environment in 2015. The participation by IFC underlines the
strategic importance and value of our infrastructure assets in
Colombia. We will continue to hold
a majority interest in Pacific Midstream and capacity rights in its
assets, allowing us to maintain the cost advantages that we
currently enjoy with respect to crude oil transportation and low
cost electricity in our main oil fields in Colombia.
"Our financial and capital strategy is focused on
maintaining a healthy balance sheet and ensuring funding for our
future growth, while generating strong returns to our shareholders.
In light of the current weaker commodity price environment, we
continue to evaluate all of our capital expenditure programs and we
have additional flexibility to scale back capital spending, as well
as opportunities for further cost savings. We will continue to
monetize our midstream assets and plan to sell certain non-core
E&P assets, the proceeds from which will be used to reduce
debt."
About Pacific Rubiales:
Pacific Rubiales, a Canadian company and
producer of natural gas and crude oil, owns 100% of Meta Petroleum
Corp., which operates the Rubiales, Piriri and Quifa heavy oil
fields in the Llanos Basin, and 100% of Pacific Stratus Energy
Colombia Corp., which operates the La Creciente natural gas field
in the northwestern area of Colombia. Pacific Rubiales has
also previously acquired 100% of Petrominerales Ltd, which owns
light and heavy oil assets in Colombia and oil and gas assets in
Peru, 100% of PetroMagdalena
Energy Corp., which owns light oil assets in Colombia, and 100% of C&C Energia Ltd.,
which owns light oil assets in the Llanos Basin. In addition,
the Company has a diversified portfolio of assets beyond
Colombia, which includes producing
and exploration assets in Peru,
Guatemala, Brazil, Guyana and Papua New
Guinea.
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.
About IFC:
IFC, a member of the World Bank Group, is the
largest global development institution focused exclusively on the
private sector. Working with private enterprises in more than 100
countries, IFC uses their capital, expertise, and influence to help
eliminate extreme poverty and promote shared prosperity. In FY14,
IFC provided more than $22 billion in
financing to improve lives in developing countries and tackle the
most urgent challenges of development. For more information,
visit www.ifc.org .
About IFC Asset Management Company:
IFC Asset Management Company LLC, a
wholly-owned subsidiary of IFC, invests third-party capital,
enabling outside investors to benefit from IFC's expertise in
achieving strong equity returns, as well as positive development
impact in the countries in which it invests. It manages
$6.3 billion of capital across six
investment funds. For more information, visit,
www.ifcamc.org.
Advisories
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, Peru, Brazil,
Papua New Guinea, Guyana and Mexico; 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 13, 2014 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.
Translation
This news release was prepared in the English
language and subsequently translated into Spanish and Portuguese.
In the case of any differences between the English version and its
translated counterparts, the English document should be treated as
the governing version.
SOURCE Pacific Rubiales Energy Corp.
