Pacific Rubiales Highlights Colombia Crude Oil Production
Pacific Rubiales Energy Corp. has provided an update on the development of crude oil production and at its
Rubiales field, together with its associated commercial activities, and on its exploration efforts.
The Rubiales oil field has now reached a new gross production level of 40,087 barrels of oil per day (bopd), marking another firm step on the Company's ambitious march to achieve gross production of 126,000 bopd by the fourth quarter of 2009. This new production record not only represents an increase of almost 60% since the beginning of the year, but also reinforces the Company's successful implementation of its Rubiales development plan.
The Company acquired its interest in the Rubiales field in July 2007, and it now represents the fastest growing field in Colombia. Together with its production from its other fields, Guaduas, Rio Ceibas, Moriche and Puli, the Company's oil production is now 43,387 bopd (gross) and 16,404 bopd (net).
The Company's master plan to expand production and export it to the international market is also on track. The bid tender for the Independent Power Producer (IPP) contract for electricity generation at the Rubiales field
has now been completed and Energy International Corp, a corporation headquartered in Miami, Florida with extensive experience in power generation solutions throughout Latin America, has been selected. Under the contract, the IPP will initially generate 30 MW, expandable to 55 MW, for eight years under a Build, Operate and Transfer contract that will generate substantial production cost savings.
The Company continues to take advantage of the dynamics of the international oil market, in combination with the investment it has made in infrastructure, which allows it to direct its volumes to the export market. On
average in August the Company has been handling, through the Guaduas facility, a total volume in excess of 25,330 bopd, including 19,897 for its own account and the balance of 5,435 for the account of third parties, under attractive fee generating throughput and transportation agreements, which are then transported by pipeline to the export terminal in Covenas. During July the average realized price for the Rubiales blend was US$113.33/barrel, FOB Covenas.
The Company also announced that it has executed firm delivery natural gas contracts for a volume of 49 mmscf, at an average price of US$6.32/mmbtu, valid until November 2009. The Company continues its efforts to develop export markets.
The company continues its exploration program at its properties throughout Colombia and, at the La Creciente gas field; the company spudded the La Creciente J-1 (LCJ-1) well on August 5. It is expected that this well
will reach the top of the Cienaga de Oro reservoir at an estimated depth of 11,574 feet. This is the third exploration well that the company has drilled on the La Creciente block during 2008. In addition, a 3D seismic survey will be acquired during the fourth quarter of 2008 on the northern portion of the block, covering prospects F, H, I and D-west.
The Company is planning to drill two exploratory wells at Prospects D and E of the Quifa Block, and is in the midst of acquiring permits for a third location sited at prospect A. The company expects to spud the first well
before the end of September 2008.
At Moriche, the Company is preparing the site to drill Mauritia N-2 at the Mauritia NW prospect. It is expected that this well will be spudded in November 2008; as well, the Company is acquiring permits to prepare the site
for the Mauritia-Este prospect.
At Arauca, the company has finished reprocessing 2,000 km of 2D seismic, and its interpretation is underway. At Jagueyes, the company is preparing the terrain to acquire the 3D seismic, while at Guama, the interpretation of new and reprocessed 2D seismic is being completed. So far, prospects A (gas and oil) and D (gas and oil) have been confirmed.
Ronald Pantin, the company's Chief Executive Officer, stated "The continuous improvement of our operational numbers confirms our commitment to continue adding value to our production assets in the region and underlines our drive to make Pacific Rubiales the largest independent oil and natural gas company in the region."
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