TORONTO, March 8 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today a new oil discovery at the Quifa 26X well, located in Prospect "F" in northern Quifa, and the results of the Quifa 31 and Quifa 23X wells, drilled on prospects "G" and "H", respectively, within the Quifa Block, Llanos Basin, Colombia (for a detailed map of prospects, please refer to the company's investor presentation located at www.pacificrubiales.com).
Mr. Ronald Pantin, Chief Executive Officer, commented: "These results continue to support our belief in the production potential of the block. The exploration campaign continues to provide valuable information enabling us to better understand the complexities of the geology in the region."
The Quifa 26X exploratory well was drilled on Prospect "F", in the northern part of the Quifa block, approximately 15.1 km to the east of the recently discovered Quifa 6 well on prospect "A" (please refer to the company's press release dated February 9, 2010). The Quifa 26X well was drilled slanted to a maximum of 69.1 degrees from a surface location and reached the objective at an angle of 5 degrees. The well found the top of the Carbonera basal sands at 4,611 feet measured depth ("MD"), or 2,594 feet true vertical depth at sub-sea level ("TVDSS"). The well found the oil water contact at 4,676 feet MD, or 2,659 feet TVDSS, resulting in an oil column of 65 feet gross at the well. The petrophysical evaluation of the well indicates a net pay zone of 41 feet with 29% average porosity. The Quifa 26X well was drilled at the northeastern flank of prospect "F", 1.6 km away from the top of the structure, which has been mapped at 2,550 feet TVDSS. The depth difference between the crest of the structure of prospect "F" and the oil water contact observed in the well indicates that the maximum hydrocarbon column for the prospect could reach 108 feet. The structure of prospect "F" has an area of approximately 12,950 acres and elongates close to 13 km in the southwest-northeast direction and 4 km crosswise.
This discovery, along with the discovery of the Quifa 6 well, confirms the hydrocarbon potential of the northern area of the Quifa block. The company is planning to continue the exploratory drilling campaign for this area during the remainder of 2010.
The Quifa 31 well was drilled as the third appraisal well for the Quifa-7 discovery well on Prospect "H". The well found the top of the Carbonera basal sands at 2,810 feet MD, or 2,194 feet TVDSS and the oil-water contact at 2,846 feet MD, or 2,230 feet TVDSS, resulting in an oil column of 36 feet at the well. The petrophysical evaluation of the well logs indicates a net pay zone of 26 feet, and an average porosity of 29%. The Quifa 31 well was drilled slanted 30 degrees from a surface location, about one kilometer south from the Quifa-7 well, and 1.7 km from the Quifa 11 well to the west. The results of this well, along with the results of the Quifa-7 discovery well and the Quifa-10 and Quifa-11 appraisal wells, extend the total area for prospect "H" to 5,175 acres (it was previously estimated to be 4,780 acres), with average net pay of 20.5 feet and 31% porosity (refer to drill results of the Quifa-7, Quifa-10 and Quifa 11 wells, in the company's press releases dated September 8, 2009, October 13, 2009, and November 24, 2009, respectively). After a preliminary test, the well initiated production at 415 barrels of oil per day (bopd) at 13.6 degree API, using a progressive cavity pump (PCP). The company is now planning an extended production test for the well.
The Quifa 23X exploratory well, drilled on prospect "G", near the northern border of the Quifa Block, found the top of the Carbonera basal sands at 3,332 feet MD, or 2,755 feet TVDSS and the top of the Paleozoic at 3,536 feet MD or 2,959 TVDSS. Despite the hydrocarbon indications and the good reservoir characteristics in the basal sand intervals (140 feet thick and 28% average porosity) that this well evidenced while drilling, the results of the petrophysical evaluation did not show that hydrocarbons were present. This may indicate that the structural trap where the Quifa- 23X well was drilled had a leak and was not effective for trapping hydrocarbons, or that a sandstone-sandstone (i.e. no lateral seal) juxtaposition across both sides of the fault allowed the hydrocarbons to escape up-dip to shallower traps. Based on this information, the company has decided to abandon the well.
The Quifa Block is an exploratory block that almost completely surrounds the Rubiales/Piriri Field. The company holds a 60% interest in this block in association with Ecopetrol (40%). The Quifa contract gives Pacific Rubiales the right to develop any discovery until 2031. This block has an area three times larger than the Rubiales field.
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 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 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.
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