Pacific Rubiales has released its unaudited consolidated financial results for the three month period ended June 30, 2009.
Ronald Pantin, Chief Executive Officer, commented, "We are very pleased with our second quarter results which continue to show strong production growth, more than compensating for the significant weakness in the current oil price when compared with the same period last year. This is largely due to our almost 68% increase in production from the same period last year. This is an achievement that demonstrates our leadership and growth potential among the Colombian E&Ps. We remain focused on executing on our internal growth strategy as the ODL pipeline construction is completed, on time and on budget, which will allow us to take the Rubiales field to its full potential."
Second Quarter 2009 Results Summary
The results of the second quarter of 2009, and by implication those of the first six months of 2009, reflect the continuous strength of the company's operations.
During the second quarter, operated production of the company reached an average of 71,533 boe/d, which is an increase of 28,829 boe/d over the same period last year. This growth in operated production came mainly through the increase in production at the Rubiales heavy crude oil field. By August 2, 2009, the production at Rubiales reached 65,000 bbl/d, making this the fastest growing and also the highest producing field in Colombia. Production costs per barrel continue to decrease, showing a 48% reduction over the same period last year. This is evidence of management's commitment to cost control while increasing production.
During the quarter, the marketing strategy of the company continued to create value in spite of the lower oil prices as compared with the same period last year. The company continued balancing volumes for export with volumes for the internal market, thereby maximizing the revenue stream from an active marketing and commercial strategy. During the second quarter of 2009, the domestic market amounted to an average volume of 5,302 bbl/d.
As a result of the significant increase in production, and even with the relatively lower prices for oil and gas during the second quarter of 2009 compared with the same period last year (WTI $60.32/bbl versus $133.88/bbl), the company was able to generate the same level of revenues for the period ($160.9 million in 2009, $158.6 million in 2008). These revenues and the operational successes that allowed the company to achieve these revenues were also impacted by a number of financial charges arising from financial and non-cash items which will level off during the course of the year. These non-cash financial charges reflect mainly foreign exchange risks associated with future income taxes liabilities, which may or may not materialize, and the effect of overlift volumes that are a reflection of the company having marketed, for operational reasons, greater volumes than its equity participation in production. This overlift is anticipated to be cancelled out over the short term.
The company continues to move forward with its comprehensive investment and exploration plans, focused on the development of the Rubiales Master Plan. As of August 2, 2009, the ODL pipeline was mechanically completed and in the final stages of hydrostatic testing. The 'Early Pumping' phase is anticipated to begin by the end of August 2009. The production and processing capacity at the Rubiales field is on track to fulfil the production goal of 100,000 bbl/d by the end of the year, as previously stated.
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