Pacific Rubiales to Buy PetroMagdalena in All-Cash Offer

PetroMagdalena Energy Corp. has entered into a definitive agreement (the "Arrangement Agreement") with Pacific Rubiales Energy Corp., pursuant to which Pacific Rubiales has offered to acquire all of the issued and outstanding common shares of PetroMagdalena (the "Shares") by way of a Plan of Arrangement under the British Columbia Business Corporations Act.

Under the Arrangement, shareholders of PetroMagdalena will receive C$1.60 in cash for each outstanding Share, representing a premium of approximately 38 percent on the 20 day volume weighted average price of PetroMagdalena's common shares on the TSX-V as of June 4, 2012. In addition, holders of all of the outstanding PetroMagdalena warrants (the "Warrants") will receive C$0.25 in cash for each unexercised Warrant held at closing. The Warrants had a closing trading price on the TSX-V of C$0.215 on June 4, 2012.

PetroMagdalena's Board of Directors, after consultation with GMP Securities L.P. who acted as PetroMagdalena's exclusive financial advisor and Blake, Cassels & Graydon LLP, PetroMagdalena's legal advisors, and based on the recommendation of an independent committee of PetroMagdalena's Board of Directors formed specifically to consider the offer, has unanimously determined that the Arrangement is fair to PetroMagdalena's shareholders and warrantholders (collectively, "Securityholders") and recommends that PetroMagdalena's Securityholders vote in favour of the Arrangement. Both Miguel de la Campa and Serafino Iacono, directors of the Company who are also directors of Pacific Rubiales, did not participate in any discussions or negotiations regarding the approval of the proposed acquisition and abstained from the Boards' deliberations.

Luciano Biondi, Chief Executive Officer of PetroMagdalena, stated "We are very pleased to receive this offer and provide shareholders with an opportunity to realize value on their investment and provide liquidity in a volatile market."