Petro Rubiales Energy Corp. announced a significant increase in proved oil reserves ("1P") and proved plus probable oil reserves ("2P"). The Company has received a revised independent engineering and economic evaluation of its assets from Petrotech Engineering Ltd. ("Petrotech") dated as of November 30, 2007 (the "Petrotech Report"). The Petrotech Report reflects the Company's recent acquisition of the remaining 25% interest of Rubiales Holdings Limited ("RHL") as well as results from the ongoing drilling of its delineation wells.
Highlights from the Petrotech Report, compared to the Company's May 2007 resource update, include a total proved ("1P") reserves increased by 266% to 89.5 million barrels; total proved plus probable ("2P") reserves increased by 26% to 230.8 million barrels; Total proved plus probable plus possible reserves ("3P") of 320.3 million barrels; and Total 3P NPV(10%) before income tax increased by 118% to $2.9 billion.
In compiling its reserve reports, Petrotech used the definition of reserves category and follows the guidelines from the Canadian Oil and Gas Evaluation (COGE) Handbook. Petro Rubiales will be preparing a fiscal year-end (December 31, 2007) reserve report for filing in accordance with Form 51-101 F1 of National Instrument 51-101 (Disclosure of Oil and Gas Activities) and will file that year-end reserve update within 120 days of December 31, 2007.
The Petrotech Report also includes an updated pre-tax cash flow model, based on constant prices and costs. This model illustrates the significant increase in net present value of the Rubiales field to US$2.9 billion, using a 10% discount rate and the P3 reserve basis. This current NPV (10%) of US$2.9 billion is up 118% from the May 31, 2007 NPV (10%) of US$1.3 billion. The table below provides further details for 1P, 2P and 3P reserves at a 0% and 10% discount rates.
Commenting on the report, Ronald Pantin, CEO of Petro Rubiales, said: "I am delighted that the Petro Rubiales team has been able to significantly upgrade the Company's reserves in such a short period of time. Our upgraded reserves, combined with the recently announced increase in both production levels and netbacks, provide the Company with an excellent foundation for further growth."
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