TORONTO, April 7 /CNW/ - Ecopetrol, S.A. (BVC: ECOPETROL; NYSE: EC) and Pacific Rubiales Energy Corp. (BVC: PREC; TSX: PRE) announced today the successful completion of the first phase of the Synchronized Thermal Additional Recovery (STAR) project, and the kick-off of the second phase, as contemplated by the Memorandum of Understanding (MOU) executed between the parties on April 6, 2009 (see Pacific Rubiales press release of April 7, 2009).
During the first phase of the STAR project a number of studies and tests were carried out at the University of Calgary's research laboratories, including three combustion tube tests, two ramped temperature oxidation tests, and numerical simulations. On the basis of the same, it has been determined that the Rubiales crude has a stable and controllable ignition point at reservoir conditions, that the fire front thereby generated is stable, and that there is evidence of significant additional recovery potential by using the STAR process at the Rubiales field. These results confirm the feasibility and potential of the technology and clear the way for the next stages of the project.
As part of the second phase of the STAR project contemplated in the MOU, Ecopetrol and Pacific Rubiales will now proceed with the definition of the required parameters for the implementation of the pilot project in the Rubiales field and for next stages of project including, among other things, the following:
- the design, duration and scope of the pilot project and on-site testing to be carried out at the Rubiales field; - the technical and economic conditions under which the pilot project will be considered to be successful for the purposes of proceeding to the last phase of the STAR project (which will include the execution of a definitive agreement between the parties and implementation of the STAR technology throughout the field); and - the basic terms and conditions, both volumetric and economic, which will frame the definitive agreement for the commercial implementation of STAR at the Rubiales field for the remaining economic life of the reservoir.
Ecopetrol and Pacific Rubiales expect to finalize the foregoing and commence the implementation of the pilot project at the Rubiales Field by June, 2010.
Mr. Ronald Pantin, Chief Executive Officer of Pacific Rubiales, commented: "We firmly believe that the STAR technology will play a key role in the development of heavy oil reserves in Colombia and at the Rubiales field in particular. We are very happy to continue to be able to work with our partner Ecopetrol in opening new frontiers for the oil industry in Colombia through the technology being developed as part of STAR."
Pacific Rubiales, a Canadian-based company and producer of natural gas and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a Colombian oil operator which operates the Rubiales/Piriri and Quifa Block in the Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company. Also, through its affiliate Pacific Stratus Energy Corp., the company is focused on identifying opportunities primarily within the eastern Llanos Basin of Colombia as well as in other areas in Colombia and northern Peru. Pacific Rubiales has a current net production of over 55,000 barrels of oil equivalent per day (after royalties), with working interests in 32 blocks in Colombia and Peru.
Information in this press release expressed in barrels of oil equivalent (boes) is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow and costs, reserve and resource estimates, potential resources and reserves and the company's exploration and development plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the company based on information currently available to the company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions; failure to establish estimated resources or reserves; fluctuations in petroleum prices and currency exchange rates; inflation; changes in equity markets; political developments in Colombia or Peru; changes to regulations affecting the company's activities; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the company's annual information form dated March 12, 2010 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.For further information: Mr. Ronald Pantin, Chief Executive Officer and Director, Mr. Jose Francisco Arata, President and Director, (416) 362-7735; Ms. Belinda Labatte, (647) 428-7035