TORONTO, Feb. 17 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today the engagement of Banc of America Securities LLC as lead arranger for an up to US$200 million two year syndicated senior unsecured credit facility. The syndicate for the facility is expected to be composed of both international and local Colombian lenders. Closing is expected to occur on or before March 31, 2010. The facility will replace existing smaller facilities currently available to the company and will be utilized to support short and medium term revolving credit needs of the company as they may arise in the ordinary course of business. The company does not expect to fully draw down the facility during the 2010 financial year.
The facility will be subject to completion of syndication and all required documentation. Pricing of the facility will depend on the rating assigned to the company's senior debt securities by Standard & Poor's Ratings Group and Fitch Inc. The company will pay commitment fees on the unutilized portion of any outstanding commitments under the facility and regular spread over any disbursed amounts.
Subject to customary acceleration events set out in the credit agreement to be executed between the parties, or unless terminated earlier by the company without penalty, repayment of outstanding principal on the facility will be made in full on the second anniversary of the closing date.
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 Quifa Block in the Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company. 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 54,222 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 5.7 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 April 1, 2009 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.
%SEDAR: 00007953EFor 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