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Pacific Rubiales provides operational update to close out its 2012 exploration and development activities

Friday, Dec 14, 2012

TORONTO, Dec. 13, 2012 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) today provided an update on its 2012 operations and exploration activities.

In summary, production is up sharply in the current quarter to date, the Company expects to meet its year-end exit production targets and has grown its production in 2012 despite the unexpected permit delays affecting all oil and gas producers in Colombia. Exploration activity continues with nine wells planned to be drilled or spud in the fourth quarter. 2012 represents an important transformational year for the Company, accomplished through a number of strategic acquisitions designed to position the portfolio for long-term growth and add value to the existing business.

The Company expects to release its 2013 Outlook and Guidance forecast during the second week in January 2013; 2012 year-end reserves and resource reports in late February; and 2012 year-end financial results after market close on March 13, 2013.

Ronald Pantin, Chief Executive Officer of Pacific Rubiales, commented:

"I am thrilled by this year's progress, in all aspects of the Company

Despite a challenging first eight months of the year during which our production growth was constrained by environmental and development permit delays outside of our control, I am very pleased by our subsequent strong production growth.

"The Company's production in the fourth quarter to date has averaged 269 Mboe/d total gross field or 107 Mboe/d net after royalty, and production has risen in all of the Company's major oil producing fields. This past week we achieved a new production record milestone of 282 Mboe/d total gross field (approximately 111 Mboe/d net after royalty). Much of this production growth has been driven by the Rubiales field which is currently producing in excess of 200 Mbbl/d total gross field (approximately 68 Mbbl/d net after royalty). At Quifa SW, production is just under 50 Mbbl/d total gross field (approximately 23 Mbbl/d net after royalty). Production is currently 3 Mbbl/d (approximately 1.7 Mbbl/d net after royalty) at the Cajua field, the new commercial field in the Quifa North area, and is expected to reach a range of 4 to 5 Mbbl/d total gross field production by year-end.

"With this production performance in place we feel very comfortable in achieving a year-end exit production of between 280 to 285 Mboe/d total gross field or approximately 112 to 114 Mboe/d net after royalty (excluding any volumes from the C&C Energia Ltd. acquisition).

"During 2012 we have transitioned the Company's portfolio through strategic acquisitions, to secure and setup long-term growth and add value to the existing business. This activity has been aimed at acquiring low cost reserves that provide immediate value and cash-flow accretive production in the near-term, as well as expanding our exploration resources to drive growth looking out beyond three to five years.

"As an example, the Block Z-1 acquisition in the shallow water offshore Peru brings low cost oil reserve additions, immediate production volumes that we can grow over the next two years through low-risk development, and complements our extensive onshore exploration portfolio in the country. With the recent delivery and placement of the new 24 drill slot CX-15 production platform on the block's Corvina oil field, development drilling is expected to commence during the next few weeks, progress through next year and contribute significant production growth in 2013. A newly completed comprehensive 3D seismic program on the block delineates multiple prospects and large exploration resources in a proven oil prone hydrocarbon basin, which will be tested by exploration drilling over the next several years. At the current time, Pacific Rubiales expects the Block Z-1 acquisition to close by year-end 2012. The acquisition is effective from the beginning of the current year (January 1, 2012).

"The Company's acquisition of PetroMagdalena Energy Corp. and the pending acquisition of C&C Energia adds medium to light oil production and reserves which will be used as a source of diluent for our growing heavy oil production in the Llanos basin. The Company's integrated light oil diluent / heavy oil production, along with its growing ownership in pipelines and transportation infrastructure, captures a significant incremental value margin on the direct ownership of the light oil, versus the cost of purchasing diluent volumes.

Current production from the PetroMagdalenga assets is approximately 4.5 Mboe/d net after royalty, which has approximately doubled since the acquisition closed on July 27, 2012. Production from the C&C Energia assets is currently approximately 10 Mbbl/d net after royalty oil, and is expected to grow from a more aggressive development of existing prospects in 2013. The Company is targeting a year-end 2012 closing of the C&C Energia transaction.

"Four additional exploration acreage acquisitions were made during 2012: 1) the increased equity investment in CGX Energy Inc., which holds an interest in deep water properties in offshore Guyana, 2) the Triceratops and PPL-237 onshore Papua New Guinea foothills play, 3) the Portofino heavy oil exploration block in the Caguan-Putumayo basin onshore Colombia, and 4) the Karoon blocks in the medium depth offshore Brazil Santos basin; should all be viewed in the context of early stage large resource capture for the future, in basins and jurisdictions which offer a balance of above- and below-ground risk.

SOURCE Pacific Rubiales Energy Corp.

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