Pacific Rubiales has filed on SEDAR its Form 51-101 F1 "Statement of Reserves Data and Other Oil and Gas Information" as of December 31, 2010, as well as other associated forms. In addition, as a result of the drilling of several successful wells that were commenced in 2010 but completed in early 2011, the Company has received an independent oil and gas reserve evaluation report as of February 28, 2011, which indicates that the aggregate of the Company's net proved and probable reserves (2P reserves) has grown to a total of 316.44 million barrels of oil equivalent ("MMboe") as at February 28, 2011, signifying an increase of 12.8% when compared to December 31, 2009.
The 2010 year-end reserves numbers announced and contained in the Form 51-101 F1 are derived from three separate independent oil and gas reserve evaluation reports: (i) the report dated February, 2011, effective December 31, 2010, entitled "Reserves Certification Report for the Rubiales Field, Colombia" prepared by RPS Energy Canada Ltd. ("RPS"); (ii) the report dated February, 2011, effective December 31, 2010, entitled "Evaluation of the Proved & Probable Reserves of Pacific Rubiales Energy Corp. in La Creciente, Guaduas, Rio Ceibas, Abanico, Quifa Norte, Moriche, Puli, Guama and Buganviles Blocks in Colombia" prepared by Petrotech Engineering Ltd. ("Petrotech"); and (iii) the report dated February, 2011, effective December 31, 2010, entitled "Reserves Certification Report for the Quifa Field, South West Region, Colombia" prepared by RPS (collectively, the "2010 Reserves Reports"). As a result of recent successful results of the appraisal and development campaign in the south western region of the Quifa field ("Quifa SW") and the recently disclosed results of the Apamate well in the La Creciente Block ("Apamate"), the Company has included in this news release details from reserves reports prepared by Petrotech with respect to Quifa SW as of January 31, 2011 and Apamate as of February 28, 2011 (collectively, the "2011 Reserves Updates"), included as "Additional Information" in the Company's Form 51-101F1. Each of the 2010 Reserves Reports and the 2011 Reserves Updates were prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and will be published on the Company's website on March 11, 2011.
The 2010 Reserves Reports and the 2011 Reserves Updates illustrate that the Company has not only replaced the volumes of reserves produced, which amounted to a net production of 21.23 MMboe, but the 2011 Reserves Updates also demonstrate that the Company increased the aggregate of its proved and probable reserves (2P) for its producing blocks by 35.86 MMboe. Thus, the reserve replacement ratio (RRR) amounts to 2.69 barrels of oil equivalent incorporated per barrel produced.
José Francisco Arata, President of the Company, commented, "The updated 12.8% growth in our proved and probable (2P) reserves demonstrates the appropriateness of our exploration strategy, not only replacing produced barrels, but we are adding production growth potential across our entire portfolio of assets. The increase demonstrates our ability to grow our reserve base year-over-year, which is the foundation for the continuous success of Pacific Rubiales. With current 2P reserves of 1.18 barrels per outstanding share, we believe we are providing shareholders with significant value on a per share basis and significant future upside. We continue to move toward our goal of producing 500,000 barrels of oil equivalent per day."
The recent successes from the drilling campaign in the CPE-6 Block could not be included in these reserves reports, as it is a Technical Evaluation Agreement. The Company expects to convert this Technical Evaluation Agreement into an E&P contract by the second quarter of 2011. The Company continues executing its drilling program so as to further delineate the potential of this block which it believes to be the next large producing block in its portfolio.
As at February 28, 2011, the total 2P net reserves of the Company increased by 35.86 MMboe compared to the year-end 2009 reserves and reached 316.44 MMboe. This is a 12.8% increase in 2P net reserves compared with the 2P reserves reported for year-end 2009. For the evaluated period, the Company produced 21.23 MMboe and incorporated 57.09 MMboe.
The estimates of reserves and future net revenues in this press release are based on forecast prices and costs (as set forth in each report noted above) and are estimates only.
Reserves are classified according to the degree of certainty associated with the estimates. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of the proved plus probable plus possible reserves.
2010 Reserves Reports
In 2010, the Company increased its production by 5,984,291 barrels and had a net production of 21.23 MMboe of oil and gas. The reserve replacement ratio, from exploration efforts only, incorporated approximately 1.4 barrels of oil for every barrel produced during 2010 not including the 2011 Reserves Updates with respect to Quifa SW (January 2011) and Apamate (February 2011).
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