Pacific Rubiales Closes $180MM in Commitments for $250MM Credit Facility

Pacific Rubiales has closed on initial commitments totaling US  $180 million under a previously announced senior secured revolving credit facility of up to US $250 million. The facility consists of US $50 million commitments from each of BNP Paribas, Calyon and Banco Davivienda S.A. and US $30 million from West LB A.G., each a lead arranger for the facility. The company will proceed with initial drawdown under the facility in the coming days.

The facility is a senior secured revolving credit facility maturing on June 30, 2013, and bears interest at LIBOR plus 5.50%. The company will pay commitment fees of 1.50% on the unutilized portion of any outstanding commitments under the facility. Subject to customary acceleration events set out in the credit agreement executed among the parties, or unless terminated earlier by the company without penalty, repayment of outstanding principal on the facility will be made in equal quarterly installments following the second anniversary of the closing date.

The facility is subject to a borrowing base and secured by certain assets of the company's subsidiaries operating in Colombia. The initial borrowing base was determined by the lenders at US $250 million but will be subject to re-determination semi-annually on April 1 and October 1 of each year; both the company and the lenders have discretion to request limited additional re-determinations. The company and BNP Paribas, the global coordinator for the facility, are currently involved in advanced discussions with additional local Colombian and international lenders to obtain further commitments up to the amount of the current borrowing base.

The company expects to use the proceeds from the facility for the development of its oil infrastructure (including costs of drilling, oil dehydration and water treatment) to increase the production capacity of the Rubiales and Piriri fields up to 100,000 gross barrels of oil per day by the end of 2009, as well as for general working capital purposes and the repayment of short-term debt, subject to certain restrictions set out in the credit agreement.

The availability of the facility allows the company to maintain its originally budgeted capital expenditure plan for 2009, thus paving the way for further growth in production and in the previously announced exploration program.

The company is being advised on the financing by Endeavour Financial International Corporation.

Pacific Rubiales is a Canadian-listed producer of oil and natural gas. The company is the largest independent oil and gas exploration and production company in Colombia. Pacific Rubiales owns 100 percent of Meta Petroleum Limited, which operates the Rubiales and Piriri oil fields in Colombia's Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company, as well as Pacific Stratus Energy and Kappa Energy Holdings.

The company is focused on identifying growth opportunities particularly within the Eastern Llanos Basin as well as in other areas in Colombia and northern Peru. The company has a robust and growing reserve base, and is maximizing future production prospects through its exploration activities. Pacific Rubiales has a current net production of approximately 34,000 barrels of oil equivalent per day, with working interests in 34 blocks in Colombia and Peru.