Pacific Rubiales has received independent reserves evaluation reports for the Rubiales-Piriri, Quifa and Sabanero Blocks, located in the Llanos Basin, Colombia. As a result of these reports, the Company's net proved and probable reserves (2P) have grown to a total of 350 million barrels of oil equivalent ("MMboe") as of the evaluation dates, a gross increase of 15.2% (without deducting production for the period) when compared to the reserves reports dated February 28, 2011 (effective December 31, 2010); or an increase of 10.5% if compared against the total reserves additions (after deducting production for the period).
Ronald Pantin, the Chief Executive Officer of the Company, commented, "We are very pleased with this increase in our reserves. On the one hand, we continue adding to our reserves base as a result of an exploration campaign to which we have given a lot of thought and effort. On the other hand, it is worth noting that the Quifa and Sabanero Blocks are beginning to emerge as significant parts of our future, amounting already to 126.3 MMboe, 36% of our reserves base, a volume of reserves equivalent to the Rubiales field. This is no doubt a very important milestone."
The reserves reports for the Rubiales-Piriri and for the Quifa Southwest Field were carried out by RPS Energy ("RPS") as at June 30, 2011, while the reserves report for the Quifa North and Sabanero Blocks was prepared by Petrotech Engineering Ltd. ("Petrotech") as at September 15, 2011. These new updated certifications incorporate the results of successful exploratory, appraisal and stratigraphic wells drilled during the current year on these blocks.
Total 2P reserves additions were 48 MMboe, evidencing that the Company not only has replaced the volume of reserves produced during this period, which amounted to a net production of 14.7 MMboe, but has also increased the aggregate of its 2P reserves for its producing blocks by 33.3 MMboe. Thus, the total reserves replacement ratio ("RRR") in the period amounts to 3.3 barrels of oil equivalent additions per barrel produced.
The reports for the Rubiales-Pirirí blocks and for Quifa southwest field, dated September 15, 2011, effective June 30, 2011 and entitled "Reserves Certification Report for the Rubiales Field, Colombia" and "Reserves Certification Report for the Quifa Field, South-West Region Colombia", respectively, were prepared by RPS in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). The report in respect of the Quifa Norte and Sabanero blocks dated September 28 and 29, 2011, respectively, effective as of September 15, 2011, and entitled "Evaluation of the Interests of Pacific Rubiales Energy Corp. in the proved and probable reserves update of the Quifa Norte, in the Eastern Llanos Basin, Colombia", and the report entitled "Evaluation of the Interests of Pacific Rubiales Energy Corp. in the probable reserves in the Sabanero Block in the Eastern Llanos Basin, Colombia" respectively, were prepared by Petrotech in accordance with NI 51-101. A brief summary of each report and certain operational information is provided below.
In the Rubiales-Piriri blocks, RPS estimated the Company's gross total 2P reserves to be 163.1 MMbbl as at June 30, 2011. This represents a decrease of 5% compared to gross total 2P reserves of 171.6 MMbbl as at December 31, 2010. This decrease of reserves is the natural consequence of a total gross field production of 28.5 MMbbl including fuel consumption (158,557 bbl/d) in the Rubiales Field during the first half of 2011, following the existing business plan. The Company's working interest is 40% in the Rubiales Block and 50% in the Piriri Block. The Company's gross share of production during the first half of 2011 was 12.0 MMbbl before royalties and net production of 9.6 MMbbl after royalties.
In the same reserves report, RPS estimated the 100% field reserves (3P) for the Rubiales-Piriri blocks to be 385.1 MMbbl, of which 370.6 MMbbl are proved (1P) reserves and 383.8 MMbbl are proved plus probable reserves (2P).
Quifa Southwest Field
After the successful appraisal and development drilling of 30 wells during the first half of 2011, RPS estimated the Company's gross total proved (1P) reserves as at June 30, 2011 for the Quifa Southwest Field to be 74.9 MMbbl, and gross proved plus probable (2P) reserves to be 93.1 MMbbl. The Company has a 60% working interest in the block. Between February 1 and June 30, 2011, the Quifa Southwest Field produced 5.4 MMbbl barrels of heavy oil (including fuel consumption). The Company's gross share of production during the first half of 2011 was 3.2 MMbbl barrels before royalties and the net production was 3.0 MMbl barrels after windfall profit (PAP) and royalties are accounted for.
Quifa Norte Block
As a result of the successful drilling campaign of 11 wells including exploration, stratigraphic and appraisal wells in Quifa Norte from February 1 to September 15, 2011, Petrotech estimated the Company's gross total proved (1P) reserves as at September 15, 2011 to be 2.5 MMbbl and probable reserves to be 46.4 MMbbl. The Company's total gross proved plus probable (2P) reserves for the Quifa Norte block were estimated to be 48.9 MMbbl, and 40.3 MMbbl net of royalties and windfall profit (PAP) as at September 15, 2011. The Company holds a 60% working interest in the block.
The reserves report of the Sabanero block is based on the results of the previous exploration campaign developed by Maurel et Prom in the block, as well as the results obtained in the last stratigraphic well drilled during August 2011. The Company has a 49.9% working interest in Maurel & Prom Colombia, which holds 100% of the block and serves as the operator. Petrotech evaluated the Company's gross total probable (2P) reserves as at September 15, 2011 to be 15.7 MMbbl.
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